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

Saturday, February 17, 2018

week ending Feb 17

The Fed's Impossible Choice, In Three Charts - Critics of “New Age” monetary policy have been predicting that central banks would eventually run out of ways to trick people into borrowing money.  There are at least three reasons to wonder if that time has finally come:

  • Wage inflation is accelerating. Normally, towards the end of a cycle companies have trouble finding enough workers to keep up with their rising sales. So they start paying new hires more generously. This ignites “wage inflation,” which is one of the signals central banks use to decide when to start raising interest rates. The following chart shows a big jump in wages in the second half of 2017. And that’s before all those $1,000 bonuses that companies have lately been handing out in response to lower corporate taxes. So it’s a safe bet that wage inflation will accelerate during the first half of 2018. The conclusion: It’s time for higher interest rates.
  • The financial markets are flaking out. The past week was one for the record books, as bonds (both junk and sovereign) and stocks tanked pretty much everywhere while exotic volatility-based funds imploded. It was bad in the US but worse in Asia, where major Chinese markets fell by nearly 10% — an absolutely epic decline for a single week.
  • There’s not enough ammo in any event. Another reason why central banks raise rates is to gain the ability to turn around and cut rates to counter the next downturn.  The Fed, in fact, is among the small handful of central banks that have raised rates at all. And as the next chart illustrates, it’s only done a little.  Most other central banks, meanwhile, are still at or below zero. In a global downturn they’ll have to go sharply negative.

Plunge In Interbank Lending: The Straw That Broke The Fed's Back - The plunge in interbank lending is both sudden and dramatic. What's going on? The short answer is a straw broke the Fed's back. A more robust explanation is the Fed is tightening two ways: The first by hiking, the second by letting assets on the balance sheet roll off. Both measures have a tendency to push up long-term interest rates. This is another explanation for the long-end rising. Despite conventional wisdom, inflation and wages have little to do with it. The Fed started balance sheet reduction in October of 2017. Unwinding the balance sheet escalates greatly in 2018.

  • The treasury unwind started at $6 billion per month, increasing by $6 billion at three-month intervals over 12 months until it reaches $30 billion per month.
  • The mortgage debt unwind started at $4 billion per month, increasing in steps of $4 billion at three-month intervals over 12 months until it reaches $20 billion per month.

Does the Fed Know What It's Doing?  Janet Yellen answered that question directly in her speech A Challenging Decade and a Question for the Future, at the Herbert Stein Memorial Lecture National Economists Club on October 20, 2017. The FOMC does not have any experience in calibrating the pace and composition of asset redemptions and sales to actual and prospective economic conditions. Rather than balance sheet shrinkage, the FOMC decided that its primary tool for scaling back monetary policy accommodation would be influencing short-term interest rates.So the Fed held off, and off, and off. Until now.On November 12, Benn Steil and Benjamin Della Rocca wrote the Fed Could be Tightening More Than it Realizes.

  • The Federal Reserve has no experience shrinking its balance and ending quantitative easing
  • Raising interests rates and shrinking the balance sheet could work in tandem to tighten monetary policy more than the Fed expects.
  • This could mean much slower than expected economic growth.

Danielle DiMartino Booth: Don't Count On The Powell Fed To Rescue The Markets - The recent gut-wrenching drop in asset prices began on the first day of the job for new Federal Reserve Chairman Jerome Powell. How is Mr. Powell likely to react to a suddenly sick-looking market? Will he step in forcefully to reassure investors that there's a "Powell put" in place as a backstop? To address these questions, former analyst at the Federal Reserve Bank of Dallas, Danielle DiMartino Booth, returns to the podcast this week. In her opinion, having studied Powell's previous statements, she thinks those expecting him to continue the market support his predecessors provided will likely be quite disappointed. Powell appears to be no large fan of continued quantitative easing, and has long been on the record as concerned about the eventual pain its unwind will cause. He very well may resist riding to the market's rescue at this time, allowing natural market forces to finally have their way:  Look, this is a message that market participants do not want to hear: It is not the Federal Reserves job to put a floor under risky asset prices. Compare and contrast Jerome Powell's silence in the wake of the flash crash on his first day at work to Alan Greenspan -- who got on an airplane the day after the Black Monday crash of 1987, canceling an appearance he was to have made, and reassuring the markets with a statement on Tuesday morning that the Federal Reserve was standing by and ready and willing and available to satisfy any kind of disruption in the banking and financial systems. My issue with the mainstream media these past few weeks is that they have been insistent on the fact that there is going to be a Powell put to follow the Greenspan, then Bernanke, and then Yellen put. I've been pushing back against that conventional wisdom, mainly because of A) the release of the 2012 FOMC transcripts when we finally got to hear words coming out of Powell's mouth which showed that he was no pushover and B) the fact that he worked for a $1 salary to educate the Congress on the perils of the Untied States defaulting on its debt. Powell himself has stated that he was concerned that quantitative easing would end up being habit-forming for the markets. So I read his silence these last few days as prudent and cleaving to the original intention of the Federal Reserve being lender of last resort; not babysitter to the stock market.   Click the play button below to listen to Chris' interview with Danielle DiMartino Booth (40m:10s).

Goldman: "The 2018 Inflation Rebound" -- A few brief excerpts from a note by Goldman Sachs economist Daan Struyven: The 2018 Inflation Rebound Using our top-down and bottom-up core PCE models, we project that both macroeconomic fundamentals as well as sector-specific factors are likely to push core inflation meaningfully higher this year.   We highlight three key drivers of the core PCE acceleration to 1.8% by end-2018 in our forecast: a 0.15pp boost from the pass-through from higher energy prices and a weaker dollar, a 0.1-0.15pp lift from a tighter labor market, and a 0.1pp jump from the Verizon effect dropping out.   We ... now see the risks to our core PCE forecast of 1.8% by end-2018 as moderately tilted to the upside.   CR Note: The central tendency for core inflation in the December FOMC projections was 1.7% to 1.9%. So this is in line with current FOMC projections, and still below the Fed target of 2%.

Key Measures Show Inflation Increased in January - The Cleveland Fed released the median CPI and the trimmed-mean CPI this morning: According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.3% (4.2% annualized rate) in January. The 16% trimmed-mean Consumer Price Index also rose 0.3% (3.5% annualized rate) during the month. The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics' (BLS) monthly CPI report.  Earlier today, the BLS reported that the seasonally adjusted CPI for all urban consumers rose 0.5% (6.7% annualized rate) in January. The CPI less food and energy rose 0.3% (4.3% annualized rate) on a seasonally adjusted basis. Note: The Cleveland Fed released the median CPI details for January here.  Motor fuel was up sharply in January.

1Q18 GDP Now Forecast To Be 4.0% -- February 12, 2019 -- Latest forecast: 4.0 percent — February 9, 2018. Link here.The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2018 is 4.0 percent on February 9, unchanged from February 6. The nowcast of the contribution of inventory investment to first-quarter real GDP growth inched down from 1.25 percentage points to 1.24 percentage points after this morning's wholesale trade release by the U.S. Census Bureau.  It may be unchanged from February 6, but it has come down a long way since the February 1, 2018, forecast, when it was a staggering 5.4%.

Interest rates: no shift in the economic weather yet --I wanted to make two comments about what has been happening recently with interest rates, a short term look and a long term look. Since September, long term Treasury interest rates have risen from roughly 2.1% to 2.8%. The two year Treasury yield has risen from roughly 1.3% to 2.1% -- which means that for the first time in years, the 2 year Treasury is giving you more in interest than the dividend yield from holding the S&P 500. So, not only will interest rates presumably slow the economy, in terms of income they are now a *relative* bargain compared with holding a wide index of stocks.Now, I don't pretend to know where interest rates will go from here over the short term. Whether long rates rise over 3% or fall back under 2.5%, I don't know. But let's assume that over the short term they stay roughly where they are now.  An upward spike in interest rates has happened twice in this expansion.  Most recently, rates spiked from under 1.5% in mid-2016 (thank you Brexit!) to 2.6% following the US presidential election (blue in the graph below).  Here's what happened with housing permits (red) and real GDP (green) in the year following that spike:Permits stalled for most of 2017 before turning up, while GDP also paused before continuing to advance.Next, in 2013 we had the "taper tantrum," during which long term interest rates rose from 1.6% to just over 3.0%, before fading to about 2.2% by the end of the next year. Short term rates stayed just above zero.  Here's the same graph showing what happened in 2014: Permits slowed but never completely stalled, while real GDP did turn slightly negative in Q1 2014 before continuing to advance. So far, interest rates have not broken out the type of range that led to brief slowdowns, but not a downturn, in the economy.

Treasury Yields Jump After Trump Budget Director Admits Interest Rates May "Spike" On Soaring Deficit -- In a bizarre warning coming from president Trump's own budget director, one that could accelerate the sharp market selloff which so infurated Trump last week he tweeted about it on several occasions, lashing out against those who sell stocks on "good news" claiming it is a "big mistake", Mick Mulvaney warned that the U.S. will post a larger budget deficit this year and could see a “spike” in interest rates as a result. Of course, traders have already experienced the spike, or at least a part of it: it's one of the key catalysts that moved the 10Y from 2.60% to 2.90% since payrolls Friday (coupled with the inflationary impulse from the jump in hourly wages).Earlier in the day, Mulvaney spoke on “Fox News Sunday,” a day before the White House is expected to release 2019 spending proposals - and after weeks in which financial markets have been spooked by prospects for rising inflation tied to higher deficits and lower taxes. “This is not a fiscal stimulus; it’s not a sugar high,” Mulvaney said on of the president’s economic program, including the $1.5 trillion tax cut passed in late 2017. “If we can keep the economy humming and generate more money for you and me and for everybody else, then government takes in more money and that’s how we hope to be able to keep the debt under control,” Mulvaney said.

"A Historic Reversal": Dollar, Treasurys Slide As Trump Drops Target For "Balanced Budget" -- Following last week's torrid surge in the dollar on the back of a panicked flight to safety, the greenback has weakened for a second day amid concerns President Donald Trump’s budget proposal - to be released later today - will drop a longstanding Republican Party goal to balance the budget in 10 years in a "historic reversal", as we first reported  last night. As a result, the Bloomberg Dollar Spot Index fell 0.3% amid muted trading in Asia after dropping 0.1% Friday. Among other spending measures, Trump will seek billions of dollars in new spending to build a border wall, improve veterans’ health care and combat opioid abuse, according to a White House statement.  The U.S. budget plan "has raised some concern that we could see a rising fiscal deficit at the time when the current-account deficit in the U.S. is also weakening," "That could point to further U.S. dollar weakness."  Commenting on the Trump budget, Cowen’s Jaret Seiberg writes that the President's budget, due to be released this morning, will likely be "a disappointing document" for those seeking policy blueprints, with fewer-than-usual headlines on GSE reform, student lending and deregulation. Cowen keeps expectations low about housing finance; budget may include broad call to end Fannie, Freddie conservatorships rather than detailed path forward for GSEs  As a result, Seiberg urges caution regarding any potential news about student lending as Democrats aren’t on board with curbing federal loan programs; HEA reauthorization would need 60 votes in Senate; sees no path forward in this Congress for changes that would benefit private student lenders.  Cowen writes that it will be closely watching how markets react to news Trump will abandon the traditional GOP call to balance the budget; that may reinforce market concerns about deficits, need to issue debt, which may lead to higher interest rates.

National debt jumps $175 billion after debt ceiling suspended - The national debt increased by $175 billion on Friday, the same day President Trump signed legislation that allowed new federal borrowing by effectively turning off the debt ceiling for more than a year. The debt ceiling was reimposed in December, at a level of about $20.494 trillion, and the U.S. was unable to borrow any money above that amount over the last two months. That pent-up borrowing demand led to an immediate spike in the debt on Friday, when the borrowing limit was suspended again. The government reported Monday that the new national debt was $20.699 trillion at the end of last week. The data lags by one business day. Friday's jump is the first of what is expected to be several increases in the national debt, which will now be allowed to grow unchecked for more than a year, through March 1, 2019. In light of the new spending Republicans and Democrats agreed to this week, the debt could easily grow by more than $1 trillion by early 2019. The suspension of the debt ceiling is one of the many aspects of the broad spending deal reached by Senate leaders that conservatives opposed. Conservatives have sought spending reductions as a condition of getting them to vote for a debt ceiling hike. But this time around, Republicans and Democrats in the Senate agreed to a broad range of spending increase, in addition to a yearlong elimination of any federal borrowing limits. In past years, Congress was more likely to increase the acceptable level of debt to some new, specific limit. But the last several times the U.S. has hit the debt ceiling, Congress has responded by suspending it all together — a move that effectively turns off the limit for a specified amount of time. 

As Debt Ceiling Lifts, Flood of T-Bills Set to Jack Up Rates -- Investors are bracing for an onslaught of T-bill supply following last week’s U.S. debt ceiling suspension. That’s already prompting them to demand higher rates from borrowers across money markets. And that’s just a result of the government replenishing its cash hoard to normal levels. The ballooning budget deficit means there’s even more to come later, and that deluge of supply could further buoy funding costs down the line, making life more expensive both for the government and companies that borrow in the short-term market. Concerns about the U.S. borrowing cap had forced the Treasury to trim the total amount of bills it had outstanding, but that’s no longer a problem and the government is now busy ramping up issuance. Financing estimates from January show that the Treasury expects to issue $441 billion in net marketable debt in the current quarter and the bulk of that is likely to be in the short-term market. “Supply will come in waves and we’re in a very heavy wave right now,” said Mark Cabana, head of short-term interest rates strategy at Bank of America Corp. “If you take Treasury at their word that they want to issue $300 billion in bills, that’s a lot of net supply that needs to come to market.” Next week’s three- and six-month bill auctions will be the largest on record at $51 billion and $45 billion respectively, Treasury said Thursday. The four-week auction will be boosted to $55 billion next week, having already been lifted to $50 billion for the Feb. 13 sale. Auction volume at the tenor had earlier been shrunk to just $15 billion. The government’s cash pile will, of course, receive a sugar hit when annual tax receipts start really flowing through to the coffers in April, and that may allow a temporary slowdown in issuance -- and a reprieve in rates. But bill sale volumes are likely to surge again in the second half of 2018 as tax changes and increased government spending swell the fiscal deficit, and the Fed continues shrinking its balance sheet. The anticipated supply boost is already causing T-bill yields to rise relative to overnight index swaps as investors seek more compensation to hold the securities. 

Memo to younger readers: in an era of rising interest rates, deficits DO matter very much -- If you are under about 45 years of age, the odds are that you agree with one statement made by Dick Cheney: that "Reagan proved that deficits don't matter." As I mention from time to time, I am a fossil. I remember the "guns and butter" inflation of the late 1960s (Google is your friend) and the stagflationary 1970s. Here is a graph of the interest yield on the 10 year bond from 1981 through 2013: In an era of declining interest rates, deficits don't matter -- or at least very little. Suppose the national debt runs up from $20 Trillion to $25 Trillion while at the same time interest rates decline from 4% to 3%. In that situation annual interest due on the debt goes from $800 Billion to $750 Billion -- an actual decline of $50 Billion a year. That can cover a multitude of sins. Now here is a graph of the interest yield on the 10 year bond from 1961 through 1980:  In an era of increasing interest rates, deficits DO matter very much. Suppose in that era the national debt runs up from $20 Trillion to $25 Trillion while at the same time interest rates rise from 3% to 4%. In that situation annual interest due on the debt goes from $600 Billion to $1 Trillion -- an increase of $400 Billion a year. That's $400 Billion that can't be spent on infrastructure or social or insurance programs.

Military hawks win big in budget deal — for now - The bipartisan budget deal inked Friday marks a major victory for Republican hawks, who battled fiscal conservatives in their own party for years to lift the strict limits on defense spending that they warned were crippling the military. Friday’s pact, signed by President Donald Trump, adds $165 billion to the Pentagon budget over two years. That means the military will receive at least $1.4 trillion in total through September 2019 to help buy more fighter planes, ships and other equipment, boost the size of the ranks, and beef up training — a level of funding that seemed a long shot just months ago. Senate Armed Services Chairman John McCain (R-Ariz.), who has long pushed for a $700 billion annual budget for the military, said in a statement that the agreement finally gives the Pentagon the “budget certainty it needs to begin the process of rebuilding the military.”"The deal is a huge win for defense hawks," said Mackenzie Eaglen of the American Enterprise Institute. "The groundwork was being laid for years culminating in what I predict will be the peak year of defense spending since the last peak in 2010." Since then, military commanders have been hobbled by the strict annual spending caps imposed by the Budget Control Act, a 2011 deal that then-President Barack Obama reached with congressional Republicans who demanded a curb on the federal deficit. In addition, a seemingly endless series of short-term spending deals in the Capitol frequently left the Pentagon unable to plan for more than a month or two at a time.  Frederico Bartels, a policy analyst for defense budgeting at the Heritage Foundation, hailed the deal for getting the Pentagon “out from under the crushing effects of a continuing resolution, and the budget control caps which have caused so much damage to our security.” The boost came after years of failing to convince House leaders and some of the most fiscally conservative members of the GOP of the pressing need to increase military spending.

Trump’s Tax Success Is at the Expense of His Trade Agenda - Brad Setser, CFR - It looks like a combination of tax cuts and spending increases will raise the U.S. fiscal deficit by about 2 percentage points of GDP (that’s the number Krugman used; Goldman’s US economics team puts the increase in the fiscal deficit between fiscal 2017 and fiscal 2019 at 1.7 percent of GDP). The IMF’s standard coefficient relating changes in the fiscal balance to changes in the external balance would imply that the U.S. current account deficit will increase by about a percentage point of GDP—so rise to around 4 percent of GDP.There are a few reasons to think that this might be a bit high. The U.S. is globally speaking, a relatively closed economy. Imports have increased at about a quarter of the pace of domestic demand over the course of the recovery from the global (or north Atlantic) crisis. So the external spillovers from a U.S. fiscal stimulus might be smaller than the global norm. *A high portion of the tax cut will go toward buybacks, special dividend payments, and the like, and a high portion of those payments may be saved not spent. This isn’t a fiscal stimulus designed for maximum impact on demand.And, well, the IMF’s coefficients have a whole lot of implicit assumptions baked into them—assumptions that may not hold this time. In most cases a fiscal loosening changes the stance of monetary policy, and those changes in the stance of monetary policy in turn drive some change in the exchange rate. But, if the Fed doesn’t end up tightening more, or if the dollar doesn’t in fact appreciate as the Fed tightens, the impact of the fiscal expansion on the trade deficit may be smaller than the simple application of the IMF’s model would predict.But there are a couple of factors that could work the other way too. The closer the economy is to operating at capacity, the more the demand created by the stimulus may bleed out to the rest of the world. That is arguably what happened in q4 of 2017. Domestic demand growth accelerated, with the contribution from demand to GDP growth rising from around 2.5 percent to above 3.5 percent. But an unusually big chunk of that was spent on imports—over 50 percent. ** If that pattern continues, The U.S. would get stuck with the debt while the United States’ big trading partners would get the stimulus. A poorly timed fiscal expansion thus could end up making China, Korea, Japan, Germany, and the other big exporting economies great.

Dems left Dreamers out to dry, say activists | TheHill: Immigration activists are furious that 73 House Democrats, including seven members of the Congressional Hispanic Caucus, voted for a bipartisan spending bill that doesn't include a DACA fix. The early-morning House vote ended a brief government shutdown precipitated by Sen. Rand Paul (R-Ky.), and in the process passed a two-year spending proposal that included a bevy of Democratic priorities, but not immigration. “Last night immigrant young people and people of conscience fighting for justice were betrayed by both parties,” said Greisa Martínez Rosas, a DACA recipient and advocacy director for United We Dream, an immigrant youth activism network.Senate Democrats took some cover on the immigration front in the form of a promise from Majority Leader Sen. Mitch McConnell (R-Ky.), who is expected to bring to the floor a shell bill Monday for the Senate to generate an immigration bill through the amendment process. Minority Leader Sen. Charles Schumer (D-N.Y.) reaped scant praise from immigration advocates for extracting that promise, as he, along with McConnell, was the principal architect of the two-year deal. But the 73 House Democrats — and Democratic leadership — took the brunt of activists’ rage, both for voting to re-open government and for not getting Speaker Paul Ryan (R-Wisc.) to make a promise akin to McConnell's. “We are angry, we are appalled and we are disgusted by Democrats and Republicans alike who so willingly threw immigrant youth under the bus,” said Kica Matos, director of immigrant rights and racial justice at the Center for Community Change. 

Government Shutdown Once Again Shows the Lies Behind Deficit Hysteria - Marshall Auerback - Another day, another temporary government shutdown and then finally a long-term “bipartisan compromise” so beloved of the punditocracy is reached. Early last Friday morning, the president signed a new funding bill that was narrowly passed in Congress only a few hours earlier. All told, the deal authorizes about $300 billion in new discretionary spending over the next two years.  Certainly, there were a few deficit scolds here and there, who decried the latest “spending spree” and the “unsustainable” growth in the nation’s debt. That was clearly not the case a few weeks earlier when the Trump tax cuts were passed and Democrats in particular vociferously sounded off on the dangers of increasing the federal debt to the tune of $1.5 trillion. Nothing from Nancy Pelosi, who several weeks earlier had tweeted, “A GOP tax bill that explodes the deficit by $1.5 trillion means dumping $4600 in debt on every man, woman & child in America.” Well, it’s great that Ms. Pelosi can do basic arithmetic. But at a time when the Republicans have been (hypocritically) abandoning deficit terrorism to advance their own political agenda, it’s uninspiring that the Democrats could do no better than reinforce the ‘deficits are bad’ meme.Because the truth is, there is nothing insidious or inherently sinister about these deficits per se. As the economist Stephanie Kelton argues:“Government spending adds new money to the economy, and taxes take some of that money out again. It’s a constant churning of pluses and minuses, and their minuses become our pluses. When the government spends more than it gets in taxes, a ‘deficit’ is recorded on the government’s books. But that’s only half the story. A little double-entry bookkeeping paints the rest of the picture. Suppose the government spends $100 into the economy but collects just $90 in taxes, leaving behind an extra $10 for someone to hold. That extra $10 gets recorded as a surplus on someone else’s books. That means that the government’s -$10 is always matched by +$10 in some other part of the economy. There is no mismatch and no problem with things adding up. Balance sheets must balance, after all. The government’s deficit is always mirrored by an equivalent surplus in another part of the economy.” Obsessing about government budget deficits is as absurd as an accountant only paying attention to one half of a balance sheet ledger when conducting an audit. And the public, frankly, is more interested in the ways in which we spend, rather than whether we should spend at all.

Saudi Arabia Receives Lockheed Arms Deal As Podesta Group Lobbies For Both Parties -- On Tuesday the Department of Defense announced a new $524 million contract for Lockheed Martin to sell Patriot missiles domestically and to foreign militaries, including those of Romania, Qatar and Saudi Arabia. The Saudi Kingdom is represented in Washington through a web of influential power brokers — among them until recently was the Podesta Group, which folded late last year amid possible implication in Special Counsel Robert Mueller’s probe. While representing Saudi Arabia in Washington, Podesta Group also lobbied Washington on behalf of Lockheed.  Saudi Arabia’s three-year-long war in Yemen has been aided by U.S. military equipment, intelligence, and logistics support. Last year, the kingdom acquired $1.1 billion worth of American precision-guided munitions and helicopters, aided by lobbying from former U.S. congressman Howard “Buck” McKeon . In May, President Donald Trump announced a $110 billion arms package to be sold to Saudi Arabia over the next 10 years, but only a small portion of that has so far been approved and delivered. Since the Saudi-led coalition’s assault on Yemen began in 2015, at least 5,558 Yemeni civilians have been killed and 9,065 injured, according to the latest available United Nations statistics . A blockade initiated by Saudi Arabia has caused widespread famine, with the United Nations estimated that more than 7 million Yemenis lack reliable access to food . Lobbying disclosures reviewed by IBT show that Podesta Group has continuously lobbied for Lockheed Martin since 1999. The defense contractor has paid Podesta Group as much as $660,000 a year in that period. Meanwhile, the firm also lobbied on behalf of Saudi Arabia, receiving $1,385,150 from the country for the first half of 2017, according to documents filed with the Department of Justice. Podesta Group has not yet filed its foreign lobbying activities report for the second half of 2017.

US Ambassador Confirms Billions Spent On Regime Change in Syria, Debunking ‘Obama Did Nothing’ Myth - Real News Network - The United States spent at least $12 billion in Syria-related military and civilian expenses in the four years from 2014 through 2017, according to the former U.S. ambassador to the country.  This $12 billion is in addition to the billions more spent to pursue regime change in Syria in the previous three years, after war broke out in 2011. This striking figure provides a further glimpse of the exorbitant sums of money the U.S. spent trying to topple the government in Damascus. It also bluntly contradicts claims by Syrian opposition supporters that the former administration of President Barack Obama “did nothing” in Syria, or that it supposedly did not seek regime change fervently enough.  Former U.S. ambassador to Syria Robert S. Ford disclosed this information in written testimony prepared for a House Foreign Affairs Committee hearing on February 6. “The cost of US military operations in Syria between FY 2014 and the end of FY 2017 was between $3 and $4 billion,” Ford said. “In addition to the cost of those military operations, the FY 2017 budget request included $430 [million] to build local security forces and the FY 2018 request was for $500 million.”

Taliban appeals to American people to ‘rationally’ rethink war effort — Taliban insurgents on Wednesday issued an extraordinary, 17,000-word appeal to the “American people,” asking them to pressure U.S. officials to end the 16-year-old conflict in Afghanistan and asserting that the protracted American “occupation” had brought only death, corruption and drugs to the impoverished country. The letter, whose authenticity was confirmed by a brief telephone conversation with insurgent spokesman Zabiullah Mujahid, was primarily aimed at a U.S. audience. Unlike previous statements issued by the Taliban, it used statistics and logical arguments — not just ideological harangues — to convince Americans that their government’s investment in the war has been a dire mistake. “Prolonging the war in Afghanistan and maintaining American troop presence is neither beneficial for America nor for anyone else,” the document said, calling on U.S. citizens, legislators and others to “read this letter prudently” and evaluate the costs and benefits of continuing to fight. “Stubbornly seeking the protraction of this war,” it added, “will have “dreadful consequences” for the region and the “stability of America herself.”The letter, sent under the banner of “The Islamic Emirate of Afghanistan,” was issued just weeks after a blitz of deadly insurgent attacks in the Afghan capital have left the government struggling to cope with increased public anxiety and anger. It also came as the Trump administration is ramping up a new military strategy, involving thousands of additional troops, to expand the Afghan security forces and train them to defend their country independently. While insisting that “our preference is to solve the Afghan issue through peaceful dialogues,” the letter also warned that Taliban forces “cannot be subdued by sheer force” and that seeking a peaceful solution does not mean “that we are exhausted or our will has been sapped.” [Read the full Taliban letter]

US to expand military deployments as war danger builds in Asia -- The National Defense Strategy released by the Trump administration last month defined China and Russia as the paramount “strategic competition” facing US imperialism. It labelled the two nuclear-armed states as “revisionist powers” that must be prevented from undermining American global dominance. The document declared that the US had to “prioritize preparedness for war.” The American military has been doing precisely that in Asia for over six years, since the Obama administration announced its provocative “pivot” to the region in November 2011. It has prepared and positioned a vast array of surface ships, submarines, bombers, jet-fighters, infantry divisions and marine units to wage a region-wide war against China. New bases for US forces have been established in Australia and Singapore and re-established in the Philippines and Thailand. India, which has been groomed as a “strategic partner” against China, now provides access, maintenance and supply arrangements to the US military. The US has some 50,000 personnel in Okinawa and elsewhere in Japan, including 18,000 marines, an aircraft carrier battlegroup and squadrons of Air Force jet fighters. It has some 29,500 personnel in South Korea, on the frontline of any conflict with North Korea. Guam hosts 7,000 military personnel, as well as B-52 and B2 strategic bombers capable of delivering nuclear weapons.  The Pentagon is considering deploying to the region the three West Coast-based Marine Expeditionary Units (MEUs), which have primarily been used in Iraq and the Middle East over the past decade or more. MEUs consist of 2,200 marines, jet fighters and helicopters aboard amphibious assault ships, accompanied by guided-missile cruisers and destroyers, support vessels and often an attack submarine.

At Olympics opening ceremony, Pence refuses to stand for any country except the U.S. - Athletes from North Korea and South Korea marching under the same flag in the opening ceremonies of the 2018 Olympic Winter Games was a significant symbolic moment for many. Vice President Mike Pence, in Pyeongchang to lead the U.S. delegation, was not impressed, however. The Washington Post’s Anna Fifield described “huge cheers” when the unified Korea team entered the stadium on Friday. She also said it appeared that everyone in the VP’s box stood to acknowledge the moment — except Pence and his wife, Karen. If Pence used the moment to make a political statement, it would be an interesting tactic, considering he walked out of an NFL game last year because several players linked arms or took a knee during the playing of the national anthem — a silent protest against injustice and inequality that Pence just couldn’t bear to witness.The unified Korean team just entered the Olympic stadium. From where I was sitting, it looked everyone in the VIP box stood – except VP Mike Pence and Karen Pence— Anna Fifield (@annafifield) February 9, 2018 A White House official, speaking on the condition of anonymity, told the Associated Press “Pence stood only for the U.S. team, despite other people in the box standing and applauding when athletes from the two Koreas walked in together.” Pence was seated next to South Korean President Moon Jae-in and Japanese Prime Minister Shinzo Abe, with Kim Yo Jong, sister of North Korean dictator Kim Jong Un, seated behind them.

 Neo-McCarthyite hysteria at US Senate Intelligence Committee hearing -  Tuesday’s Senate Intelligence Committee hearing on “Global Threats and National Security” was an exercise in right-wing hysteria aimed at promoting the claim that all social opposition in the United States is the product of foreign subversion. This fraudulent narrative was advanced to justify censorship and police state repression.Not since the McCarthyite witch hunts of the 1950s has Congress seen such a vitriolic denunciation of supposed foreign subversion. Russia, Director of National Intelligence Dan Coats told the committee, “perceived its past efforts [at manipulating the 2016 elections] as successful and views the 2018 US midterm elections as a potential target.”It is necessary to “inform the American people that this is real,” Coats proclaimed, and that “resilience is needed for us to stand up and say we’re not going to allow some Russians to tell us how to vote, how we ought to run our country.”One after another, senators pressed the assembled intelligence officials about purported Russian and Chinese plots to “sow divisions” within American society, calling on the intelligence agencies to work with technology companies to censor the Internet and prevent the dissemination of “divisive content.” Chinese students were denounced as potential spies and subversives and Americans were instructed not to buy smartphones made by Chinese companies. All of these accusations were made without the slightest attempt at proof or substantiation. This is because they are simply made up.

The Age of Lunacy: the Doomsday Machine - naked capitalism - Jerri-Lynn here: Lest anyone be deluded into thinking that the current lunacy of Trump foreign policy is unprecedented and ahistoric, part eight of an excellent Real News Network series  on Undoing the New Deal reminds us this simply isn’t so. That series more generally discuses who helped unravel the New Deal and why. That was no accident, either. In this installment, historian Peter Kuznick says Eisenhower called for decreased militarization, then Dulles reversed the policy; the Soviets tried to end the cold war after the death of Stalin; crazy schemes involving nuclear weapons and the Bay of Pigs invasion of Cuba put the world of the eve of destruction. Three things I’ve seen recently made me think readers might appreciate  this interview. First, I recently finished reading Stephen Kinzer’s The Brothers, about the baleful consequences of the control over US foreign policy by Dulles brothers– John Foster and Alan. These continue to reverberate to today. Well worth your time. Over the hols, I watched Dr. Strangelove again. And I wondered, and this not for the first time: why has the world managed to survive to this day? Seems to me just matter of time before something spirals out of control– and then, that’s a wrap. Queued up on my beside table is Daniel Ellsberg’s The Doomsday Machine: Confessions of a Nuclear War Planner. Haven’t cracked the spine of that yet, so I’ll eschew further commentary, except to say that I understand Ellsberg’s provides vivid detail about just how close we’ve already come to annihilation.

No ‘bloody nose’ plan for North Korea: U.S. official, senators (Reuters) - The senior U.S. diplomat for Asia, Susan Thornton, said on Thursday she understood the Trump administration had no strategy for a so-called bloody nose strike on North Korea, but Pyongyang would be forced to give up its nuclear weapons “one way or another.” President Donald Trump’s administration says it prefers a diplomatic solution to the crisis over North Korea’s development of nuclear missiles capable of hitting the United States. But U.S. officials have told Reuters and other media that Trump and his advisers have discussed the possibility of a limited strike on North Korea that would neither knock out its program nor overthrow leader Kim Jong Un’s government. Such talk of a “bloody nose” strike has alarmed Korean experts who said that this could trigger catastrophic retaliation, but it has died down since North and South Korea resumed talks last month and North Korea joined the Winter Olympics in South Korea. Two U.S. senators, a Democrat and Republican, who spoke at Thornton’s confirmation hearing for the post of assistant secretary for East Asia, said they and other senators had been told by senior White House officials on Wednesday that there was no such strategy. Asked by Democratic Senator Jeanne Shaheen if the Trump administration had no “bloody nose” strategy, Thornton replied: “That is my understanding, senator, yes.” Republican Senator James Risch said the lawmakers had been told “by administration people, about as high up as it gets, that there is no such thing as a ‘bloody nose strategy.'” Risch added that the officials said they had never considered it or talked about it. Thornton, currently the acting assistant secretary for East Asia, said Washington was open to talks with Pyongyang but that North Korean denuclearization would be the only issue. “Our preference is to achieve denuclearization of the Korean Peninsula through a diplomatic settlement, but we will reach this goal one way or another,” Thornton said. 

White House Will Add Pakistan To List Of Terror-Financing Nations - In a decision that comes as the directors of several US intelligence agencies testify before the Senate about various terrorism-related (and Russia-related) risks facing the US, Reuters is reporting that the Trump administration is moving to place Pakistan on a global watchdog's terrorist-financing watchlist. Pakistan reportedly said it is "hopeful" it can stave off its inclusion on the list at a meeting next week. The declaration has been in the works virtually since the beginning of the Trump administration, as Trump has accused Pakistan of not doing enough to stop the Afghan Taliban and affiliated Haqqani network - even accusing officials in Islamabad of allowing safe haven to the terrorists. Of course, such a decision will only push Pakistan, a nuclear power and the world's sixth-most populous country, into the waiting arms of its neighbor, China, which shares a border with the contested regions of Jammu and Kashmir and has been working to strengthen its diplomatic ties with Pakistan as part of its geopolitical chess match against the US, which is explored in this article from Global Research: As GR explains, one US-led effort to contain China's regional activities has been the formation of a regional "quadrilateral alliance" - or quad - including the US, Australia, Japan and India.To create a buffer, China has sought to strengthen ties with Islamabad. The move also comes as China is preparing to launch its first yuan-denominated crude-futures contract during the third week of March - a major blow to the US dollar's hegemonic status as the world's de facto global reserve currency.

Trump's $4 Trillion Budget Proposal Unveiled: Here Are The Main Highlights - As previewed last night, President Donald Trump has proposed to Congress a $4 trillion-plus budget for next year that projects a $1 trillion or so federal deficit and in the biggest surprise leaked last night, and unlike the plan he released last year, never comes close to promising a balanced federal ledger even after 10 years. On, and that was before last week's $300 billion budget pact is added this year and next, showering both the Pentagon and domestic agencies with big increases. The spending spree, along with last year's tax cuts, has the deficit moving sharply higher, and spooking interest rates. Ironically, the original plan was for Trump's new budget to slash domestic agencies even further than last year's proposal, but instead it will land in Congress three days after he signed a two-year spending agreement that wholly rewrites both last year's budget and the one to be released Monday. The 2019 budget was originally designed to double down on last year's proposals to slash foreign aid, the Environmental Protection Agency, home heating assistance and other nondefense programs funded by Congress each year.  More from Bloomberg:The document says that the budget will propose cutting spending on Medicare, the health program for the elderly and disabled, by $237 billion but doesn’t specify other mandatory programs that would face reductions, a category that also includes Social Security, Medicaid, food stamps, welfare and agricultural subsidies.The Medicare cut wouldn’t affect the program’s coverage or benefits, according to the document. The budget will also call for annual 2 percent cuts to non-defense domestic spending beginning “after 2019.’Trump will urge an increase in defense spending to $716 billion and a 2.6 percent pay raise for troops. He will request $18 billion to build a wall on the Mexican border, the summary indicates.The White House also seeks $200 billion for the infrastructure proposal the administration plans to unveil alongside the fiscal year 2019 budget, as well as new regulatory cuts.

Trump's $4.4T budget would move U.S. deficits sharply higher - U.S. President Donald Trump unveiled a $4.4-trillion US budget for next year that heralds an era of $1-trillion-plus federal deficits and — unlike the plan he released last year — never comes close to promising a balanced ledger even after 10 years. The budget submitted Monday shows the growing deficits despite major cuts for domestic programs, largely because of last year's tax overhaul, which is projected to cause federal tax revenue to drop. This budget does not yet reflect last week's two-year bipartisan $300-billion pact that wholly rejects Trump's plans to slash domestic agencies. The president's budget proposes dramatic cuts to a wide range of domestic agencies from the Departments of Labour and Interior to the Environmental Protection Agency and the National Science Foundation. Unlike last year's submission, the 2019 Trump plan would cut Medicare by $554 billion over the next 10 years, a six per cent reduction from projected spending, including cuts in Medicare payments going to hospitals and rehabilitation centres.Presidential budgets are often declared dead-on-arrival in Congress where lawmakers have their own ideas about spending priorities. But the documents do represent the most detailed elaboration of an administration's priorities. Tax revenue would plummet by $3.7 trillion over the 2018-27 decade relative to last year's "baseline" estimates, the budget projects. Trump is requesting a record $686 billion for the Pentagon, a 13 per cent increase from the 2017 budget enacted last May. In remarks Monday, Trump focused on the spending increases he favours rather than the deficits he and other Republicans have pledged to reduce. This will be a big week for Infrastructure. After so stupidly spending $7 trillion in the Middle East, it is now time to start investing in OUR Country! @realDonaldTrump "We're going to have the strongest military we've ever had, by far," Trump said. "In this budget we took care of the military like it's never been taken care of before." Also getting a boost would be border security. Trump's budget includes money to start building 103 kilometres of border wall in south Texas as well as money to bring immigration jails up to a capacity of 47,000 and add 2,000 Immigration and Customs Enforcement employees and 750 border patrol agents.

US Debt To Hit $30 Trillion In 2028 Under Trump Budget - On Friday, with the US on the verge of another government shutdown and debt ceiling breach (with the agreement reached only after the midnight hour, literally) Moody's warned Trump  that he should prepare for a downgrade from the rating agency that refused to join S&P in downgrading the US back in August 2011. The reason: Trump's - and the Republicans and Democrats - aggressive fiscal policies which will sink the US even deeper into crippling debt while widening the budget deficit, resulting in "meaningful fiscal deterioration." In short: a US downgrade due to Trumponomics appears inevitable. And incidentally, with Friday's 2-year debt ceiling extension, it means that once total US debt resets  - unburdened by the debt ceiling - it will be at or just shy of $21 trillion.Now, following today's release of the White House budget proposal from the Office of the Management and Budget, Moody's will have even greater motivation to downgrade the US as according to the forecast, total US debt is projected to rise from $20.5 trillion today to an unprecedented $29.9 trillion in 2028.As the next chart shows, the Trump deficit, which is surely on the optimistic side with its projections, anticipates total US debt rising by over $1 trillion for the next 5 years, until 2022, then gradually declining to only $352BN annual increase in 2028.The good news, as noted earlier, is that Trump’s proposal, which calls for higher spending on military and immigration enforcement and abandons the GOP goal of balancing the budget over decade, is expected to be ignored by Congress. What is unknown is what alternative Congress will come up with, and how much higher the 2028 debt total will end up being. For now the 10Y does not appear especially concerned, although with a debt-busting recession guaranteed in the next 10 years, it is a virtual certainty that the total debt number in 10 years will be substantially higher than what is projected above.

The Military Industrial Complex Strikes Again: War Spending Will Bankrupt America - Mark my words, America’s war spending will bankrupt the nation. For that matter, America’s war spending has already bankrupted the nation to the tune of more than $20 trillion dollars.Now the Trump Administration is pushing for a $4.4 trillion budget for fiscal year 2019 that would add $7 trillion to the already unsustainable federal deficit in order to sustain America’s military empire abroad and dramatically expand the police state here at home. Trump also wants American taxpayers to cover the cost of building that infamous border wall.Truly, Trump may turn out to be, as policy analyst Stan Collender warned, “the biggest deficit- and debt-increasing president of all time.”For those in need of a quick reminder: “A budget deficit is the difference between what the federal government spends and what it takes in. The national debt, also known as the public debt, is the result of the federal government borrowing money to cover years and years of budget deficits.”Right now, the U.S. government is operating in the negative on every front: it’s spending far more than what it makes (and takes from the American taxpayers) and it is borrowing heavily (from foreign governments and Social Security) to keep the government operating and keep funding its endless wars abroad. This is how military empires fall and fail: by spreading themselves too thin and spending themselves to death.It happened in Rome. It’s happening again.

The President’s new budget. Sorry, but attention must be paid. - Jared Bernstein - Every year around this time, we ask the Talmudic question: is there any reason to pay attention to the president’s budget?This year, given that the Congress just passed, and President Trump just signed, a spending deal covering the next couple of years, the question is particularly germane, as “dead on arrival” would be an upgrade for this year’s budget.And yet, I once again conclude that attention must be paid. People should know an administration’s priorities, but in the case of team Trump, as the gulf between their rhetoric and their budget preferences is uniquely wide, tracking their priorities is particularly important. They make a huge deal over infrastructure but cut transportation funds; they talk about helping the left-behind but propose cuts to health care, nutritional assistance, and housing. They preach fiscal rectitude but practice fiscal recklessness.In this regard, the basic structure of Trump’s second budget is closely related to those Republicans have been writing for years, reflecting their shared priorities of tax cuts for the wealthy and spending cuts for the economically vulnerable. For example, according to CBPP analysis, the budget takes us back to the big health care debate of last year, calling for repealing the Affordable Care Act, cutting Medicaid, and eliminating protections for people with pre-existing conditions. It proposes cuts in nutrition, housing, and other basic assistance for millions of vulnerable Americans. For example, SNAP (formerly food stamps) would face a $213 billion, or a nearly 30 percent cut over ten years; at least 4 million low-income people would lose their SNAP benefits altogether.

Trump releases budget proposal for health department | TheHill: The Department of Health and Human Services would receive $95.4 billion under the budget proposal released by the Trump administration Monday. Under the proposal, The Centers for Disease Control and Prevention would face a cut but the National Institutes of Health and the Food and Drug Administration would see increases. "The president's budget makes investments and reforms that are vital to making our health and human services programs work for Americans and to sustaining them for future generations," HHS Secretary Alex Azar said in a statement. The administration requested $11 billion for 2019 for the Centers for Disease Control and Prevention, a cut of about $900 million. That includes $175 million in new funding to address the opioid crisis. The Administration for Children and Families, which provides assistance to families in poverty, would get $15.3 billion, a decrease of nearly $4 billion. However, NIH would get a boost of $1.4 billion in the proposal, with total funding of $35.5 billion for 2019. That includes $750 million to NIH as part of a $10 billion HHS wide investment in fighting the opioid crisis. The FDA would get $5.8 billion under the proposal, an increase of $673 million. The Indian Health Service would receive $6.8 billion in 2019, an increase of $513 million.

Trump war budget calls for sweeping cuts to Medicare, Medicaid, food stamps -- The Trump administration released its proposed budget for the 2019 fiscal year on Monday, calling on Congress to enact the massive boost in military spending indicated in a bipartisan budget deal last week, but withhold the funding for domestic programs approved under the same agreement.Budget Director Mick Mulvaney said the $63 billion increase in non-defense domestic spending incorporated into the budget resolution was not mandatory. “These are spending caps. They’re not spending floors,” he said. “So you don’t have to spend all that.”An addendum to the budget, prepared in response to the bipartisan deal, calls for Congress to spend $6 billion on the opioid crisis and forgo any other increases.Given that Trump signed the bipartisan spending framework into law last Friday, and that both the House and Senate are already working on appropriations bills based on it, it is unlikely that the White House appeal to renege on the domestic side of the agreement will have any effect on current spending.Nonetheless, the priorities laid down in the massive budget document indicate the outlook and intentions of the financial oligarchy in regard to fiscal and social policy. It wants virtually unlimited increases in military spending combined with dramatic cuts in domestic spending, particularly on the so-called entitlement programs, for which spending is driven by the number of people enrolled and qualified for benefits, not specific appropriations by Congress.  The Trump budget incorporates all this money for the Pentagon, and for further increases in the “out-years,” from fiscal 2020 through fiscal 2027 (by law, the federal budget projects spending over a 10-year period).In contrast to this bonanza for the US military machine, the world’s largest by far, the Trump budget calls for slashing more than $1 trillion from entitlement programs over the next 10 years: $554 billion from Medicare, $250 billion from Medicaid, and $214 billion from the Supplemental Nutrition Assistance Program (SNAP), the formal name of the food stamp benefit.The cuts in Medicare would include $47 billion to come from a reduction in subsidies for prescription drug costs, forcing the elderly to pay more, and $34 billion through the elimination of “facility fees” for some hospital-owned medical practices, which would lead some hospitals to turn away Medicare recipients in favor of more lucrative patients.

Trump Budget Would Swap Food Stamps for ‘100% American’ Food Packages -- In what would be one of the biggest shakeups of the U.S. food-stamp program in its five-decade history, President Donald Trump is proposing to slash cash payments and substitute them with "100 percent American grown food" given to recipients.The changes, outlined Monday in Trump’s budget proposal, would reshape the Supplemental Nutrition Assistance Program, or SNAP, which supports roughly one in eight Americans, by reducing cash spending by about one-third from current levels.The plan is part of an effort to reform SNAP and save a projected $214 billion over a decade. It would give all households receiving more than $90 a month in cash a food-aid package that would "include items such as shelf-stable milk, ready to eat cereals, pasta, peanut butter, beans and canned fruit, vegetables, and meat, poultry or fish," according to the proposal. The so-called USDA America’s Harvest Box "is a bold, innovative approach to providing nutritious food to people who need assistance feeding themselves and their families -- and all of it is home grown by American farmers and producers," Agriculture Secretary Sonny Perdue said in a statement. The program would provide food-stamp recipients with "the same level of food value" as the current system, Perdue added.  Reaction was muted on Capitol Hill, where both congressional agriculture committees are working on reauthorizations of the food stamp program as part of a farm law that expires Sept. 30. "The task at hand is to produce a Farm Bill for the benefit of our farmers, ranchers, consumers and other stakeholders," House Agriculture Committee Chairman Michael Conaway of Texas and Senate Agriculture Committee Chairman Pat Roberts of Kansas, both Republicans, said in a joint statement. "This budget, as with every other president’s budget before, will not prevent us from doing that job."

Trump budget seeks cuts to domestic programs, Medicare, favors military and wall  (Reuters) - President Donald Trump proposed a budget on Monday that calls for cuts in domestic spending and social programs such as Medicare and seeks a sharp increase in military spending and funding for a wall on the Mexican border. While running for president in 2016, Trump pledged to leave popular benefit programs such as Medicare and Social Security untouched, but his new budget proposal would reduce Medicare spending by $236 billion over the next 10 years. The White House argued, however, that the reduced spending would come through reforms to the government health insurance program for the elderly, not benefit cuts. There is little chance of those cuts becoming real, as presidential budgets are rarely enacted by the U.S. Congress, which controls federal purse strings. Instead, the budget allows the White House to lay out its priorities for the year. Still, the proposed cuts drew a rebuke from the top Democrat on the House of Representatives Budget Committee, John Yarmuth. ”These cuts to critical federal investments are so extreme they can only reflect a disdain for working families and a total lack of vision for a stronger society,” Yarmuth said in a statement. Beyond social programs, the plan calls for deep cuts in non-military spending that the White House said would lower the federal budget deficit by more than $3 trillion over 10 years. It calls for spending $57 billion less in fiscal year 2019 than mandated in a two-year budget deal passed last week by Congress that raised spending limits on both military and domestic programs by $300 billion. That bipartisan agreement means Congress has already locked in its own spending priorities and that Trump’s proposals are unlikely to be taken on. The Trump administration says, however, that Congress need not spend all of the money called for under the deal, particularly with regard to domestic spending. “The message is really simple: You don’t have to spend it,” said Mick Mulvaney, Trump’s budget director. Trump’s budget proposal forecasts annual economic growth of at least 3 percent over the next three years, an aggressive target that is crucial to help cover the cost of $1.5 trillion in tax cuts passed by the Republican-controlled Congress in December. Even given those optimistic projections, the swelling of the federal debt following the tax bill and the two-year budget agreement means that Trump’s proposal notably abandons the objective of eliminating the federal budget deficit after 10 years, a long-standing goal of fiscal conservatives. 

Trump administration wants to sell National and Dulles airports, other assets across U.S -- The Trump administration is pushing federal officials to sell off, privatize or otherwise dispose of a broad array of government assets, from Reagan National Airport and the George Washington Memorial Parkway along the Potomac River to properties held by federal agencies across the country. The proposals are part of a long-awaited infrastructure initiative that President Trump has referred to repeatedly since the night of his election in 2016, when he struck a bipartisan tone in promising to “rebuild our highways, bridges, tunnels, airports, schools, hospitals.” In last month’s State of the Union address, he called for remaking the nation “with American heart, American hands and American grit.” The $200 billion infrastructure proposal, crafted over the past year but overshadowed by other priorities such as tax cuts and immigration, is focused on speeding up permitting by reducing environmental regulations. It also is geared toward trying to prompt state and local governments and private industry to spend more on projects without major new federal investments. It would achieve that with a mix of loan and grant programs, including those focused on rural areas and risky but potentially “transformative” projects. Despite appeals for bipartisan support, the caustic political environment and the proposal’s basic approach — promising much-needed improvements while simultaneously proposing broad cuts in infrastructure spending elsewhere in the federal budget — have raised doubts about the package’s prospects. While a senior administration official called the president’s ­53-page proposal “the start of a negotiation,” it has been something of a rough start. Senate Minority Leader Charles E. Schumer (D-N.Y.) said the plan “is like a Hollywood facade.”

Trump wants to slash food stamps and replace them with a ‘Blue Apron-type program’ - The Trump administration wants to slash food aid to low-income families and make up the difference with a box of canned goods — a change that Office of Management and budget director Mick Mulvaney described in a Monday briefing as a “Blue Apron-type program.” “What we do is propose that for folks who are on food stamps, part — not all, part — of their benefits come in the actual sort of, and I don't want to steal somebody's copyright, but a Blue Apron-type program where you actually receive the food instead of receive the cash,” Mulvaney said. “It lowers the cost to us because we can buy [at wholesale prices] whereas they have to buy it at retail. It also makes sure they're getting nutritious food. So we're pretty excited about that.”  On Monday, the Trump administration proposed cutting food stamps, formally known as the Supplemental Nutrition Assistance Program, by $17 billion in 2019 and more than $213 billion over the next decade. The dramatic reductions came as part of a budget proposal that made sweeping, across-the-board cuts to popular safety net programs, including federal housing subsidies and Medicaid. But the administration's SNAP proposal was particularly striking, advocates and experts said, because it advocates a fundamental change to the program's administration. For the past 40 years, the Agriculture Department has distributed benefits as either paper coupons or virtual disbursements on Electronic Benefit Transfer cards, allowing recipients to use them as cash on foods of their choice and at their own grocery store. But under the Trump proposal, which the Agriculture Department has dubbed “America’s Harvest Box,” all households receiving more than $90 per month in benefits — 81 percent of SNAP households overall — would begin receiving about half their benefits in the form of government-purchased, nonperishable food items. Those foods would include shelf-stable milk, juice, grains, cereals, pasta, peanut butter, beans and canned meat, fruits and vegetables, according to the USDA. The department estimates that it could supply these goods at about half the cost of retail, slashing the cost of SNAP while still feeding the hungry. 

 The 22 agencies and programs Trump's budget would eliminate | TheHill - President Trump on Monday unveiled his budget proposal for the 2019 fiscal year, which makes significant cuts to some federal agencies and projects as part of an effort to slash the federal deficit by $3 trillion over the next 10 years. As part of that effort, Trump has proposed eliminating funding for several agencies, grant programs and institutes. While lawmakers are unlikely to enact most of Trump's proposal, here’s a look at some of the centers and agencies the White House wants to abolish:

  • 1. The McGovern-Dole International Food for Education, which donates agricultural commodities and financial assistance to carry out school feeding programs in foreign countries.
  • 2. The Rural Business and Cooperative Service, which provides loans, grants and payments intended to increase opportunities in rural communities.
  • 3. The Economic Development Administration, which provides federal grants to communities in support of locally-developed economic plans.
  • 4. The Manufacturing Extension Partnership, which subsidizes advisory and consulting services for small and medium-size manufacturers.
  • 5. 21st Century Community Learning Centers, which helps communities establish or expand centers to provide before- and after-school programs and summer school programs.
  • 6. Gaining Early Awareness and Readiness for Undergraduate Programs, an Education Department program that provides grants to support college preparation for low-income students.
  • 7. The Agency for Healthcare Research and Quality, which researches ways to enhance the effectiveness of health services.
  • 8. The Advanced Research Projects Agency, which provides support for Energy Department projects.
  • 9. The National Wildlife Refuge Fund, which compensates communities for lost tax revenue when the federal government acquires their land.
  • 10. The Global Climate Change Initiative, a proposal that reflects Trump’s decision last year to withdraw from the Paris climate agreement.
  • 11. The NASA Office of Education, which provides grants to colleges and universities, museums and science centers. The funding would be redirected within NASA.
  • 12. The Chemical Safety Board, which is tasked with investigating accidents at chemical facilities.
  • 13. The Corporation for National and Community Service, which funds service opportunities, promotes volunteering and helps nonprofit organizations find volunteers.
  • 14. The Corporation for Public Broadcasting, which funds public television and radio stations including Public Broadcasting Service  and NPR.
  • 15. The Institute of Museum and Library Services, which funds museums and libraries nationwide with grants.
  • 16. The Legal Services Corporation, a nonprofit that provides civil legal assistance for low-income individuals.
  • 17. The National Endowment for the Arts, which funds American artists and projects with grants.
  • 18. The National Endowment for the Humanities, which provides grants to American humanities scholars.
  • 19. The Neighborhood Reinvestment Corporation, which funds community development projects nationwide.
  • 20. The Denali Commission, the Delta Regional Authority and the Northern Border Regional Commission, which fund infrastructure and economic projects in specified areas.
  • 21. The U.S. Trade and Development Agency, which provides U.S. goods and services for foreign projects.
  • 22. The Woodrow Wilson International Center for Scholars, a think tank focused on international affairs and foreign policy.

Trump budget aims to jump-start construction, cut red tape | Fox News: President Trump is calling to pump $1.5 trillion into fixing America’s infrastructure while streamlining the often-cumbersome permitting process, as part of a $4 trillion-plus budget plan unveiled Monday. “Washington will no longer be a roadblock to progress. Washington will now be your partner,” Trump said at a meeting with state and local officials at the White House. In the runup to the release, the president also tweeted: "This will be a big week for Infrastructure. After so stupidly spending $7 trillion in the Middle East, it is now time to start investing in OUR Country!"Unlike last year’s plan, the fiscal 2019 blueprint does not seek to balance the budget over the next decade. Combined with a newly passed spending deal and sweeping tax cuts, the budget would see the federal deficit once again rising past $1 trillion in the near-term. The infrastructure component, however, would not necessarily be a huge driver of Washington’s red ink. Under the plan, $200 billion of the $1.5 trillion in proposed spending would be federal dollars, which a senior administration official said would come from "reductions in other areas of the budget." The plan calls on state and local governments and the private sector to put up most of the funding. The federal funding would be used to match local spending, provide “incentives” and expand loan programs. The plan also would boost investment for projects in rural America -- including transportation, broadband, water, waste, power, flood management and ports -- by $50 billion in a bid to address criticism from some Republican senators that the Trump administration's initial emphasis on public-private partnerships would do little to help those areas. But the Trump administration is casting another part of the plan as equally vital – streamlining the permitting process, which a senior administration official described as “fundamentally broken.”

White House Releases 55-Page, $1.5 Trillion Infrastructure Plan -  Just like Trump promised during his State of the Union address late last month, the White House has released an infrastructure package Monday that hopes to raise $1.5 trillion to help rebuild American roads, bridges and airports. Since the initial draft was leaked last month, Trump has raised his fundraising goal to $1.5 trillion from $1 trillion. Most of the 55-page plan's most salient details were leaked overnight. At its core, the proposal will use the $200 billion, to be disbursed over a decade, as seed money to incentivize states, localities and the private sector to commit to spending the balance of the headline number... It will also streamline the permitting process and improve training to get qualified workers ready to work on rural infrastructure projects... However, Democrats have complained the plan relies too heavily on municipalities and states, and doesn't provide enough federal funding to have much of an impact.  The White House's updated proposal was released Monday ahead of an 11 am meeting between Trump and mayors of cities and other l The $200 billion in federal spending will also be included in the White House's budget map, also to be released Monday, following a bipartisan deal last week that eliminated years-old spending caps, setting the stage for a two-year budget agreement. And as CBS points out, Trump's plan leaves a little something to be desired... But there's one major hole in the White House's proposal — Mr. Trump's plan relies almost entirely on funding from entities outside the control of the federal government. Only $200 billion of the $1.5 trillion proposal would come from new federal funding. The White House would offset the new spending with unspecified cuts in other areas of the budget. The rest is expected to come from state and local governments and private investment. According to the Washington Post, the plan has plenty of details (unlike the early drafts of Trump's tax-reform package) but few guarantees about how it will all be paid for. In one particularly galling section, it even suggests cutting money from existing infrastructure plans and reallocating it to the Trump plan.

    "Low Odds Of Being Enacted": Here Is Goldman's Summary Of Trump's Infrastructure Plan - "No surprises": that is how Goldman summarizes today's detailed infrastructure proposal released by the White House. According to the bank, it includes the same amount of funding, distributed in the same way, as the short proposal leaked to the media several weeks ago." It is summarized below: More importantly, Goldman believes that "the low odds of enactment this year have not changed, in our view", which coupled with the White House's full budget proposal which also has virtually zero chances of being adopted in its proposed shape, means that Monday has so far been much ado about nothing. Here is Goldman's full take:The overall amount of federal funding under the proposal remains at about $200bn. This was originally described as helping to finance up to $1 trillion in infrastructure investment, but the President has described it more recently as backing up to $1.5 trillion. Regardless of the amount of non-federal funding the proposal might attract, the federal portion remains $200bn spread over several years.The major aspects of the proposal are similar to the proposal that has been circulating informally and has already been described in the media. It consists of four broad segments:

    • Infrastructure Incentives Program ($100bn): States would be required to establish a sustainable non-federal funding stream equal to 80% of project costs, which would be matched with 20% federal funding. This would be aimed at traditional areas of federal investment, i.e., transportation, water/sewer.
    • Rural Infrastructure Program ($50bn): This funding would come via grants to states with no matching funds required, and would be aimed more broadly than traditional federal investment by including broadband and electrical power in addition to transportation and water/sewer.
    • Transformative Projects Program ($20bn): The federal government would put up funding for 30%, 50%, or 80% of the project cost (depending on project stage). This would be aimed at projects that are commercially viable but have much higher than usual risk/reward.
    • Infrastructure Financing Programs ($20bn): The proposal would expand several existing federal programs through additional funding and broader eligibility, including the TIFIA and WIFIA programs and private activity bonds (PABs).

    The Trump administration’s infrastructure plan remains empty talk and will be paid for by cuts to programs that help working people - The Trump administration has released another variation of their long-dormant infrastructure plan. Just like the previous version, the plan amounts to empty talk. To understand why, one must examine the fiscal year 2019 budget proposal, released alongside their infrastructure proposal. While the administration trumpets an infrastructure plan, their budget radically cuts federal investments. Even their trumpeting of the stand-alone infrastructure plan is hugely misleading. Instead of the $1 trillion being claimed by the administration (already pared back from the $1.5 trillion they claimed they’d be investing in infrastructure in earlier discussions), the plan only calls for $200 billion in federal funds. Finding the rest of the $1 trillion will be left overwhelmingly to states and localities, despite the fact that they already bear the brunt of paying for public infrastructure spending. In total, state and local governments account for 77 percent of public infrastructure spending in the United States. They account for 62 percent of capital investment and 88 percent of operations and maintenance. It is odd to argue that the United States needs a substantial infrastructure push to deal with past underinvestment, and then to propose that the same system that yielded this underinvestment—relying too much on state and local governments—should just be continued. If we want a real investment in infrastructure, continuing to kick the problem to state and local governments won’t solve anything. The Trump administration will claim that their plans are different because they will leverage the private sector. This claim doesn’t change anything. Private entities will not build infrastructure for free, but will expect a return on investment. That means state and local governments will have to pay for the infrastructure with taxes, tolls, or other user fees. And if state and local governments predictably dodge the task of financing and funding projects directly, public-private partnerships come with their own set of problems, as natural monopoly characteristics can leave the private partner in a position to hike tolls and degrade service quality. The infrastructure plan is paid for by unspecified budget cuts. And whichever of the myriad cuts from the administration’s fiscal year 2019 budget is chosen would be disastrous. The vast majority of public investment is funded by the nondefense discretionary (NDD) portion of the budget. This year’s budget follows last year’s in gutting NDD spending and thus, public investment in the long run. Last year’s president’s budget called for NDD budget authority to reach an unprecedented low of 1.4 percent of GDP by 2027 (for historical comparisons, see here). The new budget follows in the previous budget’s path, and NDD spending would reach 1.3 percent of GDP by 2028.

    Trump’s infrastructure plan: no money, no action, no surprise - Hiltzik - President Trump introduced his infrastructure plan Monday with a ringing preamble: "It is time," he said, "to give Americans the working, modern infrastructure they deserve." That raises the question: "What did we do to deserve this?" The plan, which the White House bills as a $1.5-trillion program, only provides $100 billion in federal funds over 10 years for major federal-state projects — and those funds are mostly, at this moment, mythical. The plan bristles with incentives to allow private investors to profiteer, to expand tolls and other user fees on crucial roads and bridges, and to despoil public lands with pipelines. It aims to fast-track the most environmentally hazardous projects, the better to keep experts and local communities from weighing in. And it increases obligations on state and local governments just at the moment when their ability to raise funds has been hamstrung by Congress.You'll be hearing lots of huzzahs for this program from construction lobbyists representing builders and labor unions. Each will be pointing with anticipation to big-ticket projects in their local areas, without noticing that the program impoverishes the ability to get such projects done by any level of government.The smart money on Capitol Hill says that the whole package is dead on arrival in Congress anyway. Progressives say it's not big enough, and what's there gives away too much to special interests; conservatives grouse that it's too big and not enough of a giveaway. None of this is unexpected, and little enough of it is new. Trump aides have been telegraphing the outlines of the infrastructure program for more than a month. The formal 55-page document issued Monday puts a bit more meat on the bones that have been rattling around since early January, but the whole package should mostly be seen as a guide to the Trump administration's approach to governing: programs with virtually no rationale and without adequate financing, along with a commitment to getting government off the backs of the people so Big Business can saddle up.

    Drastically Changing the Rules On Infrastructure Spending - Most observers have figured out that the Trump infrastructure spending plan seems to be weirdly lopsided in an unrealistic way, with $200 billion in federal spending somehow supposed to inspire a total of $1.5 trillion in spending by state and local sources along with private ones.  What has not been made all that clear publicly is how this plan upends decades of established practice in fiscal relations between the federal and the state and local governments.  The long-established formula has been 8 to 2, that is $8 in federal money for $2 in state or local money in infrastructure construction projects.  Trump’s plan proposes to completely reverse this to a 2 to 8 formula, $2 in federal money for $8 in state or local money.  Anyone who thinks this is going to provide any actual infrastructure activity that would not have otherwise is simply completely delusional. Of course it is well known that the private sector input will involve tolls or other payment methods to make sure the private interests make a positive rate of return. One important area many want to see work done is on fixing bridges. The American Society of Engineers has identified about 50,000 bridges in the nation that need repair.  However they also estimate that only about 100 of those are reasonably suitable for private tolling.  This is another not-going-anywhere part of the proposal. However, Trump is apparently hoping to raise money by outright selling off some publicly owned infrastructure assets.  The Washington Post reports today that in the Washington area this includes the two main airports, Dulles and Reagan National, as well as the George Washington Memorial Parkway (currently not tolled).  I can hardly wait and am curious what else around the country is going to be put on the block for a grand fire sale leading to all kinds of tolls and other nonsense.

    Trump's Infrastructure Plan Is Actually Pence's—And It's All About Privatization - President Donald Trump’s $1 trillion plan to rebuild America’s infrastructure may be unprecedented in size and ambition, but it mimics a controversial scheme championed by Vice President Mike Pence when he was the governor of Indiana. That’s why Pence is the public face of the Trump initiative, and executives from financial firms that helped privatize Indiana’s toll road are in the White House, busily sculpting Trump’s national plan. Pence and his allies like to boast about how Indiana sold control of major roads to private firms, claiming the move prompted corporations to invest money in infrastructure that would otherwise have been funded by taxpayers. But opponents say Indiana made some bad deals that offer a cautionary tale of get-rich-quick scheming, secrecy and cronyism that led the state to sell off valuable assets that were then wildly mismanaged.  Public-private partnerships involve private companies investing in, constructing or maintaining public assets such as roads, bridges and airports—in exchange for those companies raking in tolls, fees or other revenues generated by those assets. The model—sometimes called “asset recycling”—has been prevalent in Australia, Asia and Europe, and since the turn of the 21st century, more American cities and states have begun to embrace it. Few, however, have been as aggressive as Indiana in pursuing such partnerships.  The American Society of Civil Engineers estimates that it will take $4.6 trillion to maintain and upgrade infrastructure throughout the United States, a ripe profit opportunity for politically connected firms. Trump recently secured a pledge by Saudi Arabia’s government to invest billions in American infrastructure. That money is slated to flow through Blackstone Group LP—the private equity firm run by Trump adviser Stephen Schwarzman. Pence began his vice presidency as the Interstate 69 privatization deal he championed as Indiana’s governor collapsed amid construction delays, allegations of financial mismanagement and a spike in traffic accidents, culminating in the return of the section of the road under private control to the state in mid-August of this year. At the same time, the foreign firm Pence approved to run the 156-mile Indiana Toll Road announced it would be hammering economically battered northwest Indiana with huge toll increases. Those two road deals are precisely the kind of arrangements Trump’s infrastructure plan hopes to replicate across the nation, led by a team with ties to the privatization in Indiana.  If Trump has his way, all of America’s roads might be said to run through Indiana.

    Private Equity Firms Turn Up Noses at Trump’s Infrastructure Headfake -- Yves Smith - Trump’s infrastructure plan, such as it is, has been getting well-deserved, widespread negative reviews. It’s too small a program to make any difference, overwhelmingly places the funding burden on already budget-strained state and local governments, and still requires localities to charge various user fees, thus obviating any economic benefit. It also ignores the highest bang for the buck spending, namely unglamorous repairs and rural broadband, in favor of weird unspecified exercises in pork that are supposed to “lift the national spirit.” Is adding Trump’s mug to Mount Rushmore on the project list? But even better, even private equity robber barons who run infrastructure funds, one of the big audiences this program was meant to woo, aren’t keen about it either. As the Wall Street Journal explains, they aren’t all that keen about building things. They’d much prefer to loot purchase existing assets.  But enough of those too-innocously named privatization deals, like the sale of Chicago’s parking meters, have gotten the bad press they deserve so as to make not just local officials, but even more important, local businessmen leery of these initiatives. They understand that the price of getting a quick cash injection is being bled with user charges and what even amount to profit guarantees. For instance, in the case of the Chicago parking meter deal, the new owners would get paid fees by the city even if it took a lane of traffic with meters on it out of operation for emergencies or street repairs.From the Wall Street Journal: Fund managers say they are mainly looking for assets that are already privately owned—such as renewable energy, railroads, utilities and pipelines—and not the deteriorating government-owned infrastructure like roads and bridges that helped attract the capital in the first place. To the extent they are interested in public assets, the focus is more likely to be on privatizing existing infrastructure than on new development—the heart of Mr. Trump’s push.  Those of you who have been following the collapse of Carillion are likely gobsmacked at the critical functions that the UK Government saw fit to hand off to them, leaving itself at risk if the Carillions of the world made a mess of it, or as it did, stopped performing altogether. But you see nary a mention of Carillion in this article. Instead the US is depicted as a laggard by not allowing private operators to take a skim out of providing public services:

    Trump Surprises Democrats, Supports 25 Cent Federal Gas Tax Hike - President Trump surprised a group of lawmakers during a Wednesday meeting at the White House by repeatedly mentioning a 25-cent-per-gallon increase on federal gasoline and diesel tax in order to help pay for upgrading America's crumbling infrastructure by addressing a serious shortfall in the Highway Trust Fund, which will become insolvent by 2021. The tax increase was first pitched by the U.S. Chamber of Commerce in January, while the White House had originally been lukewarm towards the idea.The federal gasoline and diesel tax has been at 18.4 and 24.4-cents-per-gallon respectively since 1993, with no adjustments for inflation. It currently generates approximately $35 billion per year, while the federal government spends around $50 billion annually on transportation projects.Senator Tom Carper (D-DE), the top Democrat on the Senate Environment and Public Works Committee, seemed pleasantly surprised at Trump's repeated mention of the tax as a solution to pay for upgrading American roads, bridges and other public works. “While there are a number of issues on which President Trump and I disagree, today, we agreed that things worth having are worth paying for,” Carper said in a statement. “The president even offered to help provide the leadership necessary so that we could do something that has proven difficult in the past.” Rep. Peter DeFazio (D-OR) - the top Democrat on the House Transportation and Infrastructure Committee was also present at the meeting, in which he says President Trump told lawmakers he would be willing to increase federal spending beyond the White House's $200 billion, 10-year proposal. Rep. Bill Shuster (R-PA), chairman of the House Transportation and Infrastructure Committee, is encouraging his GOP colleagues to support the increased gas tax as a way to keep the Highway Trust Fund solvent beyond 2021. The fund finances road, bridge and transit projects.  “He understands that we’ve got to figure out the funding levels and where the money’s coming from, make sure it’s not smoke and mirrors,” Shuster said of the president.

    Trump’s Gas-Tax Hike Goes Nowhere in Congress - Despite backing from groups as wide ranging as the U.S. Chamber of Commerce, the lobby for truckers -- and now President Donald Trump -- a proposal to raise gas tax for the first time in 25 years appears to be going nowhere fast on Capitol Hill. Trump surprised a bipartisan group of House and Senate committee leaders Wednesday at the White House by offering to support a 25 cent-per-gallon increase in the tax on gas and diesel fuel dedicated to improving roads, highways and bridges. But that wasn’t swaying Republican opinion Thursday.“I don’t think there is support for it right now,” Representative Kevin McCarthy of California, the second-ranking House Republican, said in an interview Thursday. Asked whether there’s support among Senate Republicans to increase the fee, Majority Leader Mitch McConnell spokesman Don Stewart referred to previous statements made by the Kentucky Republican. “It’s always no,” Stewart said.Even Marc Short, Trump’s legislative affairs director, said Thursday in an interview the “political reality” is that “there is not support for a gas tax in Congress.”A White House official declined to comment on Trump’s discussions in the closed-door meeting, called to discuss his $1.5 trillion infrastructure plan released Monday. But Tom Carper of Delaware, the top Democrat on the Senate Environment and Public Works Committee, said Trump offered his support at the meeting. Senator Jim Inhofe of Oklahoma, who was also in the meeting, said reports about Trump’s backing were “exaggerated” but that the president did say all options were on the table and he would support an increase to the fuel levies. The prospect of a higher gas tax has pitted the Chamber against another one of the most powerful forces in conservative American politics. The political network led by billionaire industrialists Charles and David Koch is opposed to raising the levy right after Congress passed a $1.5 trillion tax-cut bill.

    The Trump administration wants to turn the International Space Station into a commercially run venture, NASA document shows - WaPo - The Trump administration wants to turn the International Space Station into a kind of orbiting real estate venture run not by the government, but by private industry. The White House plans to stop funding the station after 2024, ending direct federal support of the orbiting laboratory. But it does not intend to abandon the orbiting laboratory altogether and is working on a transition plan that could turn the station over to the private sector, according to an internal NASA document obtained by The Washington Post. “The decision to end direct federal support for the ISS in 2025 does not imply that the platform itself will be deorbited at that time — it is possible that industry could continue to operate certain elements or capabilities of the ISS as part of a future commercial platform,” the document states. “NASA will expand international and commercial partnerships over the next seven years in order to ensure continued human access to and presence in low Earth orbit.” In its budget request, to be released Monday, the administration would request $150 million in fiscal year 2019, with more in additional years “to enable the development and maturation of commercial entities and capabilities which will ensure that commercial successors to the ISS — potentially including elements of the ISS — are operational when they are needed.” The plan to privatize the station is likely to run into a wall of opposition, especially because the United States has spent nearly $100 billion to build and operate it.  Last week, Sen. Ted Cruz (R-Tex.) the decision was the result of “numskulls” at the Office of Management and Budget. When asked about the possibility of a public-private partnership, he said, “I think all of us are open to reasonable proposals that are cost effective and that are utilizing the investments we made in a way that maximize their effectiveness." 

    Mnuchin Breaks With White House, Calls On Congress To Address Gun Violence -- Treasury Secretary Steve Mnuchin called on Congress Thursday to address issues related to gun violence less than 24 hours after 17 people were murdered in a Florida school shooting. "I will say, personally, I think the gun violence its a tragedy what weve seen yesterday, and I urge Congress to look at these issues," said Mnuchin, while addressing a question from Rep. John Lewis (D-GA) during a House Ways and Means Committee hearing about whether Trump's new budget addressed gun violence.While Mnuchin first stumbled through his response, "Um, I, I don't, I'm not aware of that level of detail in the budget for me to be the expert to attest on that," he then shifted into his personal views on the matter when he asked Congress to look into the issue of gun violence.A spokesman for the Treasury, Tony Sayegh, told Politico that Mnuchin's testimony was taken out of context:Instead, according to a Treasury official, Mnuchin was referring to whether there was money in the federal budget to examine the proliferation of mass shootings in the United States, not whether Congress should consider new gun control laws.Secretary Mnuchin was directly addressing Congressman [John] Lewis question about availability of funds in the budget to address the issue of gun violence. He also reflected the feelings shared by all Americans that yesterdays school shooting was a profound tragedy, said Treasury spokesman Tony Sayegh. While Mnuchin is notably the first senior official in the Trump administration to suggest Congress look into "these issues," one should note that the former Goldman alum turned Hollywood financier may be one of the more liberal members of Trump's cabinet - having contributed heavily to Democrats prior to the 2016 election, including the campaigns of Hillary Clinton, Al Gore, John Kerry and Barack Obama.

    Trump spars with GOP lawmakers on steel tariffs | TheHill: President Trump on Tuesday told lawmakers at the White House that he is considering new tariffs on imported steel and aluminum, warning that the domestic industries are being “decimated” by unfair trade. “They are dumping and destroying our industries,” Trump said. “We can’t let that happen.” Trump pushed back against several lawmakers who warned him the tariffs could cost U.S. jobs and hurt the broader economy. “You may have a higher price, but you have jobs,” Trump said during the nearly hourlong meeting, which included lawmakers from both parties. The White House meeting was scheduled as closed to the press, but Trump let reporters remain in the room. That allowed for an unusual public airing of the tensions between Republican lawmakers and the president on trade. Republicans have been particularly outspoken on trade issues, repeatedly calling on the president to remain in the North American Free Trade Agreement. Lawmakers stayed on offense, warning the president that previous tariff actions have backfired and done more harm than good to jobs and U.S. manufacturing.

    Trump weighs his options on 232 -- President Donald Trump has yet to make any concrete decisions regarding whether to proceed with limiting imports of steel and aluminum for national security reasons — but after a bipartisan, bicameral meeting at the White House on Tuesday with lawmakers and a half-dozen of his top advisers, he’s at least well-versed in both sides of the debate.The hourlong gathering provided an opportunity for 19 lawmakers to sit down with Trump, U.S. Trade Representative Robert Lighthizer, Commerce Secretary Wilbur Ross and others to either urge the administration to move more quickly to restrict imports or to emphasize the need to take a narrow, targeted approach.In one exchange, Sen. Pat Toomey (R-Pa.) pressed Trump to move "very, very cautiously" and to only go after countries that engage in unfair trading practices. “That's all countries," Trump replied.In another, Sen. Mike Lee (R-Utah) warned that restrictions could cost jobs in other industries, but the president dismissed his concerns. “It will create a lot of jobs,” Trump said."If we ever have a conflict, we don't want to be buying steel from a country that we're fighting because somehow that doesn't work very well," Trump said at the meeting. "We hopefully will not have any conflicts but ... we cannot be without a steel industry. We cannot be without an aluminum industry. So what we're talking about is tariffs and/or quotas." But overall, Trump “was listening very carefully,” House Ways and Means Chairman Kevin Brady said after the meeting, noting that the president appeared to be open to suggestions on how to proceed. “I made the case that 232 sort of is like old-fashioned chemotherapy. It’s not used very often because it can do as much damage as it can good.”  Trump also made clear, however, that he wanted to take a “very different course” from what his predecessors have done, Sen. Ron Wyden, the top Democrat on the Senate Finance Committee, told reporters. Read the full story from Doug Palmer and yours truly here.

    Trump Threatens "Reciprocal Tax" On Imported Goods; White House Denies - US President Trump, who has already raised taxes on the US consumer once this year, is vowing to do so again. On Monday, the president suggested a reciprocal tax on imported goods (details were not forthcoming). Generally, such taxes tend to hit lower income consumers more than higher income consumers. The Wall Street Journal reported that Trump's blueprint surprised his top aides, who were quick to note that no formal plans have been drawn up yet. The comments about the reciprocal tax were made during a meeting at the White House with mayors and governors to discuss his infrastructure plan, which was officially unveiled yesterday. However, Trump seemed pretty adamant that such a plan would, in fact, be put into place.“We are going to charge countries outside of our country - countries that take advantage of the United States,” Mr. Trump said. “Some of them are so-called allies, but they’re not allies on trade.”As a result, he said, “we’re going to be doing very much a reciprocal tax, and you’ll be hearing about that during the week and the coming months.” Trump famously campaigned on raising trade barriers, including threatening to slap a 30% import tax on Chinese goods, as a central tenant of his nationalist agenda. But he has been slow to implement measures that typically pro-free trade Republicans oppose, though his administration has made some notably protectionist moves, like slapping Canadian aerospace company Bombardier's C-Series jet with a 300% import tariff for purportedly anticompetitive subsidies.  Update: Citing an unnamed administration official, Bloomberg reports that the White House has "no formal proposal on the table for a so-called reciprocal tax on imports" - presenting yet another case of an administration official contradicting their boss in the press.

    Commerce Department calls for Trump to impose steep tariffs or quotas on foreign steel and aluminum - The Commerce Department on Friday recommended imposing heavy tariffs or quotas on foreign producers of steel and aluminum in the interest of national security, following a trade investigation of imports.President Donald Trump and his administration announced the so-called Section 232 investigation into steel and aluminum imports in April. The investigation sought to determine whether the imports posed a threat to the country's national security.On Friday, Commerce Secretary Wilbur Ross reported that steel is in fact important to U.S. national security, and current import flows are adversely impacting the steel industry. "[T]he Secretary of Commerce concludes that the present quantities and circumstance of steel imports are 'weakening our internal economy' and threaten to impair the national security as defined in Section 232," the department said.  In a 262-page document, Ross recommended a couple alternatives for the president to take "immediate action by adjusting the level of imports through quotas or tariffs." The department's goal is to increase demand for American-made metals.Trump must respond to the reports by April 11 and 19 for steel and aluminum, respectively. Among the recommendations in the reports are a global tariff of 24 percent on all steel imports.  An alternative option would target 12 countries, including China and Brazil, who export the most cheap steal to the U.S. Those countries would be charged new tariffs of 53 percent or higher. In this scenario, countries not listed in the list would see US imports capped at the amount they imported in 2017. A third option would institute a quota on steel imports from all countries, up to 63 percent of what those countries imported in 2017. The aluminum recommendations include a 7.7 percent tariff on imports from all exporter nations. Ross separately suggested a 23.5 percent tariff on aluminum products from China, Hong Kong, Russia, Venezuela and Vietnam, with a cap for all countries at 2017 import levels.  An aluminum import quota on all countries of 86.7 percent of their 2017 imports was also an option detailed in the report.

    Trump Administration Proposes Stiff Penalties on Steel and Aluminum Imports - — The Trump administration for the first time declared imports of steel and aluminum from China and other nations a threat to national security, laying the foundation for President Trump to impose the types of punitive tariffs he has long championed.In a report released on Friday, the Commerce Department said a recent influx of foreign metals posed a risk to national security by threatening the viability of American manufacturers who make planes, armored vehicles and other products for the military. It outlined an array of recommendations the president could take to help domestic manufacturers struggling to stay competitive, including a sweeping tariff of 24 percent on steel imports from all countries.The recommendations hand Mr. Trump an opportunity to make good on the get-tough approach to global trade that he has long espoused by giving him authority to decide the scope and severity of any trade action by mid-April. Mr. Trump has previously embraced tariffs on imports of steel and solar products as crucial to protecting American companies.Yet erecting barriers could prompt swift retaliation from other trading partners, including China and the European Union, which have already warned of reciprocal action in response to protectionist measures. It could also further erode relations with foreign allies that might be ensnared by the measure and drive up prices for American consumers. Wilbur Ross, the secretary of commerce, outlined three alternatives Mr. Trump could choose from to protect American steel producers, which have struggled to compete with a flood of cheap metals from China and other countries. The options included a broad 24 percent tariff on all steel imports, or a targeted 53 percent tariff on all steel products from 12 countries, including China, Brazil, India, South Korea and Vietnam. Under this option, imports from all other countries would be limited to the level they imported in 2017. Mr. Ross also proposed an alternative for the steel industry that involved no tariffs, but would set a quota limiting steel imports from all countries to roughly two-thirds the level they were at last year. For aluminum, the Commerce Department also outlined three alternatives, including a flat 7.7 percent tariff on imports from all countries, or a targeted 23.6 percent tariff on aluminum from China, Hong Kong, Russia, Venezuela and Vietnam. A third option involved putting into effect quotas to limit aluminum imports to lower levels than were shipped to the United States last year.

     Canada's Trudeau: To Save NAFTA, Avoid Trump - Consider this article from Bloomberg on Canadian PM Justin Trudeau seeing a "clear path forward" on NAFTA. You see, the path he's taken is to largely bypass the Americans actually responsible for (re)negotiating trade deals, namely Trump and his trade representative Robert Lighthizer. Instead, Trudeau has taken his case directly to [a] representatives whose constituents will lose out from NAFTA's demise and [b] companies presumably with strong lobbying arms who would also be negatively affected:Trudeau’s government has been attempting to win support from U.S. lawmakers and businesses to keep Trump from pulling out of the North American Free Trade Agreement, as he’s repeatedly threatened to do. Canadian efforts also come amid signs U.S. Trade Representative Robert Lighthizer is growing more frustrated with the country. “There is a clear path forward and we’re working very hard together on that path,” Trudeau said Saturday in Los Angeles. He spoke alongside Mayor Eric Garcetti, one of many prominent Democrats he met with. Canada wants to “ensure that we can move forward in a way that is a win-win for all of us.” Garcetti hailed Canadian investment in his city and said Trudeau’s trip was well-received. “This is deeply important work the prime minister is doing.” Canada's NAFTA game plan was already spelled out sometime ago. If anything, this is not a "clear path forward" for a number of reasons. First, as I've mentioned, Trudeau's path appears more circuitous than direct through bypassing the formal counterparties to the NAFTA re(negotiations)--Trump, Lighthizer, and others in the executive branch. So, he's trying to raise support in a roundabout manner even if you can argue that Trudeau is actually appealing to those with a greater stake here--namely, NAFTA-participating regions and companies.

     US Slaps China With Antidumping Duty On Cast Iron Soil Pipe Fittings -- Another day, another escalation in the upcoming US-China trade war. On Wednesday, U.S. Secretary of Commerce Wilbur Ross announced the affirmative preliminary determination in the antidumping duty (AD) investigation of imports of cast iron soil pipe fittings from China. “Though politics plays no role in antidumping investigations, President Trump made it clear that we will vigorously enforce our trade laws and provide U.S. industry relief from unfair trade practices,” said Secretary Ross. “Today’s decision allows U.S. producers of cast iron soil pipe fittings to receive relief from the market-distorting effects of potential dumping while we continue our investigation.”The Commerce Department announced that it had determined that exporters from China have sold cast iron soil pipe fittings in the United States at 68.37 to 109.95 percent less than fair value.As a result of today’s decision, Commerce will instruct U.S. Customs and Border Protection (CBP) to collect cash deposits from importers of cast iron soil pipe fittings from China based on these preliminary rates. The petitioner of the action was the Cast Iron Soil Pipe Institute (IL), the members of which are AB&I Foundry (CA), Charlotte Pipe & Foundry (NC), and Tyler Pipe (TX). 

    US Congress begins debate on milestone anti-immigrant legislation --  The Senate voted 97-1 yesterday to open debate on legislation to revamp the US immigration system and address the legal status of 1.8 million young undocumented immigrants who are either beneficiaries of or eligible for the Deferred Action for Childhood Arrivals (DACA) program.The program, which shields from deportation young undocumented immigrants brought to the US as children, was terminated last fall by President Trump, who set a March 5 date for the termination to take effect.Republican Speaker of the House Paul Ryan has given no firm pledge to start debate on immigration and DACA in the lower chamber, saying he will do so only if the proposed bill is backed by President Trump, who is demanding a further buildup of border security and immigration police and prisons, along with sharp reductions in legal immigration.Immigrants could wish for no worse group of people to determine their fates than the 535 corporate hacks and military-intelligence stooges who make up the United States Congress.The strongest warning must be made: there is no possibility of a positive outcome from the debate in Washington. There are two alternatives: either no agreement is reached, leaving hundreds of thousands of immigrant youth to face deportation, or a deal is worked out that tightens restrictions on immigration, separates immigrants from their families, and further militarizes the border, causing thousands more to die in search of a better life.

    And So It Begins: Mitch McConnell Kicks Off Free-For-All Senate Immigration Debate - In keeping with his promise to call an open-ended debate on an immigration compromise bill should lawmakers fail to reach a compromise on their own, the Senate tonight will begin arguing about a bill that has no clear form or substance... Senators are predicting a chaotic debate, according to the Hill. Tonight, Majority Leader Mitch McConnell will call for debate on a shell bill that basically will allow lawmakers to bringing up any and every topic they'd like. And predictably, several different factions are working out their own plans, all hoping to be the leaders of the eventual compromise bill that makes it to President Trump's desk.“It sounds like Senator McConnell’s just going to pull up a shell bill and let people have at it. ... It ought to be pretty fascinating,” said Senate Majority Whip John Cornyn (R-Texas), McConnell’s top deputy.Sen. Dick Durbin (Ill.), Cornyn’s Democratic counterpart, predicted: “You’re going to hear as many variations as the fertile minds of my colleagues can produce.”McConnell made his promise to secure the necessary Democratic votes to pass the bipartisan agreement to keep the government funded through March 23 while raising the debt limit and suspending spending caps that will open the door toward negotiations for a two-year budget deal. So far, lawmakers have complained that the White House - which is ostensibly pro-DACA - has repeatedly shifted its position, making it impossible to negotiate or arrive at anything even remotely resembling a compromise that would be acceptable to Democrats. For example, the so-called "Gang of Six" famously put forward a bipartisan proposal that included enshrining DACA protections in exchange for increased funding for border security - but crucially, it didn't include money for the wall, and so was panned by President Trump.

     Sen. Hatch’s H-1B bill and other guestworker proposals should be kept out of Senate immigration debate - EPI Blog - In the context of this week’s immigration debate in the Senate, Republican Senators will push for the reforms in the Secure and Succeed Act of 2018, which reflect the White House’s policy priorities for immigration. It’s likely, however, that one or more Senators will try to attach legislation to increase the number of temporary migrant workers who lack adequate wage and worker protections onto any bill that emerges. The thrust of any guestworker proposals that may arise will be to widen the essentially lawless zone in the labor market that has been carved out by the proliferation of temporary work visa programs, which put American and permanent immigrant workers into competition with temporary migrants who are denied all opportunity to bargain meaningfully for higher wages. This week’s debate in the Senate should prioritize providing a path to citizenship for DREAMers, not opportunistically expanding the share of workers in America who are not protected by labor standards. As the Los Angeles Times recently suggested, there may be an attempt to include a bill from Sen. Orrin Hatch (R-Utah) that would triple the number of college-educated temporary migrant workers who are employed in the H-1B visa program—a flawed guestworker program used mainly to outsource jobs in information technology and send high-tech jobs offshore. Hatch’s bill is known as I-Squared, and although Hatch is trying to sell it as an increase in “merit-based” immigration, it is primarily an attempt to increase the number of temporary migrant workers the tech industry can hire at low wages.   Hatch’s I-Squared bill would exacerbate the problems the H-1B program creates by vastly increasing the number of H-1B workers while failing to fix the three main problems with the H-1B program: first, employers are allowed to legally underpay H-1B workers compared to similarly situated U.S. workers; second, employers do not have to recruit U.S. workers before hiring H-1B workers, allowing them to ignore the U.S. workforce altogether; and third, the H-1B program allows employers to replace U.S. workers with much lower-paid H-1B workers—a deplorable practice that has occurred far toomany times—and the laid-off workers are often forced to train their own H-1B replacements as a condition of their severance pay.

    Bipartisan group of senators says it has a DACA deal -- A bipartisan group of senators working on immigration legislation has reportedly reached a consensus.The deal will be announced later Wednesday, senators involved in the so-called Common Sense Coalition told reporters after a closed-door meeting."It's going to be ready today," said Sen. Tim Kaine, D-Va., The Hill reported.Sen. Lindsey Graham, R-S.C., said the deal would establish a pathway to citizenship for the nearly 2 million undocumented immigrants brought to the U.S. as children and protected under the Deferred Action for Childhood Arrivals program, or DACA, Bloomberg reported. Graham also said the deal will address border security. Graham said the deal would not, however, deal with the so-called diversity visa lottery, which prioritizes immigration from countries that send fewer immigrants to the U.S., or family reunification, which immigration hardliners have dubbed "chain migration." Axios reported on Tuesday that President Donald Trump will veto an immigration bill that doesn't include the reforms he wants. The report cited a senior administration official. Trump has pushed to end the family reunification and visa lottery systems.Trump decided in September to end the Obama-era DACA but gave Congress until March to fix it.  The offices of Sens. Jeff Flake, Susan Collins, Graham and Kaine did not immediately respond to CNBC's requests for comment.

    Bipartisan DACA, border security deal fails in Senate, putting immigration bill's future in doubt - In a stinging defeat after months of negotiations, senators on Thursday failed to advance a bipartisan proposal to resolve the future of millions of young undocumented immigrants, leaving talks seemingly back at square one. A much-anticipated bipartisan deal that would have paired a pathway to citizenship for nearly 2 million undocumented immigrants who came to the US as children with $25 billion in border security and some other measures failed to get the 60 votes necessary to advance legislation after furious White House opposition. The vote was 54-45. A competing White House-backed plan that would have also substantially increased federal deportation powers, heavily cut family-based legal migration and ended the diversity visa also failed, 39-60.  The episode, coming at the end of a much-anticipated Senate week of debate on immigration, revealed that the White House was able to kill momentum for a deal that had emerged out of weeks of talks by roughly 20 bipartisan senators -- but that it also had no ability to enact any legislation to achieve its stated goal of protecting the recipients of the Deferred Action for Childhood Arrivals program, which President Donald Trump is ending, and increasing border security measures along with it.Sen. John Thune said it's "back to the drawing board." "Well, we'll go back to the drawing board, come up with a solution. I've got a proposal that maybe we'll get a shot at one of these days, too, so. We've gotta fix the issue, address the DACA problem and do something about the border," Thune, R-South Dakota, told CNN's Sunlen Serfaty. Trump called the bipartisan bill "a total catastrophe," tweeting that "Voting for this amendment would be a vote AGAINST law enforcement, and a vote FOR open borders." Attorney General Jeff Sessions also derided the legislation, saying it "will invite a mad rush of illegality across our borders," and Homeland Security Secretary Kirstjen Nielsen made calls to lawmakers urging them to reject the bill.

    Senate immigration debate ends in failure – POLITICO - The Senate's drive to clinch an immigration deal sputtered to an end on Thursday, with a bipartisan and White House-blessed proposal both defeated and the Dreamers left in limbo once again.It was a frustrating, if largely expected, conclusion to a much-hyped immigration debate this week that never really got off the ground.And in a blow to President Donald Trump, the GOP plan to enshrine his four-part immigration framework came the furthest of any proposal from reaching the 60-vote margin needed for passage, failing by 39-60. A competing bipartisan agreement got rejected, 54-45, after a furious White House campaign to defeat it, including a Thursday veto threat. In the end, eight Republicans joined all but three Democrats in support of the main bipartisan proposal, which would have given an estimated 1.8 million undocumented immigrants a path to citizenship while spending $25 billion on border security. But the amendment outlining the president's proposal, which he made clear was the only option he'd support, lost 14 GOP votes while gaining support from only three red-state Democrats. The Trump-backed plan would have provided a path to citizenship for a similar pool of Dreamers but included cuts to legal immigration, along with increased border security.“This vote is proof that President Trump’s plan will never become law," Senate Minority Leader Chuck Schumer (D-N.Y.) said in a statement. "If he would stop torpedoing bipartisan efforts, a good bill would pass.”The upshot is stalemate, despite long-running negotiations, particularly among the bipartisan group of mostly moderate senators.  Two other amendments were also rejected: a narrower plan with no border wall funding from Sens. John McCain (R-Ariz.) and Chris Coons (D-Del.) on a 52-47 vote, and a sanctuary cities measure from Sen. Pat Toomey (R-Pa.) on a 54-45 vote.

    Danger of mass deportations grows as US Senate refuses to protect immigrant youth - Hundreds of thousands of immigrants brought to the US as children face an increased threat of deportation after the Senate rejected a series of proposals to couple legal status for those covered by the Deferred Action for Childhood Arrivals (DACA) program with stepped-up repressive measures against immigrants, including Trump’s wall along the US-Mexico border.Four votes were taken, each to close debate on a specific immigration measure, and all four fell short of the 60 votes required to end debate and force a vote on final passage. Three of the measures dealt directly with those covered by the DACA program, which Trump cancelled last September, setting a deadline of March 5 for expiration—at which point nearly 800,000 young people brought here as children could face deportation.These included two bipartisan plans, named after their lead Republican and Democratic sponsors, the McCain-Coons amendment, and the Collins-King amendment. Both these bills provided for legal status and a 10 to 12-year path to citizenship for DACA recipients, with the Collins bill providing more money for “border security” than the McCain bill, and explicitly approving the wall.The Democratic leadership went all-out to back the Collins-King bill, and 45 Democrats, including Elizabeth Warren and “independent” Bernie Sanders, backed a measure that would have increased funding for border militarization and expanded funding for internal deportation operations by $25 billion.The third bill, backed by the Senate Republican leadership, incorporated all four “pillars” demanded by the Trump White House, including drastic cuts in legal immigration. Three Democrats voted for this bill, but nearly a dozen Republicans opposed it because they oppose granting any path to citizenship for DACA recipients, no matter how onerous.The fourth bill was unrelated to DACA, but was introduced by Republicans seeking to punish so-called sanctuary cities that limit cooperation by local police with federal immigration agencies. Significantly, four Democrats, including Debbie Stabenow of Michigan, backed this ultra-right measure. The dangerously xenophobic framework of the entire immigration debate was suggested in a passing reference made by Republican Senator Lindsay Graham at a press conference before the vote. “There’s some crazy people around here” making immigration policy, he said, referring to Trump’s top policy adviser Stephen Miller and the press spokesman for the Department of Homeland Security, Tyler Houlton, who previously worked for Representative Tom Tancredo, a notorious anti-immigrant demagogue.

    Trump's travel ban is unconstitutional religious discrimination, US court rules - Donald Trump’s latest travel ban on travelers from six predominantly Muslim countries is unconstitutional because it discriminates against people based on their religion, a federal appeals court ruled Thursday. In a 9-4 vote, the fourth US circuit court of appeals in Richmond, Virginia, said it examined statements made by Trump and other administration officials, as well as the ban itself, and concluded that it was “unconstitutionally tainted with animus toward Islam”. The court upheld a ruling by a federal judge in Maryland who issued an injunction barring enforcement of the ban against people from Chad, Iran, Libya, Somalia, Syria and Yemen who have bona fide relationships with people in the US. The US supreme court has already agreed to hear the travel ban case in April. In December, the high court said the ban could be fully enforced while appeals made their way through the courts. In its ruling, the fourth circuit used soaring language to criticize the ban, saying it had a “much broader deleterious effect” than banning certain foreign nationals. The court said the ban “denies the possibility of a complete, intact family to tens of thousands of Americans”. “On a fundamental level, the proclamation second-guesses our nation’s dedication to religious freedom and tolerance,” the chief justice, Roger Gregory, wrote for the court in the majority opinion. Trump has said the ban is a legitimate measure to protect national security. The ruling was the second time the fourth circuit has rejected a travel ban. In May, the court cited Trump’s remarks on Muslim travelers while rejecting an earlier version of the ban, finding it “drips with religious intolerance, animus and discrimination”. Trump announced his initial travel ban on citizens of certain Muslim-majority countries shortly after taking office in January, bringing havoc and protests to airports around the United States. The latest version blocks travelers from the listed countries to varying degrees, allowing for students from some of the countries, while blocking other business travelers and tourists, and allowing for admissions on a case-by-case basis. 

    The US is the world’s second worst tax haven, say Tax Justice Networks ranking - US senator Sheldon Whitehouse didn’t hold back when talking about America’s role as laundering the world’s dirty money on Tuesday, Feb 6. “Our European partners are doing their part to combat crime facilitated by shell corporations. If we don’t soon follow suit, I fear we will risk losing our place as that city on a hill and beacon of justice,” he said at a Senate Judiciary Committee hearing.Last week, the US was ranked the world’s second worst jurisdiction for lack of financial transparency by the Tax Justice Network (TJN). The only more secretive country is Switzerland, according to the anti-corruption organization’s 2018 Financial Secrecy Index. The US provides an increasingly large portion of the world’s offshore financial services, especially in states like Delaware, Nevada, and Wyoming. As Quartz has previously written, one 2012 academic study found it was easier to form a shell company(pdf) in the US than in Panama. Despite years of documentation of US shell companies being used for illegal activity, the US has failed to change its ways. In fact, the country jumped up a spot from third place when the TJN last did the study in 2015, with the US share of the offshore market growing from 19.6% to 22.3%. The index is calculated on a mixture of each jurisdiction’s secrecy and market share. The US government “refuses to take part in international initiatives to share tax information with other countries, and has failed to end anonymous companies and trusts aggressively marketed by some US states,” the report says. “There is now real concern about the damage this promotion of illicit financial flows is doing to the global economy.”

     Mnuchin: IRS Will Ban Carried-Interest Tax Dodge - That was fast.  No sooner had we begun pecking out a post on this morning's report about hedge funds fleeing to Delaware to create shell companies to circumvent certain new impositions on their carried-interest tax rate than Treasury Secretary Steve Mnuchin let the world know - lest the 10-year yield pop above the widely feared 3% threshold - that the Internal Revenue Service will issue guidance within the next two weeks to outlaw the practice. Per Bloomberg:"I’ve already met with the IRS and our Office of Tax Policy this morning as a result of that article," Mnuchin said Wednesday during a Senate Finance Committee hearing, referring to a Bloomberg News story about hedge fund managers creating shell companies to work around stricter limits on carried interest. "Taxpayers will not be able to get that loophole."Mnuchin made his comments in response to criticisms from Oregon Senator Ron Wyden, the ranking member of the Senate Finance Committee, who questioned the administration's decision to change the carried-interest requirements to force hedge funds to hold assets for three years now if they want to qualify for the lower rate. Previously, investors only needed to hold them for one year.  Wyden called the provision "a farce."As Bloomberg explains, carried interest is the portion of a fund's returns that are paid to hedge fund managers, private-equity players, venture capitalists and some real estate investors. For federal tax purposes, it’s eligible for a tax rate of 23.8% - which includes a 3.8% tax on investment income imposed by the Affordable Care Act - on sales of assets held for at least three years. Otherwise, it’s treated as ordinary income and managers face a top federal income tax rate of 37%.

    Florida Governor Says FBI Chief Chris Wray Should Resign -Florida Governor Rick Scott has called on FBI director Chris Wray to resign after the bureau admitted earlier today that certain protocols weren't followed when an acquaintance contacted the FBI's Public Access Line (PAL) tipline to report concerns about Nikolas Cruz, the former student at a Florida high school.... On Jan. 5, a person close to Cruz called an FBI tip line warning them about the 19 year old's behavior, and warning them that he might try to carry out a school shooting. They also discussed his expressed desire to kill people, his erratic behavior and disturbing social media posts. The FBI was also notified about a comment on a YouTube video posted by a "Nikolas Cruz" last year. "The comment simply said, 'I'm going to be a professional school shooter,'" Robert Lasky, FBI Special Agent in Charge of the Miami field office, said during a Thursday news conference. "No other information was included with that comment, which would indicate a time, location or true identity of the person who made that comment." "We have determined that these protocols were not followed for the information received by the PAL on January 5. The information was not provided to the Miami field office, and no further investigation was conducted at that time," the FBI said in a statement Friday. Scott called the failure to act, which occurred under Wray's watch, "unacceptable" and said the only reasonable thing for Wray to do would be to resign. "The FBI’s failure to take action against this killer is unacceptable....The FBI Director needs to resign," said Scott in a statement. "We constantly promote ‘see something, say something,’ and a courageous person did just that to the FBI. And the FBI failed to act. ‘See something, say something’ is an incredibly important tool and people must have confidence in the follow through from law enforcement. The FBI director needs to resign," Scott added. "Seventeen innocent people are dead and acknowledging a mistake isn't going to cut it. An apology will never bring these 17 Floridians back to life or comfort the families who are in pain. The families will spend a lifetime wondering how this could happen, and an apology will never give them the answers they desperately need."

    Last February, Trump signed a bill making it easier for people with mental illness to buy guns --It did not attract a ton of attention at the time (nothing does these days) but about a year ago on February 28, 2017, Congress passed and Donald Trump signed a law revoking an Obama-era regulatory initiative that made it harder for people with mental illness to buy a gun.  Yet despite this effort to roll back even a very modest effort to restrain the ability of seriously incapacitated people from obtaining deadly weapons, this morning Trump tweeted that there were “so many signs that the Florida shooter was mentally disturbed,” implying that someone should have done something to report him.So many signs that the Florida shooter was mentally disturbed, even expelled from school for bad and erratic behavior. Neighbors and classmates knew he was a big problem. Must always report such instances to authorities, again and again!— Donald J. Trump (@realDonaldTrump) February 15, 2018 But it’s Trump’s party — and Trump himself — who have consistently prevented the federal government from doing anything about this kind of situation. The Obama-era gun regulation wouldn’t have had a massive impact on gun violence in the US since it’s estimated that it would only affect about 75,000 people. And disability rights groups had their own objections to the bill so some liberal groups, including the ACLU, joined with the National Rifle Association in urging Trump to reverse it. But anything that makes it easier to obtain a gun, the research suggests, will likely worsen gun violence. After all, America already has some of the weakest gun laws in the developed world — and repealing a rule that made it a little tougher for some people to buy a gun likely makes that worse.

    Nothing in the Constitution Prevents Sensible Gun Rules -- The use of the Second Amendment, which reads: “A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms shall not be infringed.” to block consideration of sensible gun control measures is a national disgrace.  Historians have long debated whether the Second Amendment provides any protection, at all, for the individual right to own guns. There are reasonable arguments both ways. For most of the 20th century, the firm consensus among federal judges — Republican or Democratic — was that it did not provide that protection. It was not until 2008 that the Supreme Court ruled that it did. The justices were badly divided. Four members of the court agreed with the longstanding consensus. The majority opinion, joined by five justices, ruled that the Second Amendment does create an individual right of gun ownership. But the opinion, written by Justice Antonin Scalia, was modest and cautious. Justice Scalia’s opinion did not come close to embracing the arguments made by those who invoke the Second Amendment as an all-purpose weapon against democratic efforts to prevent the murder of high-school kids. On the contrary, his opinion is full of permission slips for federal, state and local governments to act. In a crucial sentence, Justice Scalia wrote, “Nothing in our opinion should be taken to cast doubt on longstanding prohibitions on the possession of firearms by felons and the mentally ill, or laws forbidding the carrying of firearms in sensitive places such as schools and government buildings, or laws imposing conditions and qualifications on the commercial sale of arms.” Justice Scalia also emphasized that the Second Amendment is restricted to weapons “in common use at the time.” He added that the Constitution leaves government with many tools for combating the problem of handgun violence, including regulation. After the court’s decision, lower courts have upheld numerous restrictions on the sale and ownership of guns. On dozens of occasions, the justices have declined to review such rulings, suggesting that they accept Justice Scalia’s permission slips. It is true that the precise meaning of the Second Amendment has yet to be settled. But no one can doubt the central point: There is a profound disconnect between the actual meaning of the Second Amendment, as it is understood by courts, and political uses of the Second Amendment, as it is invoked in federal and state legislatures, and as a basis for attacking politicians who are thinking in good faith about how best to save lives.

    U.S. Spies, Seeking to Retrieve Cyberweapons, Paid Russian Peddling Trump Secrets – NYT — After months of secret negotiations, a shadowy Russian bilked American spies out of $100,000 last year, promising to deliver stolen National Security Agency cyberweapons in a deal that he insisted would also include compromising material on President Trump, according to American and European intelligence officials.The cash, delivered in a suitcase to a Berlin hotel room in September, was intended as the first installment of a $1 million payout, according to American officials, the Russian and communications reviewed by The New York Times. The theft of the secret hacking tools had been devastating to the N.S.A., and the agency was struggling to get a full inventory of what was missing Several American intelligence officials said they made clear that they did not want the Trump material from the Russian, who was suspected of having murky ties to Russian intelligence and to Eastern European cybercriminals. He claimed the information would link the president and his associates to Russia. Instead of providing the hacking tools, the Russian produced unverified and possibly fabricated information involving Mr. Trump and others, including bank records, emails and purported Russian intelligence data.The United States intelligence officials said they cut off the deal because they were wary of being entangled in a Russian operation to create discord inside the American government. They were also fearful of political fallout in Washington if they were seen to be buying scurrilous information on the president. The Central Intelligence Agency declined to comment on the negotiations with the Russian seller. The N.S.A., which produced the bulk of the hacking tools that the Americans sought to recover, said only that “all N.S.A. employees have a lifetime obligation to protect classified information.”

      CIA Slams "Fictional" Report Of Payment For Trump Sex Tape, NSA Cyberweapons -- The CIA has slammed "fictional" reports in The Intercept and the New York Times alleging that American spies paid a Russian operative $100,000 last September for what they were told were stolen NSA cyberweapons and a videotape of President Trump engaged with prostitutes in a Moscow hotel room.  After allegedly paying the operative, The Times reports US intelligence discovered that much of much of the material had already been made public, and they had effectively been swindled out of the first installment of an agreed upon $1 million payment - whittled down from the Russian's original demand for $10 million. According to the @nytimes, a Russian sold phony secrets on “Trump” to the U.S. Asking price was $10 million, brought down to $1 million to be paid over time. I hope people are now seeing & understanding what is going on here. It is all now starting to come out - DRAIN THE SWAMP! — Donald J. Trump (@realDonaldTrump) February 10, 2018  Shortly after Pulitzer Prize winner James Risen of The Intercept published his report on Friday alleging that the US intelligence community had "opened a secret communications channel with the Russian operatives" which involved the CIA transporting cash "to the CIA's station in Berlin to complete the transaction," Matthew Rosenberg of the New York Times published a similar story, adding that the cash was routed through an indirect channel, and delivered in a Berlin hotel room last September.   In reaction, the CIA called the report "fictional," telling the Daily Caller News Foundation: “The people swindled here were James Risen and Matt Rosenberg," adding "The fictional story that CIA was bilked out of $100,000 is patently false”

       Trump's Lawyer: Trump Didn't Pay Porn Star $130,000, I Did - President Trump's longtime personal lawyer, Michael D. Cohen, told the New York Times that he paid $130,000 to porn star Stephanie Clifford (a.k.a. "Stormy Daniels) out of his own pocket, and that neither the Trump Organization or the Trump Campaign had anything to do with the 2016 transaction. What a nice guy! “Neither the Trump Organization nor the Trump campaign was a party to the transaction with Ms. Clifford, and neither reimbursed me for the payment, either directly or indirectly,” Mr. Cohen told The New York Times. “The payment to Ms. Clifford was lawful, and was not a campaign contribution or a campaign expenditure by anyone.”Cohen refused to answer further questions from the NYT, including whether President Trump was aware of the payment, what Cohen's motivation was or whether similar payments to others had been made over the years. Trump has denied the affair, while Ms. Clifford's signature appeared on a statement released by Mr. Cohen in January denying it as well - however she has refused to directly answer questions about it.The Wall Street Journal reported in January that Cohen arranged for a $130,000 payment to be made to the porn star as part of a nondisclosure agreement one month before the 2016 election. Following the report, nonprofit watchdog group Common Cause filed a complaint with the DOJ and the Federal Election Commission claiming that the payment to Clifford violated campaign finance laws because it was an "unreported in-kind contribution to the president's 2016 campaign."Mr. Cohen said that he had given a similar statement to the Federal Election Commission in response to a complaint filed by the government watchdog group Common Cause, which filed a complaint saying that the payment, which was made through a limited liability company that Mr. Cohen established, was an in-kind contribution to the Trump campaign.Officials with Common Cause also sought to determine whether the payment was made by the Trump Organization or another person.“The complaint alleges that I somehow violated campaign finance laws by facilitating an excess, in-kind contribution,” Mr. Cohen said in his statement. “The allegations in the complaint are factually unsupported and without legal merit, and my counsel has submitted a response to the F.E.C.” –NYT

      Trump’s Stormy Daniels problem gets worse | TheHill: President Trump’s Stormy Daniels problem is getting worse. The porn star, whose real name is Stephanie Clifford, says she is ready to spill the beans about a 2006 extramarital sexual encounter with the president now that Michael Cohen, the president’s personal attorney, has acknowledged he paid her $130,000 to not discuss the allegations publicly. Cohen, who spent years leading the legal team at the Trump Organization, has in the past described himself as the president’s “fix-it guy.”A lawyer for Clifford says Cohen violated their nondisclosure agreement and that she’s preparing to tell the story in full. “Everything is off now and Stormy is going to tell her story,” said Gina Rodriguez, an attorney for Clifford. Clifford’s accusations bring unwanted scrutiny to the Trump’s private life, and could also have legal ramifications. A liberal watchdog group has filed complaints with the Department of Justice and the Federal Election Commission alleging that Cohen’s payment to Clifford runs afoul of campaign finance laws, although GOP lawyers are dismissive of the claims. It’s another political headache for the White House at a time when the administration is dealing with the enduring controversy over a senior aide who resigned amid accusations he abused his ex-wives. Republicans are worried that the White House’s stumbling response to that controversy will further erode their standing with women ahead of the 2018 midterm elections. As a result, more news about a possible presidential affair with a porn star, which allegedly took place shortly after first lady Melania Trump Melania TrumpMeghan McCain: Melania is 'my favorite Trump, by far' White House announces 140th annual Easter Egg Roll Listen: Tumbling stocks wipe out market gains this year MORE gave birth, is unwelcome. 

      Playboy Model Details 9 Month Covert Affair With Trump: New Yorker -- In a bombshell New Yorker report from Ronan Farrow, who was the first reporter to expose Democratic donor Harvey Weinstein for his decades-long history of sexual assault, Karen McDougal, a former Playboy Model who first met President Trump in 2006 during a pool party at the Playboy mansion, shared details about her alleged relationship with the president, and his relationship with National Enquirer owner David Pecker (and holding company American Media Inc), a longtime "personal friend" who once reportedly paid her $150,000 for the exclusive rights to her story, only to let it never see the light of day. In the world of tabloid journalism, this process is called "catch and kill". Though McDougal's story was first reported in 2016 by the Wall Street Journal, Farrow's account is the first time she's shared her story - which she "corroborated with an eight-page handwritten account taken at the time of the affair" - in full detail. The two first met after a taping of Trump's show, the Apprentice, at the Playboy mansion. Trump was reportedly "all over her" and one of the show's producers even remarked "you could be his next wife." According to the New Yorker, McDougal kept handwritten notes about the affair, which she said began in 2006, after the taping of “The Apprentice” episode.Over a period of nine months, Trump ferried her to meet him both in LA and around the country, taking care not to leave a paper trail. During their meetings, McDougal said she would first be led to meet Trump by Keith Schiller, his former bodyguard. Pecker's relationship with Trump is an advantageous one for him, because Pecker is likely one of the few people who knows where "all the bodies are buried" for the most powerful man in the world. Trump has denied the affair.

       U.S. President Trump Had an Affair With a Playboy Model at the Same Time He Was in a Relationship With a Porn Star and the National Enquirer Tabloid Paid the Model $150,000 to Prevent Her Story Being Made Public (Reuters) - U.S. President Donald Trump had an affair with a Playboy model at the same time he was in a relationship with a porn star and the National Enquirer tabloid paid the model $150,000 to prevent her story being made public, the New Yorker reported on Friday. The magazine’s account of the relationship was based on notes handwritten by the model, Karen McDougal, who was Playboy’s 1998 Playmate of the Year. The New Yorker reported that McDougal confirmed that she had written the notes. The account had similarities with descriptions that adult-film actress Stephanie Clifford, also known as Stormy Daniels, and other women have given of sexual encounters with Trump, including private dinners and offers to buy them real estate. The magazine reported that American Media Inc, publisher of the National Enquirer, paid McDougal $150,000 in 2016, soon after Trump became the Republican presidential nominee, for exclusive rights to her story, which it never published. The article noted that American Media head David Pecker has described Trump as a “personal friend.” It reported that McDougal declined to discuss details of her relationship with Trump for fear of violating her agreement with American Media. American Media told Reuters in a statement that the suggestion it “engages in any practice that would allow it to hold influence over the President of the United States, while flattering, is laughable.” The New Yorker reported that American Media said it did not publish McDougal’s story because it did not find it credible. The payment to McDougal by American Media was originally reported by the Wall Street Journal on November 4, 2016. Trump allegedly began his affairs with McDougal and Clifford roughly three months after his wife Melania Trump gave birth to his youngest son Barron.   Reuters has not independently confirmed any of the accusations.

      Kushner Companies Decides to Fight Tenants in State Court Rather Than Reveal Its Investors’ Identities -- Jared Kushner’s family real estate company has backtracked on its effort to have a lawsuit filed against it by tenants of its Baltimore-area apartment complexes moved to federal court, after a judge ruled that this transfer would require it to reveal the identities of its investment partners.The tenants’ class-action lawsuit was filed in the Circuit Court for Baltimore City in September, four months after a ProPublica article co-published with the New York Times Magazine described the highly aggressive tactics used by Kushner Companies to pursue tenants and former tenants over allegedly unpaid rent or broken leases. The lawsuit alleged that Kushner Companies, which owns 15 large apartment complexes in the Baltimore area, was improperly piling late fees and court fees onto tenants’ bills, often in excess of state limits, and using the threat of immediate eviction to force payment.In early November, the various Kushner affiliates named in the lawsuit filed a request to have the case moved from the state court, where it would be heard by a Baltimore City jury, to the federal courts, where it would be heard by a jury drawn from a broader geographic swath of Maryland. To get approval for this request, Kushner Companies had to show that none of the investors it has brought in as partners on the complexes are based in Maryland. The Kushner affiliates also filed a motion in federal court seeking to have the list of the investment partners shielded from public view, citing the high degree of media interest in Jared Kushner, who as Kushner Companies CEO presided over the purchase of the complexes before moving into the White House to serve as senior advisor to President Donald Trump, his father-in-law.

        Trump Sold a $40 Million Estate to a Russian Oligarch for $100 Million—and a Democratic Senator Wants to Know Why -- A Democratic senator wants the Treasury Department to hand over records relating to President Donald Trump’s sale of a Palm Beach estate that he bought for $41 million to a Russian oligarch for $95 million only four years later."It is imperative that Congress follow the money and conduct a thorough investigation into any potential money laundering or other illicit financial dealings between the president, his associates, and Russia," wrote Senator Ron Wyden, an Oregon Democrat, reported ABC on Friday. Wyden, who sits on the Senate Intelligence Committee that is investigating alleged collusion between the Trump camp and Russia, wrote that the transaction between Trump and oligarch Dmitry Rybolovlev is being probed by special counsel Robert Mueller.  In the request, he notes the timing of the 2008 sale, which came months after Trump Entertainment Resorts filed for Chapter 11 bankruptcy, and while the then–real estate mogul was struggling to find banks willing to lend to him.  Trump has in the past attributed the markup to renovations he made to the property, which he snapped up when the previous owner filed for bankruptcy. "What do I have to do with Russia?" Trump told a reporter in 2016. "You know the closest I came to Russia, I bought a house a number of years ago in Palm Beach, Florida...for $40 million, and I sold it to a Russian for $100 million including brokerage commissions." The Trump Organization and Treasury Department have not commented on Wyden’s request.

       Ex-CIA analyst: Trump giving Russia ‘green light’ to interfere in US elections - Former CIA analyst and National Security Council spokesman Ned Price accused President Trump of giving Russia “the green light” to meddle in upcoming US elections by failing to punish the country for interfering in the 2016 election.“We have heard that President Trump has personally himself done absolutely nothing to help our national security establishment and infrastructure stop the next round of Russian meddling. That should be hugely troubling to all of us,” Price said in a Tuesday appearance on MSNBC’s “The Beat with Ari Melber.”“Both what he has done and has not done, are very clear signals to Moscow - a clear signal that they have the green light to continue,” Price continued.Price’s remarks come after top intelligence leaders testified on Capitol Hill Tuesday about national security threats facing the US, including the threat of future election interference from Russia.“There should be no doubt that Russia perceived its past efforts as successful and views the 2018 midterm elections as a potential target for Russian influence operations,” Director of National Intelligence Dan Coats  said during the Senate Intelligence Committee hearing.Coats also warned lawmakers that Moscow is "likely to pursue even more aggressive cyberattacks" against future elections in an effort to undermine U.S. democracy.NSA Director Adm. Michael Rogers echoed Coats’ warnings, saying Russia’s attempts to interfere in US elections are “not going to change or stop.”

      Mueller Flips Third Witness In Russia Probe - Just hours after NBC News reported that former White House Chief Strategist Steve Bannon met with Special Counsel Robert Mueller and his team multiple times to answer questions for "20 hours" this past week, CNN dropped the first serious bombshell in the investigation.According to CNN, Mueller is about to flip Paul Manafort's former No. 2 man, Rick Gates - though it's unclear what Gates' role will be, or what evidence Mueller has on him.  The effort is under seal, so the details aren't available, but a few days ago it was reported that Gates was working with a new lawyer who, speculation had it, would be more amenable to striking a plea deal.Former Trump campaign adviser Rick Gates is finalizing a plea deal with special counsel Robert Mueller's office, indicating he's poised to cooperate in the investigation, according to sources familiar with the case. Gates has already spoken to Mueller's team about his case and has been in plea negotiations for about a month. He's had what criminal lawyers call a "Queen for a Day" interview, in which a defendant answers any questions from the prosecutors' team, including about his own case and other potential criminal activity he witnessed.  Gates' cooperation could be another building block for Mueller in a possible case against President Donald Trump or key members of his team. Once a plea deal is in place, Gates would become the third known cooperator in Mueller's sprawling probe into Russian interference in the 2016 presidential election. It would also increase the pressure to cooperate on Gates' co-defendant Paul Manafort, Trump's former campaign chairman, who has pleaded not guilty to Mueller's indictment and is preparing for a trial on alleged financial crimes unrelated to the campaign. Gates pleaded not guilty on October 30 alongside Manafort. Gates probably didn't work close enough with Trump to have direct knowledge of misdeeds, but Gates could be valuable in pressuring Manafort to roll on his former boss. Gates' deal will likely be announced in the coming days, and could also coincide with the filing of new, tax related charges that could increase the amount of prison time he could face. Right now, he's facing up to 10 years.

      House Russia investigation has 'abundance' of evidence’ says top Democrat -- Adam Schiff, the top Democrat on the House intelligence committee, said Wednesday that the panel had seen an “abundance” of evidence of collusion with Russia and obstruction by Donald Trump’s campaign and administration that is not yet public. Speaking to reporters in Washington, Schiff said a lot of information was already in the public domain that pointed to extensive contacts between the Trump campaign team and the Kremlin, and later efforts by the Trump entourage to cover up those contacts. But Schiff said there was much more to come out. He said: “There is certainly an abundance of non-public information that we’ve gathered in the investigation. And I think some of that non-public evidence is evidence on the issue of collusion and some … on the issue of obstruction.” Trump has repeatedly asserted that there has been no collusion and no obstruction involving him or his team during the 2016 presidential election or since he took the White House. Schiff, from California, added on Wednesday that the intelligence committee had also seen evidence pointing towards money laundering involving Trump’s circle, but had been hindered by the partisan deadlock that has paralysed its investigation of Russian interference in the 2016 election. He said: “It is a tried and true maxim. As a former prosecutor, you follow the money. We have not been able to adequately follow the money. And I think the allegations on money laundering are credible enough that we ought to, in the exercise of due diligence, see if this was one of the other vectors of the Russian active measures campaign.” He added: “We know that in other places they use money laundering as a way of entangling people, as a way of compromising people. To me that is far more potentially compromising than any salacious video would be.” This refers to the possible existence of a compromising video of Trump in Moscow, allegedly held by Russian intelligence and first referenced last year in the dossier compiled by former British intelligence officer, Christopher Steele. Schiff did not name names in relation to money laundering allegations. Trump’s former campaign manager, Paul Manafort, and a business associate, Rick Gates, denied money laundering and other charges last year in a federal court in Washington, on the same day it emerged that former campaign foreign policy adviser George Papadopoulos had pleaded guilty to lying to FBI investigators over contact with people apparently linked to the Russian government. 

      Special Counsel Issues Indictment Against 13 Russian Nationals Over 2016 Election— The special counsel investigating Russia’s interference in the 2016 presidential election charged 13 Russian nationals and three Russian organizations on Friday with illegally trying to disrupt the American political process, including efforts designed to boost the presidential candidacy of Donald Trump and hurt that of his opponent, Hillary Clinton.The indictment represents the first charges by the special counsel, Robert S. Mueller III, for meddling in the 2016 presidential election — the fundamental crime that he was assigned to investigate.In a 37-page indictment filed in United States District Court, Mr. Mueller said that the 13 individuals have conspired since 2014 to violate laws that prohibit foreigners from spending money to influence federal elections in the United States.The indictment charges that the foreigners falsely posed as American citizens, stole identities and otherwise engaged in fraud and deceit in an effort to influence the U.S. political process, including the 2016 presidential race. [Read the full text of the indictment as a PDF, 37 pages, 8.2MB]“The nature of the scheme was the defendants took extraordinary steps to make it appear that they were ordinary American political activists,” Rod J. Rosenstein, the deputy attorney general overseeing Mr. Mueller’s inquiry, said in a brief news conference on Friday afternoon at the Justice Department. Though the Russians are unlikely to be immediately arrested, they are now wanted by the United States government, which will make it hard for them to travel or do business internationally. All were charged with conspiracy to defraud the United States, three with conspiracy to commit wire fraud and bank fraud and five with aggravated identity theft.

      Russia Responds To "Absurd" Election Meddling Allegations --The indictment of 13 Russian nationals and three entities over allegations by the DOJ that Russians interfered in US elections - but "did not alter the outcome of the 2016 election" nor that any American was a knowing participant in this activity - are absurd, Russian Foreign Ministry spokeswoman Maria Zakharova said on Friday."13 people interfered in the US elections?! 13 against an intelligence services budget of billions? Against intelligence and counterintelligence, against the latest developments and technologies? Absurd? Yes," Zakharova wrote in a post on Facebook.Then again, what else could she say.Furthermore, as noted in the DOJ complaint, the funding for the Russian operation came from catering and management companies controlled by defendant Yevgeniy Viktorovich Prigozhin, a Russian businessman often referred to as "Putin's chef" in the media because his organizations had hosted dinners for Russian President Vladimir Putin and foreign leaders, the AP reported.  Prigozhin was quoted in Russian state media responding to the indictments, saying, "Americans are really impressionable people. They see what they want to see. I greatly respect them. I’m not upset at all that I am on this list. If they want to see the devil, let them see him." This probably means that Russia will not exactly rush to extradite the 13 named officials to the US.

        Trump Responds: Mueller Indictment Shows "Campaign Did Nothing Wrong. No Collusion!" - Russia wasted no time responding to today's surprising DOJ charge which found not Russia collusion, but what some have described as criminal trolling: "13 people interfered in the US elections?! 13 against an intelligence services budget of billions? Against intelligence and counterintelligence, against the latest developments and technologies? Absurd? Yes" Russian foreign ministry spokeswoman Maria Zakharaova wrote on Facebook. And then, shortly after 3pm, in his first official response which also took place on a social network, in this case his favorite Twitter, President Trump also responded to the DOJ, stating that because "Russia started their anti-US campaign in 2014, long before I announced that I would run for President" and  because "the results of the election were not impacted" then "The Trump campaign did nothing wrong - no collusion!"Russia started their anti-US campaign in 2014, long before I announced that I would run for President. The results of the election were not impacted. The Trump campaign did nothing wrong - no collusion!— Donald J. Trump (@realDonaldTrump) February 16, 2018 And while Trump can celebrate for now, earlier in the afternoon, the top House Intel Committee Democrat Schiff laid out what the next angle of attack will be in the special counsel probe:"The indictment leaves open the vital question of whether Americans, including any associated with the Trump campaign, knowingly played a role in Russia’s active measures campaign.” We expect the answer will be unveiled shortly, especially after yesterday's news that Mueller managed to flip a third witness in the Russia probe...

        Why the public may never learn what Robert Mueller discovers - - Special prosecutor Robert Mueller’s investigation into President Donald Trump’s campaign and its potential Russian ties has now entered its 10th month. While millions around the world are waiting eagerly for the next shoe to drop, it’s possible that the information Mueller uncovers may never actually reach the public.  Since Attorney General Jeff Sessions recused himself from the Russia inquiry in March 2017, Mueller’s investigation has been overseen by Deputy Attorney General Rod Rosenstein, who retains the power to fire the special prosecutor. However, Trump has reportedly expressed his dissatisfaction with Rosenstein, prompting concerns that his job — and Mueller’s, by extension — could be at risk.  Trump’s alleged consideration of terminating Rosenstein, or Mueller, has sparked outcry both in and out of Washington. Advocacy groups have started campaigns to protect Mueller, and Congress has introduced several pieces of legislation aimed at protecting special prosecutors from the whims of Trump or future presidents. However, even if Mueller keeps his job, there’s a chance that those eagerly awaiting the results of his investigation may ultimately be disappointed. Thanks to the expiration of a statute that gave independence to past special prosecutors, there’s no guarantee that Rosenstein — or his hypothetical replacement — will let Mueller’s final findings see the light of day.  Under the current regulations, the special counsel is required to report findings directly to the attorney general. He or she must provide an update on the investigation’s status 90 days before the start of each fiscal year, and a “confidential report” at the conclusion of their work.What happens with the findings from there, however, is in the attorney general’s hands. He or she is required to notify ranking members of the House and Senate Judiciary Committees when the investigation has concluded, and is only required by law to provide a description and explanation of instances in which he or she believed the special counsel was “inappropriate or unwarranted” under established departmental practices. The attorney general, however, is not required to make the prosecutor’s findings public, but must decide if the reports would be in the public interest.

        Financial Markets Have Taken Over the Economy. To Prevent Another Crisis, They Must Be Brought to Heel. - Banks have long had undue influence in society. But with the rapid expansion of a financial sector that transforms all debts and assets into tradable commodities, we are faced with something far worse: financial markets with an only abstract, inflated, and destabilizing relationship with the real economy. To prevent another crisis, finance must be domesticated and turned into a useful servant of society. Ours is, without a doubt, the age of finance—of the supremacy of financial actors, institutions, markets, and motives in the global capitalist economy. Working people in the advanced economies, for instance, increasingly have their (pension) savings invested in mutual funds and stock markets, while their mortgages and other debts are turned into securities and sold to global financial investors (Krippner 2011; Epstein 2018). At the same time, the ‘under-banked’ poor in the developing world have become entangled, or if one wishes, ‘financially included’, in the ‘web’ of global finance through their growing reliance on micro-loans, micro-insurance and M-Pesa-like ‘correspondent banking’ (Keucheyan 2018; Mader 2018). More generally, individual citizens everywhere are invited to “live by finance”, in Martin’s (2002, p. 17) evocative words, that is: to organize their daily lives around ‘investor logic’, active individual risk management, and involvement in global financial markets. Citizenship and rights are being re-conceptualized in terms of universal access to ‘safe’ and affordable financial products (Kear 2012)—redefining Descartes’ philosophical proof of existence as: ‘I am indebted, therefore I am’ (Graeber 2011). Financial markets are opening ‘new enclosures’ everywhere, deeply penetrating social space—as in the case of so-called ‘viaticals’, the third-party purchase of the rights to future payoffs of life insurance contracts from the terminally ill (Quinn 2008); or of ‘health care bonds’ issued by insurance companies to fund health-care interventions; the payoff to private investors in these bonds depends on the cost-savings arising from the health-care intervention for the insurers.

        Wall Street’s Regulators Move Deeper Into Darkness Under Trump --Pam Martens - The ability of the U.S. public to attend government meetings; hear firsthand what is being done with taxpayers’ dollars; ask questions about any perceived conflicts that might exist; and file Sunshine law requests for documents is how citizens hold government officials accountable. When we lose that, we lose the entire concept of America as a country of the people, by the people and for the people. Thus, any effort at all to whittle away at open government laws must be viewed as a dangerous encroachment on democracy. Tragically, the mainstream media and much of America were so enamored with President Obama’s statesmanship and his status as the first black to sit in the highest office of the United States, that he was able to preach transparency while delivering darkness to a vast part of his government. Under President Donald Trump, the dark curtain has enveloped more and more parts of the Federal government with new details coming out just this week. We’ll get to those details in a moment, but first some necessary background to show that Wall Street Democrats have failed the American people as well as Republicans. […]   It’s getting worse under President Trump. Yesterday Bloomberg News reported that the SEC is now settling cases against banks and hedge funds without issuing press releases as it has historically done, ostensibly to save the firms embarrassment and deny the public the ability to see that wrongdoing continues unabated on Wall Street despite the huge fines following the financial crash. Last month, Susan Antilla and Gary Rivlin wrote an in-depth report for The Intercept showing how Trump’s SEC is allowing more secrecy in what Wall Street itself has to report to the public. Now the U.S. Treasury, headed by the former foreclosure king, Steve Mnuchin, has announced it plans to hold a secret meeting of the Financial Stability Oversight Council (F-SOC) next Wednesday, February 21. F-SOC was created under the Dodd-Frank financial reform legislation of 2010 to make sure the financial collapse of 2008 would never happen again. That collapse was the worst economic event for the United States since the Great Depression of the 1930s. Given the financial devastation to citizens from that collapse, the public has every right to know about any new financial stability threats facing the nation.

        SEC Blocks Chinese Takeover Of Chicago Stock Exchange --In a decision that many had anticipated, the SEC Thursday night officially rejected a proposal from a Chinese investment group to purchase the Chicago Stock Exchange - which handles a tiny 1% of daily order volume - in an acquisition that would have created a conduit for a Chinese entity to exert more control over IPOs of China-based companies in the US, where markets are significantly more open to international investors than in China. Hundreds of small companies are waiting to list in China, where they're being held up by red tape.The CSE buyers group included Chongqing Casin Enterprise Group Co. and a consortium of US based investors after two original Chinese members of the investor group dropped out late last year after the deal appeared to stall. As Bloomberg explains, the small transaction would nevertheless have allowed a Chinese company to gain an important foothold in US financial markets, even as the Congress in recent years has passed laws trying to make it easier for companies to go public. The exchange planned to leverage the Jumpstart Our Business Startups, i.e. JOBS, Act, a 2012 law Congress passed to make it easier for smaller companies to go public.

        The Economist: It Appears Market Conspiracy Theorists Were Right -- Three new recently published scientific papers seem to confirm what many have claimed for years: the "efficient markets" are not only inefficient - from an informational standpoint - they are also badly rigged. Of the three papers, the Economist reports, one argues that well-connected insiders profited even from the financial crisis, while the other two go so far as suggesting the entire share-trading system is rigged.Unlike conventional insider trading cases - which traditionally require fortuitous tip-offs and extensive, expensive investigations, involving the examination of complex evidence from phone calls, e-mails or informants wired with recorders - the papers make imaginative use of pattern analysis from data to find that insider trading is probably pervasive, according to the Economist.The approach reflects a new way of analyzing conduct in the financial markets. It also raises questions about how to treat behaviour if it is systemic rather than limited to the occasional rogue trader.  The first paper starts from the private meetings American government officials held during the crisis with financial institutions. As discussed here years ago, what was not made public at the time were critical details about the infamous TARP program. . Knowing the structure and scope of the bail-out in advance would have been a vitally important piece of information for investors during this period.The paper examines conduct at 497 financial institutions between 2005 and 2011, paying particular attention to individuals who had previously worked in the federal government, in institutions including the Federal Reserve. In the two years prior to the TARP, these people’s trading gave no evidence of unusual insight. But in the nine months after the TARP was announced, they achieved particularly good results. The paper concludes that “politically connected insiders had a significant information advantage during the crisis and traded to exploit this advantage.”Almost as if the Fed was working covertly with Wall Street to make insiders richer, at the expense of the middle class...The other papers use data from 1999 to 2014 from Abel Noser - a firm used by institutional investors to track trading transaction costs - which covered 300 brokers, and focused on the 30 biggest, through which 80-85% of the trading volume flowed. "They authors found evidence that large investors tend to trade more in periods ahead of important announcements, say, which is hard to explain unless they have access to unusually good information."

        Goldman's Shocking Capitulation: The Buy-The-Dip Era Is Dead, "This Is A Genuine Regime Change" - Earlier today, we were delighted to report that after the biggest vol explosion in history, the world's largest hedge fund Bridgewater, went from urging traders to go all in as recently as January 23, to warning that a "bigger shakeout is coming."  It turns out that Ray Dalio wasn't the only fund to urge its broader client universe - and anyone else who cared to listen - to do one thing, while telling a select group of clients to do the opposite. As we noted on Saturday, in his latest Weekly Kickstat published on Friday, Goldman's chief equity strategist David Kostin essentially told clients to BTFD, suggesting that the correction was likely almost over, based on historical patterns. Meanwhile, on the very same Friday, Brian Levine - co-head of global equity trading at Goldman Sachs - sent out an email to the investment bank’s bigger clients, in which he made a stunning prediction: the Buy the Dip Regime is now over.  In the email, first reported by the Financial Times, Levine writes that "Historically shocks of this magnitude find their troughs in panicky selling" and yet "I’ve been amazed at how little ‘capitulation selling’ we’ve seen on the desk . . . The ‘buy on the dip’ mentality needs to be thoroughly punished before we find the bottom." And, more shockingly, the person in charge of the most important trading desk also said that “longer term, I do believe this is a genuine regime change, one where you sell-the-rallies rather than buy-the-dips." Brian Levine's full shocking letter is below:

        Hedge Funds’ Biggest Short in Bonds Faces Make-or-Break Moment - Hedge funds and other large speculators are more convinced than ever that the 2018 bond-market rout will resume in the days ahead. The group, known for trading on momentum, boosted short bets in 10-year Treasury futures to a record 939,351 contracts, according to Commodity Futures Trading Commission data through Feb. 6. That means the violent market moves on Feb. 5, when the Dow Jones Industrial Average suffered an unprecedented drop and 10-year yields fell almost 14 basis points, weren’t enough to dissuade wagers that rates are headed higher. The next gut-check comes Wednesday, with the latest read on consumer prices.Speculators’ positioning matters because it can push momentum to extremes, and can serve as a contrarian indicator since these traders are among the quickest to switch directions when prices turn against them. By contrast, longer-term holders like asset managers are seen as more likely to stay the course. Their net long in 10-year futures is the highest since October 2015.The question facing Treasuries traders throughout the 2018 selloff is whether something is truly different this time that will push yields ever higher. After all, asset managers have been adding to long positions for months, and 10-year yields just keep setting multi-year highs. At the very least, investors may be recalibrating to a higher yield range.The speculators’ stance “signals people think the 10-year has more value at 3-plus percent than at 2.85 percent,” said Ben Emons, head of credit portfolio management at Intellectus Partners LLC. “Anecdotal evidence suggests more pent-up demand for duration at 3 percent, especially by long-only players.”

        City of London financiers contemplate “imminent” 2018 US stock market crash of up to “50%” - A new analysis published on the website of a London-based think-tank, funded by the world’s biggest banking and financial services institutions, warns that the US stock market is on the brink of an imminent crash that could trigger another global recession. The document by a senior US economist and former Houblon-Norman Fellow at the Bank of England is published on the website of the Centre for the Study of Financial Innovation (CSFI), which runs around 100 roundtable events a year involving financial services insiders from the UK and beyond. The document forecasts that in 2018, US stock prices are likely to plummet by as much as “forty to fifty percent” — compared to the less than five percent plunge in early February. The document was published weeks before the recent stock market volatility. The warning of a forty to fifty percent drop points to the prospect of a global financial crash worse than the 2008 banking collapse. It comes at a time when the Federal Reserve, Bank of England and other authorities are looking to tighten up their cheap money policies, as economic growth is at its highest levels since the 2008 slump. The new analysis is an ‘open letter’ by US economist Robert Aliber, Professor Emeritus at the University of Chicago Booth School of Business, a world renowned authority in identifying the source of shocks behind over forty banking crises that have occurred since the 1970s.

        Rumors Grow that the U.S. Fed is Propping Up the Stock Market --  Pam Martens -  It’s not every day that three well-credentialed men are willing to put their names and reputations behind the allegation that the U.S. Federal Reserve is rigging the stock market. But that’s exactly what happened yesterday. Paul Craig Roberts, a former Associate Editor of the Wall Street Journal and Assistant Secretary of the U.S. Treasury under President Ronald Reagan joined with Economist Michael Hudson and Wall Street veteran Dave Kranzler to write that “it appears that in May 2010, August 2015, January/February 2016, and currently in February 2018 the Fed is rigging the stock market by purchasing S&P equity index futures in order to arrest stock market declines.”  This is not the first time the Fed has come under such suspicion. In 2013 Time Magazine’s Dan Kadlec wrote the following about the unprecedented number of central banks that were moving into stock purchases:  “The U.S. Federal Reserve does not appear to have joined in the stock-buying trend. The Fed is not permitted to make direct stock purchases. But there is nothing to prevent it from funding a Special Purpose Vehicle that buys a broad basket of stocks through indexes or Exchange Traded Funds. In the past year, Wall Streeters have speculated the Fed would buy stocks as part of its quantitative-easing programs to stimulate the economy.”More suspicions were raised on May 23 of last year when long-tenured New York Post financial writer, John Crudele, suggested that the heavy purchases of stocks by the Swiss central bank could be “as an agent of US financial authorities who fear that a big decline in stock prices would be against America’s national interest?”

        JPMorgan: Cryptocurrencies 'could have a role' in investor portfolios -- An in-depth report on cryptocurrencies just released by JPMorgan Chase says the class of assets spawned by bitcoin is here to stay, and may even represent a smart investment, despite the unlikelihood that digital coins will ever displace national currencies such as the dollar and euro. Highlighting the incredible returns enjoyed by many cryptocurrency investors, as well as the assets' low correlation to traditional investments, such as stocks and bonds, the report says that digital currencies "could potentially have a role in diversifying one's global bond and equity portfolio." Had Las Vegas oddsmakers been forced to choose the Wall Street bank most likely to admit the value and staying power of cryptocurrencies, it seems unlikely that any would have chosen JPMorgan. Just five months ago, the bank's CEO, Jamie Dimon, was railing against bitcoin, calling it a "fraud." Any of his employees caught trading the speculative asset, he said, would be fired "for being stupid." The new report strikes an altogether more positive note. While noting the speculative fervor that fuels cryptocurrency markets, the report's authors say the markets "have been sending the right signals in recent months."   The report even admits the truth that diehard bitcoiners have been proclaiming for years, that the traditional financial system affords people little privacy, and that bitcoin and digital currencies will consequently always have a fanbase "among players who desire greater decentralization, peer-to-peer networks and anonymity, even as the latter is under threat."

        Virtually Nobody Is Reporting Crypto Profits To The IRS - Despite the IRS's victory late last year in a lawsuit against Coinbase - the most popular cryptocurrency exchange in the US - that forced the organization to hand over transaction data pertaining to more than 14,000 users, surprisingly few Americans are reporting income from cryptocurrency trading as income this tax season.That's even more surprising considering the astronomical gains realized, not just by bitcoin, but by dozens of coins.Fewer than 100 people out of the 250,000 who have already filed federal taxes this year through Credit Karma reported a cryptocurrency transaction, Reuters reported Tuesday.This, despite nearly 57% of the 2000 Americans surveyed by the credit score startup and research firm Qualtrics last month saying they had realized some gains from cryptocurrencies last year, according to a Credit Karma study. About the same percentage of respondents said they had never reported a crypto transaction to the IRS. Meanwhile, about half said they understood how cryptocurrency gains might impact their taxes.  As Reuters explains, the IRS considers cryptocurrencies to be property for federal tax purposes, meaning any profits or losses from the sale or exchange of the virtual coins must be reported as capital gains or losses. Still, it remains unclear exactly how many Americans hold cryptocurrencies, which were initially designed to protect the identities of their holders and can be difficult for federal authorities to trace. Coinbase famously surpassed retail brokerage Charles Schwab in terms of the number of accounts last year, but its unclear how many of those accounts are actively trading.

        U.S., UK government websites infected with crypto-mining malware: report (Reuters) - Thousands of websites, including ones run by U.S. and UK government agencies, were infected for several hours on Sunday with code that causes web browsers to secretly mine digital currencies, technology news site The Register reported. More than 4,200 sites were infected with a malicious version of a widely used tool known as Browsealoud from British software maker Texthelp, which reads out webpages for people with vision problems, according to The Register. The news comes amid a surge in cyber attacks using software that forces infected computers to mine crypto currencies on behalf of hackers. The prevalence of these schemes has increased in recent months as the volume of trading in bitcoin and other crypto currencies has surged. The tainted version of Browsealoud caused inserted software for mining the digital currency Monero to run on computers that visited infected sites, generating money for the hackers behind the attack, The Register said. Representatives of the U.S. and British law enforcement agencies and Texthelp could not immediately be reached for comment. 

        Government websites have quietly been running cryptocoin mining scripts -- A security researcher has discovered thousands of legitimate websites — many belonging to local governments and government agencies — running scripts that secretly force visitors’ computers to mine cryptocoins.In the UK, both the websites of the Information Commissioner’s Office and the Student Loan Company have found to be affected. The mining scripts were also found on the websites of the General Medical Council and NHS Inform.On the other side of the pond, the websites belonging to the Indiana Government and the US courts system were also discovered to be running the CoinHive mining software.The issue stems from a piece of software called BrowseAloud, which is embedded on all affected sites. BrowseAloud offers accessiblity services, assisting those with literaracy or visual impairments to access government services and information.  There is no suggestion of wrongdoing by the aforementioned sites, nor TextHelp (the owner of BrowseAloud). It appears that at some point on Sunday, an unknown third-party modified BrowseAloud to covertly inject the CoinHive mining software. TextHelp has since withdrawn the BrowseAloud plugin while it addresses the issue. Cryptojacking is a problem most commonly associated with the seedier aspects of the Internet. Some sites often struggle to attract typical advertisers: like those in the porn and file sharing spaces. In order to keep the lights on, they instead resort to using their visitor’s spare CPU power to mine cryptocoins.  Users with these scripts running find their computers inexplicably slower. Their machines might also run hot. If they’re on a mobile device, battery life will be adversely affected. It’s pretty astonishing to see cryptojacking scripts running on legitimate government webpages. In this case, security researchers identified the issue quickly. The biggest takeaway from this episode is that, no matter your browsing habits, cryptojacking is a threat you should protect yourself from.

        Banks' underground data vault is evolving — will it use blockchain next? -- Two years ago, dozens of U.S. banks, including Citigroup, JPMorgan Chase and Bank of America, began working on a secret, ultrasecure data bunker called Sheltered Harbor that would hold a copy of all bank transaction data in the event of a devastating cyberattack. But the banks and industry groups behind Sheltered Harbor have recently changed the plan from a single bunker, itself a possible target of attack, to a backup buddy system. Banks choose “restoration” partners that store a vault of one another’s core data that’s updated each night. If one bank goes down, the other could restore accounts and make customers whole. The goal remains the same: when the worst happens, and even backup systems fail, there will still be a way to give customers access to their bank accounts. “Initially the concept was to create this secure, underground vault,” said Trey Maust, Sheltered Harbor's CEO. “But as we worked through the logistics of that and the specifications and the initial founding members thought about, Do we want a single point of failure? That’s where the distributed model was born.” More changes could be in the offing. If executives from a company called Synechron have their way, for example, Sheltered Harbor may make another pivot, this time to blockchain technology.

        Wells Fargo Sends 38,000 Apology Letters In Error - Wells Fargo accidentally sent apology letters to 38,000 people in error after the bank was caught foisting auto insurance on more than 800,000 customers who only wanted to take out auto loans. Tacking insurance onto the loans were part of the bank's "cross-selling" practice of offering products across different segments - which also included opening millions of credit card and bank accounts for people who never asked for them.  It gets better: the expense of the unneeded auto insurance (which covered collision damage) pushed some 274,000 Wells Fargo customers into delinquency and resulted in almost 25,000 wrongful vehicle repossessions. And the cherry on top: "among the Wells Fargo customers hurt by the practice were military service members on active duty."The mechanics of the fraud, via the New York Times:Here is how the process worked: When customers financed cars with Wells Fargo, the buyers’ information would go to National General, which was supposed to check a database to see if the owner had insurance coverage. If not, the insurer would automatically impose coverage on the customers’ accounts, adding an extra layer of premiums and interest to their loans.When customers who checked their bills saw the charges and notified Wells Fargo that they already had car insurance, the bank was supposed to cancel the insurance and credit the borrower with the amount that had been charged. In some cases the bank did just that. In most cases, nobody noticed and the scheme continued: "The Oliver Wyman report indicated that many customers appear not to have notified Wells Fargo of the redundant insurance. This may have been because their payments were deducted automatically from their bank accounts and they did not spot the charges." The bank ended up paying $185 million to regulators and settled a $142 million class-action lawsuit for more than three million fake accounts opened up by Wells Fargo employees to meet sales quotas.  The 38,000 erroneous letters were allegedly part of a "coding mistake" caught by the vendor responsible for the communications, reports the New York Times.

        Wells CEO downplays impact of tough Fed order - Don’t expect any major turnover in the ranks of Wells Fargo’s commercial bankers following the Federal Reserve’s unprecedented move last week to restrict the company’s asset growth. That was the message from CEO Tim Sloan, who discussed the Fed order at an investor conference Tuesday morning. The central bank on Feb. 2 barred Wells from growing any larger until it addresses a host of risk-management issues, an action stemming in part from Wells' recent string of retail banking scandals. Wells has said that the Fed’s asset cap may reduce 2018 earnings by as much as $400 million. But since the surprise announcement, questions have lingered in the industry about whether the cap could ultimately hurt the bank’s ability to keep top-performing commercial bankers on staff. Sloan said he doesn’t expect that to be a problem. “I don’t anticipate any sort of outflow of relationship managers,” he said.   Since the Fed order was imposed a week and a half ago, Wells Fargo executives have reiterated to employees that business is operating as usual at the San Francisco bank, Sloan said. He also noted that in 2017 Wells recorded its lowest employee turnover rate in six years. “If you communicate to our relationship managers that we’re open for business, and they see no difference in how we’re making decisions, then not only do they hear it, they believe it and they act upon it,” Sloan said. During a conference call with analysts immediately after the Fed’s announcement, Wells executives said they had identified several noncore businesses to shrink, to hold the line on growth. Those include $200 billion of noncore commercial deposits, roughly $149 billion in deposits from financial institutions, plus additional portfolios of short-term investments and trading assets.  At the conference Tuesday morning, Sloan said he doesn’t expect the Fed’s order to affect Wells Fargo's core base of commercial clients.

        Wells Fargo Screws Customers Yet Again, Now Failing to Make Right on Abuses; Elizabeth Warren Demands Answers --Yves Smith - Wells Fargo is getting yet more deserved bad press. Gretchen Morgenson and Emily Glazer of the Wall Street Journal reported Tuesday that the bank was making a hash of the customer restitution it had promised to make in connection with its various scandals. Even though the press firestorm last fall was over the bank’s “fake accounts,” the much bigger payments to customers, and the ones it is messing up involve the force placing of auto insurance, which in over 20,000 cases led to car repossessions, and charging unjustified fees in connection with mortgages. The Journal’s story got the attention of Elizabeth Warren, who shot off a letter to Wells Fargo CEO Tim Sloan demanding answers. As we’ll describe below, even though Wells Fargo may try to depict the delays and errors as mere mistakes, there’s at least one process Wells Fargo set up was clearly designed to lower how much the bank has to pay out. And since we are talking dollar totals across all the abuses that are chump change for a bank the size of Wells Fargo, what this accidental or deliberate ham-handedness says about the bank is not pretty. At best, the bank doesn’t care about doing this right. Another possibility is that the bank is addicted to maximizing profit at no matter what the risk to its reputation and was arrogant enough to think it wouldn’t be disciplined again. Finally, there may be people in positions of influence who resent the regulatory choke chain and are trying get away with as much as they can get away with out of a reflexive, “How dare they tell us how to run our business.” If that is found to play any role in these supposed screw-ups, expect the boot to come down hard on Wells Fargo management.Although the story only suggested the connection in passing, recall that in the evening of February 2, her last day in office, departing Fed chair Janet Yellen hit Wells Fargo with a balance sheet cap plus required that four directors be replaced. The press seemed stunned at this development, but Yellen had threatened Wells Fargo since last July that it could force the bank to appoint new directors or impose other sanctions if it didn’t shape up. One has to wonder if she’d gotten reports from the OCC and/or the CFPB of these shenanigans and had decided enough was enough. And in a breathtaking demonstration of tone-deafness, Charlie Munger, the vice chairman of big Wells Fargo investor Berkshire Hathaway, tried depicting “regulators” as meanies who needed to let up on the oh-so-well meaning bank.

        Warren to Wells Fargo: Hurry up and make customers whole again - — Sen. Elizabeth Warren, D-Mass., sent a letter to Wells Fargo CEO Tim Sloan on Tuesday asking him to address reports that the bank is struggling to compensate customers who were victims of unnecessary fees and add-on products.In August, Wells admitted that it sold auto insurance to 600,000 customers without proper disclosures and that some customers had been charged insurance premiums inappropriately. The bank announced a few months later that it had charged 110,000 customers fees to extend mortgage rate locks between 2013 and 2017 even though the bank was the source of processing delays that made extensions necessary.“You have an obligation to your customers to improve your efforts so that every customer harmed by Wells Fargo is fully and promptly compensated with minimal hassle and frustration,” Warren said in the letter. For the two episodes together, Wells said it would make $178 million in redress payments.But The Wall Street Journal recently reported that repayments for the auto insurance victims were being bungled and that in order to receive compensation for the rate lock fees, customers had to “opt in,” which would result in as many as half of the victims not filing the proper paperwork.“To address how it happened and what you intend to do to remediate these problems, I ask that you please provide answers to the following questions no later than February 28, 2018,” the letter said.Warren asked a series of questions, including whether the reports were true, as well as how many customers were harmed, how much money the bank estimates will be paid to customers and if the bank will reform its repayment plan for victims.She was also particularly critical of the opt-in feature for victims of the unnecessary charges on rate locks. “Will Wells Fargo commit to revising its refund process for victims of the mortgage rate lock extension scam so that victims automatically receive their due compensation rather than having to opt in to receiving it?” she said.

        Regulators fine U.S. Bank more than $600M for AML errors - U.S. Bancorp. has agreed to pay $613 million in penalties to state and federal authorities for violations of the Bank Secrecy Act and a faulty anti-money-laundering program. Three federal regulators and the U.S. Attorney's Office of the Southern District of New York announced the coordinated actions Thursday. The bank's AML program had been the subject of a 2015 consent order by the Office of the Comptroller of the Currency. News of the fine wasn't a surprise. U.S. Bank had disclosed last month that it was setting aside $600 million related to an expected enforcement action by regulators. The OCC said the bank had systemic deficiencies in its anti-laundering monitoring systems, which resulted in gaps and "a significant amount of unreported suspicious activity." The bank failed to adopt and implement a compliance program because of an inadequate system of internal controls, ineffective independent testing, and inadequate training, the agency said. The Federal Reserve Board, Financial Crimes Enforcement Network and the U.S. Attorney's Office of the Southern District of New York also announced penalties against the bank. "Today's resolution finalizes legacy matters involving our AML compliance program," said Andy Cecere, president and CEO of U.S. Bank. "We regret and have accepted responsibility for the past deficiencies in our AML program. Our culture of ethics and integrity demands that we do better. One of U.S. Bank's key priorities is to maintain an exceptional AML program and we are confident in the strength of the program we have in place today." 

        B of A’s Moynihan: Big banks are 'fine' with Dodd-Frank  — While small and regional banks are pushing for a rollback of the Dodd-Frank Act, big banks are largely supportive of the 2010 financial reform law, Bank of America CEO Brian Moynihan said Thursday.“Dodd-Frank is fine,” Moynihan said at the Economic Club of Washington. “None of us are trying to touch it.” Moynihan said Dodd-Frank has made the financial system safer, which in turn has strengthened the financial footing of the industry-funded Federal Deposit Insurance Corp. Since a bank's FDIC premiums are calculated by the size of its deposit base, large banks have the most incentive to protect the FDIC, Moynihan said.  “The FDIC gets filled up by the banking system. So the large banks have the highest interest in getting the regime right,” he said.However, he suggested there could be some adjustments to the regulatory dials. “With anything that happens, you swing a pendulum and the idea is to get it back to the middle," Moynihan said. He added that large banks "are trying to say, ‘Let’s get this thing back in the middle.' ”For instance, during his discussion with a moderator at the Economic Club, he called for lowering Basel III capital requirements. Lowering the capital ratios from 10.5% to 9.5% would mean that banks would have more money to deploy to businesses, he said.“For us, we can make $160 billion more loans if you say 9.5 instead of 10.5,” Moynihan said. But he reiterated that, broadly speaking, capital and liquidity requirements, mandatory stress testing and resolution planning have all been good reforms.“All these things are very important things that we don’t want to touch,” he said.

        Ex-B of A employee's court victory puts all banks on notice - A small legal case in California brings a warning to banks: Be careful who you report for fraud. On Tuesday, a California federal jury found that Bank of America illegally blacklisted and defamed a former employee. It awarded her employee compensatory and punitive damages that could surpass $1.6 million. According to court documents, Salma Aghmane, a client manager at Bank of America, was fired in 2013 for withdrawing money from a cousin’s Bank of America account, purportedly without authorization. Aghmane said she did have the authorization and the young cousin owed her the money. Her cousin, a Moroccan emigre, had shared her online banking username and password with Aghmane to let her withdraw an agreed-upon amount of $12,800 as reimbursement for expenses incurred getting her an apartment, furniture, and other efforts to help her get settled in the United States. When fraud was reported on the account, Aghmane explained the situation to a fraud investigator at the bank and presented her with documentation of these expenses. The bank put Aghmane on a blacklist run by Early Warning Services, a provider of fraud prevention services that also runs the person-to-person payments network Zelle. Aghmane argued that under Early Warning’s rules, in order for a company to put someone on a fraud report, there has to be an admission and conclusive evidence of wrongdoing, which she says does not exist.

        Banking’s response to #MeToo: Training employees to speak up - Taking a cue from the cultural moment, the banking industry is attempting to revamp a corporate formality that too often has been fodder for sophomoric office jokes — sexual harassment training. Employers in recent months have dusted off their human resources policies, looking at ways to improve their handling of harassment claims after the #MeToo movement brought to light allegations of sexual harassment in media, politics and other industries. Financial services — known for its intense focus on compliance — is in better shape than most when it comes to employee protections, according to HR experts.But it’s one thing for bankers to say they have airtight codes of conduct, and another thing altogether to ensure employees in every corner of their organizations uphold high standards. So Ally Financial, Regions Financial and others are taking new approaches to training, in some cases even ditching the antiquated reviews of sexual harassment policies and, instead, giving employees strategies to call out demeaning behavior when they see it, experts said. “This won’t shock you, but training doesn’t really work for people who are likely to be harassers,” said Joelle Emerson, CEO of Paradigm, a diversity and inclusion firm in San Francisco. Ally Financial has added a sensitivity training course and another that helps employees talk about difficult topics. It is trying to avoid creating "an environment where people disengage because they are afraid to offend each other,” said Kathleen Patterson, chief human resources officer at the Detroit company.  Emerson is best known for helping big tech firms, such as Twitter and Lyft, tackle diversity issues, but her clients also include three Fortune 500 banks, which she declined to name. In response to a growing demand, her company has started designing a curriculum to help employees speak up — even in situations that may not seem egregious, such as overhearing a sexist joke, but that may be indicative of larger cultural problems. “The question is: How do we empower everyone who sees behavior that feels inappropriate?” Emerson said. “How do we all play a role in speaking up?”

        Nafta, tariffs, Ex-Im vacancies: Turbulent times for trade finance -- These are trying times for U.S. exporters and their bankers. President Trump, playing off the populist agenda from his campaign, is threatening to pull the U.S. out of the North American Free Trade Agreement. He’s already withdrawn the U.S. from the Trans-Pacific Partnership trade agreement, which was intended to smooth trade between the U.S. and 11 Asian nations. He recently imposed tariffs on imported solar panels and washing machines, a move that could lead to retaliatory tariffs from China and imperil trade with one of the country’s largest trading partners. Meanwhile, the U.S. Export-Import Bank continues to operate without a permanent director or a full board of directors. Banks rely heavily on the Ex-Im Bank’s loan guarantees to fill gaps in financing, and with the agency operating at just partial capacity, trade deals that might have been completed months ago instead remain on hold, said Tod Burwell, the CEO of BAFT, a trade group that represents banks in the business of trade finance. “There is a substantial amount of business that U.S. companies can’t get involved with,” said Burwell. “It remains an issue because it’s business that’s not getting done.” Turmoil at the Ex-Im Bank is nothing new — the agency has not operated at full capacity since 2014 as congressional Republicans opposed to its mission have at times cut off its funding. But its relevance has waned significantly over the past year, as the search for a permanent director has dragged on. In the fiscal year that ended Sept. 30, it authorized just $3.4 billion of loans or loan guarantees, compared with $12.4 billion two years earlier and nearly $36 billion in 2012. The uncertainty at the Ex-Im Bank is causing bankers a fair amount of anxiety, and the protectionist stance taken by the Trump administration is only making matters worse, said Burwell. “If the U.S. is not part of these competitive trade mechanisms, we could be at a disadvantage,” The $37 billion-asset East West Bancorp in Los Angeles is active in financing exports to China, but Chairman and CEO Dominic Ng said on a Jan. 25 conference call that his bank would not be hurt by a potential trade war with the country. Nonetheless, bankers say that the U.S. should look to strengthen relationships with trading partners, not put up roadblocks. On Nafta, for example, some have argued that if the U.S. leaves the 24-year pact, other countries in Latin America will gladly step in and fill the trading void. 

        Top banks' 2017 commodities revenue drops 42 percent to lowest since 2006 (Reuters) - Commodities-related revenue at the 12 biggest investment banks fell by 42 percent last year to its lowest since at least 2006, a report by financial industry analytics firm Coalition said on Friday. Revenue from commodity trading, selling derivatives to investors and other activities in the sector fell to $2.5 billion in 2017 from $4.3 billion the previous year, it said in a report. “Low volatility and subdued client activity, coupled with trading underperformance witnessed in 1H17, led to the overall decline,” it said. Revenue was the lowest since Coalition began analyzing bank data in 2006, it said. Banks’ commodity revenue has been on a steady downward path in recent years as they have exited or slimmed down their commodity businesses due to heightened government regulation and poor performance from the sector. A number of firms suffered heavy losses in the first half of 2017 after a slide in natural gas prices, while others lost money in the second half due to swings in oil prices during Hurricane Harvey, analysts have said. Coalition did not mention individual banks, but in the second quarter Goldman Sachs posted the weakest commodities results in its history as a public company. Coalition tracks Bank of America Merrill Lynch, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan, Morgan Stanley, Societe Generale and UBS. 

        Big banks got huge tax cuts, then hiked cities' interest rates - As U.S. banks were tallying up the billions of dollars in extra profits they'll reap from the sweeping tax cuts signed into law by President Donald Trump, they were quietly delivering unwelcome news to local governments: The interest rates on their loans were about to go up. That's because banks often include clauses in contracts when they lend to states and cities giving them the right to trigger the increases if legal changes lower the returns on their investments.The tax cut did just that. Slashing the corporate rate made the tax-exempt loans less valuable than before compared with other assets, once federal taxes are taken into account. So companies including Wells Fargo & Co., U.S. Bancorp and SunTrust Banks Inc. demanded more interest to make them whole.The impact is being felt across the country by governments and non-profits that borrowed through loans, a loosely regulated niche of public finance that took off after the end of the last recession. Municipal Market Analytics estimates that there are about $180 billion of such loans outstanding. That could translate into to tens of millions of dollars in extra costs each year for local agencies that Trump is pushing to boost spending on roads, airports and other projects."It takes away from money that would help the state's reserve, or it takes away from money the state may appropriate for other statewide public purposes," said David Erdman, the capital finance director for Wisconsin, whose payments on a $279 million loan will jump by about $750,000 next year.

        Bill to address Madden ruling would be nightmare for consumers -- A vote is expected imminently in the House on the so-called “Madden” bill, which, if it becomes law would spread predatory triple-digit loans, like a virus, to every state in America. The legislation would ensnare borrowers in financially devastating debt traps.The bill states that if a loan interest rate is valid at the moment of origination, then it remains valid when the loan is transferred. The bill would thus facilitate “rent-a-bank” schemes whereby non-banks, such as payday, installment loan or credit card companies, form a superficial partnership with a bank in order to piggyback off bank preemption of state usury laws and charge triple-digit interest rates well in excess of state rate caps. At the same time, these non-bank entities are not bound by the regulatory regimes banks must abide by — they get to have their cake and eat it too.The House bill and its companion in the Senate are sold as a fix to a federal court’s decision in Madden v. Midland, which reaffirmed the illegality of this type of transfer. Instead of fixing anything, these bills would break apart crucial state consumer protection laws. Lawmakers should vote down a bill that would allow non-banks to bypass state usury laws. FotoliaIn evaluating this measure, we should keep in mind something basic. Good loans serve as ladders of opportunity, helping borrowers reach their dreams. Predatory loans turn dreams into nightmares.This holds true for brick-and-mortar lenders and for online loans. The latter is often referred to as part of the “fintech” sector. This phrase has been brandished like a magic wand that can transform a debt trap into a springboard for success — but fintech is not a magic wand.

        Bill to unwind Madden ruling clears House, but Senate is question mark -  The House passed a bill Wednesday that would allow debt buyers, including fintech firms, to bypass state interest rate caps. The bill would define a loan and the interest rate set by the lender as “valid when made,” regardless of whether the loan is later sold to a nonbank, such as a marketplace lender, in a different state. Such a definition was long assumed for years, with debt buyers operating as if they enjoyed the same preemption powers as national banks to avoid state interest caps.A court ruling in 2015 by the U.S. Court of Appeals for the Second Circuit said such loans in fact did not enjoy such favorable treatment, calling into question transactions that fell under the laws of Connecticut, New York and Vermont.The legislation, which passed 245 to 171 and was introduced by Rep. Patrick McHenry, R-N.C., would essentially reverse the Madden v. Midland decision. Supporters argue the court ruling has since thwarted marketplace lenders from buying debt from banks and ultimately, prevented companies from offering more credit to consumers. “The Second Circuit decision has caused considerable uncertainty and risk for many types of bank lending programs,” House Financial Services Chairman Jeb Hensarling, R-Texas, said during a House floor debate Wednesday. “Being able to offer consistent terms nationwide is vital to scaling the marketplace lending business, which in turn allows lenders to access cheaper investment capital and then pass the savings on to the borrowers.” McHenry put forward the bill in mid-2016 after the Supreme Court had declined to hear the case. The appeals court had determined that a debt buyer, Midland Funding LLC, could not charge a consumer an interest rate that was higher than New York’s usury cap after buying debt from a Bank of America unit.  House Financial Services Committee's top Democrat, Rep. Maxine Waters of California, said lenders' claims that they cannot make loans because of the Second Circuit decision have “not been substantiated.” Democrats and consumer groups opposed to the bill say it is too broad and would open the door to predatory lenders charging interest rates higher than state limits.

        How Trump’s budget affects CFPB, GSE fees, other bank priorities - — The Trump administration’s 2019 budget highlights the administration’s goal of reining in the post-crisis regulatory apparatus, with proposed cuts for several agencies including the Consumer Financial Protection Bureau.The White House budget has been a mostly ceremonial document for much of the last 10 years, with Congress primarily relying on continuing resolutions to fund the government. This year’s budget is especially moot, since Congress passed and the president signed a deal last week that would fund the government through 2019. But if the budget document allows President Trump to state where his priorities are, he made a point in his second budget — his first budget was released in mid-May of 2017 — of calling for a reduction in the various means by which financial regulators are funded.The administration is proposing significant curbs to how the CFPB is funded, as well as further cuts to the Securities and Exchange Commission, and the Office of Financial Research.Perhaps reflecting the influence of Mick Mulvaney, who is both the director of the Office of Management and Budget and acting director of the CFPB, the budget was especially critical of the consumer bureau. The agency’s brief history, the budget said, was “rife with examples of the poor financial and personnel management decisions.”The 2019 budget proposal repeated the administration’s 2018 call to do away with grants for community development financial institutions, and also called for an end to special allotments for affordable housing made through the government-sponsored enterprises, although the budget also calls for doubling the GSEs’ guarantee fee tax. Meanwhile, the budget projects a net profit of $26 billion for the Federal Housing Administration over a three-year period. The following are key takeaways of how the proposed budget would affect financial services policy. 

        CFPB embraces free-market approach in new strategic plan — Continuing to pull back the reins on the aggressive approach taken under former Director Richard Cordray, the Consumer Financial Protection Bureau unveiled a new strategic plan Monday that values consumer choice over heavy-handed enforcement. The new strategic plan, which lays out a vision for this fiscal year through 2022, sets out a more free-market approach for the agency, prioritizing things like making sure consumers can benefit from financial products rather than penalizing firms.The plan, which is consistent with other policies outlined by acting Director Mick Mulvaney, sets three main goals: making sure consumers have access to financial services; enforcing financial laws fairly and transparently; and operating efficiently with a “security of resources and information.”  "Consumer protection begins with ensuring that all consumers have access to markets for consumer financial products and services. Access is enhanced where markets are transparent, competitive, and innovative and where providers can adapt to changing consumer demand," the agency said in the strategic plan. Previously, the CFPB had four goals focused on preventing financial harm; informing the public of its data-driven decisions on policymaking; maximizing the agency’s impact; and aiming to “empower” consumers’ financial lives. Most significant is the apparent lack of an enforcement focus that had characterized the previous strategic plan under Cordray. The change is largely in response to past criticism that the CFPB was so heavy-handed in overseeing the financial industry that it was making decisions for consumers. “Some would say the prior CFPB strategy was paternalistic in protecting consumers from making bad decisions,” The CFPB’s new strategy seems to say “they will not substitute the government for consumers. Consumers can make their own fully informed decisions,” Morris added.

        Mick Mulvaney looks to neuter CFPB’s most potent weapon - Acting Consumer Financial Protection Bureau Director Mick Mulvaney is discarding many of the policy priorities of his predecessor, Richard Cordray, but none as consequential perhaps as the agency's targeting of "unfair, deceptive or abusive acts or practices." The Dodd-Frank Act prohibited so-called UDAAPs and tasked the CFPB with identifying such acts of wrongdoing and punishing firms that commit them. Mulvaney cannot repeal that provision, but — as indicated by the agency's new five-year strategic plan released Monday — the bureau's new leadership does not seem that interested in pursuing firms for UDAAP violations."It's really a signal that the aggressive enforcement of UDAAP will be coming to an end," said Richard Horn, principal at Richard Horn Legal in Tucson, Ariz., and a former CFPB special counsel and adviser.The release of the strategic plan was a continuation of Mulvaney's aggressive remaking of the bureau. In addition to an apparent shying away from using UDAAP, the plan also pointed to the CFPB's intention of easing its recent mortgage rules.The CFPB's previous five-year strategic plan issued in 2013, under Cordray, had featured UDAAP prominently in its "vision statement." The statement cited the bureau's interest in making sure no company could "build a business model around unfair, deceptive, or abusive practices."  But the agency's vision statement unveiled as part of the new strategic plan dropped any reference to so-called UDAAP claims, suggesting that the agency will not use the Dodd-Frank authority as the same kind of blunt enforcement tool that resulted in scores of fines under Cordray. Previously, the memo Mulvaney sent to staff last month described how the bureau would pursue enforcement actions only as a last resort.

        Consumer protection agency drops lawsuit against lender that charged 950 percent interest rates | TheHill: © Getty The Consumer Financial Protection Bureau has dropped a lawsuit against a lender that was allegedly charging interest rates up to 950 percent, NPR reported.The case against Golden Valley Lending had taken CFPB staffers years to establish, but new agency Director Mick Mulvaney instructed staffers to drop the lawsuit, according to NPR. "People are devastated and angry — just imagine how you would feel if years of your life had been dedicated to pursuing justice and you lose everything," Christopher Peterson, a former attorney at the bureau who had worked on the case, told the news outlet. The agency had sued Golden Valley in April, alleging unfair, deceptive and abusive business practices. Golden Valley declined NPR's request for comment."The Trump administration is just going to turn them loose and let them off the hook despite the fact they were making 950 percent interest rate loans to struggling families in ways that were illegal and unauthorized under both state and federal law," Peterson said.Mulvaney’s spokesperson told NPR that the decision to drop the suit wasn’t made by him, but by "professional career staff.”   However, several bureau staffers pushed back against that claim, saying that Mulvaney was involved in the decision to stop pursuing the lawsuit. The spokesperson later said Mulvaney had in fact been involved. The dropped lawsuit comes as Mulvaney moves to reign in the agency. The new bureau head, who is also serving as the head of the Office of Management and Budget, requested no new funding for the agency for the second quarter of fiscal 2018.

        Payback: Dems give CFPB's Mulvaney the Cordray treatment — When Richard Cordray ran the Consumer Financial Protection Bureau, staring down skeptical and even hostile GOP lawmakers in Capitol Hill in frequent hearings seemed a regular part of the job.Mick Mulvaney, the senior Trump administration official who now runs the CFPB on an acting basis, and in a very different manner from his predecessor, had his first taste of that Tuesday as Democrats on the Senate Budget Committee questioned him directly over his policies at the consumer bureau.The criticism was tempered by the fact that Democrats are in the minority and the hearing's purpose was not directly tied to the CFPB; Mulvaney was there to discuss President Trump's budget. Still, lawmakers leaned into Mulvaney over a recent lawsuit the CFPB dropped under his leadership, and his steps to reconsider the agency's payday rule, among other things.“You seem to take great pleasure in having wiped out” the payday rule, said Sen. Jeff Merkley, D-Ore. Mulvaney, who is also director of the Office of Management and Budget, rebutted that notion. The bureau announced in January that it planned to reconsider the rule and may waive an April registration deadline, but the initial implementation phase of the rule technically began last month.“The payday rule, as far as I know, is still in effect,” said Mulvaney.Some of the questioning was reminiscent of how Republicans would interrogate Cordray during his appearances before Congress.Mulvaney also took heat over the agency's decision in January to drop lawsuits against a group of payday lenders — including Golden Valley Lending — associated with an American Indian tribe.The decision involving Golden Valley — which is said to have made loans with interest rates as high as 950% a year — was highlighted Monday in a National Public Radio report that said Mulvaney was involved in the decision to drop the suit despite his having received political donations from payday lenders in his past congressional campaigns.

        CFPB chief search complicated by GOP’s tenuous Senate hold - — The statutory clock on Mick Mulvaney serving as acting head of the Consumer Financial Protection Bureau is under a year, but the administration's path to getting a full-time director confirmed by the Senate has never looked rockier. Numerous names have already been floated for CFPB director, but the administration's tightrope walk in getting nominees through Congress was on full display last week when Marvin Goodfriend, a nominee for the Federal Reserve Board, lost GOP support, which appeared to put his confirmation in jeopardy. Analysts say a similar political reality would complicate a CFPB choice. The GOP's razor-thin Senate majority became tighter — down to one vote — after Alabama Democrat Doug Jones' upset victory. Losing Republican votes could spell doom, especially with the availability of Sen. John McCain, R-Ariz., in question. The administration could look for Democratic votes to make up the difference, observers said.  “They need to try to get nominees that can win at least a handful of Democratic votes. And if they can't do that, then they have to really be sure they have every Republican vote,” said Ian Katz, an analyst at Capital Alpha Partners.Goodfriend's nomination to be a Fed board governor was approved along party lines by the Senate Banking Committee on Thursday, but reports quickly surfaced that Sen. Rand Paul, R-Ky., would oppose his nomination. With the health status of McCain a bit of an unknown, Goodfriend’s nomination could be blocked if Democrats hold firm and all vote against him. (Vice President Mike Pence holds a tie-breaking vote.)“This underscores how thin the Trump administration's margin for error is on these nominations and how careful they need to be,” said Katz. Goodfriend has expressed controversial views in the past and had a rocky nomination hearing. But CFPB director is an even higher-profile job and a nomination battle could be an even greater political flash point. This could explain why the potential CFPB nominees whose names have been floated seem more moderate than Mulvaney, the White House budget director whose focus on reining in the agency and easing up on companies' burden has led to Democratic backlash. Mulvaney, meanwhile, cannot hold the job indefinitely. Under the Federal Vacancies Reform Act, his term as acting director cannot last longer than 210 days. (He was appointed in late November.)

        CFPB's Mulvaney adds eight other topics to broad agency review - The Consumer Financial Protection Bureau issued a request for information Wednesday about the effectiveness of its supervisory activities and added eight other topics to its broad review of all aspects of the agency's operations.  The request for information on supervision is the fourth in a series by acting CFPB Director Mick Mulvaney, who froze the agency's enforcement actions in late November, as he conducts an overhaul of the bureau.  The CFPB said it will ask for public input on eight more topics including external engagement, complaint reporting, rulemaking processes, bureau rules not under assessment, inherited rules, guidance and implementation support, consumer education and consumer inquiries. So far the CFPB has asked for the public and companies it regulates to weigh in on how it should make changes to its enforcement process, administrative adjudications, and so-called civil investigative demands, which are issued to companies during enforcement investigations. The CFPB said it will begin accepting comments on its supervisory activities on Feb. 20, when the request is published in the Federal Register. The comment period lasts 90 days.

         Small nonbanks call for clearer exemption from CFPB audits — Nonbank mortgage firms are seeking formal assurance from the Consumer Financial Protection Bureau that they will not become subject to surprise audits or enforcement without involvement of a state regulator. In a joint letter to acting CFPB Director Mick Mulvaney, the Community Home Lenders Association and the Community Mortgage Lenders of America said the agency should practice “streamlined supervision” of smaller nonbanks, which is consistent with the Dodd-Frank Act. They noted that the current CFPB supervision regime exempts small banks from being examined by the bureau, while no such exemption exists for nonbanks.

        Goldman Sachs over the hump on mortgage settlement obligations -- Almost two years after settling mortgage securitization allegations with the Department of Justice and a group of states, Goldman Sachs has fulfilled more than half of its consumer relief commitment.Since the last settlement monitor's report in November, Goldman has forgiven more than $73.5 million in principal. Combined with previous activity and multipliers for certain types of allocations, it has put in total more than $918 million toward its $1.8 billion commitment.On average, Goldman has forgiven $91,202 in principal per borrower, according to the most recent report by independent settlement monitor Eric Green. Borrowers have to earn forgiveness in stages by paying on time. Goldman distributed the most recent round of consumer relief across 41 states, Washington, D.C., and Puerto Rico. More than one-third of the relief went to New York, Illinois and California. Hardest Hit Areas, which are census tracts identified by the Department of Housing and Urban Development as being particularly distressed, received 12% of the assistance. The company agreed to provide the $1.8 billion in consumer relief as part of an agreement it entered into in April 2016 with the Department of Justice and the three states. The settlement resolves allegations related to Goldman's marketing, structuring, arrangement, underwriting, issuance and sale of residential mortgage-backed securities.

        Banks need more skin in the housing finance game -- We all know it was a really bad idea in the last cycle to concentrate so much of the credit risk of the huge American mortgage loan market on the banks of the Potomac River — in Fannie Mae and Freddie Mac. But the concentration is still there, a decade later.The Fannie and Freddie-centric U.S. housing finance system removes credit risk from the original lenders, taking away their credit skin in the game. It puts the risk instead on the government and the taxpayers.  Many realized in the wake of the crisis that this was a big mistake (although a mistake made by a lot of smart people) in the basic design of the inherently risk-creating activity of lending money. Many realized after the fact that the American housing finance system needed more credit skin in the game. Skin-in-the-game requirements were legislated for private mortgage securitizations by the Dodd-Frank Act, but do not apply to lenders putting risk into Fannie and Freddie. Regulatory pressure subsequently caused Fannie and Freddie to transfer some of their acquired credit risk to investors — but this is yet another step farther away from those who originated the risk in the first place. That isn’t where the skin in the game is best placed. The best place, which provides the maximum alignment of incentives, and the maximum use of direct knowledge of the borrowing customer, is for the creator of the mortgage loan to retain significant credit risk. No one else is as well placed. The single most important reform of American housing finance would be to encourage more retention of credit skin in the game by those making the original credit decision.

        Dems demand fair-lending docs from CFPB's Mulvaney - Democratic lawmakers are demanding that acting Consumer Financial Protection Bureau Director Mick Mulvaney turn over "all documents" related to his decision to strip the agency's fair-lending office of enforcement powers.Sen. Sherrod Brown of Ohio and Rep. Maxine Waters of California sent a letter to Mulvaney on Friday questioning how a reorganization of the CFPB's fair-lending office would protect consumers from unfair discrimination.The letter said that the office was created because of the "economic disaster" of the financial crisis, in which "financial institutions were able to sell consumers dangerous products that fueled the Great Recession." The CFPB's fair-lending office has "played an important role in fighting discrimination — just as Congress intended," Sen. Sherrod Brown, above, and Rep. Maxine Waters said in a letter signed by 52 other Democrats. Bloomberg NewsSome lawmakers and consumer advocates are concerned that Muvlaney's efforts to loosen mortgage lending requirements and reverse the collection of home loan data will result in more fair-lending violations at a time when the CFPB is demoting the office of fair lending. "While Mr. Mulvaney once blamed the predatory lending occurring in the mid-2000s on CFPB inaction — notwithstanding the fact that the Bureau did not even exist until 2011 — that economic disaster was the result of the same regulatory indifference he is displaying today," the letter stated. The letter, signed by 52 other Democrats, including Sen. Elizabeth Warren of Massachusetts, who founded the agency, asked whether the CFPB had performed a legal analysis of the effects of demoting the Office of Fair Lending.

         Fannie's $3.7B drawdown not as bad as it looks, CEO says -- Fannie Mae had warned of a fourth-quarter loss, but that didn't dull the pain of the actual numbers when they were released Wednesday, nor did it eliminate the need for explanation — lots of it was required.The government-sponsored enterprise had recently been permitted to retain $3 billion for the quarter, but it had to burn that cushion and request a $3.7 billion draw from the Treasury to cover the $6.7 billion write-down of a deferred tax asset prompted by the new federal tax law. The result: Fannie’s capital is back to zero.Yet CEO Timothy Mayopoulos sought to reassure listeners on Fannie’s quarterly media call that "I wouldn't expect … any impact in the marketplace" because of the special circumstances.He said in a follow-up interview that the timing was unfortunate, but that it is unusual situations like this quarter’s huge tax adjustment that the retained earnings were meant for."People have recognized there is potential volatility for us and for any other large financial institution quarter to quarter and that you should have some cushion in there to absorb that," Mayopoulos said. "Unfortunately, it wasn't possible to have this [retained-earnings] arrangement back in place before we experienced this one-time, accounting-driven event."

        Freddie Mac needs $312 million from Treasury after writing down tax assets — Freddie Mac posted a fourth-quarter net loss of $3.3 billion and will request $312 million from the Treasury after recent tax reform legislation forced it to write down the value of deferred tax assets.The $5.4 billion write-down was greater than the $3 billion capital cushion that regulators let each government-sponsored enterprises set aside at the end of 2017. Fannie Mae had a $6.7 billion write-down that resulted in a $6.5 billion fourth-quarter loss and a $3.7 billion draw from the Treasury."Excluding this significant item, comprehensive income was $2.1 billion," Freddie Mac Chief Executive Donald Layton said during a conference call Thursday. Freddie's available funding under an agreement with the U.S. Treasury is $140.2 billion. Since the Treasury funding agreement was established nine years ago, "Freddie Mac has returned 60% more than we have received from Treasury in draws," Layton said.

        GSE reform isn't dead, but it isn't going anywhere either -— Despite a legislative push by some senators and other stakeholders to jump-start housing finance reform, efforts to form consensus over a bill once again are stuck in neutral.A draft of a housing finance reform bill being crafted by Sens. Bob Corker, R-Tenn., and Mark Warner, D-Va., was leaked late last month, but neither lawmaker has put their formal stamp on the legislation and it’s not clear when an official bill will be brought forward.Groups on both the left and right have been unwilling to support the draft plan, and even though the focus may be shifting quickly to what the Trump administration can do without a bill to reform Fannie Mae and Freddie Mac, clarity on what an administration plan might look like has also been lacking. In a recent interview, Corker acknowledged the difficulty of getting momentum behind a bill.“It is a good-government kind of issue, not one that has a lot of huge political push,” he said. “It is moving slowly, but we had a good meeting with the administration" last week.The legislative window for reforming the government-sponsored enterprises this year is closing, with many observers viewing the run-up to the midterm elections as a deadline."You would have to get there before" the midterms, Corker said. If no legislative progress emerges by then, the Federal Housing Finance Agency and the Treasury Department could proceed on reforms without legislative input. One idea is to put the GSEs through a receivership, which is somewhat similar to how the Federal Deposit Insurance Corp. resolves failed banks.

        Late payments on CMBS loans fall again in January - Late payments on securitized commercial mortgages fell again in January for the seventh straight month. The Trepp CMBS Delinquency Rate for U.S. commercial real estate loans in CMBS is now 4.83%, a decrease of six basis points from the December level.The delinquency rate moved up in 13 of the 16 months between March 2016 and June 2017. However, the delinquency level has receded consistently since June as most of the bubble-year loans from 2006 and 2007 have passed their maturity date and have been resolved. “In other words, fewer loans from the bubble years are defaulting and those that did default are being resolved away (often with losses) at a decent clip,” Trepp stated in its monthly report. Since June 2017, the Trepp CMBS Delinquency Rate has fallen by 92 basis points.

        Upbeat FHA outlook in Trump budget renews calls for premium reduction — The Trump administration's new budget proposal shows the Federal Housing Administration mortgage insurance program should be very profitable in fiscal year 2019, but there are no indications that the FHA will reduce its mortgage insurance premiums anytime soon. The budget projects that the agency will endorse $230 billion in FHA-insured single family loans next fiscal year, which is down from $238 billion in fiscal year 2018. But the agency will end the fiscal year with a net profit of $7.36 billion, according to the administration's proposal. Whereas the budget shows the agency's main insurance capital reserve losing funds in 2017 and 2018, the proposal shows an estimated $7.35 billion being invested in the reserve in fiscal year 2019, bringing the total reserve to $33.26 billion. The positive outlook has renewed calls for the FHA to reduce the premiums it charges home buyers. Last year, just after President Trump took office, the new administration suspended an Obama-era plan to reduce the agency's price."This makes a case that FHA is overcharging FHA single-family borrowers," Scott Olson, executive director of the Community Home Lenders Association, said of the new budget projection. His group said the 80-basis-point annual mortgage insurance fee should be reduced to the pre-crisis level of 55 basis points.The fiscal 2019 budget plan released Monday shows that the FHA will make a cumulative profit of roughly $26 billion over the three-year period ending in Sept. 30, 2019.

        Fannie and Freddie: REO inventory declined in Q4, Down 30% Year-over-year -- Fannie and Freddie reported results this week. Here is some information on Real Estate Owned (REOs).Freddie Mac reported the number of REO declined to 8,299 at the end of Q4 2017 compared to 11,418 at the end of Q4 2016.For Freddie, this is down 89% from the 74,897 peak number of REOs in Q3 2010. For Freddie, this is the lowest since at least 2007. Fannie Mae reported the number of REO declined to 26,311 at the end of Q4 2017 compared to 38,093 at the end of Q4 2016. For Fannie, this is down 84% from the 166,787 peak number of REOs in Q3 2010. For Fannie, this is the lowest since at least 2007.Here is a graph of Fannie and Freddie Real Estate Owned (REO).REO inventory decreased in Q4 for both Fannie and Freddie, and combined inventory is down 30% year-over-year. There are still a number of properties in the foreclosure process with long time lines in judicial foreclosure states - but this is close to normal levels of REOs.

        Texas and Florida mortgage delinquencies stick out like a sore thumb - Hurricanes continue to have a notable impact on mortgage delinquencies, clearly evident by CoreLogic's Loan Performance Insight report. Serious delinquency rates were up sharply in both Texas and Florida in November, compared to a year ago, while lower in all other states but Alaska, according to CoreLogic Chief Economist Frank Nothaft.The serious delinquency rate in Texas grew to 2.5% from 1.9% from the previous year, and rose in Florida to 3.9% from 3.2%. In Puerto Rico, the serious de  linquency rate spiked 2.7 percentage points to 6.3%.The serious delinquency rate in the Houston metropolitan area more than doubled to 4.6%, and grew more than one-third in the Miami area to 5.1%. Comparatively, all stages of delinquency including the foreclosure rate declined on a national scale year-over-year in November, with the serious delinquency rate falling to 2% from 2.3%. This may represent a call to servicers for natural disaster readiness. While things like defaults are issues servicers are prepared for, hurricanes and other natural disasters are not planned, making it imperative for the servicing industry to have effective disaster plans in place.Transition rates were also stable across most of the country, with the exception of areas impacted by the 2017 hurricanes. Nationally, the share of mortgages that shifted from current to 30 days past due remained unchanged from a year ago and were down month-over-month in November from 1.1% to 1%."In many of the harder-hit regions, such as the Houston and Miami metropolitan areas, housing stock availability has taken a hit as many homes were damaged and are no longer habitable. As a result, we expect to see further upward pressure on prices and rents for habitable homes, which will continue to erode affordability," Frank Martell, president and CEO of CoreLogic, said in a press release. In Florida, the share of mortgages that were 30 or more days delinquent grew to 9.9% from 6.3% year-over-year in November, and in Texas, they rose to 6.7% from 5.6%.

        Will a $25 late fee cost a West Palm Beach man his home? -- David Silva didn't believe he deserved the $25 late fee when his condo switched property managers and his $282 maintenance check never got deposited. He still doesn't.But by this year, the late fee assessed in 2015 had metastasized into $50,000 of additional late fees, interest and attorney charges for a two-day trial. A county judge's Feb. 5 ruling puts the retired New York State trooper in jeopardy of losing his $340,000 townhome to the Ventura Greens at Emerald Dunes Condominium Association through foreclosure, if he doesn't pay in full."I am disappointed in the judge's decision," said Silva. "I believe that this case, looked at with another set of eyes, would have resulted in a different decision. It is a sad day in America when the American dream becomes the American nightmare...." The association's attorney, Jeannette Bellon, said Silva's fate was sealed because he could not document he issued the check until that August, so by then he'd incurred late fees. The association even waived one month's late fee but Silva refused to pay any, arguing that the entire matter arose because of a change in property managers, of which he was not aware. But he was notified multiple times, Bellon argued in court. "The rules are the rules in this case," she said. "I'm a condo association owner myself, so I think people just need to be aware what their condo declaration states, what the rules and regulations state and what your duties and obligations are." Aggravating the dispute was the fact that Silva and association President Vic Bally couldn't stand each other, both affirmed in court. Bally once accused Silva of assault and it took a videotape of the incident to acquit Silva. The two tended to videotape each other to keep a legal record of their encounters, according to court testimony.

         Landlord Who Destroyed 5Pointz Must Pay Graffiti Artists $6.7M - Money can’t bring back 5Pointz—the bright yellow warehouse in Queens that became a "graffiti mecca" for street artists from around the world. When the building's owner, Gerald Wolkoff, unceremoniously whitewashed its art-covered walls one night in 2013, an unparalleled cache of world-class street art was irreversibly destroyed. But in a landmark ruling on Monday, a judge awarded $6.7 million in damages to 21 of the artists whose work was obliterated, the Washington Post reports. In his 100-page decision, Judge Frederic Block ordered Wolkoff to pay $150,000 for each of the 45 works destroyed—the maximum damages possible. His ruling represents a decisive victory for street artists in the fight to legitimize and protect their work. After years of renting out the building to artists, letting them spray paint the building's walls, Wolkoff moved to tear down what had become the country's"largest collection of exterior aerosol art" to build luxury condos. The artists tried to stop Wolkoff under the Visual Artists Rights Act (VARA)—which protects "works of recognized stature"—but the owner destroyed the artwork before a court decision was made. "Rather than wait for the court’s opinion, Wolkoff destroyed almost all of the plaintiffs' paintings by whitewashing them during that eight-day interim," Block said. "The sloppy, half-hearted nature of the whitewashing left the works easily visible under thin layers of cheap, white paint, reminding the plaintiffs on a daily basis what had happened," he added.

        Mortgage rates will spike faster, higher than originally projected - The recent bond market volatility will cause mortgage rates to rise to a higher level than previously projected, according to Fannie Mae.However, the rise in long-term bond yields led Fannie Mae Chief Economist Doug Duncan to increase his forecast for rates for the 30-year mortgage. The rate is expected to rise to 4.4% by the end of the year; last month Duncan forecast rates remaining in the 4% to 4.1% range throughout this year. The 30-year fixed rate mortgage ended 2017 at 3.9%."We upped this year's 30-year fixed mortgage rate forecast as a result of the unexpected spike in long-term interest rates at the start of the year," he said in a press release.The inventory shortage, not rising rates, will be a bigger factor on total home sales in 2018."We don't expect rates to play much of a role in total home sales, especially with anticipated stronger disposable household income growth," Duncan said. "The ongoing inventory shortages should continue to constrain sales despite otherwise ripe home buying conditions." The forecast for originations is now $1.69 trillion this year and $1.68 trillion next year, compared with his projection in January of $1.73 trillion and $1.69 trillion, respectively.

        MBA: Mortgage Applications Decrease in Latest Weekly Survey --From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey Mortgage applications decreased 4.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 9, 2018.... The Refinance Index decreased 2 percent from the previous week. The seasonally adjusted Purchase Index decreased 6 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 4 percent higher than the same week one year ago. ...The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to its highest rate since January 2014, 4.57 percent, from 4.50 percent, with points increasing to 0.59 from 0.57 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The first graph shows the refinance index since 1990.

        Home Prices Hit Record Highs In Two-Thirds Of US Cities As Manhattan Rents Collapse - Meanwhile, Bloomberg claims the steadily improving job market has helped drive prices higher (we imagine the flood of money-creation by central banks also had something to do with it).Here's Bloomberg:Home values have grown steadily as the improving job market drives demand for a scarcity of properties on the market. While prices jumped 48 percent since 2011, incomes have climbed only 15 percent, putting purchases out of reach for many would-be buyers.The consistent price gains “have certainly been great news for homeowners, and especially for those who were at one time in a negative equity situation,” Lawrence Yun, the Realtors group’s chief economist, said in a statement. “However, the shortage of new homes being built over the past decade is really burdening local markets and making homebuying less affordable.”Sales of previously owned homes, including single-family houses and condos, increased 4.3% to a seasonally adjusted rate of 5.62 million in the fourth quarter, the Realtors said. At the end of December, only 1.48 million existing homes were available for sale, 10.3% less than a year earlier.Predictably, the most expensive markets were in densely populated coastal areas where job growth and wealth creation since the financial crisis have largely clustered...The most expensive markets were San Jose, California, where the median price was $1.27 million, followed by San Francisco, the Irvine, California, area, Honolulu and San Diego. The San Jose area had a 26 percent increase in prices, the biggest of any region, followed by Reno, Nevada, and the Putnam/Dutchess County area, north of New York City. The biggest decline was in Glens Falls, New York, where prices dropped almost 12 percent. Cumberland, Maryland, and Elmira, New York, followed.

        Housing: Part 284 - No Bubbles, Only Busts -  Kevin Erdmann - Timothy Taylor has a post up today on homeownership rates around the globe. One of the key pieces of information that is a clue about what happened in the US is that US housing markets were not international outliers until 2007.  We had two markets - the Closed Access cities and the rest of the country.  The Closed Access cities looked like places with housing supply problems like the UK and Canada and the rest of the country looked like places that don't have housing supply problems, like Germany and Japan.After 2007, prices in the US, along with just a couple other small countries, collapsed relative to those other places.  The Closed Access cities collapsed relative to Canada and the country's interior collapsed compared to Germany and Japan.Benchmarking to the rest of the world, we didn't have a bubble.  We just had a bust. Well, it turns out that this is the case if you look at homeownership rates, too.  From 1990 to 2005, homeownership here increased from 64% to 69%.  But, that was actually a slower increase than the typical country experienced over that time.  Then, after 2005, homeownership rates collapsed here, along with prices.  In the rest of the world, homeownership rates are still about where they were in 2005.No bubbles.  Just a bust.

        Study: Even Apple and Google engineers can’t really afford to live near their offices -- That’s according to the Y Combinator-backed real-estate startup Open Listings, which looked at median home sales prices near the headquarters (meaning within a 20-minute commute) of some of the Bay Area’s biggest and best-known tech companies. Using public salary data from Paysa, Open Listings then looked at how many software engineers from those companies could actually afford to buy a house close to their office. Here’s what it found:

        • Engineers at five major SF-based tech companies would need to spend over the 28% threshold of their income to afford a monthly mortgage near their offices.
        • Apple engineers would have to pay an average of 33% of their monthly income for a mortgage near work. That’s the highest percentage of the companies analyzed, and home prices in Cupertino continue to skyrocket.
        • Google wasn’t much better at 32%, and living near the Facebook office would cost an engineer 29% of their monthly paycheck. (The companies are headquartered in Mountain View and Menlo Park, respectively.)
        • Across the Bay Area, the median cost for houses near the companies analyzed was $1,203,750. The median salary for software engineers at those companies was $210,500.

        Housing Starts increased to 1.326 Million Annual Rate in January --From the Census Bureau: Permits, Starts and Completions Privately-owned housing starts in January were at a seasonally adjusted annual rate of 1,326,000. This is 9.7 percent above the revised December estimate of 1,209,000 and is 7.3 percent above the January 2017 rate of 1,236,000. Single-family housing starts in January were at a rate of 877,000; this is 3.7 percent above the revised December figure of 846,000. The January rate for units in buildings with five units or more was 431,000. Privately-owned housing units authorized by building permits in January were at a seasonally adjusted annual rate of 1,396,000. This is 7.4 percent above the revised December rate of 1,300,000 and is 7.4 percent above the January 2017 rate of 1,300,000. Single-family authorizations in January were at a rate of 866,000; this is 1.7 percent below the revised December figure of 881,000. Authorizations of units in buildings with five units or more were at a rate of 479,000 in January. The first graph shows single and multi-family housing starts for the last several years. Multi-family starts (red, 2+ units) increased sharply in January compared to December. Multi-family starts were up 6.7% year-over-year in January. Multi-family is volatile month-to-month, but has been mostly moving sideways the last few years. Single-family starts (blue) increased in January, and are still up 7.6% year-over-year. Total Housing Starts and Single Family Housing StartsThe second graph shows total and single unit starts since 1968. The second graph shows the huge collapse following the housing bubble, and then - after moving sideways for a couple of years - housing is now recovering (but still historically fairly low). Total housing starts in January were above expectations, mostly due to a sharp increase in multi-family starts. However starts for November were revised down, and December revised up slightly.

        Housing Starts, Permits Surge On Spike In Rental Units - Another day, another confirmation that the US economy is heating up just a little more than most expected.With Wall Street expecting housing starts and permits of 1.234MM and 1.300MM, respectively, moments ago the US Census reported number that blew away expectations, with starts printing at 1.326MM in January, a 9.7% increase relative to the 3.5% expected, while permits jumped by 7.4% from 1.300MM to 1.396MM, on expectations of an unchanged print.What is notable in today's number is that single-family units were largely in line, declining for Permits from 881K to 866K, while single-family Starts rose from 846K to 877K, still well below November's 946K.So where did the bounce come from? The answer: multi-family, or rental units, which surged for Permits from 382K to 479K, while multi-family Starts surged from 360K to 431K, the highest number since December 2016.Here is the visual breakdown, first Starts: then Permits: While it is very early to infer causality, the jump in rental unit construction could potentially add a modest disinflationary pressure to rents, which in recent months have seen declines across some of America's largest MSAs. Whether or not this impacts Fed policy is too early to determine.

        Comments on January Housing Starts -- Bill Mcbride -  The housing starts report released this morning showed starts were up 9.7% in January compared to December, and starts were up 7.3% year-over-year compared to January 2017.  This first graph shows the month to month comparison between 2017 (blue) and 2017 (red). Starts were up 7.3% in January compared to January 2017.Total starts are up 18.1% compared to January 2016 (two years ago).  That is solid growth.Single family starts were up 7.6% year-over-year, and up 3.6% compared to December.Multi-family starts were up 6.7% year-over-year, and up 23.7% compared to December (multi-family is volatile month-to-month). Below is an update to the graph comparing multi-family starts and completions. Since it usually takes over a year on average to complete a multi-family project, there is a lag between multi-family starts and completions. Completions are important because that is new supply added to the market, and starts are important because that is future new supply (units under construction is also important for employment). The blue line is for multifamily starts and the red line is for multifamily completions.The rolling 12 month total for starts (blue line) increased steadily over the last few years - but has turned down recently.  Completions (red line) have lagged behind - and completions have caught up to starts (more deliveries). Completions lag starts by about 12 months, so completions will probably turn down in a year or so. As I've been noting for a couple of years, the growth in multi-family starts is behind us - multi-family starts peaked in June 2015 (at 510 thousand SAAR). The second graph shows single family starts and completions. It usually only takes about 6 months between starting a single family home and completion - so the lines are much closer. The blue line is for single family starts and the red line is for single family completions. Note the low level of single family starts and completions.  The "wide bottom" was what I was forecasting following the recession, and now I expect a few more years of increasing single family starts and completions.

        New Residential Building Permits: 1.4M in January --The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for January new residential building permits. The latest reading of 1.396M was an increase from 1.300M in December and above the forecast of 1.290M.Here is the opening of this morning's monthly report: Privately-owned housing units authorized by building permits in January were at a seasonally adjusted annual rate of 1,396,000. This is 7.4 percent (±1.2 percent) above the revised December rate of 1,300,000 and is 7.4 percent (±1.9 percent) above the January 2017 rate of 1,300,000. Single-family authorizations in January were at a rate of 866,000; this is 1.7 percent (±1.3 percent) below the revised December figure of 881,000. Authorizations of units in buildings with five units or more were at a rate of 479,000 in January. [link to report]  Here is the complete historical series, which dates from 1960. Because of the extreme volatility of the monthly data points, a 6-month moving average has been included.  Here is the data with a simple population adjustment. The Census Bureau's mid-month population estimates show substantial growth in the US population since 1960. Here is a chart of housing starts as a percent of the population. We've added a linear regression through the monthly data to highlight the trend.

        Quarterly Housing Starts by Intent, Q4 2017 --In addition to housing starts for January, the Census Bureau also released the Q4 "Started and Completed by Purpose of Construction" report today.It is important to remember that we can't directly compare single family housing starts to new home sales. For starts of single family structures, the Census Bureau includes owner built units and units built for rent that are not included in the new home sales report. For an explanation, see from the Census Bureau: Comparing New Home Sales and New Residential ConstructionWe are often asked why the numbers of new single-family housing units started and completed each month are larger than the number of new homes sold. This is because all new single-family houses are measured as part of the New Residential Construction series (starts and completions), but only those that are built for sale are included in the New Residential Sales series.However it is possible to compare "Single Family Starts, Built for Sale" to New Home sales on a quarterly basis.The quarterly report released today showed there were 149,000 single family starts, built for sale, in Q4 2017, and that was above the 139,000 new homes sold for the same quarter, so inventory increased in Q4 (Using Not Seasonally Adjusted data for both starts and sales). This graph shows the NSA quarterly intent for four start categories since 1975: single family built for sale, owner built (includes contractor built for owner), starts built for rent, and condos built for sale.

        Why 'build to rent' is having its moment - The ranks of renters have swollen since the financial crisis, but there are few foreclosed homes left to pick up on the cheap and rent out. So some of the biggest landlords are buying, or building, new single-family homes to pad their portfolios.  While the initial yields for new construction tend to be lower, these firms have access to cheaper capital than they did when they started out a few years ago; some have raised equity or obtained financing from government-sponsored enterprises. Consolidation has also created experienced property managers with huge economies of scale, another factor making new build more economical. Though it will be awhile before these new homes show up as collateral for asset-backed issuances, their low maintenance costs and the higher-quality tenants that they attract should tend to reduce the overall risk in the pools.

        NAHB: Builder Confidence unchanged at 72 in February -- The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 72 in February, unchanged from 72 in January. Any number above 50 indicates that more builders view sales conditions as good than poor. From NAHB: Builder Confidence Stays at Strong Level in February Builder confidence in the market for newly-built single-family homes remained unchanged at a healthy 72 level in February on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). “Builders are excited about the pro-business political climate that will strengthen the housing market and support overall economic growth,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “However, they need to manage supply-side construction hurdles, such as shortages of labor and lots and building material price increases.” “The HMI gauge of future sales expectations has reached a post-recession high, an indicator that consumer demand for housing should grow in the months ahead,” ... The HMI component charting sales expectations in the next six months rose two points to 80, the index measuring buyer traffic held steady at 54, and the component gauging current sales conditions dropped one point to 78. Looking at the three-month moving averages for regional HMI scores, the Midwest rose two points to 72, the South increased one point to 74, the West remained unchanged at 81, and Northeast fell two points to 56.

        AIA Forecast: 4% increase in Nonresidential Construction in 2018 --  Note: This does not include spending for oil and gas. From the AIA: Pace of construction activity projected to accelerate through 2019 Despite labor shortages and rising material costs that continue to impact the construction sector, construction spending for nonresidential buildings is projected to increase 4% this year and continue at that pace of growth through 2019. The American Institute of Architects (AIA) semi-annual Consensus Construction Forecast indicates the commercial construction sectors will generate much of the expected gains this year, and by 2019 the industrial and institutional sectors will dominate the projected construction growth.  “Rebuilding after the record-breaking losses from natural disasters last year, the recently enacted tax reform bill, and the prospects of an infrastructure package are expected to provide opportunities for even more robust levels of activity within the industry,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “The Architecture Billings Index (ABI) and other major leading indicators for the industry also point to an upturn in construction activity over the coming year.”

        Hotels: Solid Start for Occupancy Rate in 2018 - From STR: US hotel results for week ending 3 February: The U.S. hotel industry reported positive year-over-year results in the three key performance metrics during the week of 28 January through 3 February 2018, according to data from STR.  In comparison with the week of 29 January through 4 February 2017, the industry recorded the following:
        • Occupancy: +1.4% to 56.4%
        • Average daily rate (ADR): +2.2% to US$122.35
        • Revenue per available room (RevPAR): +3.6% to US$69.05
        The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

        Mortgage balances surge, but gains are uneven - Household debt hit another all-time high in the fourth quarter as student and auto loan balances surged to new heights and outstanding mortgage balances climbed to levels not seen since 2009. In its quarterly report on household debt and credit, released Tuesday, the Federal Reserve Bank of New York said that total outstanding consumer debt climbed to a record $13.15 trillion at Dec. 31, up 1.5% from the prior quarter and 4.5% from a year earlier. The New York Fed said that 2017 was the fifth consecutive year in which household debt increased. This latest surge was driven largely by a sharp increase in mortgage balances. Total outstanding mortgage balances increased by 4.7% year over year, to $8.88 trillion, according to Fed data. The last time mortgage balances were at those levels was in late 2009, and the year-over-year increase was the largest in more than a decade. But that growth has been uneven, Fed officials said Tuesday. In some states, mortgage balances surpassed their 2008 peaks by 10% or even more, while in others harder hit during the financial crisis, balances remained well below their 2008 peaks. Texas, Oklahoma, Louisiana, Colorado, Utah, North Dakota and South Dakota are among the states where mortgage balances are now at all-time highs. California, Florida, Nevada, and Arizona, are among the states where balances are still below peak levels. “Despite recovered house prices, mortgage balances remain far below their previous peaks in the states that were hardest-hit by the Great Recession,” Donghoon Lee, research officer at the New York Fed, said in a press release. “While the subdued mortgage balance levels of these areas should not necessarily be interpreted as a negative outcome, the regional differences clearly show that the echoes of the financial crisis still linger.”

        NY Fed Q4 Report: "Household Debt Increased, Fifth Consecutive Year Of Positive Annual Growth" --From the NY Fed: Household Debt Jumps as 2017 Marks the Fifth Consecutive Year Of Positive Annual Growth Since Post-Recession Deleveraging - The Federal Reserve Bank of New York’s Center for Microeconomic Data today issued itsQuarterly Report on Household Debt and Credit,which reported that total household debt increased by $193 billion (1.5%) to $13.15 trillion in the fourth quarter of 2017. This report marks the fifth consecutive year of positive annual household debt growth. There were increases in mortgage, student, auto, and credit card debt (increasing by 1.6%, 1.5%, 0.7% and 3.2% respectively) and another modest decline in home equity line of credit (HELOC) balances (decreasing by 0.9%). The Report is based on data from the New York Fed's Consumer Credit Panel, a nationally representative sample of individual- and household-level debt and credit records drawn from anonymized Equifax credit data. Mortgages are the largest form of household debt and their increase of $139 billion was the most substantial increase seen in several quarters. Unlike overall debt balances, which last year surpassed their previous peak reached in the third quarter of 2008, mortgage balances remain 4.4% below it. The New York Fed issued an accompanying blog post to examine the regional differences in mortgage debt growth since the previous peak.

        Household Debt And Credit Report: Up $193B in Q4, Another Peak - The latest household debt for Q4 2017 was up 1.5% from Q3 and currently at $13.15T and at its peak. Here is an excerpt from the latest press release: – The Federal Reserve Bank of New York’s Center for Microeconomic Data today issued its Quarterly Report on Household Debt and Credit,which reported that total household debt increased by $193 billion (1.5%) to $13.15 trillion in the fourth quarter of 2017. This report marks the fifth consecutive year of positive annual household debt growth. There were increases in mortgage, student, auto, and credit card debt (increasing by 1.6%, 1.5%, 0.7% and 3.2% respectively) and another modest decline in home equity line of credit (HELOC) balances (decreasing by 0.9%). The Report is based on data from the New York Fed's Consumer Credit Panel, a nationally representative sample of individual- and household-level debt and credit records drawn from anonymized Equifax credit data. Read moreAs a result of the housing and mortgage crisis of the Great Recession, economists have been paying more attention to the liabilities portion of household balance sheets. Among the New York Federal Reserve Board's many economic reports is the Household Debt and Credit report, which is released quarterly with data going back to 2003. Data is collected through the NY Fed's Consumer Credit Panel which is constructed from a nationally representative random sample of Equifax credit report data resulting in a sample size of over 40 million individuals quarterly. Here is some background on the report from the NY Fed: one of the CMD’s large data collection projects is the New York Fed Consumer Credit Panel, which is constructed from a nationally representative random sample of Equifax credit report data. Analysis of this data set is regularly reported in the CMD’s Quarterly Report on Household Debt and Credit. The data set can be used to calculate national and regional aggregate measures of individual- and household-level credit balances, and delinquencies by product type. The Consumer Credit Panel also provides new insights into the extent and nature of heterogeneity of debt and delinquencies across individuals and households. The chart below shows total debt balance nation-wide by composition in trillions of dollars. The current total is $13.156T, well exceeding the 2008 peak.

        Household Debt Rises By $572 Billion, Ends 2017 At All Time High -  After we first reported last week  that US credit card, student and auto debt all hit record highs in December of 2017.... it should not come as a surprise that according to the just released latest quarterly household debt and credit report  by the NY Fed, Americans' debt rose to a new record high in the fourth quarter on the back of an increase in virtually every form of debt: from mortgage, to auto, student and credit card debt (although HELOCs posted a tiny decline). Aggregate household debt increased for the 14th straight quarter, rising by $193 billion (1.5%) to a new all time high, and as of December 31, 2017, total household indebtedness was $13.15 trillion, an increase of $572 billion from a year ago - the fifth consecutive year of increases - equivalent to 67% of US GDP, versus a high of around 87% in early 2009. After years of deleveraging in the wake of the 2007-09 recession, household debt has risen more than 18% since the trough hit in the spring of 2013. Some more big picture trends:

        • Mortgage balances, the largest component of household debt, increased by $139 billion during the quarter to $8.88 trillion from Q3 2017.
        • Balances on home equity lines of credit (HELOC) have been slowly declining; they dropped by another $4 billion and now stand at $444 billion.
        • Non-housing balances, which have been increasing steadily for nearly 6 years overall, saw a $58 billion increase in the fourth quarter.
        • Auto loans grew by $8 billion to $1.22 trillion
        • Credit card balances increased by $26 billion to $834 billion
        • Student loans saw a $21 billion increase to $1.38 trillion

        There were some red flags of caution: confirming recent negative data from Wells Fargo, and suggesting that the housing recovery is stalling, mortgage originations were at $452 billion, down from $479 billion in the third quarter.  Also troubling: There were $137 billion in auto loan originations in the fourth quarter of 2017, a small decline from 2017Q3 but making 2017 auto loan origination volume the highest year observed in our data.Meanwhile, credit card balances increased by $26 billion. Aggregate credit card limits rose for the 20th consecutive quarter, with a 1.0% increase.The table below summarizes the key changes in household debt and credit developments as of Q4 2017

        Households Are Borrowing More to Fuel Spending, Wells Fargo Says - U.S. households may be borrowing more to fuel their spending as wages grow slowly, according to Wells Fargo & Co. Consumer spending may be rising because Americans are growing more confident, analysts John McElravey and Ryan Brinkoetter wrote in a presentation to clients Monday. Savings rates are falling, and a measure of debt levels has been edging higher relative to income recently after plunging in the years following the crisis. “Debt may be filling the gap for many households when incomes have not kept pace with rising living expenses," the analysts wrote. "A reversal may be ahead if income growth does not catch up to consumer expectations." Lower income consumers have been showing signs of weakness, because their income has been growing slower than wealthier Americans’. The pockets of weakness may explain why some asset-backed securities are performing worse even as the unemployment rate dropped in January and consumer confidence and income growth expectations are strong, the analysts said. They said the consumer credit cycle "appears to be maturing," though faster economic growth could benefit more vulnerable consumers. Rising education debt may also be crimping consumers’ demand for other kinds of debt, according to the analysts. Total student loan debt reached $1.36 trillion in the third-quarter of 2017, according to the Federal Reserve Bank of New York. That’s up from $530 billion a decade earlier, and is the largest share of non-housing debt. It’s also "significantly more burdensome" for lower income households, the analysts said. Many lower-income households still have lower net worths than they did 15 years ago. Rising asset values have helped generate wealth, but many lower net worth households don’t have retirement accounts, investment funds or stock holdings. They also typically don’t own homes or businesses, meaning they’ve missed out on rising nonfinancial asset appreciation as well. Despite a low unemployment rate, "a significant cohort" of workers have been unemployed for a long time, suggesting a structural shift in the economy compared to past economic cycles. These workers may need re-training to find employment, the analysts said. An elevated share of part-time workers also signals a changing economy.

        The warning signs in consumer credit data - U.S. households are borrowing more than ever to buy homes and cars, pay for college and even finance every day purchases. The Federal Reserve Bank of New York said in September that consumer debt hit a record $12.96 trillion in the third quarter of 2017, as student and auto loan totals reached all-time highs and mortgage and credit card debt crept closer to pre-financial-crisis levels. It’s an eye-popping figure to be sure, but should lenders be spooked by it? The New York Fed has noted that its data is not adjusted for inflation, and the cost of goods and services has risen by more than 10% since 2008, the last time total consumer debt neared the $13 trillion mark. Moreover, the U.S. population has increased by about 7% during that span, which means that, on a per capita basis, consumer debt is actually lower than it was a decade ago. Another sign that households are managing their debt reasonably well: Foreclosures hit a new historical low in the third quarter, according to the New York Fed. Still, there are reasons to be concerned about rising debt levels. The personal savings rate hit a 12-year low at the end of 2017, which means that many households likely do not have enough of a financial cushion to weather sudden economic shocks, like a major medical bill or a busted refrigerator. Delinquencies on all types of consumer loans, while nowhere near 2009 and 2010 levels, have started to tick up in recent quarters. Factor in slow wage growth and high housing costs in many urban markets and it is not hard to imagine many households struggling to keep pace with their monthly bills. It’s too soon to say what this all means for banks, but not too soon point out the warning signs. Here they are.  (slides)

        Retail Sales decreased 0.3% in January - On a monthly basis, retail sales decreased 0.3 percent from December to January (seasonally adjusted), and sales were up 3.6 percent from January 2017. From the Census Bureau report: Advance estimates of U.S. retail and food services sales for January 2018, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $492.0 billion,a decrease of 0.3 percent from the previous month, but 3.6 percent above January 2017. ... The November 2017 to December 2017 percent change was revised from up 0.4 percent to virtually unchanged. This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline). Retail sales ex-gasoline were down 0.4% in January. The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993. Year-over-year change in Retail Sales Retail and Food service sales, ex-gasoline, increased by 3.5% on a YoY basis. The increase in January was well below expectations, and sales in November and December were revised down sharply. A disappointing report.

        January Retail Sales: Down 0.3% MoM -- The Census Bureau's Advance Retail Sales Report for January was released this morning. Headline sales came in at -0.3% month-over-month to one decimal. Today's headline number was below the consensus of 0.2%. Core sales (ex Autos) came in at 0.0% MoM. November and December figures were revised.Here is the introduction from today's report:Advance estimates of U.S. retail and food services sales for January 2018, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $492.0 billion, a decrease of 0.3 percent (±0.5 percent)* from the previous month, but 3.6 percent (±0.7 percent) above January 2017. Total sales for the November 2017 through January 2018 period were up 4.9 percent (±0.5 percent) from the same period a year ago. The November 2017 to December 2017 percent change was revised from up 0.4 percent (±0.5 percent)* to virtually unchanged (±0.3 percent)*.Retail trade sales were down 0.3 percent (±0.5 percent)* from December 2017, but 3.9 percent (±0.7 percent) above last year. Nonstore Retailers were up 10.2 percent (±1.4 percent) from January 2017, while Gasoline Stations were up 9.0 percent (±1.6 percent) from last year. [view full report] The chart below is a log-scale snapshot of retail sales since the early 1990s. The two exponential regressions through the data help us to evaluate the long-term trend of this key economic indicator.

        What Stores Do With $90 Billion in Merchandise Returns - Retailers still celebrating their strongest holiday sales in years now face the less-pleasant task of disposing of billions of dollars in returned merchandise. Often, retailers offload rejected clothes, appliances and toys for pennies on the dollar through a vast ecosystem of resellers, ranging from outlet stores and online auctions to flea markets and salvage dealers.  On one online auction site Monday, 49 washing machines and dryers that had recently been returned to Best Buy Co sold at a 68% discount for $13,300. Sears Holding Corp. recouped even less the same day when it accepted a 93% markdown on four pallets of sportswear, intimate apparel and accessories, selling them for $5,825. A spokesman for Sears declined to comment. Best Buy didn’t respond to a request for comment.  Retailing’s secondary market saw volume surge this year, reflecting both the strongest growth in holiday sales since 2011 and the rise of online shopping, where purchases are more likely to be returned.  These post-retail sales, including both returns and overstocked items, totaled $554 billion in 2016, and have been growing at about 7.5% a year, according to Zac Rogers, an operations and supply-chain professor at Colorado State University’s business school.  January and February are the busiest months for resellers and the so-called reverse supply chain, said Howard Rosenberg, chief executive of B-Stock Solutions, which runs online liquidation sites for major retailers, “It’s just mayhem during this period,” Mr. Rosenberg said. The National Retail Federation said holiday sales reached nearly $692 billion in November and December. About 13%, or $90 billion, is expected to be returned through the end of February, according to a forecast by Optoro Inc., a logistics provider that helps companies like Target Corp. , Staples Inc. and BJ’s Wholesale Club Inc. take back and resell returned merchandise.   Sometimes retailers find it is cheaper to just throw returned merchandise away. Optoro estimates five billion pounds of returned merchandise ends up in landfills each year.

        With CPI Looming, Here Is A Heatmap Of US Inflation - With what is arguably the year's most important number set to hit at 8:30 tomorrow when the Bureau of Labor Services reveals tomorrow's core CPI number (expected at 1.7%, just below December's 1.8%), traders are furiously betting and/or hedging whether the US economy is running hotter or cooler, amid concerns what a beat could send risk assets even lower. And while we don't know what the BLS will reveal tomorrow, to explore what is taking place at a far more granular level than the broad averages disclosed by the government, Goldman has analyzed the transcripts of America’s largest companies to identify where the bottom-up concern over rising costs is most acute. Specifically Goldman searches for commentary across industries around inflationary pressures with a specific focus on identifying trends in language topology around freight, logistics, wages and commodity costs.  Each industry in is then scaled by overall sales. Here are Goldman's inflationary findings:

        • Wages: Banks, Hotels, Construction, Restaurants & Leisure (among others) called out labor inflation most often with a prevalence of commentary around minimum wage increases and one-time bonuses on the back of tax reform.
        • Commodity costs: Input costs have moved markedly up across the commodity and feedstock complex. Not surprisingly, discussions around input costs and inflation were highest in the Industrials and Materials transcripts, though Consumer areas (Household Durables, Food and Staples Retailing) have not been immune.
        • Trucking/Transportation/Logistics: While most retailers have yet to report, many consumer companies have already spoken to higher freight and logistics costs. Heavy duty truck utilization is at a record level, with the market tight even before new regulations around electronic time logging took effect at the start of the year.

         Consumer Price Index: January Headline at 2.1% --The Bureau of Labor Statistics released the January Consumer Price Index data this morning. The year-over-year non-seasonally adjusted Headline CPI came in at 2.07%, down from 2.11% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 1.82%, up from the previous month's 1.78%. Here is the introduction from the BLS summary, which leads with the seasonally adjusted monthly data: The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent in January on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.1 percent before seasonal adjustment. The seasonally adjusted increase in the all items index was broad-based, with increases in the indexes for gasoline, shelter, apparel, medical care, and food all contributing. The energy index rose 3.0 percent in January, with the increase in the gasoline index more than offsetting declines in other energy component indexes. The food index rose 0.2 percent with the indexes for food at home and food away from home both rising. The index for all items less food and energy increased 0.3 percent in January. Along with shelter, apparel, and medical care, the indexes for motor vehicle insurance, personal care, and used cars and trucks also rose in January. The indexes for airline fares and new vehicles were among those that declined over the month. The all items index rose 2.1 percent for the 12 months ending January, the same increase as for the 12 months ending December. The index for all items less food and energy rose 1.8 percent over the past year, while the energy index increased 5.5 percent and the food index advanced 1.7 percent. [More…] was looking for a 0.3% increase MoM in seasonally adjusted Headline CPI and 0.2% in Core CPI. Year-over-year forecasts were 1.9% for Headline and 1.7% for Core. The first chart is an overlay of Headline CPI and Core CPI (the latter excludes Food and Energy) since the turn of the century. The highlighted two percent level is the Federal Reserve's Core inflation target for the CPI's cousin index, the BEA's Personal Consumption Expenditures (PCE) price index.

        January 2018 CPI - Non-shelter core CPI does continue to show some recovery.  The noisy month-over-month measure was strong and year-over-year is now up to 0.8%.  Shelter inflation remains at 3.2%. Maybe the parallel to where we are is the late 1990s, but now a little more extreme.  Core inflation then was about 2%, which really consisted of 1.5% core non-shelter inflation, plus a 1.5% annual increase in the transfer of economic rents to real estate, which was expressed as shelter inflation.  Today, we have 0.8% core non-shelter inflation, plus a 2.5% annual increase in the transfer of economic rents to real estate, which is expressed as shelter inflation. In both cases, the policy rate is rising, and I suspect will rise too much.  In 1999, the Fed had been hiking rates slowly, and they accelerated the hikes in 2000 when inflation moved higher.  The 2000 recession coincided with a hard equities crash.  I'm not sure we will see that.  But, it might be reasonable to expect a drop in yields and only a slight drop in employment and housing starts.  In fact, housing starts have already leveled off, as they had in 1998 and 1999.On the other hand, I think capital repression has pushed low tier home prices down, making it difficult to trigger new building.  It appears that credit conditions have loosened ever so slightly, which may be allowing low tier credit to expand.  The initial effect of this may be to raise prices.  Possibly prices will need to rise 10% to 20% before they are high enough fund the development of new lots.  Maybe that means that the initial expansion of credit has more of an inflationary effect than a real effect because of household balance sheet recovery and credit creation.  That may be necessary, but on the other hand, it would probably create a negative Fed reaction.This still seems like a race between the Fed's policy rate and the neutral rate, and if long rates can continue to stay ahead of short rates, maybe the expansion can continue.  If long rates reverse back down, that calls for defense.  And, a careful position somewhere in the real estate or construction sectors probably is useful. In the meantime, I hear the usual talk about how deficit spending is inflationary and how the increase in Treasury supply will drive interest rates higher, etc.  It really does make sense, and it would move me if I saw any evidence of it in historical data.  Yields will mostly reflect monetary policy and sentiment.  Intrinsic value trumps supply and demand.

        Apparel Inflation Hits A 67 Year High - Here is an interesting data point that may have been missed in today's noise: the core CPI surprised jumped by 0.349%, barely missing out on a 0.4% print. Had the BLS not revised its seasonal adjustments (which dragged the Jan CPI by 4bps lower vs the old seasonal factors), the monthly CPI jump would have been 0.4%. A second notable data point: According to SocGen, in January, 43 of the 62 core CPI subcomponents were positive on a monthly basis, the most since May 2016, and above the 2017 monthly average of 35. However, while the breadth of gains was impressive, the strength was concentrated in a few components which the French bank does not expect to put persistent upward pressure on the core rate moving forward. Furthermore, what stands out is that about 14% of the core CPI was responsible for nearly 50% of the rise in the core. And a third point of note: Of all CPI components, apparel was the biggest contributor by far to January's inflation spike (0.064pp), posting an eye-popping 1.7% SA rise in January. That was the fourth-largest increase since 1947 and the biggest since a 1.8% jump in February 1990. On an NSA basis, it registered its biggest January increase since 1951.Yes but... according to SocGen, Q1 strength has been a feature of this category over the last few years (likely reflecting changing discounting patterns. However, that Q1 strength has generally proved short-lived. Indeed, looking at first prints of apparel, Q1 over the 2015-2017 period averaged a rise of 0.4%, but the balance of the year it averaged a drop of 0.2%. It wasn't just apparel, however: in January, the BLS reported that several components posted the largest gains in their respective histories. As SocGen analyst Omair Sharif writes, "we cannot recall having seen that many “L-EVER” mentions in any CPI report before. Perhaps they were early-year price increases that are unlikely to be repeated, but some, in our view, could be related to changes in methodology and seasonal patters." For example, the “window and floor coverings and other linens” category, which is a measly 0.3% of the core CPI, jumped by 4.1%, adding 0.135pp to the core by itself! Within appliances, laundry equipment climbed by 3.4%, perhaps reflecting the new tariffs on washing machines, and the reported price increases instituted by firms hit by the charges. Women’s apparel climbed by 3.4%, which helped to boost the overall apparel category. The information technology commodities gauge rose by 1.0%, with the telephone hardware component climbing by 2.5%. Elsewhere, the medical care index increased by 0.41% SA, the strongest reading since August 2016. The bulk of that rise (about 85%) was centered in the hospital services index, which climbed by 1.3% and added 0.037pp to the core increase In terms of some of the other components, rent climbed by 0.34% while OER advanced by 0.28%. There was less giveback in those shelter components in January than we had expected. The new vehicles index fell by 0.1% while airfares slid by 0.6%, both of which were in line with our expectations. Hotel rates tumbled by a surprising 2.4%, the third-largest decline in four years. Recreation was softer than expected, posting an unchanged reading, while communication was also flat.

        January Producer Price Index: Final Demand Up 0.4% MoM -- Today's release of the January Producer Price Index (PPI) for Final Demand came in at 0.4% month-over-month seasonally adjusted, up from last month's 0.0%. It is at 2.7% year-over-year, up from 2.6% last month, on a non-seasonally adjusted basis. Core Final Demand (less food and energy) also came in at 0.4% MoM, up from the previous month and is up 2.2% YoY NSA. MoM consensus forecasts were for 0.4% headline and 0.2% core. Here is the summary of the news release on Final Demand:The Producer Price Index for final demand increased 0.4 percent in January, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices were unchanged in December and moved up 0.4 percent in November. (See table A.) On an unadjusted basis, the final demand index rose 2.7 percent for the 12 months ended in January.In January, the rise in the index for final demand is attributable to a 0.3-percent increase in prices for final demand services and a 0.7-percent advance in the index for final demand goods.The index for final demand less foods, energy, and trade services rose 0.4 percent in January, the largest advance since increasing 0.5 percent in April 2017. For the 12 months ended in January, prices for final demand lessfoods, energy, and trade services moved up 2.5 percent, the largest rise since 12-month percent change data were available in August 2014. More… The BLS shifted its focus to its new "Final Demand" series in 2014, a shift we support. However, the data for these series are only constructed back to November 2009 for Headline and April 2010 for Core. Since our focus is on longer-term trends, we continue to track the legacy Producer Price Index for Finished Goods, which the BLS also includes in their monthly updates. As this overlay illustrates, the Final Demand and Finished Goods indexes are highly correlated.

          Producer Prices Rise More Than Expected In January, Markets Shrug - Following yesterday's hotter than expected Consumer price inflation (and rise in Core CPI), Producer prices confirmed the hotter-than-expected trend, rising 2.7% YoY (vs 2.4% exp). However, unlike CPI, PPI actually rose from December.   While YoY CPI did actually slow in January, YoY PPI actually re-accelerated  A major factor in the January increase in prices for final demand services was the index for hospital outpatient care, which rose 1.0 percent. The indexes for apparel, footwear, and accessories retailing; health, beauty, and optical goods retailing; residential real estate services (partial); long-distance motor carrying; and hospital inpatient care also moved higher. In contrast, margins for chemicals and allied products wholesaling declined 2.3 percent. Prices for wireless telecommunication services and airline passenger services also fell. Nearly half of the January increase in the index for final demand goods is attributable to prices for gasoline, which climbed 7.1 percent. The indexes for residential electric power, iron and steel scrap, diesel fuel, jet fuel, and fresh and dry vegetables also moved higher. In contrast, prices for chicken eggs fell 38.9 percent. The indexes for residential natural gas and for power cranes, draglines, and shovels also declined. Interestingly, Core inflation data did the opposite of headline - CPI rose and PPI slowed...

          US producer prices rise in January; industrial output falls (Reuters) - U.S. producer prices accelerated in January, boosted by strong gains in the cost of gasoline and healthcare, offering more evidence that inflation pressures were building up. While other data on Thursday showed an increase in the number of Americans filing for unemployment benefits, claims continued to point to a tightening labor market. Economists were also unfazed by an unexpected dip in industrial production last month, citing strong business sentiment surveys. The relatively strong producer inflation report came on the heels of data on Wednesday showing a broad increase in consumer prices in January. Rising inflation was also corroborated by two regional manufacturing surveys on Thursday, which showed sharp increases in prices paid by factories for inputs. “The drumbeat of higher inflation is getting louder,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. “It does appear as if higher inflation is here to stay.” Firming inflation could force the Federal Reserve to raise interest rate a bit more aggressively than is currently anticipated. The U.S. central bank has forecast three rate increases this year, with the first hike expected in March. The Labor Department said its producer price index for final demand rose 0.4 percent last month after being unchanged in December. That lifted the year-on-year increase in the PPI to 2.7 percent from 2.6 percent in December. A key gauge of underlying producer price pressures that excludes food, energy and trade services jumped 0.4 percent last month. The so-called core PPI edged up 0.1 percent in December. Core PPI rose 2.5 percent in the 12 months through January, the largest increase since August 2014. That followed a 2.3 percent gain in December. The cost of hospital outpatient care surged 1.0 percent in January, the largest increase since August 2014, after gaining 0.1 percent in December. There was also an increase in the price of hospital inpatient care. Overall, the cost of healthcare services shot up 0.7 percent in January. These costs feed into the Fed’s preferred inflation measure, the personal consumption expenditures (PCE) price index excluding food and energy. The Fed has a 2 percent inflation target. Following the CPI and PPI reports, Morgan Stanley is forecasting the core PCE price index rising 0.31 percent in January after increasing 0.2 percent in December. That would raise the year-on-year increase in the core PCE price index to 1.6 percent from 1.5 percent in December. 

           US import prices rose 1.0% in Jan, vs 0.6% increase expected - U.S. import prices rose more than expected in January as the cost of imported petroleum and a range of other goods increased, which could boost inflation in the coming months. The Labor Department said on Friday that import prices jumped 1.0 percent last month after an upwardly revised 0.2 percent rise in December. Economists polled by Reuters had forecast import prices increasing 0.6 percent in January after a previously reported 0.1 percent gain in December. In the 12 months through January, import prices increased 3.6 percent, the largest advance since April 2017, quickening from a 3.2 percent rise in December. Data this week showed an acceleration in consumer and producer prices in January. The increases have bolstered expectations that inflation will rise this year and potentially breach the Federal Reserve's 2 percent target. Inflation is expected to be driven by a tightening labor market, a weak dollar and fiscal stimulus in the form of a $1.5 trillion tax cut package and increased government spending. Higher inflation could prompt the Fed to be a bit more aggressive in raising interest rates this year than is currently anticipated. The U.S. central bank has forecast three rate increases for this year, with the first hike expected in March. Last month, prices for imported petroleum increased 4.3 percent after rising 2.3 percent in December. Import prices excluding petroleum gained 0.5 percent, the largest increase since July 2016, after being unchanged in the prior month.  Import prices excluding petroleum increased 1.9 percent in the 12 months through January. Imported capital goods prices edged up 0.1 percent last month, while the cost of imported food surged 0.8 percent. The rise in imported prices excluding petroleum likely reflects the dollar's depreciation against the currencies of the United States' main trading partners. 

          Inflation Dead Ahead: Core Import Prices Surge Most In 6 Years - Economists, but mostly traders, breathed a sigh of relief last month when US import prices (ex petroleum) printed an unexpected 0.2% drop last month, a big miss relative to expectations and recent gains. However, as it turned out, this unexpected drop was merely a delayed effect by US trade partners, with inflation of rising foreign prices merely deferred, and in January import prices jumped by a whopping 1.0% M/M, in line with the highest monthly increase observed in the past five years. Furthermore, excluding petroleum, the annual increase in import prices (NSA) rose to the highest in 6 years, as suddenly the US is importing far more inflation that previously expected. And since this is usually a 2-3 month leading inflationary indicator, we expect this to manifest itself in rising prices sometime in the early spring, just as the Fed unveils its new and improved dot plot. Finally, those wondering where this inflation is being imported from, the chart below should provide some hints. 

          Port of Long Beach: Record Port Traffic in January 2018 -- From the Port of Long Beach: Year Begins With Records in Long BeachThe new year brought a raft of records to the Port of Long Beach, where January container volumes reached an all-time high for the month.Workers moved 657,830 twenty-foot equivalent units (TEUs) through the harbor in January, 12.9 percent more than the same month last year. The total marks the first time Long Beach has surpassed 600,000 containers in the month of January. The quick start to 2018 comes after officials recently announced that 2017 was the busiest year in the Port’s 107-year history, reaching 7.54 million TEUs. “The pre-Lunar New Year surge is definitely here,” said Port of Long Beach Executive Director Mario Cordero, taking note of the upcoming two-week holiday period in Asia, the Port’s primary trading partner. “Since this year’s holiday begins Feb. 16, we anticipated a busy January and February, as cargo owners seek to get goods shipped ahead of the festivities.” CR Note: The timing of the Chinese New Year always impacts traffic.

          Industrial Production Decreased 0.1% in January -- From the Fed: Industrial Production and Capacity Utilization - Industrial production edged down 0.1 percent in January following four consecutive monthly increases. Manufacturing production was unchanged in January. Mining output fell 1.0 percent, with all of its major component industries recording declines, while the index for utilities moved up 0.6 percent. At 107.2 percent of its 2012 average, total industrial production was 3.7 percent higher in January than it was a year earlier. Capacity utilization for the industrial sector fell 0.2 percentage point in January to 77.5 percent, a rate that is 2.3 percentage points below its long-run (1972–2017) average. This graph shows Capacity Utilization. This series is up 11.2 percentage points from the record low set in June 2009 (the series starts in 1967). Capacity utilization at 77.5% is 2.3% below the average from 1972 to 2015 and below the pre-recession level of 80.8% in December 2007. The second graph shows industrial production since 1967. Industrial production decreased in January to 107.2. This is 23% above the recession low, and 2% above the pre-recession peak.

          Peter Thiel Ditches "Intolerant" Silicon Valley For LA, May Quit Facebook Board - Peter Thiel has had it with Silicon Valley. The popular libertarian billionaire investor is relocating his home and personal investment firms to Los Angeles from San Francisco and scaling back his involvement in the tech industry, the WSJ reported, marking a rupture between Silicon Valley and its most prominent conservative. According to WSJ sources, Thiel has recently said tech culture has become increasingly intolerant of conservative political views since Mr. Trump’s election, an attitude he has said is intellectually and politically fraught. As a result, after spending most of the past four decades in the Bay Area, the 50-year-old plans to permanently move into the 7,000-square foot home overlooking the Sunset Strip that he bought six years ago, a person familiar with the matter said. He also will move Thiel Capital and Thiel Foundation, two firms that oversee his investments, into new L.A. headquarters this year, the person said. Underscoring the growing ideological polarization of the Valley, what prompted Thiel to take the drastic action was his disappointment with "what he sees as the intolerant, left-leaning politics of the San Francisco Bay Area" coupled with increasing pessimism about the prospects for tech businesses amid greater risk of regulation. Separately, the WSJ said that Thiel also discussed the possibility of resigning from the board of Facebook: "His relationship with the social-networking company—where he has been a director since 2005, the year after its founding—came under strain after a dispute with a fellow director over Mr. Thiel’s support for Donald Trump’s presidential campaign, and a related confrontation over boardroom leaks with Chief Executive Mark Zuckerberg last summer." Still, for now "Thiel feels he can still help the company and is likely to remain on the board at least for now."

          Cryptocurrency craze is hampering search for extraterrestrial life - RT - Alien hunters say their search for extraterrestrial life is being hindered by the continuing cryptocurrency craze - specifically the mining of the digital currency. The Seti@Home project, a scientific project hosted by UC Berkeley that uses public resource computing to analyze radio telescope signals, says their plans to expand operations have been scuppered by the short supply of crucial computer components."That's limiting our search for extraterrestrials, to try to answer the question, 'Are we alone? Is there anybody out there?'" Dan Werthimer, chief scientist at the Berkeley search for extraterrestrial intelligence (SETI) Research Center, told the BBC.  GPU’s (graphics processing units) are high-performance chips used by radio astronomers, video gamers and, most recently, Bitcoin and other cryptocurrency miners. This has reportedly caused an increase in demand and a shortage of supply."This is a new problem, it's only happened on orders we've been trying to make in the last couple of months," Werthimer added.The cost of high-end GPUs purchased by the group has doubled in the midst of cryptocurrency fever, from $1,000 to $2,000, Werthimer told RT. It was reported last month that the increase in demand for GPUs for cryptocurrency mining helped boost sales for manufacturers Nvidia and AMD in 2017. However, Nvidia said it was not happy with the rise in prices, urging retailers to ensure the needs of gamers were met before cryptocurrency miners.

          Earlier: Philly and NY Fed Manufacturing Surveys Showed Growth in February --Earlier from the NY Fed: Empire State Manufacturing Survey Business activity continued to expand in New York State, according to firms responding to the February 2018 Empire State Manufacturing Survey. The headline general business conditions index fell five points to 13.1, suggesting a somewhat slower pace of growth than in January. ... Labor market conditions pointed to a modest increase in employment and hours worked. And from the Philly Fed: February 2018 Manufacturing Business Outlook Survey Results from the Manufacturing Business Outlook Survey suggest that the region’s manufacturing sector continues to expand in February. ... The index for current manufacturing activity increased 4 points in February to a reading of 25.8. ... The survey’s indicators for labor market conditions suggest a pickup in hiring this month. Over 30 percent of the firms reported increases in employment this month, up from 24 percent in January. The employment index increased 8 points. The firms also reported overall higher average work hours in February, although the workweek index fell 3 points to 13.7. Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:

          Fed Warns Inflation Has Arrived: Philadelphia, New York Fed Prices Paid Soar - Just in case the economic data appeared to be coming in as too hot in recent days, today's two key regional Fed manufacturing indicators sent conflicting signals, with the New York Fed survey sliding from 17.70 to 13.1, and missing expectations of 17.50, while the Philadelphia Fed rose from 22.2 to 25.8, beating exp. of a dip to 21.6 The commentary from both regional Feds was optimistic, although NY conceded a slowdown in January:Business activity continued to expand in New York State, according to firms responding to the February 2018 Empire State Manufacturing Survey. The headline general business conditions index fell five points to 13.1, suggesting a somewhat slower pace of growth than in January.The New York internals, however, were good, especially when it comes to labor: number of employees rose to 10.9 vs 3.8, while work hours rose to 4.6 vs 0.8. Meanwhile, inventory fell to 4.9 vs 13.8. Unlike current conditions, optimism rose with six-month general business conditions up to 50.5 vs 48.6. A potential bottleneck was noted in future delivery times at a record high in Feb, up from 10.9 to 15.3 The Philly Fed meanwhile was stronger across the board:  Results from the Manufacturing Business Outlook Survey suggest that the region’s manufacturing sector continues to expand in February. The indexes for general activity, new orders, and employment were all positive this month and increased from their readings last month. Price increases for inputs were more widespread this month, according to the respondents. The survey’s future indexes, reflecting expectations for the next six months, suggest continued optimism. Here, too, the internals were strong: But the biggest surprise for both regional Feds was the blistering surge in the Prices Paid index, the clearest indicator of input cost inflation, which in the New York Fed surged from 36.2, to 48.6, the highest in six years, while according to the Philly Fed, "cost pressures were more widespread this month among the reporting manufacturers: The prices paid index increased 12 points to 45.0, its highest reading since May 2011" or in nearly 7 years.

           Verizon to stop honoring FCC restriction on not SIM-locking phones because nothing matters anymore -- According to CNET, Verizon Wireless will begin SIM-locking its smartphones out of the box at some point this Spring. Essentially no details are provided about how this will be implemented, but it really doesn't matter, because Verizon rather explicitly agreed not to do this ten years ago. Per the restrictions imposed by the 700MHz Upper Block C spectrum auction it won in 2008, Verizon is expressly barred from locking down handsets on its network that utilize this spectrum. The plain text from the restrictions makes this absolutely clear.(e)Handset locking prohibited. No licensee may disable features on handsets it provides to customers, to the extent such features are compliant with the licensee's standards pursuant to paragraph (b)of this section, nor configure handsets it provides to prohibit use of such handsets on other providers' networks. (Emphasis added) So, Verizon's announcement today is complete and utter bullshit. It doesn't matter if you'll be able to unlock your phone 90, 60, or 30 days after you buy it. It doesn't matter if it is or isn't paid off. What matters is that Verizon agreed to the above rules when it won the auction for that spectrum, and it is now deciding that a clear and flagrant violation of those restrictions is worth pursuing because the current FCC leadership has very little interest in protecting consumers. When the restrictions on the spectrum were first added, Verizon actually sued the FCC over them, though later dropped that suit and pledged to honor them... for as long as was politically expedient, apparently.

          Small Business Optimism Index Increased in January, "Difficulty of finding qualified workers" is Top Problem -- From the National Federation of Independent Business (NFIB): Record Number of Small Business Owners Say ‘Now is Good Time to Expand’ The Index of Small Business Optimism gained 2.0 points in January, rising to 106.9, again one of the strongest readings in the 45-year history of the NFIB surveys. The highest reading of 108.0 was reached in July 1983 and the lowest reading of 79.7 occurred in April 1980.  Job creation was solid in the small-business sector as owners reported a seasonally adjusted average employment change per firm of 0.23 workers, a strong showing. The lack of “qualified” workers is impeding growth in employment. ... Twenty-two percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem (up 3 points), exceeding the percentage citing taxes or the cost of regulation as their top business problem.  This graph shows the small business optimism index since 1986.

           Weekly Initial Unemployment Claims increase to 230,000 -- The DOL reported: In the week ending February 10, the advance figure for seasonally adjusted initial claims was 230,000, an increase of 7,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 221,000 to 223,000. The 4-week moving average was 228,500, an increase of 3,500 from the previous week's revised average. The previous week's average was revised up by 500 from 224,500 to 225,000. Claims taking procedures in Puerto Rico and in the Virgin Islands have 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.

          Average Monthly Paycheck Rises $131 After Trump Tax Cuts -Americans’ monthly paychecks increased by an average of $130.76 in February thanks to the new 2018 tax plan changes, according to a new LendEDU survey, with a majority of respondents saying they will use the extra income to pay down credit card debt.As a result of the Tax Cuts and Jobs Act of 2017, the federal tax withholding tables changed on Jan. 11, 2018. The Treasury estimated that 90% of Americans who get a paycheck are likely to see more in take-home pay as a result. Sure enough, most Americans started to see the impact of the new tax plan in their paychecks starting on Feb. 1.To quantify the financial impact of these changes, LendEdu conducted an 11-question survey of 1,000 Americans who reported that their take-home paychecks have increased as a result of the tax plan changes. Here are the survey highlights:

          • Respondent reported a $130.76 increase in their average monthly paycheck after tax cuts
            • Take-home pay after taxes increased by 3.5% on average
          • 35.7% of respondents are using the tax savings to pay down debt, 9.9% of respondents are increasing luxury spending
            • 62% of respondents will pay down credit card debt
          • 12.8% of respondents are increasing retirement savings, of those 47.66% believe that they will be able to retire sooner.
          • 55.3% of respondents are more confident in their financial futures as a result of the tax plan changes
          • 60.7% of respondents believe that the 2018 tax plan will strengthen economy
          • 50.3% of respondents reported a more positive sentiment towards President Trump

          LendEdu asked respondents to best describe how they are going to spend their additional take-home pay. As the most common answer, 35.7% of respondents said they are going to use their extra take-home to pay down debt faster. 19% of respondents are going to be spending as usual and will be letting the additional money collect in their bank accounts. Additionally, 12.8% of respondents are going to use the additional money to save more for retirement while 9.9% of respondents are going to use the additional money on life’s day-to-day luxuries.

           This is bad: real wages *declined* in January; may be rolling over - Consumer prices rose +0.5% in January. That in itself isn't bad news, as they rose an equal +0.5% one year ago, so the YoY inflation rate remains at +2.1% (so if 2% really is a target rather than a ceiling, it should not give the Fed any cause for alarm). But that much vaunted wage hike in the January jobs report has entirely disappeared, and not just for non-managerial workers, but for the average of all workers including managers. In fact in January real wages declined. And the trend is a little worrying. To begin with, real wages declined -0.3% for ordinary workers, and they are now down -0.8% from their July peak: On a YoY basis, real wages are only up +0.3%: Even worse, they are only up +0.1% from January 2016! Note that even when we include managers, real wages fell in January, and are -0.5% below where they were in July: Another metric that I think is very important is aggregate real payrolls for non-managerial workers. This tells us how much money, in real terms, the middle and working class are earning. After rising strongly in 2014 and 2015, it decelerated in 2016 and even more in 2017: Note that, in the aggregate, real wages declined for the middle and working class in January, and they are back at the level they were 7 months ago. On a YoY basis, real aggregate payrolls rose 2%: This is undoubtedly why we have seen the personal saving rate decline over the last 6 months: Also this morning, although Fred hasn't update the graphs yet, real retail sales declined -0.8%, putting that figure at a three month low. All in all, this is bad news, not just for the month, but in terms of a stalling trend that may even have rolled over, both in terms of worker wages, and possibly even in terms of real retail sales per capita, a long leading indicator of recession.

           Why I’m worried about the decline in real wages -- This is a follow-up to my post yesterday concerning the decline in real average and aggregate wages. Why should the data from just one month cause me to warn that “This is Bad?” To show you, let’s decompose the data into CPI and nominal aggregate wages, shown in the below two graphs, the first of which covers the inflationary era of the 1960s and 1970s, and the second covers the disinflationary era since: In the year prior to at least 5 (arguably 6) of the last 7 recessions, BOTH nominal aggregate wage growth was decelerating (1980 and arguably 1969 being the exceptions) and consumer inflation was increasing (1980 and arguably 2007 being the exceptions). The 1981 recession was caused by the Fed very aggressively raising rates, and in the other two instances the pattern held, but with much less of a lead. Note that a very good coincident marker for the onset of a recession, within about 3 months, has been the point at which the trends intersect. i.e., where YoY consumer inflation increases to the level of decelerating aggregate payrolls. Note further that in the last 18 months YoY consumer inflation has generally been increasing. Meanwhile there are some slight signs of deceleration in aggregate payrolls, highlighted by this past month. So now let’s subtract YoY inflation from YoY aggregate payroll growth: When the relative growth in payrolls decreases by 50% from its high (e.g., from 4% to 2%), that is a good marker for the onset of at very least a slowdown (e.g., 1966, 1984, 2016). EVERY SINGLE TIME the line has crossed zero it has indicated the onset of recession. In the last 6 months, this line has been declining again, from 3% to 2%. Since the inflation rate is more than anything determined by the price of gas, and I see no reason to expect a decline in that, and further we know that deceleration in YoY payrolls growth is a very regular feature of later expansions, so I see no reason for that to reverse (unless if for some reason the new leadership at the Fed decides to reduce interest rates). So, there’s nothing imminent, but I am seeing what looks like the beginning of the trend that will ultimately end in a recession, maybe in 18 to 24 months. That’s what has me concerned. 

          As profits soar, US construction workers see increase in death and injury on the job --Deaths and injuries among workers in the booming construction industry in New York state in 2016 showed a striking parallel in both the rate and causes of death in the industry nationwide, according an annual report “Deadly Skyline,” published last month by the New York Committee for Occupational Safety and Health (NYCOSH).NYCOSH reports that construction deaths in the state of New York reached a 14-year high in 2016, with 71 workers killed on the job. This amounts to a nearly 30 per cent increase from 2015, when a total of 55 construction workers were killed on the job in the state.As the WSWS has reported, there were 5,190 fatal workplace injuries recorded in the United States in 2016, an increase of seven percent from the 4,836 workers killed on the job in 2015.Overall, construction workers in the US saw the highest number of deaths in any industry in 2015. That year, a total of 937 construction workers were killed on the job, marking the second straight year of fatality increases in construction, according to the most recent data available to the Bureau of Labor Statistics. Unreported incidents undoubtedly place the numbers even higher, as injury and deaths among migrant and undocumented workers who are forced to accept the most hazardous jobs routinely go unreported. In the recent tally of fatalities for New York state, half died from falls, an entirely preventable cause of death that plagues many sectors of basic industry. This grisly toll in flesh and blood takes place in the face of revolutionary advances in the knowledge, technology and equipment which could make it possible to eliminate injury and death on the job entirely. Safety belts, harnesses, ropes, ladder ties and other equipment, as well as computer technology for monitoring and tracking safety procedures, could, if implemented systematically, eliminate falls altogether.

          Big tech’s bid to control FOIA -- It was whispered like some secret oracle: Sidecat, sidecat is coming.   Negotiations over the tax incentive deal began in Ohio in early spring of last year, and only a cabal of quasi-state officials were in the know. Even after the $37.1 million in incentives were approved by state officials on July 31, 2017, the company was only referred to in a press release as Sidecat, a provider of “information technology services, such as remotely accessed computing power and data storage.”  It wasn’t until nearly two weeks after the deal went through that The Columbus Dispatch uncovered that “Sidecat” was actually a code name for Facebook. After getting a tip from another reporter in the newsroom, Mark Williams, a business reporter, confirmed the information with anonymous sources, then went to officials at JobsOhio, the state’s privatized development entity, who wouldn’t confirm, either. “They were just continuing to wait,” Williams says. “At that point, you are shaking your head. What’s the big secret?” Four days later, Ohio Governor John Kasich, at a symbolic groundbreaking in front of a banner bearing the Facebook logo, at last confirmed Sidecat’s true identity. Ironically, the deal to lure the social media giant to my home state of Ohio was hammered out earlier in the summer, as Kasich’s administration worked to plug a nearly $1 billion shortfall in the Rust Belt state’s budget. At the press conference in mid-August, flanked by dignitaries awkwardly holding shovels, Kasich hailed the deal as a step toward diversifying Ohio’s manufacturing-heavy economy with high-tech jobs.  But Facebook wouldn’t be coming to a struggling industrial region of Ohio, and it wasn’t guaranteeing many jobs. It was going to build a $750 million data center in one of the state’s wealthiest suburbs—New Albany, where the median household income is nearly $200,000 and unemployment hovers around 4 percent. Fifty new jobs were guaranteed.

          The nightmare reality for immigrants across US in 2018 -- As Democrats and Republicans celebrate last week’s budget deal that funds the federal government through March 23 without providing any protections for 800,000 DACA recipients, a nightmare is playing out across America for 12 million undocumented people. Immigration and Customs Enforcement (ICE) reported 143,470 arrests in the 2017 fiscal year, a 30 percent increase from 2016. Though ICE raids increased dramatically in all regions, the figure is half the total number arrested in 2009, Obama’s first full year in office. The areas with the largest increases in ICE arrests from 2016 to 2017 are Florida (76 percent), Dallas (71 percent), St. Paul, Minnesota (67 percent), followed by New Orleans, Atlanta, Boston, and Detroit (over 50 percent each).

          • On January 30, Houston school police detained an undocumented student after a scuffle at Stephen Austin High School. Police turned the teenager over to immigration agents, who sent him to an immigration detention center where he has been held for nearly two weeks. The boy, Dennis Rivera, had been accepted to computer science programs at two Texas colleges, but now faces imminent deportation.
          • On February 8, immigration agents denied a request by 30-year-old Jesus Berrones to remain in the US to care for his young child who suffers from leukemia and is currently undergoing chemotherapy. Berrones, who now lives in Arizona, was himself brought to the US in 1989 when he was one year old.
          • Construction worker Carlos Gudiel Andres was arrested in front of his Houston apartment on his way to work on January 19. ICE agents had no warrant for his arrest but grabbed him randomly after staking out apartments in working class immigrant neighborhoods.
          • A Bangladeshi chemistry professor, Syed Ahmed Jamal, was arrested in front of his home in Lawrence, Kansas on January 24 while taking his daughter to school. Jamal has three children, aged 7, 12, and 14, and has lived in the US for 30 years. He is now detained in a jail in Missouri, 160 miles from his family.
          • Immigration agents arrested 14 construction workers staying at a hotel in Colchester, Vermont at 5 a.m. on January 18. Despite being asked for help by immigration rights groups, Vermont Senator Bernie Sanders has made no public statement on the raid.
          • Immigration attorneys in Los Angeles report that undocumented immigrants are being sent jury duty summons that ask them to admit they are “non-citizens” in a trap to arrest them if they appear at court.
          • Twenty-three-year-old asylum seeker Laura Monterrosa attempted suicide in January after exposing widespread sexual abuse by guards at the T. Don Hutto detention center in Texas, which is owned by the for-profit corporation CoreCivic. After speaking out Moterrosa was forced to eat in the same cafeteria as the female guard who repeatedly molested her multiple times. 

          Seeing Like a Neoliberal, Part 1: Blinded by the Data -- Steven Pinker recently had an op-ed in the WSJ in which he summarised his new book celebrating the progress of mankind in recent decades. Pinker relied extensively on social statistics measuring (among other things) poverty, income, violence, the environment and health to make his point that contrary to the naysayers, things are generally getting better.   Pinker is not alone. At the beginning of last year Nicholas Kristof wrote an article called Why 2017 May Be the Best Year Ever, focusing largely on the continued decline in extreme poverty experienced by humanity. Two years before that Zach Beauchamp, senior reporter at Vox, published an article entitled The world is getting better all the time, in 11 maps and charts, an article format which is not uncommon at Vox. Ex-Adam Smith Institute Sam Bowman’s defence of existing neoliberalism also made heavy use of statistical indicators to illustrate that things are improving. Max Rosser has an entire website, Our World in Data, which is basically dedicated to showing the same thing.  This is a perspective I’ve been sceptical of for a long time. The idea is that if ‘good’ outcomes such as income and health are increasing (or if ‘bad’ outcomes such as violence and poverty are falling) then we can confidently say that things are getting better. A general faith in social statistics to measure these outcomes is a crucial part of this perspective — starkly illustrated by Jonathan Portes’ article entitled Forget anecdotes. If you want to know what’s going on in the real world, look at a spreadsheet. Bowman’s neoliberal manifesto also stressed that neoliberals prefer “rigorous quantitative evidence”.  I am not intending this as a direct refutation of neoliberalism as a philosophy, or of the general arguments made by Pinker or anyone else. My point is narrower, concerning an assumption which many of these arguments lean on: that statistical social indicators, often viewed from above, are a good way to measure ‘progress’. Secondly, as you will see much of what I am saying is not new — I will be drawing from countless articles by people who have a more in-depth knowledge than me. Finally, I am not claiming that no ‘progress’ has taken place or that things are ‘actually getting worse’.  Nevertheless, I think that the triumphalism I have observed based on these social indicators is usually unwarranted.

          If we gave everyone a decent standard of living, could we sustain it? - Could we meet the needs of everyone on the planet without stripping the Earth of all its resources? A paper in this week’s Nature Sustainability says: kind of.It should be possible to meet the basic physical needs of everyone on the planet without using up physical resources too quickly. But it wouldn’t be possible to extend a first-world standard of living to everyone without needing “a level of resource use that is two-six times the sustainable level,” researcher Daniel O’Neill and his colleagues report. Only a drastic improvement in efficiency would allow the planet to manage this higher standard of living.O’Neill and his colleagues looked at the resources that humans use a lot of and that are critical for the planet’s health: things like fresh water, carbon dioxide, nitrogen, and phosphorus. Exceeding the “planetary boundaries” of these resources risks global environmental stability—and we’re not doing well on that front. The new paper assesses around 150 countries for their performance at meeting a series of human needs, ranging from the very basic (nutrition, sanitation, and freedom from extreme poverty) to the more advanced (like equality and democratic quality). They used the data to assess how well countries are doing at meeting their citizens’ needs and how much they’re eating into the planet’s resources to achieve this. To achieve global utopia, every country on the list would need to meet all of its citizens’ needs without exceeding its share of planetary resources. Instead, unsurprisingly, an interactive graphic shows that the countries that are doing well on quality of life are hogging the resources, while the countries that aren’t hogging resources generally lag on well-being. Wealthy countries like the US, Canada, France, and Japan are generally doing well by their citizens but are blazing through planetary boundaries. Countries like Malawi and Nepal aren't gobbling up resources, but they also aren't meeting well-being thresholds

          Trump Administration Wants To Decide What Food SNAP Recipients Will Get -- The Trump administration is proposing a major shake-up in one of the country's most important "safety net" programs, the Supplemental Nutrition Assistance Program, formerly known as food stamps. Under the proposal, most SNAP recipients would lose much of their ability to choose the food they buy with their SNAP benefits.The proposal is included in the Trump administration budget request for fiscal year 2019. It would require approval from Congress.Under the proposal, which was announced Monday, low-income Americans who receive at least $90 a month — just over 80 percent of all SNAP recipients — would get about half of their benefits in the form of a "USDA Foods package." The package was described in the budget as consisting of "shelf-stable milk, ready to eat cereals, pasta, peanut butter, beans and canned fruit and vegetables." The boxes would not include fresh fruits or vegetables.Currently, SNAP beneficiaries get money loaded onto an EBT card they can use to buy what they want as long as it falls under the guidelines. The administration says the move is a "cost-effective approach" with "no loss in food benefits to participants."The USDA believes that state governments will be able to deliver this food at much less cost than SNAP recipients currently pay for food at retail stores — thus reducing the overall cost of the SNAP program by $129 billion over the next 10 years.   "They have managed to propose nearly the impossible, taking over $200 billion worth of food from low-income Americans while increasing bureaucracy and reducing choices," Joel Berg, CEO of Hunger Free America, a hunger advocacy group says. He says SNAP is efficient because it is a "free market model" that lets recipients shop at stores for their benefits. The Trump administration's proposal, he said, "is a far more intrusive, Big Government answer. They think a bureaucrat in D.C. is better at picking out what your family needs than you are?"

          The Genius Of Trump's Food Stamp Proposal: You're Not Supposed To Like Being On Welfare - If I was on food stamps, I wouldn't like this either... I think that's the point.  If you can't afford to buy your own food and you need the government to provide it for you, then you get it on the government's terms. That's usually what happens when someone else is supplying your needs. mDon't like it? Take every available action to get off food stamps and achieve independence, at which point you can buy whatever you want at the grocery store with your own money that you earned. Until then, enjoy your Harvest Box:Under the USDA America’s Harvest Box proposal, all Supplemental Nutrition Assistance Program (SNAP) participating households receiving $90 per month or more in benefits will receive a package of nutritious, 100-percent U.S. grown and produced food. Approximately 16.4 million households, or about 81 percent of SNAP households would be impacted by this proposal.The amount of food received per household would be scaled to the overall size of the household’s SNAP allotment, ultimately representing about half of their benefits. SNAP participants would receive domestically-sourced and produced food in lieu of a portion of their SNAP benefits.USDA would utilize a model similar to that currently used to distribute USDA Foods to other nutrition assistance programs to provide staple, shelf-stable foods (such as shelf-stable milk, juice, grains, ready-eatcereals, pasta, peanut butter, beans, canned meat, poultry or fish, and canned fruits and vegetables) to SNAP households at approximately half the retail cost. This proposal creates a new approach to nutrition assistance that combines retail-based SNAP benefits with delivery of USDA America’s Harvest Boxes supporting the President’s leadership on Buy American. This proposal is cost-effective, enhances the integrity of SNAP, and provides for states’ flexibility in administration of the program. The remainder of the household’s benefits will still be provided via the current Electronic Benefit Transfer card. The Department of Agriculture estimates the change would save taxpayers $129 billion over 10 years by switching to defined packages that would presumably have a predictable, consistent cost. I'm guessing it would actually save a lot more than that precisely because people would hate being restricted to the Harvest Boxes, and at least a significant percentage of them would respond to the added incentive to improve their situations.

          Crime Is Down Drastically — But Americans Are More Fearful Than Ever - On the subject of crime, there is good news and bad. Reports by both the FBI and the Bureau of Justice Statistics show that crime has decreased in the past 25 years in the U.S. Violent crime fell between 48% and 74% since 1993, based on the agencies’ measures, respectively. Property crime has fallen sharply, too: the FBI estimates a drop of 48% between 1993 and 2016, and BJS reports 66%.While the organizations have different parameters for measuring crime, their results show the same conclusion: Americans are safer than they have been in a quarter century. So why do Americans say crime is a bigger concern than ever before?A study at Pew Research Center shows the juxtaposition between the reality of falling crime rates and Americans’ growing fear of crime. “In 17 Gallup surveys conducted since 1993, at least six in 10 Americans said there was more crime in the U.S. compared with the year before, despite the generally downward trend in national violent and property crime rates during much of that period.” “Pew Research Center surveys have found a similar pattern. In a survey in late 2016, 57% of registered voters said crime in the U.S. had gotten worse since 2008, even though BJS and FBI data show that violent and property crime rates declined by double-digit percentages during that span.” To view it differently, as Christian Science Monitor writes, “people became 62 percent less likely to become the victim of a violent crime between 1993 and 2014. The number of violent-crime victims per 1,000 persons age 12 or older dropped from 29.3 to just 11.1 in that period, according to Bureau of Justice Statistics.” So why are Americans more fearful of crime than ever? There are two likely reasons: the over-reporting of crime by national and local news media, and politically motivated lies spread by conservative politicians. . Experts confirm this: in their book Crime, Media, and Reality: Examining Mixed Messages About Crime and Justice in Popular Media, Venessa Garcia and‎ Samantha G. Arkerson write, “with the exception of weather and traffic, the media dedicate more time to crime than other topics, including sports.”

          Grand Theft Auto Chicago: Car-Jackings Surge To Decade Highs - According to the Wall Street Journal, a surge in carjackings in Chicago has led to the highest number of car thefts in more than a decade, terrifying residents who are often traumatized about the explosion in homicides and shootings over the past two years. Law enforcement and crime specialists mostly attribute the surge, which is also evident in Baltimore, Milwaukee, and St. Louis, on “repeat offenders, many of them juveniles who use the cars to commit other crimes or to brag about on social media,” said WSJ. “You’ll have one of them post that they got a Lexus, and then the other responds and say he stole a Mercedes,” said St. Louis Metropolitan Police Department Maj. Kenneth Kegel. “It is almost like a game, where they want to one up each other.” In Chicago, the total number of carjackings have exploded over the last year, from 700 in 2016 to 950 in 2017, which has reached the highest level of car thefts not seen in more than a decade. So far, 2018 is nothing to cheer about, there have already been 100 carjackings in the first forty-three days, even as WSJ says murders and shootings were down 16 percent and 21 percent between 2016 and 2017. Earlier this month, Chicago officials “assembled a carjacking strike force with federal representatives from the FBI and the Bureau of Alcohol, Tobacco, Firearms and Explosives, along with prosecutors, suburban police and state police,” said WSJ. Law enforcement experts told the Wall Street Journal, the surge is also attributed to repeat offenders, who use the stolen vehicles to carry out other crimes. “Both car thefts and jackings have been driven by a need for a motor vehicle to commit additional crimes,” said Richard Rosenfeld, a criminologist at the University of Missouri-St. Louis. “That crime may be a retaliatory homicide…or the vehicle is sometimes traded for drugs.” 

          California police worked with neo-Nazis to pursue 'anti-racist' activists, documents show -- California police investigating a violent white nationalist event worked with white supremacists in an effort to identify counter-protesters and sought the prosecution of activists with “anti-racist” beliefs, court documents show. The records, which also showed officers expressing sympathy with white supremacists and trying to protect a neo-Nazi organizer’s identity, were included in a court briefing from three anti-fascist activists who were charged with felonies after protesting at a Sacramento rally. The defendants were urging a judge to dismiss their case and accused California police and prosecutors of a “cover-up and collusion with the fascists”. Defense lawyers said the case at the state capital offers the latest example of US law enforcement appearing to align with neo-Nazi and white supremacist groups while targeting anti-fascist activists and Donald Trump protesters after violent clashes. “It is shocking and really angering to see the level of collusion and the amount to which the police covered up for the Nazis,” said Yvette Felarca, a Berkeley teacher and anti-fascist organizer charged with assault and rioting after participating in the June 2016 Sacramento rally, where she said she was stabbed and bludgeoned in the head. “The people who were victimized by the Nazis were then victimized by the police and the district attorneys.”   Felarca’s attorneys obtained numerous examples of CHP officers working directly with the TWP, often treating the white nationalist group as victims and the anti-fascists as suspects.

          Chart of the Day: Does Your State Allow Police to Have Sex With People They Arrest? - In 35 states, it’s legal for cops to detain and have sex with someone in their custody. Is your state one of them? Yesterday, Buzzfeed News published an investigative piece about Anna Chambers, a New York teenager pressing rape charges against Eddie Martins and Richard Hall, two members of the New York Police Department. Last fall, Anna was picked up by the two cops who told her two male friends to leave, handcuffed her, and led her into their van. According to Anna’s lawyer, the policemen ordered her to undress — and when they didn’t find drugs, they raped her. You’d think this would have been an open-and-shut case. Anna’s forensic exam (commonly known as a ‘rape kit’) matched Martins’ and Hall’s DNA, and a security camera shows the detectives leaving her on the side of a street a quarter-mile from a police station. Anna says she repeatedly told the detectives no; the detectives say it was consensual. To be clear, I completely believe Anna. But even if she hadn’t verbally said no, these two cops picked up a teenage girl, detained her in a police van, and then had sex with her while she was in their custody. They exploited the immense difference in power between an armed police officer and a civilian locked in the back of their car — a different in power that could easily coerce someone into saying yes to sexual contact they absolutely don’t want. A person in police custody can’t give genuine consent, free from coercion. Not to armed police officers who have the power to arrest them if they say no. But here’s the kicker: Buzzfeed’s investigation found that in 35 states, it’s legal for police to have sex with people in their custody.

          Top ICE Lawyer Accused of Stealing Immigrants’ Identities - A top lawyer for Immigration and Customs Enforcement has been charged with stealing immigrants’ identities to defraud credit-card companies, according to court documents cited by the Associated Press. Raphael A. Sanchez, who resigned as the special counsel of the agency’s Seattle office Monday—the same day charging documents were filed in court—is accused of targeting at least seven immigrants “in various stages of immigration proceedings.” Prosecutors say Sanchez used the immigrants’ identities to defraud credit-card companies, including American Express, Bank of America, and Capital One. In one case, Sanchez allegedly saved images of a Chinese national’s U.S. permanent resident card, a page in his Chinese passport, and a utility bill in his name as part of an alleged fraud scheme. He faces one count of aggravated identity theft and another of wire fraud. He is due to enter a plea in court on Thursday.

          US Judges issue temporary stays of deportations for Christian Indonesians -- Federal courts in Boston, Massachusetts and Newark, New Jersey have temporarily stayed the deportations of over one hundred Christian Indonesian immigrants recently targeted by US Immigration and Customs Enforcement (ICE). The rulings, issued February 1 in Boston and February 2 in Newark, are in response to two lawsuits by the American Civil Liberties Union (ACLU) arguing that the immigrants have the right to reopen their cases due to increasing hostility toward Christians in Indonesia.Ethnic Chinese in general have been scapegoats in the Southeast Asian, majority-Muslim country since the period of Dutch colonial rule in the 1700s. After the bloody anti-communist coup of 1965, the Suharto regime banned Chinese names and cultural expressions and made it difficult for ethnic Chinese to find jobs. Several thousand Chinese Christian Indonesians fled to the northeastern US throughout the 1990s, especially during the Asian Financial Crisis in 1998, when rioters assaulted ethnic Chinese and vandalized their businesses based on the reactionary stereotype that they were universally affluent. Many of these refugees arrived on and overstayed temporary visas and were not made aware of an arbitrary one-year deadline to apply for asylum passed under the Illegal Immigration Reform and Immigrant Responsibility Act, signed by President Bill Clinton in 1996.

          Report details psychological and health impact of deportation on children - Last August, the medical journal Frontiers in Pediatrics published an academic report entitled “Fear of Massive Deportations in the United States: Social Implications on Deprived Pediatric Communities” which details long-term health consequences of stress suffered by children whose parents are at risk of deportation. The report comes amidst an intensified crackdown on immigrants with Immigration and Customs Enforcement (ICE) boasting a staggering 143,470 arrests in the 2017 fiscal year. Marie Leiner and her co-authors point out that regardless of whether the children might be living in the country legally or illegally, their parents—usually the intended targets of immigration raids—tend to use “negative coping mechanisms” to deal with the persistent stress and depression engendered by their situation. Because of the constant fear and insecurity, parents—and by extension—children “will experience limited access to the pillars that sustain society, including access to education, protection by law, basic needs (e.g., food and housing, health care) and opportunities to plan for the future.”In real terms, this means parents who fear deportations stop taking their children to school, children fail to report family abuse, and parents stop seeking help in acquiring food, shelter or health care, both preventative and urgent, for themselves and their children. Above all, the environment of fear and instability prevents not just the parents, but also children from making any plans for the future.As the report explains, each of the behaviors outlined above has an even more ominous consequence for childhood development. Missing school means that the children inevitably fall behind their peers; the continuation of abuse leads to a devastating physical and psychological fallout that will create lifelong scars. Additionally, lack of access to basic needs and preventive health care will inhibit growth and brain development, and the inability to envisage a secure future makes children potentially prone to “many physical, mental and emotional problems.”

          Minnesota school district removes To Kill a Mockingbird and Huckleberry Finn from the curriculum - In a reactionary decision made earlier this week, the Duluth, Minnesota, school board decided to remove Harper Lee’s novel To Kill a Mockingbird (1960), set in the Jim Crow south, and Mark Twain’s The Adventures of Huckleberry Finn (1885), about the friendship between a white boy and an escaped slave in the antebellum South, from its schools’ curricula. The reason given was the frequent use of racial slurs. Michael Cary, director of curriculum and instruction for the district, told the media, “Conversations about race are an important topic, and we want to make sure we address those conversations in a way that works well for all of our students.” The decision was made by a group of “district leaders and leaders in Duluth’s secondary schools,” after complaints by parents and students. Apparently, teachers were not consulted and only heard the news last week. The books will remain in the Duluth Public School libraries. The decision was called “long overdue” by Duluth NAACP Vice President Claudie Washington. In a remarkably blinkered and arrogant statement, he claimed that “Teachers don’t know how to teach that. You know, that’s my belief and it’s not necessary that they even try. They can’t identify with that period.” Contrary to Mr. Washington’s assertion, these challenging works are eminently teachable, which is why they have been included in the curricula of thousands of schools for decades in the United States, and still are. The two books in particular lend themselves to revealing the reality of the present though the outlook of the authors of and their concrete, “living” depiction of characters in the past. This is what literature does, as opposed to historical works or political documents. The use of racial epithets was part of the time and place in which the books were written, and every reader will grasp the authors’ hostility to bigotry and brutality.

          Arizona "Ground Zero" for Koch Attack on Public Education - The annual Koch donors summit took place at the five-star Indian Wells Resort and Spa in the California desert at the end of January. The millionaires and billionaires pledged to go to war with parents and teachers in Arizona who are fighting to block the state's massive school voucher expansion.  "Koch donors see Arizona as ground zero in their push" to transform the education system, reports the Washington Post. Arizona public schools are in crisis. Between 2008-2012, Arizona cut more funding to K-12 public schools than any other state, and schools have not yet recovered. Today, per pupil spending is down $800 from where it was in 2008, classrooms are large, and Arizona school teachers are the worst paid in the nation.Arizona Governor Ducey, who has been attending Koch donor summits since 2011, is up for reelection in 2018 and is all of sudden pledging new money for schools. His fate is intertwined with Proposition 305, a statewide referendum opposing his massive school voucher expansion, which will be on the ballot at the same time. The roots of Proposition 305 can be traced to the Koch-funded American Legislative Exchange Council (ALEC). In April 2017, the Arizona legislature narrowly passed SB 1431, geared to expanding the state's small educational savings account (ESA) program to all 1.1 million school children over time. The bill was based on an ALEC "model bill," and the lead sponsor was ALEC member and former State Senator Debbie Lesko. ESAs work like school vouchers because they siphon public taxpayer money from community schools and transfer those funds to private and religious schools. A passel of interlinked right-wing groups that fund and participate in ALEC, including the Koch's astroturf group, Americans for Prosperity, the DeVos family's American Federation for Children, and the State Policy Network's Goldwater Institute joined the push to expand the state's voucher program (even though its small scale voucher plan was not popular with parents and not yet full.) Betsy DeVos is the current Secretary of Education.

          Chicago public school teachers vote to approve merger with charter teachers union -- On January 25, Chicago Public Schools teachers voted to merge their union, the Chicago Teachers Union (American Federation of Teachers Local 1), with the charter school teachers union, Chicago Alliance of Charter Teachers and Staff (AFT Local 4343), which has less than 1,000 members. The merger will bring about a quarter of Chicago charter school teachers into the CTU, according to the head of the charter union, Chris Baehrend. The CTU reports that it has a membership of 20,000 teachers and staff, a precipitous drop from 28,000 in 2010. The CTU reported that 70.65 percent voted in favor and 29.35 percent voted against the merger. After the decision was announced, some teachers protested on social media about a lack of transparency in the voting process, while others questioned the legitimacy of the vote. Because of the CTU’s complicity with Democratic Mayor Rahm Emanuel’s school “reform” and privatization efforts, nearly one-third of district teachers and staff rejected the merger. Many Chicago teachers fear that the merger will not bring charter teachers to parity with their public school district counterparts and will instead be used to lower the pay of district teachers. They also see the merger as facilitating the decades-long expansion of lucrative, privately-run charter schools at the expense of public education. Charter teachers earn significantly less—as much as $20,000 per year—than district teachers and have even less control over their working conditions. In Chicago, charter teachers and staff have made a determined effort to secure better wages and conditions, taking strike votes and seeking to establish pay and benefits that approach parity with district teachers.

          The political issues facing West Virginia teachers -Thousands of West Virginia teachers, school employees, state workers and supporters are protesting today to demand the right to a decent standard of living and high quality public education.Teachers have defied threats and voted overwhelmingly for statewide strike action. This has generated widespread support among students and parents who know that the teachers’ fight is their own fight.The aims of teachers are placing them in direct conflict with both the Republican and Democratic parties, as well as with the West Virginia Education Association and the American Federation of Teachers—West Virginia. The unions are preparing to ignore the strike mandate from the membership and quickly shut down any struggle if Governor Justice and the state legislature show some signs of “movement.”Educators don’t need a pathetic wage increase of one, two or three percent, or a temporary delay in crushing co-pays and deductibles, which would more than wipe out any raises. Nor do they need the same old promises of new committees and commissions to find alternative sources of revenue, including by implementing regressive taxes on already struggling working-class families.The Socialist Equality Party (SEP) calls for teachers to demand:

          • An immediate 50 percent across-the-board wage increase for all teachers and public employees.
          • Abolition of all co-pays, deductibles and premiums, and the implementation of a fully state-paid health care and pension system.
          • A massive increase in state funding to hire more educators, build modern, well-equipped schools, and employ specialists to address the educational challenges associated with poverty, ill health, and the opioid crisis.

          The governor and both the Democrats and Republicans in the state legislature will of course howl that there is no money for these essential requirements. This only reflects the class interests these politicians serve.

          Tech-free schools for children of Silicon Valley -- The Waldorf School of the Peninsula is small, exclusive and packed with the children of Silicon Valley executives who love the role that technology plays in the pupils’ education there. That is, it plays no role whatsoever.Instead children at the $25,000-a-year elementary school in Los Altos, California, are learning to explore the world through physical experiences and tasks that are designed to nurture their imagination, problem-solving ability and collaborative skills.Pencils, paper, blackboards and craft materials abound while tablets, smartphones and other personal electronic devices are banned from the classrooms until they are teenagers studying at the middle and high school campus nearby. Even then technology is only introduced slowly and used sparingly.Alumni and present pupils include the children of Alan Eagle, a director of communications at Google, who helped to write the New York Times bestseller How Google Works, as well as those of a chief technology officer at eBay and senior executives at Apple and Yahoo. Their outlook is in line with some of the most powerful figures in the industry. Last month Tim Cook, the chief executive of Apple, said he did not want his nephew, who is about 12, to use social media. Last year Sean Parker, the billionaire and an early Facebook investor, admitted that he and the other creators of the publishing site had deliberately made it as addictive as possible. “God only knows what it’s doing to our children’s brains,” he said. Beverly Amico, leader of outreach and development at the Association of Waldorf Schools of North America, said that the emphasis on “experiential” learning meant that 13-year-olds studying the Renaissance at a typical Waldorf school might, “in addition to learning stories about the history, reproduce a Renaissance masterpiece. Eighth-graders [14-year-olds] all do a Shakespeare play. Our high school science pupils do blacksmithing with a 1,500 degree forge to learn about chemistry and heat energy.”

          Jeff Bezos, Amazon: Why ‘Charity’ Is Wrong Solution -- In January, Jeff Bezos announced that he would donate $33 million to help 1000 people go to college. This week, shortly after Amazon posted a $2 billion quarterly profit to end 2017, his company announced hundreds of layoffs at its headquarters. Meanwhile the 20 finalist cities for Amazon HQ2 are working feverishly to put together the most lavish package of taxpayer-funded subsidies.  It's great that Mr. Bezos wants to help 1,000 Dreamers – immigrants who were brought to the United States illegally as children – to attend college. But just imagine how many people he could help if Amazon paid taxes, wasn't focused obsessively on replacing workers with automation, didn't employ hundreds of thousands of temps who are paid low wages and receive no benefits, and declined to engage in reality TV-style "contests" to find out which state and local governments will succumb to desperation and give his very, very profitable company billions of dollars that might otherwise be spent on things, for one.  Charity is good. A system in which handouts from the wealthy weren't necessary in order for people to access basics like education and healthcare would be vastly better.   Andrew Carnegie, the Scots-American 19th Century steel baron, is almost as famous for his philanthropy as for his tremendous wealth.  At the same time, his wealth was built in no small part on the low pay and shabby treatment of his workforce for decades. And he hired strikebreakers to kill his employees who dared to unionize (the infamous Homestead Strike of 1892 was at the main Carnegie Steel plant and resulted in the workforce being replaced with non-union immigrants). He used every legal subterfuge available, as was common during the Robber Baron era, from price-fixing and collusion to bribery and brute force to build his business empire. Carnegie's charity and philanthropy were nice. But it might have been better for the country and society if he had devoted more of his immense fortune to human capital and less on parting gifts toward the end of his life.

          Watch Out for Charlie Kirk’s Treacle Tart -- Who is Charlie Kirk? He is the 24-year old executive director and founder of Turning Point USA. Jane Meyer profiled the organization in the New Yorker in December: Based outside of Chicago, Turning Point’s aim is to foment a political revolution on America’s college campuses, in part by funneling money into student government elections across the country to elect right-leaning candidates. But it is secretive about its funding and its donors, raising the prospect that “dark money” may now be shaping not just state and federal races but ones on campus.A couple of weeks ago in The Baffler, Maximillian Alvarez described the tactics employed by TPUSA to harass and silence opposition to their “free market” totalitarianism. If you like Tomi Lahren, Sebastian Gorka, Donald Trump Jr. and Sean Hannity, you’ll love Charlie Kirk.  Charlie Kirk is a Charlatan.  Last Friday, the Sandwichman posted Is the “Invisible Hand” a lump of labor? to EconoSpeak and Angry Bear. It received a little over 300 views on EconoSpeak and a total of three comments on both blogs. Charlie Kirk’s twitter video on the “socialist myth of the ‘fixed pie'” was tweeted three days earlier. It has so far received 3,300 “likes” and 1,688 comments.

          Higher education and the new doctrine of vocation -- Students, who incur debt (or a higher tax rate) as part of their higher education, are eager for information related to the value of their degree.. But what information might shed light on their financial value, specifically?This question reverberates with increasing velocity around the UK higher education industry. It is also one likely to offend more traditional, mid-20th century conceptions of the social role of education.And so we come to a detailed report published this month by the Higher Education Funding Council for England (HEFCE), which investigates “the relationship between the extent to which a subject is vocational and the employment outcomes of its graduates”.HEFCE, which draws on data released last summer on the destinations of leavers from higher education, is the main regulator of English universities. In April it will be replaced by a new regulatory body, the “Office for Students”, which will as part of its mandate assess the thorny question of value for money. So expect more debate on the value of degrees, and if they should even be thought of in this way. (We raised some difficulties with the notion of value, and a market for education, last month.) The study, which covers data from over 600,000 students graduating between the academic years 2012-13 and 2015-16, finds that “those studying more vocational subjects have a higher probability of being in highly skilled employment and are more likely to have higher earnings than those studying a less vocational subject”.

          Universities Should Encourage Scientists to Speak Out about Public Issues, Opinion by the Editorial Board of Scientific American - Opioids. Fracking. Zika. GMOs. Scientists should be speaking up about all sorts of science-based issues that affect our lives. Especially now, when Trump administration officials tell us that climate change is debatable and that killing African elephants can benefit the herd, scientists should be constantly exposing misinformation, bogus alternative facts and fake science. Unfortunately, the greatest obstacle to informing the public may be the very universities that many scientists work for. When Scientific American editors talk with Ph.D. students, postdoctoral researchers and early-career scientists, they often tell us that an adviser or senior department member has instructed them not to write blogs or articles for the general public, speak at public events or talk with reporters and to stay away from social media. In a 2016 survey of 61 chairs of U.S. and Canadian medical departments, only 23 percent said it was important for faculty to participate in blogs hosted by medical journals. Never mind personal blogs and those in the media. These activities, they are told, are a waste of time because they do not count toward attaining tenure or promotions. The only things that count are publishing research in respected journals, getting grants, teaching and serving on a university committee. Forget the rest of society. This message is delivered most strongly to young scientists, who are striving to build a career and are passionate about improving the world. Older scientists also tend to stay silent because it has been ingrained in them to do so. Yet if these individuals would write popular articles, appear on radio and television, or post their insights on blogs and social media, scientists as a group would have far more influence than they do today. 

          Fat cat university bosses who decide their OWN pay: 95% of vice chancellors sit on salary panels or go to meetings --  Almost every university boss is on the panel deciding their salary, a study suggests.It found that 95 per cent of vice-chancellors sit on their own remuneration committee – or at least attend its meetings.The study highlights the controversy over six-figure salaries for university chiefs.Average vice-chancellor pay last year including pensions and benefits was more than £280,000.But the highest paid, Dame Glynis Breakwell of Bath University, received £468,000.At the same time, student fees, which fund institutions and are paid for by taxpayer-provided loans, rose again to £9,250 a year.Universities have in the past defended the pay decisions by saying they are made by independent committees. But the latest data suggests otherwise.The figures are part of research into pay, perks and transparency carried out by the University and College Union, covering the academic year of 2016/17.The union, which represents staff, found that only seven universities did not allow the vice-chancellor to sit on, or attend, their remuneration committee.‘It is quite staggering,’ said UCU general secretary Sally Hunt. ‘For too long universities have got away with painting remuneration committees as independent bodies to deflect attention over senior pay.‘The time has come for proper transparency of senior pay and perks in our universities and that starts with full disclosure of the shadowy remuneration committee.’

          Meet the pirate queen making academic papers free online - In cramped quarters at Russia’s Higher School of Economics, shared by four students and a cat, sat a server with 13 hard drives. The server hosted Sci-Hub, a website with over 64 million academic papers available for free to anybody in the world. It was the reason that, one day in June 2015, Alexandra Elbakyan, the student and programmer with a futurist streak and a love for neuroscience blogs, opened her email to a message from the world’s largest publisher: “YOU HAVE BEEN SUED.” It wasn’t long before an administrator at Library Genesis, another pirate repository named in the lawsuit, emailed her about the announcement. ‘That’s fucked up. We’re fucked.’” The publisher Elsevier owns over 2,500 journals covering every conceivable facet of scientific inquiry to its name, and it wasn’t happy about either of the sites. Elsevier charges readers an average of $31.50 per paper for access; Sci-Hub and LibGen offered them for free. But even after receiving the “YOU HAVE BEEN SUED” email, Elbakyan was surprisingly relaxed. She went back to work. She was in Kazakhstan. The lawsuit was in America. She had more pressing matters to attend to, like filing assignments for her religious studies program; writing acerbic blog-style posts on the Russian clone of Facebook, called vKontakte; participating in various feminist groups online; and attempting to launch a sciencey-print T-shirt business.  That 2015 lawsuit would, however, place a spotlight on Elbakyan and her homegrown operation. The publicity made Sci-Hub bigger, transforming it into the largest Open Access academic resource in the world. In just six years of existence, Sci-Hub had become a juggernaut: the 64.5 million papers it hosted represented two-thirds of all published research, and it was available to anyone.

          Trump’s budget would end student loan forgiveness program -- Higher education faces massive changes in President Donald Trump's spending plan. The proposal unveiled Monday would sharply curtail income-based loan repayment plans, scratch the Public Service Loan Forgiveness Program, embolden the government to go after students who don't pay their loans and cut funding for federal work study in half. Changes to loans would apply to borrowing after July 1, 2019, not including those loans provided to borrowers to finish their current education. The budget would eliminate subsidized loans. Some 5.7 million students had subsidized loans in the 2016-2017 academic year, according to Mark Kantrowitz, a student loan expert. The budget plan also would narrow the number of income-driven repayment plans — in which people pay back their loans at a rate that takes into consideration their income — from four to just one. Under that option, students' monthly payments would be capped at 12.5 percent. Students generally pay 10 percent of their discretionary income under current income-based repayment plans.   The Public Service Loan Forgiveness Program is eliminated in the proposed budget. This program allows former students who fulfill certain public service positions — such as public school teachers or health researchers — to have their loans erased after 10 years of on-time payments. Nearly two-thirds of student loan borrowers who've shown interest in the Public Service Loan Forgiveness earn less than $50,000 a year.

          Retired teachers relying on Texas health care system face uncertain future - — Many retired teachers who get health insurance and benefits through the Teacher Retirement System of Texas have noticed spikes in premiums after more than a decade with minimal increases. “I understand that everything is going up, prices increase, but to go up more than about $400 more is unbelievable,” retired El Paso teacher Rowena Garcia said. The bills each month for her and her husband shot up from $130 to $529.“I was a teacher for 25 years and then I was a counselor for 11, so that’s 36 years in the retirement system, and I’ve always been happy with [TRS]. But this time I feel really betrayed,” she said of the state’s TRS-Care program, which serves nearly 270,000 retired Texans and their families.TRS-Care experienced a budget shortfall in 2017 and was set to run out of money this year. Lawmakers stepped in and came up with temporary fixes, totaling $700 million, a representative for TRS said.“The remaining shortfall was addressed through adjustments to premiums and benefits to help to sustain the program,” TRS spokesperson Kaylee Nemec said in a statement to El Paso NBC affiliate KTSM. “The retirees have not seen any contribution increases in more than 12 years and saw few benefit changes in the same time frame.”

          $1.2 Trillion Asset Manager: Forget Volatility, The Real Financial Timebomb Is Public Pensions - As we have reported over and over and over (and over, and over), public pensions are in deep, deep trouble.  In addition critical funding shortfalls (U.S. public pensions had just 71.8% of assets required to meet obligations as of June 2016), many of the country's largest pensions have completely unrealistic target rates-of-return of 7% on average.And while interest rates and therefore the cost of leverage has been at historic lows, and markets at historic highs (until they underwent a brief Vol-fib cardiac arrest last week), the question is what happens when the music stops, liquidity dries up, and economic contraction besets (or catch up to) the markets?  David Hunt, CEO of $1.2 trillion asset manager PGIM, is asking this exact question. "If you were going to look for what’s the possible real crack in the financial architecture for the next crisis, rather than looking in the rearview mirror, pension funds would be on our list,” Hunt said in a Friday interview with Bloomberg, discussing what municipalities and states will do when local tax revenues decline and unemployment worsens. "So we're worried about those pension obligations.” PGIM, owned by New Jersey-based Prudential Financial, advises 147 of the 300 largest pension funds around the world. Hunt joined Prudential in 2011 after leaving McKinsey & Co., where he doubled assets under management, renamed the business PGIM, and bought a Deutsche Bank AG unit to expand in India. In other words, he knows the business like the back of his hand. Hunt said that corporate retirement funds typically outperform their public counterparts. To that end, one of the most difficult aspects of managing money for public plans, says Hunt, is the fact that lawmakers are promising unrealistic goals to retirees. As such, he has advised public-pension clients to stop seeking the highest returns, and "start doing what the corporate folks have long been doing, which is to find ways to minimize the deficit and to take risk gradually off the table."

          CalPERS Let New Fox in the Private Equity Henhouse: Silicon Valley Fixer Wilson Sonsini --  Yves Smith - As we’ve said repeatedly, one of the most troubling things about CalPERS is its institutionalized culture of lying, not just by implication or omission but too often overtly. Today’s example is the unclear and questionable role that top Silicon Valley law firm and power broker Wilson Sonsini Goodrich & Rosati (“Wilson Sonsini”) is playing in CalPERS’ scheme to outsource private equity. We’ve written at length as to how moving in this direction is the polar opposite to what other major investors are doing, which it to bring more PE activities in house to cut out costly middlemen. CalPERS is instead proposing to add another layer of fees, which will hurt beneficiaries by reducing performance. We discuss in a companion post today how CalPERS is almost certain to suffer in an even bigger way, since its returns are likely to suffer for other reasons, such as some general partners being unwilling to work with a CalPERS outsourcer like BlackRock.  We aren’t the only party that smells the stench of corruption. One long-standing CalPERS insider said: In all my years of working with the system, I’ve never seen anything that makes my hair stand up on the back of my neck like this. Even though I can’t prove it, my gut says someone will go to jail if this gets done. And my gut has a good track record.

          Why CalPERS’ Private Equity Outsourcing Scheme Is Likely to Hurt Returns -- Yves Smith -  As readers probably know, the giant California public pension fund CalPERS is underfunded in a serious way as a result of taking a contribution holiday in the dot-con era when it looked like it had too much cash on hand, and then taking a big hit in the crisis. CalPERS has embarked on trying to implement a major change which is clearly counterproductive: that of handing off private equity investing to costly middlemen, incurring an additional layer of unnecessary fees. Even worse, as we’ll describe below, CalPERS has reasons to believe that this scheme cannot improve performance enough to make up for the fees.  CalPERS clearly recognizes that the odds favor that outsourcing will be a lose/lose proposition. CalPERS will lose on fees and will more importantly is likely to lose on returns too. This means its staff, and if it goes along, its board, is knowingly violating its fiduciary duty to beneficiaries. As we have chronicled for several years, CalPERS has been pinning undue hopes on private equity as the salvation for its underfunding problem. But private equity has come under deserved criticism for not generating enough in returns to compensate for its outsized risks, a cardinal sin in investing-land, along with the discovery of widespread abuses by general partners that include what amounts to embezzlement.  Rather than upping its private equity game as other investors have, by doing more investing directly so as to save staggering private equity fees and costs estimated at 7% per year, CalPERS instead appears to be letting PR considerations and potentially even worse motives trump its paramount responsibility: managing its money for the good of beneficiaries and California taxpayers, who ultimately backstop the giant fund. Below we’ll describe how CalPERS already has strong evidence that its outsourcing scheme, which amount to hiring a fund of funds manager, is likely to produce the worst of all worlds: inferior performance and higher fees, on the order of $50 million a year plus a profit share.

           U.S. health care costs up 29% because of obesity - The overall cost of health care in America is up 29%, varying greatly among states, according to a new report from Cornell University."We have, for the first time, estimated the percentage of health care spending that is devoted to obesity, using microdata for each state," the research's co-author John Cawley told Science Daily.Cawley said that the study found states including New York, California, Arizona and Pennsylvania devoted 5% to 6% of their total medical budget to obesity-related treatments. But other states, like North Carolina, Ohio and Wisconsin, spent more than twice that amount — over 12% of all their health care dollars went toward taking care of people with complications from obesity.Across the country, the study found that medical expenditures — including those paid through private health insurance, Medicare and Medicaid — focused on obesity-related procedures and therapies for adults rose from just over 6% in 2001 to nearly 85 in 2015 — a 29% increase."Once again, we find dramatic differences across states in the fraction of Medicaid spending that is devoted to obesity-related illness," Cawley said. "For example, over 2001 to 2015, Kentucky and Wisconsin devoted over 20% of their Medicaid spending to obesity-related illness. In contrast, in New York, 10.9% of Medicaid spending was devoted to obesity-related illness, and the average for the U.S. as a whole was 8.23% during that period." The study said that the differences across states in obesity treatment need could be driven by a number of factors, including health care access, cost and overall obesity prevalence.

          An Aetna “Fake Accounts” Level Scandal? Medical Director Admits He Never Reviewed Medical Records Before Denying Care – Yves Smith - CNN managed to get the attention of California’s insurance regulator Dave Jones over a bombshell admission in a suit against Aetna over the denial of care.1 From a videotaped deposition, as summarized in MedCity News Aetna’s former medical director Dr. Jay Ken Iinuma, whose job was to review whether to authorize payments:He went on to admit he never looked at patients’ records at Aetna and instead relied on information provided by a nurse. Most of his work, he said, was found online. During any given month, Iinuma said he’d call a nurse “zero to one” times to gather more data.Iinuma was a medical director at Aetna from 2012 to 2015. Commissioner Jones was so outraged over the testimony that he has not only opened up an investigation but is also soliciting information from other Aetna patients who believe they were treated improperly. The state insurance departmetn site urges “any Californians who are concerned that they might have been affected to contact the California Department of Insurance at 1-800-927-4357.” If you have trouble getting through, they also have a “File a Complaint” page.  Medical professionals were stunned by Iinuma’s admission. From the CNN story:“Oh my God. Are you serious? That is incredible,” said Dr. Anne-Marie Irani when told of the medical director’s testimony. Irani is a professor of pediatrics and internal medicine at the Children’s Hospital of Richmond at VCU and a former member of the American Board of Allergy and Immunology’s board of directors.“This is potentially a huge, huge story and quite frankly may reshape how insurance functions,” said Dr. Andrew Murphy, who, like Irani, is a renowned fellow of the American Academy of Allergy, Asthma and Immunology. He recently served on the academy’s board of directors.. Dr. Arthur Caplan, founding director of the division of medical ethics at New York University Langone Medical Center, described Iinuma’s testimony as “a huge admission of fundamental immorality.”

          In India, Stakeholders Drive Down Drug Prices for the Benefit of All - Parveen Malhotra, a doctor and the officer heading one of the main treatment centers located at the facility, known locally as PGI Rohtak, strides through the crowd and makes his way to his office inside the hospital. He knows that many in the crowd are suffering from Hepatitis C.“My favorite topic is Hep C,” he says with a smile. His office is filled with clippings from local media in Hindi and English about his Hepatitis C work. He goes on local radio and TV shows almost every week to spread the message about the disease and its treatment. He also runs an information hotline from his personal cell phone.The treatment of choice these days for Hepatitis C involves drugs called “direct-acting antivirals.” Chief among these is a drug called sofosbuvir, which was launched by the American pharmaceutical company Gilead in late 2013. A standard three-month course of treatment can have a sticker price as high as $84,000 in the United States. In Canada, it costs as much as $45,000. And because the drug must be taken in combination with other medications, the price of treatment is often higher.  Here in Haryana, however, and its neighbouring state, Punjab, governments are now purchasing 12-week courses of the drug, plus its companion drugs, for as low as $80 – and they are providing it to their residents for free. This is of no small consequence to Indian activists who have been working for years to drive down the costs of medications available to Indian citizens – many of them outlandishly expensive even for residents of countries of far greater means. India has long been an important battleground in the ongoing drug-pricing wars. India-based generic drug makers have repeatedly drawn the ire of multinational pharmaceutical companies for copying patented drugs without agreement, but they also proved crucial in driving down prices for HIV drugs used in AIDS relief programmes across the world in the early 2000s. Big pharma has fought back, of course, by lobbying foreign governments to enforce intellectual property law to protect their monopolies. But the ability of stakeholders in India – an eclectic mix of activists, government officials, generics manufacturers, and very often, doctors like Malhotra – to force down the costs of Hepatitis C medicine has been heralded as a victory for those who argue that it is a moral outrage to keep drugs out of the hands of sick people simply because they cannot afford it.

          Green Science’s White People Problem - Esteban González Burchard was on a mission. The then-senior medical resident at Boston’s Brigham and Women’s Hospital had given himself a steep challenge: Read all the posters within his field, epidemiology.  Amid the flood of research abstracts, images, and data, one graphic caught his eye. Colored in blue hues, a map from the Centers for Disease Control and Prevention depicted asthma prevalence among Latinos in the United States. A quick glance seemed to tell a simple tale: Latinos in New York, Massachusetts, and other northeastern states experienced asthma at significantly higher rates than Latinos living in other parts of the country. Except Burchard realized this wasn’t the whole story. When he studied the poster more closely, he was able to connect it with his own work on a certain mutation to the interleukin-4 gene. He knew that a certain variant of the gene, which he’d linked to increased asthma severity, is more common in African-Americans, and that Puerto Ricans have a deeper African ancestry than other Latinos. So this asthma hotspot in the U.S. Northeast was a reflection, in part, of the heavy Puerto Rican population in that region. “I was like, ‘I know what this is,’” Burchard tells Grist. “This is the African gene coming through Puerto Rican populations.” The Mexican American scientist, now a professor and principal investigator at the University of California, San Francisco’s Asthma Collaboratory, grew up in California, home to the largest number of Latinos, most of whom are of Mexican origin. But he also spent time in Boston, where the Latino population is largely Puerto Rican. And he thought those regional differences might be behind the disparate asthma rates. “It was because of my personal experiences that I was able to look at a scientific problem and nail it on the head in 30 seconds,” Burchard says. But we may not be getting insights like the one Burchard had at the rate we could be. After all, there’s an overall lack of people of color in science. And that’s especially true of the environmental and climate sciences. An analysis of science employment patterns found the workforce in the medical and life sciences is the most diverse, while the makeup of environmental scientists and geologists is among the least diverse.

          Cost Of U.S. Opioid Epidemic Since 2001 Is $1 Trillion And Climbing - The opioid epidemic has cost the U.S. more than a trillion dollars since 2001, according to a new study, and may exceed another $500 billion over the next three years. The report by Altarum, a nonprofit group that studies the health economy, examined CDC mortality data through June of last year. The greatest financial cost of the opioid epidemic, according to the report, is in lost earnings and productivity losses to employers. Early deaths and substance abuse disorders also take a toll on local, state and federal government through lost tax revenue. These costs are rising. One reason for the increase, says Corey Rhyan, a senior research analyst with Altarum's Center for Value and Health Care, is that more young people are being affected as the epidemic moves from prescription opioids to illicit drugs like heroin and fentanyl. "The average age at which opioid deaths are occurring — you're looking at something in the late 30s or early 40s," Rhyan says. "As a result, you're looking at people that are in the prime of the productive years of their lives." Health care expenses linked to the crisis — more than $215 billion since 2001 — have been significant, too, the report suggests. Those expenses stem largely from emergency room visits, ambulance costs and the use of naloxone, a drug used to stop and reverse the effects of an opioid overdose. The Altarum researchers say the growth in costs between 2011 and 2016 was double the rate of the previous five years and is projected to keep rising steeply unless there is a comprehensive and sustained national response. Congress is considering spending $6 billion over the next two years to address the national crisis. In his budget, President Trump is proposing $13 billion in new spending on opioids, but that is partially offset by cuts in other health care programs like Medicaid  

          Chemicals in packaging, carpets and non-stick pans 'may contribute to obesity' --Chemicals used to make non-stick pots and pans, stain-resistant carpets, and food packaging may contribute to high levels of obesity by disrupting the body’s ability to burn calories, scientists say.Researchers at Harvard University examined the effects of compounds called perfluoroalkyl substances (PFASs), which have already raised concerns among some health experts after animal experiments and other studies linked them to cancer, high cholesterol and immune problems.In the latest work, Qi Sun, a nutritionist who specialises in the risk factors for diabetes, obesity, and cardiovascular disease, analysed records for 621 overweight and obese people who spent six months dieting. All were part of a clinical trial run in the 2000s to test the effectiveness of different types of diets. As expected, those on the trial lost weight – on average 6.4kg over the six months of the diet – and then regained nearly half of that in the following 18 months. But Sun found that those who gained the most weight after dieting had the highest blood levels of PFAS chemicals, with the effects more pronounced in women.According to a report in the journal Plos Medicine, women in the study with the highest PFAS levels re-gained about 2kg more than those with the lowest PFAS levels. The scientists went on to show that those with high levels of PFAS in their blood also burned calories more slowly than the rest, as measured by their resting metabolic rate.  “These chemicals may lead to more rapid weight gain after dieting,” Sun told the Guardian. “It is very hard to avoid exposure to PFASs, but we should try to. It’s an increasing public health issue.”

          Shampoo 'as bad a health risk as car fumes' - Shampoo, oven cleaner, deodorant and other household products are as significant a source of the most dangerous form of air pollution as cars, research has found. Scientists studying air pollution in Los Angeles found that up to half of particles known as volatile organic compounds (VOCs) came from domestic products, which also include paint, pesticides, bleach and perfumes. These compounds degrade into particles known as PM2.5, which cause respiratory problems and are implicated in 29,000 premature deaths each year in the UK. Traffic had been assumed to be the biggest source of air pollution. The new findings, published in the journal Science, led to warnings that countries may struggle to hit pollution targets, with most tackling vehicle emissions. The research came as another study claimed that professional cleaners suffered a decline in lung function comparable to that seen in regular smokers. PM2.5 are one of the biggest global air pollution concerns. Scientists who had blamed them mainly on traffic realised that they could not account for measured air quality levels simply by looking at car emissions, however. They estimate that in Los Angeles as much as 50 per cent of VOCs came from domestic products and said there was no reason why the research would not be replicated in other cities. In past decades, cars have become significantly cleaner and their PM2.5 output has plummeted. Household products, which are also often derived from petroleum, have been overlooked. “We don’t use a vast amount of these products in our daily lives. It is pretty small compared to fuel,” he said. “But that fuel is combusted very efficiently. A small amount makes it into the atmosphere.” With cleaning products, the impact is more significant. When the VOCs in the products enter the atmosphere they undergo reactions that form ozone and PM2.5 particles, becoming harmful to health. “The net result is it rivals that from vehicles,” 

          Household Products Cause as Much Air Pollution as Cars, Surprising Study Finds - Petroleum-based chemicals , such as those used in paints, cleaners and personal care products such as perfumes and deodorants, contribute as much to volatile organic air pollution in urban areas as cars and trucks, according to a new finding published in Science . The consumer products emit synthetic "volatile organic compounds" or VOCs that contribute to ground-level ozone or small particulate pollution, causing asthma, lung disease and other serious health problems. According to the research led by Colorado University, the source of non-vehicle VOC sources is likely two or three times higher than estimated under present air pollution inventories. Meanwhile, stricter vehicle emission controls have made cars and trucks cleaner—resulting in consumer products rivaling cars in air pollution contribution. As reported by the Washington Post : "These results have important implications for how and what emissions we regulate," said Brent Stephens, an expert on indoor air and the built environment at the Illinois Institute of Technology [by email]. "We have traditionally focused on transportation and industrial emissions to the outdoor environment. [Volatile chemical products] are now relatively more important emission sources, and they come from both indoor and outdoor sources (and some primarily from indoor sources), although we don't regulate the vast majority of indoor environments." Stephens noted that proposed budget cuts to the Environmental Protection Agency loom large in this context, because the agency conducts much relevant work on atmospheric chemistry and air quality. "We typically think of outdoor air pollution as an outdoor problem," Stephens added. "But this study demonstrates (quantitatively) that it's more complicated than that."

          Flu Is Causing 1 in 10 American Deaths and Climbing - The amount of influenza ravaging the U.S. this year rivals levels normally seen when an altogether new virus emerges, decimating a vulnerable population that hasn’t had a chance to develop any defenses. It’s an unexpected phenomenon that public health experts are still trying to decode. The levels of influenza-like illnesses being reported now are as high as the peak of the swine flu epidemic in 2009, and exceed the last severe seasonal flu outbreak in 2003 when a new strain started circulating, said Anne Schuchat, the U.S. Centers for Disease Control and Prevention’s acting director. Swine flu, which swept the globe in 2009 and 2010, sickened 60.8 million Americans, hospitalized 274,304 and killed 12,469, according to CDC data. Deaths from the current outbreak will likely far outstrip those of the 2009-2010 season. “This is a difficult season, and we can’t predict how much longer the severe season will last,” she said. “I wish there was better news, but everything we are looking at is bad news.” The primary type of influenza this year hasn’t changed enough from previous seasons to be considered a novel strain, Schuchat said. The agency’s virologists are studying it to determine if there are any other explanations for why it’s been so hard-hitting.   Deaths from influenza and pneumonia, which are closely tied to each other in the winter months, were responsible for 1 of every 10 deaths last week, and that’s likely to rise, Schuchat said in a conference call Friday. There were 40,414 deaths in the U.S. during the third week of 2018, the most recent data available, and 4,064 were from pneumonia or influenza, according to the CDC data. The number for that week is expected to rise more reports are sent to the agency. It gets worse. The death toll in future weeks is expected to grow even higher because flu activity is still rising—and the number of deaths follow the flu activity. Hospitalization rates are already approaching total numbers seen at the end of the flu season, which may not be for months.

          Flu Killing Up to 4000 Americans a Week - The amount of influenza ravaging the U.S. this year rivals levels normally seen when an altogether new virus emerges, decimating a vulnerable population that hasn’t had a chance to develop any defenses.It’s an unexpected phenomenon that public health experts are still trying to decode.The levels of influenza-like illnesses being reported now are as high as the peak of the swine flu epidemic in 2009, and exceed the last severe seasonal flu outbreak in 2003 when a new strain started circulating, said Anne Schuchat, the U.S. Centers for Disease Control and Prevention’s acting director. Swine flu, which swept the globe in 2009 and 2010, sickened 60.8 million Americans, hospitalized 274,304 and killed 12,469, according to CDC data. Deaths from the current outbreak will likely far outstrip those of the 2009-2010 season.“This is a difficult season, and we can’t predict how much longer the severe season will last,” she said. “I wish there was better news, but everything we are looking at is bad news.”The primary type of influenza this year hasn’t changed enough from previous seasons to be considered a novel strain, Schuchat said. The agency’s virologists are studying it to determine if there are any other explanations for why it’s been so hard-hitting.“We have a lot to learn still about influenza,” she said. “It’s a wake-up call about how severe influenza can be, and why we can never let down our guard.” Deaths from influenza and pneumonia, which are closely tied to each other in the winter months, were responsible for 1 of every 10 deaths last week, and that’s likely to rise, Schuchat said in a conference call Friday. There were 40,414 deaths in the U.S. during the third week of 2018, the most recent data available, and 4,064 were from pneumonia or influenza, according to the CDC data. The number for that week is expected to rise more reports are sent to the agency.

          Why are people outside high-risk groups dying from the flu? — As far as flu seasons go, experts are saying the levels of visits to hospitals and emergency rooms for this one are comparable to the 2009 swine flu. As such, reports of otherwise healthy or young people dying from the infection are flying around. The stories have been shocking, especially because many of these people were outside the high-risk groups for flu-related death that include pregnant women, small children and the elderly. So far in the 2017-2018 season, the U.S. Centers for Disease Control and Prevention has recorded 63 pediatric deaths. This compares to 110 deaths in 2016-2017, 93 in 2015-2016 and 148 in 2014-2015. The CDC does not know how many deaths are caused overall from the seasonal flu because, among other reasons, flu-related deaths happen a few weeks after someone is infected and are often caused by a secondary illness or a pre-existing condition. From the 2010-2011 to the 2013-2014 seasons, the CDC gives a range of 12,000 (during the 2011-2012 season) to 56,000 (2012-2013) deaths. Here are some reasons why otherwise healthy people can die from the flu.

          • Pneumonia causes inflammation in your lungs and can attack just after the flu. Harmful bacteria already in your body, or that enters while your immune system is fighting the flu, can multiply when your system is compromised.  Pneumonia can come on when you're just starting to feel better a few days after the flu has struck, according to Popular Science. WebMD outlines symptoms including chills, fever, chest pains, sweating, a cough producing green or bloody mucus, and bluish lips or nails caused from an inadequate amount of oxygen.
          • A January article in the New England Journal of Medicine found a "significant association" between respiratory infections, including the flu, and acute myocardial infarction — the medical term for a heart attack.  The authors found that people were six times more likely to have a heart attack during the first seven days after being diagnosed with the flu than in the year before and after it.
          • Infections in your lungs, kidneys, skin and gut can trigger sepsis. As your body releases chemicals into the bloodstream to fight infections, your immune system can go too far and cause inflammation in — and damage — several organs. Sepsis can take hold after pneumonia that occurs after the flu, according to the Sepsis Alliance. The CDC calls sepsis life-threatening and highlights that without treatment, it can result in damaged tissues, failed organs and death. According to WebMD, symptoms include rapid breathing, confusion, fever and chills, low body temperature, urinating less than usual and diarrhea.

            Trump Proposes Deep Cuts In Detecting Disease Outbreaks Worldwide - There's a glaring hole in President Trump's budget proposal for 2019, global health researchers say. A U.S. program to help other countries beef up their ability to detect pathogens around the world will lose a significant portion of its funding. The ambitious program, called Global Health Security Agenda, was launched in early 2014, aiming to set up an early-warning system for infectious diseases across the world. After the Ebola outbreak later that year the program was significantly ramped up with an additional $120 million dollars a year to expand the building of disease-detection systems to dozens more developing countries around the world. That ramped-up funding runs out in September 2019. And while Trump is keeping the original program he has not proposed continued funding at the current level. Congress, which has the responsibility to adopt the budget, could end up restoring the funds. Still, the proposal has critics worried. "Cutting this money is shortsighted," says Dr. Paul Spiegel, who directs the Center for Humanitarian Health at Johns Hopkins University. "By downsizing this program, outbreaks may not be detected as quickly now, and in the end, the U.S. could wind up spending more money [to stop an emergency outbreak]." In Trump's proposal, funding for the program would drop by about two-thirds, from about $180 million each year to about $60 million each year. As a result, the Centers for Disease Control and Prevention is planning to downsize its operations — or even close up shop — in 39 countries by September 2019. It will continue its work in 10 countries. For decades, the CDC has been helping other countries stop dangerous, fast-spreading outbreaks, such as SARS in 2009. But a few years ago, the agency decided to try a different approach: Help other countries set up their own disease-detection facilities so they can find outbreaks before they spiral out of control. Global Health Security Agenda has goals such as building laboratories that can test biological samples and creating a network of health workers who can detect dangerous diseases when they crop up 

            Scientists grow human eggs to full maturity in a lab - Scientists have succeeded for the first time in growing human eggs in a laboratory from the earliest stages in ovarian tissue all the way to full maturity – a scientific step that had previously been taken in mice. Publishing their result in the journal Molecular Human Reproduction on Friday, scientists from Britain and the United States said it could one day help in developing regenerative medicine therapies and new infertility treatments.In previous studies, scientists had developed mouse eggs in a laboratory to the stage where they produced live offspring, and had also matured human eggs from a relatively late stage of development. This latest work, by scientists at two research hospitals in Edinburgh and the Center for Human Reproduction in New York, is the first time human eggs have been developed outside the human body from their earliest stage to full maturity.  “Being able to fully develop human eggs in the lab could widen the scope of available fertility treatments. We are now working on optimizing the conditions that support egg development in this way and studying how healthy they are,” said Evelyn Telfer, who co-led the work.Independent experts not directly involved in this work praised it as important, but also cautioned that there is much more to do before lab-grown human eggs could be safely be made ready for fertilization with sperm.“This early data suggests this may well be feasible in the future,” said Ali Abbara, a senior clinical lecturer in Endocrinology at Imperial College London. “(But) the technology remains at an early stage, and much more work is needed to make sure that the technique is safe and optimized before we ascertain whether these eggs remain normal during the process, and can be fertilized to form embryos that could lead to healthy babies.”

            Cellphone Radiation Linked To Tumors In Male Rats, Government Study Says — High exposure to radiofrequency radiation — the radiation known as RFR and emitted from your cell phone — causes a rare cancer in male rats, according to draft conclusions released by the National Institutes of Health on Friday. The two technical reports, one on mice and the other on rats, released by the NIH’s National Toxicology Program (NTP) show the exposure to the high levels of radiation resulted in tumors in the tissues surrounding nerves in the heart of male rats.  Both male and female rats that were exposed to high levels of RFR showed increased patterns of damage to their heart tissue, according to the researchers. “The levels and duration of exposure to RFR were much greater than what people experience with even the highest level of cell phone use, and exposed the rodents’ whole bodies. So, these findings should not be directly extrapolated to human cell phone usage,” said NTP senior scientist Dr. John Bucher in a written statement. “We note, however, that the tumors we saw in these studies are similar to tumors previously reported in some studies of frequent cell phone users.”Bucher said these studies “provide the most comprehensive assessment, to date, of health effects in rats and mice from exposure to RFR.”

            Worms pulled from Oregon woman's eye in first known case of infection -- An Oregon woman who had worms coming out of her eye is being called the first known human case of a parasitic infection spread by flies. Fourteen tiny worms were removed from the left eye of the 26-year-old woman over a 20-day period in August 2016 before her symptoms dissipated. The worms were translucent and each less than half an inch long. Scientists reported the case on Monday. The woman was diagnosed with Thelazia gulosa, a type of eye worm seen in the northern United States and southern Canada – but only in cattle. It is spread by flies that feed on eyeball lubrication. The woman had been horseback riding in Gold Beach, Oregon, in a cattle farming area. After a week of eye irritation, she pulled a worm from her eye. In a study published in the American Journal of Tropical Medicine and Hygiene, researchers said North Americans may be more vulnerable than previously understood to such infections. If the worms remain in a person’s eye for a prolonged time, they can cause corneal scarring and even blindness, according to the researchers. “Cases of eye worm parasitic infections are rare in the USA, and this case turned out to be a species of the Thelazia that had never been reported in humans,” said study lead author Richard Bradbury, who works with the CDC’s Division of Parasitic Diseases and Malaria. Previous cases of eye worm infections have been reported worldwide, predominantly in Europe and Asia and in rural communities with close proximity to animals and with poor living standards, the researchers said. Eye worms are found in a variety of animals including dogs, cats and certain wild carnivores. 

             Scientists Battle Mysterious Pathogen Destroying Coral Reefs Off Florida Coast - Off the coast of Broward County in southeast Florida, a 330-year-old coral colony has withered in the water thanks to a mysterious pathogen. At the height of its health, this slow-growing variety of coral, known as mountainous star, looked like a car-size brown mushroom cap scored by ridges and valleys and colored with splashes of fluorescent green. Today the countless minuscule sea-anemone-like polyps that form the colony have turned white and died, laying bare the skeletal structure below.Corals all along Florida's southeastern shore are succumbing to the same disease. In fact, more than half ofthe state's Coral Reef Tract —an area 175 miles long and covering more than 100,000 acres—has been infected. It's a rapid change in circumstance that has experts concerned and scrambling for answers and solutions."This is unprecedented," said Karen Bohnsack, reef resilience coordinator for the Florida Department of Environmental Protection (DEP) Coral Reef Conservation Program. Never before has this number of coral species in an area of this size begun dying off this quickly, she said. "Unfortunately, as far as what it is that's causing it, the only answer I can give is that we don't know." There are in fact many unknowns in this unfolding coral murder mystery. Scientists have coined the generic term "white syndrome" to describe the unidentified virus or bacteria because of the white bands or uneven white blotches that engulf the coral. The disease has touched at least 21 of the approximately 25 species of stony, or hard, corals that help make up the Florida reefs. The most common of these, including staghorn, acorn, mountain star, cavernous and knobby brain corals, have all been dealt a hefty blow."If corals contract this white syndrome, in most cases the coral colony will die, and that's what's most concerning," said Bohnsack. "We have seen an almost 100 percent mortality in this disease event."

            Resist a US trade deal. Your life may depend on it --  Monbiot - It looks like a proper zombie apocalypse. Bacteria we thought we had conquered are on the march again, defeating almost all attempts to slaughter them. Having broken through the outer walls, they have reached our last lines of defence. Antibiotic resistance is among the greatest threats to human health. Infections that were once easy to quash now threaten our lives. Doctors warn that routine procedures such as caesareans, hip replacements and chemotherapy could one day become impossible due to the risk of exposing patients to deadly infection. Already, in the European Union alone, 25,000 people are dying each year because of antibiotic-resistant bacteria. Yet our last defenses – the rare drugs to which bacteria have not yet become immune – are being squandered with wild abandon. While most doctors seek to use them precisely and parsimoniously, some livestock farms literally slosh them around. They add them to the feed and water supplied to entire herds of cattle, pigs and poultry: not to treat illness, but to prevent it. Or not even that. In the 1950s, farmers discovered that small quantities of antibiotics added to feed made animals grow faster. Using antibiotics as growth promoters – low doses routinely applied – is a perfect formula for generating bacterial resistance. Yet many countries continue to permit this reckless practice. The US Food and Drug Administration asks drug companies voluntarily to refrain from labeling antibiotics as growth promoters, suggesting they be rebranded for “new therapeutic indications”. Around 75% of the antibiotics used in the US are fed to farm animals. Our city is under siege, and we are knocking down our own defenses. The EU and the UK are no paragons. The Guardian has revealed that both pork and chicken sold here are infected with resistant superbugs. Outrageously, it is still legal in the UK to dose chickens with fluoroquinolones, powerful antibiotics that save many human lives: a practice even the US has banned. But in other respects the US, whose corporate livestock production looks more like The Island of Dr Moreau than anything you’d recognise as farming, makes our methods seem virtuous. Last week, the Alliance to Save Our Antibiotics revealed that the US uses on average roughly five times as many antibiotics per animal as the UK does. Why? Because the stack ’em high, sell ’em low model of farming there, in which vast numbers of animals are reared in appalling conditions in megafarms, cannot be sustained without mass medication. The animals are weaned so young, are so debilitated and so crowded that extreme methods are required to keep them alive and growing. The impacts are not confined to the US: when America sneezes, the world catches antibiotic-resistant salmonella.

            'Dangerous Drift-Prone Pesticide' Threatens Millions of Acres, Hundreds of Endangered Species: Farmers and Conservationists Sue EPA, Monsanto -- On Friday, public interest organizations representing farmers and conservationists made their legal case in a federal lawsuit against the U.S. Environmental Protection Agency ( EPA ) and the Monsanto Company, challenging EPA's approval of Monsanto's new "XtendiMax" pesticide . XtendiMax is Monsanto's version of dicamba , an old and highly drift-prone weed-killer. EPA's approval permitted XtendiMax to be sprayed for the first time on growing soybeans and cotton that Monsanto has genetically engineered (GE) to be resistant to dicamba.  The 2017 crop season—the first year of XtendiMax use—was an unprecedented disaster. Just as critics warned would happen, dicamba sprayed on Monsanto's GE soybeans and cotton formed vapor clouds that drifted to damage a host of crops and wild plants. Over three million acres of soybeans as well as scores of vegetable and fruit crops, trees and shrubs throughout the country were damaged by dicamba drift. Flowering plants near cropland also suffered, with potential harms to pollinators, as well as hundreds of endangered animal and plant species . Agronomists reported they had never seen herbicide-related drift damage on anything approaching this scale before. The papers filed in court tell the story of how EPA should have known this would occur, yet instead was pressured by Monsanto into approving the pesticide without any measures to prevent vapor drift. "The evidence shows that, rather than protecting farmers and the public interest, government officials rushed this pesticide to market without the rigorous analysis and data the law requires," said George Kimbrell, of the Center for Food Safety and counsel in the case. "There was good reason that decision had such devastating consequences last year: it was illegal." 

            Trump EPA Slammed for Ag Giant's 'Absurdly Low' Pesticide Fine -  The U.S. Environmental Protection Agency ( EPA ) announced a settlement this week with Syngenta Seeds, LLC over violations of federal pesticide regulations at its farm in Kauai, Hawaii.  The company, a subsidiary of Swiss biotech giant Syngenta AG, agreed to pay a civil penalty of $150,000 and spend another $400,000 on worker protection training sessions.  That fine, however, is a tiny fraction of the $4.8 million in civil penalties initially sought by President Obama's EPA.  According to an EPA complaint, on Jan. 29, 2016, 19 workers entered a Syngenta field recently sprayed with a restricted use organophosphate insecticide. Ten of these workers had to be taken to the hospital for medical treatment.  The EPA alleged that Syngenta misused the pesticide "Lorsban Advanced," and failed to notify workers to avoid the field. The active ingredient in "Lorsban Advanced" happens to be chlorpyrifos , a controversial insecticide linked to a host of health and environmental problems. It was said that Syngenta allowed workers to enter the site without protective gear and did not provide adequate decontamination supplies at the field, nor did it supply prompt transportation for emergency medical care.  Then, in an amended complaint filed this month, Syngenta again violated pesticide use rules in January 2017 after a worker sprayed chlorpyrifos on a field but did warn work crews about the treated areas. One worker who said he was exposed experienced "adverse health effects" as a result.  Chlorpyrifos is widely used in citrus, nuts and orchards. Chemical maker Dow Chemical sells about 5 million pounds of it in the U.S. each year.  But chlorpyrifos is acutely toxic and associated with neurodevelopmental harms in children. Furthermore, the EPA released a report indicating that that 97 percent of the more than 1,800 animals and plants protected under the Endangered Species Act are likely to be harmed by the commonly used insecticide. But in March 2017, EPA administrator Scott Pruitt scrapped Obama-era plans to ban the toxic chemical.

            Bacteria-infected mosquitoes might be good thing for Miami — Mosquitoes are a year-round downside to living in subtropical Miami, but millions of bacteria-infected mosquitoes flying in a suburban neighborhood are being hailed as an innovation that may kill off more bugs that spread Zika and other viruses. Miami-Dade County Mosquito Control and Habitat Management Division is releasing non-biting male mosquitoes infected with naturally occurring Wolbachia bacteria to mate with wild female mosquitoes.The bacteria are not harmful to humans, but will prevent any offspring produced when the lab-bred mosquitoes mate with wild female mosquitoes from surviving to adulthood. This drives down the population of Aedes aegypti mosquitoes that thrive in suburban and urban environments and can spread Zika, dengue fever, and chikungunya. During a six-month field trial approved by the U.S. Environmental Protection Agency, over half a billion of the mosquitoes bred by Kentucky-based MosquitoMate will be released in a suburban neighborhood split by long, narrow canals near the University of Miami, said South Miami Mayor Philip Stoddard. Miami-Dade County is testing MosquitoMate’s insects as a potential mosquito-control method about 10 miles southwest of Miami’s hip Wynwood neighborhood, where health officials confirmed the first local Zika infections spread by mosquitoes on the U.S. mainland in July 2016.Stoddard, a zoology professor at Florida International University, said he volunteered his city for the trial, wanting to keep the outdoor cafes in his city from becoming another ground zero for a mosquito-borne virus outbreak. “All those diseases are still a concern. They’re still in the Caribbean and could move to the mainland to cause problems,” Stoddard said.

            Red wolves may be going extinct in the wild — again - The red wolf, which went extinct in the wild before the federal government managed to revive the species, is disappearing again, maybe forever. A few weeks after the 30th anniversary of reintroduction, there is serious doubt that the only distinctively American wolf, which once ranged throughout the southeast United States, can survive outside zoos. If wild red wolves are lost, it would mark one of the biggest and most dramatic failures for a federal endangered species recovery plan.The story of the rise and fall of the experimental red wolf population at the Alligator River National Wildlife Refuge is a testament to the power of the Endangered Species Act to protect wildlife — and its limitations.U.S. Fish and Wildlife Service biologists who manage the restoration program have introduced more than 100 captive-bred wolves into the refuge and watched as the population peaked at more than 225 wolves a decade ago and plummeted to fewer than 45 now.Wolves have been shot by hunters and private landowners in a state where officials want to end the program. They’ve also been accidentally run over on roads and trapped and removed by federal officials after doing what comes naturally to wolves: roaming to find new territory.Missteps by the Fish and Wildlife southeast regional office in Atlanta that oversees the program hasn’t helped. Poor communication with state officials about the number of wolves released in and around the refuge at the start of the reintroduction and a recent decision to allow a private landowner to shoot a wolf have angered both the agency’s friends and enemies.The project is mired in politics, distrust, open bickering, scientific disputes and a legal challenge. It reflects the discord on Capitol Hill as lawmakers debate Endangered Species Act revisions that could dramatically weaken one of the most powerful environmental laws in the world.

            Ravaged by Deforestation, Borneo Loses Nearly 150,000 Orangutans in 16 Years - The world lost nearly 150,000 orangutans from the island of Borneo in the past 16 years due to habitat loss and killing, and is on track to lose another 45,000 by 2050, according to a new paper in the journal Current Biology. The study, published Feb. 15, observed 36,555 orangutan nests across Borneo, an island that is shared between Indonesia, Malaysia and Brunei, between 1999 and 2015. During that period, the researchers reported a steep decline in the number of nests they encountered over a given distance: the encounter rate more than halved from 22.5 nests per kilometer (about 36 per mile) to 10.1 nests per kilometer. That decline, they calculate, represents an estimated loss of 148,500 individual Bornean orangutans ( Pongo pygmaeus ). The data also suggested that only 38 of the 64 identified spatially separated groups of orangutans, known as metapopulations, now include more than 100 individuals, which is the accepted lower limit to be considered viable. "They are disappearing even faster than researchers had envisaged," said Maria Voigt, a researcher at the Max Planck Institute for Evolutionary Anthropology in Germany and lead author of the new study. "The major causes are habitat degradation and loss in response to local to global demand for natural resources, including timber and agricultural products, but very likely also direct killing," Voigt wrote.

            South African lions eat ‘poacher’, leaving just his head - BBC - A suspected big cat poacher has been eaten by lions near the Kruger National Park in South Africa, police say. The animals left little behind, but some body parts were found over the weekend at a game park near Hoedspruit. "It seems the victim was poaching in the game park when he was attacked and killed by lions," Limpopo police spokesman Moatshe Ngoepe told AFP. "They ate his body, nearly all of it, and just left his head and some remains." Police have not yet established the victim's identity. A loaded hunting rifle and ammunition were found next to the body, South African website Eyewitness News reports.  Lion poaching has been on the rise in Limpopo province in recent years.  The big cats' body parts are sometimes used in traditional medicine, both within Africa and beyond.

            Why a simple, lifesaving rabies shot can cost $10,000 in America -- On November 17, 2016, a bat flew into Ally McNamee’s mouth. When she woke up the next day, she started to worry about rabies. She went to the local urgent care center, which sent her to the emergency room.   A few weeks later, the bill arrived: $6,017. The vast majority of the charge was for a drug to treat rabies exposure called immunoglobulin. The emergency room billed this drug at $3,706.  And it turns out McNamee’s bill was actually at the low end of what hospitals charge for the drug in the United States, which can sometimes be closer to $10,000.  Vox learned of McNamee’s bat incident during a running, months-long investigation into emergency room costs. Readers from across the country have contributed more than 1,000 bills to Vox’s emergency room bill database. In reviewing those bills, I kept coming across something I didn’t expect to see: readers with significant medical debt from rabies treatment.  Michael Cinkosky also sent me a bill from a visit to a hospital near Denver. A bat collided with his 8-year-old son’s chest last summer and left behind two scratch marks, a sign of a possible bite. That hospital billed the same rabies drug at $10,494. The Cinkosky family was responsible for $3,563 of the hospital bill, which they’re still paying off.  “Rabies is 100 percent fatal. What are you going to do? Not get it?” Cinkosky says. “We’ve been living off our reserves because of the bills, and that’s not a good long-term strategy.”  The price of rabies treatment in American reveals unique failures of our country’s health care system. It shows that in the United States, pharmaceutical companies can set sky-high prices for lifesaving medication.  Specifically, the drug that prevents rabies from spreading to the brain can cost more than $10,000 in the United States. In some cases I reviewed, hospitals charged more than six times what the identical drug would cost in the UK.

            Rural America’s drinking-water crisis - When people think of water crises, they tend to think of big cities like Flint, Michigan, or Cape Town, South Africa. These places understandably attract the most attention, because one faulty system in an urban area can affect vast numbers of people at once. But, in reality, most health-based violations of drinking-water standards occur outside of big cities, in places like Martin County: small, poor, out of the way. Of the 5,000 drinking-water systems that racked up health-based violations in 2015, more than 50 percent were systems that serve 500 people or fewer. In those small areas, who is going to raise hell except for the people affected and maybe the local paper? Put all these systems together, however, and rural America’s drinking-water situation constitutes a crisis of a magnitude greater than Flint, or any individual city. From Appalachian Kentucky to the Texas borderlands, millions of rural Americans are subject to unhealthy and sometimes illegal levels of contaminants in their drinking water, whether from agriculture, or coal, or plain old bad pipes. And as the economic gap separating rural America from its urban and suburban counterparts continues to grow, this basic inequality is set to become more entrenched—and possibly more dangerous, as sickness seeps into rural America.  Often, the very industries that provide a community its economic backbone are what’s damaging or even poisoning its water supply. In Martin County and other communities across Appalachia, that industry is mining. “A lot of people in Kentucky actually get their water from wells that are sunk into flooded, abandoned mines,” explained Erik Olson, a policy analyst for the Natural Resource Defense Council. “That water quality is horrific because the mines are loaded with heavy metals.”  Other communities, from West Virginia to North Carolina, trace their water problems to the waste produced from burning coal, which is often stored in liquid ponds that have a tendency to spill and leak. Toxic water may disappear from the headlines, but not from the bodies of local residents. Some research links mountaintop-removal mining to carcinogens in local groundwater that can lead to cancer, heart disease, and birth defects, which means thousands of families, especially those who rely on well water, live with constant anxiety about long-term health problems.

            Here are the places that struggle to meet the rules on safe drinking water (NYTimes)— To ensure that tap water in the United States is safe to drink, the federal government has been steadily tightening the health standards for the nation’s water supplies for decades. But over and over again, local water systems around the country have failed to meet these requirements.In a new study published in the Proceedings of the National Academy of Sciences, researchers found that, since 1982, between 3 and 10 percent of the country’s water systems have been in violation of federal Safe Drinking Water Act health standards each year. In 2015 alone, as many as 21 million Americans may have been exposed to unsafe drinking water.The problem is particularly severe in low-income rural areas, the study found. And the researchers identified several places, including Oklahoma and West Texas, that have repeatedly fallen short in complying with water safety rules issued by the Environmental Protection Agency over the past decade. “These are often smaller communities flying under the radar,” said Maura Allaire, an assistant professor of urban planning at the University of California, Irvine, and a lead author of the study. “They’re struggling to maintain their aging infrastructure, and they’re struggling to keep up with the latest water treatment techniques.” Concerns about the safety of America’s tap water gained national prominence after the 2015 crisis in Flint, Mich., when residents discovered dangerously high levels of lead in their drinking water. Since then, a barrage of reports have revealed that a surprisingly large number of local water systems serving millions of Americans sometimes contain unsafe levels of contaminants like lead, nitrates, arsenic or pathogens that can cause gastrointestinal diseases.

            Testimony reveals depth of recklessness in decision to use outmoded Flint water plant -- Preliminary hearings proceeded last week in the criminal prosecution of four Michigan Department of Environmental Quality (MDEQ) officials charged for their roles in the Flint water crisis, caused by the switching of the city’s water supply from treated Lake Huron water to the badly polluted Flint River, utilizing the city’s outdated water plant. The MDEQ is the state agency that is directly responsible for safeguarding the public water supply, yet used its authority to run roughshod over any opposition to using Flint River water. This body, unbeknownst to the public, issued the unheard-of order not to use corrosion inhibitors, wreaking havoc on the city’s water infrastructure and causing toxic lead to leach from pipes into the water being delivered to people’s homes. The switch in the water supply also resulted in one of the country’s most severe outbreaks of Legionnaires’ disease, killing at least 12 people. These are but four of the 15 criminal indictments by the Michigan state attorney general’s office that have resulted from the investigation that began almost two years ago.  Before, during and after the switch from Great Lakes water to the Flint River, authorities responsible for public health ignored numerous warnings from experts in order to implement a plan that was based solely on the financial interests of an elite clique that stood to benefit from the change.The most glaring of the revelations was the testimony of the division director of the Genesee County Drain Commission, John O’Brien, who testified that in an early 2014 meeting, which included Flint Emergency Manager Darnell Earley, former Emergency Manager Gerald Ambrose, Public Works Director Howard Croft and Flint Mayor Dayne Walling, he warned of the dangers of putting Flint’s water treatment plant (WTP) into service after some 50 years of disuse.

            Did Flint’s Water Crisis Damage Kids’ Brains? - Detroit Free Press columnist Rochelle Riley recently noticed a startling fact about kids in the lead-poisoned city of Flint, Michigan: They have become increasingly bad at reading since the water crisis began in 2014. A state government report showed that, from the year 2014 to the year 2017, third-grade reading proficiency in the citydropped from 41.8 percent to 10.7 percent. “That’s nearly a three-quarters drop in third-grade reading proficiency among children whose lives were affected by lead poisoned water during the Flint water crisis,” she wrote. Other factors were involved in this decline. The test changed to become more difficult in 2015, which led the third-grading reading proficiency statewide to fall from 70 to 44 percent. But Flint’s decline was much worse than the state’s average.Michigan Superintendent of Education Brian Whiston told Riley that this was “unacceptable,” and that some of the decline could be attributed to “stress.” Riley wasn’t having it. “What also isn’t acceptable is the state not putting into place three years ago a program to monitor and continually assess the development of the poisoned children,” she wrote.  Her outrage was shared by others. The Center for American Progress declared that Flint’s water crisis “has lead to a reading proficiency crisis,” while HuffPost reporter Alanna Vagianos tweeted that lead exposure in Flint was “having a significant developmental effect on children.” Their worry is grounded in the fact that, according to the CDC, lead exposure to children “can cause learning disabilities, behavioral problems, and, at very high levels, seizures, coma, and even death.”

            Kentucky residents face water shutoffs as UK study exposes health dangers from leaking pipes -- Residents of Martin County, Kentucky have received notices warning them that water service will be turned off if payments are not received by February 20. At the same time, county water district officials are seeking state approval to raise rates 49.6 percent.This is the latest affront to citizens in the former coal mining county, where water service was repeatedly disrupted last month due to failing infrastructure, and residents have long complained of discolored, foul-tasting water, which causes skin rashes.The threat of water shutoffs is being used to blackmail residents into paying for a financial crisis that they did not create. The district is $816,000 in debt and is functioning on a cash-only basis with vendors that supply replacement parts, pipes, pumps and other badly needed equipment. It is estimated that $13 million is needed for repairs.In January, the Martin County Water District shut off service for several hours each day to the county’s nearly 1,400 residents. The procedure went on for a number of days because an intake pump and service pipes froze during severely cold weather. Many residents did not have water at all or only intermittently for more than a week. Local schools were closed, and many were forced to rely on volunteers who donated and distributed bottles of water.For years the water system, which has had no substantial investment in nearly fifty years, has been losing between 50-60 percent of its treated water due to aging, leaky pipes, which can also allow untreated groundwater—or worse—to seep in.A significant scientific study conducted in Great Britain may shed light on the condition of the water in eastern Kentucky. In 2015, the University of Sheffield engineers published the results of a study, entitled, “Leaky pipes can allow contaminants into our drinking water.” The study is the first to prove conclusively that contaminants can enter pipes through leaks and be transported through the pipe network. The pressure in mains usually forces water out through leaks, preventing anything else from getting in. But when there is a significant pressure drop in a damaged section of pipe, water surrounding the pipe can be sucked in through the hole.

            More on the Cape Town, South Africa, Water Crisis - Gaius Publius - Earlier we wrote about the extreme water shortage in Cape Town, South Africa. Things are so dry there, and the dams so low, that it looked like the city would have to shut off their water taps by April 29, which they’re calling “Day Zero.” Seriously.  This piece updates that information and adds a couple of points. First, the update, via the National Geographic: On Monday, February 5, Cape Town officials announced that the city had gotten “a slight reprieve” and that “Day Zero” had been pushed back to May 11. The reason: Fruit growers and other agricultural operations in the region have used up their annual water allocation, making more water available for the city. “There has not been any significant decline in urban usage,” deputy mayor Ian Neilson stressed in a statement. With a heat wave forecast to increase evaporation from reservoirs, he said, Capetonians must reduce consumption “to prevent the remaining water supplies running out before the arrival of winter rains.”  A few things to note about this:

            • The “growers … have used up their annual allotment.” This means that the agricultural industry there is SOL until the rains start. Translate that to a California context.
            • Urban usage has not declined. The obvious reason is that it’s harder to enforce urban water rationing than agricultural rationing. There seems to be an “I’ll get mine if I can” attitude among city dwellers. The social tensions have started.
            • Reservoirs are dangerously low due to the drought, and since it’s their summer (while we have winter) the heat is causing water evaporation. As of the most recent reports, reservoirs are at just 30% capacity or less, with the last 10% unusable.
            • The end of the crisis will come with the “arrival of winter rains,” hopefully soon after Day Zero. That means around June or so, since their winter is our summer.

            More from the report, first on how water rationing will work after the taps are — yes, literally — turned off by the city: “By late spring, four million people in the city of Cape Town—one of Africa’s most affluent metropolises—may have to stand in line surrounded by armed guards to collect rations of the region’s most precious commodity: drinking water.”

            This is what it's like when your country runs out of water - The Mandrare River is the village’s lifeblood and people from all over the southern region of Amboasary Sud come to its shores every day.  The Mandrare was once so vast a bridge had to be built over it so cars could pass. When BuzzFeed News visited the river as part of trip organized by UNICEF in order to visit the remote area, it was so dry that when people stood in the deepest part, the water hardly reached their knees. Dry seasons normally don’t phase people from Madagascar, known as Malagasy, but a drought that began two years ago has reduced rivers like the Mandrare to glorified puddles, resulting in failed crops and severe acute malnutrition. The massive island country off the coast of Mozambique in the Indian Ocean faces a conundrum unlike that of any other African country: It is so poor that a humanitarian crisis like a water shortage is enough to rattle a resource-thin government to its core, yet it rarely faces the kinds of calamities, like civil war, that normally spur the international community into action. And even when natural disasters do strike, there is no chance of people crossing borders as refugees, often rendering it a self-contained crisis that becomes easy to ignore. Malagasy farmers and aid workers alike are concerned that things will only get worse with time as climate change continues to shift the weather patterns that they've depended on for centuries.  Madagascar is an outcast — geographically, linguistically, and politically, it stands apart in its corner of Africa. Even pneumonic plague’s spread to the capital last year was met with mild concern, because the chance of the viral disease jumping from the island to other countries was low.  Madagascar has managed to avoid the kind of civil unrest or terrorism that has stricken many other countries and grabbed the international community’s attention — like in Somalia, Nigeria, the Democratic Republic of Congo, South Sudan, and Libya. As a result, Malagasy people have largely been left to fend for themselves when disaster strikes, apart from the efforts of local and international NGOs based there.

            Water use climbs in California enclaves as drought returns (AP)— Overall water use is climbing in Southern California as that part of the state plunges back into drought, driving state and regional water managers as they consider permanently reinstating some watering bans and conservation programs. Gov. Jerry Brown lifted California’s drought emergency status a year ago, after a wet winter that snapped a historic 2013-2017 drought, and the state ended his 25 percent mandatory conservation order. Water use has been moving steadily upward since then, especially in a six-county area of Southern California that includes the biggest chunk of the state’s nearly 40 million people. Water use there was up 3 percent in December, the last month for which figures are available, compared to the same month in 2013 before mandatory conservation. Many of the biggest offenders are well-off communities, with sweeping lawns to keep alive. The average residential user in one Malibu water district, for instance, used 255 gallons a day, according to the state water board — three times the U.S. average of 83 gallons per person per day. It’s also up 7 percent from the same month in 2013, before Brown ordered the 25 percent conservation by cities and towns in 2015. The water district for an enclave north of Pasadena, La Canada Flintridge, hit 270 gallons per person, per day water use that month. Residents of an east Orange County water district used 203 gallons a day. Despite a fall and winter that have brought Los Angeles less than one-fourth of normal rainfall, “you still see thick green lawns” in some communities

            A hot, dry winter in California--could it be drought again? -  Atmospheric conditions that helped create the recent multiyear California drought have returned, leaving the state dry and exceptionally warm this winter and its residents wondering if another long dry spell is on the way.A ridge of high-pressure air off the West Coast has persisted for much of the past three months, blocking many Pacific storms from reaching California and weakening others that do get through. Normally such ridges tend to come and go, but they also lingered during the 2012-16 drought, the worst in the state’s history.“We are now seeing another year that looks like one of those drought years,” said Daniel Swain, a postdoctoral researcher at the Institute of the Environment and Sustainability at the University of California, Los Angeles, who during the drought coined the term “ridiculously resilient ridge” to describe the atmospheric pattern.“This one is definitely a resilient ridge, but we don’t know if it’s quite reaching the ‘ridiculous’ threshold,” said Dr. Swain, who blogs about California’s weather.  By one measure, at least, drought has already returned. According to the United States Drought Monitor, most of the southern half of California is now experiencing moderate or severe drought, a marked change from three months ago, when less than 10 percent of the state was in moderate drought and no part was in severe drought. The Los Angeles area has been especially dry. Dr. Swain said that Los Angeles has had only one 24-hour period with rainfall of more than one-third of an inch in nearly a year. The one exception, Jan. 8-9, was the day the Santa Barbara area just to the north was inundated with even more rain, leading to deadly mudslides.

            February 2018 La Niña update: tuned in -- During January, the sea surface temperature in the Niño3.4 region of the tropical Pacific—our primary measurement for ENSO’s ocean component—was close to 1.0°C cooler than the long-term average. This places it comfortably in La Niña territory. The November–January temperature in the Niño3.4 region was also 1.0°C cooler than the long-term average. Our double-dip La Niña’s second year has been stronger than the first, as the greatest departure from average during 2016–17 was -0.7°C.  As Nat showed in his excellent post last week, this is somewhat unusual for a double-dip La Niña, as the second year tends to be a bit weaker than the first. However, as he discussed, the impacts on North American temperature and precipitation tend to be stronger in La Niña’s second year…  The atmosphere continues to respond to the cooler-than-average surface waters in the tropical Pacific, showing all the signs of a strengthened Walker Circulation. Those cooler-than-average waters lead to less rising air and cloud formation in the central Pacific than average, with more rising air and storms forming over the far western Pacific and Indonesia. More evidence of the strengthened Walker Circulation during January was provided by stronger-than-average near-surface winds (the trade winds), as well as stronger west-to-east winds in the upper atmosphere. The stronger trade winds help to keep the surface cooler, and to keep warmer water piled up in the far western Pacific—part of the critical feedback processes that make up ENSO. However, this feedback doesn’t go on forever, and we’re seeing signs that La Niña’s swan song is imminent. From early December to late January, an area of warmer-than-average water centered between about 50 and 200 meters (~160–650 feet) under the surface traveled from the western Pacific to the east-central Pacific. This downwelling Kelvin wave chased away most of the cooler-than-average subsurface waters, leaving La Niña without it’s steady supply of cooler waters.

            La Niña is on its way out. What does that mean for California? - La Niña, the climate system associated with drier and warmer than average winters in Southern California, will likely be over by spring, the National Oceanic and Atmospheric Administration reported Thursday. Scientists regularly look for the formation or absence of the system when predicting weather in the American Southwest. La Niñas are driven by changes in ocean temperatures in the equatorial Pacific, as is the El Niño climate system that typically brings wetter, cooler winters to Southern California.  This winter, La Niña predictions of less rain and snow have been spot on as counties across SoCal have dipped back into to moderate-to-severe drought conditions. Climate scientists began to flag this year's La Niña as a possibility during the summer of 2017 when the waters in the eastern and central tropical Pacific began to cool, an early sign of the system. Through fall and early winter the waters continued to cool, and La Niña strengthened into what is considered a moderate showing of the event. Since then, the waters have begun to warm, indicating that La Niña could be on its way out. NOAA gives it a 55 percent chance of dissipating some time between March and May. But the predicted end of La Niña coincides with the traditional end of California's wet season. While it's always possible the state could get hit by a large storm system, it gets the majority of its precipitation between December and February, and as of right now things aren't looking good. The Los Angeles basin has only received 17 percent of its average amount of rainfall while the eastern Sierra Nevada only has 27 percent of its expected snowpack. While a third year of La Niña isn't likely, it's certainly a possibility.

            Sea Levels Are Surging at Faster and Faster Rates as Antarctica and Greenland Melt, Satellite Data Reveals - Sea levels aren’t just steadily rising—they’re accelerating, according to a new assessment based on 25 years of satellite data. The findings, published Monday in Proceedings of the National Academy of Sciences, confirm what climate projections have already told us. The results reveal that sea level rise has been accelerating for the past 25 years, rather than steadily rising the same amount each year. Assuming the acceleration rate stays the same, which the lead author said is unlikely, sea levels will surge 26 inches by 2100 from climate change alone.  Scientists used satellite data to pinpoint acceleration of sea level rise over 25 years, beginning in 1993. A second part of the study used satellite data tracking tiny fluctuations in gravity due to ice mass loss to trace the acceleration back to melting ice in Greenland and Antarctica. “This study would not have been possible without satellite measurements,” Steve Nerem, lead author and fellow of the Cooperative Institute for Research in Environmental Sciences at University of Colorado Boulder, told Newsweek. “They really are our kind of eye on the Earth.”These so-called eyes on the Earth revealed that sea level rise is not steadily rising at 0.1 inch every year, but rather, that increase is increasing, itself—by 0.003 inches each year. Though these numbers sound small, tiny increases across the globe over several decades can result in devastating consequences from sea level rise on coastal cities alone. Storm surges and salt water intrusion into aquifers where some communities get their drinking water are just two examples. Assuming the acceleration rate that this study found stays consistent throughout the century, sea levels will rise 26 inches by 2100, the authors concluded. But, that number “is almost certainly a conservative estimate of future sea level change,” Nerem said. “The acceleration will probably go up as ice sheets start to respond more to the warming.”

            Global sea level rise rate speeding up, 25 years of satellite data confirms - The rate of global sea level rise is accelerating as ice sheets in Antarctica and Greenland melt, an analysis of the first 25 years of satellite data confirms. The study, by US scientists, has calculated the rate of global mean sea level rise is not just going up at a steady rate of 3mm a year, but has been increasing by an additional 0.08mm a year, every year since 1993.If the rate of change continues at this pace, global mean sea levels will rise 61 centimetres between now and 2100, they report today in the journal Proceedings of the National Academy of Sciences."That's basically double the amount you would get if you only had 3 mm a year with no acceleration," said the study's lead author Steven Nerem of the University of Colorado.But that figure, which is broadly in line with climate modelling, is likely to be a conservative estimate of global mean sea level rise in the future, said Professor Nerem."When you try to extrapolate numbers like this you're assuming sea level change and acceleration are going to be the same as they've been over the past 25 years."But that's probably not going to be the case."We're seeing changes in Greenland and Antarctica that are almost certainly going to be bigger than that in the future," he said. Sea levels have been recorded by a series of four satellites, starting with the 1992 launch of the TOPEX/Poseidon satellite, in addition to long-term data captured by tidal gauges. An analysis of tidal gauge records and decadal changes in satellite data in the past had indicated global mean sea level rise was accelerating, but it had been hard to pin down a number.

            Court sides with Arctic seals losing their sea ice habitat to climate change -- A federal appeals court ruled on Monday that Arctic ringed seals must be protected under the Endangered Species Act because of their reliance on the sea ice, which is rapidly disappearing as the planet warms. The seals—named for the light-colored circles that dot their coats—build lairs on the surface of the sea ice to birth and protect their young. That puts them, like other species that rely on the ice, in a precarious position as it vanishes."This major victory gives ringed seals vital protections in the face of climate change and melting sea ice," said Kristen Monsell, an attorney from the Center for Biological Diversity who argued the case. Protecting the seals means guarding their habitat, and that could impinge on oil and gas operations along Alaska's waters, which the state relies on for revenue. The protected status comes with a requirement that the federal government designate areas as "critical habitat" for the seals. That could complicate efforts by the industry—and by the state and federal government—to increase development in the area.The ultimate protection for Arctic habitat requires ending the emissions from fossil fuel use entirely, an ambition that so far has eluded the world.The Arctic has been seeing record lows in the extent of sea ice for this time of year. January 2018's ice extent was even less than January of the previous year, when it was at a record low for the month. There was roughly 42,500 square miles less ice this year than in 2017—an area of missing ice about the size of Virginia.

            Miami could be underwater in your kid’s lifetime as sea level rise accelerates -  Sea-level rise is accelerating around the world, thanks to ongoing melting of ice sheets in both Antarctica and Greenland, a new study suggests.At the current rate of melting, the world's seas will be at least 2 feet higher by the end of the century compared to today, according to research published in the Proceedings of the National Academy of Sciences.Such a rise could leave portions of the world’s coastal cities underwater. It would also increase high tides and worsen storm surges."This acceleration ... has the potential to double the total sea level rise by 2100 as compared to projections that assume a constant rate — to more than (2 feet) instead of about (1 foot)." said Steve Nerem, the study lead author and a professor of aerospace engineering sciences at the University of Colorado in Boulder."And this is almost certainly a conservative estimate," he added. Scientists looked 25 years of satellite data to calculate the levels of Earth's seas. Sea-level rise, one of the most clear-cut signals of global warming, has risen nearly 8 inches worldwide since 1880 but, unlike water in a bathtub, it doesn't rise evenly. In the past 100 years, it has climbed about a foot or more in some U.S. cities because of ocean currents and the natural settling of land — 11 inches in New York and Boston, 12 in Charleston, 16 in Atlantic City, 18 in Norfolk and 25 in Galveston, Texas, according to a USA TODAY analysis of tide gauge data collected by the National Oceanic and Atmospheric Administration.Here's why: As the Earth's temperature warms, so do the seas. Heat-trapping greenhouse gases cause more land ice — glaciers and ice sheets — to melt and water to expand. Warmer water simply takes up more room than cooler water. Of the 3 inches of sea-level rise in the past quarter century, about 55% is from warmer water expanding, and the rest is from melting ice.

             Microplastics pollute most remote and uncharted areas of the ocean - Microplastics have been found in some of the most remote and uncharted regions of the oceans raising more concerns over the global scale of plastic pollution.Samples taken from the middle of the South Indian Ocean – at latitude 45.5 degrees south – show microplastic particles detected at relatively high volumes. Sören Gutekunst, from the Geomar Helmholtz Centre for Ocean Research in Kiel, who analysed the samples, said the data showed 42 particles per cubic metre, which was surprising given the remoteness of the area. “Data on microplastics has not been taken from this extremely remote area before and what we found was relatively high levels,” he said. “There are places in the ocean which are not being observed and that is why it is so special for us to be doing this. It is amazing that we have the opportunity and this could lead to much further knowledge about what is happening with microplastics in the ocean.” The samples were gathered by a research vessel taking part in the Volvo round-the-world ocean race as it skirted around the Antarctic exclusion zone. The race takes them through ocean areas so remote they have never been sampled before, allowing Gutekunst and his team to collect new data. Gutekunst said research on microplastics in the ocean was in its relative infancy. Currently scientists can only account for 1% of the plastic they think is in the ocean.

            Queen Elizabeth is behind a royal push to cut plastic waste - WaPo - Queen Elizabeth has long expressed admiration for David Attenborough, an environmentalist with a track record of creating beautiful, compelling movies about our planet.Most recently, he produced a conservation series called “Blue Planet II.” The seven-part documentary, which was broadcast on the BBC last year, showcased the weird and wonderful species of the oceans. But it also explored the disastrous effects of waste on the world's waters.The show was a hit in Britain, and it spurred top officials to take a serious look at reducing plastic waste. Britain's environmental secretary, for example, told reporters that he was “haunted” by the program and that his department is considering initiatives such as a national bottle-return system, an increase in drinking-water fountains and a new push for people to use reusable coffee cups.Now, Queen Elizabeth II also is pushing for environment-friendly changes in her own back yard. The Telegraph reports that she's behind Buckingham Palace's new waste-reduction plans, which will ban straws and bottles at all royal estates. Straws will be phased out of public cafes at royal residences and banned from staff dining rooms. Royal caterers will be required to use china plates and glasses. A palace spokesman told the press that there was a “strong desire to tackle the issue” at the highest levels. “Across the organisation, the Royal Household is committed to reducing its environmental impact,” he said, according to the Telegraph.

            Journey to the waste: has the West learned its lesson from China’s plastic ban? -  South China Morning Post: China’s ban on imported plastic waste may be boosting the bottom line for Southeast Asian recyclers, but the industry risks being overwhelmed if Western countries don’t do more to address their throwaway habits. That is the message from recyclers concerned that countries such as Indonesia, Vietnam and Malaysia are being asked to take on too much, too soon following China’s ban on 24 types of imported waste, which came into force on January 1. They say that if the issue is not addressed, regional countries could be forced into following China’s lead by implementing their own bans. Before China’s regulation, the country had been importing almost seven million tonnes of plastic scrap annually, valued at more than US$6 billion, making it the world’s top market for exporters such as the United States, Britain and Japan. Much of that scrap has now been redirected towards Southeast Asia, generating concerns that it will complicate regional waste disposal efforts and cause the same environmental problems that prompted the clampdown in China.

            China Reassigns 60,000 Soldiers to Plant TreesEarlier this year , the Chinese government announced plans for a major reforestation project—growing 6.66 million hectares of new forests this year, an area roughly the size of Ireland. To achieve this goal, China has reassigned more than 60,000 soldiers to plant the trees. According to the Asia Times , a large regiment from the People's Liberation Army, along with some of the nation's armed police force, have been withdrawn from their posts near the northern border to work on the task.  The majority of the troops will be dispatched in the heavily polluted industrial province of Hebei, which has pledged to raise total forest coverage to 35 percent by the end of 2020.China's State Forestry Administration aims to increase the whole country's forest coverage rate to 23 percent from 21.7 percent by the end of the decade. Then from 2020 to 2035, China plans to further boost the percentage of forest coverage to 26 percent. China is the world's largest emitter and remains heavily dependent on coal, but has been cleaning up its act in recent years due to concerns over the impacts of air pollution and climate change . The country is investing heavily in renewable energy , energy efficiency and electric cars .

            Fires in the Amazon are a problem for the entire planet - The Amazon Rainforest is known to emit a whopping 255 million metric tons of carbon a year. The reality is that this number could be much, muchhigher due to forest fires that South American governments don’t typically quantify, according to a study out in Nature Communications Tuesday.This study involved a regional assessment of the Brazilian Amazon and the fires that ravaged the forest during drought years between 2003 and 2015. When people cut down trees, they usually burn them, too, explains Luiz Aragão , the lead author of the study who also runs the tropical ecosystems and environmental sciences group at Brazil’s National Institute for Space Research. These are the emissions governments typically quantify when calculating deforestation emissions in the Amazon. “What we have to do is really start reporting these emissions to know the magnitude and be able to develop policies that will mitigate this type of event.” Aragão and his team found, however, that the wildfires that spread away from man-made fire use during drought to, for example, burn crops or clean pasture land, can double the amount of carbon emissions during these dry spells. While deforestation rates have beendropping in Brazil (though some are skeptical of this data), the number of wildfires is not. And carbon is still being released: a whole 454 million metric tons of CO2 on average a year. The numbers fluctuated from year, to year, with years like 2009 and 2011 seeing less carbon emissions, and other years like 2005 and 2007 seeing dramatically higher levels of carbon emissions. To compare, 454 million metric tons was close to Italy’s total annual carbon emissions in 2015.

            At Least 197 Eco-Defenders Murdered in 2017 - At least 197 environmental activists and eco-defenders around the world were murdered in 2017 — nearly four deaths per week, according to a shocking new report from Global Witness and The Guardian newspaper. The deaths included farmers murdered by soldiers while defending their ancestral lands from coffee plantations in the Philippines; an indigenous leader allegedly killed by rebels in Colombia; and wildlife rangers slain by poachers in multiple countries. One of the most infamous cases was the January 15, 2017 murder of Isidro Baldenegro López, an indigenous activist in Mexico who had earlier won the Goldman Environmental Prize for standing up to illegal logging. Mexico is now the fourth most dangerous countries for land-defenders, with 15 murders in 2017, according to Global Witness. Latin America overall was considered the deadliest part of the world for activists. Brazil had the highest number of murders, 46, followed by Colombia with 42. The Philippines was a close third with 41 reported homicides.Agribusiness and mining were linked to 60 percent of 2017’s deaths.“Until companies, investors and governments genuinely include communities in decisions around the use of their land and natural resources, the people who dare to speak out will continue to face violence, imprisonment and loss of life,” Rachel Cox, a campaigner for Global Witness, wrote on their website. In addition to the murders, Global Witness says many activists are intimidated or silenced with death threats, sexual assaults and aggressive lawsuits (the latter of which have become particularly prevalent). Meanwhile, the murders continue in 2018. Most recently, three Cambodian rangers and law-enforcement officers were killed just hours after locating and illegal logging camp on the Cambodia-Vietnam border. They are survived by their wives and daughters, the youngest of which is just two and a half months old.

             How Lobbyists Normalized the Use of Chemical Weapons on American Civilians - General Amos Fries’s passion shone through as he spoke. In a 1921 lecture to military officers at the General Staff College in Washington, DC, Fries lauded the Chemical Warfare Service for its wartime achievements. The US entered the chemical arms race “with no precedents, no materials, no literature and no personnel.” The 1920s became a golden age of tear gas. Fries capitalized on the US military’s enthusiastic development of chemical weapons during the war, turning these wartime technologies into everyday policing tools. As part of this task Fries developed an impressive PR campaign that turned tear gas from a toxic weapon into a “harmless” tool for repressing dissent.Manufacturers maneuvered their way around the Geneva Protocol, navigating through international loopholes with ease. But these frontier pursuits could not last forever. The nascent tear gas industry would come to face its biggest challenge yet, in the unlikely form of US senators. In the 1930s two separate Senate subcommittees were tasked with investigating the dodgy sales practices of industrial munitions companies and their unlawful suppression of protest. General Fries’s deep personal commitment to save the Chemical Warfare Service won him both allies and critics, often in the same breath. Already known for his staunch anticommunism and disdain for foreigners of all kinds, Fries was an unapologetic proponent of military solutions for dissent both at home and abroad. A journalist for the Evening Independent wrote that Fries was often “accused of being an absolute militarist anxious to develop a military caste in the United States.” But to those who shared his cause, Fries was an excellent figurehead for Chemical Warfare. A family man, a dedicated soldier, and a talented engineer, Fries was the perfect face of a more modern warfare.

            Scientists warn of unusually cold Sun: Will we face another ice age? -- A study by the University of California San Diego has claimed that by 2050, the Sun is expected to become cool. You might think "what's the big deal," but remember that this means the solar activities that create the heat of the Sun to sustain life on Earth may diminish. And the last time it happened was in the 17th century when the Thames River froze. Scientists call this the "Maunder Minimum".Physicist Dan Lubin at the university and his team studied the past event and concluded that we are in for a worse case. The Sun is expected to get much dimmer than last time and, in scientific terms, it is a "grand minimum" -- a time period in the 11-year solar cycle when the solar activities are at the lowest point. Scientists also said that the Sun might have another cooling period in a decade. However, predicting a solar minimum or maximum is a challenge to scientists because of the non-linear characteristic of solar activities that happens every day. During a minimum cycle, though solar cycles still occur, the intensity is very low, while during a maximum cycle, solar flares go up and sun spews out billion-ton clouds of electrified gas into space. These two extremes can bring about some major global and regional climate changes.  Are you now wondering what effect grand minimum will have on Earth?   Lubin said such cold spells thin out the stratospheric ozone layer first, which will affect wind and weather patterns. He also warned that not all regions will experience a dip in temperature. Rather, in some places, the mercury will rise.

            Leaked U.N. climate report sees ‘very high risk’ the planet will warm beyond key limit -- A draft United Nations climate science report contains dire news about the warming of the planet, suggesting it will likely cross the key marker of 1.5 degrees Celsius, or 2.7 degrees Fahrenheit, of temperature rise in the 2040s, and that this will be exceedingly difficult to avoid. Temperatures could subsequently cool down if carbon dioxide is somehow removed from the air later in the century, the document notes. But that prospect is questionable at the massive scales that would be required, it observes. The 31-page draft, a summary of a much-anticipated report on the 1.5 degrees Celsius target expected to be finalized in October, was published by the website ClimateHome on Tuesday. The website said the document had been “publicly available on the U.S. federal register over the past month.” Last month, several news outlets, including Reuters, quoted from the draft but did not publish it in full. The 1.5 C target is crucial to small island nations worried about rising seas, and other nations particularly vulnerable to warming, and was explicitly included in the Paris climate agreement as the more ambitious of two climate goals, the other being 2 degrees C (3.6 degrees Fahrenheit). The draft document states that there is a “very high risk” of the planet warming more than 1.5 degrees above the temperature seen in the mid-to-late-19th century. Maintaining the planet’s temperature entirely below that level throughout the present century, without even briefly exceeding it, is likely to be “already out of reach,” it finds. Jonathan Lynn, spokesman for the United Nations’ Intergovernmental Panel on Climate Change, which is producing the study, cautioned that the draft is a work in progress. 

            Keeping the world below 2°C of warming needs tech we don’t have -- The analysis is well known to everyone who has paid even a little attention: the world hasn’t yet done enough to lessen the impacts of climate change. The last Intergovernmental Panel on Climate Change report included greenhouse gas emissions scenarios that could limit global warming to two degrees Celsius or less, but we’re not even close to a trajectory that would achieve any of them. But there’s something about those two-degrees scenarios you may not know, which climate scientists have been talking a lot about recently. Those scenarios involved a substantial deployment of technologies to actively remove CO2 from the atmosphere. Without those technologies, we’re even further from sufficient emissions cuts.That leaves us with a crucial question: can carbon dioxide removal techniques be scaled up to the necessary level in time? A new European Academies Science Advisory Council (EASAC) report—reviewed and endorsed by the national academies of more than two dozen countries—evaluates the outlook for carbon dioxide removal. And it’s not optimistic.The report looks at a number of options, including reforestation, soil management, plankton fertilization, industrial CO2 capture plants, biofuels with emissions injected underground for storage, and even the boosting of bedrock weathering reactions.In the two-degrees emissions scenarios, these techniques have to start soaking up at least 11 billion tons of carbon dioxide per year around 2050 in order to offset our continued emissions. If we bank on that future offset, but it fails to materialize, we will find that it’s too late to cut our emissions and limit global warming to two degrees Celsius.  The EASAC report finds that few options look like they could scale up to three or four billion tons. And more importantly, none is on track to do so at this point. Reforestation and accumulating carbon in agricultural soils are probably the easiest options to make progress on, for example, but we’re currently still doing the opposite of these things: deforestation and soil degradation are adding to our greenhouse gas emissions, not counteracting them.

            Wait—the Ozone Layer Is Still Declining? -- In 1985 scientists reported something very unsettling: They had found a hole in the planet’s ozone layer over Antarctica. The culprits, they said, were humans emitting chemicals that depleted atmospheric ozone above the South Pole and the rest of the globe. Because the ozone layer protects us and other organisms from harmful solar radiation, the international community united in 1987 to sign the Montreal Protocol, which phased out use of such chemicals. The protocol, widely considered a huge success since its enactment, significantly dropped the level of ozone-depleting chemicals in the atmosphere, and the “hole” over Antarctica has been shrinking. Yet in a new study published in Atmospheric Chemistry and Physics, scientists report that one crucial section of the ozone layer still seems to be declining steadily. The ozone layer resides in the stratosphere, the region of atmosphere from 10 to 50 kilometers above Earth’s surface. This blanket of gas is vital for life on Earth—it absorbs the sun’s ultraviolet radiation, which can damage DNA and also promote skin cancer and other harm to humans, wildlife and crops.  Thanks to the protocol, from the late 1990s on, ozone in the stratosphere “looked like it wasn’t going down anymore, which is a massive success,”  But precise measurements of the lower stratosphere have been difficult to make. “One of the key problems that’s been left unresolved is that in the lower stratosphere, there’s lots of variability that we don't capture in the approach that we typically take to work out what the trends are,” Ball says. For their study, they synthesized and then analyzed multiple satellite data sets of atmospheric ozone. The data cover the tropics and mid-latitudes, from 1985 through 2016. The team found ozone in the upper stratosphere has indeed rebounded since 1998. They observed, however, no significant upward or downward trends for the middle stratosphere, or for the total ozone column—the sum of the troposphere and stratosphere—since 1998. Starting in 1985 “you can see [the total ozone column] is going down,” Ball says.  Ball’s team found the ozone in the lower stratosphere has slowly, continuously dropped since 1998.  The finding is important because the lower stratosphere contains the largest fraction of the ozone layer.

            Shareholder Proposals Target Climate Change Risk -  Shareholder proposals that require companies to disclose specific climate change risks will increase during this proxy season, especially for non-energy companies, according to this report from last week’s Wall Street Journal, More Shareholder Proposals Spotlight Climate Change.As the Trump administration has backed away from extending even the modest efforts on climate change initiated by his predecessor– let alone initiating any policy even remotely adequate toward confronting the magnitude of the problem– three types of efforts loom larger. First, are those  by other countries to move away from fossil fuels, toward renewable sources of energy. These are not limited to developed countries, but as I wrote here, now also include  China and India, the world’s two most populous countries, each of which is attempting to curtail use of fossil fuels. admittedly often motivated by the price drop for renewable alternatives. Second, US states and localities are promoting their own climate change initiatives. And finally private efforts to force greater awareness and accountability concerning climate change risk are also coming to the fore, as discussed in last week’s Journal piece:Investors in the U.S. so far submitted 66 resolutions about climate change in the 2018 proxy season, according to ISS Corporate Solutions, a consultancy unit of Institutional Shareholder Services.Of that total, 17 are seeking risk assessments based on the 2-degree scenario embedded in the U.N.’s Paris Agreement, which aims to limit the average rise in temperatures to below 2-degrees Celsius of pre-industrial levels. There were 18 2-degree scenario proposals for all of 2017, eight in 2016, one in 2015, said ISS.More shareholders are voting in favor of 2-degree scenario resolutions; support for the greater disclosures reached an average 45% in 2017, up from 32% in 2016, ISS said.

            Exxon targeting opponents in climate-change battle: report | TheHill: ExxonMobil is going after individuals and groups who are suing the oil giant, slapping them with lawsuits and legal threats of its own. Bloomberg reported Tuesday that Exxon has put at least 30 people and groups in its crosshairs as it seeks to push back against what it says is an effort by lawyers, state officials and environmental groups to smear the company. Exxon alleges that the public relations and legal campaign against it was developed six years ago in La Jolla, Calif. The company has dubbed the alleged crusade against it the "La Jolla playbook," according to Bloomberg.Exxon and other oil and gas companies have been the target of lawsuits by New York City and eight cities and counties in California alleging that the companies tried to cover up evidence of climate change. New York Attorney General Eric Schneiderman and Massachusetts Attorney General Maura Healey are also investigating whether Exxon sought to mislead shareholders and consumers by whitewashing information on climate change. Exxon has denied those allegations and has said that it recognizes the reality of climate change. "The attorneys general have violated Exxon Mobil’s right to participate in the national conversation about how to address the risks presented by climate change," Dan Toal, a lawyer for Exxon, told Bloomberg. "That is the speech at issue here — not some straw man argument about whether climate change is real." 

            The left’s civil war over climate change - America’s Democratic Party, environmental groups and clean-energy leaders pushing action on climate change are at odds over how best to address it.   Conflict is erupting over the best technologies and messaging, and experts worry the fighting could stifle progress toward the big thing they agree on: the need to address climate change. The divisions, brewing for years, are escalating in the face of a Republican-run government that doesn’t recognize the issue at all. The main flashpoint: how large a role renewable energy should play in America’s future energy mix, compared to other low-carbon resources not as politically popular but that most experts say are needed to cut greenhouse gas emissions in cost-effective ways.  One vocal faction is pushing for 100% renewable energy, neglecting nuclear power and fighting all fossil fuels, infrastructure to move them and technologies burning them more cleanly. These drastic actions are required given the urgent threat climate change poses, leaders of this agenda say, including:

            • The environmental groups and Sierra Club.
            • Some progressive lawmakers at the federal level, led by Sens. Bernie Sanders and Jeff Merkley.
            • Actors Leonardo DiCaprio and Mark Ruffalo.
            • Stanford University professor Mark Jacobson, who has published controversial studiesone just last week — finding economies that run 100% on renewable energy in the U.S. and around the world are possible by 2050.

            Beyond that faction, positions are not as clearly defined or vocal, but the shared theme supports a broader mix of low-carbon technologies cutting greenhouse gas emissions. This includes big increases in wind and solar but also nuclear power and technology capturing carbon emissions from fossil fuels.Natural gas, which burns 50% less carbon emissions than coal, is also considered an inevitable temporary step away from coal to renewables. This view comes amid growing criticism about emissions of methane, a potent greenhouse gas that's the main component of gas, and the Trump administration's regulatory rollback of methane rules.

            Climate Change Costs Insurance Companies Billions, And Price is Rising - (Real News Network, video and transcript) According to a recent analysis by Munich Reinsurance Company, in 2017, climate and weather disasters broke insurance records with insurance claims due to natural disasters reaching a record $135 billion. The world's largest insurance firm said that the United States, which faced three major hurricanes last year and multiple major wildfires, made up nearly 50% of global insured losses compared to its average rate of 30%. The 2017 hurricane season caused $215 billion in damages worldwide, making it the costliest hurricane season on record.  How is the insurance industry dealing with effects and risks of climate change? Could it become harder for companies and individuals to have insurance in the face of increased risk due to human-caused global warming? With us to discuss this, I'm very pleased to be joined again by Anthony Hobley, CEO of think tank Carbon Tracker. Carbon Tracker carries out in-depth analysis on the impact of energy transition on capital markets. Thanks for joining us again, Anthony.

            Climate Friendly? Congress Passes Carbon Capture and Storage Tax Breaks -- Nestled inside the U.S. budget lawmakers passed Friday morning were tax breaks for an array of energy sources, including some struggling and controversial projects and technologies. A bipartisan coalition of lawmakers, including several Democrats from coal -producing states, pushed through extended tax breaks for carbon capture and storage technologies (CCS) in the new bill, expanding a tax credit created in 2008 for 12 years.  The CCS extenders have drawn praise from a diverse collection of fossil fuel and clean energy camps, but also skepticism from some groups who claim the credits have been used only to subsidize increased oil production. The budget also extended a credit for nuclear power plants that will primarily help the struggling Vogtle plant in Georgia. As reported by InsideClimate News , a coalition of environmental groups including Earthjustice , Friends of the Earth and Greenpeace USA opposed the credits and said they "have not delivered measurable progress toward more climate friendly uses of carbon such as permanent sequestration or utilization, and appear to only have been used to increase oil production."  In a blog post Wednesday, Elizabeth Noll, legislative director for transportation and energy at the Natural Resources Defense Council , wrote, "Carbon capture can be a useful tool to reduce emissions of dirty power plants and industrial sources, but we need to strengthen accountability, not weaken it, to ensure taxpayer investments are benefiting them."

            White House proposes 25 percent cut to EPA funding | TheHill: President Trump's budget proposal for fiscal 2019 contains a 25 percent cut to funding for the Environmental Protection Agency (EPA). The plan, released Monday, calls for the agency's overall funding to drop to $6.1 billion, down from the $8 billion Congress enacted in 2017. The proposed reductions are in line with the steep cuts — just over 30 percent — that the White House's Office of Management and Budget (OMB) proposed for the agency for fiscal 2018. In fact, according to the the text of the budget proposal, OMB had originally suggested even deeper cuts this year for the agency — a 34 decrease — but the numbers were raised following Congress's decision last week to raise spending caps. Lawmakers declined to enact most of Trump's budget proposals last year, and it appears unlikely that the EPA cuts will ever come to pass, given Democratic opposition. There are some notable changes to the new budget proposal for the EPA. The agency proposes to reduce categorical grants by $469 million from the 2017 enacted budget's $1 billion in order to "better focus and prioritize environmental activities on core functions required by Federal environmental laws." Instead, it proposes putting $27 million into what it calls multipurpose grants that would allows states use the funding to set their own environmental priorities. The latest budget also continued to ask for cuts to research and development. The proposal would cut the program nearly in half. However, parts of the budget indicate that the White House listened to critiques from lawmakers and the public following the last budget release. The new plan would continue to fund two geographic programs at the Chesapeake Bay and Great Lakes, though still dropping their budgets by 90 percent. Last year the White House budget proposed zeroing out all geographic programs. This year's proposal still suggests cutting all funding to the other seven programs. 

            Trump, Citing ‘Redundancies,’ Again Proposes Steep Cuts to the EPA - Months after three major hurricanes devastated Texas, Florida and Puerto Rico, the White House once again proposed slashing spending on government programs to combat climate change and protect communities from the flooding it could unleash.The White House also suggests cutting the Environmental Protection Agency’s budget by at least a quarter, reducing the EPA to levels not seen since 1991, according to a budget blueprint proposed Monday. The budget request dovetails with an infrastructure plan also unveiled Monday that would pare federal environmental reviews and make it easier to put pipelines on federal land."It’s just completely divorced from the reality of the last 12 months," said Collin O’Mara, head of the National Wildlife Federation, adding that both proposals would force the U.S. to pay for environmental damage after it occurs instead of mitigating impacts in advance. "We’re seeing storms in very liberal and very conservative areas. They’re not discriminating at all, and yet people are picking up the pieces of their lives because we’re not making smart policy and smart investments right now."The budget plan -- which faces a highly uncertain future in Congress -- would end several programs studying global warming, cut aid to countries on the front lines of climate change and halve spending on government flood mapping. It mirrors President Donald Trump’s previous budget-cutting proposals, many of which were rebuffed by Congress.  "The president’s proposal represents a commitment to getting the government back to its basic functions," said Tom Pyle, president of the American Energy Alliance, a free-market advocacy group. The administration would strike funding for climate and environmental programs across the federal government, wherever it believes the initiatives exceed authority, duplicate spending or are out-of-line with Trump’s goals, according to the budget documents released Monday.

            Trump's Infrastructure Plan 'Steamrolls' Environmental Safeguards -- President Donald Trump boasted " a big week for infrastructure " Monday as the White House announced its long-awaited $1.5 trillion plan to improve the nation's roads, buildings and power supplies.  Infrastructure is usually a bipartisan, consensus issue, but environmental groups criticized the White House's initiative, as it involves a drastic rollback of federal environmental review to shorten the process of approving infrastructure projects.  "President Trump's infrastructure proposal is a disaster," Shelley Poticha, the managing director of the Healthy People & Thriving Communities Program at the Natural Resources Defense Council , said in a statement. "It fails to offer the investment needed to bring our country into the 21st century. Even worse, his plan includes an unacceptable corporate giveaway by truncating environmental reviews."  Regulatory oversight for infrastructure projects usually falls to the U.S. Environmental Protection Agency, the Army Corps of Engineers, the U.S. Fish and Wildlife Service and other agencies. Instead, the White House plan calls for the creation of a "one agency, one decision" scheme, or one lead federal agency to streamline environmental review and the permitting process within 21 months.  As Trump said last month in his State of the Union address: "Any bill must also streamline the permitting and approval process—getting it down to no more than two years, and perhaps even one."  The Wilderness Society has also listed a number of concerns about the infrastructure blueprint:

            • • Dismantling basic environmental safeguards. The leaked version of Trump infrastructure plan would eviscerate the National Environmental Procedures Act (NEPA) by collapsing time lines, freezing out experts and delegating federal authority to states and private interests.  Billed as "streamlining," the infrastructure proposal steamrolls over a wide array of safeguards that protect the nation's air, waters and land.
            • Pipelines through parks. The infrastructure plan would give Interior Secretary Ryan Zinke the authority to approve natural gas pipeline routes that cut through national parks.
            • • Paying for infrastructure by selling off public lands. The White House document on infrastructure called "Funding Principles" included a section titled “Disposition of Federal Real Property." That provision would give the president authority to use executive orders for "disposal of Federal assets to improve the overall allocation of economic resources in infrastructure investment."

            Trump seeks $2 billion nuclear spending boost, clean energy cuts for Energy Dept. -- The Trump administration’s fiscal 2019 budget might never become law, but it’s a declaration of intent, and it would reshuffle priorities at the Energy Department, boosting outlays on nuclear security and slashing spending on renewables and energy efficiency. Overall, the administration is asking Congress for $30.6 billion for the Energy Department, a 1.3 percent increase from fiscal 2017. That includes $1.6 billion added to the department’s budget after a last-minute spending deal was reached in Congress last week. The administration wants a 17.5 percent increase for the department’s National Nuclear Security Administration (NNSA), which safeguards the nation’s stockpile of nuclear weapons. The NNSA makes up nearly half the department’s budget, and under the 2019 proposal, it would get $15.1 billion, up from $12.8 billion in fiscal 2017. “Our nuclear weapons program has been pushed back and pushed back and pushed back for years,” Energy Secretary Rick Perry said at a briefing Monday. “They haven’t been able to keep up with modernization work that is needed to occur in that space for maybe decades.” At the same time, the administration is asking for deep cuts elsewhere, especially in the agency’s Office of Energy Efficiency and Renewable Energy, which studies advanced transportation and wind and solar energy. The budget requests $696 million for that program, a 66 percent cut from the 2017 budget. That number includes $120 million added back after the recent two-year budget accord. The budget deal two weeks ago also meant that OMB restored $1.2 billion to science programs that would have been cut deeply. The administration also restored money for carbon capture and storage, often dubbed “clean coal.” The process captures carbon dioxide and stores it in various ways. Although a likely favorite for pro-coal Trump, last year he proposed slashing the program by 55 percent. The 2019 budget proposal finds additional money because of the budget deal and asks for $503 million. Though a more modest cut than expected, that’s still a 20 percent decrease from the $631 million the program received in 2017.

             Trump’s budget proposal is out, and he really wants to kill ARPA-E - On Monday afternoon, the Trump administration released a budget proposal (PDF), including new figures for the Department of Energy (DOE). This budget proposal is just an opening salvo—Congress must approve the budget before it takes effect, and without a doubt there will be negotiations over the details. This year's suggested changes to the DOE budget track the ones found in the president’s first budget proposal in 2017. Notably, the proposed budget yet again eliminates the popular Advanced Research Projects Agency—Energy (or ARPA-E) program, which has funded early-stage energy research through a federal grant program for years. The main text of the budget proposal says the DOE ought to receive $29 billion, down from about $30.1 billion, but an addendum text adds another $1.533 billion to the DOE budget, which would reflect a budget increase of about $500 million over what the DOE received in 2017.However, despite a relatively stagnant budget for the DOE, renewable energy programs will be cut dramatically beyond the elimination of ARPA-E. Under the plan, the Office of Energy Efficiency and Renewable Energy sees its budget cut from around $2 billion to $696 million (PDF). ARPA-E was slated for elimination in Trump’s budget proposal last year, but Congress ended up allotting the energy projects incubator $15 million more than it was initially supposed to receive. The program provides grants to early-stage energy-related startups in every state, so red states and blue states alike benefit. ARPA-E has successfully funded not just renewable energy programs but also energy efficiency research and vehicle fuel research. But this year the Trump administration is trying to kill it again, eliminating the entirety of the program’s $305 million from the DOE’s budget. In a document detailing the elimination (PDF), the administration writes: “there has been concern about the potential for ARPA-E's efforts to overlap with Research & Development (R&D) being carried out, or which should be carried out, by the private sector.” (On the contrary, ARPA-E's directive is to fund technology that is uniquely too early in its development for private sector funding.) The document goes on to say that the Energy Department should redirect any unobligated balances in ARPA-E’s coffers and transfer any remaining contracts elsewhere in the DOE, “to ensure full closure of ARPA-E by mid-2020.”

            Top EPA science adviser has history of questioning pollution research - In 2015, the top toxicologist for the state of Texas, Michael Honeycutt, was interviewed on Houston Public Radio. At the time, the Environmental Protection Agency was pushing for tighter limits on ozone, a type of air pollution that is hazardous for people with asthma and other respiratory diseases.But Honeycutt said reducing air pollution could be dangerous."Houston and Los Angeles are going to lose people. People are going to die," he said. "According to EPA, people are going to die from lowering these standards," he continued, referring to the proposed tightening of ozone regulations.Now, Honeycutt is the top science advisor for the EPA, a position that gives him potentially broad influence over how scientific data is incorporated into EPA policy. But many scientists say his comments on ozone and air pollution are one indication that he's a poor choice for the position."He misrepresents the science. Pollution is not good for your health," says Elena Craft, the senior health scientist for the Environmental Defense Fund in Texas. "His positions generally are totally inconsistent with mainstream thinking. There's just never enough evidence to persuade him on environmental issues," Craft says. "It's frightening, honestly."

            Trump Administration Said to Eye Big Cuts to Fuel Economy - President Donald Trump’s administration is looking at ways to reduce future fuel economy standards for automobiles in a move to appease carmakers, who have asked to ease targets put in place under President Barack Obama.The National Highway Traffic Safety Administration is looking at a range of options to lower future targets, including one that would permit an average fleetwide fuel economy standard of 35.7 miles per gallon by 2026, down from the 46.6 miles per gallon under rules charted by the Obama administration, according to a draft NHTSA analysis obtained by Bloomberg News.Under that scenario, the agency projects an estimated 10 percent of new cars and light trucks sold in 2030 would need to be hybrid or plug-in electric to comply with the standards. That compares to 61 percent under the Obama-era proposal, according to the document. The draft analysis, dated Jan. 22, outlines several alternatives to NHTSA fuel economy standards for upcoming model years that were charted during the Obama administration. Other scenarios offer less aggressive cuts to future standards. The document doesn’t specify a preferred scenario. The draft also indicates NHTSA may propose standards for as early as the 2021 model year and as far in the future as model year 2026, giving automakers additional time to achieve reductions in fuel consumption. The documents provide a glimpse into negotiations now going on between NHTSA, the Environmental Protection Agency and California regulators over the fate of one of the Obama administration’s signature environmental policies. At the end of March, NHTSA plans to begin the process of putting rules in place that will set new fuel economy rules for 2022 to 2025. The proposal could set the Trump administration on a collision course with California regulators, who have vowed to defend their own efficiency standards.

            U.S. Intelligence Agencies Break With Trump Over Climate Threats - The U.S. intelligence community is at odds with the White House about threats America faces from climate change. The nation’s intelligence agencies are warning, in the annual Worldwide Threat Assessment, of global instability if climate change continues unabated, according to a report submitted for a hearing Tuesday before the U.S. Senate Select Committee on Intelligence.  “The impacts of the long-term trends toward a warming climate, more air pollution, biodiversity loss, and water scarcity are likely to fuel economic and social discontent -- and possibly upheaval -- through 2018,” the report states.  The intelligence report describes how warming temperatures will exacerbate disasters, war, shortages, economic volatility and migration. Citing research showing that human activities have accelerated extinctions worldwide 100 to 1000 times normal rates, the analysts write that losses “will jeopardize vital ecosystems that support critical human systems.” Two recent policy papers from the Department of Defense carried no such alarms about the warming world, placing the military nominally in line with the president’s actions and reversing a position adopted by President George W. Bush’s Pentagon in 2008.

             Trump budget targets hundreds of National Weather Service jobs: report | TheHill: President Trump's 2019 White House budget reportedly includes a proposed cut to the National Weather Service that would eliminate hundreds of jobs. As part of an 8 percent cut to the agency’s budget, the Trump administration would nix 355 jobs, including 248 forecasters, saving an estimated $15 million, according to The Washington Post.Last year, the total cost of weather and climate change-related disasters totaled more than $300 billion, making 2017 the costliest year on record for such events. The budget would also cut millions of dollars to the agency’s surface and marine observations program, the tsunami-warning program and activities that invest in weather modeling.An agency workforce analysis from 2016 noted a “mismatch … between workforce and workload” in some aspects of the National Weather Service, evidence cited in the budget as a reason to cut positions. The National Weather Service’s labor union criticized the cuts, saying they would create a “perfect storm” hindering the agency’s ability to provide reliable forecasts and natural disaster warnings. “We can’t take any more cuts and still do the job that the American public needs us to do,” union president Dan Sobien told the Post. “There simply will not be the staff available on duty to issue the forecasts and warnings upon which the country depends.” 

            No Drop in U.S. Carbon Footprint Expected Through 2050 - The carbon footprint of the United States will barely go down at all for the foreseeable future and will be slightly higher in 2050 than it is now, according to a new projection by the Energy Department's data office.If that projection came true, it would spell the end of an era in which the U.S. led the world in reducing the tonnage of carbon dioxide it pumped each year into the atmosphere.The new plateau would reflect Donald Trump's determination to walk away from the Paris climate agreement, to abandon any thought of more ambitious climate change policies, and to overturn the main federal climate protections recently put in place, like President Barack Obama's rules to curtail emissions from electric power plants.As the world's largest national economy and second largest source of greenhouse gas emissions, an American retreat of this kind would seriously undermine the key goal of Paris, which is to bring net emissions to zero in the second half of this century. Instead, the U.S. would almost single-handedly exhaust the whole world's carbon budget by midcentury. Remarkably, such a failure to further improve the nation's climate performance would come even as the nation continues to move away from coal. The Energy Information Administration projection says that starting in 2022, practically all additional electricity generation capacity would come either from natural gas or wind and solar. Coal would flatten out, but not disappear, and the boom in gas and oil would continue, turning the U.S. into a net exporter of energy—a likelihood that became apparent under Obama, and whose imminent arrival the Trump administration calls a signal economic achievement.  The projections are contained in the EIA's 2018 Annual Energy Outlook, published on Tuesday. Like all such prognostications, they depend heavily on assumptions and modeling methods, and are best thought of as case studies rather than as formal forecasts. The central projection, known as the reference case, assumes that existing policies and laws remain in place. Other projections tweak assumptions, such as economic growth rates, energy prices and the arrival of new technologies.

             EU to refuse to sign trade deals with countries that don’t ratify Paris climate accord - The European Union will refuse to sign trade deals with countries that do not ratify the Paris climate change agreement and take steps to combat global warming, under a new Brussels policy. Cecilia Malmstrom‏, the EU’s trade chief, said a binding reference to the Paris agreement would be “needed in all EU trade agreements” from now on, noting that it had been included in a deal with Japan. She said upcoming deals with Mexico and the South American trade bloc Mercosur would also include the clause. A European Commission spokesperson confirmed that the new EU policy would also apply to a post-Brexit trade deal with the UK – meaning Britain would risk its trade deal with the bloc were it ever to try to back out of the accord. The move effectively means the 500-million-citizen bloc is throwing its trade might behind tackling climate change. But the policy also means a future trade deal with the US as long as Donald Trump is in office is off the table for now. The US President has indicated that he will not sign up to the deal to cut greenhouse emissions and has said he wants to renegotiate it – a plan most other countries, including the UK, have rejected. Conveniently, talks on a trade agreement between the EU and US were effectively frozen from 2016 after Mr Trump was elected.

            How NAFTA helped an American company sue Canada — and win -- An American company is using NAFTA, specifically its contentious "Chapter 11" section, to sue the Canadian government for a half a billion-dollars — and they're winning. The fight started back in 2002 when an American concrete company chose the remote community of Digby Neck, N.S., as a new, giant quarry site. The Delaware-based company, Bilcon, had its sights set on a specific type of volcanic rock: basalt. But locals in the fishing community fought for their rock. "They'd love to have all this basalt rock from Digby Neck for the roads of the United States. I don't want to give that up. And 90 per cent of the people here don't want to give it up. It's a beautiful place and we want to keep it that way," said Harold Theriault. And when the time came for an environmental assessment, residents — who refer to themselves as "Neckers" — lined up to have their say. In the end, Canada rejected the quarry. Bilcon sued Canada under NAFTA's Chapter 11, which guarantees foreign companies that if they do business here, they'll be treated the same as a Canadian company. Bilcon argued the environmental assessment wasn't fair and took too long. A NAFTA tribunal agreed and now Bilcon is seeking more than $500 million in compensation from Canada.

             The pumped hydro storage potential of the Great Lakes -- The potential energy contained in the waters of the Great Lakes amounts to approximately six thousand terawatt hours, enough to supply the US and Canada with electricity for an entire year were the lakes to be drained to sea level. This of course will never happen, but there may be potential for partial utilization of the resource. A pumped hydro system that uses Lakes Huron and Michigan as the upper reservoir and Lake Ontario as the lower could theoretically generate 10 terawatt-hours, or more, of seasonal energy storage without changing lake levels significantly. The most likely show-stopper is the increased likelihood of flooding in the lower St. Lawrence River during pumped hydro discharge cycles.  The idea of using the Great Lakes for pumped hydro storage isn’t new – I remember reading about it once before but can no longer find the article. What brought it back to mind was a comment posted by Alex on the recent 100% renewable California thread in which he agreed that while there were indeed no fresh water lakes that no one cared about there were some that could perhaps be adapted for pumped hydro without anyone noticing: Alex says: “The only existing fresh-water lakes that would be feasible targets for large-scale pumped hydro are in fact those that no one cares about.”Or perhaps those that are so big you won’t notice the change. Here is a modelling challenge: Lake Ontario and either Lake Erie or Lake Huron. I estimate 6TWh per metre elevation change in Lake Ontario.A one-meter change in the level of Lake Ontario would in fact be noticed, but on the other hand 6 TWh of energy storage is worth shooting for, particularly in high-consumption areas that have grandiose plans to expand intermittent renewable energy, such as the Northeast US.  We begin with a couple of graphics. First a location map:

            U.S. regulator moves to clear market barriers for energy storage (Reuters) - In a boost for electric storage technology, the Federal Energy Regulatory Commission (FERC) on Thursday approved a new rule to remove barriers to batteries and other storage resources in U.S. power markets. The FERC order will “enhance competition and promote greater efficiency in the nation’s electric wholesale markets, and will help support the resilience of the bulk power system,” the commission said in a statement. The commission found in November 2016 that existing market rules that governed traditional electric generation resources created barriers to entry for electric storage technologies. Thursday’s decision changes the rules to “properly recognize the physical and operational characteristics of electric storage resources.” The market for energy storage is small, but growing as the costs of battery systems have fallen domestically. Batteries can help solve the intermittent nature of renewable energy - dependent on sun and wind - compared with more generation sources like gas and coal, which can run all the time. Last month, FERC voted to reject a directive by Energy Secretary Rick Perry to consider a plan to subsidize coal and nuclear plants for what he said were their contributions in making the power grid more reliable and resilient. FERC ruled unanimously that such subsidies were unfair and could raise power bills for homeowners and business. “I believe that new technologies like electric storage are an important part of our ongoing discussion of grid resilience,” said one of five FERC commissioners, Robert Powelson. Fellow commissioner Neil Chatterjee said eliminating barriers to battery storage technology will result in “greater reliability and lower costs for the American people.” Renewable energy executives welcomed the FERC decision, saying it will level the playing field with conventional electric generation sources. 

            Does energy storage make the electric grid cleaner?-- Carbon-free energy: Is the answer blowing in the wind? Perhaps, but the wind doesn’t always blow, nor does the sun always shine. The energy generated by wind and solar power is intermittent, meaning that the generated electricity goes up and down according to the weather. But the output from the electricity grid must be controllable to match the second-by-second changing demand from consumers. So the intermittency of wind and solar power is an operational challenge for the electricity system. Energy storage is a widely acknowledged solution to the problem of intermittent renewables. The idea is that storage charges up when the wind is blowing, or the sun is shining, then discharges later when the energy is needed. Storage for the grid can be a chemical battery like those we use in electronic devices, but it can also take the form of pumping water up a hill to a reservoir and generating electricity when letting it flow back down, or storing and discharging compressed air in an underground cavern. Motivated by a view that storage is a “green” technology, governments are increasingly promoting utility-scale and distributed energy storage. For example, in November 2017, New York Gov. Andrew Cuomo signed a bill mandating targets for storage adoption by 2030. Other states with similar policies are Oregon, Massachusetts, California and Maryland. Companies like Tesla also have been branding storage systems as clean technologies.  But do large storage systems lower emissions in our current grids? In a recent study, we found this isn’t necessarily the case – a reflection of how complex the electricity system can be.

            Corbyn calls for nationalisation of UK energy industry -- Jeremy Corbyn today called for the nationalisation of the energy industry in order to work towards preventing climate change and other environmental crises facing humanity.   Corbyn told the conference that “to go green, we must take control of energy”. The comments echoed David Cameron's 2010 general election campaign slogan, "Vote Blue, go green" which had been devised by his advisor Steve Hilton as the Conservatives fought the threat from the Green party.   Corbyn dismissed Theresa May's Tory government saying it was leaving a “trail of environmental destruction”.The Labour leader argued that his plans for a "modern mixed economy" would be part of a “great wave of change across the world in favour of public, democratic ownership and control of our services and utilities.” This would be in response to what he characterised as the failure of privatisation and the demands of a modern economy. The Labour leader also wanted to present nationalisation as modern, rather than a return to the past. He said: “A green energy system will look radically different to the one we have today. The past is a centralised system with a few large plants. The future is decentralised, flexible and diverse, with new sources of energy large and small, from tidal to solar. “The greenest energy is usually the most local. But people have been queuing up for years to connect renewable energy to the national grid. With the national grid in public hands, we can put tackling climate change at the heart of our energy system. To go green, we must take control of our energy.”

            New gold rush: Energy demands soar in Iceland for bitcoins — Iceland is expected to use more energy “mining” bitcoins and other virtual currencies this year than it uses to power its homes.With massive amounts of electricity needed to run the computers that create bitcoins, large virtual currency companies have established a base in the North Atlantic island nation blessed with an abundance of renewable energy.The new industry’s relatively sudden growth prompted lawmaker Smari McCarthy of Iceland’s Pirate Party to suggest taxing the profits of bitcoin mines. The initiative is likely to be well received by Icelanders, who are skeptical of speculative financial ventures after the country’s catastrophic 2008 banking crash.“Under normal circumstances, companies that are creating value in Iceland pay a certain amount of tax to the government,” McCarthy told The Associated Press. “These companies are not doing that, and we might want to ask ourselves whether they should.”The energy demand has developed because of the soaring cost of producing and collecting virtual currencies. Computers are used to make the complex calculations that verify a running ledger of all the transactions in virtual currencies around the world.In return, the miners claim a fraction of a coin not yet in circulation. In the case of bitcoin, a total of 21 million can be mined, leaving about 4.2 million left to create. As more bitcoin enter circulation, more powerful computers are needed to keep up with the calculations — and that means more energy.The serene coastal town of Keflavik on Iceland’s desolate southern peninsula has over the past months boomed as an international hub for mining bitcoins and other virtual currencies.Local fishermen, chatting over steaming cups of coffee at the harbor gas station, are puzzled by the phenomenon, which has spawned oversize construction sites on the outskirts of town. Among the main attractions of setting up bitcoin mines at the edge of the Arctic Circle is the natural cooling for computer servers and the competitive prices for Iceland’s abundance of renewable energy from geothermal and hydroelectric power plants.

             Iceland Expects to Use More Electricity Mining Bitcoin Than Powering Homes This Year -- The region’s energy company says Bitcoin mining is becoming so popular that the country will likely use more electricity to mine coins than power homes this year. Officials warn they won’t have sufficient energy to supply the number of proposed Bitcoin mining centers. “If all these projects are realized, we won’t have enough energy for it,” Johann Snorri Sigurbergsson, a spokesman for Icelandic energy firm HS Orka, told the BBC. Bitcoin mining tools, which primarily consist of large computers, servers, and cooling devices, will use around 840 gigawatt hours of electricity this year, Sigurbergsson estimated. The country’s homes, collectively, use about 700 gigawatt hours per year, he said.

            Blockchain in action: stabilising the grid in Germany and the Netherlands - Imagine a windy day over the North Sea that makes the wind turbines in the area rotate heavily and produce large amounts of electricity. Now there are two problems: the power consumption in northern Germany is not high enough to take all that electricity. Secondly, the power lines to southern Germany or other parts of Europe are not strong enough to transport that huge excess of energy. To bridge that bottleneck the grid operators usually turn off the wind turbines in the north and activate gas or coal fired plants in the south. The pilot project with TenneT and sonnen has found a new approach. If too much wind energy is produced in the north it is stored in the virtual connected battery storage systems in that region. At the same time, decentralised storage systems in the south discharge energy into the grid, compensating for the lack of energy from the north. So the bottleneck is bypassed via a virtual power line. The amount of energy each individual decentralised battery has charged or discharged is registered and stored by a blockchain. The process starts automatically within seconds, no phone calls between grid operator and power plants have to be made.

            Explosion at Puerto Rico power station triggers another blackout - An explosion Sunday at a main substation in northern Puerto Rico triggered a blackout in an area beset by power woes since a monster hurricane plunged the island into darkness five months ago. The island’s utility company said electricity had been restored to 75% capacity after Hurricane Maria decimated the U.S. territory in late September. But that was before the explosion Sunday set off a huge fire at a main power substation, knocking out electricity in several towns and parts of the capital of San Juan. It was not immediately known what caused the fire, although officials said the explosion knocked two other substations offline. Thick black smoke billowed from the substation as neighbors in the area described on social media seeing the sky turn orange following a loud explosion. The cause of the blast remains unknown, but no injuries were reported. The latest setback comes as more than 400,000 power customers remain in the dark. Maria destroyed two-thirds of the island’s power-distribution system and caused some $94 billion in damage. The Category 4 storm destroyed two-thirds of the island’s power distribution system and caused up to an estimated $94 billion in damage. Just hours before the explosion, the power authority reported progress in its troubled restoration effort, An island-wide boil water advisory remains in effect. 

            Electricity restored to 75 percent of customers in Puerto Rico: Utility - ABC News: Nearly six months after Hurricane Maria decimated Puerto Rico, the island's electricity has been restored to 75 percent capacity, according to its utility company. Interested in Puerto Rico?Add Puerto Rico as an interest to stay up to date on the latest Puerto Rico news, video, and analysis from ABC News. Puerto Rico Add Interest The Puerto Rico Electric Power Authority said Sunday that 75.35 percent of customers now have electricity. It added that 90.8 percent of the electrical grid, already anemic even before the Sept. 20 storm barrelled through the island, is generating power again. Thousands of power restoration personnel made up of the Puerto Rico Electric Power Authority (PREPA), the Federal Emergency Management Agency (FEMA), industry workers from the mainland, and the Army Corps of Engineers have made marked progress in recent weeks.The issue of power became controversial after Puerto Rico Gov. Ricardo Rossello recently announced plans to privatize PREPA after it chose to allocate a $300 million power restoration contract to Whitefish, a Montana-based company with only a few staffers, rather than put it through the mutual-aid network of public utilities usually called upon to coordinate power restoration after major disasters.  That contract was nixed and Whitefish stopped working in Puerto Rico after FEMA raised "significant concerns" over the procurement process.

             Global Energy Forecast to 2100 | Energy Matters - A global energy demand forecast is presented to 2100 based on historic growth of per capita energy consumption, 1965-2015 and on UN low and medium population growth forecasts. The low forecast sees energy demand growing from 13.15 billion tonnes oil equivalent (toe) per annum in 2015 to 19.16 billion toe in 2100. The medium population forecast sees 29.5 billion toe in 2100, that is a rise of 124% over 2015. This is an interactive post where commenters are invited to suggest where all this additional energy may come from. There are two main variables that control global energy consumption (three counting price), which are the total number of people in the World and the average per capita energy each person consumes. While per capita energy consumption is falling throughout much of the OECD, it is rising everywhere else as countries like China, India and Brazil strive to become like “us”. Figure 1 shows how per capita energy consumption has grown from 1965 to 2015. Total global primary energy consumption is taken from the 2016 BP statistical review of world energy. Population data are from the United Nations World population prospects 2017.

            Use of Coal Increasing in Emerging Economies - While the number of new coal-fired power plants China and India are building has declined, the planned expansion in the use of coal in fast-growing emerging economies, such as Turkey, Indonesia and Vietnam, will in part cancel out the reduction, according to a new study. Only if the countries of the world actively counteract the trend towards a planned expansion in the use of coal, can they achieve the climate goals agreed in the Paris Agreement. These are the results of the study ‘Reports of coal’s terminal decline may be exaggerated.’ Its authors are researchers from the Potsdam Institute on Climate Impact Research (PIK) and the Mercator Research Institute on Global Commons and Climate Change (MCC), published in the journal Environmental Research Letters. “The coal problem is by no means self-defeating, despite all the advances in renewable energy. If the international community wants to achieve its greenhouse gas emission reduction goals to avoid the greatest climate risks, then it must act decisively,” says PIK’s Chief Economist Ottmar Edenhofer, who is also Director of the MCC.

             Utah moves to sue California over fee on coal power  (AP) — Utah lawmakers gave initial approval Monday to a proposal that would set aside $2 million to sue California over rules that make coal-fired power more expensive.The proposal from Republican Rep. Mike Noel passed through a subcommittee with only one Democratic lawmaker raising objections. It marked the latest attempt by the state's GOP leadership to help a struggling coal industry that is key to economies in several central Utah counties. Noel said California's policy is hurting coal miners in his rural district and violates the U.S. Constitution's Commerce Clause. He said the taxpayer money is a small price to pay for standing up to what he calls "California's war on Utah coal." California utilities pay an extra $15 per megawatt hour to buy power from Utah's coal-fired Intermountain Power Plant. "They're trying to put their values on us," Noel said. California regulators and environmental groups disagree.California Air Resources Board spokesman Stanley Young said in an emailed statement that the state's system is not singling out Utah. "California's cap and trade program is designed to reduce climate-changing gases and rewards electricity with lower carbon pollution used by Californians — regardless of where that electricity comes from," Young said.

             Wyoming, Utah explore funding legal challenges to West Coast coal policies  (Reuters) - Lawmakers in coal-producing Utah and Wyoming, faced by a shrinking market for the fuel, this week introduced laws to fund legal challenges in California and Washington of policies that they believe hurt coal sales. A Utah lawmaker on Monday proposed allocating $2 million to cover legal fees to private attorneys that would challenge a California surcharge on Utah coal, imposed as part of a cap-and-trade system to cut greenhouse gas emissions there. In Wyoming, a Republican lawmaker on Monday introduced a bill in the state’s Republican-controlled lower house that would let the legislature hire and pay for its own outside lawyer to sue Washington state for denying permits for an export terminal. In both efforts, lawmakers argue the moves interfere with their states’ economies, which rely heavily on coal mining. Both bills have passed subcommittees and political observers expect them to have a good chance of passing their Republican-controlled legislatures. Western coal mining companies have already filed lawsuits against Washington state and the city of Oakland, California challenging local decisions to block export facilities on environmental grounds. The industry is also lobbying the Trump administration to override the local decisions, though it is unclear what policy options are available to the White House. The strategy to pursue legal challenges could be a long shot. The Wyoming bill says Washington state is interfering with Wyoming’s economic interests by denying permits for a Longview, Washington terminal proposed by Lighthouse Resources, that would give Powder River Basin coal producers access to more lucrative Asian markets. In Utah, Republican state lawmaker Mike Noel, who proposed the bill targeting California, said that state’s environmental policies “control” Utah’s rural coal economy. Environmental groups said such efforts were a waste of taxpayer money. ”Forcing Utahns to invest $2 million into this industry is asking them to take on incredible risk that will yield no long-term benefits,” said Ashley Soltysiak, Utah chapter director for the Sierra Club.

            Black lung study finds largest recorded cluster in Central Appalachia -- A new research letter published in the Journal of the American Medical Association details a cluster of black lung disease in Central Appalachia that researchers believe is the largest ever recorded. The study, published Tuesday, said three clinics in southwest Virginia identified 416 coal miners with the deadly disease from January 2013 to February 2017. Of those, 157 lived in Eastern Kentucky.  The study provides further evidence that progressive massive fibrosis, commonly called black lung, has surged in recent years among coal miners in Central Appalachia. “It’s shocking and it shouldn’t be happening,” said Scott Laney, one of the authors of the study and a researcher with the National Institute for Occupational Safety and Health. Progressive massive fibrosis is an irreversible disease caused by inhaling dust created during coal mining. The dust scars the lungs, making it difficult to breathe and often leading to premature death. Most of the miners identified in the study were retired and had worked in mines for more than 25 years, but more than 20 percent worked for just 10 to 20 years before being diagnosed. The study “provides a lot of credence to what we’ve been saying now for almost a decade, which is this is a very serious problem,” Laney said. Because progressive massive fibrosis can take years to develop, new cases will continue showing up for years, he said.  “We can’t just turn this tap off,” Laney said.

            Coal execs spent federal money to clean themselves, instead of coal - Instead of scrubbing down “clean” coal, energy company executives scrubbed themselves — at the spa.The Department of Energy agreed to spend $450 million in 2009 to fund a clean coal development from a Texas energy company. But the agency didn’t keep tabs on the cash, according to a report published Tuesday from the Department of Energy’s internal watchdog. Not only was the project never completed, but some of $38 million of federal money appropriated for the project was used on “social” expenses, like “catering on a private jet.” The project, which sought to fund a coal plant that would capture 90 percent of its carbon emissions, was green-lit as part of President Barack Obama’s stimulus package. The funding was a big, early demonstration of the promise of “clean coal” tech. After years of missed deadlines, however, the Department of Energy’s Office of Fossil Energy pulled the plug on the project in 2016. It never even broke ground.But that didn’t stop the company, Summit Texas Clean Energy, from spending the money before filing for bankruptcy last year. Summit spent $2.5 million of the federal cash on “potentially unallowable” expenses, according to the watchdog’s report. Those include:

            • $650,000 in charges from a consultant for spa services, booze, first-class travel, limos, and business meals that were either prohibited or not adequately accounted for.
            • $325,000 in costs that “appeared to be social in nature,” like “banquet room rental expenses” and catering for the company’s private jet
            • $1.2 million on three lobbying consultants for support for a project with federal grant money. (Federal law prohibits federal funds from being used to influence the government.)

            The rest of the $38 million was spent on other questionable expenses. Still, the Department of Energy reimbursed Summit for the entire $38 million.

            India has approved the construction of 12 new nuclear power reactors. 10 will be indigenous Pressurised Heavy Water Reactors (PHWRs) with a capacity of 700 MW each and two will be Russian Light Water Reactors (LWRs).Two PHWRs each will be set up in Madhya Pradesh, Karnataka and Haryana, while four will be established in Rajasthan. The two LWRs each having a capacity of 1,000 MW will be built at Kudankulam in Tamil Nadu. Currently there seven nuclear power projects are being constructed in India with a combined capacity of 5300 MW of capacity.  Besides work for the construction of two nuclear reactors with total capacity 1,400 MW at Gorakhpur in Haryana has commenced

            Obama energy secretary named to utility giant’s board | TheHill: Former Energy Secretary Ernest Moniz has been tapped to serve on the board of electric utility giant Southern Co. Moniz, who served under former President Obama from 2013 to 2017, will be an independent director on the board. “I have long admired Southern Company for its innovative approach to research and development within the clean energy space, and look forward to joining the board,” Moniz said in a late Monday statement. “Tom is an industry leader and I’m eager to work with him and the entire board in helping Southern advance at a time of great change in the energy world,” he said of Tom Fanning, Southern’s CEO. “Ernie Moniz enhances our board by bringing a strong energy science and technology background together with broad expertise in energy and environmental policy, which will be invaluable as we continue to develop innovative solutions to shape America's energy future,” Fanning said in the statement. Southern is the country’s second-largest utility. It is based in Atlanta and has operations throughout the southeast, in power generation, distribution and transmission. The company is working to build two new reactors at Vogtle Electric Generating Plant in Georgia, the only nuclear power plant currently under construction in the country. But they are years away from completion and billions of dollars over budget. The Vogtle project has benefited significantly from federal government actions, such as major Energy Department loan guarantees announced last year and Congress’s decision this month to extend the eligibility dates for tax credits for newly-built nuclear plants. 

            America Dumps Its Fracking Waste in My Ohio Town – Alison Stine - My southeastern Ohio town in the Appalachian foothills is a small, rural place where the demolition derby is a hot ticket, Walmart is the biggest store, and people in the surrounding villages must often drive for 30 minutes to grocery shop.  We hold the unfortunate distinction of being the poorest county in the state: an area that is both stunning — with rolling hills, rocky cliffs, pastures, and ravines — and inaccessible, far from industry.  It’s here, at the Hazel Ginsburg well, that fracking companies dump their waste. Trucks ship that sludge of toxic chemicals and undrinkable water across the country and inject it into my county’s forgotten ground. My step-grandmother, the daughter of a Kentucky miner, used to tell me stories of washing her clothes in polluted red water, downstream from mines. Coal companies exploited employees like her father, paying him in company scrip and keeping him poor and exploiting the land.That kind of abuse continues. It’s just changed shape. The Ginsburg well has a long history of violations, so many that the Ohio Department of Natural Resources ordered it shut.  It was not. It’s a pit well, which looks like an old swimming pool, covered by a tarp. No sign indicates the presence of chemicals, just a “no trespassing” sign. Allegedly, a guard will snap your picture if you stop or turn your car around. The well is located in a residential area, with houses — some with swing sets — just down the road. Our local economy now depends on tourism and farming. By contaminating the environment, fracking wastewater wells threaten all these businesses. In 2015, tank trucks injected 4 million barrels of waste into my small county alone.

            Democrats seek FERC briefing on Ohio pipeline worries - House and Senate Democrats on Thursday asked the Federal Energy Regulatory Commission to provide them with a special joint briefing on the environmental practices of a company that's trying to build a major pipeline in Ohio. “Our committees have a longstanding interest in ensuring that drilling activities minimize environmental risk and that regulated entities are operating in full compliance with all applicable statutes, regulations, and permits,” top Democrats from both chambers said in a rare request to the commission. "In order to more fully understand these issues, we request a briefing from FERC staff on any environmental risks associated with this project as referenced in FERC’s January 24 memorandum.” The letter was sent by Sen. Maria Cantwell of Washington, the top Democrat on the Senate Energy and Natural Resources Committee, and Rep. Frank Pallone of New Jersey, the top Democrat on the House Energy and Commerce Committee, to FERC chairman Kevin McIntyre. Both committees directly oversee the commission. The company in question, Energy Transfer Partners, is trying to expand its 713-mile Rover Pipeline. But the Democrats' letter explained that the FERC recently ordered the company to cease its drilling activities near the Tuscarawas River in Ohio because of environmental concerns. FERC is the primary regulator and licenser of major interstate natural gas pipelines like Rover. Democrats on the letter seem to suspect that Energy Transfer Partners' water quality management is reason for concern when it comes to building the Rover Pipeline, which traverses Ohio and multiple states to move natural gas from fracking wells. The Democrats cited a Jan. 24 FERC order instructing the Rover Pipeline and its parent company "to cease the use of horizontal directional drilling techniques in pipeline construction near the Tuscarawas River in Ohio," according to the letter. The senators point out that it was the second time that FERC had raised "major issues" over the pipeline’s construction. In a FERC memorandum to the company, the commission cited concerns about the loss of drilling fluid in tunneling to build the pipeline, the Democrats stated. The FERC memo said there has been “no approach to date" that has been "completely successful" in resolving the fluid loss.

            Fracking in shale plays could trigger earthquakes in deeper faults: study - Ohio oil and gas drillers could trigger noticeable earthquakes even if fracking activity doesn’t miss targets or directly contact deeper faults in the basement rock.That’s the conclusion of new research from Miami University that looked at how pumping fluids underground can affect faults much deeper underground. “With the results from our study, we can better advise environmental regulators and natural gas companies about what to expect when attempting hydraulic fracturing,” said geologist Michael Brudzinski at Miami University in Oxford, Ohio, a co-author of the report published Monday in the Proceedings of the National Academy of Sciences (PNAS).  The study could lead to more regulatory scrutiny of shale gas drilling in Ohio and elsewhere, but it doesn’t give a quick yes-or-no answer on where drilling should or shouldn’t take place. As one Facebook status option says, it’s complicated.   The study team found fracking can lead to two types of earthquakes, based on an analysis of the largest seismic events in Harrison County, Ohio, from 2013 to 2015. What happens depends on the local tectonics — geologic conditions linked to movements of parts of the earth’s crust over very long periods of time.  Larger earthquakes of magnitude 3 or more generally involve older faults in deeper layers, reported geologist Maria Kozlowska, who worked on the project as a post-doctoral researcher at Miami University. Fracking fluids don’t necessarily have to enter those faults or deeper layers in order to trigger earthquakes, Brudzinski said. Those older faults are in deep layers that date back to hundreds of millions of years ago when plates collided into eastern North America and built up the Appalachian Mountains. When things settled down, the fault movements slowed to nearly a stop. “We think that the injection has woken them up by allowing stored energy from long ago to finally be released,” Brudzinski said.. “Our results provide some new evidence that the stresses from fracturing the shale rocks may be enough to trigger the deeper older faults to move without having a direct connection,”

            Researchers find fracking spurs bigger quakes at different depths -  Five small earthquake sequences triggered by fracking in eastern Ohio between 2013 and 2015 were more complex than researchers previously understood, revealing that fracking-linked seismic disturbances originate at different geological depths and that deeper events pose greater risks.The new study — led by researchers at Miami University in Ohio and published in the Proceedings of the National Academy of Sciences — uncovered interesting dynamics about the rare, but concerning, earthquakes associated with deep natural gas wells targeting the Utica and Point Pleasant shale formations that sit about two miles underground.The findings offer clues that might eventually allow drilling companies to adapt their operations to avoid setting off earthquakes. For now, the study suggests, stopping fracking temporarily may help head off more intense quakes once they have started.  But the fact that a bigger quake hasn’t struck the region so far has been partly luck.  More than a dozen cases of man-made, or induced, seismic events have been associated with Utica Shale fracking or gas wastewater disposal wells in recent years in eastern Ohio — a region that had “essentially no documented seismicity before 2010,” the researchers wrote. All of the five quake sequences studied by the researchers in Harrison County, Ohio, started in previously unknown faults in rock layers beneath the horizontal paths of the Utica gas wells underground. Some of the faults were restricted to shallower layers of relatively weaker rocks, while others began in the deep, crystalline basement rock — below the layers of sedimentary rock that built up on top of it over hundreds of millions of years. The deeper earthquakes were more powerful, apparently reflecting slippage along more mature stressed faults, and the shaking there continued in some cases over a month after the fracking that triggered it stopped. Smaller, shallower earthquakes tended to stop more quickly. The researchers also saw two dynamics at play in causing the rocks to slip. Fluid used to crack the gas-rich shale sometimes apparently escaped its target and followed pathways to deeper geologic layers, where the pressure from the fluid activated stressed faults.They saw evidence of this in wells where more liquid returned to the surface than would be expected for the amount of gas produced, indicating the fractures had tapped into deep water networks. In other cases, the fluid apparently stayed within its Utica Shale target but built up so much pressure there that the rocks bowed out, sending a cascading force through lower rock layers until the faults were triggered.

            Controversial natural gas pipeline project back on the table in Hamilton County   -- One of the region's most controversial pipeline proposals in recent years is moving forward once again.For two years, Duke Energy has expressed the need to construct a new underground natural gas pipeline through central Hamilton County. It says the reliability of natural gas service depends on the project.  But opposition has been fierce. Safety is the number one concern for most community members along the proposed routes. Namely, they fear a gas explosion, which does happen with some frequency. Reading Mayor Bo Bemmes said Duke officials met with him and other city leaders in late January to let them know they would soon refile the pipeline application to state authorities, from whom the company must get permission.The pipeline runs the length of Reading, and also touches Amberley Village, Blue Ash, Bond Hill, Evendale, Golf Manor, Pleasant Ridge, Reading, Sharonville and Norwood. Duke had tweaked a few sections of the route – moving it a bit further from economic development sites that had worried city officials – and evaluated potential problems near a highly-polluted site called Pristine Inc.

            XTO Looks to Stop Methane Leak at Well Pad in Powhatan Point - --Emergency officials set up a command post along Ohio 148 next to the Clair Mar Golf Course in Powhatan Point Thursday while responding to a gas leak at XTO Energy’s Schnegg well pad.Flames did not seem to shoot from the XTO Energy Schnegg well near Captina Creek on Friday as they had after the Thursday explosion, but about 100 nearby residents remained displaced as methane continued leaking into the atmosphere.  “Right now, it seems the well is still releasing gas into the air that is not burning,” Ohio Department of Natural Resources spokesman Steve Irwin said. “That is mostly methane.” After the early Thursday blast rocked the area in southern Belmont County, emergency responders and XTO officials, along with regulators from both the ODNR and Ohio Environmental Protection Agency, remained at the site on Friday. XTO spokeswoman Karen Matusic said the mandatory evacuation for those within a 1-mile radius remained in effect as of Friday evening, but said some residents had been allowed to return home to feed livestock animals.“Some of the farmers have been escorted to their acreage to feed their livestock,” she said.“They have gone back in under supervision with law enforcement and someone with a gas monitor and paramedics,” Irwin said of the residents.  Matusic and Irwin said it is still too early to say when residents will be allowed to return to their homes. In December 2014, residents of about 30 homes near Sardis were displaced for 10 days when the wellhead blew at a Magnum Hunter Resources operation. At that time, an unknown amount of unburned methane gushed into the atmosphere in a geyser-like manner.

            ‘Out of order’: West Virginia lawmakers drag woman off House floor for reading list of oil and gas donations - In a video spotted by Common Cause, lawmakers in West Virginia had a woman dragged away from the lectern as she read off a list of members of the House and how much they collected in contributions from the oil and gas industry.According to the report, fracking activist and House of Delegates candidate Lissa Lucas appeared in the Charleston state house on Friday to address lawmakers considering a bill that would allow oil and gas companies to drill on minority mineral owners’ land without their consent. Stepping to the microphone Lucas can be seen saying, “I have to keep this short, because the public only gets a minute and 45 seconds while lobbyists can throw a gala at the Marriott with whiskey and wine and talk for hours to the delegates.” She then proceeded to list off members of the legislative body and the amounts of contributions they have taken from the industry they are regulating until she is stopped by Chairman John Shott (R-Mercer).“Miss Lucas, we ask that no personal comments be made,” Shott said.“This is not a personal comment,” Lucas replied.“It is a personal comment and I am going to call you out of order if you are talking about individuals on the committee,” Shott declared. “If you would, just address the bill. If not, I would ask you to just step down.” Proceeding ahead with her list of lawmakers, despite the warning, Lucas then found herself between two security officials ordered by Shott to remove her.Told she had to leave, Lucas told  the lawmakers, “I want to finish,”  however the guards did not relent.“Drag me off then,” she said as she was hustled out of the chambers. Watch the video below posted by Common Cause:

            Caught On Tape: Security Drags Woman From Hearing For Exposing Big Oil Funding Politicians - A West Virginia resident and House of Delegates candidate was physically removed from a public hearing at the West Virginia House of Delegates shortly after she began reading a list of donations made to delegates by the energy industry, during discussion of a bill aimed at easing restrictions on gas and oil-related drilling on private land. Lissa Lucas, Democratic candidate for District 7 of the West Virginia House of Delegates, appeared at the state capitol to testify regardingHouse Bill 4268, “which would allow a majority of 75 percent of owners or heirs of a single piece of property to determine whether the property could be developed for oil or gas production” according to WVNews. Lucas claimed that those speaking in favor of the bill and some voting on the bill were being paid by “the industry.” “I have to keep this short because the public only gets a minute and 45 seconds while lobbyists can throw a gala at the Marriott with whiskey and wine and talk for hours to the delegates,” Lucas said. She went on to list oil and gas donations that have been made to members of the House Judiciary Committee— which included Committee chairman John Shott, who quickly opposed Lucas’ listing of names.“John Shott. First Energy $2,000. Appalachian Power $2,000. Steptoe & Johnson—that’s a gas and oil law firm—$2,000. Consol Energy $1,000. EQT $1,000. And I could go on,” Lucas said. Shott then said, “Miss Lucas, we ask that no personal comments be made?” “This is not a personal comment,” Lucas responded.“It is a personal comment and I am going to call you out of order if you are talking about individuals on the committee,” Shott told Lucas. “If you would, just address the bill. If not, I would ask you to just step down.”She went on to name Delegate Jason Harshbarger, who is employed by Dominion Energy Transmission, and claimed that 40 percent of his contributions “comes from the oil and natural gas industry” as the microphone she was using was cut off. As she continued to press to continue speaking, she could be seen on video being physically led out by two men.

            She was naming lawmakers who took oil-and-gas money — so they barred her from the public hearingVideo of a little-known candidate for a statehouse seat in West Virginia went viral over the weekend after she was forcibly removed from a hearing for reciting a list of oil-and-gas donations to lawmakers’ campaigns. Here is her story.

             Fracking tied to reduced songbird nesting success - The central Appalachian region is experiencing the country's most rapid growth in shale gas development, or "fracking," but we've known almost nothing about how this is affecting the region's songbird populations—until now. A new study from The Condor: Ornithological Applications demonstrates that the nesting success of the Louisiana Waterthrush—a habitat specialist that nests along forested streams, where the potential for habitat degradation is high—is declining at sites impacted by shale gas development in northwestern West Virginia.  West Virginia University's Mack Frantz and his colleagues mapped waterthrush territories and monitored nests along 14 streams from 2009 to 2011 and again from 2013 to 2015. They also mapped and measured disturbances to streams and to the forest canopy, using aerial photographs and satellite imagery as well as extensive ground-truthing, and classifying them according to whether they were related to shale gas development. Their results show that as shale gas development has expanded in the area, nest survival and productivity and riparian habitat quality have declined. At the same time, the size of individual waterthrush territories has increased, suggesting birds need to range farther to find sufficient resources. This study is one of the first to demonstrate that shale gas development can affect songbird reproductive success and productivity, both directly through the presence of fracking infrastructure and indirectly through effects on habitat quality. "I hope our findings lead to robust protections of our forested headwater stream ecosystems, which are currently overlooked for regulation despite their critical role in providing nutrients and organic matter downstream, not to mention as an important source for drinking water," says Frantz. "Waterthrushes are a modern-day 'canary in the coal mine,' and there are many more opportunities to study how anthropogenic disturbance affects and entangles food webs at the aquatic-terrestrial interface."

            Fracking Waste Disposal: Still A Hot Mess - The slogan for Estill County is “where the bluegrass kisses the mountains.” But since 2015 the county, population 15,000, is widely known as the place where radioactive material generated by the oil and gas industry in a process known as fracking was dumped near some schools. As the Ohio Valley ReSource reported in 2016, tons of waste from the drilling practice known as fracking was hauled from state to state before being improperly disposed of in a county landfill not designed to hold radioactive material. This week the Concerned Citizens of Estill County and state officials squared off over how to best deal with the tons of radioactive waste. The landfill owners have been fined and are required to create a mitigation plan. Officials with the Kentucky Energy and Environmental Cabinet want to keep the waste in place. But local residents have a different idea. In the two years since the waste was discovered the community has come to a consensus on what should happen with the illegally dumped waste: Dig it up and move it out. Concerned Citizens member Tom Bonny said he first thought keeping the waste in place was the better solution. But when he considered the long-half life of the radioactive material coupled with its location near Estill County’s schools, he thought of the long-term consequences to the community. He is also concerned about the proximity of the landfill to the Kentucky River and potential danger to the water supply not only in Irvine but downstream. So, he changed his mind.He said most folks he’s talked to feel the same way. “The majority of the people I have spoken with indicate they will not have full peace of mind if it is left in place,” he said.The disagreement over how to deal with the mess is just a small part of a larger problem with a lack of regulation, oversight and monitoring of this difficult waste. And years after Estill County’s crisis brought attention to the matter, experts say little has changed to prevent similar incidents.

            46% Say 'Yes' to Fracking, But Want Oil to Stay Here - Rasmussen Reports®: A rise in U.S. shale production over the last several years has created a surplus of oil that is now in high demand from countries overseas. Though support for fracking has dropped slightly, nearly half still favor the idea, but most say if we’re going to do it, we should keep the surplus oil here at home. A new Rasmussen Reports national telephone and online survey finds that 46% of Likely U.S. Voters favor a process known as hydraulic fracturing used to drill for oil and natural gas in shale oil reserves. Thirty-nine percent (39%) are opposed to fracking. Fifteen percent (15%) are not sure. (To see survey question wording, click here.)   The survey of 1,000 Likely U.S. Voters was conducted on February 7-8, 2018 by Rasmussen Reports. The margin of sampling error is +/- 3 percentage points with a 95% level of confidence.  See methodology.

            The Boston Globe editorial board unloads on the ‘pipeline absolutism’ of environmentalists - In a CD post last week, I posed the question “Why is LNG coming 4,500 miles to Boston from the Russian Arctic when the US is the world’s No. 1 natural gas producer? (see map above of the route). The simple answer to the question is a lack of natural gas pipelines in New England due to the “pipeline absolutism” of anti-fossil environmentalists who have blocked all new pipeline expansions, as I explained in a recent Boston Herald op-ed “Epic U.S. energy boom cruises by region,” here’s an excerpt:Although the U.S. has been the world’s top producer of natural gas since 2009, New England relies on imported LNG from faraway countries for about 20% of its natural gas. This is what happens when you don’t build your own natural gas pipelines, which are the safest and most economical way to transport energy. The trouble is there isn’t enough pipeline capacity to bring in natural gas from the Marcellus shale in Pennsylvania to New England in times of high demand. Even as America’s natural gas production has soared, the pipeline capacity to get it to where it’s needed hasn’t kept up. The problem: political obstacles driven by environmental groups.  Now the editorial board of the Boston Globe is weighing in on “pipeline absolutism” with a lengthy, 2,000-word editorial yesterday “Our Russian ‘pipeline,’ and its ugly toll, here’s part of the opening (emphasis added): To build the new $27 billion gas export plant on the Arctic Ocean that now keeps the lights on in Massachusetts, Russian firms bored wells into fragile permafrost; blasted a new international airport into a pristine landscape of reindeer, polar bears, and walrus; dredged the spawning grounds of the endangered Siberian sturgeon in the Gulf of Ob to accommodate large ships; and commissioned a fleet of 1,000-foot ice-breaking tankers likely to kill seals and disrupt whale habitat as they shuttle cargoes of super-cooled gas bound for Asia, Europe, and Everett. Massachusetts’ officials have leaned heavily on righteous-sounding stands against local fossil fuel projects, with scant consideration of the global impacts of their actions and a tacit expectation that some other country will build the infrastructure that we’re too good for.

            Federal agency OKs start of pipeline construction in Giles County -  On Monday, the Federal Energy Regulatory Commission granted a request from the project’s developer to begin construction on parts of the 303-mile natural gas pipeline that will pass through the county. Although tree-cutting has already started in West Virginia, where the pipeline will originate, FERC’s approval allows the work to cross the state line into Virginia. A letter from Paul Friedman, the agency’s environmental project manager, informed Mountain Valley officials that construction could begin on a 12-mile segment of the pipeline. FERC also gave its go-ahead for work at 44 temporary workspaces and 14 staging areas or access roads in Giles County. Natalie Cox, a spokeswoman for Mountain Valley, said it would be difficult to say exactly when the work might begin, given the uncertainties of winter weather and the availability of needed equipment. “That said, we hope to begin tree felling activity in permitted areas in Giles County by the end of the month,” Cox wrote in an email. For anything beyond tree-cutting, Mountain Valley still needs approval from the Virginia Department of Environmental Quality, which is reviewing erosion and sediment control plans for the project. “They cannot start construction without these plan approvals,” DEQ spokeswoman Ann Regn said. “They can do limited, hand tree-felling as long as there is no land disturbance.” In other words, the trees would have to remain where they fall until Mountain Valley gets state approval for more wholesale clearing of 125-foot rights of way where the buried pipeline would be laid. FERC’s approval on Monday does not include a 3.5-mile route the pipeline would take through the Jefferson National Forest, crossing under the Appalachian Trail. Nor does it allow work in the Greater Newport Rural Historic District or the Big Stoney Creek Historic District, where preservation plans must be reviewed by the Virginia Department of Historic Resources. 

            Civitas files complaint against Cooper over pipeline fund — Civitas filed an ethics complaint Wednesday against Gov. Roy Cooper, questioning his role in a $57.8 million fund tied to the Atlantic Coast Pipeline that the governor plans to control.  The complaint, from a right-leaning group that has been a frequent critic of Cooper, does not directly accuse the governor of trading a key state permit on the project for access to the fund. But it quotes relevant state law prohibiting officials from accepting gifts in exchange for official action, and it describes the fund as "open-ended, unconstrained and rife with potential for abuse." "In our opinion, these matters rise to the level of a full ethics investigation," the complaint states. "At the very least, we request the Commission issue an opinion on the ethics of the governor leveraging his official title and official position to exchange state approval of a major project for private funds that only the Governor can spend, even if the funds trickle into the accounts of his political supporters or indirectly aid in his re-election."The complaint went to the State Board of Elections and Ethics Enforcement, which currently has no appointed members, but does have staff.The governor's office called the complaint "absurd," even for a partisan political attack. Cooper's office announced the fund Jan. 26, the same day the state announced the Atlantic Coast Pipeline planned by Duke Energy, Dominion Energy and other utilities had won a key state water permit called a 401 certification. The fund, according to the memorandum, would accept $57.8 million from the utilities, which would go into an account designated by the governor.

            Trump's idea for 'Buy American' mandate on US pipeline projects has 'vanished' - A much-ballyhooed White House proposal to boost domestic manufacturing might be stuck in the pipeline.More than a year after President Donald Trump demanded that oil and gas pipelines built in the U.S. be constructed with U.S.-made steel — roiling the energy industry in Texas and beyond — there is little evidence that the Trump administration is close to making that idea a reality.A July deadline for the U.S. Commerce Department to produce such a plan went by without the release of any details. Trump has dropped the idea from his speeches, where it was once a prominent fixture. And groups tracking the proposal say it has just fallen off the radar. “With little explanation, it has vanished,” said Scott Paul, president of the Alliance for American Manufacturing, which supported Trump’s “Buy American” effort.  That inaction could reflect concerns that the mandate would be unfeasible and potentially in violation of international trade law. Or it could result from resistance by companies like Dallas’ Energy Transfer Partners, which called the idea “well-intentioned” but “unworkable.”   The Commerce Department, which didn’t respond to requests for comment, could always press ahead. The White House’s plan for a $1.5 trillion infrastructure package could be a new vehicle. And some trade cases involving steel imports could offer an indirect way to address the issue.

            Trump administration proposes selling off US gasoline reserve - The Trump administration Monday again proposed selling off the 1 million barrel Northeast Gasoline Supply Reserve, calling it unnecessary and costly to operate. In a proposed fiscal 2019 budget President Donald Trump sent to Congress Monday, the administration proposes to "disestablish" the gasoline reserve."The [gasoline reserve] has not been utilized and has issues surrounding cost efficiency and operational functionality," the budget states. The Obama Administration set up the reserve following gasoline shortages caused by Hurricane Sandy in 2012. It currently holds 700,000 barrels in New York Harbor, 200,000 barrels in Boston and 100,000 barrels in South Portland, Maine. Congress is unlikely to enact the budget, as it crafts federal spending on its own, but the proposal serves as a guide for the administration's policy priorities in the coming year.The budget requests $11.3 billion for the Interior Department, the agency which manages oil and gas drilling on federal land and waters, a $2.2 billion, or 16%, decrease from the 2017 enacted level. It also requests $29 billion for the Department of Energy, a roughly 3% decrease, and $5.4 billion for the Environmental Protection Agency, a $2.8 billion, or 34%, decrease from fiscal 2017.

            Environmental groups sue Trump administration for allowing oil and gas companies to dump waste in Gulf of Mexico --  Environmental groups are suing the Trump administration for allowing oil and gas companies to dump fracking and drilling waste into the Gulf of Mexico, saying that the permits do not take into account potential dangers to water quality. The three groups — the Centre for Biological Diversity, the Gulf Restoration Network, and the Louisiana Bucket Brigade — filed their suit Tuesday against the Environmental Protection Agency (EPA), saying that the federal agency’s decision could have devastating effects on marine wildlife and habitats. “The Trump administration is letting oil companies dump toxic fracking chemicals into the Gulf with no regard for the risks or the law,” Kristen Monsell, the senior attorney at the Centre for Biological Diversity, said in a statement. “That’s just unacceptable,” she continued. “The EPA is supposed to protect water quality, not give oil companies free rein to use our oceans as their garbage disposal.” The lawsuit is the second time those groups have sued the EPA for the permit, which was finalised in September for new and existing offshore oil and gas platforms operating in federal waters off the coasts of Mississippi, Louisiana, and Texas. The permits allow oil companies to dump unlimited amounts of waste fluid, which includes chemicals involved in fracking. Those fracking chemicals include benzene, arsenic, lead, mercury, phenol formaldehyde resins, and hexavalent chromium.  

            Offshore drilling foes, denied microphone, hold rallies — With giant inflatable whales, signs that read “Drilling Is Killing” and chants of “Where’s our meeting?” opponents of President Donald Trump’s plan to open most of the nation’s coastline to oil and natural gas drilling have staged boisterous rallies before public meetings held by the federal government on the topic. That’s because the public cannot speak to the assembled attendees at the meetings. The U.S. Bureau of Ocean Energy Management is meeting one on one with interested parties and allows people to comment online, including typing comments on laptops it provides. People also can hand bureau officials written comments to be included in the record. What they can’t do is get up at a microphone and address the room. That has led drilling opponents on both coasts to hold their own meetings before the official ones begin. The latest took place Wednesday in Hamilton, where one attendee wore a furry red lobster hat with claws protruding from both sides. “They’re dodging democracy,” said Cindy Zipf, executive director of New Jersey’s Clean Ocean Action environmental group, which held a citizens’ hearing before the bureau meeting. “The government works for the people. I understand it’s uncomfortable to have a bad idea and be held accountable for it, but that’s what they’re proposing.” The Republican president’s decision last month to open most of the nation’s coast to oil and gas drilling horrified environmentalists, and many elected officials from both major political parties oppose it. But energy groups and some business organizations support it as a way to become less dependent on foreign energy. The Bureau of Ocean Energy Management’s chief environmental officer, William Brown, said Congress has mandated five-year energy plans since the Arab oil crisis of the 1970s sent prices rising. 

            Does fracking adversely impact on drinking water? - New research suggests a negative impact of hydraulic fracturing, intended to extract gas and oil, upon streams, plus downstream recreation water and drinking water. The research has been led by the University of Central Arkansas. The research adds to other environmental issue relating to hydraulic fracturing. The fracking process involves the injection of millions of gallons of freshwater and chemicals into shale. While most research has been into the direct effect on water quality, the new study looks at how fracking processes impact water loss. The fracking operation withdraws these large quantities of water from nearby waterways.  The effect of withdrawing large quantities of water from nearby waterways, like streams, for fracking can potentially affect aquatic ecosystems and there is also an impact upon people who use such water for drinking and recreation, according to the research. The fracking process involves the use of high-pressure injection of 'fracking fluid' (water, which may contain sand or other proppants) into a wellbore.  The researchers have assessed that, typically, over 5 million gallons of freshwater are used to fracture one gas well in the U.S. This is a water quantity can could fill seven Olympic-size swimming pools. The source water is typically streams located close to the fracking site. The researchers are concerned that many of these streams are a source of drinking water for communities and also the ecological niche for various species, some of which are in decline. The researchers are calling for greater study into the sustainably of water loss from such sources.

             Midland crude production, takeaway capacity and price differentials. -  Permian crude oil production continues to march steadily upward, headed toward 3.0 MMb/d sometime in the next few months. Most of the recent growth responsible for pushing total U.S. output past 10 MMb/d has come from increases in Permian volumes. Pipeline capacity out of the super-hot play is on the ragged edge of maxing out, and a myriad of new projects to relieve capacity constraints are in the works. Why then has the price differential between Midland, TX, and the Gulf Coast dropped over the past few weeks? Why did the Brent vs. WTI/Cushing spread crater? And what does this all mean for Midland-to-Gulf Coast transport deals getting struck for $2.00/bbl or less? Today, we look at these developments, try to make sense out of the Permian/Midland crude oil market, and consider what the future might hold for West Texas barrels moving to the Gulf Coast.

            Fracking Earthquakes Pop Up in Unexpected Corner of Oklahoma's Shale Patch - Insurance Journal - The oil prospectors of Oklahoma, it appeared, finally had a solution to their earthquake problem. Ordered by regulators to curb the wastewater they were dumping deep into the ground, they watched with satisfaction as tremors plunged to fewer than two a day from more than five. This seemed to be important confirmation of what had long been suspected in the petroleum-dependent state: The act of drilling for crude wasn’t the big problem, it was just the way the main byproduct was being discarded. But now quakes are popping up in a relatively new corner of Oklahoma’s shale patch and sparking jitters once again. It’s not the volume (so few that officials are just starting to record them) or force (very low on the Richter Scale) that’s worrisome. It’s the circumstances — because in the Scoop and Stack, the fields where the earth is suddenly moving, almost no wastewater is jettisoned underground. That, in turn, has brought critical attention back to fracking, the essential technology that has made the oil business viable in countless low-margin fields, helping push output so high the U.S. recently hit 10 million barrels a day for the first time in four decades. Oklahoma lawmakers and regulators aren’t inclined to put heavy brakes on the use of a tool that has helped triple output in the past decade to 497,000 barrels a day and create thousands of jobs. After all, the state, the fifth-largest producer in the U.S., was among the first to forbid cities and counties from banning fracking activities.  To some industry defenders in Oklahoma, in fact, low-level tremors now and again are a fair price to pay. In any event, the ones out in the Scoop and Stack are so minor experts are still puzzling over their significance.  But “all earthquakes start out small,” said Austin Holland, a supervisory geophysicist with the U.S. Geological Survey in New Mexico who worked for the Oklahoma Geological Survey until 2015. “You can’t rule out the possibility that you could have a significant earthquake triggered by hydraulic fracturing.”

            Chesapeake Energy Exits Mississippi Lime -- Richard Zeits -- February 12, 2018 -- Link here to SeekingAlpha.  Summary:

            • Chesapeake received an estimated $1,000 per acre for its Miss Lime acreage, excluding production
            • the price received is reasonable and the transaction as a positive, albeit hardly material, development for the stock
            • given the improvement in oil prices, Chesapeake is likely to put additional asset packages in the Mid-Continent on the auction block
            • Chesapeake Energy announced last week its exit from the Mississippian Lime, the play that the company helped to pioneer several years ago. 
            • we interpret the $0.5 billion price received for the properties as a success for Chesapeake
            From the article: Why are the buyers willing to pay half a billion dollars for properties that are producing less than 5,000 barrels of oil per day, have been extensively drilled and have a high operating cost?  Several factors could be the reason:
            • A large portion of production is obviously quite mature and is characterized by a relatively low decline rate - which makes it more valuable.
            • The buyer may find some promise in other zones on this stacked-pay acreage, which is held by production and represents a long-term exploration option in the event oil prices move significantly higher.
            • The acquirer may be betting on achieving a meaningful increase in production volumes via workovers (which, arguably, were not the top capital allocation priority for Chesapeake).
            • The sale includes production infrastructure that was originally configured for larger volumes and may have some value.

            Chesapeake Update -- Zeits -- February 13, 2018 -- Summary, link over at SeekingAlpha:  Chesapeake guided to sequentially lower production volumes in Q1 2018, following a very strong Q4 2017. Spending within cash flow in 2018 means activity levels will be reduced as compared to the second half of 2017.  However, even with this consideration in mind, the full-year production outlook is underwhelming. With total debt again approaching $10 billion, Chesapeake cannot "drill its way out" of the leverage problem - significant asset sales is the only path to stability. Then this: For Q4 2017, Chesapeake Energy (CHK) achieved its production goal of 100,000 barrels of crude oil per day, in-line with previous guidance. Natural gas and NGL production for the quarter were 2.6 Bcf/d and 59,500 b/d, respectively, above previous guidance.These volumes represent a 10% sequential increase on a BOE basis, after adjusting for asset sales.As a reminder, in the last six months Chesapeake significantly accelerated the pace of completions to monetize the company’s significant inventory of drilled but uncompleted wells.During Q3 2017, Chesapeake emphasized completions in the Marcellus, Utica and Haynesville to position itself for winter demand for natural gas.In Q4 2017, the company nearly tripled the pace of completions in the Eagle Ford, as compared to the preceding two quarters.The “surge” in the number of new wells being brought online yielded an impressive ramp-up in production volumes during the second half of 2017.The advantage of DUCs -- take note: In retrospect, Chesapeake's decision to accelerate DUC conversions was well timed. Cash flows have benefitted from greater crude volumes sold into an attractive price environment that prevailed during the last several months. On the natural gas side, Chesapeake took advantage of the strong heating demand this winter for natural gas and NGLs.

            Pipeline-backed 'sabotage' bill will lead to abuse of eminent domain - The "critical infrastructure sabotage" legislation before the Iowa Legislature is not what it seems. It’s backed by Energy Transfer Partners (ETP), the corporation behind the Dakota Access Pipeline, and is offered in response to arson and vandalism against the pipeline in 2016 and 2017.This legislation has nothing to do with sabotage. It’s about silencing nonviolent dissent and influencing a historic Iowa court case. Consider these points:First, under Iowa law, arson and vandalism are already serious crimes. This bill would do nothing to improve the safety of public infrastructure.Second, the legislation could apply a 25-year sentence plus a fine of $100,000 to peaceful protesters who "cause a substantial interruption or impairment of service." ETP originally said oil would flow through its pipeline in 2016. Yet because of numerous delays, some caused by protesters, oil didn't flow until June of 2017.It’s impossible to say how this legislation would be interpreted in a court of law, but ETP could argue that, given the delay, protesters caused an "interruption" of service and deserve the maximum fine and penalty.Third, and of greatest concern, this legislation legitimizes the pipeline as "critical infrastructure.” It lumps a privately owned oil pipeline in with public lines that transport electricity, gas, broadband service, water and wastewater.Of all the compelling arguments against the Dakota Access Pipeline, one of the strongest is that ETP is a private company merely transporting its product through Iowa. True public infrastructure is used by the people whose land it passes through.The pipeline’s highly questionable status as critical public infrastructure is ETP's Achilles' heel. ETP knows this, and it hopes Iowans either haven't noticed or have stopped caring. If ETP can ram this legislation through quickly, it will effectively codify a private oil pipeline as a public necessity. And that’s a big deal because of the landowner/Sierra Club lawsuit currently before the Iowa Supreme Court. If Iowa codifies that an oil pipeline is “critical infrastructure,” it could affect the outcome of that lawsuit.

            State completes amended environmental review of proposed Enbridge oil pipeline - The Minnesota Department of Commerce Monday released an amended environmental review of Enbridge’s controversial new Line 3 oil pipeline, though it includes no major changes. In December, the Minnesota Public Utilities Commission rejected the commerce department’s Environmental Impact Statement (EIS) on a handful of narrow concerns. The PUC gave the department 60 days to make clarifications. Calgary-based Enbridge wants to build a new pipeline across northern Minnesota to transport Canadian oil to its terminal in Superior, Wis. The new pipeline would replace Enbridge’s aging and corroding Line 3, which is running at just over half of its capacity due to safety concerns. The new Line 3 would follow the path of the current pipeline to Clearbrook, Minn., but it would then jog south to Park Rapids before heading east to Superior. Environmental groups and Indian tribes oppose new Line 3, saying it would open a new region of lakes and rivers to possible degradation from oil spills. They have asked the PUC to reconsider its December decision on the EIS, claiming the document should be rejected because it’s fundamentally flawed, lacking among other things an assessment of large oil spills. The PUC is expected to hear their reconsideration arguments next week. 

            'I'm just more afraid of climate change than I am of prison’ - On Oct. 11, 2016, Michael Foster and two companions rose before dawn, left their budget hotel in Grand Forks, N.D., and drove a white rental sedan toward the Canadian border, diligently minding the speed limit. As the driver, Sam Jessup, followed a succession of laser-straight farm roads through the sugar-beet fields, and a documentary filmmaker, Deia Schlosberg, recorded events from the back seat, Foster sat hunched in the passenger seat, mentally rehearsing his plan. When Jessup pulled over next to a windbreak of cottonwood trees, Foster felt the seconds stretch and slow. For months, he’d imagined his next actions: He would get out of the car, put on a hard hat and safety vest, retrieve a pair of bolt cutters from the trunk and walk to the fenced enclosure about 100 feet away. He would snip the padlock that secured the gate and approach the blunt length of vertical pipe in the center of the enclosure — the stem of a shut-off valve for the 2,700-mile-long Keystone Pipeline, which carries crude oil from the tar sands of Alberta to refineries on the Texas coast. He would cut the chain on the steel wheel attached to the stem, and turn the wheel clockwise until it stopped. What Foster didn’t expect was that once he’d broken through the chain-link fence, he would be briefly overwhelmed by the magnitude of what he was about to do. He faced away from the biting wind, and allowed himself to cry. He then put a gloved hand on the steel wheel, which was almost three feet across and mounted vertically as if on the helm of a ship, and began to turn it. For long minutes it spun easily, but then both the wheel and the ground below his feet began to shake. Foster had been told to expect this, but still he hesitated. When he resumed turning, he had to throw his body into the task, at times dangling from the wheel to coax it downward. Finally, he could wrestle it no farther, and the shaking stopped.  About half an hour after Foster walked away from the valve station, an officer arrived and arrested Foster, Jessup and Schlosberg.

            North Dakota oil output fell to 1.18 million b/d in December: state -- North Dakota oil output fell to 1.18 million b/d in December, down nearly 15,700 b/d from December and the first production decrease from the previous month since June, according to the state's Department of Mineral Resources. December's output was nearly 46,200 b/d below the all-time North Dakota output high of 1.23 million b/d, set in December 2014. North Dakota's daily natural gas output averaged over 2.08 Bcf/d in December, down from nearly 2.10 Bcf/d in November, which was an all-time record, according to the state agency. There were 14,293 producing wells in North Dakota in December, down 45 wells from November, which was also an all-time high. The state issued 86 drilling permits in December, down from 119 in November. But statistics appear to point to higher production in 2018. The state issued 106 drilling permits in January when the rig count averaged 56 rigs, up from 52 in January. The rig count Thursday was 57, the agency said. "Operators have shifted from running the minimum number of rigs to incremental increases and decreases as WTI oil price moves between $45 and $60/barrel," Lynn Helms, North Dakota's top oil and gas regulator, said in a statement. Bakken operators plan to add between five to 10 rigs in Q3 and Q4 of this year, "depending on workforce and infrastructure constraints," Helms said. The state estimates that were 877 wells waiting on completion at the end of December, down 6 from the end of November while the estimated inactive well count fell by 23 to 1,469 wells over that one-month time frame. 

            Trump Team to Rescind Methane Rule --Jerri-lynn Scofield -  The Trump team continues to dismantle slowly and methodically the limited environmental protection legacy of its predecessor– particularly with respect to climate change. Most immediately. it’s the turn of the methane rule, which was enacted during the waning days of the previous administration by the Interior Department to limit the flaring of methane and other problematic practices on public (federal) lands. Yes, I know: that regulators couldn’t get their act together to promulgate a new rule until Trump was nearly installed in the White House was no doubt a feature– not a bug. Most of those responsible for that and similarly misguided delays, no doubt expected Hillary Clinton to be elected President, and that meant the exiting charade of pretending to protect the environment– and addressing the imperative of climate change—while never quite getting around to enacting final binding rules– could continue to be played. Waiting ‘til end days to act ensured that enacted regulations were vulnerable– and ensured that some apparent Democratic governance victories were short-lived. Significant rules that had been properly promulgated were subsequently  cuppered under the procedures set out in the Congressional Review Act (CRA)– although I concede that Democrats perhaps didn’t anticipate just how aggressively these measures could be deployed. The Trump administration and its allies among the deregulation uber allies congressional Republican set have used CRA procedures to target rules enacted within 60 session days of Congress passing a CRA resolution to overturn the rule. That means the agency that had promulgated the deep-sixed rule was thenceforth barred from reviving the rule in “substantially the same form”, unless and until Congress passes new authorizing legislation (for my further discussion of CRA, see Republicans Deploy CRA Authority to Roll Back Regulations, Trump and Congress Use Congressional Review Act to Roll Back 14 ‘Midnight’ Rules; More to Follow? and Republicans to Use CRA to Roll Back ‘Midnight’ Rules and Benefit Oil Companies).

            How to Reduce Methane Emissions From the Oil and Gas Industry Across North America - U.S. natural gas production has boomed in the past decade, driving gas prices sharply downward. Natural gas has become a competitive choice for electricity generation, edging out coal . Because gas contains less carbon than coal , greenhouse gas emissions from power plants have dropped, and the U.S. grid has become cleaner, more efficient and more flexible. More natural gas is also entering the power sectors in Mexico andCanada .But the low-carbon profile of natural gas doesn't tell the whole story. Methane , its primary component, is a powerful greenhouse gas. It leaks to the atmosphere from wells and pipelines , contributing to climate changeand reducing the climate benefit of using natural gas.In 2016 U.S., Canadian and Mexican leaders pledged to reduce methane emissions from the oil and natural gas sector 40 to 45 percent below 2012 levels by 2025. Today, however, Canada is just beginning to contemplate more comprehensive regulatory limits on methane. Mexico has made only nonbinding pledges so far, and the Trump administration is rolling back federal methane regulation . Scientists are still working to quantify methane emissions from oil and gas production, and to improve tools for detecting and reducing methane leaks. But even though much of the science is still uncertain, and the Trump administration is retreating from regulating methane leaks, we believe it is still possible and necessary to make progress on reducing methane emissions. Many actors—including state and provincial governments, industry, and nongovernmental organizations—are working to advance methane measurement and mitigation efforts. To be effective, they need to work in concert. In a newly published synthesis article , we propose a North American Methane Reduction Framework to coordinate regulations, voluntary industry actions and scientific developments in methane estimation and mitigation. This approach can bridge the divide between science and policy, and drive new research that in turn can support better policies when governments are ready to act.

            US spending bill expands carbon tax credit, boosting oil producers (Reuters) - A little-noticed addition to the U.S. budget deal approved last week will help Occidental Petroleum Corp and other oil producers by more than tripling a tax credit for injecting carbon dioxide back into the earth to increase crude output. The tax-credit expansion, although supported by environmentalists and energy producers, had failed to move out of Congress during the 2016 presidential election. Its passage now likely will further boost already surging U.S. oil output in a year that production is forecast to hit 11 million barrels per day. The injection process, used for more than 40 years to prolong output from traditional oil wells, also is being tested by Oxy and others as a way to speed more oil production from shale wells. President Donald Trump last week signed the spending plan into law. It boosts for 12 years an existing tax credit to $35 per metric ton of carbon dioxide injected underground, up from $10 per ton. “This will be an economic driver for our nation,” said North Dakota Senator Heidi Heitkamp, a Democrat who had pushed for the credit’s expansion with a bipartisan group of senators. “It will hopefully push a lot of innovative technologies across a range of industries, not just in coal or oil.” Oxy, Denbury Resources Inc and others inject more than 2 billion cubic feet of carbon dioxide each day into traditional oil wells, many of which came online more than 75 years ago. The method harnesses the carbon dioxide produced during the extraction of oil or from electric-power plants, and forces it back into the fields. That helps drive more oil to the surface. The technique, one of several enhanced oil recovery (EOR) strategies that can prolong the productive life of oilfields, underpins more than five percent of U.S. oil output, or about 450,000 barrels per day, according to energy consultancy Advanced Resources International. EOR can help firms extract between 30 percent and 60 percent of all the oil held in a reservoir. That’s far more than the 10 percent usually recovered from initial traditional drilling, according to the U.S. Department of Energy.

            Shipping first as commercial tanker crosses Arctic sea route in winter - An LNG tanker designed for icy conditions has become the first commercial ship to travel the Arctic’s northern sea route in winter. It marks a milestone in the opening up of Russia’s northern coastline, as thawing polar ice makes industrial development and maritime trade increasingly viable. The Teekay vessel Eduard Toll set out from South Korea in December for Sabetta terminal in northern Russia, cutting through ice 1.8m thick. Last month, it completed the route, delivering a load of liquefied natural gas (LNG) to Montoir, France. Its voyage was captured by the crew in a timelapse video. Bermuda-based firm Teekay is investing in six ships to serve the Yamal LNG project in northern Russia. A similarly designed vessel owned by Sovcomflot made the same passage last August. This small and growing Arctic-ready fleet can operate independently of icebreaker escorts, which are also in high demand. Arctic sea ice is steadily thinning and receding, with seasonal fluctuation, as global temperatures rise due to human activity. In January 2018, ice extent hit another record low for the month, according to the US National Snow and Ice Data Center. While polar conditions remain tough, the trend creates market opportunities. The northern sea route is shorter than alternatives through the Suez Canal for many trade links between Europe and Asia. 

            Watch how easily this gas tanker just crossed the melting Arctic  - timelapse video - The first liquefied natural gas tanker to cross through the Russian Arctic this time of year without the help of a separate icebreaker finished its journey Friday. Eduard Toll, a tanker that belongs to regional energy shipping company Teekay, landed in northern Russia after setting route from Korea at the end of January. Teekay can thank climate change for this easy passage: Arctic sea ice extent was at record-breaking low levels in January. These are the kinds of conditions that made this trip possible at all. Arctic sea ice is melting, and now ships carrying the very substance that contributes to its melting can nonchalantly roll through. This saves money for companies trading between Europe and Asia (like Teekay), as the route is shorter than going through Egypt’s Suez Canal.  This time of Arctic “exploration,” as Teekay describes it, is set to expand as more and more ice melts, giving way to new shipping routes. This tanker is the first of six that’ll carry natural gas for a major Russian natural gas project. These waters also pose a security risk to the U.S. as they see more use, per the Pentagon. While Russia has been focused on investing in building its military to make use of this new region, the U.S. has been lagging behind.

            U.S. proved reserves of natural gas up in 2016, oil reserves remained unchanged – EIA - The United States had 341.1 trillion cubic feet (Tcf) of natural gas proved reserves as of the end of 2016, an increase of 5% from 2015, according to EIA’s recently released U.S. Crude Oil and Natural Gas Proved Reserves report. U.S. crude oil and lease condensate proved reserves remained virtually unchanged from their 2015 level, at 35.2 billion barrels.   Proved reserves are those volumes of oil and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Changes in proved reserves from year to year reflect new discoveries, either in new fields, new reservoirs in old fields, or extensions of existing reservoirs; net revisions and other adjustments to previous reserve estimates; and reductions from annual production of each fuel.  Pennsylvania had the largest net increase in natural gas proved reserves of all states between 2015 and 2016, adding 6.1 Tcf of natural gas proved reserves in the Marcellus Shale play in the Appalachian Basin. Following a record high set in 2015, U.S. production of natural gas decreased 1% between 2015 and 2016—the first annual decline in U.S. natural gas production in 10 years.   The share of natural gas proved reserves from shale compared with total natural gas increased from 54% to 62% in 2016 because gas reserves were added in several shales, including the Wolfcamp, Marcellus, Eagle Ford, Utica, Woodford, and Haynesville shales. Texas had the largest net increase in proved reserves of crude oil and lease condensate of all states between 2015 and 2016, adding 941 million barrels of proved crude oil and lease condensate reserves, mostly from development in the Permian Basin. Operators drilled and completed long horizontal wells into the stacked oil-bearing formations of the Spraberry Trend and the Wolfcamp Shale. Between 2015 and 2016, U.S. production of crude oil and lease condensate decreased by 6%.

            The United States is projected to become a net energy exporter in most AEO2018 cases -  EIA projects that the United States will become a net energy exporter in 2022 in the newly released Annual Energy Outlook 2018 (AEO2018) Reference case, primarily driven by changes in petroleum and natural gas markets. The transition from net energy importer to net energy exporter occurs even earlier in some sensitivity cases that modify assumptions about oil prices or resource extraction. Sensitivity cases with less energy production project that the United States will remain a net energy importer through 2050.  The transition of the United States to a net energy exporter is fastest in the High Oil Price case, where higher crude oil prices lead to more oil and natural gas production and transition the United States into a net exporter by 2020. In that case, higher crude oil prices also result in higher petroleum product prices and lower consumption of petroleum products, driving decreases in net petroleum imports.  In the High Oil and Gas Resource and Technology case, with more favorable assumptions for geology and technological developments, the United States becomes a net exporter in 2020, and net exports increase through the end of the projection period. In cases with relatively low oil prices or less favorable assumptions for geology and technological developments, U.S. net energy trade still decreases, but the United States remains a net energy importer through 2050.  In energy equivalent terms, the United States imported about 27 quadrillion British thermal units (quads) of energy in 2017 and exported 18 quads, which resulted in 9 quads of net imports. In 2017, the United States imported about 11 quads of petroleum and other liquids and exported 2 quads of coal and coal coke. U.S. natural gas trade in 2017 was nearly balanced between imports and exports, and net electricity trade with Canada and Mexico was relatively small. Petroleum and natural gas account for most of the changes EIA projects in U.S. energy trade.

            US set to become swing oil supplier --US runaway crude oil production and total oil export growth is having dramatic impacts on global oil markets, positioning the US to be the major oil export hub in the world.  It is already the world’s largest total producer of liquids, now marketing close to 15.5m barrels a day including crude oil, bio fuels and natural gas liquids. By year-end, total US oil liquids output should be well over 50 per cent higher than either Russia or Saudi Arabia. Also by this time next year, the US should add over 1m b/d not only to production, but also to exports, with total liquids exports at over 8.3m b/d, larger than either Russia or Saudi Arabia.October 2017 data were already remarkable, indicating a year-on-year increase of 2.2m b/d of which crude oil was close to 1m b/d, the remainder being oil products and liquid petroleum gas.We expect US crude production to grow about 1.4m b/d this year (vs the EIA’s projection of 1.26m b/d) while US natural gas liquids should grow another 550,000 b/d. This means that total US exports could rise by anywhere from 1.1m to 1.6m b/d this year.While the US still imports around 2.5m b/d more of crude oil and petroleum products, we expect US production to rise by at least 3m b/d by 2020, making it an oil surplus country. Far more important than that number is that fact that the US is already the largest oil trading hub in the world, with recent trade totalling around 16.5m b/d.

             Capacity, demand constraints throttle Canadian gas imports to Chicago area.  Canada’s natural gas exports — which have been pushed out of the supply-rich U.S. Northeast in recent years — are also facing challenges in Western U.S. markets. Growing supply from North Dakota’s Bakken Shale is increasingly competing for capacity on the same transportation routes as imports and is targeting the same downstream markets. Meanwhile, the rise of renewable energy in the West region from wind and solar farms is limiting gas demand in those target markets. What does that mean for imports from Canada? Today, we look at how these factors are affecting Canada’s exports to the Western U.S. This is Part 3 of a series updating our analysis of changing gas flows along the U.S.-Canada border. As we noted inPart 1, Canadian gas production has been climbing in recent years and hit 10-year highs by late 2017. Historically, about a third of that gas has found a market across the border in the U.S. But Canadian producers are facing ever-increasing competition from soaring U.S. gas supply, led by the Marcellus/Utica shales in the Northeast. On the whole, Canadian exports to the U.S. in recent years have managed to remain relatively stable in the 5.5-6.0 Bcf/d range on an annual basis. But regional dynamics tell a much different story. In Part 2, we zeroed in on border flows in the Northeast, which flipped from being strictly a net importer of gas from Canada to being a net exporter on most days. Over the past decade, Marcellus production has not only displaced the more than 2.0 Bcf/d of Canadian gas supply that once flowed to the Northeast market, but also has made the Northeast region a net exporter of gas supply to Canada for most months out of the year.

             The Shale 'Miracle' & The Reality-Optional World Of Bizarro Finance - Kunstler -- As of this week, the shale oil miracle launched US oil production above the 1970 previous-all-time record at just over ten million barrels a day.  Techno-rapturists are celebrating what seems to be a blindingly bright new golden age of energy greatness. Independent oil analyst Art Berman, who made the podcast rounds the last two weeks, put it in more reality-accessible terms: “Shale is a retirement party for the oil industry.” It was an impressive stunt and it had everything to do with the reality-optional world of bizarro finance that emerged from the wreckage of the 2008 Great Financial Crisis. . If you can’t afford to run your society, then try borrowing from the future to keep your mojo working. The shale oil industry was a prime beneficiary of this new hyper-debt regime. The orgy of borrowing was primed by Federal Reserve “creation” of trillions of dollars of “capital” out of thin air (QE: Quantitative Easing), along with supernaturally low interest rates on the borrowed money (ZIRP: Zero Interest Rate Policy). The oil companies were desperate in 2008. The discovery of new oil had been heading down remorselessly for decades, to the point that the world was fatally short of replacing the oil it used every year with new supply. Technology - that El Dorado of the Mind - rode to the rescue with horizontal drilling and fracturing of ”tight” oil-bearing shale rock. The only problem was you couldn’t make any money doing it. The shale oil companies could get plenty of cash-flow going, but it all went to servicing their bonds or other “innovative” financing schemes, and for many of the companies the cash flow wasn’t even covering those costs. It cost at least six million dollars for each shale well, and it was in the nature of shale oil that the wells depleted so quickly that after Year Three they were pretty much done.The two original big shale plays, the Bakken in North Dakota and the Eagle Ford in south Texas, have now apparently peaked and the baton has passed to the Permian Basin in west Texas. If the first two bonanzas were characteristic of shale, we can look forward not very far into the future when the Permian also craps out. There are only so many “sweet spots” in these plays. The unfortunate part of the story is that the shale oil miracle only made this country more delusional at a moment in history when we really can’t afford to believe in fairy tales.

             Oil spill tax on oil companies reinstated as part of budget deal | TheHill: Oil companies will once again have to pay a tax to fund oil spill cleanups thanks to Congress's new budget signed into law early Friday morning. Senators voted to reinstate the 9 cents per barrel tax on both domestic crude oil and imported crude and petroleum products as part of an "extenders" tax bill package. The package was included in the Senate's budget deal passed Thursday and would put the oil tax back into effect starting March 1, according to Politico. The tax on companies selling oil within the U.S. generated an average annual revenue of $500 million, according to the Congressional Research Service. But Republican leaders decided against renewing the tax in December, causing it to lapse at the end of the year. The lapse was met with heavy criticism from the public and environmentalists. "The Oil Spill Liability Trust Fund ensures that when there is a spill, American taxpayers are not left holding the bag to clean up Big Oil's mess," Sen. Ed Markey (D-Mass.) said in a statement at the time. "We should have a robust trust fund — not just trust that oil companies will do nothing wrong — in case a disaster like the BP spill happens again." The oil tax is the primary contributor to the Oil Spill Liability Trust Fund, which is used to pay for oil spill cleanups similar to the BP Deepwater Horizon oil spill. The fund contained $5.8 billion at the time of the lapse, a senior financial analyst with the Coast Guard's National Pollution Fund Center, which oversees the trust fund, told The Times-Picayune at the time.

             TransCanada Expands Gas Pipelines With Keystone XL in Limbo - While TransCanada Corp. continues to weigh whether to build its long-delayed Keystone XL oil pipeline, the company announced another major expansion of its natural gas system in Alberta. TransCanada will spend C$2.4 billion ($1.9 billion) to expand its NGTL System, adding 1 billion cubic feet of daily shipping capacity, according to a statement Thursday. The company struck binding agreements with shippers that start in November 2020 and April 2021, with an average contract term of almost 29 years. The expansion shows TransCanada isn’t sitting still while it considers whether to move ahead with Keystone XL. The company has been proceeding with preliminary work on the $8 billion, 1,200-mile (1,930-kilometer) project, but hasn’t officially announced a decision to build it. Activists haven’t given up trying to block it, with opposition groups filing a motion to invalidate a key permit last week. TransCanada made no significant new announcements about Keystone XL in its fourth-quarter earnings report on Thursday. Even without Keystone XL, the company’s oil transport business posted strong results. The unit’s comparable earnings before interest, taxes, depreciation and amortization rose 33 percent to C$401 million, helped by higher volumes on the existing Keystone system and the start of operations on its Grand Rapids and Northern Courier lines. The expansion on the NGTL system may bring some relief to Canadian natural gas drillers who have suffered through wild swings in pricing as rising production from the prolific Montney formation tries to move through a crowded pipeline network. Maintenance on the system last summer sent AECO gas’s discount to Henry Hub to the widest in more than a decade.

            Enbridge to double 2018 asset sales, targets about C$8 billion: sources   (Reuters) - Enbridge Inc, Canada’s biggest pipeline operator, plans to accelerate its divestment program by selling assets valued at about C$8 billion ($6.4 billion) in 2018, more than twice its initial sale target, according to people familiar with the situation. Under pressure from both investors and rating agencies, the Calgary, Alberta-based firm wants to ramp up the sale of non-core assets from the previous C$3 billion it forecast in November, the people said on condition of anonymity because the process is private. Enbridge is trying to take advantage of favorable selling conditions to rid itself of unwanted units and pay down its C$61.4 billion long-term debt, the people said. Enbridge last year completed a $28 billion merger with Spectra Energy Corp. The company, which reports fourth-quarter earnings on Friday, declined to comment. Shares in Enbridge have lost 23 percent in the last 52 weeks, underperforming the broader market. Earlier this month, the stock hit its lowest in nearly two years. The shares rose about 1.6 percent on the news and closed up 0.9 percent, at C$43.23. As part of a strategic review announced in November, Enbridge said it has identified C$10 billion in non-core assets that it could sell over time. Enbridge is working with an investment bank to sell Canadian and U.S. renewable energy assets worth more than C$2 billion, the sources said. It is also looking to offload Canadian midstream assets, largely the result of the Spectra merger, that could fetch as much as C$4 billion, the sources said. Renewable energy assets have drawn interest from investor groups, including infrastructure and private equity funds, in recent years due to a steady return in a low interest rate environment and their increasing prevalence in North America’s energy make-up. Also, Enbridge has hired an investment bank to sell its Midcoast Gas Gathering and Processing business in the United States, the sources said. Enbridge hopes that selling non-core assets will help speed up debt reduction, enabling it to strengthen its balance sheet and raise its dividend.

            Mexico's increasingly open natural gas market, and CFEnergia's role in it. - Mexico’s natural gas market continues to evolve rapidly. New pipelines are being built to move increasing volumes of U.S.-sourced gas to Mexican power plants, industrial customers and other end users. Gas exports from the U.S. to Mexico already average 4.5 Bcf/d and those volumes are sure to rise as more pipelines and power plants come online. Just as important, the government of Mexico has been taking aggressive steps to undo what had been state-owned Petróleos Mexicanos’s (Pemex) near-monopoly on gas pipeline capacity and to encourage a large and diverse group of gas marketers to enter the fray. Today, we examine ongoing efforts to increase transparency, pipeline access and competition in the gas market south of the border, and look at how Comisión Federal de Electricidad’s (CFE) marketing affiliate, CFEnergía, is growing its gas marketing business within Mexico. We last looked at Mexico’s gas infrastructure in Rio, where we took a deep dive into the Nueces header being built for CFE at the Agua Dulce Hub in South Texas. We also wrote about the status of gas pipelines in Mexico as well as the header system that was built by Energy Transfer Partners for CFE at West Texas’s Waha Hub in Part 4 of our Waha blog series, “It Was Good Living With You, (W)aha.” Both of those blogs were mostly focused on the pipeline infrastructure being built on both sides of the border to facilitate increased exports of gas from the U.S. at the Texas/Mexico border. However, structural changes have also been taking place within Mexico that are impacting how gas is bought and sold within the country. There are currently about 10 large capacity holders and almost two dozen smaller players actively marketing gas within Mexico. Although activity remains in a nascent phase compared to the U.S. market, the market in Mexico is developing along a path similar to its northern neighbor. In this blog, we detail the efforts of one of the largest current players in the Mexico natural gas market, CFE’s marketing affiliate, CFEnergía.

            We Are Drowning In Plastic, and Fracking Companies Are Profiting -   We are choking the planet in plastic. Everything from wasteful water bottles to grocery shopping bags are polluting our waterways, and endangering marine life and the natural environment. It’s fair to say that even the most casual news consumer has probably encountered a Facebook post, TV report, or radio segment about the garbage patches in the Pacific Ocean.  But what’s less well-known is what is fueling this plastics binge: fracking. As the Guardian recently reported, in less than a decade, tens of billions of dollars have been invested in creating new manufacturing sites around the world to turn fossil fuels into resin pellets used to manufacture plastic products. The companies profiting off this surge in plastics are contributing to a growing climate crisis while generating mountains of plastic garbage.One company behind this plastics surge is the U.K.-based chemical company Ineos. While not a household name like Shell or Exxon, Ineos is at the center of this growing plastics industry—but the damage caused by the company extends beyond the mounds of discarded waste littering beaches and waterways. The company’s 75 manufacturing facilities across 22 countries are responsible for chemical leaks, fires, explosions, and air and climate pollution. This record includes a 2008 chemical fire in Germany and air pollution in Scotland, where the company’s Grangemouth facilities were the country’s single largest emitter of carbon dioxide in 2016. And the Ineos business model also relies on polluting communities thousands of miles away in Pennsylvania and Ohio, where the fracking industry is scarring the landscape, polluting water, and threatening public health. The company uses the liquid gas found in the shale formations there to feed its chemical plants. To meet this demand, the company recently built a fleet of so-called “dragon ships” to carry volatile gas liquids across the Atlantic.  And Ineos wants to continue ramping up. After the first crossing of one of these liquid gas transport ships from the U.S. to the U.K., the chairman of Ineos called the event a “gamechanger” that could “spark a shale gas revolution,” according to a company news release.

            Unreleased government report suggests industry and ministers exaggerated fracking boom -Both politicians and industry leaders have been exaggerating the potential of future fracking operations in the UK, an unreleased 2016 government report has suggested. It estimated that 155 fracking wells will be constructed by 2025, a fraction of the number predicted by a prominent industry report that has stated 4,000 horizontal wells could be drilled by 2032, with 400 wells per year at the peak phase of construction.  The projected boom for employment and investment in the UK these would bring have been cited by ministers to justify the controversial practice. The Implementation Unit Report on Shale Gas predicted the much lower number.It was released after a Freedom of Information request revealed by Unearthed, Greenpeace’s investigative platform.Though it was made in 2016 for the Cabinet Office, the report was never released despite its discrepancies with other projections. Another industry report supported by the Government predicted fracking could create over 64,000 jobs and bring £33bn of investment to the UK, but this was based on the estimate of 4,000 wells.The new figures, therefore, raise questions over the economic benefits of fracking used by ministers and industry representatives to drum up support for it.Hydraulic fracturing, or “fracking”, to extract shale gas involves injecting water mixtures into wells to release underground fuel reserves. The technique has been opposed by many environmental campaigners and local residents in designated fracking areas due to environmental concerns.  Previous research has called into question the sustainability of fracking, and currently the US is the only nation carrying it out on a large scale.

            Carillion links put fracking firm’s scheme in doubt - A controversial plan to start fracking for shale gas in rural North Yorkshire has been thrown into doubt amid mounting concerns over the finances and management of the company behind the scheme. In a move that has encouraged anti-fracking protestors, energy secretary Greg Clark has ordered the start of drilling at Kirby Misperton to be put on hold pending an investigation into the “financial resilience” of Third Energy. The Department for Business, Energy and Industrial Strategy has offered no guarantee that the project would get a final go-ahead. Clark’s move, taken after the collapse of outsourcing firm Carillion, came as protest groups and Labour politicians drew attention to the fact that Carillion’s former chief executive, Keith Cochrane, is now the non-executive chairman of Third Energy.  Friends of the Earth has piled on further pressure by writing to Clark raising further objections, including a claim that the firm’s ultimate parent company is Third Energy Holdings, based in the Cayman Islands. No fracking operations have taken place in the UK since 2011, when it was found to be the probable cause of minor earthquakes around a test site on the Fylde coastal plain in western Lancashire.

            Norway defends its tax regime supporting oil exploration (Reuters) - Norway’s tax rules for the oil industry do not constitute state aid, its finance ministry told a European competition watchdog on Friday. The competition watchdog of the European Free Trade Association (EFTA) is investigating the tax regime following a complaint by Norwegian environmental group Bellona. Environmental groups, including Greenpeace, have also mounted a legal battle in Norway to try to stop the government from expanding exploration areas in the Arctic. “The Ministry maintains that the Norwegian rules on reimbursement of exploration costs and interest on carry forward of losses ... do not constitute state aid under Article 61 of the EEA Agreement, and are therefore in compliance with the EEA (European Economic Area) law,” the ministry said in a letter. Norway allows companies to deduct 78 percent of their exploration costs from taxable income. Since 2005, companies without taxable income have been reimbursed for the value of this benefit directly in cash. Bellona’s complaint focuses on those provisions for the up-front cash flow reimbursement of exploration costs, which the organization argues are in breach of state aid rules of the EEA. This has so far amounted to over 100 billion Norwegian crowns ($12.54 billion). In 2014 alone, the government paid 14.2 billion Norwegian crowns in reimbursements to the petroleum sector. “This means that if income is derived from petroleum activity taxed at a rate of 78 percent, the state, through the tax system, should cover a corresponding share of the cost incurred to earn this income,” the ministry said. The government argues that the scheme can generate trillions of crowns in future tax payments for the state. Bellona says that the state, as tax collector, should not trade such benefits for future gain. Norway, western Europe’s largest oil and gas producer, is seeking to attract more oil firms to explore in the Arctic Barents Sea. Environmentalists oppose the move and says reserves found in the Arctic might be never extracted because of measures to counter climate change, while the state will be left to reimburse exploration costs. 

            EU tells Turkey to avoid damaging actions after Cyprus ship incident - (Reuters) - The European Union on Monday called on Turkey to avoid threats and “refrain from any actions that might damage good neighborly” ties after Cyprus, a member of the bloc, accused the Turkish military of obstructing a ship exploring for gas. Cyprus is one of several states, also including Israel and Lebanon, racing to tap gas deposits in the eastern Mediterranean. Greek Cypriots run Cyprus’s internationally recognized government, while Turkish Cypriots have a breakaway state in the north - recognized only by Ankara - and say resources around the island belong to them too. Cyprus said on Sunday the Turkish military had obstructed a vessel contracted by Italian oil company Eni which was approaching an area to explore for natural gas. After speaking to the Cyprus President Nicos Anastasiades, the chairman of EU leaders, Donald Tusk, said: “I call on Turkey to avoid threats or actions against any EU member and instead commit to good neighborly relations, peaceful dispute settlement and respect for territorial sovereignty.” Turkey’s foreign ministry, in a statement on Sunday, did not make any mention of obstructing the Eni ship but said the case was a unilateral move by Greek Cypriots that violated the sovereign rights of Turkish Cypriots.

            Australia’s secret Timor Sea deal could pave oil and gas revenue future for East Timor - East Timor could receive up to 80 per cent of revenue from the $50 billion Greater Sunrise oil and gas field in the Timor Sea under a still-secret agreement with Australia, according to a report from the country’s capital of Dili.The Portuguese news agency Lusa quotes a source familiar with sensitive and high-level negotiations between the countries as saying East Timor would receive 80 per cent of the revenue if gas from the field is piped to an existing processing plant in Darwin, and 70 percent if it goes to a yet-to-be built industrial complex on East Timor’s remote south coast.The split, if the field is developed, would deliver billions of dollars to East Timor and likely secure its economic future for decades as existing oil and gas fields run dry in the next few years. The report written by Antonio Sampaio, the only foreign correspondent based in Dili, said a landmark agreement due to be signed at the United Nations in early March also puts the maritime boundary halfway between the countries, a huge concession by Australia for Asia’s newest nation.   East Timor and Australia announced in September they had agreed on central elements of a landmark treaty establishing maritime boundaries as well as sharing revenue arrangements for Greater Sunrise, ending years of bitter disagreement. Officials from the two countries, in meetings under the watch of the United Nations, have set a March 1 deadline to agree on the final details.

            Fracking pipe ‘deformation’ row: The sequel - A spokesman for Origin Energy says the anti-fracking Lock the Gate Alliance was misleading the public when it claimed that a pipe “deformation” amounted to a failure of the well in the NT’s Beetaloo field. Christopher Zipf says there was no risk to the safety of the public nor the environment. The claims and counter claims featured in the fracking enquiry last week: Lock the Gate spokeswoman Naomi Hogan described the deformation as a “casing failure”. She said in a media release on February 6: “Lock the Gate can reveal today that Origin Energy erased all evidence of a frack well casing deformation in a submission to the NT Fracking Inquiry, making the draft Final Report a false account. “Lock the Gate is calling for a full investigation of Origin’s conduct, including how the NT Government and the NT Fracking Inquiry came to be implicated in the cover up.” However, it was revealed that Origin had provided diagrams both showing (pictured) and not showing the deformation, to the NT Government as well as the inquiry. The government released a statement that it had not misled the inquiry. 

            A nearly invisible oil spill threatens some of Asia’s richest fisheries — A fiery collision that sank an Iranian tanker in the East China Sea a month ago has resulted in an environmental threat that experts say is unlike any before: An almost invisible type of petroleum has begun to contaminate some of the most important fishing grounds in Asia, from China to Japan and beyond.It is the largest oil spill in decades, but the disaster has unfolded outside the glare of international attention that big spills have previously attracted. That is because of its remote location on the high seas and also the type of petroleum involved: condensate, a toxic, liquid byproduct of natural gas production. Unlike the crude oil in better-known disasters like the Exxon Valdez and the Deepwater Horizon, condensate does not clump into black globules that can be easily spotted or produce heart-wrenching images of animals mired in muck. There’s no visible slick that can be pumped out. Experts said the only real solution is to let it evaporate or dissolve. Absorbed into the water, it will remain toxic for a time, though it will also disperse more quickly into the ocean than crude oil. Experts say there has never been so large a spill of condensate; up to 111,000 metric tons has poured into the ocean. It has almost certainly already invaded an ecosystem that includes some of the world’s most bountiful fisheries off Zhoushan, the archipelago that rises where the Yangtze River flows into the East China Sea. The area produced five million tons of seafood of up to four dozen species for China alone last year, according to Greenpeace, including crab, squid, yellow croaker, mackerel and a local favorite, hairtail. If projections are correct, the toxins could soon make their way into equally abundant Japanese fisheries. Exposure to condensate is extremely unhealthy to humans and potentially fatal. The effects of eating fish contaminated with it remain essentially untested, but experts strongly advise against doing so. “This is an oil spill of a type we haven’t seen before,”  “Working out the impact is actually a huge task — probably next to impossible.”

            Iraq says $4 billion needed for new downstream oil investments (Reuters) - Iraq needs $4 billion for new investments in its downstream oil industry, Oil Minister Jabar al-Luaibi said on Tuesday, outlining plans to expand refining capacity over the next several years. Speaking at a conference on reconstruction of the war-torn country, he also said Iraq planned to boost its crude oil production capacity to 7 million barrels per day by 2022, from 5 million bpd at present. Luaibi said the downstream investment would lift refining capacity to 1.5 million bpd by 2021, with 500,000 bpd of that earmarked for export. The increase in refining capacity would come from seven projects, some of them new and some involving expansion of existing refineries. Some would be turnkey projects, in which contractors would hand over facilities to Iraq, while others would be build-operate-transfer deals in which private firms would receive concessions to operate facilities.

            Nigeria preparing to comply with OPEC output cap: Kachikwu - Nigeria will refocus on oil projects that deliver higher returns to keep production within the limits set by OPEC, oil minister Emmanuel Kachikwu said late Tuesday. The country has been struggling to make good on its pledge not to produce above 1.8 million b/d under the OPEC/non-OPEC output agreement, with output hitting its highest level in more than two years in January at 1.93 million b/d, according to the S&P Global Platts survey. "Oil prices are currently depressed at $60-$70/b and, coupled with the production quota imposed by the Organization of Petroleum Exporting Countries, Nigeria will begin to look at its priorities differently," Kachikwu said in an oil ministry statement. Africa's biggest oil producer "will only consider projects that are of higher net value for the country," he added. Nigeria is working hard to keep its crude oil output within the OPEC quota, and would therefore need to focus on getting more revenue from existing projects by reviewing the production sharing contract (PSC) terms, he said. Kachikwu made clear this means prioritizing the approval of oil projects with international oil companies and reviewing the fiscal terms in the agreements with foreign partners to develop deepwater oil fields. Nigeria has not seen the start-up of new big oil fields in almost half a decade. But later this year it will get first oil from the 200,000 b/d offshore Egina oil field. 

            Venezuela To Accept More Crude Oil From Russia As Production Falters -- Russian crude oil exports to Venezuela are rising as Caracas struggles to produce enough crude to supply refineries in its contracted network, according to a new report by S&P Global Platts.Russian Urals crude is now entering Venezuela at a rate of 335,000 barrels per day to supply PDVSA’s refinery in Curacao.So far this year, Caracas has purchased 3 million barrels of Urals crude from Swiss trader GlencoreFour tankers are scheduled to reach Curacao from Russian ports just this month, trading sources said.PDVSA has been the contractual operator of Curacao for many years, but the contract is set to expire in 2019. Shell, the facility’s owner, has said PDVSA will not be the facility’s operator beyond the existing contract due to its failure to meet contractual obligations to perform upgrades.According to OPEC’s Monthly Oil Market Report published this week, secondary sources - the ones the cartel uses to monitor compliance and official stats - pegged Venezuela’s crude oil production in January 2018 at 1.6 million bpd, down by 47,300 bpd compared to December 2017. This was the largest monthly decline in oil production among OPEC’s 14 member states. Venezuela, allowed to pump as much as 1.972 million bpd under the deal, surely did not make that cut voluntarily - its economy is collapsing and oil production has been in freefall for months now.  Venezuela, for its part, self-reported to OPEC that its oil production last month increased by 148,300 bpd over December to 1.769 million bpd.

            Interview: Russia's Novak spells out vision for close long-term OPEC relationship --Russia wants to build a long-term relationship with Saudi Arabia and the broad OPEC alliance once their pact to restrict oil supplies expires, energy minister Alexander Novak said in an interview with S&P Global Platts. The world's largest producer of crude is reining in its output as part of a deal first agreed in 2016 with OPEC and a Russia-led group of smaller producers to withdraw 1.8 million b/d from global supply. Novak consented to extend the pact through 2018 last December, from the previous deadline of the end of March, and co-chairs, alongside Saudi energy minister Khalid al-Falih, the coalition's influential market monitoring committee. The coalition members are increasingly talking about future cooperation after the deal expires, and Russia and Saudi Arabia are already working closer in a number of areas.Last year, the two countries established a $1 billion fund to invest in joint energy projects, including in oil services and petrochemicals. They are also discussing gas projects, after Russia's Yamal LNG project was launched in the Arctic.While some analysts question the stability of the relationship between the world's two biggest oil producers, which are likely to start competing for the markets again sooner or later, Novak said he did not see the grounds for such concerns.

            Russia, Saudi Arabia to ink LNG deal Wed, finalize 3 joint energy projects soon: Russian official - Russia and Saudi Arabia plan to ink an agreement in the LNG sector during Wednesday talks in Riyadh, and also aim to finalize three major energy projects worth more than $2 billion in joint investments within the next three months, as the two countries aim to accelerate work to build a strong bilateral relationship, the head of Russia's Fund of Direct Investments, Kirill Dmitriyev, said Wednesday. Saudi Aramco is expected to "partner with a major LNG project in Russia," Dmitriyev said, speaking during an energy forum in Riyadh."I think today you will also see a big announcement between Saudi Aramco and a major LNG project in Russia, but let's wait for the announcement," he said, adding that Russia enjoyed seeing Saudi Arabia's energy minister Khalid al-Falih visiting the Arctic Yamal LNG project launched in late 2017. Falih twice visited the Novatek-led Yamal LNG project last year as Saudi Arabia is interested in LNG purchases to free more oil that it currently uses as feedstock for its power stations. The Yamal LNG's initial capacity of 5.5 million mt of LNG is set to grow to 16.5 million mt/year when all three trains are launched and operational, with two more trains to be launched in the third quarter of 2018 and the first quarter of 2019, respectively. Novatek is already working on its second LNG project, the Arctic LNG 2, to be located on the neighboring Gydan peninsula, also in the Arctic.Earlier this month, Novatek's representatives said the company has increased the planned capacity of the plant to 19.8 million mt/year, up from initially considered 16.5 million mt/year. Other joint projects that the two countries have been discussing recently involve a $1 billion petrochemical project that Russian Sibur plans to build in Saudi Aramco, as well as Saudi's involvement into Russia's biggest oil service provider, Eurasia Drilling Company, and Novomet oil equipment producer, to supply services and parts to Saudi Aramco, Dmitriyev said.

            Gazprom warns Europe of gas shortage without increased Russian imports - Europe will soon experience a gas shortage and price spike if it tries to rely on U.S. gas imports to cover rising demand instead of increasing purchases from Russia, Kremlin energy giant Gazprom told Reuters. The warning about a possible supply crunch comes as Gazprom prepares to start large-scale deliveries to China in a move reminiscent of Russia’s oil strategy, under which Moscow became a major supplier to Beijing at the expense of Europe. Gazprom’s deputy head Alexander Medvedev said the company would have enough supplies for both Europe and Asia but that it was time for Europe to decide from where it should source gas. “Europe completely miscalculated when they assumed that they won’t need much additional gas and if they need some it can be supplied from outside Russia,” Medvedev said.

            Saudi Arabia Plans To Double Natural Gas Output In 10 Years - Saudi Arabia plans to double its natural gas production over the next ten years, the country’s energy minister told reporters on Wednesday.“When it comes to natural gas, over the next decade we are going to be roughly doubling our production to 23 billion cubic feet per day and substantially increasing the percentage of natural gas in the Kingdom’s fuel mix, displacing liquids and therefore reducing carbon (emissions),” Khalid Al-Falih said at the eighth annual IEA-IEF-OPEC Symposium on Energy Outlooks occurring in Riyadh.Natural gas is considered a “green” fuel because burning it releases less carbon dioxide into the atmosphere than coal or oil.Al-Falih also addressed industry-wide concerns regarding the future of an OPEC-led pact to reduce global oil output by 1.8 million barrels per day through the end of the year.“Market volatility is a common concern for producers and consumers, and the Kingdom is committed to mitigating this volatility and moderating its negative impacts by responsibly meeting its pledges” under the deal. “I am confident that our high degree of cooperation and coordination will continue and bring the desired results,” Falih told the industry conference, with an audience of Russian Energy Minister Alexander Novak and OPEC Secretary General Mohammad Barkindo.According to OPEC’s latest production figures released earlier this week, Saudi Arabia lifted its January production by 23,300 bpd to 9.977 million bpd—but still below its 10.058-million-bpd quota, over complying once again. The market volatility and the plunge in oil prices—from over $70 to $62 a barrel Brent—in just two weeks has raised concerns that oil is on another downturn, and Saudi Arabia returns to reiterate its pledge that it will do “whatever it takes” to bring global inventories back to balance.

            NYMEX March natural gas down 2.3 cents seeking direction -- After settling 11.3 cents lower at $2.584/MMBtu Friday, NYMEX March natural gas futures were near unchanged overnight ahead of Monday's open with changing fundamentals. At 7:15 am ET (1215 GMT) the contract was 2.3 cents lower at $2.561/MMBtu, while trading a range from $2.545/MMBtu to $2.607/MMBtu. Colder weather helped drive up natural gas demand to start February, with the EIA's latest "Natural Gas Weekly Update" showing a 13% rise in total US gas consumption during the week to Feb. 7 from a week earlier, led by a 20% gain in ResComm demand.Rising demand in the report feeds expectations of a rise in the rate of weekly inventory withdrawals for the next storage data for the week ended Feb. 9, for which preliminary estimates call for drawdowns in the upper 170s Bcf against the 120 Bcf year-ago pull and the 154 Bcf five-year-average. The week's data would follow a 119 Bcf draw from stocks reported by the EIA for the week to Feb. 2 that bested the average anticipated 115 Bcf pull, but trailed both the 142 Bcf prior-year withdrawal and the 151-Bcf five-year average drawdown.

            March NYMEX natural gas retraces some steps to $2.606/MMBtu in 'technical buying'- NYMEX March natural gas futures climbed in technical buying overnight in the US ahead of Tuesday's open. At 6:50 am ET (1150 GMT) the contract was 5.4 cents higher at $2.606/MMBtu. March gas shed 3.2 cents in the previous session falling through the key support level at $2.57/MMBtu in its fourth consecutive day on the downtrend but sentiment of oversold conditions is inspiring a fresh round of buying, as traders consider changing fundamentals. Recent cold weather is seen to have bolstered demand and encouraged a step higher in the rate of weekly storage draws when the US Energy Information Administration releases its next inventory report on Thursday that will cover the week ended February 9, with preliminary estimates spanning withdrawals in the mid- to upper 170s Bcf. That would compare to a 120 Bcf year-ago pull and the 154 Bcf five-year-average drawdown. It would also come on the heels of a draw of just 119 Bcf the previous week. Cooler weather during the review week to February 7, much of which will be included in the upcoming storage report, is seen to have driven a 20% week-on-week boost in consumption in the residential and commercial sectors that contributed to a 13% increase in total US natural gas consumption, the EIA's latest Natural Gas Weekly Update showed. Warming in store for the major heat-consuming regions in the midrange, however, spell renewed demand weakness in the weeks ahead likely to slow anew the rate of inventory withdrawals.

            March NYMEX gas sheds a cent to $2.582/MMBtu in cautious trade - Wednesday's open, in cautious trade amid the expectation of supportive near-term storage data. Following a 4.2 cent advance in yesterday's session, the contract was down 1.2 cents at $2.582/MMBt at 7:15 am ET (1215 GMT).Cold weather that ramped up demand to start February is seen to have driven a step higher in the rate of weekly storage withdrawals when the US Energy Information Administration releases its next storage data on Thursday. Preliminary estimates call for a drawdown in the mid-170s Bcf to the low 180s Bcf for the review week ended February 9, which would exceed both the 120 Bcf year-ago pull and the 154 Bcf five-year-average withdrawal.The week's data would come on the heels of well below-average storage draws for the past couple of weeks at 99 Bcf and 119 Bcf. Warmer weather in store for the major heat-consuming regions in the eastern US spell diminished heating demand and a reduction in the amount of natural gas drawn from underground storage facilities in the coming weeks, but changing weather further out feeds upside support for demand.

            NYMEX March gas holds steady, settles at $2.587/MMBtu -- The NYMEX March natural gas futures contract was relatively unchanged Wednesday, settling 0.7 cent lower at $2.587/MMBtu, as the market took a break from what has been a volatile month so far. Despite record US demand and gas storage numbers that are well below the five-year average during February, the NYMEX front-month contract has experienced sharp declines since March took over as the front-month contract, as forecasts of warmer-than-average weather and strong production have driven prices down. Wednesday's small price movement takes a step back from drops experienced lately in the front-month contract, as the contract has fallen $1.04, or 28.6%, over the prior 12 trading days. JJ Woods Associates President John Woods said the market dip throughout February "has been an overreaction to the downside" as concerns of strong output and warmer weather pressured the front-month contract from the $3.60/MMBtu level seen just a few weeks ago. "Just like prices were too overdone" at $3.60/MMBtu, the market is likely to correct the overreaction as "prices will reach $3[/MMBtu] shortly" awaiting "some news," Woods added. But that news did not arrive Wednesday, as US demand is projected to slide in the coming weeks, averaging 81.8 Bcf/d over the next seven days, down 9.6 Bcf/d from the 91.4 Bcf/d average over the previous seven days, according to S&P Global Platts Analytics. The projected demand drop could be partly attributed to the most recent six- to 10-day weather outlook from the National Weather Service, which calls for a high probability of warmer-than-average weather along the East Coast, Southeast and demand centers in the Midwest. 

            NYMEX Mar gas slides 3.2 cents to $2.555/MMBtu ahead of storage report -- NYMEX March natural gas futures initially rose in the US overnight only to fall back despite the release later Thursday of US storage data poised to show higher weekly withdrawals. At 7:30 am ET (1230 GMT) the contract was 3.2 cents lower at $2.555/MMBtu. Cold weather is expected to have driven a large drawdown in the Energy Information Administration's storage report for the week ending February 9 to be released at 10:30 am ET. According to a consensus of analysts S&P Global Platts surveyed, the data is expected to show a 183 Bcf withdrawal. Responses to the survey were in a 174-191 Bcf range. A 183 Bcf draw would be above both the 120 Bcf a year earlier and the five-year-average of 154 Bcf. It would also take stocks down to 1.895 Tcf, 422 Bcf below the five-year average and 566 Bcf lower on the year. 

            Wow, Natural Gas Drawdown Exceeds Forecast Significantly; Almost Doubles Last Year's Draw Down -- February 15, 2018 -- Note the forecast, and prior history for this time of year, and then the actual draw down in bold red: Natural gas: Thursday, February 15: AEI natural gas storage report:

            • previous: -119 bcf
            • forecast: -179 bcf (private forecast)
            • actual: -194
            • compare: -120 Bcf last year and -154 Bcf for the five-year average (same link)
            Don did the math: at the rate of draw down the natural gas storage facility will be empty in 9.7 weeks. That is only 5.7 weeks later than Punxsutawney Phil said winter "might" be over for the year.

            NYMEX March gas down 3 cents at $2.550/MMBtu on warmer weather - NYMEX March natural gas futures fell in overnight US trading on forecasts of warmer weather. At 7:35 a.m. ET (1235 GMT), the contract was 3.0 cents lower at $2.550/MMBtu. The market attempted to rise Thursday after the US storage report from the Energy Information Administration for the week to February 9 showed a higher-than-expected 194 Bcf withdrawal. The consensus of an S&P Global Platts analysts' survey was for a 183 Bcf withdrawal. Inventories were 1.884 Tcf, down 577 Bcf on the year and 433 Bcf below the five-year average. The six-to-10-day weather forecast from the National Weather Service shows above-average temperatures across nearly the entire eastern US, with normal temperatures in the central and Southwest and below-average readings in the western half. This is calming concerns about end-of-season supply, even though storage levels are on track to end March at their lowest since 2014, according to Barclays analysts. 

            Choke points could emerge to inhibit global LNG trade expansion in 2018 - Platts Snapshot Video - As the market embarks on a second year of record level LNG supply from the Atlantic Basin and strong competition from Asia for those volumes, a potential choke point is emerging: the Panama Canal. The canal can transit just one LNG vessel a day, laden or ballast, and only during daylight hours. The vessel transit restriction will be in place until October 2018 when capacity is expected to double to two vessels a day. In this video, S&P Global Platts Senior Director for Global Gas and LNG Madeline Jowdy examines how concerns about the Panama Canal can affect trade flows and investment decisions.

            The Power Of Siberia And China's Next Natural Gas Moves - Gazprom’s Power of Siberia pipeline is more than two-thirds complete. It will be delivering gas to China by the end of this year. A second pipeline is still under discussion. A report yesterday from Alex Mercouris at The Duran noted some frustration from China over the irregular liquefied natural gas (LNG) supplies coming from its contract partners in Uzbekistan and Turkmenistan. It seems the Turkemi and Uzbek governments are shaking down China for better prices because gas demand in Western China’s autonomous regions is growing rapidly. Complicating matters is the tough winter in Europe which spiked LNG demand there as well. Remember, Gazprom recently announced that delivered volumes to Europe rose by 8% in 2017 over 2016. And that number is likely to rise again this year. Even the U.K. is begrudgingly buying Russian LNG from the Yamal LNG project on the Eastern Baltic coast. China National Petroleum Corp., CNPC, just signed a deal with Cheniere Energy to supply 1.2 million tons of LNG annually. China’s demand for natural gas has to rise as its leadership deals with the increasing costs of air pollution from running a major portion of its economy on coal. This is part of the reason why Russia and China hooked up for the original Power of Siberia pipeline in the first place. And it’s why I have little doubt that a second pipeline is a slam dunk. This would be the expanded Altai Pipeline or Power of Siberia 2 that was postponed in 2015 but is now back on the table. Last year China and Russia signed an MOU on Power of Siberia 2. Though no formal agreement has been reached, it’s obvious both parties want this done. The question for China is likely price. And they are not above holding out for better terms and cheaper gas prices. So, they’ll string Gazprom along on price by talking engineering, etc. for a few more months while they wait to see if the projected glut of gas materializes.

            China hits new record with January oil imports - China established itself as the world’s largest importer of crude in January with shipments increasing by 19.4% year on year to a record high of 40.64 million tonnes (9.61 million bpd), according to the General Administration of Customs (GAC). Last month’s figure exceeded the March 2017 record high of 9.21 million bpd. China’s crude imports during the whole of 2017 displaced the US as the world’s largest importer, the US Energy Information Administration (EIA) confirmed last week. According to EIA data, China imported an average of 8.4 million bpd compared with US imports of 7.9 million bpd. GAC data put Chinese imports for the year at 8.49 million bpd.

            Oil prices tumble as hedge funds liquidate record bullish position - Kemp (Reuters) - Hedge funds have started to liquidate some of their record bullish positions in crude oil and refined fuels as the rally has gone into reverse and amid signs that U.S. shale production is surging. Hedge funds and other money managers cut their combined net long position in the six most important futures and options contracts linked to petroleum by the equivalent of 41 million barrels in the week to Feb. 6. The combined net long position has been cut by a total of 63 million barrels over the two most recent weeks after being raised by 258 million barrels over the previous five weeks. Even after the recent reduction, however, the net long position across all six contracts is still a massive 1,112 million barrels higher than at the end of June 2017 ( The change has come from a reduction in long positions rather than an increase in short ones, which indicates that it has been driven by profit-taking after the rally. Portfolio managers have cut bullish long positions in Brent, NYMEX and ICE WTI, U.S. gasoline, U.S. heating oil and European gasoil by a combined 71 million barrels since Jan. 23. Bearish short positions have actually fallen by 8 million barrels over the same period, and are at the lowest level since oil prices started to slide in June 2014, according to records published by regulators and exchanges. The liquidation of some of the record long positions hedge fund managers accumulated in the weeks and months before Jan. 23 has coincided with a softening in benchmark Brent prices since Jan. 25. The accumulation of such an enormous number of long positions by fund managers had left the market looking very stretched, with long positions outnumbering short ones by a ratio of more than 11:1. The recent downward correction in prices therefore came as no surprise since lopsided positioning has normally preceded a sharp reversal in the previous price trend since at least the start of 2015. Commentators have identified several possible triggers for the correction in oil prices, including the sharp drop in U.S. equities, recent dollar strengthening and the unexpectedly rapid increase in U.S. shale production. In reality, positioning in the oil market had become so stretched almost anything (or nothing at all) could have sparked a sell off. 

            Money managers reduce net length in NYMEX crude futures -  Money managers reduced their net length in NYMEX crude futures the week ending February 6, primarily by shedding longs during the middle of a sell-off, US Commodity Futures Trading Commission data showed Friday. Money managers cut their net length by 14,997 contracts to 467,783 contracts, having reduced their longs by 19,404 contracts. NYMEX front-month crude prices fell $2.41 during the last three days of the reporting period, settling at $63.39/b February 6. Since then, NYMEX crude has fallen another $4.19/b to settle at $59.20/b Friday (see story 2053 GMT). Analysts have blamed the price decline at least partially on higher US crude production and rising rig counts. Also, it is likely speculative longs are exiting the market. "Speculative financial investors, who had been betting further on rising prices in anticipation of continued market tightening, are now likely to get cold feet and jettison the net long positions they had previously built up," Commerzbank analysts said. Producer/merchants took the dip in prices as an opportunity to add a combined 8,935 long and short crude futures contracts to 872,628 contracts. In the process, producer/merchants reduced their net short position by 3,575 contracts to 80,658 contracts, the CFTC data showed.

            Oil prices settle flat, steady after a week of losses - (Reuters) - Crude markets began to steady Monday, settling little changed on the day as global equities began to recoup some losses from their biggest one-week decline in two years. Brent crude LCOc1 futures slipped 20 cents, or 0.3 percent, to settle at $62.59. U.S. West Texas Intermediate crude CLc1 rose 9 cents to settle at $59.29 a barrel, up 0.2 percent but off the session high of $60.83. “Coming in today, the market tried to pick its head up,” said Gene McGillian, director of market research at Tradition Energy in Stamford, Connecticut. “It was related to the weakness in the dollar.” A weaker dollar .DXY helped to support oil by making dollar-priced crude cheaper for holders of other currencies.  Crude also got a boost as traders who had unwound long positions last week looked to regain some long footing, said John Macaluso, analyst at Tyche Capital Advisors. Crude prices rose early, then pared gains on concerns that surging U.S. production would outstrip output cuts from the Organization of the Petroleum Exporting Countries (OPEC), McGillian said. U.S. crude production from major shale formations is expected to rise in March by 111,000 barrels per day from the previous month to 6.76 million bpd, the U.S. Energy Information Administration (EIA) said in a monthly report on Monday.[EIA/RIG] The EIA expects that U.S. crude output may rise to 11 million bpd by the end of the year. Early in the week, the market is likely to be driven by technical factors before fundamental inventory data from the U.S. Energy Information Administration kicks in later in the week, Macaluso said. “We’re two days away from EIA numbers, where we’re probably going to see another build,” he said. Analysts noted that oil consumption remains robust. “Demand growth is very strong and, with (output) declines in places like Venezuela, is helping the situation. If demand stays strong, it still looks like OPEC will be in control in 2019,” said SEB chief commodities strategist Bjarne Schieldrop. 

            Oil prices firm as global stock markets rebound - Oil prices rose on Tuesday, lifted by a rebound in global stock markets that followed sharp falls last week. U.S. West Texas Intermediate (WTI) crude futures were at $59.44 a barrel at 0103 GMT. That was up 15 cents, or 0.25 percent, from their last settlement. Brent crude futures were at $62.78 per barrel, up 19 cents, or 0.3 percent, from the previous close. “Oil markets attempted a half-hearted recovery overnight on little more than an equity market correlated bounce,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore. Stock markets were roiled last week by some of the sharpest falls on record, shaking confidence across markets. With markets seemingly returning to calmer waters, oil traders said attention was turning to inventory levels to gauge crude supply levels. “The change in inventories this week will be crucial for determining whether further declines in the oil price are on the cards,” said William O‘Loughlin, investment analyst at Australia’s Rivkin Securities. The private American Petroleum Institute (API) is due to publish crude inventory estimates on Tuesday, while the government U.S. Energy Information Administration (EIA) is set to release its fuel storage and crude production data on Wednesday. On the demand side, the Organization of the Petroleum Exporting Countries (OPEC) said on Monday it expected world oil demand to climb by 1.59 million barrels per day (bpd) this year, an increase of 60,000 bpd from the previous forecast, reaching 98.6 million bpd. The rising consumption is being met by increased output from outside OPEC, the Middle East dominated producer club said. OPEC said the United States and other outside producers would boost supply by 1.4 million bpd this year, up 250,000 bpd from last month and the third consecutive rise from 870,000 bpd in November. OPEC said because of non-OPEC production growth, oil markets would only return to a supply and demand balance “towards the end of this year.” 

            Oil Prices: Collapse Now, Spike Later - Oil prices closed out the week sharply down, wiping out all the gains posted since the start of the year.  Surging U.S. shale production, along with broader financial turmoil, has clearly put an end to the bullish mood in the oil market. U.S. shale struck several blows against oil prices this week.   First, the EIA dramatically overhauled its forecasts, predicting U.S. oil production would hit 11 million barrels per day (mb/d) this year, rather than late next year. Then, on Wednesday, it revealed estimates that put U.S. oil production at 10.25 mb/d for the week ending on February 2, a staggering 330,000 bpd increase from a week earlier. Those weekly estimates are subject to revision when more data becomes available, but if those figures hold, it would point to a significant ramp up in drilling activity and new supply coming online. As a result, it seems that, in the short run at least, U.S. shale has killed off the oil price rally, which saw WTI move from $50 per barrel in October to the mid-$60s per barrel by January. Brent saw a similar jump from the mid-$50s to $70. But we’re now potentially moving into the next phase of this cycle, an all-too-familiar correction after prices have seemingly climbed too far. This time around the downward swing could be aided by a rebound in the strength of the dollar.    However, the tightening in the oil market has not been a mirage. Inventories are closing in on the five-year average. Goldman Sachs argues that inventories are probably already back at average levels, but it will take time before we know for sure because of data is published on a lag. “The rebalancing of the oil market has likely been achieved, six months sooner than we had expected,” Goldman Sachs said in a recent note, predicting Brent will hit $82 per barrel within six months. It may seem a bit of a contradiction — on the one hand, the oil market seems poised for a price correction amid rising supplies, financial turmoil and overzealous positioning from hedge funds in the futures market. On the other hand, inventories are back close to average levels and some argue that OPEC could overshoot and tighten the market too much. Who to believe?

            Oil Holds Steady, But Rebound Seems Unlikely - Oil prices seemed to have stabilized at new, lower levels after a massive decline last week. WTI has some support at about $59-$60 per barrel and Brent at $62. But fears of a shale wave cut seemed to have ended the bullish sentiment and reduced the likelihood of a rebound in prices in the short run.  . The IEA reiterated its position that global oil supply will grow faster than demand this year. The agency noted that global oil and product inventories have declined dramatically, and are very close to the five-year average, but that surging U.S. supply could tip the balance back into surplus. Production is growing so fast that it resembles the original shale wave from years ago. This “second wave of growth [is] so extraordinary” that the supply growth from the U.S. alone could equal total global demand growth in 2018. “[T]he underlying oil market fundamentals in the early part of 2018 look less supportive for prices,” the IEA wrote.Total and Shell are emerging ahead of their peers as darlings of investors, according to Reuters. Total announced plans to hike its dividend by 10 percent and also buyback $5 billion worth of shares by 2020. Bernstein analysts said that Total represents “the new benchmark in shareholder returns,” and the firm upgraded Total’s shares to “outperform.” Shell, for its part, posted earnings and cash flow that exceeded ExxonMobil’s. Shell said it will buy back $25 billion worth of shares by 2020. Meanwhile, Exxon disappointed the market and its share prices has fallen dramatically in the past two weeks.

            Oil prices flat, all eyes on US production data (Reuters) - Oil prices were flat on Tuesday, bouncing back from an early slide as the dollar fell to a one-week low, which encouraged buying of dollar-denominated crude at session lows. Global benchmark Brent futures hit a two-month low early, but by 2:02 p.m. EST (1902 GMT), Brent rose 11 cents to $62.70 a barrel. U.S. West Texas Intermediate crude futures were down 9 cents at $59.20 a barrel. The U.S. dollar hit a one-week low, which can attract investors to oil by making crude cheaper for buyers using other currencies. “We have chipped away at crude losses today, and you could easily say it’s a function of a weak dollar,” Since the stock market began falling sharply early this month, oil prices have wiped away the year’s gains amid a volatile stock market. “There are a lot of people who are praying that last week’s collapse in crude...was some anomaly, and that as soon as the stock market recovered, the crude market would recover with it,” said Walter Zimmerman, chief technical analyst at United-ICAP. “So far its looking a little ominous but WTI has not broken down,” Zimmerman said, adding the contract would have to decline more to enter a bear market. Paris-based International Energy Agency said global oil supply would outstrip demand this year, prompting fears that efforts to reduce inventories would fall short of expectations. The IEA revised its global demand forecast upward by 7.7 percent. Still, rising production, particularly from the United States may outweigh demand gains. The United States overtook Saudi Arabia last week to become the second-largest global producer. U.S. oil production is expected to surpass 11 million barrels per day in late 2018, a year earlier than projected last month, the U.S. Energy Information Administration said last week. Seasonality may also be affecting prices, analysts said.  

            WTI/RBOB Drop After Bigger Than Expected Crude Build - An ugly week or two for WTI/RBOB continued today ahead of tonight's inventory data and after API reported big builds in crude, gasoline, and distillates; both WTI and RBOB dropped further. API:

            • Crude +3.947mm (+3.05mm exp)
            • Cushing -2.319mm (-1.7mm exp)
            • Gasoline +4.634mm
            • Distillates +1.1mm

            3rd weekly crude build in a row and big builds in products too... Not been a pretty week or two for the record spec longs... and it just got a little worse... Of course the big story on traders' minds is surging US production and sudden questions about potential global growth spooked by stocks...

            OMR: History repeating itself? - IEA - New and revised data shows a modest tightening of the balance in the early part of 2018, but the main message remains unchanged from last month and it is very clear: in 2018, fast rising production in non-OPEC countries, led by the US, is likely to grow by more than demand. For now, the upward momentum that drove the price of Brent crude oil to $70/bbl has stalled; partly due to investors taking profits, but also as part of the corrections we have seen recently in many markets. Most importantly, the underlying oil market fundamentals in the early part of 2018 look less supportive for prices.  Our demand growth estimate for 2017 remains strong at 1.6 mb/d, reinforced by November data for the US. For 2018, the more positive global economic picture published by the International Monetary Fund is a key factor in raising our growth outlook to 1.4 mb/d. It was thought that the significant increase in the dollar price of crude oil since the middle of 2017 would dampen growth, and this might be the case to some extent, but the impact of higher prices has been partly offset in some countries by currency appreciations.  It is clear that strong demand growth in 2017, alongside a modest increase last year in non-OPEC output, and the cuts made by leading producers, has contributed to the extraordinarily rapid fall in OECD oil stocks. A year ago, they were 264 mb above the five-year average and now they are only 52 mb in excess of it, with stocks of oil products actually below the benchmark. Although the OECD is not the whole world, the leading oil producers who agreed to cut output identified the level of the group’s stocks as an indicator of the progress of their initiative. With the surplus having shrunk so dramatically, the success of the output agreement might be close to hand. This, however, is not necessarily the case: oil price rises have come to a halt and gone into reverse, and, according to our supply/demand balance, so might the decline in oil stocks, at least in the early part of this year.

            IEA Warns Of New Oil Glut -- The global oil market could slip into deeper oversupply on the back of non-OPEC production growth led by the United States, the International Energy Agency said in its latest Oil Market Report.“The main factor,” the IEA said, “is US oil production. In just three months to November, crude output increased by a colossal 846 kb/d, and will soon overtake that of Saudi Arabia. By the end of this year, it might also overtake Russia to become the global leader.”  Commenting on the recent reversal in oil prices, the authority attributed it to profit-taking and a market correction spanning all industries, adding that oil’s fundamentals supported a decline in prices. The situation in the United States suggests that history is repeating itself and what we are seeing now is indeed a second shale revolution that could bring petroleum liquids production on par with global demand growth.But that’s not all. The IEA noted the recent shipment of the first U.S. condensate cargo to the UAE, which although unique might prove to be the start of a new era in international oil trading patterns.The news is certainly not good for OPEC and, to a lesser extent, Russia, but there is some light at the end of the tunnel: global economic growth could turn out to be stronger than previously expected and this would help offset the impact of growing U.S. production on prices and keep them where they are now.The authority hinted that the end of the OPEC deal could be in sight given that the overhang in OECD oil inventories has shrunk to just 52 million barrels from 264 million barrels a year ago, but added that the trend in oil prices could convince the cartel to wait.Separately, the IEA maintained its 2017 oil demand growth estimate at 1.6 million bpd and said this year demand will grow by 1.4 million bpd, a 100,000-bpd upward revision on the January OMR estimate thanks to IMF’s expectations of stronger economic growth this year.

            Is History Repeating Itself In Oil Markets? -- Back in 2014, U.S. shale production was growing so fast that it ended up crashing the market. Now, history could be repeating itself...That was the warning from the International Energy Agency, which said in its latest Oil Market Report that a “second wave” of shale supply threatens another downturn.Total global oil supply is expected to grow faster than demand this year, which could lead to another downturn. It’s a conclusion that the IEA tried to emphasize in previous reports, but the message finally seems to be sinking in.The extraordinary run up in benchmark prices in December and January came to a startling end two weeks ago. Part of the reason was because of the broader market turmoil in equities, and part of it was because hedge funds and other money managers had overbought oil futures, exposing the market to a price correction.But as the IEA notes, the real worry is rising oil supply, which means that “the underlying oil market fundamentals in the early part of 2018 look less supportive for prices.”It isn’t all bad news for benchmark prices. The IEA noted that due to the OPEC production cuts and strong demand, inventories fell at a remarkable rate last year. The oil inventory surplus currently stands at about 52 million barrels above the five-year average, down sharply from 264 million barrels a year ago. Importantly, while crude oil inventories are closing in on the five-year average, total stocks of gasoline and other refined products have already fallen well below that threshold. “With the surplus having shrunk so dramatically, the success of the output agreement might be close to hand,” the IEA wrote. But even as the elusive “balance” in the oil market is within reach, the IEA says things might quickly reverse. The reason why the oil market might suffer from a renewed glut largely comes down to soaring U.S. shale production. In the three-month period ending in November, the U.S. added “a colossal 846 kb/d,” the IEA noted, with even steeper gains expected this year. The bearish forecast comes a week after the U.S. EIA said much of the same thing: shale output is rising so quickly that the U.S. could reach 11 million barrels per day (mb/d) this year instead of next year. By the end of 2018, the U.S. could surpass Russia and Saudi Arabia in terms of total production. The IEA says that the stars are aligning for U.S. shale, with “rising prices leading, after a few months, to more drilling, more completions, more production, and more hedging.”

            Oil glut nearly gone but shale rebound looms - OPEC and its allies have almost achieved their goal of clearing an oil glut, but their efforts could be derailed by rising supplies from the U.S. and other rivals, the International Energy Agency said.Oil stockpiles in developed nations fell the most in more than six years in December as supply cuts by the Organization of Petroleum Exporting Countries and Russia took effect. The surplus is also being cleared by higher consumption, with the agency boosting its forecast for global demand growth in 2018 by about 100,000 barrels a day to 1.4 million a day.Yet OPEC's strategy could be backfiring, as the increase in prices to a three-year high stimulates more supply from America. U.S. output will soon surpass that of the cartel's biggest producer, Saudi Arabia, and may overtake Russia as global leader by the end of the year, according to the IEA.  OPEC and Russia, once fierce market rivals, forged an alliance in late 2016 to offset the oil glut unleashed by the advent of the U.S. shale industry. After a year of output cuts, stockpiles in industrialized nations have shrunk to the lowest since November 2014. They were about 52 million barrels above the five-year average in December, a drop of 80 percent from a year earlier, the IEA said. Last month, OPEC's implementation of pledged cuts was its strongest since the deal came into force, with the group reducing output by 37 percent more than it promised, according to the IEA. Compliance was given a boost by Venezuela, whose oil industry has been crippled by years of under-investment and economic decline. Global inventories may stop falling in the early part of this year with the onset of new supplies, the agency said. It raised estimates for growth in non-OPEC supply in 2018 by about 100,000 barrels a day to 1.8 million a day -- approximately equal to the amount of production OPEC and its partners promised to cut.

            WTI/RBOB Spike After Smaller Than Expected Crude Build, New Record High Production - The kneejerk reaction drop in WTI/RBOB overnight on API data was rapidly unwound ahead of today's DOE data and spike further as data showed a smaller than expected crude build (and smaller than API). However, US Crude production surged to new highs once again. DOE:

            • Crude +1.84mm (+3.1mm exp)
            • Cushing -3.62mm (-1.7mm exp)
            • Gasoline +3.59mm (+1.8mm exp)
            • Distillates -459k

            3rd weekly Crude build in a row (but lower than expected), but gasoline saw a much bigger than expected build as refinery runs slowed... As Bloomberg notes, last week's refining jump was a blip after all. Gross inputs fell almost 500,000 barrels a day and utilization rates sank back to 89.8%, more in line with what you'd expect this time of year. Cushing Stocks are at their lowest since January 2015... Crude Production rose once again +20k to new record highs...

            OPEC: "Houston, We Have A Problem" -- Summary:

            • OPEC's report implies an undersupplied market in 2018
            • however, the report takes an unusually pessimistic view on the trajectory of shale production
            • if one were to use more optimistic projections for U.S. volumes instead, OPEC's report flags the risk of an oversupplied market

            OPEC issued its Monthly Oil Market Report for February. The report concludes that the "call" on OPEC production in 2018 will exceed the cartel's January 2018 output by approximately 0.6 million barrels per day. The forecast implies that in the absence of meaningful production increases by OPEC, the market will be undersupplied in 2018, which would lead to further depletion of global petroleum inventories. While the report appears to support the thesis for stronger oil prices throughout 2018, a closer review reveals that the forecast is based on a debatable assumption that U.S. crude production growth will slow down significantly from the recent pace. The assumption raises many questions, putting in doubt OPEC's forecast of a tight market for crude oil in 2018. OPEC revised its U.S. crude production forecast up by 0.15 MMb/d from the previous report. The new forecast calls for U.S. volumes to average 10.22 MMb/d in 2018. To put OPEC's forecast in perspective, the U.S. Energy Information Administration estimates U.S. current crude production at 10.27 MMb/d, which is higher than OPEC's full-year forecast average. The EIA's weekly estimate is based on the agency's STEO model, which predicts U.S. production to average 10.59 MMb/d for the year - or ~370,000 b/d above OPEC's forecast - and reach 11.13 MMb/d in December 2018.

            Crude Oil Prices Settle Above $60 as Inventories Rise Less Than Expected - WTI crude oil prices settled higher after data showing US oil supplies rose less than expected offset bearish product inventories data. On the New York Mercantile Exchange crude futures for March delivery rose 2.4% settle at $60.60 a barrel, while on London's Intercontinental Exchange, Brent rose 2.7% to trade at $64.40 a barrel. Inventories of U.S. crude rose by 1.841 million barrels for the week ended Feb. 9, below expectations for for a rise of 2.825 million barrels. Gasoline inventories – one of the products that crude is refined into – rose by 3.599 million barrels, well above the expectations for a build of 1.229 million barrels, while supplies of distillate – the class of fuels that includes diesel and heating oil – fell by 459,000 barrels, less than the 1.130 million barrels forecast. The sharp build in gasoline inventories comes amid a slowdown in refinery activity as refiners enter a period of maintenance. That, however, hasn't led to a faster pace of crude stockpiles in recent weeks. Also supporting crude prices were supportive comments from Saudi oil minister, Khalid al-Falih, who said that OPEC would continue to curb production even if that would result in a supply shortage. "If we have to overbalance the market a little bit, then so be it," Al-Falih said. His comments come a day after the Energy International Agency’s gloomy monthly report stoked investor fears that rising US oil output would derail OPEC’s efforts to rebalance the market. “All the indicators that suggest continued fast growth in the US are in perfect alignment; rising prices leading, after a few months, to more drilling, more completions, more production, and more hedging," the IEA's report stated.

            Oil shows resilience as dollar weakness continues - Oil futures proved resilient Thursday, with the U.S. benchmark reversing earlier weakness to end higher as the U.S. dollar continued to weaken, while the global oil benchmark largely erased losses.West Texas Intermediate futures rose 74 cents, or 1.2%, to end at $61.34 a barrel. On Wednesday, the contract rose 2.4% to notch its biggest one-day rise since Dec. 26. Brent crude, the global benchmark, fell 3 cents to close at $64.33.The U.S. dollar was weaker versus major rivals for a fourth straight session Thursday. A weaker buck can be a positive for commodities priced in dollars, making them cheaper to users of other currencies.Oil futures weakened in early action, with analysts saying the Wednesday rebound appeared possibly overdone given economic data and U.S. production statistics, with the bounce driven largely by a smaller-than-expected rise in crude inventories.“The strong upwards movement ran somewhat counter to the more bearish looking signals from inflation and consumer retail sales data,” wrote analysts at JBC Energy in Vienna, in a note. 

             Physical oil market sends warning to OPEC: Rout might not be over (Reuters) - As OPEC watches a near 15 percent drop in the oil price in three weeks, important indicators in the physical crude market are flashing signals that the decline might be far from over. The warnings come not from the heavily traded futures market, but from less transparent trading activity in crude oil and products markets, where key U.S., European and Russian crude prices have fallen of late, suggesting less robust demand. Benchmark oil futures have plunged in recent days together with global stock markets due to concerns over inflation as well as renewed fears that rapid output increases from the United States will flood the market with more crude this year. OPEC, including its Secretary-General Mohammad Barkindo, argues the decline is just a blip because demand is exceeding supply and that prices won’t plunge again to $30 per barrel as they did in 2015 and 2016. Traditionally, when oil futures decline, prices in the physical markets tend to rise because crude is becoming cheaper and hence more attractive to refiners. But in recent weeks, differentials in key European and U.S. markets such as North Sea Forties, Russia’s Urals, West Texas Intermediate in Midland, Texas, and the Atlantic diesel market have fallen to multi-month lows. The reasons tend to be different for most physical grades but overall the trend paints a bearish picture. “Physical markets do not lie. If regional areas of oversupply cannot find pockets of demand, prices will decline,” said Michael Tran of RBC Capital Markets. “Atlantic Basin crudes are the barometer for the health of the global oil market since the region is the first to reflect looser fundamentals. Struggling North Sea physical crudes like Brent, Forties and Ekofisk suggest that barrels are having difficulty finding buyers,” he added. This follows a run-up in U.S. production to 10.04 million barrels per day as of November, the highest since 1970.

            Brent crude settles flat, U.S. oil up on short covering  (Reuters) - Oil markets were mixed on Thursday with Brent flat even though the dollar slid, while U.S. crude rose as investors covered short positions."This is kind of an upside-down Thursday," said Dominick Chirichella, co-president at the Energy Management Institute in New York. He said he was puzzled at why a weaker dollar did not boost Brent futures prices."The rise we've seen in U.S. crude has been more of a short covering rally rather than a return to the uptrend," he added.Global benchmark Brent slipped 3 cents to settle at $64.33 a barrel. U.S. West Texas Intermediate crude gained 74 cents, or 1.2 percent, to settle at $61.34.Those price moves cut the premium of Brent over WTI <WTCLc1-LCOc1> to its lowest in six months."If the Brent-WTI spread narrows, the big incentive to export U.S. crude oil starts to narrow," Chirichella said, noting he did not expect U.S. prices to hold at these higher levels for long since "all of the fundamental snapshots ... over the past couple of weeks have been bearish."The dollar slid to its lowest since it touched a three-year low in late January. A weaker dollar often boosts prices for oil and other dollar-denominated commodities, making them cheaper for holders of other currencies."I´m surprised that (Brent) oil prices are falling today given the weaker U.S. dollar. Currently, the direction of the dollar is having a bigger impact on oil prices than fundamentals," said Rob Thummel, portfolio manager at energy investment manager Tortoise Energy.

            Crude Oil Prices Settle Lower as Slowing Refinery Activity To Weigh on Demand– WTI crude oil prices settled lower as traders continued to digest supportive comments from Saudi Arabia while expectations for a further build in product inventories weighed on sentiment. On the New York Mercantile Exchange crude futures for March delivery fell 1.2% settle at $61.34 a barrel, while on London's Intercontinental Exchange, Brent lost 2 cents to trade at $64.34 a barrel. Oil prices reversed some of their gains from Wednesday’s session as traders continued to digest recent data showing US oil producers continued to ramp up production while refinery activity continued to drop, which could add to domestic supply totals in the weeks to come. U.S. refinery utilization dropped to 89.8% last week, the Energy Information Administration said Wednesday. The slowdown in in refinery activity comes as refiners enter a period of maintenance expected to last “almost a month,” said Michael Loewen, a commodities strategist at Scotiabank in Toronto. Subdued refinery comes as U.S. crude output hit a record 10.27 million barrels per day, which keeps the US on track to meet the EIA’s recent estimate for domestic production to top 11 million barrels per day by year-end. Yet, offsetting that somewhat was a slump in the dollar to 2-week lows and recent comments from Saudi Arabia. "If we have to overbalance the market a little bit, then so be it," Al-Falih said Wednesday.

            Oil Rig Count Rises As Prices Recover | - Baker Hughes reported a 7-rig increase to the number of oil rigs this week, with a decrease of 7 gas rigs for the reporting period.The result of no increase or decrease to the number of oil and gas rigs this week will likely come as a slight reprieve to battered traders who took it on the chin last week as oil prices plummeted.The total number of oil and gas rigs holds steady at 975, which is an addition of 2224 rigs year over year.The number of oil rigs in the United States stands at 798, or 201 over this time last year. The number of gas rigs, which fell by 7 this week, now stands at 177, or 24 rigs above this week last year.At 12:01 pm EST, the price of a WTI barrel was trading up $0.47 (+0.77%) to $61.64—about a $2 recovery from last week’s dip of $59.80. The Brent barrel trading up $0.73 (+1.13%) to $65.06, also almost $2 per barrel over last week’s prices. Both benchmarks are down from January prices.  Prices have been volatile in recent weeks, but most notably last week, on the back of higher US production, higher crude oil inventories, and an updated IEA forecast that warned that a new glut may be coming on the back of robust US crude oil production. US crude oil production rose again in the week ending February 9, to 10.271 million bpd—a new high—and up from last week’s high of 10.251 million bpd.The Permian basin rig count lost the most rigs this week with a loss of 4. At 1:08pm EST, WTI was trading at $61.67 (+$0.50) with Brent trading at $65.01 (+$0.68).

            U.S. drillers add oil rigs for fourth consecutive week -Baker Hughes - (Reuters) - U.S. energy companies added oil rigs for a fourth week in a row even though crude pulled back from three-year highs over the past couple of weeks as more drillers boost their 2018 spending plans. Drillers added seven oil rigs in the week to Feb. 16, bringing the total count up to 798, the highest level since April 2015, General Electric Co’s Baker Hughes energy services firm said in its closely followed report on Friday. That was the first time since June that drillers added rigs for four consecutive weeks. The U.S. rig count, an early indicator of future output, is much higher than a year ago when 597 rigs were active as energy companies have continued to boost spending since mid-2016 when crude prices began recovering from a two-year crash. U.S. crude futures traded around $62 a barrel this week, down from late January when prices rose to their highest since December 2014. That compares with averages of $50.85 in 2017 and $43.47 in 2016.  Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, this week slightly increased their forecast for the total oil and natural gas rig count to an average of 1,014 in 2018 and 1,128 in 2019. Last week, they forecast 1,002 in 2018 and 1,128 in 2019. There were 975 oil and natural gas rigs active on Feb. 16. On average, there were 876 rigs available for service in 2017, 509 in 2016 and 978 in 2015

            US oil benchmark aims for 3-day win streak after rig data - Oil futures rose Friday, putting the U.S. benchmark on track for a three-day win streak, as the market took another rise in the number of U.S. drilling rigs in stride. West Texas Intermediate crude for March delivery on the New York Mercantile Exchange was up 43 cents, or 0.7%, at $61.60 a barrel. April Brent crude futures, the global benchmark, rose 62 cents, or 1%, to $64.95 a barrel on the ICE Europe exchange.Crude held on to gains after oilfield-services firm Baker Hughes Inc. said the number of U.S. oil rigs rose by 7 this week to 798 for the fourth consecutive weekly increase.Supply concerns were expected to keep a lid on prices. Traders remain concerned about the amount of U.S. shale that could hit the market. The International Energy Agency earlier this week forecast that crude output from outside the Organization of the Petroleum Exporting Countries—mostly from U.S. shale—could surpass global demand this year.But a rebound by stocks, and recent weakness in the dollar, notwithstanding a Friday bounce by the greenback, were seen playing a role in ending a crude selloff. That drop had driven WTI from a high above $66 a barrel back below $60 last week.“With stock market stability coming back, it’s back to a focus on tightening U.S. oil supply,” said Phil Flynn, senior market analyst at Price Futures Group, in a note. Wednesday data from the Energy Information Administration showed the amount of oil in Cushing, Okla., the delivery hub for Nymex futures, continued to fall. The amount dropped to 32.7 million barrels in the week ended Feb. 9, from 36.3 million the previous week. Private data indicate a further 1.78 million barrel drop in Cushing stocks over the last four days, Flynn said.

            Oil gains in weekly recovery on equities rebound, weak dollar : (Reuters) - Oil prices edged up on Friday as a rebound in the global equities market and a weak dollar supported crude's recovery from last week's slide.Global stocks rallied for a sixth straight session to post their best week in more than two years. The dollar rose on the day but remained on track to post its biggest weekly loss in nine months. A weaker dollar can boost oil and other dollar-denominated commodities."I don´t want to underestimate what the dollar is doing. The weaker dollar has been extremely supportive to crude," said Bill Baruch, president and founder of Blue Line Futures.Brent crude futures settled 51 cents, or 0.8 percent, higher at $64.84 per barrel, after touching eight-day highs. The global benchmark ended the week up more than 3 percent, partially recovering from a decline of more than 8 percent last week.U.S. West Texas Intermediate crude rose 34 cents, or 0.6 percent, to $61.68. WTI gained 4 percent this week after losing nearly 10 percent last week.Money managers slashed their bullish wagers on ICE Brent crude oil futures by the most in nearly eight months in the week to Feb. 13, data showed, as prices plunged amid concerns of oversupply.Speculators also cut net long U.S. crude futures and options positions in the week to Feb. 13 by the most since late August, the U.S. Commodity Futures Trading Commission (CFTC) said.

            OPEC Future In Doubt As US Production, Rig Count Surge - As US oil production surges to record highs, surpassing Saudi Arabia, rig counts continues to rise (up 7 last week, up 5 of the last 6 weeks) suggesting more production is to come. The rising rig count continues to track lagged WTI prices...  As production soars...  Surpassing Saudi Arabia and nearing Russia...  All of which has prompted OPEC and Russia, along with other countries participating in the oil production cuts aimed at balancing the market, are looking to create a “super group of oil producing countries,” according to a report from The National. As's Nick Cunningham details, the move would institutionalize the framework that has been in place since late 2016, when OPEC, plus a group of non-OPEC oil-producing countries led by Russia, cut output by a combined 1.8 million barrels per day (mb/d). The trick has been keeping everyone on board with the limits for an extended period of time, with multiple extensions, while also trying to figure out what to do when the oil market reaches the long-sought after “balance.”The fear has been that all participants would return to producing flat out, ramping up production in a short period of time, a specter that threatened to crash oil prices all over again. Up until now, OPEC has maintained a shockingly high level of compliance, although that has been aided by the involuntary cuts (i.e. collapse) of output in Venezuela. Still, OPEC and its coalition partners have been cagey about what they plan on doing at the end of this year, offering soothing but vague comments about a “gradual” exit. But, according to The National, the “super group” led by Saudi Arabia and Russia would offer an institutional framework to manage the oil market post-2018. They hope to create a draft proposal before the end of the year. The goal is “together with the secretary general [of Opec, Mohammad Barkindo], to put together a draft agreement for this group [of 24] to stay together for a longer time,” UAE’s oil minster Suhail Al Mazrouei, who currently holds the OPEC presidency, told The National in Abu Dhabi.

            OPEC Seeks Capacity Buffer To Counter Dollar-Led Oil Price Jumps -  OPEC is encouraging all its members to build buffers of oil production capacity in order to be able to counter this year a surge in oil prices led by a weaker U.S. dollar, the UAE’s Energy Minister Suhail Al Mazrouei told The National in an interview on Thursday. The weakening of the U.S. dollar in recent months was one of the reasons for the oil price rally. Both WTI and Brent prices hit three-year highs at the end of January as the dollar further slipped, before the oil price rally came to an end two weeks ago with the financial markets turmoil, soaring U.S. oil production, and money managers taking profits from part of the overstretched net long position they had amassed in oil and oil product futures.  “We are incentivising all the group members to have some buffers. That buffer is [to assure] that if you have a surge [in demand] or issue in one of the countries you can replace that in the market and achieve a short and medium-term re-balance of the market,” Al Mazrouei told The National, answering a question about the downsides of a weak dollar on prices. The UAE itself has plans to raise capacity, so do Kuwait and Iraq. Saudi Arabia currently also has spare production capacity, since it is cutting some 500,000 bpd from its production as part of the OPEC/non-OPEC deal. The oil production capacity of Iraq is nearing 5 million bpd, its oil minister Jabbar al-Luiebi said last month, while Baghdad is currently producing around 4.4 million bpd. While OPEC producers are surely happier with the price of oil now than last year or in 2016, the cartel is careful not to overshoot its own strategy to tighten the market too much or see wild upswings in prices that can further motivate U.S. shale drillers to pump more oil.

            Exclusive: Plans in the works for super group of oil producing countries -  Plans for a super group of oil producing countries could be in place before the end of this year as Opec works to institutionalise the ongoing collaboration between 24 member and non-member nations that has helped crude prices to recover. Suhail Al Mazrouei, the Minister of Energy and Industry of the UAE, which currently holds the Opec presidency, said that a draft framework for a long-term alliance will be finalised in 2018. The aim is “together with the secretary general [of Opec, Mohammad Barkindo], to put together a draft agreement for this group [of 24] to stay together for a longer time”, he said. The charter for the broader group is currently “a work in progress” but it is a clear aspiration, the minister said in an interview with The National in Abu Dhabi. Mr Al Mazrouei has some hope that the draft framework could even be endorsed and signed by all 24 countries before the end of the year. Optimism is running high that there is now a strong base on which to make the collaboration with non-Opec members a more permanent fixture of energy markets. The Saudi oil minister Khalid Al Falih said last month that the kingdom’s energy alliance with Russia will continue for “decades and generations” and on Wednesday, there was news of plans for joint investments by Saudi and Russia. Opec’s Mr Barkindo said this week that the “building blocks” to institutionalise the partnership between the 24 countries had started to be put in place.  A more permanent partnership between a grouping including the world’s biggest crude producers, Russia and Saudi, would help with efforts to keep energy markets stable in the future as the growth of the US shale sector means the United States could overtake them both in terms of output by next year, according to the IEA. The oil price crash of 2014 was triggered by an over-supply driven by surging shale production in the US.

            Turkish warships block drilling rig near Cyprus  - Turkish President Recep Tayyip Erdogan on Tuesday issued a warning to neighboring Greece and Cyprus as well as foreign companies not to encroach on Turkey's sovereignty."Right now, our warships, air force and other security units are following developments in the region closely with the authority to make any kind of intervention if necessary," Erdogan told members of his ruling AK Party in parliament."We advise the foreign companies who are conducting activities off Cyprus, relying on the Greek side, not to be an instrument to businesses that exceed their limit and power." Ankara came under fire this week after its warships began blocking a rig from reaching a location off the coast of Cyprus, where Italian energy company Eni is scheduled to drill for gas. Cyprus government spokesman Nicos Christodoulides told state broadcaster RIK that the rig remained anchored in the eastern Mediterranean, about 50 kilometers (30 miles) from the drilling target off the southeastern coast. He said both the government and Eni were determined to see the drilling go ahead as planned. Italian Foreign Minister Angelino Alfano, meanwhile, said he hoped to find a "shared solution, respecting international law and in the interests of Eni, the countries in the region and of the two Cypriot communities."

            Turkey accused of recruiting ex-Isis fighters in their thousands to attack Kurds in Syria - Turkey is recruiting and retraining Isis fighters to lead its invasion of the Kurdish enclave of Afrin in northern Syria, according to an ex-Isis source.“Most of those who are fighting in Afrin against the YPG [People’s Protection Units] are Isis, though Turkey has trained them to change their assault tactics,” said Faraj, a former Isis fighter from north-east Syria who remains in close touch with the jihadi movement.  In a phone interview with The Independent, he added: “Turkey at the beginning of its operation tried to delude people by saying that it is fighting Isis, but actually they are training Isis members and sending them to Afrin.” An estimated 6,000 Turkish troops and 10,000 Free Syrian Army (FSA) militia crossed into Syria on 20 January, pledging to drive the YPG out of Afrin. The attack was led by the FSA, which is a largely defunct umbrella grouping of non-Jihadi Syrian rebels once backed by the West. Now, most of its fighters taking part in Turkey’s “Operation Olive Branch” were, until recently, members of Isis. Some of the FSA troops advancing into Afrin are surprisingly open about their allegiance to al-Qaeda and its offshoots. A video posted online shows three uniformed jihadis singing a song in praise of their past battles and “how we were steadfast in Grozny (Chechnya) and Dagestan (north Caucasus). And now Afrin is calling to us".  Isis fighters are joining the FSA and Turkish-army invasion force because they are put under pressure by the Turkish authorities. From the point of view of Turkey, the recruitment of former Isis combatants means that it can draw on a large pool of professional and experienced soldiers. Another advantage is that they are not Turks, so if they suffer serious casualties this will do no damage to the Turkish government.

            Tillerson meets Turkey's Erdogan for 'open' talks after weeks of strain (Reuters) - Top U.S. diplomat Rex Tillerson and Turkey’s Tayyip Erdogan had a “productive and open” talk on Thursday about improving ties strained recently over their policies on Syria, in a meeting following weeks of escalating anti-American rhetoric from Ankara. Tillerson arrived in Turkey on Thursday for two days of what officials have said would likely be uncomfortable discussions between the allies, whose relations have frayed over a number of issues, particularly U.S. support for the Syrian Kurdish YPG militia, seen as terrorists by Turkey. Turkey launched an air and ground assault last month in Syria’s northwest Afrin region to drive the YPG from the area south of its border. Ankara considers the YPG to be an arm of the PKK, a banned group that has waged a decades-long insurgency in Turkey. The militia is the main ground element of the Syrian Democratic Forces (SDF), which the United States has armed, trained and aided with air support and special forces to fight Islamic State. “The two engaged in a productive and open conversation about a mutually beneficial way forward in the U.S.-Turkey relationship,” said a U.S. State Department spokesman traveling with Tillerson. In a photo distributed by the Turkish presidency before the start of the more than three-hour meeting, the two are shown shaking hands, although only Tillerson was smiling. Erdogan conveyed his priorities and expectations on Syria, the fight against terror and other regional issues, a Turkish presidential source said. Ahead of the meeting, Turkey had called for the United States to expel the YPG from the anti-Islamic State SDF forces it is backing in Syria. “We demanded this relationship be ended, I mean we want them to end all the support given to the Syrian arm of PKK, the YPG,” Turkish Defense Minister Nurettin Canikli told reporters in a briefing in Brussels, a day after meeting U.S. Defense Secretary Jim Mattis on the sidelines of a NATO meeting. 

            How American Media Spin-Doctored the Iranian Protests -- Barely a month ago, Iranians were amassing in the streets to protest against their government. Their core grievances, according to Western media and politicos, were the economy, foreign policy, expansionism, and human rights. Today, the protests are over. But according to a recent survey by the Center for International and Security Studies at Maryland and IranPoll, only one of those grievances actually provided the spark: the economy.  According to the poll, more than 72 percent of 1,002 Iranian respondents agreed that their government is not doing enough to help the poor, 86 percent said it shouldn’t increase the price of gasoline, 95 percent wanted a halt on the rising prices of food products, and an equal number agreed that their leaders should do more to fight financial and bureaucratic corruption. Asked to select the single most important problem or challenge currently facing Iran, respondents overwhelmingly selected unemployment (40.1 percent), followed by inflation and high costs of living (12.5 percent), youth unemployment (9.4 percent), low incomes (6.9 percent), financial corruption/embezzlement (6 percent), and so forth. Interestingly enough, “lack of civil liberties” was the least selected of the options offered by the pollsters, coming in at a paltry 0.3 percent, while “injustice” garnered just 1.4 percent. President Donald Trump thought otherwise: “The great Iranian people have been repressed for many years. They are hungry for food & for freedom. Along with human rights, the wealth of Iran is being looted,” he tweeted. “Big protests in Iran…The U.S.A is watching very closely for human rights violations!” blared another Trump tweet. In fact, according to poll results, over 66 percent of respondents believed their police forces handled the protests very well (34.5 percent) or somewhat well (31.8 percent), compared to 23.7 percent who said demonstrations were managed somewhat or very badly. Some 63 percent of those polled said the police used an appropriate amount of force, and another 11.4 percent said they used “too little force.”

            What Do Iranians Think About the United States? -- With Washington seeming to back Iran into a corner and start yet another Middle East war, a recent public opinion poll by the Center for International and Security Studies at Maryland (CISSM) looks at the United States - Iran relationship from the Iranian viewpoint, a viewpoint that Westerners rarely hear.  Some of the responses may make Western politicians realize that Iranians are humans, just like to rest of us.  The 103 question survey was completed after the short-lived protests that took place in various cities throughout Iran beginning on December 28, 2017 and lasting until January 7, 2018.  The questionnaire was completed by 1002 people and has a margin of error of +/- 3 percentage points.  Let's look at some of the key questions, showing the responses for January 2018 followed by the responses for earlier surveys in brackets for comparison.  We will start with a few questions about how Iranians feel about the quality of their life followed by questions about the recent protests and closing with a more detailed examination of how Iranians feel about the P5+1 nuclear agreement that was implemented in January 2016.

            Iran Unveils Two Nuclear-Capable Ballistic Missiles After Israel Attack On Syria -- Following Israel's dramatic airstrikes on Syria on Saturday, seen by many as a "dramatic escalation" in regional tensions, and the most direct threat against Tehran in years, over the weekend Iran unveiled a series of new homemade nuclear-capable ballistic missiles during military parades, in a move that experts said was a bid to bolster the hardline ruling regime while cautioning Israel against any further escalation. Describing the missile, Iran's state-run Fars  news agency described one of the rockets, the Ghadr , as a 2000km-range, liquid-fuel and ballistic missile which can reach territories as far as Israel. The missile can carry different types of ‘Blast’ and ‘MRV’ (Multiple Reentry Vehicle) payloads to destroy a range of targets. Meanwhile, the new version of the Qadr H ballistic missile "can be launched from mobile platforms or silos in different positions and can escape missile defense shields due to their radar-evading capability." As the Washington Free Beacon adds,  Iranian military leaders rolled out the latest ballistic missile technology, which includes a nuclear-capable medium-range missile that appears to share similarities with North Korean technology on the heels of an encounter between what Israel claimed was an Iranian drone and Israeli forces. The missiles are capable of reaching Israel even when fired from Iranian territory, raising concerns about an impending conflict between Tehran and the Jewish state that could further inflame the region. While it was meant to deter further aggression by Israel, the demonstration of nuclear force by Iran could further inflame tensions between the two countries. Concerns that this nuclear-capable technology could be shared by Iran with its terrorist proxies are fueling longstanding concerns among the Israelis that an attack is imminent.

            German government plans massive military expansion in Iraq --The new grand coalition in Germany is planning a massive expansion of the German army (Bundeswehr) mission in Iraq. This was announced by Defence Minister Ursula von der Leyen (Christian Democratic Union, CDU) in the course of her trip to the Middle East last weekend.  Von der Leyen praised Germany’s cooperation with the Peshmerga [Kurdish military forces] during her visit to Erbil, the capital of the Kurdistan Autonomous Region in northern Iraq. The Bundeswehr has been arming and militarily supporting the Kurdish force for three and a half years. It was “impressive to see the great success of the Peshmerga training mission,” she said, thanking “Bundeswehr soldiers” on the spot.Von der Leyen then announced that in future the Bundeswehr would be deployed throughout Iraq. There will be “another mandate,” she said, “a mandate with a new balance … between Baghdad and Erbil on equal terms on both sides.” The defense minister made no concrete statements about the planned operation, but left no doubt she envisaged a long-term military engagement throughout Iraq.“Both in Kurdistan, as well as in the central government in Baghdad,” there is “a request above all to help in the implementation of reforms, in the construction of ministry structures,” the minister said. In Erbil, for example, “the construction of an entire sanitary unit is necessary,” but this also involved “of course the entire planning, organisation, recruitment and training.” There is also “considerable demand” for logistics. Germany wanted to “make its contribution” to provide Iraq with “independent, loyal operational forces for the long term.”In Baghdad on Saturday, von der Leyen justified the German offensive by referring to the fight against the Islamic State (ISIS). She “had experienced a country that, on the one hand, is heavily marked by the devastation left by ISIS, but, on the other hand, is full of pride that it has succeeded ... in beating ISIS.” Everybody knew, however, that “ISIS has been hit hard, but is still not completely defeated.”Von der Leyen’s attempt to portray the deployment of the Bundeswehr as an “anti-terrorist operation,” or as part of the fight against the “devastation” of Iraq, is pure propaganda and lies. It is common knowledge that the US invasion under George W. Bush in March 2003 initiated the destruction of Iraq, and that ISIS was the product of the country’s subsequent occupation and Western cooperation with Islamist militias in the regime-change wars launched against Libya and Syria.

            Macron: "France Will Strike" If Chemical Weapons Used In Syria - French President Emmanuel Macron says he is prepared to "strike" Syria if evidence is found to support claims that President Bashar al-Assad used chemical weapons against civilians, though noted that French intelligence agencies do not have any such proof. “On chemical weapons, I set a red line and I reaffirm that red line,” Macron told reporters in Paris on Tuesday. “Today, our agencies, our armed forces have not established that chemical weapons, as set out in treaties, have been used against the civilian population.” “We have some indications of possible chlorine use [in Syria], but we have no absolute confirmation... So we, alongside the others, are working on trying to confirm this, as we clearly have to get the facts straight.” -French Defense Minister Florence Parly Facilities used to store and "originate" chemical weapons shipments would be the primary targets, said the French President, who also told reporters that he warned Russian President Vladimir Putin of France's plans during a phone call last Friday. “I've reiterated it to President Putin, asking to make it very clear to the Syrian regime, which has reaffirmed that it does not use chemical weapons … but we are watching it,” Macron stated.

             ISIS Moves Into Online Casinos To Offset Dwindled Oil Revenue – The Islamic State is running online casinos as the terrorists try to compensate dwindled revenues from oil smuggling after they were driven out of vast areas in Syria and out of Iraq, Vasily Nebenzya, Russia’s Ambassador to the United Nations, said on Thursday.“They are honing their skills with modern technology,” The Moscow Times quoted Nebenzya as telling the United Nations Security Council meeting.“Caliphate fighters are not shying away from seeking revenue from online casinos,” the top Russian diplomat to the UN said, citing a report by the UN Counter-Terrorism Office.As of the end of last year, ISIS revenues from oil smuggling and extortion were down to US$2 million per month, while the overall monthly earnings were at US$3 million, according to Nebenzya.  To compare, the UN has estimated that back in 2015, the annual income generated by ISIS from oil and oil products was between US$400 million and US$500 million.

            On The Syria Occupation And The New Face Of Imperialism -- US forces have attacked the Syrian military, reporting over a hundred deaths. The Syrian Ministry of Foreign Affairs is calling the air strike a massacre, a war crime, and a crime against humanity. The US is an invading, occupying force that is in Syria without the permission of its government, yet it is claiming that the air strike was an act of “self-defense” against an “unprovoked attack” upon the US-backed SDF, a mostly Kurdish militia which had occupied an area of Syrian land. No Americans suffered any injuries or deaths in the attack. The SDF suffered a single reported injury. It’s a bit like saying you broke into someone’s house and strangled them from behind with a garotte in self-defense. Believe it or not, it appears very likely that the US military’s latest act of butchery waged upon Middle Easterners on their own land was not about self-defense at all, but about oil. The always insightful Moon of Alabamamakes a compelling case that not only is America’s version of events full of plot holes, but that the whole thing could very well have been “a trap” to sabotage a local deal that had been made for the SDF to turn over an oil and gas field to the Syrian government in the near future. This would fit in perfectly with comments Professor Joshua Landis made about the attack, saying that America’s plan is to keep Syria weak, poor and divided in order to disadvantage US/Israel/Saudi rivals Iran and Russia. It would also clarify US Secretary of State Rex Tillerson’s assertion a few weeks ago that thousands of American troops are being kept in Syria to prevent Assad from regaining control of areas that have been liberated from ISIS.

            Russia Is Taking Over Syria’s Oil And Gas  -- In accordance with an energy cooperation framework agreement signed in late January, Russia will have exclusive rights to produce oil and gas in Syria. The agreement goes significantly beyond that, stipulating the modalities of the rehabilitation of damaged rigs and infrastructure, energy advisory support, and training a new generation of Syrian oilmen. Still, the main international aspect and the key piece of this move is the final and unconditional consolidation of Russian interests in the Middle East.Before the onset of the blood-drenched Civil War, Syrian oil production wavered around 380,000 barrels per day. It has declined for some time then, since its all-time peak production rate of 677,000 barrels per day in 2002. Although the Islamic State was allegedly driven underground, the current output still stands at a devastating 14–15,000 barrels per day.As for gas, the production decline proved to be lower (it fell from 8 BCm/year to 3.5 BCm/year) due to its greater significance within the domestic economy. 90 percent of the produced gas in Syria was used for electricity production (as opposed to oil, which was either refined domestically or exported), and in view of this, the government took extra care to retake gas fields first as the prospects of reconquest became viable enough.  It’s an understatement to say that whoever takes over Syria’s energy sector will receive a desolate ruin. The country’s refineries need thorough reconstruction after their throughput capacity has halved from the pre-war level of 250,000 barrels per day. This task will most likely be carried out by Iranian companies, in accordance with agreements signed in September last year, which also involved the reconstruction of Syria’s damaged power grid. However, it remains unclear whether this project will go through, as Tehran counted upon an Iran-Venezuela-Syria consortium, which is all but feasible now against the background of Venezuela disintegrating, a new solution ought to be found. In any case, Tehran already got what it wanted in Syria as Iran’s Revolutionary Guard already secured the telecommunications sector.

            US Strikes Kill 100 Russian Fighters In Syria - Following up to last night's bombshell report  that at least two Russian mercenary fighters in Syria had been killed by US-led coalition forces, this morning Bloomberg is out with an exclusive, according to which the body count is far greater than had been disclosed: U.S. forces reportedly killed "scores" of Russian contract soldiers in Syria last week "in what may be the deadliest clash between citizens of the former foes since the Cold War", Bloomberg reported. According to the unnamed US and Russian sources, "more than 200 mercenaries, mostly Russians fighting on behalf of Syrian leader Bashar al-Assad, died in a failed attack on a base and refinery held by U.S. and U.S.-backed forces in the oil-rich Deir Ezzor region" In terms of total body count, the U.S. official put the death toll at about 100, with 200 to 300 injured. A few caveats: the Russian operation was not officially mandated, and the assault "may have been a rogue operation, underscoring the complexity of a conflict that started as a domestic crackdown only to morph into a proxy war involving Islamic extremists, stateless Kurds and regional powers Iran, Turkey and now Israel." In a bizarre deflection of responsibility, Russia’s military not only did not demand an explanation from the US for the deaths, but said it had nothing to do with the attack and the U.S. military accepted the claim. Defense Secretary Jim Mattis has called the whole thing “perplexing,” but provided no further details.

            Multiple reports confirm US killed Russians in Syrian oilfield airstrikes -- Reports emerging from Russia indicate that anywhere from dozens to hundreds of Russian military contractors may have been killed in the US air and artillery assault against a column of fighters loyal to the government of Syrian President Bashar al-Assad in eastern Deir Ezzor province on February 7. As yet, a handful of names of Russians killed in the one-sided battle have emerged. The right-wing nationalist “Other Russia” group reported that one of its members, Kirill Ananiev, who had gone to Syria a year ago, was among the dead. A spokesman for the group said there had been “substantial losses” inflicted upon “paramilitary structures with ties to Russia.” A paramilitary organization calling itself the Baltic Cossak Union posted a statement online reporting that one of its members, Vladimir Loginov, had died in the US bombardment in Deir Ezzor. The Conflict Intelligence Team, a Russian opposition group that has monitored developments in Syria, provided three other names: Alexi Ladigin of Ryazan and Stanislav Matviev and Igor Kostorov of Kaliningrad. The Pentagon initially said it had killed 100 fighters in its February 7 attack, which took place on the western bank of the Euphrates River. It claimed it had responded to an advance by as many as 500 fighters, backed by tanks and artillery, on a headquarters of the so-called Syrian Democratic Forces, the US proxy ground force that consists overwhelmingly of the Syrian Kurdish YPG militia. US special forces troops directing the YPG’s operations in the area were reportedly at the site. The US troops called in a withering assault by Apache attack helicopters, an AC-130 Specter gunship and F-15 fighter jets, as well artillery batteries. The Syrian government denounced the US firestorm as a “massacre” and a “war crime,” insisting that its fighters had been targeting remnants of the Islamic State of Iraq and Syria (ISIS).

            Syria – Is War With Israel Imminent (Updated)? - Around 6 am GMT the Syrian air defense shot downed an Israeli fighter jet that was attacking the country. There is now the chance that a larger war will ensue. [This is a developing story that will be updated below as new information comes in. - The latest update (below) is a video interview with Elijah Magnier on the implications of today's developments.]This escalation comes after a series of recent provocations against the Russian forces in Syria, yesterday's U.S. attack on Syrian forces, last week's Israeli threats against Lebanon and dozens of Israeli air attacks on alleged Hizbullah or Iranian installations in Syria.Tonight's events developed after Israel shot down what it called an "Iranian drone" allegedly in air space over the Israel occupied Syrian Golan Heights. Syria denies that its drone violated Israeli air space. Israel then attacked ground targets in Syria. One attacking Israeli F-16 fighter jet was taken down by Syrian air defense. The pilot ejected and parachuted into Israeli territory. He is wounded but survived. It is the first downing of an Israeli jet by Syrian air defense since 1982!  Further Israeli "retaliation" followed. This is another paragraph in the long history of Israeli aggression against Syria.  There are some unconfirmed vague reports of a second damaged F-16 and a destroyed Israeli Apache helicopter. Today's development as covered in Eljiah Magnier's timeline (emphasis added):

            A Game Changer -- "Additionally to the downed F-16I of the Israeli Air Force, at least one Israeli F-15 warplane wad damaged by a Syrian missile and was forced to make an emergency landing on February 10, the Al Arabiya TV network reported citing own sources. According to unconfirmed report, in total 3 Israeli warplanes were damaged additionally to the F-16 which was downed by the Syrian forces earlier on February 10. If these reports are at least partly confirmed this will be one of the biggest Israeli failures in the recent time."  SF  Israeli collective psychology is based on an assumed military and cultural superiority to the Arab states surrounding them.  For them to lose an F-16 to the Syrian Air Defenses as well as to suffer damage to several F-15s is an unacceptable challenge to their self image and to the intimidating effect that they seek. For the Israelis this defiance of their usual air supremacy requires massive retaliation.  This is ongoing. 

              "Major Escalation": Israel Carries Out "Large Scale Attack" On Syria After Israeli F-16 Shot Down - Open war has now essentially broken out between Israel and Syria. Israel confirms through its IDF spokesperson that it has carried out "a large scale attack" consisting of at least a dozen strikes on Syrian and Iranian military targets inside Syria, in what Reuters dubbed a "major escalation of tension". What we previously described as Assad's strategic "waiting game" and reluctance to respond to repeat Israeli violations of Syrian airspace while launching unprovoked attacks appears to be over as Syrian air defense has shot down an Israeli F-16 fighter jet near the Golan border region in what is a major escalation in the conflict.   According to Al Masdar, the Israeli pilot whose warplane was shot down by Syrian air defense forces on Saturday morning has died from injuries sustained during the engagement.While according to initial reports both crew members ejected – the weapons operator with light injuries and the pilot with ‘severe’ injuries, according to subsequent, still unconfirmed, reports, the Israeli pilot with serious injuries has died in hospital. No further details were given according to Al Masdar. This report however is being denied by the Times of Israel  which reported that the pilot suffered wounds to chest, abdomen while ejecting from jet; co-pilot set to be released home Sunday.   Iran dismissed Tel Aviv’s claims concerning an Iranian drone and a downed Israeli jet as “ridiculous.” An Iranian commander also warned Iran could unleash “hell” on the “Zionist regime” and destroy all US bases in the area.  “The claim about the flight of an Iranian drone and Iran’s involvement in the downing of a Zionist fighter jet is so ridiculous that it does not merit a comment,” Iranian Foreign Ministry spokesman Bahram Qassemi said. He added that Iranian officials are acting in Syria only as advisers and do so “at the request of the… legitimate and lawful government."  According to Reuters, Vladimir Putin and Israeli Prime Minister Benjamin Netanyahu discussed the situation in Syria in a telephone call following the heavy Israeli air strikes in the country, Interfax news agency cited the Kremlin as saying.  “They discussed the situation around the actions of the Israeli air force, which carried our missile strikes on targets in Syria,” Interfax quoted the Kremlin, adding that Putin told Netanyahu there was a need to avoid any steps that would lead to a new confrontation in the region.

              Netanyahu: Air raids dealt serious blow to Iran, Syria -- Benjamin Netanyahu, Israel's prime minister, has described his country's most significant air attacks on Syria in decades as a heavy blow to Syria and Iran.The attacks were in response to Syrian government forces shooting down an Israeli fighter jet on Saturday, and claims that an Iranian drone entered Israeli airspace.The air attacks reportedly hit an airport on the outskirts of al-Suwayda, in southern Syria, and a weapons depot near the capital, Damascus.Israel has sounded several warnings about the perceived, increased Iranian involvement along its borders with Syria and Lebanon.Russia's President Vladimir Putin has urged Netanyahu to avoid any steps that could escalate tension. Netanyahu has held several consultations with Putin, who, for his part, has sent forces to back Syrian President Bashar al-Assad. Following the Israeli attacks, the two spoke again on Saturday, with Netanyahu conveying Israel's intention to counter Iran's actions. Russia's foreign ministry appeared to criticise Israel's actions by calling for restraint and respecting Syria's sovereignty. "It is absolutely unacceptable to create threats to the lives and security of Russian servicemen who are in Syria at the invitation of its legitimate government," it said.

              Israeli attack on Syria heightens danger of wider Mideast war --Casualties from Israeli air strikes on military sites in Syria, carried out Saturday, reportedly included Iranian personnel working in conjunction with the government of Syrian President Bashar al-Assad. Israeli Prime Minister Binyamin Netanyahu made clear that his government deliberately targeted Iranian personnel in the attacks.He gave as justification for the air strikes the destruction of an Iranian unmanned aerial vehicle that had allegedly invaded Israeli airspace from Syria.In response to the Israeli strikes, the Syrian army brought down an Israeli F-16 jet after firing more than 20 antiaircraft missiles. The pilots bailed out.Israel attacked 12 of the country’s main air defence sites, which the Israel Defense Forces (IDF) described as “Iranian targets.” The IDF said it had inflicted huge damage in the “most significant attack” against Syria since the 1982 Lebanon war and the first to claim Iranian lives.IDF sources said the Iranian military has for some time been using the Tiyas (T4) Airbase near Palmyra “for the purpose of transferring weaponry to be used against Israel.”Indicating that this will not to be the last such attack, the Jerusalem Post reported Sunday that the IDF was “preparing for war in the North.” It wrote that witnesses “reported seeing a convoy of missile defense batteries heading north near the Israeli-Arab city of Baqa el-Garbiyeh. Other witnesses posted photos of several trucks carrying the batteries on central highways in northern Israel.” Iran has denied all of the allegations made by Israel. Foreign Ministry spokesman Bahram Qasemi stated, “Reports of downing an Iranian drone flying over Israel and also Iran’s involvement in attacking an Israeli jet are so ridiculous.”

              Israel Preps for Syrian War With Golan’s Oil and Water in Its Sights -  Soon after Saturday's dangerous escalation involving Syria's downing of an Israeli fighter jet in its airspace seemed to fizzle out, the Jerusalem Post reported that Israel was approaching the de-escalation period as a time to prepare for large-scale war with its northern neighbor by boosting its air defenses. According to those cited by the Post, convoys of missile-defense batteries have been relocated to the Israeli-Arab city of Baka al-Gharbiya and numerous other batteries have been sighted on highways throughout northern Israel. While the deployment of air defenses to the country's north seems to forebode an imminent conflict, some experts, like Ofer Zalzberg of the International Crisis Group think tank, have asserted that the recent escalation between Syria and Israel will remain contained, despite Israel's apparent preparations for a large-scale conflict.  Russia, for its part, seemed eager to halt the hostilities, as it urged the need to "avoid any measure that could lead to a dangerous escalation." Indeed, any escalation that would lead to a state of open conflict between Syria and Israel would surely spread, quickly involving Syrian allies including Iran and Lebanon's Hezbollah and, potentially, more powerful nations like the U.S. and Russia. Even if recent events fail to translate into a war between Israel and its northern neighbors, any attempts to prevent such a war—no matter how "successful" they may seem—will only be temporary at best. Israel, even prior to its establishment as a state in 1948, has been ever eager to annex southern Syria in order to gain access to key resources—first, fresh water and now, oil. It is this same desire that continues to motivate Israel's aggression against its neighbors. As Syria will not relinquish what is theirs as long as their sovereignty remains intact, Israel has sought to take such prizes through a variety of tactics ranging from illegal occupation to fomenting covert regime-change efforts. As those efforts have continued to fail, Israel has grown more and more desperate to lay claim to those resources that lie just beyond its reach. Unless Israel relinquishes its desire for its neighbor's resources, the next war is inevitable.

              Syria’s War Is Fueling Three More Conflicts - When an Israeli jet crashed after being shot down over Syria over the weekend, it marked a serious escalation in the Syrian Civil War. But it also reflected an ongoing reality, one that is growing more dangerous: Syria’s war encompasses at least three other international conflicts, each of which are heating up.In the last few weeks alone, Turkey has clashed with Syrian Kurds and threatened a U.S.-controlled town in Syria; an Israeli fighter jet that was part of a response to an incursion into Israeli territory by an Iranian drone launched from Syria took Syrian anti-aircraft fire, forcing its two pilots to eject and parachute into Israeli territory; and U.S. forces repelled an attack by Russian fighters, killing an unknown number of them that reports suggest could be in the hundreds.   Taken individually, each one of the clashes has the potential to turn into something more dangerous. Taken together, they suggest the reasons why even after the defeat of ISIS, Syria cannot hope for stability to return soon—and why the next chapter could be even worse. “The issues have been out there: Kurdish-Turkish-American tensions; Iran-Syria-Israel tensions,” Ryan Crocker, a former U.S. ambassador to Syria, told me. “But … we’ve gotten to a level not reached before, and it’s all coming at once.” The recent flare-ups have come suddenly, but the conditions for them were being set soon after protests against the Assad regime in Syria erupted into a full-blown civil war some seven years ago. The conflict quickly sucked in other countries. Iran entered the conflict in 2011 to help prop up Assad’s regime as it faced growing nationwide protests. Hezbollah, the Lebanese militia that acts as an Iranian proxy, joined in soon afterward, at a point when the regime looked in danger of falling, helping Assad hold off the rebels—some of whom received covert American support. The United States started bombing ISIS and al-Qaeda positions in Syria in 2014. Then in 2015, when Assad’s grip on power appeared to be in peril again, Russian President Vladimir Putin intervened on his behalf.

              War doesn’t have to be nuclear to kill indiscriminately Al Jazeera -- Over the past year, the escalation of tensions between the United States and North Korea has caused much anxiety about the possibility of a nuclear war. Since the creation of the first nuclear bomb and the bombing of Hiroshima and Nagasaki, international diplomacy has focused its non-proliferation efforts on nuclear weapons.In doing so, it has overlooked the proliferation of conventional weapons, which have killed millions since World War II and which continue to kill on a massive scale today.As Amnesty International noted in a report released in late 2015, "reckless arms trading" encouraged atrocities committed by the Islamic State of Iraq and the Levant (ISIL) and other armed groups in Iraq. In 2016, more than 100,000 people were killed in conflicts in which conventional weapons were used. And while the Nuclear Non-Proliferation Treaty has limited the new production of nuclear weapons, the world has experienced an uncurbed proliferation of conventional weapons with no effective international legal tools to control it.Since 1960 - the early days of the Cold War nuclear arms race - international military spending has increased twenty-fold from $82bn to $1.69 trillion; and year on year, it continues to grow. The growing demand for conventional weapons is making many providers very wealthy. The top 100 arms companies have sold over $5 trillion worth of merchandise since 2002. In 2016, some $31bn was generated by the international arms trade, the US earning $9.9bn of it, followed by Russia with $6.4bn and Germany with $2.8bn.

              Trump warns Israel that settlements 'complicate' peace hopes - BBC News: US President Donald Trump has said Israeli settlements "complicate" the peace process with Palestinians and urged "care" over the issue. He also told an Israeli newspaper that he did not believe the Palestinians, and possibly Israel as well, were ready to make peace. President Trump angered Palestinians in December when he recognised Jerusalem as Israel's capital. He also threatened to withhold aid unless Palestinians agreed to talks. The US leader's latest comments came in an interview published on Sunday with the conservative newspaper Yisrael Hayom. Asked by editor-in-chief Boaz Bismouth when the US would present its peace plan, Mr Trump said: "We will see what happens. Right now the Palestinians are not into making peace, they are just not into it. Regarding Israel, I am not certain it, too, is interested in making peace so we will just need to wait and see what happens." Asked whether Israeli settlements would form part of the peace plan, he said: "We will be talking about settlements. The settlements are something that very much complicates and always have complicated making peace, so I think Israel has to be very careful with the settlements."

              Netanyahu confirms US discussions on West Bank settlement annexations - Netanyahu said Monday he was “maintaining a dialogue with the Americans” about a proposal to permanently annex Zionist settlements in the West Bank.Josh Raffel, a White House spokesman on Israel-Palestine affairs, immediately denied the claim, saying, “Reports that the United States discussed with Israel an annexation plan for the West Bank are false. The United States and Israel have never discussed such a proposal, and the president’s focus remains squarely on his Israeli-Palestinian peace initiative.”He warned that such a step would lead to tension and instability, and “destroy any international effort to save the peace process.”Following a US request for clarification, Netanyahu’s spokesperson said, “Netanyahu updated the Americans on the initiatives being raised in the Knesset [Israel’s parliament] and the Americans expressed their unequivocal position that they are committed to advancing President Trump’s peace plan.” Framed as a retreat to save Washington from political embarrassment in front of its Arab allies, the statement in fact made clear that Netanyahu told the truth about his discussions with the US.Discussions in the cabinet centre on the Sovereignty Bill, proposed by his Likud party and his coalition partner Jewish Home, that calls for annexing the settlements in the West Bank, although many coalition members want to annex the entire West Bank.Netanyahu had sought to stall the Bill, arguing that such a step had to be coordinated with Washington. Speaking at a coalition meeting, he said, “I can tell you that for a while now I’ve been talking about it with the Americans.” He added, “I’m guided by two principles in this issue … optimal coordination with the Americans, whose relationship with us is a strategic asset for Israel and the settlement movement; and the fact that it must be a government initiative rather than a private one because it would be a historic move.”

              Trump's ambassador to Israel flips out on Haaretz newspaper - The American ambassador to Israel attacked an Israeli leftwing newspaper Friday, questioning whether it had any “dignity” after a vitriolic column.The quarrel erupted after Haaretz newspaper criticised US Ambassador David Friedman, personally selected by President Donald Trump, for his support of settlements in the occupied Palestinian territories.In the wake of the murder of an Israeli rabbi and father of four from the Har Bracha settlement on Monday, Friedman tweeted that he had provided an ambulance for the community 20 years ago.Friedman then criticised Palestinian “leaders” for praising the killing, although Palestinian president Mahmud Abbas said nothing about it.In response Haaretz, which opposes settlement building in the Palestinian territories, ran a column by commentator Gideon Levy saying that “with Friedman’s ambulance or without it, Har Bracha (literally, ‘Mountain of Blessing’) is a mountain of curses.” It accused Friedman, who was Trump’s personal lawyer before being confirmed as ambassador in May 2017, of “encouraging and funding war crimes and violations of international law”.

              Israeli police recommend indicting Netanyahu for corruption: report | TheHill: Israeli police chiefs will recommend to the country's attorney general that Prime Minister Benjamin Netanyahu be indicted on corruption charges, according to reports in local media. The Times of Israel reported Wednesday that police chiefs, including the general commissioner of Israel's police force, were in "unanimous agreement" that Netanyahu should be indicted for allegedly accepting bribes and receiving lavish gifts from wealthy benefactors, including Israeli-born Hollywood producer Arnon Milchan. Any recommendation for an indictment would be sent to Israeli Attorney General Avichai Mandelblit, who will decide whether to indict the prime minister. In a Facebook video Netanyahu acknowledged that the police would likely move to recommend his indictment, but dismissed the allegations against him and predicted Mandelblit would not move to press charges. "The State of Israel is a state of law. The law says that the one to determine whether there is evidence against the prime minister is the attorney general and he consults with the state attorney. The state prosecutor recently said in the Knesset that about half of the police's recommendations end with nothing," Netanyahu said Wednesday. "So do not be nervous ... I am sure that at the end of the day the competent legal bodies will come to one conclusion, to the simple truth: There is nothing," he added. Netanyahu's current tenure as Israel's prime minister began in 2009; he previously held the office from 1996 to 1999. He was reelected in 2015 with just over 23 percent of the vote share, with his Likud party winning 30 seats in Israel's parliament. The right-leaning Israeli leader is a top ally of President Trump, who last year declared that the U.S. would recognize Jerusalem as Israel's capital. 

              Israel PM Netanyahu faces corruption charges - BBC News: Israeli police say that Prime Minister Benjamin Netanyahu should be charged over alleged bribery cases. A police statement said there was enough evidence to indict Mr Netanyahu for bribery, fraud and breach of trust in two separate cases. Speaking on Israeli television, Mr Netanyahu said the allegations were baseless and that he would continue as prime minister. The allegations, he said, "will end with nothing". What are the allegations? One case centres on an allegation that Mr Netanyahu asked the publisher of an Israeli newspaper, Yediot Aharonot, for positive coverage in exchange for help in reining in a rival publication. Police said the editor of Yediot Aharonot, Arnon Mozes, should also face charges.The second allegation centres on a claim that Mr Netanyahu, Israeli prime minister since 2009, received gifts worth at least a million shekels ($283,000; £204,000) from Hollywood mogul Arnon Milchan and other supporters. The Jerusalem Post says the gifts included champagne and cigars, and were given in exchange for help getting Mr Milchan a US visa. Mr Milchan, the producer of films including Fight Club, Gone Girl and The Revenant, should face bribery charges, police said. The police statement said that Mr Netanyahu, after receiving gifts, pushed for the Milchan Law, which would have ensured that Israelis who return to live in Israel from abroad were exempt from paying taxes for 10 years. 

              China plans to launch crude oil futures on March 26: securities regulator (Reuters) - China plans to launch its long-awaited crude oil futures contract on March 26, the country’s securities regulator said on Friday, a move that could potentially shake up pricing of the world’s largest commodity market. Chang Depeng, a spokesman for the China Securities Regulatory Commission (CSRC), gave the launch date at a regular briefing in Beijing, confirming what two sources familiar with the situation told Reuters earlier on Friday. The launch will mark the culmination of a years-long push by China to create Asia’s first oil futures benchmark, and is aimed at giving the world’s biggest oil importer more clout in pricing crude sold to Asia. It will potentially give the Shanghai International Energy Exchange (INE), which will operate the new contract, a share of the trillions of dollars each year in oil futures trading. The Shanghai Futures Exchange (ShFE) and INE, which is part of the ShFE, declined to comment. Asia has become the world’s biggest oil consuming region, and China hopes its own derivative crude contract will better reflect market conditions in the region. The two most active oil futures contracts in the world are the West Texas Intermediate (WTI) CLc1 contract offered by the New York Mercantile Exchange (NYMEX), owned by CME Group (CME.O), and the Brent LCOc1 contract offered by the Intercontinental Exchange (ICE.N) from London. WTI futures are an important component of physical oil prices in the Americas, while Brent plays a vital role for prices for Middle Eastern, European and Asian crude. Most physical oil trades globally are hedged using those two crude derivatives. 

              Bullet Trains Are Transforming the World’s Biggest Migration -- Millions of Chinese cram onto trains to make the annual pilgrimage home for the Lunar New Year holiday. It’s a crowded and often uncomfortable experience that is rapidly being transformed by the country’s push into the world of high-speed rail. China already has the globe’s longest bullet-train network, but it’s plowing 3.5 trillion yuan ($556 billion) into expanding its railway system by 18 percent over the next two years, to 150,000 kilometers, or more than 93,000 miles. Much of that will be spent on extending the high-speed network westward, which includes parts of the country that ancient Chinese poet Li Bai once lamented were so mountainous that getting there was as challenging as reaching the sky. Almost 400 million people -- that’s more than the U.S. population -- will travel by train over the Lunar New Year, also known as Spring Festival. China’s factories and offices shut down for the week-long holiday, which unleashes the largest migration of humans on the planet. Many of the country’s 1.4 billion citizens return to their hometowns for family gatherings, or, increasingly, are taking the chance to be tourists both at home and abroad.Almost nonexistent in China a decade ago, high-speed rail has exploded, with more than half of the 25,000-kilometer network built between 2013 and 2017. The plan is to expand it by more than 50 percent by 2025, with eight main bullet-train lines running from east to west by 2030. China intends to have another eight main lines running from north to south as well. That will open up the network -- which was initially focused on setting up high-speed connections in major economic hubs along China’s wealthier east coast -- to the less developed west.

              China’s ageing population is creating a new debt crisis for Beijing as pension shortfall widens | South China Morning Post: China’s pension shortfall is emerging as the next big challenge for policymakers as they intensify their years-long campaign to keep rising debt from derailing the economy. Ageing in the world’s most populous country means pension contributions by workers no longer cover retiree benefits, forcing the government to fill that gap since at least 2014. Pension expenses rose 11.6 per cent to 2.58 trillion yuan (US$409.4 billion) in 2016, leaving the government a 429.1 billion yuan tab to cover the shortfall, according to the latest available data from the finance ministry. That shortfall will reach 600 billion yuan this year and 890 billion yuan in 2020 if the system is not reformed, according to Wang Dehua, a researcher at the National Academy of Economic Strategy in Beijing. Enodo Economics in London, which has advised policymakers on the matter, forecast last year that it could soar to 1.2 trillion yuan by next year. The finance ministry does not release estimates. “China’s biggest fiscal risk is pension risk,” said Wang, whose institute is under the Chinese Academy of Social Sciences, the government’s top think tank. “There are big problems in the pension system if it can only keep operating with large fiscal subsidies.”

              While Washington Spends, China Moves to Cut Its $30 Trillion Debt - Conceived as a futuristic financial hub and business center on par with Shanghai’s Pudong district or New York City, Binhai hasn’t yet lived up to the hype. “Only about one-third of the apartments here are occupied,” estimates Liu Yulan, 75, who moved to the area to be closer to her daughter-in-law. “I don’t see Binhai becoming a boom town.” In January, Binhai government officials made a startling admission. The region was revising down its 2016 gross domestic product—by about 30 percent, to 665.4 billion yuan ($104.9 billion). That news followed revelations of creative accounting by two northern provincial governments: Liaoning and Inner Mongolia, both of which have been hit hard by recent downturns in steel, oil, and coal prices. President Xi Jinping is far less tolerant of such profligate spending and fudged data than his predecessors, and he’s in the midst of an historic three-year battle against the systemic financial risks threatening to hinder the economy. So far the focus has been on excessive lending by shadow banks and acquisitive private conglomerates such as the Dalian Wanda Group, whose founder, Wang Jianlin, is China’s fourth-richest executive, and Anbang Insurance Group Co., owner of the Waldorf Astoria New York. Amid pressure from bank regulators, these companies are selling assets at a furious pace. A once-voracious aviation and shipping giant, HNA Group Co., plans to jettison $4 billion in commercial properties in Chicago, Minneapolis, New York, and San Francisco. Yet that’s just an overture to a far bigger drama that will play out for years: Xi’s quest to restrain borrowing by local governments and the nation’s behemoth state-owned enterprises. Last year he called curbing SOE leverage “the priority of priorities” and warned local officials they’d be held accountable “for a lifetime” for building up regional debt. China’s debt of $30 trillion, roughly 259 percent of GDP, has been powered primarily by massive borrowing by state companies. That credit buildup, on track to hit 327 percent of GDP by 2022, estimates Bloomberg Economics, is in turn fueled by local government leaders, whose advancement has traditionally been tied to hitting economic targets. State companies feed off the infrastructure projects approved by career Communist officials at the local level.

              BIS Publishes A "Simplified" Map Of China's Shadow Banking System --To help China watchers in their analysis of China's financial underworld, overnight the Bank of International Settlements published a working paper  mapping China's shadow banking sector, which studies the "structure of the shadow banking system in China, focusing on the main activities and linkages with the formal banking sector."As the BIS explains in its abstract: We develop a stylised shadow banking map for China with the aim of providing a coherent picture of its s tructure and the associated financial system interlinkages. Five key characteristics emerge. One defining feature of the shadow banking system in China is the dominant role of commercial banks, true to the adage that shadow banking in China is the "shadow of the banks". Moreover, it differs from shadow banking in the United States in that securitisation and market-based instruments play only a limited role. With a series of maps we show that the size and dynamics of shadow banking in China have been changing rapidly. This reveals a marked shift in the relative importance of different shadow banking activities. New and more complex "structured" shadow credit intermediation has emerged and quickly reached a large scale, while the bond market has become highly dependent on funding channelled through wealth management products. As a result, the structure of shadow banking in China is growing more complex.  This "growing complexity" of China's shadow banking system is captured neatly in the following chart:

              How to Manipulate Stocks: Chinese Authorities Step in to Stop the Rout - Wolf Street -  The Shanghai Composite Index plunged 10.2% last week, the largest weekly drop in two years, and was down 11.4% since January 26. But it wasn’t just last week that things became unglued. The Shenzhen Composite Index had plunged 14% since January 24, only about half of it last week.The Spring Festival holiday is coming up this week, and there were fears that traders want to unload additional positions ahead of it. There are other factors lined up against the stock market, including China’s off-and-on-again crackdown on leverage. So it was time for authorities to step in and set things right.Over the weekend the China Securities Regulatory Commission (CSRC) and other regulators have sent directives to:

              • Major stockholders, telling them to acquire more shares of companies listed in mainland China in which they already own large stakes.
              • Mutual fund firms, telling them to curtail share sales to avoid becoming net sellers.
              • Brokerages, telling them to provide to the CSRC trading summaries from last week along with trading plans and previews for the current week.

              For proper effect, so that all players in the market would know that the Chinese authorities are going to stop the selloff and turn it around, and thus to encourage more buying by other players, these directives were purposefully leaked to the media, including Bloomberg, which reported it this morning. This served as confirmation what everyone had been hoping for: That the authorities would not let the market fall prey to market forces.

              North Korea heads for diplomacy gold medal at Olympics: analysts (Reuters) - North Korea has emerged as the early favorite to grab one of the Winter Olympics’ most important medals: the diplomatic gold. That is the assessment of a former South Korean government minister and political experts who say the North has used the Games to drive a wedge between South Korea and its U.S. ally and to potentially ease pressure on its sanctions-crippled state. In barely a month since North Korean leader Kim Jong Un surprised the world and said his nation was ready to join the Games, South Korean President Moon Jae-in has delayed military exercises, feted Kim’s sister at the Pyeongchang Olympics and given conditional consent to a bilateral summit in the North. “North Korea clearly appears to be winning the gold,” said Kim Sung-han, who served as Korea’s vice foreign minister in 2012-2013 and who now teaches at Seoul’s Korea University. “Its delegation and athletes are getting all the spotlight, and Kim Jong Un’s sister is showing elegant smiles before the South Korean public and the world. Even for a moment, it appears to be a normal state.” U.S. Vice President Mike Pence, who attended Friday’s opening ceremony along with the North Koreans, cast one of the loneliest figures at the opening event. He remained seated when the joint Korean team entered the stadium, in contrast to Moon who stood along with Kim Jong Un’s younger sister, Kim Yo Jong, to applaud. 

              US policies may disrupt global markets: Urjit Patel - Reserve Bank of India governor Urjit Patel said rate hikes in the US and the expansionary fiscal policy announced by the Trump administration could disrupt global markets, and emerging ones in particular. He said the same US policy mix had previously led to turmoil, including the Latin American debt crisis, warning that the risks are even bigger now. "Policy makers should be flexible in how to respond to unusual disruptions in this context to mitigate fallout,"  he told ET. "Interest rate hikes by the US Federal Reserve Bank in conjunction with US expansionary fiscal policies announced in recent days have the potential to create adverse risks for global markets." He was speaking on the sidelines of the RBI central board meeting on Saturday on volatility and enhanced risks to global and domestic financial markets and what could be done to calm them. However, exactly when these risks would materialise wasn't easy to predict. Ten-year treasury yields hit a four-year high of 2.88% in the US last week over fears that higher inflation and bigger fiscal deficits could hasten inflation and push up interest rates. US stocks just had their worst week in two years, the reverberations of which resonated across global markets, which crashed in their wake. India was no exception. The tax cut announced by the Trump administration could cost $1.5 trillion over the next decade while the budget deal passed last week would add over $400 billion in spending, sparking fears that the era of big deficits is back. Patel said emerging economies are more vulnerable to capital flowing out quickly, drawn by higher-yielding US debt, and thus face greater risk. Emerging economies received nearly $700 billion in capital last year.The reversal of this flow would cause upheaval in international markets and eventually hurt global growth. "Since, compared to the past, even more emerging markets are open to large international capital flows, both debt and equity, potential risks can get amplified in practice," the governor said. Patel didn't indicate what specifically policymakers could do to in such a situation.

              Critics of India’s ID card project say they have been harassed, put under surveillance (Reuters) - Researchers and journalists who have identified loopholes in India’s massive national identity card project have said they have been slapped with criminal cases or harassed by government agencies because of their work. Last month, the Unique Identification Authority of India (UIDAI), the semi-government body responsible for the national identity project, called Aadhaar, or “Basis”, filed a criminal case against the Tribune newspaper for publishing a story that said access to the card’s database could be bought for 500 rupees ($7.82). Reuters spoke to eight additional researchers, activists and journalists who have complained of being harassed after writing about Aadhaar. They said UIDAI and other government agencies were extremely sensitive to criticism of the Aadhaar programme. Aadhaar is a biometric identification card that is becoming integral to the digitisation of India’s economy, with over 1.1 billion users and the world’s biggest database. Indians have been asked to furnish their Aadhaar numbers for a host of transactions including accessing bank accounts, paying taxes, receiving subsidies, acquiring a mobile number, settling a property deal and registering a marriage. The Tribune said one of its reporters purchased access to a portal that could provide data linked to any Aadhaar cardholder. The UIDAI complaint, filed with the police cyber cell in the capital, New Delhi, accused the newspaper, the reporter, and others of cheating by impersonation, forgery and unauthorised access to a computer network. Media associations sharply criticised the action - the Editors Guild of India said UIDAI’s move was “clearly meant to browbeat a journalist whose story was of great public interest. It is unfair, unjustified and a direct attack on the freedom of the press.”

              Amid jockeying over Maldives, Washington presses for closer ties with India --As India continues to weigh the risks and advantages of a military intervention in the Maldives, a strategic Indian Ocean archipelago where China has dramatically expanded its influence in recent years, US President Donald Trump has made a public show of reaching out for closer military-security cooperation between Washington and New Delhi.Last Thursday, the White House let it be known that Trump had telephoned Indian Prime Minister Narendra Modi and discussed with him the current political crisis in the Maldives, as well as developments in Myanmar, Afghanistan and North Korea. It also boasted that plans had been finalized for a new 2+2 dialogue that will bring together the countries’ respective foreign and defence ministers.According to the White House “readout” of their conversation, the fascistic-minded Trump and the arch-Hindu communalist Modi “expressed concern about the political crisis in the Maldives and the importance of respect for democratic institutions and rule of law.” Claims that either leader or their governments are concerned about democracy on the Maldives are transparent lies.US imperialism has supported, armed and sustained in office brutal right-wing regimes the world over.  For decades, India backstopped an authoritarian government in the Maldives, led by Maumoon Abdul Gayoom, the half-brother of the current president, Abdulla Yameen, and it continues to view Maldives as part of its sphere of regional dominance. But Yameen, the Maldives president since a contested election in 2013, has raised New Delhi’s hackles by developing close ties to China, which did not even have an embassy in Malle until 2011. Maldives is participating in China’s One Belt, One Road (OBPR) infrastructure-building initiative, signed a free trade agreement with Beijing in December, and earlier last year received three Chinese warships. The Maldives has a population of less than half a million. But they are considered a strategic prize, because they are close to Indian Ocean shipping lanes through which much of the oil that powers the economies of India, China, Japan and other East Asian states passes, as well as much of their trade with Europe, the Middle East and Africa.

              Ramaphosa installed as South African president -- Former trade union boss Cyril Ramaphosa has been sworn in as president of South Africa following an intense battle within the ruling African National Congress (ANC) which led to the ousting of Jacob Zuma who had held the presidency since 2009.The move against Zuma was set in motion last December when Ramaphosa won a closely fought struggle within the ANC to become its leader, narrowly defeating the candidate favoured by Zuma.The campaign against Zuma, waged on the basis of  “corruption”, has now seen the elevation of one of the richest men in South Africa to the top position. It is the incarnation of “black economic empowerment,” installed after the dismantling of apartheid, which has benefited a thin layer of black businessman, enriched at the expense of the South African masses who are experiencing worsening social conditions.The campaign to remove Zuma, which has enjoyed the backing of major international financial and business interests, has been motivated by two concerns.The first is that the activities of a network of Zuma cronies has impacted adversely on other business interests, both domestic and international. During the course of his campaign, Ramaphosa emphasised that corruption was a barrier to international capital investment in the country.The second is the growing concern that under Zuma, the ANC, which has played the key role in maintaining the stability of capitalist rule in post-apartheid South Africa, is losing support in the face of growing hostility and discontent in the working class and oppressed masses.

              Brazil's Military Is Put in Charge of Security in Rio de Janeiro -  After months of escalating violence in Rio de Janeiro that included television coverage of tourists being chased and beaten by robbers during the famed Carnival festivities, Brazil’s president on Friday ordered the military to take control of public security in the state. It is the first federal intervention in a state since Brazil’s return to democracy in the 1980s, and it is seen by some as a bid by the president, Michel Temer, to improve his favorability ratings rather than as a measure to tackle crime.The decree signed by Mr. Temer on Friday afternoon falls short of a full intervention in the state government. While the military will take control of security, Gov. Luiz Fernando Pezão will continue to run the state government of Rio de Janeiro.“This decision is motivated more by politics than sound public administration,” said Kennedy Alencar, a political commentator and blogger in Brasília, Brazil’s capital. “Now the focus of news will be on the president’s federal intervention to address an issue that concerns the whole country.”  The decision was made two days after the end of Carnival, when about 1.5 million tourists descended on Rio, Brazil’s second-largest city, for the annual parades and partying. But this year the festivities were marred by mass robberies, the looting of stores and shootouts between the police and drug gangs.  The decree confers broad authority on the military to restore order. It also places police forces, which have had shortages of personnel and equipment, under the command of a general, Walter Souza Braga Netto, who oversees military operations in the eastern part of the country. “Together, the police and the armed forces will combat and confront those who have kidnapped our cities,” Mr. Temer said at the signing ceremony in Brasília. “Prison cells will no longer be thieves’ personal offices. Public squares will no longer be the reception halls for organized crime.”

              Mad Max violence stalks Venezuela's lawless roads (Reuters) - It’s midnight on one of the most dangerous roads in Latin America and Venezuelan trucker Humberto Aguilar hurtles through the darkness with 20 tons of vegetables freshly harvested from the Andes for sale in the capital Caracas.   Just a few days earlier, Aguilar said he sat terrified when hundreds of looters swarmed a stationary convoy, overwhelming drivers by sheer numbers. They carted off milk, rice and sugar from other trucks but left his less-prized vegetables alone.  While truck heists have long been common in Latin America’s major economies from Mexico to Brazil, looting of cargoes on roads has soared in Venezuela in recent times and appears to be not just a result of common crime but directly linked to growing hunger and desperation among the population of 30 million.  Across Venezuela, there were some 162 lootings in January, including 42 robberies of trucks, according to the consultancy Oswaldo Ramirez Consultores (ORC), which tracks road safety for companies. That compared to eight lootings, including one truck robbery, in the same month of last year. “The hunger and despair are far worse than people realize, what we are seeing on the roads is just another manifestation of that. We’ve also been seeing people stealing and butchering animals in fields, attacking shops and blocking roads to protest their lack of food. It’s become extremely serious,” said ORC director Oswaldo Ramirez. Eight people have died in the lootings in January of this year, according to a Reuters tally. The dystopian attacks in a country with one of the world’s highest murder rates are pushing up transport and food costs in an already hyperinflationary environment, as well as stifling movement of goods in the crisis-hit OPEC nation. They have complicated the perilous life of truckers who already face harassment from bribe-seeking soldiers, spiraling prices for parts and hours-long lines for fuel.

               Oxfam crisis spreads as Haiti suggests aid workers exploited children for sex - A top executive at the international charity Oxfam resigned Monday as the British government considered defunding the humanitarian group after accusations that its workers prostituted survivors of some of the worst disasters this century.“I am ashamed that this happened on my watch and I take full responsibility,” Oxfam's deputy chief executive, Penny Lawrence, wrote in a statement announcing her resignation. She referenced newspaper reports last week alleging that a regional Oxfam director and aid workers exploited locals for sex after two disasters — Haiti's 2010 earthquake and a Darfuri refugee crisis in Chad several years earlier.The resignation and Oxfam's repeated apologies have not stemmed the crisis. Haiti's ambassador to Britain told the Guardian newspaper that the victims “may have been underage kids,” and Oxfam's top leaders have been accused of trying to cover up the allegations for years.A spokesman for Prime Minister Theresa May told the Reuters news agency that Oxfam needs to do more to prevent such “horrific behavior” from repeating.  Ultimately, Britain’s international development secretary told BBC News, Oxfam could end up losing its government funding — worth $44 million in the past fiscal year, which is about 8 percent of its overall income.

              The prostitution claims surrounding Oxfam don’t surprise me. I’ve seen it all before with charities across the world – and the UN - Just when I thought my opinion of pro-prostitution lobbyists could not get any lower, I see a tweet by one about the Oxfam scandal: “Buying sex from professionals is not sexual misconduct and women in Haiti may well have been glad to get the sex work. I hate prissy Establishment fiddle-faddle implying ‘development’ workers are ethical puritans or saints.”  There you have it. The idea that the women involved in prostitution in Haiti are somehow benefiting from being bought and sold by the very men that are supposed to be helping them cope with their hellish existence.  Let us consider what this person is defending. Oxfam's country director in Haiti, Roland van Hauwermeiren, admitted using prostituted females at premises paid for with charitable funds. Children may well have been among those abused by van Hauwermeiren and other aid workers. This happened after the earthquake in 2010, which killed 220,000 people, injured 300,000 and left 1.5 million homeless.  There are also allegations that some male senior officials at the charity were using prostituted women and girls in Chad in 2006. Many men working in developing countries consider using women in this way as a “perk of the job”. We know that many sex markets in countries such as the Philippines exist because of the presence of the military and so-called “peacekeepers”. These men are enabling terrible human rights violations. They are literally propping up a system that causes misery and heartache for women and children. There have been numerous cases of child sexual abuse and human trafficking inside Haiti’s orphanages following the earthquake, and some young women have spoken about the desperation and poverty that led them to street prostitution. 

               WTO outlook indicator: global trade growth to stay above-trend (Reuters) - Global trade in goods will continue growing above trend during the second quarter, the World Trade Organization’s quarterly outlook indicator showed on Monday. The indicator, a composite published since the third quarter of 2016, showed a reading of 102.3, compared to 102.2 last November. All the indicator’s seven components were positive except for trade in electronic components, which fell to 94.1 from 103.3 in the previous quarter, possibly indicating a weakening of consumer sentiment, the WTO said in a statement. “Growth is still above trend,” WTO economist Coleman Nee told Reuters. ”The recovery of 2017 seems to be extending into the first quarter of 2018 at least, based on things like strong export orders, strong air freight and container shipping and other indicators. So it seems like there hasn’t been any slackening of momentum.” The strongest component of the index was container port throughput at 104.3, its highest score since the WTO began publishing the indicator. The WTO has forecast overall growth in world goods trade in a range of 1.4 percent to 4.4 percent this year, most likely around 3.2 percent, compared to an estimated 3.6 percent in 2017. Those figures, published last September, were based on IMF economic growth projections that have since been upgraded by 0.2 percentage points, to 3.2 percent in 2017 and 3.3 percent in 2018. The WTO will update its 2018 trade forecast in April. Trade disputes and international trade friction do not much affect the overall global trade picture, Nee said, since they tend to affect a particular sector in a particular country, and if one source of goods is restricted, importers often simply switch to alternative sources for the same goods. A very wide-ranging dispute or a tit-for-tat battle could still create uncertainty and sap economic growth, but that would be visible in a GDP slowdown rather than directly in trade statistics. 

              Currency War: Trump’s Games Pose Threat to European Economy - On the surface, everything appears to be in good shape. America, Europe and Asia alike are producing, consuming and investing more, and the International Monetary Fund just issued an upward revision of its forecast for worldwide economic growth to 3.9 percent for 2018 and for 2019.But the speed with which euphoria can turn into panic was on full display at the beginning of last week, when fear suddenly began to spread among markets over excessive government deficits, inflation and interest rate increases, sparking the largest point loss in Wall Street history.Even if the percentage slide on the markets was less dramatic, it is still likely that it bothered Trump a great deal. But when it comes to the weak dollar, his administration has literally talked it into existence. Trump wants to weaken the currency to promote exports, curb imports and to reduce his country's current accounts deficit -- one of the central pledges he made during the election campaign.At the World Economic Forum in Davos, U.S. Treasury Secretary Steven Mnuchin said that a weak dollar was good for the U.S. economy. Trump himself may have sounded a little more conciliatory later on, but the genie was already out of the bottle, and Mnuchin's verbal intervention was already having an effect. The dollar fell rapidly, and the nasty term "currency war" could suddenly be heard in the hallways of Davos. "There is no longer any doubt that the U.S. government is not only waging a currency war, but is also in the process of winning it," Joachim Fels, chief economist at mutual funds giant Pimco, says. Trump's policies represent a threat to Europe's recovery, a situation that has displeased the European Central Bank (ECB). But there isn't much the ECB can do about it. By pursuing economic policies that ignore the needs of America's trading partners -- an approach economists refer to as "beggar-thy-neighbor" -- Trump has revisited an old American tradition. In the early 1970s, it was Treasury Secretary John Connally who raised the prospect of a budget deficit of $40 billion -- a massive sum at the time -- and justified it as "fiscal stimulus." In response to concerns voiced by his European counterparts, worried as they were about the weak dollar, he responded with his legendary line that the dollar "is our currency, but your problem."

              Visualizing The Two NATOs - NATO defense ministers got together in Brussels yesterday (and today) for a two day meeting to discuss Washington's concerns over the European Union's new plans to deepen defense ties between its members, and increasingly strained US-Turkey relations; and they will also discuss the ever present topic of defense spending. As AFP reports, on Sunday a senior official working with US Defense Secretary Jim Mattis said Washington had concerns that some of the proposed initiatives risked "pulling resources or capabilities away from NATO".Despite the concerns of the United States, the alliance's most powerful member, NATO Secretary General Jens Stoltenberg said the right balance could be struck."Done in the right way, these efforts can make a contribution to fairer burden-sharing between Europe and North America," Stoltenberg told reporters as he arrived for talks with NATO defence ministers on Wednesday.US President Donald Trump has repeatedly urged allies to increase their share of spending to ease Washington's burden.On Tuesday Stoltenberg said the EU's efforts to boost its defense spending under the pact were welcome, but only if they were coordinated with NATO plans.He warned there was "no way" the EU could replace the transatlantic alliance in guaranteeing European security."It will be absolutely without any meaning if NATO and the EU start to compete," the former Norwegian premier told reporters."European allies are absolutely aware that the defense, the protection of Europe is dependent on NATO."  But, as Statista's Dyfed Loesche notes, Stoltenberg confirmed that more member countries are on track to meet the NATO minimum spending goal of 2 percent of their GDP. However, NATO's own figures show that the United States remains the defense hegemon within the organization.

              U.S. Condemns Russia for Cyberattack, Showing Split in Stance on Putin - The United States on Thursday joined Britain in formally blaming Russia for a huge cyberattack last June that was aimed at Ukraine but crippled computers worldwide, a highly public naming-and-shaming exercise that could further fray relations with Moscow. The White House threatened unspecified “international consequences” for the attack, which it said “was part of the Kremlin’s ongoing effort to destabilize Ukraine and demonstrates ever more clearly Russia’s involvement in the ongoing conflict.” The statement, issued by the press secretary, Sarah Huckabee Sanders, said the attack, known by the name NotPetya, was “reckless and indiscriminate” and spread rapidly, “causing billions of dollars in damage across Europe, Asia and the Americas.” NotPetya, which had the characteristics of a ransomware attack, had been widely identified by cybersecurity experts as coming from Russia, so the attribution was no surprise. But the decision of the United States and Britain to nearly simultaneously condemn the Russian military is noteworthy. It underscores the dichotomy between the administration’s consistently tough stance toward Russia on issues involving Ukraine and President Trump’s continued reluctance to criticize President Vladimir V. Putin over anything else. In December, the White House approved the sale of lethal defensive weapons to the Ukrainian military for its battle against Russian-backed forces in eastern Ukraine. Yet Mr. Trump continues to soft-pedal allegations that Russia interfered in the 2016 presidential election, even after the nation’s intelligence agencies concluded that it did — an assessment that intelligence chiefs reiterated in Senate testimony this week. 

              Bridgewater Bets Big against Largest Banks in Spain & Italy - Don Quijones - A lot of people have lost a lot of money in the recent financial market convulsions, but there’s still plenty of money to be made by betting against the companies, as the world’s largest hedge fund, Bridgewater Associates, showed this week. It bet heavily against four of Spain’s biggest corporate hitters. The fund took up short positions worth €1.2 billion, or 0.5% of total shares at Banco Santander, BBVA, Telefónica and Iberdrola. The gamble has already reaped dividends. Shares of Iberdrola, Spain’s biggest utilities company, Telefonica, Spain’s struggling telecoms giant, and Santander, Spain’s biggest bank ended the week around 5% lower, while BBVA tumbled 4%. Bridgewater placed its best against the two large Spanish banks last week, just as they presented annual results that largely disappointed the market. Since then, both banks have lost close to 10% of their market cap. These short bets are part of the firm’s $13.1 billion in shorts against 44 European companies, according to EU regulatory filings, reported by Bloomberg. Among the notable short positions, in addition to the Spanish banks, are Total, Airbus, BNP Paribas, ING, Intesa Sanpaolo, Eni, Sanofi, and Axa. Investors will nonetheless be wondering why the world’s biggest hedge fund is shorting Spain’s two biggest banks, whose shares had been on an 18-month roll. Until last week that is. As we warned in December, 2018 could prove to be a stressful year for Spanish banks, for three reasons:

              • Painful new rules. The introduction in January of a new accounting rule, known as IFRS 9, will force banks in Europe to provision for souring loans much sooner than at present. One direct result will be that banks will have to hold more capital on their books, and that will have a detrimental impact on their profits. BBVA calculated that as a result Spanish banks will have to increase their provisions by 21% — around €5.2 billion — to comply with the new requirements.
              • Potential indigestion from Popular take-over. The decline and fall last year of Spain’s sixth biggest bank, Banco Popular, served as a reminder (a painful one for the bank’s 300,000 shareholders) that Spain’s banking system is far from fixed, despite the tens of billions of euros thrown at it. Now, the attention shifts to just how well Santander will be able to digest the collapsed bank it bought for €1
              • Exposure to high-risk markets. As the IMF warned in a report last year, BBVA’s largest international exposures by financial assets are concentrated in the UK, the US, Brazil, Mexico, Turkey and Chile. At least four of those six markets — Brazil, Mexico, Turkey and the UK — are likely to face headwinds in 2018. In the US, Santander’s subsidiary, Santander Consumer USA, is dangerously exposed to the subprime auto-loan sector, which is already taking a toll on global profits.

               Bridgewater's European Short Grows To A Massive $22 Billion: Here Are The Targeted Companies - In the red corner we have Mario Draghi, who runs the world's biggest and most activist central bank... and in the blue corner we have Ray Dalio, who runs the world's biggest hedge fund and has been systematically betting against the companies backstopped by his opponent.They are set for a historic clash. Less than a week ago, we were surprised to learn  that what was until the start of the month "only" a $3 billion short bet against a broad selection of Europe's most popular public companies, had grown into a massive $13 billion basket of shorts. Well, fast forward to today when according to the latest breakdown of his filings by Reuters, Ray Dalio has been especially busy, and since last Friday he added another $9 billion shorts, bringing Bridgewater's total short against some of the continent’s biggest companies to a record $22 billion. While there was no offsetting data to show whether the $160 billion in AUM Bridgewater holds more European stocks than it “shorts” overall, an investor in the hedge fund firm’s Pure Alpha Major Markets strategy said that the fund had reduced its long exposure significantly this year. And although the filings do not say when Bridgewater first took out its European short positions - our first report of Dalio's European short was back in October when the fund had a tiny $700 million short - many of its latest disclosures are recent, with some in Germany, Italy and France in the past two weeks. As shown in the breakdown below, Bridgewater has bet against firms ranging from Anglo-Dutch consumer giant Unilever to French oil giant Total, and virtually every single prominent public bank. Broken down geographically, Bridgewater’s short positions are the highest in Germany with $7.3 billion, followed by France with $4.5 billion while in Spain its shorts in four groups amount to almost €1.4 billion ($1.7 billion) and in Italy include Unicredit and Enel. The portfolio has been fluid, adjusting its trades and recently cutting back on shorts in the Netherlands, Spain and Ireland, while increasing them in Germany and Italy.

               ITALY DEBT CRISIS: Borrowing soars to €2.2TRILLION sparking Eurozone fears -- At an increase of €119bn, Italy’s debt is now a major concern as the country heads to the polls this March. The EU Commission, in the latest report yet on the sustainability of public debts in the Eurozone, warned that the country remains exposed to "unfavourable risks" by maintaining such a large sum of public debt compared to its GDP. For Brussels, no EU country currently risks budgetary stress in the short term, but for Italy, Spain, France, Portugal and Belgium, the EU Commission sees "high risks for medium-term sustainability" on both indicators used to assess risk. The report said: ”In these five countries there is a need for a significant budget adjustment to ensure medium-term sustainability by reaching the 60 percent debt target in 2032.” Recent analysis from the former commissioner of the spending review, Carlo Cottarelli, showed that public debt could grow by another €55billion.Mr Cottarelli said: ”The lack of transparency of public accounts makes it particularly difficult to find an explanation for this phenomenon.” On March 4 this year, Italian voters will elect the 945 members of the Parliament for the 18th legislature of the Republic of Italy, since 1948. However, with Italy’s Five Star Movement still leading the polls, a top economic adviser to the party has urged the EU to debate restructuring public debt. With the Eurozone economies enjoying the sharpest spell of positive growth since the financial crash of 2008, the comments from the challenger party could yet unnerve investors and highlight the unorthodox economic views of the anti-establishment party currently leading the country’s polls. 

              French president Macron prepares to privatize railways -- After announcing the end of lifetime employment guarantees for public sector workers, French President Emmanuel Macron is preparing to end these guarantees for rail workers, another social right established during the Liberation from Nazi Occupation at the end of World War II. Jean-Cyril Spinetta, former CEO of Air France, is preparing a report commissioned by Prime Minister Édouard Philippe in October, about a strategic reorientation of rail transport amid the European Union (EU)-mandated opening of French railways to private competition.EU rules foresee the opening to private competition starting on 25 December 2023 for regional rail transport, and by 14 December 2020 for high-speed trains (TGV). French officials are drafting a bill to turn the EU directive on the SNCF (National Society of French Railways) into domestic French law.Spinetta’s report has not yet been published, but Le Parisien is already indicating various options being studied by Macron. In its article titled ‘Maximum risk of social conflict at the SNCF,’ it mentions a possible privatization of the SNCF: “Its current statute as a Public Establishment of Industrial and Commercial character (EPIC) is threatened by the EU, which considers that it hinders competition, according to Gilles Savary…a former Socialist Party (PS) deputy. This gives the SNCF a universal guarantee protecting it from bankruptcy. If it were transformed into a private corporation, partially owned by the Caisse des dépôts [i.e., the French government], it would conserve its public status while conforming to European regulations.”The privatization of the SNCF would go hand in hand with the abolition of the statute of rail workers. By moving to scrap the rail workers’ statute, Macron is also preparing the pension cuts announced for 2019. Indeed, during the presidential election, he pledged to replace the roughly 30 different existing pension schemes in France by one unified, pay-as-you-go system. Thus, the rail workers’ pension scheme, already slashed in 2007 under President Nicolas Sarkozy, would be destroyed and the entire population’s pensions cut to the same rock-bottom level.

              German grand coalition planning major military build-up - Dozens of commentaries have appeared in the media in recent days describing the power struggles over the direction of Germany’s new government as if they were merely a competition between individuals, conflicts between generations, or fateful Greek tragedies. The daily Süddeutsche Zeitung referred to Social Democrat (SPD) leader Martin Schulz as a “tragic figure” and titled an article about current SPD Foreign Minister Sigmar Gabriel “Game, set, defeat.”One searches in vain for an analysis of the political questions driving the conflicts. There is a simple reason for this. Bitter conflicts are raging between and within the political parties over foreign policy, in particular Germany’s relations with the United States. But nobody wants to discuss this openly, because the vast military build-up they are planning would then become clear. This would be met with strong opposition from the population.In the January/February edition of IP magazine, published by the German Council on Foreign Relations (DGAP), there is a piece titled “In a predicament” which gives a glimpse of the foreign policy debates taking place behind closed doors.The piece distinguishes between two camps: the “Atlanticists” hope “that after Trump’s term in office, America will return to its role as the anchor of the liberal world order,” and want to “‘maintain’ the transatlantic relationship even in the era of Donald Trump.” The “post-Atlanticists” fear “that the United States’ retreat [is] permanent,” and want to “emancipate themselves from the United States” and “focus much more strongly on Europe.” The IP authors are of the opinion that both sides “fail to recognise the scale of the challenges confronting Germany and Europe.” These challenges are mainly seen in the military sphere. A huge increase in military spending will be necessary both to retain the alliance with the United States, and in particular to decouple from Washington.

              Germany's SPD vows to clash with 'down for the count' Merkel (Reuters) - Germany’s Social Democrats (SPD) will clash over policy with Angela Merkel in the next government, the main candidate to lead the center-left party said on Wednesday, adding that the conservative chancellor was approaching the end of her career. Seeking to rally support for a deal to renew an alliance with Merkel’s conservative bloc that SPD members have to ratify in a postal ballot, Andrea Nahles said the party could reinvent itself by fighting for its policies in a coalition government. “We will not do a runner in this government. We will make our own policy proposals. We will consciously stand up to Mrs Merkel,” Nahles said in a fiery speech in Schwerte, a town in the western state of North Rhine-Westphalia, the SPD’s traditional heartland. Her combative speech signaled that the next marriage between the two largest parties would not be as harmonious as the previous two alliances during Merkel’s 12 years in power. “She may be the most powerful woman in the world but the Twilight of the Gods started a long time ago,” said Nahles, who is likely to be elected as SPD leader at an extraordinary party congress on April 22. “She has been put down for the count by her own party. The chance to renew stands before us.” She urged the SPD’s 464,000 members to approve in a postal ballot starting on Feb. 20 a four-year government program that party leaders clinched last week.  The results of the vote will be announced on March 4. If the deal is rejected, Germany would most likely hold a new election.

               Boris Johnson warns it would be 'intolerable' for Britain to be subject to EU laws after Brexit - Boris Johnson is to warn that it would be "intolerable and undemocratic" for EU laws and regulations to be imposed on Britain after it leaves the European Union.In a major Brexit speech in central London on Wednesday, the Foreign Secretary will say that the benefits of membership of the Single Market and Customs Union are "nothing like as conspicuous or irrefutable" as is claimed by pro-Europeans.He will warn that failing to "take back control of our laws" will make it impossible for Britain to strike free trade deals and "exploit the changes in the world economy".  His comments come amid Cabinet splits over how far Britain should diverge from the European Union, with Mr Johnson and other senior Eurosceptics making the case for a clean Brexit. Philip Hammond, the Chancellor, and other members of the Cabinet who backed Remain want Britain to be closely aligned to the EU after Brexit in a bid to limit the economic risk.  The divisions in Cabinet have been intensified by the leak of a gloomy cross-Whitehall analysis which found that Britain would be worse off in almost every scenario modelled after leaving the EU.Mr Johnson will make clear that stopping Brussels from imposing laws on Britain after it leaves the EU in March 2019 must be a red line.He will say: "It is only by taking back control of our laws that UK firms and entrepreneurs will have the freedom to innovate, without the risk of having to comply with some directive devised by Brussels, at the urgings of some lobby group, with the aim of holding back a UK competitor. "That would be intolerable, undemocratic, and would make it all but impossible for us to do serious free trade deals. "It is only by taking back control of our regulatory framework and our tariff schedules that we can do these deals, and exploit the changes in the world economy."

              Brexit Has Reached The Point Of No Return -  The actual negotiations could easily run right up to the deadline in March 2019, when Britain is due to leave. If no agreement is forthcoming by that date, both sides might agree to extend negotiations, but that only seems likely if there is a good prospect of an agreement. Otherwise, Britain leaves and falls back on WTO trading rules, or does away with tariffs altogether. This is seen by the EU negotiators as a threat to Britain, believing it is Britain which is running out of time. Therefore, if Britain wants a trade deal, she must make it clear that a no-deal option is attractive to her. And, be it clearly understood, the negotiations only cover a minor part of the UK’s overall economy.WTO tariffs apply to physical goods, involving only £143bn exported from the UK’s £2,000 billion economy to the EU, and imports from the EU of a larger £235.5bn. Excluding agricultural products of some £5bn (net of spirits), average trade-weighted tariffs on goods imported into the EU from non-member states without a trade agreement is only 2.3%.[i] Therefore, the EU’s external tariffs which will be applied to UK non-agricultural goods exports to the EU involves only 7.5% of the UK’s GDP, and is a tax on EU citizens amounting to roughly £2bn. Is this really worth arguing over, and paying massive divorce fees?  The larger issue is services, and here we must differentiate between services sold to consumers, such as retail investments, and wholesale services, such as capital market operations, commercial lending, legal services, architectural services, etc. The retail services involved are not material, and in any event are easily distributed through locally-incorporated subsidiaries in Dublin and Luxembourg. Wholesale services are generally excluded from trade agreements for practical reasons. Therefore, if a trade agreement is not forthcoming, the cost to British business as a whole is not as material as the Remainers and lobbying businesses have it, and certainly less than the implied cost of normal currency volatility on cross-border settlements. One should conclude that the absence of a trade agreement costs considerably less than the UK Government paying money to the EU for an implementation period.

               Brexit: Varadkar and May to work on plan for frictionless Irish border -- Theresa May and Leo Varadkar are to work together to come up with a new plan on how to achieve a frictionless Irish border after Brexit that does not involve the EU demanding Northern Ireland stays in the customs union and single market.But speaking to reporters after bilateral talks in Belfast, the taoiseach admitted that achieving this was the “tricky bit” in Brexit talks.“The two governments are very much of the view that the agreement that was made back in December stands,” Varadkar said.He was speaking days after Michel Barnier, the EU’s Brexit negotiator, said it “was important to tell the truth” and that the UK’s stated intent to leave the customs union and single market meant border checks would be “unavoidable”.Brussels and London sealed a deal on the Irish border in December with three options: an overall agreement that would allow frictionless borders between the UK and all its frontiers with the EU, a bespoke arrangement for Ireland, and in the event of a no-deal scenario or hard Brexit, a guarantee of “full alignment” north and south of the border, which would effectively mean Northern Ireland remaining in the customs union and single market. Barnier confirmed the wording for the third option was being drafted for the legally binding withdrawal agreement that the UK must reach in order to move to talks about a transition period or the future relationship.

              Brexit: EU 'removes transition punishment clause' - BBC News: EU diplomats have removed a so-called "punishment clause" from a draft text of the arrangement for the Brexit transition period, the BBC understands. A footnote published by the European Commission last week suggested that the UK would lose access to elements of the European single market if it broke EU rules during the transition period. But officials have now promised new wording that makes reference to the EU's standard infringement procedures. Brexit is scheduled for 29 March 2019. The two sides are set to begin negotiations next month on the terms of transition period after the UK's departure, which the EU has said should last until 31 December 2020. Theresa May has said a time-limited implementation period of about two years will allow businesses to adjust to changes arising from Brexit and enable the UK to negotiate its future relationship with the EU. The EU has said the UK should abide by all existing rules and regulations during the transition phase and, in text published last week, suggested there would be specific sanctions if this was not respected. This angered a number of Conservative MPs who argue the transition terms being proposed are too punitive and, in particular, the UK should not be expected to sign up to any new laws that it has not had any say over.

              May’s new immigration proposal sums up everything wrong with her approach to Brexit  --- Two weeks ago, Theresa May drew another red line in the Brussels negotiations, this time on the Brexit transition and the free movement of people. “I’m clear there’s a difference between those people who came prior to us leaving and those who will come when they know the UK is no longer a member of the EU,” she said.What does this mean? It has already been agreed that European Union migrants who arrive before Brexit Day can stay on indefinitely if they so wish, and eventually will acquire the right to permanent residence. But if Theresa May has her way, those arriving during the transition period—when free movement will continue as now—will not have the same guarantee. Their position will depend on the UK’s future, post-Brexit system.The reaction in Brussels wasn’t exactly positive; Guy Verhofstadt, the European Parliament’s lead spokesperson on Brexit, was particularly unimpressed, and on his recent visit to London Michel Barnier made clear that this was one of the remaining issues that could derail the whole transition deal. The EU27 have said all along that any transition means that the UK will have to follow all EU rules.But the difficulties with May’s position go deeper than the fact that it will be very hard to negotiate her preferred outcome.First, think what this would actually mean for individuals, families and employers. People coming here now from the EU know free movement means that they can, broadly, stay as long as they like. Those entering from outside will do so under a specific set of conditions on what they can do, how long they can stay and so on. But it’s looking increasingly likely that we won’t know what the post-Brexit immigration system is going to look like for some time. The government has just delayed its planned White Paper until the end of this year. That means that we’d be telling EU citizens that they can come here with no restrictions at all in 2019 and 2020, but that there are no guarantees after that.

              Theresa May heads to Berlin to try and bypass Michel Barnier, but will it work? - Theresa May heads to Berlin today to talk shop with Angela Merkel, the German chancellor. There’s no agenda for the talks, although painful election results and recalcitrant parliamentary allies might be off-limits. More likely is that the two will discuss Brexit and the status of negotiations. Part of the reason the PM is in Berlin is the Government’s strategy of trying to go around the EU Commission and deal directly with European leaders. Relations have soured with the Commission and its lead negotiator, Michel Barnier, and there are signs that even EU members are not all that pleased with how the negotiations are going (see below). After her brief trip to Berlin, May is set to deliver the second “Road to Brexit” speech tomorrow at the Munich Security Conference, dwelling, unsurprisingly, on security issues. Boris Johnson kicked the series off with a rather underwhelming effort on Wednesday, which failed to offer much at all that was new, but it seems May won’t repeat that mistake. Angela Merkel’s spokesman has already warned that Europe expects concrete measures from Britain. As Front Bench discussed last week, all the fudging and contradictory statements from British ministers is not making negotiations incredibly difficult. Perhaps as a concession to these demands, May is reportedly set to announce that Britain will remain in Europol and the European Arrest Warrant scheme as part of a “deep and special security partnership”. If true, this is a substantial announcement and significant sign of goodwill from the UK; security is by far Britain’s biggest strength in dealing with the EU. However, as my colleague Jack Maidment explains in this week’s edition of Chopper’s Brexit Podcast, that doesn’t make it an easy card to play. Neither Britain nor the EU wish to become less safe in future, and so it’s hard to see how Britain could seriously threaten not to cooperate with Europe on this front. Moreover, this is unlikely to go down well with hardline Brexiteers. Although May has said Britain will not be subject to EU laws after Brexit, its not immediately clear whether that is compatible with remaining in Europol or the arrest warrant scheme.

              Theresa May to warn EU lives will be put at risk if it lets ‘deep-seated ideology’ block new post-Brexit security deal - Theresa May will today warn the European Union that lives will be put at risk if it lets its "deep-seated ideology" act as a barrier to a new post-Brexit security treaty. In a landmark speech in Munich the Prime Minister will say that there will be "damaging real world consequences" if it puts "political doctrine" before co-operation on security. The EU is threatening to bar Britain from joining the European Arrest Warrant and limit access to a European police database containing information about criminals and terrorists after Brexit.Its approach is being viewed with increasing concern by member states, who believe that co-operation with Britain's world-class security services is vital. The heads of security services in Britain, Germany and France yesterday took the extraordinary step of issuing a joint warning that continued intelligence co-operation is "indispensible" after Brexit. The Prime Minister's speech in Munich this morning comes moments before Jean-Claude Juncker, the President of the European Commission, takes to the stage. She will say that the UK is "unconditionally committed" to cooperation on security after Brexit and meeting "the evolving threats we face together" but said a new deal, similar to a third party trade arrangement, must be reached. Mrs May will propose a new post-Brexit security treaty which aims to replicate the "full depth and breadth" of existing relations between Britain and the EU. She will say: "This cannot be a time when any of us allow competition between partners, rigid institutional restrictions or deep-seated ideology to inhibit our co-operation and jeopardise the security of our citizens. We must do whatever is most practical and pragmatic in ensuring our collective security."

              Brexit: Angela Merkel says she is still ‘curious’ about what the UK actually wants Angela Merkel has said she is still “curious” about what the UK’s goals from Brexit are, despite holding talks with Theresa May on Friday. The German Chancellor was speaking at a joint press conference in Berlin with the Prime Minister after bilateral discussions about Britain’s departure from the EU. During an exchange with journalists Ms Merkel said the German position on Brexit had not changed, adding: “We deplore it.’’ She denied she was “frustrated” with the process, but said: “We very much look forward to Britain again setting out its ideas. “We would like to initiate those negotiations because we are under a certain amount of time pressure, but we also want be very diligent and very careful in working on this which means we will have frequent exchanges of views.” Speaking at the same presentation, Ms May said she would be “saying something in the coming weeks” about the kind of future economic partnership the UK wanted with the EU, but insisted “it isn’t just a one-way street”. The Prime Minister said a new round of discussions between the EU and UK would start on Monday of next week. The new round comes after Sabine Weyand, the European Commission’s deputy chief Brexit negotiator, warned that, though British civil servants were “very competent negotiating partners”, they lacked a “clear political direction” from London. “That’s because the political discussion in the UK isn’t over,” she added. Ms Merkel and Ms Weyand are the latest figures to add their name to the list of Europeans who say they are not clear about what Britain wants.

              UK National Health Service “haemorrhaging nurses” as 33,000 leave in one year - New figures reveal an alarming rate of nurses departing from NHS England, resulting in a concerning downward trajectory in retention rates. The already strained National Health Service (NHS) is seeing an exodus of nurses on an unprecedented scale, at a time when the strain on the service has already reached breaking point.Last year, 33,000 nurses left the NHS, meaning that 10 percent of the nursing workforce have left NHS employment in each of the past three years.The data is from an annual report published by the Royal College of Nursing (RCN). In the introduction, it states that “previous labour market review reports have w arned of impending crises in the future supply of nursing staff, due to a lack of adequate workforce planning and workforce strategies. This year’s report shows that these warnings have inevitably been realised.” Such is the crisis that the RCN estimates there are now 40,000 vacant nursing positions in the health service.The report goes on to qualify that this has been driven by a “perfect storm” of inter-related issues affecting recruitment and retention, which include the Brexit vote to leave the European Union (EU), workload, pay pressures and the impact on new nursing staff due to the restrictive changes for prospective nursing students.The 33,000 nurses who left the NHS could staff 20 hospitals and is a 20 percent rise on that of 2012-13. These figures were provided by NHS Digital. As part of an analysis of their data, the BBC noted that the gulf between those leaving and joining the profession was much narrower in the earlier period. It explained, “Leavers outnumbered joiners by 3,000 last year, the biggest gap over the five-year period examined by the BBC.”

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