week ending Dec 29

Trump Blasts Federal Reserve as U.S. Economy's ‘Only Problem’ - President Donald Trump renewed his attacks on the Federal Reserve, commenting publicly on the central bank for the first time following last week’s interest-rate hike and reports he has discussed firing Chairman Jerome Powell. “The only problem our economy has is the Fed. They don’t have a feel for the Market, they don’t understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders,” Trump said in a tweet Monday. “The Fed is like a powerful golfer who can’t score because he has no touch - he can’t putt!” Trump’s latest broadside added to the sense of alarm among investors already rattled by turmoil in Washington that includes his private musings about sacking Powell and the government shutdown that followed his about-face on a stopgap spending bill. U.S. stocks fell back toward their session lows after Trump’s outburst, with the S&P 500 Index on track to close at a 19-month low. The president’s Twitter post didn’t mention Powell, a Trump nominee who has overseen four rate hikes this year to prevent the economy from overheating. Treasury Secretary Steven Mnuchin sought to reassure investors over the weekend that Powell’s job is safe. He held a conference call Monday with regulators that oversee banks and markets to try, without success, to restore calm.

Powell Has a Lot to Lose, Little to Gain in Trump Sit-Down - Of all the holiday gatherings Jerome Powell gets invited to, a sit-down in the Oval Office might be one of the last he’d want to attend. Just days after President Donald Trump blamed the Federal Reserve chairman for the stock market’s December swoon and discussed with aides his desire to fire him, White House staff are reportedly working to set up a meeting between the two men. While some Fed watchers said such a confab could ease tensions, most warned it might be a minefield for Powell, either creating the impression the Fed is giving in to presidential pressure, or simply generating confusion over what gets discussed. “This is a very dangerous meeting,” said Mark Spindel, the head of Potomac River Capital, a Washington investment fund. Coming amid a massive market sell-off and soon after a bevy of attacks on Powell from Trump, a meeting might only put the Fed in an even tougher spot, Spindel said. “Could I imagine a kiss and make up in the Rose Garden? Yes,” he said. But the president could also “offer his own read-out of what happens,” as he has after other meetings. Donald Kohn, a former Fed vice chairman under Ben Bernanke, agreed a meeting would carry plenty of peril for Powell. “The downside is not the meeting itself, but what happens afterwards,” said Kohn, a senior fellow at the Brookings Institution in Washington. “The risk is that the president interprets what he hears and then repeats something publicly that is not entirely consistent with what the chair wanted to convey,” he said.

 4-D Chess- Trump May Get Fed Pause He Desires After Self-Inflicted Econ Damage -  President Donald Trump may get the interest rate-hike pause he wants after abysmal December performance, softer 2019 economic forecasts, and rumors of Trump firing Fed Chairman Jerome Powell have rattled investors.  According to Bloomberg, this is "self-inflicted economic damage," by the President. As we noted last week:  Trump finally figured out that the only way to get QE4 and new all time highs is with a market crash — zerohedge (@zerohedge) December 23, 2018  The S&P 500 fell 2.7 percent on Christmas Eve, bringing U.S. stocks to the brink of a bear market after a drop of almost 20 percent from a September peak. Shares rallied Wednesday, snapping a four-day losing streak. The latest drop came after Bloomberg News reported Dec. 21 that the president had discussed firing Fed Chairman Jerome Powell following the central bank’s Dec. 19 decision to lift interest rates for the fourth time this year. -BloombergWhile the Fed has offered an economic forecast of 2.3 percent growth for next year, the latest hike was accompanied with a signal that they would likely slow the pace of increases next year.Bloomberg, meanwhile, thinks the Fed's outlook is likely to be tempered by market volatility as "falling stocks hurt consumption by reducing household wealth," while business confidence may take a hit as volatility rises, the cost of capital goes up, and uncertainty over trade wars factor in. Of course, Trump's ongoing conflict with the Fed will likely contribute as well. "The shaken confidence that this market correction reflects is very likely going to affect investment and hiring," said Julie Coronado, founder of Macropolicy Perspectives in New York - who adds that the recent plunge in the stock market will likely dampen 2019 growth forecasts - possibly shifting any further Fed rate hikes into the second half of next year.  Former Treasury Secretary Larry Summers suggested on Wednesday that his previous odds of a recession of "a bit less than 50 percent" are now at 60%, while knocking Treasury Secretary Steven Mnuchin's weekend announcement that they had made a "liquidity test" call to bank CEOs.

Quantitative tightening is already rattling markets worldwide - When it comes to reversing their crisis-era bond buying, central bankers are focused on the destination. Traders in risk assets care more about what could be a painful journey. The contrasting views upset markets this week. Chairman Jerome Powell reiterated the notion that the Federal Reserve would remain on auto pilot when trimming its $4 trillion portfolio, and investors dumped equities in response. The tension may prove even more consequential in 2019 now that the European Central Bank is stopping -- though not yet unwinding -- asset purchases. Bank of America Corp. analysts say liquidity from the developed world's four major central banks will contract by $200 billion next year, driving volatility in the riskier markets that thrived under quantitative easing. The liquidity drain is potentially destabilizing for risk markets because central banks are removing cash that was cheap to borrow and invest in high-yielding assets, including in emerging economies. Some analysts argue that so-called quantitative tightening is behind the recent selloff in equities and credit markets, overshadowing trade wars and a slowdown in global growth. "The only thing that ties in the decline in global equities, the decline in EM over the summer is this global liquidity argument," said Lee Ferridge, head of North America macro strategy at State Street Corp. Against this backdrop, he says short-maturity Treasuries are attractive, with high-yield credit looking particularly vulnerable. Views differ on exactly when the central-bank pullback will start to bite, or if it already has. Ferridge estimates the net drain on liquidity began in October, when the ECB halved monthly asset purchases to 15 billion euros ($17 billion), in preparation for stopping them this month. Also in October, after a year of shrinking its portfolio, the Fed raised the maximum monthly runoff to $50 billion -- $30 billion for Treasuries and $20 billion for mortgage-backed securities. Goldman Sachs Group Inc.'s Marty Young is among strategists doubting that quantitative tightening played a pivotal role in the recent market upheaval. If the Fed's runoff were such a dominant trigger, "we would expect to see the most extreme impacts on the agency MBS and Treasury bond sectors," he said in a Dec. 21 research note. Instead, mortgages have performed in line with equities and Treasuries rallied, he wrote.

Actually, Only Banks Print Money -- Steven Roth - I’m thinking this headline will raise some eyebrows in the MMT community. But it’s not really so radical. It’s just using the word money very carefully, as defined here. You can compare the magnitude of these asset-creation mechanisms here. (Hint: cap gains rule.) The key concept: “money” here just means a particular type of financial instrument, balance-sheet asset: one whose price is institutionally pegged to the unit of account (The Dollar). The price of a dollar bill or a checking/money-market one-dollar balance is always…one dollar. This class of instruments is what’s tallied up in monetary aggregates. A key tenet of MMT, loosely stated, is that government deficit spending creates money. And that’s true; it delivers assets ab nihilo onto private-sector balance sheets, and those new assets are checking deposits — “money” as defined here. But. Government, the US Treasury, is constrained by an archaic rule: it has to “borrow” to cover any spending deficits. So Treasury issues bonds and swaps them for that newly-created checking-account money, reabsorbing and disappearing that money from private sector balance sheets.If you consolidate Treasury’s deficit spending and bond issuance into one accounting event, Treasury is issuing new bonds onto private-sector balance sheets. It’s not printing “money,” not increasing the aggregate “money stock” of fixed-price instruments.This was something of an Aha for me: If you look at the three mechanisms of asset-creation in the table above, only one increases those monetary aggregates: bank (net new) lending.Arguably there might be one more row added to the bottom of this table: so-called “money printing” by the Fed. But as with Treasury bond issuance, that doesn’t actually create new assets. The Fed just issues new “reserves” — bank money that banks exchange among themselves — and swaps them for bonds. That leaves private-sector assets and net worth unchanged, and only increases one monetary aggregate measure: the “monetary base” (MB). I’ll leave it to my gentle readers to consider what economic effects that reserves-for-bonds swap might have.

In the Space of Two Weeks, the 10yr-3mo Spread Has Halved, and Is Now at 0.35% - Menzie Chinn - That’s all you need to know.

Underlying Inflation Gauge: November Update - Here is the latest from the NY Fed: The UIG “full data set” measure decreased from a currently estimated 3.07% in October to 2.98% in November. The “prices-only” measure increased from 1.98% in October to 2.00% in November. The twelve-month change in the November CPI was +2.2%, a 0.3 percentage point decline from October. The UIG measures currently estimate trend CPI inflation to be approximately in the 2.0% to 3.0% range. Both measures have declined modestly in the second half of the year reflecting the softening of the CPI. Economists at the NY Federal Reserve Bank introduced a new measure of trend inflation in September 2017, the Underlying Inflation Gauge (UIG), meant to complement the current standard measures. Investors and policymakers alike have an interest in the behavior of inflation over longer time periods. The trend component of inflation is not an observed measure and a proxy measure is required to calculate it. To calculate trend inflation, transitory changes in inflation must be removed such as volatile components or specific items. Core CPI, which is the most widely used and accepted form of estimating trend inflation, only focuses on price components. The UIG derives trend inflation from a large set of data that extends beyond price variables. Additionally, it has shown higher forecast accuracy than traditional core inflation measures. The UIG uses a dynamic factor model for large data sets and uses two different sets for calculations. The first is a disaggregated price data series in the CPI, called “prices only” and the second is the CPI disaggregated price series plus a wide range of macroeconomic and financial data, called the “full set”. The major difference between say, Core CPI data, and the UIG data is that the UIG adds instead of removes information that signal changes in trend inflation.  Here is a chart of both the full set and prices-only series. You’ll notice the difference between the full and prices-only sets, especially during recessions, which is a result of the additional information included in the full set, like macroeconomic factors. The latest full set UIG for November is 2.98% while the prices-only measure is 2.00%. Current Headline CPI is now 2.21% and Core CPI is 2.18%.

Chicago Fed "Index Points to an Increase in Economic Growth in November" - From the Chicago Fed: Index Points to an Increase in Economic Growth in November Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) increased to +0.22 in November from a neutral reading in October. Two of the four broad categories of indicators that make up the index increased from October, and three of the four categories made positive contributions to the index in November. The index’s three-month moving average, CFNAI-MA3, moved down to +0.12 in November from +0.23 in October. This graph shows the Chicago Fed National Activity Index (three month moving average) since 1967.

Q4 GDP Forecasts: Mid 2s -- From Goldman Sachs: We also lowered our Q4 GDP tracking estimate by one tenth to +2.6% (qoq ar). [Dec 28 estimate)  From the NY Fed Nowcasting Report The New York Fed Staff Nowcast stands at 2.5% for 2018:Q4 and 2.1% for 2019:Q1. [Dec 28 estimate] And from the Altanta Fed: GDPNow The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in thefourth quarter of 2018 is 2.7 percent on December 21, down from 2.9 percent on December 18 [Dec 21 estimate]   CR Note: These estimates suggest GDP in the mid-2s for Q4.

AP Explains: What happens in a partial government shutdown -- Social Security checks will go out and troops will remain at their posts. Doctors and hospitals will receive their Medicare and Medicaid reimbursements. The U.S. Postal Service, busy delivering packages for the holiday season, is an independent agency and won’t be affected. Passport services, which are funded by fees and not government spending, will also continue.Virtually every essential government agency, including the FBI, the Border Patrol and the Coast Guard, will remain open. Transportation Security Administration officers will staff airport checkpoints.The air traffic control system, food inspection, Medicare, veterans’ health care and many other essential government programs will run as usual. The Federal Emergency Management Agency can continue to respond to disasters.Nearly 90 percent of the Department of Homeland Security’s 240,000 employees will be at work because they’re considered essential.Special counsel Robert Mueller’s office, which is investigating potential ties between the Trump campaign and Russia, is unaffected by a shutdown.But hundreds of thousands of federal workers will be forced off the job, and some services will go dark.In the past, the vast majority of national parks were closed to visitors and campers, but beginning with the last government shutdown, in January, the Interior Department has tried to make parks as accessible as possible despite bare-bones staffing levels. Some are staying open thanks to funding from states and charitable groups.In Washington, the museums along the National Mall will remain open at least through Jan. 1, but Smithsonian officials said they will reevaluate the situation if the shutdown continues into the new year. The Washington Monument is closed for repairs.Arizona and Utah officials put in place plans to keep open Grand Canyon, Zion, Arches and Bryce Canyon and Zion national parks. At the Statue of Liberty and Ellis Island, it was business as usual, thanks to funding from New York state.

White House Reportedly Offered Dems $2.5 Billion Border 'Compromise' - The Democrats already rejected a funding bill that would have provided $1.6 billion for President Trump's border wall...so in what appears to be the Republicans latest attempt at offering up a shutdown-ending "compromise", Bloomberg reported Sunday that in the hours before the Senate adjourned for Christmas - guaranteeing that a handful of government agencies would remain closed until at least Thursday - Republicans tried offering Democrats a deal that would have allocated $2.5 billion for border security, including money for border fencing and $400 million for immigration policy. According to a Democratic legislative aide, who was the main source for the report, described the $400 million as a "slush fund."  : On Saturday, the White House offered a $2.5 billion compromise deal for border security. The deal including funding for Trump's desired wall barrier, and $400 million for immigration policy, according to a Democratic aide close to the matter #tictocnews pic.twitter.com/CiPQ7Z8D9Z — TicToc by Bloomberg (@tictoc) December 23, 2018 The deal was reportedly offered by Vice President Mike Pence to Democratic leader Chuck Schumer during a Saturday afternoon meeting. At the time, the White House was standing by its commitment to only accept the full $5 billion in funding passed by the House. After the meeting, Schumer said the two sides remained "far apart" on a deal. Democrats are still insisting that they won't accept any funding for a border barrier, while Republicans say funding for a physical barrier must be part of any deal. "If you want to open the government, you must abandon the wall," Schumer said on the Senate floor on Saturday.

Trump in Christmas remarks says shutdown won’t end until he gets money for wall - President Trump on Tuesday dug in on his demand for a border wall as the government shutdown stretched into its fourth day. Speaking to reporters after calling troops on Christmas Day, Trump said lawmakers must approve wall funding or else the shutdown will continue. “I can't tell you when the government is going to be open,” he said. “I can tell you, it's not going to be open until we have a wall, a fence, whatever they'd like to call it. I'll call it whatever they want.” Trump argued that thousands of workers being furloughed due to the shutdown also want the wall. “Many of those workers have said to me, communicated, stay out until you get the funding for the wall. These federal workers want the wall,” the president said. The comments suggest the funding impasse is unlikely to be resolved quickly when Congress comes back into sessions after Christmas. Senate Minority Leader Charles Schumer (D-N.Y.) said Saturday that Trump “must abandon the wall, plain and simple” for the government to reopen. The shutdown has fueled the year-end chaos that appears to be enveloping Trump's presidency, along with plummeting stock markets, intraparty warfare over the ouster of Defense Secretary James Mattis and troop withdrawals from Syria and Afghanistan and the Russia investigation.

Shutdown Grinds On With Democrats Venting and Trump ‘All Alone’ - As the partial U.S. government shutdown enters a third day, lawmakers have left Washington for the Christmas holiday with no sign of urgency to resolve the fight over President Donald Trump’s demand for border wall money. Unlike shutdowns of the past, Congress and the White House aren’t racing to reopen the government. Offices of congressional leaders who are responsible for negotiating with the president are shuttered as Trump remains at the White House after canceling a trip to his Mar-a-Lago resort in Florida. Previous government closures have put Washington in crisis mode with round-the-clock talks, strategy sessions and public posturing. Not so, this time. The next possibility for votes in the House and Senate is on Dec. 27, but Democrats have indicated the two sides are far from a deal. If there’s no agreement, many lawmakers won’t return until the new session of Congress starts on Jan. 3, when Democrats take control of the House.Democrats said Monday they’re having trouble negotiating with the Trump administration. “Different people from the same White House are saying different things about what the president would accept or not accept to end his Trump Shutdown, making it impossible to know where they stand at any given moment,” House Democratic leader Nancy Pelosi and Senate Democratic leader Chuck Schumer said in joint statement. The president has been attacking Democrats over the wall on Twitter, and continued on Monday. “I am all alone (poor me) in the White House waiting for the Democrats to come back and make a deal on desperately needed Border Security,” Trump wrote. In a later tweet, he said the administration just awarded a contract for a section of wall in Texas and that “Democrats must end Shutdown and finish funding.” 

US government shutdown may extend into January -- All indications are that the partial shutdown of the US federal government, which began at 12:01 a.m. Saturday, will last at least a week, and likely into the New Year. Some 800,000 federal workers are affected, either working without paychecks—if they are designated as “essential”—or furloughed without pay until Congress enacts a new spending authorization.  In general, police repression and mass surveillance are considered “essential” functions of the federal government, while anything to do with providing actual services to the public is considered “inessential.” The shutdown was triggered by President Trump’s somersault on whether to sign a “continuing resolution” that would have funded nine federal departments and agencies through February 8. The Senate passed the resolution Wednesday by 100–0 after the White House indicated approval. After ferocious attacks by right-wing talk show hosts on the failure of the resolution to fund the proposed wall on the US-Mexico border, Trump abruptly reversed himself. On Thursday, the lame duck session of the House of Representatives concluded with a 215–177 near-party line vote on a new version of the continuing resolution, with $5.7 billion for the wall, even more than the $5 billion Trump was demanding. That version of the resolution could not pass the Senate, narrowly controlled by the Republicans by a 51–49 margin, since ending debate and bringing the measure to a vote requires approval by 60 senators. Both the House and Senate convened Saturday, after the partial federal shutdown had begun, but took no action. Senate Majority Leader Mitch McConnell scheduled the next regular meeting of the Senate for Thursday, December 27, although he indicated that the session will be canceled if no agreement is worked out in the interim between the White House and Senate Democrats.White House budget director Mick Mulvaney, who becomes Trump’s acting chief of staff on January 1, replacing Gen. John Kelly, told several Sunday television interview programs that the administration fully expected the partial federal shutdown could extend into January. “I don’t think things are going to move very quickly here for the next couple days,” he told Fox News Sunday. “I think it’s very possible the shutdown will go beyond the 28th and into the new Congress.” The new Congress convenes on January 3, with the Democrats in control of the House of Representatives and longtime Democratic leader Nancy Pelosi expected to become House speaker.

Here's what's affected by the December 2018 partial government shutdown - The federal government is in a partial shutdown, as Democrats, Republicans and the White House are at an impasse about a line item representing 0.004% of the spending this fiscal year — $5 billion for President Trump's border wall. Nine federal departments and several agencies — representing about a quarter of the $1.24 trillion in government spending for fiscal year 2019 — shut down early Dec. 22. The remaining three-quarters of the government, including the Department of Defense, Department of Labor and Health and Human Services, were already funded and won’t be affected by the shutdown.  Federal rules prohibit employees classified as “essential” from taking paid time off, including time for illness, vacation or religious obligations during a shutdown. That includes security staff at airport checkpoints and air traffic controllers. Here’s a look at how a lapse in government funding would affect key agencies and federal functions:

• The Department of Housing and Urban Development would continue to make Section 8 housing voucher payments, which assist low-income families. The U.S. Department of Agriculture would continue to inspect meat, poultry and eggs, and its data releases on cotton, dairy, produce and livestock would continue as needed to minimize market disruptions.New housing voucher requests would not be processed but staff would be available to provide oversight of the program.
• Air traffic controllers, critical airline safety inspections and the registration of aircraft would continue to work if a government shutdown occurs, according to a statement by the Federal Aviation Administration. Transportation Security Administration’s airport functions would continue to operate, so air travel would not be affected. The Federal Highway Administration and Federal Motor Carrier Safety Administration, which regulates trucking, would continue their operations. Amtrak would continue its normal operations during a short-term shutdown, according to a spokeswoman for the railroad.
• The Treasury Department, which includes the Internal Revenue Service, would continue to address any disruptions in the liquidity in the financial system, monitor financial and terrorism intelligence and continue small businesses lending. The U.S. Trade Representative would continue negotiations and enforcement.
• The Securities and Exchange Commission would halt many of its routine activities and significantly scale back its law enforcement and litigation efforts. The Wall Street regulator would reduce staff to around 300 from over 4,500 normally, according to a plan for a shutdown.
• The shutdown could postpone the release of several scheduled economic data releases with market-moving potential. The U.S. Census Bureau would delay all economic releases, which next week include new home sales, merchandise trade and inventories. Agencies not affected by the shutdown — including the Labor Department, Federal Housing Finance Agency, and the regional Federal Reserve banks — would continue releasing data on a regular schedule. That means the markets would still get data on weekly unemployment claims, regional manufacturing surveys and house prices. The independent Energy Information Administration, which publishes projections and reports relied upon by oil traders and energy analysts, was already funded through the fiscal year and wouldn’t be affected by a shutdown.

Trump On Shutdown- Whatever It Takes We're Going To Have A Wall - President Donald Trump on Wednesday said that he is prepared for a lengthy shutdown, and said he would do "whatever it takes" when asked how long he would wait to get the $5 billion he has demanded for his US-Mexico border wall. The holdout has triggered a partial shutdown of the federal government which is now in its fifth day. Speaking from a surprise visit to the troops in Iraq, Trump blamed the shutdown on Nancy Pelosi (D-CA), who is expected to assume the role of Speaker of the House on January 3. Trump also defended his decision last week to pull US troops out of Syria - a move which led to the abrupt resignation of Defense Secretary James Mattis and leading US diplomat Brett McGurk. "I think a lot of people are going to come around to my way of thinking. It’s time for us to start using our head," Trump told reporters at the Al Asad Air Base located west of Baghdad, where he and first lady Melania Trump spent approximately three hours on the ground with US troops. Trump added that he has no plans to withdraw US troops from Iraq, however, adding "In fact we could use this as the base if we wanted to do something in Syria." Trump told us he has "no plans at all" to pull U.S. forces out of Iraq, says it can be used as a base for remaining ISIS in Syria. ⁰"If we see something happening with ISIS that we don't like, we can hit them so fast and so hard they really won't know what the hell happened." — Jennifer Epstein (@jeneps) December 26, 2018 The President also noted that he was in no rush to replace Mattis - and that Deputy Defense Secretary Patrick Shanahan, who Trump named on Sunday as a temporary successor to begin on January 1, "could be there for a long time."

 Trump remains firm on wall, no House votes on Thursday - President Trump on Wednesday reiterated his demand that $5 billion for a border wall be included in any spending legislation that would end a partial government shutdown that is now in its fifth day. “Whatever it takes. We need a wall. We need safety for our country. Even from this standpoint. We have terrorists coming in through the southern border,” he told reporters during an unannounced trip to Iraq to visit with U.S. troops. Trump added that he intends to hold a "groundbreaking" at the U.S. border with Mexico before next year’s State of the Union address. The border wall has been the focal point of negotiations between Congress and the White House. The Senate last week passed a government funding bill without border wall funding, and Trump declared the next day, after facing pressure from conservative allies, that he would not sign a spending bill that doesn't include money for his signature campaign promise. The House then passed a bill with $5.7 billion in wall funding, though it was considered dead on arrival in the Senate, where it's unlikely to receive the 60 votes needed to advance. Democrats in both chambers have declared their opposition to the border wall, with House Minority Leader Nancy Pelosi (Calif.) calling it a “non-starter.” In the latest sign that the two sides are not close to striking a deal, House Majority Whip Steve Scalise’s (R-La.) office said Wednesday that no votes in the House are expected on Thursday and that members will get 24 hours' notice when they need to return to Washington for legislative matters.

No End To Shutdown In Sight As Trump Promises Whatever It Takes To Fund The Wall - During a surprise visit with US troops in Iraq on Wednesday, President Trump offered his own spin on Mario Draghi's famous "whatever it takes" line when asked about what it would take to break the impasse and deliver a funding bill to end the partial government shutdown, which entered its sixth day on Thursday. Illustrating just how difficult it might be for Trump to work out a compromise, Democratic leader Nancy Pelosi said yesterday that she would work to pass a funding bill similar to one passed by the Senate last month that doesn't include the $5 billion in wall funding (instead, they're standing by their offer of $1.3 billion) - though it's unlikely that the president will sign it, or that both chambers can muster the supermajority needed to override the president's veto. "Whatever it takes," Trump said. "I mean, we're gonna have a wall. We're gonna have safety. We need safety for our country." Senate and the House of Representatives were set to meet at 4 pm EST on the sixth day of the shutdown and resume debating ways to end it. That will include Senate consideration of a measure already approved by the Republican-controlled House that meets Trump’s wall-funding demand. In his latest tweet bashing Democrats for placing politics above security, Trump referenced the fact that the bureaucracy has a well-known Democratic bias by reminding Democrats that "most of the people not getting paid" are Democrats.

Trump threatens to close 'Southern Border entirely' if Dems don't fund wall - President Trump on Friday threatened to "close the Southern Border entirely" if Democrats do not agree to provide money to "finish" building a wall on the Mexican border. Trump made the threat as a partial government shutdown enters its seventh day with no end in sight. The shutdown began on Saturday after Democrats rejected demands from Trump that $5 billion be included for the wall in a measure to keep the government open. "We will be forced to close the Southern Border entirely if the Obstructionist Democrats do not give us the money to finish the Wall & also change the ridiculous immigration laws that our Country is saddled with," the president tweeted. He also criticized past presidents and Congresses over the nation's current immigration laws. "Hard to believe there was a Congress & President who would approve!" The tweet was one of several Trump wrote on Friday morning as the shutdown increasingly looked like it could drag well into 2019.

Border closure could cost billions -- Closing the U.S. border with Mexico, which President Trump threatened to do in a Friday tweet if Democrats do not approve funding for his wall, could cost the economy billions of dollars, say analysts who have studied the issue. “It would affect the U.S. economy massively and very negatively,” said Chris Wilson, deputy director at The Wilson Center’s Mexico Institute, and the co-author of a study on the border economy. “There’s about a billion dollars of commerce that crosses the border every single day, so every day it’s closed we’re losing out on hundreds of millions of dollars,” he added. Trump threatened to close down the border as part of a broader fight with Democrats over building a border wall and funding the government. “We will be forced to close the Southern Border entirely if the Obstructionist Democrats do not give us the money to finish the Wall & also change the ridiculous immigration laws that our Country is saddled with,” Trump wrote in the Friday tweet. Trump is demanding $5 billion to fund his wall in order to reopen the government, while Democrats say they will only support legislation that includes $1.6 for border security, including $1.3 billion for fencing. Mexico is America's third largest trade partner, and the two economies are deeply intertwined, with $558 billion in goods crossing the border in two-way trade last year alone. The Commerce Department estimated that in 2015, nearly 100,000 American jobs were supported by goods trade with Mexico. If the border were to be shut down, experts say, the consequences would be immediate. “The first thing you’d start to see is a spike in car prices and factories in trouble,”

Congress punts shutdown into new year, when Democrats will retake the House -  Congress effectively gave up Thursday on breaking the impasse over President Trump’s demands for border-wall funding, all but ensuring that the partial government shutdown will stretch into at least the start of the new year, when Democrats retake control of the House.  Trump retreated from public view, hurling insults at Democrats over Twitter, as the House and the Senate convened for just minutes before gaveling closed until next week. During the brief session in the House, Republicans shot down a Democratic attempt to vote on legislation to reopen the government.The halls of the Capitol were largely vacant, and leaders’ offices were shuttered. There was no sign that negotiations were taking place. Instead, the two sides traded public recriminations.Trump, in one of a series of Twitter attacks on Democrats, claimed that the dispute isn’t even about the wall he long claimed Mexico would pay for. “This is only about the Dems not letting Donald Trump & the Republicans have a win,” he wrote.Rep. Jim McGovern (Mass.), the Democrat who was denied on the House floor as he sought a vote to fund the government, said that it was urgent to end the shutdown, adding: “The only people who don’t seem to be in any hurry are the Republican leadership and the president.”   The country on Thursday entered the sixth day of a government shutdown that has closed a quarter of the federal government and furloughed an estimated 350,000 workers, sending them home at risk of losing paychecks during the holiday season. Barring a surprise resolution, it will become the second-longest shutdown of the decade when the new, divided Congress convenes next week to open its 116th session.

Nearly one week in, where things stand on the partial government shutdown - About a quarter of the federal government has been shut down for six days as of late Thursday, and neither party in Congress nor President Trump seems to see much of a reason to compromise, yet. Capitol Hill is a ghost town; for most of the day, newspapers stacked up outside the closed door to the suite belonging to Senate Majority Leader Mitch McConnell (R-Ky.). President Trump continued to fire off tweets signaling he was dug in on his demand for money to build a border wall. And Democrats tried a third time to get the House to approve a measure that the Senate approved unanimously last week, but which Trump rejected — because it lacked wall money. How long is this going to last? Into 2019, it’s all but certain. The House and Senate both confirmed on Thursday that they will have no votes this week. They’ve promised 24 hours’ notice to lawmakers dispersed for the holidays. Even if members of Congress were summoned before New Year’s Day, it’s unclear how many would show up. (Remember, Democrats won a net gain of 40 House seats in November to take the majority; some Republicans who lost or are retiring haven’t had good attendance records in the weeks since.) The new Congress will be sworn in on Jan. 3. Pomp and circumstance will take much of the day and then negotiations could begin. Because it takes a few days to get bills through both the House and Senate, reopening the shuttered government agencies in mid- to late January is possible. First, Congress has to have something both chambers can pass, and that Trump will sign. Marc Short, Trump’s former legislative affairs director, told CNN on Thursday that it could be a few weeks before a compromise is reached.

Shutdown delays many lawsuits involving government -- Administration lawyers are citing the partial government shutdown as they ask judges to delay some cases, including a lawsuit on whether President Trump has profited illegally while in office. Lawyers for the administration asked a judge on Wednesday to delay all future deadlines in a lawsuit in which plaintiffs accuse Trump of violating the Emoluments Clause of the Constitution by accepting payments from foreign governments through his Trump International Hotel in Washington, D.C. "Department of Justice [DOJ] attorneys and employees are prohibited from working, even on a voluntary basis, except in very limited circumstances, including ‘emergencies involving the safety of human life or the protection of property' " during shutdowns, DOJ attorneys told the court in a filing. "Undersigned counsel for the Department of Justice therefore requests a stay of all deadlines in this case until Congress restores funding to the Department." In other federal cases across the country, attorneys representing migrants accused of crossing the border illegally also found immigration hearings postponed without warning following a decision from the Department of Justice’s Executive Office of Immigration Review (EOIR). Law and Crime reports that Wednesday morning EOIR sent out a notice stating that cases "will be reset for a later date after funding resumes." "Immigration courts will issue an updated notice of hearing to respondents or, if applicable, respondents’ representatives of record for each reset hearing," the statement continued. On social media, immigration attorneys complained about the lack of notice given to themselves or their clients about the change in case scheduling due to the shutdown.

Federal workers thrown into crisis by US government shutdown - Those most directly victimized by the political play-acting between the Trump White House and the Democratic Party over Trump’s demand for a border wall, which has resulted in the third federal government shutdown this year, are the hundreds of thousands of federal workers who have been furloughed or forced to work without pay.  The partial shutdown, which began at 12:01 AM last Saturday, is entering its sixth day with no end in sight. National Public Radio reported Wednesday, “Sentiment on Capitol Hill is that the closure could continue through the middle of January…”  It is almost certain that the lockout of 380,000 workers and payless workdays for another 420,000 employees who are deemed “essential,” including the bulk of border agents and FBI personnel as well as airport baggage and passenger screeners, will continue into the New Year. This means the 800,000 federal employees affected (out of a total of 2.1 million) will miss at least one paycheck.This is under conditions where 80 percent of Americans live from paycheck to paycheck and household debt rose to a record $13.5 trillion by the third quarter of this year, as stagnant wages forced workers to go deeper into debt to pay their bills.  After previous shutdowns, measures were enacted providing retroactive pay to furloughed workers and those forced to work without pay, but there is no guarantee that will happen this time. Moreover, many thousands of janitors, food service workers and others who work at federal facilities are contract workers, who often have not been repaid for missed work due to shutdowns.

President Trump Orders Pay Freeze for Federal Employees While Many Work Without Getting Paid - President Donald Trump on Friday signed an executive order that freezes federal workers’ pay after the new year, according to CNN. Trump’s move, which is in keeping with a proposal that he announced earlier in 2018, comes amid a partial government shutdown which has left more than 700,000 federal employees furloughed or forced to work without pay. The planned pay raise was an across-the board 2.1 percent bump. Trump’s decision also slashes the “locality pay increase,” an annual paycheck adjustment based on where federal employees live, CNN notes. American troops are still poised to receive a 2.6 percent pay increase in 2019. While legislators could put a pay raise in a spending bill that would reopen the federal government, talks have stalled over Trump’s insistence on funding for a U.S.-Mexico border wall, per CNN.

Impact on workers, services spreads as US shutdown enters second week --The partial shutdown of the US federal government entered its second week on Saturday, with thousands of workers receiving short paychecks December 28 and 800,000 set to receive no pay at all when the next paycheck is due on January 11, 2019.Both the Trump White House and the Democratic leadership in Congress are completely indifferent to the consequences for federal employees and workers at myriad government subcontractors, as well as the public at large, as the impact of the shutdown is felt more widely following the Christmas holiday. Wednesday, December 26, was the first regular work day after the shutdown began at 12:01 a.m. Saturday morning, December 22. Workers with weekend work schedules including that Saturday were not paid for those hours in the checks they received Friday. A total of 800,000 workers in nine federal departments and numerous agencies will receive no pay January 11 if the shutdown continues—an outcome that is now widely predicted. The Office of Personnel Management (OPM) sent out draft letters Thursday to federal workers who have either been furloughed or designated as “essential employees” and ordered to work without pay. The letters urged workers to call their landlords if they are renters, or mortgage companies if they are buying a home, as well as other major creditors, and attempt to get their payment obligations deferred during the shutdown. “Speaking with your creditors will enable you to work out the details of any payment plan that you can later confirm with your letter,” the memo says. The text of one sample letter to be sent to a creditor begins: “I am a Federal employee who has recently been furloughed due to a lack of funding of my agency. Because of this, my income has been severely cut and I am unable to pay the entire cost of my monthly payments, along with my other expenses.” The OPM communication emphasizes that the federal agency will not take any action to influence creditors or provide legal assistance, instead advising workers to “consult with your personal attorney or contact your state or county bar association, many of which maintain lawyer referral services.” In other words, you’re on your own.

The US is on the edge of the economic precipice – Trump may push it over - Robert Reich - On Friday, Donald Trump said: “We are totally prepared for a very long shutdown.” It was one of his rare uses of the pronoun “we” instead of his preferred – and in this case far more appropriate – “I”.   The shutdown is indubitably his. Congress offered him a way to continue funding the government without the money to build his nonsensical wall along the Mexican border, but Trump caved in to the rabid rightwing media and refused. I was in Bill Clinton’s cabinet when Newt Gingrich pulled the plug on the federal government in 1996. It wasn’t a pretty picture. A long shutdown hurts millions of people who rely on government for services and paychecks. Trump’s shutdown also adds to growing worries about the economy. The stock market is on track for the worst December since the Great Depression. World markets have lost nearly $7tn in 2018, making it the worst year since the 2008 financial crisis. The shutdown is stoking fears that Trump could do something even more alarming. He might fail to authorize an increase in government borrowing before the federal debt reaches the current limit, which Congress extended to 2 March. A default by the US on its obligations would be more calamitous than a government shutdown. All this brings us closer to the economic precipice. It worsens America’s most fundamental economic problem. Economies depend first and foremost on spending. Otherwise, there’s no reason to produce goods and services. In the US, consumer spending constitutes about 70% of total demand. The rest comes from government and exports. Export markets are in trouble. Europe’s and China’s economies were already slowing before Trump’s trade wars added to the stresses. US government spending was hobbled even before the shutdown by a large debt, which Trump’s tax cut for big corporations and the wealthy has further enlarged. Don’t count on American consumers to come to the rescue. Most Americans have jobs, to be sure, but their pay has barely risen when adjusted for inflation. Many are worse off due to the escalating costs of housing, healthcare and education.  Even if the Fed weren’t raising interest rates – an unwise move under these circumstances – consumers would still be in trouble. Mortgage, auto and student-debt delinquencies are already mounting.The last time household debt was nearly this high was in 2007, just before the Great Recession.   Without wage growth, American workers can’t continue to buy without going into deeper debt. Unless they continue to buy, the economy can’t continue to move forward.

Senators Sneak Illegalization of Israel Boycott into Budget Bill - Real News Network, video & transcript -  While Senators Cardin and Portman are trying to sneak a last-minute amendment into the budget bill to make BDS illegal – violating free speech – 26 states are also moving to make boycotts of Israel illegal. We speak to IPS’s Phyllis Bennis about the anti-BDS efforts in the US

Our Poor, Defenseless Military Industrial Complex — It is a sign of our times that our media attempt to decipher future government policy by analyzing the president’s tweets, like some bizarre game of telephone. Throughout November, there was speculation of a coming reduction in military spending, and when Donald Trump took to Twitter (12/3/18) to describe the $716 billion budget as “crazy,” media took this as confirmation. The prospect of a cut to the military elicited a storm of condemnation across the media landscape. The National Review (11/17/18) wrote that “cutting the resources available to the Pentagon is a bad idea,” noting that, “for decades, America has short-changed defense” meaning “America’s ability to defend its allies, its partners, and its own vital interests is increasingly in doubt.” In an article headlined “Don’t Cut Military Spending Mr. President” (Wall Street Journal, 11/29/18),  Senate and House Armed Services committee chairs James Inhofe and Mac Thornberry claimed the military is in “crisis” after “inadequate budgets for nearly a decade,” and that “any cut in the Defense budget would be a senseless step backward.”More centrist outlets concurred. Forbes Magazine (11/26/18) began its article with the words, “The security and well-being of the United States are at greater risk than at any time in decades,” recommending a “sensible and consistent increase” to the budget. Bloomberg (19/11/18) recommended a consistent increase in military spending of 3 percent above inflation for five to ten years, while Reuters (12/4/18) noted the increased “risk” of a lower military budget.

Good Riddance to America’s Syria Policy - President Donald Trump’s sudden decision Wednesday to withdraw the roughly 2,000 U.S. troops stationed in Syria has set off an all-too-predictable debate between those who believe he is abandoning the sacred mantle of U.S. global leadership and those who believe that Syria is not a vital interest and that U.S. power should be deployed elsewhere or preserved for future contingencies. Hard-line hawks such as Republican Sen. Lindsey Graham and neoconservatives such as Max Boot were quick to denounce Trump’s decision, along with other establishment figures (and Trump critics) such as former CIA Director John Brennan. By contrast, libertarians on the right and noninterventionists on the left have embraced the move, despite their deep aversion to Trump himself and their concerns about most of his other policies. What’s really at stake in Syria? Is Trump following in former President Barack Obama’s footsteps (as David Sanger of the New York Times suggests), and continuing a “retreat” from America’s previous engagement in the region? Or has Trump simply ordered a prudent redeployment of a very small U.S. force, thereby ending an otherwise open-ended commitment whose strategic purpose was unclear? What broader lessons, if any, should be drawn from this latest episode?

Democrats and Republicans Unite in Panic Over Syria Pullout, Afghanistan Drawdown  — Open-ended war continuation has so much momentum in the US that President Trump’s announced pullout from Syria shocked the nation. Followed up the same week with a drawdown from Afghanistan, the mainstream is now completely apoplectic.On the left and right, comfort with the status quo was virtually uniform. The arguments behind condemning the drawdowns vary depending on the side of the aisle the commenter is on, but the message is uniform opposition to ending a war Congress never authorized in the first place.Conservative hawks are playing the usual fear-mongering about threats that have been ongoing since 2001, with suggestions that either not being in Syria, or being in Afghanistan but at a lower troop number, will lead to “the next 9/11.”Perma-hawk Sen. Lindsey Graham (R-SC) has never seen an escalation he didn’t like, and he is demanding Senate hearings on Trump’s troop level changes. It’s not clear such hearings will happen, however.In Afghanistan, this is hardly the first drawdown the US has done,  and despite Graham opposing them all, they’ve generally just happened. It’s also not clear the Senate has any say in how the Syrian War is being engaged in, or not engaged in, as the Senate has consistently refused to vote on the question of authorizing the US to be in Syria in the first place. Others were quick to call Trump’s policy in Syria “Obama-like,” even though Obama is the one who sent troops to Syria in the first place, and Trump campaigned in 2016, at least at times, on the idea of eventually withdrawing. Eventually withdrawing works as a campaign slogan, but clearly officials never expected it to happen as a real policy.

European powers condemn Trump’s withdrawal from Syria - The withdrawal of US troops from Syria announced by US president Donald Trump and the subsequent resignation of his defence secretary James Mattis have provoked a fierce response from European leaders. After the initial shock, the European ruling elites reacted overwhelmingly with calls for a more independent European foreign and defence policy. In Germany, in particular, leading politicians and the media are outdoing one another with demands for an even faster rearmament of the German army (Bundeswehr) and the establishment of a European military force. Trump's decision evidently came as a complete surprise to European governments. In their official statements they condemned the decision and urge a continuation of the war against the so-called Islamic State (IS) in Syria. “The decision of the White House is cause for concern,” reads an official statement of the German defence ministry. IS was “territorially under control, but by no means defeated.” One hopes that “the Americans will not withdraw in an overly hasty manner, but are aware of their responsibilities, not only to their own troops but also to others.” A similar response came from Germany’s foreign minister, Heiko Maas (Social Democratic Party), who campaigned for greater military and economic intervention by Germany in Arab countries during his visit to Iraq last week. “The abrupt change of course of the American side was surprising” and not only for Germany. There was “the danger that the consequences of this decision will harm the fight against IS and jeopardise the achievements made.” The fight against the IS will be decided “in the long run—militarily and also with civil means: Bringing about stability requires security and political order, which can continue into the future.” The governments in London and Paris also condemned Trump's plans and announced they would continue their military intervention in Syria. On Thursday a French foreign ministry spokesman stated: “The fight against terrorism is a priority for France. The fight against the global threat of Daesh [IS] is ongoing and a long-term commitment.” British defence minister Tobias Ellwood said he “strongly disagreed” with Trump's decision.

Endless War Has Been Normalized and Everyone Is Crazy --  Caitlin Johnstone -  — Since I last wrote about the bipartisan shrieking, hysterical reaction to Trump’s planned military withdrawal from Syria the other day, it hasn’t gotten better, it’s gotten worse. I’m having a hard time even picking out individual bits of the collective freakout from the political/media class to point at, because doing so would diminish the frenetic white noise of the paranoid, conspiratorial, fearmongering establishment reaction to the possibility of a few thousands troops being pulled back from a territory they were illegally occupying. Endless war and military expansionism has become so normalized in establishment thought that even a slight scale-down is treated as something abnormal and shocking. The talking heads of the corporate state media had been almost entirely ignoring the buildup of US troops in Syria and the operations they’ve been carrying out there, but as soon as the possibility of those troops leaving emerged, all the alarm bells started ringing. Endless war was considered so normal that nobody ever talked about it, then Trump tweeted he’s bringing the troops home, and now every armchair liberal in America who had no idea what a Kurd was until five minutes ago is suddenly an expert on Erdoğan and the YPG. Lindsey Graham, who has never met an unaccountable US military occupation he didn’t like, is now suddenly cheerleading for congressional oversight: not for sending troops into wars, but for pulling them out.  “I would urge my colleagues in the Senate and the House, call people from the administration and explain this policy,” Graham recently told reporters on Capitol Hill. “It is imperative Congress hold hearings on withdrawal decision in Syria — and potentially Afghanistan — to understand implications to our national security,” Graham tweeted today.  It is absolutely bat shit crazy that we feel normal about the most powerful military force in the history of civilization running around the world invading and occupying and bombing and killing, yet are made to feel weird about the possibility of any part of that ending. It is absolutely bat shit crazy that endless war is normalized while the possibility of peace and respecting national sovereignty to any extent is aggressively abnormalized. In a sane world the exact opposite would be true, but in our world this self-evident fact has been obscured. In a sane world anyone who tried to convince you that war is normal would be rejected and shunned, but in our world those people make six million dollars a year reading from a teleprompter on MSNBC. How did this happen to us? How did we get so crazy and confused?

Withdrawing US Troops From Syria Is the Right Thing to Do—Even if Trump Does It -- The United States Congress never declared war on Syria, yet leading members of Congress are now melting down about the decision of President Trump to withdraw US troops from that country. Florida Senator Marco Rubio, a Republican who serves on the Foreign Relations Committee, called the president’s move “a catastrophic decision” and announced that “We in this Congress and we as a nation will be dealing with the consequences for years to come.” Labeling the president’s decision “a huge Obama-like mistake,” Senator Lindsey Graham, a member of the Republican majority on the Senate Armed Services Committee, is suddenly all excited about the system of checks and balances that he has spent the last two years dismantling.  “I want a hearing. I want oversight,” announced Graham. “This is a Republican president who I try to work with and I like him but he can’t be immune from oversight.” Seriously? These guys want congressional oversight for the decision to withdraw troops from a conflict to which those troops were dispatched without the formal congressional authorization that is required by the Constitution? Rubio and Graham, onetime rivals of the president who have since emerged as two of Trump’s more ambitious apologists (especially when it comes to right-wing social engineering on the home front), have picked an odd moment at which to dissent.  There’s nothing wrong with being skeptical about Donald Trump’s motivations, especially for a move that has been most enthusiastically received by Russian President Vladimir Putin and the Turkish President Recep Tayyip Erdoğan. There’s nothing wrong with expressing concern about his timing and his chaotic and consistent approach. And there’s nothing wrong with sensing an ominous turn in the decision of Defense Secretary James Mattis to resign next years over his many differences with this president—including the Syria decision and an expected reduction in the US troop presence in Afghanistan. But concerns about how the man who is in charge of the executive branch must be balanced with an equal concern for the failure of the legislative branch to provide oversight before bombing missions are launched and interventions are ordered.

We Know How Trump's War Game Ends - Matt Taibbi - Nothing unites our political class like the threat of ending our never-ending war ... So we’re withdrawing troops from the Middle East.  GOOD!  What’s the War on Terror death count by now, a half-million? How much have we spent, $5 trillion? Five-and-a-half? For that cost, we’ve destabilized the region to the point of abject chaos, inspired millions of Muslims to hate us, and torn up the Geneva Convention and half the Constitution in pursuit of policies like torture, kidnapping, assassination-by-robot and warrantless detention. It will be difficult for each of us to even begin to part with our share of honor in those achievements. This must be why all those talking heads on TV are going crazy. Unless Donald Trump decides to reverse his decision to begin withdrawals from Syria and Afghanistan, cable news for the next few weeks is going to be one long Scanners marathon of exploding heads. “Maybe Trump will bring Republicans and Democrats together,” said Bill Kristol, on MSNBC, that “liberal” channel that somehow seems to be populated round the clock by ex-neocons and Pentagon dropouts. Trump’s decisions on Syria and Afghanistan will lay bare the real distinctions in American politics. Political power in this country is not divided between right and left, and not even between rich and poor. The real line is between a war party, and everyone else. This is why Kristol is probably right. The Democrats’ plan until now was probably to impeach Trump in the House using at minimum some material from the Michael Cohen case involving campaign-finance violations. That plan never had a chance to succeed in the Senate, but now, who knows? Troop withdrawals may push a collection of hawkish Republicans like Lindsey Graham, Marco Rubio, Ben Sasse and maybe even Mitch McConnell into another camp. The departure of Defense Secretary Jim Mattis — a standard-issue Pentagon toady who’s never met an unending failure of a military engagement he didn’t like and whose resignation letter is now being celebrated as inspirational literature on the order of the Gettysburg Address or a lost epic by Auden or Eliot — sounded an emergency bell for all these clowns. The letter by Mattis, Rubio said: “Makes it abundantly clear we are headed towards a series of grave policy errors which will endanger our nation, damage our alliances & empower our adversaries.”

Did Trump Put The Deep State On Notice With Syrian Withdrawal?  - The reason so many people continue to misread the actions of US President Donald Trump is because they tend to confuse him with the actions and behaviors of past US administrations, where indiscriminate death and destruction was America’s calling card around a shell-shocked planet. Although certainly erratic in his actions, Trump thus far has been predictable on one score: keeping the powers-that-be guessing. Last week, Donald Trump, acting unilaterally and within full power as Commander-in-Chief, derailed the Deep State’s plans for yet another disastrous regime change operation, announcing the withdrawal of US troops from Syria.In a video released via Twitter, the American leader announced that, “We have won against ISIS…and it’s time for our troops to come home.”In the not-so-distant past, such an announcement would have been greeted with cheers since it is generally agreed that war is - at least for those doing the grunt work - a very unpleasant enterprise. But the times have changed, together with the national agenda, and instead of applause filling the airwaves, the American people can hear nothing but the screeching of incensed hawks on both sides of the political aisle. That screeching is the sound of the Deep State expressing its deep displeasure and even pain. Trump withdrawing US troops from Syria strongly suggests that the real estate magnate from Manhattan just might be the real deal, a rabble-rousing populist delivered to the White House by an army of voters across an angry and divided country that are tired of traveling snake-oil salesmen deceiving them with empty promises. There are two schools of thought on Donald J. Trump. The first says that he is just another typical politician beholden to the puppet masters of the Establishment, dutifully carrying out orders from above, albeit with a bit more bluff and bluster than past frauds. After all, the argument goes, there is no possible way any individual could reach the Oval Office without the full support of the establishment – media, military, intelligence, etc. The other school of thought says that Trump is the real deal, one of those rare, irresistible forces of political nature who, by sheer exertion of will, character and – dare I say it – genius, ascends the misty mountaintops despite, or because of, the powerful forces aligned against him. In other words, the Trump phenomenon is an open window of opportunity to salvage what is left of the American political system, and the elite, fully aware as to what is at stake, is doing everything to destroy it.

Trump's Syria Withdrawal Is A Simple Case Of Foreign Policy Realism  - Patrick Cockburn --President Trump’s decision to withdraw US troops from Syria is being denounced by an impressive range of critics claiming that it is a surrender to Turkey, Russia, Syria and Iran – as well as a betrayal of the Kurds and a victory for Isis. The pullout may be one or all of these things, but above all it is a recognition of what is really happening on the ground in Syria and the Middle East in general.This point has not come across clearly enough because of the undiluted loathing for Trump among most of the American and British media. They act as a conduit for the views of diverse figures who condemn the withdrawal and include members of the imperially-minded foreign policy establishment in Washington and terrified Kurds living in north-east Syria who fear ethnic cleansing by an invading Turkish army.Opposition to Trump’s decision was supercharged by the resignation of Secretary of Defence Jim Mattis which came after he failed to persuade the president to rescind his order. Mattis does not mention Syria or Afghanistan in his letter of resignation, but he makes clear his disagreement with the general direction of Trump’s foreign policy in not confronting Russia and China and ignoring traditional allies and alliances.The resignation of Mattis has elicited predictable lamentations from commentators who treat his departure as if it was the equivalent of the Kaiser getting rid of Bismarck. The over-used description of Mattis as “the last of the adults in the room” is once again trotted out, though few examples of his adult behaviour are given aside from his wish – along with other supposed “adults” – to stay in Syria until various unobtainable objectives were achieved: the extinction of Iranian influence; the displacement of Bashar al-Assad; and the categorical defeat of Isis (are they really likely to sign surrender terms?). In other words, there was to be an open-ended US commitment with no attainable goals in an isolated and dangerous part of the world where it was already playing a losing game.

The World According to the 'Adults in the Room' - Leave it to liberals to pin their hopes on the oddest things. In particular, they seemed to find post-Trump solace in the strange combination of the two-year-old Mueller investigation and the good judgment of certain Trump appointees, the proverbial “adults in the room.” Remember that crew? It once included Secretary of State Rex Tillerson, the former ExxonMobil CEO, and a trio of active and retired generals -- so much for civilian control of the military -- including Secretary of Defense Jim Mattis, National Security Advisor H.R. McMaster, and White House Chief of Staff John Kelly. Until his sudden resignation, Mattis was (just barely) the last man standing. Still, for all these months, many Americans had counted on them to all but save the nation from an unpredictable president. They were the ones supposedly responsible for helming (or perhaps hemming in) the wayward ship of state when it came to foreign and national security policy. Too bad it was all such a fantasy. As Donald Trump wraps up his second year in the Oval Office, despite sudden moves in Syria and Afghanistan, the United States remains entrenched in a set of military interventions across significant parts of the world. Worse yet, what those adults guided the president toward was yet more bombing, the establishment of yet more bases, and the funding of yet more oversized Pentagon budgets. And here was the truly odd thing: every time The Donald tweeted negatively about any of those wars or uttered an offhand remark in opposition to the warfare state or the Pentagon budget, that triumvirate of generals and good old Rex went to work steering him back onto the well-worn track of Bush-Obama-style forever wars. All the while, a populace obsessed and distracted by the president’s camera-grabbing persona seemed hardly to notice that this country continued to exist in a state of perpetual war.

Mattis Marks End of the Global War on Terror - Senior officials never seem to resign over a president starting a war. Now Trump, the guy everyone expected to start new wars, has instead ended one and is on his way to wrapping up another.The New York Times, its journalists in mourning over the loss of a war, ask, “Who will protect America now?” Mattis the warrior-monk is juxtaposed with the flippant commander-in-Cheeto. The Times sees strategic disaster in an “abrupt and dangerous decision, detached from any broader strategic context or any public rationale, [that] sowed new uncertainty about America’s commitment to the Middle East, [and] its willingness to be a global leader.” “A major blunder,” tweeted Senator Marco Rubio. “If it isn’t reversed it will haunt…America for years to come.” Senator Lindsey Graham called for congressional hearings. And what is history if not irony? Rubio talks of haunting foreign policy decisions in Syria seemingly without knowledge of previous calamities in Iraq. Graham wants to hold hearings on quitting a war Congress never held hearings on authorizing.That’s all wrong. Jim Mattis’s resignation as defense secretary (and on Sunday, Brett McGurk, as special envoy to the coalition fighting ISIS) and Trump’s decision to withdraw from Syria and Afghanistan are indeed significant. But that’s because they mark the beginning of the end of the Global War on Terror (GWOT), the singular, tragic, bloody driver of American foreign policy for almost two decades. It’s 2018, soon to be 2019. Why does the U.S. have troops in Syria? To defeat the Islamic State? ISIS’s ability to hold ground and project power outside its immediate backyard was destroyed somewhere back in 2016 by an unholy coalition of American, Iranian, Russian, Syrian, Turkish, and Israeli forces in Iraq and Syria. Sure, there are terrorists who continue to set off bombs in ISIS’s name, but they are not controlled or directed out of Syria. They are most likely legal residents of the Western countries they attack, radicalized online or in local mosques. They are motivated by a philosophy, which cannot be destroyed on the ground in Syria. This is the fundamental failure of the GWOT: that you can’t blow up an idea.

Send Mad Dog Mattis to the Corporate Kennel — Outgoing Defense Secretary Gen. James “Mad Dog” Mattis was famous for quipping, “It’s fun to shoot some people.” It remains a supreme irony that Mattis was widely considered the only “adult in the room” in the Trump administration. Compared to whom? John Bolton, the rabid neocon serving as national security adviser? That would be the epitome of “condemning with faint praise.” With his ramrod-straight image, not to mention his warrior/scholar reputation extolled in the media, Mattis was able to disguise the reality that he was, as Col. Andrew Bacevich put it on Democracy Now! this morning, “totally unimaginative.” Meaning that Mattis was simply incapable of acknowledging the self-destructive, mindless nature of U.S. “endless war” in the Middle East, which candidate-Trump had correctly called “stupid.” In his resignation letter, Mattis also peddled the usual cant about the indispensable nation’s aggression being good for the world.  Mattis was an obstacle to Trump’s desire to pull troops out of Syria and Afghanistan (and remains in position to spike Trump’s orders). Granted, the abrupt way Trump announced his apparently one-man decision was equally stupid. But withdrawal of ground troops is supremely sane, and Mattis was and is a large problem. And, for good or ill, Trump — not Mattis — was elected president.

President Ends the Mattis Era at the Pentagon Two Months Early - President Donald Trump directed Defense Secretary James Mattis to depart his administration by Jan. 1, two months earlier than planned, and will replace him with the Pentagon’s second-ranking official Patrick Shanahan.  The abrupt move to cut short Mattis’s tenure was announced Sunday by Trump in a tweet. It follows waves of bipartisan criticism over the president’s sudden change of course on Syria and Afghanistan, which has fueled a sense of turmoil at the highest level of the president’s national security team.  Hours after Mattis announced his resignation to Trump in an Oval Office meeting on Thursday, he released to the public a scathing letter he had given the president that underscored what he said were their differences over the role of American leadership and alliances. In the letter, Mattis said he would stay on until Feb. 28 to help provide a bridge to the next defense chief. Trump initially praised the retired four-star Marine general as having served with “distinction,” but his view soured after reading Mattis’s letter, according to an administration official who described the Pentagon chief’s missive as inappropriate. It fell to Secretary of State Michael Pompeo to tell Mattis on Sunday morning that he had about one week to finish up at the Pentagon and make room for Shanahan, according to the official, who asked not to be identified.

Mattis Signs Order to Withdraw US Troops From Syria  — With just a week left before his new departure date, Defense Secretary James Mattis has signed the official order to withdraw US troops from Syria. Mattis had opposed the withdrawal, and it is seen as a major reason for his resignation.The withdrawal will see some 2,000 US troops removed from Syria, a plan announced last week. It is believed that Turkey will be replacing the US in that part of eastern Syria, though this will involve Turkey fighting the Kurdish YPG.Mattis followed the initial announcement up of his withdrawal with an announced plan to resign by the end of February. With reports of him criticizing Trump, he was subsequently ordered to leave at year’s end.  Trump has issued a further series of statements since then criticizing Mattis, saying Mattis did not see a problem with the US subsidizing the militaries of rich countries, or allowing them to “take total advantage of the US and our TAXPAYERS, on Trade.”

Fallout Of Trump's Syria Withdrawal - Why Erdogan Does Not Want To Invade »  The Associated Press has a new tic toc of Trump's decision to withdraw from Syria: Erdogan quickly put Trump on the defensive, reminding him that he had repeatedly said the only reason for U.S. troops to be in Syria was to defeat the Islamic State and that the group had been 99 percent defeated. “Why are you still there?” the second official said Erdogan asked Trump, telling him that the Turks could deal with the remaining IS militants....Erdogan’s point, Bolton was forced to admit, had been backed up by Mattis, Pompeo, U.S. special envoy for Syria Jim Jeffrey and special envoy for the anti-ISIS coalition Brett McGurk, who have said that IS retains only 1 percent of its territory, the officials said. ..Bolton stressed, however, that the entire national security team agreed that victory over IS had to be enduring, which means more than taking away its territory.Trump was not dissuaded, according to the officials, who said the president quickly capitulated by pledging to withdraw, shocking both Bolton and Erdogan. Trump did not "capitulate". He always wanted to pull the U.S. troops out of Syria. He said so many times. When he was finally given a chance to do so, he grabbed the opportunity. Erdogan though, was not ready for that: Caught off guard, Erdogan cautioned Trump against a hasty withdrawal, according to one official. While Turkey has made incursions into Syria in the past, it does not have the necessary forces mobilized on the border to move in and hold the large swaths of northeastern Syria where U.S. troops are positioned, the official said.   Erdogan had planned to only occupy a 10 miles deep strip along the Syrian-Turkish border. He would need some 50-100,000 troops to occupy all of east Syria northward of the Euphrates. It would be a hostile occupation among well armed Kurds who would oppose it and an Arab population that is not exactly friendly towards a neo-Ottoman Turkey. Erdogan knows this well. Today he announced to delay the planned invasion: “We have postponed our military operation against the east of the Euphrates river until we see on the ground the result of America’s decision to withdraw from Syria.”

Turkey Says US Agreed To Vacate Syrian Kurdish Enclave As Ground Attack Imminent - On Christmas Eve the White House announced in a statement that President Trump is open to a "potential meeting in the future" with Turkish President Recep Tayyip Erdogan. The statement noted Turkey's president had formally invited Trump to meet in 2019, though nothing specific or definite has been planned. This comes after it was revealed that in a Dec. 14 phone call between the two leaders Trump said the US was "done" with Syria. Trump's senior aides later revealed the decision for a "full" and "immediate" pullout of the some 2000+ American military personnel training and advising Kurdish-Arab SDF forces in north-east Syria was made after the phone call, and curiously the U.S. State Department approved the sale of $3.5 billion in patriot missiles to Turkey the day after.According to a senior administration official who spoke to CNN, Trump told Erdogan, "OK, it's all yours. We are done," in reference to Syria. The president sought assurances from Erdogan that Turkey would finish off remnant ISIS cells in eastern Syria, per the CNN report:A senior White House official said Erdogan gave Trump his "word" that Turkey would finish off ISIS."In the call on Friday, Erdogan said to the President, 'In fact, as your friend, I give you my word in this,'" the senior White House official said. While giving a speech last Friday Erdogan revealed some of the details of the call, saying, "During a conversation I had with Mr. Trump — he said 'ISIS, can you clear ISIS from this area?'" Erdogan recalled further: "We did it before, and we can again as long as we have logistic support from you... And so they began pulling out." Erdogan added: "Within the framework of the phone call we had with Mr. Trump, we have started preparing plans for operations to clear the ISIS elements still within Syria." Meanwhile a major Turkish Army and Turkish-backed rebel assault on the key Syrian Kurdish stronghold of Manbij is imminent. Turkey has been reported over the past days to be mustering large forces, including hundreds of vehicles and troops surrounding the northwestern Syrian town, around Manbij.

Ex-NATO Commander Wesley Clark To CNN- Did Erdogan Blackmail Trump? -Former NATO commander Wesley Clark told CNN Monday morning that Turkish President Recep Tayyip Erdogan night have blackmailed President Trump into withdrawing US forces from Syria. The retired U.S. Army general and former NATO Supreme Allied Commander posed the following explosive question during a CNN live interview on Monday: "You have to ask, why was the decision made? People around the world are asking this and our allies in the Middle East are asking, did Erdogan blackmail the president? Was there a payoff or something? What was it? Why would a guy make a decision like this?" This follows a broad Pentagon and deep state backlash in reaction to last week's sudden White House announcement of a "full" and "immediate" pullout of the some 2000+ American military personnel training and advising Kurdish-Arab SDF forces in north-east Syria (in October the commander of the Special Operations Joint Task Force Operation Inherent Resolve let slip that there were actually 4,000 troops in Syria, but quickly tried to walk it back). Quickly on the heels of the decision Trump's senior aides noted the decision was made after a phone call between Trump and Erdogan on December 14th, and curiously the U.S. State Department approved the sale of $3.5 billion in patriots missiles the day after.  Clark further slammed Trump for weakening relationships with allies around the world, including with NATO: “What the United States had going for it [was] the reputation of reliable consistency — that we were going to be there through thick and thin. The decision on the spur of the moment as the president made undercuts all of that,” Clark said.

From now on, Trump will try to use foreign policy to distract us. It won’t be pretty. The adults in the room are gone. Secretary of Defense Jim Mattis quit because he could no longer abide President Trump’s ally-bashing isolationism. With his departure, it’s clear that the only way to stay in the West Wing is to be a Trumpian toady, blindly repeating the president’s lies and uncritically enabling his worst impulses. (The jobs of Stephen Miller, Kellyanne Conway, Sarah Sanders and Trump’s family members are safe). Those people have virtually no knowledge of the rest of the world. Trump has surrounded himself with sycophants while systematically purging experts like Mattis who tried to serve the country. During the presidential campaign, Trump was asked who his main foreign policy advisers were. His answer then is our reality now: “I’m speaking with myself, number one, because I have a very good brain and I’ve said a lot of things.” Trump is advising Trump. We are entering a new and dangerous stage of Trump’s presidency. It will be defined by a reckless man who will happily burn down the international order or launch missiles to distract the country as he tries to save his own skin. History will likely judge the first two years of the Trump era as the comparatively normal and stable period. Unfortunately, it’s a perfect storm. Trump is already the most incurious and poorly informed president in modern history. But now he faces few constraints from advisers who understand the risks of rule-by-tweet. Trump is more likely to lash out than before, too. He surely understands that the legal cases closing in on him pose an existential threat not just to his presidency but to his post-presidency freedom, too. He also understands — or will soon realize — that his domestic agenda will be dead on arrival in the Democratic-controlled House come January.The next two years are certain to prove frustrating. And for a man obsessed with branding, “Donald the Lame Duck” isn’t a moniker that he will accept quietly. He will want to create news that buries his bad news. Given his domestic constraints, however, foreign policy will be the logical recourse.

The Biggest Critics Of Trump's Syria Withdrawal Fueled Rise Of ISIS - President Donald Trump’s announcement of an imminent withdrawal of US troops from northeastern Syria summoned a predictable paroxysm of outrage from Washington’s foreign policy establishment. Former Secretary of State and self-described “hair icon” Hillary Clinton perfectly distilled the bipartisan freakout into a single tweet, accusing Trump of “isolationism” and “playing into Russia and Iran’s hands.”Michelle Flournoy, the DC apparatchik who would have been Hillary’s Secretary of Defense, slammedthe pull-out as “foreign policy malpractice,” while Hillary’s successor at the State Department, John Kerry, threw bits of red meat to the Russiagate-crazed Democratic base by branding Trump’s decision “a Christmas gift to Putin.” From the halls of Congress to the K Street corridors of Gulf-funded think tanks, a chorus of protest proclaimed that removing US troops from Syria would simultaneously abet Iran and bring ISIS back from the grave.Yet few of those thundering condemnations of the president’s move seemed able to explain just why a few thousand U.S. troops had been deployed to the Syrian hinterlands in the first place. If the mission was to destroy ISIS, then why did ISIS rise in the first place? And why was the jihadist organization still festering right in the midst of the U.S. military occupation?  Too many critics of withdrawal had played central roles in the Syrian crisis to answer these questions honestly. They had either served as media cheerleaders for intervention, or crafted the policies aimed at collapsing Syria’s government that fueled the rise of ISIS. The Syrian catastrophe was their legacy, and they were out to defend it at any cost. During the run-up to the invasion of Iraq, Clinton, Kerry, and the rest of the Beltway blob lined up reflexively behind George W. Bush. The insurgency that followed the violent removal of Iraq’s Ba’athist government set the stage for the declaration of the first Islamic State by Abu Musab Zarqawi in 2006. Five years later, with near-total consent from Congress, Hillary enthusiastically presided over NATO’s assault on Libya, cackling with glee when she learned that the country’s longtime leader, Moammar Gaddafi, had been sodomized with a bayonet and shot to death by Islamist insurgents — “We came, we saw, he died!” It was not long before an Islamist Emirate was established in Gaddafi’s hometown of Sirte, while 31 flavors of jihadi militias festered in Tripoli and Benghazi.

Trump’s national security team is constant source of turnover - Defense Secretary James Mattis's decision to quit the Trump administration is the latest indication of a Cabinet constantly being shaken up. Mattis, who President Trump announced Sunday will leave office at the end of this year — ahead of the secretary's preferred exit — is just the latest person with a high-level national security or foreign policy position to be headed out of the president's orbit. Some have resigned, others have been ousted, and a few have moved to other posts within the administration. It will leave Trump with a different team in 2019. Here's a look at the top national security-related posts that have seen turnover under Trump.

Trump Scores, Breaks Generals’ 50-Year War Record - The mainstream media has attacked President Donald Trump’s decision to withdraw U.S. troops from Syria as impulsive, blindsiding his own national security team. But detailed, published accounts of the policy process over the course of the year tell a very different story. They show that senior national security officials and self-interested institutions have been playing a complicated political game for months aimed at keeping Trump from wavering on our indefinite presence on the ground in Syria.  The relationship between Trump and his national security team has been tense since the beginning of his administration. By mid-summer 2017, Defense Secretary James Mattis and Chairman of the Joint Chiefs General Joseph Dunford had become so alarmed at Trump’s negative responses to their briefings justifying global U.S. military deployments that they decided to do a formal briefing in “the tank,” used by the Joint Chiefs for meetings at the Pentagon.   But when Mattis and Dunford sang the praises of the “rules-based, international democratic order” that has “kept the peace for 70 years,” Trump simply shook his head in disbelief.  By the end of that year, however, Mattis, Dunford, and Secretary of State Mike Pompeo believed they’d succeeded in getting Trump to use U.S. troops not only to defeat Islamic State but to “stabilize” the entire northeast sector of Syria and balance Russian and Iranian-sponsored forces. Yet they ignored warning signs of Trump’s continuing displeasure with their vision of a more or less permanent American military presence in Syria.   Then in early April 2018, Trump’s impatience with his advisors on Syria boiled over into a major confrontation at a National Security Council meeting, where he ordered them unequivocally to accept a fundamentally different Syria deployment policy.  Mattis responded that an immediate withdrawal from Syria was impossible to carry out responsibly, would risk the return of Islamic State, and would play into the hands of Russia, Iran, and Turkey, whose interests ran counter to those of the United States.  Trump reportedly then relented and said they have could five or six months to destroy the Islamic State.  When his advisors reiterated that they didn’t think America could withdraw responsibly, Trump told them to “just get it done.”  Mattis and Dunford were consciously exploiting Trump’s defensiveness about a timeline to press ahead with their own strategy unless and until Trump publicly called them on it. That is what finally happened some weeks after Trump’s six month deadline had passed. The claim by Trump advisors that they were taken by surprise was indeed disingenuous. What happened last week was that Trump followed up on the clear policy he had laid down in April.

Trump makes first visit to US troops in harm’s way (AP) — In an unannounced trip to Iraq on Wednesday, President Donald Trump staunchly defended his decision to withdraw U.S. forces from neighboring Syria despite a drumbeat of criticism from military officials and allies who don’t think the job fighting Islamic State militants there is over. Trump, making his first presidential visit to troops in a troubled region, said it’s because the U.S. military had all but eliminated IS-controlled territory in both Iraq and Syria that he decided to withdraw 2,000 forces from Syria. He said the decision to leave Syria showed America’s renewed stature on the world stage and his quest to put “America first.” “We’re no longer the suckers, folks,” Trump told U.S. servicemen and women at al-Asad Airbase in western Iraq, about 100 miles or 60 kilometers west of Baghdad. “We’re respected again as a nation.” The decision to pull U.S. forces from Syria, however, stunned national security advisers and U.S. allies and prompted the resignations of Defense Secretary Jim Mattis, who was not on the trip, and the U.S. envoy to the coalition fighting the Islamic extremist group. The militant group, also known as ISIS, has lost nearly all its territory in Iraq and Syria but is still seen as a threat.

Trump cites concern for first lady’s safety during surprise trip to Iraq - President Trump said Wednesday that he was concerned for the safety of first lady Melania Trump when making an unannounced trip to visit U.S. troops in Iraq for the Christmas holiday. “I had concerns about the institution of the presidency. Not for myself personally. I had concerns for the first lady, I will tell you,” Trump told reporters shortly after landing at the Al Asad Airbase west of Baghdad. “But if you would have [seen] what we had to go through in the darkened plane with all window[s] closed with no light anywhere. Pitch black. I’ve been on many airplanes. All types and shapes and sizes,” Trump added. “So did I have a concern? Yes, I had a concern.” The president and first lady departed Washington late Tuesday to make a previously unannounced trip to visit American forces in Iraq, where Trump met with military leaders and delivered remarks to roughly 100 U.S. troops involved in combat operations in Iraq and Syria. Details of the trip were kept under wraps until Wednesday afternoon. Wednesday's trip was Trump’s first to a combat zone in his nearly two years in the White House. He had previously faced scrutiny from critics for not visiting a combat zone since becoming president. "I want to come and pay my respects most importantly to the great soldiers, great troopers we have here," Trump said Wednesday. It has been routine practice for presidents to visit combat zones around the holidays, and Trump appeared to concede Wednesday that his personal safety was one thing that kept him from visiting combat zones.

President and First Lady make SECOND stop to visit U.S. troops in Germany on way back from surprise trip to Iraq where Trump told cheering soldiers: ‘We’re no longer the world’s suckers’ and ‘The U.S. cannot continue to be the policeman of the world’ President Trump and Melania made their second unannounced visit to US troops abroad around 8pm ET as they visited troops on the German base of Ramstein. The First Couple were on their way back from meeting troops in Iraq when Air Force One stopped to refuel and meet service members carrying MAGA hats who had waited up until around 4am local time. Trump and Melania landed safely back in the US in the early hours of Thursday morning as they waved to the crowds following their visit. Upon his return, the President tweeted: 'Just returned from visiting our troops in Iraq and Germany. One thing is certain, we have incredible people representing our Country - people that know how to win!' It came hours after President Trump's first visit to a war zone with his three-hour trip to the Al Asad airbase, west of Baghdad. The president delivered a speech to the rank and file, took selfies with the troops and met with military leaders in Iraq. He did not meet with the country's prime minister but spoke to him over the phone.

The Memo: Trump puts isolationism at center stage - President Trump’s embrace of isolationism has been a hallmark of his presidency. It is now at the center of a foreign policy that will remove troops from Syria and cut the U.S. presence in Afghanistan in half. The president’s “America first” instincts and his willingness to make public his differences with military commanders differentiate him from recent presidents and from many members of his own party. During his visit with American troops stationed in Iraq on Wednesday, he emphasized his distrust of his own generals — who he characterized as repeatedly asking for more time to defeat the Islamic State in Iraq and Syria (ISIS). It was an unusual message for a commander in chief to give during an inaugural visit to troops in a combat zone after nearly two years in office. “They said again, recently, ‘Can we have more time?’ ” Trump said of his generals. “I said, ‘Nope. You can’t have any more time. You’ve had enough time. We’ve knocked them out,’ ” Trump told the soldiers in Iraq, according to pool reports. The choice of words was particularly notable given two resignations in the last week that have rocked the Pentagon: Defense Secretary James Mattis and the administration’s special envoy to the anti-ISIS coalition, Brett McGurk. Mattis resigned in a letter that laid bare his differences with Trump over foreign policy, and that led to sighs of worry from Republicans on Capitol Hill. McGurk’s departure came as a direct response to Trump’s decision to remove all troops from Syria, which the president justified in a Dec. 19 tweet that said ISIS had been defeated in the country.

 Bring the Troops Home, But Also Stop the Bombing - As our nation debates the merits of President Donald Trump's call for withdrawing U.S. troops from Syria and Afghanistan, absent from the debate is the more pernicious aspect of U.S. military involvement overseas: its air wars.  By our calculations, in this "war on terror," the U.S. and its allies have dropped a staggering 291,880 bombs and missiles on other countries—and that is just a minimum number of confirmed strikes. As we contemplate that overwhelming number, let's keep in mind that these strikes represent lives snuffed out, people maimed for life, families torn apart, homes and infrastructure demolished, taxpayer money squandered, and resentment that only engenders more violence. After the horrific crimes of September 11, 2001, Congress was quick to pass a sweeping Authorization for the Use of Military Force (AUMF). While three presidents have claimed that the 2001 AUMF legally justifies these endless wars as a response to the crimes of 9/11, no serious reading of the authorization could interpret it that way.   As former Nuremberg prosecutor Benjamin Ferencz told NPR a week after 9/11: "It is never a legitimate response to punish people who are not responsible for the wrong done... We must make a distinction between punishing the guilty and punishing others. If you simply retaliate en masse by bombing Afghanistan, let us say, or the Taliban, you will kill many people who don't believe in what has happened, who don't approve of what has happened." And yet here we are, 17 years later, mired in wars in which we are bombing ever more "nations, organizations, (and) persons" who had absolutely nothing to do with the crimes committed on September 11. We don't have a single real or lasting success we can point to in 17 years of war in 7 countries and "counter-insurgency" operations in a dozen more. Every country the U.S. has attacked or invaded remains trapped in intractable violence and chaos. Please look at this chart, and take a few moments to reflect on the mass destruction it represents:

Why Saudi Arabia is waging a war on Rashida Tlaib and Ilhan Omar - The record number of Americans who turned out to vote in the midterm elections last November delivered a sweeping repudiation of President Donald Trump, the Republican Party and the racist xenophobia that is constitutive of Trumpism. Two Muslim-American women rode this blue wave to Congress, Rashida Tlaib, a Palestinian-American, and Ilhan Omar, a Somali refugee. The success of Tlaib and Omar, meanwhile, were only the tip of the iceberg of what was an unprecedented political mobilisation of Muslim-Americans and Arab-Americans in the 2018 election season.   The vast majority of these new candidates ran explicitly against Trump, presenting themselves as perfect exemplars of what America could be, simply by being everything that Trump hates: Persons of colour, non-Christian, and immigrants or their descendants. The electoral victories of Tlaib and Omar were widely celebrated in the US as evidence that there continued to be a strong, even dominant, current of American political life that refused to abandon America’s promise as a pluralistic democracy in which all citizens, regardless or race, religion or ethnicity, are equal.    Even before the election results were complete, an Egyptian columnist in the pro-government daily al-Ahram was warning of an alliance between the "Muslim Brotherhood International" and the Democratic Party to bring down Trump.   Pressing claims that even the far right website Breitbart would be ashamed to make, the columnist stated that the Muslim Brotherhood already controlled several American states, including:“Florida, California, Texas, Chicago [sic], and Michigan”, and allocated $50bn to support the election campaign of its allies in the US.  About a month after the historical election results, another journalist published a piece in Al Arabiya English with the priceless headline: “Details of Calls to Attack Trump by 'US Muslim Sisters' allied to Brotherhood." Like al-Ahram's piece, it is the work of a fabulist, promoting international conspiracies to explain the success of anti-Trump Arab-American and Muslim-American politicians. The open embrace of American Islamophobia by anti-democratic Arab political elites reveals their deep affinities with the authoritarian right’s suspicion of anything that smacks of "globalism". Of course, the reactionary nature of these Arab elites is light-years beyond their Islamophobic compatriots in the West, who, after all, do endorse democracy for the privileged members of their societies.   That states like the United Arab Emirates and the Kingdom of Saudi Arabia are hitching their fates to Trump displays a shocking ignorance of the realities of American politics, and the depth of Trump’s toxicity. Unless they move quickly to shed their relationship with Trump, they will very soon be permanently branded with that same toxicity.

The Other Gulf State That Is Manipulating U.S. Mideast Policy - Saudi Arabia is not the only country cozying up to the Trump Administration and seeking to manipulate U.S. foreign policy. There is another key player in this ongoing struggle for influence, one that is closely linked to Saudi Arabia—the United Arab Emirates. Both Saudi Arabia and the UAE have friendly ties with the U.S. government, safeguarded by political contributions and the promise of high-priced arms deals. And much like Saudi Arabia, the UAE’s campaign for influence, largely centered on public relations, has permeated Washington. According to documents filed with the Department of Justice, firms registered under the UAE spent nearly $20 million lobbying on behalf of Emirati interests in 2017 alone. Propagating a narrative that demonizes Qatar, supports the war in Yemen, and portrays Emirati leadership as a progressive U.S. ally lies at the crux of the UAE’S crusade to capture Washington.  In order to push their agenda, the UAE has employed vast swaths of lobbyists and designed an intensive PR campaign, with the UAE’s ambassador Yousef Al Otaiba acting as its principle architect. For years, Otaiba has cultivated a prominent reputation in Washington and has closely aligned himself with the current administration, specifically President Trump’s senior advisor (and son in-law) Jared Kushner.  Kushner has become Otaiba’s mainline to the White House, both men keeping in consistent contact with one another. Jodi Kantor of the New York Times aptly describes their relationship as that of a student and teacher, “with Mr. Kushner playing the student, asking Mr. Otaiba for his impressions of shifting forces in the Middle East, Syria, Iran, extremism, relationships.” And just as Kushner is Otaiba’s link to the White House, Otaiba has proven to be Kushner’s link to the Emirati crown prince Mohammed bin Zayed (MBZ). Reports indicate that Kushner even spoke to MBZ—as well as Saudi crown prince Mohammad bin Salman (MBS)—through WhatsApp in a clear breach of government norms, which has raised security concerns among senior administration officials.

A Reuters Report on Iran That Fueled US Diatribes - When U.S. Secretary of State Mike Pompeo gave speeches about mega corruption in Iran this year, he did not cite a Reuters’ 2013 article or give credit to its three reporters; Steve Stecklow, Babak Dehghanpisheh and Yeganeh Torbati.  Instead he presented it as the kind of specialized knowledge that only a high-ranking official such as himself might be in a position to reveal. “Not many people know this,” Pompeo told an audience gathered last July at the Ronald Reagan Presidential Foundation and Library in Simi Valley, California, “but the Ayatollah Khamenei has his own personal, off-the-books hedge fund called the Setad, worth $95 billion, with a B.” Pompeo went on to tell his audience that Khamenei’s wealth via Setad was untaxed, ill-gotten, and used as a “slush fund” for the Islamic Revolutionary Guard Corps.  But a comparison between the 5-year-old Reuters article and Pompeo’s speech, which was lauded by The Wall Street Journal’s editorial board as “truth telling,” shows a type of symbiosis that could only help cast a backward glow over President Donald Trump’s move, last summer, to reimpose all sanctions lifted by the Obama’s administration’s historic nuclear deal with Iran.  The imprint of the Reuters article on Pompeo’s speech was obvious in an anecdote about the travails of an elderly woman living in Europe. “The ayatollah fills his coffers by devouring whatever he wants,” Pompeo said. “In 2013 the Setad’s agents banished an 82-year-old Baha’i woman from her apartment and confiscated the property after a long campaign of harassment. Seizing land from religious minorities and political rivals is just another day at the office for this juggernaut that has interests in everything from real estate to telecoms to ostrich farming.”  The 82-year-old Baha’i woman living in Europe clearly matches Pari Vahdat-e-Hagh, a woman the Reuters team put at the very start of their extensive, three-part investigation.

  U.S. court orders North Korea to pay $501 million in U.S. student’s death (Reuters) - A U.S. court on Monday ordered Pyongyang to pay $501 million in damages for the torture and death of U.S. college student Otto Warmbier, who died in 2017 shortly after being released from a North Korea prison. Warmbier’s parents sued North Korea in April over their son’s death. The 22-year-old student died days after he was returned to the United States in a coma, and an Ohio coroner said the cause of death was lack of oxygen and blood to the brain. “North Korea is liable for the torture, hostage taking, and extrajudicial killing of Otto Warmbier, and the injuries to his mother and father, Fred and Cindy Warmbier,” Judge Beryl Howell of the U.S. District Court for the District of Columbia said in her ruling. Pyongyang has blamed botulism and ingestion of a sleeping pill for Warmbier’s death and dismissed torture claims. Fred and Cindy Warmbier said in a statement they had promised their son justice. “We are thankful that the United States has a fair and open judicial system so that the world can see that the Kim regime is legally and morally responsible for Otto’s death,” the Warmbiers said.

Sabrina Meng Wanzhou’s arrest is just a taste of the US-China battle to come -- The United States and Canada are countries in which the judicial system operates independently from any political interference and where all court cases, including ones with international dimensions, are dealt with in strict compliance with laws and conventions. Or so legend has it. In fact, the recent incarceration and the subsequent bail hearing of Sabrina Meng Wanzhou, the chief financial officer of Huawei Technologies, makes it seem that politics does play a role in the two countries’ judicial affairs, coming as it does amid a spiralling trade war and escalating tensions between the United States and China. Meng, the daughter of Huawei founder Ren Zhengfei and the heir apparent of the Chinese telecoms giant, was arrested by Canadian authorities at the request of the American government on suspicion of fraud related to Washington’s sanctions on Iran. Beijing, for certain, sees Meng’s arrest as politically inspired. It has responded with tough political and diplomatic actions, unsurprisingly given Huawei is seen as the pride of China and a symbol of the country’s rise.  Meanwhile, US President Donald Trump’s statement that he was willing to intervene in the case if it helped achieve “the largest trade deal ever made” only further convinced most people that “hostage diplomacy” was in play. Indeed, whatever the result of Meng’s case, Beijing has ample reason to believe the US action against her is one of Trump’s tactics to force Chinese concessions in trade talks and undermine China’s ability to compete with the US in the field of technology.

Wilbur Ross Tells FT All Options For US Auto Tariffs Are Still On The Table - Shrugging off Steven Mnuchin's alarmingly unprompted reassurances that liquidity in the US banking system remains strong - which sent a ripple of unease across European markets during Monday's holiday-shortened session - US stock futures have amazingly rebounded following one of the worst weeks for stocks since the financial crisis. But apparently, Trump Administration officials just can't seem to get out of their own way. Case in point: As if the market needed one more thing to worry about, Commerce Secretary Wilbur Ross reminded investors during an interview with the Financial Times published Monday that there's still "a lot of flexibility" in deciding what form President Trump's planned tariffs on cars, trucks and car parts entering the US might take. Indeed, all options are on the table, Ross said. Back in the spring, Trump ordered the Commerce Department to launch an investigation into the national security implications of foreign car imports under Section 301 of the Trade Act of 1974 - the same statute used by the administration to justify tariffs on aluminum and steel. Last month, reports that the Commerce Department was preparing an early release of its final report (they have until Feb. 17), potentially opening the door to immediately slapping tariffs on all cars and parts entering the US except from Canada and Mexico, rattled markets - though European officials quickly stepped in to assure investors that no meetings between EU trade officials and the US to discuss such tariffs had taken place. Though the US ultimately backed off the early release of the report.

 China Heads Into Trade Talks Bracing for More U.S. Demands - China enters trade talks said to begin early next month in Beijing having made concerted efforts to end the standoff with the U.S., and also unsure it’s done enough. Since Presidents Xi Jinping and Donald Trump came to a temporary truce almost a month ago, China’s removed a retaliatory duty on U.S. automobiles and is drafting a law to prevent forced technology transfers. It’s also slashed import tariffs on more than 700 products and began buying U.S. crude oil, liquefied natural gas and soybeans again. Officials have been in constant contact with the U.S. to try to determine what else is needed to move things forward in January, according to people familiar with the talks. It appears to Chinese officials that the U.S. itself isn’t clear on what it wants, said the people, who asked not to be named because the negotiations are private. China wants the U.S. to remove the punitive tariffs that have been imposed and not add new ones, but suspects the U.S. will ask for more before it agrees to do that, the people said. Officials are working on alternative retaliatory measures in case the talks collapse, they said. “After the meeting in Argentina, the incentive for China to speed up opening up and reform has increased,” said Lu Xiang, an expert in bilateral ties at the state-run Chinese Academy of Social Sciences in Beijing. “The key obstacle to a deal is whether the U.S. demands are a bottomless pit.” The newly announced measures are a response to the “appropriate U.S. concerns,” he said, using the term in the Chinese truce statement which referred to some of the issues the U.S. has raised. China’s flurry of policy announcements since the Argentina meeting between Trump and Xi happened despite Canada’s arrest of a top Huawei Technologies executive at the U.S.’s request, and despite Xi delivering a defiant speech declaring China wouldn’t be dictated to by anybody. China underscored its determination to implement the agreement by including it as a key goal in an important annual policy statement published last week.

 Trump Considering Order To Ban Purchases Of Huawei, ZTE Equipment - After the US government elicited outrage from the Chinese due to its attempts to convince its allies to bar the use of equipment made by telecoms supplier Huawei, President Trump is apparently weighing whether to take another dramatic antagonistic step that could further complicate trade negotiations less than two weeks before a US delegation is slated to head to Beijing. According to Reuters, the White House is reportedly considering an executive order that would ban US companies from using equipment made by Huawei and ZTE, claiming that both companies work "at the behest of the US government" and that their equipment could be used to spy on US citizens. The order would invoke the International Emergency Economic Powers Act to order the Department of Commerce to prohibit the purchase of equipment from telecoms manufacturers that could threaten national security. Though it wouldn't explicitly name Huawei or ZTE, the ban would arise from Commerce's interpretation. The IEEA allows the president the authority to regulate commerce in the face of a national emergency. Back in August, Congress passed and Trump signed a bill banning the use of ZTE and Huawei equipment by the US government and government contractors. The executive order has reportedly been under consideration for eight months, since around the time that the US nearly blocked US companies from selling parts to ZTE, which sparked a mini-diplomatic crisis, which ended with a deal allowing ZTE to survive, but pay a large fine.  The feud between the US and Huawei has obviously been escalating in recent months as the US has embarked on an "extraordinary influence campaign" to convince its allies to ban equipment made by both companies, and the arrest of Huawei CFO Meng Wanzhou in Canada has also blossomed into a diplomatic crisis of sorts. But the real reason issuing a ban on both companies' equipment is seen as a priority is because Huawei's lead in the race to build 5G technology is making its products more appealing to global telecoms providers. Rural telecoms providers in the US - those with fewer than 100,000 subscribers - are particularly reliant on equipment made by both companies. They've expressed concerns that a ban would require them to rip out and scrap their equipment at an immense cost.

China is finding new ways to hurt U.S. businesses - As the trade war escalated between the United States and China this spring, American cherry exporters in Washington state unexpectedly found their customs processing slowed at the Chinese border. ..Unannounced, increased inspections began in late May and in early June. The extra time the inspections took backed up shipments into mainland China, leading to some shipments rotting on the docks and forcing exporters to divert their produce so it could be sold before it spoiled. Then, almost as suddenly as they were put in place, the increased inspections stopped, said Keith Hu, director of international operations at the Northwest Cherry Growers. “They were able to find issues with cherries, even though there was nothing abnormal, nothing different from years prior,” Hu said. “Shipments were held up. Some for a day, some for three days, some for five days.” Data on such disruptions is hard to come by. But more than one in four businesses that responded to a recent U.S.-China Business Council survey said they have been subject to increased scrutiny from Chinese regulators as a result of the increasing trade tensions. Those companies also ranked political risk associated with the U.S.-China relationship as their top challenge for the first time since the survey began 10 years ago. Disparate American goods such as oranges, logs, calf skins and even Lincoln vehicles have encountered heightened customs reviews at Chinese ports this year. Multinational companies already accustomed to the sometimes difficult environment have reported an uptick in the number of hurdles they must jump through in order to do business in the increasingly lucrative market.

China says it has made plans with the US for a face-to-face trade meeting in January -- China and the United States have made plans for face-to-face consultations over trade in January, the Chinese commerce ministry said on Thursday, as the world's two biggest economies advanced efforts to resolve a months-long trade war. Consultations through "intensive" telephone calls will continue in the meantime, Gao Feng, spokesman at the commerce ministry, told reporters, adding that talks have been steadily moving forward despite the Christmas break in the United States. "Even as the U.S side is in the Christmas holiday period, China and U.S. economic and trade teams have been in close communication, and the consultations are progressing in an orderly manner as scheduled," Gao said, when asked about progress on trade negotiations. Gao did not comment directly when asked to confirm a media report on a U.S. trade delegation visit scheduled for the week of Jan. 7. "The two sides have indeed made specific arrangements for face-to-face consultations in January in addition to continuing intensive telephone consultations," he said, without elaborating. U.S. and Chinese officials have spoken by phone in recent weeks, but a meeting next month would be the first in-person talks since U.S. President Donald Trump met his Chinese counterpart, Xi Jinping, in Buenos Aires on Dec. 1. Trump and Xi agreed to stop escalating tit-for-tat tariffs that have disrupted the flow of hundreds of billions of dollars of goods between the two nations. The two leaders also agreed to launch new talks while the United States delayed a planned Jan. 1 tariff increase until March. In response, China has resumed purchases of U.S. soybeans for the first time in six months, even though hefty tariffs on U.S. cargoes remain in place. China has also said it will suspend additional tariffs on U.S.-made vehicles and auto parts for three months starting Jan. 1, adding that it hopes both sides can speed up negotiations to remove all additional tariffs on each other's goods. A U.S. trade team will travel to Beijing the week of Jan. 7 to hold talks with Chinese officials, Bloomberg reported on Wednesday, citing two people familiar with the matter.

A 'Goodwill Gesture'- China Lifts Ban On US Rice Imports Ahead Of Trade Talks - In what appears to be another symbolic gesture with little real-world potential to reduce the gaping US-China trade deficit, Beijing has opened the Chinese economy to imports of US-grown rice for the first time ever, Reuters reported, citing a statement published to the website of China's customs authority. Like China's move to roll back retaliatory auto tariffs - which President Trump heralded as vindication of his meeting with Chinese President Xi Jinping - the lifting of Beijing's de facto ban on US rice imports likely won't lead to a surge in rice imports from the US: China already sources most of its rice from Asia, where it can be bought much more cheaply. But the decision, which is the culmination of years of talks, according to Reuters, is tantamount to China fulfilling its promise to further open US trade.It wasn’t immediately clear how much rice China, which sources rice imports from within Asia, might seek to buy from the United States. But the move, which comes after years of talks on the matter, follows pledges from China’s commerce ministry of further U.S. trade openings earlier this week.[...]Officials at a government-affiliated think-tank in Beijing said the price of U.S. rice is not competitive, compared with imports from South Asia, and said the move to formally permit import should be interpreted as a goodwill gesture.As of Thursday, rice imports from the US will be allowed in China - as long as they meet inspection standards. As of Dec. 27, imports of brown rice, polished rice and crushed rice from the United States are now permitted, as long as cargoes meet China’s inspection standards and are registered with the United States Department of Agriculture.

The Battle Over NAFTA 2.0 Has Just Begun - Lori Wallach - After over a year of renegotiations of the North American Free Trade Agreement by the United States, Canada, and Mexico, the NAFTA 2.0 text signed on November 30 revealed improvements for which progressives have long campaigned, the addition of damaging terms that we oppose, and critical unfinished business.1 It’s no surprise that the administrations of Donald Trump, Justin Trudeau, and Enrique Peña Nieto failed to deliver a transformational replacement for the corporate-rigged trade-pact model that NAFTA hatched in the early 1990s. But if progressives secure swift and certain enforcement of the agreement’s new labor standards—and succeed in incorporating some other key improvements—the final package that will head to Congress in 2019 could end some of NAFTA’s continuing, serious damage to people across North America. And that would be a big deal.2 The status quo, with NAFTA helping corporations outsource more US jobs to Mexico every week after nearly 1 million have been government-certified as lost to NAFTA, is not acceptable. Nor are the ongoing Investor-State Dispute Settlement (ISDS) attacks on environmental and health safeguards, or the corporate exploitation of Mexican workers, who today face $1.50-an-hour manufacturing wages that are unlivable and lower in real terms than before NAFTA. Neither withdrawing from NAFTA nor maintaining NAFTA 1.0 will raise wages in Mexico, which must be done to stop the offshoring that transforms middle-class jobs into sweatshop jobs.3  This explains why congressional progressives, unions, groups like Public Citizen, and others who have fought decades of bad trade deals did not respond to the signing ceremony with an opposition campaign, but rather with demands for further improvements. Thanks to the midterm elections, only a version that can win significant Democratic support will get through Congress. That creates an opportunity we must seize. The signing of the NAFTA 2.0 text was just one step in a long process. Phase two of the battle to replace NAFTA has begun.4 Trump’s claim to have created a totally different kind of agreement is a deceitful sales pitch, similar to those used for decades by US presidents to hawk previous trade deals. No one should refer to NAFTA 2.0 by using Trump’s preferred “US-Mexico-Canada Agreement” (USMCA) rebrand.5

 Trump’s Trade War Comes With an Unexpected Bonus: More Trade - A few days before Christmas, the container ship “SM Shanghai” was steaming toward California’s Port of Long Beach. Just ahead and coming to the end of an 11-day journey from China, the “Ever Lucent” was headed for the nearby Port of Los Angeles, where the “Thomas Jefferson” was preparing to sail in the opposite direction for Xiamen.The global economy, in other words, was chugging along nicely on one of the world’s busiest sea lanes. Trade wars be damned.In fact, President Donald Trump’s assault on globalization has had a paradoxical effect on world trade flows. A rush to get ahead of new and higher tariffs, particularly on U.S. imports from China, has motivated retailers and other American companies to increase orders, which has helped boost volumes at the country’s ports.“The warehouse and distribution centers are full in southern California,” said Phillip Sanfield, a Port of Los Angeles spokesman. “We’re experiencing some logistical issues at the San Pedro ports just because there’s so much cargo in play here.”  After an active 2017 when the Port of Los Angeles moved the equivalent of 9.3 million shipping containers -- an all-time high for the facility -- a busy December has put it on track to report another record year in 2018, according to Sanfield. Traffic at the Port of Long Beach increased more than 7.3 percent through November, on pace to surpass the record 7.5 million containers it handled last year.There are many other signs that international commerce did just fine in 2018, thanks in no small part to a busy trade year in America, the world’s biggest buyer of goods.Despite Trump’s efforts to reduce his country’s appetite for foreign-made products, the U.S. imported more goods and services in value terms than ever in October, the latest Commerce Department data show. U.S. exports were near the all-time monthly record set in May.

US-China Trade Paradoxically Explodes Amid Trump Trade War - Washington and Beijing may be locked in an ongoing trade war, but you wouldn't know it looking at America's busiest ports, according to Bloomberg's Shawn Donnan.  A few days before Christmas, the container ship “SM Shanghai” was steaming toward California’s Port of Long Beach. Just ahead and coming to the end of an 11-day journey from China, the “Ever Lucent” was headed for the nearby Port of Los Angeles, where the “Thomas Jefferson” was preparing to sail in the opposite direction for Xiamen.The global economy, in other words, was chugging along nicely on one of the world’s busiest sea lanes. Trade wars be damned. –Bloomberg   Donnan notes that "President Donald Trump’s assault on globalization has had a paradoxical effect on world trade flows," suggesting that retail and other industries are rushing to get ahead higher tariffs down the road - "particularly on U.S. imports from China."  "The warehouse and distribution centers are full in southern California," according to Port of Los Angeles spokesman Phillip Sanfield. "We’re experiencing some logistical issues at the San Pedro ports just because there’s so much cargo in play here." Following a record 2017 when the Port of Los Angeles processed the equivalent of 9.3 million shipping containers, December has put the port back on track to report another record-breaking year in 2018 according to Sanfield. Meanwhile, traffic at the Port of Long Beach increased over 7.3% through November - which, like the Los Angeles port, would put it on record to surpass last year's record at 7.5 million containers.  That said, the explosion in trade could be interpreted as Trump's tariff war backfiring when it comes to reducing the US appetite for China-produced goods - as the the US imported more goods and services than ever in October based on value terms according to the latest data from the Commerce Department. That said, US exports also approached an all-time monthly record set in May.

 Imminent Collapse - US Farmers Prepare For Massive Losses In Japan -  On December 30, Tokyo will begin reducing tariffs and easing quotas on products sold by US' largest agriculture competitors -- including Australia, Canada, Chile, and New Zealand, as part of the new 11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP), the Wall Street Journal reported.  President Trump had removed the US from the TPP last year, alleging it would have crippled American manufacturers by minimizing duties on US imports of automobiles.  Tokyo will slash duties to other countries on Feb 1 by implementing the European Union-Japan Economic Partnership Agreement (EPA) that would offer the 28-country bloc’s agricultural products to Japan, a move that could dramatically reduce US market share into the island nation in the Pacific Ocean.    Japan, unlike China, is not playing the retaliatory tariff game with the Trump administration. Instead, they are accelerating a market-opening agenda with more than three dozen countries (ex. the US).  The new free trade push by Japan “threatens to cut into US market share and depress profits for US agriculture exporters by granting preferential access to…internal competitors,” a May report by the Agriculture Departments warned. At a recent public hearing, a coalition of US agriculture trade groups sounded a similar alarm. “Japan is our largest, most reliable and valuable market,” buying about half its imported wheat from Americans, said Vince Peterson, head of US Wheat Associates. “But today we face imminent collapse,” he said, as competitors will start taking American market share and sell their products at an effective tariff rate nearly 10% below those facing US producers.Peterson told government officials the US “has not sold one kernel of wheat” to China for several months because of the trade war.  The US Meat Export Federation estimated that Japan’s new trade agreements (ex. the US) could severely damage American beef and pork exports, with expected losses of more than $1 billion within five years.  The Trump administration has said they aim to correct that "emerging disparity by laying the groundwork to negotiate America’s own free-trade agreement with Japan," However, those negotiations with Tokyo are not scheduled to start until mid-January -- after both the Pacific and Europe trade deals take effect.

What Comes After US Hegemony? - Faced with the decline of American hegemony, what are the United States’ trade and security partners in the Asia-Pacific doing to protect their respective national interests? To answer this question, we look closely at Australia, Japan, and Vietnam. Each of these was a signatory to the Trans-Pacific Partnership (TPP) trade agreement, from which the United States withdrew in 2017.  They have all subsequently gone on to sign the successor to TPP, the Comprehensive Trade Partnership Agreement (CPTPP), also known as TPP-11. While each has its unique political and economic history, the three countries share security and economic concerns, as well as reasons to be worried by the inconsistencies in American foreign policy. Motivated by rational self-interest, each country is proactively taking steps to protect its own position in the regional and international system.

Thanks to the regulatory relic known as the Jones Act…..Shipping something to Hawaii from the West Coast can easily cost 2-3 times the cost of sending the same cargo to Australia. That cost is reflected in almost everything Hawaii residents buy in brick and mortar stores.That was the case for the Kauai-based Koloa Rum Company. Koloa Rum’s President and CEO Bob Gunter reported that when he needed to send a container of rum to Australia, he needed to first send it to Los Angeles. The Hawaii to L.A. leg cost him $5,900. From Los Angeles to Sydney, Australia cost him only $1,900.That’s what we learn from the Hawaii Public Radio article and radio segment “The Hidden Cost of Shipping Your Holiday Package.”   You might be a protectionist …. if you think that the Jones Act increases American prosperity by protecting the domestic shipping industry from foreign competition and thereby raises shipping costs for American firms above market rates by a factor of 2-3 times.

What’s ‘Immoral’ About Caring for America’s Poor First? -- Congressional Democrats are butting heads with President Donald Trump over his demand for $5 billion to continue building a wall along the southern border. Rep. Nancy Pelosi vows not one dollar will go for a wall. She calls the idea of a wall "immoral." Not building the wall is what's truly immoral. Allowing destitute, uneducated people with limited job prospects to flood across the southern border into the United States forces taxpayers here to toil longer and pay more in taxes to feed and house them, accommodate their children in public schools and pay for their medical care. Americans are already maxed out caring for our own needy, including the homeless sprawled on city streets. This nation has 40 million in poverty, 1 out of every 8 people and 1 out of every 6 children. That's far higher than in Canada or Great Britain. Our country doesn't need to import more poverty. For the same reason, Trump is also proposing that only immigrants who can support themselves without government handouts be granted green cards and permanent status. Mayor Bill de Blasio blasted Trump's proposal as "un-American." New York Governor Andrew Cuomo said, "This plan is ugly, it is cruel." Really? Why should Americans be compelled to provide a safety net for throngs pressing to get into the country?

Denouncing 7-Year-Old's Death, UN Rights Expert Demands US Halt Child Detentions - A day after the 7-year-old girl's small body returned to Guatemala in a coffin, a United Nations human rights expert demanded an independent probe into the death of Jakelin Caal while she was in the custody of U.S. Customs and Border Protection (CBP)—and made a broader call for the U.S. to stop its international law-violating practice of detaining children on the basis of their migratory status. "The U.S. authorities must ensure that an in-depth, independent investigation of the death of Jakelin Ameí Caal is conducted," Felipe González Morales, U.N. Special Rapporteur on the human rights of migrants, said in a statement Monday. Caal died earlier this month in Texas right after after being detained along with her father and over 160 other migrants at a border crossing in New Mexico. Her death prompted outrage, with the ACLU calling it a "tragedy" that "represents the worst possible outcome when children are held in inhumane conditions." "Access to justice for her relatives should be granted, including but not limited to having legal representation in the proceedings in a language they understand well," González Morales said, and called on the U.S. to prevent similar tragedies. Moreover, he added, "As repeatedly stated by a series of U.N. human rights bodies, detention of children based on their migratory status is a violation of international law." González Morales also expressed hope for being able to conduct an official visit to the United States, as that "would allow me to get first-hand, direct information about the situation of migrant children, especially on those who are being held in detention," and would "allow me to present my recommendations to the U.S. government to fulfill its international commitments to respect and protect the human rights of all migrants." Given the tragedy, González Morales's office also sent a formal complaint to Secretary of State Mike Pompeo, the Guardian reported Monday. Among the U.N. expert's specfic points of inquiry is finding out whether Caal was held in a kind of cell known as an "hielera" or ice box.

8-Year-Old Dies on Christmas Morning in US Border Patrol Custody  — An eight-year-old Guatemalan boy died in the custody of U.S. Customs and Border Protection (CBP) shortly after midnight on Christmas Day, the second death of a migrant child detained by the agency this month alone. According to the Associated Press: The boy showed “signs of potential illness” Monday and was taken with his father to a hospital in Alamogordo, New Mexico, the agency said. There, he was diagnosed with a cold and a fever, was given prescriptions for amoxicillin and Ibuprofen and released Monday afternoon after being held 90 minutes for observation, the agency said. The boy was returned to the hospital Monday evening with nausea and vomiting and died there just hours later, CBP said. The agency said the cause of the boy’s death has not been determined and that it has notified the Department of Homeland Security’s inspector general and the Guatemalan government. The death of the eight-year-old Guatemalan boy, whose name has yet to be made public, comes just over a week after seven-year-old Jakelin Ameí Caal—also from Guatemala—died of “dehydration and shock” while in CBP custody. Caal’s death sparked outrage at home and abroad, and Felipe González Morales—United Nations special rapporteur on the human rights of migrants—demanded an independent probe and an immediate halt to the detention of immigrant children.

Residents defend immigrant workers after ICE raids Indiana restaurants, arrests five - Immigration and Customs Enforcement (ICE) agents arrested five workers at three Mexican restaurants in Northern Indiana during coordinated raids on December 13. The action was the latest in the Trump administration’s war against immigrant workers. It was the second raid in the region in 2018 after nine people were arrested in Elkhart, Fort Wayne and South Bend in March.  At Mexico Lindo restaurant in Portage, three workers were taken away while an additional two were taken from a second location in Knox. Another raid took place in East Chicago, however no details have been made public. Among the four men and one woman abducted by federal agents was a single mother of three, a father, whose son witnessed the raid, and restaurant owner Jesus Cabrera.  Last week, over 100 people attended a rally in Portage in support of those who had been detained. The father of one worker told the Chicago Tribune of the effect this has had on his family and grandchildren, “It has affected my granddaughters. They are asking for their dad. We can’t give them answers because of this illegal injustice they have done. All they want is to have their family together. This is not right. We have to stop this.” At least 3,500 workers were arrested in raids in 2018 according to a review of recent ICE press releases. The actual number is higher as this only includes cases the agency felt were worth bragging about. Most notably absent was a raid at an Ohio meatpacking plant in which 146 workers were arrested.

Federal agents release more than 1,000 immigrants in El Paso, Texas - Immigration and Customs Enforcement (ICE) agents have released more than 1,000 immigrants in various locations in downtown El Paso, Texas over the last four days, in what appears to be a politically motivated effort to flood the city with impoverished people needing emergency shelter, food and medical care, including many hundreds of children as part of family groups, as well as pregnant women.  The mass releases began on Sunday night, December 23, when 200 Central American immigrants were taken to a Greyhound bus station in downtown El Paso, where many of them attempted to board buses, although they had no money or tickets. ICE made no provision for food or shelter for the immigrants, although night-time temperatures in the city were around 40 degrees Fahrenheit. Eventually four buses were brought in to house the migrants for the night, giving them a heated shelter. On Monday, another 100 immigrants were released, then on Christmas Day nearly 200 more in downtown El Paso. Finally, on Wednesday, more than 500 immigrants were released, although this release was coordinated with charities and shelters in the El Paso area which were prepared to receive the influx. The first three releases were unannounced, and aid agencies had to respond on an emergency basis. One aid official told the press, “About half of them were children, and some parents had more than one child with them.” The official said the migrants wanted “a place where they can sleep, make phone calls to their contacts or relatives in other parts of the country. Most of these folks are en route to another part of the country. They are not staying here in El Paso. They want to go to their sponsor or family members in other parts of the country. They just need a place for the night.” ICE issued a statement in response to an inquiry by CNN about the releases, blaming “decades of inaction by Congress” and unfavorable court rulings that made it impossible for it to continue detaining all the Central American immigrants now crossing the US-Mexico border to seek asylum. An executive branch agency would only engage in such extraordinary public criticism of the legislative and judicial branches of the government if authorized by the White House.

Massive New Migrant Caravan To Leave Honduras; Overloaded El Paso Faces Imminent Crisis - A new, larger migrant caravan is set to leave Honduras on Jan. 15 according to Spanish-language media and migrant rights advocates.  "They say they are even bigger and stronger than the last caravan," according to Irma Garrido of migrant advocacy group Reactiva Tijuana Foundation.  News of the new caravan comes as thousands of Central American migrants from an October caravan remain stranded at various cities along the US-Mexico border as they face wait times of up to several months for the United States to process their asylum requests. What's more, if migrants cannot justify their asylum claims, they may be denied. Coordinators who helped direct the migrants on the 2,000-mile trek with bullhorns, arranging for buses and giving advice along the way, have mostly vanished. Many of the migrants say they feel abandoned and unsure where to turn next. Some are ready to return home.Garrido said this new, larger caravan will probably be joined by more people in El Salvador and in Guatemala, but she said they don’t plan on coming straight to the Tijuana-San Diego border, where resources are already stretched nearly to a breaking point. -LA Times"They will stay in the south of Mexico in Chiapas and Oaxaca. Their aim is to request work there," said Garrido. Meanwhile, an incoming congresswoman of the Texas border city of El Paso has warned of an imminent "crisis" as the city scrambles to accommodate at least 1,600 migrants dumped by federal authorities over the last several days. The issue is that the entire town is packed to the brim with fans attending the Sun Bowl college football game El Paso has hosted since 1935.  "We're facing a real crisis coming up … to find places for all of these (migrant) families," said Democratic representative-elect Veronica Escobar.

In Defeat for Trump's Xenophobic Agenda, Supreme Court Rejects 'Immoral' Anti-Asylum Policy - In what immigrant rights groups celebrated as a significant victory over President Donald Trump's xenophobic agenda, the U.S. Supreme Court ruled on Friday that the White House cannot automatically deny asylum to those who don't enter the country through an "official" border crossing. "The Trump administration can no longer discriminate against asylum-seekers based on how they entered the country," RAICES, the largest immigration legal services non-profit in Texas, wrote on Twitter. "This government's policy of clogging ports of entry and then punishing those who cross outside is immoral. We're glad it's beginning to crumble."  In its 5-4 ruling, the Supreme Court upheld a lower court decision that blocked the Trump administration's asylum rule from taking effect. Conservative Justice John Roberts joined the court's four liberal justices in denying the Trump administration's plea to allow the policy to move forward, while Justice Brett Kavanaugh sided with the White House.As the ACLU noted in its legal brief to the Supreme Court, those "fleeing persecution" in their home countries are "desperate" and often have "no understanding of the option to apply for asylum at a port, are forced by gangs and others to enter away from designated ports of entry, or cannot realistically travel to such ports because of danger and distance."While noting that the legal battle over the Trump administration's policy is far from over, Bloomberg observed that "the high court rebuff of Trump's request to block the order suggests skepticism about the administration's legal case."  "The disputed Trump policy, designed to apply for 90 days, would effectively require all asylum claims to be made at official ports of entry," Bloomberg noted. "Federal immigration law says people may apply for asylum 'whether or not at a designated port of arrival' and 'irrespective of such alien's status.'"

A Supreme Court Divided. On the Right -  The Supreme Court’s docket-setting process, by which it selects less than 1 percent of the appeals that reach it every year, is a black box. The justices almost never explain at the time why they agree to hear one appeal or turn down another. But in the case of the efforts by Louisiana and Kansas to “defund” Planned Parenthood — shorthand for disqualifying a health care provider from reimbursement eligibility under a state-administered Medicaid program for low-income individuals — the court’s three most conservative justices did us a great favor. In a dissenting opinion that can only be described as snarky, Justices Clarence Thomas, Samuel Alito and Neil Gorsuch did more than permit some light to enter the black box. They trained a spotlight on the court’s most private proceeding, the weekly closed-door conference at which the justices, unaccompanied by law clerks or secretaries, meet to set the country’s legal agenda. Based on the court’s online docket, we could deduce during the run-up to last week’s action that the cases were controversial inside the court. The Louisiana petition, Gee v. Planned Parenthood of Gulf Coast Inc., went to the conference eight times since the current term began. It was nine times for the Kansas petition, Andersen v. Planned Parenthood of Kansas and Mid-Missouri. In a typical case, one or two conferences suffice for the justices to decide what to do. Extended review typically means one of three things: three or fewer justices want to hear the case and are trying to find the necessary fourth vote; those justices have given up on that effort and are working on a dissent to be circulated internally and then published to the world; or the court as a whole regards the case as so easy that it can be decided in conference without full briefing and oral argument. In the Planned Parenthood cases, it’s safe to assume that the third explanation was never on the table. What we most likely had was a failed search for a fourth vote that turned into the revealing dissent.  Who might have provided a fourth vote?  Following the court’s normal practice, Chief Justice Roberts and Justice Kavanaugh kept to themselves their reasons for not voting to hear the cases. It was Justice Thomas, in a dissent joined by Justices Alito and Gorsuch, who broke the norm by accusing his two colleagues of “abdicating our judicial duty.”’

Dems push for increased scrutiny of Trump’s court picks - A staunch ally of President Trump will soon wield the gavel on the Senate Judiciary Committee, and Democrats are worried they will have little power to act as the first line of defense when the panel considers judicial nominees. Sen. Lindsey Graham (R-S.C.), the committee’s most senior Republican member, is expected to take over as chairman after lawmakers convene for the 116th Congress in early January. He will succeed Chairman Chuck Grassley (R-Iowa), who has made judicial confirmations the panel's main focus during his tenure, drawing criticism from opponents for how quickly he moved nominees to the floor.Democrats on the committee such as Sens. Mazie Hirono (Hawaii) and Sheldon Whitehouse (R.I.) want to see changes under Graham's leadership, chief among them the restoration of what's known as the blue-slip rule.The slips are actual blue pieces of paper that senators are asked to submit if they’re OK with a judicial nominee from their state who is under consideration by the Judiciary Committee. Declining to submit a blue slip has traditionally been a way for senators to object to a nominee.Grassley, however, viewed blue slips as a courtesy, not a hard-and-fast rule, and refused to allow them to be used as a Democratic tool to block Trump’s circuit court nominees.While he was less likely to hold a hearing if blue slips were missing for district court nominees, Grassley forged ahead with confirmations of appeals court judges for whom blue slips were not returned.“The reason for this distinction is simple: Circuit courts cover multiple states,” he said in a March op-ed in Law360. “There is less reason to defer to a single senator’s opinion on a circuit court nominee when the judge’s decisions will impact residents of multiple states.”Hirono told The Hill she hopes Graham will go back to adhering to the blue slip process. “That’s one procedural thing that I would want him to adhere to,” she said.

Acting AG incorrectly claimed 'Academic All-American' honors on resume: report - Matthew Whitaker, the acting attorney general, incorrectly claimed on his resume and on government documents that he was named an Academic All-American while he played football at the University of Iowa, The Wall Street Journal reported Wednesday. Whitaker claimed the Academic All-American status in his biography on the website of the law firm where he used to work, as well as on a résumé he sent in 2014 to a patent-marketing firm, according to the newspaper. The Journal reported that the résumé was also included in documents that the Federal Trade Commission released in November and that the claim was included in a 2009 press release from the Department of Justice. Whitaker, whom President Trump named acting attorney general last month, also made the claim when he applied to be a judge in Iowa in 2010, according to the newspaper. Whitaker was a tight end for the University of Iowa's football team from 1990 to 1992. A spokeswoman for the College Sports Information Directors of America told the Journal that the organization doesn't have a record of Whitaker as an Academic All-American. The spokeswoman, Barb Kowal, said Whitaker appeared to have been awarded a lower honor, an All-District honor. Additionally, his name isn't on a list of past Academic All-Americans on the organization's website. Student athletes must have at least a 3.3 cumulative grade point average to be eligible to be nominated as an Academic All-American. 

Trump Administration Bans Bump Stocks, Says They’re Equal to Machine Guns - Saying bump stocks are similar to machine guns, the Trump administration is banning the firearm accessory that came to national attention last October after a man in Las Vegas unleashed murderous gunfire on concertgoers. The new regulation requires bump stock owners to turn them in to federal law enforcement or destroy them within 90 days after the ban is published in the Federal Register.  “The Department of Justice is amending the regulations of the Bureau of Alcohol, Tobacco, Firearms, and Explosives to clarify that bump-stock-type devices-meaning ‘bump fire’ stocks, slide-fire devices, and devices with certain similar characteristics-are ‘machine guns’,” the order reads. “Current possessors of these devices will be required to destroy the devices or abandon them at an ATF office prior to the effective date of the rule.”Bump stocks make it easier to rapidly fire the trigger of a semi-automatic weapon. President Donald Trump said he intended to outlaw the devices in the wake of the Las Vegas shooting, which killed 59 people and injured 851 more—422 by gunfire.The National Rifle Association hasn’t publicly commented on the regulatory order. Exactly how many bump stocks are in people’s hands is unknown. After the shooting, prices for the accessory skyrocketed in anticipation of a ban.

Trump’s prison plan to release thousands of inmates -- Sweeping changes to the federal prison system will allow tens of thousands of federal inmates to be released from prison over the next 10 years, but there’s little data about who or where they are now.The legislation signed by President Donald Trump on Friday makes big changes to the treatment and rehabilitation of low-level federal prisoners.Qualifying Inmates — mostly people who have committed low-level drug offenses — can earn credits to be released from prison early and serve the remainder of their sentence in home confinement or halfway houses if they participate in the plan’s anti-recidivism programs such as job training, education and faith-based classes.The Bureau of Prisons and Congressional Budget Office, which analyzed the plan for cost, estimated roughly 53,000 prisoners could be released over the next 10 years. There are roughly 180,000 current federal inmates, according to the Bureau of Prisons, which declined to comment on which facilities would be impacted.

Trump administration tightens work requirements for food stamps - The Trump Administration announced Thursday that it will impose tougher work requirements on adults seeking food assistance. The US Department of Agriculture (USDA) unveiled the proposed rule, which will strip food stamp benefits from hundreds of thousands of poor workers. The proposal came on the same day that a five-year farm bill, from which a similar work requirement rule had been removed, headed to the president’s desk for his signature.  Trump, along with Republicans in Congress, had pushed for the bill to mandate stricter work requirements or tightened eligibility criteria for the Supplemental Nutrition Assistance Program (SNAP), more commonly known as food stamps. Failing to obtain this through legislation, Trump is seeking to achieve the same ends by means of administrative action. The proposed rule will make it harder for states to issue waivers for people who say they cannot feed themselves under current SNAP work requirements. The program already requires able-bodied adults without dependents to have jobs. Assistance is granted only for three months every three years unless a recipient is working or attends a training program 20 hours a week. However, states can waive the work requirement in areas with at least 10 percent unemployment or if there is an insufficient number of available jobs. According to the Center on Budget & Policy Priorities, an estimated 755,000 individuals aged 18 to 49 will lose SNAP benefits over the next three years if the USDA rule is implemented. The liberal think tank says the proposal will cut the number of areas with waivers by three-quarters. One-third of Americans live in areas where work requirements are waived.

Republican tax cut made me richer and kept working Americans stagnant - One year ago, President Trump signed the Tax Cuts and Jobs Act into law, promising a “bill for the middle class and a bill for jobs” that would be “a tremendous thing for the American people.” Corporate CEOs and wealthy shareholders may be celebrating, but middle-class Americans are still waiting for their transformative tax cut. Congressional Republicans attempted to sell the bill as a deficit-neutral, pro-growth tax cut that would help every American, but from the moment details of the bill were announced, it was clear that the Republican overhaul of our tax code was designed with “the 1 percent,” not the middle class, in mind. Most of the bill’s $1.9 trillion in tax cuts targeted corporations and wealthy Americans such as me, leaving little more than crumbs for most working Americans — and the bill’s results of the last year have lived up to that initial analysis.Trump claimed that American families would receive an average of almost $4,000 in tax cuts per year. That might be true if you averaged together the millions of families getting almost no tax cut and the few wealthy Americans who are getting hundreds of thousands of dollars in cuts, but that’s poor consolation for the middle-class families receiving an average of just $323 per year. While the direct results of the bill have been underwhelming for poor and middle-class American families, the larger economic effects are even more disappointing. To the surprise of absolutely no one with even a cursory understanding of trickle-down economics, these massive tax cuts for corporations and the wealthy have done little over the past year to help poor and middle-class Americans. Promised new jobs and higher wages, working Americans instead have watched some corporations spend nearly a trillion dollars on stock buybacks that almost exclusively benefit executives and wealthy shareholders, all while wage growth has remained flat.

The Chart That Broke Our Brains - The New York Times recently published a piece that explored why many of the people who depend on government assistance end up voting for Republicans, the one political party which is not only determined to cut all forms of government assistance but is openly hostile to the concept of government itself (at least the parts of government that don’t kill, imprison, or spy on people). The article offered several important insights, although we will add a few caveats to it here, but mostly the article caught our attention because of a very strange trendline on a chart.  The plot compares county level Trump vote share and the county level percentage of personal income that comes from government transfers, which includes things like Social Security, Medicare and other public assistance for medical care, the Earned Income Tax Credit (EITC), nutrition assistance, disability insurance, unemployment insurance, and a few others.  The nearly vertical trendline looked so strange to us that we decided to replicate the plot, and found a very weak correlation between these two variables, which disappears entirely when Social Security and Medicare are excluded from the tally of government transfers (see chart). This prompted a fair amount of discussion on how it was possible for NYT to have generated that trendline in the first place. The trendline seemed so strange that most of us missed the simple explanation that the trendline was plotted with the x and y axes reversed, which apparently is an easy mistake to make.  However, neither the corrected trendline, nor our alternate regression excluding Social Security and Medicare disprove the central thesis of the piece. Far from it in fact! Excluding Social Security and Medicare from our definition of government transfers basically eliminates the county level correlation between Trump share and transfers. However, the reason for this is that Social Security and Medicare are a strong proxy for age. Age is well established as a strong predictor for voting for Republicans, who in turn are hell bent on cutting the Social Security and Medicare that keeps seniors out of poverty and provides them with the medical care they need.

Two Medicare for All Plans: HR676 and S1804 - Lambert Strether -  Moving Medicare eligibility down to zero was Ted Kennedy’s approach, before Obama did whatever he did to Teddy’s brain. Perhaps this was the approach O’Rourke would have taken in the Medicare bill he promised to introduce, and didn’t. Again, if O’Rourke has drafted a Medicare for All bill, it’s still resting comfortably in his desk drawer.  Now one policy issue:  O’Rourke hasn’t signed on to HR 676, the Medicare-for-All bill that’s attracted 121 Democratic cosponsors, because as he explained at a town hall six months ago, the bill allows for Medicare reimbursement to only nonprofit health care providers, not private providers.  Be that as it may, watching O’Rourke do fakies on health care does show us that the differences between HR676 and S1804 — especially around co-pays/deductibles and reimbursements — will form one flashpoint in the battle between centrist forces like the New Democrats and the left on health care policy. (This is distinct from the usual liberal bait-and-switch and brand confusion tactics last employed in 2009.) And since this really isn’t a post about O’Rourke, emblematic though he is as a figure, I will now turn to the two bills, and compare and contrast them. Here they are.

• 1) HR676: Expanded & Improved Medicare For All Act, sponsored for a long time by John Conyers, and in the last Congress by Keith Ellison. We don’t know who will sponsor the bill in the next Congress. Here is a list of the HR676 co-sponsors, so you can check to see if your Representative supports the bill, and call and hassle them if they don’t:  124 of 194 Represenatives (64%) supported HR676 in the last Congress. There are 40 new Democrat representatives in the the next Congress. If none of them support HR676, the percentage will drop to 53%.
• 2) S1804, Medicare for All Act of 2017, sponsored by Bernie Sanders. Here are the co-sponsors; I’ve underlined the mooted Presidential candidates, though that will change”  The Democrats lost two Senators, so if now new Senators sign on, support will increase to 34%.

Now lets turn to the good news about both bills.  There’s a lot of good news in both bills — both really would improve the health care system dramatically,making health care a human right in addition to saving a boatload of money — but I’m going to single out one. From a handy comparison chart produced by the Western Washington chapter of PNHP (PDF):

Congress votes to make open government data the default in the United States - On December 21, 2018, the United States House of Representatives voted to enact H.R. 4174, the Foundations for Evidence-Based Policymaking Act of 2017, in a historic win for open government in the United States of America. The Open, Public, Electronic, and Necessary Government Data Act (AKA the OPEN Government Data Act) is about to become law as a result. This codifies two canonical principles for democracy in the 21st century:

1. public information should be open by default to the public in a machine-readable format, where such publication doesn’t harm privacy or security
2. federal agencies should use evidence when they make public policy

For the full backstory on what’s in the bill and how it came to pass, read yesterday’s feature. It’s worth noting that last minute objection did result in two amendments that the Senate had to act upon. Thankfully, on Saturday, December 22nd, the Senate acted, passing the resolution required to send the bill onwards to the president’s desk.

Congress approves act that opens US government data to the public -- Congress has passed a bill that could make it easier for you to access public data released by the government. The House approved the OPEN Government Data Act on Saturday, while all eyes were on the shutdown, as part of a larger bill to support evidence-based policymaking. It requires that federal agencies must publish any "non-sensitive" info in a "machine-readable" format (essentially in a way that's legible on your smartphone or laptop). The act also insists that agencies appoint a chief data officer to oversee all open data efforts. Having passed the Senate last Wednesday, the bill is next headed to the President's desk.  In addition, the act also preserves privacy and national security concerns -- meaning it shouldn't include any sensitive data about the public or any military intel. However, there were a couple of amendments to the act this time round. Firstly, the text was tweaked so that it only applied to CFO Act agencies, not the Federal Reserve or smaller agencies. And second, there was a carve out "for data that does not concern monetary policy," which relates to the Federal Reserve, among others

Rural broadband is about to get $600 million in funding—but there’s a catch - Last week was a big one for rural broadband. On Tuesday, the nearly trillion-dollar farm bill passed the House and Senate. The five-year spending bill expanded the United States Department of Agriculture’s (USDA) budget for broadband funding, directed the Federal Communications Commission (FCC) to focus on boosting farmland connections, and bolstered program coordination between federal agencies. Then, on Thursday, USDA Secretary Sonny Perdue formally introduced that funding in the form of a $600-million pilot program called ReConnect. The program supplies only a fraction of the billions of dollars that other agencies, such as FCC, award to fund broadband deployment across the country, but it’s higher quality, offering a combination of grants and low-interest loans to deliver download speeds of at least 25 megabits per second (mbps)—the oft-challenged broadband standard—to rural towns and communities of under 20,000 people. (The program, which also prioritizes applications that serve more farms, businesses, health care facilities, schools, and community anchors, will begin accepting applications on February 22, 2019, with specific deadlines through June 28.)   But with all the hubbub and activity, there’s also a sneaky public records exemption tucked into the farm bill that broadband advocates say is bad public policy. According to the text of the bill, which is waiting to be signed into law by President Trump, when USDA’s Rural Utilities Service (RUS) receives a funding application for ReConnect or any other broadband program, other service providers have the opportunity to submit maps that show where coverage would be “coterminous,” or overlapping. If the area is already covered, the agency could reject the application.

Where do the investigations related to Trump stand? -  Trump is facing criminal investigations in Washington and New York. Special counsel Robert Mueller is looking into whether the Trump campaign coordinated with Russia and whether the president obstructed the investigation. Trump also plays a central role in a separate case in New York, where prosecutors have implicated him in a crime. They say Trump directed his personal lawyer Michael Cohen to make illegal hush money payments to two women as a way to quash potential sex scandals during the campaign. President Donald Trump’s pick for attorney general, William Barr, sent an unsolicited memo to the Justice Department this year criticizing parts of the Mueller probe as “fatally misconceived.” The 20-page memo, sent in June while Barr was in private practice and months before he was selected by Trump for the Justice Department job, may prompt questions about his ability to oversee the special counsel’s investigation fairly. The document argues that there could be disastrous consequences for the Justice Department and the presidency if Mueller were to conclude that acts a president is legally permitted to take — such as firing an FBI director — could constitute obstruction of justice, just because someone concludes that there was corrupt intent. There is no smoking gun when it comes to the question of Russia collusion. But the evidence so far shows a broad range of Trump associates had Russia-related contacts during the 2016 presidential campaign and transition period, and that several lied about the communication. There is also evidence that some people in the president’s orbit were discussing a possible email dump from WikiLeaks before it occurred. American intelligence agencies and Mueller have said Russia was the source of hacked material released by WikiLeaks during the campaign that was damaging to Clinton’s presidential effort.

Rumors Swirl As Mystery Firm Takes Fight With Mueller To Supreme Court - A company owned by a foreign government which appears to be locked in a fierce battle with Special Counsel Robert Mueller has taken their case to the Supreme Court, according to a new legal filing presented Saturday to Chief Justice John Roberts. The unidentified firm has asked the Supreme Court to block Mueller from obtaining records through a subpoena after a federal appeals court turned down the company's effort to block the court ordered release of documents. The identity of the firm and the foreign country at issue remain closely guarded secrets, but POLITICO first reported earlier this year that the dispute appeared to involve Mueller’s prosecutors. A POLITICO reporter was in the D.C. Circuit Court of Appeals clerk’s office in October when a person connected to the appeal arrived to request a copy of the special counsel’s latest filing in the case.When the case was argued at the D.C. Circuit last week, the courtroom was closed to the public. Court personnel went to unusual lengths to preserve the secrecy, ordering journalists to leave the floor where lawyers were presenting their positions. -PoliticoThe court's public docket has offered few clues - containing no information on the parties or their attorneys. Tuesday, however, a three-page order revealed that the witness fighting the subpoena is a corporation owned by a foreign state.The firm's argument that its status as an extension of a foreign government made it immune from subpoenas was rejected by a three-judge DC Circuit panel, while the judges were also unpersuaded by the state-owned company's claims that complying with the subpoena would violate laws in their home country. After the order was filed Tuesday, sealed filings continued in the appeals court in what appeared to be a bid to stay the D.C. Circuit’s ruling or appeal it further. On Friday, the appeals court denied a motion from the company. The precise nature of the motion was not disclosed. –Politico The Supreme Court's online docket only reveals the request for a stay of the subpoena, and the fact that the company has asked to proceed under seal. 

Three oddities in FBI handling of Flynn interview -  Michael Flynn believes he lied to FBI agents during an interview, as well as to the vice president, and he pleaded guilty to criminal charges. He owns that; it’s on him.   But while Washington and the media fixate on that aspect of the story, the recently released “302” of his interview with the FBI — the official form that agents use to summarize certain interviews — is so odd that it only helps to perpetuate perceptions that the FBI was targeting the Trump campaign, and then the Trump administration, for mostly political reasons. This aspect of the story needs more attention for the FBI’s sake and, more importantly, the nation’s sake. Having authored hundreds of 302s, and run many sensitive counterintelligence investigations and operations during my bureau career, I know an FBI oddity when one wanders by.

• Oddity No. 1: Then-FBI Deputy Director Andrew McCabe personally contacted Flynn on the second full working day of the Trump administration and asked him to meet with FBI agents, a meeting that McCabe reportedly characterized as no big deal. That should have been Flynn’s first red flag. The FBI doesn’t do “no big deal” interviews.   McCabe’s request apparently came at the direction of his boss, former FBI Director James Comey, whose now-transparent camera lust led to the nugget last week that he wanted to exploit his perceived — and likely biased — view that the Trump administration would not be sophisticated enough to spot an end run around normal protocols and White House legal counsel.   Was there anything legally wrong with Comey’s and McCabe’s duplicitous efforts to lull Flynn into a false sense of security, gain direct, solo access to him and not warn him about lying to agents? Nope.  But “legal” doesn’t mean it was proper. McCabe dispatched Peter Strzok and another agent to do the interview. Pause a moment: Comey, McCabe, Strzok. All three subsequently were fired for cause. Comey’s and Strzok’s strong anti-Trump biases, and McCabe’s conflicted links to the Clinton campaign, are well documented. It is fair to question their motivations for seeking out Flynn the way they did. Their actions were unprecedented for senior-most leadership of the FBI … yes, odd.  
• Oddity No. 2: The fact that a 302 was immediately generated is an oddity. A 302 normally is used only as a reporting mechanism in criminal cases when it is anticipated that the information obtained may be used in subsequent litigation and testimony. It usually is not used in counterintelligence investigations.'
• Oddity No. 3: The interview results reflected on the 302 seem untethered from the Russia collusion counterintelligence investigation. The only way FBI agents can legitimately interview Flynn is through an authorized FBI investigation — in this case, the Russia collusion counterintelligence case examining “links” between the Russian government and the Trump campaign to interfere with the 2016 presidential campaign. 

Trump Campaign Manager Paul Manafort Was Pressured by Former Russian Spy Over His Debts in 2016: Time - An ex-Russian spy put pressure on former Trump campaign manager Paul Manafort during the 2016 campaign on behalf of an oligarch to whom he owed “a lot of money,” TIME said in an exclusive report. Victor Boyarkin, who was recently put on a U.S. sanctions list, is considered a former Russian intelligence operative who allegedly handled money and negotiations “on behalf of a powerful Russian oligarch,” billionaire Oleg Deripaska. Manafort stands accused in the U.S. of being “deeply indebted” to Deripaska, who wanted money from a botched business deal in Ukraine, per TIME. Boyarkin said in an exclusive TIME interview that he communicated with Manafort during the presidential race on Deripaska’s behalf. “He owed us a lot of money,” Boyarkin reportedly said. “And he was offering ways to pay it back.” In spring and summer 2016, Manafort allegedly tried offering Deripaska “private briefings” on the presidential contest in order to “get hole,” according to previous reports in the Washington Post and The Atlantic. Boyarkin told the magazine that Special Counsel Robert Mueller’s office contacted him in its investigation into potential collusion between Russia and Trump’s campaign. “I told them to go dig a ditch,” he recalled saying. Sources told TIMEthat Boyarkin’s potential leverage over Manafort might explain why Trump’s onetime adviser weighed returning to work for pro-Russian interests after leaving the campaign in August 2016.

Cohen denies traveling to Prague in 2016: ‘Mueller knows everything’ - President Trump’s former personal attorney Michael Cohen denied a report Thursday that added to an unverified claim that Cohen took a trip to Prague in summer 2016 to meet with Russian officials. Cohen, who has been cooperating with special counsel Robert Mueller’s investigation into Russian interference since this summer, tweeted that he had never been to the Czech capital, adding, “Mueller knows everything.”  Cohen’s tweet came after McClatchy reported that foreign intelligence agencies identified a mobile phone linked to Cohen pinging cell towers around Prague sometime between August and September 2016. McClatchy also reported that a European intelligence service had intercepted a conversation between Russians during which one noted that Cohen was in Prague.  The report gave credence to the claim in the controversial Trump-Russia dossier that Cohen, at the time Trump's lawyer, secretly met with Kremlin representatives in Prague in August 2016, at which point Trump was the Republican nominee for president.

Giuliani: Cohen’s secret recordings are ‘ultimate betrayal of trust’ -- Michael Cohen should be “summarily disbarred,” according to Rudy Giuliani, who called the former attorney for the president's secret recordings of Donald Trump unethical and the “ultimate betrayal of trust.”“He [Michael Cohen] should be summarily disbarred — in some states what he did would be a felony, which is taping someone without permission,” Giuliani, who is now Trump's attorney, told Hill.TV’s Buck Sexton on “Rising.”Giuliani also once again questioned Cohen’s claims of loyalty to the president, saying he is “going to lie his head off to keep himself out of jail.”“He just lied the other day — he stood up and he said ‘I was fiercely loyal to Donald Trump’ — no he wasn’t, he taped him surreptitiously…he hid it and he disclosed it, which is maybe a bigger sin for a lawyer than a crime, it’s the ultimate betrayal of trust,” he told Hill.TV. Giuliani joined Trump’s legal team earlier this year to handle the White House’s response to special counsel Robert Mueller’s investigation into the 2016 presidential election, and whether there was any collusion with Russia.  Since then, the former New York City mayor has launched a number of personal attacks against Cohen, calling his credibility into question. In July, Giuliani called Cohen a “pathological liar” during an interview with CNN after the network aired audio from a 2016 conversation between Cohen and Trump about a payment tied to a former Playboy model who alleged having an affair with Trump. The secret recording was one of many tapes in possession of federal investigators in New York.

Giuliani calls for Mueller to be investigated for destruction of FBI evidence -- In wide-ranging interviews with Hill.TV’s Buck Sexton and me on Wednesday and Thursday, President Trump’s defense lawyer pointedly accused Mueller’s office of destroying evidence by allowing text messages from now-fired FBI official Peter Strzok and his FBI lover, Lisa Page, to be erased in the Russia probe. “Mueller should be investigated for destruction of evidence for allowing those text messages from Strzok to be erased, messages that would show the state of mind and tactics of his lead anti-Trump FBI agent at the start of his probe,” Giuliani said. The Justice Department inspector general (IG) reported this month that it found large gaps in the preservation of official government text messages between Strzok and Page, the two top FBI agents who helped to start the Russia probe in 2016, who were having an affair at the time, and who expressed disdain for Trump. The report said a technical glitch was to blame for the FBI’s failure to save those text messages, but the IG was able to recover more than 19,000 from the early part of the Russia probe before Mueller was named special prosecutor. However, the IG said it was unable to recover messages from the time Strzok and Page worked for Mueller’s office in spring and summer 2017 because the memories of both FBI officials’ government phones were wiped clean by technicians. That erasure occurred after Strzok and Page left Mueller’s team over revelations they exchanged anti-Trump text messages, including one string in which they talked about stopping Trump from becoming president. “That should be investigated, damn it, that should be investigated fully. You want a special counsel, get one for that,” Giuliani said.

 The Steele Dossier and the perils of political insurance policies - The wonderful thing about insurance is that you can cover just about anything, so long as you are prepared to pay the premium.   Lloyd’s of London once insured a 12-foot cigar. KISS bassist Gene Simmons’ tongue ($1 million), Pittsburgh Steeler Troy Polamalu’s hair ($1 million), Bruce Springsteen’s vocal cords ($6 million), even Rolling Stone Keith Richards’ middle finger ($1.6 million) — all insured. But what about an election? According to former British spy Christopher Steele, that was precisely the concern of the Clinton campaign when it paid him and research firm Fusion GPS to compile his controversial dossier on Donald Trump. Despite being widely declared the shoo-in for the White House, the Clinton campaign wanted insurance — and Steele and Fusion were there, as one insurer famously says, “like a good neighbor.”   Throughout the campaign, and for many weeks after, the Clinton campaign denied any involvement in the creation of the dossier that was later used to secure a secret surveillance warrant against Trump associates during the Obama administration. Journalists later discovered that the Clinton campaign hid the payments to Fusion as a “legal fees” among the $5.6 million paid to the law firm. New York Times reporter Ken Vogel at the time said that Clinton lawyer Marc Elias had “vigorously” denied involvement in the anti-Trump dossier. When Vogel tried to report the story, he said, Elias “pushed back vigorously, saying ‘You (or your sources) are wrong.’” Times reporter Maggie Haberman likewise wrote: “Folks involved in funding this lied about it, and with sanctimony, for a year.” Even when Clinton campaign chairman John Podesta was questioned by Congress on the matter, he denied any contractual agreement with Fusion GPS. Sitting beside him was Elias, who helped devise contract. Later, confronted with the evidence, Clinton and her campaign finally admitted that the dossier was a campaign-funded document that was pushed by Steele and others to the media.

 Trump DOJ Lawyers Won’t Work Amid Shutdown. Judges Say They Must - Some U.S. judges are pushing back against Justice Department efforts to halt lawsuits involving the Trump administration during the partial government shutdown, now in its sixth day. The agency is arguing in courts across the country that lawyers for the U.S. are barred from working -- even as volunteers -- when appropriations from Congress lapse, as they did on Dec. 21, after President Donald Trump refused to sign off on temporary funding agreed to by Congress because it didn’t provide money to build a wall on the Mexican border. In one case, U.S. District Judge Randolph Moss in Washington denied the government’s request to delay briefing deadlines in a suit challenging Trump’s new restrictions on immigrants seeking political asylum. "Government functions may continue" when they relate to "the safety of human life or the protection of property," Moss wrote Thursday. The judge cited a government report indicating that a large proportion of the federal government’s immigration employees, including 91 percent of Customs and Border Protection workers, should continue working during shutdowns. In recent days, Justice Department lawyers across the country have been asking judges to delay cases. "Although we greatly regret any disruption caused to the court and the other litigants, the government hereby moves for a stay of all deadlines" until funding resumes, the U.S. said in a typical request filed Dec. 26 in a suit in San Diego challenging the administration’s family separation policy. But a high-profile Maryland lawsuit involving the implementation of a consent decree for civilian oversight of the Baltimore Police Department won’t stop. Chief U.S. District Judge James Bredar in Baltimore called the shutdown a "dispute internal to one party" and directed Justice Department attorneys "to find the means by which to continue their participation in this litigation on a timely basis regardless of their client’s internal issues."

Majority in poll want Trump impeached or censured - Nearly 60 percent of U.S. voters surveyed say President Trump should be either impeached and removed from office or formally censured, according to a new Harvard CAPS/Harris poll released exclusively to The Hill. The poll shows that a majority of voters polled think some kind of action should be taken against Trump, though they are divided on how far lawmakers should go as Democrats prepare to take over the House majority. Asked whether Trump should be impeached and removed from office for his actions, censured by Congress or whether Congress should take no action, 39 percent of respondents said Trump should be impeached and removed from office. Impeachment would require a majority vote by the House — a possibility with a Democratic majority, though leadership in the party have been cautious on the topic. Conviction in the Senate would require a two-thirds vote, something unlikely in a body that will have 53 Republicans. Twenty percent of poll respondents said lawmakers should vote to formally censure the president. Forty-one percent of respondents said Congress should take no action against the president, according to the survey of 1,473 registered voters. The latest polling numbers are largely on par with past months, which saw the percentage of voters who believe Trump should be impeached and removed from office hover between 32 percent and 43 percent. Meanwhile, the percentage of those who believe he should be censured has hovered between 14 and 22 percentage. Likewise, the percentage of voters who believe that Congress should take no action has, for the most part, remained consistent, lingering largely in the low 40-percent range, according to past polling data.

Trump's Treasury Secretary convenes 'Plunge Protection Team' over Wall Street rout - US President Donald Trump's Treasury Secretary has called top US bankers amid an ongoing rout on Wall Street and made plans to convene a group of officials known as the "Plunge Protection Team". US stocks have fallen sharply in recent weeks on concerns over slowing economic growth, with the S&P 500 index on pace for its biggest percentage decline in December since the Great Depression. "Today I convened individual calls with the CEOs of the nation's six largest banks," Treasury Secretary Steven Mnuchin said on Twitter shortly before financial markets were due to open in Asia.US equity index futures dropped late on Sunday as electronic trading resumed to kick off a holiday-shortened week.In early trading, the benchmark S&P 500's e-mini futures contract was off by about a quarter of a per cent. The Treasury said in a statement that Mr Mnuchin talked with the chief executives of Bank of America, Citi, Goldman Sachs, JP Morgan Chase, Morgan Stanley and Wells Fargo."The CEOs confirmed that they have ample liquidity available for lending," the Treasury said.Mr Mnuchin "also confirmed that they have not experienced any clearance or margin issues and that the markets continue to function properly," the Treasury said. Mr Mnuchin's calls to the bankers came amid a partial government shutdown that began on Saturday following an impasse in Congress over Mr Trump's demand for more funds for a wall on the border with Mexico.

There's no process left at the White House - Last week after James Mattis resigned, Alphaville spoke to a former administration official who was familiar with the Defence Secretary's relationship with President Trump. That conversation became a small part of a broader FT story, but what stood out for us was this: Mr Mattis wasn't just concerned that the White House was making bad decisions. He was concerned that the process to make decisions had disappeared.  Normally, US presidents stand at the end of a long chain of people preparing them to make decisions. Presidents get scenarios, consequences, precedents, and so even though they often make bad decisions, we seldom see them make disorienting, head-scratchingly weird decisions.    Which brings us to this announcement from the US Treasury Department:  Secretary Mnuchin convened individual calls with the CEOs of the nation's six largest banks. See attached statement.  This might be a bad decision, but more than anything it's a weird decision. None of it makes any sense. In its annual report this year, the US Financial Stability Oversight Council worried about a couple of things, in particular non-financial corporate borrowing, and how that might feed into a stock-market slump. But the council didn't show much worry at all about whether the six largest US banks could meet their immediate obligations. Look here: the Fed's Comprehensive Capital Analysis and Review says the largest US banks held an aggregate capital ratio of 12.3 per cent last year. That's great! It's not 20 per cent, and we have quibbles about risk-weighting of assets, but still.In evaulating these banks, the Fed even subjects them to hypothetical, stressful financial markets scenarios that are way worse than what we're seeing in reality now: 2-1/4 per cent drops in GDP growth, 7 per cent unemployment, 30 per cent troughs in stock indices. And that's not even the Fed's worst hypothetical. Those banks that Steve Mnuchin called this weekend: they are the last item in a long list of what people in financial markets might be worried about.

Stocks Hit 20-Month Low as D.C. Turmoil Weighs: Markets Wrap  - U.S. stocks fell to the lowest since April 2017 as the turmoil in Washington rattled financial markets anew, pushing the S&P 500 to the brink of a bear market. Crude sank below $45 a barrel and the dollar tumbled. The S&P 500 notched a fourth straight drop of at least 1.5 percent, a run of futility not seen since August 2015. It’s now down more than 19.8 percent from its September record and on pace for the worst monthly drop since 2008. Trading was 41 percent above the 30-day average in a session that’s normally subdued ahead of the Christmas holiday. The stock market closed at 1 p.m. Investors looking to Washington for signs of stability that might bolster confidence instead got further rattled. President Donald Trump blasted the Federal Reserve, blaming the central bank for the three-month equity rout days after Bloomberg reported he inquired about firing the chairman. The comments came after Steven Mnuchin called a crisis meeting with financial regulators, who reportedly told the Treasury secretary that nothing was out of ordinary in the markets. Traders also assessed the threat to the economy from a government shutdown that looks set to persist into the new year. These are the main moves in markets:

• The S&P 500 Index fell 2.7 percent as of 1 p.m. New York time.
• The Nasdaq Composite Index dropped 2.4 percent and the Dow Jones Industrial Average lost 653 points, or 2.9 percent.
• The Stoxx Europe 600 Index dipped 0.4 percent to the lowest in more than two years.
• The MSCI All-Country World Index declined 1.4 percent.
• The MSCI Emerging Market Index decreased 0.5 percent to the lowest in almost eight weeks.

Trump’s Fed feud roils markets, alarms Republicans -- President Trump’s intensifying attacks on Federal Reserve Chairman Jerome Powell are having a destabilizing effect on financial markets and rattling Republican lawmakers. Trump's criticisms of the central bank’s chief policymaker kicked into high gear Monday, not long after Treasury Secretary Steven Mnuchin tried to reassure markets by insisting Trump has no intention of firing Powell. Trump has undercut that claim by blaming the Fed for market volatility and recent economic woes. The Dow Jones Industrial Average plunged 653 points on Monday in the worst day-before-Christmas stock performance in history as Trump renewed his attack on the Fed for raising interest rates last week. The S&P entered a bear market and is now down more than 20 percent from its August peak. Economic experts say Trump is having a destabilizing effect on markets, and GOP lawmakers have publicly urged him to tread more carefully in his public remarks about the Fed, an independent institution. Vin Weber, a former economic adviser to Mitt Romney’s 2012 presidential campaign, warned against taking drastic measures, saying firing Powell would provoke a “very bad” reaction. “People, regardless of their views on monetary policy, would view that as an assault on the independence of the Fed and it would shake confidence considerably,” he said Monday. Trump’s attempts to influence monetary policy, Weber said, are likely to backfire because they will only make the Fed’s job more difficult as it tries to maintain its credibility and independence. “The president is creating an impossible situation for the Fed because anybody appointed to the Board of Governors of the Fed has to have among their priorities preserving the independence of the Fed,” he said. “Everybody would be really rattled if they thought the Fed was not operating as an independent institution.”

Trump has unsettled Wall Street and Washington – and it will likely get worse - Characteristically, President Donald Trump responded to bad news on Christmas Eve by blaming others. As battered markets slumped again, he faulted the Federal Reserve. "The only problem our economy has is the Fed," the president declared of the central bank chaired by his appointee Jerome Powell. Yet simply by making the assertion, Trump negated it. The end of 2018 makes clearer every day that the president himself represents a fundamental problem for America's economy and national security alike. Trump's erratic behavior and weak leadership have unsettled Wall Street and Washington alike — and there's every reason to expect things will get worse. For much of the president's tenure so far, surging stock prices created an aura of economic well-being that made his conduct appear to be a sort of entertainment. After Trump and congressional Republicans passed a large, deficit-financed tax cut one year ago, an uptick in growth bolstered confidence even more. But now shifting political and economic winds have placed the president's leadership under a harsher spotlight. The image is not reassuring. Economic growth, which hit 4.2 percent in the second quarter, has already slowed. Forecasters predict it will keep slowing in 2019 as stimulus from tax cuts and spending increases wanes, with recession a rising possibility for 2020. The administration's chaotic approach to trade conflicts — threatening deeper tariffs, then backing off for negotiations, then threatening again — has deepened uncertainty about the economic outlook. So have his reported musings about firing Powell. In response, Trump's inexperienced Treasury secretary, Steven Mnuchin, undertook weekend cleanup efforts that appeared to damage rather than bolster market sentiment. Stock markets remain on track for the worst year since the 2008 financial crisis and the worst December ever.

Trump voices confidence in Mnuchin, Fed amid drop in market - President Trump expressed confidence in the Treasury secretary, Federal Reserve and U.S. economy on Tuesday, moving to calm financial markets further roiled after Bloomberg News reported that the president had discussed firing the central bank’s chairman over raising interest rates. Trump, asked if he has confidence in Treasury Secretary Steven Mnuchin, said, “Yes I do, very talented guy, very smart person.” Asked about Fed Chairman Jerome Powell, Trump said the central bank is “raising interest rates too fast” but he has “confidence” that the Fed will “get it pretty soon.” The dollar rose and U.S. equity futures advanced Wednesday after a volatile start as investors assessed the comments. Futures on the S&P 500 Index jumped 0.7 percent as of 7:26 a.m. New York time, the first advance for futures in two weeks and the largest climb in more than three weeks. The president — answering reporters’ questions at the White House after addressing U.S. armed forces members on a Christmas Day video conference call — said the Fed was hiking borrowing costs because the “economy is doing so well,” adding that U.S. companies were having “record kinds of numbers” and it’s a “tremendous opportunity to buy.” The remarks represent Trump’s first expression of public support for Mnuchin and Powell since people familiar with the matter told Bloomberg News last week that the president had discussed dismissing the Fed chief, who was recommended by Mnuchin. Before Tuesday’s comments, one person familiar with the president’s thinking said that Trump had also weighed dismissing Mnuchin, while another said that Mnuchin’s tenure may depend in part on how much markets continue to drop. .

The Richest People In The World Lost More Than $550 Billion In 2018 - Like the old saying goes: What goes up must come down. And just as the fortunes of the world's wealthiest swelled during the post-crisis era as QE and ZIRP bolstered asset prices, now that trend has been thrown into reverse thanks to the turbulence in global markets during the second half of the year. According to Bloomberg, even the world's richest individuals failed to find respite from a global market meltdown that has rendered 2018 the "worst year for markets on record."   Bloomberg's Billionaires Index showed that the 500 richest people in the world had a combined $4.7 trllion in wealth as of Friday's close, some $511 billion less than they had at the beginning of the year. With one week left to trade this year, 2018 is set to become the second year since the list was created in 2012 that the world's wealthiest have seen their wealth decline. At their peak, soaring markets drove the aggregate wealth of the world's wealthiest above $5.6 trillion before the downturn began shortly after the Federal Reserve raised interest rates for the third time this year back in September."As of late, investor anxiety has run high," said Katie Nixon, chief investment officer at Northern Trust Wealth Management. "We do not expect a recession, but we are mindful of the downside risks to global growth." Even Amazon founder and CEO Jeff Bezos, who saw his fortune swell to $168 billion earlier this year, has watched it fall more than $50 billion from the highs as FANG stocks have lead the market lower. Even Jeff Bezos, who recorded the biggest gain for 2018, wasn’t spared the volatility. His fortune peaked at $168 billion in September, a $69 billion gain. It later tumbled $53 billion - more than the market value of Delta Air Lines Inc. or Ford Motor Co. - to leave him with $115 billion at year-end.But Bezos' losses were mild compared with Mark Zuckerberg, whose net worth took the biggest hit among the world's tech titans.The Amazon.com Inc. founder had a better year than Mark Zuckerberg, who recorded the biggest loss since January, dropping $23 billion as Facebook Inc. careened from crisis to crisis. Overall, the 173 U.S. billionaires on the list -- the largest cohort -- lost 5.9 percent from their fortunes to leave them with $1.9 trillion.

Affluent Republicans Lose Faith In Trump, 40% Say They Wouldn't Re-Elect Him- CNBC Poll --  A new CNBC Millionaire Survey reveals that 34% of US millionaires, and only 62% of wealthy conservatives, would  pledge support for President Trump if the election was held today. About 36% of the overall vote was spread across ten different Democratic nominees, while 22% went to other Republicans. The polling data outlines some troubling signs for President Trump, including declining support from both wealthy Democrats and Republicans. The semiannual CNBC Millionaire Survey, conducted Nov. 07 through Nov. 19 by Spectrum Group, examines the investment behaviors of 750 investors with $1 million or more of investible assets. In the survey, 40% of the 750 respondents classify as Republicans, 32% are Independents, and 26% are Democrats. Twenty percent of respondents, including 18% of well-to-do Republicans, believe President Trump will not win the Republican nominee in 2020. About 8% think Ohio Governor John Kasich will be the nominee, while 7% believe it will be Vice President Mike Pence. This means an rising number of Republicans think President Trump will lose in 2020, or that he would likely step down from office.

Insider Stock Purchases Surge To 8 Year High -  In the latest indication that the market is due for a rebound, buying by corporate insiders - who are best known in recent years for aggressively dumping their shares to corporate buyback programs - surged in the past two months, and according to data from the Washington Service, has outpaced insider selling by the most in eight years, or since the US downgrade in August 2011 which prompted a market-wide rout. The last time insider buying soared as much as it has in recent months, in August 2011, the S&P 500 was in the middle of a comparable 19% retreat before staging a 10% rally in each of the next two quarters. A similar spike in insider buying took place in August 2015 during the ETFlash crash following the China currency devaluation when stocks also tumbled only to see a sharp rebound.As Bloomberg notes, the increase in demand from companies’ highest-ranking employees "will likely be seen as a vote of confidence in stocks" which on Monday briefly entered a bear market, even as anxiety rises over Federal Reserve rate hikes and political turmoil in Washington."Insiders are pretty well informed at the micro level of their businesses,” Todd Fungard, who oversee $1.2 billion as chief investment officer of McQueen, Ball & Associates Inc., said by phone. “It’s a good sign that business leaders still see demand at their companies and feel comfortable buying their own stock despite the headline risk." One possibility is that insiders are telegraphing that another barrage of corporate buybacks may be imminent, as insiders generally tend to buy when they are confident that their stock will rise, and what better way to levitate stock prices than by having these same insiders announce even more buybacks. On the other hand, with IG credit spreads blowing out to 2+ year widest...

Apple Lost $11 Billion Buying Back Its Own Stock In 2018 - There's a funny thing about buybacks: when stocks are rising (and are therefore more expensive), companies have zero doubts about repurchasing their own stock, especially if said purchase is funded with cheap debt. Of course, by repurchasing their stock, the price goes even higher making management's equity-linked comp more valuable, which explains why management teams usually have no misgivings about allocating capital to this most simplistic of corporate uses of funds. However, when stocks fall, companies tend to clam down on buybacks due to fears that the drop may continue, forcing the CFO or Treasurer to explain his actions to the CEO or the board, and why they risked losses on capital (as well as getting a pink slip) instead of investing in "safer" corporate strategies like M&A, R&D or capex. The irony, of course, is that companies should not be buying back stocks when the stock is rising (as that's when it is more expensive), and accelerate repurchases when it is dumping. And yet, that virtually never happens in reality as management teams, like most investors and algos, tend to chase momentum and direction. Meanwhile, confused by underlying pricing mechanics, management - which is singlehandedly responsible for the levitation in the stock price with its buybacks - then watches its stock price tumble even more one stock repurchases are halted. But the "funniest" moments are reserved for when companies spent tens of billions on stock repurchases then had the rug pulled under from under the market - and their stocks - resulting in billions in unbooked losses on invested capital. And in 2018, there has been no company that has had a greater share of "funny" buyback moments than Apple, which as we reported recently, accounted for 24% of all buyback growth in the first half of 2018, a year that will go down in history books for a record $1+ trillion in stock repurchase announcements and over $700 billion in executed buybacks

'The worst is yet to come': Experts say a global bear market is just getting started -  Volatility on Wall Street has led shares across the globe on a wild ride in recent months, resulting in a number of stock markets dipping into bear territory. That's set to worsen in the new year, experts told CNBC on Monday.Bear markets — typically defined as 20 percent or more off a recent peak — are threatening investors worldwide. In the U.S., theNasdaq Composite closed in a bear market on Friday and the S&P 500 entered one on Monday. Globally, Germany's DAX and China'sShanghai Composite have also entered bear market levels.Major market risks remain, experts said. The Federal Reserve is likely to continue raising interest rates and worries about a global economic slowdown — made worse by a trade war between the U.S. and China — are mounting."I would love to be more optimistic but i just don't see too many positives out there. I think the worst is yet to come next year, we're still in the first half of a global equity bear market with more to come next year," Mark Jolley, global strategist at CCB International Securities, told CNBC's "Squawk Box." For Jolley, the big risk lies in the credit markets. With the Fed projecting another two interest rate hikes in 2019, companies will find it increasingly difficult to service their debt causing some to default or get downgraded, he said.Such weakness in the credit markets will spill over to stocks, noted Jolley. "My core scenario will be a credit event, which will further weigh on equity markets, which will definitely weigh on high growth sectors like tech," he said.More generally, investors have fewer reasons to be optimistic now because the Fed tightening monetary policy means there will be less money for investments, said Vishnu Varathan, head of economics and strategy at Mizuho Bank. "There is really no conviction for markets to buy back because they're not sure this is the bottom, and so they are thinking this is the proverbial falling knives," Varathan told CNBC's "Squawk Box."

'I'm stunned' by all the recession talk — Mohamed El-Erian warns against self-fulfilling prophecies -- Economist Mohamed El-Erian is warning Wall Street that being overly concerned about an economic recession could actually cause one.  "I'm stunned by all this talk of recession," El-Erian said on CNBC's "Squawk Box" on Friday. "For us to get into a recession, the rest of the world has got to really slow down dramatically."While acknowledging signs of weakness in the U.S. economy, El-Erian cautioned, "We've got to be careful because we can talk ourselves into a recession. And that's how bad technicals become bad economics."The Commerce Department on Friday said the economy expanded at a solid 3.4 percent annual rate in the third quarter, slightly slower than the previous estimate. Economists see gross domestic product slowing in the fourth quarter to around 2.5 percent. But for all of 2018, GDP is expected to log its best year since 2005."It's really hard to get a recession when the labor market is strong, wages are going up, business investment is going up, [and] government spending is going up," said El-Erian, Allianz' chief economic advisor.Earlier this month, the Labor Department reported slowing job creation in November. But nonfarm payrolls still increased by 155,000, with a steady unemployment rate of 3.7 percent and incremental wage gains.Some economists are predicting a recession as soon as next year, citing the flattening of the yield curve, when yields on long-term Treasurys approach those of short-term notes.El-Erian believes such worries are unwarranted and a function of forgetting just "how special" last year was for investors. "Last year was exceptional. We had returns, no volatility, and every single correlation worked for the investor. The average of two years, it doesn't look that bad."

Trump administration asks top investor for advice on markets amid wild ride for stocks - A high-ranking Trump administration official reached out to at least one well-known investor for advice on markets after a recent drubbing for stocks, sources told CNBC.The call took place after a sell-off on Christmas Eve, the worst day of Dec. 24 trading ever. The Dow Jones Industrial Average, S&P 500 and Nasdaq all dropped more than 2 percent Monday, as rumors swirled about President Donald Trump's desire to fire Federal Reserve Chairman Jerome Powell and Defense Secretary James Mattis resigned amid disagreements with the president. The major indexes then spiked about 5 percent on Wednesday.The administration, which has judged Trump's success in part on stock market performance, is "determined" to boost equities, the sources said. The sources said the investor advised the official to tell the president to end his criticism of Powell on Twitter, stop administration turnover and reach a trade deal with China in order to help markets. Trump celebrated a consistent rise for stocks during his first year in office. But markets have faltered this year amid a trade war with China, concerns about the Fed's four interest rate hikes and fears about slowing global growth. As of Friday morning, stocks were on track for their worst December since 1931, with the S&P down about 10 percent.Trump has tried to blame market carnage on the Fed. Before the plunge Monday, the president tweeted that "the only problem our economy has is the Fed." He contended the U.S. central bank does not "have a feel for the Market."The tweet followed the Fed's decision to raise the target range for its benchmark interest rate by a quarter point to 2.25 to 2.5 percent. The Trump administration has denied that the president wants to fire Powell, the head of the independent central bank. It is unclear whether Trump even has the authority to remove the Fed chair.

Trump Urges Buying the Dip After Stocks Sink on D.C. Dysfunction -- President Donald Trump suggested that a recent swoon in U.S. stock markets is a buying opportunity for investors, even though many analysts blame his policies and Washington gridlock for the plunge. “We have companies -- the greatest in the world, and they’re doing really well,” Trump told reporters at the White House on Tuesday. “They have record kinds of numbers. So I think it’s a tremendous opportunity to buy. Really a great opportunity to buy.”U.S. equities extended a weeks-long slide into Christmas Eve, dragging the benchmark S&P 500 index to its lowest level in 20 months. The president has looked to the stock market as a barometer on his administration, and the declines have infuriated him. He has discussed firing Federal Reserve Chairman Jerome Powell over the central bank’s interest rate increases, which Trump and his allies blame for the market plunge, though he concluded over the weekend it wasn’t within his power, according to Treasury Secretary Steven Mnuchin. The latest run of selling has come amid White House turmoil led by Trump and a gridlocked U.S. government. Mnuchin recommended Powell’s nomination, raising speculation that Trump could turn his wrath to the Treasury secretary, whom he can more easily dismiss. But Trump said Tuesday he retains confidence in Mnuchin and called him “very talented.”

  Dow soars over 1,000 points, obliterating Christmas Eve losses -- U.S. stock markets soared on Wednesday, recovering from a Christmas Eve trading day that was the worst in the history of the Dow Jones. The Dow Jones closed up 1,086, or 5 percent, while the S&P 500 rose 116 points, also 5 percent, defying a bear market. The spike represented the highest-ever single-day point increase for the Dow, and its best daily percentage gain since 2009. By some measures, the S&P entered a bear market on Monday, ending a 10-year bull run. But Wednesday's stock jump put that milestone aside, at least temporarily. The performance follows reports from MasterCard saying that holiday spending was the strongest in six years and from Amazon that it sold a record number of items during the holiday season. The positive day of trading was the latest sign of extreme volatility in a market that continues to surprise. Markets are still in the red for all of 2018, and without a course correction are on track to have their worst December in 87 years. Rising interest rates, slowing global growth, concerns about U.S. economic performance retreating, a turbulent trade war and an ongoing government shutdown have all added to market concerns.

Why Stocks Are Soaring- A Massive, $64 Billion Buy Order - Last Friday, when stocks were tumbling, we reported "some good news for the bulls" which was lost in the overall chaos over the latest mutual fund liquidation discussed earlier.And no, we did not anticipate that President Trump would activate the Plunge Protection Team over the weekend: the good news in question was that as Wells Fargo calculated U.S. defined-benefit pensions fund would need to implement a "giant rebalancing out of bonds and into stocks" - in fact the biggest in history - with the bank estimating roughly $64 billion in equity purchases in the last trading days of the quarter and year, prompting the banks to ask if traders are about to make pension rebalancing "great" again.Judging by today's market action, the answer is a resounding yes, even though as Wells warned investors and traders looking for a desperately needed respite from market gyrations "may have to deal with yet one more seismic bout of volatility before Dec 31 finally pops up on their calendar dials."For those who missed our Friday post on the topic, Wells explained where this massive rebalancing comes from: the huge, end-of-quarter buy order was precipitated by the jarring divergence between equity and bond performances both in Q4 and the month of December. The stocks in the bank's pro forma pension asset blend had suffered a 14% loss this quarter, including about an 8.5% drop in December. Contrast this with a roughly +1.6% quarterly total return for the domestic aggregate bond index. The gap between equity and bond performance in pension portfolios would have been even larger had IG credit OAS not widened nearly 40 bps in Q4. As a result of this need for massive quarter-end rebalancing, corporate pensions would need to boost their equity portfolios by as much as $64 billion into year-end. Getting a bit more granular, Wells analyst Boris Rjavinski wrote that domestic stocks – both large cap and small cap – may need disproportionately large boosts of $35 billion and $21 billion, respectively, compared to “only” $9 billion for global developed equities (see table below). This is driven by large performance gaps within equity markets: U.S. stocks have trailed global and EM equities in Q4 and December after outperforming the ROW for quarters on end.

Dow rallies 1,000 points, logging its biggest single-day point gain ever-- Stocks posted their best day in nearly a decade on Wednesday, with the Dow Jones Industrial Average notching its largest one-day point gain in history. Rallies in retail and energy shares led the gains, as Wall Street recovered the steep losses suffered in the previous session. The 30-stock Dow closed 1,086.25 points higher, or 4.98 percent, at 22,878.45. Wednesday's gain also marked the biggest upside move on a percentage basis since March 23, 2009, when it rose 5.8 percentage points. The S&P 500 also catapulted 4.96 percent — its best day since March 2009 — to 2,467.70 as the consumer discretionary, energy and tech sectors all climbed more than 6 percent. The Nasdaq Composite also had its best day since March 23, 2009, surging 5.84 percent to 6,554.36. Wednesday also marked the biggest post-Christmas rally for U.S. stocks ever. Retailers were among the best performers on Wednesday, with the SPDR S&P Retail ETF (XRT) jumping 4.7 percent. Shares of Wayfair, Kohl's and Dollar General all rose more than 7 percent. Data released by Pulse showed retailers were having their best holiday season in six years. Amazon's stock also jumped 9.45 percent, snapping a four-day losing streak, after the company said it sold a record number of items this holiday season. Energy stocks also jumped as U.S. crude oil prices catapulted more than 8 percent. Shares of Marathon Oil and Hess were the best performers within the energy sector, jumping 11.9 percent and 11 percent, respectively. "We still have a ways to go. We need to have three days of moving higher into the close to stem this wave of selling." A strong sell-off on Monday sent the major indexes down more than 2 percent and ended with the S&P 500 falling into a bear market. Monday's pullback was also the worst Christmas Eve decline ever. The S&P 500 was down 20.06 percent from an intraday record high set on Sept. 21 before Wednesday's sharp rebound. U.S. exchanges were closed Tuesday for the Christmas holiday.

 Bear Market Kept at Bay as Stocks Rise From Lows: Markets Wrap - Volatility returned to U.S. markets, with stocks roaring back from the lows of the day to close higher after flirting with a bear market. Treasuries rose and oil slipped below $46 a barrel. The S&P 500 and Dow Jones Industrial Average turned green in a late surge after trading negative for most of the day, with a more than 800 point swing up by the Dow in less than two hours. On top of Wednesday’s 5 percent surge, it was the biggest two-day rally in the S&P since August 2015. “It’s hard to explain moves like today and yesterday and the last month,” said Sean O’Hara, president at Pacer ETFs. “From a time perspective, it’s a historic bull market and when you get that far into the cycle, people get more jittery.” The S&P 500 has been careening toward its worst month of the record bull run and is down about 15 percent in the quarter as everything from higher interest rates to political turmoil in Washington to concern about global growth hammer at investor sentiment. Havens came back in vogue, with Treasury 10-year yields slipping below 2.8 percent, and gold climbing with the yen.

How Banks Unwittingly Finance Mass Shootings - The New York Times reviewed hundreds of documents including police reports, bank records and investigator notes from a decade of mass shootings. Many of the killers built their stockpiles of high-powered weapons with the convenience of credit. No one was watching. Two days before Omar Mateen killed 49 people and wounded 53 more at the Pulse nightclub in Orlando, he went on Google and typed “Credit card unusual spending.” Mr. Mateen had opened six new credit card accounts — including a Mastercard, an American Express card and three Visa cards — over the previous eight months. Twelve days before the shooting, he began a $26,532 buying spree: a Sig Sauer MCX .223-caliber rifle, a Glock 17 9-millimeter semiautomatic pistol, several large magazines, thousands of rounds of ammunition and a $7,500 ring for his wife that he bought on a jewelry store card. His average spending before that, on his only card, was $1,500 a month. His web browsing history chronicled his anxiety: “Credit card reports all three bureaus,” “FBI,” and “Why banks stop your purchases.” He needn’t have worried. None of the banks, credit-card network operators or payment processors alerted law enforcement officials about the purchases he thought were so suspicious. Mass shootings routinely set off a national debate on guns, usually focused on regulating firearms and on troubled youths. Little attention is paid to the financial industry that has become an instrumental, if unwitting, enabler of carnage. A New York Times examination of mass shootings since the Virginia Tech attack in 2007 reveals how credit cards have become a crucial part of the planning of these massacres. There have been 13 shootings that killed 10 or more people in the last decade, and in at least eight of them, the killers financed their attacks using credit cards. Some used credit to acquire firearms they could not otherwise have afforded. Those eight shootings killed 217 people. The investigations undertaken in their aftermath uncovered a rich trove of information about the killers’ spending. There were plenty of red flags, if only someone were able to look for them, law enforcement experts say.

A drug smuggler built a predatory lending company while free on bail. Now the complaints are piling up. --Most people lie low when they’re out on bail. Not former marijuana trafficker Jonathan Braun.In the seven years that he’s been awaiting sentencing, Braun has become a major player in the lucrative field of small-business lending. From an office in Manhattan, he advances money to truckers and contractors across the country at interest rates that would exceed 400 percent on an annual basis. Rivals say he brags that he makes millions of dollars a month.Two Bentleys and a Range Rover were parked outside the yellow-brick house with Greek columns on Staten Island where he was living in July. An undated video shows his daughter playing with piles of $100 bills strewn on a table and the floor.In interviews, a dozen borrowers said Braun has cheated them, sometimes threatening to leave them penniless, or worse. Most asked not to be named because they’re afraid of him. The cash advances he makes are perfectly legal, and he uses New York State law rather than violence to collect debts. But borrowers say even compared with competitors, Braun’s tactics stand out. “He is the scum of the earth,” says Michael Gianni, whose California real estate business almost imploded after Braun got a court judgment and seized money from his bank account last year. “He treated me as a non-human.”

Bitcoin: a digital lottery ticket for a dystopian future? - Rogoff - With the price of Bitcoin down 80% from its peak a year ago, and the larger cryptocurrency market in systemic collapse, there is a distinct possibility that “peak crypto” has already passed us by. But don’t expect to see true believers lining up to have their cryptocurrency tattoos removed just yet. At a recent conference I attended, the overwhelming sentiment was that market capitalization of cryptocurrencies is still set to explode over the next five years, rising to $5-10 trillion. If so, for those who watched the price of Bitcoin go from $13 in December 2012 to around $4,000 today, this year’s drop from $20,000 is no reason to panic.It is tempting to say, “of course the price is collapsing.” Regulators are gradually waking up to the fact that they cannot countenance large, expensive-to-trace transaction technologies that greatly facilitate tax evasion and criminal activity. At the same time, central banks from Sweden to China are realizing that they, too, can issue digital currencies. As I emphasized in my 2016 book on the past, present, and future of currency, when it comes to new forms of money, the private sector may innovate, but in due time the government regulates and appropriates. But as I also pointed out back then, just because the long-term value of Bitcoin is more likely to be $100 than $100,000 does not necessarily mean that it definitely should be worth zero. The right way to think about cryptocurrency coins is as lottery tickets that pay off in a dystopian future where they are used in rogue and failed states, or perhaps in countries where citizens have already lost all semblance of privacy. It is no coincidence that dysfunctional Venezuela is the first issuer of a state-backed cryptocurrency, the “Petro”. The ultimate obstacle for any cryptocurrency is that eventually there has to be a way to buy a range of goods and services beyond illicit drugs and hitmen. And if governments ever make it illegal to use coins in retail stores and banks, their value must ultimately collapse.

Wall Street Quietly Shelves Its Bitcoin Dreams - Limbo—that’s where to find Wall Street when it comes to cryptocurrencies. Squeamish from the start about pursuing profits in one of the darker corners of finance, established firms this year slowed their already halting efforts to make a business out of Bitcoin mania. While none has thrown in the towel, and some continue to develop a trading infrastructure, most flinched as the value of virtual coins collapsed. Take Goldman Sachs Group Inc., which sought to position itself at the cutting edge of digital assets that skeptics see mainly as a domain of day traders and anarchists. Progress has been so slow as to be barely noticeable, according to people familiar with its crypto business. Many in the industry now say it was quixotic to have expected last year’s frenzy to translate into a Wall Street crypto offering. “The market had unrealistic expectations that Goldman or any of its peers could suddenly start a Bitcoin trading business,” "That was top-of-the-market-hype thinking." Goldman remains a focal point for expectations of an establishment embrace of crypto. The firm was among the first on Wall Street to clear Bitcoin futures and people familiar with the matter said last year it was preparing a trading desk—the bank even provided its bankers to the New York Times for an interview on its plans. After considering a custody service for crypto funds, the firm invested in custodian BitGo Holdings Inc. It’s also offering derivatives on Bitcoin called non-deliverable forwards. The bank has yet to offer trading of crypto and has gained little traction for its NDF product, having signing up just 20 clients, according to people familiar with the matter. Justin Schmidt, who was hired to head its digital-asset business, said at an industry conference last month that regulators are limiting what he can do. Still, Goldman plans to add a digital-assets specialist to its prime brokerage division, the person said. With regulators offering little clear guidance on how they will classify the broad universe of tokens—as commodities, securities or something else—banks and investment firms are treading cautiously. Criminal and regulatory probes aren’t helping either.

Cryptocurrency dreams went bust in 2018 - This was the year that Bitcoin and most other blockchain currencies turned out to be the new tulip — a mania that led otherwise sensible people to suspend their better judgement and become poorer by piling in. Similar fads pop up every few years — always accompanied by the phrase, "this time is different," until it ends in tears. That psychology has now changed decisively: Bitcoin’s price shot up to record prices artificially, only to plummet about 70% this year. "[O]f 573 digital coins launched since 2017," according to The Wall Street Journal, "89% are trading at a loss compared with their offering price and worth a total of about $2.1 billion — $8.4 billion less than the $10.5 billion initially invested." For cryptocurrencies, 2018 was the correction to 2017, which was basically a big free for all. Then, regulators and reality came calling.

• Initial coin offerings (ICOs), it turns out, are not a magical and regulation-free fundraising mechanism: A bad white paper does not a viable digital token make.
• "The SEC and state regulators have brought more than 90 crypto cases over the past two years," but have only managed to claw back about $36 million for duped investors, The Journal reports (subscription).
• "One of the attractions of digital currency is its anonymity. That ... can also make it hard for investigators to trace funds."

How Much of the Internet Is Fake- Turns Out, a Lot of It, Actually - In late November, the Justice Department unsealed indictments against eight people accused of fleecing advertisers of $36 million in two of the largest digital ad-fraud operations ever uncovered. Digital advertisers tend to want two things: people to look at their ads and “premium” websites — i.e., established and legitimate publications — on which to host them. The two schemes at issue in the case, dubbed Methbot and 3ve by the security researchers who found them, faked both. Hucksters infected 1.7 million computers with malware that remotely directed traffic to “spoofed” websites — “empty websites designed for bot traffic” that served up a video ad purchased from one of the internet’s vast programmatic ad-exchanges, but that were designed, according to the indictments, “to fool advertisers into thinking that an impression of their ad was served on a premium publisher site,” like that of Vogue or The Economist. Views, meanwhile, were faked by malware-infected computers with marvelously sophisticated techniques to imitate humans: bots “faked clicks, mouse movements, and social network login information to masquerade as engaged human consumers.” Some were sent to browse the internet to gather tracking cookies from other websites, just as a human visitor would have done through regular behavior. Fake people with fake cookies and fake social-media accounts, fake-moving their fake cursors, fake-clicking on fake websites — the fraudsters had essentially created a simulacrum of the internet, where the only real things were the ads. How much of the internet is fake? Studies generally suggest that, year after year, less than 60 percent of web traffic is human; some years, according to some researchers, a healthy majority of it is bot. For a period of time in 2013, the Times reported this year, a full half of YouTube traffic was “bots masquerading as people,” a portion so high that employees feared an inflection point after which YouTube’s systems for detecting fraudulent traffic would begin to regard bot traffic as real and human traffic as fake. They called this hypothetical event “the Inversion.”

 Everything Is Fake - Ex-Reddit CEO Confirms Internet Traffic Metrics Are Bullshit - "It's all true: Everything is fake," tweeted Former Reddit CEO Ellen Pao regarding a Wednesday New York Magazine article which reveals that internet traffic metrics from some of the largest tech companies are overstated or fabricated. In other words; they're bullshit.  Pao was responding to a tweet by the Washington Post's Aram Zucker-Schariff, quoting the following segment of the article:  The metrics are fake. Take something as seemingly simple as how we measure web traffic. Metrics should be the most real thing on the internet: They are countable, trackable, and verifiable, and their existence undergirds the advertising business that drives our biggest social and search platforms. Yet not even Facebook, the world’s greatest data–gathering organization, seems able to produce genuine figures. In October, small advertisers filed suit against the social-media giant, accusing it of covering up, for a year, its significant overstatements of the time users spent watching videos on the platform (by 60 to 80 percent, Facebook says; by 150 to 900 percent, the plaintiffs say). According to an exhaustive list at MarketingLand, over the past two years Facebook has admitted to misreporting the reach of posts on Facebook Pages (in two different ways), the rate at which viewers complete ad videos, the average time spent reading its “Instant Articles,” the amount of referral traffic from Facebook to external websites, the number of views that videos received via Facebook’s mobile site, and the number of video views in Instant Articles.Can we still trust the metrics? After the Inversion, what’s the point? Even when we put our faith in their accuracy, there’s something not quite real about them: My favorite statistic this year was Facebook’s claim that 75 million people watched at least a minute of Facebook Watch videos every day — though, as Facebook admitted, the 60 seconds in that one minute didn’t need to be watched consecutively. Real videos, real people, fake minutes. -NYMag"It's all true: Everything is fake," tweeted Pao, adding "Also mobile user counts are fake. No one has figured out how to count logged-out mobile users, as I learned at reddit. Every time someone switches cell towers, it looks like another user and inflates company user metrics."

How Facebook Controls What World Can Say - Inside Facebook’s Secret Rulebook for Global Political Speech – NY Times - Every other Tuesday morning, several dozen Facebook employees gather over breakfast to come up with the rules, hashing out what the site’s two billion users should be allowed to say. The guidelines that emerge from these meetings are sent out to 7,500-plus moderators around the world. (After publication of this article, Facebook said it had increased that number to around 15,000.) The closely held rules are extensive, and they make the company a far more powerful arbiter of global speech than has been publicly recognized or acknowledged by the company itself, The New York Times has found. The Times was provided with more than 1,400 pages from the rulebooks by an employee who said he feared that the company was exercising too much power, with too little oversight — and making too many mistakes. An examination of the files revealed numerous gaps, biases and outright errors. As Facebook employees grope for the right answers, they have allowed extremist language to flourish in some countries while censoring mainstream speech in others. Moderators were once told, for example, to remove fund-raising appeals for volcano victims in Indonesia because a co-sponsor of the drive was on Facebook’s internal list of banned groups. In Myanmar, a paperwork error allowed a prominent extremist group, accused of fomenting genocide, to stay on the platform for months. In India, moderators were mistakenly told to flag for possible removal comments critical of religion. The Facebook employees who meet to set the guidelines, mostly young engineers and lawyers, try to distill highly complex issues into simple yes-or-no rules. Then the company outsources much of the actual post-by-post moderation to companies that enlist largely unskilled workers, many hired out of call centers. Those moderators, at times relying on Google Translate, have mere seconds to recall countless rules and apply them to the hundreds of posts that dash across their screens each day. When is a reference to “jihad,” for example, forbidden? When is a “crying laughter” emoji a warning sign?

Facebook: The global censor -The year 2018 has seen a vast intensification of internet censorship by Google, Facebook and Twitter, transforming them from tools for exchanging information and communicating around the world into massive censorship dragnets for policing what their users say, do and think.In August 2017, the World Socialist Web Site published an open letter to Google charging that the company, in collusion with the US government, was working to shape political discourse by manipulating search results. The open letter warned that Google’s actions set a dangerous precedent for subverting constitutional protections of freedom of speech and demanded that the company cease what the WSWS called “political blacklisting” of left-wing sites.Sixteen months later, the central argument of the open letter—that Google and its peers are carrying out political censorship—is undeniable. The regime that Google pioneered through its search engine has been expanded to all major US social media platforms, including Facebook, Twitter and YouTube.In a front-page article published Friday, titled “How Facebook Controls What World Can Say,” the New York Times writes that Facebook’s actions “make the company a far more powerful arbiter of global speech than has been publicly recognized or acknowledged by the company itself.”Facebook has “quietly become, with a speed that makes even employees uncomfortable, what is arguably one of the world’s most powerful political regulators,” the article states. “Increasingly,” the Times concludes, “the decisions on what posts should be barred amount to regulating political speech—and not just on the fringes.”The transformation of Facebook into an instrument for political censorship was driven home in an end-of-year statement by Facebook CEO Mark Zuckerberg published just hours after the appearance of the Times report.“We’re a very different company today than we were in 2016, or even a year ago,” writes Zuckerberg. “We’ve fundamentally altered our DNA to focus more on preventing harm in all our services, and we’ve systematically shifted a large portion of our company to work on preventing harm. We now have more than 30,000 people working on safety and invest billions of dollars in security yearly.” Lurking behind the billionaire CEO’s sickly-sweet euphemisms about “harm prevention” is a much darker reality. The 30,000 employees Zuckerberg cites—a majority of Facebook’s workers—are engaged not in “harm prevention,” but “speech prevention.” They read the communications of Facebook users, determine what political views are and are not acceptable, and remove, ban or block users and posts.

Will Congress move to outlaw ‘live’ checks? - Depending on whom you ask, an unsolicited check that arrives in the mail and can be immediately converted into a high-interest loan is either a lifeline for cash-strapped households or predatory lending at its worst. Installment lenders say that consumers who opt to cash these so-called live checks do so because they are in need of short-term financing and don’t have many other borrowing options because their credit is blemished. They know full well that it is not free money and that once a check is cashed or deposited into a bank or credit union account it immediately becomes a loan that has to be paid back with interest, said Bill Himpler, president-elect of the American Financial Services Association, a trade group that represents installment lenders. “None of this is in fine print,” Himple said. “The checks all state, in 12-point font and moving up to 18- or 24-point font, that this is a loan. You know you’re getting a loan, you know the rate, you know the [annual percentage rate] and you know the term.” Consumer advocates argue that many consumers who receive and cash live checks don’t always know what they are getting into. The loans can carry rates ranging from 30% to over 100%, and the terms aren’t as clearly disclosed as installment lenders claim they are, said Lauren Saunders, associate director of the National Consumer Law Center. “We’ve been getting more complaints about live checks, from both lawyers on the ground and the [Consumer Financial Protection Bureau’s] complaint database,” she said. The view that these loans are predatory is gaining traction with lawmakers. Sen. Tom Cotton, an Arkansas Republican, is sponsoring legislation that would prohibit lenders from sending unsolicited checks to consumers. "Many individuals don't realize that these checks are actually high-interest loans until it's too late," he says.  Bipartisan legislation introduced in the Senate earlier this month would ban the use of live checks — installment lenders call them “convenience checks” — for the purpose of originating short-term, small-dollar loans. Sponsored by Sens. Doug Jones, D-Ala., Jeff Merkley, D-Ore., and Tom Cotton, R-Ark., the bill is modeled after a decades-old law that bans the mailing of live credit cards, Cotton said. “People should understand clearly when they are taking on debt,” Cotton said in a Dec. 10 news release. “But because ‘live' checks mailed directly to consumers don't require an application or any previous relationship with the consumer, many individuals don't realize that these checks are actually high-interest loans until it's too late."

 GSE foreclosure prevention actions already pass 2017's total - Home retention actions from Fannie Mae and Freddie Mac through the first three quarters of 2018 already eclipsed 2016 and 2017 while forfeitures kept declining, according to the Federal Housing Finance Agency. Forbearance plans rose as Fannie Mae and Freddie Mac offered 32,420 of them through the third quarter of 2018 versus 29,897 in 2017 and 7,228 for all of 2016. Loan modifications were the widest-used method for borrowers to avoid foreclosure, with 137,206 taking place through the third quarter of 2018. The modification total already surpassed 2017's total of 128,625 and 2016's 123,495. Principal forbearance, along with a reduced interest rate and an extended term, was used in 24% of the modifications, while 68% had an extended term only. There were 8,017 repayment plans offered in the third quarter, bringing the 2018 total to 24,240. It's on pace to beat 2017's sum of 30,506. Conversely, the number of short sales and deed-in-lieu resolutions fell to a combined 7,534. If it maintains that pace to close out 2018, it will continue the downward trend from 16,470 in 2017, 25,784 in 2016, and 35,251 in 2015. GSE loans between 30 and 59 days late on their payments increased to 403,463 at the end of the third quarter from 354,609 at the end of the second. However, the number of loans late by 60 days or more dropped to 313,626 in the third quarter from the second quarter's 341,106. Seriously delinquent loans overdue by 90 days or more also fell to 219,182 from the previous quarter's 254,638. The GSEs' seriously delinquent loan rate decreased to 0.79% from 0.91% in the second quarter. It's much lower than the seriously delinquent rate of 3.7% for Federal Housing Administration-insured loans and 2% for Veterans Affairs-guaranteed loans, the FHFA said.

Waters calls on FEMA to continue offering flood insurance despite shutdown - — After the Federal Emergency Management Agency announced it would not issue or renew flood insurance policies during the government shutdown, a top Democratic lawmaker is urging the agency to reconsider its decision. The decision by FEMA, announced Wednesday, comes after Congress voted last week to extend the National Flood Insurance program through May 31, 2019. “Despite this clear directive from Congress, FEMA has announced that it will not issue or renew NFIP policies during the government shutdown,” said Rep. Maxine Waters, D-Calif., who will chair the House Financial Services Committee when Democrats take control of the chamber Jan. 3. “I urge FEMA to immediately reconsider this harmful and incorrect interpretation of its authority and resume its important work of providing flood insurance to families across the country.” Lawmakers have long expressed interest in passing flood insurance reform legislation, but disagreements on what is should look like have broken down along geographic lines, stalling action. Industry groups were also caught off guard by FEMA’s decision. “FEMA’s unexpected decision will complicate and delay loan closings for borrowers who are required to carry flood insurance and seek NFIP coverage for as long as the government shutdown continues,” said Rob Nichols, president and chief executive of the American Bankers Association. “This result is in direct conflict with what Congress and the President intended when legislation was passed and signed into law last week to extend the NFIP’s authorization for six months. FEMA’s failure to inform Congress and the public earlier that such action would be taken despite the passage of the extension is distressing. We hope that FEMA will reconsider this unfortunate action immediately.” Subs

As U.S. soldiers battle landlord, confidential records shine light on his lucrative business -  One set of photographs, posted on Instagram, captures a grand, crimson-colored banquet hall at a 100-acre Irish estate with two 18th Century mansions. The owner has redecorated the residence in gilded mirrors and blue damask wallpaper with the help of a renowned interior designer and is having a personal golf course installed on the verdant grounds.  Another set of pictures, taken by tenants, shows homes across the Atlantic in North Carolina, Maryland and Louisiana, plagued by flooding, bursting pipes, mold blooms, collapsed ceilings, exposed lead paint and tap water as brown as tea. The same man is behind all these dwellings.  Ireland’s historic Capard House is among the vacation properties owned by Rhode Island real estate developer John Picerne. He purchased the estate in 2015 after emerging as one of the largest private landlords on U.S. military bases. The others are the homes of his warrior-tenants, who pay hundreds of millions of dollars a year in rent to live in housing run by Corvias Group, Picerne’s closely held company.  Since 2002, Corvias has acquired control of more than 26,000 houses and apartments across 13 military bases. Picerne’s company runs this lucrative enterprise in partnership with the Army and Air Force through a program that enlists private-sector operators to build new dwellings, upgrade others, and manage the properties for 50 years.  The Corvias homes are among 206,000 now under private management in the 22-year-old U.S. Military Housing Privatization Initiative, the largest-ever corporate takeover of federal housing. The military says the effort has enhanced the lives of service members and their families. Some of Corvias’ tenants strongly disagree. They accuse Picerne’s company of renting them poorly maintained homes riddled with health hazards that can trigger illness or childhood developmental delays.

Home price gains in 20 U.S. cities slow for a seventh month -  Home prices in 20 U.S. cities slowed in October for a seventh consecutive month, extending the longest streak since 2014, a sign of waning demand amid higher mortgage rates and elevated property values. The 20-city index of property values increased 5% from a year earlier, after rising 5.2% in the prior month, S&P CoreLogic Case-Shiller data showed Wednesday. The median estimate in a Bloomberg survey of economists called for a gain of 4.9%. Nationally, home prices climbed 5.5% from October 2017. The data showing the slowest pace of price gains in two years are the latest signs housing is in a broad slowdown, with sales and building also showing recent signs of weakness. The seasonally adjusted 20-city index gained 0.4% from the prior month, versus a 0.3% estimate. Economists watch the year-on-year gauge to better track trends, which show home-price have been outpacing wages. Price gains taking a breather would be especially attractive for younger buyers or those purchasing a house for the first time; however, softer price gains also mean smaller advances in homeowner equity for others. "The combination of higher mortgage rates and higher home prices rising faster than incomes and wages means fewer people can afford to buy a house," David Blitzer, chairman of the S&P index committee, said in a statement. "Reduced affordability is slowing sales of both new and existing single family homes. Sales peaked in November 2017 and have drifted down since then." All 20 cities in the index showed year-over-year gains, led by a 12.8% increase in Las Vegas and almost 8% increases in both San Francisco and Phoenix. The weakest gains were in Washington, which rose 2.9% on year, Chicago, which climbed 3.3%, and New York, up 3.1%.

Case-Shiller: National House Price Index increased 5.5% year-over-year in October --  S&P/Case-Shiller released the monthly Home Price Indices for October ("October" is a 3 month average of August, September and October prices). This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index. From S&P: Phoenix Replaces Seattle in Top Three Cities in Annual Gains According to the S&P CoreLogic Case-Shiller Index The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 5.5% annual gain in October, remaining the same from the previous month. The 10-City Composite annual increase came in at 4.7%, down from 4.9% in the previous month. The 20City Composite posted a 5.0% year-over-year gain, down from 5.2% in the previous month. Las Vegas, San Francisco and Phoenix reported the highest year-over-year gains among the 20 cities. In October, Las Vegas led the way with a 12.8% year-over-year price increase, followed by San Francisco with a 7.9% increase and Phoenix with a 7.7% increase. Six of the 20 cities reported greater price increases in the year ending October 2018 versus the year ending September 2018. ... Before seasonal adjustment, the National Index posted a month-over-month gain of 0.1% in October. The 10-City and 20-City Composites did not report any gains for the month. After seasonal adjustment, the National Index recorded a 0.5% month-over-month increase in October. The 10-City Composite and the 20-City Composite posted 0.5% and 0.4% month-over-month increases, respectively. In October, nine of 20 cities reported increases before seasonal adjustment, while 18 of 20 cities reported increases after seasonal adjustment. “The largest gains were seen in Las Vegas where home prices rose 12.8% in the last 12 months, compared to an average of 5.3% across the other 19 cities. This is a marked change from the housing collapse in 2006-12 when Las Vegas was the hardest hit city with prices down 62%. After the last recession, Las Vegas diversified its economy by adding a medical school, becoming a regional center for health care, and attracting high technology employers. Employment is increasing 3% annually, twice as fast as the national rate.” The first graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000).

Fewer People Can Afford A House - US Home Price Growth Slowest Since Trump Elected - The rapid slowdown in US home price growth is accelerating with Case-Shiller reporting a 5.03% YoY gain in October - the weakest since Nov 2016.  Slowing for the 7th month in a row, if printing modestly above expectations of 4.80%, home prices rose 5.03% Y/Y, down from 5.21% a month ago, and confirming that the US housing market is clearly suffering:Perhaps of greater note, the index of home prices actually declined MoM - the biggest drop since Jan 2016... Despite the ongoing slowdown, all 20 cities in the index showed year-over-year gains, led by a 12.8% increase in Las Vegas (down from 13.5% last month), and almost 8% increases in both San Francisco and Phoenix. The weakest gains were in Washington, which rose 2.9 percent on year, Chicago, which climbed 3.3 percent, and New York, up 3.1 percent.However, more dangers emerged on a month-over-month basis where prices fell in 8 cities, including Chicago (-0.3%), Cleveland (-0.5%), Denver (-0.3%), Minneapolis (-0.1%), Portland (-0.6%), San Diego (-0.1%), San Francisco (-0.7%) and Seattle (-1.1%).Finally, much like NAR did this month, even the establishment hopefuls are admitting defeat: "The combination of higher mortgage rates and higher home prices rising faster than incomes and wages means fewer people can afford to buy a house. Fixed rate 30-year mortgages are currently 4.75%, up from 4% one year earlier. Home prices are up 54%, or 40% excluding inflation, since they bottomed in 2012" said David Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices.He added that "Reduced affordability is slowing sales of both new and existing single family homes. Sales peaked in November 2017 and have drifted down since then." Realtors, academics, and bullish shareholders are now joining the chorus of Trump demanding Powell put a hold on rate hikes.

Real House Prices and Price-to-Rent Ratio in October - Here is the earlier post on Case-Shiller: Case-Shiller: National House Price Index increased 5.5% year-over-year in October.   It has been over eleven years since the bubble peak. In the Case-Shiller release this morning, the seasonally adjusted National Index (SA), was reported as being 11.4% above the previous bubble peak.However, in real terms, the National index (SA) is still about 8.9% below the bubble peak (and historically there has been an upward slope to real house prices).  The composite 20, in real terms, is still 12.4% below the bubble peak.  The year-over-year increase in prices has slowed to 5.5% nationally, and will probably slow more as inventory picks up.  Usually people graph nominal house prices, but it is also important to look at prices in real terms (inflation adjusted).  Case-Shiller and others report nominal house prices.  As an example, if a house price was $200,000 in January 2000, the price would be close to $286,000 today adjusted for inflation (43%).  That is why the second graph below is important - this shows "real" prices (adjusted for inflation).The first graph shows the monthly Case-Shiller National Index SA, and the monthly Case-Shiller Composite 20 SA (through October) in nominal terms as reported. In nominal terms, the Case-Shiller National index (SA)and the Case-Shiller Composite 20 Index (SA) are both at new all times highs (above the bubble peak). The second graph shows the same two indexes in real terms (adjusted for inflation using CPI less Shelter). Note: some people use other inflation measures to adjust for real prices. In real terms, the National index is back to January 2005 levels, and the Composite 20 index is back to June 2004. In real terms, house prices are at 2004/2005 levels.

Zillow Case-Shiller Forecast: Similar House Price Gains in November --The Case-Shiller house price indexes for October were released earlier. Zillow forecasts Case-Shiller a month early, and I like to check the Zillow forecasts since they have been pretty close. From Aaron Terrazas at Zillow: October Case-Shiller Results and November Forecast: Phoenix Replaces Seattle Among Top Three Home-Price Gainers Home prices were steady in October, gaining 5.5 percent year-over-year, the same as September, according to the Case-Shiller home price index. The gain was slightly above Zillow’s forecast, and we expect another 5.5 percent year-over-year increase in November.The Zillow forecast is for the year-over-year change for the Case-Shiller National index to be about the same in November as in October.

NAR: Pending Home Sales Index Decreased 0.7% in November --From the NAR: Pending Home Sales See 0.7 Percent Drop in November Pending home sales overall slipped in November, but saw minor increases in the Northeast and the West, according to the National Association of Realtors®.  The Pending Home Sales Index, a forward-looking indicator based on contract signings,decreased 0.7 percent to 101.4 in November, down from 102.1 in October. However, year-over-year contract signings dropped 7.7 percent, making this the eleventh straight month of annual decreases. The PHSI in the Northeast rose 2.7 percent to 95.1 in November, and is now 3.5 percent below a year ago. In the Midwest, the index fell 2.3 percent to 98.1 in November and is 7.0 percent lower than November 2017. Pending home sales in the South fell 2.7 percent to an index of 115.7 in November, which is 7.4 percent lower than a year ago. The index in the West increased 2.8 percent in November to 87.2 and fell 12.2 percent below a year ago. This was below expectations for this index. Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in December and January.

Pending Home Sales Crash 7.7%, Biggest Drop In Four Years There was some hope for a rebound in US housing indicators, after the recent existing home sales print rebounded, but that was promptly dashed after pending home sales dropped again in November, sliding -0.7% vs the expected 1.0% increase, declining in six of the last eight months, with a cumulative loss since March of -5.9% (-8.9% annualized)... ...and crashed a whopping 7.7% compared to last year, the biggest annual drop since April 2014. This is the worst pending home sales print since June 2014. Always eager to put lipstick on a pig, commenting on the collapse NAR chief economist Larry Yun said "the latest decline in contract signings implies more short-term pullback in the housing sector and does not yet capture the impact of recent favorable conditions of mortgage rates." Yun added that while pending contracts have reached their lowest mark since 2014, there is no reason to be overly concerned, and he predicts solid growth potential for the long-term. Not everyone agrees: as Bloomberg notes, the poor results underscore the challenges as elevated prices and higher mortgage rates keep many Americans on the sidelines of the housing market. Economists consider pending-home sales a leading indicator because they track contract signings; purchases of existing homes are tabulated when deals close, typically a month or two later. Pending home sales fell in the Midwest and South, which both dropped more than 2 percent from the prior month, while the Northeast and West saw increases. At the same time, all four major regions sustained a drop when compared to one year ago, with the West taking the brunt of the decrease. “The West crawled back lightly, but is still experiencing the biggest annual decline among the regions because of unaffordable conditions,” Yun said.

Hotels: Occupancy Rate Increased Year-over-year - From HotelNewsNow.com: STR: US hotel results for week ending 15 December:  The U.S. hotel industry reported positive year-over-year results in the three key performance metrics during the week of 9-15 December 2018, according to data from STR.
In comparison with the week of 10-16 December 2017, the industry recorded the following:
• Occupancy: +1.3% to 57.3%
• Average daily rate (ADR): +3.2% to US$119.10
• Revenue per available room (RevPAR): +4.6% to US$68.25
The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

Consumer Confidence Declined Again in December - The latest Conference Board Consumer Confidence Index was released this morning based on data collected through December 13. The headline number of 128.1 was a decrease from the final reading of 136.4 for November. Today's number was below the Investing.com consensus of 133.7. “Consumer Confidence decreased in December, following a moderate decline in November,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Expectations regarding job prospects and business conditions weakened, but still suggest that the economy will continue expanding at a solid pace in the short-term. While consumers are ending 2018 on a strong note, back-to-back declines in Expectations are reflective of an increasing concern that the pace of economic growth will begin moderating in the first half of 2019.” The chart below is another attempt to evaluate the historical context for this index as a coincident indicator of the economy. Toward this end, we have highlighted recessions and included GDP. The regression through the index data shows the long-term trend and highlights the extreme volatility of this indicator. Statisticians may assign little significance to a regression through this sort of data. But the slope resembles the regression trend for real GDP shown below, and it is a more revealing gauge of relative confidence than the 1985 level of 100 that the Conference Board cites as a point of reference.

Holiday Sales Strongest In Years As Consumers Binge On Debt - After several years of disappointing holiday sales, retail analysts told any and all financial media who would listen that this year would be different. With wages finally accelerating at their fastest pace since the financial crisis, and early indicators suggesting a boost in e-commerce ahead of the traditional holiday shopping season, with the National Retail Federation forecasting a sales bump of up to 4.8% to a combined $720 billion for November and December.And with the holidays having only just passed, one early indicator suggests that the final total might be more optimistic than expected: According to Mastercard SpendingPulse, total US sales (excluding autos) climbed 5.1% between Nov. 1 and Dec. 24 compared with a year earlier. That means US consumers spent some $850 billion overall.  Per WSJ, this suggests that the recent market turbulence and a partial government shut down didn't curb consumers' appetite (though there were a few weak patches during the season, analysts attributed them to the timing of the Thanksgiving holiday)."Wall Street is running around like a chicken with its head cut off, while Mr. and Mrs. Main Street are happy with their jobs, enjoying their best wage increases in a decade," said Craig Johnson, president of Customer Growth Partners, a retail research and consulting firm. A recent drop in gas prices has helped last-minute spending, he said.Sales have been generally strong throughout the holiday season, led by increases in online shopping. Retailers entered the holidays with momentum as online sales jumped 26.4% from a year earlier between the Wednesday before Thanksgiving through Black Friday, one sign of an early buying surge, according to Adobe Analytics.Buying slowed in early December in part because an unusually early Thanksgiving made it harder for retailers to sustain sales through the entire holiday shopping period, analysts and consultants said. But shoppers picked up the pace ahead of Christmas.The final push arrived relatively late in the season: Given the timing of the Christmas holiday, the ability for consumers to make last-minute purchases online in the days before Christmas Eve - then pick those items up in stores - has been credited with bolstering spending. Overall, strong growth in online shopping was a major growth factor, as total purchases climbed 20%. Meanwhile, Department Store sales grew by 10%.

U.S. holiday shopping season best in six years- report (Reuters) - Sales in the 2018 U.S. holiday shopping season rose 5.1 percent to over $850 billion, the strongest in six years, according to a Mastercard report on Wednesday, as shoppers were encouraged by a robust economy and early discounts. The data follows Amazon.com Inc’s announcement of a “record-breaking” selling season, with the online retail giant shipping a billion items for free through its Prime membership in the United States. Amazon’s shares jumped as much as 5 percent, while those of Kohl’s Corp rose 4.2 percent. Macy’s Inc gained 3.6 percent, Nordstrom Inc 3 percent, and Target Corp and Walmart Inc rising over 1 percent. The strong sales numbers indicated that rising market volatility due to concerns over slowing global growth and political deadlock in Washington has not impacted consumer confidence so far. “I don’t see that (volatility in the markets and Government shutdown) as having any impact ... but I am cautiously optimistic for the consumer going into 2019,” said Steve Sadove, senior adviser for Mastercard. The 5.1 percent sales growth included in-store and online sales between Nov. 1 and Dec. 24. The National Retail Federation had forecast U.S. holiday retail sales to rise between 4.3 percent and 4.8 percent in November and December. Low unemployment rates and rising wages have been boosting consumer confidence, which in October hit its highest in nearly two decades. “From shopping aisles to online carts, consumer confidence translated into holiday cheer for retail,” said Sadove. Online sales posted strong gains, rising 19.1 percent, according to the SpendingPulse retail report, published by Mastercard’s analytics arm. “This season was our best yet,” Jeff Wilke, Amazon’s CEO Worldwide Consumer, said on Wednesday. In contrast, sales at department stores fell 1.3 percent after two years of modest growth, largely due to store closures. But online sales grew 10.2 percent for the group, indicating that heavy investments in ecommerce to counter continuing drop in store traffic were bearing fruit. “Many retailers are benefiting from the increase in online sales, but none are benefiting as much as Amazon is,” 

Fretful over incoming tariffs, retailers are ordering ‘unprecedented volumes’ to West Coast warehouses America's West Coast ports "are experiencing extreme congestion" this month, according to a report by third-party logistics firm MIQ Logistics. There's a dearth of chassis, which are the vehicles that move shipping containers around. Huge amounts of freight have hit the Ports of Los Angeles and Long Beach in particular. Around half of the shipments to those each of those ports are from China. The volumes have reached an "unprecented" level. "Warehouses across the region have all but reached capacity," according to MIQ . The deluge of shipping containers is because of strong retail demand, and thanks to tariffs. Read more: Lost jobs, shrinking growth, and rotting crops — here are the ways Trump's trade war is hurting America West Coast logistics folks had predicted that this December would be a particularly hectic month because of the squeeze to get product from China to the US before tariffs set in. On January 1, 2019, an import tax of 25% on $200 billion of goods from China will go into effect. The tariff will affect a third of all containerized imports from China, according to the Journal of Commerce. Lidia Yan, cofounder and CEO of Southern California freight-brokerage company NEXT Trucking, works with retailers like Steve Madden, Sharp, and Hitachi — all of whom have operations in China. She told Business Insider in November that she predicted this month could be "the biggest December ever." "Most retailers are trying to squeeze in as much volume as possible to avoid the tariff in 2019," Yan said. While the West Coast ports are hectic now, business is likely to slow in 2019 as tariffs take hold. Gene Seroka, the executive director of the Port of Los Angeles, told CNBC in August that tariffs may disrupt some 25% of the imports to Los Angeles.

Sears Chairman’s Last-Minute $4.4 Billion Bid Could Save the Retailer From Liquidation — Sears Chairman Eddie Lampert’s hedge fund said it submitted a last-minute bid Friday valued at $4.4 billion to keep the struggling retailer from being liquidated. Transform Holdco LLC, an affiliate of the ESL Investments hedge fund that Lampert heads, said it hoped to keep 425 stores open. The bid includes $1.3 billion in financing from three institutions, ESL said in a statement.The iconic retailer, once the nation’s largest department store chain, faced a deadline of Friday for bids for its remaining stores to avert closing down completely. Earlier on Friday, Sears said it was closing 80 more stores as it teeters on the brink of liquidation. The 80 stores are due to close by March. That’s in addition to 182 stores already slated for closure, including 142 by the end of 2018 and 40 by February. The company filed for Chapter 11 bankruptcy protection in October, saying at the time it would close more than 20 percent of all stores, keeping open only its 500 most profitable locations.Sears Holdings Corp., which also runs Kmart, joins the list of retail brands taken over by hedge funds that collapsed under the weight of debt forced upon them.Under hedge fund manager Eddie Lampert, Sears has bought time by spinning off stores and putting on the block the brands that had grown synonymous with the company, such as Craftsman. The company’s chairman and biggest shareholder, Lampert loaned out his own money and put together deals to keep the company afloat and to turn whatever profit he could for ESL hedge fund. Lampert and ESL have been trying to buy the rest of Sears for up to $4.6 billion in cash and stock. ESL said that should the $4.4 billion bid be accepted, “we expect that the company that emerges from bankruptcy would offer employment to up to 50,000 associates

 The Dollar Store Backlash Has Begun - The U.S. has added 10,000 of these budget retail outlets since 2001. But some towns and cities are trying to push back. From a report: A recent research brief [PDF] by the Institute of Local Self Reliance (ILSR), a nonprofit supporting local economies, sheds light on the massive growth of this budget enterprise. Since 2001, outlets of Dollar General and Dollar Tree (which bought Family Dollar in 2015) have grown from 20,000 to 30,000 in number. Though these "small-box" retailers carry only a limited stock of prepared foods, they're now feeding more people than grocery chains like Whole Foods, which has around 400-plus outlets in the country. In fact, the number of dollar-store outlets nationwide exceeds that of Walmart and McDonalds put together -- and they're still growing at a breakneck pace. That, ILSR says, is bad news. "While dollar stores sometimes fill a need in cash-strapped communities, growing evidence suggests these stores are not merely a byproduct of economic distress," the authors of the brief write. "They're a cause of it."  Dollar stores have succeeded in part by capitalizing on a series of powerful economic and social forces -- white flight, the recent recession, the so-called "retail apocalypse" -- all of which have opened up gaping holes in food access. But while dollar store might not be causing these inequalities per se, they appear to be perpetuating them. The savings they claim to offer shoppers in the communities they move to makes them, in some ways, a little poorer. Using code made public by Jerry Shannon, a geographer at University of Georgia, CityLab made a map showing the spread of dollar stores since the recession.

Richmond Fed: "Fifth District Manufacturing Activity Weakened in December" - From the Richmond Fed: Fifth District Manufacturing Activity Weakened in December Fifth District manufacturing activity weakened in December, according to the latest survey from the Richmond Fed. The composite index dropped from 14 in November to −8 in December, weighed down by drops in the indexes for new orders and shipments. At −25, the shipments index was its lowest reading since April 2009. However, the third component, the index for employment, rose. Respondents indicated a deterioration in local business conditions, as this index fell to −25, its lowest reading on record, but most firms were optimistic that conditions would improve. Survey results suggested employment growth among many manufacturing firms in December, but firms continued to struggle to find workers with the necessary skills. Respondents expected this problem to continue in the coming months but anticipated continued employment growth as well. This is the weakest reading for this survey since 2016. All of the regional manufacturing surveys have been weaker in December than in November (the Dallas Fed survey will be released Monday).

US Economy Snaps As Richmond Fed Plummets Most On Record - Those seeking an economic indicator of an imminent recession just got one courtesy of the Richmond Fed Manufacturing Index, which tumbled from 14 in November to -8, crushing expectations of a modest rebound to 15, weighed down by drops in the indexes for new orders and shipments. With analysts expecting the Richmond Fed to print between 12 and 17, the -8 print was a 20 sigma event relative to expectations. The internals were an unmitigated disaster, with the shipments index print of -25 was its lowest reading since April 2009 even as the third component, the index for employment, rose. Additionally, respondents indicated a deterioration in local business conditions, as this index fell to −25, its lowest reading on record. Most other metrics were dismal:

• Shipments fell to -25 after 12 the prior month
• Local business conditions printed the lowest on record at -25 after 5 last month
• New order volume slowed to -9 after 17 the prior month
• Order backlogs fell to -18 after 15 the prior month
• Capacity utilization slowed to -16 after 9 the prior month
• Inventory levels of finished goods increased to 13 after 2 last month
• Inventory levels of raw goods rose to 15 after 5 last month

Chicago PMI Decreased Slightly in December --From the Chicago PMI: Chicago Business Barometer Moderates to 65.4 in December: The MNI Chicago Business Barometer eased to 65.4 in December, down 1.0 point from November’s 66.4.After two consecutive months of higher readings, the Employment indicator receded in December, hitting a three-month low, although did remain above the neutral-50 mark. “The MNI Chicago Business Barometer saw 2018 out in good health, assisted by a firm uptick in Production, cementing the best calendar quarter outturn in a year,” said Jai Lakhani, Economist at MNI Indicators.“Encouragingly, inflationary pressures subsided for a fifth consecutive month and should this continue, it will ease the burden on firms‘ productive capacities. Still, concerns over tariffs continue to linger in the background and stir uncertainty,” he added. This was above the consensus forecast of 62.4.

 A kick in the stomach’: massive GM layoffs leave workers distraught – and angry -- There’s a sign outside the General Motors assembly plant in Lordstown, Ohio, that reads: “GM, We Invested in You. Now It’s Your Turn to Invest in US.” . Ever since the US’s largest car company’s immense assembly plant opened here 52 years ago, it has dominated this blue-collar town. Now GM workers here are furious that the automaker plans to idle – and perhaps permanently close – the plant. GM stunned its workforce on 26 November, the Monday after Thanksgiving, by announcing it would cut roughly 14,000 jobs and idle five factories in North America, including the Lordstown plant, which employs 1,600 workers. One factor stoking the workers’ ire is that GM’s move came after American taxpayers rescued it from bankruptcy with a $49.5bn federal bailout in 2009. While some have blamed Trump policies for the closure, or at least for his inability to stop them, it’s the company that workers hold most responsible. “Their announcement was really a kick in the stomach,” said Danny Adams, who has worked at the plant since 1996. “It’s not woe is me. It’s woe is us.” Like many GM workers here, Adams, 53, is worried and bitter, not knowing where he might find a new job and wondering whether he’s too old to train for a new career. Adams could perhaps transfer to another GM plant, but he fears that such a move would be hugely trying for his 15-year-old son. “This is devastating. This is our livelihood,” said Stephanie Allein, 40, who began working for GM in 2000 and was transferred to Lordstown in 2010. 

US Jobs Outlook Crashes Most On Record - With consumer confidence in November printing near the highest levels since the dot com bubble, it was almost inevitable that in light of the recent economic and market turmoil, the December print would disappoint, and sure enough it did just that, when the Conference Board reported the December print dropped from 136.4 to 128.1, missing expectations of 133.7 and the lowest level since July. While Americans' assessment of the Present Situation was almost unchanged, at 171.6 vs 172.7 in November, it was their outlook that took a hit, as the Expectations Index tumbled from 112.3 to a two year low of 99.1, a 13.2 drop which was the biggest since August 2011 when the US credit rating was downgraded by the S&P and the S&P nearly fell in a bear market, dropping 19% before rebounding. One possible reason for the collapse is Americans' take on the job market which appears to have reversed abruptly, with those expecting more jobs in the months ahead falling to 16.6% from 22.7%, with the 6.1% pt drop is the biggest in over 41 years. This sharp drop in confidence about the labor market also resulted in a plunge in plans to purchase major appliances, which hit a level not seen since February 2016, hit during the E&P crisis when many note the US was hammered by a manufacturing recession. Commenting on the unexpectedly poor number, Lynn Franco, Senior Director of Economic Indicators at The Conference Board. said "consumer Confidence decreased in December, following a moderate decline in November." "Expectations regarding job prospects and business conditions weakened, but still suggest that the economy will continue expanding at a solid pace in the short-term. While consumers are ending 2018 on a strong note, back-to-back declines in Expectations are reflective of an increasing concern that the pace of economic growth will begin moderating in the first half of 2019.”

 Weekly Initial Unemployment Claims decreased to 216,000 -- The DOL reported: In the week ending December 22, the advance figure for seasonally adjusted initial claims was 216,000, a decrease of 1,000 from the previous week's revised level. The previous week's level was revised up by 3,000 from 214,000 to 217,000. The 4-week moving average was 218,000, a decrease of 4,750 from the previous week's revised average. The previous week's average was revised up by 750 from 222,000 to 222,750. The previous week was revised up. The following graph shows the 4-week moving average of weekly claims since 1971. The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased to 218,000.   This was close to the consensus forecast. The low level of claims suggest few layoffs.

Philly Fed: State Coincident Indexes increased in 43 states in November -  From the Philly Fed: The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for November 2018. Over the past three months, the indexes increased in 47 states and decreased in three states, for a three-month diffusion index of 88. In the past month, the indexes increased in 43 states, decreased in three states, and remained stable in four, for a one-month diffusion index of 80. Note: These are coincident indexes constructed from state employment data.  Here is a map of the three month change in the Philly Fed state coincident indicators. This map was all red during the worst of the recession, and all or mostly green during most of the recent expansion. The map is mostly green on a three month basis, but there are some red states. And here is a graph is of the number of states with one month increasing activity according to the Philly Fed. This graph includes states with minor increases (the Philly Fed lists as unchanged).

In these Bay Area counties, college grads have higher unemployment - Higher education is supposed to be the ticket to employment. But in some Bay Area counties, workers with a high school diploma have lower unemployment rates than those with bachelor’s degrees or higher. Experts suggested the Bay Area’s backwards numbers, which run counter to the national trend, could be the result of too-few lower-wage workers, many of whom have been driven out by skyrocketing housing prices and the rising cost of living. “We have employers call us all the time (saying), ‘I’m looking for low-wage, entry-level workers,’” said Kris Stadelman, director of NOVA Workforce Development in Sunnyvale. But there are few workers willing to take on those positions who don’t already have jobs, she said. In Santa Clara County, the heart of Silicon Valley, the unemployment rate for workers with a high school degree is 3.3 percent, compared to a 3.6 percent rate for workers with a bachelor’s degree or higher, according to the U.S. Census Bureau’s 2017 American Community Survey, which measures unemployment by educational attainment for workers between 25 and 64 years old. The same situation exists in two other Bay Area counties —Marin and Sonoma — where workers with at least a bachelor’s degree don’t have the lowest unemployment rate. The trend is starkest in Sonoma County, where workers without a high school degree have a 0.2 percent unemployment rate compared to a 4.4 percent rate for workers with a bachelor’s degree or higher. Workers with a high school diploma in that county have an unemployment rate of 2.8 percent.

Third Of Americans Thinking About Leaving Country To Live Abroad — A third of natural-born Americans have thought about packing up and living elsewhere — outside the United States — at some point in the future, but it may not be for the reason you think, a new study finds.Researchers from the University of Kent in the United Kingdom and Tufts University in the U.S. say that the most popular reason (87.4 percent) to live abroad is the simple desire to explore the world. Surprisingly, whether a person identifies as liberal or conservative politically had no correlation to their hopes of moving overseas.“While one might think that ideological orientation plays a role, at least in this pre-Trump survey, we found out that it did not, at least not directly,” says Dr. Amanda Klekowski von Koppenfels, of Kent’s Brussels School of International Studies, in a release.Yet while politics didn’t have a direct link, the authors found that one’s own national identity was an important underlying factor in their aspirations for living in another country. Specifically, those who didn’t respond that they had a very strong national identity were also more likely to leave. Those who had anything other than ‘very strong’ national identity were more likely to aspire to live abroad,”  “It was, of course, a quantitative measure of a subjective belief measuring individuals’ self-identity.” Other factors that played a role included knowing other Americans who’d lived abroad or having served in the military.

 Demographic Stagnation- US Population Growth Hits 80-Year Low -  Last week, the Brookings Institution published a new report regarding population data from the US Census Bureau. The data showed population change estimates for the year ending in July 2018. Brookings said the national rate of population growth collapsed to its lowest level since 1937, "a result of declines in the number of births, gains in the number of deaths, and that the nation’s under age 18 population has declined since the 2010 census." This new report comes after recent government data showed geographic mobility within the US is at historic lows. Some states —particularly in the Mountain West—are expanding at a quick rate, but approximately 20% of all states showed evidence of population losses over the last two years. The aging American population (i.e., those pesky baby boomers) is the broader cause for the downward shift in demographic trends that could cripple the nation in the years and decades ahead. A historic low for US population growth.  The population growth rate of 0.62% for 2017-2018 is the lowest registered since the end of the Great Depression. While the nation’s growth rate has fluctuated through wars, economic upheavals, baby booms, and baby busts, the current rate reflects a further fall that has also registered below the Great Recession low in 2007-2009.  "These downward growth trends initially reflected declines in immigration as well as lower natural increase (the excess of births over deaths) because the economy was down. But over the past few years, as immigration gained slight momentum, reduced natural increase was more responsible for the overall decline in population growth—as it dropped from 1.6 million in 2000-2001 to just above 1 million in 2017-2018. There were fewer births than in recent decades and more deaths than in earlier years," said Brookings.

 Right-wing rampage in Michigan, Wisconsin lame duck sessions -- Lame duck sessions of Republican-controlled state legislatures in Michigan and Wisconsin have passed dozens of bills overturning voter decisions in the November 6 election. In both states, Republican state administrations were swept out of office—narrowly in Wisconsin, by a wide margin in Michigan—but the state legislatures remain under Republican control.  While the most publicized actions have been politically motivated slaps at incoming Democratic governors in the two states, the most substantive and reactionary actions have been to effectively reverse efforts to raise the minimum wage and expand voting rights in the two states. In Michigan, the lame duck session passed more than 400 bills and sent them to outgoing Republican Governor Rick Snyder. He signed the first batch of measures on December 14, while vetoing four bills as exceeding the powers of the legislature. He is expected to sign the vast majority of the bills before he leaves office January 1.  The state legislature is pushing through a package of bills making significant changes in how the three new referenda will be implemented. This would include barring individuals from growing marijuana for their personal use and establishing tight restrictions on licensing cannabis sales, changing the method of appointment of the non-partisan commission, and requiring voters to register at a county clerk’s office rather than at the polls, effectively gutting the right to same-day voter registration.  The legislature’s cruelest action was to complete a political maneuver to block a minimum wage increase. Liberal groups and unions had collected petitions to place the increase to $12 an hour by 2022 on the statewide ballot, along with a separate provision to require most employers to offer paid sick time.  From the standpoint of the unions and the Democratic Party, this miserably inadequate measure was a cynical effort to increase voter turnout among the poorest sections of the working class, who otherwise—correctly—regard the two capitalist parties with complete indifference.

A fight over Republican leadership in Texas becomes a test of the limits of Muslims in the GOP - Muslim Americans will reach a milestone next week when Rashida Tlaib and Ilhan Omar join the House of Representatives. The Democrats from Michigan and Minnesota will be the first Muslim women in Congress, and many have hailed their election as a sign of rising diversity in politics. On the other side of the aisle, a brewing controversy over a GOP leader in Texas targeted by fellow party members because of his Muslim faith is also drawing national attention. It has become a test case for an issue the Republican Party struggles with as voters in Texas and beyond grow more racially and religiously diverse: Is there room for Muslims? Members of the Tarrant County Republican Party will vote Jan. 10 on whether Shahid Shafi, a 53-year-old trauma surgeon and city councilman in the Fort Worth suburb of Southlake since 2014, should be removed as a vice chairman. A precinct chairwoman forced the vote after making unproven claims that Shafi, who has served as a delegate to several GOP state conventions, has ties to the Muslim Brotherhood and terrorism and wants to impose sharia law. Other precinct chairs have joined in the calls to remove Shafi. Shafi, who has forcefully denied the accusations, declined to be interviewed. In a statement, he said he would not “allow this small group of closed-minded people to damage our party.” “I have never had any association with the Muslim Brotherhood … nor any terrorist organization,” Shafi said. “I believe that the laws of our nation are our Constitution and the laws passed by our elected legislatures — I have never promoted any form of sharia law.” Shafi was appointed Tarrant County Republican Party vice chairman in July. That’s when the accusations against him first appeared, initially via postings on conservative Facebook groups before spreading to anti-Muslim blogs. Dorrie O’Brien, a precinct chairwoman from Grand Prairie, called for the vote — under party rules, a single chairperson can propose an appointee’s removal — and is among those spearheading the campaign against Shafi. On a Facebook posting about him, O’Brien appeared to say Muslims were inherently extremist. “ISIS is Islam with all the public fakery removed,” she wrote, referring to the Islamic State militant group. In an interview, she said she and allies “certainly have enough votes” to oust Shafi. 

California Town OKs Destruction Of Police Shooting Records Days Before They Could Be Obtained By The Public - California has long protected police officers from accountability. Most police misconduct records are impossible to obtain via public records requests. The restrictions covering these personnel files even prevent defense attorneys and prosecutors from accessing them, allowing cops with lousy track records for telling the truth present testimony as if they've never committed a misdeed or told a lie. After years of legislative surrender to police union pressure and an overall deference to all things law enforcement, this year's model finally managed to get a records reform bill to land on the governor's desk. The new law goes into effect January 1, 2019, opening up access to a number of records Californians have never seen. Under SB-1421, law enforcement agencies are required to provide public access to records related to use of force, sexual assault complaints, and dishonesty in investigations and reporting of a crime. Faced with impending accountability, police departments are readying themselves for mass releases of previously withheld data. Oh, wait. The opposite of that. Inglewood City Council approved the destruction of records that have been in the police department’s possession — more than 100 cases — longer than required by law. The city staff report and council resolution describing the action makes no mention of the new police transparency law. Instead it says the affected records are “obsolete, occupy valuable space, and are of no further use to the police department.” It added the traditional method of destroying such records is to shred them. Yes, it's merely a coincidence that records the Inglewood PD has held onto for years -- "longer than required by law" -- are being destroyed days before the new transparency law goes into effect. It's all so innocent and devoid of subterfuge the city council did it in secret with zero public notice or input.

We are born creative geniuses and the education system dumbs us down, according to NASA scientists  - At TEDxTucson, Dr. George Land dropped a bombshell when he told his audience about the shocking result of a creativity test developed for NASA but subsequently used to test school children (see the full video below).  NASA had contacted Dr George Land and Beth Jarman to develop a highly specialized test that would give them the means to effectively measure the creative potential of NASA’s rocket scientists and engineers. The test turned out to be very successful for NASA’s purposes, but the scientists were left with a few questions: where does creativity come from? Are some people born with it or is it learned? Or does it come from our experience? The scientists then gave the test to 1,600 children between the ages of 4 and 5. What they found shocked them.  This is a test that looks at the ability to come up with new, different and innovative ideas to problems. What percentage of those children do you think fell in the genius category of imagination? A full 98 percent! But this is not the real story. The scientists were so astonished that they decided to make it a longitudinal study and tested the children again five years later when they were ten years old. The result? Only 30 percent of the children now fell in the genius category of imagination. When the kids were tested at 15 years the figure had dropped to 12 percent! What about us adults? How many of us are still in contact with our creative genius after years of schooling? Sadly, only 2 percent.  “The reasoning for this is not too difficult to apprehend; school, as we plainly call it, is an institution that has historically been put in place to ultimately serve the wants of the ruling class, not the common people.  “In order for the so-called elite to maintain their lavish life styles of overt luxury — where they contribute the least but enjoy the most — they understand that children must be dumbed down and brainwashed to accept (and even serve) their rapacious system of artificial scarcity, unending exploitation, and incessant war,” writes Nascimento.

W.Va. mom says her daughter was bullied after they balked at Bible classes in public school -- The chill set in not long after word got out that Elizabeth Deal’s little girl was not taking the Bible class at her West Virginia public grammar school. Her daughter, Jessica Roe, then a first-grader, felt it first. When her teacher and the pastor who ran that class realized they didn’t have a permission slip for Jessica Roe to attend, they placed her and another girl who wasn’t enrolled in the county's Bible in the Schools program in a coat closet and gave them iPads “to amuse themselves" during the 30-minute class,  “My child was offered no alternative education,” said Deal, 42, a granddaughter of two West Virginia coal miners who was raised a Methodist in the Virginia suburbs of Washington and now describes herself as agnostic. When Jessica Roe was in third grade, the bullying began, Deal charged in a lawsuit she and another family filed in January 2017 against the Mercer County Public Schools, with the help of the Wisconsin-based Freedom From Religion Foundation, which advocates for the separation of church and state. “The kids started telling her that she and her family were all going to hell,” Deal said. “One girl saw the Harry Potter book that Jessica Roe was reading and slammed it down on her desk. ‘You don’t need to be reading this witch magic stuff, you should be reading The Bible,’ she yelled.” In 2016, Deal transferred her daughter to a public school across the state border, in Bluefield, Virginia. After she sued in 2017, Mercer County suspended the class.

Charter Schools and Race in New Orleans - Thursday night, New Orleans public schools as we knew them ended. With a 5-2 vote by the Orleans Parish School Board, the last remaining public high school in New Orleans became its latest charter school. In a room filled to capacity, replete with security, protesters, placards, chants, and shouts of dissatisfaction, McDonogh 35 Senior High School’s future was turned over to charter school group InspireNOLA. Many were outraged, some were left in tears, but it changed nothing.With the 5-2 decision, New Orleans became the first city in the United States to turn its entire school system over to an all-charter system. Oddly, with this vote, the OPSB appears to have ceded much of its own authority by default to InspireNOLA, although the McDonogh Alumni Association had called on the board to maintain direct control over the school.  Groups protesting included parents, students, Friends and Family of Incarcerated Children (FFLIC), and the NAACP.  McDonough 35 was Louisiana’s first high school for black students, and before Hurricane Katrina, McDonogh 35 was a school with a celebrated academic reputation. After Katrina, McDonogh 35 went from a “C” rated school to a “D” in 2017. Nevertheless, many parents, educators, and alumni stand in opposition to the OPSB’s move.  Kim Ford, a community activist in the City of New Orleans, says, “The school board has been a nemesis to the recovery of the community.” She added, “I wanted to ask them to step down from their seats on the school board…the board and the superintendent, they need to go.” As a member of the NAACP, she has no plans to end her involvement, “We’re going to be organizing in January…about how we’re gonna take down this board, and their unwillingness to educate our children.”

NYPL’s Chief Digital Officer Says Public is Better off When Libraries Are ‘Risk Averse’ About Tech - New York Public Library's Tony Ageh was recently in Seattle to talk about libraries' digital transformation. Ageh made the point that tech now permeates pretty much all of a library's operations, from ebooks and article databases, to systems for checking out materials and tracking fines. Still, don't look for your library to be on the bleeding edge of digital. From a report:"What I previously imagined was a weakness I think is a strength, which is that libraries have been very reluctant to move too quickly and have allowed the marketplace and allowed other organizations to kind of prove things work before libraries have taken the plunge," said Ageh, who before joining NYPL oversaw internet and archive efforts at the BBC (British Broadcasting Corporation).  ‘I think that has actually inoculated us against waste or harmful behavior." That kind of fad-or-trend, wait-and-see behavior appears to generally suit libraries well. "Librarians are incredibly risk averse," he said. "I think they do care very much about patrons and about the impact that their work does, and so we're very unlikely to take a chance when we're dealing with public money and when we're dealing with patrons; we have a personal relationship with them."

Meeting on Oakland school closure expresses hostility to attacks on public education -- Last Tuesday, over 150 parents, students, educators and community members attended a public meeting to protest the planned closure of Roots International Academy, a middle school that serves low-income youth in East Oakland, California. After listening to district representatives attempt to justify the closure, numerous attendees spoke out forcefully against it and in favor of expanding public education funding and resources.  Roots is one of 24 public schools in Oakland Unified School District (OUSD) that are slated to be closed or merged with other public schools over the next five years as part of the district’s and state’s savage assault on public education, which includes district budget cuts of $60 million over the next two years. All 24 schools slated for closure or merger are located in the “flatlands” regions of East and West Oakland, where poverty and crime are far more prevalent than in the rest of the city. In response to this unprecedented attack on education in Oakland, the city’s working class residents are beginning to mobilize. Among Oakland teachers, who have been working without a contract since July 2017, there is growing sentiment for a statewide teachers strike to unite with Los Angeles teachers, who last week announced that they will begin striking on January 10.Two weeks ago, roughly 100 Oakland teachers engaged in a wildcat “sickout” strike, largely out of frustration over the stalled negotiations and lack of initiative from the Oakland Education Association (OEA) teachers union. The union has been dragging its feet and has done next to nothing to prepare teachers for a potential strike.

January 10 strike date set for 33,000 Los Angeles teachers -- Last week, the United Teachers of Los Angeles (UTLA) announced that it had set a strike date of January 10 for 33,000 teachers after failing to reach an agreement with the district after more than 18 months of negotiations.  The announcement came a few days after as many as 50,000 educators and their supporters marched in the nation’s second largest school district to demand increased wages, a reduction in class sizes and the hiring of nurses and other critical staff. Teachers in Oakland, Fremont and other California cities are also pressing for strike action as part of the resumption of teachers’ strikes, which saw statewide walkouts earlier this year in West Virginia, Oklahoma, Arizona and other states.  Ever since the previous contract expired in June 2017, the UTLA has sought to prevent a walkout in defiance of a 98 percent strike mandate by rank-and-file teachers. This included tying teachers up in worthless state mediation and fact-finding schemes. Even in his announcement of the deadline, UTLA President Alex Caputo-Pearl made it clear that he would call off strike action if district officials gave the union some gesture to sell the members. “We will strike on January 10 unless we see an addressing of the crucial issues that shape education,” the UTLA president declared. On the question of salary, the district had initially proposed a 3 percent increase retroactive to the 2017-2018 academic year along with a 3 percent increase in the next conditional upon the district’s financial health. The union has given its blessing to this insulting pay offer from the banker-turned school superintendent Austin Beutner, which is barely above the rate of inflation and will do nothing to relieve educators facing crushing housing, health care and debt servicing costs.

Virginia teachers plan statewide protest to demand school funding - The Virginia Educators United (VEU) has called a statewide march of educators in Richmond for January 28, as mass protests, strikes and sickouts continue among teachers across the United States. More than 30,000 Los Angeles educators are set to strike January 10, while thousands of California teachers have held sickouts or rallies this month in Oakland, Fremont and Rocklin. The East Bay Coalition for Public Education will also hold a mass protest January 12.  What do teachers in Virginia confront? A public education system devastated by years of underfunding, which has proceeded apace under both Democrats and Republicans. In 2017 Democratic Governor Terry McAuliffe pointed to the chronic teacher shortage, observing that no sixth grades in the Petersburg schools had a math teacher for the entire year. Yet he offered no increase in teacher salaries to attract new educators, and instead provided $1 million to recruit and train principals and a similar sum to automate the licensing process.A  few figures underscore the dire situation faced now by teachers, children and families in the state:

• Since 2009, total employment for Virginia public schools has declined by 1,242, even as K-12 enrollment increased by more than 50,000.
• Virginia teachers’ salaries average $51,049, well below the national average of $59,660—which itself is low given rising costs of health care and other necessities.
• Teachers must endure a probationary period of five years before receiving any type of job security.
• Public schools depend on a combination of local level and state funding. Per pupil spending by the state has declined 9.1 percent since the financial crash of 2008, leaving Virginia 40th in the country in terms of state funding. Major problems with facilities abound, including buildings that are leaking, decaying and have mice and vermin. The average Virginia school building is around 60 years old. Even 100-year-old buildings are not unusual.

Hacker Steals Ten Years Worth of Data From San Diego School District  - A hacker has stolen the personal details of over 500,000 San Diego Unified School District staff and students; the district revealed in a breach notice posted on its website on Friday, before the Christmas holiday.  The breach occurred because the attacker gained access to staff credentials via a tactic known as phishing -- sending authentic-looking emails that redirect users to fake login pages were attackers collect login credentials. The attack didn't go unnoticed. Some staff reported the funny-looking emails to IT staff, who investigated and eventually discovered the breach in October this year.  District officials said the hacker had access to its network between January 2018 and November 1, 2018, but that he stole student and staff data going back to the 2008-2009 school year.  In an email sent to affected victims, district officials said they allowed the hacker to operate after their discovery on purpose. "It was necessary for our investigation to not immediately tip off those responsible that we were aware of their activities," the district said in its letter. "We are notifying any potential victims now because that phase of the investigation is over. However, our full investigation continues."

Teachers quit at highest rate on record in 2018 - Teachers and public education employees in the U.S. quit at the fastest rate ever recorded in 2018, the Wall Street Journal reports.  The big picture: Historically low unemployment could be the cause, as Americans expect "they can find something better," per the Journal. But there were also a string of teacher protests around the country this year over pay and poor conditions. 83 of every 10,000 public educators quit in the first 10 months of 2018, which is the highest rate since records began in 2001, the Journal notes.

America's 2nd Oldest Women's College Starts Accepting Transgender Students -- The new policy will take effect beginning in fall 2019 and arrives not long after the Trump administration's proposed changes to Title IX, which would not legally define "gender,"  thus limiting one's gender identity to that of the sex assigned to them at birth: male or female. It is unclear what impact the proposed Title IX change, if implemented, could have on the new Stephens College policy. The U.S. Education Department and Stephens College did not respond to a request for comment in time for publication.“Admission and continued enrollment in Stephens College’s undergraduate residential program will be restricted exclusively to women, including students who are legally identified as female and who self-identify as women; students who document an ongoing transition to female and who self-identify as women; and students who are legally identified as female but do not fit within the gender binary,” the Stephens College email read. Transgender and non-binary students who apply "will be required to prove that they identify and live as women through legal documentation," according to an explainer released by the college.  “The world’s understanding of and definition of womanhood is changing. Stephens is evolving — just as it always has — to ensure that it continues to provide the extraordinary experience of a Stephens College education to all women who will seek and benefit from it," a statement from the college read, according to the Columbia Missourian newspaper.

 In Wake Of Minority Transcript Fraud Scandal, Ivy League Silent On Admissions Process -  A private school has been accused of numerous unethical practices to help its minority students gain acceptance to prestigious universities including Harvard, Stanford, Princeton, and Yale, and these universities are refusing to clarify how they were fooled by the fraudulent records or how they plan to improve their admissions process to prevent it in the future. T.M. Landry College Prep, a school in Breaux Bridge, Louisiana, has in recent years drawn the attention of several major programs including the “Today” show, “Ellen,” and “CBS This Morning” due to many of its students’ having been accepted at many of America’s most prestigious universities. Numerous students were presented as having surmounted difficulties at home to achieve outstanding grades in challenging courses and earn impressive honors in extracurricular activities. A recent bombshell report in The New York Times revealed that much of these accomplishments were false. “In reality, the school falsified transcripts, made up student accomplishments and mined the worst stereotypes of black America to manufacture up-from-hardship tales that it sold to Ivy League schools hungry for diversity,” the paper reported.Those schools, however, are refusing to comment on their application processes, declining to say if and how they will improve their administrative procedures in order to safeguard against future fraud. The College Fix reached out to eight prestigious universities that have accepted Landry graduates to ask about their application vetting processes. None were willing to comment. At Yale, an individual named Isaac responded to The Fix’s query to the admissions office and said: “Unfortunately, I’m not able to speak on behalf of the admissions office for your publication.” It is unclear what role this individual plays in Yale’s admissions. Further queries were not returned.

College loan debt and the life of an adjunct professor -- The ballooning of student loan debt and the growing preponderance of part-time, low-paid adjunct professors are two sides of the deepening degradation of the American higher education system. Once the envy of the world, US colleges now specialize in education on the cheap while young people are increasingly preyed upon by the Department of Education in the form of loans. Last month, student loan debt set a new record at $1.465 trillion, more than double its level in June 2009. Over 2.7 million borrowers owe in excess of $200,000 each and face a lifetime of escalating interest costs and penalties—a modern form of debt peonage. The number of people 60 and over still paying on student loans has quadrupled since 2005. The federal government is garnisheeing up to 15 percent of indebted seniors’ Social Security payments for their college loans. The average cost of tuition at public colleges has nearly doubled in the decade since 2003. At the same time, the quality of higher education has been hammered. Many schools now routinely staff more than half their classes with part-time adjunct lecturers or graduate teaching assistants. For example, the University of California-Berkeley charges $14,170 in tuition (in-state) but has part-time faculty and graduate assistants teaching 68 percent of its classes. George Washington University charges $47,343 a year and has 61 percent low-wage staff.  The WSWS Teacher Newsletter spoke with adjunct professor “Rebecca” at a US community college who was eager to expose the impossible situation faced by so many college instructors but asked that a pseudonym be used to protect her various jobs.

Ivy Leagues Are Handing Out Millions in Fees to Hedge Fund Managers - Dean Baker -  The latest tale of the well-connected rich is a study, by Markov Processes International, of the 10-year returns of the endowments of the eight Ivy League schools. The study found that all eight endowments had lower returns than a simple mix of 60 percent stock index funds and 40 percent bonds. In some cases the gap was substantial. Harvard set the mark with its annual returns lagging a simple 60-40 portfolio by more than 3 percentage points.   This dismal track record is a big deal because these endowments invest heavily in what is called “alternative investments,” primarily hedge funds and private equity funds. The people who run these funds often make tens of millions a year, in some cases hundreds of millions a year.The rationale for these astronomical salaries is supposed to be their ability to produce outsized returns. The partners in these funds claim that they can earn far more for endowments and other investors than simple investment strategies, like buying index funds.This analysis shows that high returns have not been the story in the last decade. While the people managing these funds pocketed huge salaries, they had nothing to show for it in terms of performance. In fact, they actually cost the schools money. Harvard, Yale and the rest of this elite set were paying millions of dollars to hedge fund managers who were losing the schools’ money. Markov’s analysis understates how much the Ivies lost by hiring their hedge fund friends. It used a portfolio of 60 percent stocks, 40 percent bonds as a benchmark. But the hedge funds typically engage in risky investments, comparable to a portfolio that is 80 or even 90 percent stock. Using this as a benchmark, the endowment returns would look considerably worse.  To get a sense of how much is at stake, a standard hedge fund contract pays the fund manager 2 percent of the assets under management every year, plus 20 percent of returns over a target rate. If Harvard’s $40 billion endowment were entirely managed by hedge funds, they would get $800 million in fees, plus 20 percent of the endowment’s earnings over some threshold. If Harvard’s endowment beat its threshold by 5 percentage points (it almost certainly did not), the hedge fund partners would pocket an additional $400 million for a total of $1.2 billion. This is enough to pay annual tuition for more than 2,500 students.

 How Activists Are Moving the Dial on Student Loan Debt -- Student loan debt has just reached an all-time high of $1.465 trillion. That’s double the $675 billion in loan debt amassed in June 2009, according to a recent report from Bloomberg. With more than 44.5 million people in some type of student loan debt, it’s increasingly becoming part of the platforms of high-profile progressive policymakers.  The national conversation has come a long way in the years since activists started pushing the issue of student debt during the 2008 recession. Now, incoming Rep. Alexandria Ocasio-Cortez is vocal about the idea of student loan debt cancellation and Sen. Bernie Sanders talked about making public college tuition-free during his presidential campaign. “At first we were regarded as totally unserious as to how the world works,” said Ann Larson, co-founder of the organization Debt Collective. “Yet, less than a decade later, we have Bernie Sanders, some likely presidential candidates, lawmakers, policymakers, scholars and others talking about this.”  The Debt Collective is the most recent iteration of a few grassroots initiatives aimed at tackling debt. The Strike Debt network attempted to mobilize borrowers to go into default to mandate student loan reform, while Rolling Jubilee used $701,317 in donations to buy up and cancel $31,982,455 of student loan debt. Today the organization is centered around canceling all types of debts by collectivizing the interests of individual borrowers. Protections for student loan borrowers — especially in terms of private student loans — are nearly non-existent. Borrowers must deal with unclear lending requirements and shady repayment practices. The nation’s largest student loan lender, for example, deceived borrowers on the terms of their repayment, resulting in illegal increases in principal balance by allocating payments to the interest rather than the principal loan. Borrowers are fighting against an industry based on making money off their debt.

A Worrying Rise in Gun Suicides - New data from the Centers for Disease Control and Prevention highlights the growing problem of firearm suicides in the U.S. Since 2008, the rate of gun suicides has risen 22 percent and is driving the increase in gun-related deaths. (Suicides make up almost two-thirds of all gun-related deaths.) Among children and teens in particular, the gun-suicide rate is up more than 76 percent. Although only a small percentage of suicide attempts are made with a firearm, more than half of all suicide deaths are carried out with one. The primary victims are older white men. It’s not surprising then that access to a firearm triples the risk of death by suicide — not only for those who personally own a gun, but also for those who live in a household with a gun. Likewise, gun ownership rates in states are strongly correlated with rates of firearm suicide. (Gun mortality rates in general follow a pattern: They’re higher in states with lax gun laws.) Researchers at Johns Hopkins University estimated that after Connecticut passed a law requiring individuals to obtain a permit or license to purchase a handgun (along with a background check), the state saw a 15 percent drop in firearm suicides. On the other hand, in Missouri, the 2007 repeal of its purchase permit law was associated with a 16 percent increase in firearm suicide rates. The firearm suicide rate in the U.S. is eight times higher than in other affluent countries. To reduce that deadly disparity, public officials need to adopt known strategies for harm reduction — especially among older, rural white men; military veterans; and other populations with high rates of gun ownership and suicide. Interventions by social workers or medical professionals should be tailored demographically, including by sex and age. Some gun dealers have begun to educate customers on the association between firearms and suicide.

Mississippi’s Republican governor quietly considering Medicaid expansion — Mississippi’s Republican governor is considering Medicaid expansion, the first sign that long-held GOP opposition could be wilting in the Deep South after an election that was a big winner for the Obamacare program.   Republican Gov. Phil Bryant, entering his final year in office, has been engaged in quiet talks about adopting expansion after resisting for years, according to two sources familiar with the discussions.   The behind-the-scenes move comes as a surprisingly viable Democratic gubernatorial candidate is planning to make Medicaid expansion a central issue in the 2019 election. But in an even more unlikely scenario, Republicans could beat him to it and undercut a key Democratic message.  Until now, Medicaid expansion has largely been ignored in the Republican-dominated state, one of the sickest and the poorest in the country. Even Mississippi Democrats have largely dismissed it as politically unviable since a 2012 Supreme Court decision made the program optional for states.

The little-known way consumers could challenge surprise medical bills in court - Patients can be left with surprise medical bills when a provider charges more than an insurer is willing to pay, leaving the patient to cover the difference—a practice known as balance-billing. But some legal experts say there is another path forward for patients who are unexpectedly faced with high medical bills to push back. Barak Richman, a law professor at Duke University, said contract law dictates hospitals should charge "average or market prices" if there was no explicit price agreement upfront. Richman explains that contract law rests on the idea of "mutual assent," in which both parties in a contract agree on a price before services are rendered. Because of this concept, many states require businesses provide consumers with written estimates for their services before their work begins, Appleby writes.Patients increasingly using that legal argument in court—and some have successfully gotten their medical bills lowered, Appleby writes. Hospitals in such lawsuits have argued that patients provided mutual assent by signing admission forms that included a promise to pay, even if a price wasn't disclosed. But Richman argues that claim doesn't hold up under contract law. For example, he said, if a tax preparer doesn't provide an estimate for his services up front, he couldn't suddenly bill a customer for $10,000 if the average rate for his service was $1,000 or less. Such a charge would not be permitted under contract law because there was no mutual assent, Richman said.

 CDC Warning- A Respiratory Virus Is Attacking Both Children And Adults - The Centers for Disease Control and Prevention is warning of a respiratory virus that is currently attacking both children and adults. The CDC says that everyone should watch out for Respiratory Syncytial Virus or “RSV.” RSV may start out by noticeable symptoms that are very similar to those of the common cold and most people will recover in less than two weeks believing they only had a cold. Some symptoms are coughing, wheezing, loss of appetite, runny nose, and a fever.  Those symptoms are very similar to those of the common cold, and most people have actually had RSV before possibly believing it to be a cold.RSV can spread when an infected person coughs or sneezes. You can get infected if you get droplets from a cough or sneeze in your eyes, nose, or mouth, or if you touch a surface that has the virus on it, like a doorknob, and then touch your face before washing your hands. Additionally, it can spread through direct contact with the virus, like kissing the face of a child with RSV. -CDCHowever, the CDC says that RSV can be serious for infants and the elderly. As of now, the government agency says there is no vaccine to prevent the virus either. There is a medicine that can help protect some of the babies. This medicine (called palivizumab) is a series of monthly shots.RSV is the most common cause of bronchiolitis (inflammation of the small airways in the lung) and pneumonia (infection of the lungs) in children younger than 1 year of age in the United States. It is also a significant cause of respiratory illness in older adults. But the virus is rather common. According to the CDC’s own website, almost all children will be infected with RSV by their second birthday, building natural immunities to the infection. Should you be terrified of RSV? Probably not. The CDC is well-known for the fearmongering to get people to take a flu shot every year (regardless of its efficacy) and often attempts to scare the public into accepting their notions that common illnesses are dangerous.

Ebola Cases Rising Steadily in Congo's Latest Outbreak —Following another outbreak of the deadly Ebola virus in the Democratic Republic of Congo late last week, the number of infected people continues to rise steadily, with confirmed cases in North Kivu and Ituri provinces. The current epidemic, which began in August, is considered the second deadliest to hit the DRC, and officials say it is so far showing no signs of abating. As of Dec. 19, the World Health Organization reported a total of 560 cases and 360 confirmed deaths. Ebola, which causes fever, severe headaches, and, in some cases, hemorrhaging, is highly contagious and is transmitted person-to-person via contact with blood or body fluids. The latest outbreak has a high probability of spreading to nearby provinces in the DRC and to neighboring countries like Rwanda, Burundi, Uganda, and South Sudan due to loose border control. The outbreak comes at a time when people are not only getting ready for Christmas celebrations but also when the country is preparing for upcoming the presidential election on Dec. 30. The two events mean an increase in the movement of people in and out of the infected areas, which is likely to exacerbate the spread of the virus. Complicating matters is ongoing violence from local militias as part of Eastern Congo’s 25-year-old civil war. During the election, millions of people will use touch-screen voting machines, heightening the chance of contamination. To offset this, health officials have established checkpoints with contact-free temperature-sensing devices at the entrance to polling stations in Ebola-infected areas. In addition, hand sanitizer has been distributed for mandatory use at all polling stations. 

Power Plants Responsible For Pediatric Cancers, Suit Alleges - Residents of east Orange County filed a lawsuit on Thursday alleging that Orlando’s coal-burning power plants have poisoned their homes and public spaces with metal, chemical and radioactive residues that have triggered a local spike in rare cancer cases. An area spanning nearly 30,000 residents and 15,000 homes, including the communities of Avalon Park, Stoneybrook, Eastwood, Cypress Springs, Andover Lakes/Cay and Turnberry Pointe/Cay, is identified as harmed in the lawsuit. “The danger of such exposure is borne out by an epidemiologic analysis based on data from the Florida Cancer Disease Registry and a site investigation, which found a higher incidence of, for instance, pediatric brain and blood cancers including two exceedingly rare pediatric brain cancers,” states the lawsuit by Cohen Milstein, a national firm that specializes in cases of environmental threats to communities. “The only source of these cancer-causing Contaminates is the Stanton Power Plant, which has a unique Contaminate fingerprint,” it states. Article continues below“The only source of these cancer-causing Contaminates is the Stanton Power Plant, which has a unique Contaminate fingerprint. — Lawsuit filed Thursday, blaming power plants for cancer cases. Filed in state Circuit Court in Orlando, the suit contends that Orlando Utilities Commission’s two coal-burning power plants, which have been operating since 1987 and 1996, have blanketed a large area of east Orange with chimney emissions and windblown dust from raw coal and uncovered piles of coal ash. “It’s critical that OUC stop its ongoing pollution,” said Steve Morrissey of a second, national law firm behind the lawsuit, Susman Godfrey. Utility spokesman Tim Trudell said the power plants are highly regulated by state and federal agencies. “OUC meets or exceeds all permitting requirements as environmental stewardship is one of the key principles of our organization,” he said. “Due to the pending litigation, we cannot get into any additional detail at this time.”

 Fears of health crisis as Delhi suffers worst air pollution this year - Pollution in Delhi has reached its worst level this year in the past two days, prompting authorities to rate conditions as “severe to emergency”, which indicates the potential for a public health crisis. Senior government officials said the main reasons for the increase in smog were unusually cold air, fog and a lack of wind. Such conditions trap vehicle fumes and pollution from coal-fired power plants, industry and domestic fires over the city. Data from the government’s Central Pollution Control Board (CPCB) showed the air quality index, which measures the concentration of poisonous particulate matter, was an average of 449 on Monday, only slightly better than 450 on Sunday. The index measures the concentration of PM 2.5, particles that can be carried deep into the lungs. The previous highest recording this year was 447 on 15 June, when there was a dust storm. Anything above 100 is considered unhealthy. India’s weather department said the index reached 654 in some parts of the city, and visibility was down to as little as 200 metres. Environmentalists said the authorities’ inaction was inexcusable and a concerted effort was needed to reduce pollution from vehicles and industry. “If this is not an emergency, then what is?” asked the Delhi-based environmentalist Vimlendu Jha. The “severe to emergency” rating means the air is not only hazardous for citizens with existing respiratory problems but can also seriously affect healthy people.

'A Disaster'- Critics Pounce on Trump USDA's New GMO Labeling Rule - Food safety advocates are expressing sharp disappointment with the final federal GMO labeling rule, released Thursday by the U.S. Department of Agriculture (USDA).While industry-friendly Agriculture Secretary Sonny Perdue asserted in a press statement that the new standard for foods produced using genetic engineering (GE or GMO) would boost "the transparency of our nation's food system" and ensure "clear information and labeling consistency for consumers about the ingredients in their food," groups like the Institute for Agriculture and Trade Policy (IATP)—and even food giants like Nestlé—say it does nothing of the sort."It is obvious that this rule is intended to hide, not disclose, information about genetically modified foods," said IATP senior attorney Sharon Treat.Among the concerns being raised is that the rule, published Friday in the Federal Register and with implementation set to begin in 2020, refers not to the widely recognized phrase "genetically-modified food" but rather "bioengineered (BE) food." "USDA's prohibition of the well-established terms, GE and GMO, on food labels will confuse and mislead consumers," said Andrew Kimbrell, executive director at the Center for Food Safety. To make the disclosure, food producers have four options: text, a friendly-looking symbol, an electronic or digital link, or a text message. According to Food & Water Watch executive director Wenonah Hauter, the symbol suggests "to consumers the product is natural and sustainable, when genetically engineered foods are anything but."  The option for the use of electronic codes, meanwhile, discriminates against those without access to a smartphone, tablet, or reliable internet access, and while the companies would also need to provide a telephone number for a consumer to call, that is onerous, the groups say.

Chinese Gene-Editing Trials Have 'Lost Track' of Patients: Report - A Chinese gene-editing experiment has lost touch with patients whose DNA was altered, alarming Western scientists who say subjects should be monitored for many years, The Wall Street Journal reports. The gene-editing tool known as Crispr-Cas9 allows scientists to edit the DNA of patients in hopes of eliminating harmful mutations, such as those that cause cancer. However, Chinese scientists have reportedly leapfrogged in experimenting with gene-editing on humans in the last few years. Beijing has no federal body that oversees gene-editing trials, meaning standards vary across experiments. The approach has been troubling to doctors and scientists in the U.S., who fear the promising science could be overshadowed by haphazard implementation. Last month, a Chinese scientist claimed he has created the world’s first gene-edited babies. Jennifer Doudna, a professor of chemistry and molecular & cell biology at the University of California Berkeley who is credited as a co-inventor of the Crispr technology, responded to the claim. “Because the data have not been peer-reviewed, the fidelity of the gene-editing process cannot be evaluated,” Doudna cautioned.

EU reports on pesticides are copy-pasted from industry dossiers - Remember the copy-paste scandal, when Greenpeace uncovered that the EU report on glyphosate was, over many pages, identical to the application dossier submitted by Monsanto and other pesticide companies?  Now a team of journalists working for the German news brand BR24 has checked whether this is also true for other pesticides. After all, both the BfR and EFSA said that this was common practice. And it is. The team checked 25 EU risk assessment reports prepared by different Rapporteur Member States, and in particular the human health parts. It found that many national authorities had done what the BfR had done for glyphosate – they copied large chunks of text from the application dossiers over to the EU report, without any indication of the source. The journalists also got an interview with EFSA director Bernhard Url who said, again: "We assume that the authority checks whether something corresponds to reality before taking it over." They also got an insider to speak out, anonymously, who confirmed that the authorities didn’t have the time to check all the studies.

Insects are slipping into the US and causing nearly $5 billion in damages every year - From a distance, the hemlock trees by the Wappinger Creek in Millbrook, New York, look just fine. But forest ecologist Gary Lovett knows better. He pulls back the twigs and exposes some tiny, white fluffy balls."These are the protective coating that's created over the top of the hemlock woolly adelgid, a tiny aphid-like insect," said Lovett."They're very tiny, so one of them won't bother the tree. But when we have millions and millions of them on a tree, it eventually kills the tree," explained Lovett, who is with the Cary Institute of Ecosystem Studies in Millbrook, about a two-hour drive north of New York City. The hemlock woolly adelgid, native to East Asia, is slowly killing trees from Maine to Georgia. It's among the latest in a line of invasive pests slipping into the US. But according to some studies, invasive pests are costing the US economy close to $5 billion a year. Trees don't just die in forests, they die in cities and our yards. "Most of the cost is being borne by homeowners and by local governments, municipalities," Lovett said. Consider the nearby city of Poughkeepsie, New York, which has a problem with the emerald ash borer, another invasive pest native to Asia, infecting its ash trees.  Poughkeepsie city administrator Mark Nelson brought up a computer map with about 300 dots, color-coded ash trees owned by the city. Red and yellow dots mean the emerald ash borer has found a new host. "I think it's safe to say that of the city-owned trees, 90 percent are infected," said Nelson. The city has to pay to take the trees down, or eventually, they'll die and fall. (You could imagine the horror story lawsuits were that to happen.) So the city recently took down 50 ash trees. The cost: $82,000.

'We are at war': New York's rat crisis made worse by climate change - The discarded slices of pizza that litter New York’s streets have long fuelled its sizeable population of rats, but now the city’s growing swarm has a new reason to enjoy their home – warming temperatures. City officials have reported an increasing number of calls from residents complaining about rats, and have warned that milder winters are helping them feed and mate longer into the year. And as winters warm up, more frequent outdoor activity by humans is adding to the litter rats thrive upon. Rat-related complaints have been on the rise over the past four years, with 19,152 calls made to the city last year, an increase of about 10% on 2016. There are no reliable figures on the number of rats in New York – estimates range from 250,000 to tens of millions – but the surge in rat activity has been replicated in other cities. Houston, Washington, Boston and Philadelphia have experienced large increases in calls to pest control. Veteran anti-rat strategists have, in part, blamed climate change. “It’s a complex issue but we are seeing rat population increases around the world now,” said Bobby Corrigan, a sought-after rat-catching consultant who once spent a week living in a rat-infested barn in Indiana as part of his PhD research.“Requests for my services are through the roof, I can’t keep up with them,” he said. “You speak to any health commissioner from Boston to DC and the trend is upwards.“In winter rats slow down their reproduction because it’s so cold, but they are probably having one more litter a year now because it’s getting warmer. A litter is around 10 babies and that’s making a difference.” The increase in rat sightings has spawned viral videos of rats eating pizza and navigating escalators – but has also raised health concerns.  A death was recorded in the Bronx last year due to leptospirosis, a rare disease transmitted via rat urine. New York rats trapped and tested by Columbia University researchers were found to be reservoirs of E coli and salmonella, with some even carrying Seoul hantavirus, which can cause kidney failure.

'Global Warming' Blamed For Drastic Decline In World's Reindeer Population - In the run-up to Christmas, some upsetting news has emerged regarding wild populations of reindeer and caribou in the Arctic. Over the past two decades, their numbers have fallen from nearly five million to just 2.1 million animals, according to the latest Arctic Report Card released by the National Oceanic and Atmospheric Administration. As Statista's Niall McCarthy notes, that represents a decline of 56 percent since the mid-1990s.  Some herds are faring better than others and researchers have found that in some cases, several herds have crashed by more than 90 percent. The drastic decline is due to a complex mix of factors such as hunting, disease, a lack of food and climate change. Even though the Arctic is getting warmer which results in more vegetation for the animals, increasing levels of drought, flies and parasites are taking a toll on them. Reindeer and caribou are the same species - Rangifer tarandus - but there are notable differences between them. Caribou are larger elk-like animals that have never been domesticated while reindeer are smaller and were domesticated in northern Eurasia about 20,000 years ago. The grim findings of the report hardly come as a surprise given that the WWF released a global assessment of the health of animal populations all over the world earlier this year, finding that average vertebrate (bird, fish, mammals, amphibians) population has shrunk 60 percent since 1970.

Giraffes just silently went to the list of endangered animals facing extinction - Two subspecies of giraffes were recently added to the list of "critically endangered" species for the first time ever, as per the latest report by the International Union for Conservation of Nature (IUCN), which administers the world's official endangered species list. The IUCN reported on Saturday that they have moved the giraffe from the list of 'Least Concern' to that of 'Vulnerable' status in their Red List of Threatened Species report. The next slots after 'vulnerable' are 'endangered', 'critically endangered', 'extinct in the wild', and 'extinct'. Thus, if we do nothing about it, giraffes could become extinct in the wild in the medium-term future.

‘A Lot of These Species Are Right on the Edge’: More Than 50 Australian Plant Species Could Go Extinct in 10 Years - Scientists published the first major assessment of the health of Australian plant species in two decades, and the results are urgent, The Guardian reported Tuesday.More than 50 of Australian plant species could go extinct within the next decade, but only 12 of them are listed as "critically endangered" under the nation's Environment Protection and Biodiversity Conservation Act. Thirteen of the at-risk species are not listed at all."Some of these species, it would just take a grader truck from a council to accidentally run over them to destroy a whole population," lead study author and University of Queensland postdoctoral researcher Jennifer Silcock told The Guardian. "Some of these areas are only a couple of metres wide."The papers' authors argued that their findings indicate that the Australian government should re-evaluate its lists of endangered species and coordinate them with the guidelines established by the International Union for Conservation of Nature.The paper, published in the Australian Journal of Botany, drew its conclusions from previous publications and from 125 interviews with experts in the field. Here are some of the key takeaways by the numbers.

• 1,135 species were considered.
• 80 of those do not currently appear on any Australian state or federal lists.
• 418 are in "documented, suspected or projected" decline.
• 296 are at risk for extinction if current trends continue.
• 55 are at "high risk of extinction."

Ecocide as Creative Destruction - According to the WWF (World Wildlife Fund), since 1970 60% of the mammals, birds, fish and reptiles on the planet have been driven to extinction. To the extent that the WWF has it right, climate change accounts for less than 10% of these losses (graph below). As important and logistically complex as resolving climate change is, it is but one of a host of environmental ills in equal or greater need of resolution.  Habitat degradation and loss and animal exploitation (e.g. trawl-net fishing) explain most of this animal extinction. Habitat loss is primarily due to deforestation to feed factory farm animals. According to the Guardian, these animal losses would require 5 – 7 million years to recover from. But as of today, the causes of extinction continue unabated with no plausible plans being put forward by national governments to address it. Of the mass extinction of animals that the WWF is reporting, most comes from habitat loss and degradation. Climate change explains less than 10% of the losses. The point isn’t to downplay climate change, but to express the breadth of the environmental crisis that the world now faces. While the role of global warming will increase in time, mass extinction is at present a related but separate crisis in need of resolution. Source: wwf.org.uk.As reported here and here, the animal extinction isn’t anomalous. Over approximately the same time frame, 60% – 80% of insects have also been made extinct. The precise balance of causes is debatable, but putting climate change forwardas the primary cause reframes the concept of a ‘carbon budget’ in wildly alarming terms. If the one-degree Celsius warming experienced to date explains the insect extinction, where does that leave the IPCC’s1.5 degree warming ‘budget?’ The appeal of assigning climate change as the cause of mass extinction is that solving climate change would in theory solve it. However, Raj Patel of the University of Texas-Austin is one of a number of environmental theorists who argue that industrial agriculture— including deforestation, monoculture planting and the use of pesticides, explains the insect and animal extinctions quite well. That oceanic dead zones ring industrial economies supports the interpretation that they are caused by agricultural runoff.

Plastic Water Bottles, Which Enabled a Drinks Boom, Now Threaten a Crisis - Bottled water, which recently dethroned soda as America's most popular beverage, is facing a crisis. From a report:A consumer backlash against disposable plastic plus new government mandates and bans in places such as zoos and department stores have the world's biggest bottled-water makers scrambling to find alternatives. Evian this year pledged to make all its plastic bottles entirely from recycled plastic by 2025, up from 30% today and among the boldest goals in the industry. Executives at parent company Danone hope the move will help it regain market share and win over plastic detractors who are already pressuring the makers of straws, bags and coffee cups. There's a big problem. The industry has tried and failed for years to make a better bottle. Existing recycling technology needs clean, clear plastic to make new water bottles, and bottled-water companies say low recycling rates and a lack of infrastructure have stymied supply. Danone, for its part, is betting the reputation of its flagship water brand on a new technology that claims to turn old plastic from things like dirty carpets and sticky ketchup bottles into plastic suitable for new water bottles. [...] Bottled-water sales have boomed in recent decades amid safety fears about tap water and a shift away from sugary drinks. Between 1994 and 2017, U.S. consumption soared 284% to nearly 42 gallons a year per person, according to Beverage Marketing Corp., a consulting firm.Further reading: Microplastics Found In 93 Percent of Bottled Water Tested In Global Study, and Amazon Wants To Curb Selling 'CRaP' Items it Can't Profit On, Like Bottled Water and Snacks: Report.

As anti-plastic movements sweep the globe, change doesn’t always come easy - Grist - Australia’s two largest supermarket chains made waves earlier this year when they announced plans to ban single-use plastic bags in stores across the country. Environmentalists hailed the move, which according to new figures released this month, may have saved more than 1.5 billion bags from going into overstuffed kitchen drawers or landfills in less than six months. The National Retail Association, a nonprofit group that represents the grocery industry, said in early December the entire country has seen an astonishing 80 percent drop in single-use plastic bags since Coles and Woolworths implemented the bans in July. The two supermarkets, which together own more than 60 percentof the grocery market in Australia, have each said they’ve kept more than 700 million plastic bags out of circulation this year.   But despite the good news, the proposal didn’t happen without some controversy. Angry shoppers prompted outbursts in checkout lines in several Coles stores and the supermarket giant backflipped just weeks after implementing its ban amid vehement complaints. Coles stores quickly said they would provide heavier-duty, reusable bags for free for the foreseeable future, after some media outlets dubbed the phenomenon “bag rage.” The reversal, however, created an even bigger outcry among environmental groups who claimed the chain had only increased the plastic problem by making single-use bags more durable and resistant to breaking down. The supermarket quickly backflipped again, saying it would provide those reusable bags for free for a short time before charging customers for them once more. ’’Both supermarket chains now provide several types of heavy-duty plastic bags for purchase that shoppers can pay for at a cost of about 11 cents apiece, or upwards of several dollars for nicer versions that double as coolers or are made of jute.

 Amid the Seas of Empty Asphalt, After Christmas - Today is the day after Christmas, the day when families across the country burst out from their households of holiday cheer in order to once again brave the lines and lots of shopping malls, exchanging gifts and chasing year-end deals. It is, in other words, one of the busiest shopping days of the year, a “peak” shopping day for which big box stores are equipped with acres of asphalt. This peak parking planning might seem a welcome relief to the mom in the minivan circling ever further out in search of a single open spot. But for many, if not most, commercial retail development, that parking will not be used to capacity even at peak. During the highest peak parking day of this retail year, the dread Black Friday, Chuck Marohn and the Strong Towns crew engaged in a very useful exercise, snapping photos of their local parking lots on the morning of Black Friday in order to gauge just how much peak supply was serving supposed peak demand. In many cases, the Strong Towns monitors found lots half-empty—or worse. Any failures at peak demand only serve to emphasize how woefully disconnected our zoning and town planning often is from the real demands of good policy, however. For even if every lot were ideally full on peak days, that would leave acres of empty, nearly unusable space for the other 362 (or so) days of the year. 

Brazil’s Amazon forest is in the crosshairs, as defenders step up - Early this week, about 500 of Chico Mendes’s early allies and a new generation of successors convened in Xapuri to celebrate his life and legacy, to pray and recall the deaths of hundreds of less prominent victims of frontier violence at that time and since, and to speak of solidarity at Mendes’s grave.   The prime concern was the disruptive outcome of Brazil’s tumultuous election and the kickoff of the presidency of the far-right politician Jair Bolsonaro, on January 1. By now, anyone worried about the fate of the Amazon rain forest or the indigenous and traditional communities depending on this vast, rich ecosystem knows the litany of potentially devastating steps Bolsonaro has threatened to take. He won on a platform mainly built around change and order, appealing to Brazil’s “beef, Bible, and bullet” political bloc. A big theme for this former military officer was taming and exploiting the country’s vast Amazon expanse. Beneath and within the extraordinary biological bounty of the lacework of rivers and towering forest canopies, enormous mineral and timber and hydropower resources remain unexploited. Bolsonaro disparaged Brazil’s minorities and indigenous tribes and discounted their land claims, pledged to loosen forest and environmental regulations and enforcement, to open reserves to mining, and to ban international environmental groups. “There is fear,” said Mary Allegretti, a Brazilian anthropologist who worked closely with Mendes from the early stages of the Acre land struggle, described rising tensions. Since Bolsonaro’s election, they’d been feeling increasing pressure from ranchers. Outside the reserve boundary, they have fewer legal protections. “Farmers are feeling more comfortable making threats,” Allegretti said in a Skype interview. “There are a lot of small conflicts around the reserves. It’s a clear consequence of the new government and ideology.”

'Openly Declaring Their Illegal Whaling Activities,' Japan Abandons Global Effort to Protect Whale Population --After denying for several days reports that they were planning to leave the International Whaling Commission (IWC), Japanese officials said Wednesday that the country would withdraw from the 89-member panel in order to defy its ban on commercial whaling. The move will eliminate the country's long-held "pretense" of hunting whales only for research purposes, said the conservation group Sea Shepherd, as Japan officially declares itself a "pirate whaling nation." "This means that Japan is now openly declaring their illegal whaling activities," Paul Watson, founder of the group, told the New York Times. Since the IWC introduced its ban on commercial whaling in 1986, Japan has used regular so-called "research whaling" trips off the coasts of Antarctica as a loophole to continue its whale-hunting. The country has killed an average of 333 minke whales on its expeditions, including more than 120 pregnant female whales last year.  Instead of traveling to the Southern Ocean every year, Japanese whalers will now resume hunting in Japan's territories and exclusive economic zone beginning in July 2019, selling whale meat on the open market.  Greenpeace Japan noted that the country's timing of the announcement would not stop green groups from condemning its plan to openly slaughter whales for profit.  "It's clear that the government is trying to sneak in this announcement at the end of year away from the spotlight of international media, but the world sees this for what it is,"   "The declaration today is out of step with the international community, let alone the protection needed to safeguard the future of our oceans and these majestic creatures."

Tsunami kills at least 222 in Indonesia, more than 800 injured - - A tsunami following a volcanic eruption in Indonesia on Saturday (Dec 22) has killed 222 people, with hundreds more injured, officials said on Sunday. National disaster agency spokesman Sutopo Purwo Nugroho said 843 people were injured and 28 were missing, as of 4pm local time. “This number will continue to rise, considering not all places have been checked,” Dr Sutopo told a media briefing in Yogyakarta. The tsunami was caused by “an undersea landslide resulting from volcanic activity on Anak Krakatau” and was exacerbated by an abnormally high tide because of the current full moon, he said. “The tsunami hit several areas of the Sunda Strait, including beaches in Pandeglang regency, Serang, and South Lampung,” the agency said. Video footage posted to social media by Dr Supoto showed panicked residents clutching flashlights and fleeing for higher ground. The Meteorology, Climatology and Geophysics Agency (BMKG) said the tsunami was detected at four locations in the provinces of Banten and Lampung at 9.27pm local time on Saturday. TV images showed the seconds when the tsunami hit the beach and residential areas in Pandeglang on Java island, dragging with it victims, debris, and large chunks of wood and metal. Coastal residents reported not seeing or feeling any warning signs, such as receding water or an earthquake, before waves of 2-3 metres washed ashore, according to media. Authorities said a warning siren went off in some areas.  

Devastating ‘Volcano Tsunami’ Strikes Indonesia, Killing at Least 222 (Videos) — After a wave [no pun intended] of devastating tsunamis during the summer and the fall, 2018 was already on track to be one of the deadliest years for tsunami-prone Indonesia since 2004 – when a massive tsunami struck the region, killing nearly 250,000 people, most of them in Indonesia. But with only days to go until the new year, a massive wave has struck the beaches around Sunda Strait in Indonesia on Saturday night, killing at least 222 people, according to Indonesian officials.Meanwhile, roughly 850 people have been injured, while some two dozen are still missing. Sunda Strait separates the Indonesian islands of Java and Sumatra. Its coast is located about 62 miles from Jakarta.The area worst hit by the volcano was the Pandeglang region of Java’s Banten province, which includes Ujung Kulon National Park and popular beaches, the disaster agency said.A harrowing account of the devastation from the Associated Press described broken chunks of concrete and splintered sticks of wood strewn across hard-hit coastal areas. Beach getaways popular with Jakarta residents had been leveled and turned into near ghost towns. Destroyed vehicles remained capsized or piled on top of one another. Debris from bamboo shacks floated across the beaches. The deadly wave is believed to have been caused by undersea landslides resulting from volcanic activity at Krakatoa, according to Indonesia’s disaster agency. Krakatoa is located in the Sunda Strait, and has been spewing ash and periodically erupting for the past several months.  One video that swiftly went viral, a tsunami wiped out the stage and pummeled the audience during a performance by the Indonesia pop band Seventeen at a venue on Tanjung Lesung beach in Pandeglang. The band later released a statement affirming that its bass player, guitarist and road manager had been found dead, while two other band members and one of their wives remained missing.

Death toll rises from Indonesian tsunami -- The death toll from the Sunda Strait tsunami disaster continues to rise. The Indonesian National Board for Disaster Management (BNPB) announced yesterday that at least 429 people have been killed, over 1,480 injured and more than 150 remain missing. Thousands of homes and over 70 hotels and 60 shops were heavily damaged or destroyed.  Scientists have confirmed that the tsunami was caused by a 64-hectare landslide on the nearby island volcano of Anak Krakatoa. It produced the massive and fast-moving waves that hit towns and popular beach resorts on both sides of the Sunda Strait at about 9.30 p.m. on December 22.  The volcano lies in the middle of the western side of the narrow strait. Survivors received no warning of the tsunami with waves estimated to have been between 2 and 5 metres high. The Pandeglang district, on the Javan side of the strait and not far from Jakarta, suffered the largest numbers of casualties. Some 290 people were killed and over 14,390 rendered homeless—that is, the overwhelming majority of 20,000 people displaced by the catastrophe. Heavy monsoonal rains and flooding are now complicating emergency rescue and relief with teams from the Indonesian military, the Indonesian Red Cross and NGOs unable to reach remote areas.  Damaged bridges and flooded rivers have made roads impassable, holding up convoys delivering heavy machinery and emergency relief supplies—food, medicine, shelters, latrines and generators—and forcing disaster officials to use helicopters to drop supplies and evacuate residents. Emergency relief doctors have told the media that supplies of medicine and clean water are dwindling and that children are becoming dehydrated and falling ill. Thousands of survivors are living in unhealthy conditions in areas hit by the tsunami.

Dramatic collapse of Indonesian volcano - The scale of the dramatic collapse of the Indonesian volcano that led to last Saturday's devastating tsunami in the Sunda Strait is becoming clear. Researchers have examined satellite images of Anak Krakatau to calculate the amount of rock and ash that sheared off into the sea. They say the volcano has lost more than two-thirds of its height and volume during the past week. Much of this missing mass could have slid into the sea in one movement. It would certainly explain the displacement of water and the generation of waves up to 5m high that then inundated the nearby coastlines of Java and Sumatra. Indonesia's disaster agency says more than 400 people are confirmed dead with 20 or so still missing. In excess of 40,000 have been displaced. What was once a volcanic cone standing some 340m high is now just 110m tall, says the PVMBG. In terms of volume, 150-170 million cubic metres of material has gone, leaving only 40-70 million cubic metres still in place.

Satellite images show collapse of Indonesian island volcano - Radar data from satellites, converted into images, shows Indonesia’s Anak Krakatau island volcano is dramatically smaller following a weekend eruption that triggered a deadly tsunami. Satellite photos aren’t available because of cloud cover, but radar images from a Japan Aerospace Exploration Agency satellite taken before and after the eruption show the volcano’s southwestern flank has disappeared. Dave Petley, head of research and innovation at Sheffield University, who analyzed similar images from a European Space Agency satellite, said they support the theory that a landslide, most of it undersea, caused the tsunami that killed at least 430 people Saturday evening. “The challenge now is to interpret what might be happening on the volcano, and what might happen next,” he wrote in a blog. Indonesian authorities are warning people to stay away less than a mile from the Sunda Strait coastline because of the risk of another tsunami. JAXA’s post-eruption image shows concentric waves radiating from the island, which experts say is caused by ongoing eruptions. Anak Krakatau, which means child of Krakatau, is the offspring of the infamous Krakatau volcano that affected global climate with a massive eruption in 1883. Anak Krakatau first rose above sea level in 1929, according to Indonesia’s volcanology agency, and has been increasing its land mass since then. 

 Sicily Is Shaken By Earthquake As Mount Etna Erupts Once Again - An overnight earthquake, triggered by Mount Etna's eruption two days ago, caused injuries and damage in Eastern Sicily early Wednesday morning. The volcano has been spewing ash and lava has flowed down its slopes since it began erupting on Monday. The quake registered 4.8 magnitude, according to Italian news agency ANSA, which reported 600 people were displaced by the temblor. Officials said the quake was one of about 1,000 tremors — most of them small — related to Etna's eruption, The Associated Press reports. NPR's Sylvia Poggioli reports that Italy's Civil Protection Agency set up temporary shelters for those whose homes were damaged or who were too frightened to go home. At least 10 people were injured, according to the AP, and others sought medical care for panic attacks or shock. A section of a major roadway was closed, as was the railway along the Ionian coast, ANSA reported. Images of the area showed churches and buildings strewn with rubble, fallen signs in front of shops, and toppled statues. On Monday, ANSA reported that a new fracture had opened on Etna's southeast crater, from which ash was spewing. Authorities closed down airspace over the airport in the nearby city of Catania. "Etna remains a dangerous volcano, and this country of ours is unfortunately fragile," government Undersecretary Vito Crimi said Wednesday, according to the AP. Many people reportedly slept in their cars after the quake. 

Why is FEMA is wasting our money? - The Government Accountability Office this month released a report titled “2017 Disaster Contracting: Action Needed to Better Ensure More Effective Use and Management of Advance Contracts.” Translation: FEMA isn’t managing contracts with relief providers very well. FEMA signs advance contracts with companies to provide help after a disaster. It’s a smart way to do things. During the recovery, especially in the first few days, if the agency had to negotiate a bunch of contracts on the fly, it would slow down aid delivery and probably cost more. If the deal is sealed in advance, companies can quickly and cost-effectively deliver food, water, tents, blankets, communications equipment, debris-removing machinery, etc.At least that’s the theory. The GAO found that in practice it isn’t working well. In 2017, advance contracts locked in $4.5 billion to Hurricanes Irma, Harvey and Maria as well as California wildfires. But FEMA consistently failed to ensure that it got what it paid for. According to the GAO, the agency relied on outdated management strategies, trained its contracting officers poorly, and did not communicate clearly with states and localities about what was available. Those flaws led to contracts being underutilized in Florida, Puerto Rico and other places. Taxpayers, meanwhile, paid for services and relief efforts that didn’t happen. The GAO concluded that miscommunication was a big factor in problems, especially between the feds, states and localities. Local officials on the ground simply did not know what contracted services were available because FEMA had not communicated it well.

Extreme Heat Wave Roasting Australia at Record Breaking 120.74 F --It's been the opposite of a white Christmas in Australia, as a major heat wave scorches the Land Down Under. Temperatures in the country's southeast are around 14 C (approximately 24 F) higher than normal for late December, and some parts of the states of New South Wales, Victoria and South Australia topped 40 C (104 F) for a fourth day in a row Thursday, CNN reported."We may well break some records across northern Victoria in terms of consecutive days across 40C for this heatwave, so it is certainly a noteworthy event," Victoria Bureau of Meteorology (BOM) senior forecaster Rod Dixon told Australia's ABC News.In Western Australia, records did break when the city of Marble Bar hit a temperature of 49.3 C (approximately 120.74 F), the hottest since record keeping began there, Western Australia's BOM announced on Twitter.The immediate cause of the heat wave is a high pressure system."The cause of the heat is a dome of high pressure settling in over much of the continent over the past few days," CNN meteorologist Gene Norman explained.However, climate change is also expected to increase the severity and length of heat waves. In the north part of the state of New South Wales (NSW) alone, there are projected to be 10 more heat wave days per year by 2030 and 30 more by 2070, according to the government's Adapt NSW page.Heat waves in Australia kill more people than any other extreme weather event, including flooding, bushfires and cyclones, according to the NSW government. They can also increase the risk of some hazards. "In addition to the sweltering temperatures, there is an enhanced fire risk in Victoria, with total fire bans declared for Thursday in the Mallee and Wimmera regions. South Australia has bans in place in 10 areas including the Mount Lofty Ranges and Yorke Peninsula. Western Australia has total fire bans in 13 districts, where temperatures are expected to exceed 45 C in parts," Norman told CNN.

2018 - the hottest La Niña year ever recorded -- Once the final official global annual surface temperature is published, 2018 will be the hottest La Niña year on record, by a wide margin. It will be the fourth-hottest year overall, and the fourth consecutive year more than 1°C (1.8°F) hotter than temperatures in the late-1800s, when reliable measurements began. 2009 will be bumped to second-hottest La Niña year on record, at 0.87°C (1.6°F) warmer than the late-1800s, but about 0.16°C (0.29°F) cooler than 2018.  El Niño events bring warm water to the ocean surface; La Niña events are cool at the surface. Since scientists measure global surface temperatures over both land and oceans, new hottest year records are usually set during El Niño events.  For this reason, it’s best to compare like-with-like. In the case of 2018, given that it was a La Niña year, it’s most useful to compare it with prior years in which global surface temperatures were cooled by La Niña events.2018 was a fairly weak La Niña year similar to 2009 and 2012, but the global temperature was about 0.16-0.18°C (0.29-0.32°F) hotter in 2018 despite solar activity’s also remaining relatively low.

Now you can catch a cold from a guy who died 30,000 years ago-  It seems that the permafrost on which Alaskans build their lives, to say nothing of their homes, their gas stations, their churches, and their oil rigs, is losing its permanence at an alarming rate, according to a number of recent reports. This change in the Arctic landscape (the analysis of disappearing sea ice is even scarier) ultimately could affect 70 percent of Alaska's infrastructure, and it is entirely attributable to the Great Chinese Climate Hoax. From Nature.com:  We show that nearly four million people and 70% of current infrastructure in the permafrost domain are in areas with high potential for thaw of near-surface permafrost. Our results demonstrate that one-third of pan-Arctic infrastructure and 45% of the hydrocarbon extraction fields in the Russian Arctic are in regions where thaw-related ground instability can cause severe damage to the built environment. Alarmingly, these figures are not reduced substantially even if the climate change targets of the Paris Agreement are reached. Well, we're not in the Paris Agreement any more, so there's nothing for us to worry about, right?   Results show that by 2050 3.6 million people, which constitutes about three quarters of the current population in the Northern Hemisphere permafrost area, may be affected by damage to infrastructure associated with permafrost thaw (Fig. 1, Supplementary Figs. 1 and 2, Supplementary Table 1). A substantial proportion of the fundamental human infrastructure is potentially under risk: 48–87% (mean = 69%) of the current pan-Arctic infrastructure is located in areas where near-surface permafrost is projected to thaw by mid-century (Fig. 2a, Supplementary Tables 2 and 3, Supplementary Data 1) There are also other alarming consequences to losing the permafrost. First, there's a huge amount of carbon down there and its release would be disastrous. In addition, nobody's really sure how many dormant diseases are waiting to be released as the permafrost melts. From Phys.org: The thawing of the permafrost also threatens to unlock disease-causing bacteria and viruses long trapped in the ice. There have already been some cases of this happening. In 2016 a child died in Russia's far northern Siberia in an outbreak of anthrax that scientists said seemed to have come from the corpses of infected reindeers buried 70 years before but uncovered by melting permafrost. Released from the ice, the anthrax seems to have been passed to grazing herds. Scientists have also warned that other dormant pathogens entombed in frozen soil may be roused by global warming, such as from old smallpox graves. In 2014 scientists revived a giant but harmless virus, dubbed Pithovirus sibericum, that had been locked in the Siberian permafrost for more than 30,000 years. You, too, can catch a cold now from someone who died 30,000 years ago.

There’ll be a domino effect as we trigger ecosystem tipping points - There are lots of tipping points in ecosystems and the climate, and many are interconnected. That means the massive changes we are wreaking will have many unexpected consequences. “The world is a much more surprising place then generally assumed,” says Garry Peterson of the Stockholm Resilience Centre in Sweden. As an example, in 2016 the retreat of a glacier in Canada led to a river changing direction.  Peterson’s team has analysed 300 ecosystems with potential tipping points or regime changes. For instance, as rainfall increases grasslands can suddenly turn into forests, and vice versa.  The study suggests that almost half of them are linked. For example, more extreme rainfall from global heating can greatly increase soil erosion, especially on degraded farmland, and carry more phosphorus into rivers, lakes and the sea. This can trigger algal blooms and red tides, and amplify the decline in oxygen that occurs as waters warm. This leads to even bigger aquatic “dead zones” with low oxygen, which can have further knock-on effects. What the team’s work shows is that crossing one tipping point increases the risk of crossing another and so triggering a whole cascade of effects. And we may not even recognise the danger until it is too late, Peterson says.  Take the West Antarctic ice sheet, which will raise sea level three metres if it melts. The idea that we might be nearing the tipping point beyond which it will collapse was ridiculed when it was suggested in the 1970s. Now it appears we’ve already passed the tipping point.  Scientists specialise in narrow areas and often fail to spot the connections between different earth systems, Peterson says.. Computer modellers often specifically exclude things that lead to sudden, discontinuous changes because they make the models too unstable. That is a serious mistake, he thinks. “We should be preparing for a much more unstable future.”

Risks of 'domino effect' of tipping points greater than thought, study says - Policymakers have severely underestimated the risks of ecological tipping points, according to a study that shows 45% of all potential environmental collapses are interrelated and could amplify one another. The authors said their paper, published in the journal Science, highlights how overstressed and overlapping natural systems are combining to throw up a growing number of unwelcome surprises. “The risks are greater than assumed because the interactions are more dynamic,” said Juan Rocha of the Stockholm Resilience Centre. “The important message is to recognise the wickedness of the problem that humanity faces.” The study collated existing research on ecosystem transitions that can irreversibly tip to another state, such as coral reefs bleaching and being overrun by algae, forests becoming savannahs and ice sheets melting into oceans. It then cross-referenced the 30 types of shift to examine the impacts they might have on one another and human society. Only 19% were entirely isolated. Another 36% shared a common cause, but were not likely to interact. The remaining 45% had the potential to create either a one-way domino effect or mutually reinforcing feedbacks. Among the latter pairings were Arctic ice sheets and boreal forests. When the former melt, there is less ice to reflect the sun’s heat so the temperature of the planet rises. This increases the risks of forest fires, which discharge carbon into the air that adds to the greenhouse effect, which melts more ice. Although geographically distant, each amplifies the other.

Greenland’s Rapid Ice Melt Persists Even in Winter, Study Finds - In the latest troubling study regarding how the climate crisis is affecting the world's iciest regions, a new report by the Scottish Association for Marine Science (SAMS) found that the second-largest ice sheet in the world is currently melting even in winter. The study follows a report released earlier this month showing that Greenland's ice melt rate is currently faster than it's been in about 7,000 years. The island's 650,000 cubic miles of ice is melting 50 percent faster than it did in pre-industrial times."Greenland is a bit like a sleeping giant that is awakening," Edward Hanna, a climate scientist at the University of Lincoln, told Inside Climate News this week. "Who knows how it will respond to a couple of more degrees of warming? It could lose a lot of mass very quickly." "Greenland is a bit like a sleeping giant that is awakening. Who knows how it will respond to a couple of more degrees of warming? It could lose a lot of mass very quickly." —Edward Hanna, University of LincolnThe ice sheet's persistent melting even in winter has come about because huge waves below the surface of the Atlantic Ocean, created by unusually strong winter winds, are pushing warm water up to Greenland—creating an environment that's hostile for the country's icy ecosystem, explains SAMS.These "coastally trapped internal waves" are "pushing warm water into the fjord and towards the glacier, causing melting hundreds of metres below the ocean surface," Dr. Neil Fraser, an ocean physicist who led the study, told the BBC.Greenland's huge ice sheet also makes it a huge contributor to rising sea levels, SAMS noted, accounting for more than 20 percent of the annual increase in sea levels. Accelerating, year-round run-off that persists even in the coldest months of the year is "the greatest contributor to sea level rise," Sarah Das, a researcher at Woods Hole Oceanographic Institution, told Inside Climate News.

Ozone depletion increases Antarctic snowfall, partially mitigates ice sheet loss - Ozone layer depletion has increased snowfall over Antarctica in recent decades, partially mitigating the ongoing loss of the continent's ice sheet mass, new University of Colorado Boulder research finds.  The findings, published today in the journal Geophysical Research Letters, show a distinct signal linking stratospheric ozone loss above Antarctica with increased precipitation, even as those gains have been outpaced by an even greater ice loss rate due to warming oceans, contributing to sea level rise. The Antarctic Ice Sheet is the world's largest ice sheet and freshwater reservoir, containing the potential for hundreds of feet of sea level rise if all ice were to melt. "Calving icebergs and melting ice shelves have gotten lots of attention because they're the most visible impact of ongoing climate change to Antarctica," said Jan Lenaerts, lead author of the research and an assistant professor in CU Boulder's Department of Atmospheric and Oceanic Sciences. "But the input side of the equation, which is precipitation falling in the form of snow, hasn't drawn the same level of study." An ozone "hole," or a seasonal thinning of the ozone layer, forms above Antarctica in the austral summer, influencing atmospheric circulation and creating stronger circumpolar westerly winds. The results complement a separate NASA-led study, which was led by Medley and published today in the journal Nature Climate Change, which uses observations from ice cores to show that Antarctic snowfall has increased in the last 200 years and especially so in the past 30 years, suggesting that precipitation changes can be linked to man-made causes such as greenhouse gas emissions as well as the ozone hole.

 ‘The damn thing melted’: Climate change and US interests in the Arctic -  In testimony before the Senate Armed Services Committee in April, Navy Secretary Richard Spencer announced that a rewrite of the Navy’s Arctic strategy was underway.  Asked by a reporter after the hearing what prompted the new strategy just four years after the Navy issued its U.S. Navy Arctic Roadmap 2014-2030, Spencer stated “the damn thing melted.”  Secretary Spencer was right. The Arctic is melting. Just this month, the National Oceanic and Atmospheric Administration (NOAA) issued its annual Arctic report card for 2018. NOAA’s headline “Effects of persistent Arctic warming continue to mount” was an understatement. Among the agency’s findings, air temperatures in the Arctic are warming at twice the rate of the rest of the world and sea ice “remained younger, thinner, and covered less area than in the past.” The implications of these changes for U.S. national interests cannot be ignored.

Diseases From Millions of Years Ago Are Awakening Because of Melting Ice - Climate change is melting permafrost soils that have been frozen for thousands of years, and as the soils melt they are releasing ancient viruses and bacteria that, having lain dormant, are springing back to life. As the Earth warms, more permafrost will melt. Under normal circumstances, superficial permafrost layers about 50cm deep melt every summer. But now global warming is gradually exposing older permafrost layers. Frozen permafrost soil is the perfect place for bacteria to remain alive for very long periods of time, perhaps as long as a million years. That means melting ice could potentially open a Pandora's box of diseases.  The temperature in the Arctic Circle is rising quickly, about three times faster than in the rest of the world. As the ice and permafrost melt, other infectious agents may be released.  "Permafrost is a very good preserver of microbes and viruses, because it is cold, there is no oxygen, and it is dark," says evolutionary biologist Jean-Michel Claverie at Aix-Marseille University in France. "Pathogenic viruses that can infect humans or animals might be preserved in old permafrost layers, including some that have caused global epidemics in the past." Scientists managed to revive an 8-million-year-old bacterium that had been lying dormant in ice, beneath the surface of a glacier in the Beacon and Mullins valleys of Antarctica. In the same study, bacteria were also revived from ice that was over 100,000 years old.   Because the Arctic sea ice is melting, the north shore of Siberia has become more easily accessible by sea. As a result, industrial exploitation, including mining for gold and minerals, and drilling for oil and natural gas, is now becoming profitable. "At the moment, these regions are deserted and the deep permafrost layers are left alone," says Claverie. "However, these ancient layers could be exposed by the digging involved in mining and drilling operations. If viable virions are still there, this could spell disaster."

CBO Dismisses Costs Of Global Warming, Posing Hurdle For Climate Legislation-  In a baffling repudiation of the federal government’s own scientists, the Congressional Budget Office last week said that climate change poses little economic risk to the United States in the next decade. The statement, which went so far as to highlight dubiously positive effects of rising global temperatures, poses a potential hurdle for future legislation to curb surging greenhouse gas emissions, experts said, and amounts to textbook climate change denial. Buried on page 292 of a 316-page report titled “Options for Reducing the Deficit: 2019 to 2028,” the CBO said, “Many estimates suggest that the effect of climate change on the nation’s economic output, and hence on federal tax revenues, will probably be small over the next 30 years and larger, but still modest, in the following few decades.” “That’s just completely false,” Gary Yohe, an environmental economist at Wesleyan University, said by phone Wednesday. “There are no references to these ‘many estimates,’ and the following part of the paragraph cherry-picks.”  The report ― first noted on Twitter by investigative reporter David Sirota ― goes on to tout positive effects like “fewer deaths from cold weather” and “improvements in agricultural productivity” as some of “the more certain effects of climate change on humans over the next several decades.” The stunning remarks directly contradict the National Climate Assessment, which found that, by 2100, crop damage, lost labor and extreme weather will cost the U.S. economy upward of $500 billion a year. That’s “more than the current gross domestic product of many U.S. states,” according to the report, drafted by researchers at 13 federal agencies. In a lengthy statement to HuffPost, the CBO referred to three of its own past reports, including one that said, “Even under scenarios in which significant climate change is assumed, the projected long-term effects on GDP would tend to be modest relative to underlying economic growth.”   “All told, CBO projects that the increase in the amount of hurricane damage attributable to coastal development and climate change will probably be less than 0.05 percent of GDP in the 2040s.”

Nearly Two Billion Dollars spent on Anti-Climate Science Legislative Lobbying 2000 to 2016 -  Robert Brulle at Drexel University reminds us of what makes Congress work, . Data for Brulle’s latest work comes from the 1995 Lobbying and Disclosure Act that requires all lobbying efforts that take up more than 20 percent of the time be reported. Nearly 2 million records were evaluated from 1986 to 2016.  Key words utilized in this study were: climate change, global warming, greenhouse, Keystone, renewable energy, carbon, clean energy, Kyoto, cap and trade, CAFE, fuel economy, and renewable electricity.  About $2.08 billion (in 2016 dollars) was spent on climate lobbying between 2000 and 2016. This is about 3.9 percent of total lobbying dollars spent of $53.5 billion. The electrical sector spent 26 percent of the total. The fossil fuel sector spent 17.7 percent, and the transportation sector 12.1 percent. The research also identified 231 different organizational types that do not fir into standard categories.Brulle says that the “spending of environmental groups and the renewable energy sector is dwarfed by the spending of the electrical utilities, fossil fuel, and transportation sectors.” Lobbying expenditures from 2000 to 2016 for environmental and renewable energy groups amounted to only five to seven percent of the total, or less than $145 million. An interesting note about lobbying goals was referenced from Brumbach 2015, where some players lobbied with “sophisticated strategies to simultaneously attempt to appear to support such [climate] legislation, while actually  supporting efforts to undermine it.” Brulle notes, “as soon as the threat passed, lobbying for climate legislation by the corporations … ceased.” Lobbying spending has not be the same over the years, but changed depending on different factors. Brulle’s work found, “Starting with the 109th Congress, there was a rapid increase in the number of hearings, bills introduced, and lobbying expenditures. Brulle goes on, “The 110th Congressional session showed a fourfold increase in lobbying expenditures. With both the Senate and House in Democratic Party control, there was also a much larger number of bills and hearings related to climate change. Climate lobbying expenditures doubled from their levels in the previous Congress with the 111th Congress. By this time, the Democratic Party controlled both houses, as well as the Executive Branch, and moved to fulfill its promise of passing climate legislation in this session. This session marks the peak of Congressional attention to major climate legislation.”

The Farm Bureau: Big Oil’s Unnoticed Ally Fighting Climate Science and Policy - Advocacy groups with close ties to the oil billionaires Charles and David Koch had urged House leaders to get the anti-carbon-tax resolution approved.When the measure passed, by a big margin, it proved—not for the first time, nor the last —the Farm Bureau's role as a powerful defender of the nation's fossil fuel interests.For more than three decades, the Farm Bureau has aligned agriculture closely with the fossil fuel agenda. Though little noticed next to the influence of the fossil fuel industry, the farm lobby pulled in tandem with the energy lobby in a mutually reinforcing campaign to thwart the Kyoto Protocol on climate change, legislation like the Waxman-Markey economywide cap-and-trade plan, and regulations that would limit fossil fuel emissions.In pursuit of their common goals, the fossil fuel industry and the Farm Bureau worked to sow uncertainty about the scientific consensus on human-caused climate change and the economic consensus on how to solve the problem. Fossil fuel companies spent hundreds of millions of dollars to develop a network of think tanks and friendly lawmakers who gave climate denial political credibility as part of a decades-long misinformation campaign. The Farm Bureau provided a national grassroots network that was hard for Congress to oppose.This article, part of a series exploring agriculture's role in climate change and the influence of the Farm Bureau, examines the close ties between the two industries as they fought to undermine climate policy.

EPA Runs Out of Funds as Government Shutdown Drags On -- The partial government shutdown that began nearly a week ago is likely to drag into the New Year, CNN reported Friday. If so, that would be bad news for the U.S. Environmental Protection Agency (EPA), which is set to run out of funds on Friday, according to an email from acting administrator Andrew Wheeler obtained by The Hill. "In the event an appropriation is not passed by midnight Friday, December 28th, EPA will initiate orderly shutdown procedures," Wheeler wrote.The EPA had carryover funds to keep up normal operations when the shutdown began Dec. 21, but those funds will run out Friday. What that means is that more than 700 workers considered "essential' will have to work without pay, while more than 13,000 other employees will be furloughed, The Huffington Post explained. Wheeler said furloughed employees would be instructed to change their voice mails, enable out-of-office emails and complete their time cards. All travel for furloughed employees would be canceled.The shutdown could also impact EPA activities that normally protect the nation's environment and public health. The Huffington Post listed some activities the shutdown could impact, according to the agency'scontingency plan.

1. The cleanup of Superfund sites
2. Inspections of drinking water systems
3. Inspections of hazardous waste management sites and chemical facilities
4. Reviews of pesticides

In the case of Superfund sites, the EPA will evaluate them to see which pose the greatest public health risks if cleanup efforts are delayed.

The Real-Life Effects of Trump’s Environmental Rollbacks: 5 Takeaways From Our Investigation - For nearly two years, President Trump has pursued an aggressive, far-reaching effort, lobbied for and cheered on by industry, to free American business from what he and many of his supporters view as excessive environmental regulation. The consequences are starting to play out in noticeable ways in communities across the United States. An investigation by The New York Times showed how Mr. Trump’s deregulatory policies are starting to have substantial impact on those who experience them close up — and often are economically dependent on the industries the president is trying to help. In the vast farmlands of central California, day care centers have to take account of pesticide-spraying schedules. The local government’s revenues on the Fort Berthold Indian Reservation in North Dakota have grown to $330 million from $20 million over the last 15 years because of vast fossil fuel reserves that can now be pumped from the ground using fracking. National forests 400 miles away can be clouded with haze produced by a coal-fired power plant near Houston. No parts of the federal government during the Trump era have been more aggressive in rolling back rules than the Environmental Protection Agency and the Interior Department, which between them regulate much of the intersection between the environment and the economy. Together their rule changes have touched nearly every aspect of environmental protection, including air pollution caused by power plants and the oil and gas industry, water pollution caused by coal mines, and toxic chemicals and pesticides used by farmers nationwide. In short, what is at stake is the quality of the air we breathe and the food we eat, the cleanliness of the rivers that flow past us, and the pace at which the climate is changing. Two years after Mr. Trump took office, the policy shifts are not nearly complete; dozens of other rules have been targeted for rollback. If there is a single industry that has been at the center of the fight — both during the Obama expansion of rules and the Trump rollbacks — it is coal. Mr. Obama targeted the industry as a way to combat climate change. Mr. Trump has defended and promoted it as part of his populist political and economic strategy. Mr. Trump’s approach has been to slow demands for further steps to curb air and water pollution caused by coal-burning power plants. What has not changed is the decline of coal — both coal mines and coal-burning power plants. Even as Mr. Trump has used his executive powers to help the industry, coal production in the United States continues to decline.  Another factor is that environmental change happens slowly. So the real impact of the Trump-era policies may not be fully apparent until years after Mr. Trump leaves office.

The Green New Deal, explained - If the recent report from the Intergovernmental Panel on Climate Change is to be believed, humanity has just over a decade to get carbon emissions under control before catastrophic climate change impacts become unavoidable.  The Republican Party generally ignores or denies that problem. But the Democratic Party claims to accept and understand it. It is odd, then, that Democrats do not have a plan to address climate change.  Their last big plan — the American Clean Energy and Security Act — passed the House in 2009 but went on to die an unceremonious death before reaching the Senate floor. Since then, there’s been nothing to replace it.  Plenty of Democratic politicians support policies that would reduce climate pollution — renewable energy tax credits, fuel economy standards, and the like — but those policies do not add up to a comprehensive solution, certainly nothing like what the Intergovernmental Panel on Climate Change (IPCC) suggests is necessary. Young activists, who will be forced to live with the ravages of climate change, find this upsetting. So they have proposed a plan of their own. It’s called the Green New Deal (GND) — a term purposefully reminiscent of Franklin Delano Roosevelt’s original New Deal in the 1930s — and it has become the talk of the town. Here are Google searches from the past few months:  As we will see, the exact details of the GND remain to be worked out, but the broad thrust is fairly simple. It refers, in the loosest sense, to a massive program of investments in clean-energy jobs and infrastructure, meant to transform not just the energy sector, but the entire economy. It is meant both to decarbonize the economy and to make it fairer and more just. But the policy is only part of the picture. Just as striking are the politics, which seem to have tapped into an enormous, untapped demand for climate ambition.

Green Deal, Big Deal, Same Old Deal - Why is the green deal a scam? Because like every other corporate “solution” it assumes productionism, consumerism, capitalism, industrial electrical generation and consumption (the great majority for industry), and the dominion of The Car. George Bush said the proper response to 9/11 was to Keep Shopping. And today’s climate scientists, Big Green NGOs and “progressive”/”socialist” politicians say the proper response to the climate crisis is to Keep Shopping. More and Better Capitalism. And of course Keep Driving. But these are the very things driving the ecological crisis. More of the same ecological assaults cannot result in anything but more of the same ecological destruction. There is one and only one way to avert the worst of the climate crisis: Stop industrial emissions; stop destroying sinks; rebuild sinks. And this is the only way to avert the worst of the general ecological crisis. But all corporate system “solutions”, including the “green new deal”, propose to continue massive emissions (industrial “renewables”, to give the most egregious example, can exist only on a foundation of fossil fuels and are ecologically destructive in themselves), continue the massive destruction of sinks (one of the main purposes of the Paris scam was to enshrine the “biomass” assault as a system-legitimated climate action), and pay only the most modest lip service to rebuilding sinks.

Science and Culture- Imagining a climate-change future, without the dystopia - Most popular narratives about climate change are negative, playing off people’s anxieties. In the movie The Day After Tomorrow, a climate disaster precipitates the fall of civilization. Margaret Atwood's novel MaddAddam is set in a society shattered by an ecological catastrophe. In Aaron Sorkin's HBO TV series The Newsroom, an Environmental Protection Agency researcher proclaims, “a person has already been born who will die due to catastrophic failure of the planet.” The “cli-fi” genre is so popular that the Chicago Review of Books has an entire column (“Burning Worlds”) dedicated to it. But a group of scholars is trying to resist such negative thinking, even while grappling with serious consequences for both humans and ecosystems. People from government, academia, and nonprofits are joining community representatives as part of the Urban Resilience to Extremes (UREx) Sustainability Research Network to rethink how society envisions and plans for climate’s effects in the decades to come (1). At a 2017 workshop, issues ranging from flooding to droughts to social justice were on the agenda.“It’s difficult to know where you are going if you don't have a clear vision of what that [future] should look like, in particular, a positive vision that you could get excited about and motivated to really make a transformative change,” says Timon McPhearson, director of the Urban Systems Lab at The New School in New York City. McPhearson and his colleagues at UREx are helping city planners assemble positive, and yet realistic, futures—without downplaying the dire implications of climate change. At the end of the workshops, they arrive at a set of implementable goals and timelines to achieve their strategy.   Maggie Messerschmidt, a participant in a UREx workshop and a program manager at The Nature Conservancy (TNC), says TNC polling suggests that people are much more likely to act when future scenarios are placed in a positive light, emphasizing terms such as “resilience,” “sustainability,” and “nature-based solutions” (2). “It is important for us to share a positive narrative,” she says, “and that’s been important to the way we think and construe our solutions.”

Under current policies, residential batteries increase emissions in most cases -- This month, a group of researchers from the University of California San Diego (UCSD) published a paper in Environmental Science and Technology reporting that there are very few cases in which operating a residential home battery reduces overall emissions—assuming that households are economically rational and trying to minimize costs.Of course, if the battery is only discharged during periods of peak emissions and only charged when fossil fuel use is low, then a household might reduce emissions. But across 16 representative regions, operating a battery this way ended up being costly.The results are similar to those published in Nature Energy in the beginning of 2017, although that study looked at a narrower region (99 homes in Texas) and modeled different battery software configurations.The UCSD study looks at representative homes under 16 different utilities across the country. Each utility has its own emissions profile and unique demand requirements (depending on the weather in the region). The study also looked at three different configuration possibilities:

1. A demand-shifting configuration, where the battery is used to minimize costs when electricity rates vary by time of day;
2. A solar self-consumption configuration, where the user has solar panels and wants to maximize the amount of energy they get from those panels; and
3. An energy arbitrage configuration, where the residential battery owner can buy and sell electricity at retail rates depending on what's cheaper at the moment.

US hydropower droughts cause rise in greenhouse gas emissions - Scientists at Stanford University have discovered that recent droughts in western states such as California, Idaho, Oregon, and Washington have caused a rise in greenhouse gas emissions due to the need for fossil fuels to replace hydropower in particularly dry periods. Between 2001 and 2015 droughts caused a 10% rise in average annual carbon dioxide emissions as power generators brought fossil fuels projects back online to balance the power lost from hydropower, according to a study published on 21 December in Environmental Research Letters.Stanford School of Earth, Energy and Environmental Sciences professor, climate scientist and senior author of the study Noah Diffenbaugh said: “Water is used in electricity generation, both directly for hydropower and indirectly for cooling in thermoelectric power plants.“We find that in a number of western states where hydropower plays a key role in the clean energy portfolio, droughts cause an increase in emissions as natural gas or coal-fired power plants are brought online to pick up the slack when water for hydropower comes up short.” The study shows that sulphur dioxide and nitrogen oxides also increased in some of the states observed, with the largest increases of sulphur dioxide taking place in Colorado, Utah, Washington and Wyoming. For nitrogen oxides, the biggest contributions came from California, Colorado, Oregon, Utah, Washington and Wyoming. In that 14-year time frame, switching from hydropower projects to fossil fuels in dry periods led to an additional 100mt of carbon dioxide being released into the atmosphere.

Mercury Limits on Coal Plants No Longer ‘Appropriate,’ EPA Says - The Trump administration is proposing to reverse an Obama-era conclusion that limits on mercury pollution from power plants are too costly and no longer “appropriate and necessary,” a finding that could make it difficult to impose more stringent curbs in the future. The Environmental Protection Agency is aiming to leave the 2012 standards in place, responding to a clamor from utilities that have already spent at least $18 billion complying with the requirements. But in another reversal of former President Barack Obama’s environmental policies, the agency now finds that the mercury mandates cost far more than the potential benefits that would spring from paring emissions of the toxin. According to the new EPA analysis, the costs of complying with the rule are projected at $7.4 billion to $9.6 billion annually, while monetized benefits are estimated to be $4 million to $6 million annually. That’s a sharp reduction from the EPA’s previous estimate that the requirements would result in widespread benefits, not just from paring mercury emissions but also by indirectly reducing nitrogen oxide and sulfur dioxide, leading to fewer asthma attacks, heart attacks and premature deaths. Under President Donald Trump, the EPA now is effectively ignoring those so-called co-benefits and focusing only on the direct potential benefits from slashing mercury emissions. Coal-fired power plants are the largest U.S. source of mercury, a metal that is converted in soil and water into a neurotoxin that can lower IQ, cause motor function deficits, damage the nervous system, and lead to more heart attacks.

With 'Unconscionable Rollback,' Trump EPA Lays Groundwork for Coal Industry to Release More Mercury Into the Air -- In a move decried by environmentalists as "both stunningly immoral and completely unnecessary," the Trump administration just proposed "an unconscionable rollback to serve the coal industry at the expense of all Americans, especially our children," that could also stymie future efforts to impose federal public health regulations. "Gutting MATS will put toxic pollution back in our air and cause thousands of people to die unnecessary premature deaths every year." —James Pew, Earthjustice Building on President Donald Trump's two-year track record of gutting his predecessor's environmental rules, the Environmental Protection Agency (EPA) issued a new analysis claiming that a regulation limiting how much mercury and other pollutants oil- and coal-fired power plants can emit isn't "appropriate and necessary," disputing the agency's conclusions under former President Barack Obama. As the New York Times reported Friday: Trump's new proposal does not repeal the regulation, known as the Mercury and Air Toxics Standards (MATS), but it would lay the groundwork for doing so by weakening a key legal justification for the measure. The long-term impact would be significant: It would weaken the ability of the EPA to impose new regulations in the future by adjusting the way the agency measures the benefits of curbing pollutants, giving less weight to the potential health gains.Janet McCabe, who ran the EPA's air office under Obama, told the Times, "There is a likelihood that this rule-making will be the administration's flagship effort to permanently change the way the federal government considers health benefits." When crafting the regulation, the Obama EPA considered not only the direct gains of curbing mercury pollution, but also public health impacts such as fewer asthama attacks and premature deaths. Under notoriously pro-coal Trump, the agency is now, as Bloomberg News put it, "effectively ignoring those so-called co-benefits and focusing only on the direct potential benefits from slashing mercury emissions."

Coal Ash Dumps Are Contaminating Groundwater in 22 States - Ten years ago today, the earthen wall of a coal ash impoundment in Kingston, Tennessee, ruptured, sending 1.1 billion gallons of coal ash slurry rushing across the countryside, destroying homes and chocking streams and wetlands with the toxic leftovers from burning coal for electricity. Luckily, no one died in the flood, but more than 30 workers have died after cleaning up the spill. Another 200 workers are now sick or dying from blood cancer and other illnesses linked to heavy metals such as arsenic, selenium and mercury that are found in coal ash. The Kingston disaster was the worst coal ash spill in United States history and inspired environmentalists to push for tighter regulations over the past decade, but pollution from coal ash remains a widespread and ongoing problem. Across the country, coal ash, boiler slag and other combustion waste from power plants is stored in open air pits and impoundments, where rainfall creates a toxic slurry full of heavy metals. At least 67 coal ash dumps in 22 states are currently leaking harmful chemicals into groundwater and will require cleanup efforts in the coming year, according to recent data posted by power companies and compiled by environmental groups, who expect that additional leaking pits have yet to be publicly identified.  The Kingston spill is not the only coal ash disaster in recent memory. In 2014, a Duke Energy coal sludge pond in North Carolina leaked thousands of tons of coal ash and millions of gallons of contaminated water into the Dan River, turning the water and ominous grey and compromising drinking water and ecosystems for miles. Environmental groups have tussled with Duke Energy in courtrooms for years over leaky coal ash pits the company maintains across North Carolina and were on guard as Hurricane Florence ravaged the state this September. Environmentalists say at least one Duke coal ash pond overflowed during the storm and contaminated the Cape Fear River with heavy metals,  At the helm of Trump’s Environmental Protection Agency (EPA) is Andrew Wheeler, a former lobbyist for the coal industry who shares Trump’s zeal for keeping coal central to the US energy portfolio. Wheeler’s most recent targets for elimination include limits on carbon dioxide from new and modified power plants and rules reducing air emissions of mercury — a potent neurotoxin and a danger to public health.

Philippines becoming a rich world dumping ground - Asia Times - Over 5,000 tons of hazardous waste from South Korea was recently discovered in the Philippines, marking the latest case of foreign dumping to stir outrage among Filipino officials and environmental groups as the island nation struggles to handle its own gargantuan garbage problem. The toxic discovery, made on President Rodrigo Duterte’s home island of Mindanao, represents the third time in recent years that the Philippines has been revealed as a dumping ground for hazardous foreign trash. South Korea, one of Manila’s strongest allies and top investors, has been the culprit on two occasions. The South Korean hazardous garbage was consigned to Verde Soko Philippines Industrial Corp, a company nominally engaged in plastic recycling. The firm declared the shipment, made in July, as “plastic synthetic wastes”, but customs officials found other kinds of waste, including hospital refuse and adult diapers. The company has yet to start its recycling operation due to the controversy but has claimed the discovered hazardous trash is “raw material” for processing into plastic pellets and briquettes that could be shipped back to South Korea or China to produce plastic chairs and tables. Verde Soko also maintains it has complied with all government requirements to set up a recycling plant at an economic zone in Mindanao’s Misamis Oriental province. It’s not the first time the Philippines has been dumped on by the developed world. Around five years ago, Canada dumped over 100 container vans filled with plastic bottles, plastic bags, household garbage, used adult diapers, sanitary napkins and hospital wastes in Manila. 

 There’s no easy fix for our nuclear past - The Hanford nuclear complex in eastern Washington lies in a green-gold sagebrush steppe, so big you can’t see the edges of it. There’s almost no trace that this is the biggest nuclear waste dump in the country. The scale of nuclear waste is like that: sprawling out into the metaphysical distance, too big for the human mind to hold.. If you were to pull a shot glass full of liquid out of one of the tanks buried near us, it would kill everyone with 100 yards instantly. And the danger would not disappear: Plutonium has a half-life of 24,100 years. The plant is supposed to start processing the most toxic waste in 2036. But construction has stalled out and most of the waste sits in underground tanks, some of which have begun to fail. “Suppose all these things are starting to fall apart faster than we can clean them up,” Price says. “It becomes a really interesting moral question.”  Over the past year, a series of accidents has put the spotlight on Hanford, its aging infrastructure and the lack of a long-term solution. In May 2017, part of the Plutonium Uranium Extraction Facility, which holds rail cars full of solid waste, collapsed. Later that year, workers tearing down the Plutonium Finishing Plant were contaminated with plutonium and americium particles when an open-air demolition went wrong. In December, others inhaled radioactive dust at the same site, halting work indefinitely. Then, in June of this year, the Department of Energy (DOE), which is responsible for the site, released a proposal to reclassify some of the high-level waste as less toxic, with what’s called a “Waste Incidental to Reprocessing” evaluation, so they could clean it up sooner and more cheaply. “There’s a lot more work to do than there is money to get it accomplished,” Price said. “We’ve really come to a fork in the road.” As the possibility of more waste looms, Hanford has become a flashpoint for people who fear that there’s no safe way to deal with our nuclear legacy. In this era of climate change and large-scale environmental degradation, the site raises the question: Can we ever clean up the mistakes of our past?

 Oil and gas company eyes drilling in north-central Ohio - Canton Repository  --Cabot Oil & Gas is getting ready to drill test wells in Ashland and surrounding counties in north-central Ohio.“We’ve got a really neat group of geologists who think they see something in Ohio,” said George Stark, a Cabot spokesman based in Pittsburgh. “They see something, and we want to go touch it.”Cabot is looking for natural gas and oil a hundred miles northwest of the Utica Shale play’s core in eastern Ohio.The Houston-based company has filed paperwork with the Ohio Department of Natural Resources for two well pads in Ashland County, and plans to drill up to five test wells in an area that includes parts of Richland, Knox, Wayne and Holmes counties.  During the early days of Utica exploration, Devon Energy drilled a few wells in the area Cabot is targeting, but moved on. Cabot is planning to explore below the Utica Shale, Stark said.Paperwork filed with ODNR indicates the company is targeting the Rome and Knox formations, but Stark declined to be specific. The agency has yet to issue the company a drilling permit.The company plans to drill vertical wells and take samples that will show the ratio of oil to natural gas and the pressure and thickness of the rock, factors that determine whether it makes economic sense to drill more wells, Stark said.  Cabot has obtained the right to drill vertical wells into rock formations 3,000 to 4,000 feet beneath a natural gas storage field owned by Columbia Gas Transmission, but Cabot still needs to get horizontal-drilling rights from surface landowners.

Marksmen Energy drilling in Ohio's Clinton Sandstone - Calgary-based Marksmen Energy reports it's making progress in drilling a Clinton Sandstone well in southeast Ohio, Kallanish Energy reports. Completion of milling and drilling the 1,500-foot lateral is expected to begin this week. The lateral drilling is expected to take 10 to 15 days. The sandstone was previously stimulated with a 12-stage hydraulic fracturing or fracking process. Marksmen said it has interests in 5,500 acres of additional land with several potential Clinton Sandstone wells locations that could be developed under its agreement with its operator. The company has said it's planning “an aggressive drilling program in 2019 to fully develop the acreage,” subject to financing. The drilling is different than the horizontal wells being drilled in the Utica Shale in eastern Ohio. There are no horizontal Utica wells in Hocking County. However, Marksmen has targeted the Clinton Sandstone previously drilled in many parts of Ohio. EnerVest, it said, is evaluating plans to drill multiple horizontal wells on its 115,000 gross acres of leases in Ohio’s East Canton oilfield in Stark County. It spills into surrounding counties. EnerVest operates roughly 1,600 vertical-only Clinton Sandstone wells in that area, some dating back to the late 1940s. The oil recovery from those wells has been estimated at 7% by EnerVest, Marksmen said. EnerVest reports a nearly 10-fold increase in Clinton Sandstone production by using horizontal wells, and it reported its horizontal wells encountered near virgin reservoir pressures within the field, the Canadian company reported. It also said U.S. Energy OH LLC is also drilling Clinton Sandstone wells in the East Canton field and has drilled and completed nine of 21 permitted locations.

Columbus proposes $649,000 settlement for homeowners in Upper Arlington gas explosion - The city of Columbus has proposed nearly $649,000 as its portion of a settlement payment to owners of homes damaged by a catastrophic natural gas explosion in Upper Arlington in 2015. Columbia Gas of Ohio told Columbus Business First it also has reached a confidential settlement amount with plaintiffs in several lawsuits.Upper Arlington's proposed settlements total $80,000, the city said, covered by the Central Ohio Risk Management Association and insurance. A gas leak filled the basement and exploded a home at 3418 Sunningdale Way in March 2015, causing damage to surrounding homes, some irreparable. Numerous lawsuits by homeowners were consolidated in Franklin County Common Pleas Court in 2016.Upper Arlington owns its water system, but Columbus operates it. The city's settlement will come from Columbus' water operating fund, as did a separate$37,500 settlement paid to a different homeowner in 2016.Columbus denies liability but wants to end the litigation, according to the proposal up for a vote Monday by Columbus City Council. According to the original complaint by the homeowners, Hidefumi and Mariko Ishida, Columbia Gas had abandoned a gas line in the 1990s, but failed to disconnect and seal it properly. In 2000, Columbus' water division misidentified that line as a water line, and neither utility caught the error for years.

Utica Shale Oil, Natural Gas Production Both Increased 30% in Third Quarter -- Unconventional oil and natural gas production in Ohio’s Utica Shale saw robust year/year gains in the third quarter of more than 30% each, according to newly released data from the state Department of Natural Resources.Utica oil production continued to move higher during the period, when volumes came in at about 5.5 million bbl -- up roughly 32% from the year-ago quarter and a strong increase from 2Q2018, when volumes rebounded at 4.5 million bbl.Until earlier this year, oil production in the state had fluctuated in a reflection of the broad shift to dry gas production that occured about two years ago across much of the Appalachian Basin, when oil prices were lower. While they’ve recently slid from high points, stronger oil prices this year pushed operators back into the Utica’s wetter areas. Natural gas production, meanwhile, showed no signs of slowing down. Producers set another state record with 605.7 Bcf reported for the third quarter, up about 31% from the year-ago period. Volumes were also higher than the 554.3 Bcf reported in 2Q2018.The state’s third quarter report lists 2,242 horizontal shale wells, 2,198 of which reported oil and gas production during the period. The average amount of oil produced by each well during the quarter was 2,523 bbl, while the average amount of gas from each was 275.6 Bcf. The average number of third quarter days in production was 84.   Ohio law does not require separate reporting of natural gas liquids or condensate. Those volumes are included in the oil and gas totals. To date, 2,953 horizontal Utica permits have been issued in Ohio, while 2,469 of those have been drilled, according to state data. That compares to the 2,703 horizontal Utica permits and 2,469 drilled Utica wells reported at about this time last year.

Ohio gas production surges 39%; Ascent blows away projections - Ohio's Utica Shale gas production grew 39% in the third quarter year on year, nearing 7 Bcf/d, driven largely by continued growth in dry gas production from three counties along the state's Ohio River border with West Virginia and the need to fill new pipelines. Jefferson, Belmont and Monroe counties accounted for 74% of Ohio's 6.95 Bcf/d of shale gas production in Q3, according to data from the state Department of Natural Resources, while Carroll County, the original home of the Utica, continues to see declines in output. With the opening or expansion of Energy Transfer Partners' 1.7 Bcf/d Rover Pipeline, Columbia Gas Transmission's 1.5 Bcf/d Leach XPress and the 1.5 Bcf/d DTE Energy Nexus Gas Transmission pipeline, producers had 4.7 Bcf/d of new capacity open in 2018 to markets in the Midwest and Gulf Coast. Privately held Ascent Resources, with a C-suite stocked with executives who cut their teeth opening the Utica while working at the play's pioneer, Chesapeake Energy, continued to be the state's top producer. Ascent more than doubled its Q3 production year on year in the third quarter, well ahead of its own forecasts. According to a June 2018 presentation Ascent gave to close a $1.5 billion private equity investment, the company hoped to average 1.375 Bcf/d of gas production. In Q3, output topped 1.9 Bcf/d after starting 2018 with 1.2 Bcf/d. Gulfport Energy, previously the state's top producer, decided in 2018 to shift its spending south to Oklahoma's SCOOP shale oil and gas play. Its production in Ohio grew 6% year on year in Q3, but that could change in 2019. Gulfport's longtime CEO, Michael Moore, stepped down at the end of Q3, and the board hired a veteran Appalachian shale executive to take his place. After years at Murphy Oil, incoming CEO David Wood was chairman and CEO at West Virginia driller Arsenal Resources and was a senior adviser at First Reserve, one of the private equity backers of Ascent Resources.

Ohio moves into top five for recoverable shale natural gas reserves - Ohio has moved into the top five for recoverable shale natural gas reserves in the United States.  Data released by the U.S. Energy Information Administration shows the state saw a 24.5 percent increase in proved shale gas reserves from 2016 to 2017, bringing it to 25.6 trillion cubic feet. That moves Ohio past Oklahoma and behind only Pennsylvania, Texas, West Virginia and Louisiana. Proved reserves is a measure of oil and natural gas that can be recovered in the future. JobsOhio and economic development groups have said that a robust shale industry will create jobs in Appalachia and reduce energy costs, making it cheaper for other businesses to invest here. Before development of the Utica Shale, Ohio’s peak year for natural gas production was in 1984 at 186 billion cubic feet. In 2017, it was 1.7 trillion cubic feet, said Dan Alfaro, spokesman for Energy in Depth, an advocacy group launched by the Independent Petroleum Association of America. "What the EIA data tell us is Ohio’s status as a premiere gas-producing state is secured," Alfaro said. "Most importantly, the trends for the natural gas market bode well for continued economic growth and investment in the region."Proved reserves of both U.S. crude oil and natural gas broke records from the year before – crude jumped 19.5 percent to 39.2 billion barrels and surpassed the previous peak level of 39 billion barrels set in 1970. Proved reserves of natural gas were up 36.1 percent to reach 464.3 trillion cubic feet in 2017, surpassing the 388.8 trillion cubic feet record set in 2014.

Appalachian producers set the stage for production growth — Appalachian Basin gas producers are expected to focus production strategies to take advantage of new pipeline takeaway capacity that will be serving the region in 2019 and beyond. The substantial completion of two pipeline projects, Energy Transfer's Rover Pipeline and Atlantic Sunrise, in the second half of 2018 has added about 5 Bcf/d of capacity in the region. Rover, a 713-mile, 3.25-Bcf/d pipeline, is designed to carry gas from the Marcellus and Utica shale-producing regions of southwestern Pennsylvania, West Virginia and eastern Ohio to markets in the Midwest and through interconnects to the Gulf Coast, as well as northward into the Union Gas Dawn Storage Hub in Ontario. Additionally, Transcontinental Gas Pipe Line in October got the go-ahead from the US Federal Energy Regulatory Commission to place into service large portions of the 1.7-Bcf/d Atlantic Sunrise project, which will move gas out of the dry gas region of northeastern Pennsylvania. Other projects that have recently come online or that are expected to in the near term will add another approximately 1 Bcf/d of takeaway capacity in the region by early 2019. Range Resources said the approval for both the Majorsville and Burgettstown laterals of the Rover project allowed Range to begin flowing volumes on the pipeline in September. The  EQT, the biggest US gas producer, in November completed the spinoff of its midstream assets in order to become a pure-play Appalachian E&P company. In announcing the formation of Equitrans Midstream, EQT President and CEO Robert McNally said the spinoff would allow EQT "to develop the premier natural gas asset base in Appalachia." Another big producer in the region, Southwestern Energy, also moved to refine its focus on Appalachia, with the completion of the sale of its Fayetteville Shale assets in early December to privately held Flywheel Energy for $1.865 billion in cash. The sale would allow the company to "to drive greater value from our highly attractive and significant asset base in Appalachia,"  In what was perhaps the biggest 2018 M&A deal to affect the future of Appalachian Basin gas markets, Chesapeake Energy in July announced its plans to sell its Utica Shale assets in Ohio to allow the company to focus on growing its oil production in Wyoming's Powder River Basin. As a result, privately owned Encino Energy, which acquired the assets for $2 billion, became a major Appalachian player almost overnight. CEO Hardy Murchison said the company plans to actively develop the assets, which include more than 900,000 net acres of leasehold, spanning the condensate, liquids-rich and dry gas windows of the Utica play. As part of the deal, Encino acquired about 900 gas wells that currently produce more than 600 MMcf/d of gas equivalent.

 Residents: Fracking disposal well would make Plum 'a dumping ground for the oil and gas industry' - Pittsburgh Post-Gazette - Opening the state’s largest drilling and fracking wastewater disposal well in Plum could lead to earthquakes and contaminated groundwater, according to opponents of the proposal who testified at a state Department of Environmental Protection hearing Monday. More than a dozen speakers urged DEP regulators not to approve a permit sought by at Delmont-based Penneco Environmental Solutions, a subsidiary of Penneco Oil Co. The company wants to convert an old oil and gas well into a wastewater injection well allowed to accept more than 2.2 million gallons of salty and chemically laced fracking wastewater a month.  “This injection well would put a lot of young families at risk,” said Angela Billanti, a member of Citizens 4 Plum, a community group opposed to the wastewater injection well. “This, along with new zoning that will allow the drilling of hundreds of shale gas wells, will make Plum Borough a dumping ground for the oil and gas industry.” In addition to accepting more wastewater than any other disposal well in the state, it would be the first such well in Allegheny County.  Matt Kelso, a Plum resident and manager of data and technology for the Fractracker Alliance, a non-profit that maps shale gas industry operations, said the potential for earthquakes caused by the disposal well poses a significant risk, not only due to the underlying geology, but also because of the many abandoned mines in the area. “For decades, (the DEP) determined that the subsurface geology of most of Pennsylvania was unsuitable for underground injection. But now they are tasked with overseeing an oil and gas industry that produced 58 million barrels, or 2.4 billion gallons, of toxic liquid waste in 2017 alone,” Mr. Kelso said. “Just because there is more waste to deal with does not make our area suddenly suitable to be a dump for toxic liquid waste.”

 US fossil fuel exports spur growth, climate worries - The boom in fossil-fuel production in the United States has been matched by a rush on the other side of the Pacific to build the infrastructure needed to respond to the seemingly unquenchable thirst for energy among Asia's top economies. When Congress lifted restrictions on shipping crude oil overseas in 2015, soon after the Obama administration opened the doors for international sales of natural gas, even the most boosterish of Texas oil men wouldn't have predicted the U.S. could become one of the world's biggest fossil-fuel exporters so quickly.Climate experts say there is little doubt increased American production and exports are contributing to the recent rise in planet-warming carbon emissions by helping keep crude prices low, increasing consumption in developing economies.Backers of U.S. exports of liquefied natural gas, or LNG, argue that the boom will produce environmental benefits because it will help China and other industrial nations wean themselves from coal and other dirtier fossil fuels.Environmentalists counter that the massive new supplies unleashed by American advances in extracting natural gas from shale doesn't just make coal-fired power plants less competitive. LNG also competes with such zero-carbon sources of electricity as nuclear, solar and wind — potentially delaying the full adoption of greener sources. That's time climate scientists and researchers say the world doesn't have if humans hope to mitigate the worst-case consequences of our carbon emissions, including catastrophic sea-level rise, stronger storms and more wildfires. "Typically, infrastructure has multi-decadal lifespans," said Katharine Hayhoe, a climate scientist and director of the Climate Science Center at Texas Tech University. "So, if we build a natural-gas plant today, that will impact carbon emissions over decades to come. So those are the critical and crucial decisions that are being made today. Do we increase access to and use of fossil fuels, or do we make decisions that limit and eventually reduce access to fossil fuels?"

 Fracking accountability will be legislative topic - Lawmakers are likely to face renewed debate in the next legislative session about how or whether to hold oil and gas companies accountable for property damage caused by earthquakes in Kansas. Earthquakes have increased in Kansas since 2013 when fracking, or hydraulic fracturing, became more common for oil and gas exploration. Some researchers believe injection of wastewater from the explorations into underground wells contributes to the quakes. The Topeka Capital-Journal reports Joe Spease, of the Kansas Sierra Club, says lawmakers should require oil and gas companies to pay a fee to help pay for damages from earthquakes. But Ed Cross, executive director Kansas Independent Oil and Gas Association, says companies would go out of business and jobs would be lost if such fees were imposed on the industry.  

Death in the oilfields | The Center for Public Integrity - Drilling is an inherently dangerous undertaking, with a fatality rate nearly five times that of all industries in the United States combined in 2014, the last year such rates on oil and gas extraction were published by the government. Production pressures — and the temptation to cut corners — intensify during boom times, as America is experiencing now due to a rush of fossil-fuel exports.The work of coaxing oil and gas from thousands of feet underground is performed in biting cold and breathtaking heat by stoics like Parker Waldridge, who burned to death at 60 in a driller’s cabin, known as a doghouse, atop the floor of Rig 219.    “They get up in the morning and eat nails for breakfast. We need those people to do that kind of work. We’ve just got to find a way not to kill them.”“We need those people to do that kind of work. We’ve just got to find a way not to kill them.” From 2008 through 2017, 1,566 workers died from injuries in the oil-and-gas drilling industry and related fields, according to data from the U.S. Department of Labor’s Bureau of Labor Statistics. That’s almost exactly the number of U.S. troops who were killed in Afghanistan during the same period.  From 2008 through October 25 of this year, the department’s Occupational Safety and Health Administration cited companies in the extraction industry for 10,873 violations, a Center for Public Integrity analysis of OSHA data found. Sixty-four percent of the violations were classified by the agency as “serious,” meaning inspectors found hazards likely to result in “death or serious physical harm.” Another 3 percent were classified as “repeated,” meaning the company previously had been cited for the hazard, or “willful,” indicating “purposeful disregard” for the law or “plain indifference to employee safety.” During that period, OSHA investigated 552 accidents resulting in the death of at least one worker.  Initial penalties in the 552 accidents averaged $16,813, but later were reduced, on average, by 30 percent. (OSHA often cuts fines in exchange for quick settlements and hazard abatement). Some violations are still being contested by employers. Others were dropped by OSHA after negotiations with companies.  The number of workers exposed to death, injury and illness in the upstream portion of the oil and gas industry — exploration and production — is growing, especially in the frenetic Permian Basin of West Texas and southeastern New Mexico. At the beginning of December, according to figures from oilfield services firm Baker Hughes, the basin accounted for more than half of the nation’s operating drilling rigs — 489 in all.

A sip of fracking wastewater? - Finger Lakes Times - In the dry Southwestern state of New Mexico, state officials and the U.S. Environmental Protection Agency are seriously considering an attempt to clean up toxic wastewater from hydrofracked oil and gas wells so it can be used in agriculture. And as drinking water. Seriously? Recycling fracking wastewater for drinking? In published reports in the last two weeks, this notion surfaced against a political backdrop of keeping the oil and gas industry fiscally healthy and profitable. “Oil and gas in New Mexico provide over a third of our general fund,” Ken McQueen, head of the state’s department of Energy, Mineral and Natural Resources said in the Washington Post. “We have to be concerned we’re doing what’s necessary into the future to make sure this industry continues to be alive and vibrant.” McQueen gushed that part of keeping the industry vibrant could include using cleaned-up toxic wastewater to irrigate crops and provide water for domestic taps. He also opined it might be used to revive dried-up wildlife wetlands.  An added benefit, which he didn’t emphasize, is that it would save oil and gas companies large sums of money now spent on injecting the toxic wastewater into deep wells. If this cleanup scheme seems a horrendously bad idea, that’s because it is. Hydrofracking wastewater is almost always disposed of by injecting it deep into the earth because the stew of chemicals in it is so toxic. The chemical-laced wastewater also often contains additional hazardous substances picked up in the drilling process, including radioactive material. The idea that fracking wastewater could be cleaned up is certainly attractive in arid oil-producing states. It takes 4 million to 8 million gallons of water to drill each oil or gas well, sometimes resulting in water shortages in communities where fracking takes place. The cleanup option is also attractive because when wastewater is injected into the earth, it can trigger earthquakes. But the technical and political hurdles are huge and complicated. The politics are complicated because the fracking industry is exempt from key provisions of the federal Safe Drinking Water Act. Exempt.

Another boat sinks and spills oil into Hoquiam River -  Another boat sank into the Hoquiam River on Christmas morning, polluting the water and creating an oily sheen over the river due to leaked fluid from the boat. This is the seventh vessel to sink at the boat yard just north of Al’s Hum Dinger restaurant, according to the Washington State Department of Ecology. Just after 9 a.m. Tuesday, a citizen reported there was a sheen of fuel on the Hoquiam River, originating from a privately owned boat yard in the 200 Block of Monroe Street, Hoquiam Police Chief Jeff Myers said in a release. Upon arrival by the Hoquiam Police and Fire departments, responders noticed a strong odor of fuel and the sheen of a petroleum product on the river heading downstream toward the Riverside Bridge.  Debris was floating adjacent to the boat yard with mooring lines still leading to a vessel completely submerged and not visible in the river. Oil pollution extended about 500 yards both upstream and downstream from the site, said Department of Ecology communications manager Sandy Howard. The department estimates between 10 and 15 gallons of oil were spilled. A person staying at the boat yard indicated that an old Navy patrol vessel was moored at the boat yard and may have been damaged by a piling during the recent high storm tides, Myers said. The boat had been moved and secured with additional floats, but at 1:40 a.m., the witness heard the sound of rushing water and found the boat tilting. The boat sank into the river with fuel or engine oil escaping into the water, but no one notified the Coast Guard or called 911 to report it at the time. The owner of the boat yard was not present upon arrival of police and fire units, Myers said. The state Department of Ecology’s spill response team was sent and assisted with cleaning up the leaking oil. With help from people associated with the private marina, the department deployed floating absorbents around the sunken boat to collect floating oil and any more residual that’s released, Howard said.   On Wednesday morning, the oily sheen could still be seen at many spots along the river’s shoreline near the boat yard.

U.S. crude inventories dip slightly – EIA (Reuters) - U.S. crude stocks fell modestly last week, while gasoline stocks increased more than expected, the Energy Information Administration said on Friday. Crude inventories were down by 46,000 barrels in the week to Dec. 21, compared with analysts’ expectations for a decrease of 2.9 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 799,000 barrels, EIA said. Refinery crude runs fell by 58,000 barrels per day, EIA data showed. Refinery utilization rates fell by 0.3 percentage points. Gasoline stocks rose by 3 million barrels, compared with analysts’ expectations in a Reuters poll for a gain of 28,000 barrels. Distillate stockpiles, which include diesel and heating oil, rose by 2,000 barrels, versus expectations for a 529,000-barrel drop, the EIA data showed. Net U.S. crude imports fell last week by 411,000 barrels per day. 

US Oil Delivers One-two Punch to Middle East Producers -- The U.S. oil industry is delivering a one-two punch to Middle East producers already reeling from a collapse in prices. A tussle is playing out in the market for so-called light oils, which have a lower sulfur content and are less dense than heavier varieties. When processed, these grades typically yield a higher amount of fuels like gasoline and naphtha. And now, American supplies are weighing on prices for such crudes as well as fuels made from them. Light oil pumped in U.S. shale fields is increasingly making its way to Asia, undercutting sales by the likes of Saudi Arabia. Additionally, America is exporting a record amount of refined fuel, contributing to a global glut in gasoline and naphtha. That’s hurting some of the biggest members of the Organization of Petroleum Exporting Countries as they prepare to curb crude output in a bid to stabilize the market. Middle East producers -- still the dominant suppliers to Asia -- are being forced to tackle American crude competition by lowering their oil pricing to defend their market share. The refiners, meanwhile, are contending with booming U.S. fuel shipments dragging down their returns from making processed products. “It is no surprise that Middle Eastern producers are having to cut light crude prices,” said Virendra Chauhan, an analyst at industry consultant Energy Aspects Ltd. Over the course of 2018, the key sources of global oil-output growth have included light crude from U.S. shale fields and Saudi Arabia, he said. While Middle East producers such as Saudi Arabia and Abu Dhabi are reducing the pricing for their lighter crudes, American exports to Asian nations such as India and South Korea are surging. Even a temporary halt by China due to its trade war with the U.S. hasn’t significantly dented overall flows this year. While the rivalry between Middle Eastern producers and sellers of U.S. oil has intensified since 2016, with even relatively heavier American crudes such as Mars and Poseidon coming to Asia, the competition is particularly stiff for lighter grades. Abu Dhabi’s Murban and Saudi Arabia’s Extra Light have similar fuel yields and chemical characteristics as shale crude.

US shale’s financial blanket at risk of wearing thin in 2019 - All industrial revolutions need two things: technology and finance. The US shale revolution was made possible by the advances in horizontal drilling and hydraulic fracturing that allowed oil and gas to be released from previously unyielding rocks. But the industry’s financing was equally important in turning those innovations into a production boom that has shaken the world. The financial model that has dominated the industry has been a highly competitive group of exploration and production companies using debt raised from bond markets and bank loans secured on oil and gas reserves. Often they use derivatives to hedge some or all of their revenues, giving lenders confidence in their ability to make interest payments if oil and gas prices fall. For most of the shale boom, that financial infrastructure has been underpinned by the low interest rates and quantitative easing that followed the financial crisis. The surge in US oil production has been a result of monetary stimulus, just as much as the tech start-up boom and the rise in the S&P 500 have been. As its output has grown, the US E&P industry has been unable to finance its drilling programmes from its operating cash flows, and a constant inflow of capital has been essential for keeping it afloat. With stock markets and oil prices falling, and while the Federal Reserve is still signalling its intention to keep raising interest rates, the financial conditions that have protected the shale industry like a warm blanket may next year start to wear thin. One issue that has been highlighted by Philip Verleger, an energy economist, is the outlook for the hedging used by E&P companies to protect their revenues and reassure their lenders. Strategies vary, but the standard practice is for companies to put a floor under the effective price of some or all of their production by buying put options. Mr Verleger argues that those options have been an important factor in the collapse of oil prices to a 15-month low since October. The investment banks and others that sold those put options have to hedge their own positions, typically by selling oil in the futures market. The more likely it is that the options will be exercised, the more oil the finance companies have to sell, in a practice known as “delta hedging”. That creates a positive feedback loop: as prices fall, financial companies that have sold puts need to sell more oil, which drives the price down further.

Global Drilling And Well Services Activity Sees An Upswing - Since the industry’s all-time low in 2016, field service activities have rebounded and are expected to grow at an average annual rate of 4 percent towards 2021. This is in response to stronger demand for oil and gas and to some of the 30 major energy projects that received final investment decisions in 2017. Industry analysts Rystad Energy predicts 72,000 wells will be drilled and completed in 2019, an increase of 3 percent on 2018. However, field services growth will not be evenly spread either between oil and gas sectors or by countries, given that Iranian oil is subject to sanctions on exports, Libya is vulnerable to interruptions by local tribes and insurgents, and Venezuela’s oil industry is in freefall. Local and international factors will govern the level and location of demand for the type of drilling and field development services. It is easy to overlook the fact that well drilling is predominantly land-based, a feature that owes much to the U.S. shale boom. In less than a decade, U.S. companies have drilled 114,000 shale oil wells and large numbers of gas wells, both in established basins and in new areas. Year-on-year, the United States saw an increase in the rig count of 144 to 1075 on Dec. 7. Rapid growth in North America’s shale oil and gas output has made the country the leading growth market for field services; however, fracking activity slowed in the last quarter as wells in the Permian were drilled but not fracked while awaiting three new pipelines to come online in 2019. Exploitation of shale resources, most notably in North America but also in Argentina and China, dominates the demand for high specification rigs to enable drilling of long horizontal wells accompanied by hydraulic fracturing services. Weaker activity in North America has however been compensated by increased activity in the rest of the world. This was seen by the increase in the number of international rigs by 49 to a total of 991, centered mainly in Latin America and the Middle East.   Moreover, Russia, the holder of considerable shale resources in the Bazhenov Basin, could potentially provide a growing market for heavy-duty rigs, horizontal drilling and fracking expertise and services once U.S. sanctions are lifted.

 US Is Awash with Natural Gas and More Production Is on Its Way - The Energy Information Administration recently released its reserves report, noting that proven reserves of natural gas increased 36 percent to 464.3 trillion cubic feet—a record that surpasses the previous high set in 2014. Natural gas production in 2017 increased by almost 3 percent from 2016 production levels—another record high. Most of this natural gas is coming from the Marcellus and Utica shale plays in Pennsylvania and neighboring states. .  The Permian Basin, however, is also a major player in natural gas production, as the Department of the Interior recently found the Wolfcamp Shale and overlying Bone Spring Formation in the Delaware Basin of Texas and New Mexico’s Permian Basin to contain 281 trillion cubic feet of natural gas, or about 48 billion barrels of oil equivalency. However, that production is hampered by pipeline constraints to get the gas to demand centers. Benchmark gas prices in Permian gas markets recently averaged only $0.625 per million Btu because new pipeline capacity is at least 10 months away.  Further, at least 10 new offshore platforms in the Gulf of Mexico are expected to begin producing natural gas by the end of 2018 and another eight are expected to begin production in 2019.  Last year, the United States became a net exporter of natural gas and U.S. liquefied natural gas (LNG) exports are increasing as export terminals are coming on line. U.S. LNG exports are poised for a big year in 2019. Offshore natural gas production in the Gulf of Mexico has been declining since fiscal year 2009. The number of natural gas wells in the Gulf of Mexico fell from 3,271 in 2001 to 875 in 2017.  The new offshore field starts are expected to slow or reverse the declining trend. The 18 new projects are believed to hold 836 billion cubic feet of natural gas reserves, with the energy equivalency of around 144 billion barrels of oil. Most of the natural gas produced in the Gulf of Mexico is associated-dissolved natural gas produced from oil fields. The largest of the new offshore natural gas fields is Cesar/Tonga Phase II in the Green Canyon area—about 186 miles south of New Orleans. The project is believed to contain 158 billion cubic feet of natural gas. Recently, Chevron¬†announced that it had started production on its Big Foot deep-water project, located about 225 miles south of New Orleans. It is expected to produce up to 25 million cubic feet of natural gas per day.

Prices Little Changed As The Market Awaits January Temperatures -- Highlights of the Natural Gas Summary and Outlook for the week ending December 21, 2018 follow. The full report is available at the link below.

• Price Action: The January contract fell 1.1 cents (0.3%) to $3.816 on a 42.2 cent range ($3.938/$3.516.
• Price Outlook: This week’s 42.2 cent range was less than half of last week’s 87.9 cent range, but still elevated. While the 15-day forecast was quite bearish, longer-term models suggest the potential for a very cold January as a polar vortex, similar to 2013/14 delivers Arctic air into the lower 48. If this does occur, prices likely have higher to go.  CFTC data indicated a (9,370) contract reduction in the managed money net long position as longs added and shorts added. Total open interest fell (52,400) to 3.692 million as of December 18. Aggregated CME futures open interest fell to 1.231 million as of December 21. This is the lowest total delta adjusted open interest since July 31, 2018. The current weather forecast is now warmer than 7 of the last 10 years. Pipeline data indicates total flows to Cheniere’s Sabine Pass export facility were at 3.9 bcf. Cove Point is net exporting 0.8 bcf. Corpus Christi is exporting 0.425 bcf. Cameron is exporting 0.015 bcf.
• Weekly Storage: US working gas storage for the week ending December 14 indicated a withdrawal of (141) bcf. Working gas inventories fell to 2,773 bcf. Current inventories fall (671) bcf (-19.5%) below last year and fall (713) bcf (-20.5%) below the 5-year average.
• Storage Outlook: The EIA weekly implied flow was (8)bcf from our EIA storage estimate. This week’s storage miss is back within our tolerance. Over the last 5 weeks, the EIA has reported a total withdrawal of (294) bcf compared to our (295) bcf estimate.
• Supply Trends: Total supply rose 0.2 bcf/d to 81.8 bcf/d. US production fell. Canadian imports rose. LNG imports rose. LNG exports rose. Mexican exports rose. The US Baker Hughes rig count rose +9. Oil activity increased +10. Natural gas activity decreased (1). The total US rig count now stands at 1,080 .The Canadian rig count fell (43) to 131. Thus, the total North American rig count fell (34) to 1,211 and now exceeds last year by +70. The higher efficiency US horizontal rig count rose +13 to 940 and rises +139 above last year.
• Demand Trends: Total demand rose +8.3 bcf/d to +100.9 bcf/d. Power demand rose. Industrial demand rose. Res/Comm demand rose. Electricity demand rose +793 gigawatt-hrs to 79,940 which trails last year by (1,267) (-1.6%) and trails the 5-year average by (86)(-0.1%%).
• Nuclear Generation: Nuclear generation rose 539 MW in the reference week to 91,595 MW. This is (2,887) MW lower than last year and (1,131) MW lower than the 5-year average. Recent output was at 92,091 MW.

The heating season has begun. With a forecast through January 4 the 2018/19 total cooling index is at (1,244) compared to (998) for 2017/18, (941) for 2016/17, (842) for 2015/16, (1,127) for 2014/15, (1,308) for 2013/14, (1,115) for 2012/13 and (1,091) for 2011/12.

Natural Gas Stabilizes Into January Options Expiry --It was January contract options expiry for natural gas futures today, though excitement was certainly not what it could have been should December have verified colder. On the day the January contract settled up a bit more than 2% on lingering long-range cold risks following heavy selling Monday.  Options expiry seemed to play a role, while loosening balances and expectations for a bearish EIA print to be announced Friday eased concerns about low storage, explaining why the March contract lagged.  We accordingly saw a decent bounce in the January/March contract spread today despite only a modest January rally.  Today's intraday bounce was not particularly surprising, as in our Morning Update we explained that prices under $3.5 were "undervalued" headed into options expiry given long-range cold risks. When we wrote this gas prices were down 3% on the day, and we sat bounce and watched them bounce solidly over $3.5 through the day.  Prices were aided intraday with GEFS weather model guidance that showed widespread cold risks in the long-range (image courtesy of Tropical Tidbits).  Meanwhile, we saw recent balance dynamics as potentially explaining much of the price action since last Friday. We highlighted that in our Note of the Day today, where we also looked at a recent increase in LNG exports as well.

NYMEX January natural gas settles 7.6 cents higher at $3.543/MMBtu - — The NYMEX January natural gas futures contract came out of the holiday Wednesday to rise 7.6 cents to settle at $3.543/MMBtu. February also rose 3.5 cents to close at $3.458/MMBtu. While US demand rose 1.4 Bcf to 87 Bcf Wednesday, it has been on the low side for several days, with consumption averaging 85.8 Bcf/d over the last six days, according to S&P Global Platts Analytics. To date, December demand has averaged 91.6 Bcf/d.The bulk of the consumption was seen in the major demand areas of the Northeast and Upper Midwest, where need was projected to be 39.7 Bcf Wednesday, about 1.6 Bcf below the December average of 41.3 Bcf/d. But Southeast and Texas demand is well behind year-ago levels, due to check in at 29.7 Bcf Wednesday, compared with a the month-to-date average of 33.8 Bcf/d and a year-ago average of 34.1 Bcf/d.Demand does look to rise, however, averaging 94.7 Bcf/d over the next week and 96.7 Bcf/d for the next seven-day period.That coincides with the weather forecast, which shows the bulk of the western half of the country experiencing lower-than-normal temperatures during the front part of that period and the east seeing the same during the back end.US supply continues to run at elevated levels. Wednesday's gas on hand was 90.6 Bcf, putting the monthly average to 89.9 Bcf/d. By contrast, at this point in 2017, supply was averaging 6.8 Bcf/d less at 83.1 Bcf/d.Inventories are still lagging, but withdrawals have not been too steep of late. Northeast stocks were estimated at 1.493 Tcf, down 4 Bcf from Tuesday. Pulls from storage over the last six days have averaged 3.98 Bcf/d.  But the Southeast and Texas were expected to see a 3-Bcf build to 858 Bcf.

January Gas Expires With Strength - (see graphics) It feels like we say this every natural gas contract expiry, but the prompt month contract went off the board exhibiting quite a bit of strength, with January gas contract rallying 3% despite being lower much of the morning.  The role of the January expiry was evident with the January contract leading into the settle, even as the February contract led among the winter contracts for much of the day.  The result is that the January/February F/G contract spread ticked higher on the day, with the January contract expiring almost 10 cents above the February contract (which has sense pulled back further since the expiry).    In our Note of the Day this morning we highlighted that F/G had risen into expiry each of the last 5 years, and that with any colder risks that would continue this year despite weak cash prices. All it took was a cold end to the European operational model to make it 6 years in a row.  This came after we outlined in our Morning Update that, "...we see more upside risks for gas prices today thanks primarily to what has been a pattern of very strong contract expiries in this current trading environment. Though the strength seen in the December contract expiry is highly unlikely, there still appear to be enough cold risks in January to combine with the current storage deficit and let the January contract expire with strength." We saw this strength coming despite overnight GWDD losses.  Meanwhile, traders were also preparing for tomorrow's EIA Weekly Natural Gas Storage Report, where a relatively small storage draw should be announced thanks to widespread warmth last week.   Today we looked at when cold weather could return and what stable moderate El Nino conditions per the CFSv2 climate model mean for the rest of the winter.  Things should remain busy tomorrow then with significant weekend risk before another holiday-thinned trading day Monday and an EIA report thrown in for added fun.

Natural Gas Gets Crushed As January Cold Delayed - (see graphics)It was another rough week for natural gas bulls, with the February natural gas contract settling over 13% below where the January natural gas contract settled last Friday. With the January contract now off the board, it was the February contract that logged the largest loss on the day while the March contract actually saw the largest weekly loss. Weakness today was not particularly surprising as in our Morning Update we warned that "...overnight weather model guidance was unimpressive enough to put a test of $3.25-$3.3 in play..." Sure enough, this verified well with the February contract setting a low on the day at $3.278 as afternoon model guidance was again unimpressive (images courtesy of Tropical Tidbits). EIA data today did little to spark buying interest in natural gas too, with the EIA announcing a storage draw of 48 bcf. This was just 2 bcf from our -50 bcf expectation, and we quickly labeled the report as "Neutral" but noted that "...with any warmer model guidance gas can test $3.25-$3.3" after the print which verified well on warmer 12z weather model guidance. The print confirmed that the market had loosened in recent warm weather, showing that last week's tighter print was a bit of an outlier and following right in line with the balance of the last 10 gas weeks. In the Update we noted a clear warming trend in recent Climate Prediction Center forecasts, though this is based off of past weather model guidance. Though gas prices have fallen off quite a bit and implied volatility has taken a plunge, winter is far from over, and there are likely to be quite a few more price moves from here.

Weekly Natural Gas Storage Report: The Bulls Are Giving Up, And That's A Good Thing - EIA reported a storage draw of 48 Bcf for the week ending Dec. 21. This compares to the -47 Bcf we projected and consensus average of -50 Bcf. The -48 Bcf was smaller than the five-year average of -121 Bcf and last year's -112 Bcf. For the week ending 12/28, we currently have a forecast of -40 Bcf.  We have April 2019 storage at 1.35 Bcf. We published a piece on Wednesday titled, "That cold blast always seems like a week away." The latest weather model updates do not help the bulls' cause at all as the first half of January is now expected to be warmer than normal, showing lower than normal heating degree days. (Note: The most important line in that chart is the ECMWF-EPS one.)What the current outlook is basically saying is that there's not only a cold blast in early January, but that the outlook is actually warmer than normal. With the markets coming into the end of December holding onto the belief that the bulls will get relieved via bullish weather, the latest update is a big disappointment, and hence why prices are falling some ~7%-plus today. Because sentiment and positioning is resetting precisely at a time when the long-range weather outlook shows a much better set-up. Now keep in mind that the long-range is not always accurate, but positioning/sentiment wise, if a colder than normal outlook is the set-up by the end of January just as positions get washed out, that may present the bullish trade opportunity we are waiting for. But still, nothing will eliminate the fact that the first two weeks of January may turn out to be warmer than normal. The damage is being done to our EOS 2019 April forecast which was revised from an initial 1.05 Tcf at the start of the month to 1.35 Tcf. This is what the bearish weather did to storage. For us, we like to see the sentiment washout continue. We think the set-up may be even better going into the end of January, and once traders start thinking that the rest of this winter may remain warmer than normal, that's when the set-up for a long opportunity may present itself.

B.C. regulator says fracking caused earthquakes near Fort St. John – CBC - The B.C. Oil and Gas Commission has blamed fracking for three earthquakes in northeastern B.C. last month.The provincial regulator says the events 20 kilometres south of Fort St. John on Nov. 29 occurred because of fluid injections during hydraulic fracturing at a Canadian Natural Resources wellsite.   The events, which were felt but caused no surface damage, measured 3.4, 4.0 and 4.5 magnitude. Fracking operations within the lower Montney formation, a major shale oil and gas resource near the B.C.-Alberta border, were suspended after the earthquakes and are to remain suspended at the multi-well pad, pending the results of a detailed technical review.The commission says seven wells into the upper Montney formation had previously been drilled and completed by the Calgary-based company with no seismic events larger than magnitude 2.5 detected. The immediate shutdown of operations is required when an induced seismic event in that region reaches or exceeds a 3.0 magnitude.

OGC says November earthquake caused by fracking - – The B.C. Oil and Gas Commission has determined the three seismic events which occurred approximately 20 km south of Fort St. John on November 29, were caused by fluid injection during hydraulic fracturing operations conducted by Canadian Natural Resources Limited. According to OCG, the events measured 3.4, 4.0 and 4.5 magnitude, with the first event recorded at 18:27 MST followed by two smaller aftershocks ending at 19:15 MST. The Commission received 14 reports of felt events related to this seismicity. CNRL performed wellbore integrity assessments, and no problems were reported. As per the Commission’s Kiskatinaw Seismic Monitoring and Mitigation Area Special Project Order and the Drilling and Production Regulation, CNRL immediately suspended hydraulic fracturing operations.OCG says the investigation included a review of operational and seismological data within a 10-kilometre radius of the epicentres as determined by Natural Resources Canada. “The events occurred during hydraulic fracture operations targeting the lower Montney formation. Seven upper Montney wells had been previously drilled and completed at CNRL’s well pad (5-22-81-18W6) from May to June 2018. No events larger than magnitude 2.5 were detected during that period. A pre-assessment report relating to completion operations for two wells (‘G’ and ‘H’) targeting the lower Montney was submitted as required by KSMMA and concluded induced seismicity was likely to occur, but events larger than magnitude 3 were not expected.” Factors leading to this determination include:

• • The timing of the events coincided with hydraulic fracture operations within the lower Montney zone in the ‘G’ and ‘H’ well of the 5-22 pad which were ongoing from Nov. 27, 2018 until the occurrence of the events on Nov. 29, 2018.
• • The epicentres of the events were located in close proximity to the ‘G’ and ‘H’ wells based on data from both the Canadian National Seismograph Network and a proprietary seismic array deployed to monitor for induced seismicity.
• • Water disposal was occurring in the Septimus area but the closest active disposal well was approximately six km from the epicentre of the 4.5 magnitude event. Further, the depth of the events as determined by the proprietary dense array was significantly lower than the formation where water disposal was occurring.
• • Based on “felt” reports, ground motion appears to have been strongest in the vicinity of the ‘G’ and ‘H’ wellbores.

CNRL has satisfied the pre-operation and active operation requirements as per the KSMMA order. However, all hydraulic fracture operations within the lower Montney formation will remain suspended at the 5-22 well pad pending the results of a detailed technical review. CNRL continues to cooperate fully with the ongoing investigation..

Environmental and economic development choices split Canada's First Nations - — A Vancouver-area First Nation's decision to support the Woodfibre LNG project may have come as a surprise to some, considering the nation's role in helping to derail the Trans Mountain pipeline expansion earlier this year. The Squamish Nation community was one of a handful of First Nations that lined up to convince the Federal Court of Appeal in August to overturn National Energy Board approval of the controversial oil pipeline expansion from Edmonton to the West Coast, leaving its future in doubt. But the nation's acceptance of the liquefied natural gas export project last month reinforces a simple truth, says historian Ken Coates: While Canada's first people may approach tough questions differently than non-native Canadians, their decisions are motivated by many of the same factors. "These are complex issues and you're always going to have people on both sides," said the Macdonald-Laurier Institute's senior fellow in Aboriginal and northern Canadian issues and the author of several books and publications on Indigenous relations. "These are communities that need real sustainable, substantial economic benefit, where Indigenous people have been locked out of the market economy for 150 years, since Confederation. They've been wanting in for a long period of time." Woodfibre LNG gained trust through five years of consultations and by agreeing to abide by conditions under the nation's environmental and cultural assessment process (which operates separately from federal and provincial regimes), said Khelsilem, a spokesman for the Squamish Nation council, and one of its councillors who voted against the proposal in a close 8-6 vote. In return for its support, the community is to receive annual and milestone payments totalling $226 million over the 40-year life of the project, and its companies will be in line to bid on up to $872 million in contracts.

 Heritage Petroleum claims sabotage in oil leak -  - Pre­dic­tions of sab­o­tage of T&T’s oil as­sets are ma­te­ri­al­is­ing af­ter Heritage Pe­tro­le­um re­port­ed that a crude oil line had been hack­sawed on Fri­day by al­leged saboteurs. In a state­ment, Her­itage Pe­tro­le­um Com­pa­ny Lim­it­ed said it was now work­ing with the po­lice to find the par­ties re­spon­si­ble for an act of sab­o­tage on one of its pipelines at CR64 Pro­duc­tion Head­er in Cruze Field, Point Fortin. The cut line was dis­cov­ered at 3pm on Friday and came a day af­ter a sub-sea leak de­vel­oped at Sol­da­do North fields in the Gulf of Paria. While the sub-sea oil leak has not been iden­ti­fied as sab­o­tage, Her­itage Pe­tro­le­um said the dam­age to the pipeline at Cruze Field, Point Fortin seemed to be an act of sab­o­tage. The three-inch bulk pipeline was vis­i­bly hack­sawed in sev­er­al places and stolen, re­sult­ing in the spillage of ap­prox­i­mate­ly 50 bar­rels of oil. Booms were de­ployed to con­tain the spilled oil. “Recov­ery and clean-up ef­forts are on­go­ing,” Her­itage Pe­tro­le­um said. All reg­u­la­to­ry agen­cies, in­clud­ing the Min­istry of En­er­gy and En­er­gy Af­fairs; the En­vi­ron­men­tal Man­age­ment Au­thor­i­ty (EMA); and the Oc­cu­pa­tion­al Safe­ty and Health Agency (OS­HA) have been no­ti­fied. “Her­itage Pe­tro­le­um…is com­mit­ted to en­sure that all our as­sets and peo­ple were op­er­at­ing safe­ly and with­in the law,” the company said.

US Rig Count Rises As Canadian Drillers Prepare For Winter - Coming off a rather abysmal week for oil prices, Baker Hughes reported a 3-rig increase for oil and gas in the United States this week. The total number of active oil and gas drilling rigs now stands at 1,083 according to the report, with the number of active oil rigs increasing by 2 to reach 885 and the number of gas rigs increasing by 1 to 198. The oil and gas rig count is now 154 up from this time last year, 138 of which is in oil rigs. WTI prices were up slightly on Friday following a uneventful EIA report which showed US crude oil inventories were virtually unchanged for the week, contrary to Thursday’s API report which showed a surprise crude oil inventory build. Brent crude was trading slight down on Friday, at $52.44 (-0.55%) The WTI benchmark was trading up 0.29% (+$0.13) at $44.74, still down for the week. Canada’s oil and gas rigs for the week decreased by 61 rigs this week after losing over 50 rigs in the two weeks prior. Canada’s total oil and gas rig count is now just 70, which is 66 fewer rigs than this time last year, with a 43-rig decrease for oil rigs, and a 18-rig decrease for gas rigs for the week as Canada’s oil patch gears up for winter season. The EIA’s estimates for US production for the week ending December 14 continues to weigh on prices, averaging 11.6 million bpd­—a drop off from the high of 11.7 million bpd a few weeks ago. By 1:08pm EDT, WTI had increased by 1.88% (+$0.64) at $45.45 on the day. Brent crude was trading up 1.25% (+$0.66) at $53.39 per barrel.

 Canada's Energy Policy Creates Structural Problems for Oil and Gas Industry - As the U.S. oil industry reels from the collapsing oil prices, Canada’s oil business is seeing its oil prices rallying. How can that be? It is the result of strong political intervention in Alberta’s oil business in an attempt to save it from devastation. When the oil price differential between Western Canadian Select and West Texas Intermediate swelled to $52 a barrel in November, the impending devastation of the Canadian oil industry demanded swift and decisive action. It was delivered, although somewhat reluctantly, and only after an earlier proposed solution failed to change the oil market sentiment. Following an OPEC-like production cut, the oil price differential has shrunk to only $16.60 a barrel, in line with what existed last spring. How the Canadian oil industry got into this mess is a tale of energy policies going off the rails when liberal politicians placed an anti-fossil fuel governing agenda ahead of the economic interests of the country’s largest industry, and a source of substantial government revenue. The tension between Canadian liberal and conservative governing philosophies has existed for decades. It has often revolved around the development of Canada’s natural resources. The first high-profile battle between the governing philosophies occurred in the 1980s, as the world dealt with the dramatic oil price hikes engineered by OPEC in the 1970s and the loss of Iranian oil supplies from the market. Today, the political battle is over constructing additional oil and gas pipelines for exporting more fossil fuels, which, when burned, release carbon emissions that contribute to global warming and threaten the existence of future generations. Stopping the burning of oil and natural gas, and especially the carbon-rich bitumen extracted from Canada’s oil sands, has become a paramount objective of environmentalists. Canada, with the world’s third largest oil reserves, of which 97 percent is oil sands, has become a prime target of the “keep it in the ground” movement. Their key disruption strategy is stopping the building of new pipelines. For Canada, oil exports are critical to its economic wealth. Unfortunately, the lack of pipelines carrying hydrocarbons anywhere other than to the United States has created a unique dilemma for Canada’s oil business. America’s shale revolution success is reducing the need for more Canadian oil. This is a change in the historical relationship between the two countries. While Canada remains the number one oil supplier to the U.S., the slowing of America’s oil use and the growth of its domestic output is forcing Canadian oil producers to seek new markets.

 Fracking could fuel Top End water infrastructure expansion, NT Government says -- The fracking industry could one day be pivotal in water infrastructure expansion in the Northern Territory, with the NT Government saying it has a "keen eye" on future developments. Acting NT Natural Resources Minister Lauren Moss said future private investment "in initiatives that capture, store and transport water resources would be welcomed" by the NT Government. "Industries such as those involved in onshore gas and mining are always looking at water use as a driver of innovation, and this is something we have a keen eye on," Ms Moss said. The Minister's comments follow a Curious Darwin investigation earlier in December that asked: Why can't the Top End pipe some of its abundant water south to assist drought-stricken states? More than 2,300 of you wanted to know the answer which was, in short, that such a project would be too expensive for any government to ever fully fund.  Although nearly two metres of rain falls each year in Darwin, the region currently does not have the infrastructure in place to capture enough of it to be piped out — a project which experts from CSIRO and Power and Water Corporation have estimated would cost billions, if not trillions, of taxpayer dollars.

China's LNG imports jump to record high in November -Chinese liquefied natural gas (LNG) imports soared by 48.5 percent in November 2018, compared to the same month last year, as China continues to have parts of the country switch to natural gas from coal for heating.  China’s LNG imports last month reached 5.99 million tons, beating the previous record of 5.18 million tons from January 2018 in the previous heating season, according to data from China’s General Administration of Customs, as carried byReuters.  LNG imports into China in the first eleven months of this year jumped by 43.6 percent compared to January-November 2017, to 47.52 million tons and on course to easily beat the full-year LNG import record of 38.13 million tons from 2017, according to the customs data.  This winter season, Chinese authorities are determined to avoid another severe natural gas supply shortage. And they are handling supplies much better than past winter—domestic natural gas production is rising, state energy giants are boosting gas pipeline infrastructure and connectivity, and the coal-to-gas switch is more measured and moderate, taking into account expectations of demand.Chinese natural gas imports are soaring, but procurement for this winter’s demand started early to avoid a last-minute rush and a repeat of the 2017-2018 winter.This year, weather is also in favor of Chinese authorities. Milder weather a month into the heating season through mid-December has led to expectations that China won’t see another supply crunch between December and February.Over the past week, LNG prices for February delivery in Asia rose slightlycompared to the previous week, due to lower shipping rates as more LNG ships have become available and thanks to a slight drop in winter t emperatures in some parts of Asia. According to traders who spoke to Reuters, Asian demand as a whole remains subdued, and price rises would be short-lived. A sustainable increase in Asian LNG prices would come if the weather in Asia turns cold for at least three weeks.  

  Chinese Refiners Aren't Buying U.S. Crude --  Chinese refiners are not buying more U.S. oil despite the three-month truce agreed by Presidents Trump and Xi last month, Reuters reports, citing cargo loading plans of Chinese downstream operators. According the Reuters, Chinese demand for U.S. crude has been dampened by political uncertainty around the trade war and, more directly, by relatively high costs of transportation. This means that despite the truce and future positive developments in bilateral talks on trade, U.S. oil will have yet to become a major element of China’s imported crude oil mix. One Chinese analyst told Reuters that price was the top consideration of buyers and the price of U.S. oil simply wasn’t competitive.“Chinese companies have little incentive to buy U.S. crude due to the wide availability of crude supplies today from Iran and Russia,” Seng Yick Tee from consultancy SIA Energy said. Yet trade tensions are not helping, either. With the constant threat of more tariffs, refiners are reluctant to change their buying habits.“Even though the trade tension between China and the U.S. had been defused recently, the executives from the national oil companies hesitate to procure U.S. crude unless they are told to do so.” U.S. crude oil exports hit a high of 23.95 million barrels in October 2017, data from the Energy Information Administration shows, but have since then declined, reaching 2.17 million barrels in September this year before Chinese refiners completely stopped buying U.S. crude in October.

 U.S. Shale's Blows Leave Middle East Oil Producers Staggering - The U.S. oil industry is delivering a one-two punch to Middle East producers already reeling from a collapse in prices. A tussle is playing out in the market for so-called light oils, which have a lower sulfur content and are less dense than heavier varieties. When processed, these grades typically yield a higher amount of fuels like gasoline and naphtha. And now, American supplies are weighing on prices for such crudes as well as fuels made from them. Light oil pumped in U.S. shale fields is increasingly making its way to Asia, undercutting sales by the likes of Saudi Arabia. Additionally, America is exporting a record amount of refined fuel, contributing to a global glut in gasoline and naphtha. That’s hurting some of the biggest members of the Organization of Petroleum Exporting Countries as they prepare to curb crude output in a bid to stabilize the market. Middle East producers -- still the dominant suppliers to Asia -- are being forced to tackle American crude competition by lowering their oil pricing to defend their market share. The refiners, meanwhile, are contending with booming U.S. fuel shipments dragging down their returns from making processed products. “It is no surprise that Middle Eastern producers are having to cut light crude prices,” said Virendra Chauhan, an analyst at industry consultant Energy Aspects Ltd. Over the course of 2018, the key sources of global oil-output growth have included light crude from U.S. shale fields and Saudi Arabia, he said. While Middle East producers such as Saudi Arabia and Abu Dhabi are reducing the pricing for their lighter crudes, American exports to Asian nations such as India and South Korea are surging. Even a temporary halt by China due to its trade war with the U.S. hasn’t significantly dented overall flows this year.

Producer cuts are set to boost the oil market in 2019, data firm projects - An oversupply of oil will continue to pressure prices into the first quarter of 2019, but producer cuts will eventually boost crude price as the year progresses, according to Argus Media, an energy information provider.That is, supply and demand should rebalance by the second quarter of next year, said Azlin Ahmad, editor for crude oil at Argus.  Since climbing to four-year highs in early October, the price of crude futures have crashed by more than a third. The latest wave of heavy selling comes at a time when the energy market as well as the global economy is gripped by a flurry of bearish factors.Brent oil futures, the international benchmark were trading around $53.60 per barrel on Monday, representing an almost 20 percent decline in 2018.But prices are likely to pick up next year as supply cuts by the Organization of the Petroleum Exporting Countries. The cuts are scheduled to take effect in January.OPEC and allied non-OPEC oil producers including Russia agreed at the start of December to curb output by 1.2 million barrels a day. That's equivalent to more than 1 percent of global demand, in a bid to drain tanks and boost prices.The 15-member organization said it would reduce its output by 800,000 barrels a day, while Russia and the allied non-OPEC producers will contribute a 400,000 barrels daily reduction.Argus forecasts Brent crude to trade around $65 per barrel in the first quarter, rising to $68 in the second quarter and reaching the low $70s in the third quarter. Prices will breach $80 a barrel in the fourth quarter of 2019, Ahmad projected.  Average Brent oil prices will be below $70s in the whole of 2019, according to Argus' forecast.

Oil eases on oversupply concerns ahead of holiday - Oil fell on Monday, in line with another decline across global stock markets, which came under pressure from concern about a U.S. government shutdown and a worsening world economy.  The price of oil has already fallen by about 40 percent from October highs to its lowest since the third quarter of 2017, as investors have grown increasingly wary of the impact to global growth, and crude demand, from an escalating trade dispute between the United States and China. The U.S. Senate has been unable to break an impasse over U.S. President Donald Trump's demand for more funds for a wall on the border with Mexico, and a senior official said the shutdown could continue until Jan. 3.  Investors have flocked to perceived safe-haven assets such as gold and government debt, at the expense of crude oil and stocks.  Brent crude futures were down 37 cents at $53.45 a barrel by 9:39 a.m. ET (1439 GMT). U.S. crude futures lost 72 cents, or 1.6 percent, to $44.87, falling below $45 for the first time since July 2017.  Brent fell 11 percent last week and hit its lowest since September 2017, while U.S. futures slid to their lowest since July 2017. "Today is going to be a market of very thin liquidity and we don't have strong convictions in such market conditions. Brent has managed to break 55.00 $/bbl at the end of last week, the short-term momentum is negative,"

This Key Indicator Spells Trouble For Oil Investors - The price ratio between crude oil and natural gas has changed dramatically in the past few weeks, as crude prices have crashed at a time when natural gas prices hit multi-year highs. The ratio between the two prices could have consequences for a variety of natural gas and petrochemical projects, potentially leading to delays or cancellations. Oil typically trades at a premium relative to natural gas, but at the end of November, the price ratio of Brent crude to Henry Hub gas fell to its lowest level since 2009. “The relative price of oil and gas affects the economics of various infrastructure investments across the energy industry, and the recent falloff might act as a fly in the ointment to development plans in the short term and could lead to delays,” Barclays said in a report.The reasons for the plunge in oil prices have been discussed at length in this column and elsewhere – demand looks shaky, U.S. supply is soaring and oil traders are skeptical about the ability and willingness of OPEC+ to balance the market.Meanwhile, natural gas has gone in the opposite direction over the past two months or so. Low inventories, high demand and seasonal factors have dramatically tightened the market for natural gas in the United States. Prices hit $4.70/MMBtu in November, up 60 percent since September.In other words, Brent has lost more than half of its price premium to Henry Hub in the last few months.  There could be fallout for proposed LNG projects because of this development. The fall of global crude prices has also dragged down global LNG prices (LNG prices are still influenced by crude benchmarks). So, we have falling LNG prices around the world, but rising natural gas prices in the United States. The business case for exporting LNG from the U.S. has always been about taking advantage of a cheap feedstock, and selling it abroad at a higher price. With costs for the feedstock rising, and the landing price falling, the economics of building new LNG projects in the U.S. have taking a hit. January NYMEX gas prices are trading $4/MMBtu below Asian contract LNG prices, a differential that was as high as $9/MMBtu this past summer. The window for profits on shipping LNG from the U.S. to Asia has not entirely closed, but the business case looks a lot less compelling.

Oil plunges 6 pct as economic slowdown fears grip market -(Reuters) - Oil prices plunged more than 6 percent to the lowest level in more than a year on Monday, pulling back sharply late in the session as fears of an economic slowdown rattled the market. U.S. crude futures and global benchmark Brent hit their lowest levels since 2017 during the session, putting both benchmarks on track for losses of about 40 percent in the fourth quarter. "What's happening in the stock market is raising fears that the economy is grinding to a halt and thereby will basically kill any future oil demand," . "They're pricing in a slowdown in the economy if not a recession with this drop." The fourth-quarter price decline is likely to cause producers to throttle back on their output, he said. U.S. crude futures have hit the lowest level since June 22, 2017, as jitters have grown about the impact of the escalating U.S.-China trade dispute on global growth and crude demand. Brent crude is at its lowest level since Aug. 17, 2017. Markets across asset classes have come under pressure as the U.S. government shutdown that began just after midnight on Saturday intensified growth concerns. Investors have flocked to safe-haven assets such as gold and government debt at the expense of crude oil and stocks. A gauge of stocks worldwide hurtled toward an eighth straight decline on Monday as investors ignored the U.S. Treasury secretary's actions to reinforce confidence in the economy and U.S. President Donald Trump criticized the Federal Reserve as "the only problem our economy has." The U.S. Senate has been unable to break an impasse over Trump's demand for more funds for a wall on the border with Mexico, and a senior official said the shutdown could continue until Jan. 3. U.S. crude futures settled at $42.53 a barrel, down $3.06, or 6.7 percent. Brent crude futures settled down $3.35, or 6.2 percent, at $50.47 a barrel. The market settled early ahead of the Christmas holiday. Prices extended losses in post-settlement trade. Brent fell 11 percent last week and hit its lowest level since September 2017, while U.S. futures slid to their lowest level since July 2017, bringing the decline in the two contracts to more than 35 percent for the quarter.

Plunging oil prices show the market is worried about a recession in 2019, says analyst - The continuing collapse in oil prices signals that investors are worried about a 2019 recession, according to Helima Croft, global head of commodity strategy at RBC Capital Markets.  Oil prices have now plunged by about 40 percent from their 52-week highs at the start of October. Last week alone, U.S. West Texas Intermediate crude tumbled 11 percent, posting its worst weekly performance in nearly three years. On Monday, WTI fell below $45 a barrel for the first time since July 2017."I think what we're seeing in oil is a big, big concern for 2019 about a recession. I think that is really weighing heavily on this market," Croft told CNBC's "Closing Bell" on Friday.Croft's commentary reflects an emerging view on Wall Street that slowing economic growth and weaker-than-anticipated demand are pushing the oil market deeper into bear market territory.The rout has continued despite a pledge earlier this month by OPEC, Russia and several other oil producers to remove 1.2 million barrels per day from the market beginning in January.Surging oil production from the United States, Saudi Arabia and Russia is one factor behind the selling. But Croft says the depth of the pullback indicates that expectations for slower economic growth and darkening demand forecasts are what's truly driving the rout. "I think it's a broad-based fear about where is demand going to be for oil next year, concerns about Chinese demand in particular," Croft said. To be sure, Croft is not necessarily forecasting a recession, and there are few clear signs that a period of economic contraction is on the horizon. Still, surveys indicate that executives are growing more worried about the prospect. Nearly half of chief financial officers see a chance that a recession will hit by the end of 2019, according to a CNBC survey. Meanwhile, U.S.-Chinese trade tensions are causing finance executives to lose faith in China's economic growth, a Deloitte survey shows.

OPEC in a ‘Whatever It Takes’ Moment to Prop Up Oil Prices - OPEC hasn’t even started implementing its new six-month agreement to cut output, and already members responsible for most of the reductions have pledged to extend or even deepen it. Officials from Iraq, Kuwait and the United Arab Emirates agreed with Saudi Arabia’s expectation that the group, along with Russia and other oil producers, will extend the agreement for another six months. The U.A.E.’s energy minister, while stressing that the 1.2-million barrel-a-day cut will clear an inventory buildup in the first half, hinted additional curbs could be discussed. “The planned cuts have been carefully studied, but if it doesn’t work, we always have the option to hold an extraordinary OPEC meeting and we have done so in the past,” Suhail Al Mazrouei, who is also OPEC president, said in Kuwait. “If we are required to extend for another six months, we will, if it requires more, we always discuss and come up with the right balance.”   Last week, oil capped its biggest weekly decline since 2016 on concerns that weakening economic growth and surging U.S. supply will lead to a surplus next year, overwhelming OPEC’s efforts to stabilize the market. The slide continued even after the Organization of Petroleum Exporting Countries and its partners surprised traders with the size of the supply reduction announced on Dec. 7.At a press briefing in Kuwait, Iraqi, the U.A.E. and Algerian energy ministers took turns repeating the message that OPEC will deliver its 800,000 barrels per day cut and continue their cooperation with other producers to balance supply and demand. Iraq’s oil minister Thamir Ghadhban said his country’s new membership into the OPEC+ monitoring committee “indicates that we are serious about meeting our commitments that will exceed what we’ve complied with in the past.” OPEC cuts may end up being deeper than agreed because of planned maintenance and production snags in some member countries, Al Mazrouei said. Conflict, sanctions and aging oil fields have been factors that dragged on output in Libya, Nigeria, Iran and Venezuela in recent years.

OPEC+ Deal Not Enough To Save The Oil Market - If the goal of the OPEC+ cuts was to boost oil prices, then the deal is clearly failing. OPEC+ is scrambling to figure out a way to rescue oil prices from another deep downturn. WTI is now down into the mid-$40s and Brent into the mid-$50s, both a 15-month low. U.S. shale continues to soar, even if shale producers themselves are now facing financial trouble with prices so low. Oil traders are clearly skeptical that OPEC+ is either willing or capable of balancing the oil market.OPEC+ thought they secured a strong deal in Vienna in early December, but more needs to be done, it seems. OPEC’s Secretary-General Mohammad Barkindo wrote a letter to the cartel’s members, arguing that they need to increase the cuts. Initially, the OPEC+ coalition suggested that producers should lower output by 2.5 percent, but Barkindo said that the cuts need to be more like 3 percent in order to reach the overall 1.2 million-barrel-per-day reduction.More importantly, the group needs to detail how much each country should be producing. “In the interests of openness and transparency, and to support market sentiment and confidence, it is vital to make these production adjustments publicly available,” Barkindo told members in the letter, according to Reuters. By specifying exactly how much each country will reduce, the thinking seems to be, it will go a long way to assuaging market anxiety about the group’s seriousness. Still, the plunge in oil prices this month is evidence that traders are not convinced.

What is Driving the Oil Price Down? -“What is really driving this price movement down is the fact that the market believes that the market’s oversupplied and this is really the main factor coming into the end of the year when global markets are down and everybody’s feeling a bit bearish about growth more broadly and that’s affecting the price,” Rhind said in the interview. “There are a lot of people very bearish about global growth for next year and in terms of the fund manager positioning in the oil market we’ve seen that positioning come off towards the end of the year … I think that could be just a function of people looking to close up books and investment mandates for the end of the year,” he added. Rhind told CNBC that he thinks there is more risk skewed to the upside in terms of oil in 2019. “I think that OPEC will act and will look to take production off the market and that has historically helped the price of oil,” Rhind said in the video interview. “I think also China will be a big factor next year. I think China will look to go in the opposite direction of the G7 countries and look to ease and put more liquidity into the market next year and that should support oil and other commodities,” he added. Earlier this week, Wood Mackenzie’s Chairman and Chief Analyst Simon Flowers stated in his latest The Edge column that “the sharp retreat in price may turn out to be a good thing, injecting a healthy dose of reality to the industry at just the right time”. In the column, Flowers said Brent over $80 per barrel “always seemed too good to last, defying the fundamentals”. The WoodMac analyst also confirmed in the column that WoodMac expects Brent to average $66 per barrel in 2019. “That’s a tad down on 2018 though still a price that allows companies to generate free cash flow and continue to strengthen finances,” Flowers stated in The Edge.

 US oil prices rebound after tumbling to lowest since June 2017 on economy fears - Oil prices rose on Wednesday on perceptions that a price slide to 2017 lows prompted by economic worries had been overdone amid an OPEC-led effort to tighten supply.  Crude has been caught up in wider financial market weakness as the U.S. government shutdown, higher U.S. interest rates and the U.S.-China trade dispute unnerved investors and exacerbated worries over global growth. Brent crude oil futures, the global benchmark, was up 95 cents, or 1.9 percent, at $51.42 at 9:32 a.m. ET (1432 GMT). It earlier fell to $49.93, the lowest since July 2017, and posted a 6.2 percent slide in the previous session. U.S. West Texas Intermediate crude futures was up $1.26, or 3 percent, at $43.79. WTI fell 6.7 percent to settle at its lowest level in a year and a half on Monday. "I think there is a little bit of over-extension to the downside linked to global market fears," said Olivier Jakob, analyst at Petromatrix. "It's all about equities." "OPEC has shown it wants a higher prices and is working towards that goal." Still, the head of Russian oil company Rosneft, Igor Sechin, predicted an oil price of $50-$53 in 2019, a long way south of the four-year high of $86 for Brent crude reached earlier this year. Sechin, an ally of Russian President Vladimir Putin and a critic of OPEC, said the price slump was mostly linked to the U.S. rate hike announced last week.

 Oil bounces after steep slide, but growth fears still weigh s  - Oil surged on Wednesday, erasing some of the steep losses that have taken crude benchmarks to lows not seen in 1-1/2 years on perceptions the price slide has gone too far, too fast. Both US and Brent crude were more than 6% higher on Wednesday, but it was unclear if the move would see any follow-through when trading desks are more fully staffed after the beginning of the new year. Crude has been caught up in wider market weakness as the US government shutdown, higher US interest rates and the US-China trade dispute unnerved investors and exacerbated worries over global growth. “The market is still really concerned about demand,” said Bernadette Johnson, vice president in market intelligence at DrillingInfo in Denver. The sell-off “doesn’t signal strength of confidence in demand, but we still went too far too quick. We still believe $45 is too low.” US crude was up $2.86 a barrel, or 6.7%, to $45.38 a barrel as of 12:31 pm EST (1731 GMT). Brent crude, the global benchmark, rose $3.12, or 6.2%, to $53.59 a barrel. It earlier fell to $49.93, lowest since July 2017, after a 6.2% slide on Monday. Recent selling “has felt less fundamentally driven and more a function of the overall market meltdown as increased equity volatility and growing macro concerns have weighed on a number of asset classes,” Funds have incurred heavy losses in oil markets this year, with the average commodity trading adviser fund, or CTA, down by 7.1% on the year through mid-December, according to Credit Suisse data. Funds took big bets on oil’s rally, only to see the commodity drop by more than 40% since the October highs.

Oil surges 8 percent, erasing Christmas Eve losses - Oil surged on Wednesday, posting its strongest daily gain in more than two years in a partial rebound from steep losses that pushed crude benchmarks to lows not seen since 2017.Both U.S. and Brent crude rose about 8 percent, their largest one-day increase since Nov. 30, 2016, when OPEC signed a landmark agreement to cut production. It was unclear whether follow-through buying would push prices higher again once trading desks are more fully staffed after the new year begins.The bounce on Wednesday amounted to a relief rally after Monday's plunge, with the energy complex getting a boost from the surging equity market, said John Kilduff, founding partner at energy hedge fund Again Capital. The Dow Jones Industrial Average rose more than 1,000 points, posting its biggest-ever one-day point gainon the heels of the worst Christmas Eve on record."There was all the tumult across the market like it was the end of the world," Kilduff said. "The sun came up today."U.S. West Texas Intermediate crude futures ended Wednesday's session up $3.69, or 8.7 percent, at $46.22, rebounding from a 6.7 percent plunge on Monday. WTI traded more than 10 percent higher near $47 a barrel after the settle.  Brent crude oil futures, the global benchmark, rose $4, or 7.9 percent, to $54.47. It earlier fell to $49.93, the lowest since July 2017, and posted a 6.2-percent slide in the previous session. Brent also extended gains after the settle to trade more than 9 percent higher above $55 a barrel.Crude has been caught up in wider market weakness as the U.S. government shutdown, higher U.S. interest rates and the U.S.-China trade dispute unnerved investors and exacerbated worries over global growth. "The market is still really concerned about demand," said Bernadette Johnson, vice president in market intelligence at DrillingInfo in Denver. The sell-off "doesn't signal strength of confidence in demand, but we still went too far too quick. We still believe $45 is too low."

 Oil prices fall after jump the day before; glut, economy worries weigh - Oil prices fell more than 1 percent on Thursday after rebounding 8 percent in the previous session, as worries over a glut in crude supply and concerns over a faltering global economy pressured prices even as a stock market surge offered support. Brent crude oil was down 70 cents, or 1.3 percent, at $53.77 a barrel by 0845 GMT. U.S. light crude oil was 50 cents lower at $45.72. Oil prices reached multi-year highs in early October but have fallen almost 40 percent since then and are now approaching their lowest levels for 18 months. Brent is heading for losses of almost 30 percent this year while the U.S. contract has dropped almost 25 percent. Three months ago it looked as if the global oil market would be under-supplied through the northern hemisphere winter as U.S. sanctions removed large volumes of Iranian crude. But other oil exporters have more than compensated for any shortfall, filling global inventories and depressing prices. The fuel glut has combined with faltering investor sentiment in other asset classes, producing a bear market for oil.

Oil prices slide as concerns about global economy, oversupply weigh (Reuters) - Oil prices fell on Thursday, retreating from an 8 percent rally in the previous session as the oil market focused on signs of faltering global economic growth and record production of crude. Brent crude LCOc1 futures dropped 4.24 percent, or $2.31, to settle at $52.16 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures fell $1.61 to settle at $44.61 a barrel, down 3.48 percent. “The market is giving back some of its gains from yesterday that were brought along with the euphoria in the stock market,” said Andrew Lipow, president of Lipow Oil Associates in Houston. Prices surged on Wednesday, tracking a spike on Wall Street after President Donald Trump’s administration attempted to shore up investor confidence. U.S. stocks retreated for most of the session on Thursday, dragging oil prices, before roaring back to end in positive territory. [.N] Brent and WTI have lost more than a third of their value since the beginning of October and are heading for declines of more than 20 percent in 2018. Concerns about slowing global economic growth have dampened investor demand for riskier asset classes and pressured crude futures. Market participants are also worried about a glut of crude. U.S. crude stocks rose by 6.9 million barrels in the week ended Dec. 21 to 448.2 million, data from industry group the American Petroleum Institute showed on Thursday. Analysts had expected a decrease of 2.9 million barrels. Official U.S. government data will be released on Friday. 

Oil Roller-Coaster Ride Hits Another Drop-- Crude’s rollercoaster ride pressed on with oil taking a turn lower along with U.S. stocks. Futures in New York fell 3.5 percent on Thursday. The S&P 500 dropped as much as 2.8 percent, making its way toward a bear market. Traders have been on edge this week amid giant swings in both equities and oil. On Monday, the U.S. benchmark crude fell more than 7 percent before jumping more than 10 percent on Wednesday. “What’s going on with the overall economy and because GDP is so correlated with oil demand, that’s really what’s driving the bus lately,” said Stewart Glickman, an energy equity analyst at CFRA Research. “Are we driving into a recession or are things going to stabilize and be a somewhat steady state?” U.S. benchmark crude is on track for the largest quarterly decline since 2014 amid fears that the ongoing trade war between the U.S. and China will hit demand. At the same time, some investors doubt that the Organization of Petroleum Exporting Countries’ deal to limit output with its allies will help tighten supplies. Producers aim to publish a statement in January on the implementation of the agreement, Russia’s Energy Minister Alexander Novak said. West Texas Intermediate crude for February delivery dropped $1.61 to settle at $44.61 a barrel on the New York Mercantile Exchange. Total volume traded on Thursday was about 16 percent below the 100-day average. A measure of oil market volatility jumped to the highest level in more than a month. Brent for February settlement slid $2.31 to end the session at $52.16 a barrel on London’s ICE Futures Europe exchange. The global benchmark crude traded at a $7.55 premium to WTI. Meanwhile, U.S. crude inventories probably fell 3.25 million barrels last week, according to a Bloomberg survey of analysts. If Energy Information Administration data due Friday shows a similar move, it will be the fourth consecutive weekly decline in U.S. crude stockpiles.

Oil prices stabilize, but remain weak due to oversupply - Oil prices stabilized on Friday, recovering slightly from heavy losses this week, but remained close to the lowest levels in over a year as rising U.S. inventories and concern over global economic growth rattled markets. Brent crude oil was down 27 cents at $51.89 a barrel by 10:31 a.m. ET (1531 GMT), having earlier risen more than 3 percent. It had dropped 4.2 percent on Thursday. U.S. light crude was up 5 cents at $44.66, after rising 3.6 percent in early trade.Oil prices fell to their lowest in almost 18 months this week and are down more than 20 percent for the year, depressed by ample supplies that have filled fuel tanks worldwide.Stock markets in Europe and Asia rose on Friday after Wall Street ended a volatile session with big gains, but fears of further price swings and worries about U.S. politics kept investors cautious."For the time being, the stock market and the oil market will echo each other," said Ahn Yea-Ha, commodity analyst at Kiwoom Securities. "Global economic slowdown worries have been weighing on stock market movements, and oil prices are not free from those concerns." Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore, said crude prices had been pressured by slowing economic growth "coupled with the expectation of strong U.S. production in the new year".

WTI Extends Losses After Production Rebounds To Record - WTI has slid lower overnight following API's surprise large crude build (and no equity pump) and was unable to hold gains after a bigger than expected gasoline build (and tiny crude draw) along with a production rebound to record highs.If U.S. crude output rises, it’s likely to see more inventory builds, according to Stewart Glickman, an energy equity analyst at CFRA Research. “The Permian has surprised to the upside over the last couple of months,” he says. DOE:

• Crude _46k (+3.4mm exp)
• Cushing +799k
• Gasoline +3.003mm (+1.0mm exp)
• Distillates +2k

Tiny crude draw (4th week in a row) but another Cushing build along with a rise in gasoline stocks took the edge off for the bulls.

Oil prices steady near year-and-a-half lows ahead of New Year (Reuters) - Oil prices steadied on Friday after a week of volatile trading ahead of the New Year holiday, supported by a rise in U.S. equity markets but pressured by worries about a global glut of crude. Brent crude LCOc1 futures rose 4 cents to settle at $52.20 a barrel, off the session high of $53.80 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 72 cents to settle at $45.33 a barrel, after earlier reaching $46.22 a barrel. Both benchmarks posted third straight weekly declines, with Brent losing about 3 percent and WTI nearly 0.4 percent. Crude prices were pushed higher by a rally in the U.S. equities market on Friday, markets participants said. Oil prices have tracked closely with Wall Street, and both asset classes saw volatile sessions throughout the week. Oil prices fell to their lowest in a year and a half earlier this week and are down more than 20 percent for 2018, depressed in part by rising supply. U.S. crude inventories were down by 46,000 barrels in the week to Dec. 21, the Energy Information Administration said, a smaller draw than the 2.9 million barrels analysts polled by Reuters had expected. Gasoline stocks rose by 3 million barrels, trouncing analysts’ expectations for a gain of 28,000 barrels. The crude draw “failed to spur much buying interest,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note. “Nonetheless, we viewed the data as price supportive with the exception of the 3 million barrel gasoline supply build.” U.S. energy firms added two oil rigs in the week to Dec. 28, General Electric Co’s Baker Hughes energy services firm said on Friday. The data was seen as an indication of future production. The United States has emerged as the world’s biggest crude producer this year, pumping 11.6 million barrels per day (bpd), more than Saudi Arabia or Russia. Oil production has been at or near record highs in the three countries. 

Oil Prices Set To Rebound In 2019 -- Most major investment banks are forecasting a rebound in oil prices in 2019. Price forecasts vary widely, but most have both WTI and Brent above current spot prices. Bank of America Merrill Lync, for instance, sees WTI averaging $59 per barrel in 2019. Citi is at the bearish end with a $49 price target. For Brent, Barclays says the benchmark will average $72, and a half dozen other investment banks have price estimates within a few dollars of that price. After suffering steep losses at the start of the week, financial markets rallied strongly on Wednesday and into Thursday, regaining all the lost ground from Monday. Weak industrial data from China released this week still shows signs of a slowdown.  King Salman reshuffled the Saudi cabinet on Thursday, swapping out top security personnel. But the maneuvers did not remove power from crown prince Mohammed bin Salman. The officials that were elevated are close to MbS.. After suggesting multiple times earlier this year that OPEC and its non-OPEC partners – led by Russia – would formalize a permanent governance architecture to coordinate their efforts, the group is now downplaying such a development. Russia’s energy minister Alexander Novak said that the increase in red tape, plus antitrust risks from the U.S. government, make the idea too risky. “There is a consensus that there will be no such organisation. That’s because it requires additional bureaucratic brouhaha in relation to financing, cartel, with the U.S. side,” Novak told reporters. Instead, Novak said they will continue to cooperate without institutionalizing the arrangement. “This won’t be an organisation, this is some mechanism of cooperation: to convene, to discuss, adopt some memorandums, joint resolutions,” Novak.

Iraqi politicians attack Trump’s visit to US troops as ‘blatant violation of sovereignty’ Iraqi politicians and military leaders have criticised Donald Trump’s visit to US troops in the country. Calling it a "blatant violation of Iraq’s sovereignty" Sabah al Saadi, the former head of Iraq’s integrity commission and leader of the powerful Islah parliamentary bloc, called for an emergency session of parliament. He described Mr Trump's visit as "aggressive" before claiming the US president "should know his limits."  He said: "The US occupation of Iraq is over.”His comments came as it was revealed that a meeting between the Mr Trump and Iraq's prime minister Adil Abdul-Mahdi​ had been cancelled.The US had informed Iraqi authorities of the visit prior to Mr Trump’s arrival, but Mr Abdul Mahdi’s office said in a statement that the pair had talked by telephone due to a “disagreement over how to conduct the meeting.”Iraqi politicians suggested that the two leaders had disagreed over where their planned meeting should take place. Mr Trump had asked to meet at the Ain al-Asad military base, an offer which Mr Abdul Mahdi declined.The Bina parliamentary bloc, Islah's rival in parliament and led by Iran-backed militia leader Hadi al-Amiri, also objected to Mr Trump’s trip to Iraq.“Trump’s visit is a flagrant and clear violation of diplomatic norms and shows his disdain and hostility in his dealings with the Iraqi government,” Bina said in a statement. The bloc also said Mr Trump’s visit “places many question marks on the nature of the US military presence and its real objectives, and what these objectives could pose to the security of Iraq.”

Russia Blames Fed Interest Hike For Low Oil Prices --  It seems that the Federal Reserve can’t get a break. For months, President Trump has been increasingly criticizing the Fed’s policy of incrementally increasing interest rates, a near-unprecedented move for an American president. After the most recent Fed move to hike interest rates by a quarter of a percentage point last week, Trump tweeted on Monday that the Fed was the “only problem our economy has.”  Trump’s remarks sent the White House scrambling on damage control mode, trying to ensure both domestic and global markets that the president was not about to try to remove Fed chairman Jerome Powell from office. Stock markets plunged the next day as worries over U.S. leadership waned as well as other economic concerns. . Now, criticism over Fed policy is coming from an unlikely place - Russia. The head of Russian oil giant Rosneft, Igor Sechin, said yesterday the slump in global oil prices was mostly linked to a fresh interest rate hike announced by the U.S. Federal Reserve last week. "This factor is the main one, which has an impact on the price (of oil)..." He added that he saw oil prices at $50-53 per barrel next year.Not only is it noteworthy that the head of a foreign oil company would criticize the Federal Reserve, but it could open the floodgates for more criticism over Fed policy, second-guessing and angst over what should remain an institution undeterred by both domestic and international politics.Another takeaway from Sechin’s comments is what is likely growing concern among not only Russian oil production companies, but Moscow itself, over oil prices that have plunged around 40 percent since hitting multi-year highs in October. Prices remain in the doldrums over concerns about the global economy, ongoing trade tensions between Washington and Beijing, though there is a temporary freeze on increased tariffs until at least March 2, slowing oil demand growth in 2019 and record oil production, mostly coming from the U.S., Russia and Saudi Arabia - the world’s top three oil producers.

Russia dashes plans to make its oil market alliance with OPEC permanent -- The marriage between Russia and OPEC is off.  Russian Energy Minister Alexander Novak on Friday poured cold water on long-simmering plans to make Moscow's alliance with OPEC and other oil producers permanent. The group of roughly two dozen producers has been managing global petroleum supply for the last two years in order to rebalance the market after a prolonged and punishing oil price downturn.  The effort succeeded in shrinking global crude stockpiles and boosting prices to four-year highs — until the market suddenly crashed again in early October. The group has agreed to a fresh round of output cuts that begin on Jan. 1.  For at least a year, OPEC Secretary General Mohammed Barkindo has discussed "institutionalizing" the arrangement. That would essentially form a supergroup of oil producers comprised of the 14-nation OPEC, Russia and nine other oil-exporting nations, which would be able to more quickly respond to problems in the market.  Energy ministers had been talking up progress towards the permanent arrangement as recently as their meeting in Vienna, Austria earlier this month. But on Friday, Novak said the prospects for that plan now look dim, Reuters reported. He said it would create too much red tape and expose the non-OPEC members of the alliance to potential sanctions from the U.S. government. "There is a consensus that there will be no such organization. That's because it requires additional bureaucratic brouhaha in relation to financing, cartel, with the U.S. side," Novak told reporters, according to Reuters.  The U.S. penalties in question are spelled out in legislation known as NOPEC, or the No Oil Producing and Exporting Cartels Act. The bill would authorize the Justice Department to sue groups like OPEC that are deemed cartels for price fixing and antitrust violations, stripping countries of sovereign immunity protections currently built into U.S. law. The legislation was first introduced in 2007 and was revived earlier this year in both chambers of Congress by bipartisan groups of lawmakers.

McKinsey Partner Imprisoned And Beaten By Saudi Arabia -- Following a string of stories published this year about its work for autocratic regimes in Saudi Arabia (including work that helped the Saudi government crack down on dissidents living abroad), China and elsewhere, vaunted consulting firm McKinsey has endured a firestorm of criticism. But a story published Friday by the Wall Street Journal revealed that a former partner for the consulting firm has languished in a Saudi prison since Crown Prince Mohammad bin Salman's now-infamous "anti-corruption purge" cash grab/political crackdown.But instead of rallying to its employees defense, McKinsey has apparently severed ties with Hani Khoja, the founder of Elixir Consulting, a local firm that McKinsey purchased, making Khoja a partner at the firm. Khoja's physical abuse and detention underscores "the ethical quandaries multinational companies face working in Saudi Arabia," WSJ said. And of course, news of the McKinsey partner's detention on vague "corruption" charges, the justification for which remains murky (some of WSJ's anonymous sources from within the kingdom said Khoja's relationship with the kingdom's economy minister is what lead to his arrest), could revive some of the international criticism about the kingdom's abysmal human rights record just as the controversy over the killing of Jamal Khashoggi was beginning to subside.

In Surprise Cabinet Reshuffle, Saudi King Salman Establishes Space Agency, Demotes Foreign Minister - The diplomatic crisis ignited by the killing of Jamal Khashoggi has largely subsided, and Crown Prince Mohammad bin Salman's grip on power is, if anything, even stronger than it was before (having faced down incipient challenges from one of his uncles). Which is why it's somewhat surprising to see MbS's ailing father, King Salman, order a limited cabinet reshuffle that moved around some of the key players in the scandal (including Adel al-Jubeir, who was one of the kingdom's key liaisons with western media during its response to Khashoggi's killing) and removed Prince Mohammed bin Nawaf al Saud as the Kingdom's ambassador to the UK, according to Saudi State TV station Al-Arabiya. Amid the reshuffle, the king ordered the creation of a new political and security council (presumably to help protect his chosen successor's flank) and - in a move that is reminiscent of a controversial decision made by President Trump this year - establishes a new Saudi space agency.

- Adel Al Jubeir relieved from position as Foreign Minister; named Minister of State for Foreign Affairs
- Ibrahim Alasssaf named as new Foreign Minister
- King also ordered formation of new political & security council pic.twitter.com/kA37Fw7C2z

As a result of the reshuffle, more liberals and progressives will move into positions of power, suggesting that it could be part of the Kingdom's plan to move ahead with its 'liberalizing' reforms to try and rehabilitate MbS's tarnished reputation as a reformer.

Saudi King Appoints Former Ritz-Carlton Detainee as Foreign Minister  – King Salman of Saudi Arabia has appointed a new foreign minister as part of a major cabinet reshuffle, a royal decree has said. Ibrahim al-Assaf will replace Adel al-Jubeir, the foreign ministry said on Thursday citing the decree. Jubeir will be demoted to minister of state for foreign affairs, it added.Assaf, a former long-serving finance minister and a board member of national oil giant Saudi Aramco, was among several people detained as part of a “corruption crackdown” in November 2017.He was briefly detained in Riyadh’s Ritz-Carlton, alongside dozens of other prominent Saudi royals and businessmen. However Saudi authorities said an investigation found no evidence of wrongdoing and his name was cleared.Ali Shihabi, who heads Washington-based think tank The Arabia Foundation and is close to the Saudi government, downplayed Jubeir’s demotion on Twitter describing it as a way of “relieving him of the burden of day to day management of the Ministry”.“This change in the Foreign Ministry is more of a division of labor in a space that needs a lot of bandwidth than any demotion of Jubair [sic],” he wrote. The new Foreign Minister Ibrahim Al Assaf is a seasoned bureaucrat with decades of cabinet experience and membership in the National Security subcommitee of the cabinet. — Ali Shihabi (@aliShihabi) December 27, 2018 However, a Saudi source told Middle East Eye that Jubeir’s demotion rather than outright sacking has been regarded as an act of humiliation in the kingdom. According to MEE’s source, the government shake-up was at the behest of Saudi Arabia’s powerful crown prince, Mohammed bin Salman.  The crown prince wanted Jubeir humiliated, the source said, as punishment for his perceived failure to adequately shield Mohammed bin Salman from the scandal of Jamal Khashoggi’s murder. Khashoggi, a prominent critic of the Saudi leadership and journalist, was murdered by Saudi agents in Istanbul on 2 October. The CIA has concluded that Mohammed bin Salman was responsible for ordering the operation.

Saudi Arabia Hires Child Soldiers From Darfur To Fight In Yemen: Report - Saudi Arabia has hired “tens of thousands” of soldiers from Darfur, including many children, part of an outsourced army that is fighting the war in Yemen, theNew York Times reports. The kingdom’s war effort in Yemen, headed by Crown Prince Mohammed bin Salman, has been described by Saudi Officials as at attempt to save Yemenis from Iran-backed aggressors. Officials at the United Nations, however, maintain that the conflict in Yemen has spiraled into the world’s most dire humanitarian crisis. A blockade carried out by Saudi Arabia and the United Arab Emirates has put up to 12 million people at risk of starvation and caused the death of 85,000 children, aid groups have reportedly said. According to The Times, up to 14,000 militiamen from Sudan have been fighting alongside Saudi-backed forces in Yemen “at any time for nearly four years.” Many of these militiamen are actually children. Nearly all of these Sudanese fighters appear to be from Darfur, where approximately 300,000 people died over a 12-year period in a fight over farmland and other disappearing resources, The Times reports. 

Iranian Ship Fires Rockets Near US Aircraft Carrier In Persian Gulf - A US aircraft carrier sailed into the Persian Gulf on Friday amid Iranian threats to close the Strait of Hormuz, the only sea passage from the Gulf to the open ocean and strategic waterway linking Middle East crude producers to crucial world markets. Some 30 Iranian Revolutionary Guard vessels fired rockets in the waters patrolled by a US aircraft carrier strike group led by USS John C. Stennis on Friday, the AP reported. At one point, one small ship launched what looked like a “commercial-grade” drone to film the US vessels, said the AP report, adding that journalists on the Stennis were also filming the Iranian boats. “The Iranian craft drove in front of our ship and stopped, and tried to capture their own sort of picture of what was going on”, Capt. Randy Peck, the commanding officer of the Stennis, was cited by AP as saying. There were no immediate reports of the Stennis’ arrival in the Persian Gulf in Iranian media. The US Navy statement also noted that IRGC speedboats fired rockets that weren't pointed at American vessels. The Stennis-led group was deployed on December 8, thus ending the longest period in two decades that a carrier group was absent from the region. The vessels took part in a joint naval exercise with the Essex Amphibious Ready Group (ARG) on 12 December in the Arabian Sea. Earlier on Friday, Mehr News Agency quoted Brigadier General Mohammad Pakpour, commander of IRG ground forces, as saying that the final stage of the “Great Prophet 12” drills would kick off on Saturday and include “rapid reaction units, airborne units, demolition and combat units, mid-range missiles and the third marine division”. “We pose no threat to any country but if the enemies seek to implement their malicious intentions and attack us, we will be absolutely aggressive and attack the enemies with all might and we are practicing these tactics in these exercises”, Mehr News Agency cited Pakpour as saying.

Arab League set to readmit Syria eight years after expulsion - Gulf nations are moving to readmit Syria into the Arab League, eight years after Damascus was expelled from the regional bloc over its brutal repression of peaceful protests against President Bashar al-Assad. At some point in the next year it is likely Assad will be welcomed on to a stage to once again take his place among the Arab world’s leaders, sources say. Shoulder to shoulder with the Saudi crown prince, Mohammed bin Salman, and Egypt’s latest autocrat, General Abdel Fatah al-Sisi, the moment will mark the definitive death of the Arab spring, the hopes of the region’s popular revolutions crushed by the newest generation of Middle Eastern strongmen. Syria was thrown out of the Arab League in 2011 over its violent response to opposition dissent, a move that failed to stem the bloodshed that spiralled into civil war. Now though, a regional thaw is already under way. Earlier in December, the Sudanese president, Omar al-Bashir, became the first Arab League leader to visit Syria in eight years, a visit widely interpreted as a gesture of friendship on behalf of Saudi Arabia, which has shored up ties with Khartoum in recent years. Pro-government media outlets posted pictures of the two leaders shaking hands and grasping each other’s arms on a red carpet leading from the Russian jet that ferried Bashir to Damascus along with the hashtag “More are yet to come”. Diplomatic sources have told the Guardian there is a growing consensus among the league’s 22 members that Syria should be readmitted to the alliance of Arab nations, although the US is pressuring both Riyadh and Cairo to hold off on demanding a vote from members. The move comes despite Assad’s intimate ties to Iran, to whom the regime owes its survival. For Saudi Arabia and the UAE, re-embracing Syria is a new strategy aimed at pivoting Assad away from Tehran’s sphere of influence, fuelled by the promise of normalised trade relations and reconstruction money.

Turkey Bolsters Troop Levels in Syria, Threatens to Eliminate Syrian Kurds  — Turkey on Saturday sent military reinforcements to northern Syria near an area controlled by Kurdish forces as Ankara threatens to carry out a fresh offensive to wipe them out, a war monitor said.The move comes after US President Donald Trump’s surprise announcement on Wednesday of the withdrawal of American troops stationed in northeastern Syria alongside Kurdish fighters, a long-time enemy of Turkey.Washington has for years supported the Kurdish-led Syrian Democratic Forces (SDF) in the fight against the Islamic State (IS) group in Syria, as part of an international anti-militant coalition dominated by the People’s Protection Units (YPG).But on Wednesday, Trump said he was ordering a withdrawal of about 2,000 US troops in Syria because IS had been defeated, an assessment disputed by many. America’s worst nightmare is to have reliable allies — like the Kurds who have fought so bravely against ISIS — abandoned and destroyed.https://t.co/PQjFTbGCAc— Lindsey Graham (@LindseyGrahamSC) December 21, 2018Turkey’s foreign minister said on Friday that while his country had delayed operations east of the Euphrates River, it did not mean the country had given up on them.“It doesn’t mean that we gave up on our determination to launch operations against the YPG in the future,” Mevlut Cavusoglu told Turkish state broadcaster TRT News, as cited by Hurriyet.He said postponing military operations in the region was a “logical” decision for preventing “friendly fire,” following the US decision to withdraw.

Turkish-Backed Fighters Preparing to Replace US Forces in Syria  – Turkey-backed rebel fighters in Syria are gearing up for a major deployment into northeastern Syria, with an eye on replacing the US ground troops in the area. Turkey is planning to invade in the course of this replacement, and is coordinating with the US and the pullout and deployment.  President Trump has said the withdrawal will be “slow,” and there has been no public timetable on troop movements. The rebels in question, however, are moving closer to the city of Manbij, which Turkey has indicated will be the first target.  Turkish FM Mevlut Cavusoglu addressed the situation in comments to reporters on Tuesday, saying that while the timeline of deployment may be related to coordination with the US, Turkey remains “determined” to expel the Kurds from Syria’s northeast.  Kurdish officials say that they are re-positioning their own forces in a plan to defend the area from invading Turkish and allied forces. The likelihood is that this will begin after the Manbij invasion, as few Kurds were believed to have remained in that city.

US troop withdrawal heralds the New Syria - Contrary to doomsday predictions about the fate of Syria after US President Donald Trump’s “total withdrawal” of American troops, what may happen is an overall easing of tensions in a more relaxed post-conflict Syrian order where even Israel may have much to feel comfortable about. With the Pentagon issuing the formal order on Syrian withdrawal, a big uncertainty has ended: Trump’s decision is getting implemented. Attention now turns downstream to the US troop withdrawal. After a phone conversation last Sunday with Turkish President Recep Tayyip Erdogan, the second within a week, to discuss the withdrawal plan, Trump said it would be a “slow, highly coordinated pullout.” A Turkish readout also confirmed this: “The two leaders agreed to ensure coordination between their countries’ military, diplomatic and other officials to avoid a power vacuum which could result following any abuse of the withdrawal and transition phase in Syria.” On Monday, Erdogan disclosed that a US military delegation would visit Turkey this week to discuss details. On the same day, Turkish Foreign Minister Mevlut Cavusoglu said in Ankara that he would be traveling to Russia to “evaluate the process” of US forces’ withdrawal. No power vacuum In effect, Turkey will have back-to-back discussions with the US and Russia, since the two great powers are hardly on talking terms. Meanwhile, Turkish forces have concentrated on the border with Syria and Cavusoglu said they “plan to enter areas east of the Euphrates River as soon as possible.” He added that Turkey was “working to make sure there is no vacuum after the United States pulls out of Syria, which terrorist groups will be eager to fill.” Indeed, things are not so straightforward – they never were in northern Syria. The Turkish forces will be overstretched if they occupy the entire swath of land to the east of the Euphrates that the US will be vacating, which amounts to roughly one-third of Syria. The Kurds and Arab tribes will not welcome Turkish occupation, while the residual ISIS groups may want to take advantage of any power vacuum left by the departing Americans. The Syrian government is also steadfast in its commitment to regain control of all its territory, especially the regions east of the Euphrates which contain Syria’s oilfields and water resources. Controlling the oilfields is vital for Damascus as they provide a major source of income.

US-led anti-ISIS coalition announces Syria strikes after Trump orders withdrawal -- The U.S.-led military coalition fighting the Islamic State in Iraq and Syria (ISIS) announced Tuesday airstrikes and coordinated attacks against the terrorist group’s strongholds in Syria, days after President Trump ordered the withdrawal of U.S. troops from the country. The attacks were carried out last week, from Dec. 16 to 22, in the Middle Euphrates River Valley, according to the news release from Operation Inherent Resolve. The coordinated attacks destroyed ISIS logistics facilities and staging areas, which “severely degraded” the group and “removed several hundred” of its fighters from the battlefield, the release said. The airstrikes also targeted several ISIS financial centers and capabilities in Susah and As Shafah, which the release described as dealing a “significant blow” to the terrorist group’s ability to finance its activities. “ISIS presents a very real threat to the long-term stability in this region and our mission remains the same, the enduring defeat of ISIS,” the coalition’s deputy commander, U.K. Maj. Gen. Christopher Ghika, said in the release. The released added that “coalition partner forces continue to advance through the last remaining stronghold ISIS has in the region.” On Wednesday, Trump announced that he was ordering the withdrawal of the 2,000 U.S. troops fighting ISIS in Syria. In announcing the withdrawal, Trump first declared victory over the group. He has since said others, including Turkey, Russia, Iran and Syria, can deal with the remaining ISIS fighters in Syria. Trump’s decision to withdraw sparked the resignations of Defense Secretary James Mattis and special envoy to the anti-ISIS coalition, Brett McGurk..

Two new US bases in western Iraq - "The U.S. military has established two new bases along the Iraqi-Syrian border, the Turkish state-owned Anadolu Agency reported on Tuesday. Citing an Iraqi official, the Anadolu Agency said the U.S. military established the two bases in the western countryside of the Al-Anbar. “The U.S. Army has established two new military facilities in uninhabited parts of the province,” Farhan al-Duleimi, a member of Anbar’s provisional council, told Anadolu Agency. The first base, he said, had been set up in the northern Rumana subdistrict (in Anbar’s Al-Qaim district) near the Syrian border, roughly 360 kilometers west of provincial capital Ramadi. The second base, he added, had been set up east of the city of Al-Rutbah, roughly 310 kilometers west of Ramadi and less than 100 kilometers from the Syrian border. According to al-Duleimi, the twin bases are intended to help Iraqi forces “secure the country’s borders and prevent infiltrations by the Daesh terrorist group.” “Scores of U.S. soldiers are currently stationed at the two bases, along with drones and other equipment,” al-Duleimi said without elaborating." 

Who Was Secretly Behind America's Invading And Occupying Syria? - The invasion and occupation of Syria by tens of thousands of jihadists who were recruited from around the world to overthrow Syria’s President Bashar al-Assad, was financed mainly by US taxpayers and by the world’s wealthiest family, the Sauds, who own Saudi Arabia and the world’s largest oil company, Aramco. America’s international oil companies and major think tanks and ‘charitable’ foundations were also supportive and providing propaganda for the operation, but the main financing for it came from America’s taxpayers, and from the Saud family and from the Government that they own. One of the best articles that the New York Times ever published was by Mark Mazzetti and Matt Apuzzo, on 23 January 2016, "US Relies Heavily on Saudi Money to Support Syrian Rebels”. They reported that,"the C.I.A. and its Saudi counterpart have maintained an unusual arrangement for the rebel-training mission, which the Americans have code-named Timber Sycamore. Under the deal, current and former administration officials said, the Saudis contribute both weapons and large sums of money, and the C.I.A takes the lead in training the rebels. ...From the moment the C.I.A. operation was started, Saudi money supported it.” Furthermore, "The White House has embraced the covert financing from Saudi Arabia — and from Qatar, Jordan and Turkey.” But "American officials said Saudi Arabia was by far the largest contributor to the operation.” The invasion and occupation of Syria by jihadists from around the world was primarily a Saud operation, though it was managed mainly by the US Government. Prior to the failed US-backed coup-attempt on 15 July 2015 to replace Tayyip Erdogan as Turkey’s President, Turkey was part of the U.S-Saudi alliance to overthrow and replace Syria’s Government. But afterwards, Turkey increasingly switched against the US and Sauds, and toward instead supporting the target of the Sauds and of America's aristocrats: Syria. And, so, Turkey has increasingly joined Syria's alliance, which includes Iran and Russia. That's one of the major geopolitical changes in recent decades.

Netanyahu Vows To Intensify Attacks In Syria After US Troop Withdrawal - Speaking at the fifth Israel-Greece-Cyprus summit held in the southern city of Beersheba on Thursday, Israeli Prime Minister Benjamin Netanyahu pledged to intensify military action in Syria after the White House's unexpected order for all US troops to pullout out of the country — an effort that's expected to be complete within months. “We will continue to act in Syria to prevent Iran’s efforts to militarily entrench itself against us. We are not reducing our efforts, we will increase our efforts. I know that we do so with the full support and backing of the US,” Netanyahu said. The prime minister further revealed he was personally warned in advance that the American pullout was imminent during during phone conversations with President Trump on Monday and US Secretary of State Mike Pompeo on Tuesday.Netanyahu has long lobbied the White House to take more aggressive action inside Syria while also praising and pledging support for all past US bombings targeting Damascus and the Syrian Army. Israeli officials have for years touted claims of Iran "taking control" and becoming deeply "entrenched" in Syria — something a number of analysts have doubted given that Damascus' secular Baathist political ideology doesn't mesh with Iran's hardline theocratic Shi'ism, beyond being close strategic allies confronting regional threats (namely the Sunni Gulf-NATO-Israeli axis). The prime minister also addressed ongoing IDF operations to destroy "attack tunnels" Hezbollah dug along the northern border, saying “These tunnels were built by Hezbollah with direct support and funding from Iran.” Continuing his well-known Iranian expansion theme, Netanyahu continued: “This is the Iranian web of aggression in the Middle East, which also terrorizes Europe and the entire world. Israel continues its operation against the terror tunnels and will do so until its completion. As we speak, we are employing means to neutralize these tunnels.” Netanyahu noted that his prior phone call with Trump this week focused on countering the Iran threat in the region.

Netanyahu's coalition collapses; Israel heading to elections on April  9th - Prime Minister Benjamin Netanyahu and the parties in his coalition decided Monday to disperse the Knesset this week and initiate an early general election on April 9, 2019. Netanyahu boasted to his Likud faction that his coalition lasted four years and had key diplomatic, security and economic accomplishments. He said he could not initiate the election six weeks ago, when Avigdor Liberman resigned as Defense Minister and sparked a coalition crisis, because he wanted to first complete destroying tunnels on the Lebanese border in Operation Northern Shield. "With God's help, we will win," said Netanyahu, who vowed to form the same coalition after the election. Leaders of coalition and opposition parties met with Knesset Speaker Yuli Edelstein summoned the party heads to formalize the process of dispersing the Knesset and come to an agreed-upon election date. Edelstein expressed pride in many of the laws the Knesset passed over its four years, specifically mentioning the Jewish Nation-State Law, but said he was disappointed in many lawmakers’ conduct and “verbal violence.” He expressed hope that the next Knesset will engage in more civil discourse. Justice Minister Ayelet Shaked said her ministry will begin working on the bill to dissolve the Knesset, which is set to be brought to all three plenum votes on Wednesday. Following the announcement of an election, party leaders made statements declaring victory. Yesh Atid chairman Yair Lapid, Zionist Union leader Avi Gabbay, Yisrael Beytenu leader Avigdor Liberman all predicted that they would become prime minister in the election and the Joint List’s Ayman Odeh said Israeli Arabs will come out to vote in droves. Former prime minister Ehud Barak called it “the most important election since the assassination of Yitzhak Rabin.”

Israel’s Netanyahu calls early election amid corruption charges  -- Benyamin Netanyahu announced on Monday that he will dissolve Parliament and hold early elections on April 9, instead of November as required by law, precipitating a short election campaign by Israeli standards.It follows the decision of the State Prosecutor’s Office on December 19 to recommend charging him with bribery on two counts. This, along with similar recommendations by the Tax Authority prosecutors and the police, makes it almost inevitable that Attorney General Avichai Mandelblit, who as a friend of Netanyahu has long stalled on the issue, will press charges.The resignation of Defence Minister and Israel Beiteinu (Israel is Our Home) Party leader Avigdor Lieberman last month that left Netanyahu’s fractious Likud-led coalition with a one-seat majority made an early election all but certain.Lieberman had resigned in protest, amid furious denunciations by Netanyahu’s fascistic coalition partners of the most right-wing Prime Minister in Israel’s 70-year history for being too “soft” on Gaza, in the wake of Netanyahu’s agreement to a ceasefire there with Hamas, the bourgeois Islamist group that controls the impoverished Israeli-occupied Palestinian territory.While the polls have long given Netanyahu and his Likud party a clear lead over his rivals, Netanyahu sought to use what little time he had left to choose the date that would give him maximum advantage.Determined not to be outdone by his right-wing partners, Netanyahu sought to present himself as “Mr. Security,” dispatching the Israel Defense Forces (IDF)—amid a fanfare of publicity—to blow up some abandoned tunnels under Israel’s northern border built by Hezbollah, the militant Shi’ite group that has significant support in Lebanon, and whose existence had long been known.Earlier this month, he authorized a series of provocative military operations following a drive-by shooting of Israeli settlers on the Palestinian West Bank that led to the death of six Palestinians and the arrest of at least 100 more in protests that erupted over Israeli brutality in Nablus, Tulkarem, Ramallah, Hebron and al-Bireh. Netanyahu followed up this brutal crackdown with a pledge to his right-wing base to expand the settlements in the West Bank and East Jerusalem, which Israel annexed illegally after seizing it during the 1967 June war.

Facebook's Secret Censorship Manual Exposed as Platform Takes Down Video About Israel Terrorizing Palestinians - After the New York Times on Thursday published an exposé of Facebook's global censorship rulebook, journalist Rania Khalek called out the social media giant for taking down a video in which she explains how, "on top of being occupied, colonized territory, Palestine is Israel's personal laboratory for testing, refining, and showcasing methods and weapons of domination and control." Tweeting out the Times report—and noting that while, according to the newspaper, "moderators were told to hunt down and remove rumors wrongly accusing an Israeli soldier of killing a Palestinian medic," Israeli soldiers did fatally shoot an unarmed 21-year-old female paramedic earlier this year—she announced Friday morning that Facebook had "just removed" her video. Here is my video on how Israel uses Palestine as a weapons testing laboratory, which Facebook erased without explanation. https://t.co/kT6YvZpVPj  — Rania Khalek (@RaniaKhalek) December 28, 2018 After she and other prominent reporters issued public complaints, Khalek announced a couple hours later that Facebook had restored the video. "Still this is a good reminder that at the moment these social media giants have the ability to disappear content as they please," she said in a tweet. "It's creepy and alarming and should be loudly opposed." Among those who highlighted Facebook's censorship of Khalek's video on Friday were Ben Norton of The Real News Network—who called it an "excellent, informative video report"—and The Intercept's Glenn Greenwald, who pointed out that the platform has been silencing Palestinian and pro-Palestinian voices for more than a year.

EU slams Israeli settlement plans  - The European Union on Thursday reiterated its opposition to Israel's settlement activities in the occupied West Bank after Israeli authorities advanced plans for nearly 2,200 settlement homes there."The European Union's position on Israeli settlement construction and related activities is clear and remains unchanged: All settlement activity is illegal under international law and it undermines the viability of the two-state solution and the prospects for a lasting peace," EU spokesperson for foreign affairs and security policy Maja Kocijancic said a statement.The approvals are the first of their kind since snap elections were called earlier this week.On Wednesday, a settlement watchdog, Peace Now, said the plans were at various stages in the approval process, with 1,159 housing units having received the final approvals before building permits can be issued, and 1,032 at an earlier stage. The settlements in the West Bank are considered illegal under international law as they are built on land that Palestinians see as part of their future independent state.

Israel Strikes Syria on Christmas in First Attack Since US Troops Ordered to Withdraw -- On Christmas Day, Israel launched what Bloomberg described as its first airstrike in Syria since President Trump’s “shocking”announcement that he would withdraw all US troops from Syrian territory (to the disgust of US national security officials and every neo-con anywhere). The strike targeted an ammunition depot in the Damascus countryside believed to belong either to Iran’s Revolutionary Guard, or its Lebanon-based proxy Hezbollah. According to Syrian and Russian officials, the airstrike was launched from Lebanese territory.  Air defenses intercepted most Israeli missiles, state-run Syrian Arab News Agency reported, citing an unidentified military official. However the U.K.-based Syrian observatory for human rights that monitors the war said three targets were hit, including weapons depots belonging to Iran or its Lebanese Hezbollah proxy, and that projectiles had fallen in the Israeli-occupied section of the Golan Heights.  In response to the US’s decision to withdraw, Israeli Prime Minister Benjamin Netanyahu said the IDF would “increase efforts” against Tehran’s entrenchment in Syria as a result. Israel reportedly launched six f-16 fighters from Lebanese territory to carry out the strike. The Russian Ministry of Defense claimed that 14 of 16 missiles launched by Israel had been intercepted, and that the strike had occurred while civilian planes were landing at nearby Damascus airport, threatening innocent lives. Some projectiles also fell in the Israeli-occupied section of the Golan Heights.  Israel has yet to acknowledge the strike.

Russia condemns 'Israeli' air strikes on Syria - Russia has branded as "provocative" an alleged Israeli air strike on Syria late on Tuesday. Reports from Syria said an arms depot in Qatifah, about 40km (25 miles) north-east of Damascus, was hit, injuring three soldiers. Israel has not commented, but after the reported strikes it said it had fired at a Syrian anti-aircraft missile. It did not report any damage or injuries. Israel has carried out dozens of strikes on Syria in recent years. It says it is acting to thwart advanced weapons transfers from Iran to the Lebanese pro-Iranian Hezbollah movement and the strengthening of Iran's military presence in Syria. Israel considers Iran and Hezbollah to pose a particularly dangerous threat. The foreign ministry of Russia, a key Syrian ally, said it was "very concerned" by the alleged Israeli air strikes. "The provocative actions of the Israeli air force... directly threatened two airliners," it said. The statement said the unidentified airliners "not from Russia, were preparing to land at the airports of Beirut and Damascus". The Syrian military said the attacks were carried out from within Lebanese air space. Syrian state news agency, Sana, said most of the missiles were intercepted

Israel Preparing For Comprehensive War In Syria- Report - Russia’s Nezavisimaya Gazeta said that Israel is preparing for a comprehensive war on Syria following the US’ withdrawal from the country. The newspaper said that the decision of US President Donald Trump to withdraw American troops from Syria has left Israel forced to face the Iranian presence in Syria with its troops alone.The newspaper quoted Israel’s former defence minister Avigdor Lieberman as saying that:“the United States’ withdrawal from Syria greatly increases the likelihood of a large-scale conflict in the north, whether in Lebanon or Syria”.Lieberman added that “the Americans’ departure will raise the morale of Syrian President Bashar Al-Assad and his allies, Iran and Lebanese Hezbollah.”The Russian daily quoted Russian military expert Yuri Liamin as saying that “Iran cannot interpret this decision as a blank cheque”. “We must not forget that Turkey is now threatening to launch a new military operation against the Syrian Kurds. This operation may lead to real Turkish control over a significant part of northern Syria. Such development is unlikely to please the Syrian authorities and its Iranian ally,” he added.

Syrian government troops deployed to flashpoint city of Manbij --The Syrian government announced Friday that its troops had entered the northeastern city of Manbij in an apparent bid to forestall a Turkish invasion aimed at driving out the Syrian Kurdish YPG militia.The YPG, which has served as the Pentagon’s principal proxy ground force in controlling nearly a third of the Syrian territory near the Turkish border, is regarded by the government of President Recep Tayyip Erdogan as a branch of the Turkish Kurdish PKK, against which Turkey’s security forces have waged a bloody, decades-long counterinsurgency operation.Erdogan vowed earlier this month that the Turkish military would intervene to push the YPG back from the border. US President Donald Trump’s December 19 announcement that he was ordering the withdrawal of all 2,000-plus US troops from Syria and leaving the military campaign against the Islamic State of Iraq and Syria (ISIS) in Ankara’s hands appeared to open the door to a Turkish intervention and a broader scramble for control of northeastern Syria, which consists largely of sparsely populated desert, but also contains the country’s main oil and natural gas reserves.In a statement posted on Twitter, the YPG said that it had invited the Syrian government of President Bashar al-Assad “to send its armed forces to take over these positions and protect Manbij in the face of Turkish threats.” The tweet, which was sent in the morning, was subsequently deleted and then reposted later in the day, likely reflecting the tensions between the YPG and its US military patrons following Trump’s announcement.While the Syrian government issued a statement saying that its troops had entered Manbij, a city of approximately 100,000, and hoisted the national flag, the US military, which still has special operations units based near the city, as well as some local residents speaking to the Western media denied that the Syrian army was deployed in the city.  Manbij fell to US and Turkish-backed “rebels” in 2012, including the Al Qaeda-linked Al Nusra Front, and was subsequently overrun by ISIS in 2014. In the summer of 2016 the so-called Syrian Democratic Forces, the YPG-dominated US ground proxy force, took control of the city.

Syria Sitrep – Army To Regain Northeastern Territory – Political Isolation Ends -- The fallout from U.S. president Trump's decision to retreat from Syria develops as expected. Trump had announced a rapid draw down of U.S. troops in Syria. Later he spoke of a controlled process that would allow Turkey to take over the U.S. occupied areas in northeast Syria. That plan, probably initiated by National Security Advisor John Bolton, is totally unrealistic. Such an wide ranging occupation, which would be resisted by many powerful forces, is not in Turkey's interest. Nevertheless, the Turkish president Erdogan will use the threat of a Turkish invasion to press for a dismantling of the Kurdish YPG forces which the U.S. trained and equipped. This morning the Syrian Arab Army (red) announced that it entered Manbij, west of the Euphrates. It established itself on the contact line between the Turkish supported forces (green) and the U.S. supported Kurdish YPG (yellow). The Syrian flag was raised in Manbij city. The move comes after U.S. troops and their Kurdish proxy forces voluntarily retreated from the area. Manbij was threatened by the Turkish military and its Jihadi proxy forces. To prevent a Turkish onslaught, the local armed groups, who collaborated with the U.S. military, invited the Syrian army to take over. This pattern will repeat elsewhere. A Kurdish delegation is currently in Russia to negotiate a further take over of the U.S. occupied northeastern provinces of Hasaka and Qamishli by Syrian government forces. The Kurds still hope for some autonomy from the Syrian government that allows them to keep their armed forces. But neither Damascus, nor anyone else, will ever agree to that. There will only be one armed force in Syria, the Syrian Arab Army. It is possible though, that some Kurdish units will be integrated within it.

Is China Getting Too Close To Israel? -- Two multi-billion dollar Chinese seaports near critical Israeli sites are raising concerns over potential security issues and relations with Washington ... China is constructing seaports at two sites where the US 6th Fleet deploys, in Haifa next to Israel’s main naval base and Ashdod near Tel Aviv, prompting concerns about China’s military potential in the Mediterranean Sea and Middle East. “The civilian [Chinese] port in Haifa abuts the exit route from the adjacent [Israeli] navy base, where the Israeli submarine fleet is stationed and which, according to foreign media reports, maintains a second-strike capability to launch nuclear missiles,” Israel’s Haaretz media reported.  “No one in Israel thought about the strategic ramifications,” Haaretz said in September. The guided-missile destroyer USS Arleigh Burke visited Haifa on October 25 in support of the 6th Fleet which is headquartered in Naples, Italy.Shanghai International Port Group (SIPG) signed the Haifa contract in 2015, began construction in June, and is to operate the Bayport Terminal for 25 years starting from 2021.SIPG signed memorandums of understanding with U.S. ports in Seattle, Washington in 2006 and Georgia Ports Authority in 2004, plus Barcelona, Spain, in 2006.

US Navy Could Abandon Major Israeli Port After Chinese Firms Begin Operations - The US and Chinese navies may find themselves unlikely neighbors in the Mediterranean as Israel's partnership with Beijing on constructing sea ports at two sites where the US 6th Fleet deploys is set to begin, which is raising eyebrows in Washington and could ultimately result in the Navy abandoning a key Israeli port altogether. The US Navy has acknowledged that its longstanding operations in Haifa may change once a Chinese firm takes over the civilian port in 2021, prompting Israel’s national security cabinet to revisit the arrangement, The Jerusalem Post has learned.  Currently the Shanghai International Port Group (SIPG) is set to manage Israel's largest port at Haifa as part of a contract to be inagurated in 2021, which will run for 25 years, and a separate Chinese firm was recently awarded a contract to construct a new port in the southern Israeli city of Ashdod, next to Israel's main naval base near Tel Aviv. Both deals are what both Washington officials and some Israeli generals have expressed deep concerns about of late, with the latter multi-billion dollar contract having been awarded to China Harbor Engineering, one of China’s biggest government-owned enterprises.For example in September Israeli Brigadier General Shaul Horev, who had previously served as navy chief of staff and chairman of the Atomic Energy Commission, loudly questioned the move in Israeli press, saying “When China acquires ports it does so under the guise of maintaining a trade route from the Indian Ocean via the Suez Canal to Europe, such as the port of Piraeus in Greece. Does an economic horizon like this have a security impact?"  And Israel Haaretz media recently reported of the growing controversy, “The civilian [Chinese] port in Haifa abuts the exit route from the adjacent [Israeli] navy base, where the Israeli submarine fleet is stationed and which, according to foreign media reports, maintains a second-strike capability to launch nuclear missiles.” Haaretz questioned further in an op-ed titled Israel Is Giving China the Keys to Its Largest Port – and the U.S. Navy May Abandon Israel, “No one in Israel thought about the strategic ramifications.”

China’s advances in Arctic may pose security threat to Canada -- China’s growing focus on the Arctic Ocean has drawn the eye of circumpolar nations, including Canada, which lays claim to the waters of the Northwest Passage.  The Canadian government tends to downplay the military threat posed by Beijing, but at the same time has voiced concern about its disrespect for international rules in dealing with territorial disputes in the China seas, and the possibility that it could replicate its intimidatory tactics in the High North.  The Chinese rolled out their Arctic policy last January. The Asian giant considers itself a “near-Arctic” state, and wants a stake in the region’s development as ice melting is creating new business opportunities – a concept reiterated by Gao Feng, China’s special representative for Arctic Affairs, at the Arctic Circle Conference in Seoul on December 8.  Beijing aims to set up the polar leg of its Belt and Road Initiative for better connectivity across Eurasia and beyond. The Chinese are keen to utilize new Arctic sea routes to narrow the distance and cut transport time with Europe for their cargo ships, besides exploiting the region’s natural resources and investing in infrastructure projects.  Canada’s Department of National Defense spokesperson Jessica Lamirande told Asia Times that her country was committed to cooperation with other states in the Arctic, provided they abide by international law, including environmental, navigation and other standards. Against this backdrop, “Canada welcomes continued discussions with China on Arctic issues,” she said.

Vanadium Skyrockets After China Shocks Market With New Regulations - The global scramble for a little known metal called vanadium is officially underway. The metal, which when used in small amounts can help strengthen steel significantly, is in high demand following new Chinese regulations on infrastructure and buildings. The new rules, which came as a result of a 2008 earthquake that devastated part of China, are aiming to phase out the use of low strength steel in building projects, according to the Wall Street Journal. The market for the metal is very small, with about 80,000 metric tons produced each year. Roughly 90% of that is used in small amounts in projects like bridges and skyscrapers. While two years ago it cost less than $5 per pound, it surged as high is $29 per pound last month. Supply of vanadium globally has been "drawn down to nearly nothing,” according to Jack Bedder, director at a London-based research and consulting firm. The new Chinese regulations set out specifications for three high-strength grades of steel that each require vanadium. While many of the miners of this metal have been shut down, the surge in pricing is reinvigorating the interests of numerous companies. Macquarie group said that global demand for the metal could be up 25% in coming years. About 14% of the world's vanadium comes directly from mines and it is usually found along side of minerals like iron ore, coal and aluminum. It’s relatively abundant but it hasn’t been mined on its own because prices have been too low to make it worth it. As a result, the new boom has brought in smaller miners that are setting up next to major mines, like Energy Fuels' Utah mill. 

 China Tests Sub-Launched Nuclear Missile That Can Hit USA From Thousands Of Miles - China conducted the first known flight-test of its JL-3 solid-fuel, submarine-launched ballistic missile last month, according to The Diplomat, citing US government sources with knowledge of the test. The test took place in the Bohai Sea from a modified conventional submarine, according to the Washington Free Beacon, which first reported the test this week.   The JL-3 will include advanced precision guidance technology as well as anti-jamming capabilities, utilizing a "photonic-crystal optic-fiber gyroscope" as well as other guidance systems described as "terminal boost, stellar guidance and scene matching guidance." According to the Beacon, the JL-3 will include missile-defense penetrating features such as variable trajectory, a stealth warhead which evades radar, and motors which burn quickly and early in order to reduce the heat signature detected by US warning satellites. Furthermore, the JL-3 will feature "water-exit" technology that will optimize underwater ejections from launch tubes.

China Selling Hypersonic Anti-Ship Missiles; Travels 6X Speed Of Sound For "Rapid, Precision Strikes" - China has brought to market a hypersonic anti-ship ballistic missile, said to be the first of its kind on the international market for buyers seeking a "reliable and affordable deterrence against threats from the sea," according to China.org. "The system is intended for rapid and precision strikes against medium-size ships, naval task forces, and offshore facilities," said a representative from China Aerospace Science and Industry Corp (CASIC) in November. According to CASIC, the CM-401 is fitted with a terminal radar guidance unit featuring a nose-mounted gimballed antenna. Once launched, the missile flies along a ballistic trajectory, reaching a near-space altitude. The weapon is stated to have an average speed of Mach 4 and a peak of Mach 6, although it is not clear at what altitudes these speeds are reached. -Janes.com   The missile flies between 20 and 100 kilometers above earth (12 - 62 miles) and maneuvers at hypersonic speeds. Once fired, the missile ascends to a predetermined altitude until its target is identified, before entering an "ultrafast terminal dive" towards the target at hypersonic speeds according to the CASIC. ...the missile flies at an average speed of 1,360 meters per second - 4,900 kilometers per hour - or four times the speed of sound, during most parts of the flight, and reaches a maximum velocity of more than 2,000 m/s, six times the speed of sound as it approaches the target. It can carry a 290-kilogram warhead and has a maximum strike range of 290 km and a hit rate of 90 percent, meaning there will be nine effective hits on target out of 10 shots. -China.org   The missile - unveiled at the the 12th China International Aviation and Aerospace Exhibition in Zhuhai, Guangdong province - can be mounted to a variety of platforms, such as ships or land-based launch vehicles according to the company.  We wonder how China's new hypersonic missile competes with Putin's new toys?

Trade war-hit China faces slowest growth in 3 decades next year - The year of the Golden Pig is around the corner, but no Eldorado is in sight for Xi Jinping’s China. According to Chinese astrology, the upcoming Lunar New Year, starting on February 5, traditionally brings wealth and economic prowess.  Yet, this time Chinese middle classes are fretting with anxiety ahead of 2019, amid growing economic uncertainty due to a slowing GDP growth, and an unprecedented trade war with the United States. In 2018, US President Donald Trump took Beijing’s leadership by surprise, slapping massive tariffs on the world’s second-largest economy, which sent shockwaves through the Politburo. Impact on the ground has been limited so far, but the psychological damage is done, with markets, investors and consumers questioning China’s ability to weather the storm. Next year will raise the stakes for President Xi as the world’s two leading powers will be engaged in tense trade talks and the daunting task of bridging their widening difference during a short window of less than three months. The year to come might herald the official start of a long Sino-US Cold War with global ramifications, even if an elusive trade breakthrough can be achieved. After decades of economic growth and a “peaceful rise,” a new chapter of open strategic competition between Washington and Beijing has begun. This new environment will hang over all the key issues China’s leadership will face in 2019, from domestic politics to economic strategy, or diplomacy, making the next 12 months a potential watershed. 

China Industrial Profits Collapse In November, Set To Worsen - For the first time in almost three years, the profits of Chinese industrial companies tumbled in November, highlighting the effects of slowing economic growth, falling prices, and the trade war with the US. "Slowdown in sales growth and factory gate inflation, combined with rising costs, led to the decline of industrial profits in November," the NBS said in the statement on its website. Profits contracted 1.8% year-on-year in November, vs. an expansion of 3.6% yoy in October. This is the first year-over-year contraction in industrial profits since 2015. In month-on-month terms, profits fell meaningfully after seasonal adjustment by around 7.2% (non-annualized), vs. a contraction of 0.1% in October. In absolute level terms, profits in November were the lowest of the year. Among major sectors, profit growth turned negative in computer manufacturing, ferrous metal smelting and pressing, and chemical product manufacturing, but improved in general equipment manufacturing, electrical machinery manufacturing and automobile manufacturing. As Goldman Sachs notes, compared with November 2017, profit margins (total profits divided by revenues from principal business) were materially lower by around 0.6pp, contributing to the fall in headline profit year-over-year growth. On a 12-month rolling average basis, both upstream and downstream industries' margins narrowed. Revenue growth decelerated in November, with PPI inflation modestly lower in November vs. October, and the implied real industrial sales growth slowed in November, to around 4.5% yoy based on our estimate, vs. 5% yoy in October. However, flashing red flags everywhere, Bloomberg notes that the official year-on-year growth rate for profits began diverging from the growth rate calculated from the nominal profit figures in 2017, and that continued to be an issue in November’s release.

 China Cutting Tariffs On 700 Items Amid Push To Boost Imports By $30 Trillion - As part of China's efforts to open its economy - something its leaders have been touting at least since President Xi's keynote speech at the 2017 World Economic Forum - Xi revealed on Monday a detailed breakdown of what will be the third round of tariff reductions this year, measures that were teased by President Xi during a speech nearly two months ago.The plans to spend more on foreign goods are part of China's plan to import an additional $30 trillion over the next 15 years as the world's second-largest economy continues its transition from an industrial powerhouse to a service-focused economy, according to Bloomberg.In addition to the $30 trillion in goods (which is higher than the $24 trillion previously promised by Xi), China is also hoping to increase services imports by $10 trillion during the same period. The measures come as China is weighing whether to abandon its "Made in China 2025" initiative and speed up the liberalization of its economy and its openness to foreign competition as a means of reducing wasteful state-directed spending that has heavily contributed to the massive pile of bad debt swirling around China's corporate sector. The tariffs will have the added bonus of cutting costs for Chinese consumers at a time when a dramatically weaker yuan is expected to stoke inflation. The announcement follows a raft of disappointing economic data released earlier this month raised fears of a global recession (and sent stocks around the world tumbling lower). Before Trump takes credit for the cuts as another victory in his trade war with China, Bloomberg pointed out that Xi's latest comments "don't move the needle very far on trade policy". China has already cut tariffs this year (case in point: the recent reductions in auto tariffs) and has repeatedly said it's planning more cuts.

China's draft foreign investment law bans forced tech transfer, emphasizes reciprocity (Reuters) - China has proposed a ban on forced technology transfer and illegal government “interference” in foreign business operations, practices that have come under the spotlight in a trade dispute with the United States. A draft foreign investment law, the full text of which was published by the top legislature on Wednesday, comes as China tries to resolve its protracted standoff with the United States, which accuses it of unfair trade practices including intellectual property (IP) theft and forced IP transfer. While China has frequently denied such accusations, it has pledged to improve market access for foreign investors and better protect their rights in the face of growing complaints and slower foreign investment. The final draft law, with 39 articles, was far shorter than a version released in 2015, but took a notably stronger line on IP protection. “Official authorities and their staff shall not use administrative means to force the transfer of technology,” the draft says. That compares with a general statement that foreign firms’ IP rights would be protected, in 2015. As trade tension flares, there has been growing caution in countries like the United States and Germany about Chinese companies - backed by the state and flush with cash - obtaining advanced foreign technology through aggressive acquisitions abroad. In an apparent move to emphasize reciprocity, the draft law said China would reserve the right to retaliate against countries that discriminate Chinese investment with “corresponding measures”. 

Chinese Media Highlights Rebound In Men's Underwear Sales As Sign Of Impending Economic Boom - China is reviving a leading indicator that was popularized during the aftermath of the financial crisis to tout a nascent economic recovery in one of its northeastern provinces. According to the Global Times, an English-language mouthpiece for the Communist Party, climbing sales of men's underwear bodes well for the broader regional economy. The Men's Underwear Index was first popularized by Fed Chairman Alan Greenspan as a surprisingly powerful leading indicator. Here's the gist: Sales of men's underwear are typically relatively stable due to their status as a consumer necessity. But during periods of financial distress, men will delay purchasing new drawers, causing sales to dip.  So, when sales start to climb again after a prolonged slowdown, it's a sign that more consumers may be feeling optimistic about the economic outlook. As the Washington Post pointed out back in August 2009, rebounding underwear sales  had prompted some to speculate that the recession that followed the financial crisis might be about to end. And sure enough, data later reflected that economic growth had in fact rebounded, suggesting that the underwear indicator might in fact be a reliable indicator.  In its news story, the GT traced the growth in sales of men's underwear over three years, noting that not only had sales risen, but that men had been "paying more attention to the quality and color variety of the clothes". Underwear made by Playboy and two local brands were among the most popular. Sales of men's underwear in Liaoning has risen for the last three years, as consumers pay more attention to the quality and color variety of the clothes, according to recent information released by JD Big Data Research Institute. Sales of men's underwear across the province rose 42 percent in 2017 over the previous year while the year-on-year increase stood at 32 percent to date in 2018, the industrial data showed. The provincial year-on-year sales increase in 2018 grew even faster than that of other provinces.

Tokyo stocks plunge in Christmas rout amid fears over US economy - Tokyo stocks plunged on Tuesday as the few Asian markets open on Christmas Day suffered a holiday rout on fears about the US economy and a government shutdown in Washington. Tokyo markets, which were closed on Monday for a national holiday, plummeted at the open on Tuesday, with the Nikkei down more than 5% – over 1,000 points – shortly before the morning break. The fall followed a brutal holiday-shortened session on Wall Street that saw US stocks sink for a fourth straight session as investors took little heart from efforts by the US Treasury secretary, Steven Mnuchin, to reassure them. In Asia, many markets were closed for Christmas, including in Australia, Hong Kong and South Korea. US and European markets will also be closed for the holiday. But the downturn affected those bourses that remained open, with China’s benchmark Shanghai Composite index opening lower and tumbling more than 2% during the morning session. Markets have been roiled by ongoing uncertainty in the US, with Mnuchin widely panned for holding a call with the six biggest US banks and then reporting on Twitter that the six chief executives have “ample liquidity” available. Investors were also unnerved by weekend news reports that the US president, Donald Trump, had asked about the possibility of firing the Federal Reserve chairman, Jerome Powell, accounts that Mnuchin said Trump denied. Last week, the central bank raised rates, infuriating Trump who has ignored the traditional respect for the Fed’s independence, calling it “crazy”, “out of control” and a greater economic threat than China.

Japan plans for massive military build-up aimed at China - The cabinet of Japanese Prime Minister Shinzo Abe approved new so-called National Defense Program Guidelines (NDPG) on December 18 that will rapidly accelerate Tokyo’s remilitarization, including the acquisition of offensive weaponry. The new 10-year policy explicitly targets China and North Korea, as well as Russia. The document makes clear that Japan is preparing for war alongside the United States. It states that the US “remains the world’s most powerful nation, but national rivalries are surfacing and we recognize the importance of the strategic competition with both China and Russia as they challenge the regional order.” The NDPG states, “Further strengthening relations with the US, which shares the same universal values and strategic interests with our country, has become more important than ever for our national security.”While this relationship is couched in terms of defense, Tokyo is calling for a vast expansion of its military. This is in violation of Article 9 of the constitution that bans Japan from possessing the ability to make war on other countries, a ban which has been in place since the end of World War II. The NDPG calls for the acquisition of obviously offensive weaponry such as aircraft carriers and cruise missiles.  Japan intends to convert its Izumo-class helicopter carriers, which it claimed were defensive weapons, to carry and launch United States-made F-35 fighter jets. While the Defense Ministry admits that aircraft carriers are prohibited by the constitution, it claims that because the ships will not always carry fighters, that they continued to be “defensive” in nature. Japan will purchase 147 F-35 fighter jets, including 42 of the F-35Bs for the aircraft carriers. Other jets will be stationed on islands in the East China Sea, around the uninhabited Senkaku/Diaoyu Islands, that are claimed by both Tokyo and Beijing. Japan intends to equip these jets with long-range cruise missiles, capable of hitting targets at a distance of 900 kilometers. These Joint Air to Surface Standoff Missiles (JASSM), would, in the words of their developer US-based Lockheed Martin, give Japan the ability to “destroy hostile air defenses and high value, well defended, fixed and relocatable targets while keeping aircraft safely out of range from hostile air defense systems.” Japan will also pursue the development of hypersonic guided missiles that evade radar systems.

 Japan Finally Concedes Its Crazy Low Prices Can’t Be Beat.  Japan has virtually given up on reaching 2% inflation after nearly six years of trying. An argument gaining ground in Tokyo holds that the inflation goal, once seen as paramount, doesn’t matter so much after all. Inflation excluding volatile fresh food and energy prices was just 0.3% in November, and it has barely budged all year.Mr. Abe has largely stopped discussing the dangers of deflation, and his government is actually trying to push some prices down ahead of a tax increase set to take effect in October 2019. Mr. Abe’s de facto No. 2, Chief Cabinet Secretary Yoshihide Suga, has called on mobile-phone carriers to lower fees by about 40%—a move that could knock a full percentage point off inflation, according to government estimates.“There is no change to our stance of seeking the 2% price goal as soon as possible by patiently continuing powerful easing,” Mr. Kuroda said at a November press conference. At the same time, he has started talking more about the potential downsides of aggressive monetary easing, Still, BOJ officials are hesitant to abandon the target altogether out of fear it could damage expectations and push the country back into deflation, said people familiar with the BOJ’s thinking.

Japan Suffered Biggest Natural Population Decline On Record In 2018 - As the Bank of Japan finally gives up on trying to hit its inflation target and resigns itself to the deflation that has already loomed over its economy for the past twenty years, the Japanese official birthrate data delivered the latest in a series of alarming milestones: According to government s tatistics, Japan suffered its largest-ever natural population decline in the country's history during 2018, CNN reported. Japan's demographic timebomb is hardly a new development: The country has for years struggled with one of the lowest birthrates of the developed world, with deaths far outpacing births, causing its population to shrink for the ninth straight year in 2018. Meanwhile, with 921,000 births, Japan has posted the lowest birth rate since the country began keeping track in 1899 - coming in below 1 million for the third year in a row.In a sign that the demographic candle is burning at both ends, deaths in 2018 also hit a postwar record high of 1.369 million, cementing a total natural population decline of 448,000 (also the highest ever). According to international standards, Japan is a "super-aged" nation (more than 20% of its population is older than 65). The country's total population stands at 124 million: but by 2065, it's expected to drop to about 88 million.To try and reverse this trend, the Japanese government has allocated 2 trillion yen ($18 billion) to expand free preschool for children between age 3 and 5, as well as for children age 2 and under from low-income families. The government also hopes to cut wait times at day care centers, as Prime Minister Shinzo Abe hopes to stop the Japanese population from breaking below 100 million by 2060.But as the populations of developed nations either stall or shrink, growth is exploding in the developing world - particularly in Africa, where the populations of Nigeria, Uganda, Ethiopia and other nations on the Continent are exploding.Of course, falling populations mean the per-capita debt borne by Japanese will explode in the coming years, compounding the fact that these demographic trends will make it even more difficult to pay back. Fortunately, the BOJ has apparently resigned itself to monetizing the country's debt for the foreseeable future.

 India Curbs Power of Amazon and Walmart To Sell Products Online -   The Indian government dealt a surprise blow on Wednesday to the e-commerce ambitions of Amazon and Walmart, effectively barring the American companies from selling products supplied by affiliated companies on their Indian shopping sites and from offering their customers special discounts or exclusive products. From a report:If strictly interpreted, the new policies could force significant changes in the India strategies of the retail giants. Amazon might have to stop competing with independent sellers and end its offerings of proprietary products like its Echo smart speakers in India, its top emerging market. For Walmart, which spent $16 billion this year to buy 77 percent of Flipkart, India's leading online retailer, the new rules could hamper its strategy of selling clothing and other products under its own private brands and prevent it from using its supply-chain expertise and clout with retailers to drive down prices for Indian consumers.  [...] The government posted the changes, which go into effect Feb. 1, without warning on Wednesday evening in New Delhi, while much of the business world in both countries was on vacation. [...] Prime Minister Narendra Modi of India initially courted foreign companies to invest more in the country after his 2014 election victory, but his administration has turned protectionist as his party's re-election prospects have dimmed in recent months. Mr. Modi has increasingly sought to bolster Indian firms and curb foreign ones through new policies, including one that requires foreign companies like Visa, Mastercard and American Express to store all data about Indians on computers inside the country.

UK Taxpayers Funded Pakistani Death Courts As They Handed Down Blasphemy Law Sentences - New details from a secretive UK aid program reveal controversial Pakistani death sentence courts have been funded by the UK government for the past few years, even while Christians languished on death row as a result of the country's notorious "blasphemy laws". And while the program began as a "counter terrorism" initiative with a British ally, it's come under increased scrutiny after a Pakistani Christian woman was recently acquitted following 8 years on death row for "blasphemy charges". The Guardian reports: British taxpayers are funding prosecutions in Pakistan that have led to dozens of death sentences, according to newly disclosed details of a secretive UK aid programme. The documents reveal that the Foreign Office is supporting specialist civilian courts that prosecute terrorist suspects in what the UK government’s global security strategy calls a “rule of law” programme in Pakistan.  Except the courts not only operate in a highly conservative Islamic society which considers the death penalty for things like "blasphemy" and possibly "anti-Islamic" activity like converting to Christianity (as in the case with the 8-year imprisoned Christian woman Asia Bibi), but have very likely killed innocent people considering how many death sentence cases have been overturned on appeal.

Trump Leaves Behind Mess for Afghans to Clean Up -- Reports of the withdrawal of U.S. troops took Afghans by surprise. And it gives the Taliban exactly what they want.  Fears that U.S. President Donald Trump would decide to reverse course and withdraw troops from Afghanistan are not new. But the latest reports of dramatic plans to bring back 7,000 troops has shocked several sources I have spoken to in the U.S. and Afghan governments. The withdrawal represents nearly half of all U.S. forces in Afghanistan, slashing its armed presence down to its lowest levels since 2002. The news broke a day after Trump’s decision to pull forces from Syria and hours after the resignation of Defense Secretary James Mattis was made public. It is not necessarily the announcement itself that caught many by surprise, but the timing. Zalmay Khalilzad was appointed as the U.S. special representative for Afghanistan reconciliation in September, raising hopes that a peaceful settlement to America’s longest war was in sight. Khalilzad—a former U.S. ambassador to Afghanistan under the George W. Bush administration—has shuttled across the region with a relentless energy since then, and a U.S. delegation concluded three days of talks with the Taliban in Abu Dhabi on Wednesday. There has been more momentum now for talks than ever before, which Trump’s decision significantly undermines.The reduction in troop numbers diminishes U.S. leverage over the Taliban in negotiations, given that the latter’s stated priority is the withdrawal of all foreign forces from Afghanistan. While the United States has pummeled Taliban targets with airstrikes, now at an all-time high, this has not yet eroded their control or dented their military capacity. The U.S. special inspector general for Afghanistan reconstruction reportedthis fall that Afghan government control had fallen to 56 percent of the country’s districts, a record low, and that Afghan National Security Forces casualties had hit a record high. Exact casualty numbers are classified, but the New York Times estimates an average of 50 Afghan soldiers are killed each week. Afghan forces remain deeply reliant on U.S. support to maintain current levels of control and protect cities vulnerable to Taliban capture.

Sydney High-Rise Evacuated After Residents Hear "Cracking" Sounds - Some 3,000 residents of Sydney's Opal Tower, an apartment in the city's Olympic Park, are facing the possibility of spending Christmas in an emergency evacuation shelter after the building - and all buildings within a 1 kilometer "exclusion zone" - was evacuated following signs of "cracking" in the 33-storey building that have stoked fears about a possible collapse. Emergency responders were called to the building Monday morning after residents on the tenth floor reported hearing loud "cracking" noises. An initial investigation determined that the building had moved one or two millimeters, according to the Guardian. Laser monitors are being used to scan for any additional movement in the building.  Though details about the evacuation are still trickling out, the Associated Press reported that police had to use heavy equipment to force open doors to allow residents to escape. Neighboring buildings have also been evacuated. The tower has almost 400 one, two, three and four bedroom apartments, with two bedrooms selling for nearly $1 million. The tower is situated over the central site of the 2000 Sydney Olympics. Fire officials in the city said it was "too soon" to tell on Monday whether the building was in danger of collapse. Acting Superintendent Greg Wright said his department couldn't offer a time estimate for how long the inspections would take. Water, gas and electricity service to the building has been shut off.

China To Take Over Kenya's Largest Port Over Unpaid Chinese Loan - No more Mr. Nice Chinese Guy.After years of "benevolent" handouts to various African countries by Beijing, all of which however came in the form of loans, of which few have led to viable, long-term projects and cash-flow generating assets, and led to accusations that China is pursuing a "new colonialism" of the African continent (and more recently, nations along the One Belt, One Road corridor), China is demonstrating to the world what happens when its debtors refuse to pay up.But first a brief detour: readers will recall that China's ambitions for Africa are hardly new, and were discussed here over 6 years ago for the first time in "The Beijing Conference": See How China Quietly Took Over Africa"   And while back then few noticed, in September of 2018, during a major conference with African leaders, China's president Xi Jinping proposed an additional $60 billion in financing for Africa in the forms of assistance, investment and loans, the western media was quick to label the latest round of Chinese financing a "debt trap", to which a top Chinese official responded at the time that Beijing is merely helping Africa develop, rejecting criticism it is loading African countries with unsustainable financial burdens.It turns out, the official was not exactly telling the truth, because far from handing out free money the African Stand reports that China is likely to take over Kenya's lucrative Mombassa port if Kenya Railways Corporation defaults on its loan from the Exim Bank of China.Call it a "debt-for-sovereign equity" exchange with a twist.

Dozens killed in protests against austerity and repression in Sudan -- At least 37 people have been killed and 219 injured during protests opposing the Sudanese government of president Omar al-Bashir. Hundreds more have been arrested in a brutal crackdown on demonstrations against the rising cost of basic commodities including bread.Among those arrested were 14 leaders of an opposition coalition, the National Consensus Forces, including its leader, the 85-year-old Farouk Abu Issa, who is in poor health, a senior leader of Sudan’s Communist Party, as well as leaders from the pan-Arab Ba’ath and Nasserist parties. Authorities have also blocked social media sites and disrupted internet services to stop protesters communicating.Yesterday, security forces fired tear gas at hundreds of protesters following Friday prayers outside a mosque in Omdurman, part of the Greater Khartoum conurbation. The protests initially broke out on December 19 over the tripling in the price of bread and fuel shortages in the northeastern city of Atbara, where protesters torched the ruling National Congress Party’s offices. Atbara, is known as the “City of Steel and Fire” because of its historical importance to the rail network and the presence of a militant rail workers’ trade union that was dismantled under military rule in the 1980s. The protests rapidly spread across Sudan’s major towns and cities, including the Riverain region—reputedly the regime’s stronghold—and the capital Khartoum, with demonstrators torching the party’s offices in Dongola. Within 24 hours, the demonstrations had escalated into a more generalized expression of opposition to years of austerity, economic hardship and suppression of the most basic democratic rights that make life intolerable for most Sudanese people, particularly the youth. In Khartoum, the average age of protesters is reportedly around 17 to 23 years.

Rio Police To Get "License-To-Kill"  - Brazil is going weapons-free. Up to 120 sharpshooters will accompany Rio de Janeiro police into the city's slums to eradicate violent gun-toting criminals, according to Flavio Pacca - a longtime associate and security adviser to Governor-elect Wilson Witzel. The marksmen will work in pairs; one shooter and one spotter who will monitor conditions and videotape the executions, according to Bloomberg, with the two officers alternating roles. "The protocol will be to immediately neutralize, slaughter anyone who has a rifle," said Witzel - a former Brazilian marine and federal judge, on December 12. "Whoever has a rifle isn't worried about other people's lives, they're ready to eliminate anyone who crosses their path. This is a grave problem, not just in Rio de Janeiro, but in other states." According to Flavio Pacca - a police officer and regular attendee at Witzel's transition meetings, groups of 20 policemen will begin undergoing month-long marksman training as soon as March. Those who qualify as deadly at 600 meters will begin "servicing targets" in the cartel-controlled favelas, where residents are under the constant threat of drug traffickers and gang wars. As Bloomberg notes, the notion of "imminent danger" which justifies an extrajudicial killing is a gray area. "That concept is changing; it's not for nothing that Bolsonaro was elected, not for nothing that Witzel was elected," said Pacca - pointing to a jewelry-store thief who used an octogenarian as a human shield while escaping. When the thief stumbled, police shot him dead at point-blank range. "The people gave the police an ovation. That's what you're going to see." 

‘Like a cancer:’ Rio militias grow, control swaths of city (AP) — The latest scheme works like this: Brazilian paramilitary groups buy boxes of cigarettes in neighboring Paraguay for 14 cents a pack and then smuggle them back home, where prices and taxes are much higher, and sell them for up to $2.15. The cigarettes offer the militias the lion’s share of an estimated $330 million in profits and add to a portfolio of illicit operations the groups have honed over two decades, including imposing surcharges on cable service, electricity and transportation. The groups are also known to conduct extortion and summary executions.But while investigating the smuggled smokes, authorities found other evidence they deemed more troubling: cameras, online monitoring systems and signs of possible connections between militias and members of Red Command, Rio de Janeiro’s most powerful drug gang.Those, authorities say, are indications that the militia groups which used to be minor players in the Rio underworld are now becoming shot callers — and not easily controlled.“It’s like a cancer,” anti-piracy police investigator Mauricio Demetrio said. “It won’t stop.”Beginning in earnest in the 1990s, the militias were mainly made up of former police officers, firefighters and military men who wanted to combat lawlessness in their neighborhoods. For years, they were even lauded by politicians, including President-elect Jair Bolsonaro, a former army captain who as a congressman called for their legalization in 2008. In theory at least, the groups were helping to confront what the state could not, even if the trade-offs included tolerating illicit businesses and sometimes murder. Along the way, their brutal methods and control expanded. Today some crime experts argue that militias have become Rio’s biggest security threat, with methods that are being copied in other areas of Latin America’s largest nation.

 Mexican Governor Martha Erika Alonso, 45, and her senator husband are killed in a helicopter crash, less than two weeks after she became her state’s first female leader -- A Mexican husband-and-wife political power couple have died in a Christmas Eve helicopter crash, officials announced. The newly sworn-in governor of the central Mexican state of Puebla, Martha Erika Alonso, was killed alongside her senator husband Rafael Moreno Valle Rosas, when the aircraft went down in the small city of Huejotzingo on Monday afternoon. Two pilots and a third passenger were also killed. Alsonso, 45, had only been sworn into office ten days ago after independent electoral authorities dismissed the challenge. Meanwhile her husband Valle was also the former Puebla governor and a prominent figure in the opposition National Action Party who had vied unsuccessfully for the party's presidential nomination and its internal leadership. The couple did not appear to have children.Mexican Civil Aviation authorities are investigating the cause. Both federal and state officials said they had opened investigations into the cause - a potentially sensitive case because President Andres Manuel Lopez Obrador's Morena party had challenged the validity of Alonso's election in July. She was sworn in 10 days ago after independent electoral authorities dismissed the challenge. State spokesman Maximiliano Cortazar demanded a 'transparent, impartial and independent' investigation.

Russia- Hole drilled from inside Int’l Space Station capsule – A Russian cosmonaut who explored a mysterious hole in a capsule docked to the International Space Station said Monday that the opening was drilled from inside the spacecraft and Russian law enforcement agencies are investigating what caused it. Sergei Prokopyev said investigators were looking at samples he and crewmate Oleg Kononenko collected during a Dec. 12 spacewalk. Prokopyev and two other astronauts returned to Earth last week from a 197-day space station mission. The hole in the Russian Soyuz spacecraft attached to the station was spotted on Aug. 30. The crew discovered a leak that was creating a slight loss of pressure and plugged the hole with epoxy and gauze. Prokopyev said at a news conference the cavity started from the capsule's interior and "it's up to the investigative organs to judge when that hole was made." The astronauts' quick identification and repair of the hole demonstrated "the crew was ready for any developments," he said. The hole didn't pose a danger to Prokopyev and crewmates Serena Aunon-Chancellor of NASA and Alexander Gerst of the European Space Agency during their return because the section of the capsule it appeared on was jettisoned before the fiery re-entry into Earth's atmosphere. Roscosmos chief Dmitry Rogozin said in September the hole could have been drilled when the capsule was manufactured or in orbit. Rogozin stopped short of blaming crew members, but the statement has caused some friction between Roscosmos and NASA. Rogozin has since back-pedaled from the statement, blaming the news media for twisting his words. Prokopyev scoffed at the idea the hole could have been drilled by an astronaut, saying, "You shouldn't think so badly of our crew."

Germany To Trump- Don't Even Think About Stationing Nuclear Missiles In Europe After INF Withdrawal -  Washington's decision to drop out of the INF has fueled speculation about the return of a full-blown, Cold-War style nuclear arms race, as Russia has reflexively threatened to build up its tactical defenses along Europe's periphery in the face of what's expected to be a buildup of American intermediate-range arms.But whatever happens between the two nuclear superpowers, Germany wants no part of it. German Foreign Minister Heiko Maas warned this week that the US better not be thinking about stationing its intermediate-range missiles in Germany - or anywhere in Europe, for that matter. For the last 30 years, the treaty has prohibited stationing intermediate-range arms in Europe. Any push to change that would almost certainly be met with "widespread resistance" in Germany, Maas said, so as to avoid a scenario where Europe is put in the middle of a tug-of-war between Russia and the US. Quoted by the RT, in an interview with German news agency DPA, Maas said that "the deployment of new medium-range missiles would meet with widespread resistance in Germany." The US is set to quit the 30-year-old INF treaty with Russia, which has been preventing Washington from stationing such missiles in Europe. Both countries accuse each other of violating the treaty, and both deny any wrongdoing on their own part."By no means should Europe become the scene of a debate on weapons build-up," Maas said. Deploying nuclear weapons in response to supposed treaty violations is Cold War-era logic, the German diplomat believes."Nuclear armament is certainly the wrong answer," he said. "The policy of the 80s does not help to answer the questions of today."

German Military Could Recruit EU Residents To Meet NATO Commitments - French President Emmanuel Macron's vision for a pan-European army might finally become a reality...in Germany.According to the BBC, seven years after Germany abandoned conscription, the military of Europe's largest economy is struggling to fill senior roles, and might need to start hiring non-German soldiers to occupy specialized positions in its armed forces like doctors and IT specialists, said Army general inspector Eberhard Zorn, who noted that Germany is being forced to "look in all directions" as it struggles to fulfill a promise to President Trump to raise its defense spending closer to the NATO-mandated target of 2% of GDP. The country's military has been beset by under-investment for years and is presently struggling to expand its armed fighting force by 21,000 people by 2025 and increase its defense budget from 1.2% to to 1.5% of its gross domestic product by 2024. Defense Minister Ursula von der Leyen said in an interview on Thursday that Germany now has 182,000 uniformed soldiers, an increase of 6,500 in two years. Within seven years, that number should reach 203,000. Of these, 12% of army recruits are women, and one in three applicants to officer positions are women.Zorn was careful to point out that non-Germans would only be considered for "specialist" positions. Gen Zorn told the Funke newspaper group that "of course the Bundeswehr needs personnel" and the army had to "push hard for a suitable new generation", although EU citizens in uniform were "an option" to be examined only in specialist fields.

German industry views Brexit, Trump as biggest risks to economy (Reuters) - Germany’s leading industry groups said on Wednesday that Britain’s departure from the European Union and trade disputes triggered by U.S. President Donald Trump’s ‘America First’ policies were posing the biggest risks to growth and prosperity. The German economy, Europe’s largest, is expected to post its weakest growth rate in many years in 2018 as exporters are facing headwinds from abroad. But vibrant domestic demand means many companies are still able to expand business. In a survey conducted by Reuters, the heads of Germany’s leading industry associations said they did not see the economy entering a recession and that most forecasts were predicting a solid growth rate of around 1.5 percent for 2019. But the industry associations said the economic woes of company executives were increasing and the government should do more to help them, for example by lowering corporate taxes and investing more in digital infrastructure. “The biggest risk in the short term is Brexit,” said Dieter Kempf, president of the BDI industry association. If Britain left the EU in March without any agreement on its future relations with the bloc, this would create massive uncertainties for trade and business, Kempf warned. “The British economy would face the direct threat of a recession which would indirectly also affect Germany,” Kempf said. Holger Bingmann, head of the BGA trade group, said Brexit was the “most urgent problem for the German economy” while an escalation of international trade disputes sparked by the United States could potentially derail the economic upswing. DIHK President Eric Schweitzer said German companies are still worried about the U.S. imposing higher import tariffs on European cars. “The threat of car tariffs is still on the table,” Schweitzer warned. It was vital that both sides increased their efforts to find a solution to the trade dispute through negotiations that ideally would lead to lower tariffs, Schweitzer said.

Germany mulls introducing ‘mosque tax’ for Muslims - Lawmakers from Germany's grand coalition government said on Wednesday that they were considering introducing a "mosque tax" for German Muslims, similar to the church taxes that German Christians pay.Thorsten Frei, a member of Chancellor Angela Merkel's Christian Democrats (CDU) told Die Weltdaily that a mosque tax was "an important step" that would allow "Islam in Germany to emancipate itself from foreign states."In Germany, church taxes are collected from practicing Catholics and Protestants in order to fund church activities. They are collected by the state and then transferred to religious authorities. In the absence of a similar tax, mosques in Germany are reliant upon donations, raising concerns about possible financing by foreign organizations and governments, which has sometimes prompted questions about the promotion of fundamentalist ideologies. For example, there has been growing concern about the influence of the Turkish-Islamic Union for Religious Affairs (DITIB), an arm of the Turkish government based in Germany. Officials estimates report that there are between 4.4 and 4.7 million Muslims living in Germany, but those figures include people whose families are Muslim by tradition and the number of practicing Muslims could be much lower.

Outrage After Swedish TV Downplays Gruesome ISIS Beheadings, Threatens Prison For Sharing Video - Swedish state broadcaster SVT has outraged viewers after they ran an article claiming that the gruesome ISIS-inspired murder of two Scandinavian girls in Morocco "had nothing to do with Islam," before warning Swedes that sharing a graphic beheading video of the incident could result in up to four years of imprisonment. Maren Ueland, 28, of Norway and Louisa Vesterager Jespersen, 24, of Denmark were murdered while backpacking in the High Atlas mountains of Morocco. Both girls were stabbed multiple times, while one of them was beheaded on video. The culprits can then be seen pledging allegiance to the Islamic State leader Abu Bakr Al-Baghdadi. The ISIS fanatics gloated about the killing - while images of the killing were posted to the Facebook page of Ueland's mother, and the video was sent via Private Message to Ms. Jesperson's friends, according to the Daily Mail. The clip, in which a suspected ISIS terrorist shouts 'it's Allah's will', was also sent to friends of Ms Jespersen via 'private messenger', it has been claimed.It has since been revealed that horrific images of the slain tourists have been posted on the Facebook page of Ms Ueland's mother Irene. Some Moroccans bizarrely posted the images in a misguided bid to express sympathy along with calls for the killers to be executed. Earlier, it was claimed that footage itself had been sent to friends of Ms Jespersen. While it is not clear exactly who sent them the footage, there  will be strong suspicions it would have been from warped ISIS sympathisers. -Daily Mail    During a Christmas Eve report on the murders SVT made no mention of the fact that one of the women was beheaded, nor the ISIS link, called their injuries "knife damage," yet warned viewers of the legal risks of sharing the video of the incident.

Al Qaeda Plotting New Plane Attacks in Europe, Security Minister Warns - A “resurgent” Al-Qaeda is targeting Europe for terror attacks against airliners and airports, the security minister has warned. Ben Wallace said the decline of Isis – after becoming “the latest terrorist boy band” – had created renewed space for the perpetrators of the 9/11 atrocity in 2001. He revealed the government was ploughing £25m into a research programme to protect planes from new methods of explosion and “insider threats”.And he warned: “The aviation threat is real. Aviation is still a blue riband event for these terrorists.“Al-Qaeda are resurgent. They have reorganised. They are pushing more and more plots towards Europe and have become familiar with new methods and still aspire to aviation attacks.” Speaking to The Sunday Times, Mr Wallace said improvements in airport security meant terrorists were less likely to smuggle explosive through terminal security systems:“They have explored other ways of getting bombs on planes. We’ve talked publicly about an insider threat issue. If you can’t get in the front door, you’re going to try to get in the back door,” the minister said. He pointed to a failed attack against an Australian airliner in July 2017 as evidence that aviation targets are still a favourite with terrorists: “In 2019, we should be alert to al-Qaeda. They are re-energising some previous links and support and their ambition towards aviation is real. We saw in Australia that terrorists do what works and they don’t give up.”

Yellow Vests Chase French Police Out Of Champs Elysees In Pre-Christmas Rumble - France's Yellow Vest protests continued into their sixth week on Saturday - albeit in much smaller numbers. France's Interior Ministry reported 23,800 protesters came out across the country as of 2 p.m. local time Saturday, vs. 66,000 last weekend, and 136,000 two weeks ago. 142 people were arrested in Paris by 7 p.m. - down from 170 the week before. The Macron government has tried to contain the protests - offering economic concessions to try and curb anger over a fuel tax hike and other grievances which have brought protesters out en masse. Saturday's protests started off peaceful as the diminished number of demonstrators appeared to be less organized in previous weeks. "The mobilization is quieter, we’re in a holiday season," Yellow Vest organizer Paul Marra said on national television. Several hundred gathered near the Sacré Coeur Basilica in the Paris neighborhood of Montmartre, before making their way toward the Palais Garnier opera house. Most stores and restaurants remained open, and protesters intermingled with Christmas shoppers. -WSJThen things grew tense as violence broke out. At one point a group of Yellow Vests reported to be in the famous Champs Elysees were filmed throwing road cones at police as they drove away from the scene, while police deployed tear gas as clashes broke out.   Macronists in full retreat from the #ChampsElysees as the Free French Revolutionaries Brigade of the Manifest Victory seize control of the area. pic.twitter.com/M5zcjj7VZF  — Bellingdog (@Bellingdawg) December 22, 2018

 French “yellow vest” protesters mount pre-Christmas protest against Macron -- On Saturday, tens of thousands of “yellow vest” protesters demonstrated in France, amid a growing strike wave in neighboring Spain and in Portugal, where protesters also donned yellow vests. Thousands of people joined protest marches in France’s major cities, or blockaded highway intersections and France’s borders with Spain, Italy or Germany, to express their opposition to Macron and the European Union (EU).  According to the Interior Ministry, there were 2,000 “yellow vest” demonstrators in Paris, where protesters divided themselves between the Champs-Élysées and Montmartre, after having tricked police into thinking they were marching on Versailles. The authorities had preemptively shut down the Versailles Palace, next to which they stationed water cannons. In the provinces, according to official figures, thousands demonstrated in Bordeaux, Toulouse and Lille, while hundreds protested in Nantes, Marseille and Lyon.As usual, the security forces reacted with violent repression. In Paris they arrested Eric Drouet, a truck driver who helped launch the “yellow vest” protests on Facebook, alleging that he had a “sort of nightstick.” Another widely circulated video showed a policeman drawing his pistol and taking aim at protesters after throwing stun grenades unprovoked at the protesters.The mobilization was a rebuke to Interior Minister Christophe Castaner, who last week declared that on the “yellow vest” protests, “It’s enough,” and ordered police to smash highway blockades. After more than a month of protests and violent police repression of demonstrators, however, the movement is still very widely popular. It has 70 percent support in the French public, and various polls say that between 54 and 62 percent of French people want the movement to continue.  Citing Interior Ministry figures—showing 40,000 protesters Saturday, well less than the 125,000 it announced after the first protest on November 17—the French media are all predicting the imminent end of the movement and a return to order.

The anger of the ‘gilets jaunes’ - It was government policies that thrust the tax debate centre stage. With rising mass unemployment and greater international competition, politicians have gradually abandoned intervention on the primary division of revenue between wages and profits. In recent years, the social question — formulated in terms of sharing profits — has been replaced by a tax question, deployed to win working-class support. In 2007, Nicolas Sarkozy’s slogan — ‘Work more to earn more’ — and plans to make overtime tax exempt appealed to many working-class voters. In 2012, François Hollande gave his manifesto popular appeal with the promise of a new 75% tax rate on annual income over €1m, though the policy was so poorly conceived that it was thrown out by the Constitutional Council. In 2017, Emmanuel Macron used a promise to abolish residence tax to offset his image as a candidate of the elites, but later announced it would be phased out over three years.  There is a major paradox at the root of this politicisation of tax: the working class are now the group most likely to criticise the taxation level, even though they benefit most from the tax-based redistribution system. The degree of dissatisfaction varies geographically. People furthest from the big cities are most likely to feel unfairly taxed; those in the countryside and outer suburbs are much more critical of the system than Parisians. After several years of policies intended to encourage property ownership, many lower-income households who took on debt to buy their homes are also suffering from property tax rises, which are being used to compensate for reduced central funding for local authorities.

Yellow Jackets head to Portugal - France’s prototype gilet jaune was, reportedly, a BMW-loving Portuguese bricklayer called Leandro Nogueira whose Facebook rage against reduced speed limits ignited traffic-disrupting demonstrations around his home in rural Dordogne.After escalating into a nationwide revolt against the French government, the Yellow Jackets headed to Nogueira’s homeland Friday with plans for a nationwide day of action under the slogan "Vamos Parar Portugal" (Let’s bring Portugal to a halt).Their plans for street protests and highway blockages were the most ambitious of a series of copycat protests around Europe in the wake of the prolonged French unrest.In the end, however, the Portuguese edition was a flop, suggesting the Yellow Jacket revolt may have peaked. Rather than the 10,000 plus expected by organizers, only a few dozen protesters donned high-visibility vests for largely symbolic protests in cities around Portugal. Heavily outnumbered by police, they briefly slowed traffic in a number of places, notably the northern cities of Braga and Porto and at a roundabout in central Lisbon. In the capital, about 200 protesters showed up. Although there were three arrests, the demonstrations were mostly peaceful. Although violent Yellow Jackets protests spilled over into Belgium, most attempts to muster similar anti-establishment demos have fallen flat. “It’s very hard to see the gilets jaunes experiment replicated elsewhere. It’s a very French story,” said Philippe Marlière, professor in French and European politics at University College London.

Hundreds join ‘yellow vest’ protest march in Dublin - Hundreds of people have attended a “yellow vest” protest in the centre of Dublin against the perceived failures of the Irish government. In solidarity with the French yellow vest demonstrations, a group called Yellow Vests Ireland took to the streets on Saturday afternoon.Protesters wore hi-visibility jackets and chanted anti-Government slogans including: “Banks got bailed out, we got sold out”.Those who gathered outside the Custom House overlooking the River Liffey said they planned to march to Parliament at Leinster House every Saturday into the new year.Vulture Funds can buy debt for as a little as 4 cent to every €1 and sue for the full billed amount from a customer, with legal fees. What is right about a system that supports that corruption and extortion of the working class? #corruption #vulturefunds pic.twitter.com/sexQwT6Ztx— Yellow Vests Ireland (@yellowvesteire) December 20, 2018Their aims include an immediate halt on all housing evictions, the resignation of Taoiseach Leo Varadkar and Health Minister Simon Harris, a cap on bedroom rent and legalisation of medicinal cannabis.Organisers said the movement is “recognition of the desire and right of all people to live, work and thrive in a safe modern and dignified manner”. The demonstrators blocked traffic in the city centre for a brief period.

French economy to temporarily overtake UK after Brexit - France will overtake the United Kingdom to become the world's sixth biggest economy next year as the impact of Brexit bites, a report has said. The Centre for Economics and Business Research said "disruption" to the British economy was inevitable due to lower inward and business investment. However, the CEBR's World Economic League Table report says post-Brexit Britain will return to the sixth spot by 2020 - a position it is expected to retain through to 2033. The forecast also suggests that even if Britain's departure from the European Union leads to the secession of Scotland and Northern Ireland, the rest of the UK is forecast to be a larger economy than France by 2026. The United States remains the world's largest economy, but China is predicted to take the top spot by 2032. Currency collapses in many emerging economies in 2018 have led to falls in the rankings for Argentina (down four places to 30th), Pakistan (down three to 44th) and Iran (down ten places to 40th). Deputy chairman Douglas McWilliams said: "The World Economic League Table shows that despite global uncertainty and the tightening in US monetary policy which has pushed down some of the emerging market currencies, the 21st century is still likely to be the Asian century.

May Prepares Secret Brexit Plan B To Avoid No Deal Armageddon -- Three weeks have passed, and we're back at 'Plan B'. After months of pushing an EU-backed deal that has almost no chance of passing Parliament (at least, as of now), Theresa May's strategizing as she seeks to run out the clock until Brexit day has come to resemble a nightmarish loop: May tries to whip up votes for her deal, MPs either resign, or threaten to resign, reports are floating saying May and her cabinet are considering a second referendum/Plan B/calling off Brexit, those reports are promptly denied, May begs the EU for more concessions, the EU tells her to drop dead, and then we're back to whipping up votes for the draft plan. Theresa May has been stuck in neutral for weeks now, having survived a no confidence vote, and Labour having backed down on a formal challenge to her government, May has called for a vote on her deal on Jan. 14 - a vote that, though the margin has reportedly been whittled to just 20 MPs, is still widely expected to fail. And as May's minority government struggles to win the support of the 10 DUP MPs who have helped prop up her minority government (and who have exercised an outsize influence on the process since May's general election gambit last summer resulted in disaster for the conservatives), reports are again circulating that May & Co. are considering a variety of "dramatic" alternatives should her deal be defeated - including a possible Plan B Brexit deal that would lay the foundation for a 'Super Norway' trade arrangement, delaying 'Brexit Day' or calling for a second referendum.   Theresa May’s senior team are wrestling with the same question: What should she do if her deal is thrown out? In private, the options on the table are dramatic and include postponing the divorce from the European Union, calling another referendum or even announcing fresh national elections. May is trying everything she can to win support among increasingly suspicious lawmakers for the unpopular divorce settlement she’s negotiated. She was forced to pull out of a vote on it on Dec. 11 and has now rescheduled the ballot for the week of Jan. 14.

 May cuts cabinet break short to rally Brexit deal support -- Theresa May has cut short her cabinet ministers’ Christmas break, summoning them to a meeting to discuss a no-deal Brexit on January 2, as the UK prime minister tries to ramp up pressure on her critics. Tory officials have expressed growing confidence that Mrs May’s Brexit deal will pass the House of Commons next month, although they see it as an attritional struggle that may involve the bill being defeated on the first and even second attempt. The prime minister pulled the so-called meaningful vote two weeks ago, fearing a heavy defeat by MPs. Her tactics now hinge on winning over the Democratic Unionist party and maximising the threat of a no-deal Brexit. Michael Gove, environment secretary, is said by allies to be “petrified” of a disorderly no deal, which he believes could leave Britain with severe food shortages, if the Dover-Calais route becomes blocked. Stephen Barclay, the Brexit secretary, will lead the cabinet meeting on no-deal planning on January 2, the week before debates begin in the Commons. One minister described the meeting as “all about show really. It’s to prove that we are pulling out the stops to prepare for the worst”. Mrs May believes that the DUP are the key to winning parliamentary approval for her deal. Downing Street remains hopeful that Arlene Foster’s party can be won over by new concessions from Brussels on the Irish backstop, probably in the form of a separate legal document to the withdrawal deal. Olly Robbins, Mrs May’s chief Brexit adviser, was in Brussels this week for talks. A European Commission spokesman said that there was no further negotiation because the withdrawal agreement had been agreed. “It’s like dominoes,” said one ally of the prime minister. “If we can bring the DUP on board, then some of our lot will follow.” The DUP has only 10 MPs, whereas as many as 110 Tory Eurosceptics had said they would vote against the deal last month.

 Royal Bank of Scotland (RBS) applies for German banking license -- Royal Bank of Scotland Group (RBS) has applied for a banking license in Germany. An RBS spokeswoman told DW the move was part of the bank's planning for the withdrawal of the United Kingdom from the European Union. RBS plans to replace its existing Frankfurt branch with a newly licensed unit that will act as a regional "payments hub." It is the bank's first acquisition since the financial crisis in 2008.The new unit will process and settle euro-denominated payments, manage euro liquidity, and offer services to large German clients. It should allow RBS to continue to benefit from passporting rights for cross-border access to EU clients.

Inside the People’s Vote campaign’s final push to stop Brexit— The People's Vote campaign for a second Brexit referendum is on the brink of recruiting at least two Conservative MPs, including one government minister, as it prepares for a pivotal few months in its mission to stop the UK leaving the European Union. The campaign is gaining momentum amid increasing uncertainty over Brexit. The number of MPs behind it is growing and Theresa May is now a regular user of the term "People's Vote." "We live rent-free in the prime minister's head these days," one insider told Business Insider last week, while one of the group's senior figures said: "I'm chuffed ... it means we get coverage even when we don't do anything!" The only occasions May actually uses the term are to rule it out altogether. The prime minister is completely against another referendum. She even felt compelled to use a House of Commons statement to attack the idea last week. Nevertheless, the People's Vote campaign — which brings together a host of anti-Brexit groups — is increasingly confident that bereft of other options, May will use another vote to break the current parliamentary stalemate. A senior campaign figure told Business Insider this week that at least two more Conservative MPs would declare their support next month. The pair is set to be a current government minister and an MP from the backbenches. They will follow in the footsteps of ex-transport minister Jo Johnson and former universities and science minister Sam Gyimah, who both quit the government to back a People's Vote over the last few weeks.The former in particular caused ripples in Westminster, taking to a stage with the unlikely pro-Remain hero and former footballer Gary Lineker at a People's Vote rally across the road from the Houses of Parliament in November.

Brexit Britain will be just fine — There’s some James Bond film in which a power-crazed baddie is planning to blow up the world and a timer has been activated. In the closing scenes at the villain’s lair, the countdown, complete with (inevitably) a Teutonic voice, begins: “Ten minutes und kounting! Nine minutes und kounting!” Here in Brexit-crazed Westminster, that scene sounds all too familiar. There are now fewer than 100 days until we are scheduled to leave the European Union on March 29. As European Commission bigshots like to say, "the clock is ticking." Heaven knows what is going to happen: Will British Prime Minister Theresa May — still alive, and even a little stronger than she was a couple of weeks ago — elicit assurances from Brussels that will help her sell her Withdrawal Agreement deal to a skeptical House of Commons? Will pro-Remain MPs somehow force a second referendum that could stop Brexit? Will we sail out of the EU without a treaty? The only thing anyone knows for sure is that this particular thriller must soon end. By March 29 we will know if the villain has succeeded in his dastardly plot or if (spoiler alert) 007 can again save the world.   Pessimists tend to prosper in uncertain times, and British politics at present is very much a catastrophists’ market. Critics and doomsayers are agitating more noisily as the prospect of the U.K. leaving without a deal becomes more likely. We’re being told British shops will run out of food and medicines, aeroplanes will be grounded, and the economy could shrink by as much as 8 percent (that's the Bank of England's worst case scenario) if we leave the EU without a deal in place. Officials in both London and Brussels are talking publicly aboutcontingency planning, while Labour and pro-EU Tory MPs have repeatedly pressed May to rule it out. In the last Cabinet meeting of the year, Work and Pensions Secretary Amber Rudd supposedly compared Brexit to a car crash and Justice Secretary David Gauke said the concept of a "managed no-deal" was as mythical as a unicorn.  But doomsayers should hold their fire — Britain will be just fine.

 Business confidence in UK at lowest ebb since Brexit vote – IoD - Top concern for directors are the UK’s general economic condition, followed by uncertainty over Brexit and a shortage of skilled workers. Photograph: Christopher Furlong/Getty Images Business confidence in the British economy has fallen to the lowest level since the EU referendum, according to a survey of company directors. Business leaders in all parts of the UK are gloomy about 2019, said the Institute of Directors, with Scotland and London – areas where voters were heavily in favour of remaining in the EU – most pessimistic. About 57% of more than 700 company directors surveyed expected things to get worse, compared with less than 20% predicting improvement – the worse net score since the IoD started its confidence survey in 2016. Leaders of large firms were most likely to anticipate a downturn. The top concern for directors remains the UK’s general economic condition, followed by the uncertain future trading relationship with the EU and a shortage of skilled workers to fill jobs. However, they were relatively upbeat about their own firm’s prospects, with a net majority of 30% expressing optimism. Tej Parikh, a senior economist at the IoD, said: “Business leaders are looking ahead to the new year with trepidation about the economy. While we saw cautious optimism emerging when the Brexit talks appeared to be moving towards a transition period after March 2019, that has utterly dissipated now. “There can be no doubt that the tumultuous Brexit process is having a damaging impact on firms’ outlooks. The prospect of a no-deal in the near future will be weighing heavily on directors’ minds.”

MPs urge Commons veto over post-Brexit trade agreements Parliament must be given a veto over any trade deals the UK signs after Brexit, a committee of MPs has urged. Ministers hope to begin negotiating deals with key partners once the UK leaves the EU in March and start implementing them from 2021 onwards. The International Trade Committee said MPs must have a "meaningful role" in ratifying deals, with scrutiny at an early stage and a decisive final vote. The government is not obliged to give Parliament a vote on treaties it signs. However, ministers bowed to pressure and agreed to give MPs a vote on the terms of the UK's withdrawal from the EU which, if the Commons approves it next month, will take the form of a treaty. Theresa May faces an uphill struggle getting the agreement through the Commons, having postponed the crucial vote earlier this month in the face of what looked like a heavy defeat. Many Tory MPs are concerned that the agreement will keep the UK indefinitely tied to EU rules and regulations, and hamper its ability to strike trade deals with countries such as the US and Canada. US President Donald Trump has questioned the value of a future trade deal with the UK if it is not able to alter its tariffs and regulations. But, at the same time, campaigners have warned that the UK may be forced to water down food safety, consumer protection and environmental standards to reach a deal with one of its largest trading partners.

EU planning to hit small businesses in UK with VAT bombshell after Brexit, MPs warn - MPs have warned of the dangers of the Brexit transition period after it emerged that hundreds of thousands of small businesses could be forced to pay VAT for the first time after Britain leaves the European Union. Brussels is preparing to reduce the threshold at which businesses start paying VAT from a turnover of £85,000 to £76,700 in a bid to "harmonise" tax systems. MPs on the EU scrutiny committee warned Britain will have to accept the move if it comes into force after Brexit in March 2019 because it will lose its right to veto the plans.Under the terms of the Prime Minister's deal, the UK will be required to implement the directive during the transition period, which could last until December 2022. The "backstop" arrangements in Mrs May's deal could require Northern Ireland to remain aligned with EU VAT law "indefinitely", meaning the new threshold could stay in place long after the transition is over. In a report the MPs said: "If the Agreement is ratified and the Directive took effect during the transition, the Treasury would have to transpose it into UK law. This could have significant implications for small businesses. "It is particularly concerning in this regard that the UK will lose its veto over the proposal on 29 March next year, but it could nevertheless apply here in full." The committee said the lower threshold would not apply if the UK leaves the EU without a deal as Britain would then be "free to amend or repeal elements of its VAT law".

No-deal Brexit could put public at risk, warns Met chief The public could be put at risk if the UK leaves the EU in March without an official agreement, the UK's most senior police officer has said. Met Commissioner Cressida Dick said a no-deal exit would threaten access to EU-wide criminal databases and make it harder to extradite people from abroad. She told the BBC the Met was talking to other police forces across Europe about contingency arrangements if needed. Parliament will vote on the UK's proposed withdrawal deal next month. The UK is due to leave the EU on 29 March 2019. The agreement negotiated by Theresa May with the EU - which sets the terms of the UK's exit and a declaration on future relations - will only come into force if MPs approve it. The prime minister has said she wants the UK to have the most comprehensive security partnership with the EU of any country outside the bloc. After Brexit, the UK will cease to be a member of law enforcement agencies Europol and Eurojust, and will no longer be a member of the European Arrest Warrant scheme, which enables EU nations to fast-track the extradition of criminal suspects. The agreement on future relations commits the two sides to putting in place reciprocal arrangements to try and match existing law enforcement and judicial co-operation. The priority areas for future law enforcement co-operation include the exchange of data such as DNA, fingerprints, passenger records, wanted alerts, and vehicle registrations. The EU needs the UK in many of these areas, but the document is not legally binding and also makes clear that there is a variety of technical issues to be overcome.

Gatwick- man and woman questioned over ‘criminal use of drones’ - A man and woman were being questioned by police over the “criminal use of drones” as Gatwick airport slowly returned to normal after days of Christmas travel chaos. Following the most disruptive incident ever caused by a drone at a major international airport, detectives continued to interview a 47-year-old man and a 54-year-old woman from Crawley as forensic officers searched a house in the West Sussex town, three miles south of Gatwick. A series of drone sightings above its runway had forced Britain’s second-largest airport to shut three times in three days, leaving around 140,000 passengers stranded. It was the airport’s biggest disruption since the Icelandic volcanic ash cloud of 2010. Terminals at Gatwick were broadly back to normal last night with the airport on course to run “a full schedule” of 757 flights, carrying 124,484 passengers. “Safety is Gatwick’s top priority and we are grateful for passengers’ continued patience as we work to get them to their destination in time for Christmas,” said a spokesman. Those arriving at the airport told a different story, however, describing delays of many hours involving road and ferry diversions. This was the knock-on effect of more than 1,000 flights being cancelled or diverted during the 36 hours of disruption at what is the world’s second-busiest single-runway airport. The man and woman are being questioned “on suspicion of disrupting services of civil aviation in a way likely to endanger the safety of operations or persons” – offences that carry a maximum sentence of life imprisonment on conviction. 

Puzzling Events Surround London-Gatwick Drone Investigation  - Reports of drones caused havoc for passengers and airlines last week at Gatwick airport (LGW) outside of London. Drone sightings reported in the area lead the second busiest airport in Britain to be shut down for 36 hours over three days. The results: around 1,000 cancelled flights and an estimated 140,000 to 200,000 passengers’ travel plans being impacted.The investigation at Gatwick has been nothing short of baffling so far:

• Police say they have 67 eye witnesses statements to the events, however no video exists; this with Gatwick being a heavily surveilled area and smartphones nearly as ubiquitous as air.
• Police arrested and held a British couple for 36 hours even as the husband’s employer made repeated attempts to tell the authorities that the man was with him during the time of the incident. The couple was released without any charges.
• An “unidentified military technology” was deployed to the airport to regain control of the area. A BBC report says it was possibly the Israeli developed “Drone Dome,” which can be used to jam communication systems between a drone and its operator. However, the system doesn’t allow for tracking of said drone or operator.
• A damaged drone was recovered near the airport and is being examined for forensic evidence.
• Sussex police made a statement saying that it’s possible an airborne drone was never in the area during the event and that the multiple eye witnesses could be mistaken.

 Drones for Christmas -- I'm beginning to think that unmanned aerial vehicles—usually referred to as drones—are going to be next year's must-have Christmas gift after their stunning Christmas-time performance at London's Gatwick Airport.  For those who missed the excitement, mysterious drones appeared at Gatwick last week and shut down the entire airport for three days as security officials could not be certain what threat they posed. Those officials finally deployed "unidentified military technology" to protect the airport, and they have since arrested a man and a woman, neither of whom have been identified. We might have guessed that giving civilians access to drone technology for fun and profit would lead to problems. After all, their initial use was military for spying on enemies and then assassinating them when desired—extrajudicial killings with a Jetsons-like twist.  But anyone who gets a drone next Christmas could decide to park one near your home and take pictures from a discreet distance. Gatwick is lucky to have a gaggle of security people to counter drones that threaten it. What could you do in your home? Would you even notice a drone hovering several hundred feet away? An irate neighbor armed with a drone might decide to surreptitiously drop dog poop on your front steps. If the same neighbor is a little crazy, he might mount a gun on the drone and shoot you from a safe distance. How will anyone know who even shot you? I can imagine the public demanding drone control legislation and (at least in the United States) the National Drone Association mobilizing its members to protect the right to bear drones. The association's solution to the threat from drones will be for every home and business to have its own 24-hour sentry drone ready to shoot down invaders—a sort of mini Battle of Britain in every neighborhood. This absurd scenario has already become a reality at Gatwick Airport. It stems from our belief that new technologies cannot and should not be stopped—and that (again, at least  in the United States) we citizens have no right to demand that those new technologies which are potentially dangerous to the public be shown safe and useful before they are unleashed in an uncontrolled experiment.

Gatwick airport open but location of drones still up in the air - Police are yet to get to the bottom of mysterious drones reported hovering over London's Gatwick Airport that brought incoming and outgoing flights at to a standstill over multiple days. Sussex Police were hopeful they had halted the disruptive and costly drone incursions during one of the heaviest travel periods of the year when they arrested a couple who live near the airport on Friday. But the pair were released on Sunday, and police said they were no longer suspects.Tens of thousands of passengers suffered through long flight delays or were stranded by cancellations after two drones were reported as being seen above the airfield at Gatwick on Wednesday night, prompting an immediate suspension of all air traffic. Flights were again suspended at Gatwick on Friday afternoon, after reports that another drone had been spotted over the airport.Sussex Chief Detective Jason Tingley said on Sunday h e could not rule out new drone activity at Gatwick or other UK airports.

Mental health and homelessness - Homelessness and rough sleeping have risen hugely in recent years. Government statistics show that between 2010-15, estimates of the number of those sleeping rough rose by 102%. This is partly due to changes in methodology to correct suspected under-reporting of the problem. But the Government admits that there is a real and considerable increase in the numbers sleeping rough. Its own figures show that in Autumn 2017, 4,751 people slept rough on a typical night, an increase in 15% since the previous year. The homeless charity St. Mungo's identifies four causes for the increase in homelessness and rough sleeping:

• Increasing housing costs and welfare reform leading to homelessness 
• A shortage of supported housing 
• Homelessness services ‘silting up’ 
• More people from Central and Eastern Europe sleeping rough.

The last of these could reduce as the Government clamps down on EU migration after Brexit. But the other three are a direct consequence of government policies particularly since 2010. Unless these policies change, they can only get worse.The image many people have of a typical rough sleeper is a middle-aged white man with alcohol problems. But this is no longer the case. A 2018 report by the University of York highlights the changing composition of rough sleeping populations: A broad trend reported since the 1990s has been for increasing numbers of women to appear in the rough sleeping population, within a wider pattern of change that has seen the population shift from older, white, often alcohol-dependent and mobile men, towards a younger population with more complex needs. There have been major changes in health, social care, social housing and welfare systems, as well as in the UK housing and labour markets, along with significant cultural changes, and these data are within a longstanding pattern of increases in female youth homelessness.Today's rough sleepers are more likely to be young, more likely to be female (though men still make up by far the largest proportion), more likely to be from ethnic minority backgrounds, and more likely to have mental health problems. St. Mungo's says that around half of those living on the streets have mental health needs. Among women, the proportion is higher - as much as 60% in London.