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

Saturday, January 6, 2018

week ending Jan 6

Sloth-like Fed Shrinks Balance Sheet By 0.14% Or $6 Billion (Will Take 700 Weeks or 13.46 Years To Unwind) - The good news? The Fed continued to unwind its $4.4 TRILLION balance sheet. The bad news? The Fed is shrinking it at sloth-like speed. As an example, the latest SOMA report from the Fed on New York saw a $6 billion decline in the Fed balance sheet. That is only 0.14% per week. At this rate, it will take over 700 weeks (or 13.46 years) to unwind. This week, Treasury notes and Treasury bonds were the primary driver of the decline. Agency MBS? Not so much.  Here is a video of Fed Chair Janet Yellen shrinking The Fed’s balance sheet.  Yellen’s last presentation.

Fed Plans to Raise Rates in 2018 but Lacks Consensus on Frequency - — The Federal Reserve has entered 2018 without a clear plan for raising its benchmark interest rate and with the added uncertainty of an imminent change in its leadership.An account of the Fed’s final meeting of 2017, which the central bank published Wednesday, said officials generally agreed that the Fed should continue to raise its benchmark rate in the new year. But Fed officials expressed a range of views about the frequency of future hikes.Six of the 16 officials on the Federal Open Market Committee predicted during the December meeting that the Fed would raise rates three times in 2018. But six officials predicted two hikes or fewer and four officials predicted the Fed would raise rates at least four times.The decision about how often to raise rates will be made under new management. The Fed’s chairwoman, Janet L. Yellen, plans to leave the Fed in early February; her nominated successor, the Fed governor Jerome H. Powell, is awaiting a Senate confirmation vote. Last year was the first since the 2008 financial crisis that the Fed articulated a clear plan for monetary policy and stuck with it. The central bank said it would raise rates three times and did exactly that, with the third hike coming in December. The decision at that meeting to raise the benchmark rate into a range between 1.25 percent and 1.5 percent reflected the Fed’s optimistic expectations for the economy, the account said.Officials saw few serious dangers on the horizon, the account said. Most expected inflation to rebound from a long period of sluggishness and were not overly concerned about rising asset values. The S.&P. 500 stock index has climbed 19 percent over the last year. The Fed also predicted there would be a modest economic boost from the tax cuts President Trump that signed into law at the end of the year.

 FOMC Minutes: New Tax Law "would likely provide a modest boost to capital spending" --A couple of excerpts, the first on the economic impact of the new tax law, and the second on the yield curve. From the Fed: Minutes of the Federal Open Market Committee, December 12-13, 2017:Many participants judged that the proposed changes in business taxes, if enacted, would likely provide a modest boost to capital spending, al­though the magnitude of the effects was uncertain. The resulting increase in the capital stock could contribute to positive supply-side effects, including an expansion of potential output over the next few years. However, some business contacts and respondents to business surveys suggested that firms were cautious about expanding capital spending in response to the proposed tax changes or noted that the increase in cash flow that would result from corporate tax cuts was more likely to be used for mergers and acquisitions or for debt reduction and stock buybacks....Meeting participants also discussed the recent narrowing of the gap between the yields on long- and short-maturity nominal Treasury securities, which had resulted in a flatter profile of the term structure of interest rates. Among the factors contributing to the flattening, participants pointed to recent increases in the target range for the federal funds rate, reductions in investors' estimates of the longer-run neutral real interest rate, lower longer-term inflation expectations, and lower term premiums. They generally agreed that the current degree of flatness of the yield curve was not unusual by historical standards. However, several participants thought that it would be important to continue to monitor the slope of the yield curve. Some expressed concern that a possible future inversion of the yield curve, with short-term yields rising above those on longer-term Treasury securities, could portend an economic slowdown, noting that inversions have preceded recessions over the past several decades, or that a protracted yield curve inversion could adversely affect the financial condition of banks and other financial institutions and pose risks to financial stability. A couple of other participants viewed the flattening of the yield curve as an expected consequence of increases in the Committee's target range for the federal funds rate, and judged that a yield curve inversion under such circumstances would not necessarily foreshadow or cause an economic downturn.

 New York Fed makes rounds in search for next chief -- It may be the trickiest job to fill in central banking. And as the Federal Reserve Bank of New York search committee casts a wide net to find a replacement for its outgoing president, William Dudley, the wish list is getting long. Interviews with 10 members of the Fed’s advisory boards, which the committee is consulting, suggest they want a president with market expertise, crisis-management chops, strong leadership abilities, an eye on inequality and an ear for regional trends. The jury is out on whether he or she should be an economist, even though the New York Fed president traditionally plays a big role in guiding U.S. monetary policy. Some advisers are pushing for a woman or a minority and one of the search firms hired by the committee is focusing on just such picks. It’s a powerful position so the stakes are high, and the appointment will come amid broader changes in Fed leadership. Jerome Powell has been nominated to replace Janet Yellen as chairman in February and the vice chair slot is vacant. The New York president has a permanent vote on monetary policy, elevating the appointee relative to the other 11 regional Fed bank presidents, who vote on a rotating basis. The person oversees both big-bank supervision and market operations that manage the Fed’s policy rates and balance sheet, which it is carefully shrinking. And beyond that, the job entails keeping close tabs on the region’s diverse economy. 

 Procedural delay to slow, but not stop, top Fed, FHA, FDIC nominations — More than 100 pending Trump administration nominees must update their financial disclosures and have the White House resubmit their names for consideration by the Senate, including Fed Chair-designate Jerome Powell and Federal Deposit Insurance Corp. Chair-designate Jelena McWilliams.  When the Senate adjourned for the year, it did so without an agreement among senators that all pending nominations remain in play. According to published reports, Democrats were unwilling to go along with an agreement due to concerns about many of the nominees' qualifications. As a result, the administration must refile the paperwork for all outstanding nominations. That will delay the confirmation of top regulators, but it is highly unlikely to derail them.   "We generally assume that this procedural delay will add an additional 3-6 weeks to our estimated confirmation timelines," wrote Isaac Boltansky, an analyst with Compass Point.  The biggest impact for banks will be for Powell, whose confirmation may be pushed back to mid-February, according to Boltansky. Also affected is McWilliams, but as she has not had her confirmation hearing yet, her nomination was not expected to be acted upon in the immediate future.  Also impacted are Brian Montgomery, as head of the Federal Housing Administration; and Randal Quarles, who was confirmed last year as Fed vice chairman of banking supervision, and for a brief term on the Fed board, but must still be confirmed for a longer term as a member of the board.

Q4 GDP Forecasts -- From Merrill Lynch:Core capital goods shipments and orders were revised down in November. The trade deficit widened more than expected. These data sliced 0.2pp from 4Q GDP tracking, bringing us down to 2.3%.From the Altanta Fed: GDPNow The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2017 is 2.7 percent on January 5, down from 3.2 percent on January 3.From the NY Fed Nowcasting Report  The New York Fed Staff Nowcast stands at 4.0% for 2017:Q4 and 3.4% for 2018:Q1.CR Note: This is a wide range of forecasts (from 2.3% to 4.0%).Looking back at the October forecasts for Q3, Merrill was 3.0%, the Atlanta Fed at 2.7% and the NY Fed at 1.5% (the BEA reported 3.0% before revisions). For Q2, the July forecasts were Merrill at 2.1%, the Atlanta Fed at 2.5%, and the NY Fed at 2.0% (the BEA initially reported 2.6%).

Economists Are Saying We Will Have A Happy — Really Happy — New Year - It's New Year's Day, so it's time for football, hangovers, resolutions — and forecasts. With the first three, you're on your own. But for forecasts, we have economists to help. They get paid to peer into the future, and in general, they are seeing good times ahead, thanks to an upbeat business cycle."The stage is set for continued solid growth in 2018," Nariman Behravesh, chief economist at IHS Markit, said in his annual forecast. "While economic risks remain, most are low-level threats to the overall picture for 2018."That view is shared by most mainstream economists and stock market analysts. Here are a few of the typical comments issued recently by experts:

  • "Strong growth has helped move the economy to near, or even beyond, full employment," according to Lewis Alexander, Nomura chief U.S. economist. "Overall, our forecast is for the U.S. economy to continue to grow above potential."
  • "I expect double-digit returns for the S&P 500 again next year (including dividends) with continued corporate earnings improvement," wrote Chris Zaccarelli, chief investment officer for the Independent Advisor Alliance.
  • "We forecast 8-10% returns for the S&P 500 in 2018," said John Lynch, chief investment strategist for LPL Financial. "The S&P 500 is well positioned to generate strong earnings."

You get the picture: It's rosy.

The Debt Beneath – Debt is irrelevant and matters not. It’s different this time. That’s the message from politicians, markets and participants. Tax cuts pay for themselves (they do not), leverage doesn’t matter (it does) and the increased costs of servicing the debt as a result of rising rates will be offset by imaginary real wage growth to come (they won’t). But the calmest market waters in history continue to keep these illusions alive as asset prices keep levitating from record to record. Debt does matter and it was ironically left to Janet Yellen to voice any remnant concerns about the sustainability of debt to GDP: “It’s the type of thing that should keep people awake at nightshe said. With good reason:  After all the debt burden has never been higher and rates, following years of enabling the largest debt expansion in human history, are starting to rise in the US. In the larger historic context rates are still low, but let’s be clear, they are rising:  And with rising rates come questions of the sustainability of servicing incredibly high debt loads. The worldwide equity rally since the early 2016 lows has resulted in a massive increase in the market capitalization of global asset prices which have increased by over $25 trillion in value since then. As discussed in my 2017 Market Lessons US market capitalization is now north of 143% of US GDP. Low rates and free money in form of global QE and now US tax cuts make it all possible and consequence free. But is it?   Federal debt has increased by $2.1 trillion. Different management, same result and tax cuts will leave a revenue source gap in the long term budget and will add further to the debt: Corporate debt has increased by over $568B during the same timeframe: Household debt has increased by $364B: Revolving debt, you know the one subject to higher rates, is now exceeding $1 trillion, up over $100B in less than 2 years: Student loans continue to expand unabated, up by another $166B: And consumer loans on credit cards at commercial banks are up by another $100B since the February 2016 lows alone:  We don’t have full year end data yet, but there are indications on how the trend concluded:Shoppers in the U.S. racked up an average of $1,054 of debt this Christmas season — an increase of 5% over last year – 44% of shoppers racked up more than $1,000 in holiday debt, and 5% accumulated more than $5,000 in debt.” So you see a solid portion of the GDP growth you are seeing is debt spending related. It’s not as organic as it may seem. US government deficit spending filters its way into GDP as much as consumer debt spending.

US and North Korea closer to nuclear war than ever, warns US ex-military chief | South China Morning Post: The United States is now closer than it has ever been to a nuclear war with North Korea, a former top US military officer warned Sunday, saying he saw little prospect of a diplomatic solution. Mike Mullen, a former chairman of the US joint chiefs of staff, attributed the rising danger to Donald Trump’s “incredibly disruptive” presidency. “And in my view, an incredibly dangerous climate exists out there in that uncertainty with how this all ends up,” he said on ABC’s “This Week.” “One in particular that is top of the list is North Korea.” “We’re actually closer, in my view, to a nuclear war with North Korea and in that region than we have ever been,” he said, adding, “I don’t see the opportunities to solve this diplomatically at this particular point.” Mullen, who served as the top US military adviser to both presidents George W. Bush and Barack Obama, questioned whether Trump can be constrained by US Defence Secretary Jim Mattis, National Security Adviser H.R. McMaster or White House chief of staff John Kelly. “Will he follow through on his rhetoric? Or will we actually be able to get to a situation where it could be solved peacefully?” Mullen asked. “I’m just more inclined to see over time that the rhetoric seems to be where the president is, and that will limit the constraining ability that both Jim Mattis and H.R. McMaster and John Kelly have,” he said.Trump warned in a speech to the UN General Assembly in September that the United States “will have no choice but to totally destroy North Korea” if forced to defend itself or its allies. 

 Trump Warns Kim: "I've Got A Bigger Nuclear Button Than Yours" - Perhaps we should not be shocked any more by the tone of President Trump's tweets but he has kicked off 2018 with bang and his latest shot across North Korea's bow is quite stunning in both its seriousness and its juvenileness.  Apparently responding to what North Korean leader Kim Jong Un said in a New Year's Day speech - that he had a nuclear launch button at his desk, and that the international community would have to accept North Korea's status as a nuclear-armed nation as a "reality." President Trump responded by tweeting "Will someone from his depleted and food starved regime please inform him that I too have a Nuclear Button, but it is a much bigger & more powerful one than his, and my Button works!”  North Korean Leader Kim Jong Un just stated that the “Nuclear Button is on his desk at all times.” Will someone from his depleted and food starved regime please inform him that I too have a Nuclear Button, but it is a much bigger & more powerful one than his, and my Button works! — Donald J. Trump (@realDonaldTrump) January 3, 2018

In Bizarre Tweetstorm, Trump Defends His Sanity: "I Am A Very Stable Genius” - Since the first excerpts from Michael Wolff’s "Fire and Fury" were published on Wednesday, its numerous (in)credulity-inducing details have dominated the news cycle and most of the official press briefings since. President Donald Trump has insisted that Wolff had "zero" access, and that the book’s contents are gossip leaked by former White House Chief Strategist and Trump campaign leader Steve Bannon, whom Trump rechristened “Sloppy Steve” and slapped with a cease-and-desist.And, as Trump tends to do, he doubled down on half-a-week’s worth of denials and repudiations in a bizarre Saturday morning tweetstorm that saw him defending his sanity and intelligence while lashing out at two of his favorite targets: Hillary Clinton and former ABC White House Correspondent Brian Ross. Far from being mentally infirm, Trump insists that his “mental stability” has been one of his greatest assets “throughout my life,” along with the fact he’s "like, really smart." Furthermore, the fact that he was able to win the presidency on his first attempt, with no prior experience in politics (except for his 2000 bid for the Reform Party nomination, of course) prove that he’s not only a genius but "a very stable genius" at that. Saturday morning’s tweets essentially pick up from where Trump left off last night, when he tweeted that "Sloppy Steve" "cried when he got fired and begged for his job." Michael Wolff is a total loser who made up stories in order to sell this really boring and untruthful book. He used Sloppy Steve Bannon, who cried when he got fired and begged for his job. Now Sloppy Steve has been dumped like a dog by almost everyone. Too bad! — Donald J. Trump (@realDonaldTrump) January 6, 2018  Actually, throughout my life, my two greatest assets have been mental stability and being, like, really smart. Crooked Hillary Clinton also played these cards very hard and, as everyone knows, went down in flames. I went from VERY successful businessman, to top T.V. Star..... President of the United States (on my first try). I think that would qualify as not smart, but genius....and a very stable genius at that! — Donald J. Trump (@realDonaldTrump) January 6, 2018

How Trump could kill the Iran nuclear deal in January - Politico - President Donald Trump allowed the Iran nuclear deal to survive through 2017, but the new year will offer him another chance to blow up the agreement — and critics and supporters alike believe he may take it. By mid-January, the president will face new legal deadlines to choose whether to slap U.S. sanctions back on Tehran. Senior lawmakers and some of Trump’s top national security officials are trying to preserve the agreement. But the deal’s backers fear Trump has grown more willing to reject the counsel of his foreign policy team, as he did with his recent decision to recognize Jerusalem as Israel’s capital. The decision represents an opportunity for Trump to deliver on a campaign promise to rip up the Iran deal, one he has repeatedly deferred at the urging of senior officials. When Trump last publicly addressed the status of the Iran agreement, in mid-October, he indicated his patience had worn thin with what he has called “the worst deal ever,” and demanded that Congress and European countries take action to address what he considers the deal’s weaknesses. “[I]n the event we are not able to reach a solution working with Congress and our allies, then the agreement will be terminated,” Trump said in an October 13 speech. The three months since then have shown little progress toward such a solution. In an effort to save the deal, members of Congress are discussing legislation that would give Trump political cover to extend the deal. But it’s not clear whether Republicans and Democrats can agree on even a symbolic measure in time.

Erasing Obama’s Iran Success - Those wishing to kill the Joint Comprehensive Plan of Action (JCPOA), the agreement that restricts Iran’s nuclear program, have never given up. The agreement’s ever-lengthening successful record, now more than two years old, of keeping closed all possible pathways to an Iranian nuclear weapon ought to have discouraged would-be deal-slayers. But the slayers got a new lease on life with the election of Donald Trump, who, as part of his program of opposing whatever Barack Obama favored and destroying whatever he accomplished, has consistently berated the JCPOA.   The themes that the agreement’s opponents push are now familiar. One of those themes is that the Obama administration was over-eager to get the agreement and consequently gave up the store to conclude the accord. This argument never made sense, given the terms of the JCPOA. The asymmetries in the agreement go against the Iranians, who came under a more intrusive nuclear inspection arrangement than any other country has ever willingly accepted, and who had to fulfill almost all of their obligations to break down and set back their nuclear program before gaining an ounce of additional sanctions relief. But the argument has had the attraction for the opponents of not being directly disprovable as far as any mindset of former officials is concerned, and of jibing with the opponents’ further theme of a mythical “better deal” that supposedly was there for the taking. An additional theme from the opponents has been that the JCPOA fails to address other Iranian policies and actions that have ritualistically come to be labeled as nefarious, malign, destabilizing behavior (NMDB). This argument hasn’t made sense either, given that it was clear from the outset of negotiations that no agreement restricting Iran’s nuclear program would be possible if the parties negotiating the agreement dumped onto the table their other grievances against each other. Any such futile expansion of the negotiating agenda would have meant that the Iranian nuclear program would have advanced ever closer to the capability of making a bomb and there still would have been the NMDB. Nonetheless, the theme has been a favorite of opponents because it distracts attention from the success of the JCPOA in preventing an Iranian nuke, because there always will be some sort of objectionable Iranian action that can be pointed out, and because the NMDB mantra has now been chanted so much that it has come to be accepted as an unquestioned given.

Trump’s CIA Director Reaches Out Directly to Iranian Foe -- Speaking at the annual Reagan National Defense Forum, CIA Director Mike Pompeo recently disclosed that he sent a direct communication to Iranian Major General Qassem Soleimani, the longtime commander of the Islamic Revolutionary Guard’s Quds Force division responsible for Iran’s overseas paramilitary and intelligence activity. “What we were communicating to him in that letter was that we will hold he and Iran accountable for any attacks on American interests in Iraq by forces that are under their control,” Pompeo told the audience. “We wanted to make sure he and the leadership in Iran understood that in a way that was crystal clear.”To some who have operated in the clandestine and murky world of intelligence tradecraft, Pompeo’s maneuver was a surprise. Former CIA director Mike Hayden told Newsweek that he couldn’t recall ever doing such a thing during his tenure, while others labeled Pompeo’s move a too-clever-by-half strategy to signal toughness to Soleimani, who retains enormous power and influence within the Iranian political system.  But regardless of the critiques (and the fact that Soleimani reportedly sent back the letter without opening it), there are legitimate and wise reasons for a top U.S. national security official to make contact with such an adversary. History has demonstrated that back-channel negotiations (and even mere discussions on topics of mutual concern) can, if accepted as promising and sincere by the other side, result in greater understanding among competitors and perhaps even the beginning of a more formal negotiating process. Pompeo’s move was a good idea, and here are the reasons why.

The U.S. Wanted to Discuss Iran. Russia Brought Up Black Lives Matter. -  Efforts by the Trump administration to marshal a muscular international response to Iran’s crackdown on anti-government protesters appeared to backfire on Friday, as members of the United Nations Security Council instead used a special session called by the United States to lecture the American ambassador on the proper purpose of the body and to reaffirm support for the Iran nuclear agreement.It was an afternoon of high diplomatic theater that began with a passionate denunciation of Iran’s “oppressive government” by the American ambassador, Nikki R. Haley, and ended with the Iranian ambassador delivering a lengthy history of popular revolt in the United States — from the violent demonstrations at the Democratic National Convention in 1968 to the Occupy Wall Street protests in 2011.In the interim, Council members did, one by one, condemn the Iranian government’s response during more than a week of protests. . In her remarks, Ms. Haley said that the United States would remain steadfastly behind the Iranian protesters.But there was evidence of a mini-revolt brewing within the Security Council chamber, not only among traditional adversaries like Russia and China, but also among close allies like France and Sweden. Many seemed to fear that the outspoken criticism by the Americans was simply a pretext to undermine the Iran nuclear deal, which President Trump has long desired to scrap.It is not precisely clear what Ms. Haley hoped to achieve by convening the session on Friday, which was not previously scheduled. Until the meeting began at 3 p.m., it was not even certain whether Ms. Haley would be able to secure the votes needed to call the session to order.But even before the session began, France’s ambassador, François Delattre, warned against “instrumentalization” of the protests “from the outside.”Speaking before the Council, he went further. “We must be wary of any attempt to exploit this crisis for personal ends, which would have a diametrically opposed outcome to that which is wished,” Mr. Delattre said.

US Intelligence Reportedly Gives Israel Green Light To Assassinate Iran's Top General -  According to reports circulating widely in Israeli media today, the United States has quietly given Israel the green light to assassinate Iran's top military officer, Iranian Revolutionary Guards al-Quds Force commander Maj. Gen. Qassem Soleimani. The leader of Iran's most elite force also coordinates military activity between the Islamic Republic and Syria, Iraq, Hezbollah, and Hamas - a position he's filled since 1998 - and as Quds Force commander reports directly to the Supreme Leader of Iran, Ali Khamenei, and oversees Iran's covert operations in foreign countries. Iran's Revolutionary Guards have vowed to crack harshly down on protests currently gripping multiple major cities across the country, now in their fifth day, and after a particularly bloody night which saw 12 demonstrators killed - some of them reportedly shot by security forces. The report, though unconfirmed, originated in a Kuwaiti newspaper and is now going viral through a Times of Israel story. The Times of Israel summarizes the context as follows: Thursday’s report by al-Jarida, which has been known to publish improbable-sounding stories about Israel, was widely picked up by Israeli media. There was no immediate reaction to the report from Jerusalem or Washington. Three years ago, Israel came close to assassinating Soleimani near Damascus, al-Jarida quoted unnamed source as saying, but the Americans tipped off the Iranians against the background of intense disagreement between Washington and Jerusalem.  And concerning the current go-ahead for new assassination plans reportedly given by US intelligence to the Israelis: The source was quoted by the paper as saying that Soleimani’s assassination would serve both countries’ interests and that US authorities have given Israel the go-ahead to carry it out.

Facebook Says it is Deleting Accounts at the Direction of the U.S. and Israeli Governments - In September of last year, we noted that Facebook representatives were meeting with the Israeli government to determine which Facebook accounts of Palestinians should be deleted on the ground that they constituted “incitement.” The meetings — called for and presided over by one of the most extremist and authoritarian Israeli officials, pro-settlement Justice Minister Ayelet Shaked — came after Israel threatened Facebook that its failure to voluntarily comply with Israeli deletion orders would result in the enactment of laws requiring Facebook to do so, upon pain of being severely fined or even blocked in the country.The predictable results of those meetings are now clear and well-documented. Ever since, Facebook has been on a censorship rampage against Palestinian activists who protest the decades-long, illegal Israeli occupation, all directed and determined by Israeli officials. Indeed, Israeli officials have been publicly boasting about how obedient Facebook is when it comes to Israeli censorship orders:Shortly after news broke earlier this month of the agreement between the Israeli government and Facebook, Israeli Justice Minister Ayelet Shaked said Tel Aviv had submitted 158 requests to the social media giant over the previous four months asking it to remove content it deemed “incitement.” She said Facebook had granted 95 percent of the requests.She’s right. The submission to Israeli dictates is hard to overstate: As the New York Times put it in December of last year, “Israeli security agencies monitor Facebook and send the company posts they consider incitement. Facebook has responded by removing most of them.” What makes this censorship particularly consequential is that “96 percent of Palestinians said their primary use of Facebook was for following news.” That means that Israeli officials have virtually unfettered control over a key communications forum of Palestinians.

The fate of Jerusalem is not a Manhattan real estate deal -- "... we have taken Jerusalem, the toughest part of the negotiation, off the table.  We pay the Palestinians HUNDRED OF MILLIONS OF DOLLARS a year and get no appreciation or respect. They don't even want to negotiate a long overdue peace treaty with Israel," Trump tweeted. "We have taken Jerusalem, the toughest part of the negotiation, off the table, but Israel, for that, would have had to pay more. But with the Palestinians no longer willing to talk peace, why should we make any of these massive future payments to them?" CNN"We are not taking a position on any of the final status issues including the final boundaries of the Israeli sovereignty in Jerusalem," Trump said last month as he made his Jerusalem announcement. "Those questions are up to the parties involved. The United States remains deeply committed to helping facilitate a peace agreement that is acceptable to both sides." DJT's statements concerning the effect of his recognition of the Holy City as Israel's capital are nonsensical.   The Israelis, the Palestinians, the Europeans and every Muslim in the world understand that by taking Jerusalem "off the table" DJT has effectively eliminated the possibility of a negotiation over the city that would in any way relate to the real world. Evidently DJT thinks that an issue like this that concerns the essential identity and self image of millions and millions of Muslims can be handled as though the adversaries in this dispute are business people in a contract discussion.  In that setting a feature of the proposed contract that cannot be agreed on is removed from consideration so that closure can occur on the rest. Well, pilgrims,  the ownership of Jerusalem is not a hotel or skyscraper deal.  Trump's evident belief that the US has hired the Palestinian people through USAID projects and budget support is altogether incorrect.  His belief that the Palestinians are effectively his employees and therefore must settle for a Bantustan created out of some part of what is left without Jerusalem is delusional.

Trump on Saudi Leadership Shake-up: “We’ve Put Our Man on Top!” -- When Saudi Arabia’s Mohammad bin Salman effectively launched a coup and unseated his political rival in June, President Donald Trump took private credit. “We’ve put our man on top!” Trump told his friends, writes Michael Wolff in his forthcoming book, “Fire and Fury: Inside the Trump White House.” Saudi Arabia’s King Salman had ousted his nephew Mohammad bin Nayef as crown prince and replaced him with his then-31-year-old son, bin Salman, shaking up the line of succession and turning on decades of custom within the royal family. The move was announced in the dead of night and was just another step in bin Salman’s rise to power in the kingdom in recent years. The king also removed bin Nayef, once a powerful figure in the country’s security apparatus, from his post as interior minister. Just a month earlier, Trump had visited Saudi Arabia on his first overseas trip, meeting with leaders from across the Middle East and signing a $110 billion aspirational arms deal with the kingdom’s leaders. When bin Salman was named crown prince, Trump called and congratulated him on his “recent elevation.” Wolff describes Trump’s Saudi trip as a “get-out-of-Dodge godsend,” as it was an escape from Washington shortly after the president fired FBI Director James Comey. “There couldn’t have been a better time to be making headlines far from Washington. A road trip could transform everything.” The book is based on 18 months of interviews and access to Trump and his senior staff. But Wolff has a history of being an unreliable narrator, and questions have already been raised about the veracity of his claims. Trump, for his part, is outraged by the book, which contains damning passages about him and his family, attributed to the president’s former chief strategist Steve Bannon. The president’s lawyer has demanded that Wolff and his publisher cease and desist publication of the book. 

America’s endless, invisible wars -- I wonder how many Americans could accurately answer the question of how many wars the United States is currently waging. Leave aside the pesky details — you know, like an accurate list of the countries where American forces are engaged, the strategic case for our military actions in specific theaters of battle, and the overall cost of these wars in terms of blood and treasure. I'd be content to know that a solid majority of Americans were aware that we're currently at war in (at least) seven countries across the Greater Middle East: Afghanistan, Iraq, Syria, Yemen, Libya, Somalia, and Pakistan. I've added a parenthetical "at least" because our military engagements and commitments are so vast and amorphously defined that any list will almost certainly fall short of comprehensiveness. If we include covert operations, for example, we're almost certainly engaged in acts of war in several additional countries beyond those seven. And then there's the tendency among the members of our political class, including many journalists who cover it, to avoid using the term "war" for military actions that fall short of the deployment of ground troops — even when they include such acts of war as the firing of missiles at sovereign nations and the imposition or enforcement of naval blockades against them. So it's hard to know precisely how many wars the nation is currently waging. But let's say it's seven. How widely known is this? How many Americans are aware that 71 civilians were killed in Yemen over the weekend by a U.S-backed bombing campaign by Saudi Arabia? Or that our support for Saudi interference in the Yemeni civil war was begun, with barely any public explanation or justification, by the Obama administration? Or that Congress, empowered by the Constitution to declare and fund wars, has proven itself eager to shirk its responsibilities, allowing the White House and the Pentagon to prosecute endless, invisible wars across the globe with barely any democratic oversight?

Gimme Shelter: Russiagate, Foreign Policy & the Coming Forever War – Part One - Nina Illingworth - I’m honestly not trying to be an alarmist folks but it might be time to smoke em if you’ve got em here. While the international community and various media organizations have (perhaps rightfully) turned their attention towards the other brewing forever war the Trump administration is foolishly threatening to unleash on North Korea; the US military industrial complex and their client state allies in the Middle East are quietly working on manufacturing consent for a war that will likely engulf the entire Middle East, North Africa and Southwest Asia in a never-ending conflict that could perhaps be best described as “Sand Vietnam.” Just how horrifying is the current situation?

Trump shifts gears on Afghanistan | TheHill: President Trump is changing gears on Afghanistan as he enters his second year in office. After decrying nation building during his presidential campaign and lambasting Afghanistan as a “complete waste,” the president is in the midst of sending thousands more troops to the country in an effort to stabilize it. The move, military commanders say, will help break a stalemate in the longest U.S. war in history and help beat back a resurgent Taliban and straggling Islamic State in Iraq and Syria (ISIS) fighters.But defense experts say there is little indication the shift will be a quick fix. The U.S. must contend with an increased ISIS presence while keeping Afghanistan politically stable and pressuring Pakistan to limit the space for the Taliban and other terrorist groups, according to James Carafano of the conservative Heritage Foundation. “We’re seeing foreign fighters flow there. We’ve also seen some regional tensions and challenges for the government,” Carafano, a member of the Trump transition team, told The Hill. The administration is pressuring Pakistan to shore up its borders, but Carafano said it may take years to win gains from the relationship. Afghanistan’s pressing difficulties becomes all the more apparent after a terror attack this week in Kabul. The suicide bombing at a Shiite cultural center killed 41 people and injured dozens of others, with ISIS claiming credit. 

Trump To Withhold $255 Million In Pakistan Aid Over Counterterrorism Failures - The Trump administration is about to deny Pakistan $255 million worth of military aid after the terrorist-harboring nation "did not take substantial action against the Afghan Taliban or [the Haqqani Network], or substantially limit their ability to threaten U.S. interests in Afghanistan," according to an annual State Department report on terrorism. “The United States does not plan to spend the $255 million in FY 2016 in Foreign Military Financing for Pakistan at this time,” a US National Security Council spokesperson told the Hindustan Times, one of India's largest newspapers.“The President has made clear that the United States expects Pakistan to take decisive action against terrorists and militants on its soil, and that Pakistan’s actions in support of the South Asia Strategy will ultimately determine the trajectory of our relationship, including future security assistance," writes The Times.During a mid-October incident in which Pakistani forces freed a Canadian-American family and captured one of the Jihadi abductors belonging to the Taliban-linked Haqqani network, Pakistani officials rejected US requests to access the man - as authorities believed he could provide valuable information about at least one more American hostage. While the Hindustan times is reporting that the Trump administration has already decided to withhold the aid, the New York Times reported on Friday that a final decision is expected in the next few weeks, and will depend on an unknown set of conditions Pakistan would need to meet in order to receive the aid. Pakistan, however has few friends in the Trump administration.

Trump Blasts Pakistan For "Giving Safe Haven To Terrorists" As Pakistan Defense Ministry Fires Back --  It seems that Trump's first Twitter war of 2018 is officially underway.  After his first tweet of the new year took direct aim at Pakistan for giving "safe haven to terrorists," the official twitter account of the Pakistan Ministry of Defense fired back saying they've offered valuable resources to the U.S. over the years but have received nothing but "invective and mistrust" in return."Pak as anti-terror ally has given free to US: land & air communication, military bases & intel cooperation that decimated Al-Qaeda over last 16yrs, but they have given us nothing but invective & mistrust. They overlook cross-border safe havens of terrorists who murder Pakistanis."Pak as anti-terror ally has given free to US: land & air communication, military bases & intel cooperation that decimated Al-Qaeda over last 16yrs, but they have given us nothing but invective & mistrust. They overlook cross-border safe havens of terrorists who murder Pakistanis.— Pak Minister Defence (@PakMnstrDefence) January 1, 2018   In his very first tweet of the new year, President Trump threatened to cut off financial aid payments to Pakistan saying that its leaders have given the U.S. nothing but "lies & deceit" while providing "safe haven to terrorists we hunt in Afghanistan." "The United States has foolishly given Pakistan more than 33 billion dollars in aid over the last 15 years, and they have given us nothing but lies & deceit, thinking of our leaders as fools. They give safe haven to the terrorists we hunt in Afghanistan, with little help. No more!"

Pakistan Has Given ‘Nothing but Lies and Deceit’ in Exchange for US Assistance, Says Trump - With Washington to decide soon on whether to give Pakistan access to withheld military aid, US President Donald Trump on Monday accused Islamabad of not taking action against terror groups targeting Afghanistan and “thinking our leaders as fools” by offering “lies and deceit” in exchange for billions of dollars in American aid.The US president began the first day of 2018 tweeting from the early hours. Starting with a condolence message for a US law enforcement officer, his sixth post on Twitter in the new year was his most direct, accusatory comment about Pakistan so far.“The United States has foolishly given Pakistan more than 33 billion dollars in aid over the last 15 years, and they have given us nothing but lies & deceit, thinking of our leaders as fools. They give safe haven to the terrorists we hunt in Afghanistan, with little help. No more!” he wrote.According to Indian officials, Trump’s tweet could be a sign that the US was serious about the ‘deadlines’ given to Pakistan for taking action against the Taliban and Haqqani network.The United States has foolishly given Pakistan more than 33 billion dollars in aid over the last 15 years, and they have given us nothing but lies & deceit, thinking of our leaders as fools. They give safe haven to the terrorists we hunt in Afghanistan, with little help. No more!— Donald J. Trump (@realDonaldTrump) January 1, 2018This was immediately followed within half an hour with a retort from Pakistani foreign minister Khwaja Asif, promising a more extensive reply.We will respond to President Trump's tweet shortly inshallah…Will let the world know the truth..difference between facts & fiction.. — Khawaja M. Asif (@KhawajaMAsif) January 1, 2018 In an interview to Geo TV, Asif said that Pakistan would “publicly” provide details of US aid that it had received.

Pakistan summons US ambassador over Trump tweet -  - Pakistan has summoned the U.S. ambassador to protest President Donald Trump's tweets accusing Islamabad of sheltering terrorists who are battling U.S. forces in neighboring Afghanistan. A spokesperson for the U.S. embassy in Islamabad says David Hale was summoned to the foreign ministry Monday night to discuss Trump's New Year's Day tweet. In his first tweet of 2018, the president angrily said the U.S. has "foolishly" given Pakistan over 33 billion dollars in aid over the last 15 years, and had gotten "nothing but lies and deceit, thinking of our leaders as fools." "They give safe haven to the terrorists we hunt in Afghanistan, with little help. No more!" Trump said at the end of his tweet. "They give safe haven to the terrorists we hunt in Afghanistan, with little help. No more!" Trump said at the end of his tweet. Washington has long accused Pakistan, especially its security institutions, of turning a blind eye or covertly helping the Afghan Taliban and the Haqqani terrorist network to stage cross-border attacks against Afghan and U.S.-led forces. Islamabad denies allegations it is harboring Afghan insurgents and instead complains anti-state militants are using the neighboring country for terrorist attacks against Pakistan. Responding to President Trump with his own tweet, Pakistani Foreign Minister Khawaja Asif said Monday his country "will let the world know the truth...difference between facts and fiction." Pakistan's National Security Committee, comprised of the country's top civilian and military leadership, will hold an emergency meeting Wednesday to discuss the situation in the aftermath of Trump's tweet. 

US suspends ′security assistance′ to Pakistan after Donald Trump calls it terrorist ′haven′ -- The US State Department has accused the Pakistani government of failing to target terror networks operating in the country. Even before the US suspended assistance, Islamabad had dismissed the need to rely on Washington. The US State Department on Thursday announced the White House's decision to suspend security assistance to Pakistan worth significantly more than the $255 million (€211 million) in military aid given to Pakistan to purchase American military equipment. State Department spokeswoman Heather Nauert said the decision signaled growing frustration in the White House over Pakistan's failure to target terrorist networks attacking US troops stationed in Afghanistan. "Today we can confirm that we are suspending security assistance to Pakistan at this time," said Nauert. "Until the Pakistani government takes decisive action against the Afghan Taliban and the Haqqani group – we consider them to be destabilizing the region and also targeting US personnel – the United States will suspend that type of security assistance to Pakistan." However, Nauert said US authorities were still in the process of determining to what extent additional funds will be suspended, with Defense Secretary James Mattis later saying the new policy on military assistance was "still being formulated." 

Why US Foreign Policy Will Re-ignite Extremism In 2018 -- "Islamic State" (ISIS) has been defeated in Iraq and Syria, regardless of the presence of a few tactical remaining pockets. Moreover, following the decision of the international community and the other countries in the region to end the war in Syria, al-Qaeda is facing infighting and at the same time acknowledging their defeat and accepting the impossibility of changing the regime in Syria and of splitting Iraq. Does this mean the bloody extremism that hit the Middle East is over and won’t ever return?  The answer is simply and sadly “no!”. Baghdadi didn’t invent a new Islam, his source of inspiration derives from books available in most Islamic libraries worldwide, inviting readers to kill other Muslims and non-Muslims according to a specific interpretation of the holy book, the Quran, and the Hadith. In fact, how can these Takfiri vanish when books calling for hate speech and the killing and intolerance of other continue to be widely available. To name but a few: ‘Millat Ibrahim’ by Abu Mohammad al-Maqdisi; the ‘Management of savagery’ by Abu Bakr Naji; Ma’alim fi al-tariq by Sayyid Qutb; Kitab al-tawhid by Muhammad bin Abdel-Wahab; Fusul fil-Imama wal-Bay’a by Abu Munser al-Sharqiqi; Masael fi Fikh al-Jihad by Abu Abdallah al-Muhajer; Maalem al-taifa al-Mansura by Maysara al-Ghareeb; Rafa’ al-Iltibas by Mohamad Al-Atibi; Fatawi Ibyn Taymiyah, Kitab al-Tawhid and Kitab al-kabaer by Mohamad bin Abdel Wahhab; and many more… It is true that Jihadists are surely losing the Levant and Mesopotamia. Nevertheless, they operate in Sinai (Egypt), Afghanistan, Yemen, Somalia, Nigeria and Asia. Killing jihadists is not difficult. However, the ideology remains alive and can damage any and every city: the tools and ideas are widely available which convert a peaceful human being into a beast hunting other men to kill. Moreover, the US’s foreign policy is one of the most provocative incentives for this ideology to continue existing. The US apparently cannot learn from its mistakes; occupying other territories means that, sooner or later, guns are focussed on its interests and against other associated states, worldwide.

138 things Trump did this year while you weren’t looking -- In Donald Trump’s first act as president, he signed a high-profile executive order intended to dismantle Obamacare, instructing federal agencies to take any measures they could to roll back the Affordable Care Act. In retrospect, the vaguely worded directive was only symbolic. The Trump administration did eventually make moves to obstruct the law, but they took months and another executive order to implement. For all the theater, it’s hard to say whether that order had any effect at all.Less noticed on Inauguration Day was a surprise move by the Federal Housing Administration to scratch a planned reduction in mortgage insurance premiums. That change helped shore up the financial health of the FHA’s mortgage insurance fund—but came at a real cost to homeowners, who would have saved an average of $500 a year if the Obama-era plan had stayed in place.If you didn’t hear about the $500 you may have lost that day—well, that’s how the year went. The attention gap between the empty executive order and the real-life mortgage insurance rollback turned out to be representative of the whole first year of the Trump administration.  Again and again, Trump has taken the stage to an adoring crowd and declared victory on some issue, or announced lavish new promises, without any real results or plans to back them up. Meanwhile, very steadily, and almost totally separately from Trump’s speeches and tweetstorms, his administration has been ushering in a new conservative era of government—taking specific aim at Obama-era rules, and broader aim at the big regulatory mission of government.At The Agenda, we’ve been tracking these policy changes weekly since June, ignoring the noise and explaining what the Trump administration actually accomplished each week. This week, we’re pulling them all into one mega-list—a portrait of a quiet but very serious Republican push against the scope and ambition of government. Welcome to the annual wrap-up of our weekly guide to what Trump did while you weren’t looking.

Congress faces January logjam | TheHill: Lawmakers are returning to Washington without a clear strategy to tackle a massive pile-up of unresolved issues that are threatening a government shutdown in just three weeks. “It seems leadership is taking a wait-and-see approach to how everything is going to work itself out in January,” one skeptical GOP lawmaker observed. Before leaving town for the holidays, Congress passed a stopgap spending bill to keep the government’s lights on until Jan. 19. But GOP leaders punted contentious fights over immigration, health care, national security and disaster funding into the new year, meaning they’re once again facing a potential crisis of their own making. With little time to spare, formal talks will resume this week.   The “Big Four” congressional leaders — Speaker Paul Ryan (R-Wis.), Senate Majority Leader Mitch McConnell (R-Ky.), House Minority Leader Nancy Pelosi (D-Calif.) and Senate Minority Leader Charles Schumer (D-N.Y.) — will try to map out a game plan at the Capitol on Wednesday when they meet with Trump’s budget director, Mick Mulvaney, and his legislative affairs director, Marc Short. Then Ryan and McConnell will huddle with Trump at Camp David on Saturday and Sunday to discuss their 2018 agenda.House lawmakers will have a small window to deal with the legislative logjam after deciding to come back to town a week after McConnell reconvenes the Senate.The House will be back in session on Jan. 8 and will have just eight legislative days to strike a deal to avert a shutdown.

Trump, GOP Pull Off Their Tax Heist - (video) NEP’s Bill Black appears on The Real News discussing Congressional Republicans have approved their tax bill, a massive upward transfer of wealth that fulfills a decades-long right-wing goal of permanent tax cuts for corporations. You can view here with a transcript.

GOP Tax Bill Creates Deficits To Justify Cuts To Social Programs, Says Former Reagan Aide - Would Ronald Reagan approve of the tax bill that President Donald Trump signed this month work? In a podcast interview, Bruce Bartlett, a former economic adviser to the 40th president, tells International Business Times what the Republicans' strategy seems to have been, what the bill's repercussions might be, and what Reagan really thought about tax cuts.   Bartlett traced the history of Republicans’ views on taxes and budget issues, and argued that the tax legislation is designed not only to deliver big tax cuts to the wealthy, but also to create large budget deficits. Bartlett says that conservative champions of the bill want to create those deficits as a way to manufacture the budget conditions that will justify cutting larger social programs.   What follows is an excerpt of the podcast discussion. Subscribers can listen to the entire podcast by clicking here.

Trump celebrates his (very expensive) tax cuts for himself and his rich golfing buddies – Linda Beale - Remember how Trump sold the Republicans' $1.5 trillion-deficit-creating tax cut plan as a boon for the middle class that was going to create jobs and raise wages?  That was in September, when he told congressional lawmakers at the White House that "The rich will not be gaining at all with this plan."  See Washington Examiner (Sept. 13, 2017). No tax lawyer or professor believed that statement.  Nobody that knew anything about the early drafts of the bill believed that statement.  But quite a few Trump supporters have believed that statement. It wasn't true.  It was a bald-faced lie, and Trump knew it was a bald-faced lie.  He has no trouble making such lies and does it multiple times a day.  But this one was both manipulative and deceptive.  Manipulative, because it helped to prevent any outcry from his core supporters that might have caused a Senate vote loss.  Deceptive, because it was intended to mislead, as so much of what this man does in the office of the President.Trump made absolutely clear what he really is proud of at his holiday golfing retreat at Mar-a-Lago, where memberships now cost $200,000 (were $100,000 before they counted as access to the Presidency) and members are part of the oligarchic ultra rich set that Trump so adores.  Here's what he told them just before Christmas:  "you all just got a lot richer" from the passage of the Republican tax cut legislation.  See Bobic, Trump Told Friends 'You All Just Got a Lot Richer" From Tax Bill: Report, HuffPost (Dec. 24, 2017). So September, Trump is claiming that the rich won't gain a thing from the tax cut but come December, Trump is boasting about how much richer the rich got from the tax cut. Next up?   The Republicans who didn't care if they created a $1.5 trillion deficit with their tax cuts for the rich now whine about the dreadful deficit (that they created) and the oh so shocking necessity, now, of cutting back on

  • Social Security (they want to privatize it so the rich can get rich off of passing risk onto the vulnerable elderly but this is less likely since they can't do it by reconciliation with just GOP votes) and
  • Medicare (they want to decimate it- and can do that with reconciliation-GOP apparently doesn't want us to have the kind of universal and cheaper health care that the rest of the developed world enjoys because there's no money in that for them) and
  • Medicaid (GOP can't make money off it and they don't care about the poor kids and families and old people that depend on that anyway).

Tax law creates confusion and uproar in city halls across America -- Mass confusion is erupting in town halls across the country thanks to the new tax law, as tens of thousands of property owners scramble to pay next year’s taxes ahead of schedule — while the governors of their states and the IRS give conflicting signals about whether that’s even allowed.In the Albany suburb of Bethlehem, New York, more than 100 people waited in a gym to pay their property tax bills Thursday — some of them for over an hour — before a new federal $10,000 cap on state and local deductions goes into effect Jan. 1. Municipalities on Long Island were preparing to open over the weekend to give taxpayers more time to pay. But the IRS issued an edict Wednesday night saying the early payments could be deducted on 2017 taxes only if they had already been assessed. That threw residents and local government officials into a new round of confusion as everyone scrambled to determine which payments would qualify. The uncertainty this week could be the first of many misunderstandings to come as new tax rules take effect starting New Year’s Day. The tax law that President Donald Trump signed Dec. 22, which Congress rushed to pass before the end of the year, is explicit in some of its language but vague in other areas. It explicitly forbade prepayments of state and local income taxes but was silent on prepayments for state and local property taxes.“What the federal government did and the timing of their actions was, in our view, cruel and unusual,” said Steve Acquario, executive director of the New York State Association of Counties. “They passed this tax bill at a time of year when government is very much in transition to the next fiscal year. There was great confusion this week.”

Trump Could Have Killed Carried Interest Loophole; Now It May Be Too Late - Donald Trump famously promised to close a multibillion-dollar tax loophole that benefits private equity and hedge fund managers — and his top aide blamed Congress for the failure to do so. Left unsaid: As the financial industry has lobbied key agencies like the IRS, Trump’s administration has declined to use its rulemaking authority to try to limit the loophole — a refusal that personally enriches Trump’s top outside adviser, as well as executives at his aides’ former Wall Street firms. Also left unmentioned: Trump just signed a tax bill that includes language that could prevent any subsequent president from using executive action to close the loophole in the future. At issue is “carried interest” — a term that describes performance fees paid to hedge fund, private equity and real estate investment executives when they earn profits for investors. Thanks to a series of IRS interpretations over the last two decades, the executives are right now permitted to classify those fees as capital gains rather than as regular income, which lets them pay a much lower tax rate on the earnings. The loophole allows finance industry titans to avoid paying roughly $2 billion of taxes a year, according to the Congressional Budget Office. Billionaire Warren Buffett has described the situation as allowing Wall Street executives to pay a lower effective tax rate than their secretaries pay.  Trump’s recent tax legislation did not include language to statutorily end the loophole because, as his economic adviser Gary Cohn asserted, “The reality of this town is that constituency [Wall Street] has a very large presence in the House and the Senate, and they have really strong relationships on both sides of the aisle.” But experts have long contended that Trump could simply revise the rule that creates the loophole — a move he has refused to take.

Corporations Hoard Their Trump Tax Windfall (video) After President Trump signed the GOP tax plan into law, some of the bill’s corporate beneficiaries have offered workers minor bonuses. But NEP’s Bill Black says they’re keeping most of the money for themselves — and starting a new global race to the bottom for corporate taxes. You can view here with a transcript.

The Federal Tax Overhaul May Boost States’ Bottom Lines, But Some Governors Don’t Want the Money -- States may soon see an unexpected windfall of tax revenue as a byproduct of the federal tax law, but several governors have said they don’t want the money. Several governors have said they anticipate their state will take in more money because of the changes in the Republican tax overhaul, which President Donald Trump signed into law on Friday. The extra money could set off battles in state legislatures over how to spend the unexpected windfall, or whether they should even collect it in the first place.“It is very clear that due to the loss of several longstanding federal tax deductions and exemptions, Maryland state revenue will likely increase by hundreds of millions of dollars,” Maryland Gov. Larry Hogan, a Republican, said in a statement earlier this week. “Our goal will be to leave that money in the pockets of hardworking Marylanders.”  Most states, including Maryland, are still analyzing the effects of the federal tax revisions on state budgets.  But states could find themselves collecting more money, because Congress eliminated or reduced many popular tax deductions, allowing more income to be taxed.At the federal level, Congress tried to offset those provisions by lowering tax rates and raising the standard deduction. States often follow the federal government’s calculations for determining how much income should be taxed, but, unlike Congress, they have not changed their tax rates to reflect the smaller level of deductions.

Rubbing SALT in the Wounds of Republicans - Dean Baker - There is little question that the Republicans in Congress were quite explicitly targeting high-tax blue states with their decision to severely limit the deductions for state and local taxes (SALT). Putting a cap of $10,000 on these deductions can add thousands of dollars to the tax bills of many upper middle class people living in relatively high-tax states like California or New York. As a result, these states will feel considerable pressure from a politically powerful bloc to lower taxes, which will then necessitate cutbacks in areas like education and health care. Fortunately, there are ways to undermine the Republican effort. An obvious one is to partially replace the state income tax with an employer side payroll tax. This can lead to a situation in which the state tax on wage income ends up being fully deductible against federal income taxes even for people who do not itemize on their tax forms. To take a simple example, suppose a state imposes a flat 5 percent income tax. A person earning $200,000 a year will be paying $10,000 a year in state income taxes. If they also own a home and pay $8,000 to $10,000 a year in property taxes (a plausible scenario in California or New York), the $10,000 cap will drastically reduce the amount they can deduct on their federal taxes. But suppose that the state changed its income tax to an employer side payroll tax of 5.0 percent. In this case, the person pays zero state income tax on their $200,000 in wages, but their employer pays a $10,000 tax. The standard view among economists is that employer side payroll taxes are passed on pretty much dollar for dollar in lower wages. The argument is that employers care about how much it costs to hire a worker; they don’t care whether they are paying the money to the worker or the government. 

Tax Law Offers a Carrot to Gig Workers. But It May Have Costs. -  NYT -- The new tax law is likely to accelerate a hotly disputed trend in the American economy by rewarding workers who sever formal relationships with their employers and become contractors. Management consultants may soon strike out on their own, and stockbrokers may hang out their own shingle. More cable repairmen and delivery drivers, some of whom find work through gig economy apps like Uber, may also be lured into contracting arrangements. That’s because a provision in the tax law allows sole proprietors — along with owners of partnerships or other so-called pass-through entities — to deduct 20 percent of their revenue from their taxable income. The tax savings, which could be around $15,000 per year for many affluent couples, may prove enticing to workers. “If you’re above the median but not at the very, very top, one would think you’d be thinking it through,” said David Kamin, a professor of tax law at New York University. The provision may also turn out to be a boon for employers who are trying to reduce their payroll costs. Workers hired as contractors, who tend to be cheaper, may be less likely to complain about their status under the new tax law. “Firms currently have a lot of incentives to turn workers into independent contractors,”  But it could lead to an erosion of the protections that have long been a cornerstone of full-time work. 

Tax cut on booze triggers fears of more abuse and drunken driving -  Congress just slashed taxes on alcohol for the first time in decades. But public-health advocates fear the effects of the Republican tax law will be dire — more drunken driving, underage drinking and other alcohol-related programs. .They say Congress’s decision to cut alcohol taxes by 16 percent also contrasts with lawmakers’ treatment of cigarettes, a health threat they consider on par with alcohol, which has seen its levies climb nearly 1,500 percent since 1970. “The cheaper alcohol is, the more people drink and the more they have alcohol problems, and there is a huge international literature that has shown that over and over and over,” said David Jernigan, head of the Center on Alcohol Marketing and Youth at Johns Hopkins University. “The public health ramifications of this continue to be invisible to policymakers.” Though the issue drew hardly any debate during the dash to pass the once-in-a-generation tax-code overhaul, the alcohol industry is one of the biggest winners of the Republican plan President Donald Trump signed into law Dec. 22. It cuts taxes on wine, beer, whiskey, vodka, tequila and other forms of alcohol. That translates to $1.6 billion in savings next year for MillerCoors; Diageo, the maker of such brands as Captain Morgan rum and Ketel One Vodka; and smaller beer and spirits operators that had pushed for the cut. 

 Ajit Pai’s FCC is still editing the net neutrality repeal - The Federal Communications Commission voted to repeal net neutrality rules on December 14, but the FCC is still making edits to the repeal order and hasn't released the final version. The final order should be similar to the draft released by FCC Chairman Ajit Pai three weeks before the vote, but some changes will be made. FCC orders are sometimes released weeks after a vote, although orders are also often released the same day or within a few days of a vote. The time is used by FCC staff and the chairman's office to fix any mistakes or omissions and to respond to concerns raised by commissioners. Since net neutrality supporters will file lawsuits in an attempt to overturn the repeal, the final edits could also help Pai's office make the repeal order more legally defensible. "It's certainly possible that this document will have more significant changes from the circulated draft stage than we've seen in other Pai orders," Policy Director Matt Wood of advocacy group Free Press told Ars. "Free Press and others pointed out not just scores of substantive flaws in the commission's arguments, but a number of procedural errors and notice fouls that frankly cannot be fixed with a post-vote band-aid. But that doesn't mean they aren't busily trying to apply those band-aids as we speak."Wood noted that it isn't unusual for orders to come out a few weeks after votes, and that the end-of-year holidays may have slowed this one down even more. Still, the absence of a final order nearly three weeks after the vote "seems a little more remarkable [because] Chairman Pai has gone so far out of his way to praise himself for transparency, speed, and quantity in his orders—apparently in the belief that he gets a gold star for releasing as many decisions as possible, as fast as possible, no matter how bad they are for the public," Wood said.Because the final order isn't available, groups that want to overturn the repeal can't file lawsuits against the FCC. This gives net neutrality supporters more time to prepare initial court complaints. We also don't yet know exactly when net neutrality rules will officially be taken off the books. The repeal will take effect 60 days after publication in the Federal Register, and Federal Register publication may not happen immediately after the order is made public on the FCC website. In 2015, the FCC voted to impose the current net neutrality rules on February 26, made the final order public on March 12, and got them into the Federal Register on April 13, allowing the rules to take effect on June 12. A similar timeline will unfold after Pai's FCC releases its repeal.

How the Trump era is changing the federal bureaucracy - WaPo - Nearly a year into his takeover of Washington, President Trump has made a significant down payment on his campaign pledge to shrink the federal bureaucracy, a shift long sought by conservatives that could eventually bring the workforce down to levels not seen in decades. By the end of September, all Cabinet departments except Homeland Security, Veterans Affairs and Interior had fewer permanent staff than when Trump took office in January — with most shedding many hundreds of employees, according to an analysis of federal personnel data by The Washington Post. The diminishing federal footprint comes after Trump promised in last year’s campaign to “cut so much your head will spin,” and it reverses a boost in hiring under President Barack Obama. The falloff has been driven by an exodus of civil servants, a diminished corps of political appointees and an effective hiring freeze. The White House is now warning agencies to brace for even deeper cuts in the 2019 budget it will announce early next year, part of an effort to lower the federal deficit to pay for the new tax law, according to officials briefed on the budgets for their agencies. One possible casualty: a pay raise that federal employees historically have received when the economy is humming. The administration’s effort so far to reshape the workforce of nearly 2 million civil servants that serves as the backbone of the government already has provoked a contentious culture shift. Federal workers fret that their jobs could be zeroed out amid buyouts and early retirement offers that already have prompted hundreds of their colleagues to leave, according to interviews with three dozen employees across the government. Many chafed as supervisors laid down new rules they said are aimed at holding poor performers and problem workers to account. A hiring freeze technically lifted in the spring has been kept in practice at most agencies, hollowing out many offices. And the slow pace of political appointments has left a number of departments with a leadership vacuum in their upper ranks. With many top-tier posts still empty in President Trump's new government, cabinet secretaries are getting exasperated with the lack of senior-level staff in their agencies. (Jenny Starrs/The Washington Post) “Morale has never been lower,” 

Analysis: McConnell Wins In Trump-Bannon Feud - Since he left the White House last summer, Bannon has essentially operated as an opposition party to McConnell. He has called for the Kentucky Republican’s ouster as majority leader and launched an effort to recruit candidates to run against Republican senators — a direct challenge to McConnell’s own political action committee. While Trump himself has had harsh words for McConnell in the past, their relationship now seems to be on solid footing. McConnell last month said the two “go into the New Year with a high level of confidence in our ability to work together.” Their budding rapport comes as Bannon heads to Trump’s doghouse. After Bannon provided damning quotes for a forthcoming book on the administration — describing a 2016 meeting inside Trump Tower among Donald Trump Jr., Jared Kushner, Paul Manafort and a Russian lawyer they believed to have dirt on Hillary Clinton as “treasonous” — Trump released a brutal statement in which he said his former campaign executive has “lost his mind.” “Steve Bannon has nothing to do with me or my Presidency. When he was fired, he not only lost his job, he lost his mind,” the statement reads. “Steve was rarely in a one-on-one meeting with me and only pretends to have had influence to fool a few people with no access and no clue, whom he helped write phony books.” 

Dozens of picks in limbo following year-end reset -- The White House is working on renominating people for dozens of top posts after Senate Democrats balked last month at keeping them under consideration. Both parties agreed to hold on to roughly two dozen administration picks, but a list of controversial choices — including for judgeships — bounced back at the end of the year. Presidential aides are not saying whether the president will renominate every single pick senators sent back but are downplaying the process. "This is a standard paperwork practice due to long-established Senate rules, and we will proceed as necessary with renominations in January," White House deputy press secretary Hogan Gidley said in a statement to E&E News. Controversial names the Senate sent back include Kathleen Hartnett White to lead the Council on Environmental Quality and Andrew Wheeler for deputy U.S. EPA administrator. A Senate Environment and Public Works Committee spokesman said the panel will have to clear resubmitted nominations, even for candidates that got a vote last year. Another option for Senate leaders is to advance a pick through a discharge resolution, which would require 60 votes to succeed. 

Trump Admin Bans "All Personal Devices" From White House -- Having warned in November amid a hosepipe of leaks, that it was possible, The White House is banning its employees from using personal devices while at work in the West Wing, despite concerns among some staffers that they’ll be cut off from children and other relatives trying to reach them.“The security and integrity of the technology systems at the White House is a top priority for the Trump administration and therefore starting next week the use of all personal devices for both guests and staff will no longer be allowed in the West Wing,” press secretary Sarah Huckabee Sanders said in a statement Thursday.“Staff will be able to conduct business on their government-issued devices and continue working hard on behalf of the American people.”White House chief of staff John Kelly imposed the ban, citing security concerns. President Donald Trump has repeatedly complained about press leaks since taking office, but aides said the change isn’t connected to concerns about unauthorized disclosures to news organizations.The change means aides in the Trump administration won't be permitted to use their personal cellphones on the White House campus, Bloomberg News reported. There are too many devices connected to the White House wireless network, and personal phones aren’t as secure as those issued by the federal government, said an official who spoke on condition of anonymity to discuss an internal White House matter.  The phones provided by the White House reportedly don't allow texting, adding to staffers' complaints.

Churches will no longer be exempt from FEMA aid - The Federal Emergency Management Agency (FEMA) will now permit churches to request government aid following Hurricanes Irma and Harvey, The Associated Press reported.  FEMA said Tuesday that churches will no longer be exempt from aid eligibility.Private nonprofit organizations that were damaged on or had pending requests as of Aug. 23, 2017, may receive some aid, according to the report. Three churches in Texas sued FEMA last year after suffering damage during Hurricane Harvey.  President Trump in September tweeted his support for the churches. "Churches in Texas should be entitled to reimbursement from FEMA Relief Funds for helping victims of Hurricane Harvey (just like others,” Trump tweeted. Churches in Texas should be entitled to reimbursement from FEMA Relief Funds for helping victims of Hurricane Harvey (just like others). — Donald J. Trump (@realDonaldTrump) September 9, 2017 Aid is restricted to expenses that a loan from the U.S. Small Business Administration will not cover, the AP noted.

Will Trump Start Deporting Dreamers If No Deal Is Reached In 2018? - Per orders from President Donald Trump, the Deferred Action and Childhood Arrivals program, or DACA, will expire on March 5 barring Congressional action. The program gave 800,000 immigrants—colloquially known as 'Dreamers'—the chance to apply for two-year school and work permits that allowed them to live in the country without fear of deportation. But as the deadline draws nearer, many immigration advocates worry that mass deportations of Dreamers will begin shortly after March 5, considering Trump has given federal immigration agencies the green light to arrest anyone, anywhere, including a 10-year-old girl with cerebral palsy straight out of emergency surgery. Trump quelled some of those fears earlier this week by saying he's willing to reinstate DACA protections for Dreamers—if Democrats are willing to support his border wall. But immigrant rights advocates and many of their allies in the Democratic Party have signaled that they won't' concede further "militarizing" the border in exchange for DACA protections. As reported by the Arizona Daily Sun, Democrat Rep. Raul Grijalva, a staunch immigrant rights advocate, called Trump’s negotiation posture “extortion," adding that Democrats should ignore the rhetoric and work toward a permanent solution like the DREAM Act, which would provide a path to citizenship for the Dreamers. The political standoff over what to do with Dreamers is set to take center stage sometime in January. There were rumblings of the possible inclusion of DACA protections in the end-of-year spending bill, but Democrats ultimately folded.

Mayors ask administration to extend immigration program for El Salvador | TheHill: A large coalition of cities and counties is appealing Wednesday for the federal government to extend work permits for nearly 200,000 Salvadoran citizens for 18 months. In a letter to Secretary of State Rex Tillerson and Homeland Security Secretary Kirstjen Nielsen, 19 members of Cities for Action — a coalition of local governments seeking immigration reform — asked for an extension of the Temporary Protected Status (TPS) designation for El Salvador.The Central American country’s TPS status is due for renewal on Jan. 8. On that date, Nielsen will have to decide whether to extend or end the program. Ending it would essentially turn the 195,000 Salvadoran nationals into undocumented immigrants. Salvadoran nationals protected by TPS have been in the country since at least 2001. The program allows for nationals of a foreign country already in the United States — legally or illegally — to work and live in the United States if a natural or man-made disaster makes their country too dangerous to return to. El Salvador first received its TPS designation after two earthquakes ravaged the Central American country, increasing the difficulty of re-absorbing the tens of thousands of refugees who had left the country during the largely U.S.-funded 1980s civil wars. The State Department is required to send an assessment of conditions on the ground in El Salvador to Homeland Security to aid in Nielsen’s decision. 

The acting ICE director said politicians who run ‘sanctuary cities’ should be charged with crimes -- The acting director of the Immigration and Customs Enforcement agency said in an interview with Fox News on Tuesday that politicians in so-called "sanctuary cities" should be charged with harboring and smuggling unauthorized immigrants. He said he has asked the Department of Justice to look into whether such jurisdictions are violating federal law. He added that the local officials should be held "personally accountable" for crimes committed by immigrants living in the US illegally. "I think it's terrible. You've got the state of California that wants to put politics ahead of public safety, ahead of officer safety," Homan said. "What they've done is forced my officers to arrest dangerous criminals on their turf, in their homes and places of business, rather than arresting them in the safety and security of a county jail. It's ridiculous." Homan was referring to jurisdictions, such as California, that refuse to honor ICE requests to detain suspected unauthorized immigrants past their scheduled jail release dates. The ICE requests, known as detainers, are not legally binding documents because they are not issued by judges. Localities often argue that honoring ICE detainers would violate inmates' Fourth Amendment rights by detaining them unlawfully. In an effort to solve the dilemma, officials often request that ICE seek court-ordered warrants to allow them to detain people lawfully, but ICE has argued that judge-signed warrants should not be necessary.

DHS weighs major change to H-1B foreign tech worker visa program - The Department of Homeland Security is considering new regulations that would prevent H-1B visa extensions, according to two U.S. sources briefed on the proposal. The measure potentially could stop hundreds of thousands of foreign workers from keeping their H-1B visas while their green card applications are pending. The proposal, being drafted in memos shared between DHS department heads, is part of President Donald Trump’s “Buy American, Hire American” initiative promised during the 2016 campaign. The administration is specifically looking at whether it can reinterpret the "may grant" language of the American Competitiveness in the 21st Century Act to stop making the extentions. The act currently allows the administration to extend the H-1B visas for thousands of immigrants, predominantly Indian immigrants, beyond the allowed two three-year terms if a green card is pending. “The idea is to create a sort of ‘self- deportation’ of hundreds of thousands of Indian tech workers in the United States to open up those jobs for Americans,” said a U.S. source briefed by Homeland Security officials. Officials at U.S. Citizenship and Immigration Services, which is under DHS, said they can’t discuss “any part of the pre-decisional processes.” “The agency is considering a number of policy and regulatory changes to carry out the President’s Buy American, Hire American Executive Order, including a thorough review of employment-based visa programs,” said 

SEC Probing Kushner Companies Over Use Of Immigrant Visa Program - The SEC has launched an investigation into the real-estate company run by White House senior adviser (and Trump's son-in-law) Jared Kushner for its use of the "green cards for money" Federal visa program, according to the WSJ. Specifically, the SEC is probing Kushner Companies over its use of the investment-for-visa EB-5 program, which provides green cards to immigrants who invest at least $500,000 in U.S. businesses. While the WSJ explains that "the precise nature of the SEC’s inquiry isn’t clear, nor is whether the subpoena identified particular projects" it notes that in May 2017, Kushner Cos. received a subpoena from the Securities and Exchange Commission requesting information about its use of the program. That month the company also received a separate subpoena from New York federal prosecutors asking for information about development projects financed in part by the EB-5 program.  Kushner had been running the real estate business until last year, but resigned from the company to join the White House staff.The SEC probe, which hasn’t been previously reported, is being conducted out of the commission’s Texas office and in collaboration with federal prosecutors from the Brooklyn U.S. attorney’s office, according to another person familiar with it. By way of background, the EB-5 program offers green cards to aspiring immigrants who invest at least $500,000 in certain U.S. businesses that have been determined to create at least 10 jobs per investor. A green card permits a foreign national to live and work in the U.S. The majority of EB-5 visas go to wealthy Chinese individuals, according to DHS data. The federal and SEC subpoenas came shortly after the company drew attention for a marketing campaign in Beijing and Shanghai that solicited Chinese investors for One Journal Square, saying that as many as 300 individuals who invested $500,000 each into the project could be eligible for green cards under the EB-5 program, the Journal reported. The federal subpoena, which included a request for email correspondence, concerned at least one specific project: a Jersey City, N.J., development of twin, 66-floor commercial-and-residential towers called One Journal Square, the Journal reported.

Trump Justice Department Pushes for Citizenship Question on Census, Alarming Experts  -- The Justice Department is pushing for a question on citizenship to be added to the 2020 census, a move that observers say could depress participation by immigrants who fear that the government could use the information against them. That, in turn, could have potentially large ripple effects for everything the once-a-decade census determines — from how congressional seats are distributed around the country to where hundreds of billions of federal dollars are spent.The DOJ made the request in a previously unreported letter, dated Dec. 12 and obtained by ProPublica, from DOJ official Arthur Gary to the top official at the Census Bureau, which is part of the Commerce Department. The letter argues that the DOJ needs better citizenship data to better enforce the Voting Rights Act “and its important protections against racial discrimination in voting.”A Census Bureau spokesperson confirmed the agency received the letter and said the “request will go through the well-established process that any potential question would go through.” The DOJ declined to comment and the White House did not respond to a request for comment.Observers said they feared adding a citizenship question would not only lower response rates, but also make the census more expensive and throw a wrench into the system with just two years to go before the 2020 count. Questions are usually carefully field-tested, a process that can take years. “This is a recipe for sabotaging the census,” said Arturo Vargas, a member of the National Advisory Committee of the Census and the executive director of NALEO Educational Fund, a Latino advocacy group. “When you start adding last-minute questions that are not tested — how will the public understand the question? How much will it suppress response rates?”

DHS Announces Program To Illegally Scan Our Faces - As TSA agents continue to prove their incompetence in the “War on Terror,” the Department of Homeland Security is now allocating $1 billion in taxpayer funding to create a facial recognition program that will illegally scan Americans’ faces. A study conducted by Georgetown Law’s Center for Privacy and Technology looked at the biometric scanners that are creating an inventory of the faces of individuals leaving the country at airports across the United States. While they are only at certain major airports right now, the full implementation of these scanners could cost Americans up to $1 billion.The study noted that while the “9/11 Response and Biometric Exit Account” created by Congress has the funds for the program, “neither Congress nor DHS has ever justified the need for the program.”In addition to the fact that Congress has never provided a reason why the system is needed in the U.S., the study claimed that DHS has “repeatedly questioned ‘the additional value biometric air exit would provide’ compared with the status quo and the ‘overall value and cost of a biometric air exit capability,’ even as it has worked to build it.”Not only is a government agency pouring $1 billion into a program to increase the country’s security measures even though it lacks full confidence, and has no evidence that the program it is implementing will do so, there is also the fact that the program requires Americans to give up their civil liberties, and it has never been explicitly authorized by the government. As the researchers from Georgetown Law noted:“DHS’ biometric exit program also stands on shaky legal ground. Congress has repeatedly ordered the collection of biometrics from foreign nationals at the border, but has never clearly authorized the border collection of biometrics from American citizens using face recognition technology. Without explicit authorization, DHS should not be scanning the faces of Americans as they depart on international flights—but DHS is doing it anyway. DHS also is failing to comply with a federal law requiring it to conduct a rulemaking process to implement the airport face scanning program—a process that DHS has not even started.”

Airport Face Scanning Skates on Thin Legal Ice—and Doesn’t Work Too Well - Your privacy may be violated as you travel for the holidays. At more than a dozen airports around the U.S., from Houston to Boston, the Department of Homeland Security uses facial recognition to ensure people haven’t overstayed their visas. But according to a new report by the Center on Privacy and Technology at Georgetown University, that can end up violating the privacy of American citizens.The report says that “without explicit authorization DHS should not be scanning the faces of Americans as they depart on international flights.” It doesn’t have that say-so, “but DHS is doing it anyway” as people pass through airport terminals. The authors also explain that the DHS is “failing to comply with a federal law requiring it to conduct a rulemaking process to implement the airport face scanning program—a process that DHS has not even started.”This all echoes concerns with the technology that we’ve written about in the past.As it turns out, the tech isn’t working very well, either. The systems “erroneously reject as many as 1 in 25 travelers using valid credentials.” That equates to as many as 1,632 passengers per day at John F. Kennedy International Airport who suffer delays. It also seems that women and African-Americans are more likely to get pulled aside, highlighting the problem of biases baked into AIs (see “Are Face Recognition Systems Accurate? Depends on Your Race.”)Perhaps worst of all, the DHS doesn’t yet appear to be able to point to any direct benefit from using the system. All of which is worth remembering as you smile into a camera at the airport this Christmas.

Homeland Security Data Breach Exposed Over 240,000 DHS Employees In "Unauthorized Exfiltration" Over 240,000 current and former Department of Homeland Security employees had their personal details compromised in a data breach discovered in May, 2017, while conducting an ongoing criminal investigation, in what the agency is calling a "privacy incident." DHS listed a workforce of 229,000 in 2017, so we assume the breach affected most or all current employees. While conducting an internal criminal probe, DHS investigators found that a former employee in the agency's Office of the Inspector General (OIG) possessed an unauthorized copy of the agency's investigative case management system - which included employee names, social security numbers, and position of 246,167 federal government staff employed by DHS in 2014.  Friends and family of DHS employees involved in OIG investigations were also compromised. The breach of the DHS OIG Case Files included individuals associated with DHS OIG investigations.  Family members and close associates were impacted by this privacy incident only if they were involved in a DHS OIG investigation.Moreover, the database also contained information on an undisclosed number of criminal suspects, witnesses and complaints by the office between 2002 and 2014 - also exposing names, social security numbers, addresses, phone numbers and dates of birth.

Trump abolishes controversial commission studying alleged voter fraud  - President Trump on Wednesday announced that he is disbanding a controversial panel studying alleged voter fraud that became mired in multiple federal lawsuits and faced resistance from states that accused it of overreach. The decision is a major setback for Trump, who created the commission last year in response to his claim, for which he provided no proof, that he lost the popular vote to Democrat Hillary Clinton in 2016 because of millions of illegally cast ballots. The commission met only twice amid the series of lawsuits seeking to curb its authority and claims by Democrats that it was stacked to recommend voting restrictions favorable to the president’s party. In a statement, White House press secretary Sarah Huckabee Sanders said there is “substantial evidence of voter fraud” and blamed the ending of the commission on the refusal of many states to provide voter data sought by the panel and the cost of ongoing lawsuits. The bipartisan panel, known as the Presidential Advisory Commission on Election Integrity, had been nominally chaired by Vice President Pence and led by Kansas Secretary of State Kris Kobach, a Republican who has aggressively sought to prosecute alleged voter fraud in his state. Pence in recent months had sought to distance himself from its work. In the statement, Sanders said Trump had signed an executive order asking the Department of Homeland Security “to review its initial findings and determine next courses of action.” Critics of the commission hailed Trump’s announcement, calling it long overdue. 

Sessions names 17 interim U.S. attorneys, including in premier Manhattan office -WaPo --Attorney General Jeff Sessions is naming 17 interim U.S. attorneys to run federal prosecutor shops across the country, including the premier office in Manhattan. Geoffrey S. Berman, a law partner of Rudolph W. Giuliani at the firm Greenberg Traurig and a former federal prosecutor, was named to the interim post at the U.S. attorney’s office in Manhattan, which handles some of the most high-profile cases in the country, according to a release from the Justice Department.  His appointment was announced along with 16 others, which Sessions said were necessary because those serving on an acting basis had reached the maximum amount of time they would be permitted to do so under federal law unless Sessions extended them. “As a former U.S. attorney myself, I have seen firsthand the impact that these prosecutors have and it is critical to have U.S. attorneys in place during this time of rising violent crime, a staggering increase in homicides, and an unprecedented drug crisis,” Sessions said in a statement. “That is why, today, I am appointing 17 current and former federal prosecutors to serve as U.S. attorneys on an interim basis. Each has excellent prosecution skills and the temperament necessary to succeed in this critical role — and they have already proven that with a number of accomplishments on behalf of the American people.” President Trump ultimately must nominate, and the Senate must confirm, leaders to fill each of the 93 U.S. attorney jobs across the country. In March 2017, the president suddenly removed dozens of Obama-era holdovers, leaving their top deputies to assume leadership roles while Trump contemplated his own picks.

Pot Stocks Tumble After Jeff Sessions Rescinds Policies Allowing States To Legalize Pot --- Just days after California started selling recreational marijuana to anyone over the age of 21, Attorney General Jeff Sessions has announced plans to rescind policies that have allowed states to circumvent federal laws and legalize the drug.  According to the Associated Press, the move by Sessions will require U.S. attorneys where pot is legal to decide whether to aggressively enforce federal marijuana law.Attorney General Jeff Sessions is going after legalized marijuana. Sessions is rescinding a policy that had let legalized marijuana flourish without federal intervention across the country.That’s according to two people with direct knowledge of the decision. They were not allowed to publicly discuss it before an announcement expected Thursday and spoke on condition of anonymity.The move will leave it to U.S. attorneys where pot is legal to decide whether to aggressively enforce federal marijuana law. The move likely will add to confusion about whether it’s OK to grow, buy or use marijuana in states where it’s legal, since long-standing federal law prohibits it.This is not great news for the folks that have plowed roughly $158 million into the weed ETF over the past week. Following the report, pot stocks have tumbled on sudden crackdown fears.

A Return to Debtors’ Prisons: Jeff Sessions’ War on the Poor -- One day after President Donald Trump invited Republican lawmakers to the White House to celebrate the historic tax cuts they passed for corporations and wealthy business leaders, his attorney general, Jeff Sessions, quietly reinstated a draconian policy that effectively serves as a regressive tax on America's poorest people. A symbol of Victorian England's inequitable nature made infamous by Charles Dickens, debtors' prisons were banned in the United States in 1833. The Supreme Court has affirmed the unconstitutionality of jailing those too poor to pay debts on three different occasion in the last century, finding that the 14th Amendment prohibits incarceration for non-payment of exorbitant court-imposed fines or fees without an assessment of a person's ability to pay and alternatives for those who cannot. "Punishing a person for his poverty" is illegal, the Court said. Yet in recent years the modern-day equivalent of debtors' prisons have returned, as cities have grown to rely on a punishing regime of fines and fees imposed on their own residents as a major stream of revenue. Routine traffic tickets or even overdue student loan payments can set off a cycle of debt that also includes the suspension of a driver's license or professional license and, in some cases, jail time. A suspended driver's license makes it nearly impossible to get to work. When a person can't pay, courts add more fines on top of the original. If those fees aren't paid, a jail sentence is imposed. Incarceration is also often meted out to low-income defendants facing misdemeanor charges who cannot afford to pay bond ahead of a court date. It should come as little surprise that the policing tactics that have been enacted to generate revenue through this debtors' system disproportionately impact people of color.

Trump administration kills Gateway tunnel deal - President Donald Trump dropped his own New Year's ball—in the form of a wrecking ball—with a late Friday afternoon announcement that effectively wipes out plans for perhaps the nation's most crucial infrastructure project.The president officially scrapped his predecessor's proposal to have the federal government underwrite half the cost of a multi-billion-dollar Amtrak tunnel connecting New Jersey to Penn Station, the busiest transit hub in the U.S. The lone existing tunnel is rapidly deteriorating, threatening to sever Amtrak's popular Northeast Corridor and to divert tens of thousands of New Jerseyans from their daily Manhattan commutes via New Jersey Transit.The administration released the news on the cusp of a holiday weekend in a letter from a top Federal Transit Administration official to Gov. Andrew Cuomo and his New Jersey counterpart Chris Christie, who had agreed with the Obama administration to split the project's costs 50-50. President Barack Obama's Department of Transportation, which encompasses the FTA, had consented to that framework with Christie, Cuomo, now-Senate Minority Leader Charles Schumer and New Jersey Sen. Corey Booker in 2015. Friday's letter, in response to an updated proposal by the two states to fund their half of the plan with federal loans, declared the deal null and void.

Trump administration shuts down $13B Obama-era rail tunnel funding deal: report | TheHill: The Trump administration has shut down an Obama-era deal to have the federal government help fund a $13 billion rail tunnel project between New York and New Jersey, according to Crain’s New York Business. In a letter obtained by Crain’s, an administration official calls the deal for the federal government to fund half of the project “non-existent.”"Your letter also references a non-existent '50/50' agreement between USDOT, New York, and New Jersey. There is no such agreement," Federal Transit Administration deputy administrator K. Jane Williams wrote in Friday's letter, which came after New York and New Jersey requested federal loans to cover their part of the deal to split the cost of the work. "We consider it unhelpful to reference a non-existent 'agreement' rather than directly address the responsibility for funding a local project where nine out of 10 passengers are local transit riders,” Williams continued. The project would have funded necessary repairs to an Amtrak tunnel between New Jersey and New York City, as well as help fix damaged dual-tunnel conduit and rebuild New Jersey’s Portal Bridge. The federal government often helps to cover the cost of necessary infrastructure projects. Gateway Development Corp., the group overseeing the project, called the letter "posturing.” “We are confident that the Trump Administration will engage with us as the President turns to infrastructure in 2018,” the group said in a statement. 

Dumb and Dumber: Donald Trump on Amazon and the Postal Service - Dean Baker - I thought I would throw in a word or two of clarification around Donald Trump's claim that the U.S. Postal Service is "dumber and poorer" because of its deal with Amazon. Trump's claim is based on a Citigroup study that found that Postal Service loses an average of $1.46 on each package it ships for Amazon. The Postal Service claims that it profits from its arrangement with Amazon and that it would lose business if it raises its rates. There actually is a very simple explanation for the differing assessments. The Postal Service has a huge amount of fixed costs in the form of retiree benefits and especially retiree health benefits. Congress has required that the Postal Service prefund 75 years of retiree health benefits. This requirement sets the Postal Service apart from private businesses, who do little or no prefunding of retiree health benefits. It also accounts for almost all of the Postal Service's losses over the last decade. But the accounting issue is independent of this requirement imposed by Congress. Essentially what the Citigroup study did was impute the largely fixed cost of retiree health benefits to the various sections of the Postal Service's business. If these costs are imputed to its delivery of packages for Amazon, the Citigroup study finds they are coming up short by $1.46 a package.  The question for the Postal Service is whether it is recovering its marginal costs -- the additional amount spent on labor, gas, wear and tear on vehicles, etc -- with the prices it is charging Amazon. The Postal Service claims it does (I have not tried to check their calculations), and if that is true, the Postal Service is coming out ahead from its deal with Amazon. So the loss claimed by the Citigroup study is clearly wrong and Donald Trump is wrong to be using it to attack the Postal Service, Amazon, and Jeff Bezos.

HIV/Aids adviser says panel's sudden firing by Trump 'feels like retribution' - Donald Trump has fired the remaining members of his advisory panel on HIV and Aids, abruptly and without full explanation, and drawing accusations that he is retaliating against activists and experts who oppose his healthcare agenda.The White House said such moves are typical when one administration takes over from another. Six members of the panel resigned in the summer, protesting against what they saw as a lack of support from the Trump administration. They accused the White House of not caring about the issue.On Wednesday, the remaining members of the panel received letters informing them they were being terminated. Some had more than a year left on their contracts. The White House said it was a routine move, a step towards changing the guard from members appointed by Barack Obama. But some panel members were left surprised, bruised and suspicious.“I had recently been re-sworn in through 2018, so why now?,” said Gabriel Maldonado, one of the fired advisers, who is chief executive of TruEvolution, a California group that works for the elimination of HIV and Aids and justice for lesbian, gay, bisexual and transgender (LGBT) people. “The timing feels awkward.”Maldonado said he was shocked to receive his termination letter by FedEx courier.“It feels like retribution,” he told the Guardian. “I’ve criticized the Trump government’s HIV policy … I think we all know broadly that there is a hostility that this administration has to people in the LGBTQ community, particularly [among] those on the evangelical right wing.”

Trump Administration to Roll Back Fines for Nursing Home Abuse - The nursing home industry, which has long been awash in claims of health violations and neglect, may soon be freed from the kinds of penalties it has paid in the past. A new Trump administration policy will roll back fines against nursing homes cited for mistreatment or abuse. The American Health Care Association and the nursing home industry are largely in favor of the move, having requested the change to Medicare’s penalty protocols in 2016. The Hill reports: The American Health Care Association had argued that inspectors were too focused on finding wrongdoings at nursing homes instead of assisting the facilities.“It is critical that we have relief,” Mark Parkinson, the group’s president, wrote in a letter to Donald Trump, then president-elect, in December 2016. According to the [New York] Times, nearly 6,500 nursing homes have received at least one citation for a serious violation since 2013 and about two-thirds of those have been fined by Medicare.Under the new rules, regulators are now discouraged from giving nursing homes fines, in some cases. Fines for some homes may also be decreased as a result of the new guidelines. Some worry that the new policies could allow the mistreatment of nursing home patients to go unpunished, by discouraging regulators from levying fines. Under Obama-era policies, two-thirds of homes cited for severe violations were fined. The New York Times reports that easing regulations that would previously have resulted in fines means nursing homes will now see reduced penalties, or none at all. In one example, the paper cites a nursing home that failed to properly monitor a patient’s wound, which led to her death. Under Obama-era policies, the nursing home was fined $282,954, but under the Trump administration’s guidelines, the same facility would be fined less than $21,000. Jezebel reported Thursday that a retirement community for people who have worked in the film industry is being sued for attempting to cover up the sexual abuse of more than a dozen female patients. Truthdig contributor Barbara Dunlap recently wrote about the hidden crisis of sexual abuse in nursing homes: In addition to detecting sexual abuse of elders, another formidable challenge is proving that it has taken place. The crime is often committed in a victim’s room at night, with no witnesses. Many victims—especially those who suffer from dementia or have lost the ability to speak—can’t remember, describe or even understand what has happened to them.

The Supreme Court’s Quiet Assault on Civil Rights - It is a little-known and disturbing fact that the Supreme Court is in the process of gutting what may be the most important civil rights statute Congress has ever passed. It is particularly distressing that the harm is being done by a largely unanimous court—and that, other than a few legal scholars, no one seems to be paying any attention.  The statute in question is Section 1983 of the United States Code, which was enacted in 1871 as part of Reconstruction. Section 1983 enables people to bring suits in federal court to enforce the rights created by the Fourteenth Amendment—which, among other things, prohibits state officials from depriving persons of due process and equal protection of the law. The law was designed to provide a federal remedy against officials who violated the rights of the newly freed slaves or who stood by while others, like the Ku Klux Klan, did so. Specifically, it authorizes individuals to sue in federal court “any person who under color of law” violates their constitutional rights. The purposes of the law are to compensate persons whose constitutional rights have been violated and to deter future violations. Actions brought under Section 1983 are known as constitutional tort suits. In 1961, in Monroe v. Pape, the Warren Court breathed life into the statute. The plaintiff in Monroe alleged that thirteen Chicago police officers broke into his home in the early morning without a warrant, made his family stand naked, and interrogated him under physical threat. The Supreme Court upheld the plaintiff’s claim for damages under Section 1983 and interpreted the “under color of law” requirement to include actions by government officials taken under the badge of their authority even if the actions exceeded what they were permitted to do under state law. A police officer who used excessive force—as in the Monroe case—would be a prime example.

Chief Justice Roberts says courts will examine protections against sexual harassment - WaPo - Chief Justice John G. Roberts Jr. announced an initiative Sunday to ensure there are proper procedures in place to protect law clerks and other court employees from sexual harassment, saying it is clear that the federal judiciary “is not immune” from a widespread problem.The statement, in Roberts’s 2017 State of the Judiciary Report , follows the retirement last month of Judge Alex Kozinski of the U.S. Court of Appeals for the 9th Circuit. The influential 67-year-old judge stepped down after two reports in The Washington Post detailed allegations he had subjected former law clerks and other women to inappropriate sexual behavior.  “Events in recent months have illuminated the depth of the problem of sexual harassment in the workplace, and events in the past few weeks have made clear that the judicial branch is not immune,” Roberts wrote.  “The judiciary will begin 2018 by undertaking a careful evaluation of whether its standards of conduct and its procedures for investigating and correcting inappropriate behavior are adequate to ensure an exemplary workplace for every judge and every court employee.”

Crisis For Mueller: Lindsey Graham Demands New Special Counsel To investigate Trump Dossier & FBI -- Strong Republican critic of Donald Trump ‘dismayed’ by confidential information about the Trump Dossier he has seen... Senator Lindsey Graham, previously one of President Trump’s most trenchant critics who back in July 2017 actually proposed a law to prohibit President Trump from firing Special Counsel Robert Mueller, has now made the extent of his disillusionment with the FBI’s conduct and with the whole Russiagate investigation crystal clear.In an interview with Fox News Lindsey Graham says that after having reviewed confidential information about the Trump Dossier provided at the insistence of Congressional investigators he is filled with dismay and believes that a new Special Counsel must be appointed to investigate the FBI’s conduct and the Trump Dossier.Here is how Byron York of the Washington Examiner reports Lindsey Graham’s comments: I’ve spent some time in the last couple of days, after a lot of fighting with the Department of Justice, to get the background on the dossier, and here’s what I can tell your viewers: I’m very disturbed about what the Department of Justice did with this dossier, and we need a special counsel to look into that, because that’s not in Mueller’s charter. And what I saw, and what I’ve gathered in the last couple of days, bothers me a lot, and I’d like somebody outside DOJ to look into how this dossier was handled and what they did with it.Host Brian Kilmeade asked Graham, “So, you’ve found out something you did not know?“Yes,” Graham answered.

GOP Senators Ask For Criminal Probe Of British Spy Who Wrote "Trump Dossier" - Many details surrounding the now-infamous "Trump Dossier," from who funded it to how exactly it made it's way into the hands of the FBI and whether or not it was relied upon to secure FISA warrants to spy on members of Trump's campaign, are critical to determining whether partisan politics, or fact-based investigative work, drove the DOJ's initial efforts in its Russia probe. Now, Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa) and Judiciary Subcommittee on Crime and Terrorism Chairman Lindsey Graham (R-SC)  say they've uncovered what they believe is sufficient evidence to refer the author of the dossier, ex-MI6 spy Christopher Steele, to the Justice Department for an investigation of potential violations of 18 U.S.C. § 1001 for false statements about the distribution of claims contained in the dossier. “I don’t take lightly making a referral for criminal investigation. But, as I would with any credible evidence of a crime unearthed in the course of our investigations, I feel obliged to pass that information along to the Justice Department for appropriate review,” Grassley said. “Everyone needs to follow the law and be truthful in their interactions with the FBI. If the same actions have different outcomes, and those differences seem to correspond to partisan political interests, then the public will naturally suspect that law enforcement decisions are not on the up-and-up. Maybe there is some innocent explanation for the inconsistencies we have seen, but it seems unlikely. In any event, it’s up to the Justice Department to figure that out.” “After reviewing how Mr. Steele conducted himself in distributing information contained in the dossier and how many stop signs the DOJ ignored in its use of the dossier, I believe that a special counsel needs to review this matter. The rule of Law depends on the government and all who work on its behalf playing by the rules themselves. I hope the Department of Justice will carefully review our letter and take appropriate action,” Graham said.

Judiciary Republican: If there was any Trump-Russia collusion, it would have leaked months ago | TheHill: Rep. Ron DeSantis(R-Fla.) said on Sunday that if there was a connection between members of the Trump campaign and Russia's election meddling it would have already been leaked. "If there was any evidence of collusion, that would've been leaked months and months ago," DeSantis said on Fox News's "Sunday Morning Futures." Alleged collusion between President Trump's campaign and Moscow officials is the focal point of an ongoing federal probe, as well as a congressional investigation. DeSantis, a House Judiciary Committee member, referenced previous leaks to the media from individuals within the government as evidence for how likely it is bombshell information would be leaked. The congressman's comments follow a bombshell New York Times report that claimed former Trump campaign foreign policy adviser George Papadopoulos triggered the federal probe by drunkenly leaking information to an Australian diplomat in 2016. Papadopoulos reportedly said that Russian officials had dirt on former Democratic presidential nominee Hillary Clinton, potentially implying that Russian officials were shopping the information to the Trump campaign. Republicans have said the investigation was prompted by an unverified dossier containing claims of collusion compiled by a British intelligence officer. The dossier documents Trump's reported ties to Moscow. However, Republicans and the president have dismissed it as politically motivated. 

State Department releases emails from computer Huma Abedin shared with Anthony Weiner -- The State Department on Friday released 2,800 work-related emails from Huma Abedin, a top aide to Hillary Clinton, that were found by the FBI on the laptop computer of Abedin’s husband, disgraced former Rep. Anthony Weiner of New York. Five of the messages from Abedin were marked classified, like numerous other emails that were sent or received by Clinton or her aides then deemed classified by the State Department in the process of preparing them for public release in response to Freedom of Information Act requests and lawsuits. Friday’s batch of emails is connected to a lawsuit filed by Judicial Watch, a conservative group that is seeking access to work messages Abedin sent from a personal email account.Describing the release, a State Department spokesperson said the department “carefully reviews the content of records requested through FOIA to determine whether any information is sensitive or classified.”   “Today’s production will have documents with classified information that has been redacted,” the spokesperson said. The emails that were deemed classified deal with talks between the Palestinian militant movement Hamas and the Palestine Liberation Organization; a call to Israeli Prime Minister Benjamin Netanyahu; and conversations with the United Arab Emirates’ foreign minister.  Abedin has been a top Clinton aide for decades and at the time was serving as deputy chief of staff. She has filed for divorce from Weiner, but had forwarded emails to a laptop the couple shared. The computer was the source of major news coverage when the FBI, which was investigating Weiner for sending lewd texts to a minor, found the messages during the 2016 presidential campaign.

Huma Abedin Forwarded Top Secret Passwords To Yahoo Account Hacked By Russian With Odd Clinton Connection -  Huma Abedin forwarded a trove of sensitive emails to her personal Yahoo account, including passwords to government systems - before every single Yahoo account was affected by a massive hack conducted by a Russian security expert employed by the same Moscow bank former President Bill Clinton gave a $500,000 speech to in 2010, according to Luke Rosiak of the Daily Caller. As Hillary Clinton's Deputy Chief of Staff at the State Department, Abedin sent passwords for her government laptop to her Yahoo account on August 24, 2009, according to an email released in September 2017.  This wasn't the first time Abedin sent sensitive information through Yahoo. In addition to classified notes on a call with the U.N. secretary-general, Abedin received an email with the subject "Re: your yahoo acct." - establishing that others knew of her use of the email account for official business.     According to the Daily Caller: Abedin received an email “with the subject ‘Re: your yahoo acct.’ Abedin did not recall the email and provided that despite the content of the email she was not sure that her email account had ever been compromised,” on Aug. 16, 2010,  an FBI report says.The FBI also asked her about sending other sensitive information to Yahoo. “Abedin was shown an email dated October 4, 2009 with the subject ‘Fwd: US interest in Pak Paper 10-04’ which Abedin received from [redacted] and then forwarded to her Yahoo email account…. At the time of the email, [redacted] worked for Richard Holbrooke who was the Special Representative for Afghanistan and Pakistan (SRAP). Abedin was unaware of the classification of the document and stated that she did not make judgments on the classification of materials that she received,” the report said. After Abedin sent an unspecified number of sensitive emails to her Yahoo account, half a billion Yahoo accounts were hacked by Russian cybersecurity expert and Russian intelligence agent, Igor Sushchin, in 2014. The hack, one of the largest in history, allowed Sushchin's associates to access email accounts into 2015 and 2016.

Former Bush ethics lawyer: Trump’s McCabe tweet ‘a very stupid thing for him to do’ | TheHill: Former White House ethics lawyer Richard Painter blasted President Trump on Thursday for tweets attacking FBI Deputy Director Andrew McCabe, calling the messages Trump sent over the weekend "stupid." In an interview with CNN's "New Day," Painter, who served under President George W. Bush, said that Trump's tweets indicate a "pattern" of obstructing law enforcement. "In and of itself I don't think this tweet would lead to a criminal charge," Painter said. "The problem is, this is part of a pattern of the president injecting himself into the Russia investigation, first by asking Director [James] Comey for loyalty, pressuring Director Comey to not go after Gen. [Michael] Flynn, and then drop the Russia investigation and firing Comey." "If this tweet were combined with any other action by the president or people working for him, to retaliate against Director McCabe in his capacity as deputy director of the FBI, then you could get to the point where there was witness intimidation," Painter added. Painter went on to call Trump's repeated tweets about Robert Mueller's special counsel investigation into Russian election meddling "stupid" as the probe ensnares former members of Trump's campaign in legal trouble. "This is an incriminating tweet," Painter said. "It was a very, very stupid thing for him to do, to tweet that out." Trump on Saturday lashed out at McCabe on Twitter, accusing him of botching the investigation into former Secretary of State Hillary Clinton's private email server amid reports that McCabe is considering retiring from the FBI in March. 

Ex-Watergate prosecutor: Trump FBI attacks may amount to obstruction of justice | TheHill: A former Watergate prosecutor said Tuesday that President Trump's new attacks on the FBI could amount to obstruction of justice. "It is also a possible obstruction of justice, witness intimidation, and it's obstructing justice by saying to agents, 'you better not dig too deep, you better not find anything because I will attack you,'" Jill Wine-Banks said during a segment on MSNBC. Wine-Banks said if you're interfering with an investigation by doing that, then that's obstruction of justice. "And I think it's a serious threat to the investigation and to democracy," she said. She also said the evidence of obstruction of justice is starting to get clearer, citing the firing of former FBI Director James Comey, the threat to the FBI and the "possible firing or pushing out of McCabe." Trump in recent days has stepped up his attacks against the FBI. On Saturday, Trump swiped at multiple agency officials in a string of tweets, in which he suggested FBI Deputy Director Andrew McCabe may have been compromised by political donations and ripped Comey as a leaker. Special counsel Robert Mueller is conducting an investigation into possible collusion between the Trump campaign and Russia. The investigation is wide-ranging and Trump's critics hope it will lead to obstruction of justice charges against the president. "And this is the president of the United States, it is congressmen who have a national audience and can make people's lives miserable."

Ex-CIA agent: Leak of Papadopolous’ Hillary confession was timed to let Trump know the FBI is ‘taking off the gloves’ -- Appearing on on MSNBC Sunday morning, former CIA agent Ned Price was asked by MSNBC host Frances Rivera about a tweet (see below) he posted on Saturday, writing: “Timing of this story is interesting, coming 4 days after Trump’s false dossier tweets, which also impugned the FBI. The FBI largely treated the Trump campaign & subsequently the Trump presidency w kid gloves. But this may indicate the gloves are coming off.” “What would this have looked like if he didn’t get kid gloves?” Rivera asked. “Let me remind you for much of 2016 the American people were under the distinct impression the FBI was investigating one of the two major party nominees,” Price remarked. “We knew all along that an investigation grew out of the Benghazi probe into Hillary Clinton. Director Comey in July of 2016 then famously went out and detailed the case the FBI laid out ultimately exonerating her but doing political damage in the process. But then just a few months latter, in October, sending a public letter — a letter made public, I should say — essentially saying the case had been reopened. And all of that time we knew that there was this ongoing investigation into the Clinton matter.” “What we did not know until 2017 was that the FBI also had an investigation into the Trump campaign,” he added.Turning to the Papadopoulos revelation, Price elaborated. “I don’t know for certain that it came from the FBI. but the timing to me certainly is interesting,” Price explained. “It did come about four days after the president’s alleged that the [Steele] dossier — falsely alleged, I should say — that the dossier spawned this investigation when we now know otherwise. This, to me, certainly looks like it could be the FBI trying to correct the record here.” 

FBI launches new Clinton Foundation investigation | TheHill: The Justice Department has launched a new inquiry into whether the Clinton Foundation engaged in any pay-to-play politics or other illegal activities while Hillary Clinton served as secretary of State, law enforcement officials and a witness tells The Hill. FBI agents from Little Rock, Ark., where the foundation was started, have taken the lead in the investigation and have interviewed at least one witness in the last month, and law enforcement officials said additional activities are expected in the coming weeks. The officials, who spoke only on condition of anonymity, said the probe is examining whether the Clintons promised or performed any policy favors in return for largesse to their charitable efforts or whether donors made commitments of donations in hopes of securing government outcomes. The probe may also examine whether any tax-exempt assets were converted for personal or political use and whether the foundation complied with applicable tax laws, the officials said. One witness recently interviewed by the FBI described the session to The Hill as “extremely professional and unquestionably thorough” and focused on questions about whether donors to Clinton charitable efforts received any favorable treatment from the Obama administration on a policy decision previously highlighted in media reports. The witness discussed his interview solely on the grounds of anonymity. He said the agents were from Little Rock and their questions focused on government decisions and discussions of donations to Clinton entities during the time Hillary Clinton led President Obama's State Department. 

Comey’s original Clinton memo released, cites possible violations -- Ex-FBI Director James Comey’s original statement closing out the probe into Hillary Clinton's use of a private email server was edited by subordinates to remove five separate references to terms like “grossly negligent” and to delete mention of evidence supporting felony and misdemeanor violations, according to copies of the full document. Comey also originally concluded that it was “reasonably likely” that Clinton’s nonsecure private server was accessed or hacked by hostile actors, though there was no evidence to prove it. But that passage was also changed to the much weaker “possible,” the memos show. The full draft and edits were released on the website of Senate Homeland and Government Affairs Committee Chairman Ron Johnson (R-Wis.), providing the most complete public accounting to date of Comey’s draft and the subsequent edits. The draft, released in full for the first time on Thursday, offers new details on the FBI's Clinton investigation and controversial conclusion. The Hill was first to report late last year that Comey originally concluded Clinton was “grossly negligent” — the statutory term supporting felony mishandling of classified information — when she and her aides transmitted 110 emails containing classified information through her non-secure server but that subordinates edited the term to the lesser “extremely careless.” The full draft, with edits, leaves little doubt that Comey originally wrote on May 2, 2016, that there was evidence that Clinton and top aides may have violated both felony and misdemeanor statutes, though he did not believe he could prove intent before a jury. 

David Brock And Clinton Pal Funneled $700K To Fund Trump Sexual Harassment Accusers - Weeks after The Hill revealed a $750,000 scheme by California woman's rights attorney Lisa Bloom to compensate women accusing Donald Trump of sexual misconduct - one of whom had her mortgage paid off after Trump ignored her pleas to become his makeup-artist during the campaign - the New York Times claims in a bombshell report  that DNC operative and Media Matters founder David Brock, along with major Hillary Clinton friend and donor, Susie Tompkins Buell, steered $700,000 towards Bloom's efforts to smear Trump with sexual misconduct claims right before the 2016 election.  As the NYT notes, several donors reached out to Ms. Bloom “asking how they could help." She told them that she was working with “a few other women” who might "find the courage to speak out" against Mr. Trump if the donors would provide funds for security, relocation and possibly a safe house."Ms. Bloom would not identify the donors. But two Democrats familiar with the arrangements said a nonprofit group founded by Mr. Brock, American Bridge 21st Century Foundation, gave $200,000, while the fashion entrepreneur Susie Tompkins Buell, a major donor to Mr. Brock’s suite of groups, gave $500,000 to Ms. Bloom’s firm for the last-ditch effort.Democrats familiar with the financial arrangements told the NYT that Bloom's firm kept the money from Brock's American Bridge, while refunding the money from Buell - a longtime friend and financial supporter of Hillary ClintonOf note, Brock previously sat on the board of Hillary Clinton super PAC Priorities USA Action, and his group "Correct the Record" sunk over $1 million into a digital task force called "Barrier Breakers 2016," which had a mandate to "engage in online messaging for both Secretary Clinton and to push back against attackers on social media (The Atlantic)." Meanwhile, Brock's Correct The Record defended coordinating with the Clinton campaign and contributing $6 million to fund Hillary.

Congressional investigators find irregularities in FBI's handling of Clinton email case | TheHill: Republicans on key congressional committees say they have uncovered new irregularities and contradictions inside the FBI’s probe of Hillary Clinton’s email server. For the first time, investigators say they have secured written evidence that the FBI believed there was evidence that some laws were broken when the former secretary of State and her top aides transmitted classified information through her insecure private email server, lawmakers and investigators told The Hill. That evidence includes passages in FBI documents stating the “sheer volume” of classified information that flowed through Clinton’s insecure emails was proof of criminality as well as an admission of false statements by one key witness in the case, the investigators said. The name of the witness is redacted from the FBI documents but lawmakers said he was an employee of a computer firm that helped maintain her personal server after she left office as America’s top diplomat and who belatedly admitted he had permanently erased an archive of her messages in 2015 after they had been subpoenaed by Congress. The investigators also confirmed that the FBI began drafting a statement exonerating Clinton of any crimes while evidence responsive to subpoenas was still outstanding and before agents had interviewed more than a dozen key witnesses. Those witnesses included Clinton and the computer firm employee who permanently erased her email archives just days after the emails were subpoenaed by Congress, the investigators said. Lawmakers on the House Judiciary Committee who attended a Dec. 21 closed-door briefing by FBI Deputy Director Andrew McCabe say the bureau official confirmed that the investigation and charging decisions were controlled by a small group in Washington headquarters rather the normal process of allowing field offices to investigate possible criminality in their localities. The Clinton email server in question was based in New York.

Dodd-Frank is here to stay | American Banker - Despite repeated campaign promises from President Trump to dismantle the Dodd-Frank Act, the crisis-era law remains firmly implanted in the bank regulatory system—and it seems almost certain to stay that way. The Republican wave in the fall of 2016 presented the biggest threat to the law since its passage, with policymakers hostile to it running both the White House and Congress. But while there have been changes—and, to be sure, more are set to come—the law itself continues to provide a central framework for how financial institutions are supervised and run. “The skeleton of Dodd-Frank is the law of the land and will remain so, it’s just a question of the size of the muscles,” said Isaac Boltansky, an analyst at Compass Point Research & Trading.   This is perhaps surprising given the fact that several high-profile financial executives, including OneWest’s Steven Mnuchin and Goldman Sach’s Gary Cohn, now occupy top positions in the White House. But the truth is that the survival of Dodd-Frank is good news for many banks, which have for the most part adjusted to the 2010 law. It should also provide some measure of relief for those who fought for its passage in the wake of the financial crisis.  In fact, former Rep. Barney Frank, one of the law’s co-authors, said he’s feeling a lot more at ease than he was in the wake of the upheaval election.  “I remember telling my husband, that law I worked on is totally at risk,” he told me in an interview late last month. “I feel very much more optimistic than I did.”  The reforms Frank championed—targeted at the failures of the last crisis and maintaining the health of the biggest banks—are still firmly rooted. There’s been very little talk, for example, of revising the law’s derivatives rules by Trump appointees, including J. Christopher Giancarlo, head of the Commodity Futures Trading Commission.  At the same time, Trump’s decision to nominate Federal Reserve Gov. Jerome Powell, an Obama-era nominee, as the central bank’s chair perhaps best underscores the sense that, despite much bluster, the Obama administration’s position on capital rules, stress tests and supervision of Wall Street banks is unlikely to be radically altered.

 Nomi Prins: The Next Financial Crisis Will Be Worse Than the Last One -  The billionaire who ran on an anti-establishment platform went on a swamp-filling, deregulatory and inequality-producing tear, in the process creating the wealthiest Cabinet in modern United States history and expanding his own empire along the way. His offspring, Russia-related investigations aside, didn’t do too shabbily either. White House policy adviser Ivanka Trump’s brand opened a splashy new store in the lobby of Trump Tower in Manhattan, just in time for Christmas. Those of us living in the actual world without billionaire family pedigrees possess a healthy dose of skepticism over the “Make America Great Again” sect that believes Trump has transformed America “hugely,” for record-setting markets don’t imply economic stability, nor do 40 percent corporate tax cuts translate into 40 percent wage growth. We can march forward into 2018 carrying that knowledge with us.  Since the Fed’s announcement that it was going to stop reinvesting the interest payments on the bonds it’s holding, the size of its book has been about the same. There’s always a mismatch between what the Fed says and what it does.So despite its tapering talk, the Fed’s balance sheet is down a mere $10 billion (an equivalent of a rounding error) this year. Its book of assets remains at $4.41 trillion, a figure equivalent to 23 percent of U.S. GDP. Incoming Fed Chair Powell is more likely to keep supplying cheap money than withdrawing it from the markets in the instance of any wobbles.What does that mean? Financially speaking, 2018 will be a precarious year of more bubbles inflated by cheap money, followed by a leakage that will begin with the bond or debt markets. The GOP tax cuts won’t technically kick in monetarily for corporations until after the year is over in 2019, but the anticipation of extra funds will fuel more buybacks. This will help to provide cover for any rate hikes the Fed implements, because it provides corporations the ability to boost their own share prices further. Meanwhile, the Treasury Department, Federal Reserve and other smaller regulatory authorities in Washington will push for greater deregulation of the financial systems and banking industry on any level possible. If there is another financial crisis in 2018 or later, it will be worse than the last one because the system remains fundamentally unreformed, banks remain too big to fail and the Fed and other central banks continue to control the flow of funds to these banks (and through to the markets) by maintaining a cheap cost of funds. Politically, no one in any position of power will do anything to fix any of this.

Goldman Sachs Trying to Kill Initiative Requiring More Lobbying Disclosure -- Amid intensifying shareholder pressure on companies to be more transparent about their political spending, Goldman Sachs has moved to prevent its shareholders from voting to force executives to disclose their efforts to influence politicians, according to corporate documents reviewed by International Business Times. The banking behemoth, which has been boosted by taxpayer-financed bailouts and has landed former executives in key government jobs, asked federal regulators to bless its attempt to block the initiative in a letter sent to the Securities and Exchange Commission — an agency now chaired by a former outside attorney for Goldman Sachs whose spouse also worked at the bank. Goldman’s request to the SEC comes in response to shareholders’ proposed resolution to require the bank to release an annual report documenting the policies governing the company’s lobbying, and disclosing all payments made by the company for direct and indirect lobbying of public officials. Between 2010 and 2016, Goldman has spent more than $26 million on federal lobbying, on top of what it spent at the state level where “disclosure is uneven or absent,” wrote the Unitarian Universalist Association (UUA), which represents more than 1,000 religious organizations and has spearheaded the resolution. The group also said the bank does not comprehensively disclose its memberships in and payments to powerful lobbying groups -- even as at least one of those groups has lobbied the National Economic Council headed by former Goldman president Gary Cohn.

 Hatch retirement paves way for makeover atop banking panel - — The announcement Tuesday by Sen. Orrin Hatch that he will retire at the end of the year could have a ripple effect throughout the Senate, including the leadership of the Banking Committee. It was not a surprise that Hatch, an 83-year-old Utah Republican who chairs the Senate Finance Committee, decided to leave after more than 40 years in the Senate. But his departure will leave an opening to oversee one of the Senate's most coveted panels. Senate Banking Committee Chairman Mike Crapo, R-Idaho, is third in seniority among Republicans on the Finance Committee. He may want to trade up to what is viewed as a more prominent chairmanship, leaving an opening atop the banking panel. That could in turn affect the committee's agenda on everything from reforming the government-sponsored enterprises to regulatory reform. “Whenever a coveted position like chair of Senate Finance opens, there will be many contenders,” said James Ballentine, executive vice president of congressional relations and political affairs for the American Bankers Association.  “Chairman Crapo, who has done a great job of leading the Senate Banking Committee, has enough seniority to be strongly considered to lead Finance.”If Crapo gives up the Banking Committee gavel next year and the GOP holds the Senate in midterm elections, Sen. Pat Toomey, R-Pa., would stand in line potentially to become chairman of the banking panel. Sens. Richard Shelby, R-Ala., and Bob Corker, R-Tenn., have both served on the banking panel longer than Toomey, but Shelby — a past chairman — is termed out and Corker announced earlier this year that he also plans to step down from the Senate.

Congress to take fresh look at money laundering regs — Congress may look to reform illicit financing and money laundering regulations in 2018. The Senate Banking Committee’s first hearing of the year is titled "Combating Money Laundering and Other Forms of Illicit Finance: Opportunities to Reform and Strengthen BSA Enforcement." The House Financial Services Committee has also raised the issue of anti-laundering regulations and created a new subcommittee in 2017 devoted to terrorism and illicit finance. Some members of Congress have also proposed requiring companies to simply report the beneficial owner in the state in which a firm is created. Banks would then be able to access that information when they are doing their due diligence. Greg Baer, the CEO of The Clearing House Association, which represents the largest financial firms, is expected to testify at the Senate Banking hearing on Jan. 9 along with former FBI Chief Dennis Lormel and Heather Lowe, head of government affairs at the think tank Global Financial Integrity.  U.S. anti-money-laundering and counter-terror-financing laws derive in large part from the 1970 Bank Secrecy Act and the 2001 USA Patriot Act. But regulations haven’t kept up with technological advances or even inflation, according to experts and industry representatives.  Some members of Congress have proposed requiring companies to simply report the beneficial owner in the state in which a firm is created. Banks would then be able to access that information when they are doing their due diligence.

Citibank fined $70M for failing to fix BSA deficiencies - Citibank has paid a $70 million penalty for failing to comply with a 2012 consent order related to the bank’s anti-money-laundering policies, the Office of the Comptroller of the Currency said Thursday. The 2012 order cited Citibank for deficiencies in its Bank Secrecy Act and anti-laundering compliance program. At the time, the regulator said that Citibank had begun taking steps to fix those problems.   “In assessing this civil money penalty, the agency found that the bank has not achieved compliance with the OCC’s 2012 order, failing to complete corrective actions to address BSA/AML compliance issues as required by the order,” the OCC said in a statement.

Can blockchain technology revive peer-to-peer lending? - The original premise of online peer-to-peer lending platforms was simple and democratic: A single mom from Kalamazoo, Mich., could post her story explaining why she needed $5,000 to pay off her credit card, and a retired electrician in Illinois could read it, decide to fund her loan and receive interest far exceeding what he could get on his savings account.LendingClub and others that proffered this people-helping-people model quickly found they needed to make changes. They turned to large institutions to buy the loans in bulk. Is it possible that blockchain or distributed ledger technology — a mechanism through which many parties share a record of transactions and supporting documents — could be used to revive the original idea of P-to-P lending?  Eric Piscini, a principal in banking and technology at Deloitte Consulting, suggests that blockchain technology could bring a return to the way people got funding even before banks existed.  “Blockchain is a way to go back in history, because when you think about the way we were lending, the way we were paying, the way we were trusting each other, it was peer-to-peer. Over time we added intermediaries and third parties because we stopped trusting each other,” he said.

 Will tomorrow's core banking systems run on open-source software? - Banks, long committed to keeping customer data private and their own code proprietary, are now opening up to fintechs and third-party developers in new ways.  Open-source projects are underway at Deutsche Bank, which made code from its Autobahn commercial banking software publicly available this fall, and at JPMorgan Chase, whose Quorum blockchain software is available in the open-source software repository GitHub.  As financial institutions experiment with new technologies, more are expected to adopt open-source software in place of commercial applications. Some may even explore open-source development themselves, as it offers access to a wider pool of developers who can not only work out bugs at no charge but write programs that will benefit bank customers. A global study by Accenture found that 99 of 100 payments executives at major banks said their bank intends to make large investments in open banking initiatives by 2020. Of those at North American banks, 63% believe that a move toward open banking is essential to compete with fintech startups and large technology firms, while 52% of all the executives surveyed said they would be forced to adopt open banking practices to keep up with other big banks, as a wave of digital transformation overtakes the industry as a whole.

Merrill Lynch bans its clients, advisors from trading bitcoin-related investments, report says -- Merrill Lynch financial advisors cannot buy bitcoin-related investments for their clients, The Wall Street Journal reported Wednesday.The ban prevents the financial giant's roughly 17,000 advisors from pitching investments related to bitcoin and executing client requests to trade Grayscale's bitcoin investment trust (GBTC), the newspaper said, citing a person familiar with the matter.   "The decision to close GBTC to new purchases is driven by concerns pertaining to suitability and eligibility standards of this product," according to an internal memo the newspaper reviewed.  A Merrill Lynch spokesperson confirmed the report to CNBC.Michael Sonnenshein, director of sales and business development at Grayscale, said in a statement to CNBC that, " We look forward to speaking with Merrill Lynch and addressing any questions or concerns they have about the Bitcoin Investment Trust. We are unaware of any similar policies at other brokerage firms." GBTC is traded over the counter, rather than through a formal venue like the New York Stock Exchange. The bitcoin trust is the top holding of two of Ark Invest's exchange-traded funds, which unsurprisingly were among the top performing ETFs last year, according to Merrill Lynch previously banned access to the bitcoin futures that CME, the world's largest futures exchange, and its competitor Cboe launched in mid-December.  Bitcoin has soared more than 1,300 percent over the last 12 months and has drawn strong criticism that the digital currency is in a highly speculative bubble.

Crypto-asset market will hit $10 trillion, analyst predicts - If the crypto-asset market is in a bubble at $700 billion or so — a level it reached in the past 24 hours — then what should we call a $10 trillion crypto market? A Double Bubble?Wacky as it might sound, $10 trillion is the future value a new report from RCB Capital Markets predicts for the asset class, its associated technologies and the companies built on them.Public blockchains such as bitcoin's and Ethereum's, and their attendant cryptocurrencies, rely for their value on a combination of decentralized computing, open-source software and social consensus. So powerful is this combination that Mitch Steves, an RBC Capital Markets analyst focused on information technology, believes it will allow the digital-asset market to gobble up chunks of the existing markets for gold, offshore bank accounts, international remittance payments and more. This bull case makes more sense when you step back from the hype and consider the profound implications of cryptocurrencies and blockchains. Bitcoin is often called "programmable money" for its ability to serve as a medium of exchange that improves with each software upgrade. And Ethereum, which offers the ability to create and run automated functions known as smart contracts, has been called a "world computer" potentially capable of powering a new, decentralized internet.

Researchers Discover Two Major Flaws in the World’s Computers - Computer security experts have discovered two major security flaws in the microprocessors inside nearly all of the world’s computers. The two problems, called Meltdown and Spectre, could allow hackers to steal the entire memory contents of computers, including mobile devices, personal computers and servers running in so-called cloud computer networks. There is no easy fix for Spectre, which could require redesigning the processors, according to researchers. As for Meltdown, the software patch needed to fix the issue could slow down computers by as much as 30 percent — an ugly situation for people used to fast downloads from their favorite online services. “What actually happens with these flaws is different and what you do about them is different,” said Paul Kocher, a researcher who was an integral member of a team of researchers at big tech companies like Google and Rambus and in academia that discovered the flaws. To take advantage of Meltdown, hackers could rent space on a cloud service, just like any other business customer. Once they were on the service, the flaw would allow them to grab information like passwords from other customers. That is a major threat to the way cloud-computing systems operate. Cloud services often share machines among many customers — and it is uncommon for, say, a single server to be dedicated to a single customer. Though security tools and protocols are intended to separate customers’ data, the recently discovered chip flaws would allow bad actors to circumvent these protections. The personal computers used by consumers are also vulnerable, but hackers would have to first find a way to run software on a personal computer before they could gain access to information elsewhere on the machine. There are various ways that could happen: Attackers could fool consumers into downloading software in an email, from an app store or visiting an infected website. According to the researchers, the Meltdown flaw affects virtually every microprocessor made by Intel, which makes chips used in more than 90 percent of the computer servers that underpin the internet and private business operations. Customers of Microsoft, the maker of the Windows operating system, will need to install an update from the company to fix the problem. The worldwide community of coders that oversees the open-source Linux operating system, which runs about 30 percent of computer servers worldwide, has already posted a patch for that operating system. Apple had a partial fix for the problem and is expected to have an additional update. The software patches could slow the performance of affected machines by 20 to 30 percent, said Andres Freund, an independent software developer who has tested the new Linux code. The researchers who discovered the flaws voiced similar concerns.

Meltdown, Spectre: The password theft bugs at the heart of Intel CPUs - The severe design flaw in Intel microprocessors that allows sensitive data, such as passwords and crypto-keys, to be stolen from memory is real – and its details have been revealed.On Tuesday, we warned that a blueprint blunder in Intel's CPUs could allow applications, malware, and JavaScript running in web browsers, to obtain information they should not be allowed to access: the contents of the operating system kernel's private memory areas. These zones often contain files cached from disk, a view onto the machine's entire physical memory, and other secrets. This should be invisible to normal programs.Thanks to Intel's cockup – now codenamed Meltdown – that data is potentially accessible, meaning bad websites and malware can attempt to rifle through the computer's memory looking for credentials, RNG seeds, personal information, and more. Here's a video demonstrating a Meltdown attack:  Using #Meltdown to steal passwords in real time #intelbug #kaiser #kpti /cc @mlqxyz @lavados @StefanMangard @yuvalyarom — Michael Schwarz (@misc0110) January 4, 2018On a shared system, such as a public cloud server, it is possible, depending on the configuration, for software in a guest virtual machine to drill down into the host machine's physical memory and steal data from other customers' virtual machines. See below for details on Xen and VMware hypervisor updates. Intel is not just affected. Arm and AMD processors are as well – to varying degrees. AMD insisted there is a "near-zero" risk its chips can be attacked in some scenarios, but its CPUs are vulnerable in others. The chip designer has put up a basic page that attempts to play down the impact of the bugs on its hardware.

Apple Says All iPhones, Macs Exposed To "Meltdown", "Spectre" Flaws -- All Mac iOS devices and systems are exposed and vulnerable to the recently discovered chip bugs known as Spectre and Meltdown, Apple confirmed on Thursday. The flaws, which as we discussed before, allow hackers unauthorized access to a computer’s memory and sensitive data, were discovered by security researchers at Google Project Zero on Wednesday. Security vulnerabilities called Meltdown and Spectre affect almost all modern CPUs, including those produced by Intel, AMD and ARM Holdings. “All Mac systems and iOS devices are affected,” Apple acknowledged in a statement on Thursday, adding that no cases had yet been reported of customers being affected by the security flaws. To address these security vulnerabilities, Apple users may have noticed a suspiciously timed software update released earlier this week for their iPads, MacBooks and iPhones – an update that appeared to precede news about the latest controversy involving makers of microprocessors. Intel, one of the world’s largest chipmakers, admitted that its chips contain a flaw making it easier for hackers to hoover up sensitive information like the owner’s passwords. It was later revealed that this flaw wasn’t exclusive to Intel’s chips: Indeed, it reportedly affects nearly all microprocessors in circulation, according to the New York Times. Here’s a succinct explanation of the problems that we published earlier this week:

  • 4. We're dealing with two serious threats. The first is isolated to #IntelChips, has been dubbed Meltdown, and affects virtually all Intel microprocessors. The patch, called KAISER, will slow performance speeds of processors by as much as 30 percent.
  • 5. The second issue is a fundamental flaw in processor design approach, dubbed Spectre, which is more difficult to exploit, but affects virtually ALL PROCESSORS ON THE MARKET and has NO FIX.

Users may have been wary after reading last month about Apple admitting what was long suspected by many loyal customers: That the company intentionally engineers software updates to slow down older products, thereby hastening the cycle of planned obsolescence that has helped establish Apple as the world’s most valuable company.  But as it turns out, the software update was designed to try and plug some of the security holes resulting from Intel’s Meltdown flaw.

"Everyone Is Affected": Why The Implications Of The Intel "Bug" Are Staggering - Earlier today, we reported that according to a press reports, Intel's computer chips were affected by a bug that makes them vulnerable to hacking. Specifically, The Register said the bug lets some software gain access to parts of a computer’s memory that are set aside to protect things like passwords, and making matters worse, all computers with Intel chips from the past 10 years appear to be affected. The news, which sent Intel's stock tumbling, was later confirmed by the company. In a statement issued on Monday afternoon, Intel said it was working with chipmakers including Advanced Micro Devices Inc. and ARM Holdings, and operating system makers to develop an industrywide approach to resolving the issue that may affect a wide variety of products, adding that it has begun providing software to help mitigate the potential exploits. Computer slowdowns depend on the task being performed and for the average user “should not be significant and will be mitigated over time" the company promised despite much skepticism to the contrary. As Bloomberg helpfully puts it, Intel's microprocessors "are the fundamental building block of the internet, corporate networks and PCs" and while Intel has added to its designs over the years trying to make computers less vulnerable to attack, arguing that hardware security is typically tougher to crack than software, there now appears to be a fundamental flaw in the design. As Bloomberg writes, "the vulnerability may have consequences beyond just computers, and is not the result of a design or testing error." Security vulnerability aside, the fix may be just as bad: it would result in a significant slowdown of the CPU, and the resultant machine. Because the exploit takes advantage of a technology intended to accelerate the performance of the processors, the fix slows them, said the person. In devices with the current generation of Intel chips, the impact will be small, but it will be more significant on older processors. Microsoft is still looking at the impact on the speed of cloud services and how it will compensate paying customers, the person said.

Intel CEO Krzanich sold shares after company was informed of chip flaw  - Intel CEO Brian Krzanich sold off a large portion of his stake in the company months after Google had informed the chipmaker of a significant security vulnerability in its flagship PC processors — but before the problem was publicly known.  The vulnerability, which affects processors from Intel, AMD, and ARM and could allow malicious actors to steal passwords and other secret data, became public this week. The disclosure has left processor makers and operating-system vendors including Intel and Microsoft scrambling to get on top of the story and patch their products.  But while the public is just being informed about the security problem, tech companies have known about it for months. In fact, Google informed Intel of the vulnerability in June, an Intel representative told Business Insider in a statement.  That means Intel was aware of the problem before Krzanich sold off a big chunk of his holdings. Intel's CEO saw a $24 million windfall November 29 through a combination of selling shares he owned outright and exercising stock options.  The stock sale raised eyebrows when it was disclosed, primarily because it left Krzanich with just 250,000 shares of Intel stock — the minimum the company requires him to hold under his employment agreement.

Banks, retailers, tech firms make rare joint call for federal data security rules — Twenty-two financial, retail and technology trade associations have sent a letter to the House Energy and Commerce Committee calling for new federal regulations governing data breaches that would preempt state law. The groups said new legislation should create a “flexible, scalable” standard that would account for the size, cost and nature of data collected by a company and that it should create a “notification regime” requiring timely notice of a data breach to consumers, law enforcement and regulators. “Consumers’ private information is extremely important to them, and Congress must act to better protect them,” said Jason Kratovil, vice president of government affairs for payments at the Financial Services Roundtable, who co-signed.

Congress needs to act on fintech before it's too late, key Dem says — Rep. Emanuel Cleaver, D-Mo., has emerged as one of the most outspoken members of Congress when it comes to fintech, both embracing its potential and calling for regulatory guardrails.“If we fail to act on fintech, we are setting ourselves up for problems down the road,” Cleaver said in a recent interview. “Not because the fintech folks are evil … but because we are behind the curve.”“We have a good chance now to build a road down which the wagon travels and I think we ought not to blow it.”Billions of dollars are flowing into the financial technology sector, but it remains unclear what kinds of actions regulators or policymakers may take to address the risks and rewards of the new products and services that are being offered. But many expect the issue to get more attention on Capitol Hill. As the top Democrat on the House Financial Services housing and insurance subcommittee, Cleaver is lobbying for a methodical approach. He wants to study the issue first and figure out a way to ensure proper safeguards are in place. For starters, he wants Republicans to hold more hearings on the issue. “We absolutely need to have representatives from fintech before the” Financial Services Committee, he said. “We have to have a good idea about fintech and online banking… before we start thinking about where they fit or will they be a new category altogether, separate and distinct from the big banks, from the community banks.”Cleaver said that there has to be a congressional “study period” on the state of fintech, and that leaders in the space, “to the degree they can express it,” should tell Congress how they envision the future.

FDIC win against PwC could finally force auditors to look for fraud - A federal judge has given the Federal Deposit Insurance Corp. a big win against PricewaterhouseCoopers, a decision that could cost the auditor more than $1 billion in damages and finally put auditors on the hook for detecting fraud.It’s a new responsibility that these firms have traditionally argued is not the point of an audit.On Dec. 28, U.S. District Judge Barbara Jacobs Rothstein gave the FDIC a victory on one of three claims it brought against PricewaterhouseCoopers, the auditor of Colonial Bank Group, a financial crisis-era bank that failed after a massive fraud was discovered between the bank and the mortgage originator Taylor Bean & Whitaker.But the claim — for professional negligence — was the FDIC’s most serious against PwC related to audits of Colonial for 2002 through 2005 and again in 2008.The case against PwC, and its internal audit co-source vendor Crowe Horwath, for professional malpractice and breach of contract, was the first FDIC suit against an auditor for financial crisis-era bank frauds or failures.  The Colonial Bank failure cost the FDIC’s deposit insurance fund $2.3 billion, according to the FDIC’s court filing. Judge Rothstein’s decision reduced the potential damages to an estimated $1.4 billion, after determining that a related breach by Bank of America BAC, -0.10%   of its custodial obligations to Colonial Bank was not foreseeable by the auditor. A hearing on the damages has not yet been scheduled. But even the lower award could stretch PwC’s finances since it has already agreed to two additional confidential settlements in the last 18 months, one for a related case brought against the firm by the bankruptcy trustee for TBW and another for the crisis-era failure of brokerage firm MF Global, another PwC audit client.

December 2017: Unofficial Problem Bank list declines to 103 Institutions, Q4 2017 Transition Matrix -- Note: Surferdude808 compiles an unofficial list of Problem Banks compiled only from public sources. Here is the unofficial problem bank list for December 2017.  Here are the monthly changes and a few comments from surferdude808: Update on the Unofficial Problem Bank List for December 2017. During the month, the list fell by five institutions to 103 after seven removals and two additions. Assets declined to $20.9 billion from $25.5 billion a month earlier. A year ago, the list held 169 institutions with assets of $45 billion.This month, actions were terminated against The Brand Banking Company, Lawrenceville, GA ($2.3 billion); Los Alamos National Bank, Los Alamos, NM ($1.3 billion); PBI Bank, Louisville, KY ($961 million Ticker: PBIB); Brickyard Bank, Lincolnwood, IL ($106 million); American Metro Bank, Chicago, IL ($63 million); State Bank of Burnettsville, Burnettsville, IN ($39 million); and Eagle Community Bank, Maple Grove, MN ($23 million).The two additions this month were South LaFourche Bank & Trust Company, Larose, LA ($157 million) and Bank of Hazlehurst, Hazlehurst, GA ($124 million). Concentrations of lending to commodities sectors are contributing factors in these banks problem status – oil & gas lending for South LaFourche Bank & Trust Company and agriculture lending for the Bank of Hazlehurst.Two weeks ago, Washington Federal Bank for Savings, Chicago, IL ($166 million) became the eight failure of 2017; however, its failure did not cause a removal from the Unofficial Problem Bank List as the thrift had not been identified as a problem bank by the Office of the Comptroller of the Currency (OCC), its primary federal regulator. The FDIC estimated the thrift’s resolution cost at an extremely high 36.4 percent of the thrift’s assets.  It seems likely that a long running fraud happened at the thrift. The lack of fraud identification by the OCC and the high resolution cost would lead some observers to say there was negligent oversight by the primary regulator. The untimely failure left $11.6 million of uninsured deposits at risk of loss. 

The Banks with the Most Consumer Complaints: A Dive into CFPB’s Database - There is no telling if the Consumer Financial Protection Bureau (CFPB) will even survive the next few years, given the opposition to it in the White House, Congress, and the banking lobby because it has become just too inconvenient for banks.One of the inconvenient aspects for the banks is the CFPB’s database of consumer complaints against financial institutions and other companies. This database is public and can be searched. Remember Wells Fargo? It became the most hated bank in America in 2016. You can go to CFPB’s site and search this database for Wells Fargo or any other bank and see what crops up. Go ahead, take a look while you can and put your bank of choice in the search box — before the data base gets taken off line. Below is this list of 49 banks for which the CFPB received at least some complaints between January 1 and December 10, 2017. They’re ranked from Number 1 with the most complaints (TFC Financial with 13.59 complaints per $1 billion in deposits) to Number 49 with the lowest complaint ratio (Western Alliance Bancorporation with 0.18 complaints per $1 billion in deposits).

GOP senator wants probe into vetting of CFPB deputy -- Sen. Ron Johnson, R-Wis., has asked the Office of the Special Counsel to investigate how Consumer Financial Protection Bureau Deputy Director Leandra English was "hastily approved" for a permanent civil service job at the agency, having previously been a political appointee at the Office of Personnel Management. Johnson, who heads the Senate Homeland Security and Governmental Affairs Committee, alleged that the Office of Personnel Management engaged in "a flawed vetting process," that allowed English's conversion to the CFPB job. "It appears that [the Office of Personnel Management] hastily approved Ms. English's conversion in the waning days of the Obama administration based on information that included errors, potential conflicts of interest, and insufficient independent verification," Johnson wrote in a four-page letter to Henry Kerner, the special counsel in the Office of Special Counsel.

The High Cost of Going Cashless - Essentially, there are two groups which would find themselves most impacted by the shift to a cashless society, the “unbanked” and the “underbanked.” While the Times article makes one, brief mention of the unbanked, linking to a piece about “Fintech” startups, the actual implications for those who do not have, or regularly use, bank accounts for their financial services are left unexplored. Therefore, to begin, let us understand the demographics of those who compose these two groups.The FDIC has identified that roughly 7 percent of the U.S. population does not have a bank account, however a further 20 percent are considered underbanked. These underbanked, despite having a bank account, regularly utilize alternative financial services, such as payday lenders and check cashing businesses, both of which charge higher fees for services that could be rendered at a bank.Statistically, people of color are far more likely to be either underbanked or unbanked. As of 2015, 54 percent of Black households and 46 percent of Latino households fell into one of these categories, as compared to 19 percent of white households. Low-income families and families with volatile monthly-to-monthly incomes are similarly more likely to belong to one of these categories. Finally, rural families are more likely to be unbanked and underbanked than urban families. Economic reasons are the primary cause of individuals being, and remaining, unbanked or underbanked. When surveyed, approximately 58 percent of unbanked individuals cite not having enough money to keep in the account or the account fees as their primary reason for not having one. While ostensibly trivial amounts, bank accounts, and the debit cards attached to them, usually require an initial deposit to open and minimum balance to maintain.

To stay an S Corp or not: Tax law puts small banks in a bind - It used to be an automatic that being a Subchapter S corporation could trim the tax bills of a lot of small-bank owners — no longer.Leaders of S Corp banks, along with their accountants, analysts and lawyers, are trying to determine whether the new tax law provides them the same upper hand they once enjoyed over traditional corporations. If not, it might encourage more banks to shed their S Corp status before the March 15 federal deadline.“Everybody’s scrambling right now,” said Guy Williams, president and CEO of Gulf Coast Bank & Trust in New Orleans, which is mulling a switch. “There’s a key deadline … and you have to decide by then whether you want to be a C Corp or an S Corp. Everyone is doing that analysis right now.” The new law is clearly more beneficial to C corporations, the head of the $1.5 billion-asset bank said.

 Bankers anxious as Trump mulls credit union regulator McWatters for CFPB — The Trump administration’s consideration of J. Mark McWatters to lead the Consumer Financial Protection Bureau is stoking fears among bankers that he will show favor to credit unions once in office. In his current position as chair of the National Credit Union Administration, McWatters has publicly advocated for cutting back the CFPB’s oversight of the credit union industry and supported separate measures that would allow such institutions to expand their lending footprint. “The NCUA has developed a reputation for being a cheerleader for its industry,” said Camden Fine, president and CEO of the Independent Community Bankers of America. Banking regulators, on the other hand, “have traditionally and still are basically impartial regulators of their industry,” he said. But some observers said that if he leads CFPB, McWatters, a former adviser to House Financial Services Committee Chairman Jeb Hensarling, R-Tex., would take a more objective approach to regulation. “Like Chairman Hensarling, his loyalty is to ideas, not to institutions,” “The longstanding rivalry between banks and credit unions is irrelevant to McWatters’ candidacy for the CFPB.”   McWatters’ public record is a concern for bankers, particularly his lobbying for breaks for credit unions from the CFPB. In a July letter to then-CFPB Director Richard Cordray, McWatters said credit unions with assets of more than $10 billion should be exempt from the bureau’s oversight. “As not-for-profit, consumer-owned and -controlled financial institutions," McWatters wrote, federally insured credit unions "serve a unique, positive role for consumers in today’s financial services marketplace. I believe that role can and should be distinguished from the role played by for-profit, investor-owned and –controlled financial institutions.” McWatters also called on the CFPB to clarify its authority to oversee unfair, deceptive and abusive acts. 

Retailers score latest win in fight to allow credit card surcharges -- A slew of state laws that bar retailers from imposing surcharges on credit card transactions are poised to be toppled, though the legal process will take some time to unfold. The latest omen came Wednesday, when a federal appeals court in California sided with merchants that want to charge higher prices to customers who pay with plastic, since those transactions cost more for retailers to process. They were challenging a 32-year-old state law that banned the cash-register fees. The California decision built on a U.S. Supreme Court ruling from March 2017 involving a similar law in New York. The nation’s highest court found that the New York law regulated speech rather than conduct, casting doubts on its ability to withstand First Amendment scrutiny.Florida’s credit card surcharge ban has already been struck down by the courts, and while similar laws remain in effect in Colorado, Connecticut, Kansas, Maine, Massachusetts, Oklahoma and Texas, the recent court decisions seem likely to spark more legal challenges. “We’re confident that all of these statutes will be wiped out,” said Deepak Gupta, the lawyer who spearheaded the court challenges in both New York and California. “And that is the clear trend in the courts now.”

 CMBS delinquency rate falls sharply in December - Late payments on securitized commercial mortgages fell in December for the sixth straight month. The Trepp CMBS Delinquency Rate ended the year at 4.89%, a decrease of 29 basis points from the November level. That’s the largest monthly drop since January 2016, when several large troubled CMBS loans were resolved, including the $3 billion Stuyvesant Town/Peter Cooper Village loan. After hitting a post-crisis low in February 2016, the reading climbed steadily for more than a year as loans from the "bubble" years of 2006 and 2007 reached their maturity dates and were not paid off. However, the delinquency level has receded since June as bubble-year loans have passed their maturity date and been resolved.  “Put another, simpler way: fewer loans are defaulting, and those that defaulted in recent years are being resolved away (often with losses),” Trepp stated in its monthly report. It thinks that further reductions could be in the cards for 2018.

Shorts still waiting for big payout on bonds tied to malls - Speculators who bet on declines in commercial mortgage bond indexes as a way to profit from the expected demise of regional shopping malls may still be waiting for a big payout, according to Trepp. Sure, yield spreads on subordinate bonds of some CMBX indexes widened significantly over the course of the year — until very recently. So anyone who timed the trade right could certainly have come out ahead. But, as Trepp noted in a report published this week, few mortgage bonds referenced in these mall-heavy indexes realized actual losses. So buyers of credit protection may not have profited as much as they had hoped. Here’s how the trade, which gained notoriety in February, was supposed to work: CMBX consists of a group of indices operated by Markit that are each linked to a group of 25 CMBS conduit deals issued during a particular year. These indices are used as an indicator of the overall performance of the commercial real estate market. Participants who expect (or fear) that bonds will incur losses can buy insurance in the form of credit default swaps. If the bonds realize losses, they get a payout. In the meantime, the buyers pay monthly premiums to the seller (usually a bank) as long as they hold the position. Speculators concentrated their bets CMBX Series 6 (linked to 2012 vintage CMBS) and Series 7 (linked to 2013 CMBS), which have the most exposure to retail center and shopping mall loans (38.2% for the Series 6 index and 32.4% for the Series 7). In particular, the weak performance of JCPenney, Sears and Macy’s could impact loans the properties they occupy, which are referenced in these indexes. The three department store chains often anchor class-B and -C malls and have been shuttering stores by the dozens. “Such closures often trigger co-tenancy clauses for other in-line mall tenants, prompting them to downsize or vacate altogether,” Trepp stated in the report. “The thinking has been that properties, particularly those in secondary or tertiary markets, exposed to the three firms are at greater risk of default and losses. As such, those holding short positions in certain CMBX indices would receive a payout.” So far, however, only 40 retail loans in deals tied to the CMBX 6 and 7 series have paid off, and four incurred losses totaling $4.3 million. Each of those notes disposed was in a 6 series deal. No losses have been attributed to deals tied to CMBX 7. 

 Could blockchains replace banks in real estate lending? -- Real estate deals on a blockchain are becoming real.  The startup Propy recently sold an apartment in the Ukraine through its blockchain, and in the last week of December it began letting Californians buy and sell properties on its blockchain using bitcoin. They will be able to use U.S. dollars next year. It’s also offering other homes including a “Packer House”— a house located next to the Green Bay Packers’ stadium and training field that is draped in team paraphernalia and is available for $1 million. Other startups, including ShelterZoom and RealBlocks, are offering other takes on the idea of buying and selling real estate on a distributed ledger. ShelterZoom has built an Ethereum-based platform that went live Dec. 14. RealBlocks lets people invest in housing on its blockchain with fiat or digital currency (and starting in February 2018, its own tokens). It has completed seven deals so far.Distributed-ledger technology — a database that can live in many places at once, where transactions and smart contracts can be executed, theoretically without any need for middlemen — could simplify real estate investment, turning a complicated process into a series of clicks. At some point in the near future, not only real estate transactions but mortgages themselves may be handled on a blockchain.Banks will have to adapt. Theoretically, almost every element of a real estate transaction could be handled on a blockchain.

You Can Now Buy A Private Prison On Craigslist For Only 88 Bitcoin - Private prisons across the United States are set to reap the financial benefits of changes in the tax code signed by President Donald Trump. Under the new tax law, investments in REITs will see a 25% reduction in tax, from 39.6% down to 29.6%.Jamie Trinkle, campaign and research coordinator with the racial and economic justice coalition Enlace said, “it’s going to be great for the investors, banks and hedge funds that own shares in private prisons, and are dependent on increased incarceration and criminalization.”As a result, investors are focused on a catalyst that would trigger the next wave of incarcerations, such as Trump’s promise to greatly expand the U.S. Immigration and Customs Enforcement (ICE). In this context, it’s not too often that a former medium-security prison comes up for sale on Craigslist. The facility is located in Brush, Colorado with an asking price of $1,200,000 or 88 bitcoins @ 13,650.23. Yes, you heard that correctly, as of December 2017, the listing broker on the property now accepts bitcoin.

For housing market, tax reform is a wrench in the works — The recently enacted tax reform bill is likely to reshape sections of the housing industry, including encouraging more consumers to rent instead of buy and tamp down the rapid rise in home prices.  At the same time, the doubling of the standard deduction to $24,000 for couples and $12,000 for singles may make it easier for potential homebuyers to save for a down payment, encouraging more into the market. "The big change for all itemizers is that the standard deduction nearly doubles,” said Robert Dietz, chief economist at the National Association of Home Builders. “We are going to have this interesting experiment in the housing market where there will be competition between the income effect and the substitution effect.” The so-called income effect comes into play for households that receive a tax cut due to the doubling of the standard deduction, making it easier to save. The substitution effect, meanwhile, is that there are fewer tax itemizers to take advantage of the mortgage interest deduction. That may deter prospective homebuyers. Ultimately, Dietz said, it “could cause a few people to remain renters longer.” Currently, 34 million householders claim the mortgage interest deduction. But that is expected to fall to around 14 million.  Many in the housing market remain optimistic that lifestyle factors such as the desire to settle down and have kids will encourage millennial consumers into the home-buying market. "If we are correct, then the demand side in the housing market will remain healthy and continue to grow in part because we have these really favorable demographics," Dietz said. Still, even if they want to purchase a home, the supply is likely to remain tight — and expected interest rate hikes may put homeownership out of reach for some.  "Higher interest rates will reduce affordability for buyers even if they have a down payment," said Laurie Goodman, co-director of the Housing Policy Center at the Urban Institute in Washington.  If interest rates rise dramatically higher in 2018, “it will likely affect turnover, because homeowners will want to hang on to their 3.5% mortgages," she added.

Time to reform Fannie and Freddie is now - The Treasury Department and the Federal Housing Finance Agency struck a deal last week amending how Fannie Mae and Freddie Mac’s profits are sent to Treasury as dividends on their senior preferred stock. But no one pretends this is anything other than a patch on the surface of the Fannie and Freddie problem. The government-sponsored enterprises will now be allowed to keep $3 billion of retained earnings each, instead of having their capital go to zero, as it would have done in 2018 under the former deal. That will mean $6 billion in equity for the two combined, against $5 trillion of assets — for a capital ratio of 0.1%. Their capital will continue to round to zero, instead of being precisely zero. Fannie and Freddie’s top regulator, Mel Watt, had worried about their running with exactly zero capital going forward, so any quarterly losses, perhaps from the vagaries of derivatives accounting, would force renewed bailout investments from the Treasury. That would have looked bad. Additional bailout investments may well be necessary anyway, as Treasury and the FHFA admit, because by dropping the corporate tax rate, the new tax reform law implies major write-downs in Fannie and Freddie’s deferred tax assets. That will look bad, too.Here we are in the tenth year since Fannie and Freddie’s creditors were bailed out by Treasury. Recall the original deal: Treasury would get dividends at a 10% annual rate, plus — not to be forgotten — warrants to acquire 79.9% of both companies’ common stock for an exercise price of one-thousandth of one cent per share. In exchange, Treasury would effectively guarantee all of Fannie and Freddie’s obligations, existing and newly issued. The reason for the structure of the bailout deal, including limiting the warrants to 79.9% ownership, was so the Treasury could keep asserting that the debt of Fannie and Freddie was not officially the debt of the United States, although de facto it was, is, and will continue to be.

PHH Mortgage to pay $45M to settle robosigning allegations by 49 states -- PHH Corp. settled allegations of foreclosure process abuses with 49 states that involved "inconsistent signatures" and improper certification of servicing documents. The Mount Laurel, N.J.-based company will pay $45 million, including $31.5 million that will go to borrowers whose homes were foreclosed on or who were put into foreclosure between Jan. 1, 2009, and Dec. 31, 2012. The allegations of misconduct by PHH Mortgage, a division of PHH Corp., were raised following a 2010 Multistate Mortgage Committee examination of its servicing activities. The MMC is a joint committee of the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators. The examiners alleged PHH failed to exercise proper control over foreclosure documents, allowed unauthorized executions, inconsistent signatures, and improper certification and notarization. In addition, the examinations found deficiencies in other internal controls, loan servicing and mortgage modifications. PHH did not admit any liability or wrongdoing in the settlement agreement. 

Trump administration must back CFPB action against PHH, top Democrat says  -- Sen. Sherrod Brown, the top Democrat on the Senate Banking Committee, is calling on the Trump administration to support the Consumer Financial Protection Bureau's enforcement action against PHH Corp., which agreed Wednesday to a $45 million settlement for foreclosure abuses. PHH, a Mount Laurel, N.J., mortgage lender and servicer, agreed to pay $31 million to consumers as part of a settlement with 49 state attorneys general. The states found that PHH violated federal law by allowing the unauthorized execution of foreclosure documents, including improperly certifying and notarizing foreclosures, often referred to as "robo-signing."   "This settlement by a bipartisan group of 49 state attorneys general is a reminder that many Americans still haven't recovered from the abuses caused by the financial crisis," Brown, D-Ohio, said in a press release "I hope the administration takes their side by vigorously pursuing the CFPB's enforcement action against PHH and nominating a CFPB director with bipartisan support that will aggressively enforce consumer laws and stand tough against special interests and big banks." The CFPB has been locked in a contentious legal battle with PHH since 2014. An administrative law judge ruled that PHH's reinsurance agreements violated the Real Estate Settlement Procedures Act's prohibition on kickbacks in exchange for referrals, and ordered the company to disgorge more than $6 million.Former CFPB Director Richard Cordray overruled that decision in 2015 and ordered PHH to pay $109 million, prompting the company to file a lawsuit alleging the CFPB was an unconstitutional agency.  The case, PHH Corp. v. CFPB, is on appeal to an en banc panel of the U.S. Court of Appeals for the D.C. Circuit.

N.J. suspends applications for programs offering foreclosure relief - Two New Jersey programs that provide financial assistance to homeowners on the brink of foreclosure are temporarily suspending acceptance of applications, a state official said this week, bringing an indefinite hiatus to a set of funds that have helped thousands of residents stay afloat in the aftermath of the Great Recession.New Jersey's HomeKeeper and HomeSaver programs, both of which are housed under the state's federally bankrolled Hardest Hit Fund, are not taking new applications "in order to better assist the current pipeline of applicants," Tammori Petty, director of communications for the state's Department of Community Affairs, said in emails this week."The agency wants to ensure that there is enough funding to process all applications that are currently in process," Petty said. "... No new applications are being accepted at this time." The decision to suspend new applications to the assistance programs comes as homeowners across New Jersey remain in the throes of the state's foreclosure crisis. Nearly 2% of housing units in the state — almost 68,000 properties in total — are in some state of foreclosure, according to Attom Data Solutions, a California company that tracks foreclosures. In November alone, one out of every 737 housing units in New Jersey had foreclosure proceedings initiated against the homeowner, a rate far higher than the national average of one out of every 2,074 units.

Fannie Mae's delinquency rate returns to high last seen in March - Fannie Mae's serious delinquency rate climbed to a high not seen since March 2017, but remained lower than it was 12 months prior, according to the agency's latest monthly report. The share of single-family loans with serious delinquencies was 1.12% in November 2017, up from 1.01% the previous month. In November 2016, Fannie's serious delinquency rate was 1.23%.  For loans originated in 2004 or earlier, the serious delinquency rate in November 2017 was 3.05%, up from 2.82% in October 2017 and November 2016. The serious delinquency rate for loans originated between 2005 and 2008 was 6.26%, up from 5.91% in October 2017, but down from 6.47% in November 2016.  Loans originated between 2009 and 2017 had a serious delinquency rate of 0.42%, up from 0.35% in November 2016 and from 0.33% in October 2017. Fannie's serious delinquency rate rose compared to the previous month regardless of whether loans had credit protection from mortgage insurance or were referenced by credit risk transfer deals. But only credit risk transfer deal loans registered higher serious delinquency rates than in November 2016. Credit risk transfer deal loans had a serious delinquency rate of 0.27% in November 2017, up from 0.18% the previous month and 0.15% in November 2016.Mortgages with primary mortgage insurance had a 1.76% serious delinquency rate in November 2017, up from 1.06% the previous month, but down from 2.21% in November 2016.

Credit score gap between homebuyers, consumers at widest point in 12 years - The average U.S. consumer FICO credit score reached 700 for the first time during the second quarter of 2017. At the same time, the average credit score for purchase mortgage borrowers was 745.That gap between average consumer and homebuyer credit scores has widened significantly and now sits at its highest point in 12 years. In 2005, the national average credit score was 688, only nine points shy of the 697 average score for homebuyers, according to data from FICO and CoreLogic.There's no single reason why these figures have diverged so much, and whether or not it actually represents a problem for mortgage lenders is a matter of perspective.The observation is nevertheless noteworthy, given the difficult shift the industry is making to a more purchase-driven originations market.To be sure, the housing crisis stunted consumer appetite for mortgages. But the credit score gap may also indicate that lenders aren't taking on as much risk as they could be, despite new tools and policies that would allow them to responsibly lend to the full limits of the credit boxes of agency and government-guaranteed loan programs. In addition to using tools like the government-sponsored enterprises' automated data validations and representation and warranty waivers to more safely take advantage of an extended credit box, lenders can also "take the opportunity to look beyond just the credit score, and start to understand credit behaviors and trends of potential borrowers," according to Joe Mellman, senior vice president and mortgage business leader at TransUnion. Some mortgage professionals also attribute the growing credit score gap to borrowers who have essentially fallen off the map, due primarily to altered consumer behaviors from the Great Recession. "So many lenders have tightened their underwriting and guidelines in a variety of ways, but the major reason that credit scores have increased is not because of a restriction from lenders," . "It's the fact that lower credit borrowers have dropped out of the market — lower credit meaning below 640."

Credit scores on mortgages made to millennials drop -  The average credit score of loans made to members of the millennial generation were a little lower than they were a year ago, according to Ellie Mae's latest monthly numbers."With the average credit score dipping, lenders are extending credit to borrowers who may have had no previous access to the housing market,” said Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae, in a press release. While on average millennials' scores have fallen, they are "still significantly above the levels seen a few years ago," Tyrrell said.

US considers mortgage credit check shake-up -- A new fight for a share of the lucrative US credit scoring market has broken out as Washington considers the first big change for about two decades in the way would-be mortgage holders are assessed.Fannie Mae and Freddie Mac, the government-controlled groups that guarantee US mortgages, have for years required lenders to use a system developed by analytics software company FICO to determine the creditworthiness of prospective borrowers.Critics complain the checks are outdated and lock millions of Americans out of home ownership. Almost 45m individuals do not have a regular credit score, according to a 2015 study by the Consumer Financial Protection Bureau.Now the Federal Housing Finance Agency, which oversees Fannie and Freddie, is looking at opening up the market. It is seeking views about changing credit score requirements, potentially using an alternative metric from FICO’s main rival VantageScore. The review poses another potential challenge to New York-listed FICO’s dominance of US consumer credit ratings. Its algorithm aims to predict how likely consumers are to repay their debts by examining factors such as payment history, rating them on a scale from 300 to 850.

‘Climate gentrification’ is coming to Miami’s real estate market - Prospective homeowners often evaluate nearby schools, public parks, and public transportation options. But future homeowners in coastal cities might want to consider another factor before making a down payment: climate change.Research from Harvard shows a link between elevation and price appreciation in Miami neighborhoods. Properties at higher elevations in Miami-Dade County have been increasing in value since 1971. For the most part, that’s been due to non-climate factors. But since 2000, the correlation has grown stronger.  That could be a sign of preference for properties that are more resilient to flooding. Florida has certainly seen more than its fair share of rising seas and climate-fueled storms. And nationwide, coastal homes at risk of inundation are beginning to lose value. Climate gentrification — a new phrase to describe climate change’s transformation of real estate markets — could have huge repercussions. If real estate values start to decrease rapidly for high-risk properties, we could be on the cusp of a foreclosure crisis, Harvard researchers say. In addition, wealthy people might crowd mixed-income areas, pushing out longtime residents. “People’s lives, their livelihoods, and their culture” are at stake, Mustafa Santiago Ali, senior vice president of the Hip Hop Caucus, told CBS.

 CoreLogic: House Prices up 7.0% Year-over-year in November -  The CoreLogic HPI is a three month weighted average and is not seasonally adjusted (NSA). From CoreLogic: CoreLogic Reports Fourth Consecutive Month with More Than 6 Percent Year-Over-Year Home Price Growth in NovemberCoreLogic® ... today released its CoreLogic Home Price Index (HPI™) and HPI Forecast™ for November 2017, which shows home prices are up both year over year and month over month. Home prices nationally increased year over year by 7 percent from November 2016 to November 2017, and on a month-over-month basis home prices increased by 1 percent in November 2017 compared with October 2017,* according to the CoreLogic HPI.Looking ahead, the CoreLogic HPI Forecast indicates that home prices will increase by 4.2 percent on a year-over-year basis from November 2017 to November 2018, and on a month-over-month basis home prices are expected to decrease by 0.4 percent from November 2017 to December 2017. The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.“Rising home prices are good news for home sellers, but add to the challenges that home buyers face,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Growing numbers of first-time buyers find limited for-sale inventory for lower-priced homes, leading to both higher rates of price growth for ‘starter’ homes and further erosion of affordability.” CR Note: The YoY increase has been in the 5% to 7% range for the last couple of years.  This is the top end of that range. The year-over-year comparison has been positive for almost six consecutive years since turning positive year-over-year in February 2012.

MBA: Mortgage Applications Decrease over Previous Two Weeks  --From the MBA: Mortgage Applications Decrease Over Two Week Period in Latest MBA Survey Mortgage applications decreased 2.8 percent from two weeks earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 29, 2017. The results include adjustments to account for the Christmas holiday. ... The Refinance Index decreased 7 percent from two weeks ago. The seasonally adjusted Purchase Index increased 1 percent from two weeks earlier. The unadjusted Purchase Index decreased 40 percent compared with two weeks ago and was 3 percent higher than the same week one year ago. ...The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) decreased to 4.16 percent from 4.20 percent, with points decreasing to 0.35 from 0.39 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.  The first graph shows the refinance index since 1990. Refinance activity will not pick up significantly unless mortgage rates fall well below 4%. The second graph shows the MBA mortgage purchase index.  According to the MBA, purchase activity is up 3% year-over-year.

NYC Apartment Sales Collapse 25% In Q4 As Trump Tax Plan Takes Its Toll -- Apparently the combination of a massive flood of excess supply in the form of new luxury developments and a Trump tax plan that penalizes people living in expensive cities by capping SALT, mortgage interest and property tax deductions was simply too much for the Manhattan real estate market to ignore in 4Q 2017.  As Douglas Elliman points out in their new Q4 2017 Manhattan Market Report, both prices (-9.4%) and volumes (-25.4%) of New York City apartments collapsed sequentially in Q4 as potential buyers took a pause amid the growing uncertainty.Sales activity for the Manhattan housing market was at the lowest fourth quarter total in six years. The pace of the fall market noticeably cooled as market participants awaited the housing-related terms of the new federal tax bill. This translated into a decline in year over year closings for the final quarter of the year, although contract volume showed an uptick.There were 2,514 sales to close in the final quarter of the year, down 12.3% from the prior-year quarter. The decline in sales allowed listing inventory to rise after declining year over year for the past few quarters. There were 5,451 listings at the end of the quarter, up 1.1% from the same period a year ago. As a result, the absorption rate, the number of months to sell all inventory at the current rate of sales slowed, rising to 6.5 months from 5.6 months in the year-ago quarter.Listing discount, the percentage difference between the list price at the date of sale and the sales price, was 5.4% up nominally from 5.3% in the prior year quarter as sellers continued to travel farther to meet the buyer on price. Buyers continued to hold firm, forcing sellers to meet them on price.Days on market, the average number of days to sell all apartments that closed during the quarter rose 3.2% to 97 days from 94 days in than the same period last year.New development active listings and resale listings were up 0.7% and 1.2% respectively over the same period. With  the nominal rise in supply, there was also a nominal decline in bidding wars, still accounting for 11.7% of all sales in the quarter, down 0.9% from the same period last year.

Tax law likely to spur crisis in affordable housing - The tax reform law enacted late last year is already threatening to exacerbate the affordable housing crisis — and the outlook could be even worse going forward. The tax law is expected to eliminate 300,000 affordable housing units over 10 years in part because it will reduce the value of banks’ low-income tax credits, which finance half of all affordable housing units, according to a report by NHP Foundation, a nonprofit real estate firm. "Lowering the corporate tax rate to 21% from 35% has a large effect on affordable housing in terms of what investors will pay and what yield they will settle in at," said Bob Moss, a principal and national director of government affairs at CohnReznick. The affordable housing market relies heavily on subsidies from two different affordable housing programs: the low-income housing tax credit program, and private activity bonds that allow states and cities to borrow on behalf of private companies and nonprofits to lower their borrowing costs.  Lowering the corporate tax rate reduces the value of the tax credits by roughly 15% because banks and partnerships that use the tax credits are limited in deductions on depreciating expenses, experts said Investments in low-income housing tax credits also depend on whether alternative investments are attractive or not. In past years, the tax credits have been in such demand by banks that they have been oversubscribed, but lowering corporate rates could change that dynamic, experts said.  "When you rush something that's going to amend 60,000 pages of the IRS tax code, the unintended consequences are huge," said Richard Burns, the CEO of the NHP Foundation. "It's politics over policy. Congressmen just aren't interested in affordable housing, they are playing to a base that doesn't really understand it, or they don't put enough of a priority on it."  What is still unknown is how corporate expensing under the new tax law will play out, Moss said. The reduction in the corporate tax rate could reduce the number of banks and corporations that are buyers of the tax credits. In addition to reducing the supply of affordable housing, the tax law is likely to create more income inequality. More than 11 million American households now spend more than 50% of their income on rent, according to the Joint Center for Housing Studies at Harvard University.

Rent for the Poor Really Is Too High - Are poor Americans doing better than they used to, or worse? It’s hard to know, because so many important things in life -- social status, emotional health, human relationships -- can’t be measured. But in purely material terms, many things have improved.  Homelessness is down. Government assistance to families with children has lowered the official child poverty rate. Hunger has fallen as well. Though the country doesn’t do a great job at providing the poor with health care, things have improved marginally since the Affordable Care Act went into effect. What’s more, most of the poor now possess items that you would find in most middle-class households; according to a 2011 Census report, 53 percent of households in the lowest income quintile have a computer, 65 percent have a clothes dryer, and 38 percent have a washer, dryer, refrigerator, stove, dishwasher and a telephone.  However, there is at least one way in which poor American families are being increasingly squeezed -- the rent. A new research note from the Federal Reserve Board’s Jeff Larrimore and Jenny Schuetz of the Brookings Institution shows a combination of rising rents and falling incomes among the poorest fifth of households. In real terms, the rent paid by low-income households has risen modestly -- about 9 percent. Meanwhile, real income for the bottom fifth fell by about the same amount. Squeezed between smaller paychecks and higher rents, the poor have less and less money each month to spend.Larimore and Schuetz estimate that poor American households pay more than 55 percent of their earnings in rent, compared with less than 30 percent for households in the second-lowest quintile. Despite much public outcry over rising rents in the U. S., most non-poor households are still able to afford shelter without a severe economic burden. More money spent on rent means less for everything else. Larimore and Schuetz find that the average household in the bottom fifth has only $476 to spend every month after paying rent:

  Keys legislator asks for millions toward hurricane housing - Efforts to secure funding for Florida Keys housing in the wake of Hurricane Irma rank among priorities for Monroe County's state representative in the upcoming legislative session. State Rep. Holly Raschein, R-Key Largo, filed more than two dozen bills for the law-making session beginning Jan. 9, including a request of $20 million for the purchase of properties "to rebuild affordable [and] workforce housing by acquiring former trailer parks and other sites" as part of Irma recovery efforts. "Hurricane Irma destroyed or substantially damaged thousands of units of housing, including those in trailer parks, that serve our working families," says the HB 4361 appropriation request filed by Raschein. "Affordable housing enables [the] workforce to remain in the Keys and ensure an adequate local labor pool for businesses in the Florida Keys," it continues. County Administrator Romas Gastesi said Friday, "We need the land to assist developers willing to build workforce housing and keep it affordable for working residents." Allocations from the state budget must be approved in the annual legislative session, which this year runs from Jan. 9 to March 9. A separate Raschein bill, HB 4433, requests $2.85 million for a project of the Emergency Care Help Organization to "provide immediate, temporary [or] permanent housing options for installation of approximately 30 disaster housing units for eligible families in Monroe County ... [who] were displaced by Hurricane Irma." 

Houston mayor makes desperate plea for Hurricane Harvey recovery aid - In a moving plea for help from the state and federal government, Houston Mayor Sylvester Turner was joined at a Thursday press conference by three of his constituents who remain displaced by Hurricane Harvey nearly four months after the storm made landfall. “Literally, there are thousands of people living in homes that need to be remediated,” said Turner. “And there are thousands of people who are still living in hotels. And the question is, where do they go when FEMA says, ‘No more’?”  The push is part of Houston and Texas’s request for Congress to approve a bill for $61 billion in federal assistance. Thus far the state has received $11 billion in federal disaster aid — far less than the nearly $115 billion of federal assistance provided after Hurricane Katrina or the $56 billion after Hurricane Sandy. Turner also asked that Texas Gov. Greg Abbott provide the city with $200 million from the state’s rainy day fund, which he said currently carries $11 billion. The mayor said his plan is to repay the loan with federal aid once Congress has approved it.  Abbott has claimed there is no need to touch the fund until 2019 when the state legislature next reconvenes in regular session and can decide how to use the funds. The Texas governor also rejected the Turner's call for a special session of the legislature.  “We cannot wait until 2019," Turner said in response to Abbott. "There are things that need to be done right now.”

‘We have a big problem’: Puerto Rico seeks aid for tens of thousands of squatters — When Hurricane Maria ripped across Puerto Rico, it revealed the damage wrought by years of government neglect. It also exposed an open secret generations in the making: Tens of thousands of island residents are, in fact, squatters, living illegally on abandoned or government land. For years, squatters were ignored or used as political pawns as the bankrupt central government swung from crisis to crisis. That changed with Maria, which tore through these low-lying barrios with particular ferocity. Now, with no legal claim to their homes or the land they’re built on, squatters find themselves unmoored from federal aid — and high on the government’s list of priorities.  Gov. Ricardo Rosselló, who took office in January, wants to fix his squatter problem by embracing it. He’s proposed giving 48,000 illegal settlers legal title to their land, a plan that could cost up to $30 million. He needs federal disaster aid to make the project work. “Before the emergency, it was something we needed to do; now it’s a more ambitious project,” said Puerto Rico Housing Secretary Fernando Gil. “It would be helping out 48,000 people who thought that they couldn’t get any help.”Rosselló, a Democrat, has had limited success squeezing disaster aid out of the Republican administration and Congress in the aftermath of the storm. But the issue of land ownership could be a test case for Housing and Urban Development Secretary Ben Carson, who has promised to break through entrenched government policies to put people on the path to self-sufficiency.

Hotels: Strong Finish to 2017, Record Occupancy due to Hurricanes -- From STR: US hotel results for week ending 23 December. The U.S. hotel industry reported positive year-over-year results in the three key performance metrics during the week of 17-23 December 2017, according to data from STR.
In comparison with the week of 18-24 December 2016, the industry recorded the following:
• Occupancy: +7.1% to 45.1%
• Average daily rate (ADR): +0.5% to US$106.97
• Revenue per available room (RevPAR): +7.6% to US$48.28
Among the Top 25 Markets, Houston, Texas, reported the largest increase in each of the three key performance metrics: occupancy (+33.5% to 50.9%), ADR (+17.3% to US$92.28) and RevPAR (+56.7% to US$47.00).
Note: The hurricanes continue to drive demand in Texas and Florida, especially in Houston. The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

Construction Spending increased in November -- Earlier today, the Census Bureau reported that overall construction spending increased in November:  Construction spending during November 2017 was estimated at a seasonally adjusted annual rate of $1,257.0 billion, 0.8 percent above the revised October estimate of $1,247.1 billion. The November figure is 2.4 percent above the November 2016 estimate of $1,227.0 billion. Both private and public spending increased in November:Spending on private construction was at a seasonally adjusted annual rate of $964.3 billion, 1.0 percent above the revised October estimate of $955.1 billion. ...In November, the estimated seasonally adjusted annual rate of public construction spending was $292.7 billion, 0.2 percent above the revised October estimate of $292.0 billion. This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.  Private residential spending has been increasing, but is still 22% below the bubble peak.Non-residential spending has been declining over the last year, but is 5% above the previous peak in January 2008 (nominal dollars). Public construction spending is now 10% below the peak in March 2009, and 11% above the austerity low in February 2014. The second graph shows the year-over-year change in construction spending. On a year-over-year basis, private residential construction spending is up 8%. Non-residential spending is down 3% year-over-year. Public spending is up 2% year-over-year. This was above the consensus forecast of a 0.6% increase for November.

 Framing Lumber Prices Up Sharply Year-over-year, Looks like Record Prices in 2018 --   Here is another update on framing lumber prices. Early in 2013 lumber prices came close to the housing bubble highs - and prices finished 2017 near the bubble highs. This graph shows two measures of lumber prices: 1) Framing Lumber from Random Lengths through December 2017 (via NAHB), and 2) CME framing futures. Prices in 2017 are up solidly year-over-year and will probably exceed the housing bubble highs in the Spring of 2018.  Note: CME prices hit an all time high briefly in November. Right now Random Lengths prices are up 20% from a year ago, and CME futures are up about 43% year-over-year.   There is a seasonal pattern for lumber prices. Prices frequently peak around May, and bottom around October or November - although there is quite a bit of seasonal variability.    It looks like we will see record prices in the Spring of 2018.

Reis: Office Vacancy Rate unchanged in Q4 at 16.3% -- Reis released their Q4 2017 Office Vacancy survey this morning. Reis reported that the office vacancy rate was unchanged at 16.3% in Q4, from 16.3% in Q3. This is up from 16.1% in Q4 2016, and down from the cycle peak of 17.6%. From Reis Economist Barbara Denham:Maintaining a steady balance between added supply and positive net absorption, the office market recorded no change in vacancy for the third quarter in a row. Currently at 16.3%, the national office vacancy rate has held steady most of the year climbing from a low of 16.1% at year-end 2016. Construction fell to 7.0 million square feet from 8.3 million last quarter and 10.7 million in the fourth quarter of 2016. Net absorption, or occupancy growth, was in line with construction at 5.2 million. Last quarter’s net absorption was 5.3 million square feet, while the fourth quarter of 2016 saw net absorption of 12.9 million square feet. Indeed, the fourth quarter generally sees the highest completion and net absorption numbers in the year; thus, this quarter’s lackluster results were especially noteworthy...The sluggish occupancy growth numbers have kept a lid on rent growth. Although office rents increased 0.6% in the quarter – higher than previous quarters growth rates of 0.4% – asking and effective rents have both only increased 1.8% since the fourth quarter of 2016. This is the third straight quarter that saw a year-over-year effective rent growth rate below 2%.

Reis: Mall Vacancy Rate unchanged in Q4 2017 -- Reis reported that the vacancy rate for regional malls was 8.3% in Q4 2017, unchanged from 8.3% in Q3, and up from 7.8% in Q4 2016. This is down from a cycle peak of 9.4% in Q3 2011. For Neighborhood and Community malls (strip malls), the vacancy rate was 10.0% in Q4, unchanged from 10.0% in Q3, and up from 9.9% in Q4 2016. For strip malls, the vacancy rate peaked at 11.1% in Q3 2011. Comments from Reis Economist Barbara Byrne Denham: The retail real estate statistics camouflage the changes in the retail sector. Although the vacancy rate was flat for the quarter and the year, new tenants including grocery stores and gyms are taking space formerly occupied by bankrupt businesses such as Kmart. At the same time, some retail space is shutting down entirely or getting converted to other uses. Rent growth has been low but still positive throughout 2017. New construction of 1.5 million square feet was the lowest level of completions since 2013. Net absorption of 1.9 million square feet was the highest since the first quarter. Asking rents increased 0.5% to $20.85 per square foot. This increase amounts to $0.10 per square foot. The effective rent increased 0.5% as concessions are not as significant in retail real estate as they are in the apartment market. Asking and effective rents have increased 1.8% and 1.9%, respectively, since the fourth quarter of 2016 and less than 4.0% since the end of 2015.

More than 3,600 stores will close in 2018 — here's the full list -  The record-high rate of store closures that rocked the retail industry this year is expected to spill into 2018, with more than 3,600 closures already on tap for next year, according to an analysis by Business Insider. Walgreens, Payless, Toys R Us, and Gap are among the many retailers expected to shutter hundreds of stores in 2018. Some companies' closures will take effect immediately, such as Sears and Kmart, which plan to close a total of 63 stores in January. Other closures are already underway and could last several months before completion. The children's clothing retailer Gymboree, for example, announced in July that it would close 350 stores. As of November, 248 closures had been carried out. The following is a list of expected closures next year. As this list grows over the next couple months, we will update it accordingly.

 The dark side of your $5 Footlong: Business owners say it could bite them -- A Subway sandwich is far more than the sum of its fillings, franchisee Keith Miller says. Those ingredients cost roughly $2. Then he pays labor. Electricity. Gas. Royalties. Credit card transaction fees. Rent. All told, Miller, who owns three Subway franchises in Northern California, says it costs him well over $4 to produce one of Subway’s foot-long subs. And that is why, when the chain announced plans to drop the price of the sandwich to $4.99 starting in January, he and hundreds of Subway’s other 10,000 U.S. franchisees sent a strongly worded letter warning that the promotion could force some stores to close. “The numbers don’t work for us,” said Miller, who also chairs an industry group, the Coalition of Franchisee Associations. “Ten years ago, they might have worked. But now they don’t, in my opinion.” As fast-food chains across the country have slashed menu prices to revive flagging sales, a growing rift has emerged between some name-brand corporations and the local operators who run their outlets. For years now, the retail industry has been shaken by giant companies that have been able to keep prices low, wooing consumers but squeezing suppliers and smaller competitors. But in the restaurant business, the push to keep prices low has pitted corporate headquarters against individual outlet owners — all operating under the same brand. Corporations need to grow systemwide revenue to please board members and shareholders. But small-scale franchisees, who face rising costs and increased local competition, are far more concerned with store-level profits. In addition to Subway’s plans to relaunch the $5 Footlong, McDonald’s will revive a version of its Dollar Menu next month. Taco Bell has promised to expand its selection of discount items, as have Wendy’s and Jack in the Box. “This is an inherent financial conflict between franchisees and franchisers,” 

 U.S. Light Vehicle Sales at 17.79 million annual rate in December --Based on a preliminary estimate from WardsAuto, light vehicle sales were at a 17.79 million SAAR in December. That is down 1.5% from December 2016, and up 2.2% from last month.This puts annual sales 17.14 million, down from 17.46 million in 2016.  The top five years for auto sales are (2017 is fourth overall). This graph shows the historical light vehicle sales from the BEA (blue) and an estimate for December (red, light vehicle sales of 17.79 million SAAR  from WardsAuto).This was above the consensus forecast of 17.5 million for December. Still - even with the bump in sales following the hurricanes - vehicle sales were down year-over-year in 2017, following two consecutive years of record sales. The second graph shows light vehicle sales since the BEA started keeping data in 1967.

November Trade Deficit at $50.5B, Down 3.2% MoM --The U.S. International Trade in Goods and Services, also known as the FT-900, is published monthly by the Bureau of Economic Analysis with data going back to 1992. The monthly reports include revisions that go back several months. This report details U.S. exports and imports of goods and services. Here is an excerpt from the latest report: The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $50.5 billion in November, up $1.6 billion from $48.9 billion in October, revised. November exports were $200.2 billion, $4.4 billion more than October exports. November imports were $250.7 billion, $6.0 billion more than October imports.The November increase in the goods and services deficit reflected an increase in the goods deficit of $1.7 billion to $70.9 billion and an increase in the services surplus of $0.1 billion to $20.4 billion.Year-to-date, the goods and services deficit increased $53.4 billion, or 11.6 percent, from the same period in 2016. Exports increased $112.7 billion or 5.6 percent. Imports increased $166.1 billion or 6.7 percent.  Today's headline number of -50.50B was worse than the forecast of -49.50B. The previous month was revised downward by 200M. This series tends to be extremely volatile, so we include a six-month moving average.

Earlier: Trade Deficit at $50.5 Billion in November - From the Department of Commerce reportedThe U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $50.5 billion in November, up $1.6 billion from $48.9 billion in October, revised. November exports were $200.2 billion, $4.4 billion more than October exports. November imports were $250.7 billion, $6.0 billion more than October imports. Both exports and imports increased in November. Exports are 12% above the pre-recession peak and up 8% compared to November 2016; imports are 8% above the pre-recession peak, and up 8% compared to November 2016. Trade has been picking up. The second graph shows the U.S. trade deficit, with and without petroleum. The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products. Oil imports averaged $50.10 in October, up from $47.26 in November, and up from $40.81 in November 2016. The petroleum deficit had been declining for years (although the petroleum deficit has been steady for the last few years) this is the major reason the overall deficit has mostly moved sideways since early 2012. The trade deficit with China increased to $35.4 billion in November, from $30.5 billion in November 2016.

Trade Deficit Spikes To 6-Year High Despite Tumbling Dollar - While the equity markets are exuberant, today's payrolls data suggests all is not awesome, and the US trade balance print is just terrible. Despite the relative freefall in the US Dollar, the US trade deficit disappointed expectations, spiking above $50 billion. This is the biggest trade deficit since January 2012. Imports rose 2.5% to a record $250.7b on more inbound shipments of consumer goods and industrial supplies. Exports climbed 2.3% to all-time high of $200.2b, led by increased shipments of automobiles, consumer merchandise and capital goods including commercial aircraft. As Bloomberg notes, the widening trade gap could be a drag on fourth-quarter economic growth, keeping gross domestic product from advancing at least 3 percent on an annualized basis for a third straight quarter. Net exports added 0.36 percentage point to the 3.2 percent gain in third-quarter GDP. In November, the unadjusted U.S. merchandise shortfall with China climbed to the highest since September 2015, while the gap with European Union countries was the largest in a year Perhaps worse still, ex-Petroleum, this was the biggest trade deficit in US history...

AAR: Rail Carloads increased, "Best Year Ever" for Intermodal -- From the Association of American Railroads (AAR) Rail Time Indicators. Graphs and excerpts reprinted with permission.   Rail traffic ended 2017 on a positive note. Total U.S. rail carloads in December 2017 were up 2.5% (24,606 carloads) over December 2016, their first year-over-year monthly increase in six months, thanks largely to gains in carloads of crushed stone, sand, and gravel; metallic ores; and chemicals. ... For all of 2017, total carloads were up 2.9%, or 381,266 carloads ... Meanwhile, U.S. intermodal traffic was up 5.3% (53,990 units) in December 2017 over December 2016 and up 3.9% (521,121 units) in 2017 over 2016. 2017 was the best year ever for U.S. intermodal volume. This graph from the Rail Time Indicators report shows U.S. average weekly rail carloads (NSA).  Dark blue is 2017.
Rail carloads have been weak over the last decade due to the decline in coal shipments.U.S. railroads originated 998,168 carloads in December 2017, up 2.5% (24,606 carloads) over December 2016. It’s the first year-over-year monthly increase for total carloads in six months. Total carloads averaged 249,542 per week in December 2017. Since 1988, when our data begin, only 2009, 2014, and 2015 had fewer weekly average carloads in December than December 2017 did. Still, you take what you can get; the carload increase in December was certainly welcome.  The second graph is for intermodal traffic (using intermodal or shipping containers): 2017 was the best year ever for U.S. intermodal. Originations for the year were 14.01 million containers and trailers, up 3.9%, or 521,121 units, over 2016 and up 2.2%, or 301,172 units, over 2015’s previous record of 13.71 million units. In December, intermodal volume was 1.07 million units, up 5.3%, or 53,980 units, over December 2016. In 2017, containers accounted for 91.0% of U.S. intermodal units, down slightly from 2016’s 91.3%. Eleven of the top 12 U.S. intermodal weeks in history were in 2017.

ISM Manufacturing index increased to 59.7 in December  -- The ISM manufacturing index indicated expansion in December. The PMI was at 59.7% in December, up from 58.2% in November. The employment index was at 57.0%, down from 59.7% last month, and the new orders index was at 69.4%, up from 64.0%. From the Institute for Supply Management: December 2017 Manufacturing ISM® Report On Business®  “The December PMI® registered 59.7 percent, an increase of 1.5 percentage points from the November reading of 58.2 percent. The New Orders Index registered 69.4 percent, an increase of 5.4 percentage points from the November reading of 64 percent. The Production Index registered 65.8 percent, a 1.9 percentage point increase compared to the November reading of 63.9 percent. The Employment Index registered 57 percent, a decrease of 2.7 percentage points from the November reading of 59.7 percent. The Supplier Deliveries Index registered 57.9 percent, a 1.4 percentage point increase from the November reading of 56.5 percent. The Inventories Index registered 48.5 percent, an increase of 1.5 percentage points from the November reading of 47 percent. The Prices Index registered 69 percent in December, a 3.5 percentage point increase from the November reading of 65.5 percent, indicating higher raw materials prices for the 22nd consecutive month. Comments from the panel reflect expanding business conditions, with new orders and production leading gains; employment expanding at a slower rate; order backlogs expanding at a faster rate; and export orders and imports continuing to grow in December. Supplier deliveries continued to slow (improving) at a faster rate, and inventories continued to contract at a slower rate during the period. Price increases continued at a faster rate. The Customers’ Inventories Index declined and remains at low levels.” Here is a long term graph of the ISM manufacturing index.  This was above expectations of 58.0%, and suggests manufacturing expanded at a faster pace in December than in November.

Markit Manufacturing PMI: December Saw Strongest Manufacturing Since 2015 -- The December US Manufacturing Purchasing Managers' Index conducted by Markit came in at 55.1, up from the 53.9 final November figure. Today's headline number was slightly above the forecast of 55.0. Markit's Manufacturing PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.Here is the opening from Chris Williamson, Chief Business Economist at IHS Markit in their latest press release: "US manufacturers ended 2017 on a high. Output growth accelerated to its fastest since the start of the year on the back of a marked upswing in demand as the year came to a close.""Prospects for the upturn also look good. With business optimism about the year ahead running at its highest for two years in the closing months of 2017, companies are clearly expecting to be busier in 2018." [Press Release] Here is a snapshot of the series since mid-2012.

US Manufacturing PMI Jumps To Highest Since March 2015 - Following strong European PMI data this morning, Markit reports US Manufacturing's final December PMI at a better than expected 55.1 - the highest since March 2015. Manufacturing is notably diverging from the slump in Services - which is at its lowest since September 2016... Furthermore, the rate of job creation is at its fastest since September 2014... New business received by manufacturers continued to rise in December, with the rate of expansion accelerating to a ten-month high. Anecdotal evidence linked increases to greater demand from new and existing clients. Exports sales, however, grew at a marginal pace.  Commenting on the final PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:: “US manufacturers ended 2017 on a high. Output growth accelerated to its fastest since the start of the year on the back of a marked upswing in demand as the year came to a close. “Prospects for the upturn also look good. With business optimism about the year ahead running at its highest for two years in the closing months of 2017, companies are clearly expecting to be busier in 2018. “The upbeat mood is underscored by an increased appetite to hire new staff, with the survey indicating that factory payroll numbers are rising at a rate not seen for over three years.

ISM Non-Manufacturing Index decreased to 55.9% in December - The November ISM Non-manufacturing index was at 55.9%, down from 57.4% in November. The employment index increased in December to 56.3%, from 55.3%. Note: Above 50 indicates expansion, below 50 contraction.  From the Institute for Supply Management: December 2017 Non-Manufacturing ISM Report On Business®  "The NMI® registered 55.9 percent, which is 1.5 percentage points lower than the November reading of 57.4 percent. This represents continued growth in the non-manufacturing sector at a slower rate. The Non-Manufacturing Business Activity Index decreased to 57.3 percent, 4.1 percentage points lower than the November reading of 61.4 percent, reflecting growth for the 101st consecutive month, at a slower rate in December. The New Orders Index registered 54.3 percent, 4.4 percentage points lower than the reading of 58.7 percent in November. The Employment Index increased 1 percentage point in December to 56.3 percent from the November reading of 55.3 percent. The Prices Index increased by 0.1 percentage point from the November reading of 60.7 percent to 60.8 percent, indicating that prices increased in December for the seventh consecutive month. According to the NMI®, 14 non-manufacturing industries reported growth. There has been a second consecutive month of pullback in the rate of growth. Overall, the majority of respondents’ comments indicate that they finished the year on a positive note. They also indicate optimism for business conditions and the economic outlook going forward."This graph shows the ISM non-manufacturing index (started in January 2008) and the ISM non-manufacturing employment diffusion index. This suggests slower expansion in December than in November.

Markit Services PMI: Business Activity Growth Softens in December --The December US Services Purchasing Managers' Index conducted by Markit came in at 53.7 percent, down 0.8 from the final November estimate of 54.5. The consensus was for 55.9 percent. Markit's Services PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction. Here is the opening from the latest press release:December data signalled a solid, but softer expansion in business activity across the US service sector. Moreover, the latest upturn eased to a seven-month low. In line with the trend in output, the rate of growth in new business volumes softened slightly. Meanwhile, backlogs continued to rise and the latest expansion was the fastest for four months. Another solid rise in employment levels was linked to greater capacity pressures. On the price front, both input cost and charge inflation eased slightly. In line with softer business activity growth, the degree of optimism in the sector dipped to a 15-month low. The seasonally adjusted final IHS Markit U.S. Services Business Activity Index registered 53.7 in December, down from 54.5 in November. The latest index was higher than the earlier ‘flash’ reading (52.4) and indicated a solid increase in business activity at US service providers. A number of panel members suggested the upturn was due to greater client demand and increased new order volumes. However, the overall rate of activity growth was the weakest since May and below the series trend. [Press Release] Here is a snapshot of the series since mid-2012.

Services PMI Sinks To 6-Month Lows As Confidence Tumbles - After Manufacturing's surge, Services PMI failed to inspire... as business confidence tumbles to 15-month lows, and employment drops to its weakest since June.December data signalled a solid, but softer expansion in business activity across the US service sector. Moreover, the latest upturn eased to a seven-month low.  The overall rate of activity growth was the weakest since May and below the series trend, an workforce numbers rose at the softest pace since June. The final seasonally adjusted IHS Markit U.S. Composite PMI™ Output Index fell to 54.1 in December, down from 54.5 in November. Despite an accelerated upturn in manufacturing output, the composite index signalled softer growth following a slower expansion in service sector business activity.Commenting on the Composite PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:“The final services and manufacturing PMI surveys collectively signalled faster business activity growth than the earlier flash readings, though still indicated a moderation in the pace of expansion to the weakest since June. A welcome improvement in manufacturing output growth was countered by a slowdown in the comparatively larger services economy.“However, while moderating, the overall rate of expansion remains relatively robust, with the PMIs running at levels consistent with the economy growing at a solid 2-2.5% annualised rate in the fourth quarter.“Similarly, hiring, while also slowing slightly at the end of the year, continued to run at a pace indicative of non-farm payrolls up by around 195,000 in December as firms boosted capacity in line with rising demand. Price pressures meanwhile moderated but remained elevated by standards seen over the past three years.“The US economy therefore ends 2017 with an encouraging scoresheet of steady economic growth, solid hiring and firmer inflationary pressures, supporting the view that interest rates will continue to rise in 2018.“A note of caution is sounded by a deterioration in optimism about the outlook in the service sector to the joint-weakest in the past 18 months. However, hopefully news of tax  cuts and fiscal stimulus in 2018 will help revive business spirits and drive growth higher."

 Weekly Initial Unemployment Claims increase to 250,000 -- The DOL reported:In the week ending December 30, the advance figure for seasonally adjusted initial claims was 250,000, an increase of 3,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 245,000 to 247,000. The 4-week moving average was 241,750, an increase of 3,500 from the previous week's revised average. The previous week's average was revised up by 500 from 237,750 to 238,250. Claims taking procedures continue to be disrupted in the Virgin Islands. The claims taking process in Puerto Rico has still not returned to normal. The previous week was revised up. The following graph shows the 4-week moving average of weekly claims since 1971.

 Job-cut announcements in 2017 see lowest level since 1990 -- U.S. employers announced plans to cut 32,423 jobs in December, bringing the year's total to a low not seen since 1990, global outplacement consultancy Challenger, Gray & Christmas reported Thursday."The tight labor market, coupled with uncertainty surrounding health care and tax legislation, possibly kept employers from making any long-term staffing decisions this year," CEO John Challenger said in a statement. "However, 2018 may see an increase in job cut announcements, as companies realign with consumer demand."Cuts in 2017 totaled 418,770, 20 percent below 2016's number. In 1990, companies announced plans to cut 316,047 jobs.  Last month saw 7.4 percent fewer job-cut announcements than November, and 3.6 percent fewer than in December 2016. Widespread restructuring and competition from online sales led to unprecedented cuts in retail jobs in 2017. Retail employers announced 76,084 job cuts this year, a 28 percent increase from 2016, according to the Challenger report. "The retail pivot that caused thousands of store closures and job cuts was not seen in any other industry this year," John Challenger said. The health-care and services sectors also had significantly higher job-cut announcements in 2017. Health-care employers announced 40,732 cuts, a 118 percent increase over 2016, while announced plans to cut jobs in services almost quadrupled to 36,174. "While companies in the Pharmaceutical, Health Care, Construction, and Food industries did announce more job cuts than last year, it was nothing like the Energy cuts seen in the last two years or the Financial cuts seen during the recession," Challenger said. Despite the losses, the passage of the tax bill has prompted unprecedented hiring plans for 2018. Employers report plans to hire more than 1.1 million near hires, 27 percent more than last year.

ADP: Private Employment increased 250,000 in December -- From ADP: Private sector employment increased by 250,000 jobs from November to December according to the December ADP National Employment Report®. ... The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.... “We’ve seen yet another month where the labor market has shown no signs of slowing,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Throughout the year there was significant growth in services except for an overall loss of jobs in the shrinking information sector. Looking at company size, small businesses finished out 2017 on a high note adding more than double their monthly average for the past six months.”Mark Zandi, chief economist of Moody’s Analytics, said, “The job market ended the year strongly. Robust Christmas sales prompted retailers and delivery services to add to their payrolls. The tight labor market will get even tighter, raising the specter that it will overheat.” This was well above the consensus forecast for 185,000 private sector jobs added in the ADP report.  

December Employment Report: 148,000 Jobs Added, 4.1% Unemployment Rate -- From the BLS: Total nonfarm payroll employment increased by 148,000 in December, and the unemployment rate was unchanged at 4.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment gains occurred in health care, construction, and manufacturing.... The change in total nonfarm payroll employment for October was revised down from +244,000 to +211,000, and the change for November was revised up from +228,000 to +252,000. With these revisions, employment gains in October and November combined were 9,000 less than previously reported.... In December, average hourly earnings for all employees on private nonfarm payrolls rose by 9 cents to $26.63. Over the year, average hourly earnings have risen by 65 cents, or 2.5 percent. The first graph shows the monthly change in payroll jobs, ex-Census (meaning the impact of the decennial Census temporary hires and layoffs is removed - mostly in 2010 - to show the underlying payroll changes). Total payrolls increased by 148 thousand in December (private payrolls increased 146 thousand). Payrolls for October and November were revised down by a combined 9 thousand. This graph shows the year-over-year change in total non-farm employment since 1968. In December the year-over-year change was 2.055 million jobs. The third graph shows the employment population ratio and the participation rate. The Labor Force Participation Rate was unchanged in December at 62.7%. This is the percentage of the working age population in the labor force. A large portion of the recent decline in the participation rate is due to demographics. The Employment-Population ratio was unchanged at 60.1% (black line). . The fourth graph shows the unemployment rate. The unemployment rate was unchanged in December at 4.1%. This was below consensus expectations of 190,000 jobs, and the previous two months combined were revised down slightly.

December Jobs Report – The Numbers -- The U.S. labor market ended 2017 on a solid but unspectacular note. Here are five key figures from Friday’s Labor Department report. The economy added 148,000 jobs in December, almost all of them in the private sector. That’s far below the 2017 monthly average of 171,000 jobs added but is enough to keep up with population growth and chip away at unemployment. The economy added 252,000 jobs in November and 211,000 jobs in October. U.S. payrolls grew by a seasonally adjusted 2.1 million in 2017, a solid gain, though it was the lowest since 2010. For the first time since the 1990s, the economy has added at least 2 million jobs a year for seven consecutive years. The jobless rate remained at 4.1% for the third consecutive month, the lowest since late 2000. The rate is below what the Federal Reserve projects will be the economy’s long-run average, suggesting a tight labor market. Unemployment has fallen just over half a percentage point since December 2016, when it stood at 4.7%.  The average hourly paycheck for private-sector workers grew 2.5% in 2017, more than enough to keep up with inflation, but a modest gain compared with prior expansions. That suggests the labor market still has some slack despite the low unemployment rate. Hourly wages grew 9 cents, or 0.34%, in December from  a month earlier. The labor-force participation rate didn’t budge in 2017 despite two million jobs added. The share of American workers with jobs or looking for work stood at 62.7% in December, the same as a year earlier. While retiring baby boomers account for much of the weakness in participation, millions of working-age Americans remain on the sidelines.

December jobs report: late cycle mediocre growth reasserts itself - HEADLINES:

  • +143,000 jobs added
  • U3 unemployment rate unchanged at 4.1%
  • U6 underemployment rate rose  +0.1% from 8.0% to 8.1%
  • Not in Labor Force, but Want a Job Now: rose +43,000 from 5.265 million to 5.308 million   
  • Part time for economic reasons: rose +64,000 from 4.851 million to 4.915 million
  • Employment/population ratio ages 25-54: rose +0.1% from 79.0% to 79.1%
  • Average Weekly Earnings for Production and Nonsupervisory Personnel: rose $.0.07 from  $22.23 to $22.30, up +2.3% YoY. 
  • Manufacturing jobs rose by +25,000 for an average of  +17,500 a month vs. the last seven years of Obama's presidency in which an average of 10,300 manufacturing jobs were added each month.   
  • Coal mining jobs fell -400 for an average of -63 a month vs. the last seven years of Obama's presidency in which an average of -300 jobs were lost each month
  • October was revised downward by -33,000. November was revised upward by +24,000, for a net change of -9,000.  
  • the average manufacturing workweek fell -0.1 hour from 40.9 hours to 40.8 hours.  This is one of the 10 components of the LEI. 
  • construction jobs increased by +30,000. YoY construction jobs are up +210,000. 
  • temporary jobs increased by +7,000.  
  • the number of people unemployed for 5 weeks or less decreased by -18,000 from 2,253,000 to 2,235,000.  The post-recession low was set over two years ago at 2,095,000.Overtime was unchanged at 3.5 hours.
  • Professional and business employment (generally higher- paying jobs) increased by  +19,000 and  is up +488,000 YoY.
  • the index of aggregate hours worked in the economy rose by 0.1%  from 115.9 to  116.0.
  • the index of aggregate payrolls rose by  0.7%  from 172.2 to 172.9.    

This was a mediocre but not bad report.  There was growth in almost all sectors of employment. Participation measures were positive. Aggregate payrolls and hours increased.  But there were concerning signs of late cycle deceleration as well. The underemployment rate increased for the second month in a row, and the unemployment rate is up from two months ago. Involuntary part-time employment and those outside of the workforce who want a job now both increased. And wage growth is actually declining.

December Jobs Report Falls Short Of Expectations - In advance of the release of the December Jobs Report this morning, the consensus was that we would see something in the arena of 190,000 new jobs created last month, a number somewhat below what is considered ideal but still not entirely bad. Instead, the number that came in was lower than that and, in the end somewhat disappointing:In December, the unemployment rate was 4.1 percent for the third consecutive month. The number of unemployed persons, at 6.6 million, was essentially unchanged over the month. Over the year, the unemployment rate and the number of unemployed persons were down by 0.6 percentage point and 926,000, respectively. (See table A-1.)Among the major worker groups, the unemployment rate for teenagers declined to 13.6 percent in December, offsetting an increase in November. In December, the unemployment rates for adult men (3.8 percent), adult women (3.7 percent), Whites (3.7 percent), Blacks (6.8 percent), Asians (2.5 percent), and Hispanics (4.9 percent) showed little or no change. (See tables A-1, A-2, and A-3.)Among the unemployed, the number of new entrants decreased by 116,000 in December. New entrants are unemployed persons who never previously worked. (See table A-11.)The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.5 million in December and accounted for 22.9 percent of the unemployed. Over the year, the number of long-term unemployed declined by 354,000. (See table A-12.)The labor force participation rate, at 62.7 percent, was unchanged over the month and over the year. The employment-population ratio was unchanged at 60.1 percent in December but was up by 0.3 percentage point over the year. (See table A-1.)(…)Total nonfarm payroll employment rose by 148,000 in December. Job gains occurred in health care, construction, and manufacturing. In 2017, payroll employment growth totaled 2.1 million, compared with a gain of 2.2 million in 2016. (See table B-1.)Employment in health care increased by 31,000 in December. Employment continued to trend up in ambulatory health care services (+15,000) and hospitals (+12,000). Health care added 300,000 jobs in 2017, compared with a gain of 379,000 jobs in 2016.Construction added 30,000 jobs in December, with most of the increase among specialty trade contractors (+24,000). In 2017, construction employment increased by 210,000, compared with a gain of 155,000 in 2016.In December, manufacturing employment rose by 25,000, largely reflecting a gain in durable goods industries (+21,000). Manufacturing added 196,000 jobs in 2017, following little net change in 2016 (-16,000).Employment in food services and drinking places changed little in December (+25,000). Over the year, the industry added 249,000 jobs, about in line with an increase of 276,000 in 2016.In December, employment changed little in professional and business services (+19,000). In 2017, the industry added an average of 44,000 jobs per month, in line with its average monthly gain in 2016.Employment in retail trade was about unchanged in December (-20,000). Within the industry, employment in general merchandise stores declined by 27,000 over the month. Retail trade employment edged down in 2017 (-67,000), after increasing by 203,000 in 2016. Employment in other major industries, including mining, wholesale trade, transportation and warehousing, information, financial activities, and government, changed little over the month. In addition to the numbers above, the Bureau of Labor Statistics reported that total nonfarm payroll employment for October was revised downward from +244,000 to +211,000 and that the number for November was revised upward from +228,000 to +252,000. This represents a net downward revision for the two months combined of -9,000 jobs.

US Payrolls Growth Unexpectedly Cooled In December - Corporate payrolls in the US increased by less than expected in December, rising 146,000 in 2017’s final month — well below November’s strong 239,000 rise, according to this morning’s monthly employment report from the Labor Department. Economists were looking for a stronger rise: 185,000 via’s consensus forecast. The softer gain kept the year-over-year trend unchanged at a modest pace, which suggests that the labor market in 2018 may face stronger headwinds than previously assumed. Companies lifted payrolls by 1.64% for the year through last month, matching the annual rate in November. That’s still a healthy pace, but the latest numbers reinforce the possibility that labor-market growth will remain flat or trend lower this year. Indeed, the annual trend for private employment has been slowly trending down for two years and today’s figures from the Labor Department hold out the potential for more of the same in 2018.“It’s a little soft across the board but overall, when you’re this close to full employment, I think it’s reasonable to see some slowdown in job gains,” notes Jeremy Schwartz, a US economist at Credit Suisse. “This year we should probably expect to see some slowdowns in job gains — it’s just harder to add jobs when there’s a smaller pool to choose from.”The outlook for job growth looked stronger via yesterday’s ADP Employment Report, which estimated a 250,000 gain for private employment in December – the biggest monthly rise since March. The annual gain for this dataset also accelerated, reaching 2.1%, which matches October’s increase as the best pace in over a year.“The job market ended the year strongly. Robust Christmas sales prompted retailers and delivery services to add to their payrolls,” says Mark Zandi, chief economist of Moody’s Analytics, which co-produces the data with ADP. “The tight labor market will get even tighter, raising the specter that it will overheat.” Perhaps, although today’s government numbers offer a reason to remain cautious for projecting an acceleration in growth going forward. The employment trend is still convincingly positive, supported by low jobless claims and a generally upbeat macro profile for the US. In short, maybe today’s employment update is just a temporary bout of noise, in which case the signal is in the ADP release. What is clear is that the divergence between the annual changes in the two series is the widest since 2009. A sign of increased turbulence ahead? Or is the Labor Department’s number headed for a major upgrade to catch up with ADP’s estimate.

The December Employment Numbers Look Softer -  (5 graphs) The BLS announced that December employment rose by 148,000. The gains were broad-based, the only declines were found in retail trade, -20.3, and utilities, -0.9. This is well off the trend rate of job growth of the last few months.  It is also significantly softer than the ADP estimate based on payroll data of 250,000 new private sector jobs. But employment growth has been volatile month-to-month and this softening is not statistically meaningful. The unemployment rate remained steady at 4.1% and other features of the labor market remained much the same. Average hours of work remained at 34.5 and average hourly earnings ticked up 9 cents to $26.63. Average hourly earnings increase was 0.3% which signals some upward pressure on wages but nothing like a the break through increases that observers have been looking for as evidence of a tight market. The household survey shows that labor force participation and the employment population ratio remain largely unchanged at historically low levels. This represents a degree of slack in the labor market and it isn’t changing. Weather and recurrent natural disasters have had a fairly steady damping effect on the aggregate labor market over the past 12 months.  Observers report emerging signs of tightness and rising wages in some regional markets that have not been so affected.  We should expect to see some significant strengthening of labor markets over the next 12 months that have nothing to do with changes to the tax law.  If that also turns out to have an impact on employment then we should begin to see that show up in wage growth and labor force participation.

December jobs report: tight labor market sends black unemployment to historical lows -- Jared Bernstein --Payrolls rose by 148,000 last month and the unemployment rate held steady at 4.1 percent. While the headline payroll number was below consensus, this is another solid report. Persistently strong job markets are most beneficial to the least advantaged—privileged types do well even in weaker markets—and the December unemployment rate for African-Americans fell to 6.8%, its lowest on record going back to the 1970s. The black-white gap (black minus white unemployment), at 3.1 percentage points, is also the lowest on record. Especially given weather issues in recent months, it’s essential to look at my monthly smoother, which shows payrolls adding a very solid 204,000, on average, over the past three months (2017q4), a slight acceleration over the longer-term trend. So, while the 148,000 payroll number was below expectations, it should not be over-interpreted. The job market remains strong.  Moreover, there are no signs of overheating. To the contrary, wage growth is uniquely stable, as the next two figures reveal. Average hourly earnings were up 2.5%, year-over-year, for all private-sector workers, and just 2.3% for blue-collar (manufacturing) and non-managerial workers (services). Though some other wage series show more responsiveness to the tightening job market, this remains a missing piece in the current recovery. By this point, I’d have expected more of an acceleration in these two wage series.With today’s data, we have a first look at the 2017 labor market. Employers added a net of 2.1 million jobs in 2017, an average of 171,000 jobs per month and an annual growth rate of 1.4% (these numbers will be slightly revised in coming months). That’s a bit slower job growth than prior years, as shown in the table below, but this is a typical pattern as the job market closes in on full employment. 

Where The Jobs Were In December: Who's Hiring... And Who Isn't - December was expected to be a weaker month than October and November, as a result of the double-whammy of the post-hurricane rebound ending and an adverse winter storm effect, but virtually nobody on Wall Street expected the 3-sigma outlier December payrolls report to be as poor as it was. So which sectors were responsible for the sharp slowdown in the December jobs growth rate, in which only 148K jobs were added, far below November's 252K, and the estimate of 190K? As has been the case for nearly a decade, much of the job growth in December took place among minimum-wage job categories, although, in December somewhat surprisingly, construction was the best performing category, adding some 30,000 jobs and a continuation from the strong performance last month, with most of the increase among specialty trade contractors (+24,000); at the same time, some 25,000 high-paying manufacturing jobs were also added. At the same time the low-wage staples of leisure & hospitality and education and health both added 29K and 28K respectively. Employment in health care increased by 31,000 in December; employment continued to trend up in ambulatory health care services (+15,000) and hospitals (+12,000) Employment in professional and business services rose by 12,000 while temp-help jobs increased by 7,000, a big jump from November's 1,000. That old faithful - waiters and bartenders - added a solid 25,000. Over the year, employment in food services and drinking places added 249,000 jobs, about in line with an increase of 276,000 in 2016. But the biggest surprise of all took place in December, however, was the big drop in retail trade, which tumbled by over 20,000 jobs.  Finally, as Bloomberg shows, below are the industries with the highest and lowest rates of employment growth for the most recent month: monthly growth rates are shown for the prior year.

Comments on December Employment Report - The headline jobs number was below consensus expectations at 148 thousand, probably somewhat due to weather (snow) during the reference week in December (Weather was the reason I took the "under"). The previous two months were revised down slightly by a combined 9 thousand jobs.  In December, the year-over-year change was 2.055 million jobs. This is still generally trending down. This graph is based on “Average Hourly Earnings” from the Current Employment Statistics (CES) (aka "Establishment") monthly employment report. Note: There are also two quarterly sources for earnings data: 1) “Hourly Compensation,” from the BLS’s Productivity and Costs; and 2) the Employment Cost Index which includes wage/salary and benefit compensation.  The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees.  Nominal wage growth was at 2.5% YoY in December.  Wage growth had been trending up, although the acceleration in wage growth slowed in 2017. The number of persons working part time for economic reasons increased slightly in December. The number working part time for economic reasons suggests a little slack still in the labor market. These workers are included in the alternate measure of labor underutilization (U-6) that increased to 8.1% in December. This graph shows the number of workers unemployed for 27 weeks or more. According to the BLS, there are 1.52 million workers who have been unemployed for more than 26 weeks and still want a job. This was down from 1.59 million in November This is the lowest level since April 2008. This is trending down, but still a little elevated. The headline jobs number was a little disappointing and the unemployment rate unchanged at a low level - but overall a continuation of multi-year trends. Wage growth was disappointing again.

Manufacturing employment and productivity - This National Bureau of Economic research paper is behind a paywall, but the premise is up for discussion:This Paper challenges two widely held views: first that trade performance has been the primary reason for the declining share of manufacturing employment in the United States and other industrial economies, and second that recent productivity growth in manufacturing has actually been quite rapid but is not accurately measured. The paper shows that for many decades, relatively faster productivity growth interacting with unresponsive demand has been the dominant force behind the declining share of employment in manufacturing in the United States and other industrial economies. It also shows that since 2010, however, the relationship has been reversed and slower productivity growth in manufacturing has been associated with more robust performance in manufacturing employment. These contrasting experiences suggest a tradeoff between the ability of the manufacturing sector to contribute to productivity growth and its ability to provide employment opportunities. While some blame measurement errors for the recently recorded slowdown in manufacturing productivity growth, spending patterns in the United States and elsewhere suggest that the productivity slowdown is real and that thus far fears about robots and other technological advances in manufacturing displacing large numbers of jobs appear misplaced.

Minimum wage increases expected in 18 states in January - Beginning on January 1, workers in a large number of cities and states across the nation should expect a pay bump as new minimum wage policies go into effect. Eighteen states and 20 cities are scheduled to raise minimum wages on the first day of the New Year, according to the National Employment Law Project (NELP), a worker advocacy group. As of January 1, California’s minimum wage will increase to $11 per hour from the current level of $10.50 per hour for businesses with 26 employees or more. In New York City, larger employers will be required to pay employees a minimum wage of $13 per hour as of Dec. 31, while minimum wage in the state as a whole will rise to $10.40 on the same date. In Rhode Island and Hawaii, where campaigns have already been proposed to increase the minimum wage to $15 per hour over the next few years, the minimum wage will be raised to $10.10 during 2018. In New Jersey, the minimum wage will rise to $8.60, and in Vermont to$10.50.Later in 2018, three additional states will implement a wage hike, according to NELP. The campaign for a $15 minimum wage, and rising wages overall, has been divisive. Earlier this year, a study conducted by the Employment Policies Institute (EPI), which analyzed employment trends from 1990 through 2017, found that each 10% increase in the minimum wage in California has resulted in a corresponding 2% decline in employment for affected employees. The impact was larger, 5%, for lower-paid workers. By those estimates, the EPI projects that the pending $15 minimum wage hike would cost California 400,000 private sector jobs, with heavy losses in both the foodservice and retail sectors.

 Americans Haven’t Been This Poor and Indebted in Decades - One of the lesser oddities of the Trump era is that the president and his party have managed to achieve historic levels of unpopularity — even as the unemployment rate has fallen to a decade low, and the stock market has soared to all-time highs. This is largely a testament to the extraordinary toxicity of Donald Trump’s persona, and the heinous unpopularity of his party’s policy priorities.  Still, there may be a separate, secondary explanation for why Republicans have failed to benefit from presiding over a good economy: That economy isn’t nearly as good as the past year of jobs reports and stock tickers would have one believe. All “full employment” economies aren’t created equal. And there’s long been reason to think that our current one is less golden than gilded. As I’ve previously noted, we’re living through the weakest recovery in postwar history — one that’s left the prime-age labor-force-participation rate near decade lows, underemployment above pre-recession levels, and wage growth too tepid to compensate for mounting household debt.  Now, Deutsche Bank economist Torsten Slok has added two new, (profoundly) disconcerting data points to the pile: The percentage of families with more debt than savings is higher now than at any point since 1962, while the median American family’s net worth is lower than it’s been in nearly a quarter-century. Axios provides this helpful illustration of Slok’s findings:  So, this is what a “good” economy now looks like in the United States: shrinking household wealth; soaring middle-class debt; wage growth that can’t keep pace with the rising costs of housing, health care, and higher education; job growth concentrated in part-time positions; widespread retirement insecurity; and more wealth-less households than America has seen for 56 years. And contra Trump, there’s reason to think that this is about as good as things are going to get. Job growth in 2017 was weaker than it was in 2016, when it was weaker than it was the year before. Expansions don’t last forever.

 Eight charts on inequality in the US - Deutsche Bank have put out a big, long, 80-page note on “US Income and Wealth Inequality” that is full of great charts, like these: Probably someone should do something about all that before something blows up, but, according to DB, “the bottom line is that inequality is increasing in most countries around the world and there are no signs of this changing anytime soon.”

Upgrade your jail cell – for a price - Wurtzel pleaded no contest to sexual battery and was sentenced to a year in jail. Markin was disappointed in the short sentence, but she still believed a measure of justice would be served with her assailant locked behind bars at the Los Angeles County Jail. Instead, Wurtzel, who also had been convicted of sexual battery in a previous case, found a better option: For $100 a night, he was permitted by the court to avoid county jail entirely. He did his time in Seal Beach’s small city jail, with amenities that included flat-screen TVs, a computer room and new beds. He served six months, at a cost of $18,250, according to jail records. Markin learned about Wurtzel’s upgraded jail stay only recently, from a reporter. “I feel like, ‘Why did I go through this?’” she said. In what is commonly called “pay-to-stay” or “private jail,” a constellation of small city jails — at least 26 of them in Los Angeles and Orange counties — open their doors to defendants who can afford the option. But what started out as an antidote to overcrowding has evolved into a two-tiered justice system that allows people convicted of serious crimes to buy their way into safer and more comfortable jail stays. An analysis by the Marshall Project and the Los Angeles Times of the more than 3,500 people who served time in Southern California’s pay-to-stay programs from 2011 through 2015 found more than 160 participants who had been convicted of serious crimes including assault, robbery, domestic violence, battery, sexual assault, sexual abuse of children and possession of child pornography.

Why Inequality Predicts Homicide Rates Better Than Any Other Variable -- A 17-year-old boy shoots a 15-year-old stranger to death, apparently believing that the victim had given him a dirty look. A Chicago man stabs his stepfather in a fight over whether his entry into his parents’ house without knocking was disrespectful. A San Francisco UPS employee guns down three of his co-workers, then turns his weapon on himself, seemingly as a response to minor slights. These killings may seem unrelated – but they are only a few recent examples of the kind of crime that demonstrates a surprising link between homicide and inequality. While on the surface, the disputes that triggered these deaths seem trivial – each involved apparently small disagreements and a sense of being seen as inferior and unworthy of respect – research suggests that inequality raises the stakes of fights for status among men. The connection is so strong that, according to the World Bank, a simple measure of inequality predicts about half of the variance in murder rates between American states and between countries around the world. When inequality is high and strips large numbers of men of the usual markers of status – like a good job and the ability to support a family – matters of respect and disrespect loom disproportionately. Inequality predicts homicide rates “better than any other variable”, says Martin Daly, professor emeritus of psychology and neuroscience at McMaster University in Ontario and author of Killing the Competition: Economic Inequality and Homicide. According to the FBI, just over half of murders in which the precipitating circumstances were known were set off by what is called the “other argument” – not a robbery, a love triangle, drugs, domestic violence or money, but simply the sense that someone had been dissed.  When someone bumps into someone on the dance floor, looks too long at someone else’s girlfriend or makes an insulting remark, it doesn’t threaten the self-respect of people who have other types of status the way it can when you feel this is your only source of value.  “If your social reputation in that milieu is all you’ve got, you’ve got to defend it,” says Daly. “Inequality makes these confrontations more fraught because there’s much more at stake when there are winners and losers and you can see that you are on track to be one of the losers.”

Rising energy costs eyed amid brutal cold snap gripping US (AP) — Plunging temperatures across half the country on Thursday underscored a stark reality for low-income Americans who rely on heating aid: Their dollars aren't going to go as far this winter because of rising energy costs. Forecasters warned people to be wary of hypothermia and frostbite from an arctic blast that's gripping a large swath from the Midwest to the Northeast, where the temperature, without the wind chill factored in, dipped to minus 32 (minus 35 Celsius) on Thursday morning in Watertown, New York.Even before the cold snap, the Department of Energy projected that heating costs were going to track upward this winter, and many people are keeping a wary eye on their fuel tanks to ensure they don't run out.The burden caused by higher prices and higher energy usage is felt by all Americans, especially those who struggle to stay warm. Elizabeth Parker, 88, of Sanford, Maine, said she lives in fear of running out of heating fuel and remains vigilant in monitoring the gauge outside her trailer. She said she is allowed to request a fuel delivery thanks to federal aid, but only when her gauge dips to one-eighth of a tank. "I couldn't get along without it,"  Prolonged, dangerous cold weather this week has sent advocates for the homeless scrambling to get people off the streets and to bring in extra beds for them. Warming centers also were set up in some locations. Frozen pipes and dead car batteries added to the misery across the region. President Donald Trump said the East Coast could be facing "the COLDEST New Year's Eve on record" and poked fun at scientists who say the earth, in general, is getting warmer."Perhaps we could use a little bit of that good old Global Warming that our Country, but not other countries, was going to pay TRILLIONS OF DOLLARS to protect against," Trump tweeted. "Bundle up!"

 Children Forced To Freeze, As Baltimore Schools Open With No Heat - Baltimore students and teachers returned to school from holiday break on Tuesday, expecting to start the new year with a bang, but that proved an overly optimistic assumption for a collapsing school system, as the classrooms they found were flooded, and indoor temperatures barely above freezing. Starting off on the wrong foot, Baltimore’s school system could be on track for a turbulent year, in conjunction with a widespread cheating scandal.  The recent cold snap in Maryland has sent temperatures across the state plunging: on Wednesday morning, Baltimore printed at 11 degrees.On Tuesday, the cold weather paralyzed the school system across the city, however, schools remained open despite the horrific conditions.It was miserable. The kids had their coats, hats, and gloves on all day,” said Jesse Schneiderman, a social, studies teacher at Frederick Douglass High School. One classroom at Frederick Douglass was completely destroyed, after flooding from a burst pipe rendered the classroom unsafe.“A teacher in our basement, because her room is under the flooded classroom, lost all of her materials,” he said. “Other teachers had to teach in the library because their classrooms were too cold.”Schneiderman added, “we were shocked we weren’t one of the schools sent home.” He also said water damage destroyed the wrestling room, the weight room, and the JROTC room. Baltimore Brew notes that temperatures were barely above freezing inside the classrooms, Social media was flooded with angry parents and teachers voicing their concern for a deteriorating schools system. Baltimore Brew reports classrooms at “Patterson High School, City College and Calverton Elementary School” also experienced no heat.

Charter Schools Are Reshaping America’s Education System for the Worse - Charter schools have been hailed as the antidote to public-school dysfunction by everyone from tech entrepreneurs to Wall Street philanthropists. But a critical autopsy by the advocacy group Network for Public Education (NPE) reveals just how disruptive the charter industry has become—for both students and their communities. Charter schools are technically considered public schools but are run by private companies or organizations, and can receive private financing—as such, they are generally able to circumvent standard public-school regulations, including unions. This funding system enables maximum deregulation, operating like private businesses and free of the constraints of public oversight, while also ensuring maximum public funding.  According to Carol Burris of NPE, charter schools “want the funding and the privilege of public schools but they don’t want the rules that go along with them.” She cites charter initiatives’ having developed their own certification policies, as well as disciplinary codes and academic standards—a tendency toward “wanting the best of both worlds” among both non- and for-profit charter organizations.   The “flexibility” granted to charter schools also drives questionable academic trends. One online charter chain, managed by the Learn4Life network, serves 2,000 students in 15 schools through distance-learning-based programs. But its modular “storefront” teaching system has been accompanied by a churning enrollment with huge attrition rates. According to NPE, in 2015, four-year graduation rates ranged from zero percent in two of its schools, to 19 percent, with an overall average of less than 14 percent making it through all four years.

 Banks offer young techies student debt repayment benefits -- Banks spend not only a lot of time thinking about how to attract millennial customers, but also how to get millennials to work for them.This is especially true of young workers in the technology industry, who may find working for a tech giant like Google, Amazon or even the latest hot Silicon Valley startup, more appealing than a bank. Though banks might be hard-pressed to offer similar wages — average starting salaries at Uber, Pinterest, and Airbnb are all over $220,000, according to Paysa — they can offer something most tech companies don’t: a student loan repayment benefit plan. It may not be enough to sway every potential hire, but more and more banks say it's a perk they need to offer if they hope to compete for in-demand tech talent. “Maybe they can’t pay as much as a starter role in a software firm, but for many people coming out of college with student debt, this kind of benefit can make up for that,”

Trading Social Security for Student Debt -- Rep. Tom Garrett is a Republican representing Virginia’s 5th Congressional District. He is a member of the Committees on Education and the Workforce, Homeland Security, and Foreign Affairs. He presents a problem:We can’t afford to lose the energy, ideas, and vision of young people who give up their dreams of going to college because it is unaffordable. And we shouldn’t saddle young people who graduate with enormous debt, forcing them to postpone marriage, becoming parents, buying homes, starting a business, and many other activities that enhance their lives and strengthen our economy. The student debt crisis is a huge threat to the long-term economic prosperity of our country. If we fail to take positive measures to address the looming economic challenges brought on by student loan debt, nothing less than the long-term prosperity of our country hangs in the balance. And offers a solution for some: For every $550 in student loan forgiveness – or roughly the average cost for one credit hour at a public university – a Student Security participant would agree to raise his or her full-retirement age for Social Security benefits by one month. A student could get a maximum of $40,150 in debt relief. To get that, the person would delay the starting age for collecting Social Security benefits by 6 years and 1 month.  Leaves me flabbergasted.

Michigan residents age 60 and older now almost quarter of state's population -- Thanks to Baby Boomers, Michigan is a rapidly graying state.In 2016, 23% of Michigan residents were age 60 or older, according to the U.S. Census Bureau.To show the shift over time: In late 1950s, just as Michigan birth rate was hitting its peak, about 8% of Michigan residents were 65 or older. It's now twice that as the Baby Boomers hit retirement age, and the percentage is continuing to inch up every year. The U.S. Census Bureau estimates that 27% of Americans will be age 65 or older by 2050.  That demographic shift is having a profound impact on individuals and society as a whole. A rapidly aging population typically means a decline in the workforce, which can create shortages of qualified workers and stall economic growth. It also means a lower ratio of workers to retirees, making it harder to fund programs such as Social Security, Medicare and private pension plans.Older people are much more likely to have expensive health problems, which means health-care costs go up. And an increase in senior citizens reshapes local economies in other ways. There's more demand for health-care and support services. Housing demands are different for seniors compared to young families. Seniors also need or want different goods and services than young adults, forcing businesses to shift gears. Below is a look at Michigan's senior citizen population based on the latest Census data. We'll begin with a searchable database that provides a county-by-county look at the percentage of residents age 60 and over, and 75 and over, using the Census Bureau's five-year estimate for 2012-16. Those numbers are compared to the 2000 Census.

 The Case for More Medicare -   Yesterday, Paul Starr, the eminent health scholar, published a persuasive essay, through a joint project of The American Prospect and Century Foundation, about the future of health policy. The core of his idea is Midlife Medicare: opening up the highly popular and successful program to Americans starting at age 50, rather than 65. The idea is more politically feasible than single-payer Medicare for All, which would involve forcing many people to give up their current insurance plans. As Starr notes, the forcible switching of health plans has been a repeated political loser in this country. And yet single-payer advocates, like Bernie Sanders’s many supporters, may still be willing to support Midlife Medicare as “a first step toward their larger goal,” Starr writes. In his proposal, Americans would be able to buy into Medicare at age 50 if they were not offered coverage through their jobs. Today, many people in their 50s and early 60s struggle to afford insurance that covers their needs. Expanding Medicare makes more sense than further expanding Medicaid, because the Supreme Court has turned Medicaid into a patchwork program that varies greatly by state. Focusing on Medicare also makes more sense than enlarging Obamacare’s private markets, given the repeated Republican efforts to undermine those markets (as I explain here). Medicare both works better than they do and is on more solid political ground. A larger Medicare could also have an enormous secondary benefit: The program holds down medical costs more than any other part of the health care system. The No. 1 reason medical costs are so much higher in the United States than anywhere else is the price, rather than the volume, of treatments. A famous 2003 journal article on this subject was titled, “It’s the Prices, Stupid.” More recently, Sarah Kliff explained the problem. Starr’s new article goes into much more detail on both politics and policy. Health care wonks will want to read the whole piece; others should consider reading at least parts of it.

The ‘Frequent Flier’ Program That Grounded a Hospital’s Soaring Costs—On a recent afternoon at Parkland Memorial Hospital, social worker Sheryl Abraham and senior vice president Marilyn Callies reviewed a sheath of graphs, each representing a special kind of visitor to the hospital—the “frequent fliers,” as the nurses call them, or more politely, “high utilizers.” Sitting in Callies’ office, they worked through a list of 96 people who had visited the hospital at least 10 times over the previous month. Some had run up annual tabs of over $100,000 in unpaid bills. Nearly all of them were homeless at least part of the year. Here was a man in his late 40s, admitted to the emergency room 12 times over the past month, here a mentally ill woman who had visited 16 times. “Here’s one who comes in for her medication refills,” said Callies, leafing through the stack. “Maybe we could get a courier and get the medications to her?”  The “frequent fliers” account for the running red ink in the hospital’s finances. Parkland needed to do something about them, and beginning in 2015 it did. That year, the Parkland Health and Hospital System christened a new $1.3 billion hospital, a 17-story glass-and-steel behemoth, shiny on the outside and quiet on the inside, funded by municipal bonds and donations from local oil zillionaires. It also launched an innovative new initiative that would reset the hospital’s ledger by creating a safety net for the city’s most vulnerable citizens. A sophisticated software platform would enable the hospital to easily refer homeless people discharged from its emergency room to shelters and pantries, and to let social workers at those places see what their clients were doing: whether they were filling their prescriptions, or getting healthy food, or had a place to sleep, or money for the bus. It would be so much cheaper to meet those needs outside the medical system than to pay for the consequences inside it. Two years into the program, evidence is mounting that PCCI is working.

Adderall Risks: Much More Than You Wanted To Know - I didn’t realize how much of a psychiatrist’s time was spent gatekeeping Adderall. The human brain wasn’t built for accounting or software engineering.   I work near the financial district of a big city, so every day a new Senior Regional Manipulator Of Tiny Numbers comes in and tells me that his brain must be broken because he can’t sit still and manipulate tiny numbers as much as he wants. How come this is so hard for him, when all of his colleagues can work so diligently? (it’s because his colleagues are all on Adderall already – but telling him that will just make things worse) He goes on to give me his story about how he’s at risk of getting fired from his Senior Regional Manipulator Of Tiny Numbers position, and at this rate he’s never going to get the promotion to Vice President Of Staring At Giant Spreadsheets, so do I think I can give him some Adderall to help him through? Psychiatric guidelines are very clear on this point: only give Adderall to people who “genuinely” “have” “ADHD”. But “ability to concentrate” is a normally distributed trait, like IQ. We draw a line at some point on the far left of the bell curve and tell the people on the far side that they’ve “got” “the disease” of “ADHD”. This  Some people really do have poor concentration, they suffer a lot from it, and it’s not their fault. They just don’t form a discrete population. Meanwhile, Adderall works for people whether they “have” “ADHD” or not. It may work better for people with ADHD – a lot of them report an almost “magical” effect – but it works at least a little for most people. There is a vast literature trying to disprove this. Its main strategy is to show Adderall doesn’t enhance cognition in healthy people. Fine. But mostly it doesn’t enhance cognition in people with ADHD either. People aren’t using Adderall to get smart, they’re using it to focus.  I cannot tell you how much literature there is trying to convince you that Adderall will not help healthy people, nor how consistently college students disprove every word of it every finals season.

Maternity Wards Are Disappearing From Rural America -- Located as it is in rural southwest Kansas, you’d expect the Kearny County Hospital to be a relatively sleepy operation. The county’s population is just under 4,000, and the closest metropolitan area, Wichita, is four hours away. But the hospital’s birthing suites are busy: They’re now averaging almost one birth every day, nearly twice as many as a few years ago. There’s no mystery as to why the number of babies being born annually at the county-run hospital in Lakin jumped from 189 to 360 in a four-year period. Other hospitals across the region have closed their expensive ob-gyn wards, reflecting a trend across rural America. A study published in September in the journal Health Affairs found that 1 in 10 rural counties had lost their ob-gyn wards in the past 10 years. It used to be unimaginable for any hospital to shutter its obstetrics ward, says Benjamin Anderson, the Kearny County Hospital’s CEO. But for hospitals struggling to stay open at all, there aren’t a lot of units to close other than the maternity ward. “It requires so many fixed costs,” Anderson says. “You have to have birthing suites, anesthesia, medical staff with C-section capabilities.” Yet even getting out of the birthing business hasn’t enabled some rural hospitals to survive. Since 2010, 82 of them have closed their doors, the result of factors ranging from the costs of health-care reform to declining populations to aging local workforces that make staffing a particular challenge. The Affordable Care Act forced hospitals to modernize their operations and change existing structures of health-care delivery. Rural hospitals often lacked the resources to comply, but this was especially true in states such as Kansas that didn’t expand Medicaid under the federal law.

 Why American doctors keep doing expensive procedures that don’t work - The recent news that stents inserted in patients with heart disease to keep arteries open work no better than a placebo ought to be shocking. Each year, hundreds of thousands of American patients receive stents for the relief of chest pain, and the cost of the procedure ranges from $11,000 to $41,000 in US hospitals.But in fact, American doctors routinely prescribe medical treatments that are not based on sound science. The stent controversy serves as a reminder that the United States struggles when it comes to winnowing evidence-based treatments from the ineffective chaff. As surgeon and health care researcher Atul Gawande observes, “Millions of people are receiving drugs that aren’t helping them, operations that aren’t going to make them better, and scans and tests that do nothing beneficial for them, and often cause harm.” Of course, many Americans receive too little medicine, not too much. But the delivery of useless or low-value services should concern anyone who cares about improving the quality, safety and cost-effectiveness of medical care. Estimates vary about what fraction of the treatments provided to patients is supported by adequate evidence, but some reviews place the figure at under half.   Naturally that carries a heavy cost: One study found that overtreatment — one type of wasteful spending — added between $158 billion and $226 billion to US health care spending in 2011. The stunning news about stents came in a landmark study published in November, in The Lancet. It found that patients who got stents to treat nonemergency chest pain improved no more in their treadmill stress tests (which measure how long exercise can be tolerated) than did patients who received a “sham” procedure that mimicked the real operation but actually involved no insertion of a stent.

Groundbreaking Blindness Cure Will Come With $850,000 Price Tag - How much is a patient's eyesight worth?  That’s a corollary question that a transformative medical treatment released by Spark Therapeutics seeks to answer. The treatment, known as Luxturna, has the potential to cure a rare genetically inherited form of blindness, according to Bloomberg. The price tag? $850,000 – or $425,000 per eye.A transformative genetic treatment for a rare, inherited form of blindness will come with a price tag of of $425,000 per eye, or $850,000 for both, said Spark Therapeutics Inc., the tiny biotechnology company that is bringing the therapy to market.Since Spark’s Luxturna was approved by the U.S. Food and Drug Administration last month, speculation over the price has grown as it became clear the therapy would be one of the first in a wave of medicines that yield remarkable results after a single treatment - and would carry a commensurate cost.Of course, few patients will pay the whole amount out-of-pocket. Even for the uninsured, Spark will offer discounts based on whether or not the drug works initially and remains effective for the estimated 1,000 to 2,000 patients in the US with the inherited retinal disease caused by the gene mutation that the medication treats.Though the price tag also reflects what Spark CEO Jeff Marrazzo describes as the drug’s “life-altering” properties.“We believe that this price reflects not only the breakthrough, life-altering value of one-time Luxturna, but it will enable us to continue to invest and build on the revolutionary science that supports not only Luxturna but the rest of our pipeline,” Chief Executive Officer Jeff Marrazzo said in a phone interview. The company’s “novel” pricing scheme was devised to help placate insurers who don’t want to get stuck paying for the entire course of treatment if a patient changes plans while still enjoying the benefits of the treatment, which only needs to be administered one time.

 “As much death as you want”: UC Berkeley’s Stuart Russell on “Slaughterbots” - Bulletin of the Atomic Scientists - Not many films advocating arms control will get hundreds of thousands of hits on YouTube. But not every film advocating arms control comes with a title such as “Slaughterbots.”At 7 minutes and 47 seconds, “Slaughterbots” is fast-moving, hyper-realistic, anxiety-laden, and deeply creepy. If you’ve never heard of swarming drones before, this is just the short film to turn you against them forever. If you never dreamed that those toy-like drones from off the shelf at the big-box store could be converted—with a bit of artificial intelligence and a touch of shaped explosive—into face-recognizing assassins with a mission to terminate you—well, dream it.The set-up is simple enough. The CEO of something called StratoEnergetics takes to a stage and demonstrates to a live audience his company’s newest product: a tiny drone equipped with face recognition technology, evasive capabilities, and a deadly explosive charge. The drone, after showing off some tricks, blasts open the skull of a luckless mannequin. Things get much weirder from there. The prime mover behind the film is Stuart Russell, a professor of computer science at the University of California, Berkeley. Here, Russell checks in with the Bulletin to explain how the film was made, how little stands between us and the drone apocalypse, and what the prospects are for banning autonomous weapons before they get truly out of hand.

Severe flu brings medicine shortages, packed ERs and a rising death toll in California - LA Times: So many people have fallen sick with influenza in California that pharmacies have run out of flu medicines, emergency rooms are packed, and the death toll is rising higher than in previous years.  Health officials said Friday that 27 people younger than 65 have died of the flu in California since October, compared with three at the same time last year. Nationwide and in California, flu activity spiked sharply in late December and continues to grow.The emergency room at UCLA Medical Center in Santa Monica typically treats about 140 patients a day, but at least one day this week had more than 200 patients — mostly because of the flu, said the ER’s medical director, Dr. Wally Ghurabi.“The Northridge earthquake was the last time we saw over 200 patients,” Ghurabi said. Experts say it’s possible that this year’s flu season is outpacing the last simply because it’s peaking earlier. The flu season is typically worst around February, but can reach its height anytime from October to April. Though influenza had only only killed three Californians at this time last year, it had taken 68 lives by the end of February, according to state data. Many California doctors, however, contend that the recent surge has been unusually severe. “Rates of influenza are even exceeding last year, and last year was one of the worst flu seasons in the last decade,” said Dr. Randy Bergen, clinical lead of the flu vaccine program for Kaiser Permanente in Northern California. 

Drinking alcohol causes cancer by ‘damaging DNA’ - Drinking alcohol raises the risk of cancer by damaging DNA, scientists have discovered for the first time, leading health experts to call for people to cut down on their consumption. A study by the Medical Research Council Laboratory of Molecular Biology at Cambridge University has found that when the body processes alcohol it produces a chemical called acetaldehyde, which is harmful to DNA. The damage happens in blood stem cells, which create the red and white blood cells that carry oxygen through the body and help fight infections. Researchers found acetaldehyde snaps stem cell DNA, permanently altering the genetic code and triggering cancer. Experts and charities described the findings, reported in 'Nature', as "very important" and urged people to drink less. Professor Linda Bauld, Cancer Research UK's expert on cancer prevention, said: "This thought-provoking research highlights the damage alcohol can do to our cells, costing some people more than just a hangover. "It's a good idea to think about cutting down on the amount you drink." Alcohol is linked to seven types of cancer: liver, breast, bowel, upper throat, mouth, oesophagal and larynx. To find out how it damages the body, scientists gave diluted alcohol to mice then sequenced their DNA and analysed their chromosomes. 

Short-term exposure to low levels of air pollution linked with premature death among U.S. seniors - Harvard School of Public Health – Short-term exposures to fine particulate air pollution and ozone—even at levels well below current national safety standards—were linked to higher risk of premature death among the elderly in the U.S. according to a new study from Harvard T.H. Chan School of Public Health. The risk was even higher among elderly who were low-income, female, or Black. The study was published December 26, 2017 in the Journal of the American Medical Association (JAMA). “This the most comprehensive study of short-term exposure to pollution and mortality to date,” said Francesca Dominici, professor of biostatistics, co-director of the Harvard Data Science Initiative, and senior author of the study. “We found that the mortality rate increases almost linearly as air pollution increases. Any level of air pollution, no matter how low, is harmful to human health.” Studies have shown that fine inhalable particles (PM2.5) and ozone—particularly ‘warm-season ozone,’ which occurs from April to September—are linked with increased mortality rates. Under the National Ambient Air Quality Standards (NAAQS) set by the U.S. Environmental Protection Agency (EPA), long-term exposures to PM2.5 are considered safe if they average 12 micrograms per cubic meter of air (12 μg/m3) or less per day over the course of a year. The 24-hour standard is 35 µg/m3. For warm-season ozone there is no annual standard; the 8-hour standard is 70 parts per billion (ppb). The researchers assessed daily air pollution exposures using prediction models that provided accurate estimates of PM2.5 and ozone for most of the U.S., including unmonitored areas. They then linked the air pollution data with mortality data from the entire U.S. Medicare population residing in 39,182 zip codes (93% of all the zip codes in the U.S.), over a 13-year period from 2000-2012.

Read this before you go sales shopping: the environmental costs of fast fashion -- Fast fashion focuses on speed and low cost in order to deliver frequent new collections inspired by catwalk looks or celebrity styles. But it is particularly bad for the environment as pressure to reduce cost and the time it takes to get a product from design to shop floor means that environmental corners are more likely to be cut. Criticisms of fast fashion include its negative environmental impact, water pollution, the use of toxic chemicals and increasing levels of textile waste. Vibrant colours, prints and fabric finishes are appealing features of fashion garments, but many of these are achieved with toxic chemicals. Textile dyeing is the second largest polluter of clean water globally, after agriculture. Greenpeace’s recent Detox campaign has been instrumental in pressuring fashion brands to take action to remove toxic chemicals from their supply chains, after it tested a number of brands’ products and confirmed the presence of hazardous chemicals. Many of these are banned or strictly regulated in various countries because they are toxic, bio-accumulative (meaning the substance builds up in an organism faster than the organism can excrete or metabolise it), disruptive to hormones and carcinogenic. Polyester is the most popular fibre used for fashion. But when polyester garments are washed in domestic washing machines they shed microfibers that add to the increasing levels of plastic in our oceans. These microfibers are minute and can easily pass through sewage and wastewater treatment plants into our waterways, but because they do not biodegrade, they represent a serious threat to aquatic life. Small creatures such as plankton eat the microfibres, which then make their way up the food chain to fish and shellfish eaten by humans. The devastating impact of toxic chemical use in agriculture for growing cotton was shown in a documentary called The True Cost, including the death of a US cotton farmer from a brain tumour and serious birth defects in Indian cotton farmers’ children. Cotton growing requires high levels of water and pesticides to prevent crop failure, which can be problematic in developing countries that may lack sufficient investment and be at risk of drought.

Ore. sues Monsanto over PCB pollution - Oregon sued Monsanto Co. yesterday over decades of pollution from polychlorinated biphenyls, or PCBs. The suit asks for $100 million to address the effects of the toxic industrial chemicals, especially along 10 miles of the Willamette River in Portland. Federal authorities announced a $1 billion cleanup of the same stretch in 2016. Portland Harbor is a Superfund site, and Monsanto is involved in the cleanup. The state cites Monsanto company documents from as early as the 1930s, claiming the agribusiness giant knew the danger of PCBs yet continued to use them. Dozens of rivers and streams and more than 40 watersheds in Oregon have showed signs of PCB contamination. Humans and predators like seals, eagles and orcas face the frequent danger of ingesting accumulated PCBs. "PCBs cause a wide range of systemic toxic effects in humans and animals and can seriously impair the endocrine, neurologic, and reproductive systems," according to the lawsuit, filed in Multnomah County Circuit Court. 

Law aiding Monsanto is reason for Delhi’s annual smoke season - Until a few years ago, when farmers in Punjab burnt the remnants of the rice crops in their fields in preparation for sowing wheat, the smoke from such fires was confined to Punjab. Back then, farmers burnt the straw in late September and early October.  However, in recent years, farmers have delayed the burning until late October. This delay is crucial and responsible for the smoke being carried all the way to Delhi. An analysis of the wind flow patterns reveals that the wind changes direction in October when it starts blowing into Delhi from the north. The decision to delay the clearing of the fields was not the choice of farmers, but was forced on them by the Punjab government, which passed the Punjab Preservation of Subsoil Water Act in 2009. According to this law, farmers can no longer sow rice in April, but have to wait until the middle of June to do so. This piece of legislation was passed ostensibly to preserve groundwater, the depletion of which was blamed on rice fields, which supposedly not only used too much water, but also lost a significant quantity of water to evaporation, but this argument is a very tenuous one.  The group that has been primarily responsible for exerting pressure to move away from growing rice in the name of “crop diversification” is the United States Agency for International Development (USAID), which operates out of the American embassy.  It should, therefore, come as no surprise that Monsanto will be the primary beneficiary of USAID’s purported solution for Punjab’s problems. According to their solution, farmers need to stop growing rice and replace it with Monsanto’s genetically modified (GMO) maize. India’s surplus food grain supply is an uncomfortable fact for Monsanto and other proponents of GMO food, who insist that the world would face a shortage of food grains if not for genetically engineered plants sold by Monsanto. It is in this light that one must view Monsanto’s collusion with the Punjab government and their joint efforts targeting the production of rice in India.

Left with "chocolate water", Madagascar's parched south grows hungrier - Every morning, residents of this village in southern Madagascar’s Amboasary Sud district set off on an eight-hour round-trip journey to collect water from the nearest river. Along the thirsty way, some give up and instead use plastic jerry cans to scoop up whatever they can find in potholes along the road – muddy liquid that aid workers jokingly call “chocolate water”. This region of Madagascar has been chronically poor for decades, but a series of droughts, which government officials say are driven by climate change, have left close to a million people struggling to cope in this southern African island nation. Drought is increasing the risk of malnutrition and could cause deaths in children younger than five, half of whom already suffer from stunting, Norohasina Rakotoarison, a spokeswoman for Madagascar’s Ministry of the Environment, told the Thomson Reuters Foundation. In the south of the island, where many people farm for a living, the rainy season is getting shorter and shorter, they say. Rains that once stretched from October to March now fall only between December and February. A recent El Nino event – a warming of sea surface temperatures in the Pacific that often causes drought in southern Africa – aggravated already dry conditions, driving hunger not only in Madagascar but across southern Africa. That El Nino has now ended, but many families have not recovered, and harsh weather continues, they say. “The air is more violent. The wind is very strong,” Soja Voalahtsesylvain, the chief of AnkilibeVahavola, told the Thomson Reuters Foundation. Around the area, “there’s no production because the land is very dry”. “It’s our everyday life now,” he said. “We wait for the rain because our main issue is lack of water. We don’t know when it will come.” 

When There Are No More Fish - The old stories go like this: In 1992, Yem Yun caught a 220-pound Mekong giant Catfish. How big was it? So big, his boat nearly collapsed. So big, no one dared to buy it, so Yun cut it up and dried it out and the entire village feasted for a week. Or: When Sok Chetra was young, the fish in the lake were so plentiful they jumped into her boat. Or, even just: Ly Yoeu used to be able to support his family from fishing alone. The new stories are like this one, shouted from the water by a passing fisherman: “I’m concerned that if there are no fish, I will not eat.”  For half of the year, Tonle Sap Lake is an elongated figure eight in the heart of Cambodia. At the peak of the six-month dry season, the lake covers about a thousand square miles, its edges demarcated by forests, grasslands, paddy fields, and red roads. During the wet season, roughly May to November, all of that disappears: Viewed from a satellite, the lake’s prodigious floodplains, which can cover 6,000 square miles, make it look as though half the country has vanished below the sea. The lake operates on a flood-pulse system, like a beating heart, emptied and filled through the arterial Tonle Sap River, a major tributary of the Mekong. During the dry season, the eponymous river is pushed toward the Mekong; come rainy season, when monsoons swell the Mekong, the Tonle Sap reverses course entirely, the only river in the world to do so seasonally. Water rushes toward the lake, spilling into the plains, forests, and paddy fields surrounding it.  With the water comes the fish — billions of them, representing more than 100 species, which migrate from higher reaches of the Mekong down through the Tonle Sap river and into the lake. Across the globe, only a handful of countries — all many times the size of Cambodia — boast larger inland fisheries. None rely on their lakes to the extent that Cambodia does. The fish, some 500,000 tons of which are caught each year, feed the nation, providing the main source of protein for as much as 80 percent of the population, and they feed Cambodia’s neighbors, who import thousands of tons each year as part of a $2 billion industry.

Drones Over Africa Target $70 Billion Illegal Poaching Industry - In addition to the central bank-created bubble in financial markets, there is another bubble festering in the fields of Africa, called the "poaching boom."  Economic development in Vietnam, China, and the United States have fueled an illegal $70 billion industry of killing elephants and rhinoceroses for tusks. Poachers illegally hunt elephants and rhinos under the cover of darkness using surveillance equipment and high-tech weaponry.The boom in poaching has contributed to a 9000% increase in rhino killings since 2007 in South Africa alone. Across Africa, a rhino is slaughtered twice a day and an elephant is killed every 14 minutes.According to Air Shepherd, a wildlife conservation group aimed at stopping poachers through a new AI drone system that targets poachers said, "at this rate elephants and rhinos will be extinct within 10 years."Air Shepherd has already conducted 6,000 flight hours over the skies of Africa testing the new AI drone system. Air Shepherd’s drones use high-tech airborne sensors, such as thermal infrared vision to detect heat coming from human or animal bodies. The mobile command center fits into the back of a van and uses AI systems developed by researchers from Carnegie Mellon, the University of Southern California, and Microsoft to detect potential poachers. Discovery Magazine breaks down how Fang and her colleagues trained the deep learning algorithms to automatically spot humans or animals associated with poaching: Eventually, Fang wants to deploy deep learning algorithms that can even help rangers predict the possible hotspots for poaching activities and automatically suggest the best patrol routes for intercepting such illegal hunting activities.

Activist who fought land trafficking is tortured, killed - A gang involved in wildlife trafficking tortured and killed a community leader in northern Peru, according to the man's family and locals. José Napoleón Tarrillo Astonitas, 50, was hit with a stick and strangled with a cable, according to his wife. She said the attackers told her they were being paid. Tarrillo has fought land grabs in a local wildlife preserve, where land traffickers were clearing forest. The area is home to the rare spectacled bear. Flor Vallejos, his wife, said Tarrillo often received death threats for fighting deforestation and illegal activity in the preserve. "He was threatened two days before he was killed," said Juan Carrasco, a fellow member of the Muchik Santa Catalina de Chongoyape community, in the northern Lambayeque region. "He was a brave man, and he never lost his nerve," Carrasco said. "He said we must organize our own patrol to evict the land invaders because the authorities would not take action." Some locals say the killers were responsible for the slayings of three farmers in 2016. Criminal gangs do business with impunity, exploiting the communal land and private reserve owned by the local peasants, according to Heinz Plenge, a Peruvian wildlife photographer. "These mafias are trying to grab hold of as much communal land as possible and take over peasant communities, which can be easily bought off," he said. "These lands are bought up by small operators, but behind them are politicians and very powerful businessmen"

 Ivory Trade in China Is Now Banned - China's ivory trade ban is now in effect, making it illegal to sell and buy ivory in the country. China, one of the world's largest markets for both legal and illegal ivory, has been a major driver of elephant poaching in Africa. Last year, the Chinese government announced its commitment to shut down its legal, domestic ivory markets by the end of 2017. By March 3, about 67 ivory carving factories and shops had been closed, according to Xinhua News . The remaining markets and factories are said to have been shut by Dec. 31, 2017. Conservationists have welcomed this ban. "Decades from now, we may point back to this as one of the most important days in the history of elephant conservation," Ginette Hemley, senior vice president of wildlife conservation at the World Wildlife Fund (WWF) said in a statement . "China has followed through on a great promise it made to the world, offering hope for the future of elephants." Raising awareness about the ban and reducing demand for ivory, however, is critical for the ban to work, conservationists say. In a recent survey , WWF and TRAFFIC, the wildlife trade monitoring network, found that only 19 percent of the people interviewed in mainland China had heard of the ivory ban. But on learning about the ban, 86 percent of the people surveyed said they would support it. The ivory ban has also received support from celebrities like NBA star Yao Ming. In 2012, conservation groups WildAid, African Wildlife Foundation and Save the Elephants, together with Yao Ming, launched a large public awareness campaign to highlight how the demand for ivory was fueling elephant poaching in Africa.

China's demand for donkey skins devastates African villages - As demand for donkey skins skyrockets in China, so is theft of the animals in African villages that depend on donkeys for work and transport. One Tanzanian village alone reported losing almost 475 donkeys in one year, most of them likely stolen and sold to slaughterhouses. The purpose: ejiao, a traditional medicine extracted from boiled donkey hides. The concoction is used to treat everything from aging to the side effects of chemotherapy. Ejiao sells for about $400 per pound in China. Fifteen years ago, that price was $9 per pound. About 1.8 million donkeys are killed each year to produce ejiao, out of a total global population of about 44 million. Meanwhile, China's donkey population has fallen from 11 million to fewer than 6 million. "There's a huge appetite for ejiao in China that shows no signs of diminishing," said Simon Pope, manager of rapid response and campaigns for the U.K. nonprofit Donkey Sanctuary. "As a result, donkeys are being hoovered out of communities that depend on them." In many cases, the donkeys are stolen. Morris Njeru, a Kenyan farmer, lost eight donkeys last year. In Kenya, the price for a live donkey tripled from 2014 to 2016, while the price of donkey skin was 50 times higher

State cuts back on automatic kill permits for cougars - The California Department of Fish and Wildlife will no longer immediately give ranchers automatic depredation permits for mountain lions that have killed pets and livestock. Now the permit applicant must first try non-lethal methods to scare away the cougar. After two such attempts, a depredation permit will be given. The original policy came under fire in 2016 when a Malibu rancher got a permit to shoot a mountain lion that had killed almost a dozen alpacas. Eventually, volunteers built pens to keep the alpacas safe. Livestock owners decried the state policy shift. "I think they're bowing to political pressure, and it's too bad," rancher Wendell Phillips said of wildlife officials. "But the reality is nobody will bother to apply for permits anymore. Shoot, shovel and shut up, that's what coming." The shift applies to small and genetically isolated populations of cougars in the Santa Monica and Santa Ana mountain ranges

Sea creatures in deepest parts of ocean found to have plastic fibres in their stomachs for first time - Scientists found traces of manmade fibres and plastics in the stomachs of sea creatures living at the bottom of the deepest ocean on Earth, in a concerning world first. The shocking results show no part of the world’s oceans now remains untouched by human waste. Scientists from Newcastle University tested crustaceans at the bottom of the Mariana Trench, known as Challenger Deep. At 10,890 metres below sea level it is the remotest part of the world’s oceans. Each creature was found to have ingested some form of manmade material, including the plastics Nylon, PVC, and PVA. Dr Alan Jamieson, professor in marine ecology and the study’s lead, said the results were “immediate and startling”. “There were instances where the fibres could actually be seen in the stomach contents as they were being removed,” he said. “We felt we had to do this study given the unique access we have to some of the most remote places on Earth, and we are using these samples to make a poignant statement about mankind’s legacy.” Tide of plastic rubbish discovered floating off idyllic Caribbean island coastline The team tested 90 crustaceans in the ultra-deep trenches spanning the Pacific Ocean - the Mariana, Japan, Izu-Bonin, Peru-Chile, New Hebrides and Kermadec trenches. All were found to have creatures that had eaten some form of artificial fibre or plastic, ranging from 50 per cent in the New Hebrides to 100 per cent in the Mariana. Deep-sea animals which will eat “just about anything” are dependent on food raining down from the surface. “Litter discarded into the oceans will ultimately end up washed back ashore or sinking to the deep-sea, there are no other options," Mr Jamieson said. “Once these plastics reach the deep-sea floor there is simply nowhere else for them to go, therefore it is assumed they will simply accumulate in greater quantities.”  

Oceans Losing Oxygen at Breathtaking Speeds - Ocean dead zones quadrupled in size since 1950, while low oxygen sites around the world increased tenfold, threatening large swaths of marine life , scientists warned in a study released on Friday. "Major extinction events in Earth's history have been associated with warm climates and oxygen-deficient oceans," the analysis published in the journal Science stated. "Under the current trajectory that is where we would be headed. But the consequences to humans of staying on that trajectory are so dire that it is hard to imagine we would go quite that far down that path," Denise Breitburg, an author of the study and researcher at the Smithsonian Environmental Research Center in the U.S., told the Guardian . Human activities are largely responsible for the growth of ocean dead zones. Climate change , caused by fossil fuel emissions, is behind the large-scale removal of oxygen in open waters. Open oceans have naturally low oxygen areas that typically lay west of continents due to the Earth's rotation. Coastal zones, which provide jobs to 350 million people, are now home to at least 500 known dead zones, though that number could be much higher. According to the study, these areas have increased by an area roughly the size of the European Union since 1950, when there were 50 reported around the world.  In coastal regions, algae blooms are the main culprits behind dead zones. Manure, sewage and fertilizers create these blooms. When the algae decomposes it sucks oxygen out of the water.

Oceans suffocating as huge dead zones quadruple since 1950, scientists warn --  Ocean dead zones with zero oxygen have quadrupled in size since 1950, scientists have warned, while the number of very low oxygen sites near coasts have multiplied tenfold. Most sea creatures cannot survive in these zones and current trends would lead to mass extinction in the long run, risking dire consequences for the hundreds of millions of people who depend on the sea. Climate change caused by fossil fuel burning is the cause of the large-scale deoxygenation, as warmer waters hold less oxygen. The coastal dead zones result from fertiliser and sewage running off the land and into the seas. The oceans feed more than 500 million people, especially in poorer nations, and provide jobs for 350 million people. But at least 500 dead zones have now been reported near coasts, up from fewer than 50 in 1950. Lack of monitoring in many regions means the true number may be much higher. The open ocean has natural low oxygen areas, usually off the west coast of continents due to the way the rotation of the Earth affects ocean currents. But these dead zones have expanded dramatically, increasing by millions of square kilometres since 1950, roughly equivalent to the area of the European Union.  Furthermore, the level of oxygen in all ocean waters is falling, with 2% – 77bn tonnes – being lost since 1950. This can reduce growth, impair reproduction and increase disease, the scientists warn. One irony is that warmer waters not only hold less oxygen but also mean marine organisms have to breathe faster, using up oxygen more quickly. There are also dangerous feedback mechanisms. Microbes that proliferate at very low oxygen levels produce lots of nitrous oxide, a greenhouse gas that is 300 times more potent than carbon dioxide.

The End of Night: Global Illumination Has Increased Worldwide - Artificial light is often seen as a sign of progress: the march of civilization shines a light in the dark; it takes back the night; it illuminates. But a chorus of scientists and advocates argues that unnaturally bright nights are bad not just for astronomers but also for nocturnal animals and even for human health.Now research shows the night is getting even brighter. From 2012 to 2016 the earth’s artificially lit area expanded by an estimated 2.2 percent a year (map), according to a study published last Nov­ember in Science Advances. Even that increase may understate the problem, however. The measurement excludes light from most of the energy-efficient LED lamps that have been replacing sodium-vapor technology in cities all over the world, says lead study author Christopher Kyba, a postdoctoral researcher at the German Research Center for Geosciences in Potsdam. The new data came from a nasa satellite instrument called the Visible Infrared Imaging Radiometer Suite (VIIRS). It can measure long wavelengths of light, such as those produced by traditional yellow-and-orange sodium-vapor street lamps. But VIIRS cannot see the short-wavelength blue light produced by white LEDs. This light has been shown to disrupt human sleep cycles and nocturnal animals’ behavior. The team believes the ongoing switch to LEDs caused already bright countries such as Italy, the Netherlands, Spain and the U.S. to register as having stable levels of illumination in the VIIRS data. In contrast, most nations in South America, Africa and Asia brightened, suggesting increases in the use of traditional lighting.

2017 was second hottest year on record, after sizzling 2016: report (Reuters) - Last year was the second hottest worldwide on record, just behind a sweltering 2016, with signs of climate change ranging from wildfires to a thaw of Arctic ice, a European Union monitoring center said on Thursday. The Copernicus Climate Change Service, the first major international weather agency to report on conditions in 2017, said temperatures averaged 14.7 degrees Celsius (58.46 Fahrenheit) at the Earth’s surface - 1.2C (2.2F) above pre-industrial times. Last year was slightly “cooler than the warmest year on record, 2016, and warmer than the previous second warmest year, 2015”, it said. Temperature records date back to the late 19th century. “It’s striking that 16 of the 17 warmest years have all been this century,” Jean-Noel Thepaut, head of Copernicus, told Reuters, adding there was overwhelming scientific consensus that man-made emissions were stoking the warming trend. The Copernicus study is in line with a projection by the U.N. World Meteorological Organization (WMO) in November that 2017 would be second or third warmest behind 2016. In 2016, an extra dose of heat came from El Nino, a natural event that releases heat from the Pacific Ocean every few years. But last year was the hottest year without an El Nino, according to Copernicus, run by the European Centre for Medium-Range Weather Forecasts. It pointed to a retreat of sea ice in the Arctic and prolonged dry conditions in southern Europe that helped trigger wildfires in Portugal and Spain in 2017 as examples of the sort of disruptions that are becoming more frequent in a warming climate. 

It's Colder Than Mars Out There - On Thursday morning, Adam Gill stepped outside in a heavy, bright-yellow coat, bulky gloves, and a ski mask to brace himself against the blistering wind. He brought with him a metal teakettle full of boiling water. As he tipped the kettle over, the piping-hot liquid turned instantly into snow and blew away in the wind. That’s how cold it was at the Mount Washington Observatory in New Hampshire, the highest peak in the northeastern United States. The video of Gill, a meteorologist at the observatory, conducting this little presentation received thousands of sympathetic likes on Facebook. The temperature that day at the observatory hit a bone-chilling low of -34 degrees Fahrenheit (-37 degrees Celsius)—and that was without accounting for wind chill. The day broke the previous record of -31 degrees Fahrenheit (-35 degrees Celsius), set in 1933. The frigid weather in New Hampshire is part of an Arctic cold front that has settled over large swaths of the United States this week. Millions of people are bundling up as temperatures hit bone-chilling lows in the Northeast and the Midwest. Daily high temperatures on the East Coast have dipped into the teens and 20s in Fahrenheit, and highs in parts of the Midwest are well below zero, with some in the negative 20s and 30s. The National Weather Service warns of hypothermia and frostbite.  In Toledo, Ohio, a dog was discovered frozen solid on a porch. These conditions mean that in some parts of the United States, it’s actually colder than it is on Mars. The latest weather data from the Curiosity rover on Mars recorded a peak temperature of -9 degrees Fahrenheit (-23 degrees Celsius) on the day of Sol 1910, which for us is December 20. The rover roams around Gale Crater, near the equator. There, the winter solstice has just passed and the cold season is getting started. Humans have yet to figure out if the red planet could be habitable, but right now it seems just as (in)hospitable as home, at least weather-wise.

Malfunctioning Chinese Space Station Expected To Crash To Earth In March - An out-of-control Chinese space station which has lost communication with Earth is expected to come crashing down to Earth sometime in March - only nobody knows exactly where or when the derelict spacecraft will hit, except that it will be between the 43rd parallels.  Harvard astrophysicist Jonathan McDowell says it's impossible to predict where the station will hit. “You really can’t steer these things," McDowell said, adding "Even a couple of days before it reenters we probably won’t know better than six or seven hours, plus or minus, when it’s going to come down. "Not knowing when it’s going to come down translates as not knowing where it’s going to come down.”  In October, McDowell predicted a late 2017 or early 2018 reentry.  While most of the space station should burn up in the Earth's atmosphere, thousands of pounds of debris is expected to survive reentry, with a 1-in-10,000 chance of hitting a populated area. According to a FAQ about the Tiangong-1, the actual impact of the space station might not even be the most dangerous aspect of the reentry. Potentially hazardous materials including hydrazine, a highly toxic chemical used in rocket fuel, might survive re-entry. If humans or animals come into contact with large quantities of the substance, it can cause serious liver, kidney and central nervous system damage.

States Across U.S. See Record-Cold New Year's Day As Rest of World Boils -- As morning temperatures across the U.S. broke records Monday ― residents of Watertown, New York, woke up to minus 31 degrees Fahrenheit and temperatures plunged to minus 19 degrees in Des Moines, Iowa ― many other parts of the world were warmer than usual. Huge sections of the Arctic were among the areas that saw temperatures well above average, according to the University of Maine’s Climate Reanalyzer, which compares daily temperature anomalies to a baseline of data from between 1979 and 2000.Temperatures around the globe were nearly one full degree Fahrenheit, or 0.5 degrees Celsius, above average on Monday. The Northern Hemisphere, which is currently experiencing winter, was 1.6 degrees F (0.9 degrees Celsius) warmer than usual. In Antarctica, where a Delaware-sized iceberg broke off last summer, temperatures were 1.4 degrees Fahrenheit (0.8 degrees C) higher than normal. And the Arctic, which is warming about twice as fast as anywhere else on the planet, started 2018 with temperatures 6.8 degrees F (3.4 degrees C) warmer than average.  A peer-reviewed report released last month by the National Oceanic and Atmospheric Administration found that the Arctic is warming faster than at any point in the past 1,500 years, with 2017 its hottest year on record.

 This brutally cold winter could mean life or death for the poor -- The weather is all anyone can talk about these days—and for good reason. A“bomb cyclone” is on its way to tear up the East Coast, so it’s freezing outside. But for poor people who struggle to pay their energy bills, weather like this is more than a nuisance. It can be a life or death situation.  More and more often, Americans are getting their electricity cut off—even if it’s freezing outside. In a single year ending May 2016, Ohio utilities disconnected more than 314,000 residents from power, 84 percent more than 10 years ago. Pennsylvania saw 220,000 shutoffs in 2015. A disproportionate number of communities facing shutoffs are low-income and/or predominantly made up of people of color, according to a report the NAACP released earlier this year.  The reason for the shutoffs? Energy isn’t cheap, man. It’s an especially heavy burden for families who don’t make much money: A household with a median annual income of roughly $25,000 will spend more than 7 percent of its annual income on energy bills, whereas a household that makes a median annual income of $90,000 a year spends just 2 percent on energy costs, according to a 2016 report from the American Council for an Energy-Efficient Economy. Black and Latino households allocate more of their income on energy than their white neighbors.

Winter Storm Grayson Brings Whiteout Conditions to New York City, Near-Record Tidal Flooding to Boston Harbor - Winter Storm Grayson is clobbering the Eastern Seaboard with blizzard conditions, damaging coastal flooding and destructive winds that are leading to increasing power outages in New England as fresh bitterly cold Arctic air settles in through the weekend. Whiteout conditions continue to lash an expansive swath from the New York City Tri-State area to parts of New England as intense Winter Storm Grayson slides northward off the East Coast. The top snow total so far is 18 inches in Brick Township, New Jersey, as of early Thursday evening.Islip, New York, picked up over 13 inches of snow Thursday alone, with snowfall rates of 2 to 3 inches per hour for five straight hours through 1 p.m. EST. Snow fell at the rate of 1 to 2 inches per hour at Newark-Liberty and JFK airports, with winds at JFK gusting over 50 mph.Snow rates of 3 inches per hour were also observed in Providence, Rhode Island, with 3 inches in less than one hour at the National Weather Service office in Taunton, Massachusetts, where more than a foot of snow has already accumulated. Boston's Logan Airport reported a rarely seen low visibility in a snow event of one-sixteenth of a mile. Pounding north to northeast winds worsened coastal flooding along east and north-facing shores of Massachusetts around the early-afternoon high tide. Tidal levels at Boston Harbor neared an all-time record set during the infamous "Blizzard of '78," sending water pouring over the Long Wharf, then surging into streets in the city's Fort Point neighborhood.

2017’s natural disasters cost American agriculture over $5 billion -   Over a period of 10 months in 2017, America experienced 16 separate, billion-dollar weather and climate-related disasters. Those weather events carved paths of destruction straight through some of the most fertile and productive regions of the country, wreaking havoc on beef cattle ranches in Texas, soaking cotton and rice farms in Louisiana, orange groves in Florida, and burning up vineyards in California. And that was all before Southern California’s still-active Thomas fire, which began on December 4, and then closed in on the country’s primary avocado farms. It’s now the state’s largest-ever, in terms of total acreage.   We won’t know how much more damage the American food production system might suffer until later this year. That’s the nature of disaster. It destabilizes and destroys, upends the way we understand the world, and fools the eye. The avocado trees in Ventura County, for example, might appear to have been spared by smoke or fire that’s still raging, even today. But it won’t be until the next harvest—beginning in the spring, when a tree fails to yield—that farmers might know the total extent of their misfortune. It may be years, one agricultural extension agent told The New Food Economy, before all the trees in the literal line of fire are fully studied. So, too, is the case in Puerto Rico. Months after Hurricane Maria, half of the island is still living without power. Land grant universities, which have helped to calculate disaster-related damage on the mainland, are running scattershot on the island. Under these conditions, it may be months before farmers and ranchers there can fully report their losses. Below is a humbling—and evolving—chronicle of true American carnage. The kind only Mother Nature can conjure. Consider it an itemized receipt of the agricultural damage Congress is purporting to cover.

The US Suffered 15 Billion-Dollar-Plus Weather Disasters In 2017 -- In the year that President Donald Trump pulled out of the Paris accord and downplayed global warming as a security threat, the US received a harsh reminder of the perils of the rise in the planet’s temperature: a destructive rash of hurricanes, fires and floods.  According to Bloomberg, the US recorded 15 weather events costing $1 billion or more each through early October, one short of the record 16 in 2011, according to the federal government’s National Centers for Environmental Information in Asheville, North Carolina. And that tally doesn’t include the recent wildfires in southern California, one of which grew to be the largest fire in state history, according to Bloomberg. Among the most devastating events were hurricanes Harvey, Irma and Maria and wildfires in northern California. The killer storms caused economic losses of more than $210 billion in the U.S. and across the Caribbean, and about $100 billion in insured damages, according to Mark Bove, a senior research scientist with Munich Reinsurance America in Princeton, New Jersey. These incidents also included hail in Colorado and Minnesota, tornado outbreaks across the Midwest and South, flooding that damaged a massive dam in California and triggered evacuations downstream. A lake-effect snowband off Lake Erie dumped 34 inches of snow at Pennsylvania’s Erie International Airport on Christmas Day, quadrupling the previous record from 2002, according to the Weather Channel  There were many bizarre weather patterns around the country. In others, it was just downright odd, like the February warm spell that sent temperatures to a record 72 Fahrenheit (22 Celsius) in Burlington, Vermont, and spawned a tornado in Massachusetts.“When all is said and done, this year is going to be one of the worst years on record for U.S. damages,” said Antonio Busalacchi, president of the University Corporation for Atmospheric Research in Boulder, Colorado.

Is DIY Disaster Relief the New Normal? - For many Americans, 2017 is set to go down as the year of disaster, with three massive hurricanes and new wildfires in California together slamming areas with more than 8 percent of the United States population. With natural disasters on the rise and the resources available to respond to them fast diminishing, vigilante rescue efforts and private-driven initiatives have been stepping up to help rebalance this fatal equation and provide disaster relief.  In Louisiana, for example, a group calling themselves the Cajun Navy took their boats to Texas and started ferrying people to safety amidst the destruction wrought by Hurricane Harvey. The outfit first formed more than 10 years ago in the aftermath of Hurricane Katrina, and has provided critical first-response support every hurricane season since then, ferrying desperately needed food and equipment to-and-fro and bringing stranded people to dry land.   Their story -- one of driven citizens braving the storm to help their most vulnerable neighbors -- is an inspiring one. But it also speaks to the dangers of what can happen without adequately-funded public institutions and infrastructure. Heroic as they may be, citizens' outfits like the Cajun Navy can't be expected to compensate for severely underfunded emergency prevention and disaster response systems.

2017 Set a Record for Losses From Natural Disasters. It could get worse - Insurers are set to pay out a record $135 billion to cover losses from natural disasters in 2017, the world’s largest reinsurer said Thursday, driven by the costliest hurricane season ever in the United States and widespread flooding in South Asia. Overall losses, including uninsured damage, came to $330 billion, according to the reinsurer, Munich Re of Germany. That tally was second only to 2011, when an earthquake and tsunami in Japan contributed to losses of $354 billion at today’s dollars. Insured losses from weather-related disasters were at a high, making up most of the $135 billion. Munich Re executives warned that losses would continue to escalate. “Some of the catastrophic events, such as the series of three extremely damaging hurricanes, or the very severe flooding in South Asia after extraordinarily heavy monsoon rains, are giving us a foretaste of what is to come,” Torsten Jeworrek, a Munich Re board member, said in a statement. While it was still difficult to attribute individual weather events to climate change, he said, “our experts expect such extreme weather to occur more often.”The United States made up an unusually high share of global insured losses last year — about 50 percent, compared with just over 30 percent on average.  Hurricane Harvey, which made landfall in Texas in August, was the most costly natural disaster of 2017, causing losses of $85 billion. Together with Hurricanes Irma and Maria, the 2017 hurricane season caused the most damage ever, with losses reaching $215 billion. But that wasn’t all. The devastating wildfire season in California drove insured losses to around $8 billion. And at least five severe thunderstorms across the country, accompanied by tornadoes and hail, caused insured losses of more than $1 billion each.

Insurance companies refusing to write policies for fire-risk areas in California, report finds | -- As the Thomas Fire erupted into California's largest wildfire in modern history, many residents in Ventura County continue to pick-up the pieces. The blaze led people who saw the devastation to look for insurance to protect themselves from future fires. But they found that there is either none available to them or it's too expensive for them to afford. In a new report, more and more insurance companies are refusing to write policies for at-risk areas. "This is very frustrating for homeowners to do and everything the fire officials tell them to do, at the same time the home insurer is not writing insurance," said Dave Jones, state insurance commissioner. Jones added that the California Department of Insurance doesn't have the authority it needs to keep insurance companies in check on the issue. So on Wednesday, he announced recommendations to lawmakers who have the power to write consumer protection laws that would allow residents in high-risk fire areas to still be able to afford insurance. "One of our recommendations to address that is that if the homeowner does these things to protect their homes, then the insurance has to be written to protect them," Jones said. Basically, if homeowners conduct fire mitigation on their property, insurers must insure that property at an affordable rate.

Wildfires threaten to make home insurance unaffordable -  More frequent and intense wildfires are making it harder for homeowners to find and keep insurance in California, a state regulator warned Thursday. "The problem of insurance availability is going to expand" after last year’s record-breaking wildfires, California Insurance Commissioner Dave Jones said in an interview Thursday. He said growing rates of non-renewal and rate increases for people in wildfire zones are "entering a critical stage." Wildfires were already pinching the availability of coverage in large sections of the state, new data show. The number of homeowners in fire-prone areas who complained about getting dropped by their plans increased 250 percent from 2010 to 2016, Jones’s department reported Thursday. In the 24 counties with the greatest wildfire risk, the number of policies canceled by companies increased 15 percent between 2015 and 2016 alone; in at least six of those counties, that number grew by more than 50 percent. California was struck by a series of wildfires starting last fall that damaged or destroyed more than 14,700 homes, according to the regulator. Those losses resulted in "more than $9 billion in insured damages so far." One Southern California fire started in December, known as the Thomas Fire, burned more acreage than any other blaze in the state’s history. The pressure on California’s market is a warning for states elsewhere, according to climate and industry experts. The number of acres consumed by wildfires each year has doubled since 2000, according to federal data. The Union of Concerned Scientists warns that warmer and drier conditions caused by climate change will mean even more fires. Meanwhile the number of people who live in the most fire-prone areas keeps growing. "We used to have in this country a wildfire season, and now we have wildfire risk in multiple states all year long,"

Severe Coral Reef Bleaching Now ‘Five Times More Frequent’ Than 40 Years Ago - The scale of bleaching has been rising steadily in the last four decades, a study author told Carbon Brief , with the global proportion of coral being hit by bleaching per year rising from 8 percent in the 1980s to 31 percent in 2016. The findings indicate that "coral reefs as we know them may well vanish in the lifetime of the youngest of us" if no efforts are made to rapidly curb climate change , another scientist told Carbon Brief. Coral reefs are one of the most diverse habitats in the world. Despite covering just 0.1 percent of the oceanfloor, reefs support around 25 percent of the world's fish biodiversity . However, these colorful habitats are vulnerable to climate change. High sea temperatures are one of the main causes of coral bleaching, which occurs when stressed corals expel the tiny algae living in their tissues—known as zooxanthellae —leaving behind a stark white skeleton .The algae provide the corals with energy through photosynthesis. Without them, the corals starve . Although corals can recover from a bleaching event over time, persistent bleaching can kill off entire reefs. The new study, published in Science , is the first to make a global estimate of how both the frequency and severity of coral reef bleaching have changed over the last 40 years.

Starfish are eating the Great Barrier Reef --  Starfish are devouring the Great Barrier Reef. The crown-of-thorns starfish has been found on 37 areas of the southerly Swain Reef, the Great Barrier Reef Marine Park Authority said today.When its population booms, the native species can eat corals faster than the corals can reproduce."Whenever coral in any location in the Great Barrier Reef is threatened or stressed, it is of concern," said Fred Nucifora, a spokesman for the authority.Higher ocean temperatures are already threatening the reef system. According to a study published yesterday, coral bleaching events worldwide have increased nearly fivefold in frequency since the early 1980s (Climatewire, Jan. 5). The cause of the recent outbreak is unknown. Currents could be bringing in nutrient-rich water that might promote starfish larvae growth (Isabella Kwai, New York Times, Jan. 5).

Sea Level Rise Is Creeping into Coastal Cities. Saving Them Won’t Be Cheap. To get a sense of how much it will cost the nation to save itself from rising seas over the next 50 years, consider Norfolk, Virginia. In November, the Army Corps released a proposal for protecting the city from coastal flooding that would cost $1.8 billion. Some experts consider the estimate low. And it doesn't include the Navy's largest base, which lies within city limits and likely needs at least another $1 billion in construction.Then consider the costs to protect Boston, New York, Baltimore, Miami, Tampa, New Orleans, Houston and the more than 3,000 miles of coastline in between. Rising seas driven by climate change are flooding the nation's coasts now. The problem will get worse over the next 50 years, but the United States has barely begun to consider what's needed and hasn't grappled with the costs or who will pay. Many decisions are left to state and local governments, particularly now that the federal government under President Donald Trump has halted action to mitigate climate change and reversed nascent federal efforts to adapt to its effects.

  • Globally, seas have risen about 7 to 8 inches on average since 1900, with about 3 inches of that coming since 1993. They're very likely to rise at least 0.5-1.2 feet by 2050 and 1-4.3 feet by 2100, and a rise of more than 8 feet by century's end is possible, according to a U.S. climate science report released this year.
  • By the time the waters rise 14 inches, what's now a once-in-five-years coastal flood will come five times a year, a recent government study determined. By 2060, the number of coastal communities facing chronic flooding from rising seas could double to about 180, even if we rapidly cut emissions, according to a study by the Union of Concerned Scientists. If we don't slash emissions, that number could be 360.
  • The costs from this inundation will be tremendous. One study,published in the journal Science in June, found that rising seas and more powerful tropical storms will cost the nation an additional 0.5 percent of GDP annually by 2100. Another, by the real estate firm Zillow, estimated that a rise of 6 feet by 2100 would inundate nearly 1.9 million homes worth a combined $882 billion.
  • Estimating what it would cost to avoid some of this is trickier. It will certainly be expensive—look no further than Norfolk's $1.8 billion—but some research indicates it may be less costly than failing to act. An analysis by NRDC found that buying out low- and middle-income owners of single-family homes that repeatedly flood could save the National Flood Insurance Program between $20 billion and $80 billion by 2100.
  • The Trump administration, however, has revoked or withdrawn at least six federal programs or orders intended to help make the nation's infrastructure more resilient to rising seas and climate change.

Long-dormant bacteria and viruses, trapped in ice and permafrost for centuries, are reviving as Earth's climate warms - Throughout history, humans have existed side-by-side with bacteria and viruses. From the bubonic plague to smallpox, we have evolved to resist them, and in response they have developed new ways of infecting us.  The battle is endless: because we spend so much time with pathogens, we sometimes develop a kind of natural stalemate. However, what would happen if we were suddenly exposed to deadly bacteria and viruses that have been absent for thousands of years, or that we have never met before? We may be about to find out. 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.  In August 2016, in a remote corner of Siberian tundra called the Yamal Peninsula in the Arctic Circle, a 12-year-old boy died and at least twenty people were hospitalised after being infected by anthrax. The theory is that, over 75 years ago, a reindeer infected with anthrax died and its frozen carcass became trapped under a layer of frozen soil, known as permafrost. There it stayed until a heatwave in the summer of 2016, when the permafrost thawed. This exposed the reindeer corpse and released infectious anthrax into nearby water and soil, and then into the food supply. More than 2,000 reindeer grazing nearby became infected, which then led to the small number of human cases. The fear is that this will not be an isolated case.  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.

Large Antarctic snowfall increases could counter sea level rise, scientists say  - Scientists have found large increases in snow accumulation in a vast region of eastern Antarctica, a trend that, if it continues or becomes more widespread, could lessen the ice sheet’s contribution to sea level rise and mitigate one of the most feared consequences of climate change. The study, conducted by scientists from NASA and several other institutions, examined snowfall in western Queen Maud Land, an area due south of the southern tip of Africa that is warming rapidly and contains 7 percent of Antarctica’s ice. Based on a more than 500-foot-long ice core extracted from the thick sheet and containing a snowfall record dating back 2,000 years, the researchers found snow accumulation levels had been rising since around 1900. And the increase is most marked in recent decades, up through the year 2010. It’s a finding that aligns with the notion that climate change, by increasing the atmosphere’s retention of water vapor, is increasing precipitation. “We know very robustly that the present day is not anything like we’ve seen in the past essentially 2,000 years” for snowfall, said Brooke Medley, a NASA research scientist who was the lead author of the study in the journal Geophysical Research Letters. “It’s receiving much more precipitation.” Medley conducted the research with colleagues at institutions in the United States, the Netherlands, Switzerland and Germany. The work, she said, casts light on the large-scale dynamics of how water moves onto, and through, the Antarctic ice sheet to the sea — a process of addition and subtraction whose overall sums determine how the ice sheet is affecting the level of the planet’s oceans. Antarctica contains about 200 feet of potential sea level rise.

 Scientists Warn of Permanent Drought for 25% of Earth By 2050 If Paris Goals Not Reached -- In a new study that adds to the lengthy and ever-growing list of potential consequences of global climate inaction , scientists warn that around a quarter of the Earth could end up in a permanent state of drought if the planet warms by two degrees Celsius by 2050."Our research predicts that aridification would emerge over about 20-30 percent of the world's land surface by the time the global mean temperature change reaches 2ºC," said Manoj Joshi, one of lead researchers of the study, which was published on Monday in the journal, Nature.Scientists have for years linked widespread and more intense droughts to human-caused climate change. The only way to avoid these conditions is to limit global warming to 1.5ºC, Joshi concluded."The world has already warmed by 1ºC," said Dr. Su-Jong Jeong, a researcher from China's Southern University of Science and Technology. "But by reducing greenhouse gas emissions into the atmosphere in order to keep global warming under 1.5ºC or 2ºC could reduce the likelihood of significant aridification emerging in many parts of the world," including Central America, Southern Europe, Southern Africa, Southern Australia and Southeast Asia— home to more than 20 percent of the world's population .Though the Paris climate accord has long been criticized by environmentalists and researchers as wholly inadequate to the task of confronting the climate crisis already wreaking havoc across the globe, the agreement's central objective is keeping average global temperatures from rising 2°C by the end of the century. Meeting that mark by taking "early action" would substantially "constrain" the spread of drought , the study concluded.

'Muffled' Climate Scientists Relocate to France as Trump's Disregard Blatantly Continues - Many East Coasters will be returning to work today in bitter cold conditions after the second-coldest New Year on record.   The low temperatures over the festive period did not go unnoticed by President Donald Trump who tweeted in late December:   "In the East, it could be the COLDEST New Year's Eve on record. Perhaps we could use a little bit of that good old Global Warming that our Country, but not other countries, was going to pay TRILLIONS OF DOLLARS to protect against. Bundle up!" "Trump is free to tweet whatever he likes. And he will continue to do so. But to use cold weather as some sort of rebuttal of broader climatological warming is not even close to accurate, factual or funny," said CNN . And over the long term, Trump's toxic assault on science will have an impact on the quality of the science that the U.S. produces. In time, there will be a so-called "brain drain" of leading climate experts who will leave the U.S. to escape the noxious fumes of the Trump administration.  And it has already started to happen. Some 18 scientists are taking up French President Macron 's offer to relocate to the country to continue work on climate change. The majority of these are relocating from the U.S.  One of the world's most influential climate scientists, Camille Parmesan, is one such scientist, who currently works at the University of Texas and Plymouth in the UK. Her 1996 study published in the journal, Nature, on butterflies was one of the first scientific studies to document impacts of climate change on wildlife.  In an interview with the Guardian , she outlined why she has decided to relocate to France: "The impact of Trump on climate science has been far greater than what the public believe it has."

How Scott Pruitt turned the EPA into one of Trump’s most powerful tools -  Since 2010, the Environmental Protection Agency has been embroiled in an enforcement battle with a Michigan-based company accused of modifying the state’s largest coal-fired power plant without getting federal permits for a projected rise in pollution. On Dec. 7, as the Supreme Court was considering whether to hear the case, EPA Administrator Scott Pruitt issued a memo that single-handedly reversed the agency’s position. The little-noticed episode offers a glimpse into how Pruitt has spent his first year running the EPA. In legal maneuvers and executive actions, in public speeches and closed-door meetings with industry groups, he has moved to shrink the agency’s reach, alter its focus, and pause or reverse numerous environmental rules. The effect has been to steer the EPA in the direction sought by those being regulated. Along the way, Pruitt has begun to dismantle former president Barack Obama’s environmental legacy, halting the agency’s efforts to combat climate change and to shift the nation away from its reliance on fossil fuels. Such aggressiveness on issues from coal waste to vehicle emissions has made Pruitt one of Trump’s most high-profile and consequential Cabinet members. It also has made him one of the most controversial.   “We’ve spent 40 years putting together an apparatus to protect public health and the environment from a lot of different pollutants,” said William Ruckelshaus, the EPA’s first administrator, who led the agency under Richard M. Nixon and Ronald Reagan. “He’s pulling that whole apparatus down.” Yet, allies praise Pruitt for returning more power to individual states while scaling back what they see as the previous administration’s regulatory excesses.

The daughter of an ex-coal executive helped lead Trump’s national monuments review — This month, on the recommendation of his Interior secretary, President Donald Trump gutted a pair of protected national monuments in Utah, including coal-rich Grand Staircase-Escalante. The decision followed the controversial review of more than two dozen national monuments ― a process that public records reveal to have been overseen by the daughter of Frederick Palmer, the former executive of coal giant Peabody Energy and a current senior fellow at the conservative Heartland Institute.  Downey Magallanes, Palmer’s daughter, is a 2012 graduate of the Georgetown University Law Center who worked for seven years as a staffer for Sen. Roy Blunt (R-Mo.) and now serves as Interior Secretary Ryan Zinke’s deputy chief of staff for policy. Magallanes was at Zinke’s side throughout his months-long monuments review. And her personal calendar shows she had several one-on-one meetings with Zinke to discuss the review in the days before Aug. 24, when Zinke submitted his draft report to the White House.  A version of that report was leaked to the media in September, and the Interior Department released the final version earlier this month. It calls on Trump to shrink or otherwise weaken protections for 10 monuments. On Dec. 4, Trump signed a pair of proclamations to reduce the size of the two Utah sites by a combined 2 million acres. The 1.87 million-acre Grand Staircase-Escalante National Monument, the largest land monument in the country, was cut roughly in half. The boundary of Bears Ears National Monument, a 1.35 million-acre landscape named after a pair of buttes and home to thousands of Native American archeological and cultural sites, was shrunk by about 85 percent.  The move, which opens the door for mining, drilling and other industrial development on public land that has been off limits to such activities, was quickly met with numerous lawsuits from Native American tribes and conservation groups. Meanwhile, groups like the Heartland Institute, a right-wing think tank that’s loaded with climate change deniers and furiously promotes the use of fossil fuels, rejoiced

Trump plan to shrink ocean monuments threatens vital ecosystems, experts warn --  The Trump administration’s plan to shrink four land-based national monuments has provoked howls of anguish from environmental groups, Native American tribes and some businesses, such as the outdoors company Patagonia.Accompanying changes to protected monuments in the oceans – vastly larger areas than their land-based counterparts – have received less attention, but could have major consequences for the livelihoods and ecosystems dependent upon the marine environment. Ryan Zinke, the secretary of the interior, has recommended to Donald Trump that three sprawling marine monuments, one in the Atlantic and two in the Pacific, be either opened up to the commercial fishing industry or reduced in size, or both.“These ‘blue parks’ harbor unique species, a wealth of biodiversity and special habitats,” said Jane Lubchenco, the administrator of the National Oceanic and Atmospheric Administration between 2009 and 2013.“They are undersea treasures. I fervently hope that these incredible marine monuments will not be degraded by opening them up to extractive activities. There are plenty of other places in the ocean to fish.” In 2009, George W Bush created the Pacific Remote Islands national monument around seven islands and atolls in the central Pacific. The monument, subsequently expanded by Barack Obama to become what was the largest marine protected area in the world, comprises “the last refugia for fish and wildlife species rapidly vanishing from the remainder of the planet”, according to the Fish & Wildlife Service, boasting creatures such as sea turtles, dolphins, whales, sharks and giant clams.

National Parks: Official who helped Redskins owner cut trees to be acting chief - A former national park superintendent who gained notoriety by helping Washington Redskins owner Daniel Snyder cut down trees on a hillside near his property in 2004 will be named the new acting director of the National Park Service next week, according to sources. Two sources with knowledge of the move said P. Daniel Smith, the former superintendent of Colonial National Historical Park in Virginia, will take the job Monday.He will replace acting Director Michael Reynolds, who took over for Jonathan Jarvis, President Obama's parks chief, a year ago.  Sources said Reynolds has been told that he must give up the job, with his term limited to a 300-day appointment as the acting chief.Neither the Park Service nor the Interior Department would comment on the news first reported by the National Parks Traveler blog. Smith helped Snyder in his bid to cut down more than 130 trees on a Park Service-protected easement between his Potomac property and the Chesapeake and Ohio Canal, according to a report by the Interior Department inspector general's office.

EPA to finalize all ozone designations by April  -  The U.S. EPA, facing a court-ordered deadline to spell out its plans, expects to wrap up work on an overdue round of compliance decisions for its 2015 ground-level ozone standard within the next four months.The agency "intends to complete" remaining area attainment designations by April 30, according to a notice set for publication in tomorrow's Federal Register. "This would complete the designation process" for the 70-parts-per-billion standard, the notice said.The April date, inserted almost as an aside to a routine filing, would appear to address a question entwined in several lawsuits.Under the Clean Air Act, EPA officials were supposed to have made all designations by the beginning of last October. While Administrator Scott Pruitt in November declared most of the country to be effectively in attainment, he has put off thornier decisions on heavily populated parts of Utah, California and other areas that are unlikely to meet the 70-ppb limit.The foot-dragging has prompted litigation from public health groups and Democratic-led states; last month, the U.S. Court of Appeals for the District of Columbia Circuit ordered EPA to say "with precision and specificity" by Jan. 12 when it will issue a final rule setting the remaining designations (Greenwire, Dec. 20, 2017).In an earlier interview, recently installed air chief Bill Wehrum had said that he expected to reach that point by this spring. Days after the court's order, the agency provided a more concrete indication of its schedule with the announcement that it was giving states the customary four-month heads-up for proposed changes to their attainment recommendations (E&E News PM, Dec. 22, 2017).With tomorrow's Federal Register publication, the agency is opening a 30-day public comment period on those proposals.

Department rescinds Obama-era mitigation and climate docs - The Interior Department is dialing back more environmental goals set in the Obama administration, this time through a secretarial order.In a three-page order issued without fanfare Dec. 22, Deputy Interior Secretary David Bernhardt rescinded three Obama-era documents involving environmental mitigation and one involving climate change policy.Secretarial Order 3360 also directs the Bureau of Land Management to re-evaluate the specific mitigation strategy previously proposed for the Northeast National Petroleum Reserve in Alaska."The department seeks to implement statutorily-based, effective and transparent compensatory mitigation principles and standards, across its bureaus and offices ... that provide a level of certainty to all involved parties," the order states.The order and the documents it involves are bureaucratic and, to some extent, rather opaque in their references. The Interior Department did not issue a press release or otherwise comment on the order, quietly signed on the Friday before the Christmas holiday.Their potential impact, though, could be meaningful to the energy industry and alarming to environmentalists and others supportive of the Obama administration approaches now being retracted. "These smart mitigation policies accelerate responsible infrastructure permitting and protect our clean air and water and wildlife habitat," Alex Daue, the Wilderness Society's assistant director of energy and climate, said in a statement. "Eliminating them will decrease permitting efficiency, increase legal challenges, and damage our public lands."

Fighting climate change with bioenergy may do ‘more harm than good’ - As nations try to stem emissions to keep the world from warming more than 2 degrees Celsius in line with their commitments towards the Paris Accord, replacing fossil fuels with renewable alternatives is widely seen as a big step in the right direction. A major source of energy oft-extolled as renewable is biomass from trees, which are usually harvested from managed forests either established on land that has already been deforested or planted where forests didn’t naturally grow. But a new study finds land-use like managing forests for biomass production may come at a much higher carbon cost than previously thought.The study, published recently in Nature, was conducted by an international team of researchers who analyzed data how much biomass – organic matter – is contained in areas of terrestrial vegetation around the world. They used this, in turn, to calculate how much carbon this vegetation stores.But they didn’t just assess current biomass and carbon stocks – they also figured out how much carbon the world’s vegetation could be storing if it wasn’t affected by human land-use.Their results indicate terrestrial vegetation currently stores around 450 billion metric tons of carbon. But absent land-use, it could be storing more than twice that – about 916 billion metric tons.Of the 466 billion tons of “lost” carbon, the researchers found 53 to 58 percent can be attributed to the direct clearing of forests and other land-cover changes. Deforestation has long been recognized as one of the biggest emitters of greenhouse gases and reducing it is prominently addressed in the Paris Accord, so the researchers weren’t surprised that deforestation is having a big limiting impact on carbon sequestration.  But when it came to the remainder of the missing carbon, the study uncovered some surprises. Its results showed land management that didn’t change cover type – e.g., forests stayed forests, grasslands stayed grasslands – contributed 42 to 47 percent towards the 466 billion-ton carbon deficit.

Bioenergy ‘flaw’ under EU renewable target could raise emissions - Europe is currently considering a renewable energy directive that would raise the requirements to use renewable energy from a level of roughly 16% of final energy demand in 2015 to a level of 27-35% by 2030. The flaw is this: the directive will use an expansive classification of bioenergy products, allowing countries, factories and power plants to claim credit as renewable fuel for using trees harvested specifically for use in power plants and not merely residues and wastesBurning wood by-products – that is, residues and production wastes – has been long practiced in Europe. This can benefit the climate thanks to a two-fold displacement effect.First, energy is produced from biomass when it would otherwise have been produced by fossil-fuel energy, so significant emissions are avoided by keeping those fuels in the ground.Additionally, the alternative fate of wood residues and production wastes would most likely be to rot in the forest or in landfills, emitting greenhouse gases as they did so. While the action of burning wood waste itself creates CO2, the net effect is beneficial because of these displacement effects. Shaping the directive to allow trees themselves to be harvested for the sole purpose of energy means that several other science and policy complexities come into play. First, the alternative fate of trees that are harvested directly for bioenergy, unlike the fate of wood residues and production wastes, is to remain standing as living biomass for decades, locking up their carbon for that period. If the trees are actively growing, they will also be actively absorbing CO2, and this same rule applies to small and large trees alike. If bioenergy uses trees or portions of trees that would otherwise be used as sawn timber or for paper products, then trees elsewhere must be harvested to replace those products. Second, harvesting and burning trees is inefficient as a system for clean-energy production. Around a third of a tree is left behind (as roots and small branches) to decompose into the soil (a carbon-emitting process). Then, the lower burning temperature of wood and its greater carbon intensity means wood releases more carbon than fossil fuels per unit of energy generated (almost 4 times more than natural gas, and over 1.5x that of coal).  Third, there are implications for cross-border supply and demand of forest products. We have already seen how European renewable energy mandates and carbon accounting rules have led to the development of large numbers of wood pellet plants across the southeastern US and Canada, in order to fulfil European demand.

Car Sales to Top 90 Million Globally for First Time - Global sales of passenger cars and trucks likely surpassed 90 million for the first time in 2017, the latest indicator that demand for conventional automobiles remains strong even as driverless cars and ride sharing get increasing attention. The results were fueled in part by a continued rebound in Western Europe and recovery in major emerging markets, including Brazil and Russia. Asian buyers are the main engine for sales growth with more than a quarter of the cars sold last year going to Chinese customers, up from less than 15% a decade ago. The North American market is the world’s most profitable for auto makers, but American dealership traffic has slowed after several years of momentum. Analysts expect U.S. sales in 2017 to fall short of a record 2016 and are bracing for production cuts in the first quarter of this year amid further slowdown.  December’s U.S. sales are due out Wednesday (tomorrow).

China Ends Production of 553 Car Models to Fight Air Pollution - China will suspend production of hundreds of car models in an effort to curb air pollution , the official state news agency announced this week. The suspension, effective Jan. 1, covers 553 models that do not meet the country's fuel economy standards, including cars from major domestic manufacturers like Chery Automobile Co., Ltd. and joint international models from FAW-Volkswagen and Beijing Benz Automotive. While the government estimates the suspension will affect only 1 percent of vehicle production, the move is the latest effort from China to crack down on air pollution, promote electric vehicles and phase out fossil fuel cars. As reported by Engadget : "The production freeze stands in sharp contrast to the U.S. The recently passed Republican tax plan doesn't include a measure that would have taken away the EV tax credit , but the incentives to move to eco-friendly cars are far from guaranteed to survive when the current administration is determined to protect fossil fuels at all costs . China, meanwhile, is aggressively pursuing greener cars because it has little choice. Air pollution is a serious threat in China, and anything it can do to reduce fossil fuel use can have a tangible impact on the health of its residents."

Beijing may be starting to win its battle against smog (Reuters) - Beijing may have turned a corner in its battle against the city’s notorious smog, according to Reuters calculations, and environmental consultants say the Chinese government deserves much of the credit for introducing tough anti-pollution measures. The Chinese capital is set to record its biggest improvement in air quality in at least nine years, with a nearly 20 percent change for the better this year, based on average concentration levels of hazardous breathable particles known as PM2.5. The dramatic change, which has occurred across North China, is partly because of favorable weather conditions in the past three months but it also shows that the government’s strong-arm tactics have had an impact. The Reuters’ estimates show that average levels of the pollutants in the capital have fallen by about 35 percent from 2012 numbers, with nearly half the improvement this year. “The improvement in air quality is due both to long-term efforts by the government and short-term efforts this winter,” . “After 2013, the air in summers got much cleaner, but winter had not shown much improvement. This year is the first winter improvement we’ve seen during this war on pollution.” Government officials this week signaled they were confident they were starting to get on top of the problem. “The autumn and winter period is the most challenging part of the air pollution campaign. However, with the intensive efforts all departments have made, we believe the challenge is being successfully overcome,” Liu Youbin, spokesman for the Ministry of Environmental Protection, told reporters on Thursday. “The turning point is here but we cannot rule out the possibility we can turn back,” said Ranping Song, developing country climate action manager for the World Resources Institute. “We need to be cautious about challenges and not relax now that there have been improvements. There are lots of issues to be solved.” 

Beijing Meets Air Quality Improvement Goals With Crackdown on Polluters - Beijing successfully lowered air pollution levels following a crackdown on polluters last year, bringing China's capital in line with air quality targets, according to Chinese officials. The announcement Wednesday by the Beijing Municipal Environmental Protection Bureau followed a 2013 plan that ordered the city to reduce the yearly average concentration of particulate matter to less than 60 micrograms. According to the bureau, the capital succeeded by reducing PM2.5 concentrations to 58 micrograms per cubic meter—a reduction of 35.6 percent from 2012. Reuters reported that the figures provided by the government agency were in line with the news agency's own estimates. Despite meeting the target, northern China is still a ways off its official PM2.5 of 35 micrograms per cubic meter and even further off the maximum of 10 micrograms per cubic meter recommended by the World Health Organization. "Current air pollutant levels remain a lot higher than the national air quality standard, indicating the improvement in air quality will still be a long-term process," Beijing's environment agency said.  PM2.5 is particulate matter with a length of 2.5 microns or less. Often a mix of chemicals , the microscopic cocktail of toxins from power plants, automobiles and other sources of industry harm human lungs and can cause heart problems if they enter the bloodstream.

Bitcoin Miners Migrate From China To Canada As PBOC Begins Crackdown - Bitcoin rangin the year Peter Thiel-inspired ramp following reports that the People’s Bank of China is preparing to crack down on bitcoin miners.In fact, Reuters reported that the PBOC had held a meeting about regulating bitcoin mining power use, an increasingly sensitive topic now that global bitcoin energy consumption is greater than what Qatar uses in a year. Unfortunately for bitcoiners across the world, the PBOC has called for establishing limits on the energy used by miners, sending the bitcoin price lower. Before news of the crackdown broke, we reported late last month that Winnipeg City, Manitoba, could become a hub for crypto miners because of its exceedingly low power costs. Indeed, Winnipeg City has been rated the city with the lowest power costs in North America cryptocurrencies broadens to bitcoin miners, some of the industry’s biggest players are shifting operations overseas.  While the moves are unlikely to have a noticeable effect on bitcoin transaction speeds, they could reshape the cryptocurrency mining industry. Miners have until recently flocked to China because of the country’s inexpensive electricity, local chipmaking factories and cheap labor. They now have little choice but to look elsewhere.  Bitmain, which runs China’s two largest bitcoin-mining collectives, is setting up regional headquarters in Singapore and now has mining operations in the U.S. and Canada, Wu Jihan, the company’s co-founder, said in an interview. BTC.Top, the third-biggest mining pool, is opening a facility in Canada and ViaBTC, ranked No. 4, has operations in Iceland and America, their founders said. The moves underscore how China’s once-dominant role in the world of cryptocurrencies is shrinking as policy makers clamp down. Meanwhile, the costs of bitcoin mining is expected to keep rising at a breakneck pace.

 Vehicles are now America's biggest CO2 source but EPA is tearing up regulations -  Emissions data has placed transport as the new king of climate-warming pollution at a time when the Trump administration is reviewing or tearing up regulations that would set tougher emissions standards for car and truck companies. Republicans in Congress are also pushing new fuel economy rules they say will lower costs for American drivers but could also weaken emissions standards. Opponents of the administration fret this agenda will imperil public health and hinder the effort to address climate change. “This Environmental Protection Agency doesn’t seem to have met an air regulation that it likes,” said Mary Nichols, chair of the California Air Resources Board and a former EPA assistant administrator. “I’ve not seen any evidence that this administration knows anything about the auto industry, they just seem to be against anything the Obama administration did. “Vehicle emissions are going up, so clearly not enough is being done on that front. The Trump administration is halting further progress at a critical point when we really need to get a grip on this problem.”The 1970 Clean Air Act, signed by Richard Nixon, set standards for a cocktail of different pollutants emitted from new vehicles. New cars and trucks, which account for more than 80% of transport emissions, now have to meet fuel efficiency standards and display this information to consumers. This approach has helped cleanse previously smog-laden American cities and tamp down greenhouse gas emissions.But in 2016, about 1.9bn tons of carbon dioxide emissions were emitted from transportation, up nearly 2% on the previous year, according to the Energy Information Administration. This increase means that transport has overtaken power generation as the most polluting sector in the country, and it’s likely to stay that way.   Cheap gasoline prices have led to a recent uptick in vehicle emissions, despite the fuel standards, at the same time that coal is being rapidly displaced by an abundance of cheap natural gas and the steady rise of renewable energy, driving a sharp decline in CO2 emissions from the power grid.  Americans are buying larger cars and taking more flights – domestic aviation emissions grew 10% between 2012 and 2016 – and face little opposition in doing so.

Puerto Rico: Half of residents without power three months after Hurricane Maria | DW | 30.12.2017: Over three months after Hurricane Maria hit Puerto Rico, almost half of residents are still without power. As work continues to reach areas still in the dark, anger has grown over the sluggish storm recovery efforts. After months of efforts to restore power to hurricane-hit Puerto Rico, electricity provider AEE said on Friday that 55 percent of households now had electricity.  That means that some 660,000 customers out of a total 1.5 million are still without power, AEE director Justo Gonzalez said. It was the government-owned utility's first statement since Hurricane Maria slammed into the US territory on September 20. The town of Ciales, one of the island's 78 municipalities, is still totally without electricity. No towns in Puerto Rico have had their power networks completely restored, Gonzalez said.AEE said that it had given priority to restoring power to shopping centers, hospitals and factories.Although power has been restored to many businesses and factories, residential areas are still in the dark. Puerto Rico's government also cautioned that a lot of work remained as crews were still uncovering unexpected damage after the Category 4 storm hit in September, blowing down power lines and crippling substations with winds of up to 154 mph (248 kmh).The island's governor, Ricardo Rossello, appealed to US utility companies on Friday to send 1,500 workers to Puerto Rico to speed up electricity recovery efforts. People around the island were surprised and frustrated by the statistics released by officials on Friday. "This is horrible," Amarilis Irizarry, a 38-year-old graphic designer living in Trujillo, told The Associated Press. "I didn't think it would take so long ...To have only half of Puerto Rico with power three months after the hurricane, that's worrisome," she said.

 100 Days After Hurricane Maria, 1.5 Million American Citizens in Puerto Rico Still Have No Power -  Around half of Puerto Ricans—more than 1.5 million people—remain without power 100 days since Hurricane Maria hit the island, according to official figures released Friday. In the first official figures released by the Puerto Rican government since the storm made landfall in September, officials reported that one of the island's 78 municipalities remains totally without power. Gov. Ricardo Rosselló had promised in October to restore 95 percent of power by December 15, while the Army Corps of Engineers estimated power would be totally restored by May. Anger continues to grow as residents continue to struggle with closed schools and businesses and increased health risks. Authorities are grappling with challenges updating and restoring the aged grid and potentially introducing new renewable power . As reported by NPR: " ... Puerto Ricans on the mainland are angry that it's taking too long to rebuild the island after Hurricane Maria. Many say that the lack of progress is exposing people to a growing environmental catastrophe. 'People are breathing toxic air because of the diesel generators, the water is polluted and they don't have rooftops, highways haven't been fixed,' says Elizabeth Yeampierre. She's an attorney and the executive director of UPROSE, a Latino community organization in Brooklyn.  'Communities are completely isolated and they don't have access to health care' says Yeampierre, '100 days is an indictment of the U.S. and its lack of commitment to Puerto Rico,' she says."  For Announcement: New York Times , AP , The Hill . Impacts: AP , NPR , NBC . Grid: Politico Pro , Washington Examiner

As the Tourists Return, Half of Puerto Rico Remains Without Power, Thanks to PROMESA, while Workers Leave, and Vulture Capital Circles - Lambert Strether -Yes, the tourists are coming back. Travel Weekly: On the beach, the upscale Vanderbilt Condado hotel was hosting a holiday party, its second in as many nights, and people stayed at Isla Verde’s beach late into the afternoon. To people who know San Juan, this will seem like a normal weekend.However: Conversations with smiling restaurant workers reveal that their homes have no electricity or WiFi, almost 80 days after the storm passed. Some stores have reopened without power and accept only cash. Personnel from FEMA and Con Edison and other recovery workers are working on power lines and spending evenings at bars and restaurants…. Only 65% of the island has power restored and many residents have left in a mass exodus to the mainland United States. As it turns out, 65% is an over-estimate, since it refers to power generation capacity, and not to actual humans (or, as we say, “accounts”) with or without power[1]. From the Times-Picayune:Officials said 55 percent of the nearly 1.5 million customers have power, marking the first time the government has provided that statistic since the Category 4 storm hit on Sept. 20 with winds of up to 154 mph. Officials had previously reported power generation, which stands at nearly 70 percent of pre-storm levels.  Let me break out my date duration calculator: From September 20, 2017 to January 3, 2018: 163 days (inclusive). That seems rather a lot. In this post, I’ll look first at one reason the PROMESA oversight board made rebuilding the power grid has been so hard. Then I’ll look briefly at that exodus from Puerto Rico, and finally I’ll look once again at the suit vulture capital fund Aurelius brought, challenging the very existence of PROMESA.

Anger grows and hope fades as Puerto Rico’s ground zero remains without power — The world-renowned resort here is a ghost town. No one sits by the three-tiered pool even though it’s high tourist season. At the area’s largest hospital, four of the five floors are closed. Long lines still form for ice and water. Livelihoods have disappeared. “No hay luz” (there is no power) is a repeated refrain from almost everyone. It has been three months since Hurricane Maria entered Puerto Rico like a battering ram through Humacao, sweeping through this southeastern coastal city and into the island’s history as its worst natural disaster. But the catastrophe continues. Still largely without electricity and clean water, people who withstood the hurricane’s force feel abandoned and question whether the U.S. government cares about their survival.   Just about 45 minutes from the capital of San Juan — longer with the heavy traffic now on the main highway — Humacao used to draw tourists and Puerto Rican vacationers every year. Charter yachts took passengers through the warm waters to the smaller Puerto Rico island of Vieques. It is known for the world-class golf course at the Palmas del Mar resort and its pharmaceutical and medical supplies industry.  But as of mid-December, the U.S.-based pharmaceutical giant Bristol-Myers Squibb — which manufactures cardiovascular and anti-diabetes products and employs about 300 people — was still running on generators. More than half of the city’s schools were closed, along with an untold number of businesses, including Humacao’s major shopping center, which housed Walmart, J.C. Penney, Marshall’s and the local Capri department store, among others.  “We are still in Maria. Maria has not left Humacao,” said Jahaira Paris, owner of a local drugstore, Farmacia Central, in Humacao’s city center. Although her business is operating on generators and seeing a spike in sales because the big shopping center is closed, she waits for electricity at home and only recently got running water.

NIST kicks off new year with a grim grid warning - A cyberattack on the power grid could ripple across multiple sectors, "possibly stressing the fabric of our society to the point of collapse," the National Institute of Standards and Technology warned yesterday in updates to a key cybersecurity guide.The agency called out the need to design security into electricity networks and other critical infrastructure systems from the beginning, setting a New Year's resolution for any companies following the voluntary recommendations."Our cybersecurity problems today really rise to the highest level of our economic and our national security," said Ron Ross, a fellow at NIST who authored the updates to the agency's systems security engineering publication, in an interview yesterday. "We're providing guidance so when people are designing upgrades, security can be considered in the first phase."Changes to the November 2016 document highlight "interdependencies" between power utilities and the natural gas, banking, water, transportation and communications industries.The risk of knock-on effects from an attack on the power grid has drawn high-level attention recently, as researchers test the potential impacts of a coordinated cyberattack and federal officials map out their response plans. The North American Electric Reliability Corp.'s fourth GridEx security exercise last fall brought in participants from the financial, natural gas and telecommunications industries, among others, officials say.

Nigerian power grid shut-down goes unnoticed in parts of country (Reuters) - Nigeria’s electricity grid has been shut down by a fire on a gas pipeline, the ministry of power said on Wednesday, as the country’s power infrastructure continues to struggle. Gas supply to several power stations was cut off because of the fire on the Escravos Lagos Pipeline System near Okada in the southern state of Edo, the ministry said. “The sudden loss of generation due to interruption in gas supply from these stations caused the national transmission grid to trip off around 20:20 on 2nd January,” it said. The outage went unnoticed in parts of Nigeria, where blackouts are common and many businesses and households are forced to rely on their own power generators or, for the less wealthy, not have any electricity. The country’s dilapidated power grid is often blamed for hobbling growth in Africa’s largest economy. Nigeria’s state oil firm, which owns and operates the gas pipelines, said it was working to restore gas supply on the affected pipelines, which feed power plants in the country’s southwest. Putting out the fire “might lead to a complete shutdown of the pipeline segment” and hit gas supply to customers in the three southwestern states of Lagos, Ondo and Ogun, the company said. That will shut down power plants generating 1,143 megawatts of electricity, it added. Nigeria’s total power generation capacity is about 7,000 megawatts. Most of Nigeria’s power generation is from thermal power stations that use gas, according to the power ministry. “Once the national grid is restored, output from the hydroelectric power stations and all other unaffected gas-fired thermal power stations will be increased to the extent possible to minimize the impact of loss of generation from the affected power stations,” it said. Some businesses were not affected by the blackout, while for others the outage went unheeded. 

Why Germans Are Being Paid To Use Power - Germany’s drive to use renewable sources of energy seems to be bearing fruit. Beginning last weekend, prices for electricity in the country declined below zero. That means consumers are being paid to use the power, rather than the other way around. This isn’t even the first time this has happened. According to one of Europe’s largest electricity trading exchanges (the EPEX Spot), it has happened more than 100 times in 2017. All of this would seem to bode well for German households, long regarded as operating under the highest energy prices on the continent. Well, not quite. But someone else is getting paid. And the whole matter has crucial implications for where the energy industry is going next… Given the heavy amount of taxes and fees charged for power, the wholesale cost factors in only about 20 percent of the real price charged to the average residence. That means that, while the period of negative costs helps, prices are still going up for German households. Meanwhile, bigger wholesale users – industry, factories, and other primary end users – do see a nice pop. According to EPEX Spot figures, for example on December 24, such major consumers were paid about €50 ($59.50 at current exchange rates) per megawatt-hour (MWh). The price decline results from a combination of low demand, warmer than usual temperatures, and the prevalence of ample winds that provided an abundance of wind power generation. All of this results in excess supply that needs to be moved along the grid. Due to the lack of efficient or effective battery and storage systems, electricity that is produced must be used.

Cold snap tests utilities in the Southeast - Frigid temperatures across the Southeast have led to record electricity demand and power outages as high usage and cold weather have started to stress mechanical equipment on the power grid, utilities said. The Tennessee Valley Authority reported a peak demand of 31,790 megawatts at 8 a.m. yesterday, leading the public power utility to ask customers to curb electricity use. Spokesman Jim Hopson said TVA had an adequate reserve margin but wanted to ensure it would keep that through what is likely going to be a bitterly cold week. Meanwhile, Duke Energy Corp. reported several thousand power outages yesterday, mostly in North Carolina. Officials blamed the weather and not high energy use. "Low temperatures will put higher stress on mechanical equipment used to generate and deliver electricity," Duke spokeswoman Meghan Miles said. Duke has enough resources to meet the high demand and hasn't asked customers to watch their energy consumption, she said. TVA reached peak demand when the average temperature across its seven-state territory was 11 degrees, Hopson said. That was highest peak demand on TVA's system since the polar vortex in February 2015. It was the 10th highest winter peak since the utility was formed in 1933, Hopson said. More striking, however, was TVA's peak for New Year's Day. Demand reached 28,891 MW, which was slightly lower because businesses were closed for the holiday, but the total energy during the 24-hour period reached 652 gigawatt-hours. That is the highest total energy use on any federal holiday in TVA history, Hopson said. 

The 100-year capitalist experiment that keeps Appalachia poor, sick, and stuck on coal -- The first time Nick Mullins entered Deep Mine 26, a coal mine in southwestern Virginia, the irony hit him hard. Once, his ancestors had owned the coal-seamed cavern that he was now descending into, his trainee miner hard-hat secure.  His people had settled the Clintwood and George’s Fork area, along the Appalachian edge of southern Virginia, in the early 17th century. Around the turn of the 1900s, smooth-talking land agents from back east swept through the area, coaxing mountain people into selling the rights to the ground beneath them for cheap. One of Mullins’ ancestors received 12 rifles and 13 hogs—one apiece for each of his children, plus a hog for himself—in exchange for the rights to land that has since produced billions of dollars worth of coal.  “I probably ended up mining a lot of that coal,” says Mullins. Mullins was a fifth-generation coal miner. But growing up in the 1990s, his father and uncles—all of them miners—begged him not to get into coal mining. “No one wanted to see you in the mines,” he says. “And they were all union miners too—had it good for a long time.” Those protections were gone by the time Mullins was growing up. The US government’s ongoing assault on organized labor through the 1980s and 1990s meant that the mammoth energy conglomerates that dominated the coal industry were free to open non-union mines with increasing impunity. But mining was still just as rough—replete with injuries, accidents, and black lung deaths.  Mullins planned on following their advice. But he, like so many of his friends, family, and neighbors, soon found that the industry that has wreaked havoc on the economy of central Appalachia—comprised of southwest Virginia, southern West Virginia, and eastern Kentucky—was also nearly impossible to escape. A deeply cynical capitalist experiment has taken place, in which coal companies are kept profitable by passing on the costs they incur to the public.

After photos of Perry meeting, Bob Murray says he 'never proffered' grid resilience rule to DOE -- Proposed at the end of September, the DOE’s Notice of Proposed Rulemaking (NOPR) proposes full cost recovery for merchant generators that have 90 days of fuel supply onsite. FERC should “ensure that the reliability and resiliency attributes of generation with on-site fuel supplies are fully valued and in particular to exercise its authority to develop new market rules that will achieve this urgent objective,” Perry wrote in his letter to FERC announcing the NOPR.That passage, critics say, closely resembles a central statement in Murray’s Action Plan, captured in photographs published by magazine In These Times at the beginning of December.

  • Coal mining company Murray Energy filed comments with the Federal Energy Regulatory Commission (FERC) asserting that it did not propose the Department of Energy’s controversial cost recovery proposal for coal and nuclear plants in wholesale markets. 
  • The filing came after the publication of photos showing CEO Bob Murray in March delivering a coal “Action Plan” to Secretary of Energy Rick Perry that called for plant payments similar to the DOE’s proposal. Environmental groups filed comments last week asking FERC to dismiss the proposal because the text “closely resembled” DOE’s eventual proposed rulemaking.
  • CEO Murray called the the assertion an “unmitigated lie” and claimed his plan “bears no resemblance whatsoever” to the DOE proposal, though both advocate for plant supports based on on-site plant fuel supplies. DOE officials, including Perry, have also regularly referenced other arguments present in Murray’s plan to support their proposal.

Coal mining saw 2017 boost but long-term outlook still shaky   (AP) — Coal companies in the United States boosted production of the fuel in 2017 to reverse a two-year decline. The U.S. Energy Information Administration said Thursday that companies mined 771 million tons of coal through Dec. 30, a 6 percent increase versus 2016. Wyoming, the largest coal state, saw production rise 8 percent. Neighboring Montana had a 5 percent increase. Among other coal states, production rose 13 percent in West Virginia, 8 percent in Pennsylvania and 10 percent in Illinois. Kentucky's production was relatively flat. Despite the increases, coal's long-term prospects remain shaky. Natural gas and renewables such as wind and solar have severely eroded coal's once-dominant role in U.S. electricity generation. In the last week of 2017, the government says coal production fell 32 percent versus the previous week. 

 Coal mining deaths double in 2017 -- Workplace deaths in the coal mining industry increased last year to their highest point in three years. A total of 15 miners died on the job in 2017, Mine Safety and Health Administration (MSHA) data show, compared with eight in 2016. That year saw the fewest mining deaths since records began.The 15th death occurred early Friday morning at a Revelation Energy mine in Fayette County in southern West Virginia, West Virginia Public Broadcasting reported. Thurman Watts died when a piece of machinery he was operating traveled over a wall. West Virginia saw the bulk of the 2017 miner deaths, with eight. The Senate last month approved David Zatezalo, a former coal mining executive, to lead MSHA, the main agency responsible for coal mine safety. Zatezalo faced numerous questions about his own safety record throughout the confirmation process. He was previously head of Rhino Resources when MSHA took multiple enforcement actions against the company. Zatezalo sought to assure senators that he would take strong enforcement actions when necessary. 

Moroccans continue to protest against the “mines of death” - On December 31, residents of Jerada, in northeastern Morocco, braved the winter cold and stayed on the streets late into the night in what was the ninth day of continued rallies in demand for jobs, social development and government intervention in what the call “the mines of death.”  This time, protesters showed up dressed as miners, had their faces and hands blackened and were carrying black loaves and coffins. With such attire, they wanted to symbolize what happens at the many abandoned coal pits that exist in the mountains surrounding the town, where young people struggling to find employment go to try to extract some coal to then sell it; the problem is that many end up not finding the mineral but death instead.  Precisely following the passing of brothers Houcine and Jedouane Dioui after the tunnel they were digging 85 metres below ground flooded in late December, people took it to the streets. They want both regional and national officials to intervene so that young men and women are able to find regular jobs that help them make ends meet and keep them out illegal mining. According to RFI, the protesters have created a dialogue committee that met with the governor of the Oriental region, of which Jerada is the chief town, as well as with labour unions and political parties. Yet, no agreements were reached and local media reports state that rallies are set to continue.

Asia could attract $250B in coal power investment - With power demand in Southeast Asia expected to grow at roughly 4.6% per year in the next 10-plus years, baseload, low-cost coal-fired generation offers an investment opportunity of $250 billion over the next decade, Wood Mackenzie projects. According to Shirley Zhang, principal analyst for the Asia-Pacific coal market at the consulting firm, despite the strong headwinds coal is facing globally, it will still dominate emerging markets in Asia, where energy security and affordability remain priorities for governments. The challenge, though, lies in the financing of such projects, given that institutions, mostly export credit agencies (ECAs) in OECD countries, and European banks, are reducing their investment support in coal. Zhang noted funding could come from both export and import banks (EXIM) and private sector banks in Asia, as they have been backing coal projects in Southeast Asia on both the financial and technology front. “The effects of the tightening financing terms from ECAs also tend to be milder for emerging markets in Asia,” she added. “The new ECA rules will not apply to projects that have already finished detailed feasibility studies, environmental assessment or requests for proposal before the rules came into force on Jan. 1, 2017.” The new ECA rules also make exceptions for markets such as Indonesia, Cambodia, Laos, Myanmar, the Philippines, along with South Asian and Central Asian countries, which are classified as “low national electrification rate countries” per International Energy Agency criteria, or are recognized as “International Development Association-eligible countries.” 

 Washington Sued For Blocking The Biggest Coal Export Terminal In The US - A coal mining company filed a lawsuit against Washington state in federal court Wednesday for denying a permit to build what would be the largest coal export terminal in the United States, The Washington Examiner reports. Lighthouse Resources proposed building the Millennium Bulk Terminal to ship 44 million tons of coal to Asia from Montana and Wyoming. Washington’s Department of Ecology Director Maia Bellon denied the proposal over “too many unavoidable and negative environmental effects.” Lighthouse’s federal suit claims that Democratic Gov. Jay Inslee and the Department of Ecology violated the commerce clause of the Constitution. The clause gives Congress authority “to regulate Commerce with foreign Nations, and among the several States, and with Indian Tribes,” implying that individual states are barred from interfering in interstate commerce.“It’s no secret that Washington state officials are philosophically opposed to coal,” Lighthouse President and CEO Everett King said, according to The Washington Examiner. “But that does not give them legal authority to discriminate against this project and block foreign trade and interstate commerce.”Lighthouse previously filed a lawsuit against Washington in a state court, claiming regulators based their denial on unreasonable evidence. When studying the effects of the project, the Ecology department considered nine broad categories, such as air quality and noise, and calculated the environmental effects of the coal being burned in Asia, according to regulators have denied every proposed export terminal in the state, six in all, since 2010. Environmentalists have drawn a “thin green line” around the Pacific Northwest and are committed to fighting fossil fuel projects proposed in the area, especially those that increase energy exports to Asia. Environmentalists’ tactics include lobbying Washington state against approving coal terminals.

 Is 'polar vortex 2.0' a Hail Mary for coal, nuclear? - As temperatures plunge, the politically packed terms "polar vortex" and now "polar vortex 2.0" are making the rounds in blogs, social media and national headlines, as are "weather bomb" and "bombogenesis." While that colorful weather jargon remains murky, energy lobbying groups are making it crystal clear that the ensuing cold spell will be a talking point — as it was when temperatures cratered four years ago — in pushing the Trump administration's proposal for subsidizing struggling nuclear and coal plants. Coal boosters are already hailing the "historic deep freeze" gripping the eastern United States, from Nebraska to New England, as proof that grid operators are reliant on their product. Ahead of the looming storm and possible record-setting temperature drops, Luke Popovich, spokesman for the National Mining Association, said heavier use of coal in the Midwest and Mid-Atlantic gives credence to the Trump administration's request to throw his industry a policy lifeline. The Federal Energy Regulatory Commission is slated to decide the fate of that request next week. "All a reminder to FERC commissioners that coal shines when temperatures plunge," Popovich wrote in a blog post today. "Polar Vortex 2.0 was just the exclamation point to an otherwise good year for coal if not for its detractors." The nuclear industry is also beating its chest. The Nuclear Energy Institute reported all 99 of the nation's reactors are running, hailing it as an "incredible but unsurprising testament" to the industry's reliability and resilience, all while moderating electricity prices. And after pointing out that many natural gas and coal plants struggled during the polar vortex of 2014, Exelon Corp., which operates the largest nuclear fleet in the United States, said its plants are chugging along at full steam. 

Gas, not renewables, driving coal, nuclear woes -- Low natural gas prices, not high renewable energy penetrations, are the main cause of low and negative electricity prices that are negatively impacting coal and nuclear operators, a new report from two DOE national labs finds.  "There is little relationship between the location of recent (2010‐2016) coal, nuclear and other thermal retirements and [renewable] penetration levels," Impacts of Variable Renewable Energy on Bulk Power System Assets, Pricing, and Costs from Lawrence Berkeley National Laboratory (LBNL) and Argonne National Laboratory says. The findings have important implications for the current federal proposal to provide cost recovery for generators with 90 days of fuel supply onsite, such as coal and nuclear plants. Advocates for these resources argue they are needed for reliability, but disadvantaged by state and federal supports for variable renewable energies (VREs).But the numbers — displayed in the second and third graphs below — show that the market share loss for coal and nuclear is mainly due to their inability to compete against natural gas.The debate over the merits of DOE's cost recovery proposal raises questions about how nuclear, coal, natural gas and VREs fit together and what their relative values are to power markets. Those are questions to which the new research provides detailed, data-based answers.

 Dominion Energy to buy Scana, assume failed nuclear project costs - (Reuters) - Dominion Energy Inc (D.N) said on Wednesday it would buy Scana Corp (SCG.N) in an all-stock deal worth about $7.9 billion, offering the utility a way to appease customers and investors angered by the cost of a failed nuclear project. Richmond, Virginia-based Dominion will pay Scana’s customers $1.3 billion, averaging about $1,000 for each customer, and has promised to cut bills by 5 percent to appease users who have been overcharged for years as Scana funded the nuclear project. Shares of Dominion, which will also assume Scana’s debt of $6.7 billion, were down 4 percent in after-market trading. Dominion’s $55.35 per share offer represents a premium of 42.4 percent to Scana’s Tuesday close. South Carolina-based Scana’s shares were trading well below the offer price at $47.89, suggesting some investors were skeptical of the deal. Scana, which owns the South Carolina Electric & Gas Co (SCE&G), has been under pressure since it scrapped the V.C. Summer nuclear project in July after spending about $9 billion on it with state-owned utility Santee Cooper. The company received a subpoena in October from the Securities and Exchange Commission related to an investigation of the nuclear project. ( Scana was funding some of the project’s costs from SCE&G, a move that angered customers and led to the utility rolling back electricity rates for residential users. The nuclear project became a lightning rod for criticism, with local politicians arguing over who should pay for the aborted project. South Carolina Governor Henry McMaster said while the deal is a step in the right direction, it will not resolve all problems for customers. As part of the deal, Dominion will also write off more than $1.7 billion in connection with the abandoned nuclear plant.

North Korea Designed A Nuke. So Did This Truck Driver - NPR - This year, deep inside a mountain, North Korea detonated a giant nuclear bomb.The weapon was powerful; at least 10 times more destructive than the bomb the U.S. dropped on Hiroshima at the end of World War II. The North claimed it was an advanced, thermonuclear design. The test came just months after a report that some intelligence officials believed North Korea had successfully "miniaturized" some of its nukes in order to fit them on top of missiles.The apparently rapid progress alarmed politicians and pundits, and it worried average Americans, many of whom hadn't thought much about nuclear weapons since the end of the Cold War.But a 71-year-old truck driver named John Coster-Mullen wasn't surprised. Nuclear weapons are not particularly "hard" to design and build, he says. "Compared to what they do in manufacturing today for making a light bulb, these are simple. They really are," he says.Coster-Mullen is an unlikely judge of North Korea's nuclear progress. He works nights for a major trucking firm, delivering merchandise to big box stores. Before that, he worked as a photographer. He never graduated from college.But for the past 24 years, he has had an extraordinary hobby. He has carefully re-created detailed designs of America's very first nuclear weapons: Little Boy, the bomb that was dropped on Hiroshima, and Fat Man, the one that fell on Nagasaki.  His unbroken way of speaking is cluttered with minute details of the bomb: The threading on Little Boy's nose cone (it was two threads per inch); the gold foil used at the center of the Fat Man design (physicists debated for hours about how many thin sheets to use). It would be easy to write him off as an eccentric, but experts do not. "He knows a lot," says Johnpierre Paglione, a physics professor at the University of Maryland who recently invited Coster-Mullen to give a lecture about the bomb as part of his class on the Manhattan Project.

The world is running out of a resource, and it’s not oil - South China Morning Post: A looming shortage of sand – a crucial resource once thought endless – could sink infrastructure projects, including those in China’s Belt and Road Initiative. Kampot, in southern Cambodia, seemed an unlikely place for a development boom. But that quiet was shattered seven years ago as a wave of infrastructure projects began to swell, including the restoration of a railway that linked to the capital, the refurbishment of colonial buildings and the construction of a resort in nearby by Bokor Hill. The rapid development that followed created a need for raw materials, especially one: sand to make cement and concrete. And in the quiet Kampot, the sight of dredging barges, that extracted sand from the estuary of the river, became frequent. As development spread, the extraction of seemingly endless sand became more prosperous. During this time, Cambodia was also exporting sand to Singapore, which had an insatiable appetite for the material to expand its territory through artificial islands. “In some [Asian] regions, the economic costs of the impacts from sand mining are starting to be noticed,” Peduzzi says. According to a 2014 UN report Peduzzi wrote, sand and gravel, which have surpassed fossil fuels and biomass to become the world’s most extracted materials, “are now being extracted at a rate far greater than their renewal”.“Sand and gravel are the main commodities used for human activities. It is everywhere: roads, dams, buildings, airport, land reclamation …”, Peduzzi says. “It seems so usual and we have a lot of sand, we humans are poorly equipped for continuous impacts.” Asian countries have been some of the main contributors to sand scarcity as development booms. Beijing’s urban growth quadrupled from 1999 to 2009, while New Delhi tripled its population in 25-years. Singapore increased its territory through land reclamation by 25 per cent over the past 200 years.More than 70 per cent of total sand mined for construction in 2014 was used in Asia, mainly in China, according to the market-research firm Freedonia Group. “The amount of concrete used by China in the last 4 years is equal to the quantity used by the USA in 100 years,” Peduzzi says.

 Trump Administration Abandons Tighter Regulations on Fracking in Wayne Forest and Other Public Lands - WKSU News - The Trump administration decided quietly over the holidays to abandon proposed federal regulations governing fracking on public lands. For Ohio environmentalists, the decision is big and bad news. For Ohio’s oil and gas industry, it’s a practical approach to regulation.  The Interior Department has rescinded a proposed Obama administration rule that would have set limits on hydraulic fracturing in places like Ohio’s Wayne National Forest. The rules would have tightened standards for well construction and required disclosure of toxic chemicals contained in fracking fluids. But Mike Chadsey of Ohio’s Oil and Gas Association says Ohio already has adequate disclosure and other requirements and states are better positioned to set standards.  “We’ve got folks that live in the areas they regulate. The county regulator lives in that county. That is far superior than someone in D.C. saying hey do XYZ and they’ve never even been to Monroe County.”   But Nathan Johnson  of the Ohio Environmental Council says disclosure rules regarding chemical spills aren’t enough. “We have some limited propriety chemical requirements in Ohio, under state law, but we’re really missing out on the stronger first-responder type of disclosure we could have seen.” He cites an explosion in 2014 just outside the Wayne forest in which operator Halliburton took several days to disclose the chemicals.  Johnson has another concern about the loss of the proposed federal requirement that companies store their drilling waste in special tanks. He says under Ohio law, such tanks aren’t required, and operators often opt for open pits.  “This stuff is highly toxic. When it’s just out in an open pit there’s a much greater risk of leaks and spills. And wildlife are often also negatively impacted. Birds and bats, it’s known that these pits often attract them and are sort of death traps for these species.”

City Council to 'fix' laws arising from TACO, BORC votes -   Since 2014, Athens city voters have overwhelmingly approved two citizen-submitted ballot issues that ended up becoming city law because of those votes. They are the Athens Cannabis Ordinance (TACO), which de-penalizes marijuana misdemeanor crimes in areas where the city has jurisdiction, and a ban on oil-and-gas drilling and other activities in the city of Athens put forward by the Athens Bill of Rights Committee in 2014.  However, until recently, Athens City Council had never taken a vote to officially codify either law to place them in the city’s code of ordinances. Voters approved the TACO ordinance this past November, while voters approved the BORC “water supply protection” ordinance in November 2014. Realizing this, Athens City Council on Nov. 20 voted unanimously with an emergency clause to approve adding the language from both ballot issues to the city’s books.  However, even after that vote, Caleb Brown, a local activist who pushed the TACO ordinance, said he noticed something strange. The ordinances as codified had dropped significant portions of the language that was included with both the TACO and the BORC anti-fracking ballot issues. In particular, the BORC ordinance did not include a “bill of rights” section that was included with the ballot issue that, among other things, calls for a change to Ohio’s Constitution to “recognize and enforce the right to local community self-government that shall not be preempted when the municipality enacts laws that protect the health, safety and welfare of the community or… asserts and expands the rights of human and natural communities,” according to the original text of the BORC water-supply protection bill. “I obtained copies of the ordinances that were codified and compared them with the ordinances as they appeared in the petitions that were circulated and approved by voters,” Brown said in a Dec. 3 email to The NEWS. “I discovered that the entire Bill of Rights section of the Athens Community Bill of Rights and Water Supply Protection Ordinance was removed, as was any mention of its origin as a citizen initiative petition. I also noticed that any other mention of rights of citizens or of nature was removed from both petitions, as were all statements of intent.”

Pennsylvania Suspends Mariner East 2 Pipeline Construction - Pennsylvania suspended permits for Sunoco Pipeline on Wednesday, LP 's $2.5 billion Mariner East 2 pipeline project, after finding that the company committed "egregious and willful violations" of state laws. The order directs Sunoco, a subsidiary of Dakota Access Pipeline builder Energy Transfer Partners , to stop Mariner East II construction activities across Pennsylvania. The 306-mile pipeline project would carry 275,000 barrels a day of butane, propane and other liquid fossil fuels from Ohio and West Virginia to the Atlantic coast for export. "Suspension of the permits described," the order states, "is necessary to correct the egregious and willful violations described herein."  Construction has been plagued by numerous spills and contaminated drinking water supplies for homes in Silver Lake Township, Pennsylvania. State regulators had discovered that Sunoco was drilling under streams without permits when a spill contaminated a high-quality creek in Berks County, Pennsylvania, the order notes—and then found unpermitted construction at over a half-dozen other locations along the pipeline's route.  The 24-page order requires the company to provide a report that "fully explains the failures that led to the violations," to outline the steps it will take to prevent recurrences, to address the private water wells contaminated in Silver Lake Township "to the satisfaction of the private well owners," and to "properly abandon" illegally drilled pilot holes within 10 days, as well as a long list of other terms and conditions. The only activities allowed will be those associated with ensuring the shutdown is done safely and without further environmental damage.

Pa. halts Mariner East 2 work amid 'egregious' violations -- A pipeline project designed to move natural gas products across Pennsylvania hit a major roadblock yesterday as state regulators halted construction indefinitely. The Pennsylvania Department of Environmental Protection suspended permits for the Mariner East 2 project, citing "egregious and willful" violations. The 24-page order enumerates dozens of infractions, including instances in which project backer Sunoco Pipeline LP allegedly did not obtain a permit at all for certain installation activities. "Until Sunoco can demonstrate that the permit conditions can and will be followed, DEP has no alternative but to suspend the permits," DEP Secretary Patrick McDonnell said in a statement. "We are living up to our promise to hold this project accountable to the strong protections in the permits." Mariner East 2 would deliver natural gas liquids including propane, butane and ethane 350 miles across the southern portion of the Keystone State, sending products to eastern Pennsylvania and the Marcus Hook terminal near Philadelphia.  Sunoco has touted the pipeline as a critical link between the Utica and Marcellus Shale formations and markets in Pennsylvania and beyond. The Marcus Hook facility serves as a budding hub for exports of gas products. For now, Pennsylvania's order will block all construction on the $2.5 billion project until Sunoco corrects violations, addresses complaints about fouled private water wells and submits a plan for avoiding future problems. According to the order, the dozens of permit infractions represent violations of Pennsylvania's Clean Streams Law and Dam Safety and Encroachments Act. "Suspension of the permits ... is necessary to correct the egregious and willful violations herein," the order says. "Other enforcement procedures, penalties and remedies available to the Department under the Clean Streams Law and the Dam Safety and Encroachments Act would not be adequate to effect prompt or effective correction of the conditions or violations demonstrated by Sunoco's lack of ability or intention to comply."

Mammoth W.Va. storage project moves closer to DOE loan - West Virginia officials are applauding the progress of a natural gas storage facility that could be built beneath their state, after the proposal got the first of two necessary approvals for a $1.9 billion Department of Energy loan. The Appalachia Development Group project, which would also include another $1.4 billion in financing, is being hailed as a possible economic hub for the state. Its exact location hasn't been decided, but the American Chemistry Council estimates it would create some 100,000 jobs locally. In addition to the storage facility, the project would include pipelines running into nearby valleys, as well as a cracker facility where ethylene would be produced. On Wednesday, West Virginia Sen. Shelley Moore Capito (R) called the project a "game-changing idea" for the state, adding that the first approval was "a clear indication of the strength of their application" (Jonathan Mattise, AP/Houston Chronicle, Jan. 3).

US FERC approves two major TransCanada gas pipeline expansions - The US Federal Energy Regulatory Commission has granted certificate approval to the second-largest natural gas expansion project in the US Northeast, the 170-mile, 2.7 Bcf/d Mountaineer XPress project in West Virginia. The project, sponsored by TransCanada's Columbia Gas Transmission, was approved late Friday and is roughly 500 MMcf/d shy of Rover Pipeline's 3.25 Bcf/d capacity. Like Rover, it is producer-backed and expected to boost production in the Marcellus shale and also increase deliveries from the Northeast to neighboring regions, particularly the US Gulf area. In addition to the Mountaineer XPress, the commission late Friday granted certificate approval to Columbia Gulf Transmission's 860 MMcf/d Gulf XPress project, adding seven new compressor stations in Kentucky, Tennessee and Mississippi to allow for bidirectional flows on Columbia Gulf's Lines 200 and 300, as well as changes to an existing compressor station and one existing meter station. Mountaineer XPress is the third major expansion of Columbia Gas' pipeline system to receive approval in 2017, following the January approval of the 1.5 Bcf/d Leach XPress project and the November approval of the 1.3 Bcf/d WB XPress project.It is also the fourth project targeting West Virginia production takeaway capacity to receive FERC approval in fourth-quarter 2017 alone, following WB XPress, the 2 Bcf/d Mountain Valley Pipeline and the 1.5 Bcf/d Atlantic Coast Pipeline, bringing total capacity approvals targeting West Virginia production to 7.5 Bcf/d in the last three months of the year.

 Sens. Warren, Markey query feds about Tennessee Gas pipeline wastewater spill in Agawam -  U.S. Sens. Edward J. Markey and Elizabeth Warren are seeking answers from top federal regulators after a Tennessee Gas Pipeline contractor improperly spilled 16,500 gallons of tainted wastewater near the company's Agawam compressor station in November.Warren and Markey on Jan. 2 wrote to Environmental Protection Agency administrator Scott Pruitt and Federal Energy Regulatory Commission chairman Kevin McIntyre with a list of questions about the incident and its aftermath.The hazardous spill "may pose a significant danger to surrounding communities and the environment, especially as the discharge may have reached nearby water bodies," Warren and Markey wrote.The wastewater, stored in an above-ground tank, had been used for "hydrostatic testing" of a pipeline segment associated with the Connecticut Expansion, a recently-completed project in three states that serves natural gas utilities in Connecticut.The Nov. 20 discharge contained copper, iron, lead, and two chemicals, according to an independent lab report. PERC, an industrial solvent, and DEHP, used to produce polyvinyl chloride, are classified by the EPA as likely carcinogens.The company submitted the lab report to FERC and the the EPA Region I New England office in response to a Dec. 12 demand letter from the Boston regulators.While the company told FERC and the EPA the spill did not contaminate a nearby stream, Warren and Markey said that claim "does not appear to be backed up by any additional testing, only a visual observation performed almost 10 days later."  The company told the regulators in December that it "did not observe any environmental damage resulting from the discharge."

Study: Pregnant Women Face Risks Living Near Fracking Sites -- Pregnant women living next to fracked gas wells are more likely to have a low birth-weight baby - that's the finding in a new study from Princeton University.   The researchers compared standard birth-weight records collected by Pennsylvania hospitals with the locations of the parents' homes. Princeton economics professor and study co-author Janet Currie said they found a strong correlation - that the low birth weights were highly localized, much more likely to be found right next to the well sites.  "What is surprising is we found a fairly large effect for people living very close” Currie said; "but by the time you got to two miles away, we did not detect any effect." The industry argues that air pollution from gas wells and equipment such as compressor stations disperses quickly after it's released. It also says the issue is well understood and regulated.  Low birth weight has long been considered an important indicator of later health problems.

Hydraulic Fracturing Decreases Infant Health, Study Finds - From North Dakota to Texas to Pennsylvania, hydraulic fracturing has transformed many places in America into energy powerhouses. But while some see the new energy boom as benefiting the local economy, others fear the potential health and environmental consequences. As U.S. and international policymakers grapple with whether the benefits of allowing hydraulic fracturing outweigh the costs, new evidence sheds light on a clear cost: an increase in the probability of poorer health for babies born near these sites. The study, released today in the journal Science Advances, finds infants born to mothers living up to about 2 miles (3 kilometers) from a hydraulic fracturing site suffer from poorer health. The largest impacts were to babies born within about a half mile (1 kilometer) of a site, with those babies being 25 percent more likely to be born at a low birth weight—leaving them with a greater risk of infant mortality, ADHD, asthma, lower test scores, lower schooling attainment and lower earnings. “Broadly, hydraulic fracturing has reduced energy prices and caused natural gas to greatly decrease the use of coal for power generation in the United States, leading to reductions in air pollution that have very likely improved health throughout the country,” said study co-author Michael Greenstone, the Milton Friedman Professor in Economics and director of the Energy Policy Institute at the University of Chicago. “But these national benefits depend on local communities allowing hydraulic fracturing and governments around the world have taken very different approaches with some banning it and others embracing. This study provides the first large-scale peer-reviewed evidence of a link between hydraulic fracturing activities and our health, specifically the health of babies.”

Fracking Boom Further Spurs Plastics Crisis -  Jerri-lynn Scofield -  As I’ve written before, every time I return to the US, I’m struck by just how ubiquitous over-packaging is– and how difficult it is to avoid. This problem infects just about everything, down to the simple purchase of food.  I’ve been disturbed by the sheer volume of metal, cardboard, and plastic, plastic, plastic that enshrouds even the most basic foodstuffs.  So, although one can in theory commit to reducing one’s consumption of plastics, there’s a limit to how much an individual can do– no matter how diligent one is. So, around the world, countries, states, and cities have undertaken limited measures to reduce plastics use. In 2016, France became the first country to ban plastic cups and cutlery, extending an earlier ban on plastic bags. Delhi in 2017 banned use of disposable plastic. Hawaii was the first US state to ban the use of single use shopping bags at checkout in 2016, followed by California. These initiatives are all no doubt well-intentioned, but they fail to grapple with the full scope of the problem. And that’s to ban not just the use of plastics– single use or otherwise– but to drastically curtail the production of them, at source.  That seems to me to be where the focus should be. And that’s a much larger and more difficult problem that looks destined to get much worse, due to investments being made by some of the very same companies that have brought us climate change. As The Guardian reports: The new facilities – being built by corporations like Exxon Mobile Chemical and Shell Chemical – will help fuel a 40% rise in plastic production in the next decade, according to experts, exacerbating the plastic pollution crisis that scientist warn already risks “near permanent pollution of the earth.” Now, it’s apparent that Trump has yet to see a fossil fuel friendly policy that he doesn’t like.  So I’m not holding out for the United States to take any leadership role in reducing the production of plastics. But I should point out that it was under his predecessor that fracking boomed, as reported in this cheerleading CNN piece, The Obama Oil Boom. And that expansion, according to The Guardian, lies behind the plastics investment surge.

U.S. Just Burned the Most Natural Gas Ever - The U.S. burned the most natural gas ever on Monday, breaking a record set during the so-called polar vortex that blanketed the nation’s eastern half with arctic air in 2014. America consumed 143 billion cubic feet of gas as temperatures dipped to all-time lows on New Year’s Day, topping the previous high of 142 billion from four years ago, data from PointLogic Energy show. Prices for the heating fuel rose to the highest in a month.

 US winter storms spark record natural gas demand - Frigid temperatures across much of North America have sparked record natural gas demand — but in a sign of the overpowering supply coming from shale rock, the surge did little to ignite futures prices. New Year’s Day was the coldest day of the 21st century in the 48 contiguous US states, according to a measure tracked by Commodity Weather Group, which uses temperatures from across the country and gives more weight to areas of high gas demand. Monday also smashed gas consumption records, with total demand surpassing 140bn cubic feet, said S&P Global Platts. Yet benchmark gas prices have moved mildly, despite forecasts for continuing brutally cold conditions across large parts of the US and winter storm warnings issued as far south as Florida. Nymex February gas futures dropped 1.6 per cent Wednesday to settle at $3.008 per million British thermal units. Some spot markets responded more dramatically. Gas for immediate delivery to Louisiana’s Henry hub had more than doubled from mid-December to $6.625 per mBtu Wednesday, according to S&P Global Platts. Prices at Dominion South, a hub in the producing region of Pennsylvania, respectively, rose a similar amount to $5.345. The subdued response in the futures market stands in contrast to the winter of 2013-14, when arctic air spilled south into big cities and Henry hub gas futures soared above $6 per mBtu.

U.S. power prices soar, gas use peaks in frigid start to year - (Reuters) - Power and natural gas prices in several U.S. regions jumped to their highest in years on Tuesday as gas use hit an all-time high due to arctic weather blanketing much of the country. Gas demand in the lower 48 U.S. states is expected to reach an all-time high of 144.0 billion cubic feet per day (bcfd) on Tuesday, according to Reuters data going back to 2008. That would top the 142.0 bcfd record set on Monday, New Year’s Day, and the previous record of 133.8 bcfd set on Jan. 7, 2017, data showed. One bcfd represents enough gas to fuel about five million U.S. homes. In New England, next-day electricity prices jumped to their highest since March 2014 as temperatures across the six-state region were expected to remain below freezing all week. Temperatures in Boston, New England’s biggest city, were expected to peak at 20 Fahrenheit (minus 11 Celsius) on Tuesday, and after a pair of slightly warmer days, slip further to 17F on Friday and 10F on Saturday, according to AccuWeather. On Monday, the high was 13F. Last week, next-day gas prices in New England rose to their highest since the winter of 2015. Gas and electricity prices in New England usually spike on the coldest winter days as homes and businesses use most of the region’s gas supplies for heating, leaving little for utilities to burn in power plants. To produce electricity during the freeze, New England’s electric grid, ISO New England, expects utilities to increase their use of oil for power generation instead of gas. With the retirement of several coal, oil and nuclear plants over the past decade, gas has become the biggest fuel for electric production in New England. Gas generated about 49 percent of the region’s power in 2016, while oil accounted for just 1 percent. Generators in New England usually only burn oil on the coldest winter days. 

U.S. Cold Snap Lifts Natural Gas Prices as Deep Freeze Ices East Coast - Natural gas prices rose to the highest levels in nearly a month Tuesday as Americans braced for another record-breaking day of low temperatures amid one of the worst cold snaps in decades. The U.S. National Weather Service has warned of "dangerously cold wind chills" in certain parts of the east coast and mid-west this week as a front continues to ice cities from Maine to Texas, bringing record-low temperatures and a surge in heating fuel demand. "Bitter cold wind chills continue across the Northern Plains, Great Lakes, Northeast, New England and Mid-Atlantic," the NWS said in an update on its website. "Freezing temperatures reach all the way to southern Texas and central Florida. The cold air will begin to moderate early this week. Heavy Lake Effect snow continues downwind of the Great Lakes."  Natural gas future for February delivery traded more than 4% higher than their Friday closing price in early European hours, taking benchmark prices to $3.09 per million British Thermal Unit (BTUs), the highest since Dec. 4, before paring gains to around $3.012 per million BTUs by 7:45 am eastern.   Reuters is forecasting a 14.5% increase, to 136.3 billion cubic feet per day, this week as Americans hunker down for an arctic blast that has brought temperatures to as low as -20 degrees Fahrenheit in Omaha, Nebraska, the coldest in more than 130 years. The city of Chicago, Illinois, also recorded its coldest-even New Year's Day, with temperatures only hitting a high of -1 degrees while the Baltimore Ravens of the National Football League played the coldest game in franchise history, with a kick-off wind-chill of -10 degrees Fahrenheit. The New England Patriots also played their coldest regular season game in history Sunday, topping the New York Jets 26-6 in a 2017-ending finale that kicked off with an on-field temperature of -13 degrees.

Arctic Plunge Pushes Natural Gas Prices Higher - A bona fide Arctic invasion is underway for much of the country.Temperatures have been tumbling since the start of the new year. Below is a map of forecast highs across the U.S. for Tuesday, Jan. 2. Along with this cold snap comes the increase in demand for heating across the Midwest, Northeast and even into the Deep South. This has resulted in an uptick in the price of natural gas. Coming up from lows around $2.50 in 2017, the commodity is now back to the $3 mark. With a below-normal temperature forecast for the next two weeks, the price may edge higher as we venture into the first few weeks of 2018.   While it's uncertain to what extent this cold snap will have on heating costs, it certainly bears watching. Analysts acknowledge other factors (other than the weather) that also drive the price of natural gas, such as inventory and imports/exports. One analyst pointed out that all of these factors could culminate into a buying opportunity in 2018.

Cold Weather Shocks Natural Gas Prices -- Natural gas markets are receiving a jolt from the wave of icy weather that has swept over the Eastern half of the United States.The effect is twofold: extreme cold is actually cutting production, while demand is surging because everyone is turning up the thermostat to stay warm.First the supply side. There are reports that in North Dakota’s Bakken, for instance, cold weather is cutting into production. Reuters reports that gas output in the Bakken is down more than 20 percent since last month. Citing Genscape data, Reuters said that gas flowing through interstate pipelines from North Dakota dropped from 1.3 billion cubic feet per day (bcf/d) in the week ending on December 25 to just 1 bcf/d as of Tuesday. Some of that decline could be consumed within North Dakota, but the drop-off is probably too significant not to be related to production problems. “That drop is due to the freeze off we’re seeing,” said Andrew Bradford of BTU Analytics, according to Reuters.Texas (-20 percent) Oklahoma (-22 percent) and Pennsylvania (-5 percent) are also reporting weather-related production problems, Genscape data says.Gas output can be affected by water and water vapor freezing. With temperatures in North Dakota recently dipping to -45F (-43C), it is no surprise there have been issues.In Canada, cold weather is also curtailing output. The Financial Post reports that some natural gas wells in Alberta were “frozen shut,” a situation called a “freeze-off” in industry jargon. Benchmark natural gas prices in Alberta surged 72 percent from $2.50 per thousand cubic feet to $4.30/mcf because of the cold temperatures.  On the demand side of the ledger, the U.S. is now burning through much more gas because of the cold snap. There is a structural issue and a seasonal one. The U.S. has built a long line of new gas-fired power plants in recent years to burn cheap natural gas, which has catapulted natural gas into the top spot for electricity generation. So while gas consumption fluctuates seasonally, the spring and autumn lows are getting higher and the winter spikes are also getting higher. This is a structural increase that will continue to grow over time.However, the recent jump in consumption is also the result of the extreme cold that has swept over the country. Bloomberg noted that on New Year’s Day, the U.S. burned the most natural gas ever recorded. The U.S. consumed 143 bcf of natural gas on January 1, breaking the previous record of 142 bcf during the polar vortex in 2014.

NYMEX February natural gas futures fall 4.8 cents as weather warms-- With US demand falling to its lowest levels in four days, the NYMEX February natural gas futures contract fell 4.8 cents/MMBtu to $3.008/MMBtu Wednesday. The February contract had risen to a four-week high of $3.056/MMBtu Tuesday, largely on the back of a cold snap that enveloped the eastern half of the US . Although the cold weather persisted Wednesday, it was warmer than earlier in the week, driving down demand. US demand Wednesday checked in at 123.7 Bcf/d, down 9 Bcf/d from Tuesday and the lowest since Saturday's consumption of 118.4 Bcf/d, according to data from Platts AnalyticsBentek Energy.  Although demand was down across all sectors, the largest decline came from residential and commercial consumption, which fell 5.1 Bcf/d to 66.3 Bcf/d. Meanwhile, consumption of gas for power burn fell to 28.6 Bcf/d, down 2.9 Bcf/d, and industrial demand slipped 700 MMcf/d to 25.5 Bcf/d. With demand down, withdrawals from storage also slowed. Wednesday's pull came in at 50.5 Bcf, down 5.2 Bcf from Tuesday's draw of 55.7 Bcf. Heavy withdrawals have been the norm of late and are expected to be reflected in the weekly storage report from the US Energy Information Administration, which will be released Thursday. A consensus of analysts surveyed by S&P Global Platts expected to see a draw of 219 Bcf for the week ended December 29. The predicted draw dwarfed recent withdrawals. The EIA reported storage withdrawals of 112 Bcf for the week ended December 22 and a pull of 182 Bcf for the period ended December 15. The last time a draw from storage topped the 200 Bcf mark was the week ended January 13, when 243 Bcf was taken out of stocks.

'Bomb cyclone' is driving demand, yet prices are falling -- Not even nasty winter weather and the frigid "bomb cyclone" could lift natural gas markets out of their doldrums. The weather anomaly dumping snow on the Northeast and chilling residents from Georgia to Maine has left gas traders unimpressed, even after a federal government report showed a strong draw on gas in storage. Prices for the now dominant fuel source have actually fallen during this latest spell of rough weather. Gas demand even spiked in Texas as the Lone Star State experienced an unusually protracted period of chilly conditions. Yesterday the Electric Reliability Council of Texas (ERCOT), which oversees most of the state's grid, said the state set a new winter peak electricity demand record. Demand hit 62,855 MW, which exceeded the previous winter record by more than 3,200 MW, according to ERCOT. Still, the Henry Hub natural gas price index fell in trading, losing more than 4.6 percent of its value. Yesterday the federal Energy Information Administration (EIA) released its latest Weekly Natural Gas Storage Report. The data confirms that the cold winter weather is having an impact on supplies. Gas in storage fell by 206 billion cubic feet. Volumes are nearly 200 billion cubic feet lower than this time last year and 200 billion cubic feet below the five-year average. Brian LaRose, a commodities market analyst at ICAP Technical Analysis, said traders didn't care as the markets still don't see a fundamental case for breaking natural gas prices much higher than a $3 per million British thermal unit (Btu) level.

Blizzard Triggers a 60-Fold Surge in Prices for U.S. Natural Gas - Natural gas surged to 60 times the going rate as howling blizzard conditions stoked demand for the furnace fuel across the U.S. Northeast. Spot prices for the fuel used to heat homes and generate power reached a record $175 per million British thermal units in New York, according to Consolidated Edison Inc. That’s a far cry from the $2.93 that U.S. gas futures have been averaging on the New York Mercantile Exchange this winter. Other major trading hubs in New York and New England saw prices exceed $100, according to a person familiar with those markets. Even if the rally cools later Thursday as the storm lambasting New York and Boston moves off to the north, prices in the region probably will close in the triple digits, the person said. “This string of cold has stressed the market just as much as the polar vortex” of 2014. “You are seeing pipeline restrictions and flow restrictions pop up.”The cold-weather cyclone swirling off Nantucket island grounded thousands of flights, disrupted rail service, shut schools and prompted emergency declarations up and down the Eastern Seaboard. Even as slashing winds cut off power to more than 70,000 homes and businesses, electricity prices climbed 126 percent to $273.23 a megawatt-hour on Thursday morning, the highest for that time of day in almost four years. The gas squeeze underscores the lack of adequate pipeline capacity to haul enough gas from Appalachia and points farther afield to Northeast metropolises where households have been scrapping heating-oil tanks for gas-fired furnaces. As a result, gas in the region is the world’s priciest, commanding 14 times more than U.K. futures price and about nine times more than Asian imports of the liquefied version of the fuel.

Oil to the rescue in New England's blizzard -- At 2:09 p.m. yesterday, as New England's grid operators strained to cope with a blizzard and wind blasts resulting from the "bomb cyclone," one of the region's major power plants, the Pilgrim Nuclear Power Station in Plymouth, Mass., suddenly shut down. One of two power lines connecting it to the electric grid was lost in the storm, plant owner Entergy Corp. said. In Massachusetts, power outages had hit 15,879 customers, concentrated on the coast, and the region's hourly demand still topped 18,000 megawatts. Pilgrim's loss took out 680 megawatts in an instant. But the region rode through the loss, according to ISO New England, the grid operator. The key to its escape — 3.9 million barrels of fuel oil held in reserve by dual-fuel gas and oil generators, emergency stocks that state grid planners were counting on if polar weather pushed the grid to the edge. After the bitter polar vortex in 2014, ISO New England created a winter reliability program offering incentives for natural gas plants able to also burn oil to stock up on oil supplies before the winter and keep them replenished until March. "Oil is taking the place of gas," said Paul Peterson, principal with Synapse Energy Economics, in Cambridge, Mass. "That's the good news element to this. The concern about unavailability or scarcity of natural gas that would lead to giant price spikes and reliability problems hasn't materialized," he said. 

DOE Pumps $30 Million Into Fracking Projects As Natural Gas Takes Center Stage  The Energy Department plowed tens of millions of dollars into projects designed to explore new fracking technology as the U.S. leans heavily on natural gas amid harsh winter weather.  DOE’s decision will help the agency master oil and gas development in untapped, energy-rich areas, according to a press statement Wednesday from the agency. The funding targets the Tuscaloosa Marine Shale in Texas and the Huron Shale, which spans four states in the Appalachian.The effort will help “strengthen America’s energy dominance, protect air and water quality, position the nation as a global leader in unconventional oil and natural gas (UOG) resource development technologies, and ensure the maximum value of the nation’s resource endowment is realized,” the statement notes. DOE’s funding effort comes shortly after Americans consumed a record-breaking amount of gas during the most-recent cold snap, according to data from PointLogic Energy, an oil and gas firm that monitor gas usage. The country used more gas throughout the holidays last year than in 2014, a year that saw a so-called polar vortex cover the U.S.’ east coast with arctic air. Snowstorms and frigid temperatures pounded parts of the Northeast and the Midwest during Christmas and New Year’s Day.  The country consumed more than 143 billion cubic feet of gas as temperatures dipped to all-time lows on New Year’s Day, the data show. Prices for natural gas skyrocketed to the highest level in a month — gas is not the only fossil fuel states are turning to for warmth this winter. DOE’s move to pump money into the industry also comes President Donald Trump moved late last year to nix Obama-era regulations leveled against the fracking industry.

 Court Rejects Sierra Club Lawsuits Challenging Natural Gas Exports -- A U.S. Court of Appeals has thrown out three lawsuits filed by the Sierra Club that sought to block the export of liquefied natural gas from terminals on the East Coast and the and the Gulf of Mexico. The U.S. Court of Appeals for the District of Columbia Circuit has thrown out three lawsuits filed by the environmental activist group the Sierra Club that sought to block the export of liquefied natural gas (LNG) from terminals on the East Coast and the Gulf of Mexico.The November 1 ruling by a three-judge panel rejected Sierra Club’s argument the U.S. Department of Energy (DOE) failed to give adequate consideration to the potential climate impacts of the export of LNG from the Cove Point plant in Maryland and the Sabine Pass facility in Louisiana and Corpus Christi in Texas. The Sierra Club had raised three objections to DOE’s decision to approve natural gas exports from the terminals, arguing the department should have conducted an in-depth environmental impact assessment for all three terminals instead of the more narrowly focused environmental assessments for Cove Point and Sabine Pass; DOE’s assessment ignored information about the environmental effects of natural gas production that would feed into Cove Point; and DOE failed to properly weigh the public interest in approving the three projects. In rejecting the Sierra Club’s arguments, the judicial panel’s four-page decision cited a ruling handed down by a separate panel of the D.C. Circuit in August in which judges rejected similar arguments raised by environmental groups against DOE’s approval of LNG exports from a terminal in Freeport, Texas.

Haynesville natural gas production is surging -- again -- but will it last? -- After being left for dead for more than five years, natural gas production in the greater Haynesville region has been surging upward — from about 5.7 Bcf/d this time last year to more than 7 Bcf/d today, an increase of 25% during 2017. Much of this growth has been coming from a new cast of characters, employing different technologies and different strategies than the first wave of Haynesville pioneers that established the play back in 2008, then abandoned it in 2012. But a couple of big challenges face the Haynesville. Today, we begin an examination of the Haynesville that will take us from production trends through producer strategies and finally into detailed calculations of production economics for the play.  We first highlighted the resurrection of the Haynesville in Don’t Call It a Comeback, pointing out that new drilling technology and burgeoning Gulf Coast gas markets had changed the dynamics for a production province that today is “not your father’s Haynesville.” The rags-to-riches-to-rags saga of this play began back in 2008-09, when horizontal drilling and hydraulic fracturing techniques honed first in North Texas’s Barnett Shale were deployed in the “Greater Haynesville” — a region we define as the Haynesville, Bossier and Cotton Valley formations in northwestern Louisiana and East Texas. Production there surged from less than 4 Bcf/d in 2008 to more than 6 Bcf/d in 2010 — almost all of it dry gas containing no economically recoverable natural gas liquids (NGLs). Dry gas meant that new processing plants were not needed, and that expedited infrastructure development to get new production to market. But the lack of NGLs was not so good for the play’s production economics.

Trump administration aims to trim rules on offshore drilling -— The Trump administration on Friday proposed to rewrite or kill rules on offshore oil and gas drilling that were imposed after the deadly 2010 rig explosion and oil spill in the Gulf of Mexico. The administration said the rules are an unnecessary burden on industry and rolling them back will encourage more energy production. An offshore-drilling group welcomed the rollback, while environmentalists said President Donald Trump was raising the risk of more deadly oil spills. A division of the Interior Department published the proposed change Friday in the Federal Register. The public will have until Jan. 29 to comment. The Obama administration imposed tougher rules last year in response to the 2010 explosion on a drilling rig called the Deepwater Horizon and used by BP. The accident killed 11 workers and triggered a massive oil spill. The Obama rules targeted blowout preventers, massive valve-like devices designed to prevent spills from wells on the ocean floor. The preventer used by BP failed. The rules required more frequent inspections of those and other devices and dictated that experts onshore monitor drilling of highly complex wells in real time. In its notice Friday, the Bureau of Safety and Environmental Enforcement, an office of the Interior Department that regulates offshore oil and gas drilling, said some provisions in the rules created “potentially unduly burdensome requirements” on oil and gas operators “without significantly increasing safety of the workers or protection of the environment.” The agency estimated that revising some rules and removing others would save the energy industry at least $228 million over 10 years.

Trump admin proposes vastly expanded leasing - In a huge win for the oil and gas industry, the Trump administration today unveiled a new five-year plan that would allow more drilling in the Atlantic, Pacific and Arctic oceans. Ending months of speculation and igniting an outcry from critics, Interior Secretary Ryan Zinke announced the decision in a 1 p.m. press call. "This is a start on looking at American energy dominance," Zinke said, adding that the plan would make the U.S. "the strongest energy superpower." He said the new plan would make more than 90 percent of the outer continental shelf (OCS) open for leasing, including off California. The plan would schedule 47 lease sales from 2019 to 2024, which Zinke called the largest number of lease sales ever proposed for the National OCS Program’s five-year lease schedule. It would include 19 sales off the coast of Alaska, seven in the Pacific region, 12 in the Gulf of Mexico and nine in the Atlantic region. Zinke's move came less than a week after the Trump team proposed weakening the rules on offshore drilling safety equipment, saying they create an unnecessary burden for the industry. The combination marked a double punch for environmental groups and other opponents of the proposal, which will replace the current five-year plan finalized last January under the Obama administration and scheduled to run through 2022. "More drilling and less safeguards is a recipe for disaster," .

Trump Moves to Open 90 Percent of Our Coastal Waters to Oil Drilling - President Trump has launched the most sweeping industrial assault in history on our oceans , marine life , coasts and all they support, proposing to expose nearly all U.S. waters to the risk of another BP oil spill–style disaster. In a move that would put every American coastal community at risk, Trump proposed Thursday to hand over vast reaches of waters currently protected from drilling —in the eastern Gulf of Mexico and the Atlantic, Pacific and Arctic oceans—to the oil and gas industry.  If Trump gets his way, iconic fishing grounds like George's Bank, treasured recreational waters like the Florida Straits, and critical marine-breeding areas like those off the California coast would be exposed to the dangers of blowouts, explosions, catastrophic spills, seismic blasting and other perils that come with these inherently hazardous industrial operations at sea. We could see drill rigs going up in federal waters off our coasts from Maine to Florida, from California to Alaska, and everywhere in between.  Trump's proposal comes on the heels of two moves that needlessly increase those dangers. Over the holidays, the Trump administration proposed weakening offshore drilling and production safeguards that grew directly from lessons learned from the BP disaster. And earlier in December, the administration killed an independent study needed to help modernize and strengthen responsible public oversight of oil and gas operations at sea. This three-front assault on our oceans and coasts is madness—and it's maddening.

Trump administration plan would widely expand drilling in U.S. continental waters - The Trump administration unveiled a controversial proposal Thursday to permit drilling in most U.S. continental-shelf waters, including protected areas of the Arctic and the Atlantic, where oil and gas exploration is opposed by governors from New Jersey to Florida, nearly a dozen attorneys general, more than 100 U.S. lawmakers and the Defense Department.Under the proposal, only one of 26 planning areas in the Arctic Ocean, Pacific Ocean, Gulf of Mexico and the Atlantic Ocean would be off limits to oil and gas exploration, according to Interior Secretary Ryan Zinke. He said the Bureau of Ocean and Energy Management has identified 47 potential areas where industry companies can buy leases between 2019 and 2024, when the proposed period would begin and end. The Draft Five Year Outer Continental Shelf Oil and Gas Leasing Program was embraced by oil and gas industry groups but is expected to face withering opposition from a wide range of state officials and conservationists. “Nothing is final,” Zinke said in remarks at a news conference. “This is a draft program. The states, local communities and congressional delegations will all have a say” before the proposal becomes final in the coming months. Zinke said the proposal is consistent with President Trump’s executive order in April to widen energy exploration. He said it was a clear departure from the Obama administration’s effort to protect areas rather than exploit them. “This is a clear difference between energy weakness and energy dominance,” the secretary said. He vowed that the Trump administration would heed environmental safeguards. But potential environmental disasters are on the minds of numerous Atlantic-coast governors who oppose drilling in four planning areas from Maine to the Florida Keys. In a resounding bipartisan call, Republicans and Democrats have said in no uncertain terms that oil and gas drilling should not be allowed.

Trump plan to drill for oil off Atlantic coast stirs opposition - The Trump administration’s proposal to allow offshore oil and natural-gas drilling in federal waters off the Atlantic Coast could make 2018 an even tougher election year for Republicans in coastal states.The long-awaited plan would reverse an Obama-era prohibition on offshore energy exploration and make good on a campaign promise by President Donald Trump to boost U.S. energy production. That much Republicans can cheer.But the plan will also force a number of anxious, regional Republican candidates — already unsettled by predictions of a Democratic wave in the midterm elections — to either side with an unpopular president’s industry-friendly proposal, or join coastal residents, businesses and environmental groups in opposing it."For members that have districts that are impacted, it will definitely be an issue," Rep. Mark Sanford, R-S.C., who represents a coastal district and opposes offshore drilling. "Geography will drive the politics here."That political dynamic was in full effect on Thursday.After Florida’s Democratic Sen. Bill Nelson delivered a speech on the Senate floor opposing offshore drilling on Wednesday, Florida’s Republican Gov. Rick Scott, who is widely expected to seek Nelson’s seat, broke months of silence on the issue, saying he too opposes drilling off Florida’s coast. “I have already asked to immediately meet with Secretary Zinke to discuss the concerns I have with this plan and the crucial need to remove Florida from consideration,” Scott said in a statement. “My top priority is to ensure that Florida’s natural resources are protected.”

 Zinke open to tweaks as plan draws strong reactions -  While critics estimated the Obama administration put 94 percent of the outer continental shelf off-limits to oil and gas development, Interior Secretary Ryan Zinke said today he wants to make more than 90 percent of the OCS open for leasing. But Zinke said his proposal for 47 lease sales from 2019 to 2024 — the most ever for a five-year planning period — is just a start, and he made it clear he's open to tweaking the proposal."Today's announcement lays out the options that are on the table and starts a lengthy and robust public comment period," Zinke said. "Just like with mining, not all areas are appropriate for offshore drilling, and we will take that into consideration in the coming weeks."The Interior Department said it will hold public meetings around the country beginning Jan. 16 to receive comments on Zinke's plan, which calls for potential lease sales in 25 of the 26 OCS planning areas, including off California. According to the Interior Department, the 47 lease sales would include 19 off the coast of Alaska, seven in the Pacific region, 12 in the Gulf of Mexico and nine in the Atlantic region (Greenwire, Jan. 4).Zinke said gas and oil drilling had "taken a backseat" during the Obama years but that would no longer be the case. "Today we're embarking on a new path for energy dominance in America," Zinke said.

New Report Exposes Inconsistencies In Obama Oil & Gas Testing Approvals - A new investigation by the Government Accountability Office (GAO) says the Obama administration took an inconsistent amount of time to approve applications for seismic testing for offshore oil and gas drilling, a report by The Hill says.  Depending on the regional office, some applications were approved within a day and others would take almost a year to go through the process. The National Marine Fisheries Service (NMFS) and the Fish and Wildlife Service (FWS) did not record application turnaround times consistently either.“Until NMFS and FWS develop guidance that clarifies how and when staff should record the date the agency determines the ‘adequacy and completeness’ of an application, the agencies and applicants will continue to have uncertainty around review time frames for incidental take authorizations,” GAO said.“Moreover, NMFS and FWS officials we interviewed said that they do not analyze their review time frames, a practice that is inconsistent with federal standards for internal control.”  Seismic analysis, which allows oil and gas companies to determine potential reserves in the underwater areas they would bid on to lease, is a controversial practice for environmentalists. They claim it unduly disturbs the wildlife. An unpredictable bureaucracy generally makes it difficult for high cost, high risk businesses, like the oil and gas industry, to run on a set schedule. The report makes Obama’s executive branch seem unfriendly to the industry, though the previous White House did reverse forty years of restrictions on American fossil fuel exports. “Seismic research is vital to unlocking energy potential off our coasts, and federal red tape is standing in the way,” Utah Rep. Rob Bishop, who requested the report, said. “GAO’s report highlights the bureaucratic dysfunction, lack of transparency and blatant abuses of discretion that has stalled greater exploration and development.”

Feds should improve permitting for seismic surveys — GAO - Federal guidance for issuing seismic research permits to companies interested in offshore oil and gas exploration is confusing, possibly resulting in unnecessary delays in some instances, according to a new watchdog report. Three agencies within the Commerce and Interior departments have responsibilities related to reviewing and approving seismic survey applications from companies seeking to tap the potential for oil and gas drilling in waters within the outer continental shelf (OCS), because of risks posed to the marine ecosystem.But those agencies — the Bureau of Ocean Energy Management, the Fish and Wildlife Service, and NOAA Fisheries — don't always use the same process or time frames, which can lead to frustration for applicants."In reviewing applications for seismic survey permits, BOEM records the date on which an application for a seismic survey permit is 'accepted,' or complete, which may be weeks or months after an application is received," concluded the Government Accountability Office in a new report, released today. "NMFS [NOAA Fisheries] and FWS, however, were unable to provide accurate data on the dates that they determined applications for incidental take authorizations were adequate and complete because the agencies' guidance does not specify how or when staff should record this date," the report says.

Strong margins keep US LNG exports growing - Business is booming this winter for the US LNG-export industry. With global gas prices at their highest in over three years, export margins from the US are at their strongest yet. In December, those margins propelled cargo shipments to the highest monthly volume on record, nearly 85 Bcf. Thanks to a natural gas shortage in China, bitterly cold temperatures in Japan and a supply shortfall in Australia, benchmark global prices, currently around $11/MMBtu, appear likely to linger through mid-February. Combined with the looming startup of exports from Dominion Energy's Cove Point facility in Maryland, elevated global gas prices are poised to keep US exports in record-setting territory again this month. But with swaps markets betting on weaker shoulder-season demand setting in by April, US exporters could be facing prices below $8/MMBtu by early March and ultimately the upper $6s/MMBtu before the summer months. As US export volumes continue to build in 2018, a return to lower prices later this year will pose new challenges both for exports and for a domestic US gas market that's growing increasingly dependent on the whims of global demand. On Monday the Platts JKM, the benchmark price for spot LNG delivered to northeast Asia, was assessed unchanged at $11.20/MMBtu. By late December, that price level boosted the profit margin on US export cargoes delivered to the region to a record-high $4.57/MMBtu, according to Platts Analytics. The calculation includes gas transport, shipping costs and product losses along the value change, but excludes sunk-cost liquefaction fees currently estimated at between $2.25-$3/MMBtu.

Momentous Change in US Natural Gas, with Global Impact - Wolf Richter - In 2017, the US became a net exporter of natural gas for the first time. It started small in February, when the US exported 1 billion cubic feet more than it imported. By October, the last month for which data from the Energy Department’s EIA is available, net exports surged to 45 billion cubic feet. For the first 10 months of 2017, the US exported 86 billion cubic feet more than it imported. And this is just the beginning.  Exports to Mexico via pipeline have been rising for years as more pipelines have entered service and as Mexican power generators are switching from burning oil that could be sold in the global markets to burning cheap US natural gas. The US imports no natural gas from Mexico.Imports from and exports to Canada have both declined since 2007, with the US continuing to import more natural gas from Canada than it exports to Canada.What is new is the surging export of liquefied natural gas (LNG) by sea to other parts of the world. This chart shows net imports (imports minus exports) of US natural gas. Negative “net imports” (red) mean that the US exports more than it imports:The first major LNG export terminal in the Lower 48 – Cheniere Energy’s Sabine Pass terminal in Cameron Parish, Louisiana – began commercial deliveries in early 2016 when the liquefaction unit “Train 1” entered service. Trains 2 and 3 followed. The three trains have a capacity of just over 2 billion cubic feet per day (Bcf/d). In October 2017, the company announced that Train 4, with a capacity of 0.7 Bcf/d, was substantially completed and is likely to begin commercial deliveries in March 2018. Train 5 is under construction and is expected to be completed in August 2019. The company is now lining up contracts and financing for Train 6. All six trains combined will have a capacity of 4.2 Bcf/d.This is just the Sabine Pass export terminal. In addition, there are five other LNG export terminals under construction, according to the Federal Energy Regulatory Commission (FERC), with a combined capacity of 7.5 Bcf/d. This brings total LNG export capacity to over 11 Bcf/d over the next few years and will make the US the third largest LNG exporter globally, behind Australia and Qatar. In addition, there are several other export terminals that FERC has approved but construction has not yet started. And other projects are in the works but have not yet been approved.

US Gulf Coast distillate flows to Europe around 700,000 mt for Jan - Distillates products heading to Northwest Europe and the Mediterranean from the US Gulf Coast for January currently total some 700,000 mt, according to data from S&P Global Platts trade flow software cFlow, with some additional volume being exported towards the end of December likely as a result of year-end destocking. While destocking may also be adding some pressure to sell cargoes out of the region, nearly all of the volume currently on the water -- especially on medium-range vessels -- is term or contract barrels, with the HOGO spread -- the difference between NYMEX heating oil futures and the ICE low sulfur gasoil contract -- continues to keep the arbitrage to Europe closed.\ Such is the strength of the heating oil contract, driven by cold weather in the US, that a possible reverse arbitrage to the US Atlantic Coast could be on the cards. In the meantime, six vessels have left the USGC region over the last seven days, including one LR 1, according to cFlow. The majority of these cargoes are heading to Northwest Europe, as a weak Mediterranean is struggling for demand to absorb the native volumes being produced.

U.S. arctic cold draws rare tankers of heating oil (Reuters) - Freezing weather across the U.S East Coast has drawn a number of tankers carrying diesel and heating oil from Europe, reversing a traditional trade route. The Pacific Anna set sale this week from the Gibraltar straits to the storage hub of St Croix in the Caribbean with a 90,000 tonne cargo of diesel it had loaded in Saudi Arabia in December, according to Reuters AIS ship tracking. Similarly, trading house Vitol chartered the 60,000 ton Amalia to deliver diesel from the Baltic port of Primorsk to St Croix, where it is expected to discharge on Jan. 15, according to shipping data and tracking. “The cold weather is drawing barrels,” a European diesel trader said. Oil products stored at St Croix are typically sold into the United States, traders said. The cargo might be blended with other components to meet the U.S. winter specifications for heating oil, they added. A third cargo, STI Donald C Traus has also been booked by Gazprom from Primorsk with options to go on the transatlantic route. The United States has in recent years become a major exporter of refined oil products, supplying large volumes of diesel to Europe, where regional refineries can not meet local demand. But an Arctic front that hit eastern United States has led to a sharp rise in demand for diesel, used in many states for heating, offering traders what is known as a reverse arbitrage. Another major winter storm is set to hit the region on Wednesday with freezing rain, snow and strong winds, demand was expected. Several other traders are seeking to deliver cargoes on the west-bound transatlantic route, traders said. 

NWE gasoline flows to North America at around 222,000 mt for January -- Gasoline flows to the US and East Coast of Canada from Northwest Europe in January so far amount to around 222,000 mt, according to data Wednesday from cFlow, S&P Global Platts trade flow software. In December, around 557,000 mt of gasoline loading in Northwest Europe and the Baltics arrived in the US and the East Coast of Canada, up slightly from 518,000 mt in November. Only three vessels likely carrying gasoline have left NWE over the past seven days to go to North America. All of them are Medium Range tankers heading to the US Atlantic Coast. According to data from PJK International, gasoline inventories in the Amsterdam-Rotterdam-Antwerp hub edged higher for the first time in six weeks, rising 21,000 mt, or 2.5%, to 854,000 mt for the week ended December 27. While the spot gasoline arbitrage from Europe to the US has now been closed for at least a couple of months, the NWE gasoline cargo market had been supported by ample volumes leaving the region in December for West Africa, and some smaller volumes having left Europe the same month to go the Persian Gulf or even Asia.

'Like thunder in the ground': Texans fear link between quakes and fracking waste - Significant new research led by a seismologist at Southern Methodist University in Dallas and published in November indicates that the spate of tremors in north Texas is occurring on faults that were inactive for at least 300m years. Using a different analytical technique from earlier studies, it backs up previous conclusions that the only plausible explanation for the earthquakes is human activity.In Fort Worth there are 2,127 pending and approved gas well drilling permits within the limits of the city, which has a population of more than 850,000.Since 2008, the Fort Worth Basin has changed from experiencing no confirmed recorded earthquakes to hundreds, mostly minor. The likely primary culprit is not hydraulic fracturing (fracking) in itself, but the process of wastewater injection. A common way to get rid of the vast amounts of water that are a byproduct of fracking and other extraction methods is to use disposal wells to push it underground, where it is thought to put pressure on faults.In the fall an earthquake-tracking website was launched by the Bureau of Economic Geology at the University of Texas.It shows that in 2017 there were clusters of seismic activity around prominent oil-and-gas producing regions in west and south Texas, as well as the Dallas-Fort Worth area, home to more than 7 million people and a number of huge dams of debatable resilience.

To round out a year of rollbacks, the Trump administration just repealed key regulations on fracking -- On the last business day of the year, the Interior Department rescinded a 2015 Obama administration rule that would have set new environmental limitations on hydraulic fracturing, or fracking, on public lands. The regulation from the Bureau of Land Management, which had been opposed by the oil and gas industry and tied up in court, would have tightened standards for well construction and wastewater management, required the disclosure of the chemicals contained in fracking fluids, and probably driven up the cost for many fracking activities. It had been held up in litigation and had not taken effect; a Wyoming district court said it exceeded the agency’s authority. Reversing the regulation, the Interior Department says, clears up that legal question and also lifts a costly regulation for the industry, in line with President Trump’s agenda to slash regulations and advance the United States’ “energy dominance.” The agency said rescinding the rule would save “up to $9,690 per well or approximately $14 million to $34 million per year” in industry compliance costs. It also noted that because of state, tribal and existing federal regulations, the move “would not leave hydraulic fracturing operations unregulated.” But Mike Freeman, an attorney with EarthJustice who defended the now-repealed regulation in court, countered that it “was a reasonable and long overdue update of the agency’s old regulations, adopted in the early 1980s, about 35 years ago, and they were developed long before modern fracking became common.” “The move today represents just another example of the Trump administration sacrificing our public lands, air and water in order to pad the bottom line of oil and gas companies,” Freeman said. 

Trump administration kills Obama-era fracking rule before it can be enacted -- The Obama administration’s 2015 fracking rule was never actually implemented, thanks to an ongoing court battle, and it apparently never will be. The Interior Department published a final rule Friday in the Federal Register repealing immediately the hydraulic-fracturing regulation on federal lands, saying that “we believe it imposes administrative burdens and compliance costs that are not justified.” The previous fracking rule was already moribund after a federal judge in Wyoming struck it down in June 2016 in response to a four-state lawsuit, holding that the Bureau of Land Management had overstepped its authority by acting without congressional approval. The U.S. Court of Appeals for the 10th Circuit had given the BLM until Jan. 12 to move ahead with its appeal, but the repeal renders the case moot. The decision met with cheers from Western lawmakers and oil-and-gas advocates, who had argued that the federal rule duplicated existing state regulations on hydraulic fracturing and energy production.

The Home Front: Trump’s BLM revokes chemical disclosure rules for fracking | The Colorado Independent: -- “The Trump administration is proceeding with revoking a 2015 rule requiring chemical disclosures and otherwise regulating hydraulic fracturing on federal and tribal lands,” reports The Grand Junction Daily Sentinel. “According to a Bureau of Land Management document released Thursday and scheduled to be published today in the Federal Register, the BLM is issuing a final rule repealing the measure, which never has taken effect due to a court challenge of it. The repeal is effective immediately. ‘This final rule is needed to prevent the unnecessarily burdensome and unjustified administrative requirements and compliance costs of the 2015 rule from encumbering oil and gas development on Federal and Indian lands,’ the document says. The action is likely to be challenged by supporters of the 2015 rule. “This decision is illegal and completely arbitrary and we expect we’ll take the Trump administration to court,” said Michael Freeman, an attorney with the group Earthjustice who up to now had been working to defend the rule from a court challenge aimed at overturning it.”

Colo. regulators ready to weigh in on Firestone explosion - Colorado oil and gas regulators could vote as early as next week to finalize Gov. John Hickenlooper's (D) proposal for tighter safety regulations on the type of pipelines linked a deadly home explosion last year. The Colorado Oil and Gas Conservation Commission will hold a two-day hearing beginning Monday in Denver on the rules. The proposal applies to flow lines, which are typically low-pressure lines that connect oil and gas wells to tanks and other equipment. A flow line at a gas well in Firestone, about 35 miles north of Denver, apparently caused an explosion in April that killed two people and destroyed a home. The line was connected to a 24-year-old gas well, and had been cut off and left unplugged near the basement of a newly built home, possibly when some of the surrounding gas field's equipment was moved to make way for a subdivision (Energywire, May 3, 2017).Industry groups and the state's largest oil driller have pushed the commission to make the rules more flexible, while neighborhood groups and at least one local government are asking for broader restrictions on energy producers."A rulemaking solely about the issue of flowlines, while important, is not sufficient to address the issues raised by the tragic events of this past summer," Sara Loflin, executive director of the League of Oil and Gas Impacted Coloradans (LOGIC), which represents a coalition of neighborhood groups, said in a written comment about the rules. Colorado is one of the few oil- and gas-producing states that regulate flow lines, but the explosion highlighted a weakness — state regulators don't have reliable information on the pipes' locations. That became a key concern for homeowners and local governments, since many of the suburbs north of Denver are built over aging oil fields and are interlaced with pipelines and well sites.

Anadarko exec in Colorado says she's 'never stopped learning' in oil & gas - Denver Business Journal - Since May 2017, Horton has been Anadarko Petroleum Corp.’s vice president for development in Colorado's Denver-Julesburg Basin.She grew up in Kentucky, better known for its coal mines than oil and gas production. She got her bachelor’s degree in geology from Miami University in Ohio, and a master's in geology from Duke University in North Carolina. Neither school is well known in the industry for churning out graduates with typical oil and gas degrees, such as petroleum engineering. But, she said, “I got a great, classic, geology education.” Anadarko, based in suburban Houston, recruited her to an internship as part of an effort that focused on non-traditional oil and gas schools.“I accepted an internship with Anadarko not knowing anything about the industry, not having ever been to Texas,” Horton said with a laugh.  “I got in my car, drove to Texas and loved it from day one. It’s such a dynamic, challenging industry," she said. "To this day, I’ve never stopped learning.”

 Fracking rule fracas: The next round - Obama-era safeguards for hydraulic fracturing on public lands suffered their final blow last week as the Trump administration formally rescinded them.The Bureau of Land Management's fracking rule is really dead this time, but the conflict is not over.Finalized Friday, the rescission caps off a yearlong deregulatory campaign by President Trump and his team as they attempt to dissolve any measures seen as hurdles to domestic fossil fuel production (see related story).It also sparks the next round in a bitter battle over fracking on public and tribal lands, as environmental groups prepare to sue BLM and the Interior Department for rolling back the only federal regulation that specifically addressed the practice."Yesterday's move represents another example of the Trump administration sacrificing our public lands, air and water in order to pad the profit margins of oil and gas companies," said Earthjustice attorney Mike Freeman, who has led environmental defense of the Obama rule."We'll see them in court," he added. The fracking rule would have set new standards for well construction, wastewater management and chemical disclosure, and would have required operators to get BLM approval for fracking operations. The Trump administration's rescission took effect immediately, skipping the 30-day waiting period often incorporated into rollbacks.  Freeman and a coalition of groups supporting the tighter safeguards for fracking on public lands are expected to file suit in the coming weeks, taking aim at the government's rationale for reversing the regulation.

Group calls for review of online leasing -- The Center for American Progress today called for federal officials to review Interior's online oil and gas leasing program, arguing that the process lacks transparency and is vulnerable to fraud and abuse. The liberal think tank released an 11-page report criticizing Interior's shift to online lease auctions from in-person auctions."The BLM's move toward privatized, online lease sales further shrouds an already-abused and opaque system in secrecy; obstructs public oversight; and likely costs taxpayers millions of dollars in lost revenues each year," the report says.CAP argues that the process could allow oil and gas companies to exceed federal limits on leasing land reserved for future drilling, via the use of "subsidiaries, affiliates and lease brokers — referred to as landmen."The organization urged a review of the program by both the Government Accountability Office and Interior's Office of Inspector General."While the in-person bidding system was not specifically designed to be an open and transparent process, this increased level of secrecy is concerning. As noted above, for several industry and government watchdog groups, the move to privatized, online lease sales appears intended to silence public opposition and protests at the behest of the industry," the report says.The Bureau of Land Management shifted to online leasing under the Obama administration, as part of an effort to save money, streamline transactions and increase transparency (E&E News PM, July 25, 2016).

Tribes ask PUC to reconsider review of new Enbridge pipeline route, saying cultural study wasn't done - Minnesota’s Ojibwe Indian tribes say state regulators failed to do a complete cultural study and thus botched their environmental review of Enbridge’s proposed new oil pipeline across northern Minnesota. In a regulatory filing this week, five bands asked the Minnesota Public Utilities Commission (PUC) to reconsider its recent decision on the environmental review and order that a “full historic properties review” be done. The tribes and environmental groups have harshly criticized the Environmental Impact Statement (EIS) done by the Minnesota Department of Commerce on Enbridge’s proposed new Line 3, which would replace an aging and corroding pipeline. In December, the PUC rejected the EIS, but on narrow environmental concerns. The EIS must be approved before the PUC’s final decision on Line 3, which had been expected in April but now may not occur until June. Representatives of the Fond du Lac Band of Chippewa and the Mille Lacs Band of Ojibwe told the PUC last month that the EIS should have been rejected out of hand because it failed to include a formal tribal cultural resource study. Environmental reviews often account for such cultural resources as burial grounds and historic villages. “The state’s historic properties work on the Line 3 Replacement project to date has been so inadequate that it could be used as a ‘what not to do’ example in future guidance,” said the filing by the Mille Lacs, Fond du Lac, White Earth, Leech Lake and Red Lake Indian bands. The approach “violates a host of state laws.” 

Trucking company pays fines over wastewater dumping in N.D. -- A Wyoming-based trucking company has paid over $950,000 in fines for dumping oil production wastewater on a North Dakota road in 2014.The $951,526 shelled out by Black Hills Trucking to the North Dakota Industrial Commission last week came after the company lost its appeal of the fine in the state Supreme Court.It stems from incidents in February and March of 2014, when a truck driver with the company disposed of the byproduct on a gravel road in Williams County. Alison Ritter, spokeswoman for the state's Department of Mineral Resources, called it the largest fine ever collected by the commission, which has been unable to collect in some past cases involving bigger fines. Nearly all of the money will go to a fund for restoring abandoned oil wells (Amy Dalrymple, Bismarck Tribune/Inforum, Jan. 3).

ONEOK Inc. Plans to Build $1.4 Billion Natural Gas Pipeline (AP) — An Oklahoma natural gas liquids company has announced plans to create a $1.4 billion pipeline system from eastern Montana to the company's existing facilities in central Kansas. The Oklahoman reports that ONEOK Inc. has proposed building a 900-mile (1,448-kilometer) pipeline to transport up to 240,000 barrels of unfractionated natural gas liquids each day. The Elk Creek Pipeline will be designed to allow for expansion to 400,000 barrels a day with the creation of additional pumping facilities. The pipeline is expected to cost $1.2 billion with an additional $200 million in related infrastructure costs. Company officials say they'll offer up to 19 million shares of common stock in a public office to help pay for the project.   The pipeline is expected to be operational by the end of 2019.

Monterey County Judge: Measure Z fracking ban remains; two other bans preempted, invalid by existing laws: With the passage of Measure Z in November 2016, Monterey County stood to be the first oil-producing county in California to ban hydraulic fracturing, also known as fracking, and the expansion of oil production procedures, but the oil-industry quickly filed suit and on Thursday a decision was finally handed down. Monterey County Superior Court Judge Thomas Wills issued an “intended decision” on Measure Z, the voter-approved initiative that banned fracking, new oil wells and would phase out wastewater injection wells. The decision said that Measure Z’s bans on drilling new wells and wastewater injection are preempted and invalid by existing state and federal regulations. The decision leaves the fracking ban in place because it said the oil industry plaintiffs lack standing to challenge it in light of the fact they do not currently conduct hydraulic fracturing in Monterey County. But if and when Monterey County were to attempt to enforce the fracking ban, it could be challenged at that point. “No fracking in Monterey County takes place because it’s not needed to produce oil here,” said Kathy Miller, an Aera Energy spokeswoman. “The geology is different in Monterey County.” Aera Energy filed the lawsuit in December 2016 in response to the passage of Measure Z. “It didn’t uphold the fracking ban,” said Miller. “We continue to believe that the fracking ban is preempted just as the two other bans are.”

Judge backs Texas company over workers’ claims of toxic gas exposure in Alaska -- An Anchorage Superior Court judge has ruled against a group of men seeking a punitive-damage award from Baker Hughes for neurological illnesses they say arose after they were exposed to toxic gases during a construction project.Judge Eric Aarseth on Tuesday issued a single-page "final judgment" favoring "prevailing party" Baker Hughes, one of the world's largest oil-field services companies, with headquarters in Houston, Texas.The decision came on the heels of a Dec. 22 order in which Aarseth granted a motion for summary judgment that had been filed by Baker Hughes. In that decision, Aarseth said there were "no further matters to litigate." He vacated a trial that had been set for early January.The "alleged toxic gas exposure," Aarseth wrote in the December order, took place near a chemical transfer facility outside Kenai, where drilling chemicals are packaged for shipment to oil fields.Baker Hughes owned and operated the facility, and in 2013 began building a modern transfer facility next to the old one.The plaintiffs suing Baker Hughes were Christopher Lovely, Steven Adams, Robert Defoe, Chuck Van Curren and Dustin Leavitt.The men worked on the project for UIC Construction, the contractor carrying out the construction for Baker Hughes. The men could not be reached for comment.TV station KTVA in November interviewed Lovely and Adams. The men said they had suffered brain damage and other severe health problems that left them disabled. They said a horizontal exhaust pipe from the old building, where chemicals were transferred to containers, repeatedly blew toxic gas on them as they helped build the new facility next door.  The workers also suffered dizziness, hair loss, nausea, confusion, headaches, inexplicable rashes and other problems, according to the KTVA story and complaints filed in court.

 USGS, BOEM hike Alaska resource estimates - US Interior Sec. Ryan Zinke issued an updated resource assessment showing that the National Petroleum Reserve-Alaska, Western Beaufort Sea, adjacent Alaska state and Native lands, and state waters might contain 17.6 billion bbl of crude oil and more than 50 tcf of natural gas. Zinke listed recent discoveries among reasons the Bureau of Ocean Energy Management and US Geological Survey sharply increased their estimates of mean undiscovered, technically recoverable resources onshore and offshore.  USGS led onshore assessment, and BOEM led offshore efforts with data contributed by the US Bureau of Land Management. State and industry partners provided additional information.​Onshore, USGS estimated mean undiscovered, technically recoverable resources at 8.7 billion bbl of oil (up from 1.5 billion bbl in a 2010 resource estimate) and 25 tcf of gas. Offshore, BOEM’s revised estimates of mean undiscovered, technically recoverable resources in the Beaufort Sea Outer Continental Shelf Planning Area are 8.9 billion bbl of oil and 27.7 tcf of gas.​ The updated assessment resulted in a net increase of nearly 700 million boe over BOEM’s 2016 Beaufort Sea Planning Area assessment.

Without fanfare, oil companies just received a tax break on New Year’s Day -  Congressional Republicans allowed a tax on oil companies that generated hundreds of millions of dollars annually for federal oil-spill response efforts to expire this week — a move that amounts to another corporate break in the wake of lawmakers’ sweeping tax overhaul late last month. The tax on companies selling oil in the United States generated an average of $500 million in federal revenue per year, according to the Government Accountability Office. The money, collected through a 9 cents-per-barrel tax on domestic crude oil and imported crude oil and petroleum products, constituted the main source of revenue for the Oil Spill Liability Trust Fund. The fund has roughly $5.7 billion in reserve. Intended to help the government respond quickly to accidents on land or offshore, it was established in 1986 but only got a stable source of funding in the wake of the 1989 Exxon Valdez spill. The tax, which expired Sunday, had lapsed before but was renewed under the bipartisan 2005 Energy Policy Act. Federal officials recently had debated whether it should be expanded to apply to oil sands products. Although GOP leaders opted not to renew the tax in December, they are considering reinstating it retroactively in an “extenders” bill that would revive several recently expired taxes. Industry officials noted that the U.S. Coast Guard or the National Oceanic and Atmospheric Administration could always ask Congress to reimpose it if either felt it was needed. A White House official did not respond to a request for comment Thursday. Environmentalists called the tax lapse another industry victory under President Trump at the expense of people and wildlife located near sites susceptible to spills. 

America could dethrone Russia and Saudi Arabia as oil king in 2018 - The United States is poised to ramp up crude oil production by 10% in 2018 to about 11 million barrels per day, according to research firm Rystad Energy. Surging shale oil output should allow the United States to dethrone Russia and Saudi Arabia as the planet's leading crude oil producer, Rystad predicted in a recent report. The U.S. hasn't been the global leader, nor ahead of both Russia and Saudi Arabia, since 1975. "The market has completely changed due to the U.S. shale machine," said Nadia Martin Wiggen, Rystad's vice president of markets. The prediction shows how the fracking revolution has turned America into an energy powerhouse -- a transformation that President Trump has vowed to accelerate by cutting regulation. This long-term shift has allowed the U.S. to be less reliant on foreign oil, including from the turbulent Middle East. U.S. oil production slipped -- but didn't completely collapse -- after Saudi-led OPEC launched a price war in late 2015 aimed at reclaiming market share lost to shale and other players. A massive supply glut caused crude to crash from around $100 a barrel to a low of $26. Cheap prices forced shale companies in Texas, North Dakota and elsewhere to dial back. Domestic output bottomed at 8.55 million barrels per day in September 2016, down 11% from the recent peak in April 2015, according to the U.S. Energy Information Administration.

U.S. Shale Can’t Offset Record-Low Oil Discoveries  -- The U.S. shale resurgence has been one of the main themes in oil markets this year, while OPEC’s production cut deal to deplete the oil overhang and boost oil prices has been the other key development in 2017.U.S. shale production is expected to grow over the next few years as the companies that survived the worst of the downturn showed resilience in the face of the lower-for-longer oil prices. But three years of low oil prices also led to the global oil industry slashing investments in conventional oil exploration, and deferring or revisiting development plans.This has led to the lowest ever volumes of oil discoveries in 2017, Rystad Energy said last week. While the low level of discoveries is not an immediate threat to global oil supply, it could become such ten years down the road, according to Rystad Energy.In ten years’ time, U.S. shale production may have peaked, at least according to OPEC that sees shale peaking after 2025, although the cartel has conceded that U.S. tight oil has defied previous forecasts and has increased production more than initially expected and will continue to do so in the short term. This year has seen less than 7 billion barrels of oil equivalent discovered globally, a volume as low as last seen in the 1940s, Rystad Energy has estimated. What worries analysts the most is the fact that this year the reserve replacement ratio—the amount of discovered resources relative to the amount of production—was a mere 11 percent, compared to 50 percent in 2012, Sonia Mladá Passos, Senior Analyst at Rystad Energy, said. Another point of concern is that the resources discovered per field also dropped, and this could affect the commercial viability of new discoveries. “Under our current base case price scenario, we estimate that over 1 billion boe discovered during 2017 might never be developed”,

Schlumberger acquires US hydraulic fracturing business of Weatherford - Energy Business Review: A subsidiary of oilfield services company Schlumberger has completed acquisition of the US pressure pumping and pump-down perforating assets of rival Weatherford International for $430m in an all-cash deal. In late March 2017, the oilfield services companies agreed to create a joint venture called OneStim, with Schlumberger holding 70% stake and Weatherford owning the remaining stake. The aim of the joint venture was to deliver completions products and services for the development of unconventional resource plays in the US and Canada land markets. As per the original agreement, both companies were to contribute all their respective North America land hydraulic fracturing pressure pumping assets, multistage completions, and pump-down perforating businesses to the joint venture. Additionally, Schlumberger was to make a one-time payment of $535m to Weatherford. However, the companies had agreed to revise the terms of the agreement to include the sale of the hydraulic fracturing business of Weatherford in the US. With the closing of the deal, Schlumberger has also become the owner of the supplier and customer contracts related to the former US hydraulic fracturing business of Weatherford. The Texas-based Weatherford will retain 100% of its multistage completions portfolio, manufacturing capability and supply chain, which is expected to enable significant upside potential for the company. Weatherford will also continue to take part in the emerging completions markets in Canada and the US and in other parts of the world. 

BP Takes $1.5B Hit Over US Tax Changes, Joining Shell (Reuters) - Oil giant BP will take a one-off $1.5 billion charge to adjust to new U.S. tax rules, joining rival Royal Dutch Shell and other companies, but expects a long-term boost from the corporate-friendly tax rates, it said on Tuesday.The massive $1.5 trillion tax overhaul that U.S. President Donald Trump signed into law last month cuts the corporate rate from 35 percent to 21 percent and temporarily reduces the tax burden for most individuals as well.BP, like many other international companies, said it expected a positive impact to its U.S. earnings in the long run.But in the short term, lower tax rates will affect its deferred tax assets and liabilities, resulting in a one-off, non-cash charge of $1.5 billion to its 2017 fourth quarter results which are due to be announced on Feb. 8, it said."The ultimate impact of the change in the U.S. corporate income tax rate is subject to a number of complex provisions in the legislation which BP is reviewing," BP said in a statement.The British company's shares were down 1.15 percent by 1534 GMT.The adjustment will not impact BP's cash flow in the fourth quarter.Deferred tax assets refer in some cases to a company overpaying taxes in advance and then getting them back in the form of tax relief.BP has large operations in oil and gas production in the Gulf of Mexico and onshore shale operations as well as refineries that can process up to 746,000 barrels per day of crude oil, according to its website.Shell said last week it would incur a one-off charge of $2-$2.5 billion, although the new legislation would have a "favourable" impact on earnings.On Dec. 22,

Alberta issues alert, natural gas outages in north during extreme cold snap - Alberta's Emergency Management Agency has issued an alert about natural gas outages affecting people who live in the north as the region deals with frigid temperatures. The agency says the extreme cold weather has disrupted the supply of gas to the Mackenzie County area. People who can't heat their homes are being encouraged to stay with friends and family who have alternative heat sources. The agency says natural gas supply trucks are being brought in to try and maintain gas line pressure, but the problem is expected to continue until temperatures rise. A reception centre is open at the Mennonite Heritage Centre in La Crete, a hamlet about 700 kilometres north of Edmonton. Environment Canada is reporting temperatures at the High Level airport of -38 C, -48 C with the wind chill, and there is more extreme cold weather in the forecast. "At this point we are requesting that all natural gas users within the region limit their usage as much as possible," the county said in a post on Facebook Friday. "This will help gas reach the end of the line and prevent additional houses from freezing." The Mackenzie County website says about 12,000 people live in the remote area that includes the communities of La Crete, Fort Vermilion and High Level. Len Racher, the county's chief administrative officer, said as a precaution the hospital in Fort Vermilion has switched over to diesel for heat and a long-term care home in La Crete has switched to propane. He said officials have warming centres and buses ready if needed. Racher said officials are focusing on maintaining service to the communities where most people live. 

Mexico’s Standing Rock? Sempra, TransCanada Face Indigenous Pipeline Resistance South of Border - Steve Horn - Since Mexico privatized its oil and gas resources in 2013, border-crossing pipelines including those owned by Sempra Energy and TransCanada have come under intense scrutiny and legal challenges, particularly from Indigenous peoples. Opening up the spigot for U.S. companies to sell oil and gas into Mexico was a top priority for the Obama State Department under Hillary Clinton. Mexico is now facing its own Standing Rock-like moment as the Yaqui Tribe challenges Sempra Energy’s Agua Prieta pipeline between Arizona and the Mexican state of Senora. The Yaquis in the village of Loma de Bacum claim that the Mexican government has failed to consult with them adequately, as required by Mexican law. Under Mexico’s new legal approach to energy, pipeline project permits require consultations with Indigenous peoples living along pipeline routes. (In addition, Mexico supported the adoption of the United Nations Declaration on the Rights of Indigenous Peoples, which includes the principle of “free, prior and informed consent” from Indigenous peoples on projects affecting them — something Canada currently is grappling with as well.) It was a similar lack of indigenous consultation which the Standing Rock Sioux Tribe said was the impetus for lawsuits and the months-long uprising against the Dakota Access pipeline near the tribe’s reservation in Cannon Ball, North Dakota, in late 2016. Now, according to Bloomberg and Mexican reporter Gema Villela Valenzuela for the Spanish language publication Cimacnoticias, history is repeating itself in the village of Loma de Bacum in northwest Mexico. Agua Prieta, slated to cross the Yaqui River, was given the OK by seven of eight Yaqui tribal communities. But the Yaquis based in Loma de Bacum have come out against the pipeline passing through their land, even going as far as chopping out a 25 foot section of pipe built across it. “The Yaquis of Loma de Bacum say they were asked by community authorities in 2015 if they wanted a 9-mile tract of the pipeline running through their farmland — and said no. Construction went ahead anyway,” Bloomberg reported in a December 2017 story. “The project is now in a legal limbo. Ienova, the Sempra unit that operates the pipeline, is awaiting a judicial ruling that could allow them to go in and repair it — or require a costlier re-route.” As the legal case plays out in the Supreme Court of Justice in Mexico, disagreements over the pipeline and its construction in Loma de Bacum have torn the community apart and even led to violence, according to Cimacnoticias.

Peak México -- In Bottleneck: Humanity’s Impending Impasse, William R. Catton called our modern humans Homo colossus — those among our kind living in industrial countries and consuming massive amounts of fossil fuels to motivate and control machines that do orders of magnitude more work than humans or animals could do otherwise. Homo colossus is gradually replacing Homo sapiens as industrial development spreads like a cancer across the Earth. Fossil fuels artificially boosted carrying capacity for human occupancy, at least to outward appearances. It could never last. While Homo sapiens, with a stable population under one billion, might have stood a reasonable chance of being around for another two or three million years, Homo colossus hasn’t a prayer. México is a poster child for the present schizophrenia. On November 3rd the national oil company, Petróleos Mexicanos (Pemex), made headlines across the world: “Pemex makes México’s biggest onshore oil find in 15 years. ” México’s President, Enrique Peña Nieto personally made that announcement, standing shoulder-to-shoulder with his energy minister, Pemex’ chief executive, and a range of other government and union officials at the Tula refinery in Veracruz. He proudly announced that Pemex made its historic discovery by drilling its onshore Ixachi well near the municipality of Cosamaloapan, and that the overall field is believed to hold some 350 million barrels of proven, probable and possible reserves. Pause for a second and consider that number. True, it is the biggest find in 15 years. Equally true it represents less than one year of the oil México produced at its peak, in 2003, and perhaps 18 months worth at present rates of production. In the United States, its largest trading partner, it would keep the lights on and the filling stations operating for all of 17 days, 18 hours and 20 minutes, unless it arrived at a holiday travel time. But even the number 350 million is suspect. First, that number is “proven, probable and possible;” three very different categories. If it was all proven reserves, bankers would be lining up to lend capital to develop the find. Instead, México has had to go to Big Oil looking for venture partners, and dropped its expectations from a majority holding, to 49% and now 40% and still no takers.

Belize Ends Oil Operations in Its Ocean Waters - Belize, home of the largest barrier reef in the western hemisphere, has permanently suspended oil operations in its ocean waters. The legislation marks the first time that a developing country has taken such a major step to protect its oceans —and all the life within —from oil exploration and extraction. The new suspension of oil activity marks an enormous win for the Belize Barrier Reef Reserve System World Heritage site, the wildlife that live there, and the hundreds of thousands of Belizeans who rely on the reef for survival. "Today is a great day for Belize," said Nadia Bood, Mesoamerican reef scientist at World Wildlife Fund (WWF). "Not only has its government listened to calls to protect the Belize Barrier Reef, which only last year was under threat from seismic oil exploration , it has stepped up to become a world leader in ocean protection by ending all oil activity in its waters." Ecosystems in the reef have already been damaged by coastal construction, and potential oil drilling posed a major threat. Harmful industrial activities would impact Belize's economy, natural resources and the 1,400 species found in the reef system.  More than 450,000 people from around the world joined WWF's campaign to end oil exploration and other harmful activities in the reef.

Oil-Rich Venezuela Is Out Of Gasoline - According to the Organization of the Petroleum Exporting Countries, the highest proven oil reserves in the world, including non-conventional oil deposits, are in Venezuela.“Gentlemen: There is no more gasoline in Venezuela. In Venezuela, we are out of gas. In Venezuela, there is no gas oil. In Venezuela, there are no lube oils,” said Iván Freites in a televised press conference. Freites is the secretary of the professional and technician division of the United Federation of Venezuelan Petroleum Workers.In his address, Freites said that poor management led to the stoppage of 80 per cent of the country’s refineries. “Only Amuay and Cardón refineries are operative and that is nothing. They produce 40,000 barrels per day and the national demand is over 200,000 barrels of gas per day,” he said.Venezuela’s oil production has fallen to levels not seeing since the late-1980s. According to the latest OPEC report, which is based on information provided by the Nicolás Maduro government, the country is producing about 2.3 million barrels of oil per day. In October, it experienced the steepest fall in production of 2017, as only 1.9 million barrels were extracted, 130,000 barrels less than the previous month. The oil industry, however, is still the major source of income as it generates about 96 per cent of the foreign exchange. He also expressed concern about the fact that Maduro’s administration pulled out of a partnership with Cuba in its Cienfuegos oil refinery, taking into account that all of Venezuela’s oil products have been unloaded on the island for the past 15 years before making their way to other markets.

Fracking and earthquakes: weighing up the dangers in SA -- The South African government is looking into fracking to reduce the country’s huge reliance on coal for energy. Fracking involves pumping high pressured fluids into rock formations to release reserves of oil and gas.  Estimates for gas deposits in the main Karoo region of South Africa range widely. A few studies have been done for government on the potential for shale gas in the country. These include a report on the technical readiness for a shale gas industry, a strategic environmental assessment on shale gas and a multi-authored academic book on hydraulic fracturing in the Karoo. Government must now integrate this information into policy and develop regulations for the fracking industry.Environmental groups and landowners are concerned about the negative environmental and the social impact of fracking. They say that it could have an impact on water quality and quantity, and could also cause habitat fragmentation and loss. They are also worried about possible increased seismicity associated with deep well waste water injection and fracking operations.Our research set out to look at the link between earthquakes and fracking. It formed part of the vulnerability mapping for fracking in South Africa. We found that the areas with the highest vulnerability for seismicity linked to fracking were in the parts of Western Cape, Gauteng, North West Province, Mpumalanga, KwaZulu-Natal and one of South Africa’s neighbours, Swaziland. Even though no gas is expected to be found in many of these areas, they would still be prone to the seismic effects of fracking in the Karoo basin, the site of what is assumed to be the country’s biggest gas deposits.  Seismic hazards in South Africa are not high by international norms. But there could be significant damage to infrastructure if seismicity increases.

Europe’s Largest Oil And Gas Producer Is Back On Its Feet - Europe’s largest oil and gas producer, Norway, suffered its fair share of problems when oil prices tanked three years ago. Yet, helped by the cushion of its massive sovereign wealth fund, the Norwegian economy is back on track, and this year’s unemployment fell to 2.4 percent, according to the country’s central bank—the lowest since 2012. The central bank now believes that job creation will continue, and that unemployment will continue to shrink, with the rate of the shrinking gradually slowing down, as befits the cyclical nature of the labor market. That’s a pretty good development, especially in light of the fact that between 2013 and 2016, employment in the oil industry in the country shrank by about a fifth, from more than 232,000 people to 183,800, as the industry struggled with the global oil price crisis. The petroleum sector—which accounts for 12 percent of Norway’s GDP and for 36 percent of the nation’s total exports—generated 40 percent lower revenues for the government in 2016 compared to 2015. These revenues should have improved this year thanks to higher oil prices, even though oil and gas investments in the Norwegian Continental Shelf are expected to drop for a fourth consecutive year in 2018. One might think that this means Norway is moving away from oil after the crisis, but that would only be partially true. Norway’s oil fields are maturing, that’s true. New exploration has had mixed results, but after a decline between 2001 and 2013, oil production is now on the rise and has been for the last three years despite the oil price collapse. Two huge fields discovered in 2010 and 2011, Johan Sverdrup in the North Sea, and Johan Castberg in the Barents Sea, are expected to start operations in 2019 and 2022 respectively, and will lift Norway’s oil production in the early 2020s compared to expected declines in 2018 and 2019. But after 2025, production and activity are expected to significantly drop off unless there are new discoveries, according to oil major Statoil.

Norway court clears ways for controversial Arctic drilling (AP) — A court in Norway said Thursday that the government can hand out oil drilling licenses in the Arctic, dealing a blow to two environmental groups that had filed a lawsuit against further drilling in the Barents Sea. The Oslo District Court acquitted the government against charges from Nature and Youth and Greenpeace Nordic that drilling for oil and gas in Arctic waters would violate with the Paris Agreement on climate change and the Norwegian constitution. The court cited the constitution, saying "natural resources shall be managed on the basis of long-term considerations, which will safeguard this right for future generations as well." Activists decried the decision. "Climate change is global. And climate scientists are freaking out. The Norwegian oil policy is letting down my generation and threatens my future," said Ingrid Skjoldvaer, head of Nature and Youth. The groups had sued Norway's Ministry of Petroleum and Energy in an attempt to invalidate the latest round of 10 production licenses in the Barents Sea on the edge of the Arctic Ocean. The oil ministry had said the licensing round was in compliance with the constitution and noted that it was backed by a large majority in Norway's parliament. The government said following the court ruling that it now "had a sound basis for its decision to award the production licenses." The court also said the groups should pay legal expenses worth 580,000 kroner ($71,435). 

Russia Posts Highest-Ever Natural Gas Output - Russia registered its highest-ever natural gas production last year amid plans to expand into China and boost sales of liquefied natural gas. The nation’s output of the fuel jumped 7.9 percent to 690.5 billion cubic meters, according to data emailed Tuesday by the Russian Energy Ministry’s CDU-TEK unit. That beat the previous record, set in 2011, by 2.9 percent. Russia, the world’s largest gas exporter, is working to boost output with plans to increase production of LNG with new plants in an area that stretches from the Baltic region to its Pacific coast.  That will put the country up against the biggest producers of the super-chilled fuel, including Qatar, Australia and the U.S. Russia has resources to increase its LNG production almost 10 times by 2035, led by the privately-owned Novatek PJSC in the Arctic, according to the nation’s Energy Ministry.

 Russian natural gas exports to Europe hit all-time high in 2017 --Russia’s gas exports to Europe and Turkey rose by 8.1 percent to a record high 193.9 billion cubic metres (bcm) in 2017, Alexei Miller, head of Gazprom, said in a statement on Wednesday, despite EU efforts to cut its reliance on Russian energy.  Gazprom, run by Miller, a close ally of Russian President Vladimir Putin, supplies more than a third of the European Union's gas.However, the European Commission has called on EU member states to curb their reliance on Russian energy following Moscow's 2014 annexation of Crimea from Ukraine and a clash over gas deliveries between Kiev and Moscow that saw Gazprom cut off supply."The rising trend of the record-high data for the second year in a row shows, on one hand, a rising demand for the Russian gas in Europe, and on the other hand, its secure supply in necessary volumes," Miller said. Gazprom said its gas deliveries to its largest customer, Germany, jumped by 7.1 percent to 53.4 bcm last year, a new record high. Its 2017 gas production, the world's largest, rose by 12.4 percent to 471 bcm, Miller said.

Russia's Gazprom sets annual Europe, Turkey gas export record of 193.9 Bcm - Russia's Gazprom supplied a total of 193.9 Bcm of gas to Europe and Turkey in 2017, its CEO Alexei Miller said Wednesday, easily breaking the record set in the previous year. Miller, cited by Russian news agency Tass, said deliveries to the "Far Abroad," which includes Europe and Turkey but not the countries of the former Soviet Union, were 8.1% higher than 2016's 179.3 Bcm."The trend of record yearly records demonstrates the growing demand of European countries for Russian gas on the one hand and the reliability of our supplies in the required volumes on the other," Miller said.Russian supplies to Germany and northwest Europe are likely to remain at elevated levels through the winter as the oil-indexed contract price range remains well below the TTF month-ahead price until April.Supplies to Germany hit a record of 53.4 Bcm last year, Miller said, a 7.1% year-on-year increase.Gazprom's supplies to Austria, the Netherlands and Denmark also hit new record highs in 2017, he said.Austria bought 8.5 Bcm last year, a 40% year on year increase, while the Netherlands was supplied with 4.6 Bcm, up 9.7% year on year.Gazprom delivered 1.75 Bcm of gas to Denmark, up 1.9% year on year.The previous records to Austria, the Netherlands and Denmark were set in 2005, 2007 and 2016, respectively.Russian gas supplies also rose to France by 6.8% to 12.3 Bcm, to the Czech Republic by 28% to 5.8 Bcm and to Slovakia by 24.5% to 4.6 Bcm. Demand for Russian gas was strong across Europe in early 2017 due to cold weather and remained robust through the summer and autumn given the need to refill storage stocks -- especially in Germany and the Netherlands -- which fell to historically low levels last winter.

Russia to Keep Its Grip on Europe’s Gas Market After Record 2017 - Russia is working to keep natural gas exports to Europe near record levels in 2018 after the continent’s biggest supplier, Gazprom PJSC, said its deliveries this year signal it is achieving on its ambitions to expand. The state-controlled gas giant plans to ship a minimum of 180 billion cubic meters next year, Deputy Chief Executive Officer Alexander Medvedev said in an interview in St. Petersburg. That volume would be the second highest ever after at least 190 billion cubic meters expected this year, which is a record. “Of course, it’s business, not sports,” Medvedev said. Yet, this is “a new stage” in the company’s history. Gazprom meets more than a third of Europe’s demand for natural gas, Russia’s biggest and most lucrative market worth some $37 billion in revenue this year. Tighter trade links with the Kremlin-backed company contrast with increasing tensions on the military and political front. Officials across Europe accuse Russia of everything from meddling in elections to menacing coastlines and airspace with warships and planes. Earlier this month, the U.K.’s armed forces warned of a growing threat for the Atlantic undersea communications cables, the internet and international trade from Russia’s submarines. European Union lawmakers have had their hearts set on diversifying energy supplies away from Russia and are urging expansion of ports to handle liquefied natural gas tankers from the U.S.   Production there has skyrocketed, making the U.S. a potential top producer of LNG in the mid-2020s, according to International Energy Agency estimates. Gazprom accuses the U.S. of politicizing its economic interests in the EU through a sanctions law earlier this year that targeted pipeline projects. Executives in Russia have so far shrugged off the threat of serious competition in Europe. While EU gas demand depends on weather and economic growth, it’s likely to increase next year as domestic production falls and coal prices recover, making imports from Gazprom more competitive, Medvedev said. Russia has the biggest potential to meet the additional demand, he said. 

Russian daily oil output edges up in 2017 to 30-year high (Reuters) - Russian oil production has continued to grow in 2017, with average daily output at a 30-year high of 10.98 million barrels per day, though the pace of growth slowed from 2016 because of the country’s participation in an OPEC-led global supply pact. The Middle East-dominated Organization of the Petroleum Exporting Countries and other leading oil producers agreed to cut their combined oil production by almost 1.8 million barrels per day (bpd) from the start of 2017 to prop up prices. Russia said it would cut its output by 300,000 bpd from the 30-year monthly high of 11.247 million bpd hit in October 2016 and achieved the targeted cut by the second quarter. OPEC and Russia have subsequently agreed to extend the cuts for the whole of 2018. Russian energy ministry data showed that oil and gas condensate production stood at 10.95 million bpd in December, up from 10.94 million bpd in November. In tonnes, oil output rose to 46.322 million last month from 44.782 million in November, lifted by a 0.2 percent rise in output at leading oil company Rosneft For the whole of 2017, the average output of 10.98 million bpd compared with 10.96 million bpd in 2016 and 10.72 million bpd in 2015. In tonnes, Russian oil output reached 546.8 million last year, against 547.5 million tonnes in 2016, which was one day longer. Reuters uses the barrel to tonnes ratio of 7.33 to 1. Russian Energy Minister Alexander Novak has said that 2018 oil production is expected to stay at 547 million tonnes if the cuts last until the end of the year, as agreed. “Output is likely to hold around current levels following the recent decision by OPEC and non-OPEC producers to extend the cuts to the end of 2018,” the International Energy Agency (IEA) said in its December review 

New Pipeline Doubles Russian Crude Oil Supply To China -  Russia quietly doubled its crude oil export capacity to China in the new year when it launched a new pipeline, cementing its position as the number one supplier of crude to its Asian neighbor. The extension of the East Siberia-Pacific Ocean, or ESPO, oil pipeline between Russia and China started operating on January 1, doubling the export volumes from 15 to 30 million tons annually, or almost 220 million barrels, Xinhua reported. The agency noted that the extension, which was agreed in 2013, would serve China’s Belt and Road initiative for expanding China’s regional influence in Asia. The new section of the Eastern Siberia–Pacific Ocean pipeline began operations Monday, Xinhua added. The venture is expected to "deepen energy co-operation between Moscow and Beijing" and serve the Belt and Road Initiative, a major Chinese-led development project across Asia. Rosneft is the supplier of the crude via the ESPO pipeline, while PetroChina is the buyer. The oil will be processed at three refineries in the Northeast of China. Back in September, Reuters reported, citing refinery sources, that one of these was undergoing a capacity expansion upgrade that cost US$880 million. The upgrade should increase its capacity to 400,000 bpd by the end of this year. Originating in Skovorodino, Russia, the pipeline stretches to Mohe, the northernmost province of China, before passing through the Inner Mongolia Autonomous Region all the way to Daqing in the northeastern Heilongjiang province. As a result of the second line, Russia’s crude export capacity to China has now doubled from 15 million to 30 million tons, or about 600,000 barrels a day. This significantly boosts Russia’s lead over Angola and Saudi Arabia as Beijing's’s biggest supplier of crude oil. China is currently considered the number one importer of raw petroleum in the world. Construction on the second line began in August 2016. According to RT, the first pipeline from Mohe to Daqing began operating on January 1, 2011. Some 110 million tons of oil have passed through the first line so far. Another section of the pipeline snakes around China to Russia's Far East, serving the specialized oil seaport of Kozmino. Almost exactly one year ago, we reported that Russia overtook Saudi Arabia  to become China’s biggest oil supplier for 2016.  Since then Russia has held the crown of China's biggest supplier for nine consecutive months based on the latest data, released in the last week of December.In November, Russian crude exports to China totaled 5.12 million tons, or about 1.25 million barrels daily. That was 11% more than in November 2016. At the same time, Saudi imports fell by 7.8% in November, to 1.056 million bpd.

China overtakes S Korea to become second-largest LNG importer in 2017: cFlow - China overtook South Korea to become the world's second-largest LNG importing country in 2017, according to completed voyage data compiled by S&P Global Platts trade flow software cFlow. Northeast Asia's four largest buyers imported a total of 172.28 million mt in 2017, up 12.65% year on year. Related video: US and China: Partners in global LNG growth? Chinese imports of LNG in 2017 totaled 37.89 million mt, up 48.4% year on year, while imports by South Korea totaled 36.51 million mt, up 10.81% year on year. Japan retained its position as the world's top importer, receiving 81.61 million mt in 2017, up 2.28% year on year. Northeast Asia's fourth-largest importer, Taiwan, imported 11% more in 2017 at 16.27 million mt. In December, China imported 5.05 million mt of LNG, up 38.25% year on year, registering its single highest ever monthly import volume since it started importing LNG in 2006. Japan imported 7.6 million mt of LNG in December, up 0.82% year on year. 

China set to top Japan as world’s biggest natural gas importer -- Beijing's crackdown on pollution has put China on track to overtake Japan this year as the world's biggest importer of natural gas, used to replace dirtier coal. China — already the biggest importer of oil and coal — is the world's third biggest user of natural gas behind the United States and Russia, but has to import around 40 percent of its total needs as domestic production can't keep up with demand. Data compiled from the Thomson Reuters Eikon terminal indicates China's 2017 imports of pipeline gas and liquefied natural gas (LNG) will top 67 million tonnes, up by more than a quarter from a year earlier. LNG imports alone surged more than 50 percent. The data, which includes LNG tanker arrivals to China and pipeline monthly import flow estimates, is preliminary as December figures are not yet available. China still lags Japan, with gas annual imports of around 83.5 million tonnes, all as LNG, but its overall gas imports topped Japan's in September and again in November, government data and shipping flows show. Analysts say the trend is set and China should top Japan for the full year in 2018. "Both LNG and pipeline imports will continue to increase in the next few years. We expect China to overtake Japan as the world's largest gas importer in 2018," said Miaoru Huang, Asia gas and LNG senior manager at energy consultancy Wood Mackenzie. "But Japan will remain as the No.1 LNG importer till around 2028," she added.

Pakistan restricts fuel oil imports as consumption falls - Pakistan has imposed restrictions on fuel oil imports with immediate effect, as domestic consumption declines amid rising LNG imports and the shutdown of several fuel oil power plants. A new energy committee, headed by the minister for power, has also been constituted to approve future fuel oil imports and monitor output from domestic refineries, demand from the power sector, and stocks at oil marketing companies, an official with the ministry of energy said. The decision was taken December 28 at a meeting in Islamabad attended by Prime Minister Shahid Khaqan Abbasi, minister for power Sardar Awais Ahmed Khan Leghari and officials from oil refineries, oil marketing companies and the ministry of energy. "During the meeting, a decision was made to restrict imports of fuel oil with immediate effect. Only four cargoes, which were booked by Pakistan State Oil, would be received," the official said. Pakistan State Oil deferred four cargoes in November, one of which is due to arrive in the first days of 2018, and another three by the end of January, the same official added. 

 Israeli pipeline, once a link to Iran, will remain a mystery (Reuters) - An oil pipeline company established decades ago by Israel and Iran, and a new Israeli company that is meant to replace it, can continue to operate secretly, an Israeli parliamentary committee ruled on Sunday. The Eilat-Ashkelon Pipeline Co (EAPC) was a joint venture set up in 1968, when the two nations were friendly, to transport Iranian oil via Israel to the Mediterranean. Ties were cut after Iran’s 1979 Islamic revolution, and the enemies are now locked in arbitration that could be worth billions of dollars. Although Iranian oil no longer flows through the pipeline, EAPC has become a major distributor of oil in Israel, with ambitions to become a leading trade hub. It also added a reverse-flow system so oil from the Black or Caspian Seas can be shipped from Eilat, Israel’s southernmost city and port, to southern Asia and the Far East, and increased its storage capacity for traders in the region. Israel, worried about national security, maintains tight control over EAPC, to the extent that articles about its business dealings must pass through the military censor. Instead of renewing EAPC’s concession, which came up this year, Israel formed a new company with the same initials, the Europe Asia Pipeline Co, owned by the government. It will take over the original EAPC’s responsibilities by September, with an option to extend the handover period an additional six months. . Calls to end the secrecy surrounding EAPC emerged after its pipe burst in 2014, spilling millions of liters of oil into a desert nature reserve in Israel’s worst spill. After an Israeli environmental group petitioned the Supreme Court, the gag order was narrowed slightly to exclude issues like environmental impact and safety measures. The company’s primary dealings, including the sources of oil and how it is used, are still under censorship. 

Libya burns dirty oil for electricity as Islamic State disrupts gas plans - Libya is turning to crude oil to solve electricity shortages, as the threat from Islamic State holds back gas infrastructure development. Two new plants at Ubari in the southwest and Tobruk in the northeast are primarily designed to run on gas. But in the absence of pipelines to deliver the fuel, both will instead burn oil, emitting roughly double the greenhouse gases. In the instability since former leader Muammar Gaddafi was toppled in 2011, the imperative to address frequent power blackouts is taking priority over environmental protection. “It’s more a strategy of necessity than a deliberate approach to burn oil for power,” Richard Mallinson, analyst at London-based Energy Aspects told Climate Home News. “In a more stable environment they’d aim to have everything connected up when it came on stream. But they have an urgent need for power.” The 640MW power plant at Ubari is expected to be commissioned in the coming weeks. Gas fields in the southwest are connected by pipeline to an export terminal in Mellitah, but the pipeline stops about 300km short of Ubari. The 650MW Tobruk plant has a similar problem. Libya’s main gas pipeline runs along the Mediterranean coast between the capital Tripoli and Libya’s second city, Benghazi, but it stops about 400km short of Tobruk. Libya bucks the global trend away from oil-fired power generation, which in most parts of the world is used as a last resort. Even oil-rich nations see more value in exporting the product than squandering it in inefficient power plants. 

Oil resurrection sets stage for another Opec-shale clash - Oil continued its revival from the biggest crash in a generation, with prices set for a second annual gain after a year marked by hurricanes, Middle East conflict and the tussle between Opec and US shale. Futures are up more than 12 per cent in 2017, having entered a bull market in September. In 2018, investors will watch whether rising prices trigger a new flood of US output. "The current highs are unsustainable in the short-to-medium term, with prices likely to head back below $60 once we get past January, but for now the season of goodwill appears to be in full swing," said analysts led by Michael dei-Michei at consultants JBC Energy in Vienna. West Texas Intermediate, the US benchmark, is now trading at the highest level since mid-2015, pushed above $60 a barrel by a severe cold snap in the northeastern US that spiked demand for heating fuel. Oil topped natural gas as the biggest source of electricity in New England on Thursday morning, after temperatures plunged well below freezing. US output has surged overall this year, hitting a 46-year high in October when producers pumped 9.6 million barrels a day, according to federal data. The US expects production to top 10 million barrels a day in the coming year. For now, shale drillers are showing restraint, with the number of working rigs unchanged for the second week in a row, according to Baker Hughes data released on Friday. The rig count, now at 747, stayed relatively stable during the last quarter, even as oil strengthened. At the same time, speculation is rising that American drillers will put more rigs to work next year as oil strengthens. That could undermine plans by the Organization of Petroleum Exporting Countries and and other producers, including Russia, who have pledged to extend production curbs through the end of 2018 to wipe out a global glut.

The Oil and Gas Sector Is Changing — and So Is Geopolitics - The decline in crude oil prices from $100 per barrel to around $60 and below over the past two years, along with the widespread ability to extract shale gas through hydraulic fracturing of rock, or fracking, has moved the United States from being “the world’s thirstiest consumer of overseas oil to a position of greater self-sufficiency,” O’Sullivan writes. Falling energy prices have also stabilized Europe’s economy, helped Japan manage the aftermath of the Fukushima nuclear disaster, allowed China to more aggressively pursue its new Silk Road strategy across Eurasia (while reducing the pain of a decelerating economy), kept Russia from becoming an energy superpower and weakened the prospects for energy-rich sub-Saharan African countries. “On the whole,” the author says, “the new energy abundance is a boon to American power — and a bane to Russian brawn.” In fact, it was new extraction techniques in tight oil and shale gas that helped ease America out of the recession. But triumphalists beware. Though the United States is now the world’s largest energy producer, it can never be the swing producer of hydrocarbons that Saudi Arabia once was, able to determine world prices by simply deciding how much to pump. That is because the United States is not an autocracy with a national oil company, but a vast network of hundreds of small producers making their own decisions and taking their own risks.At the same time, the energy revolution has laid the basis for a more politically and economically unified North American continent. For this reason, O’Sullivan criticizes Barack Obama for alienating Canada with his delays of the Keystone XL pipeline and Donald Trump for alienating Mexico with his insults and talk of a “wall” between the two countries. O’Sullivan’s book lays out Trump’s ignorance of the whole United States-Mexico relationship. In 2015, the two countries traded “more than $1 million of goods and services every minute.” Rather than “simply trading in final products, the United States and Mexico build goods together, utilizing complex supply chains that crisscross the border,” a grid-work that includes 20 natural gas pipelines.

The Oil Chart is Setting Up Very Bullishly To Start the Year -- Oil is looking very bullish right now. On the daily chart (top chart), prices are in a multi-month uptrend.  They recently consolidated gains in a triangle pattern and are now at a 1-year high.  The moving averages are setting up in a bullish manner: they're all increasing, the shorter EMAs are above the longer EMAs and prices are above the EMAs.  The MACD has plenty up upside potential at current levels. The weekly chart (bottom chart) is also very bullish.  Prices consolidated around the 200-week EMA and have since moved higher.  The MACD is also rising and has plenty of upside room.   When a security sets up in bullishly in several time frames, the odds of a bullish advance increase.    This is one of the charts I recently said was key to 2018

Hedge funds gamble OPEC will tighten oil market too much: Kemp (Reuters) - Hedge funds are the most bullish about oil prices in years, expecting further gains even as prices touch multi-year highs and ignoring the risk linked to such a large concentration of positions.A record net long position has been accumulated by hedge funds and other money managers, amounting to 1,183 million barrels in the five biggest futures and options contracts covering crude, gasoline and heating oil.Portfolio managers held a record 1,328 million barrels of long positions in Brent, WTI, U.S. gasoline and U.S. heating oil on Dec. 26, according to data published by regulators and exchanges.By contrast, hedge funds held only 145 million barrels of short positions, the lowest level for 10 months and among the lowest at any point since the start of 2013.Fund managers now hold more than nine long positions for every short position, the most bullish picture for at least five years ( are record net long positions in Brent crude (561 million barrels), WTI (461 million barrels) and U.S. heating oil (82 million barrels).There are also large, if not quite record, net long positions in U.S. gasoline (79 million barrels) and European gasoil (131 million barrels). In many of these contracts hedge fund positioning appears extremely stretched, with the ratio of long to short positions at multi-year highs. The concentration of so many bullish positions poses a significant downside risk to prices if and when portfolio managers decide to close them out and realise some of their paper profits. For the time being, however, most fund managers are ignoring the liquidation risk and focusing on the prospect of further price increases first.

Oil Markets Start 2018 With A Bang | - Despite pipelines in the North Sea and Libya coming back online in 2018, oil has remained above $60 in the new year. Oil prices started out the year with some bullish sentiment related to geopolitical flashpoints, while the market fundamentals looked less favorable with the restoration of some key pipelines. Oil prices remained at more than two-year highs as protests swept across multiple cities in Iran. Crowds of protestors, mainly young people, criticized the government for poor economic conditions. The demonstrations pushed crude prices up a bit, and both WTI and Brent opened above $60 per barrel for the first time in years. "Growing unrest in Iran set the table for a bullish start to 2018," the Schork Report said in a note to clients on Tuesday.  The saga over North Korea’s nuclear program continues to take new twists and turns. The latest disturbance comes after news that Russian oil tankers helped send oil to North Korea, which would be a violation of UN sanctions. The U.S. has also accused China of violating UN sanctions by shipping crude oil to the isolated North Korea regime.  The return of the Forties pipeline to operation and the restoration of output from North Sea oilfields removed one of the recent bullish catalysts from the oil price equation. Libya’s pipeline outage also came to an end after the damaged pipeline was repaired. So far, the bearish news of resumed oil flows in the North Sea and Libya has been outweighed by the protests in Iran.

Oil Hits Highest Since Mid-2015 But Settles Down As Outages Abate - (Reuters) - Oil prices hit mid-2015 highs in early trading on Tuesday but dipped to settle slightly lower as major pipelines in Libya and the UK restarted and U.S production soared to the highest level in more than four decades.It was the first time since January 2014 that the two crude oil benchmarks opened a year above $60 per barrel. Prices were buoyed by large anti-government rallies in Iran and supply cuts led by OPEC and Russia.U.S. West Texas Intermediate (WTI) crude futures settled 5 cents lower at $60.37 a barrel. In early trading WTI hit $60.74, the highest level since June 2015.Brent crude futures, the international benchmark, settled 30 cents, or 0.5 percent lower at $66.57 a barrel. The session high of $67.29 was the highest since May 2015.The spread between U.S. crude and Brent hit the narrowest in nearly two weeks.The 450,000 barrel per day (bpd) capacity Forties pipeline system in the North Sea returned to full operations on Dec. 30 after an unplanned shutdown.Repairs have been completed on a Libyan oil pipeline damaged in a suspected attack last week and production is restarting gradually, engineers said."The resolution of the North Sea pipeline issue is having the expected result that the Brent-WTI spread is narrowing today," David Thompson, executive vice-president at Powerhouse, an energy-specialized commodities broker in Washington.Thompson added that traders have been returning to work from the holidays, boosting volumes."Despite the day's price weakness, both Brent and WTI remain in solid, long-term bullish trends - $58.95 is nearby support on WTI front-month futures and $65.60 is the corresponding support on front-month Brent futures."

 OPEC's focus on stocks risks prices overshooting – Kemp - (Reuters) - The Organization of the Petroleum Exporting Countries (OPEC) is sticking doggedly to its plan to cut commercial oil inventories down to the five-year average to rebalance the oil market.But in doing so, the organisation risks tightening the market too much, sending prices sharply higher and encouraging a faster-than-expected acceleration in production from U.S. shale producers.Saudi Arabia’s oil minister, who is the organisation’s de facto leader, has reiterated that stocks are still around 150 million barrels too high and it would be premature to discuss an exit strategy or change of course.“Almost the single metric we look at is global inventories and of course the most transparent and trustworthy is the OECD,” he said in an interview before Christmas (“Saudi energy minister Q&A with Reuters”, Dec. 20). OPEC, the International Energy Agency (IEA) and the U.S. Energy Information Administration (EIA) all have slightly different figures for OECD commercial crude and products stocks, but they show a similar trend.OPEC estimates that total stocks were around 137 million barrels higher than the five-year average in October, down by around half since May (“Monthly Oil Market Report”, OPEC, December 2017).IEA puts commercial stocks about 111 million barrels above the prior five-year average at the end of October (“Oil Market Report”, IEA, December 2017).EIA data shows commercial stocks 167 million barrels above the five-year seasonal average at the end of October, down from a surplus of 380 million barrels in July 2016 ( the specific numbers differ, mostly for definitional and methodological reasons, the data from each of the agencies shows the stock overhang compared with the five-year average has narrowed significantly.Most of the remaining overhang is concentrated in crude oil rather than refined products such as gasoline and heating oil.Product inventories are already tight in some cases, notably for middle distillates such as gasoil, diesel fuel and heating oil.OPEC seems determined to drive total stocks down to the five-year average, or very close to it, before starting to increase its own output. But that would almost certainly leave stockpiles uncomfortably low, send benchmark Brent prices well above $70 per barrel and push the market into a big backwardation.

WTI/RBOB Extend Gains After 7th Straight Week Of Crude Draws - WTI/RBOB rallied into the inventory data as expectations were for a seventh straight week of crude draws and gasoline builds. API confirmed the streak is alive and saw a 4.27mm build in distillates - the biggest weekly build since June 2017. API:

  • Crude -4.992mm (-5mm exp)
  • Cushing -2.11mm
  • Gasoline +1.87mm (+2mm exp)
  • Distillates +4.272mm (+500k exp) - biggest build since Jun 2017

The trend of crude draws and gasoline builds continues for the 7th straight week...  WTI/RBOB ramped higher today ahead of the API data and extended gains after...

Oil prices reach highest since June 2015 as US stockpiles dwindle - Oil climbed to the highest level in two and a half years on expectations a US government report will register the longest decline in crude stockpiles since the summer driving season. Futures rose as much as 1.6% in New York, topping $61 a barrel. Oil stored in US tanks and terminals probably dropped for a seventh straight week, according to a survey of analysts. Prices also have been buoyed by almost a week of violent protests in Iran that the nation’s Revolutionary Guard Corps on Wednesday said had been brought to heel. “The fundamental backdrop right now is stronger than we’ve seen in recent memory,” said Michael Tran, commodities strategist with RBC Capital Markets in New York. “Prices will likely be able to hang in there this year, due to tightening stockpiles.” Oil has risen for two years running as the Organization of Petroleum Exporting Countries (Opec) and allied producers including Russia trimmed supplies to reduce a global glut. Oil prices will probably trade between $40 and $60 a barrel this year, penned in by rising US shale production, declining but still ample spare supplies and slipping discipline among Opec members, according to Moody’s Investors Service. “The US shale-Opec tug of war will simultaneously cap upside price potential and downside risks,” West Texas Intermediate for February delivery rose 78 cents to $61.15 a barrel at 10:12am on the New York Mercantile Exchange. In earlier trading, the contract touched $61.35, the highest intraday price since June 2015. Brent for March settlement rose 64 cents to $67.21 on the London-based ICE Futures Europe exchange after losing 30 cents on Tuesday. The global benchmark crude traded at a premium of $6.02 to March WTI. 

Oil rallies to 3-year high as Iranian unrest persists - Oil rallied Wednesday to a close at a nearly three-year high as antigovernment protests rattled Iran, raising concerns over the potential for disruptions to crude output from OPEC's third-largest producer. February West Texas Intermediate crude on the New York Mercantile Exchange added $1.26, or 2.1%, to settle at $61.63 a barrel. March Brent gained $1.27, or 1.9%, to end at $67.84 a barrel on ICE Futures Europe. Both WTI and Brent scored their highest settlements since December 2014, according to data from Dow Jones. Antigovernment demonstrators have taken to the streets in cities across Iran over the past week to voice anger over the country's economic woes. The protests, which have left more than 20 people dead, have reignited a geopolitical risk premium in global oil markets amid concerns the civil unrest could result in crude supply disruptions out of the Islamic Republic. "Political uncertainty in Iran has moved in to support the market this week as protests are expected to continue in the days ahead,"   "While there is currently no tangible threat to oil supply, it is not yet clear how extensive and widespread the current protest movement could become." "Ultimately, any sign of instability in OPEC’s third largest producer will tend to provide at least a near-term lift until the situation appears to be trending towards resolution," he said in a daily note.Analysts at Commerzbank said that protests in Iran, so far, "have had no impact on the country's oil production or oil shipments." But they cautioned the situation could change if the U.S. were to impose fresh sanctions on the Iranian regime or dismantle the 2015 international agreement to curb Iran's nuclear program. "This justifies a certain risk premium on the oil price, though this should already be more than sufficiently reflected in the current price level," the Commerzbank analysts wrote in a note Wednesday. 

WTI/RBOB Rise After Biggest Crude Draw Since August - WTI/RBOB were sinking into the DOE data, despite API's solid crude draw data, after tagging $62/$1.81 overnight. Official data confirmed API's with the seventh straight week of crude builds (biggest crude build since Aug) and gasoline draws but it was distillates' massive build (most since Dec 2016) that stood out.A pull-back in prices might be seen if builds in gasoline and distillate inventories are larger than a crude oil decline, according to Bob Yawger, director of the futures division at Mizuho Securities USA. Yet, a second weekly drop in U.S. crude production would be “a bullish indicator.”Bloomberg's Intelligence Energy Analysts Fernando Valle and Vince Piazza note the potential weather effects...Although winter usually ushers in a slowdown in demand, refiners are being encouraged to use domestic crude instead of imports tied to the Brent benchmark, whose price remains elevated because of Middle East tensions.Cold weather in the Northern Hemisphere is having diverging effects on distillates and gasoline. It's making distillate refining margins larger, putting downward pressure on supplies, while gasoline cracks are likely to narrow as frigid temperatures discourage domestic demand and exports. DOE:

  • Crude -7.419mm (-4.7mm exp) - biggest draw since Aug 2017
  • Cushing -2.441mm
  • Gasoline +4.813m(+2mm exp)
  • Distillates +8.899mm (+500k exp) - biggest build since Dec 2016

This is the seventh straight week of crude draws and gasoline builds but it is distillates' massive 8.9mm builds (the most since Dec 2016) that stands out... As Bloomberg notes, Distillate shipments were the lowest since ports were shut post-Hurricane Harvey in September. That accounts for at least 2.5 million of the distillate stock build.

Crude Oil Price Steady as Gas, Diesel Stockpiles Soar - The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Thursday morning, showing that U.S. commercial crude inventories decreased by 7.4 million barrels last week, maintaining a total U.S. commercial crude inventory of 424.5 million barrels. The commercial crude inventory remained in the middle of the average range for this time of year. Wednesday evening the American Petroleum Institute (API) reported that crude inventories fell by about 5.0 million barrels in the week ending December 29. Gasoline inventories rose by 1.8 million barrels and distillate stockpiles rose by 4.3 million barrels. For the same period, analysts polled by S&P Global Platts had consensus estimates for a decrease of 5.7 million barrels in crude inventories, a rise of about 1.3 million barrels in gasoline and an increase of 2.0 million barrels in distillate stockpiles.  Total gasoline inventories increased by 4.8 million barrels last week, according to the EIA, and remain above the upper limit of the five-year average range. U.S. refineries produced about 9.7 million barrels of gasoline a day last week, down by about 500,000 barrels a day compared to the prior week. Total motor gasoline supplied (the agency’s proxy for demand) averaged about 9.2 million barrels a day for the past four weeks, up about 2.1% compared with the same period a year ago. Before the EIA report, benchmark West Texas Intermediate (WTI) crude for February delivery traded up about 0.3% at around $61.77 a barrel, and it moved down to around $61.68 after the report’s release before returning to $91.78 minutes later. WTI settled at $61.63 on Wednesday and opened at $61.93 Thursday morning. The 52-week range on February futures is $43.76 to $62.21, and the high was posted this morning. Since mid-December WTI crude oil has added about $5 a barrel and settled on Wednesday at its highest price in three years at $61.63, and it posted a 52-week high at $62.21 early this morning. How long can the party go on?   The higher pricing is almost entirely due to the withdrawal of about 1.8 million barrels a day in global crude oil supplies resulting from the OPEC-initiated production cuts. The cartel expects that the crude market to balance this summer and run at a small deficit in the second half of 2018.

Oil closes above $62 as stockpiles shrink - Houston Chronicle: Oil closed above $62 a barrel for the first time in more than three years after U.S. crude stockpiles shrank by the most since the summer driving season. Futures jumped 0.6 percent in New York to the highest level since December 2014. American crude inventories slipped by 7.42 million barrels last week as refiners boosted operating rates to the highest level in more than a decade, signaling strong demand, the Energy Information Administration said on Thursday. Stored crude supplies have been dwindling for seven straight weeks and the scope of last week's withdrawal surprised analysts. "The crude oil inventory number was pretty healthy relative to consensus," Brian Kessens, who helps manage $16 billion in energy assets at Tortoise Capital Advisors LLC, said by telephone. "People are optimistic that there are some tailwinds behind the underlying crude oil price." Oil broke above $62 in New York as the U.S. supply picture appeared tighter, with crude inventories at Cushing, Oklahoma sliding below their five-year average. Prices have risen as the Organization of Petroleum Exporting Countries and Russia work to reduce global inventories through output reductions and amid concerns over the stability of the group's third-biggest producer, Iran. Tensions in Iran have also sparked fear that there could be an impact on oil production in the region. West Texas Intermediate for February delivery rose 38 cents to settle at $62.01 a barrel on the New York Mercantile Exchange. The front-month futures' premium over second-month WTI is at the widest in more than three years. Brent for March settlement advanced 23 cents to end the session $68.07 a barrel on the London-based ICE Futures Europe exchange, the highest since December 2014. The global benchmark crude traded at a premium of $6.17 to March WTI. U.S. crude inventories fell to 424.5 million barrels last week, while distillate supplies climbed by about 8.9 million barrels, the most since December 2016, the EIA said. U.S. refiners boosted operating rates for a third straight week, contributing to the decline in stored oil supplies. Stockpiles at the nation's key pipeline hub in Cushing dropped to about 49 million barrels. 

US shale returns to growth, posing problem for OPEC: Kemp - (Reuters) - U.S. crude oil prices have risen above $60 per barrel which should accelerate shale drilling and production in the next few months, provided the price increase is sustained.U.S. crude futures are trading over $60 for all delivery months between February and August 2018, an increase of about 40 percent since the middle of 2017 ( the futures strip for 2019, the benchmark against which U.S. shale producers can execute hedges for next year's output, is trading over $56, up almost 20 percent on the last six months.  Breakeven prices for shale vary tremendously between different companies, different basins and even different wells within the same play.But with futures prices above $60, a much wider range of wells and shale plays should now be profitable.Futures prices are sending a clear signal to shale firms that they should step up drilling programmes and boost output.  Experience shows changes in drilling rates generally follow changes in futures prices with a lag of about 16 to 20 weeks.  Futures prices have been rising fairly consistently for 27 weeks since hitting a trough around $43 in late June 2017. Drilling rates, as measured by the Baker Hughes rig count, started turning up 19 weeks later, consistent with normal behaviour. The rig count unexpectedly stalled in the second half of December, but the continued increase in futures prices strongly suggests the rig count will start increasing again and should rise at least through March and April.Shale production is already increasing strongly as a result of the growing number of wells drilled earlier in 2017 and completed in the second half of last year. Monthly completion rates across the seven major shale plays climbed from 700 in January 2017 to 921 in June and 1,086 in November, according to the U.S. Energy Information Administration.Production from the Lower 48 states excluding the Gulf of Mexico, much of it from shale formations, has surged from 6.6 million barrels per day (bpd) in January 2017 to 7.0 million bpd in June and 7.7 million bpd in October.

OilPrice Intelligence Report: Oil Prices Stumble As Traders Take Gains: Oil prices fell back on Friday during early trading after posting strong gains for much of the week. The tension in Iran has helped push prices up, and a strong U.S. crude inventory drawdown added some momentum on Thursday, although that bullish data was slightly offset by the large build in gasoline stocks. Overall, by Friday, it appeared that oil traders had sold off some positions to pocket some of the recent gains. The breather raises questions about the durability of the current rally.   The Trump administration has proposed to open up vast new territory for offshore oil and gas drilling, going so far as to push drilling in areas currently off limits, including the Atlantic, Arctic and Pacific Oceans, as well as parts of the Gulf of Mexico that haven’t seen drilling. The five-year plan for 2019-2024 would replace the Obama-era plan for 2017-2022, and it would include 47 possible auctions that encompass more than 90 percent of the U.S. outer continental shelf. The proposal will take time to finalize and would be vulnerable to legal challenges. . Energy stocks have significantly lagged behind the broader stock market, underperforming even in a period in which oil prices rebounded. But 2018 could be different. With oil prices at their highest level since mid-2015, the outlook looks better for energy stocks than it has in some time. On top of that, a long list of companies have trimmed costs and the oil majors have returned to positive cash flow. This has more investors gaining confidence in the investment case of oil and gas stocks. “2017 was a challenging year for investors but there are now real opportunities in the energy sector,” Olivia Markham, portfolio manager at BlackRock Commodities Income Investment Trust, told Reuters. According to Reuters, investment banks UBS, RBC and JP Morgan issued strongly positive outlooks for the oil and gas sector in recent weeks, while Barclays predicted European integrated oil companies could rise 20 percent from the third quarter. Others agree.

US Rig Count Dips As Oil Prices Hold Steady - The number of active oil and gas rigs dipped again this week, according to Baker Hughes data, decreasing by 5 rigs, bringing the total rigs to 924 rigs, which is an addition of 259 rigs for the 2017 calendar year.The number of oil rigs in the U.S. decreased by 5, while the number of gas rigs stayed the same. The number of oil rigs stands at 742 versus 529 a year ago. The number of gas rigs in the U.S. now stands at 182, up from 135 a year ago.At 9:52am EST, the price of a WTI barrel was down $.60 (-0.97%) to $61.41, while the Brent barrel was trading down $0.35 (-0.51%) to $67.72. Both benchmarks are up week on week.U.S. crude oil production has been on a steady upward trajectory during Q4 2017—a thorn in OPEC’s side which has managed to cap price spikes courtesy of various supply disruptions and unrest in Iran. The last week of the 2017 calendar year, crude oil production came in at 9.782 million bpd—the second highest level in 2017.Last week, Baker Hughes data showed an alarming drop off in Canada’s rig count—the oilfield services provider reported that Canada lost 58 oil rigs and 16 gas rigs, marking a 21-rig loss year over year. This week, Canada regained 38 rigs (36 oil, 2 gas), but this still leaves Canada 31 rigs in the whole year over year.The Permian basin rig count increased by 2 this week, standing at 400 rigs, or 133 above this same week last year. The Haynesville and Williston basins each lost a rig. At 1:07pm EST, WTI was trading at $61.39 (-$0.62) with Brent trading at $67.62 (-$0.45).

 Baker Hughes: US rig count falls 5 units to 924 - - The US drilling rig count fell 5 units to 924 rigs working during the week ended Jan. 5, data from Baker Hughes indicate. This total is up 259 units from a year ago.Offshore this week dropped 1 unit to 17 rigs working. In the Gulf of Mexico, 17 rigs were drilling, 1 fewer than a week ago. The 906 total rigs drilling on land and the 1 rig drilling in inland waters were down 3 units and 1 unit, respectively, from last week.Rigs targeting oil fell 5 units to reach 742. A year ago this week, 529 rigs were drilling for oil. There were 182 units targeting gas this week, unchanged from last week. This time a year ago, 135 rigs were drilling for gas.Among the major oil and gas-producing states, Louisiana, with 56 total units running, saw the largest drop in rigs, down 6 units from last week. Oklahoma was down 2 units to 118 rigs working, and North Dakota was down 1 unit to 45. Eight states’ rig counts were unchanged this week, namely Pennsylvania, 36; Colorado, 34; Ohio, 27; California, 14; West Virginia, 13; Utah, 11; Alaska, 5; and Arkansas, 0.Wyoming gained 2 units from last week to 26 rigs working. Texas and New Mexico each gained 1 unit to 454 units and 76 units, respectively. Canada gained 38 units to 174 rigs from a week ago. There are 31 less rigs running than a year ago this week. Oil-directed rigs rose 36 units this week to 98, while those targeting gas increased 2 units to 76.

U.S. oil rig count ends 2017 40 percent above year-ago levels (Reuters) - The U.S. oil rig count rose by about 42 percent by end-2017 compared to the corresponding period last year, as energy companies boosted spending amid a recovery in crude prices. Drillers held the number of oil rigs steady for a second straight week at 747 in the week to Dec. 29. That was 222 more than the 525 rigs at the end of 2016, General Electric Co’s Baker Hughes Inc energy services firm said on Friday. The oil rig count, an early indicator of future output, remained unchanged in December after rising by 10 in November. It declined by 3 in the fourth quarter after falling by 6 in the third quarter. U.S. oil prices closed above $60 a barrel for the first time since mid-2015 on the final trading day of the year, ending 2017 with a 12 percent gain spurred by strong demand and declining global inventories. [O/R] Oil prices had been boosted by signs the global crude glut that has dogged the market since 2014 is shrinking, as a year of production cuts led by Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) and Russia helped tighten the market.  In 2017, U.S. crude futures have averaged about $51 a barrel, easily topping last year’s $43.47 average. Looking ahead, futures were trading at about $59 for the balance of 2018 and $56 for calendar 2019. In anticipation of higher prices in coming years, U.S. financial services firm Cowen & Co said 21 of the roughly 65 E&Ps they track have already provided capital expenditure guidance for 2018 indicating a 13 percent increase in planned spending over 2017. Cowen, which has its own U.S. rig count, said it expects a gradual decline in the count in 2018. There were 929 oil and natural gas rigs active on Dec. 29, up 41 percent from the 658 at the end of 2016. The average number of rigs in service in 2017 was 876. That compares with 509 in 2016 and 978 in 2015. Most rigs produce both oil and gas. U.S. crude oil production in October hit the highest in more than 46 years, rising by 167,000 barrels per day (bpd) to 9.64 million bpd, U.S. Energy Information Administration’s monthly production report on Friday.

 Oil retreats on US output after hitting near 2-yr high (Reuters) - Oil prices fell on Friday, dropping from highs last seen in 2015, as soaring U.S. production undermined a 10 percent rally from December lows that was driven by tightening supply and political tensions in OPEC member Iran. Rising U.S. output and weaker refined products demand weighed on the market, traders said. “The holiday demand surge that we get is in the rearview mirror,” said John Kilduff at Again Capital. “That, coupled with the rebound in U.S. production, is helping to undercut some of the recent price strength.” While product demand is up from a year earlier, robust stockpiles and a cold snap in the U.S. could put a damper on demand for transportation fuels. Traders said political tensions in Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), had pushed prices higher. “The protests in Iran add more fuel to the already bullish oil market mood,” said Norbert Ruecker, head of commodity research at Swiss bank Julius Baer. On Friday there was no new major outbreak of violence in the country, relieving some of the tension from the market. West Texas Intermediate crude CLc1 futures fell 57 cents to settle at $61.44 a barrel. WTI hit $62.21 the previous day, which was its strongest price since May 2015. Brent crude LCOc1 futures for March delivery fell 45 cents, or 0.7 percent, to $67.62 a barrel. The previous day it touched $68.27, also the highest price since May 2015. “Crude oil traders are probably getting some demand concerns at the $60 threshold for WTI and especially the risk that Brent – the biggie globally – could hang out above $65 for too long,”

Bromance to Break-Up: 4 Ways the OPEC Deal Could End Early - OPEC and Russia have surprised the industry with the success of their grand alliance as oil surges to a three-year high. As the unlikely bond enters a second year, there are challenges ahead.Here are four scenarios that could end their deal earlier than planned.

  • Street Fighting. Tension is flaring in OPEC members Iran and Venezuela, the two countries that RBC Capital Markets LLC says pose the biggest risk of supply disruption. If either nation shuts oil output as a result, fellow producers could just decide the restraints are no longer appropriate, and instead boost supplies to prevent a damaging price shock.Discontent with economic stagnation has sparked the biggest street protests since 2009 in Iran, rekindling memories of the 1979 revolution that paralyzed crude production. In Venezuela, food shortages and rampant inflation have threatened to trigger a massive social collapse. Even if the country can avoid that, the industry has already been hit so hard that production could slump anyway.
  • Mission Accomplished.  Russian President Vladimir Putin could heed pressure from his country’s biggest oil companies for a swift exit. Though he gave his blessings to extending the deal, Rosneft PJSC and Lukoil PJSC have warned that if the measures drag on too long they could lose market share to rivals. With oil prices rising and stockpiles draining, Russia could persuade other countries to end the deal before its time.
  • Temptation to Cheat. Last year, Iraq -- which initially resisted output curbs as it recovered from years of war -- was so slow to deliver on promised cuts that its petroleum minister was summoned to Riyadh. The country’s very public ambitions to expand capacity as soon as possible only add to doubt about its commitment.
  • Too Much of a Good Thing.  The OPEC-Russia strategy has always contained a contradiction: by boosting oil prices, they risk triggering a fresh surge of output from the original source of the glut -- U.S. shale. If the U.S. opens up more shale taps, Commerzbank AG says OPEC and Russia’s logical response will be to abandon their strategy and return to the days of pump-all-you-can. The unlikely bromance could turn out to be a victim of its own success.

Will new tax spur economic reform in UAE and Saudi? --  Saudi Arabia and the United Arab Emirates are ringing in the new year with the introduction of a five percent value-added tax (VAT) on most goods and services, in an effort to boost revenue and revive their oil-dependent economies.The tax, which goes into effect on Monday, will be imposed on a wide range of commodities, including food, clothes, fuel, entertainment, electronics, and telephone, water and electricity bills.Rent, real estate sales, airline tickets and school fees are excluded from the scheme.The move is part of a region-wide measure agreed upon by the six Gulf Cooperation Council (GCC) member states in Riyadh in 2016."The imposition of VAT will help to raise tax revenues of the Saudi government to be utilised for infrastructure and developmental works," Mohammed Al-Khunaizi, a member of Saudi's Shoura Council, said on Sunday. The other GCC members - Qatar, Bahrain, Oman and Kuwait - have until January 1, 2019, to impose the tax.

Saudis Get Extra Pay After Price Surge Sparked Public Complaints - King Salman ordered extra pay for Saudi government workers and soldiers this year after the implementation of value-added taxation and a surge in fuel prices stirred grumbling among citizens, highlighting the kingdom’s struggle to overhaul its economy without risking a public backlash.Royal orders issued early Saturday restored an annual pay raise for Saudi civil servants, suspended as part of attempts to rein in a hefty public-sector wage bill. The monarch also ordered a 5,000-riyal ($1,333) bonus for soldiers fighting in the kingdom’s war in Yemen and granted Saudis working for the state an extra 1,000 riyals a month as a “cost of living” allowance for a year. Saudi citizens, including some prominent writers, took to social media and television to complain about rising prices after the introduction of a 5 percent VAT as well as a substantial increase in electricity tariffs and gasoline prices as of Jan. 1. The measures were part of Crown Prince Mohammed bin Salman’s plan to raise non-oil revenue and repair public finances strained by low oil prices. The handouts show how hard it is for Saudi rulers to overhaul a decades-old social contract based on government largesse for political loyalty, even after Prince Mohammed, 32, tightened his grip on power to emerge as the kingdom’s predominant leader. Last year, King Salman also reversed cuts to public sector salaries. Finance Minister Mohammed Al-Jadaan, appearing on state television to explain the reasons behind the price increases, struggled to keep up with repeated questions over the impact on citizens. Calls for the return of annual pay raises for public sector workers were persistently trending on social media. King Salman said he issued the orders after Prince Mohammed, his son and heir, explained that the recent measures “would increase the burden on some citizens,” according to the royal decree published by the official Saudi Press Agency.The handouts will cost the state more than 50 billion riyals, Saud Al-Qahtani, an adviser to the royal court, said on his Twitter account.

Iran blocks social media access as protests turn deadly | South China Morning Post: Iran on Sunday blocked access to Instagram and a popular messaging app used by activists to organise and publicise the protests now roiling the Islamic Republic, as authorities said two demonstrators had been killed overnight in the first deaths attributed to the rallies. The demonstrations, which began on Thursday over the economic woes plaguing Iran and continued on Sunday, appear to be the largest since protests following the country’s 2009 presidential election. They were fanned in part by messages sent on the Telegram messaging app, which authorities blocked on Sunday along with the photo-sharing app Instagram, which is owned by Facebook.Many in Iran are learning about the protests and sharing images of them through Telegram, a mobile phone messaging app popular among the country’s 80 million people. On Saturday, Telegram shut down one channel on the service over Iranian allegations it encouraged violence, something its moderator denied. On Sunday, Telegram CEO Pavel Durov wrote on Twitter that authorities had blocked access to the app. “Iranian authorities are blocking access to Telegram for the majority of Iranians after our public refusal to shut down … peacefully protesting channels,” he wrote Iran’s state television news website,, quoted an anonymous source saying that social media in Iran would be temporarily limited as a safety measure.“With a decision by the Supreme National Security Council, activities of Telegram and Instagram are temporarily limited,” the report said, without elaborating.

Iran protests: 'Iron fist' threatened if unrest continues - BBC News: Iran's Revolutionary Guards have warned anti-government protesters they will face the nation's "iron fist" if political unrest continues. Three days of demonstrations over falling living standards have become the biggest show of dissent since huge pro-reform rallies in 2009. A Revolutionary Guards commander said the protests had degenerated into people chanting political slogans and burning public property. Two protesters died of gunshot wounds. The authorities in Dorud in western Iran said security forces did not open fire on demonstrators, and blamed the deaths instead on Sunni Muslim extremists and foreign powers. Correspondents say the reference to foreign intelligence agencies was intended to mean Saudi Arabia. Iran has imposed "temporary" restrictions on social networks Telegram and Instagram. The decision was taken "to maintain tranquillity and security of society", a source told state news agency IRIB. Telegram CEO Pavel Durov tweeted that the action was taken after his company refused to shut down channels on the messaging app used to organise peaceful protests.

Jihadist Group Blows Up Oil Pipeline In Iran, In Midst Of Protests - Overnight Friday a well-known Sunni jihadist group which operates in Iran posted a video to its media accounts purporting to show an attack on an oil pipeline in Iran's southern Khuzestan province, which has historically been a restive area in which Sunni Arab separatists have been active. Though Iran has yet to confirm the attack, the terror group Ansar al-Furqan Ahwaz Martyrs Brigade claimed responsibility in an official statement, which noted "This operation was conducted to inflict losses on the economy of the criminal Iranian regime." Ansar al-Furqan is a relatively new group, having been founded in 2013, and has ties to Syria’s Al-Qaeda-linked Al-Nusra Front (currently called Ha’yat Tahrir al-Sham). It is comprised primarily of Baluchi Salafist militants which are hostile to the Iranian government - the Baluch people, an entho-linguistic group, are spread primarily throughout southern Iran, Afghanistan, and western Pakistan. Both the video and written statement identify the location of the attack as near near Omidiyeh, a city in Khuzestan Province - an area of the country which has witnessed periodic uprisings and sporadic bombings going back to 1979 and into the mid-2000's. Meanwhile, late in the day Friday the US State Department issued a formal condemnation of the Iranian government, calling the regime "a rogue state whose chief exports are violence, bloodshed, and chaos" while announcing support for protesters. As we noted, statements now coming from US officials fit a familiar script which seem to roll out when anyone protests in a country considered an enemy of the United States - no matter the motivations and grievances of the demonstrators, whether economic and local or otherwise.

Rouhani defends right to protest but rejects violence -- Iran's President Hassan Rouhani says people in the country have the right to protest but warned that violence is unacceptable. His comments on Sunday were the first since widespread anti-government protests, the biggest show of dissent since huge rallies in 2009, broke out in the Islamic Republic earlier this week. "It should be clear to everyone that we are people of freedom. According to the constitution and citizens' rights, people are free to express their criticism and to protest," Rouhani said in televised comments from Iran's capital, Tehran. "However, we need to pay attention to the manner of that criticism and protest. It should be in such a way that it will lead to the improvement of the people and state," he added. "People have the right to protest, but those demonstrations should not make the public feel concerned about their lives and security."Iranians began protesting on Thursday in the second-largest city of Mashhad, rallying against the clerical elite, which they blame for economic hardships and alleged corruption. The rallies have since gained momentum and spread to other cities, including Tehran, where clashes between students and police were reported on Saturday. On Sunday, Mehr, the semi-official Iranian news agency, reported that at least two protesters died on Saturday night in Dorud, a city in western Iran, although there is confusion over who is responsible for the deaths. Habibollah Khojastepour, security deputy of the governor of Lorestan province, said the presence of "agitators" prevented a peaceful end to the protest, according to Mehr. Khojastepour said neither police nor security forces fired at the protesters. He did not provide a reason for their deaths.  

Death toll jumps as Iran protests continue -- At least 12 people have been killed in Iran, according to local news media reports, as anti-government demonstrations continued across the country for a fourth night.Thousands have engaged in protests since the first rallies against the high cost of living on December 28, marking the biggest show of dissent in Iran since huge rallies took place in 2009.State TV reported on Monday that 10 people were killed in several cities on Sunday, and showed footage of damage allegedly caused by protesters.The report did not provide further details about the deaths.Local media reports said that of those who died, six were killed in Twiserkan, in Hamedan province, and three others in Shahin Shahr, in Esfahan province.Another person was killed in Izeh, while two others died in Dorud, in western Iran, late on Saturday. Some 400 people have been arrested across Iran in the protests, state news agencies have reported.

Iran – Early U.S. Support For Rioters Hints At A Larger Plan -- In Iran - Regime Change Agents Hijack Economic Protests we looked at the developing U.S.-Israeli operation to instigate a revolt in Iran. What follows are a few more background points and a view on the developments since. A color revolution or revolt in Iran have only little chances of success. But even as the fail they can be used as pretext for additional sanctions and other anti-Iranian measures. The current incidents are thus only one part of a much larger plan. The "western" democracies are used to distinguish political parties as left or right with fixed combinations of economic and cultural policies. The "left" is seen as preferring a social economy that benefits the larger population and as cultural liberal or progressive. The right is seen as cultural conservative with a preference for a free market economy that favors the richer segments of a nation. The political camps in Iran are different. The conservatives, or "principalists", are cultural conservative but favor economic programs that benefit the poor. Their support base are the rural people as well as the poorer segments of the city dwellers. The last Iranian president near to them was Mahmoud Ahmedinejad.  The current Iranian president Hassan Rouhani is a member of the "reformist" camp. His support base are the merchants and the richer parts of the society. He is culturally (relative) progressive but his economic polices are neoliberal. The protests on December 28 and 29 were about these and other economic issues. Such protests have regularly occurred in Iran throughout the decades. But the current ones were soon hijacked by small groups which chanted slogans against the Iranian system and against the strong Iranian engagement in Syria and Palestine. These are not majority positions of the 80 million inhabitants of Iran:  The small groups that hijacked the protests against Rouhani's economic polices were heavily promoted by the usual suspects of U.S. influence operations. Avaaz, the RAND cooperation, Human Rights Watch and others immediately jumped onto the bandwagon. (True to form HRW's Ken Roth used a picture of a pro-government rally to illustrate the much smaller anti-government protests.) The smaller groups that hijacked and publicized the demonstration seem well coordinated. But they are far from a genuine movement or even a majority. On the morning of December 30 large demonstrations in support of the Iranian republic were taking place in several cities. In Tehran several thousand people took part.

Iran protests have violent night; at least 13 dead overall (AP) — Protests across Iran saw their most violent night as "armed protesters" tried to overrun military bases and police stations before security forces repelled them, killing 10 people, Iranian state television said Monday. The demonstrations, the largest to strike Iran since its disputed 2009 presidential election, have seen five days of unrest across the country and a death toll of at least 13 with the slaying of a police officer announced late Monday. The protests began Thursday in Mashhad over Iran's weak economy and a jump in food prices and have expanded to several cities, with some protesters chanting against the government and the supreme leader, Ayatollah Ali Khamenei. Hundreds of people have been arrested. Iranian state television aired footage of a ransacked private bank, broken windows, overturned cars and a firetruck that appeared to have been set ablaze. It said 10 people were killed by security forces during clashes Sunday night. "Some armed protesters tried to take over some police stations and military bases but faced serious resistance from security forces," state TV said. In a later report, state TV said killed six people were killed in the western town of Tuyserkan, 295 kilometers (185 miles) southwest of Tehran, and three in the town of Shahinshahr, 315 kilometers (195 miles) south of Tehran. It did not say where the 10th person was killed.

China Orders Media To Stop Reporting Iran Unrest, Desires Stability For Massive Investments As widespread protests in Iran have now reached a full week, a new censorship directive from the Chinese government has ordered newsrooms across the nation to cease reporting on Iran demonstrations. The leaked directive, which has been translated and published by the China Digital Times, notifies journalists to "not report any more on the demonstrations in Iran" and that "follow-up reports require further notice from superiors." The China Digital Times reports the government instructions as follows:The following censorship instructions, issued to the media by g  overnment authorities, have been leaked and distributed online. The name of the issuing body has been omitted to protect the source.Do not report any more on the demonstrations in Iran. Follow-up reports require further notice from superiors. Relevant information that has already been transmitted and is from an authoritative source and is compliant should no longer be hyped but do not delete it. [Chinese] News of the Iran protests have been trending on Chinese social media and have received intensive coverage in state and independent media. New York Times Hong Kong correspondent Austin Ramzy observed, "Chinese activist Twittersphere has been very focused on the Iran protests, cheering the expanding demonstrations, with the hope that something like this could happen at home." However, authorities in Beijing have as their chief driving concern that Iran maintain stability as China has already positioned itself to be the chief international investor in Iranian infrastructural projects, to the tune of tens of billions of dollars. When asked about the Iran protests at a regularly scheduled press conference on Tuesday, China’s foreign ministry spokesperson Geng Shuang simply gave a one-sentence answer and moved on, saying, “China hopes that Iran can maintain stability and achieve development.” This decidedly conservative and reserved pro-Tehran response has much more to do with protecting Chinese investment and trade growth in an emerging market, than it does over questions that Iran protests could inspire similar movements domestically.

Iran deploys Revolutionary Guards to quell 'sedition' in protest hotbeds (Reuters) - Iran’s elite Revolutionary Guards have deployed forces to three provinces to put down anti-government unrest after six days of protests that have rattled the clerical leadership and left 21 people dead. The protests, which began last week over economic hardships suffered by the young and working class, have evolved into a rising against the powers and privileges of a remote elite, especially supreme leader Ayatollah Ali Khamenei. The unrest continued to draw sharply varied responses internationally, with Europeans expressing unease at the delighted reaction by U.S. and Israeli leaders to the display of opposition to Iran’s clerical establishment. Defying threats from the judiciary of execution if convicted of rioting, protests resumed after nightfall with hundreds hitting the streets of Malayer in Hamadan province chanting: “People are begging, the supreme leader is acting like God!” Videos carried by social media showed protesters in the northern town of Nowshahr shouting “death to the dictator”. In a sign of official concern about the resilience of the protests, the Revolutionary Guards commander, Major General Mohammad Ali Jafari, said he had dispatched forces to Hamadan, Isfahan and Lorestan provinces to tackle “the new sedition”. Most of the casualties among protesters have occurred in those regions of the sprawling Islamic Republic. The Revolutionary Guards, the sword and shield of Iran’s Shi‘ite theocracy, were instrumental in suppressing an uprising over alleged election fraud in 2009 in which dozens of mainly middle-class protesters were killed. Khamenei condemned that unrest as “sedition”. 

Iran protests could hurt clerics but Rouhani has most to lose, say insiders (Reuters) - Iranian authorities are concerned that nationwide unrest will undermine the clerical establishment and want to stamp out the protests quickly, senior government officials say. But the person with the most to lose is President Hassan Rouhani. While several senior officials said there was concern that prolonged unrest would damage the legitimacy and influence of the country’s religious leaders, few insiders see the unrest as an existential threat to that leadership, which has ruled since the 1979 revolution and is now controlled by Supreme Leader Ayatollah Ali Khamenei, the ultimate authority in Iran’s system of dual clerical and republican rule. The biggest loser, they say, is likely to be Rouhani, who is much more closely tied to the country’s economic policies. “Of course Rouhani and his government will have less power afterwards, especially because his economic policy was criticized during the unrest,” said political analyst Hamid Farahvashian. “He will be a lame-duck president and Khamenei will have more power.” Much of the protesters’ anger has focused on what Rouhani and his government have failed to deliver: an economic boom promised as the payoff for the 2015 deal that curbed Iran’s disputed nuclear program in return for world powers lifting sanctions. Protesters are angry that Iran’s youth unemployment rate is edging towards 30 percent, want higher wages and an end to alleged graft. They have chanted slogans against all of Iran’s leaders, including the clerical elite, and attacked police vehicles, banks and mosques as the unrest widened. “The continuation of the protests will lead to a legitimacy crisis,” said one senior official close to Rouhani, asking not to be named due to the sensitivity of the issue.

US Intelligence Reportedly Gives Israel Green Light To Assassinate Iran's Top General -  According to reports circulating widely in Israeli media today, the United States has quietly given Israel the green light to assassinate Iran's top military officer, Iranian Revolutionary Guards al-Quds Force commander Maj. Gen. Qassem Soleimani. The leader of Iran's most elite force also coordinates military activity between the Islamic Republic and Syria, Iraq, Hezbollah, and Hamas - a position he's filled since 1998 - and as Quds Force commander reports directly to the Supreme Leader of Iran, Ali Khamenei, and oversees Iran's covert operations in foreign countries. Iran's Revolutionary Guards have vowed to crack harshly down on protests currently gripping multiple major cities across the country, now in their fifth day, and after a particularly bloody night which saw 12 demonstrators killed - some of them reportedly shot by security forces. The report, though unconfirmed, originated in a Kuwaiti newspaper and is now going viral through a Times of Israel story. The Times of Israel summarizes the context as follows: Thursday’s report by al-Jarida, which has been known to publish improbable-sounding stories about Israel, was widely picked up by Israeli media. There was no immediate reaction to the report from Jerusalem or Washington. Three years ago, Israel came close to assassinating Soleimani near Damascus, al-Jarida quoted unnamed source as saying, but the Americans tipped off the Iranians against the background of intense disagreement between Washington and Jerusalem.  And concerning the current go-ahead for new assassination plans reportedly given by US intelligence to the Israelis: The source was quoted by the paper as saying that Soleimani’s assassination would serve both countries’ interests and that US authorities have given Israel the go-ahead to carry it out.

As guns fall silent, Russia to shape Syria's political endgame | Asia Times: Many analysts predict that the upcoming year will witness a phased end to the Syrian conflict — at least, militarily. According to the Russian Ministry of Defense, 85% of Syrian territory has been liberated from ISIS and other groups that had controlled entire cities and towns since 2012. Aleppo was re-taken by the Russian and Syrian armies in December 2016, followed more recently by Albukamal and al-Mayadeen in the Syrian northeast. In early December 2017, President Vladimir Putin landed in Syria and, from Russia’s military base in Hmeimeem, on the Syrian coast – he announced a thundering “mission accomplished,” promising to bring Russian troops back home in the weeks and months ahead. Excess troops that had been shipped to Syria in 2017 will be returning to Russia in the first weeks of 2018.This will not apply to the 1,200 Russian military police deployed in the countryside of Aleppo and Damascus, or to the 1,000 troops monitoring the ceasefire in southern Syria. The Hmeimeem base will remain intact – it was leased to the Russians in January 2017 for 49 years, extendable for another 25. Putin hopes that other stakeholders in the Syrian conflict – like Iran, Hezbollah, Turkey, and the United States – will take their cue from him and start evacuating soon. Politically, Putin hopes to jumpstart peace talks at the Red Sea resort of Sochi some time in January or February. Over 1,000 Syrians will be invited to attend a “national dialogue conference” hosted by the Russian Foreign Ministry, ahead of Russia’s presidential elections in March. They will be tasked with signing off an endgame to the Syrian conflict, in accordance Putin’s terms and conditions. 

Likud party calls for de-facto annexation of Israeli settlements (Reuters) - Prime Minister Benjamin Netanyahu’s Likud party unanimously urged legislators in a non-binding resolution on Sunday to effectively annex Israeli settlements in the occupied West Bank, land that Palestinians want for a future state. By enacting civilian law over settlements, the move could streamline procedures for their construction and expansion. That land is currently under military jurisdiction and Israel’s defense minister has a final say on building there. The settlers are subject to Israeli civilian law. “We will now promote the recognition of our sovereignty of the Jewish settlements in Judea and Samaria (the West Bank). ... We must begin to enact this sovereignty, we have the moral right and obligation towards our settler brothers,” Public Security Minister Gilad Erdan told a meeting of Likud’s Central Committee. Netanyahu is not bound to follow the resolution. He did not attend the meeting, which attracted several hundred delegates including ministers, legislators and party officials. The Likud Central Committee is the party’s governing body. At least two previous Likud Central Committee decisions have been ignored by party leaders: Likud party members vote during a Likud Central Committee meeting in Airport City, Israel December 31, 2017. REUTERS/Amir CohenIn 2002, it voted against the creation of a Palestinian state, but then-Prime Minister Ariel Sharon said he would act as he saw fit and Netanyahu in 2009 voiced conditional support for the establishment of a Palestinian state in a landmark speech. Political commentators said the decision might bolster right-wing support for Netanyahu, who could seek a public mandate in an early election as he awaits possible criminal indictments against him on corruption suspicions. He denies wrongdoing.

 Why Is the State of Israel So Afraid of 16-Year-Old Ahed Tamimi? -- Sixteen-year-old Ahed Tamimi was back in court Thursday, with the judge ruling for the third time that her detention is extended, this time for another five days. Over the past week and a half, Ahed has been shuffled between numerous Israeli prisons and police stations. She has been held in cold isolation cells with cameras pointed at her 24 hours a day. Repeatedly, without a parent or lawyer present, they have attempted to interrogate her. The reasoning for the judge’s rulings to extend her detention is that she “poses a risk” to the military and the Israeli government's case against her. Israel is right that Ahed Tamimi poses a risk. But it isn’t a risk to one of the most heavily armed and advanced militaries in the world or to the legal case being built against her. The risk she poses is in her refusal to submit to the Israeli demand that Palestinians acquiesce to their own occupation. Israeli logic is that Palestinians should cooperate with their own oppression. They should move quietly through the checkpoints, open their bags, not look their occupiers in the eye and not challenge or protest the theft of their lands, resources and freedoms. Israeli logic is that if they don’t like it, they can leave. Actually, they would strongly prefer that Palestinians leave. The strategy is to make life so unbearable for Palestinians, that they leave willingly. This even has a name: “voluntary transfer.” On Friday, December 15, during a protest of President Trump’s announcement of Jerusalem as the capital of Israel, Ahed’s 14-year-old cousin Mohammed Tamimi was shot in the face with a rubber bullet. He was taken to the hospital where he required surgery and a was placed in a medically induced coma. A few hours later, when armed soldiers came to Ahed’s home demanding to enter, she pushed back. She slapped and kicked them, and screamed that they could not come in.

Israel indicts Palestinian teen activist Ahed Tamimi - Israeli authorities are seeking 12 charges against Ahed Tamimi, a prominent 16-year-old Palestinian activist filmed slapping and kicking two Israeli soldiers in the occupied West Bank.The teenager was detained on December 19, four days after the video showing her confronting the soldiers outside her family's home in the village of Nabi Saleh went viral.  The incident occurred moments after Israeli forces had shot Ahed's 15-year-old cousin point-blank in the face with a rubber bullet.The wounded minor experienced severe internal bleeding and was put in a medically-induced coma for 72 hours.Ahed's 20-year-old cousin Nour, who also appeared in the video, as well as her mother Nariman, were arrested soon afterwards.  During a hearing on Monday at Israel's Ofer military court near Ramallah, Ahed faced 12 charges, including assaulting an Israeli soldier, interfering with a soldier's duties and two past instances of stone-throwing, according to her lawyer Gaby Lasky.  Lasky told Al Jazeera that Nariman was charged with "incitement" for uploading the video on social media, as well as another charge of assault. Ahed's father, Bassem, told Al Jazeera that it was very likely his daughter would be sentenced and imprisoned over the charges. "They built the case around her specifically to try to keep her in prison as long as they can," he said.

Nabi Saleh Is Where I Lost My Zionism -- A short video of 16-year-old Ahed Tamimi slapping an Israeli soldier has dominated the Israeli media for the past week, and received prominent coverage internationally as well. Ahed, a Palestinian girl from the West Bank village of Nabi Saleh, makes a big impression with her eye-catching mane of blonde hair, the fierce, intelligent expression in her blue eyes — and her fearlessness. One of the most striking aspects of the immense discussion generated by the video is the near-binary contrast between what Israelis and their advocates see, and what everyone else sees. For Israelis, one of their soldiers was provoked, almost unbearably, but still managed to rise above the situation. For almost everyone else, the video shows an unarmed adolescent — who could easily, based on her appearance, be an Israeli teenager shopping at the mall — bravely confronting an armed soldier in her own village. Even without knowing the circumstances, a fully-grown man in combat gear and carrying a powerful weapon refraining from hitting a much smaller, unarmed adolescent girl, seems not remarkably praiseworthy but rather a response predicated on basic humanity and ethics. The Israeli media has, for the most part, promoted the army’s narrative about the incident — of a restrained and mature soldier who dealt admirably with a difficult and stressful situation involving enemy actors. In the segment below, Yaron London, the host of an eponymously named primetime news magazine program on Channel 10, mirrors the perspective of the army. London’s guests are Or Heller, the station’s military affairs correspondent, and Jonathan (Yonatan) Pollak, a veteran anti-occupation activist:

Palestinians are watching Saudi Arabia closely - Palestinians have been carefully watching Saudi Arabia drawing closer to Israel.The past few months have seen not only a flood of Saudi statements on social media supporting normalisation with Israel (some saying that Saudi is "more important" than Palestine and others apparently dreaming of Israel becoming Saudi's top vacationing spot), but also a flurry of diplomatic activity between Riyadh and Tel Aviv.Saudi and Israeli political leadership agree on a number of issues, the most important of which is the need to curb Iran's growing influence and to keep the US engaged in the Middle East. Pursuing these common interests, the Saudis and the Israelis have intensified their efforts for a formal normalisation of relations.In June 2017, Anwar Eshki, former Saudi general and current head of the Middle East Center for Strategic and Legal Studies, said that Saudi Arabia would accept normalisation with Israel if it, in turn, accepted the Arab peace initiative. He also said that if Saudi Arabia did so, the rest of the Islamic world would follow suit.In October, former head of Saudi intelligence Prince Turki al-Faisal took part in a forum in New York with the former head of Mossad, Efraim Halevy. In November, Israeli Chief of Staff General Gadi Eizenkot had an interview with Saudi website Elaph. The same month, the Israeli minister of communications, Ayoub Kara, invited Saudi Mufti Abdulaziz Al Sheikh to visit Tel Aviv.

South Korea Seizes 2nd Ship Suspected Of Violating UN Sanctions On Oil Sales - After we reported yesterday that South Korean authorities had seized a ship suspected of illegally delivering oil to North Korea via clandestine ship-to-ship transfers, Reuters  reported Sunday that the South also seized a Panama-flagged vessel suspected of violating UN sanctions restricting oil sales to North Korea. The seizure was the second to be revealed by South Korea within a few days, as the United Nations steps up efforts to squeeze essential oil supplies to the reclusive North following its nuclear or ballistic missile tests. The ship, the KOTI, was seized at Pyeongtaek-Dangjin port, the official told Reuters, without elaborating, due to the sensitivity of the issue. The port is on South Korea’s west coast, south of Incheon. A marine official also confirmed the seizure, which he said was done “recently”. The KOTI’s estimated time of arrival at the port was Dec. 19, according to VesselFinder Ltd., a tracking service provider. The ship can carry 5,100 tonnes of oil and has a crew mostly from China and Myanmar, Yonhap News Agency reported, adding that South Korea’s intelligence and customs officials are conducting a joint probe into the vessel. A Foreign Ministry spokesman confirmed the probe, declining to provide details.

Chinese Military Rushed To North Korean Border In "Preparation For War": Report - A Chinese province along the border with North Korea is seeing an influx of Chinese tanks, soldiers, and military trucks, according to the  DailyNK and the Daily Star.  According to the same report, People’s Liberation Army (PLA) forces have been building up military assets in the cover of the night around the Tumen River in Yanji city, Jilin province, which borders North Korea. One source told the Daily NK, “there were so many soldiers in the car that there was a lot of traffic. I have not seen so many soldiers trucking to Yanji so far.” Another source said, "Chinese troops are gathering around the Yalu and Tumen rivers. It is also heard that the tanks are moving to the North and the Chinese border." Chinese authorities have reportedly told local residents near the Northern Korean border: Trump to hit North Korea in the New Year, we are preparing for war on the peninsula.”  And according to the Daily Star: Chinese military officials have recently conducted the so-called “war ceremony” – urging their troops to be ready to fight. If the media report is accurate, it would suggest that China - fearing the worst - is preparing for war on the Korean Penisula. Previously, internal documents leaked from China’s main state-owned telecommunications company shows three villages and cities in the northeastern border province of Jilin, have been designated for refugee camps-if war breaks out. China is afraid a swarm of refugees from North Korea could cross the Tumen River into China.Zhang Liangui, a professor of international strategic research at the Communist Party’s Central Party School said, “it is highly possible that there is a conflict between North Korea and the United States now. What China does here is to be prepared for any kind of situation happening on the Korean Peninsula.”While China prepares for war on the Korean Peninsula by moving military assets to border cities along the Tumen River. There is another threat breaking Tuesday morning: North Korea is preparing to test the largest ICBM to date.

North Korea Calls Hotline to South for the First Time in Two Years - Korea contacted authorities in Seoul over a hotline for the first time in about two years, paving the way for a thaw during the Winter Olympics despite U.S. President Donald Trump’s fresh taunts at Kim Jong Un. Officials from both countries spoke several times Wednesday to conduct technical checks before agreeing to stop for the day, according to Lee Yeon-du, an official with South Korea’s Unification Ministry. President Moon Jae-in has proposed holding talks Jan. 9 at the border village of Panmunjom, which would be the first formal gathering between the two sides since 2015. The move shows further progress after Kim called for improved relations with South Korea in a New Year’s Day address. Tensions over North Korea’s nuclear program had threatened to hang over the Games in Pyeongchang, a city about 50 miles (80 kilometers) from the border dividing the Korean Peninsula. The detente between the two Koreas progressed even as Trump continued a war of words with Kim, who warned on Monday that the nuclear button is “always on my desk.” The U.S. president responded Tuesday night, saying on Twitter that he had “a much bigger & more powerful one than his, and my Button works!”

North Korea: South proposes Olympics delegation talks - BBC News: South Korea has offered high-level talks with North Korea next Tuesday to discuss its possible participation in the 2018 Winter Olympic Games. The North's leader, Kim Jong-un, said earlier he was considering sending a team to Pyeongchang in South Korea for the Games in February. He said the two sides should "urgently meet to discuss the possibility". South Korea's president said he saw the offer as a "groundbreaking chance" to improve relations. At a cabinet meeting on Tuesday, Moon Jae-in also said the North's nuclear programme would be the backdrop of any sporting discussions. Where might they meet? South Korean Unification Minister Cho Myoung-gyon proposed a meeting at Panmunjom, the so-called "truce village".The village, in the heavily guarded demilitarised zone (DMZ) at the border, is where the Koreas have historically held talks.It is not yet known who, if anyone, will attend the proposed talks as North Korea has yet to respond. President Moon said he wanted his ministers to act fast to ensure the North's delegation attended. If the two countries do meet, Hyung Eun Kim from the BBC's Korean service says, they are expected to talk logistics:

  • What route the North might take into the host country
  • Whether the athletes would come with a cheer squad
  • Whether the two countries would issue a joint declaration

Kim Jong-un’s Overture to South Korea Signals Possible Thaw in Nuclear Crisis — North Korea’s leader, Kim Jong-un, moved Monday to ease his country’s isolation by offering to send a delegation to the Winter Olympics in South Korea next month, even as he claimed to have accomplished the ability to launch a nuclear missile at the mainland United States. Mixing the nuclear threat with an overture for easing tensions on the divided Korean Peninsula, Mr. Kim proposed immediate dialogue with South Korea to discuss the North’s participation in the Olympics. If such talks were held, they would mark the first time the two Koreas have had an official dialogue since the South’s new president, Moon Jae-in, took office in May. Mr. Moon has doggedly championed dialogue with the North, even as President Trump has threatened military action to stop the North’s nuclear weapons program. “I am willing to send a delegation and take necessary measures, and I believe that the authorities of the North and South can urgently meet to discuss the matter,” Mr. Kim said in his annual New Year’s Day speech, broadcast on North Korea’s state-run television. “We sincerely hope that the South will successfully host the Olympics.” “Above all, we must ease the acute military tensions between the North and the South,” Mr. Kim said. “The North and the South should no longer do anything that would aggravate the situation, and must exert efforts to ease military tensions and create a peaceful environment.” But Mr. Kim also reiterated his country’s achievements with its nuclear weapons program. “It’s not a mere threat but a reality that I have a nuclear button on the desk in my office,” he said. “All of the mainland United States is within the range of our nuclear strike.”

South Korea Proposes Border Talks With North Korea After Kim’s Overture - NYT — South Korea on Tuesday responded to an overture from the North and proposed holding high-level talks between the countries on their border next week. North Korea’s leader, Kim Jong-un, had suggested on Monday that the countries open dialogue on easing military tensions and on the possibility of the North’s participating in the Winter Olympics in the South, even as he noted that he now had a “nuclear button” on his desk.President Trump responded somewhat cautiously to Mr. Kim’s overture early Tuesday, but later in the day the “nuclear button” comment drew a more robust response.In a Twitter message posted Tuesday night, Mr. Trump, referring to Mr. Kim, said: “Will someone from his depleted and food starved regime please inform him that I too have a Nuclear Button, but it is a much bigger & more powerful one than his, and my Button works!”North Korean Leader Kim Jong Un just stated that the “Nuclear Button is on his desk at all times.” Will someone from his depleted and food starved regime please inform him that I too have a Nuclear Button, but it is a much bigger & more powerful one than his, and my Button works! — Donald J. Trump (@realDonaldTrump) Jan. 3, 2018 The Trump administration earlier had sent a series of mixed messages that strongly suggested it was still trying to figure out the meaning of Mr. Kim’s overture and the South’s response.

South, North Korea to talk after military drills postponed  - North Korea has agreed to South Korea’s proposal for “high-level” inter-Korean talks at the truce village of Panmunjeom next Tuesday, Jan. 9, as a series of rapid rapprochement moves ahead of the Winter Olympics gain momentum. The North Korean acceptance was delivered early Friday, the morning after South Korean President Moon Jae-in and US President Donald Trump agreed, during a late-night (Korea-time) phone call Thursday to suspend military exercises during the Winter Olympics, set for Pyeonchang, South Korea, in February. Seoul’s Unification Ministry announced in a briefing Friday morning that North Korea had agreed to the talks, and the agenda would include how to improve inter-Korean ties and the North’s participation in the upcoming Games. The development is the latest in a string of events which follows the North’s re-opening of an inter-Korean telephone hotline on Wednesday, the South’s proposal of talks on Tuesday, and North Korean leader Kim Jong-un’s broadcast of a conciliatory New Year’s message on Monday. Trump said yesterday that the South Korean and US militaries would “de-conflict the Olympics and our military exercises.” Moon said that he would “closely consult” with the United States during upcoming inter-Korean talks. He added, “We are confident that South-North Korea dialogue helps create an atmosphere for dialogue between the US and North Korea on resolving the North Korean nuclear issue.” According to reports from the presidential Blue House in South Korea, the White House in Washington and newswires, the two spoke in a call requested by Moon late Thursday night, Korea-time. Trump also told Moon he would send a senior level delegation to the Olympics. Reuters reported it could include Trump’s high-profile daughter, Ivanka.

China’s Ambitious New ‘Port’: Landlocked Kazakhstan - China’s largest shipping company has poured billions of dollars into buying seaports in Greece and other maritime nations around the world. But the location of its latest big foreign investment has given a curious twist to the expanding ambitions of the China Ocean Shipping Company: The nearest ocean is more than 1,600 miles away. The state-owned Chinese shipping giant, known as COSCO, became the 49 percent owner this past summer of a patch of frost-covered asphalt bisected by railway tracks and lined with warehouses in landlocked Kazakhstan. The barren wilderness close to the border with China stands near the Eurasian Pole of Inaccessibility, meaning that nowhere on the landmass of Europe and Asia is more distant from the sea. But it is here, where huge, Chinese-made cranes load containers onto trains instead of ships, that China and Kazakhstan are embracing what they see as the new frontier of global commerce. Forbidding as it is, the place is a central link in what President Xi Jinping of China trumpets as the “project of the century” — a $1 trillion infrastructure program known as “One Belt, One Road,” which aims to revive the ancient Silk Road and build up other trading routes between Asia and Europe to pump Chinese products to foreign markets. The gamble is not only reshuffling global transport routes, but also shaking up Kazakh and global politics as China inserts itself deeper into a region that R ussia considers squarely within its area of influence. Not least, it is testing the economic logic of China’s ability to carry out its grandest of ambitions.Creating a transport hub — the Khorgos Gateway, a “dry port,” or terminal without water for handling cargo for trains rather than ships — in one of the world’s most remote places has involved an expensive exercise in social engineering.

GM Sold More Cars in China Than in the US (Again) Last Year - General Motors Co. (NYSE: GM) reported sales of 4.04 million vehicles in China in 2017, a third more than the 3.002 million the company sold in the United States. Included in the total for China are sales of Buick, Cadillac and Chevrolet brands, as well as sales made by the company’s joint ventures with China-based automakers Wuling and Baojun. 2017 marks the sixth consecutive year that China has been GM’s top market. Sales of the Cadillac, Buick and Baojun brands set new domestic sales records. Sport utility vehicle sales soared 37% year over year in 2017, and overall sales rose 4.4% for the year. GM’s best-selling brand was Buick, up just 0.2% in 2017 to 1.18 million units. For the month of December only, however, Buick sales rose 20.8% year over year.Sales of the Chevrolet brand rose 4.2% for the year to nearly 550,000 units. In December Chevy sales rose 6.6% year over year to 78,661 units. Cadillac sales increased by 50.8% compared with 2016 sales to nearly 175,500 units. December-only sales rose 29.5% to 17,217 units.

Half of U.S. soy exports to China would fall afoul of new rules - (Reuters) - Half of U.S. soybeans exported to China this year would not meet Chinese rules for routine delivery in 2018, according to shipping data reviewed by Reuters, signaling new hurdles in the $14-billion-a-year business.  More stringent quality rules, which take effect on Jan. 1, could require additional processing of the U.S. oilseeds at Chinese ports to remove impurities. This could raise costs and reduce sales to the world’s largest soybean importer, according to U.S. farmers and traders.  Half of the 473 vessel shipments in 2017 and half the total 27.5 million tonnes of U.S. soybeans exported to China this year contained more than 1 percent of foreign material, exceeding a new standard for speedy delivery, according to U.S. Department of Agriculture (USDA) data compiled by grain broker McDonald Pelz Global Commodities LLC. “It’s going to raise the costs of sending the soybeans to China,” said Richard Wilkins, a Delaware farmer and former chairman of the American Soybean Association.  Growers often receive a higher price for selling soybeans with 1 percent or less foreign material, known as No. 1 grade, because importers pay more for better quality.  Wilkins said the change would deliver higher-grade soybeans to Chinese buyers without requiring a premium price. “They basically want to pay us for No. 2 grade but they want it to be No. 1 grade,” he said.  China will routinely accept U.S. soybean shipments with 1 percent or less foreign material, according to the USDA. Existing specifications for No. 2 soybeans, the type most common in U.S. export contracts, have allowed for up to 2 percent of dirt or weed seeds. The new agreement by the USDA to label cargoes with more than 1 percent foreign material came after China raised concerns about weed seeds in September.

China puts US$15,000 annual personal cap on overseas bank card withdrawals | South China Morning Post: New limits on the amount of money people can withdraw from their Chinese bank accounts while overseas will come into effect on Monday, in the latest move by Beijing to tighten its capital account controls and curb money outflows. Under the new rules individuals will be allowed to withdraw a maximum of 100,000 yuan (US$15,000) a year, regardless of how many separate bank accounts or ATM cards they have, the State Administration of Foreign Exchange said in a statement released on Saturday. The current cap on daily withdrawals remains unchanged at 10,000 yuan per card. Under the current rules, there is an annual ATM withdrawal cap of 100,000 yuan per bank card, but there are no rules to stop people having multiple cards attached to a single account or multiple accounts with different banks. People will still be allowed to hold multiple ATM cards but the annual limit will apply to the combined value of all withdrawals.The foreign exchange regulator said that if any Chinese is found using mainland bank cards to withdraw more than 100,000 yuan from overseas ATMs within a calendar year, they will be barred from taking out cash abroad using any mainland bank card for the rest of the year as well as the following year. The restrictions were a “necessary measure” to curb money laundering, terrorism financing and tax evasion, the regulator said. “International experiences have shown that large cash transactions are often associated with criminal activities such as fraud, gambling, money laundering and terrorism financing,” the statement said. Some Chinese had been found to have used a large number of ATM cards to withdraw sums of cash overseas that far exceeded what was needed for “normal consumption”, according to the regulator. It also warned Chinese not to try evading the rules. “People should not borrow other people’s bank cards or lend them to others to help get around the regulation,” the statement said.

China Launches New Capital Controls: Puts $15,000 Annual Cap On Overseas ATM Withdrawals - According to the SCMP, to greet the New Year, Beijing will implement new limits on the amount of money people can withdraw from their Chinese bank accounts while overseas, "in the latest move by Beijing to tighten its capital account controls and curb money outflows." Under the new rules individuals will be allowed to withdraw a maximum of 100,000 yuan (US$15,000) a year, regardless of how many separate bank accounts or ATM cards they have, China's FX regulator, the State Administration of Foreign Exchange said in a statement released on Saturday. Under current rules, there is an annual ATM withdrawal cap of 100,000 yuan per bank card, but there are no rules to stop people having multiple cards attached to a single account or multiple accounts with different banks. So apparently, the PBOC finally figured out the oldest trick in the book that Chinese residents were using to game the regime. Meanwhile, the existing cap on daily withdrawals remains unchanged at 10,000 yuan per card. People will still be allowed to hold multiple ATM cards but the annual limit will apply to the combined value of all withdrawals.

 Indian low-caste workers disrupt life in Mumbai for second day after clash  (Reuters) - Protests disrupted business in India’s financial hub of Mumbai for a second day on Wednesday as lower-caste Dalits pelted buses, blocked rail lines and shut malls after a clash with right-wing Hindus. Mumbai police advised people to avoid a number of key roads and intersections. Train services, the life line of the city, stalled throughout the day. The Dalit call for a general strike across the western state of Maharashtra led to largely peaceful demonstrations. Police said protesters burned a few buses round the state, while dozens of buses and cars were damaged in Mumbai. The Dalits, who rank at the bottom in India’s ancient caste hierarchy, called the strike in protest against an attack by right-wing groups in the city of Pune, 150 km (95 miles) from Mumbai, on Monday. The attack came as the community was celebrating the 200th anniversary of a battle they won, fighting alongside British colonial forces, against an upper-caste ruler. A 28-year-old man was killed in the clashes, according to the state government. “The government didn’t arrest the perpetrators of violence in Pune. Hindu group members were beating Dalits and the police were just watching from afar,” said protester Sandeep Kamble. “We are demanding the arrest of the culprits.”  Thousands of Dalits hurled stones and caused traffic disruption across Mumbai on Tuesday. Dalits have been ostracized by upper-caste Hindus for centuries for doing jobs they deemed as impure, such as working in tanneries and as picking garbage.

 Pakistan Ditches Dollar In Trade With China In Retaliation For Trump Twitter Meltdown - Less than a day after President Trump slammed Pakistan on Twitter for failure to combat terrorism, stating, "It's not only Pakistan that we pay billions of dollars to for nothing, but also many other countries, and others," and after it was revealed that the US will withhold $255 million in aid, Pakistan's central bank announced it will be replacing the dollar with the yuan for bilateral trade and investment with China."SBP has already put in place the required regulatory framework which facilitates use of CNY in trade and investment transactions," the State Bank of Pakistan (SBP) said in a press release late Tuesday, ensuring that imports, exports and financing transactions can be denominated in the Chinese currency."The SBP, in the capacity of the policy maker of financial and currency markets, has taken comprehensive policy related measures to ensure that imports, exports and financing transactions can be denominated in yuan," Dawn news, Pakistan's most widely read English-language daily, announced while quoting the SBP press release.

Chaos Strikes As 1.4 Million Afghans Have 30 Days To Leave Pakistan - On Wednesday, the Pakistani government ordered 1.4 million Afghan refugees to leave the country in 30 days. According to DAWN, the oldest English-language newspaper in Pakistan, this is the sixth extension given to refugees, which the last expired on December 31. The announcement was made by the National Security Committee and approved by the federal cabinet, which comes after President Trump unleashed a series of tweets accusing Pakistan of harboring terrorist.“The United States has foolishly given Pakistan more than 33 billion dollars in aid over the last 15 years, and they have given us nothing but lies & deceit, thinking of our leaders as fools,” Trump said on New Year’s day.They give safe haven to the terrorists we hunt in Afghanistan, with little help. No more!”Further, the US Ambassador to the United Nations Nikki Haley accused Pakistan of playing “a double game for years” and said President Trump will withhold $225 million in aid to the country.The Pakistani cabinet viewed the American statements as distasteful and detrimental to the bilateral relationship between Pakistan and the United States. The official statement from the PM Office media wing said,“Pakistan has rendered huge sacrifices, both in terms of loss of precious human lives and substantial damage to the economy. Achievements made by Pakistan in curbing the menace of terrorism have been acknowledged throughout the world.” It appears the announcement’s decision was linked to President Trump and US Ambassador to the United Nations Nikki Haley threats to Pakistan, which now requires 1.4 million Afghan refugees, who lost their legal status on December 31, 2017, to migrate back to Afghanistan by end of month, where the infestation of Taliban forces thrive. On top of America’s failed war in Afghanistan, President Trump has ramped up aerial bombings in the country by threefold leading to more destabilization.

Australian Banks Reportedly Freeze Accounts Of Bitcoin Users -  Adding to the pressures on bitcoin early this morning, the Sydney Morning Herald reported that bitcoin users across Australia are reporting that their accounts have been abruptly frozen by the country’s “Big Four” banks. And while the banks have remained largely tight-lipped about the closures, many angry account-holders are jumping to conclusions and blaming the banks for punishing them because of their involvement with bitcoin. Bitcoin investors are claiming Australia's banks are freezing their accounts and transfers to cryptocurrency exchanges, with a viral tweet slamming the big four and an exchange platform putting a restriction on Australian deposits. According to the Herald, cryptocurrency trader and Youtuber Alex Saunders called out National Australia Bank, ANZ, the Commonwealth Bank of Australia and Westpac Banking Corporation on Twitter for freezing customer accounts and transfers to four different bitcoin exchanges  - CoinJar, CoinSpot, CoinBase and BTC Markets. So @NAB @CommBank @WestpacNZ and @ANZ_AU are all freezing customer accounts and transfers to @BTCMarkets @coinspotau @GetCoinJar @coinbase . #Banks can fight it, but people want control of their money #ausbiz #auspol — Nugget's News Australia (@nugget_alex) December 28, 2017   In response, some users complained that their activities with the cryptocurrency had still been described as a "security risk" by their financial institutions.

 Turkish Religious Authority Says Girls As Young As 9 Can Marry - Turkey’s state Directorate of Religious Affairs – popularly known as the Diyanet – infuriated the country’s largest opposition party on Wednesday when it said that, under Islamic law, girls as young as nine could marry.The comments triggered an outpouring of rage on social media, as Turkish women’s groups expressed outrage at the sudden clarification.The directorate responded that it was only defining points of Islamic law.Turkey's legal age of marriage is 18 but the practice of underage weddings in religious ceremonies is widespread. Turkish law also allows 17-year-olds to marry with the consent of their parents or guardian, or 16-year-olds in exceptional circumstances with court approval. The statement on adolescence was posted online by the Diyanet, the state body which administers religious institutions and education, according to the BBC. It said that, according to Islamic law, the beginning of adolescence for boys was the age of 12 and for girls the age of nine. On the same website, it said that whoever reached the age of adolescence had the right to marry. Thirty lawmakers from the main opposition Republican People's Party (CHP) called on the government to launch an investigation into child marriage.

Chaos in Catalonia Hits Barcelona Housing Bubble --Spain’s breakaway region, Catalonia, is riven in two and as unruly as ever. Just about the only thing the latest round of elections accomplished was to confirm just how divided the region is. Catalonia’s failed bid for independence has left behind a stinking economic hangover. None of the lofty promises made by the separatist forces have materialized. Four senior politicians and political activists remain in jail. The European Commission has roundly rejected any possibility of an independent Catalonia remaining in the EU. Yet enough people voted for pro-independence parties to grant them the slimmest of majorities in the region’s parliament. And that’s enough to ensure that nothing much changes. But one thing has changed: The rampant political uncertainty has tempered global appetite for real estate assets in the region’s capital, Barcelona. Back in July, when we last reported on the housing bubble, it looked like this:In June 2017, the median home price in Barcelona soared 21.7% year-over-year, to €3,094 per square meter (ca. $350 per square foot), with double-digit increases across all of the city’s districts. In the city’s old town — ground zero for the tourist industry — the median price skyrocketed 35%. Property speculators, domestic and foreign, were piling in too. And as landlords focused on meeting the much more profitable needs of short-term visitors, rents soared 50% between 2013 and mid-2017. Then, on October 1, the referendum happened and all hell broke loose. Since then, demand for real estate in Barcelona has waned, with the result that property prices fell 1.7% in the fourth quarter from the third quarter, according to Tinsa, the biggest quarterly decline since Spain’s recession ended in 2013.The irony is that Barcelona’s City Council tried just about everything it can to dampen international demand for local real estate, from fining sharing platforms like Airbnb for featuring unlisted tourist apartments on their platforms to sanctioning local banks for refusing to sell or rent out unoccupied bank-owned properties, but to little avail, largely because Spanish national courts keep annulling the legislation it passes.Now, it turns out that all that was needed to halt the property bubble was a constitutional crisis of epic proportions. But even that has barely put a dent in the relentless surge in the price of rents in Barcelona.

Negative interest rates – James Hamilton - A few years ago, most economic models presumed that interest rates were subject to a lower bound of zero. Why lend a dollar to someone who only promises to pay you back 99 cents, when you could just hold on to the dollar yourself? But we now have several years of experience from Sweden, Denmark, Switzerland, Japan, and the European Central Bank in which the central bank successfully induced negative interest rates in hopes of stimulating a greater level of spending on goods and services. We have enough data now to take a look at how much that seems to have accomplished, and update my earlier discussion of this topic. First, it’s useful to understand how the central bank could bring about negative interest rates. Consider for example the European Central Bank. Traditionally the ECB would set two interest rates: a deposit interest rate that the ECB pays to banks on excess reserves held overnight in the banks’ accounts with the ECB, and a marginal lending rate at which banks could borrow overnight from the ECB. The deposit rate would usually set a lower bound on the interest rate at which banks would offer to lend to each other– why would I lend to another bank at 2.5% if I can get 3% on my ECB deposits, which are in effect an overnight loan from my bank to the ECB? The borrowing rate likewise sets a ceiling– why borrow from another bank at 5.5% if the ECB will give me all I want at 5% through their lending facility? The graph below shows how this system worked historically, with the interest rate on 3-month loans between banks moving within the corridor specified by the ECB. The ECB brought its deposit rate all the way to zero in July 2012. When that didn’t seem to be enough, they went to -0.1% in June of 2014, in other words, charging banks a fee (corresponding to a 0.1% annual rate) on their deposits held in excess of requirements. By March of 2016 the ECB had brought the deposit rate all the way down to -0.4%, where it still stands today. Here’s a more close-up view of the most recent data. It’s functioned just like the historical system, with banks lending to each other at a rate that is somewhere between the deposit rate (currently -0.4%) and lending rate (currently +0.25%). The average rate on interbank loans for December turned out to be -0.33%.

Why Are Profit-Making Factories Closing Across England?  naked capitalism Yves here. Even though this post focuses on manufacturers in the UK, the underlying dynamic applies to altogether too many companies that subscribe to the Anglo-American version of capitalism. For instance, one of my brothers works for a coated paper mill that should have been a world class efficient producer for his career and longer. Instead, it has been traded repeatedly, in a portfolio that consists mainly of uncompetitive mills, with a revolving door of multi-milion dollar executives (when paper mill operators go for much less) while skrimping on maintenance, cutting supervisory staff, and reducing the workforce while putting the remaining workers on punishing schedules in the hopes of driving out the more senior union employees who can’t handle the physical demands. While this article focuses on the role of underinvestment, as in capital investment, management can underinvest in other ways too, such as cutting service levels or marketing budgets. Over the holidays, I visited the 35-employee factory of a Naked Capitalism reader who is a specialist in a particular niche manufacturing technology and whose customers are mainly in the auto business. Many of her customers and contacts are small to medium sized private companies. She and they regularly get calls from private equity firms, which she rejects with prejudice. She described in detail how they would come in and wreck the business in less than two years by firing senior employees who were critical to the business because the new owners deemed them to be paid too much, and the MBA or other generalists they would install in their place had no clue as to what it took to serve customers well or run an efficient operation. In keeping with the sort of profit-squeezing that has become common, she had some customers ask her for a 5% rebate off her contract price after she had completed the order. There was no legal basis for doing that, and even more perversely, at least one of these requests came from a customer with a cost plus agreement. It took some doing for her to get through their heads that no one would give that concession on a successfully completed job, and the only way they would get that in the normal course of events would be if they had indicated that desire up front, so the vendors would build extra margin into their contracts.

Britain exploring membership of the TPP to boost trade after Brexit --Britain is in talks to join a trans-Pacific trade group to boost exports after the UK leaves the European Union, according to reports. The government is exploring becoming a member of the Trans-Pacific Partnership to stimulate exports after Brexit next March and has held informal discussions with the group. If the proposals go ahead Britain would be the first member of the trade agreement which does not have borders on the Pacific Ocean or the South China Sea. Liam Fox’s Department for International Trade is believed to be developing the proposals to join the group which is regrouping after it lost the United States, its largest member, when President Donald Trump withdrew from the agreement last year. The Trans-Pacific Partnership is a trade agreement that was signed in February 2016 and has 11 members: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Together they account for more than $10tn in economic output, 13% of the global total, and include nearly 500 million people. The pact is being renegotiated after President Donald Trump’s decision to pull the US out shortly after his inauguration in January 2017, and is now called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP. The US had been key to talks that began in 2010 to create TPP by expanding an existing trade deal. The pact is aimed at deepening economic ties between the Pacific Rim nations by lowering both non-tariff and tariff barriers to trade. Since the US left, the remaining members have agreed to remove a number of intellectual property protections previously backed by Washington. The 11 remaining member states include Australia, Mexico, Singapore and Canada. Trade minister Greg Hands told the Financial Times there was no geographical restriction on Britain joining trade groups. “Nothing is excluded in all of this,” he said. “With these kind of plurilateral relationships, there doesn’t have to be any geographical restriction.”

UK business group tells Theresa May the patience of British companies is ‘wearing thin’ over Brexit - One of the UK’s most influential business groups has warnedTheresa May that the patience of British companies is “wearing thin” over Brexit.The British Chambers of Commerce said its 75,000 members were “dismayed” with the Government’s approach and the apparent “division and disorganisation” within politics. Director general Adam Marshall said firms need clarity and demanded Westminster get to grips with the challenge of EU withdrawal. It comes as the Government prepares to secure terms of the Brexit transition period starting after 2019, with discussion of trade expected to start early by March at latest. The leader of the BCC, which represents firms employing more than five million people, said: “Some very big decisions lie ahead. “Getting the twin challenges of Brexit and the economic fundamentals right will require leadership, consistency and clarity – after a year in which business has been dismayed by what it sees as division and disorganisation across Westminster.”Speaking to The Observer, he went on: “Businesses have been very patient in waiting for clarity on Brexit in the 18 months since the referendum.“That patience is now wearing thin. Businesses want answers, they want clarity and they want results.” The BCC, the Confederation of British Industry, the Federation of Small Businesses, the Institute of Directors and EEF, which represents manufacturers, have all called for the terms of a transition period after the UK leaves the EU in March 2019 to be agreed as soon as possible, to give firms time to plan for the new relationship with Brussels. The longer the process drags on, the less value a transitional deal will have as firms will already have been forced to implement contingency plans that could see them shift work and jobs to one of the 27 other European Union members.

Brexit: the game is never over   -- In my earlier piece, I had remarked on the "genius" of the European Union in being able to harness the essential administrative functions of global bodies to its own ambitions, creating structures and institutions to deal with them. Through these, the EU has gradually transformed its role in trade standards from a rule-maker to a rule-taker, with well over 80 percent of its Single Market acquis coming from sources outside Brussels, with the proportion growing by the year.  For more than ten years, I have been watching this transformation, often through bodies few people realise exist. It enables the EU to maintain its own internal market and the EEA "Single Market" adjunct, with a greater economy of resource, allowing it to focus on developing "high" political areas such as foreign policy and defence. What is fascinating about this transformation is the way it is going on under the noses of the political classes and the know-all pundits, yet it remains unrecognised almost to the point of invisibility. But, before virtually anybody else, the EU had recognised that power and status does not come from making laws. In implementing laws in its own domain, their origin makes absolutely no difference, even to the point where they are attributed to the EU even when they come from elsewhere.

2018: the year that Brexit gets real and the year for getting real about Brexit -- It is eighteen months since the EU Referendum and a great deal has happened since then, but most of it has been removed from any sense of reality. For the first six months all we knew was that ‘Brexit means Brexit’, something which lasted until the Lancaster House speech when it was announced that Brexit meant leaving the single market, the customs union and all institutions and agencies that entailed a role for the ECJ; a position then endorsed by the White Paper. It is worth pausing to reflect on this, because that six month delay gives the lie to the claim that the Referendum vote automatically entailed hard Brexit: had it done so, there would have been no such delay in announcing it. We also now know that the Cabinet did not have a formal discussion of the government’s post-Brexit plan until just a couple of weeks ago, and that no detailed impact assessment of it was made. So it would seem that the hard Brexit decision was made by Theresa May and her advisers, rather than by Cabinet, and with little understanding of what its implications would be. Nevertheless, it was this decision, endorsed by Parliament, which framed the terms of the Article 50 letter and thus fundamentally shaped the way that the phase 1 negotiations occurred. Throughout those negotiations Brexiters continued to spout nonsense – that there would be the ‘row of the summer’ over sequencing; that the EU could ‘go whistle’ for a financial settlement; that ‘no deal’ was a possible or even desirable outcome; that the Irish border issue could be solved by magical, non-existent technologies. All this – along, of course, with the bizarre decision to call an election, and its outcome – was a stupendous waste of time and good will. Thus nine months into the Article 50 period the UK has agreed to pretty much everything the EU set out at the beginning, as was always inevitable unless the government was willing to accept the ‘no deal’ calamity that a breakdown of the talks would mean. Yet even at that point some Brexiters tried to say that the phase 1 agreement wasn’t really binding – only to be immediately disabused of that by the EU.

Brexit: a belief in success -- When Michel Barnier makes a speech or an official statement, we can be more or less assured that a transcript will appear shortly thereafter on the Commission's Europa website. By contrast, when we need to see what David Davis has to say, our own chief Brexit negotiator, like as not we have to read The Daily Telegraph as premium content.   Invariably, one is better off reading M. Barnier – with the added advantage of not having to pay extra just to read his words.  Nevertheless, those who have access to premium content might remind themselves of the futility of relying on Davis, or they might use this paywall-free access to his current authored piece, headed: "How we will deliver the best Brexit in 2018". Following what he calls an "important milestone in Britain's negotiations to leave the EU" which we supposedly reached in December, Davis purports to inform us of what comes next. And right from the first few lines, we're in trouble. Says Davis, "Donald Tusk has approved an immediate start to initial discussions on the future relationship", although he concedes that the "EU guidelines will not be agreed until March, when Michel Barnier and his team will be able to confirm their positions".But if Tusk did approve immediate talks on the future relationship, he failed to mention it in his remarks following the European Council meeting on 15 December. What in fact he did say was that it was "time for internal EU27 preparations" and also "exploratory contacts with the UK, to get more clarity on their vision". This has been a recurring theme, with EU negotiators consistently asking for the UK to state its position.  Then, in direct contradiction of Mr Davis's assertion, the newly approved guidelines state that: … the Union will be ready to engage in preliminary and preparatory discussions with the aim of identifying an overall understanding of the framework for the future relationship, once additional guidelines have been adopted to this effect". In other words, there cannot be and will not be any talks on future relationships until after that March European Council. Until then, most emphatically, there has been no approval to conduct talks on this matter.

A close reading of David Davis’ delusional Telegraph piece on Brexit - Secretary of State for Exiting the European Union David Davis has written a worryingly Panglossian article in theTelegraph about his plan for Brexit this year, headlined: “How we will deliver the best Brexit in 2018”. It reads more like a fantasy than an honest plan, so let’s have a closer look at what it really means:Headline: How we will deliver the best Brexit in 2018 The wild optimism of this piece is summed up in the headline. Yes, Brexit talks are set to finish in October in order to deliver the draft final deal in time – but 2018 does not mean the end of it all. For example, the EU could decide that the transition period isn’t long enough, and vote to extend it (although this is unlikely), and the EU has suggested it could take up to 2020 to decide trade terms. First paragraph: “In December we reached an important milestone in Britain’s negotiations to leave the EU. So, what next?” Hang on, Mr Davis. You can’t get away with it that easily. Let’s think about that “important milestone” for a minute. It’s a reference to Phase One of the negotiations being tackled (including settling the Brexit bill, setting out the rights of EU citizens in the UK and vice versa, and the Irish border question), whichwas agreed by both sides, who decided they could move on to the second phase. But it was Davis himself who angered Ireland and the EU by claiming this agreement was “more a statement of intent than it was a legally enforceable thing” after it was reached – and had to scramble to win back their trust(telling Guy Verhofstadt: “Let’s work together to get it converted into legal text as soon as possible”).And the Irish border question remains. The agreement is a fudge: it just tries to guarantee no hard border by saying it will reach a trade deal to make this happen. But it doesn’t say how. Instead, it just states that if it can’t do this, the UK will “propose specific solutions to address the unique circumstances of the island of Ireland”. After the deal was done, Theresa Mayreiterated, “specific solutions to what are the unique circumstances of Northern Ireland” would still need to be found.

Former Treasury Minister slams UK’s „fantasy” approach to post-Brexit trade - Die Welt -  A former Treasury Minister has sharply criticised the British government’s approach to trade relations in the run-up to Brexit.In an interview with DIE WELT Lord O’Neill condemned the Prime Minister’s failure to build strong relationships with important economies, particularly China. „Within a week of the [Brexit] referendum the Chinese approached us about a free trade agreement. Under [former Prime Minister] Cameron and [former Chancellor] Osborne they would have had that discussion 15 months ago.“ Theresa May, on the contrary, „doesn't get out and about and think about China“, said Lord O’Neill, who served as a Treasury Minister the time of the EU referendum and resigned in September 2016 allegedly unhappy with May’s lack of enthusiasm for developing the economy in Northern England. On Tuesday it was announced that Trade Secretary Liam Fox was on a visit to China. Lord O’Neill also expressed doubts about the Government’s approach to focus future trade links with the Commonwealth. With the exception of India those countries’ economies are, in Lord O’Neill’s opinion, too small for what British business will need after Brexit. „It’s kind of fantasy. This year, China is going to grow by 6.7 percent. In nominal GDP-dollar terms, China will create a new Australia this year. It will create 4 New Zealands this year. And Liam Fox and our ludicrous foreign minister spend half of their life going to New Zealand. It’s mad.“ Brexiters in May’s cabinet like Boris Johnson or Michael Gove were „very intellectual, smart people. But they have no clue about the world of economy. They are clueless, sadly. Clueless.“ Lord O’Neill’s global economic outlook for 2018 is optimistic, with the exception of Britain. „The world economy is entering the end of this year in my view the strongest it’s been in ten years. With 8 of the 10 largest economies of the world all accelerating at the same time. So the world is probably growing by more than 4 percent right now. Unfortunately, the UK and India are the two that are not. And ours has been self-inflicted because of [the way Brexit is handled]... I think there is considerable uncertainty about the next two or three years for the UK.“

Ministers consider using volunteers to guard UK borders -- Volunteers could be deployed to help plug gaps in the UK’s Border Force, which has undergone drastic cuts under successive Conservative-led governments. The plan, similar to the use of special constables in the police, is being considered in Whitehall. Critics, however, say doing so would be risky and caution against using a “Dad’s Army” to guard Britain’s frontiers. Under the proposal, teams of volunteers would be used to bolster staffing levels at the Border Force, which manages immigration and customs controls. The government stressed that involving volunteers in immigration enforcement was not under discussion. Concerns have been raised in recent years about the coverage of dozens of minor harbours and landing places in the UK. “Small ports and airfields are a known security weakness in our border security, so it’s important to ensure that security is stepped up, particularly to stop illegal immigrants and returning Isis fighters,” said Charlie Elphicke, the MP for Dover. But he told the Mail on Sunday: “Border security is a skilled job, which takes many years of training. I would urge great caution before seeking to adopt a model like that used by the police, with special constables. We can’t have a Dad’s Army-type of set-up.” 

Labour members reject leadership on second Brexit vote: poll -- Eight out of 10 Labour members oppose the party leadership’s opposition to a second referendum on an eventual Brexit deal, according to a poll of over 4,000 members of the U.K.’s major political parties. The survey by the Mile End Institute at Queen Mary University in London, published Thursday, found that 78 percent of the Labour grassroots either agree or strongly agree with having a second vote — something Labour leader Jeremy Corbyn has ruled out. Support for such a step among the groups of Liberal Democrat and Scottish National Party (SNP) members is even stronger. Among the pro-EU Lib Dem grassroots, 91 percent want a second say on the country’s EU departure, along with 87 percent of SNP members questioned. Just 14 percent of British Prime Minister Theresa May’s Conservatives think there should be a public vote on the final deal. On membership of the EU’s customs union, 95 percent of Lib Dem members, 91 percent of SNP members and 85 percent of Labour members wish to remain within it, while the equivalent figures for the EU single market are 96 percent, 95 percent and 87 percent. Just 27 percent of Tory members want to stay in the customs union and 25 percent wish to stay in the single market — reflecting the government’s policy of leaving both after Brexit. Tory members also adopted a harder line on immigration with 83 percent agreeing that all EU member countries’ nationals should be subject to the same immigration rules as non-EU nationals. Among Labour, 33 percent agreed with that proposition. The poll by the Mile End Institute at London’s Queen Mary University was carried out among party members of the Conservatives, Labour, Liberal Democrats as well as SNP in June 2017. In total, researchers surveyed 4,117 members of the four parties.

Brexit latest: Britain not ready for trade talks, warns our own commissioner - Theresa May was today warned by Britain’s own European commissioner that she cannot have trade talks until the Cabinet is “clear about what it wants” from Brexit. Julian King, who holds the bloc’s security portfolio, told the Standard it was too early for talks to move on to discussions about a future relationship. “We haven’t got there yet,” Mr King said. “I hope we’re going to get there quite soon, that we can start talking about the future relationship, the substance of the future relationship, in key areas like security. That will depend on the UK being reasonably clear about what it wants in different areas. “It will also depend on the EU27 clearing their minds on some of these issues. But I do hope that we can move reasonably quickly to look at this.” His remarks will disappoint Tory MPs hoping for quicker progress in laying the groundwork for the trade talks, which are due to start in March. On Monday Brexit Secretary David Davis said that “early in the new year” Britain would begin a “deep and open exploratory dialogue” to discover the right balance. Last month EU leaders agreed to start talks with the UK on a transition deal in the new year but said they wanted more “clarity” from the UK government before they would discuss a trade accord. Michel Barner, the European Commission’s lead negotiator, said the bloc was prepared to offer the UK a free trade agreement along the lines of the EU’s existing deals with Canada, Japan or South Korea, with separate agreements on judicial co-operation, aviation and security. Mr King said security should be part of the relationship regardless of a final trade deal. “Security is one of the areas, whatever else happens in the wider Brexit discussions, where there is a clear self-interest — a shared self-interest, of the EU27 on one side and the UK on the other — to find productive ways of continuing to work together as close as possible,” he said. 

Ireland issues record number of passports amid Brexit - Ireland issued a record number of passports in 2017, with nearly a fifth going to applicants in Britain and Northern Ireland, according to its foreign affairs ministry. The Irish Republic approved a record 779,184 passports during the year, an increase of more than 6 percent on 2016 and a 15 percent spike over two years. Dublin has previously noted a marked increased in the number of Britons with Irish ancestry applying for citizenship since last year's Brexit referendum result. Other European Union countries have also recorded a surge in such applications from British people in the wake of the country's vote to leave the bloc, according to reports. Outside the British Isles, New York in America and Canberra, Australia, saw the most passport requests by Irish citizens abroad. Simon Coveney, foreign affairs minister, hailed the country's award-winning new online renewal service for handling over 100,000 of the applications. The system, launched in March, allows Irish citizens to renew their travel documents online from anywhere in the world, anytime. 

Five-Year Brexit Transition Funding to Help U.K. Farmers Adjust  - The U.K. government will extend its Brexit transition regime to help farmers cope with the loss of European Union subsidies when the country leaves the bloc in 2019 in a move that will add billions of pounds to the cost of the split. Environment Secretary Michael Gove will on Thursday give a speech outlining his plan to overhaul the way state funds are spent on farming once Britain withdraws from the EU’s Common Agricultural Policy, his office said. The U.K.’s governing Conservative Party promised last year to match the CAP rate of annual payments worth 3 billion pounds to farms for three years after Brexit -- until 2022. On Thursday, Gove will signal he’s extending these grants until 2024, effectively giving farmers a five-year cushion to soften the impact of Brexit. “I want to give farmers and land managers time and the tools to adapt to the future, so we avoid a precipitate cliff edge but also prepare properly for the changes which are coming,” Gove will tell a farming conference in Oxford, England. “I want to develop a new method of providing financial support for farmers which moves away from subsidies for inefficiency to public money for public goods.”

No comments: