Fed Officials Say Economy Is Ready for Higher Rates - — Robust economic growth has increased the confidence of Federal Reserve officials that the economy is ready for higher interest rates, according to an official account of the central bank’s most recent policymaking meeting in late January.The Fed did not raise its benchmark interest rate at the meeting on Jan. 30 and 31, but the account reinforced investor expectations the Fed would raise rates at its next meeting in March.The account said Fed officials have upgraded their economic outlooks since the beginning of the year and listed three main reasons: The strength of recent economic data, accommodative financial conditions and the expected impact of the $1.5 trillion tax cut that took effect in January.“The effects of recently enacted tax changes — while still uncertain — might be somewhat larger in the near term than previously thought,” said the meeting account, which the Fed published Wednesday after a standard three-week delay. The Fed is seeking to raise rates gradually to maintain control of inflation without impeding an economic expansion that is nearing the end of its ninth year, one of the longest stretches of continuous economic growth in American history. A wave of turbulence passed through global equity markets in the days after the Fed’s January meeting. The government reported an unexpected increase in wages, and investors worried the Fed would respond by raising rates a little more quickly. Then Congress passed a plan increasing government spending, tossing more logs onto the fire.So far, however, Fed officials have treated the stronger economic news as a reason to carry out their plans for gradual rate hikes, rather than as a reason to start raising rates more quickly. Most Fed officials predicted in December the Fed would raise rates three times in 2018, as it did last year.“If the economy evolves as I anticipate, I believe further increases in interest rates will be appropriate this year and next year, at a pace similar to last year’s,” Loretta Mester, president of the Federal Reserve Bank of Cleveland, said this month. In the policy statement the Fed issued after the January meeting, the central bank outlined its approach to raising rates, saying it “expects that economic conditions will evolve in a manner that will warrant further gradual increases in the federal funds rate.”
Fed Watch: Fedspeak Reiterates Gradual Path - Fed speakers continue to reiterate that policy remains on a gradual path of tightening. So far, the inflation data and brightening economy has more emboldened their commitment to gradual rate hikes than a faster pace of hikes. What about fiscal policy? That train has left the station, but central bankers don’t seem too concerned – yet.Federal Reserve Governor and Vice Chairman for Supervision Randal Quarles today gave a short speech on the economic outlook and associated policy implications. He praises low unemployment:After peaking at 10 percent in October 2009, the unemployment rate fell rather steadily to 4.1 percent in January–the lowest level, outside of a period from 1999 to 2000, since the 1960s. Job gains in recent months have continued at a pace that would be pushing the unemployment rate even lower if the labor participation rate had not stabilized in recent years, a welcome development and a sign that the strength of the labor market is pulling in or retaining workers who might otherwise be on the sidelines. This is a fairly optimistic take – as long as the economy continues to draw in workers at a faster than expected pace, unemployment can stay low despite solid job growth and without inflationary pressure. This is dovish; the Fed doesn’t need to accelerate the pace of rate hikes in this environment. Still, Quarles views activity as close to full employment: Broader measures of labor market slack–for example, those that include individuals who are out of the labor force but say they want a job as well as those working with a part-time job but who would like to work full time–have largely returned to pre-crisis levels. The economy is thus running near full employment but with enough new labor supply coming online to prevent overheating. This is something of a Goldilocks scenario. As far the broader economy is concerned: While the labor market has shown steady improvement over the past decade, the post-crisis performance of gross domestic product (GDP) growth has been more disappointing, averaging just 2 percent per year over the past seven years. Bottom Line: Fed speakers continue to show no urgency to accelerate the pace of rate hikes despite firming inflation data and budget-busting fiscal stimulus. Also, keep an eye out for the possibility that Trump’s appointees reveal themselves to be doves in hawks’ clothing.
FOMC Minutes: "Labor market continued to strengthen and that economic activity expanded at a solid rate" --Still on pace for 3 or 4 rate hikes in 2018, although few signs of "broad-based pickup in wage growth". Some excerpts: From the Fed: Minutes of the Federal Open Market Committee, January 30-31, 2018: In their discussion of the economic situation and the outlook, meeting participants agreed that information received since the FOMC met in December indicated that the labor market continued to strengthen and that economic activity expanded at a solid rate. Gains in employment, household spending, and business fixed investment were solid, and the unemployment rate stayed low. On a 12-month basis, both overall inflation and inflation for items other than food and energy continued to run below 2 percent. Market-based measures of inflation compensation increased in recent months but remained low; survey-based measures of longer-term inflation expectations were little changed, on balance. Participants generally saw incoming information on economic activity and the labor market as consistent with continued above-trend economic growth and a further strengthening in labor market conditions, with the recent solid gains in household and business spending indicating substantial underlying economic momentum. They pointed to accommodative financial conditions, the recently enacted tax legislation, and an improved global economic outlook as factors likely to support economic growth over coming quarters. Participants expected that with further gradual adjustments in the stance of monetary policy, economic activity would expand at a moderate pace and labor market conditions would remain strong. Near-term risks to the economic outlook appeared roughly balanced. Inflation on a 12-month basis was expected to move up this year and to stabilize around the Committee's 2 percent objective over the medium term. However, participants judged that it was important to continue to monitor inflation developments closely.
Goldman: "It Is Possible The Fed Does Five Hikes This Year - It took the market about 30 minutes to read today's FOMC minutes, and realize that despite the post-FOMC kneejerk narrative which "found" the minutes to be dovish if only to justify the jump in stocks, the Fed was decidedly hawkish, and may well be looking at the higher number in the ongoing debate whether it will hike rates 3 or 4 times in 2018.To some, such as IHS Markit Executive Director Ken Matheny, the Fed was clear enough, and the economist revised his FOMC forecast up to 4 rate hikes this year after the report. The discussion in the minutes was consistent with our forecast that the FOMC will raise the federal funds rate several times in 2018 as it seeks to balance the risks of too low inflation against overheating and financial excesses. We continue to expect a total of four rate hikes in 2018, with the next hike at the upcoming meeting on March 21.And while 4 rate hikes will certainly be frowned upon by the market, it will hardly be disastrous: after all, that has long been the baseline case of some of the more hawkish banks, such as Goldman Sachs.What was more surprising, however, is what Goldman said shortly after the minutes were released: in a podcast with David Mericle, Goldman's senior US economist reiterated his expectation for four rate hikes this year, adding that the risk is not to the downside, but rather higher, predicting that "by later in the year, it's certainly possible that they wind up adding another one and do five hikes for the year", with the fifth hike taking place during a non-press conference meeting. Needless to say, 5 rate hikes would send the short end just shy of 3%, and assuming the 10% remains roughly where it is, flatten to the yield curve to a pancake, beginning the countdown to the next recession. It would also have a very adverse effect on the stock market, where i) the equity risk premium is rapidly collapsing, and where ii) if the short end offers the same yield with a fraction of the duration risk, investors will promptly move "up in quality while reducing duration" as Guggenheim's Scott Minerd observed earlier today.
Bullard Calms Markets: "Everything Needs To Be Perfect" For Fed 4 Rate Hikes - Yesterday, what many strategists had believed would be a quiet release of minutes from the Fed's Jan. 31 meeting was, in reality, anything but. Once the market had deemed that the Fed had released another batch of neutral "goldilocks" minutes, the Dow powered higher, climbing 300 points before, upon closer reading, investors abruptly changed their minds and decided that four interest-rate hikes in 2018 (with Goldman even saying 5 are possible) - one more than the central bank had anticipated in December - was the most likely scenario. This sent stocks spiraling lower during the last 90 minutes of trading, forcing another close in the red. So perhaps it's unsurprising, given the events of yesterday, that St. Louis Fed President (and FOMC non-voter in 2018) James Bullard appeared on CNBC's Squawk Box this morning to try and talk the market back from the ledge. Bullard is one of the most - if not the most - dovish regional Fed presidents, and is best known for casually hinting that QE4 is just around the corner any time stocks suffer a sharp selloff.Granted he could not do that this time, but he did push as far as he could, and futures traders, desperate for good news after Goldman Sachs anticipated last night that the Fed could even hike rates five times this year, bid the market higher after the regional Fed president said that "everything would need to go perfectly" for the central bank to hike rates four times this year.
Raising Interest Rates Is Like Starting A Fission Chain Reaction -- Gail Tverberg - Central bankers seem to think that adjusting interest rates is a nice little tool that they can easily handle. The problem is that higher interest rates affect the economy in many ways simultaneously. The lessons that seem to have been learned from past rate hikes may not be applicable today. Furthermore, there can be quite a long time lag involved. Thus, by the time a central banker starts seeing an effect, it may be clear that the amount of the interest rate change is far too large. A recent Zerohedge article seems to suggest that problems can arise with 10-year Treasury interest rates of less of than 3%. We may be facing a period of declining acceptable interest rates. Let’s look at a few of the issues involved: [1] The standard reason for raising interest rates seems to be concern about inflationary impacts occurring as a result of rising food and energy prices. In practice, the impact of such an interest rate change can be quite severe and quite delayed. Figure 2 is an illustration from the Bureau of Labor Statistics website showing one of today’s concerns: rising energy costs. Food prices are not yet rising. Normally, however, if oil prices rise, the cost of producing food will also rise. This happens because modern agricultural methods and transportation to markets both require the use of petroleum products. In fact, raising short-term interest rates seems to have been associated with trying to bring down rising food and energy costs, as early as the 1970s and early 1980s. The reason why an increase in short-term interest rates is helpful is because it reliably induces a recession. A person can see the close connection between short-term interest rate increases and recessions (gray bars) in Figure 3. Recessions in turn damp down food and energy prices. The reason why this damping down effect occurs is because when there is a recession, many people are laid off from work. With people out of work, “demand” for goods and services falls. ( When demand falls, fewer goods of practically every type are made. This indirectly leads to less need for commodities of many types, including oil, natural gas, metals, and food. Commodities have very long production cycles, and only modest storage facilities. When lower demand for a commodity such as oil occurs, prices tend to adjust sharply downward, in order to signal the need for lower production. Figure 4 shows that interest rate spikes corresponded to the 1973-1974 oil price spike, the 1979 oil price spike, the 2004-2008 price run-up, and perhaps to other shorter oil price spikes.
Powell Warns Of "Rising Leverage & Elevated Valuations"; Dudley, Rosengren: QE (Or More) Will Be Back - Ahead of Fed Chair Powell's first semi-annual monetary policy report to Congress next week (brought forward to 2/27), The Fed has released his prepared remarks warning that "valuations are still elevated across a range of asset classes" and fears "signs of rising non-financial leverage." To wit:Looking at the key topic of inflation, and the labor market, the Fed found that U.S. labor market is "near or a little beyond" full employment in early 2018, and that while the pace of wage growth has been modest, "serious labor shortages'' would probably give it an upward push.Ironically, and paradoxically for an "economy beyond full employment", the Fed observes that "the pace of wage gains has been moderate; while wage gains have likely been held down by the sluggish pace of productivity growth in recent years."Regardless, the Fed clearly is concerned about labor supply-demand imbalances, and has even added a new word: serious, as in "serious labor shortages would probably bring about larger increases than have been observed thus far."In a separate special section on financial stability, the Fed notes that overall vulnerabilities in the U.S. financial system remain moderate, while noting some spots where things are warming up. These include signs of increased leverage to the nonbank sector, noting greater provision of margin credit to equity investors such as hedge funds.Looking at financial imbalances, the Fed warns that "leverage in the nonfinancial business sector has remained high, and net issuance of risky debt has climbed in recent months. In contrast, leverage in the household sector has remained at a relatively low level, and household debt in recent years has expanded only about in line with nominal income." The Fed also cautions about the record leverage we recently noted in the hedge fund world, as follows: "There are signs that nonbank financial leverage has been increasing in some areas --for example, in the provision of margin credit to equity investors such as hedge funds. Vulnerabilities from nonfinancial leverage are judged to be moderate."
Fed’s Quarles Says U.S. Economy in ‘Best Shape’ Since Crisis -- Federal Reserve Governor Randal Quarles delivered an upbeat assessment of the U.S. economy and endorsed a “gradual” path for raising interest rates in his first public speech on monetary policy since joining the central bank in October. “The U.S. economy appears to be performing very well and, certainly, is in the best shape that it has been in since the crisis and, by many metrics, since well before the crisis,” Quarles said in prepared remarks Thursday in Tokyo. “With a strong labor market and likely only temporary softness in inflation, I view it as appropriate that monetary policy should continue to be gradually normalized,” he said. The views appear to align Quarles on monetary policy with Fed Chairman Jerome Powell, who testifies next week before Congress for the first time as central bank chief. His comments follow the release of minutes from the Fed’s Jan. 30-31 policy meeting that showed confidence growing among policy makers that growth in 2018 may exceed their December forecasts and justify additional rate hikes this year. Officials have penciled in three hikes in 2018, according to their median projection released in December. Quarles, who was named to the central bank’s board by President Donald Trump, said recently enacted tax changes and bipartisan budget deals could help sustain the economy’s expansion by increasing demand and spurring business investment. He also drew attention to capital investment data that had already improved in 2017.
Q1 GDP Forecasts -- It is early, but here are few Q1 GDP forecast.From Merrill Lynch: The weak retail sales data sliced 0.3pp from our 1Q estimate to 2.0%, while 4Q 2017 dropped to 2.5% from 2.7%. And from the Altanta Fed: GDPNow. The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2018 is 3.2 percent on February 16, unchanged from February 14. From the NY Fed Nowcasting Report. The New York Fed Staff Nowcast for 2018:Q1 stands at 3.1%. CR Note: It looks likely that GDP will be 2% to low 3% range again in Q1.
Conference Board Leading Economic Index: Another Record High in January --The latest Conference Board Leading Economic Index (LEI) for January increased to 108.1 from 107.0 in December. The Coincident Economic Index (CEI) came in at 103.0, up from the previous month.The Conference Board LEI for the U.S. increased for the fourth consecutive month in January. Large positive contributions from building permits and the financial subcomponents were the main drivers of the strong gain. In the six-month period ending January 2018, the leading economic index increased 3.8 percent (about a 7.8 percent annual rate), faster than the growth of 2.3 percent (about a 4.6 percent annual rate) during the previous six months. In addition, the strengths among the leading indicators remain very widespread. [Full notes in PDF] Here is a log-scale chart of the LEI series with documented recessions as identified by the NBER. The use of a log scale gives us a better sense of the relative sizes of peaks and troughs than a more conventional linear scale.
How much must interest rates spike for the economy to roll over?: Interest rates are the most potent background long leading indicators. Last week I wrote that I did not see them as having risen enough at this time to cause a recession, and noted that I thought they had to rise to at least about 3.25%, and for a sufficient period of time. Here's why. The below is a graph of 10 year treasury yields over the last five years, minus 2.6%, so that a 2.6% yield shows as zero: Note that the 2013 "taper tantrum" caused yields to rise over 2.6% for about 1 year, from midyear 2013 to midyear 2014, and to a maximum of just over 3%. While housing slowed down substantially, the market did not roll over and there was no recession. We have just in the last few weeks penetrated the 2.6% level. The below is the same graph for the late 1960s, minus 4.5%: It was only once interest rates rose 1.75% by early 1969, and rose even higher thereafter, that the housing market rolled over, and a recession began at the end of the year.The late 1960s, like today, featured an outsize generation of young adults creating a tailwind in the housing market. It also featured "guns and butter" fiscal policy, in which both marked increases in both military and domestic spending created significant budget deficits, even in the face of a good economy. It is thus a very good match for our current situation.So, for interest rates to cause the economy to roll over now, it would probably take an increase interest rates by at least 1.75% from their lows of roughly 1.5% -- i.e., up to 3.25%. After one year of this in 1969 the economy actually entered a recession. But because interest rates act upon the economy with a lag, we probably only need about 6 months or so of rates at the heightened level in order to knock the economy down. Finally, note that even if we hit 3.25% interest rates on the 10 year treasury today, and interest rates stayed at that level, it would normally take at least a year -- i.e., into spring 2019 -- before I would expect a recession to begin.
Trump Faces Quarter Trillion Bond Market Test as Dollar Sags, Economy Roars - President Donald Trump may face the sternest test of his ambitious economic policies to date this week as the Treasury prepares to raise more than $250 billion in a series of bond auctions spread over three days that will gauge investor appetite for U.S. debt amid rising yields and a ballooning federal deficit. Fresh off a Republican-led tax cut that will add an estimated $1.5 trillion to the country's debt pile over the next ten years, and a recently-agreed budget plan that will pump the deficit by $300 billion, investors are starting to question the President's strategy of priming the world's biggest economy with stimulus at such a late stage in the business cycle with a trillion dollar infrastructure plan. The Atlanta Federal Reserve's GDPNow forecast suggests a first quarter growth rate of around 3.2%, inflation sits at just over 2% and the country's jobless rate have been hovering at a 17-year of 4.1% for the past three months. Benchmark 10-year U.S. Treasury bond yields hit a four-year high of 2.944% last week amid the global equity market rebound and the best five-day gain for the S&P 500 since 2011. The moves, which mirrored continued weakness in the dollar as it fell to a three-year low against a basket of its major global peers, have puzzled analysts who have wondered what signals they're sending with respect to broader confidence in Trump's handling of the economy."For the US dollar to re-couple with rising US bond yields, we'd need to see a return in (relative) confidence over the medium-term US economic outlook," said ING analysts in a client note. "Broadly, we're scratching our heads at finding any new positive US demand or supply shocks that could change the landscape for an economy in the 10th year of its expansion cycle. Without this, it's easy to see the weak dollar story persist."
Jittery US bond market braces for supply wave (Reuters) - Bond investors, who have been on edge over signs of growing inflation and a possibly more aggressive Federal Reserve, will have their work cut out for them as the U.S. government seeks to sell $258 billion worth of debt this coming week. The Treasury Department began ramping up its debt issuance earlier this month to fund the expected growth in borrowing tied to the biggest tax overhaul in 30 years and a two-year federal spending package. Last year’s tax reform is expected to add as much as $1.5 trillion to the federal debt load, while the budget agreement would increase government spending by almost $300 billion over the next two years. Analysts worry the combination of a rising budget deficit, faster inflation and more Fed rate increases have ratcheted up the risk of owning Treasuries. Those concerns pushed benchmark 10-year Treasury yields US10YT=RR up to 2.944 percent, a four-year peak last week, Reuters data showed. Treasury bill and two-year yields US2Y=RR have reached their highest level in more than nine years. The five-year Treasury yield US5YT=RR is hovering at its highest levels in nearly eight years, while seven-year yield US7YT=RR climbed to levels not seen since April 2011. The increase in U.S. yields may entice investors seeking steady income in the wake of the rollercoaster sessions on Wall Street and other stock markets this month, analysts said. “While the rise in yields could draw additional demand, investors have remained very picky on where they decide to buy front-end rates,” TD Securities strategists wrote in a note. “We therefore look for relatively cautions demand at this week’s auction series even as we view the 2-year part of the curve as relatively attractive,” they added. (For a graphic on U.S. Treasury bill, short-to-medium term note yields, click reut.rs/2BELNTs) The heavy Treasury supply will kick off on Tuesday with $151 billion worth of bills including record amounts of three-month and six-month T-bills. The rest of the debt sales will spread over a holiday-shortened week with $28 billion of two-year fixed rate notes on Tuesday; $35 billion in five-year debt on Wednesday and $29 billion in seven-year notes on Thursday. The Treasury Department also plans to add $15 billion to an older two-year floating-rate issue.
US Pays Up to Auction $179 Billion of Debt in a Span of Hours - The government began at 11:30 a.m. New York time by auctioning $51 billion of three-month bills at a yield of 1.64 percent, 6 basis points more than similar-tenor debt sold on Feb. 12, and $45 billion of six-month bills at 1.82 percent.Its $55 billion sale of four-week notes at 1 p.m. had a yield of 1.38 percent, with a gauge of demand known as the bid-to-cover ratio falling to 2.48, the lowest level since 2008. The first coupon offering of the week, a $28 billion auction of two-year notes, yielded 2.255 percent, the highest in almost a decade. All told, the offerings saw decent demand, given the market is facing a deluge of sales following the recent U.S. debt ceiling suspension. The bid-to-cover ratios on the three- and six-month auctions were 2.74 and 3.11, respectively. The $258 billion slate of U.S. auctions set for this week is helping to push up the rates investors demand. Concerns about the U.S. borrowing cap had forced the Treasury to trim the total amount of bills it had outstanding, but with the latest debt-ceiling drama over, 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, with the bulk of that in the short-term market. This is just the beginning of the U.S. debt auction schedule. The Treasury will sell five- and seven-year maturities in the next two days, with both offerings larger than last month. It will also issue $15 billion of two-year floating-rate notes.
U.S. short-term borrowing costs hit highest since 2008 (Reuters) - Some of the U.S. government’s short-term borrowing costs rose to their highest level in more than nine years on Tuesday as the government raised $179 billion in the Treasury securities market to fund spending and make debt payments. Tuesday’s auctions made up more than half of the $258 billion in Treasury debt supply scheduled for sale this week, which is projected to raise nearly $48 billion in new cash for the government. The amount of Treasury issuance is the second largest ever over three-day period, falling $1 billion short of the record high set in August 2010, according to Wrightson ICAP chief economist Lou Crandall. Concerns about an expected surge in federal borrowing have escalated after a major tax overhaul late last year that is estimated to add up to $1.5 trillion to government indebtedness. Adding to these concerns was a two-year U.S. budget deal reached this month that would increase spending on military and entitlement programs by $300 billion. Tuesday’s short-dated government supply had a mixed reception from investors and dealers. Analysts and traders said they were more concerned about demand for the $35 billion five-year note sale on Wednesday and $29 billion seven-year auction on Thursday. These medium-term Treasuries were hit hard last week by stronger-than-forecast inflation data that stoked bets the Federal Reserve may speed up its interest rate hikes. The yield on seven-year Treasuries was 2.817 percent on Tuesday, below a near seven-year high set last week, while the five-year Treasury yield reached a near eight-year peak at 2.689 percent. On Tuesday, the Treasury sold $51 billion of three-month bills at an interest rate of 1.63 percent and $45 billion of six-month bills at an interest rate of 1.82 percent. These were record-high amounts offered in an auction for both maturities, and they sold at the highest yields since September 2008. The Treasury also sold $55 billion in one-month bills at an interest rate of 1.380 percent, and $28 billion in two-year fixed-rate debt at a yield of 2.255 percent, the highest since August 2008.
Berkshire Owns $100 Billion In T-Bills: More Than China And The UK - Well, we received another update on Buffett's long-term thinking on Friday when the Wall Street Journal reported that Berkshire Hathaway is holding more than $100 billion in cash or cash-equivalents - i.e. Treasury bills - on its balance sheet.The company is doing this at great expense to shareholders (referring to the opportunity cost that comes with avoiding higher-yielding assets) and Buffett - who is expected to release his widely read annual shareholder letter this weekend - has vowed to find a better place to park this cash. Because of this conservatism, Berkshire is now one of the largest holders of Treasury debt.However, Buffett has been promising to find a home for the cash for a few years now - which makes one wonder whether this is part of a deliberate strategy...Berkshire has used its mounting cash pile to become one of the world’s largest owners of U.S. Treasury bills after struggling to find big companies to buy in recent years.It held $109 billion in cash as of Sept. 30, up from $86 billion at the end of 2016 and more than double what it had at the end of 2006. Nearly all of that was invested in short-term bills, according to Mr. Buffett.Berkshire has an outsize presence in the $2 trillion market for Treasury bills, a type of government debt that matures in a year or less. It held more bills around the end of the third quarter than large countries such as China and the U.K. It also had more at that time than the $13.5 billion held collectively by a group of 23 primary bond dealers that are obligated to underwrite U.S. government debt sales.Berkshire’s holdings are big enough that when bond dealers need bills for a specific date, they will come to Berkshire and arrange a trade, Mr. Buffett said. "We’re the ones they call. We’ve got the best inventory," Mr. Buffett said in a 2017 interview with The Wall Street Journal. "That’s a new sideline for us here."
Treasury Seven-Year Sale Caps $258 Billion Week of Higher Yields -- The U.S. Treasury’s $29 billion auction of seven-year notes drew the highest yield for securities at that tenor since 2011, capping a $258 billion flood of debt sales over three days.As with the week’s other note offerings, there was a dip in the amount of bids relative to the amount sold, signaling weaker demand. With the Treasury ramping up borrowing as part of its plan to finance widening budget deficits, the auction was $1 billion larger than it was last month and the bid-to-cover ratio slid to 2.49 from 2.73 at the prior sale. Indirect bidders, a class of investors that includes pensions and mutual funds, purchased 62.2 percent, down from 78.1 percent last month. Direct bidders, on the the other hand, bought 15.6 percent, the largest share since September. The securities were priced to yield 2.839 percent, around 0.7 basis point above the level they were trading at before the auction in the when-issued market. The yield was the highest since at auction since March 2011. All told, the auctions show that there’s demand out there for Treasuries, even as supply ramps up, but investors may require higher yields to step in and buy.
Goldman Sachs sees red ink everywhere, warns US spending could push up rates and debt levels --Goldman Sachs sees a tidal wave of red ink — and it may drag the U.S. economy into its undertow.Federal deficit spending is headed toward "uncharted territory," the firm said on Sunday, suggesting that the Trump administration and Congressional Republicans may not be able to count on the economic boost of tax reform for very longer.In the wake of an ambitious infrastructure plan and a budget that drew fire from virtually all sides, Goldman Sachs said in a note to clients that the federal deficit would reach 5.2 percent of U.S. growth by 2019, and would "continue climbing gradually from there."The GOP is counting heavily on the fiscal stimulus provided by tax reform—many companies have announced investment plans and doled out bonuses, even as the majority of taxpayers enjoy lower rates—to insulate them from a restive public in November. Polls suggest that Republicans may lose control of Congress, and President Donald Trump's own poll numbers hover below 50 percent in most polls. Yet Goldman Sachs warned that the economic impetus from tax reform may have diminishing returns after this year. "The fiscal expansion should boost growth by around 0.7pp in 2018 and 0.6pp in 2019, but will likely come to an end after that"—listing a litany of reasons why spending and debt would conspire to undermine the world's largest economy.While tax cuts are partly responsible, Goldman stated that "projected increases in mandatory spending—this includes Social Security, Medicare, Medicaid, and income support programs—are primarily responsible" for an unsustainable surge in spending. The dire fiscal backdrop comes against Trump's spending plans, which have created plenty of critics on the right and left. In a weekly podcast, Caleb Brown, a scholar at the libertarian Cato Institute, branded the Trump administration spending and infrastructure spending "budget buster[s]" saying that overall spending was "very likely" to rise in the coming years despite isolated cuts.
US Federal Reserve rings alarm about America’s soaring debt - The US deficit stands at $20 trillion and will rise to $30 trillion in a decade. That should be a reason for concern, according to the US Fed. "I believe the Federal Reserve should be gradually and patiently raising the federal funds rate during 2018," Dallas Federal Reserve Bank President Robert Kaplan said on Wednesday. "History suggests that if the Fed waits too long to remove accommodation at this stage in the economic cycle, excesses and imbalances begin to build, and the Fed ultimately has to play catch-up."Kaplan’s words come after this week’s report by Goldman Sachs indicated that US debt will turn unsustainable under the Republican leadership. Kaplan previously worked for Goldman as vice chairman.The new US budget pushed by Donald Trump’s administration envisages serious growth in military spending, and American debt could reach $30 trillion in just 10 years, according to some estimates."This projected increase in government debt to GDP comes at a point in the economic cycle when it would be preferable to be moderating the rate of debt growth at the government level… While addressing this issue involves difficult political considerations and policy choices, the US may need to more actively consider policy actions that would moderate the path of projected US government debt growth," Kaplan said. While recent concerns about the soaring US deficit are mostly aimed at Trump, the national debt has been surging independent of party politics during this century. Under the previous administration of Democrat President Barack Obama, the US deficit nearly doubled, rising by about $9 trillion to just under $20 trillion.
Fed President Sounds Panic Over Level Of US Debt -- Nearly a decade after the US unleashed its biggest debt-issuance binge in history, doubling the US debt from $10 trillion to $20 trillion under president Obama, which was only made possible thanks to the Fed's monetization of $4 trillion in deficits (and debt issuance), the Fed is starting to get nervous about the (un)sustainability of the US debt.The Federal Reserve should continue to raise U.S. interest rates this year in response to faster economic growth fueled by recent tax cuts as well as a stronger global economy, Dallas Federal Reserve Bank President Robert Kaplan said on Wednesday."I believe the Federal Reserve should be gradually and patiently raising the federal funds rate during 2018," Kaplan said in an essay updating his views on the economic and policy outlook."History suggests that if the Fed waits too long to remove accommodation at this stage in the economic cycle, excesses and imbalances begin to build, and the Fed ultimately has to play catch-up." The Fed is widely expected to raise rates three times this year, starting next month. Echoing the recent Goldman analysis, which warned that the recently implemented Republican spending plan could lead to an "unsustainable" debt load, Kaplan - who previously worked for Goldman - also had some cautionary words about the Trump administration's recent tax overhaul, which he said would help lift U.S. economic growth to 2.5% to 2.75% this year, pushing the U.S. unemployment rate, now at 4.1% down to 3.6% by the end of 2018, but not for long. On the all important issue of inflation, he projected it would firm this year on route to the Fed's 2-percent goal. The most ironic warning, however, came when Kaplan predicted the US fiscal future beyond 2 years: he said that while the corporate tax cuts and other reforms may boost productivity and lift economic potential, most of the stimulative effects will fade in 2019 and 2020, leaving behind an economy with a higher debt burden than before. "This projected increase in government debt to GDP comes at a point in the economic cycle when it would be preferable to be moderating the rate of debt growth at the government level," Kaplan said.Fractious politics, debt pose security threats: U.S. intelligence director - (Reuters) - U.S. Director of National Intelligence Dan Coats told a Senate panel on Tuesday that the country’s bitter political wrangling and growing debt posed grave threats to U.S. national security. “ I‘m concerned that our increasing fractious political process, particularly with respect to federal spending, is threatening our ability to properly defend our nation, both in the short term and especially in the long term,” Coats told the Senate Intelligence Panel. “The failure to address our long-term fiscal situation has increased the national debt to over $20 trillion and growing. I would urge all of us to address this challenge.”
Do Trump’s deficits matter? - The answer that mainstream economics gives is straightforward. In a recession when interest rates have hit their lower bound [1] you do not worry about the deficit and you ignore those that do worry. Deficits should be whatever size is required to enable the economy to recover. Enough stimulus so that central banks feel they need to raise interest rates above their lower bound. Politicians failed to follow that advice during the last recession.In contrast, when the economy is not in a recession, and interest rates are perfectly able to control aggregate demand, then deficits at a level where government debt starts rising may well be a problem. For various reasons, not least the chance of a recession, it is best to have deficits at a level which very gradually reduces the ratio of government debt to GDP, unless you have a good reason for doing otherwise. There are many reasons why, outside of a recession, deficits that, if sustained, would steadily increase the debt to GDP ratio may be bad for the economy, but let me give the most obvious here. For a given level of government spending, interest on debt has to come out of taxes. The higher the debt, the higher the taxes. That is a problem because high taxes discourage people from working, and it is also unfair from an intergenerational point of view. This last point is obvious if you think about it. The current generation could abolish taxes and pay for all spending, including any interest on debt, by borrowing more. That cannot go on forever, so at some point taxes have to rise again. A whole generation has avoided paying taxes, but at the cost of future generations paying even more.
Why the president’s 2019 budget request was more of a ‘policy document’ than anything else - Federal employees who saw workforce reductions and other cuts to their agency’s budget in the president’s 2019 budget request this week may want to delay their worst fears. Most budget proposals from the White House contain several recommendations that never see the light of day after Congress finishes the subsequent appropriations process and passes a spending bill into law. But this year’s request from the White House couldn’t have come at a more inopportune time. After putting off a budget for fiscal 2018 with four continuing resolutions, Congress finally struck a deal and decided to raise spending caps — putting an end to the sequester for the next two years that was supposed to kick in for 2018 and 2019. The Bipartisan Budget Act of 2018, which Congress passed and the president signed on Feb. 9, sets spending caps — $300 billion higher than current levels — for the next two years. It sets the spending limit for defense agencies at $629 billion in fiscal 2018 and $647 billion in fiscal 2019, while domestic agencies would be authorized to spend no more than $579 billion and $597 billion this year and the next. And with Congress’ agreement, the Office of Management and Budget had days — with an hours-long government shutdown in between — to revisit work it had done for months previously and update agency spending to comply with the numbers Congress had just set. OMB worked through the weekend, agency director Mick Mulvaney said, to update the president’s 2018 budget request to comply with the new congressional spending caps and release a document Feb. 12. It did release a rough outline of how the Trump administration would like to spend the additional non-defense dollars that Congress set under new spending caps for 2018. But OMB didn’t update its spending figures to match up with the new Bipartisan Budget Act figures.. For now, the White House’s fiscal 2019 budget resembles more of the president’s intentions on policy, and less on specific numbers. “It remains a messaging document,” Mulvaney said of the 2019 request. “So what are those messages? There are two primary messages in what we bring to you today. Number one, you don’t have to spend all the money that you’ve just allocated or provided for [in] the caps, but if you do, here is how the administration would prefer to spend it. You don’t have to spend it all. And that’s what we’ve put in the [20]19 budget. Yes, we’ve added money back to the [20]19 budget, money in addition to what we would have sent you, if there was no caps deal.”
The Democrats Keep Capitulating on Defense Spending - Since earlier this month, when Congress passed a budget deal that massively boosts both defense and non-defense spending, liberal commentators—and even some Republican politicians—have accused the GOP of hypocrisy. Republicans, they noted, are supposed to loathe debt. They’re supposed to loathe government spending. Yet, in large numbers, they voted for much more of both.Fair enough. But what about the Democrats? If Republicans are supposed to worry about the United States bankrupting itself with social-welfare spending, aren’t Democrats supposed to worry about the United States bankrupting itself with military spending? Not anymore. In the run-up to the deal, Nancy Pelosi’s office fired off an email to House Democrats proclaiming that, “In our negotiations, Congressional Democrats have been fighting for increases in funding for defense.” Chuck Schumer’s office announced that, “We fully support President Trump’s Defense Department’s request.” Not all congressional Democrats voted for the budget agreement: Thirty-eight percent of Democrats backed it in the House and 76 percent did in the Senate. But even those who voted no mostly did so because they were upset about its lack of protection for immigrant “dreamers”—not because they oppose a higher defense budget. Last year, in fact, when Democrats were offered a standalone vote on big increases in military spending—in the form of House and Senate defense authorization bills—large majorities in both bodies voted yes. What makes this so remarkable is that the arguments for a large increase in defense spending are extraordinarily weak.
Mnuchin's Most Bizarre Claim Yet: "There Is No Link Between Rising Wages And Inflation" -- Treasury Secretary Steven Mnuchin has a degree from one of the most prestigious universities in the world (Harvard grads may dispute this); He was the CIO of Goldman Sachs; He launched a successful hedge fund; He is now Treasury Secretary. Yet he appears to barely grasp basic economic concepts (not to mention his apparent fondness for fake math). Last night, Mnuchin transparently tried to sooth markets by telling a crowd of reporters who accompanied him to the US Mint in Philadelphia that investors shouldn't worry about rising inflation and Treasury yields - even with the 10-year yield so close to crossing into the "danger zone" above 3%. Quoted by Bloomberg, Mnuchin swatted away the suggestion that investors are worried about rising prices, even as the average hourly wage number for January soared the most since 2009, triggering this month's "volocaust". Why? Because in Mnuchin's mind, wage inflation and rising consumer prices have only a tenuous link - if that. "There are a lot of ways to have the economy grow," Mnuchin said in an interview aboard a train to Philadelphia on Thursday, where he toured the U.S. Mint. "You can have wage inflation and not necessarily have inflation concerns in general." If that's true - it's certainly news to us. And judging by the tone of these dismayed Jeffrey Gundlach tweets, we're not alone. Mnuchin: policies will raise wages w/out inflation. Yeah, sure. And we are going to expand the Buffalo Art Museum without making it bigger. — Jeffrey Gundlach (@TruthGundlach) February 23, 2018 Mnuchin added that he isn’t concerned about foreign investment in new US debt, which analysts expect could exceed $1.2 trillion this year (with all the latest bells and whistles) as the Trump tax cuts force the federal government to issue more debt, saturating the market and probably driving yields higher. Of course, Mnuchin has fallen in line behind his boss and repeatedly asserted that the US would make up for lost tax revenue by boosting economic growth to 3% over the coming decade, something that would result in one of the longest and most powerful economic expansions in modern history.
North Korea Bailed At The Last Minute On Secret Meeting With Pence - Two weeks ago, followers of geopolitics couldn't help but speculate about the chances of a clandestine meeting between North Korea and the US when the news first broke that North Korean leader Kim Jong Un's younger sister, Kim Jo Yang, would be attending the Winter Games in PyeongChang.After all, US Vice President Mike Pence was already confirmed to be stopping by South Korea during the beginning of the Games as part of a five-day Asia tour. But the White House was quick to repudiate this chatter, announcing that there were no plans for diplomatic talks, though both US and North Korean rhetoric since then has left the door open for such a meeting.But as it turns out, just as the White House was denying it, plans for talks were being set in motion, according to the Washington Post, which reported Tuesday evening that the North Koreans backed out of a meeting with Pence at the last minute. Instead, it appears as if North Korea calculated the maneuver as a way to exert maximum pressure on Washington, as the cancellation coincided with an invitation by North Korean leader Kim Jong Un to begin talks with South Korean leader Moon Jae-in. Conscious of this fact, Moon's response was noncommittal.Vice President Pence departed for a five-day, two country swing through Asia earlier this month having agreed to a secret meeting with North Korean officials while in South Korea at the 2018 Winter Olympic Games.But on Feb. 10, less than two hours before Pence and his team were to meet with Kim Yo Jong, the younger sister of North Korean leader Kim Jong Un, and Kim Yong Nam, North Korea’s nominal head of state, the North Koreans pulled out of the scheduled meeting, according to Pence’s office.The North Korean decision to withdraw from the meeting came after Pence used his trip to denounce the North’s nuclear ambitions and announce the “toughest and most aggressive” sanctions yet against the regime, while also taking steps to further solidify the U.S. alliance with Japan and South Korea. The North Koreans attributed the cancellation to Pence's rhetoric during a speech in South Korea, where he declared that North Korea is the most evil, repressive regime in the world.
Trump warns of military action with North Korea if sanctions don't work - President Trump signaled on Friday that military action could be in the works if new sanctions against North Korea don’t curb the country’s nuclear ambitions. The White House on Friday announced aggressive new sanctions against North Korea aimed at crippling their ability to trade. Speaking at a joint press conference with Australian Prime Minister Malcolm Turnbull at the White House, Trump said that if the sanctions don’t work “we’ll have to go to phase two,” which he said “may be a very rough thing.” “We'll have to see,” Trump said. “I don't think I'm going to exactly play that card. But we'll have to see. If the sanctions don't work we'll have to go to phase two. Phase two may be a very rough thing. May be very, very unfortunate for the world.” “But hopefully the sanctions will work,” Trump added. “We have tremendous support all around the world for what they're doing. It really is a rogue nation. If they can make a deal it will be a great thing. If we can't, something will have to happen. So we'll see.”
Trump Warns World Of "Very, Very Unfortunate Phase 2" If North Korean Sanctions Fail - If you weren't paying attention, you might have missed it; but during today's joint press conference with Aussie PM Turnbull, US President Trump let slip a brief comment that the rest of the world should likely be paying close attention to. After unveiling the "heaviest sanctions ever imposed on a country before" against North Korea earlier in the day, President Trump told the gathered media that the US will go to "Phase 2" if those sanctions do not have the desired effects of denuclearizing the Korean peninsula.As Reuters reports, in addressing what the Trump administration calls its biggest national security challenge, the U.S. Treasury sanctioned one person, 27 companies and 28 ships, according to a statement on the U.S. Treasury Department’s website.The United States also proposed a list of entities to be blacklisted under separate United Nations sanctions, a move “aimed at shutting down North Korea’s illicit maritime smuggling activities to obtain oil and sell coal.”The U.S. Treasury said the sanctions were designed to disrupt North Korean shipping and trading companies and vessels and further isolate Pyongyang, but as we noted previously Russian and Chinese ships have been "caught red handed" breaking the sanctions.All of which led to his comments during today's press conference during which Trump made apparent reference to military options his administration has repeatedly said remain on the table."If the sanctions don’t work, we’ll have to go phase two," Trump said."Phase two may be a very rough thing, may be very, very unfortunate for the world. But hopefully the sanctions will work."The president did not specify exactly what he meant by 'Phase 2' and qualified the statement saying that he didn’t think he was "going to exactly play that card."
White House slaps fresh sanctions on North Korea | Asia Times: The Trump administration imposed tough new shipping sanctions against North Korea on Friday. The move, after a lull in tensions during the Winter Olympics in PyeongChang, South Korea, indicated that the White House intends to renew pressure against Pyongyang over its nuclear weapons program. “Today, I am announcing that we are launching the largest-ever set of new sanctions on the North Korean regime,” Mr. Trump was set to say to the Conservative Political Action Conference, according to comments released by the White House. The latest sanctions target 27 shipping companies and 28 vessels, registered in North Korea and six other nations, including China. The Treasury Department says the shippers are participating in a complex scheme to help North Korea dodge UN restrictions against imports of refined fuel and exports of coal. The US and its allies say the illegal ship-to-ship transfers at sea of oil and coal have enabled the North to blunt the impact of the sanctions on its economy. Chinese and Russian interests are alleged to be behind the smuggling, which has been hotly criticized by Washington. “The timing of Mr. Trump’s announcement was notable, coming just hours after South Korea’s president, Moon Jae-in, played host at dinner to Mr. Trump’s daughter, Ivanka, who is leading the United States delegation to the closing ceremony of the games on Sunday,” the New York Times said Friday.
U.S. Revives Concerns About European Defense Plans, Rattling NATO Allies - — After years of encouraging European nations to work together to provide more of their own defense, the United States is having second thoughts, driven by concerns about NATO and possible protectionism in defense industries. The new American skepticism has been the big surprise of the high-level security conference held this past week in Munich. And it has puzzled and disconcerted NATO officials, who have welcomed the European Union’s new commitment, after the Russian annexation of Crimea, to do more for its own defense. Only last November, American and NATO officials embraced the bloc’s plans, under a program called the Permanent Structured Cooperation on Security and Defense, or Pesco, to spend more money on defense and to do it more efficiently, on national programs that would enhance European combat capacity and reduce overlapping national equipment that does not always work together with those of other allies. The European Union created a defense research fund to provide 5.5 billion euros ($6.8 billion) a year in financing after 2020, a relatively modest sum, but one that could grow. As a psychological breakthrough, Pesco and the fund “mark a cultural revolution in Brussels,” the French defense minister, Florence Parly, said at the Munich conference. The German defense minister, Ursula von der Leyen, said “We want to remain trans-Atlantic but also more European,” on defense, so that Europeans can shape the international order. The German foreign minister, Sigmar Gabriel, declared that Europe needed a common “power project” to avoid remaining a “vegetarian with a lot of problems in a world of carnivores.” But in the past few days, American officials have raised new questions and doubts about these European plans, expressing concerns that they could weaken the NATO alliance and cut out United States military manufacturers from bidding on certain European projects.
Washington delivers new ultimatum on Iran - The US State Department has issued a fresh ultimatum on the Iran nuclear deal to Washington’s ostensible major allies in Europe, demanding that Germany, Britain and France commit themselves to altering the agreement along the lines demanded by President Donald Trump or face its unilateral abrogation by the US.A secret State Department cable obtained by Reuters presents what are essentially the same demands made by Trump last January. At that time, he announced that he was prepared to relaunch all-out US economic warfare against Iran unless the European powers joined Washington in imposing a rewritten nuclear accord on Tehran, including provisions that the Iranian government cannot and will not accept.The occasion for Trump’s threat was his reluctant announcement on January 12 that he had decided to waive the reimposition of US sanctions that were lifted as part of the nuclear agreement, formally known as the Joint Comprehensive Plan of Action (JCPOA). He vowed that this would be the last time he issued such a waiver, unless his conditions were met. The next deadline for waiving the sanctions is May 12.The message from the State Department to the European powers asks for their “commitment that we should work together to seek a supplemental or follow-on agreement that addresses Iran’s development or testing long-range missiles, ensures strong IAEA inspections, and fixes the flaws of the ‘sunset clause.’”Washington has demanded that Iran grant International Atomic Energy Agency inspectors immediate and unlimited access to any site in the country, including military bases; the elimination of “sunset clauses” in the JCPOA, making time-limited restrictions on aspects of Iran’s civil nuclear program permanent; and drastically limiting, if not outlawing, Iran’s ballistic missile program. While presented by Reuters and other media as a softening of the position outlined by Trump in January, the cable makes it clear that the US is continuing to present its nominal allies in Europe with an ultimatum.
US admiral advocates war footing against China - The US Congress House Armed Services Committee (HASC) dedicated two days o hearings last Thursday and Friday to “security challenges” and “strategic competition” with China in the “Indo-Asia-Pacific region.” The hearing took place in the wake of the publication by the Pentagon of its new National Defense Strategy, which labelled China and Russia as the primary threats to US security and insisted on the need to “prioritise preparedness for war.”The sole witness at the February 14 hearing was Admiral Harry Harris, the commander of US Pacific Command (USPACOM), who was nominated just days before by President Donald Trump to fill the vacant post of US ambassador to Australia. Harris and his headquarters submitted a 20,500-word statement to the committee and he fielded questions for over two hours.The admiral portrayed the US military, with its $1.4 trillion two-year budget, 1.3 million active personnel, 11 aircraft carrier battlegroups and arsenal of over 4,000 ground, air and sea-launched nuclear weapons, as under-resourced, under-manned and in the danger of being overtaken by military rivals. He complained that it did not have enough forward-deployed munitions and logistics, while bases and infrastructure on the US West Coast were run-down. He bitterly condemned the minor limits on increased military spending that were imposed by Congress via budget sequestration in 2013—which were lifted in the latest budget. Repeating a line that appears regularly in his speeches, Harris’s statement asserted: “If USPACOM has to fight tonight, I don’t want it to be a fair fight. If it’s a knife fight, I want to bring a gun. If it’s a gun fight, I want to bring in the artillery, and the artillery of all of our allies. I have said during my last two appearances before this Committee, that sequestration could reduce us to wielding a butter knife in this fight. This is unacceptable. We must not let that happen.…
Another US step toward trade war --The United States has taken a further step toward trade war, with significant military overtones. Commerce Secretary Wilbur Ross announced last Friday that he has sent a range of options to President Donald Trump for the imposition of tariffs and other restrictions on imports of steel and aluminum. Ross released details of long-awaited investigations conducted under section 232 of the 1962 Trade Expansion Act, which allows the president to impose restrictions on imports deemed to impact on “national security” without congressional approval. Ross said separate inquiries into both metals launched last year found that import surges in recent years “threaten to impair our national security.” He recommended global tariffs of 24 percent on steel and 7.7 percent on aluminum. A large portion of steel comes from Canada and other strategic allies, which would be hit by a global tariff. So other options are being considered to target China and other countries, such as Brazil and Vietnam. The latter is regarded as a “third country” exporter of Chinese steel to the US. A third option being considered is to reduce imports of the metals from all countries to well below the levels reached in 2017.The recommendations now go to the White House, with Trump having until April to make a final decision. Ross last week suggested that Trump could adopt a more “surgical” approach, which would see a 53 percent levy introduced on steel from a list of 12 countries that includes China, Russia, India and South Korea, but would allow exemptions for close allies like Japan, Germany and Canada. The imposition of trade restrictions is fraught with conflicts, not only with the exporting countries, but also with sections of industry in the US that use imports of aluminium and steel to keep their costs down. Trump claimed imposing tariffs would “create a lot of jobs,” brushing aside concerns that it would raise costs for many companies and cut jobs. At the same time, he pointed to the military implications of the move, especially as regards China. “I want to keep prices down but I also want to make sure that we have a steel industry and an aluminium industry and we do need that for national defence,” Trump said. “If we ever have a conflict we don’t want to be buying steel [from] a country we are fighting.”
Draft critical mineral list—Summary of methodology and background information—U.S. Geological Survey technical input document in response to Secretarial Order No. 3359 -- Pursuant to the Presidential Executive Order (EO) No. 13817, “A Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals,” the Secretary of the Interior, in coordination with the Secretary of Defense, and in consultation with the heads of other relevant executive departments and agencies, was tasked with developing and submitting a draft list of minerals defined as “critical minerals” to the Federal Register within 60 days of the issue of the EO (December 20, 2017). Based on an analysis by the U.S. Geological Survey and other U.S. Government agencies, using multiple criteria, 35 minerals or mineral material groups have been identified that are currently (February 2018) considered critical. These include the following: aluminum (bauxite), antimony, arsenic, barite, beryllium, bismuth, cesium, chromium, cobalt, fluorspar, gallium, germanium, graphite (natural), hafnium, helium, indium, lithium, magnesium, manganese, niobium, platinum group metals, potash, rare earth elements group, rhenium, rubidium, scandium, strontium, tantalum, tellurium, tin, titanium, tungsten, uranium, vanadium, and zirconium. The categorization of minerals as critical may change during the course of the review process and is thus provisional.
China Threatens To Retaliate If US Imposes Metal Tariffs - Just hours after the Trump administration received a green light from the Commerce Department to impose steep tariffs on aluminium and steel imports on national security grounds across the board, but especially on China and Russian, China threatened with immediately retaliation in the latest escalation of the growing trade war between the two superpowers.In an unexpected announcement on Friday, commerce secretary Wilbur Ross recommended a possible global tariff of at least 24% on imports of steel and 7.7% on aluminum after investigations into trade in both metals determined that import surges seen in recent years “threaten to impair [US] national security.”Responding to the unprecedented Commerce recommendation which many interpreted as the first official salvo in global trade wars, Wang Hejun - chief of the trade remedy and investigation bureau at China’s Ministry of Commerce - said imposing tariffs on such grounds was reckless.Quoted by the FT, he said that "The spectrum of national security is very broad and without a clear definition it could easily be abused," and added that “if the final decision from the US hurts China’s interests, we will certainly take necessary measures to protect our legitimate rights."For now the threat of "nuclear" trade war seems to be contained: analysts say Beijing is wary of escalating any trade disputes for fear of damaging its export-dependent economy, and so will focus any retaliation on specific sectors — most likely particular agricultural goods such as soybeans, for which China is the US’ largest export market. Earlier this month, Beijing launched an anti-dumping investigation into US exports of sorghum, an animal feed. . “Agricultural sector retaliation is more likely since (China’s) food price inflation is low. The next possible step will be going on further with a soybean and corn investigation." Still, expectations of only a "cold" trade war may soon be dashed, as Friday's action shows that trade hardliners in the Trump administration are eager to take action against China "after months of internal debate" according to the FT.
U.S. trading partners brace for 232 action -- The slate of recommendations Commerce Secretary Wilbur Ross gave President Donald Trump to impose restrictions on steel and aluminum imports reverberated around the world over the weekend, with U.S. allies and trading partners in Asia and elsewhere warning the administration against taking drastic action. In Japan, the government did not comment directly, noting that a final decision had not been reached. But Yasuji Komiyama, director of the metal industries division of Japan’s Ministry of Economy, Trade and Industry, told Reuters on Monday that “Japan believes any steel and aluminium imports by the U.S. from Japan do not pose any threat to the U.S. national security.” Japan Iron and Steel Federation Chairman Kosei Shindo added that Japanese industry hopes “Trump would make a careful and appropriate judgement.”The 232 reports Commerce released on Friday laid out a series of ways Trump could limit imports to protect U.S. national security, including by imposing blanket tariffs of 24 percent on all steel imports and 7.7 percent for aluminum. In South Korea, officials were upset over one of the options Commerce outlined that would exclude a number of NATO allies and trading partners but hit Seoul and 11 other nations with tariffs and quotas. The South Korean trade ministry said Monday it would consider filing a World Trade Organization complaint if Trump chose that option, Korean media reported.Kang Sung-cheon, South Korea’s deputy minister of trade, said in a briefing that South Korea may have been targeted because it imports Chinese steel, Yonhap News reported. But he said Seoul would work to make sure Washington understands that South Korea’s imports of Chinese steel do not affect Washington. In South Africa, which was also among the list of 12 countries, steel industry representatives warned that levying tariffs or quotas would decrease local production. “The latest developments have the potential of further dampening production in the local steel industry, reducing steel exports to the U.S., squeezing margins and depriving the steel industry of much-needed foreign reserves,” Steel and Engineering Industries Federation of South Africa chief economist Michael Ade said, according to Reuters.
EU prepares response to possible US tariffs - Deutsche Welle - The European Commission is mulling concrete counter-measures, should the United States impose high tariffs on steel and aluminum imports, newspaper reports have indicated. Brussels has no intention to just sit still.Amid global overcapacities, US Commerce Secretary Wilbur Ross last week recommended slapping high tariffs on US imports. He indicated that one possible scenario could be a punitive tariff of around 24 percent on all steel imports and a tariff of at least 7.7 percent on aluminum imports. Another scenario would see tariffs being imposed only on five nations including China and Russia. US President Donald Trump will still have to decide on any tariffs suggested by Ross.Should EU nations be affected by higher tariffs, the EU executive would "come up with an adequate response within days," the newspaper reported, adding that the focus would most likely be on agricultural produce including tomatoes and potatoes. But according to the report, tariffs might also be slapped on motorcycle imports. The Frankfurter Allgemeine Zeitung said EU officials had mentioned the possibility of imposing a tariff on Harley-Davidson imports from Wisconsin, the home of House Speaker Paul Ryan.They also mentioned a possible tariff on bourbon from Tennessee and Kentucky, the home of longtime Kentucky Senator and Senate Majority Leader Mitch McConnell. Some items on the list of possible EU tariffs were put there during the last big trade dispute between the EU and the United States under former President George W. Bush. But many parts of the list have been altered since to reflect changing realities.
If Trump helps steel mills, other Ohio companies say they'll be hurt - cleveland.com -- Sen. Sherrod Brown this week invited President Donald Trump to come to Ohio. He sent a letter saying he wants the president to "see the devastation of unfair, cheap foreign steel imports on Ohio steel mills and steelworkers."But Trump said last week he has seen the hollowing out of steel mills already, and is poised to act. "I've been looking at them for two years, as I went around campaigning," the president told Congress members including Brown and Ohio colleague Sen. Rob Portman, meeting at the White House to talk with the president about steel and foreign trade. "No matter where you go, you look at them and see what happened to U.S. Steel and these other companies. They were the giants and now they're hanging on for their life."Days later, Trump's commerce secretary recommended the president impose steep tariffs -- extra fees -- on steel and aluminum imports, or else issue quotas, both with the intent of either limiting steel imports from around the globe or making them more expensive. This could help American steel companies compete, Brown and others said, and reverse the deep harm caused by foreign steel firms and their governments. How will this play out? Trump will decide by the end of April, and the domestic steel industry hopes he will stay by its side. But other industries worry that if steel prices go up, their businesses and employees will get hurt.These include companies that buy steel and aluminum to make auto and truck parts, that fabricate construction equipment, that manufacture all manner of industrial goods. "We have so many jobs that are going to be impacted," said Bill Adler, president and CEO of Stripmatic Products, a firm in Cleveland that uses steel to make parts for chassis, frames and suspension bushings in the auto industry and axle and suspension parts for heavy trucks. His company only gets about 10 percent of its steel from imports, but because prices reflect global practices, a new tariff on that small share would likely be matched by domestic price hikes. "If there are steel tariffs, even if my foreign supply is only 10 percent, all my steel is going to go up," Adler said.
Trump Wants "Harshest" Import Tariffs: 24% On Steel, 10% On Aluminum - Defying threats of retaliation from the Chinese, Bloomberg reports that President Trump is pushing for a global tariff of 24% on all steel imports, a decision that will anger nearly every industrial manufacturer based in the US, while at the same time helping revive the fortunes of US steel producers.The rates were first proposed by Commerce Secretary Wilbur Ross last week.The commerce department released reports on the U.S. Department of Commerce’s investigations into the impact on our national security from imports of steel mill products and from imports of wrought and unwrought aluminum. These investigations were carried out under Section 232 of the Trade Expansion Act of 1962, as amended. All classified and business confidential information in the reports was redacted before the release.Specifically, the department, found that the quantities and circumstances of steel and aluminum imports “threaten to impair the national security,” as defined by Section 232. It also recommended several options, of which Trump now reportedly supports the stiffest.On steel the options include: a global tariff of at least 24% on all steel imports from all nations; tariff of at least 53% on all steel imports from 12 nations with a quota by product for all steel products from all countries equal to 100% of their 2017 exports to U.S.; quota on all steel products from all nations equal to 63% of 2017 exports.On aluminum the options include: tariff of at least 7.7% on all aluminum exports from all countries; 23.6% tariff on all products from key nations; quota on all imports from countries equal to maximum of 86.7% of 2017 exports.Anticipating the administration's support, six free trade advocacy groups sent an open letter to Trump on Thursday urging him not to impose the steel and aluminum tariffs. They also said the national security argument advanced by the Commerce Department wasn't credible.
Final version of mega Pacific trade deal dumps rules the US wanted - The final version of a landmark deal aimed at cutting trade barriers in some of the Asia-Pacific's fastest-growing economies was released on Wednesday, signalling the pact was a step closer to reality even without its star member the United States. More than 20 provisions have been suspended or changed in the final text ahead of the deal's official signing in March, including rules around intellectual property originally included at the behest of Washington. The original 12-member deal was thrown into limbo early last year when U.S. President Donald Trump withdrew from the agreement to prioritize protecting U.S. jobs. The 11 remaining nations, led by Japan, finalized a revised trade pact in January, called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). It is expected to be signed in Chile on March 8. The deal will reduce tariffs in economies that together amount to more than 13 percent of the global GDP — a total of $10 trillion. With the U.S., it would have represented 40 percent. "The big changes with TPP 11 are the suspension of a whole lot of the provisions of the agreement. They have suspended many of the controversial ones, particularly around pharmaceuticals," said Kimberlee Weatherall, professor of law at the University of Sydney.Many of these changes had been inserted into the original TPP 12 at the demand of U.S. negotiators, such as rules ramping up intellectual property protection of pharmaceuticals, which some governments and activists worried would raise the costs of medicine. The success of the deal has been touted by officials in Japan and other member countries as an antidote to counter growing U.S. protectionism, and with the hope that Washington would eventually sign back up. Last month, Trump told the World Economic Forum in Switzerland that it was possible Washington might return to the pact if it got a better deal.
Why Economists Are Worried About International Trade - Greg Mankiw --When President Trump imposed tariffs on imported solar panels and washing machines, I was reminded of a line from George Orwell: “We have now sunk to a depth at which the restatement of the obvious is the first duty of intelligent men.” While Orwell’s comment was focused on military and political issues of the late 1930s, my subject is economics, and to most people in my field, the benefits of an unfettered system of world trade are obvious. Any good student of Econ 101 can explain the logic. But in light of the growing evidence of the Trump administration’s apparent disdain for free trade, from the recent tariffs, to a report recommending fresh quotas or tariffs on steel and aluminum, to its earlier rejection of the Trans-Pacific Partnership, it may be worth reviewing the theory, as well as the evidence that convinces economists that the theory is right. Adam Smith’s book “An Inquiry Into the Nature and Causes of the Wealth of Nations” argued that trade among nations is like trade among people. No one feels compelled to sew his own clothes and grow his own food simply to keep busy. Instead, we find employment doing what we do best and rely on other people for most goods and services. Similarly, nations should specialize in producing what they do best and freely trade with other nations to satisfy their consumption needs. More recently, economists have emphasized how trade affects productivity. In a model pioneered by my Harvard colleague Marc Melitz, when a nation opens up to international trade, the most productive firms expand their markets, while the least productive are forced out by increased competition. As resources move from the least to the most productive firms, overall productivity rises.
How the New Tax Law Could Slow Disaster Recovery in Small Towns -- Since Congress passed its sweeping tax overhaul in December, considerable attention has been paid to new rules around mortgage interest deductions and state and local tax deductions -- both of which could have serious implications for taxpayers and state and local revenue streams. But one substantial shift has gotten somewhat lost in the shuffle: a change to what are known as “casualty loss” deductions, which filers can claim when they’re hit by a major, unexpected disaster. It's not just for victims of natural disasters like one of the several hurricanes to hit the U.S. last year. It's also for victims of smaller disasters like car crashes, house fires and floods. Starting next year, when Americans file their 2018 taxes, only victims of presidential-declared disasters qualify for casualty loss deductions. Presidential-declared disasters are the kind that receive assistance from the Federal Emergency Management Agency (FEMA) under the Stafford Act, which regulates federal assistance to state and local governments suffering from a disaster they can’t handle on their own. Last year, the president declared 137 disasters across the country, from severe winter storms to mudslides to hurricanes to wildfires. Experts in natural disaster recovery say this could have a substantial effect on people and could negatively impact small communities affected by a disaster that doesn’t meet the threshold for FEMA assistance. “The casualty loss deduction has been one of the single most important sources of funding for your average middle-class person who is affected by a catastrophic disaster when that disaster is not widespread,” says Ed Thomas, president of the Natural Hazard Mitigation Association and a previous FEMA employee, where he worked on about 200 disasters. “You’ll have a small tornado or an urban fire, for example. So often we’ll see a small situation, with a half a dozen buildings affected, and yet for the individuals involved it’s just as catastrophic as Hurricane Harvey or Hurricane Katrina,” he says. Thomas points to the case of Harpers Ferry, W.Va. After a fire destroyed nearly 10 structures in the town in 2015, the federal government declined to offer any aid. At least eight businesses were destroyed, a devastating blow for a small town. Harpers Ferry is far from alone.
Pelosi Pummeled As A Majority Of Americans Now Support Trump Tax Cuts - For the first time since President Trump signed it into law late last year, the Republican tax-reform plan has more supporters than opponents, according to the New York Times.The law's increasing popularity, which is likely tied to the fact that workers are beginning to see the withholding savings materialize in their paychecks, is also buoying Republicans' chances during the upcoming 2018 midterm elections, which were previously expected to be a rout for the party, which controls both houses of Congress - but holds only a one-vote majority in the Senate. It also follows a multimillion-dollar effort to convince consumers of the law's benefits. And, in another sentence we bet you never thought you'd read in the New York Times, the paper admits that the law's growing popularity is eroding the Democrats' lead in election polling for 2018. Dozens of Republican lawmakers opted to announce their retirement last year instead of face a difficult reelection campaign, but at least a few of them - including Tennessee Sen. Bob Corker - are reportedly reconsidering that decision. While most of the law's newfound supporting is coming from Republicans, the tax bill is winning over more Democrats than many of Trump's other, more controversial, policies. Support for the law remains low among Democrats, but it has doubled in the past month. Democrats' approval of the tax bill is twice as high as their approval of Trump. Overall, 51% of Americans approve of the law, while 46% disapprove. By comparison, approval was 37% in December.
Tax Astroturf: The B-Team Lowers the Bar for Tax Transparency -- The B Team, the leading global group for responsible business, has released a report: ‘A New Bar for Responsible Tax‘. To our great sadness, it moves the bar in one direction – towards the bottom.When the B Team first got in touch to discuss their plan to work with major multinationals to establish a new standard of tax transparency, we were excited. The one thing lacking so far in the process towards publiccountry-by-country reporting has been a champion among the major multinationals – and that’s exactly who the B Team work with. Moreover, they have made some genuine progress towards beneficial ownership transparency for their own group structures. We felt their staff were on the right track, and we hoped that they would be able to take the business members with them.It soon became clear that the members were less keen. But even so, the report which has now been released is desperately disappointing. The Tax Justice Network has always reflected the importance of business actors. While we resist giving undue credit purely for economic size, and we are well aware of the lobbying power to resist financial transparency and progressive tax, we also understand that the private sector is far from monolithic. Small businesses suffer more than most from the unlevel playing field created by multinationals’ tax avoidance and the self-serving lobbying of their professional services firms. And all businesses are controlled by people, with social consciences and community spirit – so that many staff and directors, whatever the size of the business, support the principles of tax justice. Investors, meanwhile, respond both to ethical motivations and to the growing evidence that multinationals’ tax avoidance does not yield higher return – but does leave investors to bear higher risks.
To Get Into the 1%, You Need Adjusted Gross Income of $480,930 - What does it take to get into the 1 percent? The price of admission is an adjusted gross income -- basically, what you make before deductions -- of $480,930.That’s according to the latest Winter 2018 edition of the Internal Revenue Service’s Statistics of Income Bulletin, which shows that the number of that elite group hit about 1.4 million in 2015, continuing its steady growth since 2009. Back then, you could have gotten into this bunch with an AGI of $350,000, its Great Recession low, but it’s been climbing ever since.And that’s just the minimum. The average AGI of the 1% in 2015 was $1,483,596, according to the IRS. By comparison, to make it into the top 0.001%, your AGI must be at least $59,380,503. It’s an extremely exclusive club: just 1,412 American households made that much.
The Business World Is Livid Over Trump’s Immigration “Train Wreck” - Despite claiming over and over that he has a “big heart” where DACA recipients are concerned, that he wants to come up with a solution before the March 5 deadline he set, and that if lawmakers came to him with an agreement, “I will be signing it,” Trump this week chose to torpedo Congress’s best stab at a bipartisan deal. With four proposed Senate bills to protect the Dreamers from deportation, the White House chose to “work vigorously to oppose” a centrist bill that had the best chances of passing, with the Department of Homeland Security claiming it amounted to “mass amnesty for over 10 million illegal aliens.” While the Common Sense Coalition measure, sponsored by eight Republicans, seven Democrats, and one independent, would have provided $25 billion for border security, including Trump‘s precious wall, it would have done so over a period of 10 years and not immediately, [as the man-child in the Oval Office has demanded. “I don’t think the president helped very much,” Senator Lindsey Graham, told The New York Times, adding, “As long as the president allows Steve Miller and others to run the show down there, we’re never going to get anywhere.” Thanks to Congress’s paralysis, experts estimate that more than 100 DACA recipients are losing their status daily. And Trump’s pals in corporate America are pissed. “I’ve been very worried for quite a while that I was watching a train wreck in slow motion, and yesterday we had that train wreck,” Tamar Jacoby, president of ImmigrationWorks USA, an alliance of small businesses, told the Financial Times. Echoing the sentiment was Jay Timmons, president of the National Association of Manufacturers, who noted: “We have people who are working here contributing to our society. Many of them are in the manufacturing sector. We don’t want to lose those folks. And frankly our country shouldn’t want to lose those folks—especially in manufacturing where we have 364,000 open jobs.”
Congress punts fight over Dreamers to March | TheHill: Congress is poised to kick a heated immigration fight into overtime, with no clear path forward. With the Senate rejecting four proposals — including President Trump's preferred plan and a key bipartisan deal — and no viable backup plan in sight, lawmakers are poised to hit pause on the issue until at least next month as they go back to the drawing board. It’s a stark contrast from just a week ago, when senators had hoped to gain momentum coming out of what they anticipated to be a freewheeling floor fight. Instead, both sides are pointing fingers and raising fresh questions about what, if anything, can win over two deeply divided chambers and the White House.House Speaker Paul Ryan (R-Wis.) is now pointing to the end of March as the deadline for his chamber to take action on an immigration bill. He’s pledged he will only bring up legislation that has the president’s support, making it a non-starter for many Democrats. Ryan called an initial March 5 date “an important deadline,” but added that “it’s not as important as it was before, given the court rulings.” “But I think this — this place works better with deadlines, and we want to operate on deadlines. We clearly need to address this issue in March. I'll just leave it at that,” he said. Meanwhile, some GOP senators are pointing to a March 23 spending bill as a new goal post. "I don't know when it's going to be. Obviously we're going to have to deal with the DACA issue probably on the [omnibus] because of what has happened ... and extend it,” Sen. Bob Corker (R-Tenn.) told reporters, referring to the spending bill. He added that he expected the mammoth spending bill could include a three-year extension of the Deferred Action for Childhood Arrivals (DACA) program, but that it “may be longer.”
Trump administration pursues inhumane policy of separating migrant children from parents - In an article published on February 20, the Los Angeles Times documented the spread of a new and virulent anti-immigrant policy adopted by the Trump administration. Parents who crossed the border into the US with their children—and without the necessary documents—were generally held in family detention centers or released with a court date, as the families awaited a decision on whether or not they would be deported. However, as part of their harsher and more aggressive anti-immigrant drive, immigration enforcement officials have started the process of systematically separating parents from their children.The policy was signaled by the Trump administration a few months ago as an element of its broader approach to “discourage border crossings.” This came in the aftermath of the news that the so-called “Trump effect,” which had initially seen a drop in the influx of people crossing the Southern United States border, had worn off. By November 2017, the administration reported that the number of people who had been apprehended for illegally crossing the border had reached 29,086—the highest since the previous January. Of these, 7000 were counted as “family units” and 4000 were unaccompanied minors. In response, the Trump administration convened a group of officials from the National Security Council, the Domestic Policy council, the Department of Homeland Security (DHS), the Department of Justice and the State Department to come up with new policy measures aimed at curtailing border crossings, particularly by children. In late December, the Washington Post first broke the story that the administration was seriously considering a “family separation policy” as part its proposed solutions. Dismissing the earlier policy of letting families remain intact as they awaited a court date as “catch and release,” the Trump administration has started making good on its threat to prosecute some of the migrant parents on the grounds that entering the country illegally is a federal crime. The first time a migrant parent is caught and charged the offense is a misdemeanor, with a maximum sentence of six months. Those caught a second time face a felony charge with a maximum sentence of up to 20 years, depending on their criminal record. Once a case becomes a criminal matter, parents and children are separated.
Citizenship and Immigration Services removes “nation of immigrants” from mission statement -- US Citizenship and Immigration Services isn’t for immigrants anymore.That’s not an exaggeration. USCIS, the federal agency responsible for issuing visas and green cards and for naturalizing immigrants as US citizens, has unveiled a new mission statement that strips out all references to immigrants themselves — including taking out a line that called the US a “nation of immigrants.” And in an email to agency staff Thursday, as first reported by the Intercept’s Ryan Devereaux, director L. Francis Cissna bragged about the change — saying that USCIS wasn’t supposed to help immigrants and the US citizens seeking to sponsor them, but rather “the American people.”The new mission statement, and Cissna’s justification, downplays the agency’s commitment to helping immigrants become American citizens and plays up the idea that US citizens attempting to bring their family members to the US don’t count as real Americans whose interests deserve to be protected. USCIS’s new mission statement doesn’t just reflect the Trump administration’s hawkishness toward legal as well as unauthorized immigration. It encourages the notion that Americanness is a matter of blood and soil, of birth and descent, rather than an idea that anyone can be proud of regardless of where they were born.
The Stubbornly High Cost of Remittances — When migrants send money across borders to their families, it promotes economic activity and supports incomes in some of the poorest countries of the world. Annual cross-border remittances are running about US$600 billion, three quarters of which flow to low- and middle-income countries. To put that number into perspective, total development assistance worldwide is $150 billion. Indeed, for many countries, these transfers account for a significant fraction of people’s incomes. For example, in Guatemala, the Philippines and Senegal, remittances exceed 10 percent of GDP. Yet, despite the remarkable technological advances of recent decades, remittances remain extremely expensive. In an earlier post, we extolled the virtues of domestic payments systems like Zelle, an inexpensive, bank-run means for person-to-person transfers up to several thousand dollars. The marginal cost of using Zelle is zero. That is, for customers of the bank, there is no charge. Cross-border remittances are far from costless. On average, the charge for sending $200―the benchmark used by authorities to evaluate cost―is $14. That is, the combination of fees (including charges from both the sender and recipient intermediaries) and the exchange rate margin typically eats up fully 7% of the amount sent. It is less expensive to send larger amounts, with the global average cost of sending $500 at just under 5%. Even so, the aggregate cost of sending remittances in 2017 was about US$30 billion, roughly equivalent to the total non-military foreign aid budget of the United States! In this post, we discuss remittances, why their costs remain high, and what might be done to lower them.
Trump’s Bogus Infrastructure Plan Takes the U.S. Further Down the Road of Rentier Capitalism –- President Trump presented his infrastructure plan last week. If you’re keen on the idea of out-of-control privatized utilities gouging customers and manipulating energy markets, or consortia building overpriced, expensive toll roads (until they go bust), then you’ll love the president’s proposals. His mooted public-private partnerships are another variant of socialism for the rich and free market discipline for the rest of us. PPPs are like a religion that offers its adherents the promise of capitalist heaven via tax breaks, subsidized funding, and guaranteed returns, minus the discipline of private bank credit arrangements or potential bankruptcy, the costs of which are invariably borne by a public already experiencing the hell of significantly more restricted access (think toll roads and bridges), higher user fees or “slower lane” traffic (think the end of net neutrality), and the costs of bailouts if and when the venture goes bust. There is no question that Trump is tapping into a big need for the country when he calls for more public infrastructure investment, but as usual with this president the devil is (literally) in the details. The American Society of Civil Engineers (ASCE) estimates that there are $4.6 trillion worth of needed investments to maintain and upgrade infrastructure throughout the U.S. But the president’s proposed plan offers up a mere $200 billion in direct federal funding over the next 10 years. This is to be complemented with another $1.3 trillion in spending from cities, states, and private investors for a total of $1.5 trillion, which is still massively insufficient relative to the needs outlined in the latest ASCE report card (which currently grades U.S. infrastructure at D+).
Why Trump’s Plan Won’t Solve the Problems of America’s Crumbling Infrastructure - President Trump’s plans for the nation’s infrastructure are, unbelievably, even worse than they appear. In the President’s budget, released on the same day as the infrastructure plan, Democrats in Congress identified more than $240 billion over the next decade in proposed cuts to ongoing infrastructure. This includes a cut of $122 billion to the Highway Trust Fund as well as reductions in programs that fund rail, aviation, and wastewater projects. Net federal spending on infrastructure may actually fall over the next decade if the President’s plans are approved by Congress, potentially leaving the nation’s infrastructure in a more dire condition than when he took office. The meagerness of the federal contribution — just $200 billion over ten years, or less than 0.1 percent of GDP over that period — was already clear from the State of the Union. Half of those funds are allocated to an Incentive Program intended to support surface transportation and airports, passenger rail, ports and waterways, flood control, water supply, hydropower, water resources, drinking water facilities, wastewater facilities, storm water facilities, and brownfield and Superfund sites. Just listing everything the President’s plan claims to address for a federal expenditure of just $100 billion makes the inadequacy of the plan obvious. But there’s more. The Incentive Program requires states and localities to put up 80 percent of the cost of any project in order to get a federal match of 20 percent. This turns the traditional approach to infrastructure investment on its head. The federal government typically provides 80 percent of the funding for such projects. It is wishful thinking to imagine how cash-strapped states and cities — already on the hook for extensive local infrastructure spending — will be able to find new public sources of financing, especially now that the recent Republican-passed tax law has severely limited their ability to raise taxes to pay for such undertakings. Trump’s plan turns infrastructure investment on its head in another way as well. Traditionally, the selection of projects to be funded by the federal government emphasized benefits to the public. The administration’s plan weighs the ability to attract sources of funding outside the federal government at 70 percent when considering whether to support it; economic and social returns from the project count for just 5 percent. Federal funding will go to projects that are most attractive to private investors, rather than to those, like clean water, that meet the needs of communities.
To Save Our Infrastructure, Make Every Road A Toll Road - Few things exemplify the United States’ disconnect between personal freedom and collective responsibility like our automobile habit. Drivers travel at will, as long as they have money for gas and road snacks. But what they pay for that privilege, in the form of gas and other taxes, doesn’t come close to covering the costs of maintaining the roads on which they travel—let alone recoup all the productivity lost in congestion and the damage that tailpipe emissions do to our health. Compared to what society pays, driving is practically a free ride. Transportation economists have long sought to make drivers pay their fair share without raising the federal gas tax—a political nonstarter. In recent decades, a broad swath of experts has settled on an idea with the potential to fix the three big problems that come with cars: road damage, congestion, and pollution. The answer? Charge ‘em by the mile. It’s not too crazy to think some version of this might happen. The Highway Fund, meant to provide for road maintenance, is perpetually broke, because its current funding mechanisms are broken. Many states have studied, and some have even tried, what are known as Vehicle Miles Traveled taxes. It just sounds fair. But if the feds ever take the idea national, you can bet it won’t be as ideal as the one I’m about to describe. Federal gas taxes were supposed to keep the Highway Trust Fund afloat, but politicians have refused to raise them since 1993. “Funding for highways has basically gotten worse since then,” says Robert Atkinson, a longtime transportation policy wonk and current president of the Information Technology and Innovation Foundation. Unlike politicians, inflation doesn’t worry about reelection, and the 73 percent increase since 1993 means the 18.4 cents Americans pay per gallon is worth less than ever. As cars get more efficient, drivers are pumping less gas, exacerbating the problem. Things are so bad that, since 2008, Congress has had to periodically cover the Highway Fund’s shortfall through (potentially illegal) transfers from the general fund—that is, tax money paid by everyone, no matter how much (or how little) they drive. That’s just at the federal level. In a majority of states, direct user fees (gas taxes, tire taxes, registration fees, and so on) cover less than half of road spending, according to research done by the Tax Foundation. The perceived unpopularity of gas taxes leads many states to draw from their general funds to pay maintenance.
FCC reversal of net neutrality rules expected to be published Thursday: sources (Reuters) - The U.S. Federal Communications Commission is expected to publish on Thursday its December order overturning the landmark Obama-era net neutrality rules, two sources briefed on the matter said Tuesday. The formal publication in the Federal Register, a government website, means state attorneys general and advocacy groups will be able to sue in a bid to block the order from taking effect. The Republican-led FCC in December voted 3-2 to overturn rules barring service providers from blocking, slowing access to or charging more for certain content. The White House Office of Management and Budget still must sign off on some aspects of the FCC reversal before it takes legal effect. Congressional aides say the publication will trigger a 60-legislative-day deadline for Congress to vote on whether to overturn the decision. U.S. Senate Democrats said in January they had the backing of 50 members of the 100-person chamber for repeal, leaving them just one vote short of a majority. Even if Democrats could win a majority in the Senate, a repeal would also require winning a vote in the House of Representatives, where Republicans hold a larger majority, and would still be subject to a likely veto by President Donald Trump. Democrats need 51 votes to win any proposal in the Republican-controlled Senate because Vice President Mike Pence can break any tie. On Friday, a coalition of more than 20 state attorneys general and advocacy groups agreed to withdraw a protective petition filed in January that sought to preserve the right to sue. Amy Spitalnick, a spokeswoman for New York Attorney General Eric Schneiderman, said the office reached an agreement to withdraw “the original petition and will simply refile it once the final rule is published. Either way, our coalition of AGs is taking the FCC to court to challenge its illegal rollback of net neutrality.”
F.C.C. Watchdog Looks Into Changes That Benefited Sinclair — Last April, the chairman of the Federal Communications Commission, Ajit Pai, led the charge for his agency to approve rules allowing television broadcasters to greatly increase the number of stations they own. A few weeks later, Sinclair Broadcasting announced a blockbuster $3.9 billion deal to buy Tribune Media — a deal those new rules made possible.By the end of the year, in a previously undisclosed move, the top internal watchdog for the F.C.C. opened an investigation into whether Mr. Pai and his aides had improperly pushed for the rule changes and whether they had timed them to benefit Sinclair, according to Representative Frank Pallone of New Jersey and two congressional aides.“For months I have been trying to get to the bottom of the allegations about Chairman Pai’s relationship with Sinclair Broadcasting,” Mr. Pallone, the top Democrat on the committee that oversees the F.C.C., said in the statement to The New York Times. “I am grateful to the F.C.C.’s inspector general that he has decided to take up this important investigation.”It was unclear the extent of the inspector general’s investigation or when it might conclude, but the inquiry puts a spotlight on Mr. Pai’s decisions and whether there had been coordination with the company. It may also force him to answer questions that he has so far avoided addressing in public. The inquiry could also add ammunition to arguments against the Sinclair-Tribune deal. Public interest groups and Democratic lawmakers, including Mr. Pallone, are strongly opposed to the deal, arguing that it would reduce the number of voices in media and diminish coverage of local news. Sinclair’s chief executive, Chris Ripley, has called Mr. Pai’s relaxation of media ownership rules a “landmark” development for his company and the industry. A union of Sinclair and Tribune would create the nation’s biggest television broadcaster, reaching seven out of 10 American homes. The F.C.C. and Justice Department are widely expected to approve the merger in the coming weeks. The office of F.C.C. inspector general, which is a nonpartisan role that reports to the agency and regularly updates Congress on some investigations, said it would “not comment on the existence or the nonexistence of an investigation.”
US Federal Communications Commission sets end date for net neutrality - In the latest step in the drive by the US ruling class to censor the Internet, the Federal Communication Commission (FCC) on Thursday published its order abolishing Internet neutrality in the governmental Federal Register, initiating a 60-day countdown for the law to come into force. The FCC’s ruling represents a far-reaching attack on the democratic rights of the entire population and public access to the Internet. Beginning April 23, multibillion-dollar corporate behemoths, such as Verizon and AT&T, will be free to restrict access to or completely censor Internet sites as they see fit. On December 14, the FCC voted by a 3-2 margin to overturn the previous characterization of Internet broadband as a public utility under the 1934 Communications Act. This definition required that Internet Service Providers (ISPs) provide customers with the same level of Internet access, regardless of what they were connecting to. Moreover, ISPs could not selectively block or reduce speeds for specific sites or services, and could not create a multi-tiered system by charging users or content providers for higher traffic speeds. Since the ISPs will not be forced to treat all content the same, they will be able to block web sites and services at their discretion. The claim, promoted by the FCC and its chairman Ajit Pai, that competition between ISPs for market share will prevent such actions ignores the fact that the telecommunications infrastructure is largely monopolized, with four companies controlling 75 percent of all high-speed Internet service. Over half of American households have only one ISP to “choose” from. These corporations are now being handed an incredible power over global communications. The ISPs will also be able to establish a class-based system of Internet access, including by offering “packages” of Internet content. They may, for example, introduce a premium “Wikipedia package,” charging customers to access Wikipedia, a repository of humanity’s collective knowledge currently accessed by over 400 million people each day, just as cable television networks charge for news and sports.
Ajit Pai’s Plan Will Take Broadband Away From Poor People - A broadband internet connection is vital to full participation in our society and economy. Increasingly, government services and job opportunities can only be accessed online. Indeed, homework assigned to seven out of 10 K-12 students in the US requires internet access, according to a recent study. But accessing this critical network is unattainable for the poorest Americans. Data from Pew Research shows that a little over half of American adults with household incomes under $30,000 have a home broadband connection, and one in three have a smartphone. This is why in 2016, the FCC modernized the Lifeline program, which gives low-income Americans a monthly $9.25 subsidy for communications services. Created during the Reagan administration and expanded during George W. Bush's presidency, Lifeline historically applied only to landline, and then mobile, phone service. The 2016 FCC modernization began to shift the Lifeline subsidy to include broadband internet access. These efforts elicited vociferous dissent from then-commissioner, now FCC chair Ajit Pai, who has portrayed the Lifeline program and the people who benefit from it as hopelessly corrupt. Now he is proposing to make changes that will, for all intents and purposes, destroy the program. He aims to severely reduce both the supply of and demand for Lifeline-supported services. One of Pai’s first acts as chair was to chill competition and innovation in the Lifeline program. Pai reversed a decision made by former FCC chair Tom Wheeler that allowed nine new Lifeline providers into the program. In the process Pai got rid of new competitors who could drive down prices and improve services. It gets worse. Pai proposes to make the Lifeline subsidy available only to those companies that own their facilities, like the wires, towers, and other infrastructure that make up networks. The problem here? Seventy-five percent of Lifeline customers get their service from businesses that resell the capacity of companies like Sprint and T-Mobile. If resellers are forced out of the Lifeline program, some low-income Americans may find themselves unable to use their Lifeline subsidy at all. This result could have dire consequences—some Lifeline customers may find themselves without access to critical services like 911.
USA, USA, USA: America's 4G Network Is Ranked 62nd 'Best' In The World (Behind Macedonia) - The United States takes pride in being a technological leader in the world. Companies such as Apple, Alphabet, IBM, Amazon and Microsoft have shaped our (digital) lives for many years and there is little indication of that changing anytime soon. But, as Statista's Felix Richter notes, when it comes to IT infrastructure however, the U.S. is lagging behind the world’s best (and many of its not-so-best), be it in terms of home broadband or wireless broadband speeds. According to OpenSignal's latest State of LTE report, the average 4G download speed in the United States was 16.31 Mbps in Q4 2017. (infographic) That’s little more than a third of the speed that mobile device users in Singapore enjoy and ranks the U.S. at a disappointing 62nd place in the global ranking.
Kushner Pushes Back Against Kelly As Top White House Staffers Battle For Political Survival - As speculation mounted earlier this month that Chief of Staff John Kelly might soon be shown the door following the Feb. 6 revelation that White House Staff Secretary Rob Porter's ex-wives exposed him as a domestic abuser, we anticipated that Kelly's exit might be fraught with complications for one important reason: Many of top White House officials - most notably senior advisor Jared Kushner - are still working with the same type of temporary security clearance that Porter had. Kelly's equivocating over when, exactly, he learned about Porter's sordid history drew attention to this uncomfortable fact, and we anticipated that, once the White House made clear it would stand by its man, the simmering tensions between Kelly and Kushner, whom Kelly has long treated with quiet derision, would soon spill over into public view. And lo and behold: Not even two weeks later, the New York Times dropped a bombshell report late Tuesday about Kushner's efforts to hang on to his top-level clearance - even after Kelly issued a memo on Friday promising to revoke access for any West Wing officials whose clearances were pending as of June 1 (as Kushner's was). This, in turn, has set the stage for a "Beyond Thunderdome"-esque confrontation between two of the most influential members of the president's inner circle. Kushner is fighting to keep his security clearance because, quite simply, it'd be nearly impossible for him to carry out his multitudinous responsibilities without it.
Kushner requests more intel info than almost all White House staff: report | TheHill: White House senior adviser Jared Kushner has reportedly requested more intelligence information than almost every other White House official. The Washington Post reports that Kushner, whose portfolio encompasses issues ranging from the Middle East peace process to modernizing the federal government’s use of technology, has put in more requests for U.S. intelligence information than any White House staffer not working for the National Security Council. Kushner holds a Top Secret/sensitive compartmented information (SCI) security clearance, the highest level, which allows him to review some of the nation’s most closely-guarded secrets and allows him access to the presidential daily briefing, according to the Post. He is one of reportedly dozens of White House officials who have been operating with temporary clearances during Trump’s first year in office, and his clearance could be in jeopardy following chief of staff John Kelly’s changes to the clearance process, the Post said. In a memo released Friday, Kelly outlined a series of changes to the clearance process amid the controversy surrounding former staff secretary Rob Porter, who resigned over domestic abuse allegations. “The American people deserve a White House staff that meets the highest standards and that has been carefully vetted—especially those who work closely with the president or handle sensitive national security information,” Kelly wrote in the memo. “We should — and in the future must — do better.”
Trump Dodges Kushner Security Question: "Gen. Kelly Will Make That Call" - President Donald Trump's placid press conference with Australian Prime Minister Malcolm Turnbull took an interesting turn Friday afternoon when a reporter from the Washington Examiner asked the president about his son-in-law Jared Kushner's future in the West Wing. And the president, as he often does, surprised his audience by offering a rambling non-answer, saying he'd ultimately leave the decision of whether to grand a waiver in the hands of Chief of Staff John Kelly. This is the first time the president or anyone from the White House communications department has offered a clue as to its thinking about Kelly's new policy. A week ago, Kelly announced that he would soon begin revoking temporary security clearances from the dozens of senior administration employees who still don't have them - and Kushner, who is in charge of a large portfolio of responsibilities, is probably the most senior among them.Asked whether he would give Kushner a security clearance, Trump praises his son-in-law and senior adviser as a hard-working and "extraordinary" man, and doesn't answer the question. "Gen. Kelly will make that call. ... I have no doubt he'll make the right decision."— Shane Harris (@shaneharris) February 23, 2018Trump repeatedly referred to Kushner as an "outstanding" and "extremely talented and extremely smart" young man who - by the way - is working without pay. Trump spoke highly of Kushner's work ethic and devotion to bettering the country, but also admitted that he would leave the question of whether to grant Kushner a waiver up to Kelly, saying "I have no doubt he'll make the right decision" and that Kelly "would do what's right for the country." "He is truly outstanding. He was very successful when he was in the private sector. He is working on peace in the middle east," Trump said. "He's a high-quality person. He works for nothing. No one ever reports that. But he gets zero," the president said.
How Russia turned the internet against America - The indictment released Friday by special counsel Robert Mueller makes plain how prosecutors believe Russia pursued its multiyear scheme to undermine the 2016 presidential election — by wielding the social media-driven internet that the United States itself did so much to create. They had help, digital experts say, from decades of accepted U.S. policy about how to help the internet thrive: The U.S. government has taken a largely hands-off approach, while the anonymity that protects people's priva - cy and liberty online also allowed Russian trolls to deceive overly trusting Americans. And the same freedom to innovate that has made Silicon Valley wealthy and powerful meant that there were few eyes on the ball as Russian actors began figuring out how to manipulate the internet's few dominant platforms, such as Facebook, Twitter and the Google-owned YouTube. "So many of us thought for so long that the internet was an unbridled force for good, but man, over the last year, the shine has really come off," said Joseph Lorenzo Hall, chief technologist at the Center for Democracy & Technology, a D.C.-based tech advocacy group. "I’m sort of at a loss right now," Hall added. "I value anonymity, but it’s really hard to see how this doesn’t lead to some sort of driver’s license for the internet, which makes me feel horrible. There needs to be some sort of accountability, though I really don’t know what that is. We have a lot of work to do.”
The media and the Mueller indictment: A conspiracy theory to end all conspiracy theories -- The announcement Friday by the US Department of Justice that a federal grand jury has returned criminal indictments against 13 Russian citizens and three Russian companies, charging illegal activities in the 2016 US presidential election, has become the occasion for a barrage of war propaganda in the American corporate media. Leading the charge is the New York Times, which published a front-page “news” lead Sunday, authored by Peter Baker. The article was published online Saturday evening under the headline, “Trump’s Conspicuous Silence Leaves a Struggle Against Russia Without a Leader.” In the newspaper’s print edition, the “struggle” was upgraded to a “war … being fought on the American side without a commander in chief.”The indictments, the Times argues, “underscored the broader conclusion by the American government that Russia is engaged in a virtual war against the United States through 21st-century tools of disinformation and propaganda.” It noted that only a few days ago, the Trump administration “formally blamed Russia for an expansive cyberattack last year called NotPetya and threatened unspecified ‘international consequences’. What cyberattack could be more significant than an effort to hijack the US presidential election? By the logic of the leading “newspaper of record,” the US government would be justified in responding militarily to an alleged Russian election operation.What is propounded in the media coverage is a conspiracy theory to end all conspiracy theories. The New York Times, the Washington Post, and much of the media are espousing paranoid views that were once associated with the John Birch Society, which notoriously claimed that President Dwight Eisenhower was a card-carrying member of the Communist Party. This supposed conspiracy is described in breathless terms in media accounts: “sophisticated,” “massive,” of “breathtaking” scope, one with “tentacles” that “reached deeply into American political life.” Even if one accepts the facts of the indictment as alleged—and that is hardly a legitimate assumption, given the capacity of the FBI and other intelligence agencies for fabrication—nothing in the indictment comes close to supporting what is being claimed by the Times and other media outlets.
The Result of Mueller’s Investigation: Nothing – Paul Craig Roberts -- Robert Mueller discredited himself and his orchestrated Russiagate investigation last week (Friday, February 16, 2018) with his charges that 13 Russians and 3 Russian companies plotted to use social media to influence the 2016 election. Their intent, Mueller says, was to “sow discord in the US political system.” What pathetic results to come from a 9 month investigation! Note that the hyped Russian hacking of Hillary’s emails that we have heard about every day is nowhere to be found in Mueller’s charges. In its place there is “use of social media to sow discord.” I mean, really! Note also that the Trump/Putin conspiracy is also not present in Mueller’s charges. Mueller’s charges say that the Russians’ plan to sow discord began in 2014, before there was any notion that Trump would run for president in 2017. The link of the plot to Putin is reduced to the allegation that the plot was financed by a St. Petersburg restaurateur whose connection to Putin is that his business once catered official dinners between Russian officials and foreign dignitaries. Finally, note that Mueller’s release of his charges in the face of dead news weekend means that Mueller knows that he has nothing to justify the massive propaganda onslaught against Trump for conspiring with Putin with which the presstitutes have regaled us. If the charges amounted to anything, they would have been released on Monday morning, and the presstitutes would have been handed by the FBI and CIA the news stories to file with their papers. How did the 13 Russians go about sowing discord? Are you ready for this? They held political rallies posing as Americans and they paid one person (unidentified) to build a cage aboard a flatbed pickup truck and another person to wear a costume portraying Hillary in prison clothes. How much money was lavished on this plot. A monthly budget of $1.2 million, a sum far too small to be seen in the $2.65 billion spent by Hillary and Trump and the $6.8 billion spent by all candidates for federal elective offices in the last election.
Robert Mueller’s America–A Farce Wrapped in Hypocrisy -- The indictment unveiled last Friday by Assistant Attorney General Rob Rosenstein, charging 13 Russian nationals with posting "false" information on the internet would be great grist for a satirical send up of government incompetence except the underlying premise of the charges is nothing short of a road map for authoritarian governments who will want to treat anyone who dares post contrarian material on the internet as a criminal. Let me state it succinctly--if you posted a blog suggesting that Hillary deserved to go to jail then you might be a criminal. The indictment is nothing more than a rancid puff pastry. It pretends to have a mountain of evidence of evil doing by the Russians. But if you simply ask probing questions about the underlying proof of the misdeeds you will quickly discover that this document is a piece of political theater rather than an actual listing of criminal deeds. What do I mean?The indictment states that "THE ORGANIZATION" (i.e., THE INTERNET RESEARCH AGENCY) had the strategic purpose of sowing political discord in the United States. Okay. How do we know that? Did the owner of the IRA make such a statement or is there a written document or recorded conversation in which he made the claim? We do not know. There is not one piece of solid evidence in the entire document that substantiates that claim. It is nothing more than an assertion of belief. That is not how one writes an indictment alleging criminal conduct. Also worth noting that the indictment provides not hard evidence, either documentary or the claim by a confidential informant, of THE ORGANIZATION acting on behalf of or at the direction of the Russian Government. Again, it is assumed but nothing even approaching solid evidence is proffered in this document.
In Two So-Called Fact Checks of Facebook, NYT Forgets Everything It Knows about Indictments – Marcy Wheeler - In both this Scott Shane article and this “fact check” of Facebook VP Rob Goldman’s recent tweets on Russian trolls’ use of Facebook (which President Trump then picked up), the NYT has twice forgotten everything it knows about indictments, and in the process failed to properly analyze last week’s Internet Research Agency indictment. In Shane’s article, he attempts to fact check Goldman using the indictment. Facebook’s vice president for advertising, Rob Goldman, said on Twitter on Friday, “I have seen all of the Russian ads and I can say very definitively that swaying the election was *NOT* the main goal” — a statement that President Trump retweeted. But Mr. Mueller’s indictment repeatedly states that the Russian operation was designed not just to provoke division among Americans but also to denigrate Hillary Clinton and support her rivals, mainly Mr. Trump. The hashtags the Russian operation used included #Trump2016, #TrumpTrain, #MAGA and #Hillary4Prison, and one Russian operative was reprimanded for “a low number of posts dedicated to criticizing Hillary Clinton,” the indictment says. On Twitter, Shane even suggested Goldman hadn’t read the indictment. Then, Sheera Frenkel extends the purported fact check. “I have seen all of the Russian ads and I can say very definitively that swaying the election was *NOT* the main goal.” Tweet #2 Not according to the indictment. The grand jury indictment secured by Mr. Mueller asserts that the goal of Russian operatives was to influence the 2016 election, particularly by criticizing Hillary Clinton and supporting Mr. Trump and Bernie Sanders, Mrs. Clinton’s chief rival for the Democratic nomination. Both Shane and Frenkel don’t consider what I laid out here: [T]here are hints that Mueller is using this indictment to set up a more important point.For example, the indictment (perhaps because of Mueller’s mandate) focuses on political activities supporting or opposing one or another 2016 candidate. Even where topics (immigration, Muslim religion, race) are not necessarily tied to the election, they’re presented here as such. Unless Facebook’s public reports are wrong, this is a very different emphasis than what Facebook has said the IRA focused on. Which is to say that Mueller’s team are focusing on a subset of the known IRA trolling, the subset that involves the 2016 contest between Trump and Hillary.
Anti-Trumpists Use Mueller Indictments to Escalate Tensions With Nuclear-Armed Russia - Caitlin Johnstone -- U.S. empire loyalists are so close to telling the truth when they babble about “Russian propaganda.” They are openly admitting that it is wrong to use media to manipulate the ways that Americans think and vote. Now all we need is for them to admit that they themselves do this constantly, and we’ll be on the right track. The word “Russians” is America’s top trend on Twitter at the time of this writing because of a Mueller indictment of 13 alleged members of a Russian troll farm, those nefarious supervillains who posted pictures of puppies and promoted Bernie Sanders to “sow discord in the U.S. political system, including the 2016 U.S. election.” Predictably, no evidence is added to cohesively tie the establishment Russia narrative together with allegations of Russia hacking the Democratic Party and giving their emails to WikiLeaks, meeting with Donald Trump, Jr. at Trump Tower, any shenanigans with well-hydrated Russian prostitutes, or indeed anything tying the troll farm to Trump or the Russian government at all.The focus instead is on people disguising their identities to troll Americans on social media, which we have now learned constitutes a “conspiracy to defraud the United States.” As Disobedient Media’s Elizabeth Lea Vos rightly points out, it is also behavior that the Hillary Clinton campaign is known to have funded and engaged in extensively.In response to this underwhelming revelation, Democrats and Never-Trumpers are howling for new Cold War escalations with Russia. This despite the fact that this administration has already killed Russians in Syria, greatly escalated nuclear tensions with Russia, allowed the sale of arms to Ukraine (a move Obama refused for fear of angering Moscow), established a permanent military presence in Syria with the goal of effecting regime change, forced RT and Sputnik to register as foreign agents, expanded NATO with the addition of Montenegro, assigned Russia hawk Kurt Volker as special representative to Ukraine, shut down a Russian consulate in San Francisco and expelled Russian diplomats as part of continued back-and-forth hostile diplomatic exchanges. We are already at an extremely dangerous point in the ongoing trend of continuous escalations with a country that is armed with thousands of nuclear warheads. And these deranged lunatics want more.
The Russian journalist who helped uncover election interference is confounded by the Mueller indictments - A 37-page indictment issued by special counsel Robert S. Mueller III’s team on Friday brings fresh American attention to one of the strangest elements of alleged Russian interference in the 2016 election: The Internet Research Agency (IRA), a state-sponsored “troll factory” in St. Petersburg.But much of the information Mueller published on Friday about the agency’s efforts to influence the election had already been published last October — in an article by a Russian business magazine, RBC.In a 4,500-word report titled “How the 'troll factory' worked the U.S. elections,” journalists Polina Rusyaeva and Andrey Zakharov offered the fullest picture yet of how the “American department” of the IRA used Facebook, Twitter and other tactics to inflame tensions ahead of the 2016 vote. The article also looked at the staffing structure of the organization and revealed details about its budget and salaries.Расследование РБК: как «фабрика троллей» поработала на выборах в США https://t.co/iYHjucGX9t— РБК (@ru_rbc) October 17, 2017Zakharov agreed to answer some questions for WorldViews about his reaction to the details about the IRA in Mueller’s indictments (Rusyaeva left journalism after the story came out, although she stresses she did not do so because of a reaction to the story). Zakharov explained how it was a strange feeling seeing something he had so closely investigated become a major issue in the United States, when it had not been a “bombshell” when he published his report at home.Russian trolls and hackers targeted social media networks, political organizations and state election systems during the 2016 election. Here's what we know about the Kremlin's playbook for creating division in the U.S. The transcript below has been edited for length and clarity.
Hyping the Mueller Indictment - Special counsel Robert Mueller has charged 13 Russian individuals and three organizations for using social media “to interfere with the U.S. political system, including the 2016 presidential election.” The Russian effort denigrated Hillary Clinton, and sought to inflame divisive social issues through fake accounts on Facebook, Instagram, and Twitter, as well as staging political rallies. Neoconservative pundit Max Boot decries “the second-worst foreign attack on America,” after 9/11, one that “may be even more corrosive.” According to liberal Jonathan Alter, the Russians have launched “an attack that—but for the loss of life—is as bad as Pearl Harbor.” Democratic Representative Jerrold Nadler concurs, explaining to MSNBC: “They didn’t kill anyone but they’re destroying our democratic process.… Not in the amount of violence, but in the seriousness, it is very much on par.” Dispassionate, veteran journalists echo the seriousness. “It seems increasingly likely,” writes The Intercept’s James Risen, “that the Russians have pulled off the most consequential covert action operation since Germany put Lenin on a train back to Petrograd in 1917.” “Russia is engaged in a virtual war against the United States through 21st-century tools of disinformation and propaganda,” concludes New York Times chief White House correspondent Peter Baker. While Mueller’s indictment has been received as “ stunning,” a “ bombshell,” and a “ blockbuster,” the Russian outlet RBC already revealed much of its details last year. Employees of the Internet Research Agency, a Kremlin-linked troll farm operated out of St. Petersburg, were allegedly instructed to foment “political intensity through supporting radical groups, users dissatisfied with [the] social and economic situation and oppositional social movements.” When it came to the 2016 election, the IRA initially “engaged in operations primarily intended to communicate derogatory information about Hillary Clinton, to denigrate other candidates such as Ted Cruz and Marco Rubio, and to support Bernie Sanders and then-candidate Donald Trump.”
Russian Meddling Was a Drop in an Ocean of American-Made Discord - NYT -- As international conspiracies to undermine the world’s last remaining superpower go, the Russian-led plot revealed by a Justice Department indictment on Friday can seem, in its particulars if not its intent, audacious but, as revealed so far, somewhat narrow. The conspirators stand accused of spreading falsehoods online, hiring Hillary Clinton impersonators at rallies and starting Facebook groups that tried to convince minority voters to stay home or cast their ballots for Jill Stein. That these efforts might have actually made a difference, or at least were intended to, highlights a force that was already destabilizing American democracy far more than any Russian-made fake news post: partisan polarization. “Partisanship can even alter memory, implicit evaluation, and even perceptual judgment,” the political scientists Jay J. Van Bavel and Andrea Pereira wrote in a recent paper. “The human attraction to fake and untrustworthy news” — a danger cited by political scientists far more frequently than orchestrated meddling — “poses a serious problem for healthy democratic functioning.” It has infected the American political system, weakening the body politic and leaving it vulnerable to manipulation. Russian misinformation seems to have exacerbated the symptoms, but laced throughout the indictment are reminders that the underlying disease, arguably far more damaging, is all American-made.
Do Russiagate Skeptics Go Too Far? – naked capitalism - Yves here. This Real News Network segment with John Feffer and host Aaron Maté received a huge number of comments, so I encourage readers to visit the TRNN site as well as pipe up here if you are so inclined. Even though Maté pushed back consistently, some of the readers at TRNN thought he didn’t make as strong a counterargument as he could have. It’s worth noting that the troll farm that was the subject of the Mueller indictment had already been reported at length in a Russian business magazine: 9/11-Pearl Harbor talk aside, it's v. funny seeing troll farm indictment greeted as "bombshell," etc. Much of it was revealed last year: https://t.co/uS7Qo2TMyO Co-reporter on that story now calls US wing "a very successful social media marketing campaign" https://t.co/RqCYWh2VJ2pic.twitter.com/QdkXuddXe0— Aaron Maté (@aaronjmate) February 19, 2018
Former Skadden Lawyer Pleads Guilty to Lying in Russia Investigation — The son-in-law of a Russia-based billionaire admitted on Tuesday to lying to investigators about his communications with a former Trump campaign aide. The guilty plea by the defendant, a former lawyer at a powerful New York-based law firm, broadened the scope of the special counsel’s inquiry into Russia’s election interference. The lawyer, Alex van der Zwaan, a 33-year-old Dutch citizen, acknowledged in federal court in Washington that he lied to prosecutors about a September 2016 conversation with Rick Gates, the former Trump aide, over work they did together for a Ukrainian political party aligned with Russia. He also admitted that he deleted records of email exchanges that prosecutors had sought. He faces up to five years in prison but said in court that he expected to serve six months or less. Mr. van der Zwaan’s decision to plead guilty to a felony charge could intensify pressure on both Mr. Gates and on Paul Manafort, Mr. Gates’s longtime business partner and the president’s former campaign chairman. Both were charged in the fall with laundering money and other crimes related to consulting work they did for the Ukrainian political party headed by former President Viktor F. Yanukovych. They have pleaded not guilty. It also focused attention on Mr. van der Zwaan’s former law firm, Skadden, Arps, Slate, Meagher & Flom, where he worked on a Ukrainian project steered by Mr. Gates and Mr. Manafort. In a statement, Skadden, a powerful international corporate law firm, said it fired Mr. van der Zwaan last year and was cooperating with the investigation.
Conservatives urge Trump to grant pardons in Russia probe - After months of criticizing special counsel Robert Mueller’s Russia probe, President Donald Trump’s supporters are issuing increasingly bold calls for presidential pardons to limit the investigation’s impact. “I think he should be pardoning anybody who’s been indicted and make it clear that anybody else who gets indicted would be pardoned immediately,” said Frederick Fleitz, a former CIA analyst and senior vice president at the conservative Center for Security Policy. The pleas for mercy mainly extend to the four former Trump aides who have already been swept up in the Russia probe: former campaign manager Paul Manafort, former deputy campaign manager Rick Gates, former national security adviser Michael Flynn and former campaign foreign policy adviser George Papadopoulos. But they don’t stop there. “It’s kind of cruel what’s going on right now and the president should put these defendants out of their misery,” said Larry Klayman, a conservative legal activist. “I think he should pardon everybody — and pardon himself.” Klayman and Fleitz spoke before Mueller indicted thirteen Russian nationals on Friday for staging an elaborate 2016 election interference operation in the United States. Democratic leaders said the hard evidence of Russian meddling underscores the importance of letting Mueller’s investigation run its course. But many conservatives note that the new indictment shows no evidence of collusion between Trump associates and the Kremlin. That reinforces their view that Mueller’s real target, if any, should be Russian President Vladimir Putin — not Trump’s circle. “[H]ow long will the leftist witch hunt against @RealDonaldTrump continue,” the president’s son, Donald Trump Jr., tweeted hours after the indictment’s release.
Intercepted Podcast: RussiaMania — Glenn Greenwald vs. James Risen -- James Risen and Glenn Greenwald have both won Pulitzer Prizes. They both have found themselves in the crosshairs of the U.S. government for their journalism. And they both write for The Intercept. But Jim and Glenn have taken very different approaches to covering the Trump/Russia story. This week on Intercepted, they go head-to-head in a debate. Glenn is one of the most high-profile critics of the official story that has been put forward by the U.S. intelligence community, the Democrats, and many media outlets, including some of this country’s most powerful papers and news channels. Jim battled both the Bush and Obama administrations — under threat of imprisonment — for refusing to name his sources in some of the most sensitive national security reporting of the modern era. Jim broke a key story on a secret NSA channel to Russia and his first column for The Intercept, about the Trump/Russia investigation, posed the question: Is Donald Trump a traitor? A video special of the full debate is here.
Controversies pile up for White House, alarming GOP | TheHill: President Trump’s White House is consumed by controversies on several fronts, putting the administration on the defensive at a time when Republicans are increasingly worried about their electoral prospects. Republicans would be content to spend every day between now and Election Day focused on the GOP’s tax-cut bill and the economy. But those efforts are complicated by the sheer volume of controversies the White House is juggling. “Every day they are working on another crisis is another day lost for pushing their agenda,” said one former White House adviser. “At the same time, they’ve been doing this since day one, so it’s not too unusual that they are engulfed in another crisis.” The growing list of controversies dogging the White House touch on everything from the Russia investigation to allegations that Trump has not been faithful to his wife. Chief of staff John Kelly is on thin ice for his handling of a senior aide who resigned after his ex-wives accused him of domestic abuse, which has sparked a congressional investigation into the White House’s national security clearances process.
Kim Dotcom: "Let Me Assure You, The DNC Hack Wasn’t Even A Hack" - Kim Dotcom has once again chimed in on the DNC hack, following a Sunday morning tweet from President Trump clarifying his previous comments on Russian meddling in the 2016 election. Dotcom tweeted "Let me assure you, the DNC hack wasn't even a hack. It was an insider with a memory stick. I know this because I know who did it and why," adding "Special Counsel Mueller is not interested in my evidence. My lawyers wrote to him twice. He never replied. 360 pounds!" alluding of course to Trump's "400 pound genius" comment. Dotcom's assertion is backed up by an analysis done last year by a researcher who goes by the name Forensicator, who determined that the DNC files were copied at 22.6 MB/s - a speed virtually impossible to achieve from halfway around the world, much less over a local network - yet a speed typical of file transfers to a memory stick. John Podesta's email was allegedly successfully "hacked" (he fell victim to a phishing scam) in March 2016, while the DNC reported suspicious activity (the suspected Seth Rich file transfer) in late April, 2016 according to the Washington Post.On May 18, 2017, Dotcom proposed that if Congress includes the Seth Rich investigation in their Russia probe, he would provide written testimony with evidence that Seth Rich was WikiLeaks' source.If Congress includes #SethRich case into their Russia probe I'll give written testimony with evidence that Seth Rich was @Wikileaks source.— Kim Dotcom (@KimDotcom) May 19, 2017On May 19 2017 Dotcom tweeted "I knew Seth Rich. I was involved"I knew Seth Rich. I know he was the @Wikileaks source. I was involved. https://t.co/MbGQteHhZM— Kim Dotcom (@KimDotcom) May 20, 2017 Three days later, Dotcom again released a guarded statement saying "I have consulted with my lawyers. I accept that my full statement should be provided to the authorities and I am prepared to do that so that there can be a full investigation. My lawyers will speak with the authorities regarding the proper process. If my evidence is required to be given in the United States I would be prepared to do so if appropriate arrangements are made. I would need a guarantee from Special Counsel Mueller, on behalf of the United States, of safe passage from New Zealand to the United States and back. In the coming days we will be communicating with the appropriate authorities to make the necessary arrangements. In the meantime, I will make no further comment."
America's Election Meddling Would Indeed Justify Other Countries Retaliating In Kind -- Caitlin Johnstone - Like every single hotly publicized Russiagate “bombshell” that has broken since this nonsense began, Mueller’s indictment of 13 Russian social media trolls was paraded around as proof of something hugely significant (an “act of war” in this case), but on closer examination turns out to be empty. The always excellent 'Moon of Alabama' recently made a solid argument that has also been advanced by Russiagate skeptics like TYT’s Michael Tracey and Max Blumenthal of The Real News, pointing out that there is in fact no evidence that the troll farming operation was an attempt to manipulate the US election, nor indeed that it had any ties to the Russian government at all, nor indeed that it was anything other than a crafty Russian civilian’s money making scheme. The notion that a few Russian trolls committed a “conspiracy to defraud the United States” by “sowing discord” with a bunch of wildly contradictory posts endorsing all different ideologies sounds completely ridiculous in a country whose mainstream media spends all its time actively creating political division anyway, but when you look at it as a civilian operation to attract social media followers to sock puppet accounts with the goal of selling promoted posts for profit, it makes perfect sense. James Corbett of The Corbett Report has a great video about how absolutely bizarre it is that public dialogue is ignoring the fact that these trolls overwhelmingly used mainstream media like the Washington Post in their shares instead of outlets like RT and Infowars. As a scheme to acquire followers, it makes perfect sense. As a scheme to subvert America, it’s nonsensical. There is currently no evidence that the Russian government interfered in the US election. But it is worth pointing out that if they did they had every right to.
Mueller Hits Manafort With New Bank Fraud Claim Over "Doctored" Paperwork - Days after learning that former Donald Trump campaign aide and longtime Paul Manafort business partner Rick Gates may have been flipped by Special Counsel Robert Mueller, a Tuesday court filing released on Friday reveals that Manafort now stands accused of "a series of bank frauds and bank fraud conspiracies" in order to secure a mortgage on one of his properties. The revelation emerged amid legal wrangling over Manafort's $10 million bail package, for which prosecutors say Manafort's real estate pledges are insufficient in light of recent developments. [T]he proposed package is deficient in the government’s view, in light of additional criminal conduct that we have learned since the Court’s initial bail determination," reads the court filing. "That criminal conduct includes a series of bank frauds and bank fraud conspiracies." The filing offers one example in which Manafort provided Federal Savings Bank with "doctored profit and loss statements" for 2015 and 2016, overstating the income of his lobbying firm, DMP International "by millions of dollars" to secure a $9 million mortgage on a Fairfax, Virginia property pledged against his $10 million bail. Of note, the filing specifically reads "bank frauds and bank fraud conspiracies," suggesting multiple people were involved in the alleged criminal conduct. The Wall Street Journal reported last year that New York Attorney General Eric Schneiderman's office was investigating various loans that Manafort obtained for various real estate transactions - including mortgages issued by Federal Savings Bank. Manafort has been under house arrest at his Alexandria, VA condominium since his October indictment along with Rick Gates. U.S. District Court Judge Amy Berman Jackson has yet to set a trial date in the case, however she suggested last month that September or October might work.
Rick Gates To Plead Guilty, Testify Against Manafort As Part Of Mueller Deal: Report - A former Trump campaign aide and longtime business partner of Paul Manafort, Rick Gates, will plead guilty to fraud-related charges in the coming days, and has indicated that he will testify against Manafort in upcoming proceedings, the LA Times reports."Rick Gates is going to change his plea to guilty,'' the LA Times quoted a person "with direct knowledge of the new developments", who added that the revised plea will be presented in federal court in Washington "within the next few days.''The move follows weeks of speculation and a change in legal representation for Gates, who dropped lawyers Shanlon Wu, Walter Mack and Annemarie McAvoy for Sidley Austin senior counsel and personal acquaintance of Robert Mueller, Thomas C. Green. Mueller is prosecuting Gates and Manafort in conjunction with his wide-ranging investigation into Russian interference in the 2016 election, and whether crimes have been committed by Trump or members of his campaign before, during or since the election. Manafort, who served as Trump's campaign manager for approximately two months, was fired within 48 hours of Trump's first classified intelligence briefing as a candidate - leading some to speculate that Trump found out about an active investigation against the lobbyist in relation to his activities in Ukraine with Gates and Tony Podesta - who stepped down from his now-defunct lobbying firm after Manafort's indictment. Last October Manafort pleaded not guilty to eight counts of money laundering and failing to register foreign lobbying and other business, while Gates - who faces 10 years in prison - pleaded guilty to nine counts in the same case. According to a person familiar with Gates' new plea bargain, the longtime political consultant can expect "a substantial reduction in his sentence" if he fully cooperates with the investigation, thought to be around 18 months, however the agreement will not be specified in writing.
Mueller Files Sealed New Charges in Manafort, Gates Case -- U.S. Special Counsel Robert Mueller has filed new charges in the case against ex-Trump campaign chairman Paul Manafort and his former deputy, Rick Gates, according to a sealed court filing. The filing in Washington federal court doesn’t specify the nature of the charges, or whether it expanded the case against both men or added others. They were indicted in October for money laundering and failing to register for political consulting work performed in Ukraine. Earlier this week, Mueller’s office announced a guilty plea against a London-based lawyer who worked with Manafort and Gates on a report that largely defended the conviction of a former Ukrainian prime minister, despite widespread criticism that it was politically motivated. Mueller’s office hinted at possible new charges in a separate filing last week. In that document opposing more lenient bail terms, prosecutors said Manafort engaged in a “series of bank frauds and bank fraud conspiracies’’ not previously charged. Those frauds relate to a mortgage on a Virginia property that Manafort seeks to pledge to secure his $10 million bail, according to the filing. He “provided the bank with doctored profit and loss statements’’ from his company for 2015 and 2016, while “overstating its income by millions of dollars,’’ prosecutors said.The churn has become so extreme that news that the White House fired a fleet of drivers it paid to taxi reporters and aides around Florida because one of them was found to be carrying a gun barely cut through the noise. The White House has hunkered down amid the storms, going a full week without briefing the press. At Tuesday’s terse briefing, press secretary Sarah Huckabee Sanders was pelted with a week’s worth of pent-up questions from frustrated reporters. Sanders left the lectern after only 20 minutes. Reporters shouted questions and sarcastic remarks at her as she walked away.
Mueller Files New Tax And Bank Fraud Charges Against Manafort -- Special Counsel Robert Mueller announced late Thursday that a Virginia grand jury has approved a slate of new charges against former Trump campaign executive Paul Manafort and Manafort's former deputy, Rick Gates - a move that has been widely anticipated for weeks.The two men are now facing 32 charges - that's 20 more than the original 12-count indictment. In October, Manafort and Rick Gates were indicted for laundering millions of dollars earned while purportedly acting as unregistered agents of the Ukrainian government. In the superseding indictment filed on Thursday in federal court in Washington, they face new charges of tax evasion and bank fraud, as Bloomberg pointed out."Manafort and Gates generated tens of millions of dollars in income as a result of their Ukraine work," the new indictment said. "From approximately 2006 through the present, Manafort and Gates engaged in a scheme to hide income from United States authorities, while enjoying the use of the money." The charges were likely approved earlier this month, and have been under seal until today. The new indictment claims Paul Manafort laundered more than $30 million in income, with Gates' assistance, and disguised more than $10 million in income from Cypriot entities by disguising them as loans. It also claims Manafort obtained millions of dollars in financing through "false and fraudulent" representations.
Rick Gates, Trump Campaign Aide, Pleads Guilty in Mueller Inquiry and Will Cooperate - — A former top adviser to Donald J. Trump’s presidential campaign has agreed to cooperate with the special counsel inquiry into Russia’s interference in the 2016 election after pleading guilty on Friday to financial fraud and lying to investigators. The adviser, Rick Gates, is a longtime political consultant who once served as Mr. Trump’s deputy campaign chairman. The plea deal could be a significant development in the investigation — a sign that Mr. Gates plans to offer incriminating information against his longtime associate and the former Trump campaign chairman, Paul Manafort, and possibly other members of the campaign in exchange for a lighter punishment. He faces up to nearly six years in prison.The deal came as the special counsel, Robert S. Mueller III, has been raising pressure on Mr. Gates and Mr. Manafort with dozens of new charges of money laundering and bank fraud unsealed on Thursday. Both men were first indicted in October and pleaded not guilty. The plea agreement was part of a flurry of recent activity by the special counsel’s team. Last week, 13 Russians were indicted on charges relating to a carefully planned scheme to incite political discord in the United States in the months before the 2016 election.Mr. Gates changed his plea on Friday during an appearance in a Washington courtroom, his eyes cast down as the government outlined the charges against him. A man who had made millions of dollars lobbying in Ukraine accepted the fate that may await him: a prison sentence for carrying out a financial conspiracy to hide the money he earned there. He also admitted that he lied to investigators this month — while under indictment and negotiating with prosecutors — about the details of a 2013 meeting about Ukraine that Mr. Manafort had with a pro-Russian member of Congress. What the dramatic courtroom scene might mean for President Trump depends on what Mr. Gates has to offer the special counsel, though at the least, the plea agreement is further evidence that the Trump campaign attracted a cast of advisers who overstepped legal and ethical boundaries. The indictments so far have not indicated that either Mr. Gates or Mr. Manafort had information about the central question of Mr. Mueller’s investigation — whether Mr. Trump or his aides coordinated with the Russian government’s efforts to disrupt the 2016 election.
The community banker who got tangled up in the Russia probe --Stephen Calk is one of the more unlikely characters to be caught up in the sprawling Russia investigation that has engulfed the Trump presidency.Throughout his career in the mortgage business, Calk contributed money to a handful of Republican campaigns, but he was never a significant political player. On the rare occasions when his name appeared in the newspaper, he was likely to discuss the latest interest rate hike or another industry-centric topic. He is not known to have any foreign ties.Donald Trump’s presidential campaign included a number of political neophytes, and Calk served as a member of his economic advisory team in late 2016. The Trump campaign described Calk, a onetime Army helicopter pilot, as a champion of increasing homeownership among military veterans. . Yet Calk has been swept up in the Russia probe because his small, Chicago-based bank made $16 million in mortgage loans to former Trump campaign manager Paul Manafort in 2016 and early 2017. Manafort, who once served as a political consultant to the Kremlin-friendly president of Ukraine, is a key figure in the investigation into Russian meddling in the 2016 election. He now faces numerous criminal charges, including providing false information to banks in order to obtain loans.In court filings, The Federal Savings Bank, the $341 million-asset institution where Calk serves as CEO, has been portrayed as a victim of Manafort’s alleged lies.But special prosecutor Robert Mueller is reportedly investigating whether Calk agreed to make the loans in exchange for the promise of a job within the Trump administration. The bank denies that such a quid pro quo was ever proposed. Calk was never offered a White House post, though The Wall Street Journal has reported that he did seek to be named Army secretary.
Federal Savings denies quid pro quo with Manafort - The CEO of The Federal Savings Bank, Steve Calk, is denying a news report that he was part of a quid pro quo arrangement with former Trump campaign chairman Paul Manafort. Special Counsel Robert Mueller is looking into whether Manafort promised Calk a job in the White House in return for three separate home loans, worth a total of $16 million, NBC News reported Wednesday, citing two anonymous sources said to have direct knowledge of the matter. A spokeswoman for the bank, which is based in Chicago, denied the claims.
Alarm Bells Sounded on Wall Street’s Derivatives -- Pam Martens - On February 14, the week after the Dow Jones Industrial Average experienced two separate days of more than 1,000-point losses, the House Financial Services’ Subcommittee on Capital Markets, Securities and Investment convened a hearing to discuss various legislative proposals to return to the wild west era of derivatives trading on Wall Street. One lonely voice for sanity on the witness panel, which was stacked with industry trade groups, was Andy Green, Managing Director at the Economic Policy Center for American Progress. Green’s written testimony stated that the legislative proposals “slice, dice, or otherwise poke holes – sometimes large holes – in the firewalls placed in the derivatives markets by post 2008 reforms….” Green also reminded the Congressional members present that the “unregulated OTC derivatives market was at the heart of the 2007-2008 financial crisis, which cost 8.7 million Americans their jobs, 10 million families their homes, and eliminated 49 percent of the average middle-class family’s wealth compared with 2001 levels.” Green provided a litany of the derivative horrors that led to panic and financial contagion during the financial crisis. The collapse of the giant insurer AIG from credit default swap derivatives and its role as counterparty to some of Wall Street’s largest banks. Also noted by Green was Lehman Brothers’ “disorderly failure” which “was exacerbated due to the company’s extensive OTC derivatives portfolio.” Green reminded attendees that Lehman “had around 930,000 OTC derivatives contracts at the time of its failure.”Green then delved back a little further in time: there was the blow-up of the hedge fund Long Term Capital Management in 1998. The firm had $4 billion of net assets but had “used OTC derivatives to increase its total leverage exposure to $1 trillion.” That required the New York Fed to strong arm major Wall Street banks, who were counterparties to the derivatives, to bail it out.Then, of course, there was Enron, which in 2001 filed the largest bankruptcy in U.S. history up to that time. Green says Enron’s “unregulated energy derivatives were at the center of Enron’s collapse” and it “used OTC derivatives to hide debt, to hide losses, and to speculate.”
Cryptocurrency regulation is a job for Treasury - Clearly, cryptocurrencies are causing concern on Capitol Hill and, as a result, within U.S. financial regulatory agencies.Last week, the House Science Committee held a hearing titled “Beyond Bitcoin: Emerging Applications for Blockchain Technology.” The week before, at a Senate Banking Committee hearing on cryptocurrencies, the heads of the Commodity Futures Trading Commission and the Securities and Exchange Commission, J. Christopher Giancarlo and Jay Clayton, respectively, testified about their regulatory approach in this area. Most of their testimony focused on fraud in the initial coin offering marketplace. The Senate hearing was not about protecting the public: It was about turf. Both agency heads appeared to be using the attention on ICOs and potential — in some cases, actual — fraud to get additional budget resources they can’t otherwise obtain. They both missed an opportunity to describe how they would use a new and potentially very effective technology — blockchain — to protect the public. Blockchain, which is used to structure cryptocurrencies like bitcoin, is expected to have applicability across a wide number of industries. We recently completed a survey to collect opinions on the most appropriate applications for blockchain technology. It turns out that most blockchain developers and aficionados do not believe cryptocurrency is the “killer app” for blockchain — respondents instead pointed to “establishing and safeguarding digital identity” and “establishing ownership rights” as the two top uses. Yet these findings most clearly link to the mission of a treasury department, not a securities regulator.
Crypto exchanges welcome regulators to attract institutional clients -- When the top Japanese cryptocurrency exchange bitFlyer expanded to the United States last November, its timing could hardly have been better. Led by bitcoin, digital assets were enjoying a historic bull run. Almost immediately, despite bitcoin initially being the only asset available to buy and sell, trading volumes on bitFlyer's U.S. exchange shot up to more than $1 million a day. BitFlyer, which in early 2018 expanded to Europe as well, has caught a wave partly of its own making. Between $20 billion and $30 billion worth of digital assets now routinely change hands every day, and sometimes as much as twice that amount, an exponential increase from this time last year. In February 2017, daily trading volumes across all exchanges were often less than $150 million, according to CoinMarketCap. In part, the surge can be explained by the inflated values of some digital assets. Another reason is the influx of capital not only from new retail investors — including Japan's much-ballyhooed metaphorical Mrs. Watanabe — but from institutional clients bitFlyer actively seeks to attract. Attracting institutional capital means accepting government regulation, however. Gradually, some digital-currency businesses are learning to play by the rules in order to get ahead. As other burgeoning industries have done before them, the exchanges are now allowing for checks and controls to develop that banks and other institutions need to normalize digital assets and currencies. What distinguishes bitFlyer and a few other exchanges, such as Coinbase's GDAX, from the cowboy operations that used to dominate the industry is that rather than trying to duck regulations, they are embracing compliance as a way to establish themselves as front-runners. "We believe regulation is fundamental to the future of virtual currencies," said Andy Bryant, chief operations officer of bitFlyer Europe. He is gambling that more compliant firms will be able to draw more clients and dominate the marketplace. The prize for being the best at making hedge funds, investment banks and other regulated institutions feel comfortable in this new market could be huge.
Big Profits Drove a Stock Boom. Did the Economy Pay a Price? - Stocks are too expensive. This is not a market forecast. I wouldn’t be particularly surprised if the Dow shrugged off its recent turbulence and continued its long upward thrust. What I contend is that if the American economy behaved in the way that most economists say market economies should, stocks would in all likelihood be cheaper.It is a grim proposition. Wall Street’s titans might welcome the fact that equity prices have grossly exceeded what a well-functioning, competitive economy should deliver. But for almost everybody else, it amounts to a disaster. From wage stagnation to the depressed investment rates that are holding back long-term economic growth, many of the fault lines running through the American economy can be traced back to the same root cause powering the rise of America’s overpriced stocks.Consider a few facts. The average financial wealth of American households — the market value of housing, stocks, bonds, business assets and the like, beyond their liabilities — has grown much faster than the nation’s income over the last half-century.This would not be weird were American households saving more and investing their savings in productive ventures. They are not. The personal savings rate has declined sharply. The ratio of the capital stock — the value of factories, machines and such — to the nation’s economic output has actually declined a little since the 1970s. What has enhanced wealth in recent years is the huge rise in stock prices. The Standard & Poor’s 500-stock index increased 8 percent per year from 1970 to 2015, on average. According to an analysis by Germán Gutiérrez and Thomas Philippon of New York University, the ratio of the market value of American corporations to the replacement value of their capital stock has roughly tripled since the 1970s.
A decade after meltdown, Senate moves to roll back bank rules -- U.S. senators are planning to mark the 10th anniversary of Wall Street’s meltdown this year with a gift to the nation’s banks: a bill that would unravel regulations put in place after the crisis. The proposed rollback of some key post-crisis rules – which could advance in the coming weeks – is one of the few examples of bipartisanship in Washington since President Donald Trump's election. .Yet the bill is driving a wedge between Democrats and threatening to magnify the party's divisions as it fights to win back Congress this year. On one side are moderate Democrats such as Sens. Heidi Heitkamp and Jon Tester from Republican-leaning states who support the legislation because they say it will provide relief to small and regional banks and boost rural economies. On the other are progressives like Sens. Elizabeth Warren, Sherrod Brown and their activist allies, who argue that the bill will put consumers at risk. They're working to undercut the party's centrists before the vote, with several of the moderates — as well as Brown — facing tough reelection campaigns this year. “I’m amazed that, on the 10th anniversary of the 2008 financial crisis, some Democrats are supporting the Trump administration and Senate Republicans on a bill to roll back the financial rules we put in place,” Warren, a Massachusetts Democrat, said in an interview.
Treasury Proposes Dubious, Untested Chapter 14 Bankruptcies for Too Big to Fail Banks ---The Trump Treasury has proposed changing Dodd Frank rules, supposedly to make resolving Too Big to Fail banks easier.The Treasury yesterday proposed replacing the resolution scheme under Dodd Frank, called the Orderly Liquidation Authority, confusingly also called Title II liquidations, with a new type of bankruptcy, Chapter 14. While there was a lot not to like about the OLA, Chapter 14 is no better and in key respects, markedly worse.The costly fallacy underlying Chapter 14 is the idea that big banks can be wound up without a taxpayer backstop. And despite Treasury’s chest thumping that taxpayer monies won’t be at risk, in fact, government funding is still available if needed.And like it or not, that makes sense. The reality is that banks provide critical infrastructure for commerce, known as a payment system. Recall that in the crisis, the authorities had to guarantee money market mutual funds up to $250,000 because the Lehman implosion brought down the Reserve Fund, precipitating a run on mutual funds. Mutual funds are big participants in the repo market, which is critical for financing the trading of banks and large investors.We’ve embedded the Treasury proposal at the end of this post. Note that some measures could be implemented by regulators directly, but the Chapter 14 scheme requires Congressional approval.Chapter 14 is not a new idea. It was originally proposed by the Hoover Institute and made it as far as a Senate bill which was not passed in 2013.At a high level, under Chapter 14, the assets of a failed bank would be transferred to a new entity. Shareholders and unsecured creditors would be left behind. Solvent subsidiaries, “such as broker-dealers, insured depository institutions, and overseas subsidiaries” would continue to operate as normal. The proposal discusses giving banks less support during the resolution process to the new entity by relying on private lenders as much as possible for the bridge bank (bankruptcy “debtor in possession” lenders) and using guarantees in place of loans whenever possible.
Treasury proposes reforms to FDIC’s crisis-era resolution powers — The Trump administration on Wednesday refrained from proposing the elimination of authority to clean up failed financial behemoths, but the Treasury Department still wants substantial reforms to the resolution powers. The Dodd-Frank Act authorized the government to place insolvent financial conglomerates in special receiverships — independent of the bankruptcy process — to avert systemic shock waves. But conservatives have consistently criticized the provision, arguing it could enable further bailouts, and have called for its repeal. In Treasury's report, one of a series outlining recommendations for revamping the post-crisis regulatory framework, the administration recommended retaining Dodd-Frank's Orderly Liquidation Authority "as an emergency tool for use under only extraordinary circumstances." The Treasury Department report acknowledged certain situations where an FDIC receivership would still be the best option. Bloomberg News Yet the report outlined several proposals for limiting powers of the Federal Deposit Insurance Corp. in managing resolutions. These include stripping FDIC authority to treat similar creditors of a failed company differently, repealing the tax-exempt status of bridge companies, and using more private-sector lending to provide resolutions with liquidity. In addition, the report proposed the creation of a new chapter in the bankruptcy code for financial companies. "The Chapter 14 framework would preserve the key advantage of the existing bankruptcy process—clear, predictable, impartial adjudication of competing claims—while adding procedural features tailored to the unique challenges posed by large, interconnected financial companies," Treasury said in a press release. "These enhancements to the Bankruptcy Code would make the likelihood of having to use OLA even more remote."
Treasury endorses FDIC failure cleanup powers — with caveats — The Treasury Department struck a middle ground Wednesday in long-awaited recommendations for Dodd-Frank Act wind-down powers, resisting calls to repeal those powers but still addressing concerns that the provisions are too generous to large firms. Conservatives have long argued that the "orderly liquidation authority" should be eliminated because the process could enable future bailouts, but backers of the Dodd-Frank authority — under which the Federal Deposit Insurance Corp. can be appointed receiver for a failing behemoth — say OLA is a necessary backstop in cases when the bankruptcy process could shock the financial system. The Treasury report, one in a series directed by President Trump to recommend ways to streamline financial regulations, is an appeal to both sides. It argued that OLA could indeed be necessary as a last resort, but also seeks to restrict the FDIC's authority, including how the agency settles creditor claims and funds a resolution. Meanwhile, the plan proposes a new bankruptcy code chapter — Chapter 14 — just for financial firms, to make OLA less necessary."It’s a thoughtful proposal. Bankruptcy has always been the first choice,” said Sheila Bair, who ran the FDIC when Dodd-Frank was drafted and the OLA was first implemented. “OLA is supposed to be a backstop. So in that regard, it is consistent with and preserves current law.”Here are key takeaways from Treasury's recommendations: The report acknowledges concerns about the wind-down regime that it attempted to address with proposed reforms, but the biggest question was whether the administration would support calls for OLA to be repealed.The Treasury report came out on the side of retaining the resolution framework, agreeing with backers of the provision that there are cases where an FDIC resolution is the only appropriate choice to prevent a failure from having a contagion effect. Despite its support for preserving the powers, Treasury still sought to address concerns about OLA by proposing new curbs on how the FDIC manages resolutions. Another big change in the report is a proposal to create a new “Chapter 14” bankruptcy process that would be similar to how bankruptcy works now but have added requirements specific to creditors of a complex financial firm.
There’s Still No Good Way to Let a Big Bank Fail - Bloomberg Editorial. Once upon a time, President Donald Trump vowed to “do a very major haircut” on the Dodd-Frank Act. After a lengthy review, his officials have apparently concluded that the 2010 law’s approach to the failures of large banks was about right. In some ways, this reversal is a pity. The 2008 crisis showed how dangerous it can be to let a big, interconnected financial institution go bust. When the U.S. tried that with Lehman Brothers, the repercussions were disastrous. Within months, the government was supporting vast swathes of the financial industry, including money-market mutual funds, AIG and the country’s largest banks. In response, Dodd-Frank created a tool aimed at making big failures more manageable. Known as the orderly liquidation authority, it allows regulators to keep myriad operating subsidiaries running –- with the help of government loans -- while shoring them up at the expense of the parent company’s shareholders and creditors. Ideally, a newly recapitalized enterprise emerges.The mechanism has flaws. It’s untested, for one thing, and it’s unlikely to work in a full-blown crisis -- when multiple countries are involved, markets are volatile and nobody knows exactly how insolvent financial institutions really are. It might be able to handle the failure of a single bank in otherwise favorable circumstances, but anything bigger would probably require a blanket government guarantee to prevent panic.Yet even if this part of Dodd-Frank could be improved, the Treasury Department's review has come up mostly empty. In a 53-page report, the biggest proposal is to adjust the bankruptcy code so that it’s better fitted to financial institutions -- by adding features similar to those of the orderly liquidation authority. The Treasury also suggests changes to the authority itself, but these are mainly cosmetic, intended to make the mechanism look less like a bailout. The effort illustrates, once again, the crucial point: There’s no good way to let a systemically important financial institution fail. That’s why it’s vital to make such failures as unlikely as possible, by requiring institutions to have enough equity capital to absorb even severe losses. In this, despite improvements since the crash, the U.S. still falls short. The Federal Reserve Bank of Minneapolis estimates that capital requirements would need to more than double to lower the risk of failure adequately.
Barclays pays women investment bankers half what it pays men - Barclays PLC pays its female investment bankers just under half as much as male colleagues on average, highlighting the chronic gender imbalances in the industry and the concentration of men in highly paid roles. The gender pay gap widens to 79% for discretionary bonuses paid to employees at its international unit, which houses the corporate and investment bank, said the London-based company, the first major bank with British operations to disclose such data. At the U.K. ring-fenced bank, women earn 26% less than men and receive bonuses that are 60% lower, according to the lender’s annual report. “We are dedicated to enabling women to fulfill their career aspirations,” Barclays said in the filing on Thursday. “To achieve this goal and thereby narrow our gender pay gap, we will continue to focus on ensuring there is no bias in the hiring, promotion, development and retention of women at Barclays." So far, fewer than 1,200 companies have provided the newly required disclosures, out of more than 9,000 estimated to be eligible, according to a government website. Banks including HSBC Holdings PLC, Goldman Sachs Group Inc., JPMorgan Chase & Co. are yet to disclose their numbers. Firms with 250 employees or more in Britain have until April 4 to report the difference between what men and women earn. The disparity in Barclays’s gender pay is exacerbated by a disproportionate number of men in senior positions at the bank. There is only one woman on Barclays’ nine-member group executive committee, Laura Padovani, who is the firm’s interim chief compliance officer.
Is that Cartel of Wall Street Lawyers Fixing Bank CEO Pay? -- Pam Martens - Nothing buttresses Senator Bernie Sanders’ position that fraud on Wall Street is not a bug but a feature better than the news last week that the Citigroup Board was bumping up CEO Michael Corbat’s pay by 48 percent to $23 million for 2017. Corbat has sat at the helm of the bank since October 2012 as the bank has paid more than $12 billion in fines and restitution for serial abuses of the public and investors, including its first criminal felony count in more than a century of existence. The felony count came on May 20, 2015 from the U.S. Department of Justice over the bank’s involvement in a bank cartel that was rigging foreign currency markets. Numerous other charges against the bank have focused on money-laundering. Citigroup’s long history of involvement in money-laundering also gives the appearance of being a feature not a bug. (See a timeline of the charges against Citigroup under Corbat’s tenure at the end of this article.) Aside from the feeling that overseeing a business model of fraud on Wall Street is a road to riches for Wall Street’s mega bank CEOs, there is the disquieting question as to whether this strangely uniform obscene pay of the top dogs on Wall Street is being orchestrated by another invisible cartel. On October 14, 2016 Bloomberg News’ reporters Greg Farrell and Keri Geiger landed the bombshell report that the top lawyers of the biggest Wall Street banks had been meeting secretly for two decades with their counterparts at international banks. At the 2016 secret meeting, held in May at a posh hotel in Versailles, the following were among the big bank lawyers: Gregory Palm, part of the Management Committee at Goldman Sachs; Stephen Cutler of JPMorgan (a former Director of Enforcement at the SEC); Gary Lynch of Bank of America (also a former Director of Enforcement at the SEC); Morgan Stanley’s Eric Grossman; Citigroup’s Rohan Weerasinghe; Markus Diethelm of UBS Group AG; Richard Walker of Deutsche Bank (again, a former Director of Enforcement at the SEC); Robert Hoyt of Barclays; Romeo Cerutti of Credit Suisse Group AG; David Fein of Standard Chartered; Stuart Levey of HSBC Holdings; and Georges Dirani of BNP Paribas SA.
Can this data security bill succeed where others failed -On top of everything else Congress is trying to do during a packed legislative calendar, two lawmakers want to add another financial services policy initiative to the list: data security. Modernizing data security laws has confounded Washington for years, and the gap in clear data security requirements is made more noticeable by the steady drip of breaches, including the massive Equifax hack announced in September.A bipartisan draft bill released Friday by Reps. Blaine Luetkemeyer, R-Mo., and Carolyn Maloney, D-N.Y., which would implement nationwide standards on breach notifications and how data is handled and stored, looks to pick up where past efforts have failed. But jurisdictional turf battles between congressional committees have befuddled past efforts and it’s not clear if the renewed effort will be any more successful.“Historically they have not been able to bridge that gap between the committees of jurisdiction and that is why” Congress has not been able to pass a bill, The bill builds on a 2015 piece of legislation put forward by former Reps. Randy Neugebauer, R-Texas, and John Carney, D-Del., requiring businesses to have a breach notification program, designate a person to be in charge of data security and have boards review a company's data security program annually.The new bill looks to implement a national data security standard that the Federal Trade Commission would enforce. However, financial institutions and healthcare companies that already have data security requirements would be considered in compliance. The bill would establish a new breach notification regime and federal security standards on the handling of personal information.
FDIC suit says big banks' Libor manipulation caused Doral failure - The Federal Deposit Insurance Corp. has filed a lawsuit against more than a dozen of the world’s biggest lenders, accusing them of contributing to the collapse of Puerto Rico’s Doral Bank by manipulating the benchmark Libor interest rate. The collapse of the San Juan-based Doral was the biggest U.S. bank failure of 2015. The FDIC, its receiver, is seeking unspecified economic and punitive damages from 16 lenders, including Bank of America, Barclays PLC and Credit Suisse Group. The antitrust lawsuit, filed Tuesday in Manhattan federal court, is the latest wrinkle stemming from the global Libor scandal, in which banks manipulated the London interbank offered rate tied to trillions of dollars of financial products to benefit their bottom lines at the expense of customers. Banks have already paid billions of dollars in fines, but probes and lawsuits continue. The alleged conduct "caused substantial losses to Doral with regard to its loan portfolio and derivative holdings," the FDIC said in the complaint. "Doral’s losses flowed directly from, among other things, the harms to competition caused by the fraud and collusion alleged in this complaint." The suit also names the British Bankers’ Association, which monitored Libor before the scandal erupted almost a decade ago. Doral, Puerto Rico’s second-biggest mortgage lender until it was seized, was brought down by historical accounting errors and a recession in the U.S. territory, according to court filings at the time. The failed bank, with deposits of $4.1 billion and assets of $5.9 billion, had 26 branches in Puerto Rico, Florida and New York. Popular Inc., also based in San Juan, assumed the bulk of Doral’s assets and deposits.
Did banks’ KYC controls fail in Russian efforts to swing election — The alleged use of fraudulent financial accounts by Russian internet trolls, who authorities say were trying to tip the 2016 election, reveals yet another fault line in banks' efforts to truly "know" their customers. The indictments announced Friday in the Russia special counsel's investigation illustrate how banks can be exploited by bad actors, but once again the key questions are: What did banks know, and how could they have stopped it? “If these individuals were doing activities that were disproportionate to an everyday checking account, then banks should have been more on top of that. But ... it is hard to tell from the press accounts,” said John Byrne, vice chairman of AMLRightSource and special adviser to ACAMS Advisory Board. Russian operatives through an entity called the Internet Research Agency and other affiliated companies used stolen identities to buy social media ads via PayPal, according to media reports and the indictments. The case casts yet another light on "know-your-customer" regulations, which generally require banks to take steps to validate the true person behind an account in order to detect money-laundering or an account being used to fund illicit criminal activity. The indictments present "a fundamental Know-Your-Customer-type issue,” . “Banks are expected and required at the outset of any customer relationship to know the nature and purpose of the account they are opening and they are supposed to collect information so they know who they are doing business with and how the account is being used and I don’t think this is any different.” However, Stipano also noted that there are still a lot of unknowns and added that some of the activity might have been outside of the normal banking system “so banks may not have had a role in it.” Still, the case has furthered attention on how financial institutions monitor account usage for potential wrongdoing.
How Banks Could Control Gun Sales if Washington Won’t - In the aftermath of the school shooting in Parkland, Fla., that killed 17 students and staff members — and at a time when Washington shows little interest in limiting the sales of assault weapons — there’s a real opportunity for the business community to fill the void and prove that all that talk about moral responsibility isn’t hollow.Here’s an idea.What if the finance industry — credit card companies like Visa, Mastercard and American Express; credit card processors like First Data; and banks like JPMorgan Chase and Wells Fargo — were to effectively set new rules for the sales of guns in America?Collectively, they have more leverage over the gun industry than any lawmaker. And it wouldn’t be hard for them to take a stand. PayPal, Square, Stripe and Apple Pay announced years ago that they would not allow their services to be used for the sale of firearms. The big financial firms don’t even have to go that far. For example, Visa, which published a 71-page paper in 2016 espousing its “corporate responsibility,” could easily change its terms of service to say that it won’t do business with retailers that sell assault weapons, high-capacity magazines and bump stocks, which make semiautomatic rifles fire faster. If Mastercard were to do the same, assault weapons would be eliminated from virtually every firearms store in America because otherwise the sellers would be cut off from the credit card system. There is precedent for credit card issuers to ban the purchase of completely legal products. Just this month, JPMorgan Chase, Citigroup and Bank of America banned the use of their cards to buy Bitcoin and other cryptocurrencies. To be clear: Those three banks won’t let you use your credit card to buy Bitcoin, but they will happily let you use it to buy an AR-15-style semiautomatic rifle — the same kind of gun used in mass shootings in Parkland; Newtown, Conn.; San Bernardino, Calif.; Las Vegas; and Sutherland Springs, Tex.
A solution to California’s pot-banking problem: Its own central bank -- California became the first state to legalize medical marijuana in 1996. And as of last month, recreational use of pot is also legal. Now it’s time for the state to take another bold move: to fix pot banking.Since pot remains illegal on the federal level, most financial institutions will not service cannabis businesses. But California, as the sixth-largest economy in the world, can get more creative. Previous efforts to bank cannabis companies have failed because of their inability to get master accounts with the Federal Reserve — and yet it’s a strategy California officials and others keep weighing. For example, California’s State Treasurer John Chiang has convened a cannabis group whose proposal hinges on getting a master account from the Federal Reserve. Already, commentators have concluded that their efforts are in vain. But a California central bank, operating within the borders of California, would solve this problem. Cannabis firms cannot conduct business across state lines, and thus the majority of any state’s cannabis companies have no need to conduct interstate banking. To succeed, California would need to embrace these three principles in developing its closed banking system: eliminate the problem of too much cash floating around the cannabis industry, dovetail with state cannabis regulatory agencies and create a lasting institution that survives any federal legalization of cannabis.
In Massachusetts, a call for a public bank to serve pot firms -- With Massachusetts only months away from allowing the sale of pot for recreational use, the state’s top cannabis regulator is urging policymakers to consider creating a public bank to serve growers and dispensaries that might otherwise have nowhere else to bank.As in many other states where marijuana is legal, banks and credit unions in Massachusetts have shown little inclination to provide services to the recreational marijuana industry out of fear that they might run afoul of federal laws. Steve Hoffman, the chairman of the state’s Cannabis Control Commission, said in an interview with The Boston Globe that if traditional banks and credit unions are unwilling to bank licensed pot firms, then the state should consider stepping in. Without a viable banking option, licensed firms would have to deal primarily in cash and would have nowhere to deposit the mounds of money they will likely collect each day. “There’s a high degree of urgency, so it’s something we need to start talking about,” Hoffman said of the public bank proposal.
Wells Fargo sparks more social media anger after second glitch in two weeks -- For the second time in two weeks, Wells Fargo finds itself at the center of social media fury after customers reported being locked out of their accounts. Some Wells Fargo customers on social media Thursday afternoon expressed frustration with not being able to log in to accounts digitally. The San Francisco bank responded in a tweet acknowledging the problem. We apologize to our customers who may be experiencing intermittent issues navigating within Online Banking and Mobile. Thanks for your patience while we research this issue. If you are impacted, please check back here for updates.— Wells Fargo (@Ask_WellsFargo) February 22, 2018 It was the bank's only tweet since last week, when it apologized for a separate issue in which customers could not see their online deposits in their account. Even after the bank claimed to have fixed that problem, customers said they were still having trouble.
CFPB seeks input on how best to engage the public -- The Consumer Financial Protection Bureau is seeking comment on how to engage the public in field hearings and town hall meetings as part of a broad review of all of the bureau's processes under acting Director Mick Mulvaney. The CFPB issued a request for information Wednesday on "external engagements," referring to the variety of meetings and other functions the bureau hosts to gather feedback on agency policies. They include everything from invitation-only roundtable discussions to formal advisory groups. The CFPB has a Consumer Advisory Board that is mandated by the Dodd-Frank Act, but the agency is seeking input on ways it can "maximize public participation and constructive input. In its request, the CFPB said it is looking at "vehicles for soliciting public and private perspectives from outside of Washington, D.C., on the bureau’s work."
CFPB has opportunity to reinvent approach to innovation - The new leadership of the Consumer Financial Protection Bureau has been initiating reforms at a breathtaking pace. One place where such reform would be most welcome would be to the agency’s broken “no-action letter” policy. The policy was promulgated in February 2016 as part of the bureau's "Project Catalyst," to provide fintech innovators with a way to ensure, in advance, that their new products and services would not become fodder for the bureau’s enforcement efforts. However, the policy has so far failed in that mission — only one no-action letter has been issued in the two years since the policy’s adoption. The consumer agency, currently being run by acting Director Mick Mulvaney, has an opportunity under President Trump to reevaluate its strategy on innovation. Bloomberg News This failure tells a larger story about the bureau’s approach to the financial services industry over the past six years. The no-action letter policy has underperformed because the CFPB’s interest in fostering innovation could not overcome its suspicion of the financial services industry. That suspicion led to a policy that demanded too much and promised too little. Under new leadership, the bureau now has an opportunity to reinvigorate the no-action-letter policy by simply recalibrating its burdens and benefits.
Gloves off in CFPB tug of war between Mulvaney, Warren -- The war of words between acting Consumer Financial Protection Bureau Director Mick Mulvaney and Sen. Elizabeth Warren, D-Mass., the agency's architect, is escalating. In a terse letter to Warren last week, released by the agency on Friday, Mulvaney rejected accusations that the bureau's retreat on payday lending curbs under his watch has to do with campaign donations received from the industry. "I reject your insinuation — repeated three times in as many pages — that my actions as acting Director are based on considerations other than a careful examination of the law and facts particular to any matter," Mulvaney wrote, referring to an earlier letter from Warren to the agency's interim chief. Warren wrote her letter alongalong with Rep. Maxine Waters of California, ranking member on the House Financial Services Committee, and four other Democrats questioning Mulvaney's decision in January to delay the agency's payday lending rule. “The agency barely explained its payday rule reversal,” the Democrats wrote in their letter, which was also addressed to Leandra English, who was former CPFB Director Richard Cordray’s chief of staff and is now deputy director. In his response, Mulvaney attempted to throw the criticism over campaign funds he received from small-dollar lenders back at Warren, suggesting that her support for the CFPB's arbitration rule, which Congress repealed, was influenced by a similar motivation. "Prior to receiving your letter, I never would have thought to consider, for instance, whether your vote against repealing the Bureau's arbitration rule was influenced by campaign donations you may have received from trial lawyers or other parties who stood to gain financially from the rule," Mulvaney wrote in the one-page response.
CFPB wants firms to sound off, but openness carries hidden risks - Companies that have been investigated for wrongdoing by the Consumer Financial Protection Bureau are giving acting Director Mick Mulvaney an earful about how he should roll back enforcement practices. The big question is: Are they seizing on a golden opportunity to reshape the regulatory landscape, or are they shooting themselves in the foot?Mulvaney issued a "call for evidence" last month in which he asked companies regulated by the bureau to comment on a dozen topics, starting with how its enforcement office conducts investigations. Mortgage lenders, debt collectors and credit repair companies have responded with gusto. But sounding off could draw unwanted new attention to a firm that already has been the target of a probe. And if a company sticks its neck out, it could prove to be a wasted effort, since Mulvaney will be in office until just September and a permanent CFPB director confirmed by Congress could go in a different direction."Given years of controversy surrounding CFPB enforcement and the keen interest of media, consumer and community advocates, and certain high-profile members of Congress, it may not be in the best interests of particular financial institutions to provide specific written comments ... at all," said Don Lampe, a partner at Morrison & Foerster, in a recent note to clients.Mulvaney has asked companies regulated by the CFPB to comment on a dozen topics. For each subject, the agency issues a "request for information" on a staggered schedule, triggering a comment period for each one. Companies accused of wrongdoing have the enviable position of helping the new agency leadership change the investigatory process. In blistering comment letters, they described onerous demands for documents, investigations that went on for years without resolution, and a refusal by CFPB attorneys to explain precisely why a company was being investigated. "Being treated like a second class citizen in what appeared to be a witch hunt was appalling,"
Hensarling blasts FHFA for allowing GSE affordable housing payments— House Financial Services Committee Chairman Jeb Hensarling is calling out Fannie Mae and Freddie Mac's regulator over the mortgage giants' payments to two affordable housing trust funds. Hensarling sent a letter Friday to Federal Housing Finance Agency Director Mel Watt criticizing his decision to allow Fannie and Freddie's continued support of the Housing Trust Fund and Capital Magnet Fund while the government-sponsored enterprises are suffering financially. Both GSEs this week reported fourth-quarter losses in the billions of dollars, resulting in a request for additional funding from the Treasury. “Your refusal this month to automatically stop ... [the GSEs'] payments to the Funds as FHFA stated would occur following a GSE draw of new taxpayer funds is unjustifiable,” said Hensarling in the letter. The Texas Republican demanded a written explanation from Watt by Feb. 23.
Could a spike in IRS budget solve income-verification problems?— Financial services groups are urging lawmakers to support funding for the Internal Revenue Service for technology upgrades that could fix flaws in the agency's system for verifying the income of mortgage applicants. Acting IRS Commissioner David Kautter has asked Congress for $397 million to implement the new tax reform law, including $291 million to update the agency's aging information technology systems. Those systems have been blamed for a slowdown in the Income Verification Express Service, which lenders fear could lead to long delays in processing mortgage applications during peak periods.The Treasury Department wants an increase in the IRS budget to help implement the new tax law in a more expeditious manner than the IRS's current systems would allow. But industry advocates hope the funding push will also benefit the IVES system. "They desperately need it, not just for IVES but across the board. All of their systems are very old. They need it for efficiency and security," said Anne Canfield, executive director of the Consumer Mortgage Coalition. She added that she expects some of the $291 million to be used for IVES.Key lawmakers appear to agree with the IRS's general funding needs."The IRS is still using computer software that is older than most of my committee staff. And, you can take a look at them — they’re not all millennials," Senate Finance Committee Chairman Orrin Hatch said at a Feb. 14 hearing. "The administration, in its budget, has proposed additional cuts to funding for the IRS. I think that is a mistake," Hatch said at the hearing. In a joint Feb. 14 letter to Hatch and other lawmakers, several trade groups from the banking, mortgage and construction industries said providing funds to fix the IVES system is better than "the patchwork solution that is now in place" that "could be overwhelmed, delaying mortgage closings for American homebuyers." "Rather than continuing with patchwork solutions to plug holes in an outdated system, there is a critical need to provide sufficient funds to upgrade this system, which is critical to the IRS and a major segment of the U.S. economy," according to the letter,
Supreme Court rejects hedge funds on Fannie, Freddie suits - The Supreme Court dealt hedge funds and other big investors a blow Tuesday by refusing to revive core parts of lawsuits that challenged the federal government’s capture of billions of dollars in profits generated by Fannie Mae and Freddie Mac.The justices provided no comment on why they rejected appeals filed by Perry Capital LLC, Fairholme Funds and other Fannie and Freddie shareholders. The rebuff leaves intact a federal appeals court ruling from a year ago that sent Fannie and Freddie shares plunging.The disputed move, known as the “net-worth sweep,” forced the mortgage guarantors to send almost all their profits to the U.S. Treasury. The companies have been under government control since receiving a taxpayer rescue during the 2008 financial crisis. Supreme Court justices provided no comment on why they rejected appeals filed by Perry Capital LLC, Fairholme Funds and other Fannie and Freddie shareholders. Some classes of Fannie and Freddie’s preferred shares fell as much as 5% Tuesday, while the companies’ common shares rose about 4% as of 9:50 a.m. in New York.The appeals court ruling from last year said a 2008 law barred federal judges from hearing most shareholder claims over the companies’ bailout. The law created the Federal Housing Finance Agency, which became the conservator of the two companies and was largely insulated from legal claims. The ruling said the funds could pursue some contract-based claims before a federal judge in Washington. In addition to those contract-based claims, the hedge funds and other investors have several cases ongoing around the U.S. though most of them are still in early stages. The funds have been allowed limited discovery in the U.S. Court of Federal Claims and they say the discovery shows the government lied when it decided to sweep Fannie’s and Freddie’s profits. However, no court has yet said that the government’s motives even matter, and the only courts to rule so far have dismissed the cases.
Don’t reinvent the wheel on housing finance: Restore Fannie and Freddie - Tackling the last piece of unfinished business from the 2008 financial crisis is a top priority for policymakers — the big question is how to do it. Recently, an early draft of legislation aimed at reforming the twin housing giants Fannie Mae and Freddie Mac was made public. The proposed legislation, sponsored by Sens. Bob Corker, R-Tenn., and Mark Warner, D-Va., comes just weeks after Federal Housing Finance Agency Director Mel Watt laid out his own ideas about the future of the government-sponsored enterprises. At the same time, Treasury Secretary Steven Mnuchin has articulated three core principles for reform: protect taxpayers, end government ownership and preserve the 30-year mortgage. Yet unlike Secretary Mnuchin’s and Director Watt’s stated policy preferences, the Corker-Warner proposal would continue to keep Fannie and Freddie in conservatorship until certain metrics of competition could be met. As policymakers evaluate options, an enlightened blueprint for reform put forward by investment firm Moelis & Co. warrants close attention. The Moelis proposal leverages Fannie’s and Freddie’s profitably — they have already returned $276 billion to the Treasury since they were placed into conservatorship in 2008 — in to order rebuild their capital and release the enterprises from government ownership. Although Fannie Mae recently asked the government for $3.7 billion to cover its liquidity shortfall this quarter, the firm is on track for continued profitability. The fact that Fannie and Freddie have enabled private-sector lenders to offer products such as the 30-year mortgage and expand home ownership cannot be dismissed out of hand politically. Nor can the fact that they back some $5 trillion in mortgage debt. Watt seemed to acknowledge these realities when he suggested last month that Fannie and Freddie should be reincorporated as private, shareholder-owned entities with an explicit government guarantee only for catastrophic losses in the secondary mortgage market. Conversely, the draft Corker-Warner proposal adopts elements of a proposal favored by the Mortgage Bankers Association, notably the creation of private-sector mortgage “guarantors” to compete with Fannie and Freddie. The Moelis blueprint, on the other hand, would fully compensate taxpayers for having propped up Fannie and Freddie and would end government ownership by raising new capital for the enterprises and protecting taxpayers from future bailouts.
Freddie Mac opens bidding on $420M nonperforming loan sales - Freddie Mac is now accepting bids on $420 million in nonperforming loans, its first NPL sale of 2018. The NPLs are currently serviced by Shellpoint Mortgage Servicing and are marketed through four pools; three standard pool offerings, which are likely to be large and geographically diverse, and one extended timeline pool offering to target smaller investors, including nonprofits or women-owned businesses. For the SPO pools, bids are due on March 13, and for the EXPO pool, bids are due March 27, with sales expected to settle in May. NPL sales are an important tool for Freddie to manage credit losses on its delinquent loan portfolio. The company's single-family delinquency rate increased from 95 basis points in November to 108 in December, with the multifamily delinquency rate remaining flat at 2 basis points. Freddie Mac and Fannie Mae previously faced scrutiny from housing advocates on their practice of selling nonperforming loans to the highest bidders, typically well-capitalized investment firms and hedge funds. In 2016, community and housing groups called on the Federal Housing Finance Agency, which oversees the government-sponsored enterprises, to instead offer nonprofits and community development financial institutions a chance at the loans.
Wave of home foreclosures expected to hit Puerto Rico --The following is the third in a running series of reports on conditions in Puerto Rico from Antonio. Read parts one and two. More than five months since the passing of Hurricane María and still many continue to live without power and running water, but also without a roof and a safe home. Just stepping outside my balcony, I can count 16 houses in which still the roof is just the blue tarp provided by FEMA or by the inhabitants of the house themselves. In extreme cases, which are numerous, many are living with relatives or are refugees in hotels back in mainland US.A house that had its roof blown away means that everything was inevitably damage by rain and wind. In other cases, the roof stayed in place but windows and doors imploded due to strong winds, flooding the house. In some regions houses were completely inundated, some up to the second floor or beyond, due to flooding from rivers and coastal tide. These people saved what they could and the rest had to be thrown away, including furniture, clothes, appliances and other household items.After the storm, many banks were supposedly granting a three-month moratorium on housing mortgage to homeowners who were mostly out of work or have enormous expenses in gasoline and repairs. This was advertised all around the island as an act of “generosity” from 10 banks. However, most moratoriums expired in December and January, meaning that all payments due are going to be collected by the banks, no matter the current economic state of the homeowners. Due to these measures, the number of foreclosures is expected to see an explosive growth as workers face the reality that they cannot pay their mortgages. Repair costs for home damage can quickly amount to sums of money that most workers cannot afford. For people who lost their home entirely, and many their jobs, the cost of a new place to live is well beyond their means. Aid provided by FEMA has been criminally scarce since the beginning of the crisis.
Brockton, Mass., residents rally against banks, foreclosure tactics -- Christine Hrycenko stood outside her home on Trenton Street on Sunday afternoon, surrounded by friends and supporters carrying signs and chanting rallying cries. This was because, she said, the brown-shingled bungalow has been her home for the past 13 years. And no bank, no investor and no methods of financial intimidation were going to take that away from her easily. Hrycenko was joined by about two dozen supporters and members of the nonprofit City Life foundation, rallying against banks and their foreclosure tactics and showing support for those who have faced foreclosure and eviction. Many shared their stories Sunday, detailing a puzzling system in which banks often begin foreclosure processes even when homeowners are willing to pay. That was the case with Hrycenko, who said her problems began when she started negotiating for a loan modification with her bank five years ago. She was in the process of submitting a new application for the modification, she said, when she learned her house had been auctioned off. It was truly befuddling for Hrycenko, who said she was always willing to pay what the banks asked for. "For a lot of people, it isn't because they don't want to pay," she said. "It's because the banks don't want to work with you. It's their way or your highway." Many banks seem more interested in selling and flipping homes, she said.
Black Knight: National Mortgage Delinquency Rate decreased in January --From Black Knight: Black Knight’s First Look: Mortgage Delinquencies Decline Sharply in January; Hurricanes’ Lingering Impact on Performance Continues• Calendar-driven effects and fewer hurricane-related delinquencies resulted in a 210,000-loan decline in the number of past-due mortgages
• Despite an 8.6 percent monthly decline, delinquencies remain 1.3 percent above last year’s levels
• 146,000 loans remain delinquent as a result of Hurricanes Harvey and Irma, 132,000 of which are seriously delinquent (90 or more days past due)
• An early look at January data on the mortgage market in Puerto Rico shows an additional 57,000 loans still delinquent as a result of Hurricane Maria, with 49,000 seriously delinquent
• The population of loans in active foreclosure rose 6,000 month-over-month, marking only the second monthly rise in more than five years According to Black Knight's First Look report for January, the percent of loans delinquent decreased 8.6% in January compared to December, and increased 1.3% year-over-year.
The percent of loans in the foreclosure process increased 1.8% in January and were down 30% over the last year. Black Knight reported the U.S. mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) was 4.31% in January, down from 4.71% in December. The percent of loans in the foreclosure process increased slightly in January to 0.66%. The number of delinquent properties, but not in foreclosure, is up 40,000 properties year-over-year, and the number of properties in the foreclosure process is down 144,000 properties year-over-year.
Mortgage delinquencies decline as recession-era defaults resolve - Mortgage borrowers 60 days or more late with their payments declined both quarter-to-quarter and year-over-year, as recession-era defaults work their way out of the system.There were 1.86% of mortgages past due 60 days or more in the fourth quarter, compared with 1.91% in the third quarter and 2.28% in the fourth quarter of 2016, according to TransUnion."Mortgage delinquency rates continue to decline, reaching their lowest levels since the recession," Joe Mellman, senior vice president and mortgage business leader at TransUnion, said in a press release. "This largely reflects recession-era defaults having worked their way out of the system and recent originations being underwritten to a very high standard." By age group, the highest default rate belonged to Gen Xers, those born between 1965 and 1979, at 2.33%. Gen Z members, people born after 1995, had the lowest rate at 1.23%, which might be expected given that this group is the newest to enter the market. Millennials had a 1.55% delinquency rate, while baby boomers were at 1.6% and the Silent Generation, those born before 1945, had a 1.77% default rate.Average debt per borrower increased to $201,736 from $194,415 one year prior. However, the average balance per new loan declined in the third quarter (there is a one-quarter reporting lag on new origination data, TransUnion said) to $228,563 from $235,820 in the same quarter one year prior.
Kept out: How banks block people of color from homeownership (AP) — Fifty years after the federal Fair Housing Act banned racial discrimination in lending, African Americans and Latinos continue to be routinely denied conventional mortgage loans at rates far higher than their white counterparts. This modern-day redlining persisted in 61 metro areas even when controlling for applicants' income, loan amount and neighborhood, according to millions of Home Mortgage Disclosure Act records analyzed by Reveal from The Center for Investigative Reporting. The yearlong analysis, based on 31 million records, relied on techniques used by leading academics, the Federal Reserve and Department of Justice to identify lending disparities. It found a pattern of troubling denials for people of color across the country, including in major metropolitan areas such as Atlanta, Detroit, Philadelphia, St. Louis and San Antonio. African Americans faced the most resistance in Southern cities - Mobile, Alabama; Greenville, North Carolina; and Gainesville, Florida - and Latinos in Iowa City, Iowa. No matter their location, loan applicants told similar stories, describing an uphill battle with loan officers who they said seemed to be fishing for a reason to say no. "I had a fair amount of savings and still had so much trouble just left and right," said Rachelle Faroul, a 33-year-old black woman who was rejected twice by lenders when she tried to buy a brick row house close to Malcolm X Park in Philadelphia, where African Americans were 2.7 times as likely as whites to be denied a conventional mortgage.
Lending discrimination, redlining still plague St. Louis, new data show -- Nearly 50 years after the federal Fair Housing Act was signed into law, banning racial discrimination in lending, black prospective homebuyers in the St. Louis area continue to be denied conventional mortgage loans at a much higher rate than whites — even when controlling for income, loan amount and neighborhood. In the metropolitan area, African-Americans who apply for conventional mortgage loans are 2.5 times more likely to be denied than non-Hispanic whites. That's according to two years of Home Mortgage Disclosure Act (HMDA) data analyzed by Reveal from The Center for Investigative Reporting, a nonprofit news organization based in California. The act requires thousands of financial institutions to provide mortgage records to the public. Analysis of the data was provided to the Post-Dispatch by the Associated Press in coordination with Reveal. The racial discrimination analysis does not include credit scores or debt-to-income ratios of applicants. Private and personal information, such as a person's credit score, is protected under FOIA. The Reveal report, which identifies 61 areas across the U.S. where lending discrimination still occurs, controls for nine other economic and social factors, including applicants' income, desired loan amount and the neighborhood where they wanted to buy property. But no regression analysis is needed to see the historically persistent housing problem in St. Louis. The number of loan applications in specific neighborhoods alone tell the story.
Industry hopes for revamp of HUD manufactured-housing rules — Housing industry advocates are hopeful that the Department of Housing and Urban Development’s review of its manufactured housing regulations will bring rules more in line with current building trends. The comment period on the HUD review, which was launched on Jan. 25, will end later this month. The review comes as Congress weighs legislation to ease lending restrictions on manufactured homes. In announcing the request for input, HUD said it was seeking “to identify existing or planned manufactured housing regulatory actions to assess their actual and potential compliance costs and whether those costs are justified against the backdrop of the nation's shortage of affordable housing.”
Mortgage rates rise for seventh week on inflation fears - The 30-year fixed mortgage rate moved up for the seventh consecutive week with further increases possible as bond yields rise over concerns about higher inflation. The 30-year fixed-rate mortgage averaged 4.4% for the week ending Feb. 22, up from last week when it averaged 4.38%, according to Freddie Mac. A year ago at this time, the 30-year fixed-rate mortgage averaged 4.16%. "Mortgage rates have followed U.S. Treasuries higher in anticipation of higher rates of inflation and further monetary tightening by the Federal Reserve. Following the close of our survey, the release of the Federal Open Market Committee minutes for Feb. 21 sent the 10-year Treasury above 2.9%. If those increases stick, we will likely see mortgage rates continue to trend higher," Len Kiefer, Freddie Mac's deputy chief economist, said in a press release.
As 10 year Treasury yields spike, local mortgage rates will matter more - Government bond market fluctuations have renewed concerns about rising mortgage rates and may prompt borrowers to take more notice of what mortgage lenders are charging on a local level. The yield on the 10-year Treasury bond — which serves as the benchmark for mortgage interest rates — is nearing 3% for the first time since December 2013, amid ongoing concerns about inflation and large-scale auctions of short-term Treasury notes this week that's adding a glut of supply for government debt. The recent bond market volatility already prompted Fannie Mae to revise its outlook for mortgage rates, while housing experts are also concerned about how recent tax reform legislation will affect home prices."Typically when the 10-year Treasury moves around a lot, you'll see mortgage rates follow," said Leonard Kiefer, deputy chief economist at Freddie Mac."The rate [consumers] are likely to get on a mortgage is going to tie very closely to what happens with the 10-year," he added. "It's not exactly one-for-one, but if you look historically week-to-week, the correlation is super high, so an increase in the 10-year yield is going to mean higher mortgage rates in all likelihood." But Tuesday's bond market activity didn't immediately produce significant swings in mortgage rates.
PMI gets first time home buyer bump on low down payment mortgages make gains - First-time homebuyers using loans backed by private mortgage insurance soared in the fourth quarter on the growing popularity of Fannie Mae and Freddie Mac's 3% down payment options, according to Genworth's First-Time Homebuyer Market Report. PMI carriers insured 157,000 loans for first-time homebuyers at the end of 2017, the best fourth quarter since 1994, due largely to more lenders and borrowers taking advantage of Fannie Mae and Freddie Mac's 97% loan-to-value mortgage programs. The most popular mortgage product for first-time buyers remains the Federal Housing Administration program, which insured 167,000 loans in 4Q17. But FHA volume decreased 8% year-over-year, even though the total number of first-time buyers during the quarter increased 4% year-over-year. If this trend continues, Genworth projects PMI could soon overtake the FHA program in market share.
MBA: Mortgage Applications Decrease in Latest Weekly Survey --From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey - Mortgage applications decreased 6.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 16, 2018.... The Refinance Index decreased 7 percent from the previous week. The seasonally adjusted Purchase Index decreased 6 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 3 percent higher than the same week one year ago. ...The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to its highest level since January 2014, 4.64 percent, from 4.57 percent, with points increasing to 0.61 from 0.59 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The first graph shows the refinance index since 1990.
Fewer mortgage applications as rates reach four-year high - With 30-year mortgage rates reaching a four-year high, loan application activity was lower this past week, according to the Mortgage Bankers Association.The MBA's Weekly Mortgage Applications Survey for the week ending Feb. 16 found it decreased 6.6% on a seasonally adjusted basis from one week earlier.The refinance index decreased 7% from the previous week and the refinance application share decreased to 44.4% from 46.5% for the previous week. The seasonally adjusted purchase index decreased 6% from one week earlier. The unadjusted purchase index increased 1% compared with the previous week and was 3% higher than the same week one year ago.
Refinance mortgage market share starts the year at 12-month high - Refinance mortgages accounted for 45% of mortgage volume, the highest share in a year, according to Ellie Mae's Origination Insights Report. The share of refinance loans increased from 40% in December, but is still below the 47% share of volume in January 2017. Purchase originations, which are typically lower in the winter months, accounted for 55% in January, after reaching a 2017 peak of 68% in May and June. The share of Federal Housing Administration refinances grew three percentage points to 28%, and the percentage of conventional refinances hit 51% of closed loans in January, up from 47% in December 2017.
NAR: "Existing-Home Sales Slip 3.2 Percent in January" -- From the NAR: Existing-Home Sales Slip 3.2 Percent in January Existing-home sales slumped for the second consecutive month in January and experienced their largest decline on an annual basis in over three years, according to the National Association of Realtors®. All major regions saw monthly and annual sales declines last month. Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, sank 3.2 percent in January to a seasonally adjusted annual rate of 5.38 million from a downwardly revised 5.56 million in December 2017. After last month’s decline, sales are 4.8 percent below a year ago (largest annual decline since August 2014 at 5.5 percent) and at their slowest pace since last September (5.37 million). Total housing inventory at the end of January rose 4.1 percent to 1.52 million existing homes available for sale, but is still 9.5 percent lower than a year ago (1.68 million) and has fallen year-over-year for 32 consecutive months. Unsold inventory is at a 3.4-month supply at the current sales pace (3.6 months a year ago).This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993. Sales in January (5.38 million SAAR) were 3.2% lower than last month, and were 4.8% below the January 2017 rate. The second graph shows nationwide inventory for existing homes. According to the NAR, inventory increased to 1.52 million in January from 1.67 million in December. Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer. The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.
Existing-Home Sales Slip in January -- This morning's release of the January Existing-Home Sales decreased from the previous month to a seasonally adjusted annual rate of 5.38 million units. The Investing.com consensus was for 5.61 million. The latest number represents a 3.2% decrease from the previous month and a 4.8% decrease year-over-year. Here is an excerpt from today's report from the National Association of Realtors. Lawrence Yun, NAR chief economist, says January’s retreat in closings highlights the housing market’s glaring inventory shortage to start 2018. “The utter lack of sufficient housing supply and its influence on higher home prices muted overall sales activity in much of the U.S. last month,” he said. “While the good news is that Realtors® in most areas are saying buyer traffic is even stronger than the beginning of last year2, sales failed to follow course and far lagged last January’s pace. It’s very clear that too many markets right now are becoming less affordable and desperately need more new listings to calm the speedy price growth.” [Full Report] For a longer-term perspective, here is a snapshot of the data series, which comes from the National Association of Realtors. The data since January 1999 was previously available in the St. Louis Fed's FRED repository and is now only available from January 2014. It can be found here.
Existing Home Sales Extend Plunge, Biggest Annual Drop Since 2014 - After new- and existing-home sales tumbled in December, expectations were for a modest 0.5% rebound in January (despite plunging mortgage applications and soaring rates). But that did not happen as existing home sales tumbled 3.2% MoM to its lowest level since Aug 2016.Existing Home Sales are unchanged since June 2015... (NOTE - this data is based on signed contracts from Nov/DEC, which means the recent spike in rates is not even hitting this yet) Existing home sales are down 4.8% YoY - the biggest drop since August 2014. The West (-5.0%) and Midwest (-6.0%) saw the biggest drop in sales and while the blame (see below) was put on inventories, data shows a 4.1% increase in "available for sale" homes? Of course NAR is careful to blame inventories - and not soaring rates affecting affordability: Lawrence Yun, NAR chief economist, says January’s retreat in closings highlights the housing market’s glaring inventory shortage to start 2018.“The utter lack of sufficient housing supply and its influence on higher home prices muted overall sales activity in much of the U.S. last month,” he said.“While the good news is that Realtors® in most areas are saying buyer traffic is even stronger than the beginning of last year, sales failed to follow course and far lagged last January’s pace."It’s very clear that too many markets right now are becoming less affordable and desperately need more new listings to calm the speedy price growth.”The median existing-home price in January was $240,500, up 5.8% from January 2017.First-time buyers were 29 percent of sales in January, which is down from 32 percent in December 2017 and 33 percent a year ago.“The gradual uptick in wages over the last few months is a promising development for the housing market, but there’s risk these income gains could be offset by the recent jump in mortgage rates,” said Yun.“That is why the pace of added new and existing supply in the months ahead is worth monitoring. If inventory conditions can improve enough to cool the swift price growth in several markets, most prospective buyers should be able to absorb the higher borrowing costs.”So, will higher rates break housing market momentum? The following chart suggest 'yes' - that surge in rates will have a direct impact on home sales (or prices will be forced to adjust lower) as affordability collapses...
A Few Comments on January Existing Home Sales -The consensus was for sales of 5.65 million SAAR in December. Lawler estimated 5.48 million, and the NAR reported 5.38 million."Based on publicly-available local realtor/MLS reports from across the country released through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 5.48 million in January, down 1.6% from December’s preliminary estimate and down 3.7% from last January’s seasonally-adjusted pace." Inventory is still very low and falling year-over-year (down 9.5% year-over-year in January). More inventory would probably mean smaller price increases, and less inventory somewhat larger price increases. This was the 32nd consecutive month with a year-over-year decline in inventory.The following graph shows existing home sales Not Seasonally Adjusted (NSA). Sales NSA in January (313,000, red column) were below sales in January 2017 (319,000, NSA).Sales NSA will also be low seasonally in February. We will probably have to wait until March - at the earliest - to draw any conclusions about the impact of the new tax law on home sales.
AIA: "Architecture billings continue growth into 2018" --Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment. From the AIA: Architecture billings continue growth into 2018 2018 started on a strong note for architecture firms, as the Architecture Billings Index (ABI) saw its highest January score since 2007. The American Institute of Architects (AIA) reported the January ABI score was 54.7, up from a score of 52.8 in the previous month. This score reflects an increase in design services provided by U.S. architecture firms (any score above 50 indicates an increase in billings). The new projects inquiry index was 61.1, down from a reading of 62.0 the previous month, while the new design contracts index increased slightly from 53.4 to 53.9.“Healthy conditions continue across all sectors and regions except the Northeast, where firm billings softened for the second consecutive month,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “With strong billings and healthy growth in new projects to start the year, firms remain generally optimistic about business conditions for the next several months.”
• Regional averages: West (56.2), South (55.3), Midwest (54.8), Northeast (47.3)
• Sector index breakdown: multi-family residential (56.0), commercial / industrial (53.3), institutional (52.5), mixed practice (50.1)
Hotels: Solid Start for Occupancy Rate in 2018 - From HotelNewsNow.com: STR: US hotel results for week ending 17 February The U.S. hotel industry reported positive year-over-year results in the three key performance metrics during the week of 11-17 February 2018, according to data from STR.
In comparison with the week of 12-18 February 2017, the industry recorded the following:
• Occupancy: +1.2% to 62.9%
• Average daily rate (ADR): +3.2% to US$128.75
• Revenue per available room (RevPAR): +4.4% to US$80.99
Note: Houston is no longer reporting a large year-over-year increase in occupancy, so it appears the impact of the hurricanes is fading. The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.
Retail Apocalypse Accelerates: 200 Winn-Dixie Stores To Close As Parent Goes Bankrupt - After shutting down more than 5,000 stores in 2017, store-closings are accelerating in 2018 with news that Bi-Lo LLC, the supermarket company that owns the Winn-Dixie chain, is preparing for a potential bankruptcy filing as soon as next month, and is planning to shut almost 200 stores as part of the move - either before or after the filing. Winn-Dixie joins JCPenney, Bon-Ton, Toys R Us, Sam’s Club, Macy’s, Sears, Kmart and others in the growing list of 2018 shutterings as the 'great economy' that stocks foreshadow fails to show up in the retailer landscape. As Clark.com details, the new year is shaping up to be another difficult one for traditional retailers.
- J.C. Penney – 8 stores - After closing more than 140 stores in 2017, J.C. Penney is shutting down one of its distribution centers and eight more stores nationwide, The Dallas Morning News reports. Around 670 jobs will be cut with the closing of the distribution center in Wauwatosa, Wisconsin, this summer. Meanwhile, around 480 employees will be affected by the eight stores that are closing, which follows a post-holiday review. The locations will be shut down between now and May, according to CNBC.
- Bon-Ton – 42 stores - The Bon-Ton Stores Inc., a department store chain, is closing more than 40 underperforming locations this year, including stores under all of the company’s nameplates. Store closing sales are scheduled to begin on February 1 and run for approximately 10 to 12 weeks, the company said in a news release.
- Toys R Us – Up to 182 stores Toys R Us, the iconic Wayne, New Jersey-based toy retailer, has announced that it will shut down up to 182 U.S. stores.
- Sam’s Club – 63 stores - The Walmart-owned warehouse club has abruptly shut down multiple locations across the country, according to local media reports. The retailer has confirmed that 63 clubs are closing and up to 12 of them will be converted to e-commerce fulfillment centers. Walmart said the impacted clubs will close over the next few weeks, leaving 597 Sam’s Club locations.
- Macy’s – 11 stores - In a news release, the company announced the closure of 11 Macy’s stores. It’s part of the retailer’s plan to close approximately 100 stores, which was announced back in August 2016. Macy’s intends to close an additional 19 stores as leases or operating covenants expire or sale transactions are completed.
- Sears and Kmart – 103 stores Sears Holdings announced that it’s closing more than 100 stores.In a news release, the struggling retailer said it told associates at 64 Kmart and 39 Sears stores that the locations will be shut down between early March and early April 2018. Liquidation sales will begin as early as January 12 at the impacted department stores. Sears Holdings previously announced plans to shut down 63 Kmart and Sears stores this January. The company closed more than 350 locations last year.
- J. Crew – 50 stores- After reporting a 12% sales drop for its third quarter, J. Crew said it will close dozens of stores by the end of January 2018, CNN Money reported. In a news release, J.Crew said it expects to close 50 stores during fiscal 2017, which ends in January.
Do You Believe In BLS Unicorns? - - The chart below says there has been 55.6% inflation over the last 20 years. That is just less than a 2.4% annual level of inflation. What a load of bullshit. Let’s look at a couple of categories listed below and do a smell test. Everyone knows the prices of TVs have fallen dramatically, but 99% – I don’t think so. I was able to find the price of a 28 inch Samsung TV in 1997 – $750. The same size Samsung TV costs $200 today. That’s a 73% decrease. The good old BLS says the decrease is really 99% because the new TV does so much more. They call this a hedonic adjustment. It gets better. The BLS shows the cost of housing up about 56% over the last 20 years. Here are a couple indisputable facts from the same government peddling this inflation drivel. The average new home cost $175,000 in 1997. The average new home in 2017 cost $380,000. For the math challenged, that is a 117% increase. The average monthly rent in 1997 was $576. In 2017 it was $1,021. That is a 77% increase. Housing is the biggest weighting in the CPI calculation. Since using actual cost increases would show at least a 90% increase in housing, the BLS drones created a fake calculation called owners equivalent rent which no one can question. That’s how you fake housing inflation. And now for the funniest bullshit of them all. According to these fake news aficionados, the cost of a new car has not gone up by one dime in the last 20 years. It seems there is some non-government data that says otherwise. The average price of a new car in 1997 was $19,214. The average price of a new car in 2017 was $33,560. Does that strike you as a 0% increase? The actual increase for the average schmuck living in the real world has been 75%. But those good old hedonic adjustments get you back to 0%. Those heated seats for your ass and those deluxe cupholders made your drive to work $14,000 cheaper, according to the BLS. The absurdity of this crap is almost beyond comprehension. The CPI is nothing but fake data disguised to make you think you haven’t been reamed up the ass for the last 20 years by the actual Federal Reserve created inflation exceeding 5% per year. The Deep State counts on a dumbed down, math illiterate populace to believe this crap because it comes from the government. Anyone who believes this bullshit is willfully ignorant or just a plain dumbass.
The Car of the Future Will Sell Your Data - Picture this: You’re driving home from work, contemplating what to make for dinner, and as you idle at a red light near your neighborhood pizzeria, an ad offering $5 off a pepperoni pie pops up on your dashboard screen. Are you annoyed that your car’s trying to sell you something, or pleasantly persuaded? Telenav Inc., a company developing in-car advertising software, is betting you won’t mind much. Car companies—looking to earn some extra money—hope so, too. Automakers have been installing wireless connections in vehicles and collecting data for decades. But the sheer volume of software and sensors in new vehicles, combined with artificial intelligence that can sift through data at ever-quickening speeds, means new services and revenue streams are quickly emerging. The big question for automakers now is whether they can profit off all the driver data they’re capable of collecting without alienating consumers or risking backlash from Washington. “Carmakers recognize they’re fighting a war over customer data,” “Your driving behavior, location, has monetary value, not unlike your search activity.” Carmakers’ ultimate objective, Lanctot said, is to build a database of consumer preferences that could be aggregated and sold to outside vendors for marketing purposes, much like Google and Facebook do today.
Chemical Activity Barometer Increased in February -- Note: This appears to be a leading indicator for industrial production. From the American Chemistry Council: Industrial Activity Signals Further Gains in U.S. Economy The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), expanded 0.5 percent in February on a three-month moving average (3MMA) basis, its fifth such solid gain following the 2017 hurricanes. On an unadjusted basis, growth was just 0.1 percent. The CAB is up 4.2 percent on a 3MMA compared to a year earlier...Applying the CAB back to 1912, it has been shown to provide a lead of two to fourteen months, with an average lead of eight months at cycle peaks as determined by the National Bureau of Economic Research. The median lead was also eight months. At business cycle troughs, the CAB leads by one to seven months, with an average lead of four months. The median lead was three months. The CAB is rebased to the average lead (in months) of an average 100 in the base year (the year 2012 was used) of a reference time series. The latter is the Federal Reserve’s Industrial Production Index. This graph shows the year-over-year change in the 3-month moving average for the Chemical Activity Barometer compared to Industrial Production. It does appear that CAB (red) generally leads Industrial Production (blue).
Kansas City Fed: Regional Manufacturing Activity "Continued Solid Growth" in February --From the Kansas City Fed: Tenth District Manufacturing Posted Continued Solid Growth The Federal Reserve Bank of Kansas City released the February Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that the Tenth District manufacturing survey posted continued solid growth, and expectations for future activity increased moderately. The month-over-month composite index was 17 in February, higher than 16 in January and 13 in December (Tables 1 & 2, Chart 1). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Factory activity grew at both durable and non-durable goods plants, particularly for metals, machinery, and plastics products. Most month-over-month indexes also increased. The shipments, new orders, and employment indexes all rose moderately. The order backlog index fell from 20 to 13, and the new orders for exports index also eased somewhat. The raw materials inventory index decreased from 15 to 8, while the finished goods inventory index was basically unchanged.Most year-over-year factory indexes were higher in February. The composite index rose from 35 to 38, and the production, shipments, new orders, and order backlog indexes also increased.The employment index climbed from 31 to 39, and the capital expenditures index inched slightly higher. The raw materials inventory index fell from 38 to 23, while the finished goods inventory index increased slightly. So far all of the regional Fed surveys have been solid in February, and most have been above the January levels (most indexes suggest faster growth in February than in January).
PMI Composite Flash February 21, 2018 - A surge in services and continued strength in manufacturing pushed the PMI composite to a 27-month high at 55.9 in the February flash, surprising analysts and surpassing the Econoday consensus range by a wide margin. Services rebounded from recent softness where the index rose 2.6 points to 55.9, beating expectations of 53.5 and posting a 6-month high. Manufacturing, considered a leading indicator for the economy in general, rose 0.4 points to 55.9, a 40-month high. New work received by service providers boosted service sector activity, registering the largest rise since March 2015. Business confidence in the outlook for the next 12 months picked up to the strongest level since May 2015, and anecdotal evidence suggested that sales volumes were driven by high confidence among both consumers and businesses. A sharp rise in incoming new business also helped boost manufacturing, with new orders posting the steepest rise in three and a half years. Production growth was little changed, however. Cost pressures intensified in February, especially in input prices, which showed the sharpest rise recorded since July 2013, but cost burdens and improving demand also took prices charged inflation to its highest level in nearly three and a half years. The resounding strength in today's report points to rising inflationary pressures and gives the Fed support for further tightening.
Weekly Unemployment Claims: Down 7K -- Here is the opening statement from the Department of Labor: In the week ending February 17, the advance figure for seasonally adjusted initial claims was 222,000, a decrease of 7,000 from the previous week's revised level. The previous week's level was revised down by 1,000 from 230,000 to 229,000. The 4-week moving average was 226,000, a decrease of 2,250 from the previous week's revised average. The previous week's average was revised down by 250 from 228,500 to 228,250. Claims taking procedures in Puerto Rico and in the Virgin Islands have still not returned to normal. [See full report] Today's seasonally adjusted 222K new claims, down 7K from last week's revised figure, was below theInvesting.com forecast of 230K. Here is a close look at the data over the decade (with a callout for the past year), which gives a clearer sense of the overall trend in relation to the last recession.
The Dystopian Technologies Being Used to Control Workers - You’ve been fired. According to your employer’s data, your facial expressions showed you were insubordinate and not trustworthy. You also move your hands at a rate that is considered substandard. Other companies you may want to work for could receive this data, making it difficult for you to find other work in this field. That may sound like a scenario straight out of a George Orwell novel, but it’s the future many American workers could soon be facing. In early February, media outlets reported that Amazon had received a patent for ultrasonic wristbands that could track the movement of warehouse workers’ hands during their shifts. If workers’ hands began moving in the wrong direction, the wristband would buzz, issuing an electronic corrective. If employed, this technology could easily be used to further surveil employees who already work under intense supervision. Whole Foods, which is now owned by Amazon, recently instituted a complex and punitive inventory system where employees are graded based on everything from how quickly and effectively they stock shelves to how they report theft. The system is so harsh it reportedly causes employees enough stress to bring them to tears on a regular basis. UPS drivers, who often operate individually on the road, are now becoming increasingly surveilled. Sensors in every UPS truck track when drivers’ seatbelts are put on, when doors open and close and when the engines start in order to monitor employee productivity at all times. The technology company Steelcase has experimented with monitoring employees’ faces to judge their expressions. The company claims that this innovation, which monitors and analyzes workers’ facial movements throughout the work day, is being used for research and to inform best practices on the job. Other companies are also taking interest in this kind of mood-observing technology, from Bank of America to Cubist Pharmaceuticals Inc. Beyond simply tracking worker performance, it is becoming more common for companies to monitor the emails and phone calls their employees make, analyzing personal traits along with output.
The concerted attack on public sector union workers is a coordinated effort financed by wealthy donors-- McNicholas and research assistant Zane Mokhiber report that the Supreme Court case Janus v AFSCME Council 31, along with previous cases challenging unions’ right to collect “fair share” fees from nonmembers, have been financed by a small group of foundations with ties to the largest and most powerful corporate lobbies. Analyzing Internal Revenue Service documents, the authors find that several of the foundations supporting anti-union litigants share the same donors—including the Sarah Scaife Foundation, The Lynde and Harry Bradley Foundation, the Ed Uihlein Family Foundation, and the Dunn’s Foundation for the Advancement of Right Thinking. Working people who choose not to join their workplace’s union, but are still covered by a collective bargaining agreement, do not pay union dues. Instead, they pay “fair share” fees to cover the basic costs that the union incurs representing them. If the court finds in favor of the plaintiffs in Janus, unions representing public-sector workers could be prohibited from collecting these fees. The authors explain that if this happens, unions will be forced to operate with fewer and fewer resources. This will lead to reduced power—at the bargaining table and in the political process.“The outcome of Janus will affect millions of working people across the country and will impact the public services we depend on these workers to provide.” McNicholas and Mokhiber make the case that in a political system dominated by moneyed interests, working people are left with little power if they do not have an effective way to pool their resources. This principle is what is at stake in Janus. The decision in this case will determine the future of effective unions, democratic decision making in the workplace, and the preservation of good, middle-class jobs in public employment
Law Professor Proposes Bringing Back Indentured Servitude -- It’s 2018, so of course we’re about to discuss the possibility of rejuvenating indentured servitude. The practice, which until recently only came up when Irish-Americans wanted to explain why they think they had it just as bad as Black people, settled into the dustbin of history a long time ago, but Chicago Law Professor Eric Posner, along with Microsoft Research’s Glen Wyel, have a new proposal in Politico to bring it back in a new form as the Visas Between Individuals Program.Here’s how the program would work: Imagine a woman named Mary Turner, who lives in Wheeling, West Virginia. She was recently laid off from a chicken-processing plant and makes ends meet by walking and taking care of her neighbors’ pets. Mary could expand her little business by hiring some workers, but no one in the area would accept a wage she can afford. Mary goes online—to a new kind of international gig economy website, a Fiverr for immigrants—and applies to sponsor a migrant. She enters information about what she needs: someone with rudimentary English skills, no criminal record and an affection for animals. She offers a room in her basement, meals and $5 an hour. (Sponsors under this program would be exempt from paying minimum wage.) The website offers Mary some matches—people living in foreign countries who would like to spend some time in the United States and earn some money. After some back and forth, Mary interviews a woman named Sofia who lives in Paraguay. It’s like indentured servitude, but with a Silicon Valley spitshine as a gig economy solution. While it’s easy to recoil in horror when people start talking about making immigrants live in your basement and perform menial tasks for you for less than minimum wage, why is the notion of a 20-year-old French girl changing diapers for wealthy people acceptable while the idea of a 40-year-old Paraguayan walking dogs for a high school dropout problematic? For that matter, why can corporations use H1-B visas to secure high-end talent to enrich their overflowing coffers while Mary the Wannabe Dog Whisperer can’t get her dream off the ground?
“Life in the Sweatbox,” Personal Bankruptcy, and the Narrative of Utilitarian Calculus -- Credit Slips informs us of an important new study, “Life in the Sweatbox,” by Pamela Foohey, Robert M. Lawless, Katherine M. Porter, and Deborah Thorne, forthcoming from the Notre Dame Law Review, and available for download now at SSRN. Foohey summarizes the article:“Sweatbox” refers to the financial sweatbox—the time before people file bankruptcy, which is when they often are on the brink of defaulting on their debts and lenders can charge high interest and fees. In the article, we focus on debtors’ descriptions of their time in the sweatbox.Based on CBP data, we find that people are living longer in the sweatbox before filing bankruptcy than they have in the past. Two-thirds of people who file bankruptcy reported struggling with their debts for two or more years before filing. One-third of people reported struggling for more than five years, double the frequency from the CBP’s survey of people who filed bankruptcy in 2007. For those people who struggle for more than two years before filing—the “long strugglers”—we find that their time in the sweatbox is marked by persistent debt collection calls, the loss of homes and other property, and going without healthcare, food, and utilities. And although long strugglers do not file bankruptcy until long after the benefits outweigh the costs, they still report being ashamed of needing to file. Foohey concludes: Our results suggest that the bankruptcy system, at present, cannot deliver its promised “fresh start” to many of the families that seek its protection. In this brief post, I’ll look at one aspect of how the bankruptcy system came to be as it is: The narrative that debtors perform a “utilitarian calculus” in deciding whether or not to seek bankruptcy. This narrative is false, based the results of “Life in the Sweatbox.” Since it will crop up again if bankruptcy reform efforts gain traction — as they should — it’s important to debunk it now. This subject matter is new to me, so I will primarily quote from and contextualize Foohey et al
The case for ending Amazon’s dominance - Antitrust authorities should not be in the business of making life easy for incumbents. What, then, should they do? There are two schools of thought. One is to focus on consumers’ interest in quality, variety and price. This has been the standard approach in US antitrust policy for several decades. Since Amazon makes slim profits and charges low prices, it raises few antitrust questions. The alternative view — which harks back to an earlier era of antitrust during which Standard Oil and later AT&T were broken up — argues that competition is inherently good even if it is hard to quantify a benefit to consumers and that society should be wary of large or dominant companies even if their behaviour seems benign. The collapse of companies from Lehman Brothers to construction services business Carillion reminds us that size can be a problem when a company is weak as well as when it is strong. The narrowing in antitrust thinking is described by Lina Khan in a much-read article, “Amazon’s Antitrust Paradox”. Ms Khan berates modern antitrust thinking for its “hostility to false positives”, arguing that it has become incapable of saying anything insightful about modern tech companies. Unlike Ms Khan, I share modern antitrust’s hostility to false positives; there is a real cost to cumbersome and unnecessary meddling in a dynamic and rapidly-evolving marketplace. Donald Trump’s history of publicly attacking Mr Bezos is worth pondering too: do we really want the US government to have more discretion as to who is targeted, and why? Yet for all this, I am deeply uneasy about Amazon’s apparently unassailable position in online retail. Yes, customers are being well served at the moment. Yet the company has acquired formidable entrenched advantages, from the information about customers and the suppliers who sell through it, to the bargaining power it has over delivery companies, to the vast network of warehouses. Those advantages were earned, but they can also be abused.
Illinois Still Has $9-Billion in Overdue Bills - Illinois Comptroller Susana Mendoza is releasing her latest report on the State's finances.It's the second report under the new Debt Transparency Act designed to give a detailed monthly snapshot of Illinois' entire bill backlog. Comptroller Mendoza says it shows the State still has more than 9-billion dollars in bills to be paid."These are the numbers that the Legislature will have to utilize to eventually most likely work around the Governor to craft a budget that is responsible, balanced and looks out for the interest of people in Illinois." Mendoza says the State owes 946-million dollars in late payment interest penalties alone.
Los Angeles report on homelessness reveals widening funding gap -- A recent report from the Los Angeles Homeless Services Authority (LAHSA) shows that homelessness in Los Angeles is growing at a much higher rate than was previously thought, outstripping the already limited funding allocated to programs aimed at aiding the homeless.Existing shelter programs are trailing their housing targets by about 20 percent, as set in 2015 when several ballot initiatives—“Measure H” and “Proposition HHH,” purporting to reduce homelessness were passed. The 2015 targets behind the measures were calculated to keep pace as more people fell into homelessness, but rather than decreasing homelessness by the planned 14 percent annually, the Los Angeles homeless population has grown from 44,000 in 2015 to 59,000 in 2017. The programs’ existing funding gaps are being further strained by this surge in homelessness.The LAHSA report looks at different forms of subsidized housing, ranging from the more temporary to the permanent. In nearly every category, there is a gap between the 2015 target and what was actually met.“Permanent supportive housing” is by far the largest category in the report and constitutes the bulk of the deficit. While 19,000 units in this category were created since 2015, the recommendation by LAHSA is that this figure needs to be raised to at least 41,000 to meet demand. The report further recommends the creation of 11,000 new units for “rapid re-housing,” for those who are relatively financially stable but facing imminent homelessness, 3,000 new emergency shelter units, and 5,000 for “diversion/prevention,” for those at high risk of becoming homeless. Significantly, the only category of housing showing a surplus is that of “Transitional Housing,” which is aimed at providing homeless youth with temporary housing so they can financially stabilize. The longest one can stay in transitional housing is 24 months, though there are other restrictions that can make tenants subject to eviction sooner.
Alabama sheriffs pocket money meant to feed county jail inmates -- Three sheriffs in Alabama have admitted to pocketing money allocated for feeding inmates in county jails in response to a lawsuit brought against 49 county sheriffs by poverty advocacy groups.On January 5, the Southern Center for Human Rights (SCHR) and the Alabama Appleseed Center for Law and Justice (AACLJ) jointly filed a lawsuit against the sheriffs for failing to comply with a public records request concerning their usage of jailhouse food funds.Many sheriffs contend that their usage of these funds is legal under Alabama law."I do it just like the law tells us to. That's about all I have to say about that," Monroe County Sheriff Thomas Tate told AL.com last week. "We feed all our inmates good and the excess goes to the sheriff. If you declare it excess, you take it and you pay taxes on it."The ledgers Tate handed over in response to the lawsuit reveal that of the $423,364.60 of federal, state, and municipal funds allocated to feed inmates in his jail between 2014 and 2017, $110,459.77 was declared “excess.” Monroe County jail’s excess food funds rose each year between 2014 and 2016."The law says it's a personal account and that's the way I've always done it and that's the way the law reads and that's the way I do business," Etowah County Sheriff Todd Entrekin responded. "That's the way the law's written." Although Entrekin protested that he asked the County Commission to handle the funds for feeding inmates, he has still not turned over his records. Entrekin paid a high school student to mow his lawn with checks marked “Sheriff Todd Entrekin Food Provision Account,” and the address on the checks is his home address.
Big Pharma's War On Our Children: 1 Million Kids Under Age 6 On Psychiatric Drugs - In the United States, there are one million children under the age of six on psychiatric drugs. This number is particularly disturbing, considering the horrifying side effects and ineffectiveness of a good number of these types of harmful drugs. One in six Americans overall regularly take some type of medication in this category. However, children are now being swept up in Big Pharma’s desire to make money, not improve health. Mental health watchdog group Citizens Commission on Human Rights is drawing attention to the concerning fact that more than a million kids younger than six in our nation are currently taking these psychiatric drugs. According to Natural News, around half of these children are four to five years old and an incredible 274,804 of them are younger than a year old. That’s right: babies are being given psychiatric drugs. The number rises for toddlers aged two to three, with 370,778 kids in this category taking psychiatric drugs overall. If this isn’t horrifying to you, congratulations on your brainwashing.Data from IMS Health shows that the drug situation only gets worse as kids get older, with 4,130,340 kids aged 6 to 12 taking some type of psychiatric drug. The biggest category of psychotic drugs given to children appears to be anti-anxiety drugs. Just over 227,132 babies under one-year-old and nearly 248,000 of those aged four to five take these medications. Again, babies are being given mind-altering drugs before their first birthday. But the news just gets worse from there. Experts believe these estimates are far too low and the real numbers are actually much higher, due in part to the tendency for some doctors to hand out psychiatric medications for “off-label” uses. This risky practice entails giving out a drug to treat something that it is not indicated for, and the long-term effects of such an approach are completely unknown.
Eye exams linked to kids' reading levels - Elementary school children who read below grade level may have challenges with their eyesight even if standard tests show they see 20/20, according to a new study from the University of Waterloo. The study showed that children with reading challenges may have lower than expected binocular vision test results, something a standard eye exam may overlook. "A complete binocular vision assessment is not always part of the standard vision test," said Dr. Lisa Christian, lead researcher on the project and an Associate Clinical Professor at the School of Optometry and Vision Science, University of Waterloo. "However, binocular vision problems could be compounding a child's academic difficulties, and should be investigated." The study involved a retrospective review of 121 children between the ages of six and 14 who all had an Individual Education Plan specifically for reading. It found that more than three quarters of the students had good eyesight, but when they were tested for binocular vision, more than a third of the group scored below what was considered normal. "Kids can see words on the page, but if (for example) they have difficulty turning their eyes in to read or focusing words on a page, they may experience symptoms of eye strain, double vision or fatigue after five or 10 minutes," Christian said. "It's not just about visual acuity, but about how well the eyes work together when performing an activity such as reading."
Silicon Valley parents are raising their kids tech-free — and it should be a red flag --- . Instead of tricking out their homes with all the latest technology, many of today's parents working or living in the tech world are limiting — and sometimes outright banning — how much screen time their kids get. The approach stems from parents seeing firsthand, either through their job, or simply by living in the Bay Area — a region home to the most valuable tech companies on Earth — how much time and effort goes into making digital technology irresistible.A 2017 survey conducted by the Silicon Valley Community Foundation found among 907 Silicon Valley parents that despite high confidence in technology's benefits, many parents now have serious concerns about tech's impact on kids' psychological and social development."You can't put your face in a device and expect to develop a long-term attention span," Taewoo Kim, chief AI engineer at the machine-learning startup One Smart Lab, told Business Insider. A practicing Buddhist, Kim is teaching his nieces and nephews, ages 4 to 11, to meditate and appreciate screen-free games and puzzles. Once a year he takes them on tech-free silent retreats at nearby Buddhist temples.Former employees at major tech companies, some of them high-level executives, have gone public to condemn the companies' intense focus on building addictive tech products. The discussions have triggered further research from the psychology community, all of which has gradually convinced many parents that a child's palm is no place for devices so potent."The tech companies do know that the sooner you get kids, adolescents, or teenagers used to your platform, the easier it is to become a lifelong habit," Koduri told Business Insider. It's no coincidence, he said, that Google has made a push into schools with Google Docs, Google Sheets, and the learning management suite Google Classroom.
5 reasons why introducing charter schools in Puerto Rico is a bad idea -- The first: despite the rhetoric about “choice” and “local control,” charter schools actually take control from families and communities. Instead of elected school boards, they are managed by private groups with little guidance or regulation. Second, charter schools tend to pull revenues away from public school districts faster than the districts can reduce their costs. This is because many of the expenses associated with educating a student who transfers to a charter school — and takes public funding with them — remain with the district due to fixed costs, such as building utilities. The third reason is, as the “school choice” rhetoric goes, charter schools do in fact “disrupt” students and teachers. They can close up shop at any time during the school year and often do. Two weeks ago, a school in Sacramento, California, closed halfway through the year by handing students a letter on their way out the door as school ended, leaving dozens of families scrambling to find another school over the weekend. Reason number four: charter schools tend to avoid taking students with the highest special needs, which leaves the most expensive kids with local public schools. This could have dire consequences in Puerto Rico, which has more than double the rate of students with special needs than the rest of the country. Finally, what’s this really about? It’s about states like Florida, Ohio, and Michigan, where charter schools are nearly bankrupting public school districts, exporting their worst ideas, like online, “virtual” schools. It’s about the Trump-Betsy Devos privatization plan coming to an island in desperate need of real help, not more market forces proven to have failed elsewhere. It’s about real estate investors, hedge fund owners, and billionaires, the same folks that want to buy the U.S. territory’s power utility, trying to make a profit on the backs of Puerto Ricans, this time students.
Growing opposition to public education cuts in Oklahoma --The assault on public education in Oklahoma, side-by-side with years of tax cuts for the rich and giant energy corporations, is being met with growing opposition by teachers and students.Anger has escalated since February 12, when the state legislature refused to consider a proposal that would have given Oklahoma teachers, who are among the lowest paid in the country, a $5,000 raise. It would have been the teachers’ first raise in ten years.Protesting teachers descended on the state capitol in Oklahoma to press for improved wages but legislators rejected their demand by a 63-25 vote. The outcome underscored the bankruptcy of the Oklahoma Education Association (OEA) and the Oklahoma City Federation of Teachers, which told educators lobbying and social media campaigns would persuade the corporate-controlled politicians to defend teachers’ interests.Now there is increasing discussion among educators of a statewide strike, despite the fact Oklahoma law forbids teachers from withholding their labor.On the page of one Facebook group called Oklahoma Teachers United, organizers are encouraging teachers to work with others in their schools to call in sick on the same day. Meanwhile, a teacher in Tulsa public schools, Teresa Danks, is circulating a petition seeking support for a statewide teacher walkout to demand a $10,000 raise. Attempting to preempt the threat of independent action by teachers, some school administrators are pondering imposing temporary school closures to compel the legislature to provide increased funding, a tactic last used in Oklahoma in 1990. On Monday, February 19, a discussion of such closures drew an overflow crowd to a school board meeting in Bartlesville, a city of 37,000 people in northeastern Oklahoma.
West Virginia teachers carry out state-wide strike -- In the first West Virginia teachers strike in nearly three decades, 15,000 teachers, school bus drivers and other school employees began a two-day state-wide walkout on Thursday. West Virginia teachers, who are among the lowest paid in the nation, are demanding improved wages and an end to rising health care costs imposed by the state-run Public Employees Insurance Agency (PEIA). Teachers and other school employees are defying the state’s anti-democratic ban on public employee strikes, which carries the threat of fines, mass firings and even jailing. On the eve of the walkout, Attorney General Patrick Morrisey declared that “a work stoppage of any length on any ground is illegal.” Morrisey said he would back county school boards and school superintendents seeking back-to-work injunctions. Teachers in West Virginia are legally prohibited from collective bargaining for wages and benefits, which are left to the whim of a state government notorious for being the pockets of the coal and energy companies. On Wednesday, Republican Governor Jim Justice, a billionaire coal magnate, signed a bill giving teachers an insulting two percent raise in July, followed by annual one percent increase over the next two years. The bill was backed by Republicans and a significant section of Democrats, who have cynically postured as supporters of the teachers.
The Unique Horror of a Bulletproof Backpack Sales surge after a mass shooting -- As cell-phone videos surfaced on Wednesday and Thursday of students crouched on a classroom floor, the sound of gunshots echoing in the background, parents across the country have found themselves asking what can they do to protect their kids. There are practical, long-term answers of course, including voting for lawmakers who back sensible gun restrictions, which most Americans support to a degree. (A recentPew poll found that the vast majority of Democrats and Republicans are in favor of preventing the mentally ill from purchasing guns, as well as background checks for private and gun-show sales.) But for moms and dads glued to news stories wondering, What if it were my kid texting me good-bye from a classroom, buying a bulletproof backpack provides an immediate point of action, a grab at any sense of control over the insanity we’re living in. Yasir Sheikh, president of Guard Dog Security, a Florida-based company that sells bulletproof backpacks and other protective items, began selling the bags five years ago, after 20 children and six adults were murdered at Sandy Hook Elementary School in Newtown, Connecticut. He says that sales have been consistent — not surprising, considering that more than 400 people have become victims of school shootings since then. He also says that the company typically experiences a spike in sales in the days following a mass shooting. “Sometimes we see it instantly, sometimes it’s a few days afterward,” he explains.
Tech Start-Up Launches 'Active-Shooter' Mobile App For Schools - SafeGuard Systems, Inc., a Palo Alto tech startup, is now several weeks away from launching a revolutionary mobile phone app, that bridges the communication gap between school administrators and teachers with law enforcement agencies, in the event of a mass shooting..“SafeGuard OES isn’t just an app, it’s a clean and simple tool that can improve any emergency management program,” said Mike Jacobs, CEO of SafeGuard Systems, Inc. The app is designed to work with school administrators and teachers in providing real-time critical information about the status of their classroom to law enforcement agencies during an active shooter situation. First responders are able to see a map of the campus overlaid with GPS navigation to get an exact location of the user, and understand the status of the classroom before entering the facilities. While every second counts in a mass shooting, this app directs first responders to areas of a school where assistance to treat the most critically wounded is needed the most. KRON-TV, a local television station licensed in San Francisco, California, interviewed Jacobs this week after a teen gunman killed 17 at Stoneman Douglas High School, in southern Florida. This is what he said: "It's a problem that's growing, and we need to fix it," app creator Mike Jacobs said. The app will enable teachers and staff members to communicate with first responders directly. “You don’t want to give it to students,” Jacobs said. “There are many reasons why. One of them primarily because you don’t want any false alarms.” The “real-time” GPS system shows authorities exactly where the threat is. “The floor level. The exact room number,” Jacobs said. It also gives an overview of the entire campus and displays the status of every area. “If they’re unfamiliar with the school, they can use the navigator function, and it’ll navigate them to the exact location,” Jacobs said. It’s meant to bridge the gap of communication because every second counts when lives are at stake.
Students Who Survived the Florida Shooting Are Stepping onto the National Stage to Demand Gun Control - Seventeen people were shot to death at Marjory Stoneman Douglas High School in Parkland, Florida on Valentine's Day. Their peers and family members want this mass shooting to be the last one—and they are organizing a “March for Our Lives” march on Washington D.C. set for March 24. On a crowded podium the day after the Florida high school shooting, 12th grader and survivor of the recent massacre stood surrounded by victims' family members and other shooting survivors and spoke to a crowd at a gun control rally in Fort Lauderdale. She recalled cowering in a closet for hours while she heard gunfire rain down on her friends, shamed lawmakers for taking money from the NRA and refusing to take action on gun violence. "Every single person who is up her today, all these people, should be at home grieving, but instead we are up here because if all our government and president can do is send thoughts and prayers, then it's time for victims to be the change that we need to see," González said. González is organizing a national protest effort alongside fellow students David Hogg, Alex Wind, Cameron Kasky and Jacqueline Coren, all of whom attend Marjory Stoneman Douglas High School and were present the day of the shooting. The goal is to pressure legislators to implement stronger firearm regulations—and, ideally, restrict access to automatic and semiautomatic weapons like the AR-15 that allegedly enabled the gunman to massacre people at the school last week. "We are going to be the last mass shooting,” said Emma González to a roaring crowd at the gun control rally. "Just like Tinker v. Des Moines we are going to change the law. That's gonna be Marjory Stoneman Douglass [High School] in that textbook. And it's all going to be due to the tireless effort of the school baord, the faculty members, the family members and most importantly the students. The students who are dead, the students still in the hospital, the students who are now suffering from PTSD."
Mounting protests, walkouts by US students against school shootings - Protests and walkouts by high school students are spreading in response to the mass shooting that killed 17 people at Marjory Stoneman Douglas High School in Parkland, Florida last Wednesday. On Tuesday, as Douglas High students were traveling the 400 miles to Florida’s capital, Tallahassee, to express their anger and demand a ban on assault rifles, students at other high schools in the state walked out of class in solidarity, chanting “Stop gun violence!”Scores of students walked out of McArthur High School in Hollywood, Florida just before noon and hundreds more stormed out of West Boca Raton High School just after noon and marched the 10 miles to Parkland’s Douglas High.The Douglas High School students are planning to hold a rally Wednesday outside the state capitol. They will then meet with legislative leaders, including Senate President Joe Negron. Negron sponsored a 2011 bill, signed into law by Republican Governor Rick Scott, which banned cities and counties from regulating gun and ammunition sales. The Florida state legislature declined on Wednesday to hear a bill banning assault rifles, as students looked on from the gallery.Protests by high school students have taken place in other parts of the country as well. On Monday, students from the Washington DC area protested outside the White House, calling on lawmakers to reform gun laws. More than 100 teenagers and their supporters staged a “lie in” outside the president’s residence.Students also staged walkouts at Cary High School in North Carolina and in Los Angeles, where some 500 people rallied at a downtown park on Monday to protest the wave of school shootings and government inaction. Last Wednesday, using a semi-automatic rifle, lone gunman Nicholas Cruz, 19, took the lives of 14 Douglas High students, ages 14 to 18, and three coaches, one of whom was also a teacher. Students, teachers and families attended the funerals of four more shooting victims on Tuesday: Cara Loughran, Carmen Schentrup, Gina Montalto and Peter Wang.
High School Students Call For Assault Weapons Ban During Tallahassee Rally - Students from Marjory Douglas Tillman high school - the location of the Feb 14th school shooting that left 17 dead and more than a dozen wounded - traveled to Tallahassee, the capitol of Florida, for a rally in support of a ban on automatic weapons like the AR-15 rifle that shooter Nikolas Cruz purchased legally and used to carry out his murderous spree, per Reuters. But as celebrities like George Clooney and Oprah Winfrey make financial pledges to support the movement, elsewhere in Florida, the push for an assault weapons ban has effectively stalled after local Republican lawmakers have already blocked one such bill. In fact, Florida’s legislature has taken up at least two bills during its current session intended to provide broader access to guns.But signaling a possible shift, state Senator Bill Galvan, the chamber’s next president, called for a bill to raise the legal age limit for purchasing assault rifles from 18 to 21, the same as it is for handguns. The legislature’s current session ends on March 9, leaving little time for a vote. Last week's shooting appears to have spawned a national movement of students marching for stricter gun control laws. Students are planning national walkouts next month, and are also trying to organize a meeting with President Donald Trump.So far, the event that has generated the most interest is being called the "March for Our Lives" and is slated for March 24 in Washington, D.C., spearheaded by some Parkland students. "We’re here to make sure this never happens again," Diego Pfeiffer, a senior at Stoneman, told a crowd that included hundreds of students from a Tallahassee high school on Tuesday after arriving at the capital.
Student protests spread over US school shootings -- Thousands of high school students and their supporters rallied Wednesday at the Florida state capitol in Tallahassee, demanding legislative action to prevent further school shootings like the February 14 massacre at Marjory Stoneman Douglas High School in Parkland, Florida.There were sympathy demonstrations and school walkouts across the country, involving many thousands of high school students in at least a dozen states, including Florida, Virginia, Maryland, Washington DC, Pennsylvania, Ohio, Illinois, Iowa, Texas, Colorado, Arizona, Montana and Washington state.More than a thousand students walked out of high schools across Indian River County and Martin County, Florida, on the state’s central Atlantic coast. Some 500 students walked out at Fort Pierce Central High School aloneIn the suburbs of Columbus, Ohio, hundreds of students walked out of Upper Arlington High School and staged a protest in freezing rain and wind, with speakers reading out the names of the 17 students and teachers killed in Florida last week, and the crowd observing a minute of silence for each one.The only publicized threat of administration retaliation against student protests came in the Houston, Texas suburbs, where the superintendent of Needville school district said that all students who took part in demonstrations during school hours would be suspended from school for three days. The threat was posted on the school’s website, and a letter reinforcing the warning was sent to the home of every student. By far the largest protest was in Tallahassee, where 100 students from Douglas High School, who made the 400-mile trip by bus on Tuesday, spearheaded a rally of several thousand on the steps of the state capitol. Students and their supporters then surged to the offices of state legislators, demanding meetings on the spot to air their concerns, principally focused on a demand to ban the sale of assault rifles like the AR-15 used by Nikolas Cruz in the rampage in Parkland.
Here’s What It’s Like At The Headquarters Of The Teens Working To Stop Mass Shootings — At dusk on Sunday night, Cameron Kasky lay on a picnic table in a park not far from Marjory Stoneman Douglas High School, where a gunman opened fire Wednesday, killing 17 of his classmates and teachers, and wounding 14 others. He was exhausted. He estimated that he’d done more than 50 interviews since the shooting, all to promote a movement against gun violence that he and his young friends have spearheaded in the wake of their school’s tragedy. Kasky, just 17, said he first came up with the name of this new movement, “Never Again,” while wearing his Ghostbusters pajamas.In just days, the group of teenage survivors have made themselves impossible to ignore, headlining rallies, penning op-eds, and blanketing cable news coverage over the Presidents Day weekend with their calls for action. But behind the scenes, they’re also just kids — sitting in a circle on the floor in the home of one of their parents, eating a batch of baked pasta, tweeting at each other, and comparing which celebrity just shared their post. There’s laughter and tears, and “Mr. Brightside” by the Killers plays briefly, but it’s also remarkably businesslike. There’s work to do and a seemingly endless number of phone calls to answer. “We slept enough to keep us going, but we’ve been nonstop all day, all night,” said Sofie Whitney, 18, a senior who estimated that she has spent 70% of the past 48 hours speaking with reporters. “This isn’t easy for us, but it’s something I need to do.”
Gun-Control Advocates Are Now Arguing Against Safety Measures for Children - Advocates for gun control have actually begun arguing against practical measures addressing school security. Rather than take strategies that can be implemented virtually immediately, and which address the dangers in a specific place in a common-sense way, gun control advocates would rather focus on a political victory at some point in the future and continue to leave schools without proper security measures. The general argument is that any effort at meaningful security is unacceptable because it turns schools into "fortresses." Others are filled with reasons why security is useless. They point out that Columbine High School had security cameras, and this therefore proves that all security measures have no effect. Gun control advocates in social media have also begun passing around this article titled "Why security measures won't stop school shootings." The article, however, only briefly asserts (without argumentation) that that security won't work and barely touches on the tactics of so-called "target hardening." Most of the article is actually devoted to a sociological discussion of how a kinder, gentler, school environment will make school shootings less likely. Not even the article's sources much support the theory that greater security makes a school more "scary." A prominently cited-study within the article, called "Predicting Perceptions of Fear at School and Going to and From School for African American and White Students" does not support the idea. But, the overall strategy here is startling. Gun control advocates are in a way holding school children hostage to their message by shooting down calls for better school security. Their essential position is "no security for children until we get the gun control legislation we want!"
Sheriff Clarke Alleges Student Gun Control Effort Has "Soros' Fingerprints All Over It" - George Soros' fingerprints are "all over" the push to demand gun control in response to last week's Parkland, FL high school shooting, claimed former Milwaukee County Sheriff David Clarke Jr.Clarke made the startling allegation in a Tuesday tweet, saying "The well ORGANIZED effort by Florida school students demanding gun control has GEORGE SOROS' FINGERPRINTS all over it." Adding "It is similar to how he hijacked and exploited black people's emotion regarding police use of force incidents into the COP HATING Black Lives Matter movement." The well ORGANIZED effort by Florida school students demanding gun control has GEORGE SOROS’ FINGERPRINTS all over it. It is similar to how he hijacked and exploited black people’s emotion regarding police use of force incidents into the COP HATING Black Lives Matter movement. pic.twitter.com/XDZ3bcwF6F— David A. Clarke, Jr. (@SheriffClarke) February 20, 2018Clarke, a vocal Trump supporter who resigned as sheriff last year amid speculation he would join the Trump administration, is a senior advisor and spokesman for the pro-Trump America First Action PAC; he fired off the tweet in advance of a planned appearance at the Conservative Political Action Conference (CPAC) later this week. Several conspiracy theories have emerged in the wake of the Valentine's day shooting, which left seventeen people dead when a gunman opened fire on students in the early afternoon. A clip which was promptly featured on YouTube earlier, claimed that various students at Marjory Stoneman Douglas High School are "crisis actors" who are being used as political cudgels in efforts to repeal the Second Amendment. An aide to Florida State Rep. Shawn Harrison (R) was fired Tuesday after emailing a reporter to suggest that student David Hogg and others are crisis actors. "Both kids in the picture are not students here but actors that travel to various crisis when they happen," wrote now-fired aide Benjamin Kelly - drawing condemnation from the likes of Florida Senator Marco Rubio (R) and Harrison.
Florida's 'Teacher Of The Year' Bluntly Explains Why School Violence Is Out Of Control - Kelly Guthrie Raley has been teaching for 20 years and currently educates kids at Eustis Middle School in Lake County, Florida. Just last month she was named the 2017-2018 Teacher of the Year. The day after the horrific shooting that took place at Marjorie Stoneman Douglas High School in Parkland, Florida, she posted a rant on Facebook that has since gone viral. In the post, she talked about parental responsibility, compassion, and respect…and more than 823,000 people have “liked” the post and agreed with it, while more than 649,000 have shared it with others. Here’s what Mrs. Raley had to say. Okay, I’ll be the bad guy and say what no one else is brave enough to say, but wants to say. I’ll take all the criticism and attacks from everyone because you know what? I’m a TEACHER. I live this life daily. And I wouldn’t do anything else! But I also know daily I could end up in an active shooter situation. Until we, as a country, are willing to get serious and talk about mental health issues, lack of available care for the mental health issues, lack of discipline in the home, horrendous lack of parental support when the schools are trying to control horrible behavior at school (oh no! Not MY KID. What did YOU do to cause my kid to react that way?), lack of moral values, and yes, I’ll say it-violent video games that take away all sensitivity to ANY compassion for others’ lives, as well as reality TV that makes it commonplace for people to constantly scream up in each others’ faces and not value any other person but themselves, we will have a gun problem in school. Our kids don’t understand the permanency of death anymore!!!
Florida Deputies Will Now Carry Rifles On School Grounds: Broward Sheriff - Broward County Deputies will begin carrying rifles on school grounds in the wake of last week's shooting at Marjory Stoneman Douglas High School in Parkland, according to Broward Sheriff Scott Israel. “This morning, I implemented a practice within the Broward Sheriff’s Office and spoke to Mr. Runcie and he’s fully cooperative of my decision, that our deputies who are qualified and trained will be carrying rifles on school grounds from this point forward,” Israel said in a Wednesday press conference. "Schools as soft targets need to be fortified," said the Sheriff, who said that officers would safely secure weapons when not in use. "When they are not carrying the rifle, until we look for gun locks and gun lockers, the only place when they're not slinging the rifle, that will be allowed to be stored, will be in their locked police vehicle," Israel said.
Trump’s solution to school shootings: arm teachers with guns -- Donald Trump has said he will consider a proposal to arm school teachers in an attempt to prevent mass shootings, a move certain to prove fiercely divisive. The US president, holding a listening session at the White House with survivors of last week’s Florida school shooting and others affected by gun violence, claimed that allowing airline pilots to carry and conceal guns had demonstrated the measure could be a success. “It only works when you have people very adept at using firearms, of which you have many,” Trump said during an emotionally searing session on Wednesday that, extraordinarily, was broadcast live on national television. “It would be teachers and coaches.” Referring to Aaron Feis, a football coach who used his body as a shield to protect a student during the massacre at Marjory Stoneman Douglas high school in Parkland, the president continued: “If the coach had a firearm in his locker when he ran at this guy – that coach was very brave, saved a lot of lives, I suspect. “But if he had a firearm, he wouldn’t have had to run, he would have shot him, and that would have been the end of it. This would only obviously be for people who are very adept at handling a gun. It’s called concealed carry, where a teacher would have a concealed gun on them. They’d go for special training and they would be there and you would no longer have a gun-free zone. Gun-free zone to a maniac, because they’re all cowards, a gun-free zone is: ‘Let’s go in and let’s attack, because bullets aren’t coming back at us’.”
Trump leads charge for militarization of schools after Parkland shooting --President Donald Trump is leading the charge to flood schools across the country with armed teachers and staff as the supposed solution to the epidemic of deadly school shootings in the US, a week after a shooting by 19-year-old Nikolas Cruz killed 17 and injured 14 at Marjory Stoneman Douglas High School in Parkland, Florida.The president’s draconian proposals to further militarize schools come amid a growing wave of popular protests and student walkouts across the country, led by survivors of the Parkland shooting who are demanding stricter gun control laws and an end to school shootings. Nationally coordinated student walkouts and demonstrations are planned for March 14 and 24. Speaking Thursday at the annual meeting of the Conservative Political Action Conference, Trump repeated his call for the elimination of the federal “gun-free zone” law which makes it a crime for anyone who does not have explicit authorization to carry guns into schools or other public buildings.“It is time to make our schools a much harder target for attackers,” Trump declared. “We don’t want them in our schools. We don’t want them. When we declare our schools to be Gun Free Zones, it just puts our students in far more danger. Far more danger.”Trump argued that allowing teachers and staff, in particular those who are military veterans, to carry concealed weapons with them in the classroom would deter potential school shooters and protect students. “You do a conceal carry permit. And this would be a major deterrent, because these people are inherently cowards. If they thought like if this guy thought that other people would be shooting bullets back at him, he wouldn’t have gone to that school.” Trump suggested that teachers should be offered a bonus to induce them to take up arms.
As Gunman Rampaged Through Florida School, Armed Deputy ‘Never Went In’ — The only armed sheriff’s deputy at a Florida high school where 17 people were killed took cover outside rather than charging into the building when the massacre began, the Broward County sheriff said on Thursday. The sheriff also acknowledged that his office received 23 calls related to the suspect going back a decade, including one last year that said he was collecting knives and guns, but may not have adequately followed up.The deputy, Scot Peterson, resigned on Thursday after being suspended without pay after Sheriff Scott Israel reviewed surveillance video.“He never went in,” Sheriff Israel said in a news conference. He said the video showed Deputy Peterson doing “nothing.”“There are no words,” said Sheriff Israel, who described himself as “devastated, sick to my stomach.” Two other deputies were placed on restricted duty on Thursday because they may have mishandled tips called in to the sheriff’s office over the past two years warning that the suspect, Nikolas Cruz, appeared intent on becoming a school shooter, Sheriff Israel said. The revelations added to a growing list of failures and missed signs by the authorities that might have helped prevent one of the deadliest school shootings in American history.
"Shocked And Outraged": Four Broward Deputies Waited Outside School As Children Were Massacred -- As the details behind the Police response to the Valentines Day massacre emerge, it appears that the Coral Springs Police department - which sent 130 officers to the scene - put their lives on the line while Broward County officers simply waited for backup as the scene unfolded, in what some Coral Springs officials perceived to be a dereliction of duty. Some Coral Springs police were stunned and upset that the four original Broward County Sheriff's deputies who were first on the scene did not appear to join them as they entered the school, Coral Springs sources tell CNN. It's unclear whether the shooter was still in the building when they arrived. The four Broward Sheriff's deputies, including fired High School Resource Officer Scot Peterson, had their pistols drawn from behind the safety of their vehicles, and "not one of them had gone into the school," according to shocked Coral Springs police. The Coral Springs officers, meanwhile, entered the building soon after they arrived on scene to confront the shooter, while the four Broward County Sheriff's deputies remained outside until two more officers arrived on scene along with an officer from neighboring Sunrise city. What these Coral Springs officers observed -- though not their feelings about it -- will be released in a report, likely next week. Sources cautioned that tapes are currently being reviewed and official accounts could ultimately differ from recollections of officers on the scene. According to the Coral Springs Chief of Police, Anthony Pustizzi, roughly 40 of the 130 officers rushed into the building after the initial officers responded, where they carried 23 victims were carried out to medics, 20 of whom survived. Via CNN. So Israel knew full well that his deputies stood by and did NOTHING while he was blaming @dloesch and the @NRA for his own office's failures. pic.twitter.com/aX57S5W93a — Ben Shapiro (@benshapiro) February 23, 2018
The Big Number: 12 percent of older teens have had significant head injuries - WaPo - That’s how many 15-to-17-year-olds in the United States have had a significant head injury, such as a concussion. A report released this month by the Centers for Disease Control and Prevention found that older teens were much more likely to have had an injury than younger children. (The rate for kids 3 to 5 years old, for instance, was only 4 percent.) At all ages, boys were more likely than girls to have sustained a head injury. Not surprisingly, sports participation was most often cited as the likely reason for the increase in head injuries as kids get older. Car accidents and falls are other common causes. Sudden hits to the head can cause the brain to bounce back and forth quickly. Early symptoms of a concussion include headache, fogginess and balance problems. Neck pain, nausea, dizziness and feeling more tired than normal might linger for days or weeks. Longer term, the disruption to brain cells — especially if another concussion occurs — can lead to problems with thinking skills and memory and more significant brain damage. To prevent head injuries, kids should always wear properly fitted protective gear in sports and wear seat belts in cars and a helmet when biking.
Thousands rally to defend teachers in Charleston, West Virginia --Thousands of teachers, other public employees and their supporters rallied Saturday in Charleston, West Virginia to demand a wage increase and protest soaring health care costs. Fearful that the immense anger of teachers could get out of their control, the West Virginia teachers unions announced a two-day walkout on Thursday and Friday. This weekend’s protest is the latest expression of working-class anger over social inequality throughout the US and internationally. There are many signs of mounting opposition among teachers, students and workers in the US to the decades-long assault on working conditions and on public education.Students at high schools in Kiefer and Tulsa, Oklahoma walked out of class this week to demand pay increases for their teachers, who have not had a raise in a decade. Teachers in Phoenix, Arizona carried out sickouts last week to protest threatened pay cuts, and more than 2,300 teachers, paraprofessionals and clerical-technical staff in Pittsburgh voted last week to authorize a strike over class sizes and demand support for early childhood teachers. Since early February, teachers across West Virginia have been carrying out countywide walkouts and other protests over an insulting one percent per year salary increase proposed by the Republican-controlled state legislature. Neither the Republican proposal nor the Democratic alternative for a three-percent increase would cover rising healthcare costs, resulting in an effective cut in pay.
Behind the Explosion in Socialism Among American Teens—In a fluorescent lit classroom with handmade posters covering one wall, approximately 15 high school students are chanting the words of black revolutionary Assata Shakur: “It is our duty to fight for our freedom. It is our duty to win. We must love each other and we must support each other. We have nothing to lose but our chains.” With some embarrassed giggling, they recite it once, twice, three times, led by their visiting speaker, Pamela Gomez of the Hillsborough Community Protection Coalition, an alliance of local progressive groups. These students are some of the 40-odd members of the Blake High School chapter of the Young Democratic Socialists of America (YDSA). The Tampa high school has 1,697 students, a majority of them black or Latino, and the YDSA chapter reflects that. The chapter also has a high concentration of LGBTQ students, the club’s biggest demographic bloc. The chapter is the brainchild of Graham Shelor, 17. Slim and sandy-haired, a contemporary dancer as well as an organizer, Shelor grew up in a “fairly liberal” household but became disillusioned with the Democratic Party during the 2016 elections. “They lied to me and the people of America that they were going to make it work,” he says. “It led to a domino effect of me seeing the flaws in the current American system.” Blake’s chapter is part of the youthful explosion of interest in socialism that has led to YDSA’s impressive recent growth, with 130 chapters and organizing committees, a five-fold increase in two years. Since 2015, the average age of a DSA member has dropped from 64 to 30. YDSA’s members must be under 31 and are usually affiliated with a university or high school chapter. University chapters outnumber high school chapters by about 10 to 1. Like its parent organization, YDSA is multi-issue and “big tent.” It doesn’t require members to subscribe to any particular ideology beyond a commitment to feminism and an opposition to racism, imperialism, homophobia, transphobia and, of course, capitalism.
"Their Objective Is To Create Fear..." - The Social Justice trend has appeared in recent years, and has rapidly gained momentum. It appeared first on college campuses, where students accused a professor or, indeed, another student, of making a statement or using a word that was deemed socially unacceptable. The premise by the accuser was that a campus must be a safe space, where people should not be exposed to comments that may possibly make anyone feel demeaned or uncomfortable.The accusers have earned the name “snowflakes,” as they tend to melt down at the slightest provocation. However, the Social Justice trend has given snowflakes considerable power, a power that’s often used recklessly.Importantly, whether the offensive comment is correct or incorrect is not an issue. The “offense” is that the speaker has stated something that should not ever be mentioned, as it might upset the listener in some way. The “justice” that takes place is that one or more people file a formal complaint with a person or body that holds power over the speaker and demand that he be punished for his “wrongdoing.” This has led to teachers and professors being warned, suspended, or fired from their positions, based merely on the existence of a complaint. In addition, “offending” students have been warned, suspended, or expelled, again, without what might be regarded as due process. A related form of Social Justice is the vigilantism seeking to destroy those who are prominent. Former Miss Americas demanded that the entire board of the Miss America Pageant be dismissed for making disparaging remarks about pageant contestants. Several have been forced to resign in disgrace. And, of course, we’re seeing the rise of complaints against actors, politicians, and other prominent individuals regarding alleged sexual denigration of women, even if it’s merely verbal. In each case, witnesses are “bravely coming forward,” en masse, although they often were silent for decades (if, indeed, the individual incidents ever occurred at all). But, in fact, this trend is not new. Rabid groups of accusers appear throughout history, generally during times of existing social tension.
A Serious Push for Free College in California -- Put free college on the November ballot,” urges Estuardo Mazariegos to a student walking by. “Make California higher education free again, like it was in the 1970s.” Mazariegos greets fellow students as they return from their holiday break to the Dominguez Hills campus of the California State University in Los Angeles, one of 23 state-university campuses in the sprawling state. Across California, students have begun the formidable task of collecting over 585,407 signatures from registered voters to put their “College for All Act” on the ballot for this November. Inspired by Bernie Sanders’s presidential campaign proposal to institute free higher education, these young activists are moving forward at the state level to make Bernie’s vision a reality. “All of the revenue raised will go to making public community colleges and universities in California tuition-free and reducing the barriers to young people attending college,” said Mazariegos, who grew up in South Central Los Angeles, but now lives in the Crenshaw neighborhood. Mazariegos understands the burden of paying for his education. He started college in 2006 and has attended on and off for financial reasons. Now in his last semester, he claims his annual tuition and fees are five times higher than then they were 11 years ago. He will graduate with $18,000 in debt. “The bottom line of why it took me so long is I’ve had to work,” he said. “Right now I am working a full-time job while taking 15 credits. If the College for All act was in place, I wouldn’t have the stress of juggling full-time work and school. I would be able to integrate more into student life, study groups, and clubs and be more engaged—which is part of the value of college.” Mazariegos is part of a student movement that will change the face of California higher education for future generations and the nation as a whole.
The Misguided Drive to Measure 'Learning Outcomes' - I teach at a big state university, and I often receive emails from software companies offering to help me do a basic part of my job: figuring out what my students have learned.If you thought this task required only low-tech materials like a pile of final exams and a red pen, you’re stuck in the 20th century. In 2018, more and more university administrators want campuswide, quantifiable data that reveal what skills students are learning. Their desire has fed a bureaucratic behemoth known as learning outcomes assessment. This elaborate, expensive, supposedly data-driven analysis seeks to translate the subtleties of the classroom into PowerPoint slides packed with statistics — in the hope of deflecting the charge that students pay too much for degrees that mean too little.It’s true that old-fashioned course grades, skewed by grade inflation and inconsistency among schools and disciplines, can’t tell us everything about what students have learned. But the ballooning assessment industry — including the tech companies and consulting firms that profit from assessment — is a symptom of higher education’s crisis, not a solution to it. It preys especially on less prestigious schools and contributes to the system’s deepening divide into a narrow tier of elite institutions primarily serving the rich and a vast landscape of glorified trade schools for everyone else. Without thoughtful reconsideration, learning assessment will continue to devour a lot of money for meager results. The movement’s focus on quantifying classroom experience makes it easy to shift blame for student failure wholly onto universities, ignoring deeper socio-economic reasons that cause many students to struggle with college-level work. Worse, when the effort to reduce learning to a list of job-ready skills goes too far, it misses the point of a university education.
Jumbo Loans Are New Threat in U.S. Student Debt Market - During the housing boom of the 2000s, jumbo mortgages with very large balances became a flashpoint for a brewing crisis. Now, researchers are zeroing in on a related crack but in the student debt market: very large student loans with balances exceeding $50,000. A study released Friday by the Brookings Institution finds that most borrowers who left school owing at least $50,000 in student loans in 2010 had failed to pay down any of their debt four years later. Instead, their balances had on average risen by 5% as interest accrued on their debt.As of 2014 there were about 5 million borrowers with such large loan balances, out of 40 million Americans total with student debt. Large-balance borrowers represented 17% of student borrowers leaving college or grad school in 2014, up from 2% of all borrowers in 1990 after adjusting for inflation. Large-balance borrowers now owe 58% of the nation’s $1.4 trillion in outstanding student debt. “This is comparable to mortgage lending, where a subset of high-income borrowers hold the majority of outstanding balances,” “A relatively small share of borrowers accounts for the majority of outstanding student-loan dollars, so the outcomes of this small group of individuals has outsized implications for the loan system and for taxpayers,” the authors say. The problem is particularly acute among borrowers from graduate schools, who don’t face the kinds of federal loan limits faced by undergraduate students. Half of today’s big balance borrowers attended graduate school. The other half went to college only or are parents who helped pay for their children’s education. Grad school borrowers tend to be among the best at paying off student debt because they typically earn more than those with lesser degrees. But the rising balances unearthed in the latest study suggest that pattern might be changing. Overall across the U.S., one-third of borrowers who left grad school in 2009 hadn’t paid down any of their debt after five years, compared to just over half of undergraduate students who hadn’t, federal data show.
Loan Shark Nation: Forcing Our Kids To Choose Between Student Loans And Everything Else - It’s mid-winter, which means millions of high school seniors are winding up their childhoods and planning for what comes next. For many this next stage is college. But in yet another example of how we baby boomers have rigged the system in our favor at the expense of pretty much everyone else, student loans – barely necessary when most boomers graduated 40 years ago – have become a life-defining problem for our kids and grandkids.A college degree is now so expensive that for most students it requires massive borrowing. But the starting salary in most fields has risen so slowly that growing numbers of indebted grads can’t reduce – let alone pay off – their loans. Now, a 25-year-old with massive student debt probably doesn’t qualify for a mortgage. But they might be able to get a car loan, which partially explains why auto loans are rising right along with student loans. A car is necessary to get to work, and borrowing is the only way to get a car if a big piece of your income is going towards student loan interest.So that’s our world: Stocks, bonds and real estate – long since acquired by baby boomers who graduated college with minimal student debt and therefore had the cash flow to invest – are way up, making us the richest generation ever. Meanwhile our kids and grandkids are going ever deeper in debt with no apparent way out. Of course there is an eventual way out: Someday they’ll inherit our manipulated wealth. But in the meantime their inability to cover our Social Security and Medicare is forcing the government to pick up the slack with trillion-dollar deficits as far as the eye can see, more or less offsetting the value of our estates.
Student loan borrowers with high debts aren’t making progress repaying them - More student loan borrowers have bigger loans and they’re struggling to repay them.The share of student loan borrowers owing more than $50,000 jumped from just 2% in 1990 to 17% by 2014, according to a new paper published by The Brookings Institution. The paper, authored by Adam Looney, a former Treasury Department official and Constantine Yannelis, a finance professor at New York University’s Stern Business School, also found that borrowers are having trouble repaying the debt.Beginning in the 2010s, these borrowers on average aren’t making progress on paying down their debt, the research found. Instead, in the first five years of repayment, they owe more on average than the initial repayment balance.“When we consider the student loan market, we shouldn’t necessarily be focusing on the average borrower or average balances — at least from the perspective of repayment,” Yannelis said.The research is the first to take a detailed look at data on the debt of graduate students and those with larger balances. It’s results add nuance to the challenges facing student loan borrowers. Conventional wisdom surrounding student debt suggests that borrowers with relatively high balances don’t generally struggle to pay off their loans because their degrees, which often come from graduate school, provide major earnings gains. But Looney and Yannelis’s analysis suggest that while these borrowers may not face challenges quite as acute as those with relatively low debts and low incomes, they are struggling to pay down their debt and that’s cause for concern. About 20% of borrowers hold two-thirds of balances, Yannelis said. That means that their repayment challenges have an outsized impact on the overall student loan picture. Though borrowers with balances over $50,000 rarely default, because their debt levels are so high, they account for about 30% of all dollars in default, the study found.
Trump Admin Considering Student Loan Bankruptcy Options - The Trump administration is looking to clarify the rules which govern whether a person can discharge student loans in bankruptcy, according to a public notice issued by the Department of Education. The agency is seeking input in order to determine "whether there is any need to modify" how bankruptcy claims are evaluated. Under current law, student loans cannot be discharged unless a borrower has filed for bankruptcy and can prove an "undue hardship" which prevents repayment. Circumstances which constitute undue hardship have never been defined by congress, leaving it to bankruptcy judges to decide on a case by case basis - typically setting extremely the bar extremely high.As a result, very few borrowers are allowed to expunge their debt.The Department of Education's notice reads: The U.S. Department of Education (Department) seeks to ensure that the congressional mandate to except student loans from bankruptcy discharge except in cases of undue hardship is appropriately implemented while also ensuring that borrowers for whom repayment of their student loans would be an undue hardship are not inadvertently discouraged from filing an adversary proceeding in their bankruptcy case. Accordingly, the Department is requesting public comment on factors to be considered in evaluating undue hardship claims asserted by student loan borrowers in adversary proceedings filed in bankruptcy cases, the weight to be given to such factors, whether the existence of two tests for evaluation of undue hardship claims results in inequities among borrowers seeking undue hardship discharge, and how all of these, and potentially additional, considerations should weigh into whether an undue hardship claim should be conceded by the loan holder. Considering that nearly 40% of student loan borrowers from the mid 2000's may default by 2023 according to Brookings, it's clear something is going to need to be done, especially since the alternative is a wholesale taxpayer bailout.
Florida Teachers’ Pension Fund Invested in Maker of School Massacre Gun -- As Florida teachers grieve over the mass shooting that left 17 students and colleagues dead last week, some of them may be surprised to learn they’ve been helping fund the firearms industry—including the company that made the gun used that bloody Wednesday. A state pension plan for Florida teachers held 41,129 shares in American Outdoor Brands Co. valued at more than a half-million dollars, according to a Dec. 31 securities filing listing the plan’s holdings. Formerly known as Smith & Wesson, Springfield, Massachusetts-based American Outdoors manufactured the semiautomatic AR-15 assault rifle that was used in the Feb. 14 attack on the Marjory Stoneman Douglas High School in Parkland, Florida. The securities filing, posted on the pension plan’s web site, shows that the Florida Retirement System Pension Plan also invested in gun company stock issued by Sturm & Ruger Co., Vista Outdoor Inc. and Olin Corp. All of these companies manufacture firearms or ammunition, including assault rifles. As of June 2017, more than half of the 405,000 participants in the Florida Retirement System were employed by educational institutions, according to its 2017 annual report. The fund had a $528,000 holding in American Outdoor Brands, which included $306,000 in unrealized profit as of Dec. 31, according to the quarterly filing, making it a long-term investor in the company. (The investment is a small fraction of the fund’s $154 billion portfolio.)
Teachers in 12 states have pension funds invested in gun stocks - - Teachers across Florida and at a high school where 17 people were shot dead Feb. 14 pay into a retirement fund that invests in gun companies, it was revealed earlier this week. It turns out they're not alone.Pension funds managed for public school teachers in at least a dozen states, including New York and California, own stocks issued by the makers of firearms, including American Outdoor Brands Corp., the company previously known as Smith & Wesson that manufactured the semiautomatic AR-15 used in the attack at the Marjory Stoneman Douglas High School. The type of assault rifle has been the weapon of choice in America's mass shootings. The financial stakes held by teacher pension funds in gun companies, like those of other equities, each represent only a sliver of the multibillion dollar state retirement systems' investments, according to a Bloomberg analysis. But the holdings have already become a hot-button issue in Florida, where last week's massacre prompted teachers and students to pressure public officials to prevent similar attacks. The Florida Education Association, which represents educators but doesn't control the pension fund, urged the state body that does to sell its more than half-million dollars worth of American Outdoor stock, as well as that of other gun companies. "I am sure that most of Florida's public school employees are as sickened as I am to learn that the state has invested some of our pension fund holdings in the maker of the AR-15," said Joanne McCall, president of the FEA, an affiliate of the National Education Association. "Surely there are better places for the state to invest its public employee retirement money than in companies that make products that harm our children." The statement followed a Bloomberg report Tuesday detailing the Florida pension fund's investments in the firearms industry. Like holdings listed in other states, Florida's shares of firearms companies were actively purchased by the fund's managers, although the holdings may be part of state efforts to track equity indexes.
Why taking gun stocks out of the Florida teachers pension is not simple - When the president of the Florida teachers union suggested the state pension fund divest itself of shares in the company that manufactures the assault rifle used in the state’s school massacre last week, the complex issue of directing pension investments to achieve social objectives once again resurfaced.It’s not a new subject. And it’s not an easy one to resolve. The idea of selling stocks in order to make a point — instead of a profit — has been with us for decades. Pension administrators back in the 1970s discussed divesting their portfolios of so-called “sin stocks” — liquor, tobacco and gambling. Many more have since been thrown into the mix, including petroleum stocks, fast food, soda and, most recently, guns. Here’s the tension: Public pensions have a legal duty to maximize returns while limiting risk — and many of these stocks yield reliable returns. But on the other hand, some members want the choice of stocks to reflect their sense of social responsibility. So in that spirit the teachers’ union requested that the pension sell its shares in Massachusetts-based American Outdoor Brands, manufacturer of the AR-15 rifle that a gunman used to massacre 17 students and staff at Marjory Stoneman Douglas High School in Parkland, Fla.“It’s a complex exercise to achieve a social objective without creating greater risk or losing return,” said Ian Lanoff, an attorney who advises several state pension funds on their duties toward members, also known as fiduciary responsibilities. Lanoff said the legal formula for deciding on divesting is simple and in two parts: First, is it economically prudent to invest in a stock? If not, that ends the exercise. But if the answer is yes, then the pension administrators are legally bound to replace the economically prudent investment — in this case a gun manufacturer — with a stock that has a similar risk/return profile.
New JAMA Study Shows that Electronic Health Records Do Not Reduce Administrative Costs --The complete study (an “Original Investigation”) is here at the Journal of the American Medical Association. Unfortunately, the study is paywalled, and the study material that JAMA exposes muffles the bombshell. From the abtract, the methodology: This study used time-driven activity-based costing. Interviews were conducted with 27 health system administrators and 34 physicians in 2016 and 2017 to construct a process map charting the path of an insurance claim through the revenue cycle management process. These data were used to calculate the cost for each major billing and insurance-related activity and were aggregated to estimate the health system’s total cost of processing an insurance claim.(The Harvard Gazette calls the “process map” methology “state of the art.”). And the results: Estimated billing and insurance-related costs for 5 types of patient encounters: primary care visits, discharged emergency department visits, general medicine inpatient stays, ambulatory surgical procedures, and inpatient surgical procedures. s Estimated processing time and total costs for billing and insurance-related activities were 13 minutes and $20.49 for a primary care visit, 32 minutes and $61.54 for a discharged emergency department visit, 73 minutes and $124.26 for a general inpatient stay, 75 minutes and $170.40 for an ambulatory surgical procedure, and 100 minutes and $215.10 for an inpatient surgical procedure. Of these totals, time and costs for activities carried out by physicians were estimated at a median of 3 minutes or $6.36 for a primary care visit, 3 minutes or $10.97 for an emergency department visit, 5 minutes or $13.29 for a general inpatient stay, 15 minutes or $51.20 for an ambulatory surgical procedure, and 15 minutes or $51.20 for an inpatient surgical procedure. Of professional revenue, professional billing costs were estimated to represent 14.5% for primary care visits, 25.2% for emergency department visits, 8.0% for general medicine inpatient stays, 13.4% for ambulatory surgical procedures, and 3.1% for inpatient surgical procedures. I don’t understand why the JAMA abstract merely lists the dollar costs of EHRs, rather than comparing them to non-EHR systems; however, the study authors have been happy to do that for us in the press. The Harvard Gazette: “We found no evidence that adoption of these expensive electronic health record systems reduced billing costs related to physician services,” said Kevin Schulman, one of the study’s authors.
Trump Administration Proposes Rule To Loosen Curbs On Short-Term Health Plans - “We want to open up affordable alternatives to unaffordable Affordable Care Act policies,” said Health and Human Services Secretary Alex Azar. “This is one step in the direction of providing Americans health insurance options that are more affordable and more suitable to individual and family circumstances.”The proposed rule said short-term plans could add more choices to the market at lower cost and may offer broader provider networks than Affordable Care Act plans in rural areas.But most short-term coverage requires answering a string of medical questions, and insurers can reject applicants with preexisting medical problems, which ACA plans cannot do. As a result, the proposed rule also noted that some people who switch to them from ACA coverage may see “reduced access to some services,” and “increased out of pocket costs, possibly leading to financial hardship.”The directive follows an executive order issued in October to roll back restrictions put in place during the Obama administration that limited these plans to three months. The rule comes on the heels of Congress’ approval of tax legislation that in 2019 will end the penalty for people who opt not to carry insurance coverage.The administration also issued separate regulations Jan. 4 that would make it easier to form “association health plans,” which are offered to small businesses through membership organizations.Together, the proposed regulations and the elimination of the so-called individual mandate by Congress could further undermine the Affordable Care Act marketplace, critics say. Seema Verma, who now heads the Centers for Medicare & Medicaid Services, which oversees the marketplaces, told reporters Tuesday that federal officials believe that between 100,000 and 200,000 “healthy people” now buying insurance through those federal exchanges would switch to the short-term plans, as well as others who are now uninsured. The new rule is expected to entice younger and healthier people from the general insurance pool by allowing a range of lower-cost options that don’t include all the benefits required by the federal law — including plans that can reject people with preexisting medical conditions. Most short-term coverage excludes benefits for maternity care, preventive care, mental health services or substance abuse treatment.
Woman billed $17,850 for dodgy pee test. Alarmed experts say she’s not alone - In 2015, a college student in Texas named Elizabeth Moreno had back surgery to correct a painful spinal abnormality. The procedure was a success, and her surgeon followed it with just a short-term prescription for the opioid painkiller hydrocodone to ease a speedy recovery. Then came a “routine” urine drug test, ostensibly to ensure she didn’t abuse the powerful drug. A year later, she got the bill for that test. It was $17,850. She understandably didn’t see it coming, according to a report on her case in Kaiser Health News. But doctors and experts say that test was unnecessary, the price “outrageous,” and the case just the latest in a new, alarming trend. The testing lab, Sunset Labs, was considered out of network for Moreno’s insurance. But that may be the least of the problem. Sunset also has an “F” rating from the Houston Better Business Bureau for charging thousands of dollars for tests that cost a few hundred dollars—tops. And Sunset Labs is part of a network of pain clinics owned by Houston anesthesiologist Phillip C. Phan, which is facing lawsuits and complaints related to forced, unnecessary testing and improper billing. Moreno’s insurance company valued her $17,850 urine test at $100.92. In an emailed statement to KHN, an attorney for Sunset said the lab’s billings “are in line with the charges of competing out-of-network labs in the geographical area.” The bill’s breakdown shows Sunset charged Moreno $4,675 to screen for a variety of opioids, $2,975 for psychiatric benzodiazepine drugs, $1,700 for amphetamines, $1,275 for a host of illicit drugs, and $850 for buprenorphine, a drug to treat opioid addiction. Sunset added another $850 fee to verify that the urine hadn’t been adulterated, among other charges. Such extensive testing—and exorbitant billing—has become more commonplace amid the national epidemic of opioid abuse and overdose deaths. The Centers for Disease Control and Prevention estimates that an average of 115 Americans die each day from opioids.
Newborn survival rates in US only slightly better than in Sri Lanka -- The risk of dying as a newborn in the US is only slightly lower than the risk for babies in Sri Lanka and Ukraine, according to Unicef. A report by the UN children’s agency found that five newborn babies die around the world every minute, or about 2.6 million every year. The figure is described as “alarmingly high”, particularly as 80% of these deaths are from preventable causes.A million babies draw their last breath the same day they took their first. A further 2.6 million are stillborn worldwide, said the report, entitled Every Child Alive. The risk of dying as a newborn, which is closely linked to income level of countries, varies enormously. Babies born in Japan, Singapore and Iceland stand the best chance of survival, while those in Pakistan, Central African Republic and Afghanistan face the worst odds, according to the report, which looks at the 10 most dangerous places to be born.A baby born in Pakistan is almost 50 times more likely to die within its first month of life than a baby born in Japan, it found.But a country’s income explains only part of the story. In Kuwait and the United States, both high-income countries, the newborn mortality rate is 4.4 and 3.7 per 1,000 live births, only slightly better than Sri Lanka and Ukraine, where the rate is 5.3 and 5.4. “While we have more than halved the number of deaths among children under the age of five in the last quarter century, we have not made similar progress in ending deaths among children less than one month old,” said Henrietta H Fore, Unicef’s executive director. “Given that the majority of these deaths are preventable, clearly, we are failing the world’s poorest babies.”
A Biohacker Regrets Publicly Injecting Himself With CRISPR - When Josiah Zayner watched a biotech CEO drop his pants at a biohacking conference and inject himself with an untested herpes treatment, he realized things had gone off the rails. Zayner is no stranger to stunts in biohacking—loosely defined as experiments, often on the self, that take place outside of traditional lab spaces. You might say he invented their latest incarnation: He’s sterilized his body to “transplant” his entire microbiome in front of a reporter. He’s squabbled with the FDA about selling a kit to make glow-in-the-dark beer. He’s extensively documented attempts to genetically engineer the color of his skin. And most notoriously, he injected his arm with DNA encoding for CRISPR that could theoretically enhance his muscles—in between taking swigs of Scotch at a live-streamed event during an October conference. So when Zayner saw Ascendance Biomedical’s CEO injecting himself on a live-stream earlier this month, you might say there was an uneasy flicker of recognition. Ascendance Bio soon fell apart in almost comical fashion. The company’s own biohackers—who created the treatment but who were not being paid—revolted and the CEO locked himself in a lab. Even before all that, the company had another man inject himself with an untested HIV treatment on Facebook Live. And just days after the pants-less herpes treatment stunt, another biohacker who shared lab space with Ascendance posted a video detailing a self-created gene therapy for lactose intolerance. The stakes in biohacking seem to be getting higher and higher. Zayner holds a Ph.D. in biochemistry and biophysics, and he now runs a company called The ODIN that sells DIY CRISPR kits, including the CRISPR construct he injected in himself for the muscle growth. He’s long had critics, and he certainly does not speak for the entire biohacking community. But given that even the most visible stuntman in biohacking is worried about the effects of his stunts, I asked him to reflect on recent events. We talked about why Zayner originally injected himself with CRISPR on a live-stream, why he sees his stunts as “social activism” gone awry, and why he is still planning to sell DIY CRISPR kits. The interview has been edited and condensed for clarity.
The Flu Is Ravaging America This Year - The U.S. has been gripped by its worst flu season in years. Experts have been surprised by the intensity of the current outbreak, which Statista's Niall McCarthy notes, with the infection rate around eight percent, is as bad as the swine flu epidemic from 2009. During that season, 60.8 million people contracted the virus with 274,304 hospitalized and 12,469 dying. Even though that outbreak was bad with President Obama declaring it a national emergency, the 2014-2015 flu season was far more lethal. According to the Centers for Disease Control and Prevention (CDC), 710,000 people were hospitalized that season with 56,000 deaths recorded. The current situation is alarming with the hospitalization rate per 100,000 people already hitting 59.9 after 18 weeks, according to the CDC.It took 25 weeks for the hospitalization rate to reach that point during the deadly 2014-2015 season. During a mild year, an average of 12,000 Americans die due to the flu and judging by the current trend, 2017-18 is on course to surpass 2014-15 in lethality. More than 80 percent of flu deaths usually occur among the elderly and people with underlying health problems. This year, seemingly healthy individuals are being infected and hospitalized at higher rates than the historical average. The CDC has reported that 63 children have already died during the current season.
Another flu pandemic is coming, and the world isn’t prepared - A century ago, people woke up ill in the morning and fell dead by evening. Considered the deadliest pandemic in human history, global influenza infected a third of humanity, killing no less than 50 million and perhaps as many as 100 million people. The pandemic coincided with the first world war. Following the initial outbreak, massive troop deployments in densely packed quarters and numerous civilian travelers facilitated the spread of the virus to every corner of the globe. In a typical season, the elderly, young children and those with chronic medical conditions generally face the highest risk of serious complications and death. The 1918 pandemic, in contrast, disproportionately affected healthy young adults, aged 20 to 40. Young adult men in the military, especially those in close quarters in frontline trenches, were hit hard. A year after its initial outbreak, the global pandemic had killed more than double the 10 million who had died in first world war. Influenza/pneumonia was the top killer in 1900 for the United States, accounting for 12 per cent of all deaths. By the beginning of the 21st century, deaths due to influenza and pneumonia had declined substantially. In 2015, the top 10 causes of death worldwide did not include influenza/pneumonia. The world population has shifted from being largely rural to predominately urban, with many millions living in close quarters. An estimated 258 million migrants live abroad, and no less than a billion border crossings occur annually. Such demographics, combined with strained health services in some nations and close human proximity to domestic animals – particularly poultry – in others, facilitate the rapid spread of influenza. Estimates suggest that seasonal influenza epidemics can affect up to 15 per cent of the population with enormous economic consequences. Vaccinating 60 per cent of the US population would substantially reduce the costs and the number of deaths. Such a high vaccination rate may be difficult to achieve within the time period required for vaccine effectiveness.
Study finds new superbug typhoid strain behind Pakistan outbreak (Reuters) - An outbreak of typhoid fever in Pakistan is being caused by an extensively drug resistant “superbug” strain, a sign that treatment options for the bacterial disease are running out, scientists said on Tuesday. Researchers from Britain’s Wellcome Sanger Institute who analyzed the genetics of the typhoid strain found it had mutated and acquired an extra piece of DNA to become resistant to multiple antibiotics. An outbreak of drug-resistant typhoid that began in Hyderabad in Pakistan in November 2016 is still spreading, according to experts from Aga Khan University who worked with the Sanger team. Official data on case numbers and deaths are not available, but local Pakistan media reports say health authorities detected more than 800 cases of drug-resistant typhoid in Hyderabad alone in a 10-month period between 2016 and 2017. The researcher found the bacterial strain causing the outbreak is now resistant to five antibiotics in total, more than seen in any outbreak before. “This is the first time we have seen an outbreak of extensively drug-resistant typhoid,” said Elizabeth Klemm, who co-led the analysis work at the Sanger Institute. “This outbreak was caused by a multidrug-resistant strain that had gone a step further and acquired an extra piece of DNA encoding additional genes for antibiotic resistance.” Typhoid is a highly contagious infection caused by the Salmonella enterica serovar Typhi bacteria. It is contracted by consuming contaminated foods or drinks and symptoms include nausea, fever, abdominal pain and pink spots on the chest. Untreated, it can be fatal.
Contaminated Cosmetics Pose Growing Risk to Consumers - This month, a key Senate committee announced a bipartisan plan to consider cosmetics reform legislation this spring and work for its passage by the full Senate this year. Since 2015, Sens. Dianne Feinstein, D-Calif. and Susan Collins, R-Maine, have been relentlessly pushing their colleagues to take up their bill to give the Food and Drug Administration the power to review the most dangerous chemicals in cosmetics. Their bill has broad support from cosmetics companies of all sizes and public health groups. Recent events have lent new urgency to the need for reform. Key issues include:
- Asbestos in kids' products. Experts have found asbestos in cosmetics marketed to kids by Justice and Claire's.
- Burned scalps. A class-action lawsuit was recently settled by a company making hair relaxers that have been linked to burned scalps.
- Hair loss. Thousands of women and girls lost some or all of their hair after using a shampoo sold by a celebrity hair stylist.
- Mercury poisoning. A skin whitening cream was recently the subject of an import alert after the FDA detected mercury in the product.
- Unsafe hair spray. The FDA also found an imported hair spray that contained methylene chloride, one of the few chemicals currently banned from cosmetics.
- Contaminated cosmetics. The FDA continues to find cosmetics contaminated with bacteria, including a body wash , face powders , shadows and lotions .
- Eye shadow with coal tar. The FDA recently found imported eye shadows containing coal tar chemicals—including this product and this product .
- Eyeliners with lead. The FDA continues to intercept eyeliners containing an ingredient called kohl, which can contain significant lead levels .
- Unsafe colors. Many cosmetic products contain banned color chemicals, including shampoos , cleaners , temporary tattoos , and "Piggy Poop" soap .
Last year, The New York Times reported that contaminants such as mercury, lead, bacteria and other banned ingredients were showing up in an alarming number of imported personal care products. The Times story was based on an FDA letter that revealed imports of personal care products have doubled in the last decade and imports from China have increased 79 percent in the last five years.
Women who clean at home or work face increased lung function decline - Women who work as cleaners or regularly use cleaning sprays or other cleaning products at home appear to experience a greater decline in lung function over time than women who do not clean, according to new research published online in the American Thoracic Society's American Journal of Respiratory and Critical Care Medicine. In "Cleaning at Home and at Work in Relation to Lung Function Decline and Airway Obstruction," researchers at the University of Bergen in Norway analyzed data from 6,235 participants in the European Community Respiratory Health Survey. The participants, whose average age was 34 when they enrolled, were followed for more than 20 years. "While the short-term effects of cleaning chemicals on asthma are becoming increasingly well documented, we lack knowledge of the long-term impact," said senior study author Cecile Svanes, MD, PhD, a professor at the university's Centre for International Health. "We feared that such chemicals, by steadily causing a little damage to the airways day after day, year after year, might accelerate the rate of lung function decline that occurs with age." The study found that compared to women not engaged in cleaning:
- Forced expiratory volume in one second (FEV1), or the amount of air a person can forcibly exhale in one second, declined 3.6 milliliters (ml)/year faster in women who cleaned at home and 3.9 ml/year faster in women who worked as cleaners.
- Forced vital capacity (FVC), or the total amount of air a person can forcibly exhale, declined 4.3 ml/year faster in women who cleaned at home and 7.1 ml/year faster in women who worked as cleaners.
Study: This household chore as damaging as smoking 20 cigarettes a day - - Researchers from universities in Norway recently conducted a study, published in the American Journal of Respiratory and Critical Care Medicine, to determine how cleaners may contribute to lung decline over time. "While the short-term effects of cleaning chemicals on asthma are becoming increasingly well documented, we lack knowledge of the long-term impact," senior author Cecile Svanes said in a statement. "We feared that such chemicals, by steadily causing a little damage to the airways day after day, year after year, might accelerate the rate of lung function decline that occurs with age." For their assessment, they examined the lungs of more than 6,200 women and men from 22 health institutions, following them over a course of 20 years. During that time span, the participants were asked if they cleaned their homes and if they were professional cleaners. If so, they were also required to record how much they used typical liquid cleaning products. After analyzing the results, they found that women who cleaned as little as once a week had an accelerated lung decline risk. In fact, they said using cleaning products for 20 years is equivalent to smoking 20 cigarettes a day for 10 to 20 years for women. Men who cleaned did not see the same decline as women who cleaned.The scientists said they were initially shocked by the results. "However, when you think of inhaling small particles from cleaning agents that are meant for cleaning the floor and not your lungs, maybe it is not so surprising after all," they wrote. They believe the cleaning chemicals irritate the mucous membranes that line the airways, which causes damage. To lower the risk, the British Lung Foundation suggests looking for products that are labeled "allergy friendly" as they have fewer chemicals. While the researchers acknowledge their study included very few people who did not clean, they said their findings are strong. "The take home message of this study is that in the long run cleaning chemicals very likely cause rather substantial damage to your lungs,"
Rapid pollution increases may be as harmful to the heart as absolute levels - Rapid increases in pollution may be as harmful to the heart as sustained high levels, according to research published today in the European Journal of Preventive Cardiology,1 a European Society of Cardiology journal. The authors urgently call for confirmatory studies as even residents of clean air cities could be at risk. There is longstanding evidence that exposure to high concentrations of air pollution increases the risk for several diseases including heart attacks and European Union (EU) statutory pollution limits are based on absolute upper values. However, this study investigated whether rapid increases in pollution increase the risk of heart attack, independently of an absolute threshold. It also looked at whether an association between heart attacks and changes in air pollution exists in clean air cities where concentrations of air pollution vary but do not exceed EU limits. The study was conducted in Jena, Germany, a city with 100,000 residents and only a few days over the last several years during which concentrations of some air pollutants exceeded EU daily limits. All patients living within 10 km of Jena who had a heart attack and were admitted to Jena University Hospital between 2003 and 2010 were included. Each of the 693 patients served as his or her own control. Concentrations of air pollutants one, two, and three days before heart attack symptoms were compared to concentrations in the previous and following week. The researchers analysed whether there were rapid variations in air pollution before the heart attack. Increases of nitric oxides of more than 20 μg/m3 within 24 hours were associated with a more than doubled risk of heart attack.
Presence, persistence of estrogens in vernal pools an emerging concern - Estrogens in treated wastewater that find their way into temporary wetlands known as vernal pools persist for weeks or even months, according to researchers, who suggest that persistence may have implications for these critical aquatic habitats. An eight-week study of estrogens' behavior in three vernal pools in the area of Penn State's Living Filter, produced these findings that provide insight into current treatment inadequacy and water reuse generally. The Living Filter is a 600-acre tract where Penn State has been spray-irrigating all its wastewater on crop fields and forest since the 1980s. This 2015 spring study intentionally coincided with the development period of native amphibian larvae, deemed an "ecologically relevant" interval by researchers, as estrogens have the potential to cause endocrine disruption in amphibians. In addition to gauging the presence and concentration of estrogens in both the treated, sprayed wastewater and pool water, researchers installed sensors in each pool and measured various physical and chemical parameters, which included dissolved oxygen, oxidation-reduction potential, water level, water temperature, electrical conductivity, pH, and rainfall throughout the study period. In the highly oxygenated water of streams and rivers, estrogens break down relatively quickly. But this study demonstrated, for the first time, that in the dissolved-oxygen-depleted water of vernal pools the estrogens persist and even transform into parent compounds, explained lead researcher Odette Mina, a doctoral degree student in the College of Agricultural Sciences when the study was conducted. "I selected those pools specifically due to their close proximity to the spray-irrigation laterals, allowing for direct input of the treated wastewater into the pool water," said Mina, now managing director of Penn State's Energy and Environmental Sustainability Laboratories.
Safety Breaches at U.S. Meat Plants Spark Outcry in UK Over Possible Post-Brexit Trade Deal - British food safety experts and lawmakers are raising concerns over a possible post-Brexit trade deal with the U.S. in light of newly-released records showing serious hygiene breaches in U.S. meat plants. "We cannot allow this to be a race to the bottom. We should insist the U.S. raises its standards, and guarantees food safety, before we are prepared to allow in U.S. meat imports," said Kerry McCarthy, a former member of parliament and shadow environment minister. The outcry comes after U.S. government data showed several instances of safety failures at American packing plants, including the packaging of diseased poultry meat in containers used for food products and the discovery of fecal matter in meat bound for grocery stores. Health experts also raised alarm over a legal loophole that allows meat containing salmonella bacteria to be sold to Americans. The British organization Sustain has found that nearly 15 percent of Americans—48 million people—suffer from foodborne illnesses per year. Only about 1.5 percent of people in the U.K. experience food poisoning annually, and only about 10,000 cases of salmonella contamination were found in 2016 compared with one million in the U.S. "The U.S. meat industry has a responsibility to clean up its act," David Wallinga, senior health officer at the Natural Resources Defense Council, told the Guardian. The group obtained the documents detailing the industry's safety failings, many of which were found in Pilgrim's Pride, one of the largest American poultry producers.
Farmers, Conservationists Challenge Trump’s EPA, Monsanto Over Crop-Damaging Pesticide - On Friday, public interest organizations representing farmers and conservationists made their legal case in a federal lawsuit against the 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. As the 2018 season approaches, experts predict similar widespread devastation. “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,” 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 in the case also shows that in late 2017, under pressure to take some action, EPA adopted revised instructions for use Monsanto proposed and approved – measures that agronomists believe will again be ineffective.
Arkansas banned a weedkiller. Now, Monsanto is suing - Grist - When Monsanto introduced a new kind of seed that wouldn’t die when exposed to the herbicide dicamba, it triggered a crisis in the southeastern United States. Farmers planted the seed and started spraying dicamba, and it worked great! Except that it drifted onto other farmers’ fields and killed their crops.And the dramatic plot twists keep coming. One farmer gunned down another in a confrontation over his withered crops. Then, states began to restrict the use of dicamba, with Arkansas completely banning it last summer.Monsanto wasn’t happy about that. In the latest development, the agribusiness company sued the Arkansas State Plant Board, which regulates pesticides. It also sued each of the individual board members — who, for the record, are just local, agriculture-minded folks who volunteer their time. One board member, Terry Fuller, told NPR’s Dan Charles: “I didn’t feel like I was leading the charge. I felt like I was just trying to do my duty.” But farmers on the other side of the debate, who think the ban is way too strict, are demanding at least limited access to dicamba. What a mess.
In Blow to Monsanto, Arkansas Ban on Controversial Herbicide to Remain -- Monsanto lost its bid to overturn Arkansas' ban on dicamba , a controversial weedkiller linked to extensive damage to famers' crops in the state as well as several other states . The agribusiness giant makes a version of the herbicide called XtendiMax that's paired with its seeds that aregenetically engineered to resist the product. DuPont Co. and BASF SE also sell their own dicamba-based formulations. Pulaski County Circuit Judge Chris Piazza dismissed Monsanto's lawsuit Friday citing a recent Arkansas Supreme Court ruling which held that the state cannot be made a defendant in court. "We are disappointed in the court's decision to dismiss our legal challenge of the plant board's restrictions, and we will consider additional legal steps that might be appropriate," Scott Partridge, the company's vice president of global strategy, told the Associated Press in a statement. The AP further reported:"Among other arguments, Monsanto claimed that the state did not consider the economic impact of the ban. The company also challenged the makeup of the 18-member board, arguing a state law that gives private groups such as the state Seed Growers Association power to appoint members violates Arkansas' constitution. Piazza said he wouldn't going to rule specifically on the request for a preliminary injunction in case his dismissal ruling is appealed and sent back to his court."
Monsanto 'Commands' Civic Group to Turn in All Communications Over Glyphosate -- Avaaz , a civic campaigning network that counts roughly 45 million subscribers around the world, has been served with a 168-page subpoena on behalf of agribusiness giant Monsanto .The document, dated Jan. 26 and sent from New York Supreme Court, "commands" the U.S.-based organization to turn in a decade's worth of internal communications by Friday, Feb. 23.The subpoena specifically seeks a trove of documents and communications related to Avaaz's campaigns around regulating glyphosate —the controversial star ingredient in Monsanto's blockbuster weedkiller, Roundup. The organization says this includes their 2017 effort to stop the European Union from re-issuing a 15-year license for glyphosate; its 2013 effort to block a Monsanto genetically-modified seed factory in Argentina; and an ongoing campaign to stop the mega-merger between Monsanto and Bayer . As founder Ricken Patel and his team pointed out , that's "pretty much every single private email, document, note, chat or anything else that any Avaaz staffer has ever written or done on our campaigns to ban Monsanto's key herbicide, glyphosate." The full subpoena can be read here: https://avaazimages.avaaz.org/monsanto-subpoena-to-avaaz-r.pdfAvaaz worries about the scope of the subpoena, as it would also include the names and email addresses of members who have signed Monsanto petitions. GM Watch noted that one of its petitions calling for a moratorium on glyphosate garnered more than 2 million signatures.The subpoena was issued as part of a class-action lawsuit against Monsanto in which plaintiffs around the country claim that they or their loved ones developed non-Hodgkin's Lymphoma due to exposure to Roundup. Avaaz is now fighting back and is raising funds for the defense effort.
One Million Trees Pledged to 'Trump Forest' to Offset President's Anti-Climate Agenda - Trump Forest —a global reforestation project aiming to offset President Trump 's anti- climate policies—has reached 1 million trees after thousands of pledges from around the world. Trump Forest was launched just under a year ago after POTUS announced he was pulling the U.S. from theParis agreement ."Thanks to you guys, you've pledged more than a million trees all over the world to try and offset that ignorance," Adrien Taylor, one of the three founders of the project, said in a video message announcing the milestone. "In doing so, you've not only offset some of the carbon emissions that have come out of the Trump administration, you've also helped reforest communities, and you've helped create a small silver lining in the very dark cloud of ignorance which is in the White House." The forest does not have a single, physical location. Rather, anyone who wants to participate in the project can plant trees anywhere around the world in Trump's name. Once that's done, you send the group a receipt so the contribution is added to the global Trump Forest map. You can also directly donate to Trump Forest partner Eden Reforestation Projects , a non-profit that works in developing countries to rebuild natural landscapes destroyed by deforestation.
Increased UV from ozone depletion sterilizes trees -- Pine trees become temporarily sterile when exposed to ultraviolet radiation as intense as some scientists believe the Earth experienced 252 million years ago during the planet's largest mass extinction, lending support to the theory that ozone depletion contributed to the crisis.The effect of high UV on conifers and potentially other trees also suggests caution today in introducing chemicals that deplete Earth's ozone layer, which has yet to recover after a global ban on chlorofluorocarbon refrigerants in the 1980s instituted after ozone holes developed over the poles. Some industrial chemicals also destroy atmospheric ozone, which is the planet's sunscreen, protecting all life from excessive UV rays, in particular UV-B wavelengths, which causes mutations in DNA. Results of the experiment, which was conducted by University of California, Berkeley graduate student Jeffrey Benca, will be published Feb. 7 in the online journal Science Advances. Benca irradiated 18-inch-tall, bonsai-like pines with UV-B dosages up to 13 times stronger than on Earth today, simulating the effects of ozone depletion caused by immense volcanic eruptions that occurred at the end of the Permian Period. During the two-month experiment, none of the trees died but all seed cones, or pine cones, shriveled up only days after emerging, leaving the trees sterile.
Britain and Europe must ban palm oil in biofuel to save forests, EU parliament told -- If Britain and other European nations are to fulfill forest protection goals, they must ban the use of palm oil for biofuel and tighten oversight of supply chains, a delegation of forest peoples told parliamentarians this week.The call for urgent, concrete action comes amid an increasingly heated diplomatic row over the issue between the EU and the governments of major palm-producing nations such as Indonesia, Malaysia and Costa Rica.The European parliament voted last April to prohibit sales of biofuels made from vegetable oils by 2020 in order to meet its climate goals. This was followed by a related vote last month. Whether and how this might be implemented is now being considered by the European Commission and member states.The pushback has been strong, particularly in south-east Asia, the origin of 90% of the world’s palm oil exports, which is used in hundreds of supermarket products. Palm oil can also be blended with diesel to power engines, which is what the ban would halt.Influential politicians in these countries, many of whom are closely linked to the industry, accuse the EU of trade protectionism, colonial thinking and undermining poverty reduction efforts. Malaysia’s plantations minister described the proposed ban as “crop apartheid.” But indigenous and other communities who are negatively affected by the plantations urge the EU to push ahead with the ban and to go further by tightening other supply chain controls to prevent damage to their land, rights and environment.
Mexico finds illegal avocado plantation in Monarch reserve — Mexican environmental inspectors said Wednesday they found 7.4 acres (3 hectares) of illegal avocado plantations in the Monarch butterfly wintering grounds west of Mexico City. It's apparently the first time that a wave of avocado planting has had a significant, direct effect on the heart of the Monarch area, a protected nature reserve. Monarch butterflies migrate from the U.S. and Canada to pine and fir forests that thrive at about the same altitude as prime avocado-growing land. Previously, deforestation linked to lucrative avocado planting had been seen in areas to the west and south of the reserve. In April, police found that a 91-acre (37-hectare) swath of pine trees had been cut down in the nature reserve of Valle de Bravo, a bit east of the butterfly reserve, to plant avocado trees. Without pine trees to provide thermal cover and roosting sites, the butterflies can freeze to death. extinction, its amazing 3,400-mile (5,500-kilometer) migration is endangered. No butterfly lives to make the round trip, and experts are still studying how they "remember" the route. Previously, experts had estimated that Michoacan — the state where part of the reserve is located, and the biggest avocado-producing state in Mexico — loses about 15,000 to 20,000 acres (6,000 to 8,000 hectares) of forest land annually to avocado plantations.
Dirty talk: How pollution is snuffing out plants’ scent messages - New Scientist. IN THE classic post-apocalyptic novel The Day of the Triffids, giant carnivorous plants terrorise humanity. Triffids can walk and are equipped with venomous stingers, but their real power lies in their ability to communicate and so plot against us.It sounds far-fetched, but since John Wyndham’s book was published in 1951, one aspect of this fiction has proved to be science fact: plants do talk to one another. If you stroll through a forest and take a deep breath, you can smell the “words” – complex volatile chemicals such as beta-pinene, which smells fresh and piney. Plants produce thousands of these, combining them to create “sentences”.However, this fragrant language is under threat. Air pollution is disrupting floral scents, turning their messages into gibberish. Not only is this having an impact on plants’ abilities to survive, it is also bad news for pollinating insects – and for us, because it affects everything from crop yields to the smell of our favourite flowers. Luckily, there is a way we can help our botanical friends fight back. It has long been known that insects such as pollinators and pests can distinguish between plants by the unique bouquet of chemicals they release. What’s new is the idea that plants use their emissions to talk among themselves. “Plants release volatile chemicals into the atmosphere – these can be viewed as a language in the sense that a plant releasing the chemicals can be viewed as ‘speaking’ and the plant receiving them as ‘listening’ and then responding,” says chemical ecologist James Blande at the University of Eastern Finland.
Polluted air may pollute our morality - Exposure to air pollution, even imagining exposure to air pollution, may lead to unethical behavior, according to findings published in Psychological Science, a journal of the Association for Psychological Science. A combination of archival and experimental studies indicates that exposure to air pollution, either physically or mentally, is linked with unethical behavior such as crime and cheating. The experimental findings suggest that this association may be due, at least in part, to increased anxiety. "This research reveals that air pollution may have potential ethical costs that go beyond its well-known toll on health and the environment," says behavioral scientist Jackson G. Lu of Columbia Business School, the first author of the research. "This is important because air pollution is a serious global issue that affects billions of people--even in the United States, about 142 million people still reside in counties with dangerously polluted air." Previous studies have indicated that exposure to air pollution elevates individuals' feelings of anxiety. Anxiety is known to correlate with a range of unethical behaviors. Lu and colleagues hypothesized that pollution may ultimately increase criminal activity and unethical behavior by increasing anxiety. In one study, the researchers examined air pollution and crime data for 9,360 US cities collected over a 9-year period. The air pollution data, maintained by the Environmental Protection Agency, included information about six major pollutants, including particulate matter, carbon monoxide, nitrogen dioxide, and sulfur dioxide. The crime data, maintained by the US Federal Bureau of Investigation, included information about offenses in seven major categories, including murder, aggravated assault, and robbery.
Air Pollution from Industrial Shutdowns and Startups Worse Than Thought - When Hurricane Harvey struck the Texas coast in August 2017, many industrial facilities had to shut down their operations before the storm arrived and restart once rainfall and flooding had subsided.These shutdowns and startups, as well as accidents caused by the hurricane, led to a significant release of air pollutants. Over a period of about two weeks, data we compiled from the Texas’ Air Emission Event Report Database indicates these sites released 2,000 tons of sulfur dioxide, carbon monoxide, nitrogen oxides, volatile organic compounds and other pollutants.These types of emissions that result from startups, shutdowns or malfunctions are often referred to as “excess” or “upset” emissions and are particularly pronounced during times of natural disasters, as was the case with Hurricane Harvey.However, as we document in a newly published study in the journal Environmental Science & Technology, they also occur regularly during the routine operation of many industrial facilities, sometimes in large quantities. And, even if unintended or unavoidable, the pollutants released during these events are in violation of the U.S. Clean Air Act (CAA). With the EPA now revisiting the rules regarding these air toxics, our study shows how significant they are to public health – and how historically they have not been systematically tracked across the country or regulated comprehensively.
Is Constant Human Noise Stressing Out Wildlife? - A major study earlier this year showed something incredible. Looking at 492 protected areas in the U.S., researchers found that 62 percent of the parks, wilderness areas and green spaces were twice as loud as they should be. About 21 percent were 10 times as loud. Noise isn't just annoying—chronic exposure to traffic, generators and airplanes can lead to negative consequences for wildlife . Researchers like Nathan Kliest are just getting a handle on exactly how all that noise impacts animals. Kleist and his colleagues found that a perfect experiment was already underway in the uninhabited San Juan Basin of northern New Mexico, dotted with gas-extraction wells. While some of the wells run more or less silently, others have very loud compressors that emit a nonstop hum in a range that overlaps with the frequency of many bird vocalizations. In a previous study found that the constant hum altered which birds nested in the nearby area. Noise-tolerant species moved closer to the sites while more sensitive species fled the area. But Kleist wanted to examine the physiological effects of noise pollution on the birds. He built 240 nest boxes by hand and placed them at 12 pairs of gas wells in the Rattlesnake Canyon Habitat Management Area. One site in each pair had a droning compressor while the other was more silent. Then, over the course of three years, he monitored three cavity-nesting species that used the boxes: the western bluebird, the mountain bluebird and the ash-throated flycatcher. Kleist collected blood samples from adult female birds and chicks and assessed the body size and feather length of nestlings each breeding season. The results, reported in The Proceedings of the National Academy of Sciences , showed that mountain bluebirds avoided the noisy areas, and flycatchers also kept their distance, though they were a little more tolerant. Western bluebirds, however, seemed fine with increased noise levels and nested everywhere on the sites. But that doesn't mean they were unaffected. Nestlings in high-noise areas had smaller body sizes and reduced feather growth.
Animals have stopped turning white for winter in alarming climate change trend - Wearing a white coat in the winter will help you blend into the background only if there’s enough snow in said background. But with climate change making snowy winters shorter and rarer, white animals have to re-adapt. Snowshoe hares, like ermines and arctic foxes, famously have two coats. To blend in with the ground in the warmer months, snowshoe hares sport brown fur. In the winter, they turn white to camouflage with the snow. It’s harder for predators to spot an animal that matches the background in all seasons.This technique is a wonder of evolution, but climate change is interrupting this process. With warming temperatures, there’s less snow in the winter, and white hares on unusually snow-less ground stick out to predators, like tasty marshmallows on mud. Research recently published in the Canadian Journal of Zoology explained the new phenomenon. Biologists studying in Pennsylvania and in the colder Yukon compared the habits of their respective snowshoe hare populations, and found the distinct populations act and look very differently. Pennsylvania hares have thinner coats and don’t seek out warmer areas. Three of the 70 Pennsylvania hares captured didn’t even grow out their winter coats, staying the same color all year long.
Animals Are Losing Their Vagility, or Ability to Roam Freely - NYT— Snow comes early to the Teton mountain range, and when it does the white-bottomed pronghorn that live here get the urge to move. Following an ancient rhythm, they migrate more than 200 miles to the south, where the elevation is lower, winter is milder and grass is easier to find. Come the spring green-up, they make the second half of the round trip, returning to the Grand Teton National Park. After thousands of years, biologists are concerned about the future of this migration pattern. While there have been efforts to protect the journey, such as highway overpasses and antelope-friendly fences, some new barriers are looming. Most immediate is the prospect of 3,500 new gas wells planned on federal land at the southern end of the pronghorn’s migratory path. And then there’s the nearby Jonah Natural Gas Field, which is already intensively developed.“The challenge is understanding how many holes you can punch in the landscape,” said Matthew Kauffman, a professor of wildlife biology at the University of Wyoming, “before a migration is lost.” Room to move is critical for a wide range of species, but it has long been difficult for researchers to capture where and when they travel. But a new and growing field called “movement ecology” is casting light on the secretive movements of wildlife and how those habits are changing. A global study of 57 species of mammals, published in the journal Science, has found that wildlife move far less in landscapes that have been altered by humans, a finding that could have implications for a range of issues, from how well natural systems function to finding ways to protect migratory species. Using the GPS collars that updated an animal’s location regularly and other data, the project found that vagility — the ability of an organism to move — declines in areas with human footprints by as much as half to two-thirds the distance than in places where there is little or no human activity.
Lawsuit Launched to Protect Endangered Species From Trump’s Rollback of Clean Water Protections - Conservation groups filed a formal notice of intent today to sue the U.S. Environmental Protection Agency and U.S. Army Corps of Engineers for failing to consider harm to endangered species when adopting a rule that delays the effective date for the 2015 Clean Water Rule. That rule redefined which waterways are protected under the federal Clean Water Act.The two-year delay is the first of several steps the federal agencies are taking to carry out a 2017 executive order by President Trump that would slash protections for wetlands, creeks and rivers across the nation. The EPA and Army Corps are rushing to comply with the order without considering harm to water quality or endangered species.“It is clear EPA and the Corps are determined to reduce or eliminate Clean Water Act protections for the majority of our nation’s waters, and they are attempting to do that without legal authority and without complying with the nation’s most basic environmental laws,” said Kelly Hunter Foster, a Waterkeeper Alliance senior attorney.Among the waters likely to lose protection against pollution and destruction under the agencies’ Feb. 6 delay rule are wetlands such as vernal pools in California, prairie potholes in the upper Midwest and coastal pocosins that provide vital habitat for imperiled species.
West Virginia Senate advancing bill on water pollution (AP) — The West Virginia Senate has voted unanimously for a bill that would delete a section of state law governing water pollution by surface coal mining. The bill from the Senate Energy, Industry and Mining Committee would cut a requirement that the mining company get certification afterward that it mitigated damage to streams or more than 250 acres (101 hectares) of watershed. The provision says mitigation costs cannot exceed $200,000 per acre. Committee Chairman Randy Smith, a Davis Republican and sponsor, described only other provisions before Thursday's vote, saying this conforms state law to federal law. He says industry stakeholders and the state Department of Environmental Protection agreed. The West Virginia Rivers Coalition, an environmental group, says the coal industry-backed bill was made available only Monday without time to analyze it.
The story behind the water crisis in Martin County, Kentucky -- The residents of Martin County, Kentucky, like those in so many cities, towns, and communities across America and the world, do not have access to clean water. Since the beginning of the year the economically distressed former coal mining county on the border of West Virginia has seen frequent and long-lasting water service interruptions, the result of dilapidated and deteriorating infrastructure. The water that does come out of the pipes is foul-smelling and irritating to skin and eyes and is often contaminated with heavy metals and carcinogens. The water poses such a health risk that the water bills sent out by the county include a warning that it could cause an increased risk of cancer, as well as liver, kidney, and central nervous system damage. Despite this, residents are facing a possible 50 percent hike for contaminated water. After extracting untold billions from generations of coal miners, the energy giants have largely abandoned eastern Kentucky, like the rest of the Appalachian coalfields, and left behind nothing but economic and environmental ruin. The polluting of Martin County’s water supply can be traced to the environmentally destructive practices such as mountaintop removal mining, which routinely pollute local ecosystems with waste and processing byproducts. To this day residents of Martin County are still suffering from the consequences of the 2000 coal slurry spill, the largest environmental disaster in the history of the southeastern United States until that time. Despite evidence of criminal neglect by Massey Energy, the company and its executives, including new CEO Don Blankenship, avoided any serious accountability because of a bipartisan conspiracy to exempt the company from oversight and sabotage the investigation of the spill.
Students and workers call for the unity of the working class following meeting on Flint water crisis -- The International Youth and Students for Social Equality (IYSSE) hosted a well-attended meeting Wednesday at the University of Michigan-Flint campus on the global water crisis. The meeting had online participation from workers in Puerto Rico and Martin County, Kentucky.The meeting reviewed the depth and scope of the water crisis and what it reveals about the state of the global capitalist system in the 21st century. Workers and youth from each area made powerful contributions.The class analysis of the water crisis and the call for an independent movement of the working class to defend the rights of workers received a powerful response from those in attendance. A group of students from the university joined the IYSSE and are taking steps to organize an official chapter of the club on the campus. Anthony, a second-year computer science student who grew up in Flint, said: “I was in the Navy for eight years. I flew all over the world, to the Philippines, Thailand, Djibouti and Africa. I went to a lot of Third World countries. I really didn’t expect to come home to the same conditions.” “I came back right in the middle of the water crisis in 2015,” he continued. “It was a couple years after, but nothing had changed. I was stationed in Florida, and you didn’t hear anything on the news about Flint. I knew from my family. The cat they had for a while died, and they found out it was riddled with tumors. They had a dog that died. They quit drinking out of the faucet. The shower made a terrible smell. I’ve seen cleaner water out of the faucet in Third World countries.”
California drought: Water conservation slipping statewide as dry weather returns -- As California suffers through another dry winter, increasing fears that drought conditions may be returning, the state’s residents are dropping conservation habits that were developed during the last drought and steadily increasing their water use with each passing month. A new analysis of state water records by this news organization found California’s urban residents used 13.7 percent less water last year in the first eight months after Gov. Jerry Brown declared an end to the drought emergency than they used in the same eight-month period in 2013. But in each of those eight months last year, the water savings dropped from 20 percent in May to 2.8 percent in an unseasonably dry December. After last winter’s record rains, the governor on April 7 ended statewide emergency water conservation targets imposed on cities and water districts. Many eased, or dropped entirely, their mandatory water restrictions, rebate programs and other incentives to conserve, because they wanted to make more money by selling more water, and in part because it was difficult to convince their customers of the urgency when the state had just seen its wettest winter in 20 years.But with each passing month, the savings have shrunk. Californians opened the spigots to water their lawns, took longer showers and returned to pre-drought habits, state records show. By July, statewide water use was down 15 percent, then 8.5 percent in October. By December, the most recent month for which the State Water Resources Control Board has data, statewide water use was only down 2.8 percent, compared with December 2013, the baseline year that state water regulators use for monthly water conservation reports.
Report: 64% of Bottled Water Is Tap Water, Costs 2000x More - Bottled water companies have relied on predatory marketing practices and exorbitant lobbying efforts to sell Americans on the inaccurate belief that pre-packaged water is cleaner and safer than tap water—a notion that is costing U.S. households about $16 billion per year. In a new report entitled "Take Back the Tap," Food & Water Watch explains that 64 percent of bottled water comes from municipal tap water sources—meaning that Americans are often unknowingly paying for water that would otherwise be free or nearly free. A gallon of bottled water costs about $9.50—nearly 2,000 times the price of tap water for municipal taxpayers. "When bottlers are not selling municipal water, they are pumping and selling common water resources that belong to the public, harming the environment, and depleting community water supplies," reads the study. The bottled water industry has an enormous environmental footprint, using about four billion pounds of plastic for packaging in 2016—which required an energy input equal to at least 45 million barrels of oil.
Plundering the Planet: Coca-Cola And Nestlé To Privatize The Largest Reserve Of Water In South America - Private companies such as Coca-Cola and Nestlé are allegedly in the process of privatizing the largest reserve of water, known as the Guarani Aquifer, in South America. The aquifer is located beneath the surface of Brazil, Argentina, Paraguay and Uruguay and is the second largest-known aquifer system in the world. Reported by Correiodo Brasil the major transnational conglomerates are “striding forward” with their negotiations to privatize the aquifer system. Meetings have already been reserved with authorities of the current government, such as Michel Temer, to outline procedures required for private companies to exploit the water sources. The concession contracts will last more than 100 years. The first public conversation about this dilemma was scheduled on the same day the process of voting for the impeachment of President Dilma Rousseff was opened. As Central Politico reports, “This coincidence was fatal for the adjournment of the meeting.”“ This issue extends beyond South America, as all humans will be affected by the decision to privatize the second-largest aquifer system in the world. Essentially, the corporations are profiting off a natural resource that should be freely available to all.
Exposing Africa's Manmade Water Crisis - About a decade ago, at a meeting of South African mayors convened by Lindiwe Hendricks, South Africa’s then-minister of water and environmental affairs, we predicted that an unprecedented water crisis would hit one of the country’s main cities within 15 years, unless water-management practices were improved significantly.That prediction has now come true, with Cape Town facing a shutdown of its piped water network. The question now is whether African leaders will allow our other projection – that, within the next 25-30 years, many more of the continent’s cities will be facing similar crises – to materialize.Africa has long struggled with urban water and wastewater management. As the continent’s population has swelled, from about 285 million in 1960 to nearly 1.3 billion today, and urbanization has progressed, the challenge has become increasingly acute. And these trends are set to intensify: by 2050, the continent’s total population is expected to exceed 2.5 billion, with 55% living in urban environments.The challenge African countries face may not be unique, but it is, in some ways, unprecedented. After all, in Western countries, urbanization took place over a much longer period, and against a background of steadily improving economic conditions. In building effective systems for water and wastewater management, cities had adequate investment funds and the relevant expertise. Given that the construction of the infrastructure and systems required to meet African cities’ water needs is likely to take some 20-30 years, governments’ sustained commitment is essential. A key imperative is the development of more environmentally friendly systems for wastewater disposal, as is cleaning bodies of water within and around urban centers that are already heavily contaminated.Such an effort must be based on a comprehensive approach to assessing water quality that covers a wide range of pollutants – far more than the 10-40 that most African utilities now monitor – with the expectation that new pollutants will be added as they emerge. Cities like Singapore now regularly monitor 336 water quality parameters to ensure water safety. To that end, Africa will need access to the relevant expertise, adequate funding, and well-run laboratories – all of which are currently in short supply.
High levels of microplastics found in Northwest Atlantic fish - A new study sheds light on the magnitude of microplastic pollution in our oceans. The study, published today in open-access journal Frontiers in Marine Science, found microplastics in the stomachs of nearly three out of every four mesopelagic fish caught in the Northwest Atlantic -- one of the highest levels globally. These findings are worrying, as the affected fish could spread microplastics throughout the ocean. The fish are also prey for fish eaten by humans, meaning that microplastics could indirectly contaminate our food supply through the transfer of associated microplastic toxins. "Microplastic pollution has been in the news recently, with several governments planning a ban on microbeads used in cosmetics and detergents" says Alina Wieczorek from the National University of Ireland, Galway and lead author of the study. "The high ingestion rate of microplastics by mesopelagic fish that we observed has important consequences for the health of marine ecosystems and biogeochemical cycling in general."Microplastics are small plastic fragments that have accumulated in the marine environment following decades of pollution. These fragments can cause significant issues for marine organisms that ingest them, including inflammation, reduced feeding and weight-loss. Microplastic contamination may also spread from organism to organism when prey is eaten by predators. Since the fragments can bind to chemical pollutants, these associated toxins could accumulate in predator species. Mesopelagic fish serve as a food source for a large variety of marine animals, including tuna, swordfish, dolphins, seals and sea birds. Typically living at depths of 200-1,000 meters, these fish swim to the surface at night to feed then return to deeper waters during the day. Through these vertical movements, mesopelagic fish play a key role in the cycling of carbon and nutrients from the surface to the deep sea -- a process known as biogeochemical cycling. This means they could spread microplastic pollution throughout the marine ecosystem, by carrying microplastics from the surface down to deeper waters, affecting deep-sea organisms.
73% of Deep-Sea Fish Have Ingested Plastic - Microplastics can really be found everywhere , even in the stomachs of creatures living deep underwater. Marine scientists from the National University of Ireland (NUI) in Galway found the plastic bits in 73 percent of 233 deep-sea fish collected from the Northwest Atlantic Ocean—one of the highest microplastic frequencies in fish ever recorded worldwide.For the study, published Monday in the journal Frontiers in Marine Science, the scientists inspected the stomach contents of dead deep-water fish collected from the Northwest Atlantic Ocean. The sampled fish, including the Spotted Lanternfish, Glacier Lanternfish, White-spotted Lanternfish, Rakery Beaconlamp, Stout Sawpalate and Scaly Dragonfish, were taken from depths of up to 600 meters (about 2,000 feet).Even though microplastics are usually found around the ocean's surface, these fish were able to gobble them up anyway."Deep-water fish migrate to the surface at night to feed on plankton (microscope animals) and this is likely when they are exposed to the microplastics," One fish that was examined, a Spotted Lanternfish less than 2 inches in length, had 13 microplastics extracted from its stomach, Wieczorek said."In total, 233 fish were examined with 73 percent of them having microplastics in their stomachs, making it one of the highest reported frequencies of microplastic occurrence in fish worldwide," she said.
The Last Straw? EU Official Hints Ban on Single-Use Plastic Across Europe -- Frans Timmermans, the first vice president of the European Commission, made the comment after Britain's environment minister Michael Gove, a pro-Brexiter, suggested that staying in the EU would make it harder for the UK to create environmental laws such as banning plastic drinking straws. Gove said being in the EU meant there were "some steps we might want to take environmentally that we can't yet." Timmermans later tweeted to Gove: "One step ahead of you. EU legislation on single-use plastics coming before the summer. Maybe you can align with us?" He included several hashtags, including #EUDoesntSuck. "Plastic straws are a scourge," Gove told Sky News. "They're just one example of the ways in which we pollute the oceans and damage marine wildlife . I want to do everything we can to restrict the use of plastic straws and we're exploring at the moment if we can ban them."
Shadowy criminals are prowling the seas and putting food supplies in danger - People have been taking fish out of the sea for about as long as people have existed at all. But criminal fishing has never posed the threat that it does today. The growing problem goes by the clunky name of "illegal, unreported and unregulated fishing," and it has put whole swaths of the world's fisheries in danger. Roughly a quarter of the 120 million tons of seafood that humans catch every year is stolen from countries' waters or caught with outlawed methods, according to marine biologists. Vessels are bigger than ever, and fishing techniques more effective. Consumer incomes are higher than ever — around the world. And the mechanisms and infrastructure of global trade make it possible to ship catches further, more easily. The problem is criminals who flout the regulations that legal fleets must obey. Sometimes, illegal perpetrators use small boats, slipping from their own waters to poach other countries' fisheries. Other times, the fish thieves use huge, industrial vessels that scoop up vast stretches of water, killing everything in their nets.The biggest outfits work in fleets, dropping their catches onto tremendous, refrigerated mother ships. That practice, called "transshipping," lets fishing boats stay at sea, sweeping up marine life, for years at a stretch. Scientists warn that, unchecked, overfishing will eradicate whole species, and could within a few decades contribute to a total collapse of the world's fisheries. But fishing grounds from Asia to Africa and beyond are already cleaned out. Fish are swept away for sale in wealthier, far-away markets, such as China. Beijing helps its fishing fleet — the world's biggest — range far across the globe by giving government subsidies based on boat horsepower, according to risk analysis firm Stratfor and others.
Coral reefs at risk of dissolving as oceans get more acidic - (Reuters) - Coral reefs could start to dissolve before 2100 as man-made climate change drives acidification of the oceans, scientists said on Thursday. Acidification will threaten sediments that are building blocks for reefs. Corals already face risks from ocean temperatures, pollution and overfishing. “Coral reefs will transition to net dissolving before end of century,” the Australian-led team of scientists wrote in the U.S. journal Science. “Net dissolving” means reefs would lose more material than they gain from the growth of corals. Carbon dioxide, the main man-made greenhouse gas, forms a weak acid in water and threatens to dissolve the reef sediments, made from broken down bits of corals and other carbonate organisms that accumulate over thousands of years, it said. The sediments are 10 times more vulnerable to acidification than the tiny coral animals that also extract chemicals directly from the sea water to build stony skeletons that form reefs, the study said. Coral animals will be able to keep growing and replenish reefs long after sandy sediments start to dissolve, lead author Bradley Eyre, of Southern Cross University, told Reuters. “This probably reflects the corals’ ability to modify their environment and partially adapt to ocean acidification whereas the dissolution of sands is a geo-chemical process that cannot adapt,” he wrote in an e-mail. The report said it was “unknown if the whole reef will erode once the sediments become net dissolving” and whether reefs “will experience catastrophic destruction” or merely a slow erosion. Some reef sediments were already starting to dissolve, such as at Kaneohe Bay in Hawaii, where other pollutants were contributing.
Sea Level Rise Is Accelerating: 4 Inches Per Decade (or More) by 2100 - The rate of sea level rise is accelerating so fast that some coastal communities could confront an additional 4 inches per decade by the end of the century—a growing concern now confirmed by thorough measurements from space.At that rapid pace of change, vulnerable communities might not be able to keep up. Storm surges will increase erosion and damage homes, businesses and transportation infrastructure in some areas. In other places, seawater will intrude on freshwater aquifers. In South Asia and the islands, people will lose the land where they live and farm. And the changes will arrive much faster than they do today.Scientists have been warning about this speed-up for many years based on computer climate simulations. A new study released Monday confirms the modeled trend with a detailed analysis of satellite observations spanning a quarter of a century.The findings, published in the Proceedings of the National Academy of Sciences, reinforce the outlook that average global sea level is likely to go up at least 2 feet by the end of this century compared to 2005 levels.The study confirms that the Intergovernmental Panel on Climate Change (IPCC), NASA and the European Environmental Agency were correct when they found that the rate of change had increased in recent years. And if the rate of acceleration intensifies—as it might if global warming speeds the melting of the Greenland and Antarctic ice sheets and glaciers—a 2-foot rise might be the low end of the likely range. The study assumes a steady acceleration at only the rate observed in the past 25 years.
Retreat From a Rising Sea: A Book Review by Dr. Jeff Masters - The only answer to rising seas is to retreat, argue Duke University sea level rise expert Dr. Orrin Pilkey and co-authors in their excellent 2016 book, Retreat From a Rising Sea: Hard Choices in an Age of Climate Change. The book provides an excellent overview of how fast sea level is rising, the vulnerability of coastal cities to sea level rise in both the U.S. and worldwide, the failed government policies that subsidize the wealthy and encourage high-risk development near eroding shores, and the well-funded PR campaign by the fossil fuel industry to keep us from recognizing the problem. The authors write: “Like it or not, we will retreat from most of the world’s non-urban shorelines in the not very distant future. Our retreat options can be characterized as either difficult or catastrophic. We can plan now and retreat in a strategic and calculated fashion, or we can worry about it later and retreat in tactical disarray in response to devastating storms. In other words, we can walk away methodically, or we can flee in panic.”In a chapter titled, “The Fate of Two Doomed Cities”, the authors argue that “the survival of Miami and New Orleans beyond the twenty-first century is in serious doubt”, due to sea level rise:“Miami will probably be doomed when the sea has risen 2 more feet. There is no nearby high ground to move buildings to; seawalls and the like won’t work [due to the porous bedrock that allows sea water to filter through]; and city and state leaders haven’t even agreed that there is a problem, much less started planning how to respond to the coming flood. Making a response all the more difficult, Miami’s demise will be slow and gradual; death from a thousand cuts. The demise of New Orleans, however, will be either one big catastrophe or a series of catastrophes—that is, big storms. The potential for extreme damage from storms increases every year as the sea level rises.”
Climate Refugees in Florida Could Change the Politics There for Generations - Marámellys Castro-Pérez is a Puerto Rican refugee living in Orlando with her husband and twins after the one-two punch of Hurricanes Irma and Maria . Maria, in particular, scrubbed the island clean of electricity, working toilets and phone service. It dragged Castro-Pérez's world into the dark ages and pitted the island's modern, cosmopolitan populace against the once-tamed perils of hunger, biting insects and disease. "I was very sad because the island was in desolation. It was a hard hit," Castro-Pérez explained through an interpreter. "It truly hurt to see my home like that: flooded, with no light or water, seeing my children suffering. I've cried. I've suffered. But hopefully this [move] will make it better." Castro-Pérez is now living in Florida, but what happened back on the island still haunts her and will likely reflect in how she votes. And she's not the only one. A wave of climate refugees fleeing the island to Florida could change the face of Florida politics. Maria's violence was unprecedented. It churned the island like a 125-mile-wide blender , set on "smite." Two years earlier the island saw one of the worst droughts in its history. It spent more than a year grinding farmland into ash, but then broke with a maddening deluge that washed away crops just as delighted farmers were finally planting them. Then came 2017 and its cache of hurricanes. Puerto Rico's climate-conscious inhabitants knew the value of recycling and a low carbon footprint long before the storms, but that couldn't stop them from being victimized. "We're a small population. We can carbon sink or recycle and bike more and plant all the trees we want, but that won't change anything on the larger scale," she said. "We're bearing the brunt of climate change and we're not really responsible for it."
Urban heat island effects depend on a city’s layout - The arrangement of a city's streets and buildings plays a crucial role in the local urban heat island effect, which causes cities to be hotter than their surroundings, researchers have found. The new finding could provide city planners and officials with new ways to influence those effects. Some cities, such as New York and Chicago, are laid out on a precise grid, like the atoms in a crystal, while others such as Boston or London are arranged more chaotically, like the disordered atoms in a liquid or glass. The researchers found that the "crystalline" cities had a far greater buildup of heat compared to their surroundings than did the "glass-like" ones.The study, published today in the journal Physical Review Letters, found these differences in city patterns, which they call "texture," was the most important determinant of a city's heat island effect. The heat island effect has been known for decades. It essentially results from the fact that urban building materials, such as concrete and asphalt, can absorb heat during the day and radiate it back at night, much more than areas covered with vegetation do. The effect can be quite dramatic, adding as much as 10 degrees Farenheit to night-time temperatures in places such as Phoenix, Arizona. In such places this effect can significantly increase health problems and energy use during hot weather, so a better understanding of what produces it will be important in an era when ever more people are living in cities.
Wednesday will be the warmest February day ever recorded along the East Coast - The East Coast feels more like May on Wednesday than February, with temperatures of at least 30 degrees Fahrenheit above average for this time of year. All-time record high temperatures are being set from Florida to the northern tip of Maine, as a southwest flow of air transports mild, moisture-laden air from the Gulf of Mexico and Atlantic Ocean. These records will add to the milestones already achieved on Tuesday, when cities like Boston and Washington, D.C. broke records. Mirroring the state of our politics, the U.S. is split in two, with record cold across the West, heat in the East, and flooding rains and even thundersleet (yes, thundersleet) in between. Washington is going for its earliest-ever 80-degree day on Wednesday. On Wednesday morning, a weather balloon launched from the National Weather Service forecast office that serves Portland, Maine, found that the temperature was 66 degrees Fahrenheit at 2,400 feet above the ground, shattering the record high for all of the winter months – December, January, and February. Many locations have set both record warm overnight low temperatures as well as record daytime highs. At Dulles Airport in Virginia, for example, the overnight low temperature only fell to 59 degrees Fahrenheit on Wednesday morning, which was tentatively the warmest seen in February. As of Wednesday afternoon, Newark, New Jersey reached 77 degrees Fahrenheit, breaking that city's all-time highest temperature on record for February.
This weird February heat dome on the East Coast could be unprecedented - Records were dropping on Wednesday amid what appears to be an unprecedented February ridge of high pressure and all the heat that comes along with it.Suffice it to say that Tuesday and Wednesday have been downright hot for a lot of places across the eastern half of the country that are usually much, much colder. The most ridiculous record broken on Tuesday was probably Pittsburgh’s all-time February warm temperature. In 1891, a big winter “heat wave” swept across the eastern United States. During that wave, a number of all-time records were set (including in the nation’s capital). On Tuesday, Pittsburgh broke that 127-year-old record when it climbed to 78 degrees.On Wednesday, Maine saw its first 70-degree high temperature in February. No where in Maine had it ever reached 70 in February until yesterday when the city of Fryeburg broke that streak. Fitchburg, Mass., hit 80 degrees on Wednesday — the first time any climate station in Massachusetts reached 80 degrees in February.This heat wave is breaking more records than just those at ground level. The heat is also significant in the upper levels of the atmosphere. It may even be unprecedented in modern record-keeping, though things get tricky when we start talking about extremes above our heads, higher in the atmosphere. Here’s what we do know, though: Meteorologists (ourselves included) are stunned by the size and intensity of the high pressure over the Eastern part of the nation this week, which is inherently related to the warmth. The bigger the ridge, the hotter it gets.
Temperature rises above freezing near North Pole, as frigid air slinks toward Europe - The temperature at Cape Morris Jesup weather station at the very top of Greenland, at one of the closest points of any land mass to the North Pole (about 400 miles away), has risen above the freezing mark of 32 degrees Fahrenheit, or 0 degrees Celsius, five times since Feb. 16. This is an unusual occurrence, and it illustrates the extreme weather pattern currently unfolding in the Northern Hemisphere. Previously, temperatures had only exceeded the freezing point at this weather station for brief periods during February in 2011 and 2017. So far this February, temperatures exceeded 32 degrees Fahrenheit on Feb. 16, 17, 18, 20 and 21, a warm streak that is incredibly rare. Right now, unusually high temperatures are flooding the Arctic from the Pacific side to the North Atlantic side. Sea ice extent is at record low levels, with the likelihood that another record low winter peak in sea ice extent could be set by the end of March. Sea ice loss is wreaking havoc on Arctic ecosystems. Missing sea ice cover exposes coastal villages to flooding from high waves during storms, and makes it harder for subsistence hunters to catch seals and other traditional sources of meat. It also threatens iconic species such as the polar bear. Ruth Mottram, a scientist with the Danish Meteorological Institute, said she recalls "it happening at least once before in the last couple of years," and that the other event may have been the first time that the temperature at Cape Morris Jesup weather station went above 0 degrees Celsius, or 32 degrees Fahrenheit, in February.
Arctic temperatures soar 45 degrees above normal, flooded by extremely mild air on all sides -- While the Eastern United States simmered in some of its warmest February weather ever recorded Tuesday and Wednesday, the Arctic is also stewing in temperatures more than 45 degrees above normal. This latest huge temperature spike in the Arctic is another striking indicator of its rapidly transforming climate. On Monday and Tuesday, the northernmost weather station in the world, Cape Morris Jesup at the northern tip of Greenland, experienced more than 24 hours of temperatures above freezing according to the Danish Meteorological Institute.“How weird is that?” tweeted Robert Rohde, a physicist and lead scientist at Berkeley Earth, a non-profit organization that conducts analyses of the Earth’s temperature. “Well it’s Arctic winter. The sun set in October and won’t be seen again until March. Perpetual night, but still above freezing.”The Danish Meteorological Institute wrote that only twice before had it measured temperatures this high during February at this location, in 2011 and 2017. It is a mere 400 miles from the North Pole. This thaw occurred as a pulse of extremely mild air shot through the Greenland Sea. Warm air is spilling into the Arctic from all sides. On the opposite end of North America, abnormally mild air also poured over northern Alaska on Tuesday, where the temperature in Utqiaġvik, previously known as Barrow, soared to a record high of 31 degrees (minus-1 Celsius), 40 degrees (22 Celsius) above normal. The warmth over Alaska occurred as almost one-third of the ice covering the Bering Sea off Alaska’s West Coast vanished in just over a week during the middle of February, InsideClimateNews reported. Brian Brettschneider, a climatologist based in Alaska, posted that the overall sea ice extent on Feb. 20 was the lowest on a record by a long shot.
The permafrost bomb is ticking --About a fifth of the Northern Hemisphere landmass is permafrost, ground that has been mostly frozen for half a million years or more. Now there are signs of thaw appearing in many places across this vast landscape circling the Arctic, and at accelerated rates.It is only a matter of time until the incremental thawing of the permafrost reaches a tipping point of no return, a state of accelerated and irreversible change, the side effects of which might well push other parts of the Arctic beyond their own tipping points. Quite possibly, we are poised to witness such a transformation within our lifetimes – ice sheet loss, increased frequencies of fires in the tundra and boreal forests, and complete habitat loss for marine mammals, to name just a few examples of the changes that could occur.The major side effect of a thawing permafrost is that it will further enhance global warming with the release of large quantities of methane, a potent greenhouse gas. The permafrost contains organic matter, and thawing will enable bacterial decomposition that will release methane as a byproduct of anaerobic respiration.The permafrost is not the only climatic system that is susceptible to abrupt regime shifts – the Greenland Ice Sheet, the West Antarctic Ice sheet, and numerous ice shelves in both hemispheres have the potential to undergo abrupt and irreversible change in their state. However, the permafrost is likely one of the fastest to respond, given its southward extent and the existence of positive feedback loops – vicious circles that can amplify the thawing initiated by human-caused warming. The question is, where is the tipping point? The past history of permafrost thawing might give a few clues…
Arctic sea ice at record low January levels -- The part of the Arctic covered by sea ice in January was the smallest for the month since records began in 1979, federal scientists announced Tuesday.January ice cover in the Arctic was a whopping 525,000 square miles less than average, which is an area the size of Texas and California put together.Sea ice is frozen ocean water that melts during the summer and refreezes in winter. It floats on top of the ocean.The report was released Tuesday by the National Oceanic and Atmospheric Administration.The Arctic has warmed more dramatically than any place on Earth. "While there is always large variability in the Arctic winter, the 'persistence' of the above-average temperatures is quite striking in the last few years," said Zack Labe, an atmospheric scientist at the University of California, Irvine.Sea ice in the Arctic affects wildlife such as polar bears, seals and walruses. It also helps regulate the planet’s temperature by influencing the circulation of the atmosphere and ocean. It can affect weather in the U.S.The amount of sea ice in the Arctic has steadily declined over the past few decades because of man-made global warming, according to NOAA. "Greenhouse gases emitted through human activities and the resulting increase in global mean temperatures are the most likely underlying cause of the sea ice decline," the National Snow and Ice Data Center said. And it's not only Arctic sea ice that's melting. The opposite side of the globe was experienced a near record low last month: Antarctic sea ice extent in January was 17.4% below average, the second-smallest January ice cover on record behind only 2017, NOAA said.
We’re witnessing the fastest decline in Arctic sea ice in at least 1,500 years -- The Arctic Ocean once froze reliably every year. Those days are over.Arctic sea ice extent has been measured by satellites since the 1970s. And scientists can sample ice cores, permafrost records, and tree rings to make some assumptions about the sea ice extent going back 1,500 years. And when you put that all on a chart, well, it looks a little scary.In December, NOAA released its latest annual Arctic Report Card, which analyzes the state of the frozen ocean at the top of our world. Overall, it’s not good.“The Arctic is going through the most unprecedented transition in human history,” Jeremy Mathis, director of NOAA’s Arctic research program, said at a press conference. “This year’s observations confirm that the Arctic shows no signs of returning to the reliably frozen state it was in just a decade ago.” The report, which you can read in full here, compiles trends that scientists have been seeing for years. The Arctic is warming at twice the rate of the rest of the world. And 2017 saw a new record low for the maximum sea ice extent (i.e., how much of the Arctic ocean freezes in the coldest depths of winter). That huge drop-off at the end? That’s “the largest magnitude decline in sea ice, and the greatest sustained rate in sea ice decline in that 1,500-year record,” said Emily Osborne, the NOAA scientist who compiled the data for the chart.
Why remote Antarctica is so important in a warming world - What was once thought to be a largely unchanging mass of snow and ice is anything but. Antarctica holds a staggering amount of water. The three ice sheets that cover the continent contain around 70% of our planet’s fresh water, all of which we now know to be vulnerable to warming air and oceans. If all the ice sheets were to melt, Antarctica would raise global sea levels by at least 56m. Where, when, and how quickly they might melt is a major focus of research. No one is suggesting all the ice sheets will melt over the next century but, given their size, even small losses could have global repercussions. Possible scenarios are deeply concerning: in addition to rising sea levels, meltwater would slow down the world’s ocean circulation, while shifting wind belts may affect the climate in the southern hemisphere.In 2014, NASA reported that several major Antarctic ice streams, which hold enough water to trigger the equivalent of a one-and-a-half metre sea level rise, are now irreversibly in retreat. With more than 150m people exposed to the threat of sea level rise and sea levels now rising at a faster rate globally than any time in the past 3,000 years, these are sobering statistics for island nations and coastal cities worldwide. Multiple factors mean that the vulnerability to global sea level rise is geographically variable and unequal, while there are also regional differences in the extremity of sea level rise itself. At present, the consensus of the IPPC 2013 report suggests a rise of between 40 and 80cm over the next century, with Antarctica only contributing around 5cm of this. Recent projections, however, suggest that Antarctic contributions may be up to ten times higher.
Mount Sinabung eruption 'completely annihilates' peak of Indonesian mountain - When Indonesia’s Mount Sinabung volcano erupted on Monday morning, it shot a towering plume of ash 7km (4 miles) into the sky, blowing away much of its summit. Before and after images show an enormous chunk missing from the stratovolcano following its biggest eruption this year.Indonesia’s Centre for Volcanology and Geological Hazard Mitigation said the peak was “completely annihilated.” Devy Kamil Syahbana, a volcanologist, said the missing chunk, known as the “lava dome,” had a volume of at least 1.6 million cubic metres (56.5 million cubic feet). Indonesia raised flight warnings around the volcano on Sumatra island to red, its highest level, and said the ash cloud's top had reached 23,872ft (7,276m) according to a ground observer. Mount Sinabung had lain dormant for four centuries before it first erupted in 2010, in an explosion which killed two people. When it erupted in 2014, more than a dozen people were killed and thousands were evacuated.
US climate change outlook worsens after further research - The dire impact of climate change on the US, spelt out in the federal government’s most recent National Climate Assessment report, looks even worse after further research, according to scientists working in the field.Scientists involved in November’s assessment, an exercise mandated by Congress that takes place every four years, gave an update at the American Association for the Advancement of Science meeting in Austin, Texas, which concluded on Monday.New findings, for example, about sea level rise and the frequency of severe weather, reinforced the report’s message that climate change was a threat, said Donald Wuebbles, professor of atmospheric sciences at the University of Illinois and a leader of the assessment.“Climate change is not just something for the future. The bottom line is that our climate is changing now, extremely rapidly,” he said. “Temperatures over Europe and North America today are the highest they have been in 11,000 years.” The assessment involves hundreds of scientists in government and universities. Many were worried that it would fall foul of the sceptical attitude of Donald Trump’s administration about man-made climate change — and were relieved that no attempt was made to hold up or change the first volume of report before publication.
Who is Guilty of Climate Crimes? - A fascinating exposé of the climate crisis awaits you in Peter Carter and Elizabeth Woodworth’s, “Unprecedented Crime: Climate Science Denial and Game Changers for Survival.” It is a comprehensive look at the climate crisis through a legal frame, with a focus on the perpetrators of the climate emergency that confronts us all. Not surprisingly, the authors’ focus is primarily on the fossil fuel corporations--who are engaged in an elaborate, multi-billion dollar misinformation campaign — and on the governments who have subsidized them and colluded with them through inaction. These are the key perpetrators of the largest human rights violation in history. ‘The Kochs are a vertically integrated fossil fuel conglomerate, and they have a vertical integrated influence-peddling apparatus to go with it’… The Kochs are bigger than either of the Democratic or Republican parties, manipulate both, and are determined to keep the Senate Republican...A major focus of Koch money has been to ensure that no legislation is passed to curb the burning of fossil fuels. Clearly, there is a lot of guilt to go around. The authors cast some-- though in my view probably not enough--blame onto the citizens of rich countries, for their their complicity in the climate crisis. The authors speak of the “moral collapse” that most Americans and other westerners experience regarding the climate crisis, and they quote Clive Hamilton, “there are three kinds of actors in this process of subversion: those who tell the lies, those who repeat the lies, and those who allow themselves to be seduced by the lies.” Most Westerners act as though the climate crisis was not happening, and as if they have no responsibility to help prevent catastrophe. Americans tend to feel like victims rather than perpetrators. And indeed, we are victimized by the corrupt and cruel system that is deeply unequal and driving hard towards ecocide. But when we are complicit in “business as usual,” we are also perpetrators. My grandmother was a Holocaust survivor, and she impressed upon me the moral duty to confront evil. She felt so betrayed by the former friends who would not stand up for her and who avoided her on the street. One didn’t have to be a Nazi to be guilty, but just to go along with the genocide.
Exxon’s Conspiracy Charges Aim To Derail Climate Lawsuits --Oil giant ExxonMobil is engaged in unprecedented efforts to sue and harass in court the very people who are investigating and suing the company over global warming. Faced with determined efforts by states and localities to hold it and other fossil fuel companies accountable for contributing to, and concealing the evidence of, climate change, Exxon is crying foul, contending that it’s the victim of politically- and financially-motivated conspiracies. But in reality there are no improper schemes behind the cases against Exxon. Instead, what’s troubling is an apparent effort by Exxon, one of the world’s wealthiest corporations, and its powerhouse corporate lawyers, to avoid a courtroom reckoning by making specious legal arguments and outspending their foes in the legal arena. Through its attorneys at New York’s Paul Weiss Rifkin Wharton and Garrison, and Texas-based firms Haynes & Boone and Cantey Hanger, ExxonMobil has sued the attorneys general of Massachusetts, New York, and the U.S. Virgin Islands. And the company has recently targeted for depositions and document subpoenas, and threats of more lawsuits, numerous state officials, private attorneys, and advocates. Exxon’s legal counterattack began after the Massachusetts, New York, and Virgin Islands AGs started investigating whether Exxon misled consumers and investors about the dangers of global warming and the potential impact of those dangers on the company’s bottom line. Investigative reporting in 2015 showed that Exxon scientists have known, and told Exxon management for decades, that burning fossil fuels was heating up the planet, but rather than educate the public on the dangers and change its business strategy, Exxon instead spent millions supporting efforts to question and deny the science of climate change. The state AGs also started investigating whether ExxonMobil has properly accounted for its oil reserves in the wake of global price drops and evidence of global warming.
Countries made only modest climate-change promises in Paris. They’re falling short anyway. -- Barely two years ago, after weeks of intense bargaining in Paris, leaders from 195 countries announced a global agreement that once had seemed impossible. For the first time, the nations of the world would band together to reduce humanity’s reliance on fossil fuels in an effort to hold off the most devastating effects of climate change. “History will remember this day,” the secretary general of the United Nations, Ban Ki-moon, said amid a backdrop of diplomats cheering and hugging. Two years later, the euphoria of Paris is colliding with the reality of the present. Global emissions of carbon dioxide are rising again after several years of remaining flat. The United States, under President Trump, is planning to withdraw from the Paris accord and is expected to see emissions increase by 1.8 percent this year, after a three-year string of declines. Other countries, too, are showing signs they might fail to live up to the pledges they made in Paris. In short, the world is off target. “It’s not fast enough. It’s not big enough,” said Corinne Le Quéré, director of the Tyndall Center for Climate Change Research in England. “There’s not enough action.” Even as renewable energy grows cheaper and automakers churn out battery-powered and more efficient cars, many nations around the world are nonetheless struggling to hit the relatively modest goals set in Paris. The reasons vary. Brazil has struggled to rein in deforestation, which fuels greenhouse gas emissions. In Turkey, Indonesia and other countries with growing economies, new coal plants are being planned to meet the demand for electricity. In the United States, the federal government has scaled back its support for clean energy and ramped up support for fossil fuels.
Senate bill would let EPA implement global greenhouse gas deal | TheHill: A bipartisan group of senators introduced a bill Friday that would let the Environmental Protection Agency (EPA) implement a global deal meant to phase out certain greenhouse gases. The legislation would give the EPA authority to ban hydrofluorocarbons (HFCs), potent greenhouse gases used in refrigeration and air conditioning. After world leaders agreed to a phaseout plan in 2015, the EPA wrote its own regulation to restrict the use of HFCs in the United States. But a federal court last year overturned that regulation and said the EPA does not have the authority to implement it.“On the surface, this bill seems more complicated than high school chemistry, but really it’s pretty simple,” Sen. John Kennedy (R-La.) said in a statement. “It’s about jobs. And it’s about protecting the investment by Louisiana companies in new technologies and protecting Louisiana jobs.” Sen. Tom Carper (D-Del.) said the bill, called the American Innovation and Manufacturing Act, “continues support for American development and manufacturing of next-generation HFC-alternatives, while also protecting our environment and helping the U.S. meet its obligations under the amended Montreal Protocol — a true win-win.” The EPA would likely have the authority to phase out HFCs if the Senate were to ratify the the 2015 deal, dubbed the Kigali Amendment. But President Trump has not yet decided whether he supports the deal and whether he will submit it to the Senate for ratification, which requires a two-thirds majority vote. Phasing out HFCs has the support of environmentalists and industry alike, since domestic manufacturers want to have the same rules worldwide for their products.
China Flooded U.S. With Solar Panels Before Trump's Tariffs - Chinese suppliers flooded the U.S. solar market with panels at the end of last year, as customers sought to avoid paying President Donald Trump’s 30 percent import tariff. Fourth-quarter deliveries from China were almost 11 times higher than in the first nine months of 2017, according to a report Friday by Bloomberg New Energy Finance. Manufacturers also hauled panels and cells across the border from Mexico, Canada and other countries to beat the import duties that were announced last month. The tariffs don’t apply to the first 2.5 gigawatts of imports this year, and there’s as much as 5 gigawatts of solar equipment already stashed in warehouses and ports around the country. That’s enough to supply U.S. developers for about six months, said Hugh Bromley, a solar analyst at New Energy Finance, undermining the impact of the protectionist policies on manufacturers. Shipments from exempt suppliers including First Solar Inc. may extend that period to nine months. “The slow pace of D.C. bureaucracy has allowed the solar industry to insulate itself from the full impact of the tariffs,” Bromley said in an interview. “They won’t be as damaging as some in the industry have warned.” The tariffs announced in January came in response to a trade suit filed in April 2017 by a bankrupt U.S. solar manufacturer that argued it had been harmed by a wave of cheap imports, mostly from Asia. The U.S. International Trade Commission agreed in October, paving the way for Trump’s decision. SunPower Corp., the second-biggest U.S. solar supplier, manufacturers most of its products in Mexico and Asia, and rushed to bring them into the country at the end of last year. The stockpiled inventory will help the San Jose, California-based company buy time as it pursues a request to be excluded from the duties because it uses a technology that’s different from standard photovoltaic panels. “Of course we accelerated” shipments, Chief Executive Officer Tom Werner said in an interview. “We’re not going to pay tariffs on goods that we already brought to the U.S.”
BP Sees Electric Future With Oil Demand Peaking in 2030s - The future is electric for BP, though it’s not giving up on oil just yet. The British company bumped up its forecast for electric vehicles by 80 percent to 180 million by 2035, according to an energy outlook released Tuesday. It expects a third of the miles driven in 2040 will be powered by electricity. The company forecasts the abundance of gasoline and diesel cars will ensure overall oil demand will continue to grow at about 0.5 percent per year. But that’s slower than the 0.7 percent annual increase it forecast last year. Consumption is expected to peak at 110 million barrels per day in the mid-2030s, BP’s Chief Economist Spencer Dale said. That’s earlier than the mid-2040s he predicted last year. “The suggestion that rapid growth in electric cars will cause oil demand to collapse just isn’t supported by the basic numbers -- even with really rapid growth,” Dale said. “It’s almost nothing. Oil used in the car market is essentially flat for the next 20 years.”BP said this year’s outlook doesn’t have a base case scenario, like in previous editions. It instead has a “evolving transitions scenario,” which has a stable pace of change.Demand from cars, the backbone of oil consumption growth in the past century, may drop after 2030 and be at about today’s level by 2040, BP said. The surge of electric cars means manufacturers may not need to put as much effort and investment in increasing the efficiency of gasoline and diesel vehicles, Dale said. “Selling more EVs will tend to have almost no effect on oil demand because now I can sell a greater number of large cars or I can do less investment in light weighting,” Dale said.
Battery storage* in perspective – solving 1% of the problem - The energy world is fixated on the “huge” amounts of battery storage presently being installed to back up slowly-increasing levels of intermittent renewables generation. The feeling seems to be that as soon as enough batteries are installed to take care of daily supply/demand imbalances we will no longer need conventional dispatchable energy – solar + wind + storage will be able to do it all. Here I take another look at the realities of the situation using what I hope are some telling visual examples of what battery storage will actually do for us. This post is all about the difference between pipe dreams and reality. Prof. Mark Jacobson of Stanford University et al. have just published a new study that responds to the critics of their earlier 2017 study. The new study is paywalled, but Stanford’s press release describes the basic procedures used: The first program predicted global weather patterns from 2050 to 2054. From this, they further predicted the amount of energy that could be produced from weather-related energy sources like onshore and offshore wind turbines, solar photovoltaics on rooftops and in power plants, concentrated solar power plants and solar thermal plants over time. The group then combined data from the first model with a second model that incorporated energy produced by more stable sources of electricity, like geothermal power plants, tidal and wave devices, and hydroelectric power plants, and of heat, like geothermal reservoirs. The second model also included ways of storing energy when there was excess, such as in electricity, heat, cold and hydrogen storage. Further, the model included predictions of energy demand over time. Scenarios based on the modeling data avoided blackouts at low cost in all 20 world regions for all five years examined and under three different storage scenarios. What’s the energy mix that leads to this happy ending in no fewer than 139 of the world’s countries? The lead-in figure of Jacobson et al’s 2017 report, reproduced below as Figure 1, tells us. Rounded off to the nearest percent it’s 5% hydro + geothermal, 37% wind, 58% solar and not a kilowatt of nuclear.
Puerto Rico utility gets $300 million after truce with creditors (Reuters) - Puerto Rico’s beleaguered electric utility has received court approval to borrow $300 million to help pay expenses, well below the $1.3 billion initially sought but enough to avert power outages it had warned about. On Monday, U.S. District Court Judge Laura Taylor Swain approved the loan which had been opposed by creditors of the U.S. commonwealth and its utility, the Puerto Rico Electric Power Authority, better known as PREPA. The federal oversight board, which represents Puerto Rico and PREPA in the island’s historic financial restructuring, initially sought $1.3 billion to assist with restoring power after Hurricane Maria cut off electricity across much of the island. The board had argued the utility faced power outages without an immediate cash infusion. Creditors of the utility and the U.S. territory opposed the initial loan over its terms and size. Last week, the two sides squared off in court, and the judge prodded Puerto Rico’s board to reduce the loan to $300 million and rework its terms. Bond insurer National Public Finance Guarantee Corp had questioned whether PREPA even needed a loan while Puerto Rico’s general obligation bondholders argued the board sought to subsidize PREPA with funds needed by the island’s government. Puerto Rico is more than $70 billion in debt and PREPA has more than $14 billion in liabilities, including some $8 billion in Power Revenue Bonds. Quarreling over the loan package has been taking place amid a separate fight between Puerto Rico and creditors over the territory’s revised fiscal plan. The plan would use $18 billion from the U.S. government to turn Puerto Rico’s deficit into a $3.4 billion surplus within six years. Last week, creditors cast doubt on the plan, saying in a joint statement it “fails to provide a credible basis on which to restructure the island’s debt.”
Why does restoring full power in Puerto Rico seem like a never-ending task? -- About a third of Puerto Rico's residents — over 900,000 — are still living without electricity five months after Hurricane Maria battered the island on Sept. 20th of last year. As power restoration efforts continue against all odds, it's still hard for officials to say when the power will be fully restored — the question on everyone's mind. “I would hesitate to give you a date,” said Lt. Col. John Cunningham of the U.S. Army Corps of Engineers, the deputy commander for the Task Force Power Restoration on the island. “We would like to go faster, but right now we’re going as fast as we can.” “The largest challenge has been logistics: getting the materials we need,” Cunningham told NBC News. “Because it is a tropical island, they need specific conductors and materials that can resist the tropical weather and there’s a limited number of suppliers available to purchase specific materials for the island.” About 1,200 temporary generators and seven microgrids are powering key areas near important buildings such as schools and hospitals. In addition, teams from utility companies from the mainland U.S. have made their way to Puerto Rico to support personnel sent to the island to help restore power. After Hurricane Maria left the entire island without power, the Puerto Rico Electric Power Authority, or PREPA, needed at least about 53,000 poles, a little over 17 million conductors and 184,750 insulators. So far, 5,072 transformers have arrived in Puerto Rico in addition to about 31,500 poles and about 2,613 miles of conductor cables already on the island, PREPA said in a statement. In the next two weeks, Puerto Rico should receive 80 containers with additional equipment.
A Reader Connects The Dots Between Project Tundra And Rare Earths -- February 17, 2018 - See Project Tundra at this post and reader's comments. The Williston Herald had an article on this back in December, 2017: Of 352 rock samples analyzed from the area, 277 averaged 120 parts per million total rare earth elements. That is twice the published average for U.S. coal, according to North Dakota Survey Geologist Ned Kruger. One of the samples was at 603 ppm, which was twice the potential economic threshold identified by Department of Energy in its grant funding requirements, and it was the fifth highest recorded in the nation for coal. Overall, the samples ranked in the top 20 of coal samples nationwide. See "Rare Earths in Coal" at dmr.nd.gov, Winter, 2017:Maintaining reliable sources of rare earth-containing raw materials, the vast majority of which are currently produced in China, is critical to each of the industries and manufactured products mentioned above.New sources must be identified and developed to ensure an adequate supply of these important metals is available today and for the technological advances of the future. Recent publications indicate the potential of coal deposits for the recovery of rare earths as by-products of mining and combustion. In particular, lignite has been highlighted owing to its potential for higher concentrations of rare earths and because there are existing techniques for extracting rare earth metals from the low-ranking coal. The North Dakota Geological Survey is in the process of acquiring data on the quantity of rare earth elements present in the lignite beds and adjacent materials via sample collection from their exposures in the badlands region of southwest North Dakota. They are doing the similar studies in Pennsylvania.
Spectacular fossils found at Bears Ears — right where Trump removed protections - One of the world's richest troves of Triassic-period fossils has been discovered in an area of Bears Ears National Monument that just lost its protected status, scientists announced Thursday. President Trump signed a proclamation in December that shrank the national monument by 85 percent.The discovery of intact remains of crocodile-like animals called phytosaurs came to light this week when researchers announced it at the Western Association of Vertebrate Paleontologists conference at Dixie State University in St. George, Utah. Based on an initial excavation, the 70-yard-long site, its depth yet unknown, “may be the densest area of Triassic period fossils in the nation, maybe the world,” Rob Gay, a contractor at the Museums of Western Colorado, said in a statement.In an interview, Gay, who led a team of researchers on last year's expedition, called it the “largest and most complete bone bed in the state of Utah, and one of, if not the largest, anywhere in the United States.” He called the discovery of three intact toothy, long-snouted fossils from the period extremely rare, adding that the “density of bone is as high or greater than all the other Triassic sites in the country.” The fossil bed is part of the Chinle Formation, ancient river and flood plain deposits that run through the center of the original monument President Barack Obama designated in December 2016. But that sedimentary rock also contains uranium, which made it more commercially attractive than other parts of Bears Ears.
Natural gas industry surprised it could be so much cleaner - Bloomberg -- Most energy executives underestimate how much they can cut emissions as they extract and transport natural gas, according to a survey by the Energy Institute. Producers can reduce greenhouse gas flows by 75 percent simply by improving practices in the supply chain of the fuel, which consists mainly of methane. About half of that can be cut at no net cost. “Implementing just those measures that pay for themselves, by monetizing the captured methane, would have the same long-term impact on mitigating climate change as immediately shutting all existing coal-fired power plants in China,” said Christophe McGlade, an oil and gas analyst at the International Energy Agency, which contributed to the report. Methane leaks into the air at various points between extraction and delivery. Trapping more heat than carbon dioxide, it’s a potent contributor to global warming. Yet credible information on the volumes released is scarce, and that’s spurring pressure from investors seeking to protect the climate. Two-thirds of the survey’s 189 respondents said they were “surprised by the scale of the possibilities” to reduce emissions. Almost half of the gas industry is failing to do anything about carbon capture and storage, even though that technology is seen as the most effective way to reduce emissions from consumption of the fuel, the survey showed.
Decreases in energy production affect employment in Appalachia - The Post --The Appalachian Regional Commission released new research in January that showed coal production in Appalachia fell by nearly 45 percent from 2005 to 2015. The report analyzed how other Appalachian industries were affected directly or indirectly by a decline in coal production and employment. The research is one of the first to analyze how decreasing coal production has affected the Appalachian region, Wendy Wasserman, communication and media relations director for the Appalachian Regional Commission, or ARC, said. Mike Cope, president of the Ohio Coal Association, said that much of the unemployment and resulting poverty in Appalachia is because of Ohio’s shift away from coal. “Decreasing coal production, without a doubt, has hurt people that were dependent on coal mining,” Cope said. The report found that highly paid coal miners have limited re-employment opportunities in their area of residence with the same pay and scope of employment. Many who work in the coal industry struggle to find equivalent occupations in other industries. The coal industry employs about 3,000 people in Ohio, according to the Ohio Coal Association. From 2005 to 2015, however, coal industry employment decreased by 27 percent. In coal mining counties, unemployment remained high as energy consumption moved away from coal, according to the ARC report. The decline in production is because of a decline in international demand for coal, a decrease in the price of natural gas and an increase in the cost of coal, according to the ARC report.
New Black Lung Epidemic Emerging in Coal Country -- In a study released this month by the National Institute for Occupational Safety and Health (NIOSH), federal researchers identified more than 400 cases of complicated black lung in three clinics in southwestern Virginia between 2013 and 2017—the largest cluster ever reported.However, the actual number of cases is likely much, much higher as the government analysis relied on self-reporting. An ongoing investigation from NPR has counted nearly 2,000 cases diagnosed since 2010 across Appalachia.NPR investigative reporter Howard Berkes, who has been closely following the epidemic explained to Pittsburgh's NPR news station :"In the study that NIOSH just produced, they looked at three clinics in southwestern Virginia which serves coal miners from Virginia, Kentucky and West Virginia. And they identified and confirmed 416 cases of the disease in the previous few years. The study ended about a year ago. That's an astonishing number. NIOSH itself in its own accounting of that disease, found less than 100 cases in the same timeframe nationwide. And here in just three clinics in southwestern Virginia, there are four times as many cases. NPR has been surveying black lung clinics across Appalachia, and our count is up close to two thousand cases in the same timeframe that NIOSH had previously identified only 99. NIOSH itself now recognizes that this as the worst cluster of this disease ever documented. NIOSH has referred to it as one of the worst industrial workplace disasters in American history. It also marks what is a sharp increase in the disease from the 1990s, when researchers believed that it might actually become extinct." Black lung disease, also known as coal workers' pneumoconiosis, comes from exposure to coal mine dust. Ever since the Federal Coal Mine Health and Safety Act of 1969 cases had been declining and virtually eradicated by the 1990s.
It’s 2018, and black lung disease is on the rise in Appalachia -- Researchers from the National Institute for Occupational Safety and Health (NIOSH) looked at three federally funded clinics between 2013 and 2017 and documented the largest cluster of advanced black lung disease — ever. In that time period, the clinics treated 416 coal miners primarily from Virginia and Kentucky with complicated black lung, the most advanced stage of the disease. Not only are coal miners experiencing an uptick in the most fatal form of black lung, they’re also being diagnosed at a younger age.“There’s an unacceptably large number of younger miners who have end-stage disease,” lead researcher David J. Blackley told the New York Times. “The only choice is to get a lung transplant or wait it out and die.”This new study follows a 2016 NPR investigation revealing that the number of cases of black lung in central Appalachia was likely much higher than NIOSH’s official count.The disease declined throughout the 1990s, but now the clinics’ black lung specialist says that within two weeks, he’s seeing the same number of cases he used to see in an entire year. Why? After exhausting thicker seams, today’s miners have to dig more deeply into rock to unearth coal. The combination of coal dust and silica dust from cutting into rock is a deadlier concoction than what plagued miners in the past.
A West Virginia newspaper is in bankruptcy, the powerful coal industry celebrates - One day after the Charleston Gazette-Mail declared bankruptcy, coal industry attorney Robert McLusky made light of the newspaper’s plight. Speaking at a West Virginia mining symposium Jan. 31, McLusky told the hundreds of executives there that he was sorry that the Gazette-Mail’s hard-hitting coal correspondent Ken Ward wasn’t there. Playing off the possibility that reporters would get “pink slips,” McLusky held up a pink sheet of paper on which he had printed Ward’s name and a notice of potential layoffs at the newspaper. The crowd laughed. McLusky later called Ward to apologize. “I took a shot in front of a pro-coal audience that I regret, that I shouldn’t have taken,” he said in an interview. Yet McLusky’s comments betrayed the ill will between the coal industry, which has dominated the economy and politics of West Virginia for the better part of a century, and the state’s premier newspaper, the feisty Gazette-Mail, which has played an important role in checking the industry’s power. The Gazette-Mail hasn’t won many friends in coal country, where executives worry more about mining jobs than they do about the 210 jobs in danger at the Charleston newspaper. McLusky said: “I think it’s safe to say that the coal industry as a whole does not view the Gazette as giving them balanced coverage.” Others see it differently. “It has been the voice of reason in our state,” said Davitt McAteer, a former head of the Mine Safety and Health Administration who led an independent investigation of the Upper Big Branch Mine disaster. “When you have a one-horse economy as West Virginia is and has been, the fact that there’s one paper willing to not be a lap dog for that industry” is important, he said.
Europeans rip Trump on climate change, import record amounts of U.S. coal - As France, Germany and Italy chastised President Trump for rejecting the Paris climate accord in June and mocked the U.S. for turning its back on the environment, their nations were busy importing record amounts of American coal. The U.S., federal data show, is seeing something of a coal renaissance, but the boom — partly the result of Mr. Trump’s aggressive policies to roll back Obama-era regulations on the fuel — largely has benefited foreign markets. Some of the biggest buyers are also the biggest critics of the Trump administration’s climate policy, including China and leading European nations that now claim to be the world’s leaders on fighting global warming.The U.S. last year produced 773 million short tons of coal, 45 million more than 2016. That was the largest year-to-year increase in nearly two decades, government numbers show. But that didn’t equal increased use at home, with more coal than ever heading overseas. “Even though U.S. coal consumption decreased, higher worldwide demand for U.S. coal led to greater coal production,” the federal Energy Information Administration said in a recent report. Indeed, the U.S. consumed 719 million short tons of coal last year, a drop of 12 million from 2016. Total exports in 2017, however, shot up to 95 million short tons, a 58 percent increase over the previous year. About 31 million short tons of that went to Asia, nearly double the amount from 2016. China alone imported 2.8 million short tons through September 2017 — a wild increase over the previous year’s 205,000. Total exports to Europe reached 40 million short tons — 13 million more than in 2016.
How a U.S. coal deal warmed Ukraine's ties with Trump - (Reuters) - For the first time in Ukraine’s history, U.S. anthracite is helping to keep the lights on and the heating going this winter following a deal that has also helped to warm Kiev’s relations with President Donald Trump. The Ukrainian state-owned company that imported the coal told Reuters that the deal made commercial sense. But it was also politically expedient, according to a person involved in the talks on the agreement and power industry insiders. On Trump’s side it provided much-needed orders for a coal-producing region of the United States which was a vital constituency in his 2016 presidential election victory. On the Ukrainian side the deal helped to win favor with the White House, whose support Kiev needs in its conflict with Russia, as well as opening up a new source of coal at a time when its traditional supplies are disrupted. Trump’s campaign call to improve relations with the Kremlin alarmed the pro-Western leadership in Ukraine, which lost Crimea to Russia in 2014 and is still fighting pro-Moscow separatists. However, things looked up when President Petro Poroshenko visited the White House on June 20 last year. The Americans had set particular store by supplying coal to Ukraine. “I felt that for them it is important,” said the source, who was present at the talks that also included a session with Vice President Mike Pence. Trump, who championed U.S. coal producers on the campaign trail, pressed the message after meeting Poroshenko. “Ukraine already tells us they need millions and millions of metric tons right now,” he said in a speech nine days later. “We want to sell it to them, and to everyone else all over the globe who need it.” The deal with Kiev was sealed the following month, after which U.S. Commerce Secretary Wilbur Ross said: “As promised during the campaign, President Trump is unshackling American energy with each day on the job.”
India to allow private firms to mine coal for commercial use (Reuters) - India will auction coal blocks to private companies, Coal Minister Piyush Goyal said on Tuesday, a move that would end restrictions on the sale and use of the fuel after more than four decades and end Coal India’s near-monopoly status. Coal India and a small stated-owned company are the only firms currently allowed to mine and sell coal in India. India does allow, however, power, steel, cement and aluminum companies to produce for their own use. The coal block auctions, in which companies would bid by offering a price per ton of coal, are intended to attract Indian conglomerates such as Adani Enterprises, and multinational miners such as Rio Tinto, BHP Billiton and Peabody Energy. India’s power sector has grown at a slower pace than the industry expected, and growth in internal demand for coal will depend on the success of India’s rural electrification program and overall industrial growth. Opening up production to private firms could provide a fillip to India’s resource-rich eastern states, which hold most of India’s coal reserves. All the revenue from the auction of coal blocks would go the states, Goyal told reporters. When asked if companies would be allowed to sell coal abroad, Goyal said it is unlikely that there would be exports, although there are no restrictions on overseas sales. “I have no problem (with exports), but nobody is going to take our 45 percent high ash coal,” Goyal told Reuters. Coal accounts for more than three-quarters of India’s power generation, and the country targets production of 1 billion tonnes by 2022. India’s coal imports stood at about 191 million tonnes for the year ended March 2017, and the country imported 116.1 million tonnes during the seven months ended Oct 2017, according to government data.
South Carolina lawmakers getting pro-SCE&G emails impersonating constituents — South Carolina lawmakers have received a barrage of form emails from constituents in recent days urging them to avoid passing laws they say could kill a proposed sale of SCANA Corp. to Dominion Energy. There's just one problem: Some of the people who supposedly sent the emails say they were impersonated. It is unclear who is behind the fraudulent emails, as Dominion, SCANA and the outside group that crafted the messages say they do not know why they are being sent from S.C. residents without their knowledge. House Majority Leader Gary Simrill, R-Rock Hill, began receiving the emails Thursday in the aftermath of the state's failed $9 billion nuclear project. SCANA subsidiary South Carolina Electric & Gas owned a majority share of the unfinished reactors at V.C. Summer Nuclear Station north of Columbia, and lawmakers are eager to stop the power company from charging its ratepayers $37 million a month for them. Dominion and SCANA have said blocking the charges could kill the $14.6 billion sale and push SCANA into bankruptcy. The emails said lawmakers "could make matters even worse" for its electric customers. One email came from one of Simrill's friends in Rock Hill, William Barron, even listing his home address. But Simrill noticed the email address was different from the one he had on file. What's more, SCE&G doesn't sell electricity in Rock Hill. So he asked Barron if he had sent the email. Barron said he didn't know anything about it. Then another acquaintance supposedly emailed Simrill. She hadn't sent it either, he said. "They're being impersonated. These folks never wrote these emails," Simrill said. "I mean it's really despicable that they are using our constituents' names and physical address as if they had written us an email."
Nuclear Reactors Could Run as Long as 80 Years Under Trump Plan - The U.S. Energy Department is throwing its support behind a request by utilities to extend the life of some nuclear power reactors -- keeping them in operation for as long as 80 years.An official with the department, who asked not to be named to discuss its decision-making process, said the agency was conducting research and working with utilities seeking permission from the Nuclear Regulatory Commission to allow nuclear reactors built in the 1970s to keep operating to 2050 and beyond. Already, the utilities Exelon Corp., and Dominion Energy Inc. and NextEra Energy Inc. have said they plan to ask regulators to extend 60-year licenses by 20 years for eight reactors in Virginia, Pennsylvania, and Florida. Requests for as many as as 20 more are expected to follow, according to the nuclear industry.The plans have already raised the ire of anti-nuclear campaigners, who cite decades of wear and tear on the nation’s reactors, as well as the 2011 Fukushima disaster in Japan.Nuclear power accounts for about 20 percent of electricity generated in the U.S. but competition from cheap natural gas, subsidized renewable power, and stagnant electricity demand has led to a wave of uneconomical nuclear reactors being retired years earlier than planned. President Donald Trump began a review in June of ways to revitalize the nation’s nuclear industry. Ultimately, the decision on extending the operating license of a reactor lies in the hands of the independent Nuclear Regulatory Commission, but the industry says the help is appreciated.
Uranium Mining's Toxic Legacy: Why the U.S. Risks Repeating Mistakes - Uranium—the raw material for nuclear power and nuclear weapons —is having a moment in the spotlight. Companies such as Energy Fuels, Inc. have played well-publicized roles in lobbying the Trump administration to reduce federal protection for public lands with uranium deposits. The Defense Department's Nuclear Posture Review calls for new weapons production to expand the U.S. nuclear arsenal, which could spur new domestic uranium mining. And the Interior Department is advocating more domestic uranium production, along with other materials identified as " critical minerals ." What would expanded uranium mining in the U.S. mean at the local level? I have studied the legacies of past uranium mining and milling in Western states for over a decade. My book examines dilemmas faced by uranium communities caught between harmful legacies of previous mining booms and the potential promise of new economic development. In my view, we owe it to them to learn from past mistakes and make more informed and sustainable decisions about possibly renewing uranium production than our nation made in the past. Today most of the uranium that powers U.S. nuclear reactors is imported. But many communities still suffer impacts of uranium mining and milling that occurred for decades to fuel the U.S.-Soviet nuclear arms race. These include environmental contamination , toxic spills , abandoned mines, under-addressed cancer and disease clusters and illnesses that citizens link to uranium exposure despite federal denials. As World War II phased into the Cold War, U.S. officials rapidly increased uranium production from the 1940s to the 1960s. Regulations were minimal to nonexistent and largely unenforced, even though the U.S. Public Health Service knew that exposure to uranium had caused potentially fatal health effects in Europe , and was monitoring uranium miners and millers for health problems. Today the industry is subject to regulations that lack uniformity , and enforcement responsibilities are spread across multiple agencies.
Japan Erects Huge New Roof Above Crippled Fukushima Reactor - In what the Japanese press heralds as an important step to safely removing all the radioactive material left inside the Fukushima-Daiichi nuclear power plant's ruined reactors, the Japanese utility in charge of cleaning up the site has finished installing a roof over reactor No. 3.The work started last August to set up a dome-shaped cover. It is part of preparations for removing nuclear fuel from the reactor's storage pool. A total of 566 spent and unused fuel units remain in the storage pool of the No. 3 reactor.On Wednesday, workers installed the last part of the cover, which is 17 meters high and 22 meters wide, and weighs 55 tons. Tepco, which ran the plant and also criminally lied and obscured the full extent of the radioactive leakage caused by the disaster, is scrambling to accomplish as much as possible ahead of the 2020 Summer Olympics in Tokyo. Cleanup of the power plant's crippled reactors - which experienced meltdowns when a tsunami thrashed the Japanese coast back in 2011 - is expected to take decades. More recently, Tepco has been criticized for draining what it described as "harmless" radioactive material into the water near the plant - sparking outraged local fishermen to fight back.
Gubernatorial Hopeful Ohio Vows To Ban All Oil & Gas Drilling - Ohio Democratic gubernatorial candidate Dennis Kucinich—a vocal opponent of fracking—vows to ban all oil and gas drilling in the state, if elected, and even take the industry to court in a class-action lawsuit.Kucinich, a former mayor of Cleveland and former Ohio Congressman, is running in the primaries on May 8. In a poll from end-January, in the crowded Democratic Party field, Kucinich had 16 percent support, behind the leading candidate of the Democrats, Richard Cordray, with 23 percent support.“Fresh water and clean water are not negotiable issues,” Kucinich told The Intercept, pointing to water contamination associated with oil and gas drilling. “They’re not negotiable.”While Kucinich is campaigning to ban all oil and gas drilling in Ohio, the other Democratic candidates don’t support either idea for a ban or the class action lawsuit.“Those who have poisoned Ohio’s people and their land will be made to pay,” Kucinich has recently said.“No longer will the industry be able to hide behind the false label of ‘proprietary’ to experiment with toxic chemicals and biocides and use them without traceability and responsibility for the health and environmental impacts on the State of Ohio. No longer will we be lied to and used by these interests,” Kucinich says, and proposes to use the eminent domain to seize control of oil and gas wells in Ohio and shut them down. Kucinich also vows to block all drilling permits and totally ban injection wells. Another proposal of Kucinich’s is to subsidize health screens for people living near fracking sites and use the data to file a class action lawsuit similar to the lawsuit against Big Tobacco in the 1990s.
Dennis Kucinich Vows to End All Oil and Gas Drilling in Ohio If Elected Governor, and Then Take the Industry to Court - The Intercept -- The man who saved Cleveland — and paid the ultimate political price for it — now wants to do the same for Ohio. Dennis Kucinich, the boy mayor of Cleveland who went on to serve nearly two decades in Congress, is running for governor on a platform of radical change to the way the energy industry operates in the state. “Fresh water and clean water are not negotiable issues,” Kucinich told The Intercept, pointing to the water contamination associated with oil and gas drilling. “They’re not negotiable.”In a press conference in late January, the Ohio Democratic gubernatorial candidate unveiled one of the most cutting-edge environmental platforms of any candidate in the country. Kucinich called for a total end to oil and gas extraction in the state of Ohio.To accomplish this, he would deploy a battery of radical policies. He would, for instance, utilize eminent domain to seize control of oil and gas wells throughout the state and then shutter them. He would block all new drilling permits and order a total ban on injection wells. Kucinich would also deploy the Ohio State Highway Patrol to stop and turn away vehicles that possess fracking waste. Under a Kucinich administration, Ohio would give subsidized health screens to residents living near fracking sites; that data would then be used to file a class-action lawsuit against fracking companies similar to how states took Big Tobacco to court in the ’90s. Industry is less than happy about Kucinich’s plan, to say the least.
Protest Challenges New Fracking Leases Threatening Ohio's Only National Forest - Center for Biological Diversity (press release) — Seven conservation groups have filed an administrative protest challenging a Bureau of Land Management plan to auction off 345 acres of Ohio’s Wayne National Forest for oil and gas fracking leases in March. The protest, filed late Tuesday, notes that the leases would lock in dangerous fracking in the Wayne. Despite known threats from hydraulic fracturing, the BLM planned the auction using only a cursory review that avoids site-specific analysis of potential harm from fracking operations. That means the public will have no information about pollution risks to streams, eradication of endangered species habitat and harm to nearby communities, which is required under the National Environmental Policy Act. “The Bureau of Land Management is unlawfully cutting corners in its push to develop the Wayne. Our protest filing is intended to rein in the agency,” said Nathan Johnson, attorney for the Ohio Environmental Council. “The Wayne is one of Ohio's finest natural treasures, plain and simple. It deserves to be protected from heavy industrial development.” The auction comes after the U.S. Forest Service announced plans to revise its 2006 forest plan governing land management in the Wayne. Conservation groups last year sued the Forest Service and the BLM, which oversees drilling and fracking of federal oil and gas. The lawsuit says federal officials relied on the outdated plan and failed to analyze threats to public health, water, endangered species and the climate before opening 40,000 acres of the Wayne to fracking Clear-cutting for well pads, roads and other infrastructure would reverse decades of forest and watershed recovery in the Wayne and destroy habitat for endangered Indiana bats and threatened northern long-eared bats. The bats are already imperiled by forest fragmentation, white-nose syndrome and climate change. Pollution from fracking operations, explosions and spills would damage water supplies that provide drinking water for millions of people.
Old wells are 'a problem for everyone' - Crain's Cleveland Business - When it comes to oil and gas wells in Northeast Ohio, environmentalists and the drilling industry are on the same page: They want a lot of them to be plugged.That's not because the Ohio Oil and Gas Association (OOGA) has taken up with the Ohio Environmental Council (OEC) to oppose drilling. They are in bed together, but it's not necessarily love. It's because they both say there's a longstanding problem of old, abandoned wells leaking methane, oil and otherwise contaminating the ground and presenting a danger to residents.They have different reasons for wanting them to be addressed, but are both pushing for it. They helped get legislation to address the issue passed in the Ohio House in January (HB 225), and are now hopeful the Senate will follow suit."It's a problem for everyone," said Melanie Houston, director of climate programs at OEC.She wants the wells addressed for reasons other than climate, though many of them do release methane, a greenhouse gas that is far more powerful than carbon dioxide in terms of its ability to trap heat and contribute to global warming. They also can contaminate ground water, sometimes contain old drilling fluids or oil, and are made of metals that should be removed, not to mention they can be a safety issue."These have been found under buildings, houses, streets," Houston said. "There's a story about a school gymnasium in Lorain where there was a methane leak and they couldn't figure out where it was. It turned out to be an old well." There are so far more than 700 so-called orphan oil and gas wells with no known owners identified around the state that need to be plugged, according to information from OOGA. Surprisingly, perhaps to some at least, Northeast Ohio has a disproportionate number of the old wells, with the Cleveland area leading the way. Cuyahoga County has 54 orphan wells; only Washington and Wood counties have more, with 55 and 79, respectively. Also ranking high are Lorain County with 41 wells that need to be addressed, Medina with 33 and Lake County with 16.
Trump wants to kill research into how oil and gas impact health - The White House’s proposed budget deals a whopping blow to environmental programs of all kinds, but the U.S. Geological Survey (USGS) would lose an invaluable asset: research into environmental health impacts.The scientific agency studies natural threats to human life and wildlife, including climate change and extractive industries. The administration is requesting to reduce the USGS’s budget from $1.1 billion to $860 million, a similar request as the White House made last year. If these cuts were made, the environmental health program would lose its $21 million in funding, associate director, and all 119 full-time staff. That money would be reappropriated “to address higher priorities” like mineral and energy resources, which would receive more money under this proposal than they did in 2017. This USGS’s environmental health program is responsible for looking at how things like abandoned uranium mines, oil spills, pesticides, and air pollution are impacting human health. It also oversees a lot of research on hydraulic fracturing, aka fracking. The USGS under the Trump administration, however, is focusing more on finding and developing energy and mineral resources (like coal, oil, gas, and rare metals) than, say, how that very development might get people sick or pollute a stream and devastate its fish population. Research already shows that the people closest to oil and gas development are disproportionately low-income or communities of color.
Landowners brace for eminent domain loss in Penneast pipeline cases - Albertine Anthony has been living in the same picturesque Carbon County farmhouse since she was born 93 years ago, and she’s not going anywhere even if PennEast builds a natural gas pipeline across her land.Anthony, a tiny figure with a slight stoop and a shock of white hair, was offered $37,000 by the company as compensation for building the pipeline across a corner of her 124-acre farm that was first purchased by her grandfather, and where tenants now grow crops including corn and oats.She might have gotten used to the idea if the company hadn’t changed its plans and redrawn the pipeline route so that it crossed a wetland containing the spring that has supplied her house with water for three generations.The idea that pipeline construction might destroy the spring that provides fresh, clear water by gravity – even to the second floor of her house – has set her firmly against PennEast’s plans and led her to tell them that she’s not accepting their compensation at any price.“You can give me any amount of money but you can’t replace that spring, and you can’t replace the good taste that it has,” Anthony is among 50 Pennsylvania landowners who are being sued by PennEast to take a portion of their land using eminent domain. Court records show the company filed 28 suits in federal court for the Eastern District of Pennsylvania on Feb. 6, and another 22 cases, including Anthony’s, in federal court for the Middle District of Pennsylvania, also on Feb. 6. The filings were prompted by federal energy regulators issuing a long-awaited Certificate of Public Convenience and Necessity for the pipeline in mid-January, allowing the company to begin its legal effort to obtain the lands from uncooperative owners. The actions came the day after a deadline imposed by PennEast for landowners to accept or decline its offers.
Environmental group: Methane pollution higher than PA thinks - An environmental group says that Pennsylvania’s gas drilling industry is releasing much more methane into the atmosphere than the state is reporting. Scientists at the Environmental Defense Fund calculated Pennsylvania’s Marcellus shale industry is emitting twice as much methane as companies are reporting to the state’s Department of Environmental Protection. The analysis, posted to the group’s website, is based on 16 peer-reviewed studies funded in part by EDF, including some involving oil and gas companies. Methane is the main component of natural gas, and is a powerful greenhouse gas. Over the course of 20 years, methane is as much as 86 times more potent at trapping heat in the atmosphere than carbon dioxide. The fracking boom in Pennsylvania has made the state the No. 2 gas-producing state in the country, behind Texas. It has also brought attention to how much methane the wells are leaking into the atmosphere. But the state’s older, conventional drilling industry may also be a significant source of methane pollution, according to the EDF.The group’s analysis showed that about half of the industry’s methane emissions are from the state’s 70,000 conventional gas wells. They are mostly vertical wells drilled into shallow formations, not into deep shale formations like the Marcellus. One study cited by EDF found conventional wells were losing about 23 percent of their gas, compared to .3 percent for larger unconventional wells in the Marcellus shale region.David Lyon, EDF’s lead scientist on the report, said the conventional wells probably lose so much gas because of their age.“One of the main reasons is a lack of maintenance, or less attention being paid to these wells, that are more common and produce a lot less oil and gas than some of the newer (unconventional) wells,” Lyon said. Estimates leave out leaky wells.
Far More Methane Leaking at Oil, Gas Sites in Pennsylvania than Reported - Leaks of methane, a powerful greenhouse gas, from oil and gas sites in Pennsylvania could be five times greater than industry reports to state regulators, according to a new analysis by the Environmental Defense Fund. Drawing from peer-reviewed research based on measurements collected downwind of oil and gas sites, along with government data, the EDF analysis estimates that the state's oil and gas wells and infrastructure leak more than 520,000 tons of methane annually, largely due to faulty equipment. "This wasted gas causes the same near-term climate pollution as 11 coal-fired power plants and results in nearly $68 million worth of wasted energy resources," the group said in its report, released Thursday. The underreporting of methane leaks in Pennsylvania is part of a nationwide pattern that peer-reviewed studies have uncovered in recent years as scientists compare federal and state statistics to data they gather on the ground and in aircraft flyovers. The disparity between what researchers find and what industry reports raises important questions about the actual level of greenhouse gas emissions in the United States and the viability of natural gas as an alternative to coal, if limits aren't placed on methane leaks from gas and oil infrastructure. In the new report, EDF analyzed methane leaks from Pennsylvania's conventional oil and gas wells, mostly drilled before 2008, and from unconventional wells, those unlocked since then using hydraulic fracturing. There are far more conventional wells than unconventional ones in the state, and because they are older they leak at a much higher rate. Twenty-three percent of methane at a conventional well leaked into the atmosphere compared to 0.3 percent at a fracked well, EDF estimated. But the newer fracked wells produce considerably more natural gas than the older wells. As a result, even a small leakage rate of 0.3 percent led to a vast amount of methane entering the atmosphere, the analysis estimated. EDF calculated that fracked wells spewed about 253,500 tons of methane in 2015, and conventional wells, 268,900 tons.
Emissions From Fracking 5 Times Higher Than Reported -- Natural gas is not a “bridge fuel to the future.” It is a death sentence for humanity. Think that is too strong? Think again. A new study by the Environmental Defense Fund finds that methane escaping from fracking operations in Pennsylvania “causes the same near term climate pollution as 11 coal fired power plants” and is “five times higher than what oil and gas companies report” to the state. A previous assessment by EDF last November found methane emissions escaping from oil and gas wells in New Mexico are “equivalent to the climate impact of approximately 12 coal fired power plants. In its executive summary of the study, the EDF says, “The analysis — based on peer-reviewed research and emissions data collected at Pennsylvania well sites — examines both the total amount of methane and volatile organic compounds emitted from oil and gas sites. These pollutants increase global warming and are hazardous to human health.” Several interactive maps and more information about the data collection procedures and analysis used by EDF are available on its website. Methane is the primary component of what is popularly known as “natural gas.” It is a powerful greenhouse gas which traps 86 times as much heat as carbon dioxide over a 20 year period, according to Think Progress. The amount of methane in the earth’s atmosphere has increased dramatically since 2006. A recent NASA review determined that the majority of that increase is attributable to oil and gas extraction. Fracking has become a matter of national pride for the United States. For the first time, it is now one of the largest producers of oil and gas in the world. OPEC never imagined back in the 1970s that America would one day out-produce its member states. Russia, another major supplier of oil and gas, is also none too pleased about the US selling more fossil fuels than it does. America’s new role as a major supplier could create geo-political tensions with global implications. Fights over access to the Arctic as sea ice melts now seem inevitable. Be careful what you wish for, America. Giving Donald Trump another reason to beat his breast and crow about what a great country America is, or was, or might be is no reason to celebrate if it means poisoning the entire planet. Fracking is nothing less than a loaded gun pointed straight at the head of every man, woman, and child alive
EQT, the biggest US natural gas producer, is spinning off its pipeline business -- EQT, the nation's biggest natural gas producer, will spin off its pipeline business into a new publicly traded company, the Pittsburgh-based driller announced Wednesday. The transaction represents something of a consolation prize to investors who objected to EQT's purchase of Rice Energy last year. Opponents led by activist investor Barry Rosenstein's Jana Partners had contended that splitting EQT's natural gas production and transportation businesses would better reward EQT shareholders. Shares of EQT were up more than 1 percent Wednesday to about $52, after popping about 5 percent in premarket trading. The spinoff will create the third-largest U.S. natural gas gathering company, according to EQT. The company says the deal will allow the two pure-play companies to attract an investor base attuned to their businesses, simplify financial results and more efficiently allocate capital. Before their combination, both EQT and Rice operated midstream businesses — which transport oil and gas from wells to processing, transportation and shipping facilities — through limited partnerships. The deal announced Wednesday will merge Rice Midstream Partners with EQT Midstream Partners, both of which are focused on the Appalachian region, the epicenter of the U.S. shale gas boom.
Environmental groups puts up legal 'roadblock' against Mountain Valley Pipeline - A new legal action filed by a coalition of environmental groups in the U.S. Court of Appeals takes issue with the way the Army Corps of Engineers issued a water crossing permit for a natural gas pipeline.The petition is the latest in attempts to stop the building of the Mountain Valley Pipeline, a 300-mile-long pipeline that would run from Wetzel County to Pittsylvania County, Virginia.The Army Corps is tasked with issuing a “dredge and fill” permit under Section 404 of the Clean Water Act, but the petition says it’s wrong to have issued the permit because West Virginia’s Department of Environmental Protectionwaived its right to a water quality analysis last year.Under Section 401 of the Clean Water Act, states have the authority to decide whether a project that needs a federal permit complies with state water quality standards, though they may waive that authority.The legal action was filed in the 4th Circuit in Richmond, Virginia, by Appalachian Mountain Advocates on behalf of the Sierra Club, the West Virginia Rivers Coalition, Indian Creek Watershed Association, Appalachian Voices and Chesapeake Climate Action Network. Officials need to readdress the impact the project might have on the state’s rivers and streams before proceeding with the project, said Angie Rosser, executive director for the West Virginia Rivers Coalition. “The combination of WVDEP’s waived water quality analysis and the Army Corps’ cookie-cutter approach just doesn’t cut it for a project of this scale,” she said. Ideally, the Army Corps or the state of West Virginia will have to do another water quality impact review before the pipeline is built, said a news release from the Sierra Club.
Federal judge grants preliminary injunction to Mountain Valley Pipeline -- A federal judge in Charleston has sided with two other federal judges, granting a preliminary injunction to developers of the Mountain Valley Pipeline. U.S. District Judge John Copenhaver granted the preliminary injunction Wednesday evening, two weeks after a hearing in the Robert C. Byrd U.S. Courthouse, in Charleston. The hearing followed decisions in the Northern District of West Virginia and Western District of Virginia, where Mountain Valley Pipeline sued landowners over easement through eminent domain rights to build the pipeline, which would run from Wetzel County, West Virginia to Pittsylvania County, Virginia.U.S. District Judge Elizabeth Dillon, from the Western District of Virginia, and U.S. District Judge Irene Keeley, from the Northern District of West Virginia, granted approval for the project.“The court finds it pertinent to note, at the outset of this discussion, that the two other district courts presiding over Mountain Valley’s companion condemnation actions have already granted Mountain Valley’s request for a preliminary injunction under virtually identical circumstances,” Copenhaver wrote in a 39-page decision.The project faces a tight deadline — tree clearing would have to be finished by March 31, the day the U.S. Fish and Wildlife Service marks as the day two species of bats come out of hibernation.
Trump's infrastructure plan would make it harder to challenge pipelines - The Trump administration’s infrastructure plan released earlier this week is designed to stimulate the construction of more oil and natural gas pipelines across the country.To make the building of new pipelines easier, the White House wants to make it harder for the next big anti-pipeline movement to win in the courtroom. How? By limiting the legal options available to lawyers at environmental groups opposed to new fossil-fuel infrastructure. Such a move could be a significant blow to the slew of protesters who spent years agitating against the Keystone XL pipeline and more recently the Dakota Access one. But environmentalists can probably rest easy despite the broadside: A new network of pipelines built with little legal opposition is probably a pipe dream for Trump and his allies because it involves the arduous task of getting Congress to rewrite long-standing environmental laws. Among the changes sought by the White House in its infrastructure plan -- a longshot for passage as it requires a lot of new government spending -- is reducing the statute of limitations for challenging permitting decisions under the National Environmental Policy Act (NEPA) from six years to 150 days. Changing NEPA, which requires that federal agencies prepare environmental reviews of major projects, has been a focus of Republicans on the House Natural Resources Committee, which held an oversight hearing on restructuring the 48-year-old law in November. The law has served as a model for environmental-review legislation in other countries, but Congress has amended NEPA only once, in 2015. The smaller window for challenging permits would give environmental groups less time to mount legal challenges, although “the reality is that most of the truly controversial projects would be challenged right out of the gate,” The White House also wants to change the standard under which a pipeline project could be temporarily halted by a judge.
New Jersey officials resist pipeline company’s eminent domain push - State regulators from Pennsylvania to Virginia have served as cheerleaders for pipeline development, regardless of the potential consequences. New Jersey, however, has started to take a different approach. New Jersey’s new attorney general, Gurbir Grewal (D), recently called on federal regulators to hit pause on the 120-mile PennEast Pipeline. Grewal wants to make sure important environmental issues are addressed before the companies behind the proposed pipeline begin legal efforts to gain access to landowners’ property in his state. So far, PennEast is seeking eminent domain over nearly 147 parcels in New Jersey and has started proceedings to condemn, or gain legal permission to take control of these areas. In his motion filed with the Federal Energy Regulatory Commission (FERC) on behalf of the New Jersey Department of Environmental Protection (DEP), Grewal urged the commission to listen to the department’s concerns. Although the proposed pipeline would cross over 30 streams in New Jersey, the DEP has not been provided with any site-specific information from PennEast detailing how environmental impacts would be avoided or minimized, the attorney general said. “FERC’s misunderstanding that impacts can be mitigated away not only threatens precious environmental resources but also would leave PennEast in the position of having condemned properties which may not qualify for permits under the Clean Water Act,” Grewal wrote. PennEast wants FERC to deny the motion, contending the issues raised by the attorney general on behalf of the DEP aren’t new and have already been considered by the commission.
Refiner goes belly-up after big payouts to Carlyle Group (Reuters) - Throughout 2016 and 2017, a rail terminal built to accept crude oil for the largest East Coast refinery often sat idle, with few trains showing up to unload. Although little oil flowed, plenty of money did. Under a deal Philadelphia Energy Solutions (PES) signed in 2015, the refiner paid minimum quarterly payments of $30 million to terminal owner North Yard Logistics LP - even if little crude arrived. Much of that cash, in turn, flowed to the investors that own both PES and North Yard, led by the Carlyle Group, a global private equity firm with $178 billion in assets. The deal in effect guaranteed lucrative payouts to Carlyle regardless of whether the refinery benefited from the arrangement. When oil market conditions made the rail shipments unprofitable later that year, the refinery took heavy losses while its investors continued to collect large distributions for two more years. The rail contract exemplifies the financial demands Carlyle imposed on PES in the years leading up to the refiner’s bankruptcy in January. The Carlyle-led consortium collected at least $594 million in cash distributions from PES before it collapsed, according to a Reuters review of bankruptcy filings. Carlyle paid $175 million in 2012 for its two-thirds stake in the refiner. More than half the distributions to the Carlyle-led investors were financed by loans against PES assets that the refiner now can’t pay back, the filings show. The rest came from the refiner’s operating budget and payments PES made under the terminal deal to North Yard, a firm with no offices or employees that PES spun off in 2015.
Trump calls meeting on biofuels policy after refiner bankruptcy (Reuters) - U.S. President Donald Trump has called a meeting early next week with key senators and Cabinet officials to discuss potential changes to biofuels policy, which is coming under increasing pressure after a Pennsylvania refiner blamed the regulation for its bankruptcy, according to four sources familiar with the matter. The meeting comes as the oil industry and corn lobby – powerful forces in Washington – clash over the future of the Renewable Fuel Standard (RFS), a decade-old regulation that requires refiners to cover the cost of mixing biofuels such as corn-based ethanol into their fuel. Trump’s engagement reflects the high political stakes of protecting jobs in a key electoral state. Oil refiner Philadelphia Energy Solutions (PES), which employs more than a thousand people in Philadelphia, declared bankruptcy last month and blamed the regulation for its demise. The meeting, scheduled for Tuesday, will include Republican Senators Ted Cruz of Texas, Chuck Grassley and Joni Ernst of Iowa, along with Environmental Protection Agency Administrator Scott Pruitt, Agriculture Secretary Sonny Perdue, and potentially Energy Secretary Rick Perry, according to the four sources, who asked not to be named because they were not authorized to speak publicly on the matter. One source said the meeting would focus on short-term solutions to help PES continue operating. PES is asking a bankruptcy judge to shed roughly $350 million of its current RFS compliance costs, owed to the EPA which administers the program, as part of its restructuring package. The other sources said the meeting will consider whether to cap prices for biofuel credits, let higher-ethanol blends be sold all year, and efforts to get speculators out of the market.
New York Harbor heating oil differential pops after multiyear low -- The differential for high sulfur heating oil barges in New York Harbor rebounded sharply Friday after reaching the lowest level in a number of years on warm weather and overblending. S&P Global Platts assessed benchmark Atlantic Coast HSHO at the NYMEX March ULSD futures contract minus 18 cents/gal, compared with minus 21.75 cents/gal on Thursday, the lowest differential since NYMEX switched its futures contract from heating oil to ULSD in spring 2013. BP offered heating oil barges lower Thursday to NYMEX March ULSD minus 21.50 cents/gal, with no buyers. But it was heard bid at minus 18.25 cents/gal on a quiet Friday of trading in the Northeast, where many people had the same forecast as given on Groundhog Day: a cold February. "I guess somebody should have shot that groundhog. He missed the forecast again," one trader said. He noted another major use is for blending the 2,000 ppm sulfur grade into 500 ppm sulfur, or S500, heating oil. "And the demand for S500 has just fallen off the cliff. That's put added pressure on heating oil on a prompt basis," he said. "I wouldn't say it's warm there, but it's probably warmer than suppliers would want to see. They may have overblended to start with." US imports of Canadian heating oil have tapered off lately, with just one ship from Irving Oil unloading 95,000 barrels of heating oil in Maine this week, according to US Customs Bureau data. But Rolympus brought in 316,000 barrels of gasoil into Connecticut on Wednesday from Russia that was likely heating oil grade.
LNG Comes To Boston, A Harbinger Of The Future? - The most curious natural gas story of the year so far comes out of Boston and seems to have echoes of a deepening Russia-related scandal in Washington. A liquefied natural gas (LNG) tanker bearing natural gas produced in part in Russia delivered its cargo to the Boston area for insertion into the natural gas pipeline system there. Apparently, the Russian company that supplied some of the gas may fall under U.S. sanctions against the financing and importation of Russian goods. One of the many ironies of the delivery is that the United States is simultaneously importing LNG in one place even as it exports LNG from another. (I'll explain later why this may become a more frequent occurrence in the years ahead.) The hue and cry from the natural gas partisans blamed Boston's predicament on the lack of pipelines to carry growing gas production from the nearby Marcellus and Utica shale deposits to needy Bostonians whose gas supplies had been depleted by a deep winter freeze.Within the context of this narrow appraisal, the partisans are mostly correct. Attempts to bring more pipeline gas to New England have come to grief, especially in New York state where residents have strongly opposed new natural gas pipelines and storage facilities.In addition, the state banned hydraulic fracturing—the main method for extracting gas from the Marcellus and Utica deposits—in 2014, claiming the process threatened water supplies. That ban, of course, prevented any shale gas development in southern New York under which the deposits lie. And, it brought into disrepute all things related to hydraulic fracturing or "fracking" including natural gas pipelines and storage facilities. What lurks behind the outrage of the partisans is the assumption—widely touted in the media and by the U.S. Energy Information Administration (EIA)—that the country is about to become a large exporter of LNG for the long term as its natural gas production grows ever skyward.
U.S. ethane consumption, exports to increase as new petrochemical plants come online - Over the next two years, EIA’s Short-Term Energy Outlook (STEO) projects growth in U.S. consumption of ethane in the petrochemical industry will exceed increases in consumption of all other petroleum and liquid products—such as motor gasoline, distillate, and jet fuel—combined. EIA also projects that ethane exports will continue increasing, as ethane is exported both by pipeline to Canada and by tankers to more distant destinations. Ethane is separated from raw natural gas at natural gas processing plants along with other hydrocarbon gas liquids (HGL) such as propane, normal butane, isobutane, and natural gasoline. Ethane is mainly used as a petrochemical feedstock for the production of ethylene, which is a building block for plastics, resins, and other industrial products. As U.S. natural gas production has increased, the amount of ethane contained in raw natural gas production streams has exceeded domestic demand or the ability to export it abroad. This situation has led producers to leave some of the ethane in the natural gas stream, up to allowable limits set by natural gas pipelines and distribution systems, and to sell it as natural gas, rather than recover and market ethane as a separate product. Nonetheless, ethane is increasingly being recovered from the natural gas stream, and U.S. ethane consumption is increasing as existing ethylene crackers have expanded and new plants have begun operating. In addition, expanding pipeline networks and two new ethane export terminals have allowed U.S. ethane exports to increase. In 2017, construction was completed on the first three of a series of new ethylene crackers—two early in the year and a third in late December, all on the Texas Gulf Coast. These crackers expanded the capacity to consume ethane in the United States by 210,000 barrels per day (b/d), and EIA expects ethylene plant capacity to continue to expand: six ethylene crackers, collectively capable of consuming 380,000 b/d of ethane, are planned to be completed by the end of 2019. EIA expects annual U.S. ethane consumption to grow from an estimated 1.2 million b/d in 2017 to 1.4 million b/d in 2018 and 1.6 million b/d in 2019 as these new plants and related infrastructure ramp up operations.
US Plans Largest Ever Oil & Gas Lease Sale In Gulf Of Mexico - The largest oil and gas lease sale for waters in the Gulf of Mexico in U.S. history will occur on March 21st, according to an announcement by the Trump administration on Friday.Less than a year ago, a similar auction in the same body of water generated little interest from energy companies.The Interior Department, which oversees all onshore and offshore licensing activities, says the auction will include 77.3 million acres of offshore waters in the Gulf for energy development.The round had been previously announced in October, but an exact date had not been assigned. It is part of President Donald Trump’s America First Offshore Energy Strategy, which promises to expand fossil fuel activity to lower imports and create jobs.Oil prices have been low for three years, so expensive offshore drilling projects are not a top priority for energy companies. Last month, analysts said the oil and gas industry’s response to the Trump administration plan to open almost all of the U.S. continental shelf for drilling leases is due to be slow. The draft program, which would replace President Barack Obama’s leasing plan through 2022, which restricted drilling in the Arctic and other federal waters, fulfills the White House’s promise to encourage the American fossil fuel sector, even as the international community opts for renewable and alternative energies in the fight against climate change. If the proposal is adopted, 47 potential lease sales could open up 25 of 26 planning areas, with the exception being Alaska’s North Aleutian Basin, which was deemed off limits by President George W. Bush, according to a report by Oil and Gas Investor. Nineteen sales would still proceed in offshore Alaska, seven in the Pacific, twelve in the Gulf of Mexico and nine in the Atlantic.
Interior to hold largest oil and gas lease sale in US history | TheHill: The Interior Department is planning to hold the largest sale of oil and gas leases in the country's history. The plans, announced Friday, would auction off 77.3 million acres of offshore waters to drilling, covering coastal waters in Texas, Louisiana, Mississippi, Alabama and Florida. The auction will take place March 21. Areas protected under a 2006 congressional moratorium, which bans drilling within 125 miles of the Florida coast until 2022, will be excluded from the lease.Interior largely credited strong offshore lease sales from 2017 for raising U.S. revenues by $1 billion dollars compared to 2016.“Responsibly developing our offshore energy resources is a major pillar of President Trump’s American Energy Dominance strategy,” Deputy Secretary David Bernhardt said in a statement. “A strong offshore energy program supports tens of thousands good paying jobs and provides the affordable and reliable energy we need to heat homes, fuel our cars, and power our economy."On a call with reporters to discuss the Interior Department's annual budget proposal Monday, Secretary Ryan Zinke teased the sale saying, "Without a strong and steady stream of revenue we cannot afford to do everything we need to do."Plans Zinke announced in early January to vastly expand offshore drilling on federally owned waters, were met with heavy criticism, including from Republican governors of coastal states.At a congressional hearing in January, an Interior department official said that each state was still being individually reviewed before any final determination on drilling. “Until such time as all those analyses are complete and we have all those comments to put in the record and consider, we will not have any indication of where the secretary wants to go," Walter Cruickshank, the acting director of the Interior Department’s Bureau of Ocean Energy Management, told the Senate committee.
Federal oil drilling lease sale off Florida coast sparks environmental opposition (Politico) — An Interior Department plan announced Friday to open a huge swath of the Gulf of Mexico to oil drilling, including a smaller area off Florida's Gulf Coast for oil and gas drilling, left environmentalists adamantly opposed.But an oil industry representative and the federal Bureau of Ocean Energy Management pointed out that the area off Florida, which covers 944,640 acres and at its closest is 125 miles from the Panhandle coast, has never been off limits to drilling. Interior Secretary Ryan Zinke's proposal in January to open federal waters off Florida to drilling appears to be fueling controversy for the lease sale — even though the sale area lies outside an area closed to drilling until 2022 under federal law. "There is a pattern here — Zinke is saying, 'Drill everywhere and drill anywhere regardless of what the environmental impacts are going to be,'" said Sierra Club Florida chapter director Frank Jackalone. "Zinke and [President Donald] Trump just don't care about the damage they do to our fisheries, our marine life and our coast." "This massive lease sale is more supporting evidence for why Florida needs to be permanently protected from offshore oil and gas exploration," Holly Parker, Florida regional manager for the Surfrider Foundation, said in an email.
U.S. Oil Exports Go Up a Gear as Supertanker Sets Sail for China -- The flood of U.S. oil exports stepped up a gear on Monday after the first fully laden supertanker sailed from an American port, alleviating a bottleneck that’s limited overseas shipments. The Louisiana Offshore Oil Port, or LOOP, the only deep water port in the U.S. able to handle the industry’s biggest tankers, said in a statement it had successfully completed the first loading of a very large crude carrier. Shipping data compiled by Bloomberg show the tanker is the Saudi Arabian-owned Shaden, now heading to the Chinese port of Rizhao. "There could not be a better time to offer this service as domestic production surpasses 10 million barrels per day in the ever-dynamic global crude oil market," said LOOP LLC President Tom Shaw. LOOP has been a vital piece of U.S. energy infrastructure for more than 30 years, handling oil imports from across the world as well as gathering crude pumped from deepwater deposits in the Gulf of Mexico. Since it started receiving oil in 1981, it has offloaded 10,200 tankers. The Shaden, which is owned by the National Shipping Co. of Saudi Arabia and carries the flag of the kingdom, was the first VLCC to load oil at the port rather than discharge it. Pipelines and ports have become the biggest bottleneck in U.S. oil exports, with traders at times engineering logistically complex chains combining railways, trucks, pipelines, barges, and ship-to-ship transfers to get crude out of the country. . While U.S. crude has already been exported using supertankers, other ports are too shallow to allow full loadings, meaning smaller ships must shuttle multiple cargoes to the giant vessels as they wait to load offshore. LOOP, because it stands in deeper water about 18 miles off of the Louisiana coast, allows the industry’s largest tankers to load in one go. The new export capacity at LOOP will allow the supertankers to deliver foreign crude into the U.S. and depart laden, known as back-hauling in the industry’s jargon, rather than returning empty.
US flexes crude export muscle with first VLCC LOOP load -- The first VLCC to directly load a crude oil cargo from the Louisiana Offshore Oil Port in the US Gulf Coast has been completed, terminal operator LOOP LLC said in a statement Sunday, in a further sign that US crude exports will play a more significant role in the global oil markets. The appeal for US crude oil is poised to broaden as the freight costs for VLCCs are much lower than smaller tankers and this could spur more global demand for US crude, making it viable for more arbitrage opportunities. This loading signals a big shift in crude exports out of the US which normally load in smaller tankers like Suezmaxes and Aframaxes. LOOP LLC confirmed that it "successfully completed the first VLCC crude oil loading operation at its Deepwater Port, 18 miles offshore of Port Fourchon in Louisiana. Sources identified the vessel as the Shaden; it left the terminal on Sunday, according to S&P Global Platts trade flow software cFlow. LOOP said the vessel was chartered by Shell. Shell was unavailable for comment. Shaden is a Saudi Arabian-flagged VLCC owned by Bahri (the top VLCC owner globally) that entered service at the end of 2017. A spokesman at Bahri was unavailable for comment. Sources also told S&P Global Platts that the tanker is bound for Asia, with some options to discharge in China. Shipping sources had said that tanker was booked by China's Unipec and the supplier of the crude was Shell. Representatives at Unipec were also unavailable for comment. China has emerged as the main destination for US crudes since the then US President Barrack Obama lifted the ban of US crude exports in December 2015.
Recent legislation mandates additional sales of U.S. Strategic Petroleum Reserve crude oil -- Recent legislation has directed the sale of more than 100 million barrels of oil from the U.S. Strategic Petroleum Reserve (SPR) in U.S. government fiscal years (FY) 2022 through 2027. Based on legislated sales established in multiple acts of Congress, the SPR could decline by about 40% in the coming decade while still meeting requirements for petroleum import coverage. Assuming no other legislation over this period, the SPR could decline from 695 million barrels at the start of 2017 to about 410 million barrels at the start of 2028. The largest stockpile of government-owned emergency crude oil in the world, the SPR was established to help alleviate the effects of unexpected oil supply reductions. Located in four storage sites along the Gulf of Mexico, the SPR held more than 695 million barrels of crude oil at the beginning of 2017, or about 97% of its 713.5 million barrel design capacity. Prior to FY 2017 sales, the SPR inventory level had remained nearly constant for several years. A previous Today in Energy article described the three bills enacted in 2015 and 2016 that collectively call for the sale of 149 million barrels in FY 2017 through FY 2025. Most of these sales set volumetric requirements, and revenues from those sales go to the U.S. Department of Treasury. A section of one of those bills—Section 404 of the Bipartisan Budget Act of 2015—included authorization for funding an SPR modernization program by selling up to $2 billion worth of SPR crude oil in FY 2017 through FY 2020. In that act, the sales are based on revenue targets that must be authorized by Congress. Two recent congressional acts collectively call for the sale of 107 million barrels of crude oil in FY 2022 through FY 2027:
- The Bipartisan Budget Act of 2018, enacted in February 2018, calls for the sale of 30 million barrels over the four-year period of FY 2022 through FY 2025, 35 million barrels in FY 2026, and 35 million barrels in FY 2027.
- The Tax Cuts and Jobs Act of 2017, enacted in December 2017, calls for the sale of 7 million barrels over the two-year period of FY 2026 through FY 2027.
One of the SPR's core missions is to hold enough oil stocks to carry out U.S. obligations under the International Energy Program (IEP), the 1974 treaty that established the International Energy Agency (IEA). Under the IEP, the United States must be able to contribute to an IEA collective action based on its share of IEA oil consumption. Based on the most recent shares, the United States must be prepared to contribute about 43% of the barrels released in an IEA coordinated response. As a member of the IEA, the United States is obligated to maintain stocks of crude oil and petroleum products, both public and private, to provide at least 90 days of U.S. net import protection. As net imports of crude oil and petroleum products into the United States continue to decline, this requirement can be met with lower SPR inventory levels.
U.S. refiners turn to export markets as gasoline growth slows at home (Reuters) - U.S. gasoline consumption has leveled off as the stimulus provided by low and falling oil prices between 2014 and 2016 has faded, so refiners are increasingly turning to diesel and customers in emerging markets. U.S. gasoline consumption is forecast to rise by just 40,000 barrels per day (bpd) in 2018, after remaining essentially unchanged last year, according to the U.S. Energy Information Administration. Slower consumption growth stands in contrast to the earlier surge when usage rose by almost 260,000 bpd in 2015 and another 140,000 bpd in 2016 ("Short-Term Energy Outlook", EIA, February 2018).Traffic volumes are also growing more slowly, after rising sharply during most of 2015 and 2016, according to separate estimates from the Federal Highway Administration.Traffic on U.S. roads was up by less than 1 percent in the three months to November compared with the same period a year earlier ("Traffic volume trends", FHWA, January 2018).Traffic growth has slowed from a peak of well over 3 percent per year in the early part of 2016, shortly after oil prices hit their lowest point in the current cycle.Oil prices have been trending higher for more than two years and are now within $10 per barrel of their average real level over the entire of the last cycle (http://tmsnrt.rs/2C9rZZC).So while the cost of fuel is not expensive, it is no longer especially cheap, and the steady increase in prices has started to moderate consumption growth.The nationwide weighted-average retail price of gasoline was $2.67 per gallon in January, an increase of more than 60 cents per gallon compared with two years previously. If oil prices continue to climb through the remainder of 2018 and into 2019 as the price cycle matures, U.S. gasoline consumption growth will likely slow even further.
Exxon Could Make Beaumont The Largest Refinery In The US - ExxonMobil is close to issuing a final approval of a major expansion of its Beaumont refinery complex in Texas that could make it the largest crude oil processing plant in the U.S., Reuters reported on Thursday, quoting three sources familiar with Exxon’s plans.The Beaumont Refinery currently has the capacity to process 365,000 bpd and produces 2.8 billion gallons of gasoline annually. The Beaumont complex also includes a chemicals plant, a polyethylene plant, and a lube plant.Exxon has estimated the total post-expansion capacity for the Beaumont refinery to be between 700,000 bpd and 850,000 bpd, according to Reuters. This capacity would be higher than the current largest refinery in the U.S., Motiva’s Port Arthur refinery in Texas, which has a crude processing capacity of more than 600,000 bpd and is North America’s biggest refinery.Exxon has been considering the addition of a third crude distillation unit (CDU) at the Beaumont refinery, but according to one of Reuters’ sources, the U.S. supermajor is still “crunching the numbers” on the capacity of that third unit.The company is looking to increase its light crude refining operations in North America, but has not made any specific decisions yet, spokeswoman Sarah Nordin told Reuters. “The Beaumont refinery is being considered as part of that evaluation,” Nordin noted.If approved, the major expansion of the Beaumont refinery would signal that Exxon wants to increasingly take advantage of the second boom in the U.S. shale production. Last month, the company said that it planned to triple its total daily production in the Permian Basin to more than 600,000 oil-equivalent barrels by 2025. Exxon also plans to invest more than US$2 billion on transportation infrastructure to support its Permian operations.
How is Trump administration crafting sanctions so as not to adversely impact US refiners? - Capitol Crude podcast - The Trump administration is considering sanctions on Venezuelan oil exports, but is worried they could bankrupt a refinery along the US Gulf Coast, a top energy adviser to President Donald Trump tells Platts Capitol Crude. On this week’s podcast, George David Banks, who stepped down as White House Special Assistant at the National Economic Council and National Security Council last week, talks about Venezuela oil sector sanctions, President Trump’s decision to leave the Paris climate change agreement, the future of the Iran nuclear deal, and the Trump administration’s evolving relationship with Saudi Arabia and OPEC. Banks left his White House position last week after he was denied a permanent security clearance due to past marijuana use. This is the first in a two-part podcast.
Permian's Mammoth Cubes Herald Supersized Future for Shale -- In the scrublands of West Texas there’s an oil-drilling operation like few that have come before. Encana Corp.’s RAB Davidson well pad is so mammoth, the explorer speaks of it in military terms, describing its efforts here as an occupation. More than 1 million pounds of drilling rigs, bulldozers, tanker trucks and other equipment spread out over a dusty 16-acre expanse. As of November, the 19 wells here collectively pumped almost 20,000 barrels of crude per day, according to company reports. Encana calls this “cube development," and it may be the supersized future of U.S. fracking. The technique is designed to tap the multiple layers of petroleum-soaked rock here in Texas’ Permian shale basin all at once, rather than the one-or-two-well, one-layer-at-a-time approach of the past. “Now it’s all about entering manufacturing mode." With the new technique, Encana and other companies are pushing beyond the drilling patterns that dominated during the early, exploratory phases of the shale revolution. Now, operators are assembling projects with a dozen or more well bores that touch multiple underground layers of the Permian and other shale plays simultaneously, tapping the entire 3-D “cube" beneath a producer’s acreage. The shift has been controversial, with some of the biggest names in oil shying away from the approach as too aggressive and expensive. But if proponents are right, the cube could accelerate a drilling boom that’s already helped push U.S. production past an historic 10 million barrels a day, rewriting the rules of global energy markets along the way.Along with the Davidson pad, Calgary-based Encana has 12- and 14-well operations in Texas as well as a 28-well behemoth in the Montney shale play in Alberta and British Columbia. Devon Energy Corp. said on Wednesday that it has more than 10 multi-zone projects scheduled for 2018, including the 11-well Boomslang pad in the Permian and the 24-well Showboat project in Oklahoma. Concho Resources Inc., another early champion, debuted its Brass Monkey operation in the Permian last year, with 10 wells that dive underground and then burrow about two miles horizontally. “We have just started to get into the manufacturing and harvest mode of the shale revolution,"
Frac Sand Shortage Threatens Shale Boom –-- Higher drilling costs could threaten the recent surge in United States shale production. Halliburton said last week that its earnings could be negatively impacted because of bottlenecks related to the supply of frac sand used in shale drilling. Halliburton’s CFO Chris Weber told an audience at the Credit Suisse Energy Summit that the company’s first quarter earnings could take a hit by a whopping 10 cents per share. The reason, he said, was because of delays by Canadian rail companies that would slow the delivery of frac sand. Halliburton saw its shares drop by more than 2 percent on a day that saw broader gains to the S&P 500. Frac sand is integral to growing shale production, increasingly so these days with more and more sand pumped down into a well. Shale drillers have credited the heavy doses of sand with squeezing out more oil and gas from the average well. Demand for frac sand surged from 34 million tons in 2012 to 61.5 million tons in 2014. Consumption fell in the ensuing years as drilling dried up when oil prices collapsed, but frac sand consumption surpassed previous highs in 2017 as drilling resoundingly came back. In 2018, frac sand demand is expected to top 100 million tons, according to Rystad Energy. Much of the frac sand has come from places like Wisconsin, which produces “northern white sand” that is hard and round, helping to create porous fractures in shale wells. It is high quality, but expensive, particularly because it has to be shipped by rail to Texas shale fields. The FT reported that frac sand could cost $120 per short ton on at the Texas well head in 2017, essentially triple what it costs at the mine in the northern U.S. That led to new investment in frac sand mining in Texas, where “brown sand” could be produced. The quality was not as good, with finer grains, but Texas brown sand could cost a third less than its northern cousin, and it is located much closer to drilling operations. But as the mines in Texas are still in the process of coming online, the U.S. shale industry’s dependence on far away suppliers continues. And because drilling is ramping up, and the average shale driller is using more proppant than ever before, sand supplies are feeling the strain.
Fracking billionaires pump millions into Texas races, pushing state GOP even further to the right -- A civil war is raging among Texas Republicans. Nowhere are the big-money moves and political schisms more apparent than in a little-publicized state Senate race on the east side of Dallas. From East Dallas’ blue precincts to moderate Republican turf in Garland and Mesquite, to ruby-red Rowlett and a huge swath of heavily GOP-leaning territory in East Texas, the sprawling Senate District 2 offers a glimpse at how a few West Texas billionaires are trying to tip the Legislature in a very different and much more hard-right direction. Tea party-aligned state Sen. Bob Hall, a first-term Republican from Edgewood, is trying to fend off a challenge from pro-business conservative Sunnyvale GOP state Rep. Cindy Burkett. The Wilks brothers of Cisco, southeast of Abilene, and political action committees they dominate have given nearly $540,000 to Hall’s re-election campaign — 55 percent of its total fundraising haul. Farris and Dan Wilks, fixtures in the Assembly of Yahweh 7th Day Church their father helped found, whose adherents follow Jesus but also dietary laws described in the Old Testament, became billionaires in a mid-2000s “fracking” boom in oil and gas drilling. Farris, his wife, JoAnn, and Dan and his wife, Staci, have invested millions in staunchly conservative political causes and news media sites. In state races, the two couples have zoomed to the top of the list of GOP mega donors.
Minnesota regulators turn down tribal request that could delay Enbridge pipeline project - Minnesota utility regulators Thursday rejected a request by the state's Ojibwe bands to require a comprehensive tribal cultural analysis for Enbridge's proposed pipeline across northern Minnesota.The tribes have asked the Minnesota Public Utilities Commission (PUC) to include a full state study of tribal historic sites as part of the state's Environmental Impact Statement for Enbridge's proposed new Line 3. The controversial pipeline would ferry Canadian oil to Enbridge's terminal in Superior, Wis.The PUC declined to include such a survey in the environmental review, essentially saying that it isn't the state's responsibility but that of the U.S. Army Corps of Engineers. A Corps-led cultural survey began last fall but is unlikely to be completed before the PUC makes a final decision on Line 3, which is expected in June.The PUC has acknowledged that the timing is a problem. It decided in December that if it approves Line 3, construction can't start until the federal tribal cultural survey is completed. "We understand there's another point of view that that's not enough," PUC member Dan Lipschultz said at Thursday's meeting.Two Minnesota House members expressed that viewpoint at the meeting."It defies logic to approve something before we have the results and the full implications of the [tribal cultural] survey," said Rep. Jamie Becker-Finn, DFL-Roseville, who grew up on the Leech Lake Reservation. "How can you approve something if you don't have all of the information?" added Rep. Peggy Flanagan, DFL-St. Louis Park, who is member of the White Earth Nation.
Bill banning sabotage of pipelines, 'critical infrastructure' passes Iowa Senate - Criminal convictions for sabotage of Iowa pipelines, telecommunications facilities, water treatment plants and other critical infrastructure could result in a long prison sentence and a hefty fine under a bill approved Wednesday night by the Iowa Senate Senate File 2235, proposed by the Iowa Department of Homeland Security and Emergency Management, is being pursued in the wake of millions of dollars in damage inflicted by protesters on Iowa sections of the Dakota Access Pipeline, prior to the crude oil pipeline becoming operational last year across Iowa and three other states.The bill passed on a 33-16 vote after a heated debate, sending it to the House, where a companion bill is being considered.The legislation would create the crime of critical infrastructure sabotage as a Class B felony. It would be punishable by up to 25 years in prison and a fine of between $85,000 and $100,000.The bill defines critical infrastructure sabotage as any unauthorized act intended to cause substantial interruption or impairment of service rendered to the public relating to critical infrastructure property. Sen. Robert Hogg, D-Cedar Rapids, argued against the bill, saying it represented "extraordinary overbreadth." He said could result in nonviolent protesters being prosecuted for circumstances that simply represented trespassing and a "bare intention." Hogg unsuccessfully offered amendments to soften the bill, including an amendment that would have exempted from the Class B felony requirements situations which did not result in physical injury or property damage. Another amendment that failed would have exempted a person protesting eminent domain while on their own property.
Earthquakes in southern Kansas linked to oil, gas production (UPI) -- Seismographs have documented a significant increase in earthquakes in southern Kansas over the last five years, and the latest research suggests the oil and gas industry's activity tied to hydraulic fracturing is to blame. Prior to 2012, no documented magnitude 4 or greater earthquake had shaken southern Kansas. Between 2012 and 2016, as oil and gas activity increased, seismographs registered six such earthquakes. To better understand the link between seismic activity and hydraulic fracturing, researchers with the U.S. Geological Survey analyzed 6,845 earthquakes that shook Harper and Sumner counties, home to the newest wave of oil and gas exploration. While researchers say the earthquakes are not linked specifically to hydraulic fracturing, wastewater injection -- an activity that follows fracturing -- may be linked to them. When scientists compared the timeline of seismic activity with the schedule of wastewater injection, they found a strong correlation between the two. Their data showed an increased in wastewater injection and seismic activity was followed by a decrease in both in 2015. A drop in oil and gas prices, combined with new regulations designed to limit wastewater injections, likely precipitated a downturn in hydraulic fracturing activity, explaining the drop-off in the occurrence of earthquakes. Though wastewater injections have slowed, scientists say it's possible earthquakes could continue in areas where the injection of fluids have altered the natural pressure in the underlying bedrock.
Interior plan to use drilling funds for new projects met with skepticism | TheHill: A new Interior Department plan to build roads in national parks, fix visitors centers and complete other infrastructure projects using money raised by drilling on public lands is facing skepticism from members of Congress and a former senior department official. The plan, part of the budget the White House proposed this week, would forgo traditional funding and instead opt to finance up to $18 billion in “backlogged” infrastructure projects solely through the sale of mineral and fossil fuel extraction on public lands and waters. But the proposal heralded by Interior Secretary Ryan Zinke faces several key hurdles, leaving even Republican members of Congress questioning its feasibility and raising a number of concerns, including whether the drilling money is already spoken for by other agencies. “Keep in mind that if we are funding this through oil revenues from offshore, what else is it being spent for?” said Sen. Lisa Murkowski (R-Alaska), chair of the Senate appropriations subcommittee on the Interior. “You have a lot of uses or sources, a lot of calls on that same money. So how many times has it been spent over? We have to find that out," she added. The annual budget already takes into consideration the billions of dollars in revenue generated from oil and gas extraction on public lands when it makes its appropriations to each department. Zinke’s plan suggests creating a Public Lands Infrastructure Fund to pool new lease sale revenues for use exclusively by Interior. The fund concept is novel, said a former Interior senior official, but the idea of trying to make a claim on a source of funding solely for one department is not.
Project Gasbuggy Brought Nuclear Fracking to New Mexico | KSFR (radio podcast) The old Atomic Energy Commission hatched Operation Plowshare in the nineteen sixties as a way to use nuclear materials for good. Some ideas were preposterous, like blowing a hole in the Alaska coast to create a harbor, others were pushed by oil and gas production companies as a way to release natural gas from underground rock. KSFR's Ellen Lockyer brings us this story about the little-known Project Gasbuggy.
Court Orders Trump Administration to Enforce Obama-Era Methane Rule - A federal judge reinstated a widely supported methane waste rule that President Trump's administration has repeatedly tried to stop . Judge William Orrick of the U.S. District Court for Northern California ruled Thursday that Bureau of Land Management's ( BLM ) decision to suspend core provisions of the 2016 Methane and Waste Prevention Rule was "untethered to evidence." Orrick ruled that the plaintiffs—California, New Mexico and environmental groups —have shown "irreparable injury caused by the waste of publicly owned natural gas , increased air pollution and associated health impacts, and exacerbated climate impacts." California Attorney General Xavier Becerra celebrated the news in a tweet: Judge Orrick, an Obama-appointee, also blasted the BLM's decision to postpone the methane waste rule in that it failed to point to any factual support underlying its concerns, and also rebuked Interior Sec. Ryan Zinke's refusal to consider public comments related to the rule. The Obama-era regulation was finalized in November 2016 and went into effect in January 2017. The rule limits methane pollution from oil and gas operations on public lands . Not only is methane is a potent greenhouse gas that's 86 times more powerful than carbon dioxide, accidental leaks and intentional venting and flaring costs more than $330 million each year.
Fracking Has Its Costs And Benefits -- The Trick Is Balancing Them – Forbes - Hydraulic fracturing, or fracking, is perhaps the most important energy discovery in the last half century. As a result of fracking, U.S. production of oil and natural gas has increased dramatically. This increase has abruptly lowered energy prices, strengthened energy security and even lowered air pollution and carbon dioxide emissions by displacing coal in electricity generation. The lower energy prices have meant more money in the pockets of American families and businesses. And the lower emissions are certainly good news for our health with large reductions in air pollution dispersed across the country and, at least for the near term, our climate. Whether or not we as a society continue to gain from the broad benefits of fracking rests on the shoulders of the local communities where drilling takes place, or could take place. These communities must determine if the local benefits exceed the local costs, a calculation that requires a lot of information to be done well. Over the past year, we have been part of two research efforts that have shed light on what’s at stake in the choices communities are making. On the benefits side, fracking increases economic activity, employment, income and housing prices. But, it also brings more truck traffic, increases in crime and potential health impacts possibly due to air and/or water pollution. In some recent work, we’ve added it all up. We discovered that for the average household living in a community where fracking takes place the benefits exceed the costs—indeed, it is worth about $2,000 per year to them. That calculation of $2,000 per year is based on people’s current understanding of the health impacts at the time of our study. If people’s understanding of the health impacts were to change, it is likely that this would alter the net benefits of allowing fracking.
Stolen fracking profits and murder in North Dakota on Pandora's Box: Unleashing Evil - Doug Carlisle was a Spokane businessman who knew his life could be in danger, warning his son just days before he was killed if I’m ever murdered let everyone know James Henrickson did it.Soon after the warning was attacked by a gunman in his home, his wife managed to hide upstairs but Carlisle was shot dead at point blank range. He owned an oil trucking company and his dealings with Henrickson related to shares in an oil field that they both planned to develop.The investigation did turn up DNA from burglar Timothy Suckow and he was charged with the murder, but the detectives were not happy that this was the end of the tale and further work showed up Henrickson’s link to Suckow and to another murder case in the shape of KC Clarke, a man Henrickson owed over half a million dollars to.In May 2016 Henrickson was found guilty of hiring Timothy Suckow to murder Dougl carlisle and hiring Robert Delao to kill Clarke. He was also found guilty of numerous other charges of solicitating to commit murder for hire. He was sentenced to life in prison and another 30 years on top for related crimes.
Zinke meets with California governor on offshore drilling | TheHill: Interior Secretary Ryan Zinke met with California Gov. Jerry Brown (D) on Tuesday to hear the governor’s objections to oil and natural gas drilling off the state’s coast. Brown’s press secretary said the two met privately in his Sacramento office. “This meeting was an opportunity to continue last month’s conversation ... regarding the state’s strong opposition to the federal government’s decision to expand oil and gas drilling off of California’s coast,” spokesman Evan Westrup said in a statement.“Secretary Zinke made it clear that California’s views will be taken into account.” Brown has been a vocal opponent of Zinke’s plan, announced last month, to consider offshore drilling along the entirety of the Pacific coast, along with the Atlantic and Gulf coasts and all around Alaska. Zinke said the offshore plan is a key piece of the Trump administration’s “energy dominance” agenda, in which officials want the United States to dramatically increase its production of fossil fuels and other energy. Brown and other California leaders made their objections known immediately. But after Zinke quickly took Florida’s waters off the table for drilling during a meeting with Florida Gov. Rick Scott (R), California and other states have demanded similar exclusions. Zinke has not yet granted any. Zinke is obligated by law to work with governors, congressional delegations, coastal communities and other key stakeholders in considering where to allow drilling.
Groups want details on Trump's approval of Keystone pipeline - Opponents of the proposed Keystone XL oil pipeline from Canada are asking a judge to force the U.S. government to turn over emails and other documents related to President Donald Trump's approval of the project. Environmentalists who sued to stop the 1,179-mile (1,800-kilometer) pipeline said the documents could bolster their case that Trump's decision was arbitrary and should be overturned by the courts. But U.S. Justice Department attorneys argued in court filings that the disputed documents include internal deliberations that don't have to be made public. They said the request amounts to a "fishing expedition" and should be rejected. Formal arguments were scheduled for Wednesday before U.S. District Judge Brian Morris in Great Falls. If the environmentalists prevail, the U.S. State Department would have to review an estimated 5 million pages of documents at a cost of more than $6 million, according to a declaration filed by Jerry Drake, an agency division chief who oversees its information technology team. That's on top of more than 4.5 million documents that were turned over in the case in December, according to the Justice Department.The pipeline is sponsored by Alberta-based company TransCanada Corp., which is siding with the U.S. government in the document dispute. An attorney for the Northern Plains Resource Council, one of the plaintiffs in the case, said the goal of the conservation group's sweeping document request was to uncover the basis of Trump's decision and see if it aligns with years of analysis on the project during the Obama years. "You can't make one decision based upon the record, then change your mind based upon the same record," council attorney Timothy Bechtold said. "That is the definition of arbitrary and capricious."
Keystone XL pipeline ruling: Trump administration must release documents - A federal judge in Montana has ordered the Trump administration to release documents it relied on to approve construction of the Keystone XL pipeline last year, a development that pipeline opponents believe could stymie the controversial project. Last March, the State Department approved construction of the nearly 1,200-mile pipeline, which would carry crude oil from the tar sands region of Alberta, Canada, to Nebraska and ultimately to refineries on the Gulf Coast. The approval reversed a 2015 decision by the Obama administration, which had blocked the project by refusing to issue a permit for the pipeline to cross the Canadian border. Environmental groups sued the Trump administration, saying its reversal broke three laws and that it failed to conduct additional, updated environmental reviews before granting approval. As the lawsuit progressed, the government released only some documents, prompting environmentalists to push for a more complete record—or an explanation of why other documents were being withheld. In January, the plaintiffs told the court that the government "wrongly omitted an unknown number of emails and other internal communications.""The government provided a cherry-picked record," said Jackie Prange, an attorney for the Natural Resources Defense Council, one of the plaintiffs in the case. "We were asking the government to produce all the documents, or if it wasn't going to, say which ones and why. Our concern is that there's a black box here, and the public deserves to know what evidence the Trump administration relied on to approve the pipeline."Under the law, the government can withhold certain documents that are deemed "deliberative," but it has to provide a "privilege log" that explains why they were withheld from the record.The Trump administration now has until March 21 to release the documents or the privilege log.
Inside the Trump Admin's Fight to Keep the Keystone XL Approval Process Secret By Steve Horn -- At a Feb. 21 hearing , a U.S. District Court judge ruled that the Trump administration must either fork over documents showing how the U.S. Department of State reversed an earlier decision and ultimately came to approve the Keystone XL pipeline , or else provide a substantial legal reason for continuing to withhold them. The federal government has an order to deliver the goods , one way or the other, by March 21. DeSmog has reviewed the court evidence from the environmental groups bringing the case, records which help illuminate their argument that the government is, in fact, withholding such documents. The judge will decide if those documents, legally, should be made public.The case, which began in March 2017 , pits the Indigenous Environmental Network and the North Coast River Alliance against the State Department, U.S. Fish and Wildlife Service, the U.S. Department of interior and TransCanada , the owner of Keystone XL. During his first week in office, Donald Trump signed amemorandum calling for the State Department to perform an expedited 60-day permit review of the pipeline. Two months later, the State Department gave Keystone XL the permit it needed to cross the U.S.-Canada border. At the center of this case is a dispute over the administrative records of federal agencies, which in other lawsuits are routinely made public as part of the pre-trial process.Generally, releasing such documents gives a snapshot of the full deliberative process behind federal agencies' decisions. In the TransCanada case, the State Department has argued for keeping these pre-trial records sealed while the plaintiffs, the environmental groups, have argued they should be made public. These documents, which might include emails and memos, would offer the plaintiffs and the general public an idea of how the Trump administration decided to approve the Keystone XL. The plaintiffs say that not all of those records have been turned over.
A downside for many midstreamers in new tax law. -- While the recently enacted federal tax cuts have been widely viewed as a boon to corporate America, including businesses in the energy sector, a new report by our friends at East Daley Capital finds a major drawback in the law for midstream companies. By slashing the corporate tax rate from 35% to 21% — and by allowing partnerships and “pass-through” entities to take a 20% deduction on their income pre-tax — the new law will increase the return on equity that midstreamers earn on their crude oil, NGL and natural gas pipelines. That may well lead the Federal Energy Regulatory Commission (FERC) to re-set its formula rates for at least some gas pipelines, and also is likely to heighten regulatory scrutiny of the rates charged by the owners of oil and NGL pipelines. Today, we continue our review of East Daley’s new “Dirty Little Secrets” report with a look at the tax law, the higher pipeline ROEs resulting from the tax cuts, and the midstream companies that may be affected. The 2018 edition of “Dirty Little Secrets” shines a bright light on the assets and prospects of 28 U.S. midstream companies. As we said in Part 1 of our blog series on the report’s highlights, accurately assessing the relative value of specific midstream energy companies requires a deep, detailed analysis — not all midstreamers are winners, even in a period of rebounding crude oil prices. We also noted some of the key takeaways from the new report, including:
- $7.2 billion (15%) in cash-flow growth from midstream companies in 2018 will be transformational for an industry beaten down in 2017.
- 17 of the 28 companies covered in this report are expected to outperform market consensus, highlighting a positive outlook for midstream growth.
- Coverage and leverage are key metrics but they can mask insight into future company performance that is only exposed through detailed asset-level analysis — Boardwalk Pipeline Partners and Energy Transfer Partners being two prime examples.
- Gas and oil production is expected to surge across the country, bolstering earnings across the sector.
- Supply growth has been underappreciated in basins like the Bakken, the Powder River and the Marcellus.
EDITORIAL: Fracking data lacking -- It shouldn’t be surprising that hydraulic fracturing is a hot topic in Nova Scotia again. The McNeil government placed a ban on high-volume fracking in 2014. And so a new debate on this method of “stimulating” the flow of oil and gas trapped in shale formations has itself been stimulated by the recent release of the Energy Department’s Nova Scotia Onshore Petroleum Atlas.Assembling the best available data and modelling, the atlas focuses on two geological formations with hydrocarbon potential, the Cumberland Sub-basin in Northern Nova Scotia and the Windsor Sub-basin south of the Minas Basin and Cobequid Bay.It estimates some 6.5 trillion cubic feet (tcf) of recoverable natural gas lies in the two formations, of which 4.3 tcf would be shale gas requiring fracking to crack the rock and make it flow. The remainder is conventional gas and coal-bed methane. The atlas estimates a market value of $20-$60 billion for these reserves.Given the potential of this resource to lift economic growth and public revenues, in a province that could use a lot more of both, it’s reasonable that voices are calling on government to at least permit enough exploration to clarify the extent and value of shale reserves, so their public owners can make informed decisions on development. But it’s not surprising, either, that people who wanted a ban still believe fracking can’t be safely regulated and presents threats to groundwater that can’t be mitigated. No one in government, after all, is doing work on how fracking might be well regulated or what the best practices and highest standards would look like in terms of Nova Scotia’s geology and hydrology
Canada's Oil Crisis Continues To Worsen -- Canadian oil producers can’t get a break. First it was the pipelines - there are not enough of them to carry the crude from Alberta’s oil sands to export markets. This pipeline capacity problem has been forcing producers to pay higher rates for railway transportation, which has naturally hurt their margins in no small way. Now, there is a shortage of rail cars as well. The situation is going from bad to worse for Canadian producers who can’t seem to catch a break. Canadian railway operators are fighting harsh winter weather and finding it hard to supply enough cars to move both crude oil from Alberta and grain from the Prairies.The harsh weather is just the latest factor, however. Before that, there was the 45-percent surge in demand for rail cars from the oil industry, Bloomberg reports, citing Canadian National Railway. The surge happened in the third quarter of last year, and Canadian National’s chief executive Ghislain Houle says that it took the company “a little bit by surprise.” This surprise has led to “pinch points” on the railway operator’s network, further aggravating an already bad situation.As a result, crude oil remains in Alberta and prices fall further because Alberta is where the local crude is priced, Bloomberg’s Jen Skerritt and Robert Tuttle note. In fact, Canadian crude is currently trading at the biggest discount to West Texas Intermediate in four years, at $30.60 per barrel. The blow is particularly severe as it comes amid improving oil prices elsewhere driven by the stock market recovery. The light at the end of the tunnel is barely a glimmer. Despite federal government support for the Trans Mountain pipeline expansion project, it is still facing obstacles that may result in it never seeing the light of day. The project that would boost the current pipeline’s capacity from 300,000 bpd to 890,000 bpd, accommodating much of the increased Alberta bitumen production, is being challenged in court and Kinder Morgan has yet to collect even half of the necessary permits to proceed with it. There are no other major pipeline projects in Canada that have been approved. Meanwhile, the news from the research front is not good, either. Back in September, media outlets reported on an accidental discovery that could make transporting bitumen by rail much safer by turning the crude into pellets. This would minimize the danger of a spill but, some said at the time, would increase transportation costs.
New Technology Could Turn Tar Sands Oil Into 'Pucks' for Less Hazardous Transport -- A new technology has the potential to transform the transportation of tars sands oil . Right now, the already thick and slow-flowing oil, known as bitumen, has to be diluted with a super-light petroleum product, usually natural gas condensate, in order for it to flow through a pipeline or into a rail tank car.However, scientists at the University of Calgary's Schulich School of Engineering inadvertently found a way to make tar sands oil even more viscous, turning it into "self-sealing pellets" that could potentially simplify its transport."We've taken heavy oil, or bitumen, either one, and we've discovered a process to convert them rapidly and reproducibly into pellets," Ian Gates, the professor leading the research, told CBC News in September.Based on the initial description of this product, it appears that it could alleviate many of the risks involved with moving tar sands oil by rail. The research teams says this product floats in water, does not pose a fire and explosion risk like the diluted bitumen currently moved in rail tank cars, and would eliminate air quality issues related to the volatile components of diluted bitumen.If true, this technology would appear to reduce potential risks to people and the environment, in comparison with moving diluted bitumen by rail or in pipelines. Gates also suggests that the solidified bitumen can be moved in the type of open rail cars used for coal . That would be welcome news to railroads, which have been losing business transporting coal as demand has dwindled.
Refined-Product Delivery And Storage Infrastructure In Mexico, Part 4 --Mexico continues to open up its refined-products sector to competition, and refinery troubles at government-owned Pemex are providing U.S. refiners and motor-fuel marketers with a golden opportunity to export increasing volumes of gasoline and diesel south of the border. But transporting all those refined products to Mexican population centers and distributing them to thousands of service stations requires port and rail terminals, pipelines and storage, and Pemex has been slow in relinquishing control of its infrastructure. Today, we continue our series on efforts to facilitate the transportation of motor fuels from U.S. refineries to — and within — Mexico, this time looking at more port and rail-related projects and at existing and planned pipelines. The final numbers for 2017 Pemex motor-fuel production are in, and the news isn’t good — unless, that is, you’re a U.S. refiner exporting gasoline and diesel. Gasoline output at Pemex’s six refineries averaged only 257 Mb/d last year, down 21% from 2016 (and 33% from 2015), and in the fourth quarter of 2017, Pemex’s output averaged a dismal 185 Mb/d. The situation is even worse for diesel: 2017 Pemex production averaged 154 Mb/d, down 29% from the previous year (and 44% from 2015), and in the last three months of 2017, Pemex diesel output fell to 103 Mb/d. U.S. exports have flooded into this void, averaging 377 Mb/d for gasoline and 232 Mb/d for diesel in the first 10 months of 2017, according to the Energy Information Administration (EIA), then spiking in November to all-time records of 655 Mb/d for gasoline and 310 Mb/d for diesel.
NYMEX March gas continues slide as shoulder season approaches The NYMEX March natural gas futures contract Friday continued the month's downward trend, settling 2.2 cents lower at $2.558/MMBtu, as outlooks for warmer weather, rising production and decreasing demand again weighed on prices. It has been a stormy past few weeks for the front-month contract, which has now fallen to its second-lowest point since February 21, 2017, despite a higher-than-expected storage withdrawal from national stocks. Friday's move brings the total decline to 63.7 cents since March took over as the front-month contract on January 30, a 20% drop. Phil Flynn, senior market analyst at Price Futures Group, said that given milder weather, the market likely would have a hard time "holding on to rallies." He noted that after the larger-than-expected draw from storage prompted no rise in price, market watchers were left to "wonder what it will take to maintain a rally." Flynn added that the "closer we get to spring with no rally" in price, "the harder it will be to prevent further price drops" as winter ends and the shoulder season approaches. The most recent eight- to 14-day weather outlook from the National Weather Service called for a likelihood of warmer-than-average weather in the Northeast, Southeast, Midwest, Midcontinent and in Texas. Accordingly, US demand is expected to fall to an estimated 79.9 Bcf/d in the next eight to 14 days, a 6.8 Bcf/d drop from the 86.7 Bcf/d averaged in the previous seven days, according to S&P Global Platts Analytics.
NYMEX March gas up 8.7 cents at at $2.645/MMBtu in US morning trading - The NYMEX March natural gas futures contract jumped in morning trading Tuesday, bucking the downward trend experienced since the beginning of February. As of 11 am EST (1600 GMT), the March contract was trading at $2.645/MMBtu, up 8.7 cents from Friday's close. So far on Tuesday the March contract has traded in a range of $2.562-$2.662/MMBtu. Tuesday's increase in price comes after the NYMEX front-month contract declined sharply over the past few weeks, with total losses at 98.6 cents since February expired as the front-month contract January 29, a 27% drop. The market has appeared to be unfazed by bullish storage data. According to the US Energy Information Administration, total national gas stocks are currently at an estimated 1.884 Tcf, an 18.7% deficit to the five-year average. The rebound in price Tuesday may not continue, as falling US demand and strong dry production may begin to eat away at the storage deficit. Over the next seven days, US demand is forecast to average 79.1 Bcf/d, a 10.4 Bcf/d drop from the 90.6 Bcf/d average experienced so far over the current month, according to S&P Global Platts Analytics.Weather forecasts are sending more of a mixed signal, as the most recent six-to-10-day weather outlook from the National Weather Service calls for colder-than-average temperatures along the West Coast and Rockies, while warmer-than-average temperatures along the East Coast and demand centers in the Midwest, Midcon and Texas are expected.
NYMEX March natural gas continues upward trend for second consecutive day - The NYMEX March natural gas futures contract was up for the second straight day in morning trading Wednesday, as the market continued to rally from the heavily bearish trend experienced so far in the month of February.As of 11:15 am EST (1615 GMT), the March contract was trading at $2.671/MMBtu, up 5.5 cents from Tuesdays close. So far on Wednesday, the March contract has traded in a range of $2.565-$2.680/MMBtu.The NYMEX front-month contract's recent upward momentum has helped it recover from the rapid decline felt thus far in the month of February as total losses since February 1 are now 18.5 cents, a 6.5% drop.Kyle Cooper, analyst and principal at IAF Advisors, said "the rebound from low levels" occurring over the past two days is coming "off the back of less bearish weather." When temperatures are colder than average, "demand is there" and with large storage draws and a high national stock deficit, there is "no need to buy any more demand," he added.This upward movement in price could be partly attributed to a forecast of colder weather in the coming weeks, as the most recent eight- to 14-day outlook from the National Weather Service calls for colder-than-average temperatures along the West Coast and Rockies, with average temperatures expected along the East Coast, Midwest, Midcon and Texas. Riding on the back of an outlook for colder-than-average weather during the closing of the winter season is an expectation of an uptick in demand. According to S&P Global Platts Analytics, US Demand is estimated to average 85.3 Bcf/d over the next eight-14 days, a 4 Bcf/d increase from the 81.3 Bcf/d averaged over the month of February last year.
NYMEX March natural gas inches lower as demand forecast trumps EIA data -- The NYMEX March natural gas futures contract ticked slightly lower Thursday despite the US Energy Information Administration announcing a higher-than-expected storage withdrawal. As of 11:31 am EST (1631 GMT), the March contract was trading at $2.644/MMBtu, down 1.5 cents compared with Wednesday's close. So far on Thursday, the March contract has traded in a range of $2.624/MMBtu to $2.670/MMBtu. The EIA announced an estimated 124 Bcf draw from storage for the week that ended February 16, compared with the 119 Bcf draw expected by a consensus of analysts surveyed by S&P Global Platts, although it is 14.5% below the 145 Bcf withdrawal averaged over the past five years. The withdrawal puts the deficit to the five-year average at an estimated 19%, according to EIA data. The market has appeared to be unconcerned with storage changes of late, as the winter season is quickly coming to an end and players expect robust production to continue in the shoulder and summer months. According to S&P Global Platts Analytics, US dry production has averaged 77.3 Bcf/d so far in February, an increase of 6.3 Bcf/d compared with the same period in February 2017. Looking ahead, the most recent eight- to 14-day weather outlook from the National Weather Service calls for colder-than-average temperatures along the West Coast and in the Rockies and Southwest, but average temperatures are expected along the East Coast and in the Midwest, Midcontinent and Texas. However, the forecast for colder temperatures is unlikely to boost consumption, as US demand is expected to average 82.7 Bcf/d over the next eight to 14 days, 200 MMcf/d below the 82.9 Bcf/d average for the previous seven days, according to S&P Global Platts Analytics.
NYMEX March natural gas returns to February downward trend -- The NYMEX March natural gas futures contract was down during morning trading Friday, as steady demand and strong production could be overshadowing the outlook of cold weather in the waning winter season. As of 10:50 am EST (1550 GMT), the March contract was trading at $2.583/MMBtu, down 5.1 cents from Thursday's close. So far on Friday, the March contract has traded in a range of $2.555-$2.620/MMBtu. The NYMEX front-month contract appears to have returned to the downward trend it has experienced so far over the month of February, after a brief uptick in prices during the beginning of the week. The front-month contract has fallen below the $2.60/MMBtu level for the seventh time during the month of February, well below the $3.60/MMBtu level seen last month, despite two consecutive weeks of higher than expected storage withdrawals from national stocks. Friday's decline brings the total losses for the front-month contract to $1.048 since February expired as the front-month contract on January 29, a 29% drop. Yesterday's higher-than-expected draw from storage of 124 Bcf, brings the national storage stocks to 1.760 Tcf and a 19% deficit to the five year average, according to the US Energy Information Administration. With little time remaining in the winter season, some cold weather could be on the horizon, as the most recent eight- to 14-day weather outlook from the National Weather Service calls for a likelihood of colder-than-average temperatures in the Northwest, Southwest, Rockies, Midcon and parts of the East Coast. Despite the forecast for colder weather, demand is expected to stay relatively unchanged, as US demand is estimated to average 83.1 Bcf/d over the next eight- to 14-days, a small dip of 570 MMcf/d from the 83.67 Bcf/d averaged over the previous seven days, according to S&P Global Platts Analytics.
The End Of The LNG Glut - Many reputable forecasters, who've anticipated an LNG supply glut for years, now expect a brief period of surplus at most, and gradual market tightening after 2020. But global demand, which has surprised market watchers to the upside and kept physical markets tight during the past four years, could cut this looming mini-glut short. Numerous factors are at play but a few key indicators will shed light on likely supply and demand conditions through the mid-2020s. Looking near term, the International Energy Agency (IEA) expects that available LNG export capacity will greatly exceed demand through 2022. The IEA’s recent medium term gas market outlook titled Gas 2017 says the surplus will reach its highest level in the year 2020, then gradually dissipate as tighter market conditions reappear in the early 2020s. “It is relatively easy to see what’s coming on the supply side, given the long lead times for liquefaction projects,” says researcher Akos Losz of Columbia University’s Center on Global Energy Policy, “but predicting demand is much more difficult.” “There is no question about the availability of supply,” Losz says, “there is plenty of gas in the world ready to be tapped.” Barring project delays, Losz believes that supply capacity is pretty much baked in for the next 2-3 years. The IEA report says that LNG export capacity will continue to grow rapidly, from 450 bcm (in 2016) to 650 bcm worldwide in 2022, with the most remarkable additions coming from the US and Australia. The latter will have the world’s largest LNG export capacity in 2022, estimated at 120 bcm per year, followed closely by the US and Qatar at about 105 bcm each per year. As for demand, the IEA report foresees worldwide demand rising from 353 bcm (in 2016) to 460 bcm in 2022. It anticipates import volumes shrinking in Japan, Korea and Europe, but rising in China and India. More demand is also expected from a group of new, smaller importing countries which together will be greater than China in scale, accounting for about 20 percent of the global LNG trade in 2022.
Interest in LNG fires up again, but the market's different now: Russell (Reuters) - If you were looking for signs that the liquefied natural gas (LNG) merry-go-round is starting to spin a little faster, the announcement of a planned massive expansion in Papua New Guinea is ample evidence. Global majors Exxon Mobil and Total are considering plans to double LNG exports from Papua New Guinea to about 16 million tonnes per annum, their partner Oil Search said on Feb. 20. If approved, three new trains would be added to the existing Exxon-operated PNG LNG facility, with natural gas from Total’s fields supplying two of the units and the third using existing fields and a new Exxon development. While a final investment decision on the $13 billion expansion is still more than a year away, it’s a clear sign that LNG producers believe the market is headed for a deficit and that large-scale projects are once again viable. The LNG industry’s recent development has been characterised by periods of massive investment and capacity expansions followed by lulls amid fears of low prices caused by oversupply. The past decade has witnessed a rapid expansion of LNG capacity, with eight large-scale projects being built in Australia and six in the United States, as well as some others such as the Yamal venture in Russia. Most of these developments have started, or are due to start, within a fairly narrow time frame between 2016 and 2020, a bunching together of new capacity that led to widespread market concern of oversupply and weak prices. While it’s still likely that there may be some oversupply this year, and perhaps until the early 2020s, the market reality is that new LNG buyers in Asia and a surge in Chinese demand has eaten away most of the expected surplus.
Natural gas, LNG restrictions seen likely to worsen Australia's market imbalance - Moratoria and bans on both unconventional and conventional gas by Australian states and territory governments are exacerbating the fundamental imbalance of Australia's east coast market, according to industry sources, analysts and policy advisers. Australia needs to act quickly to ensure it is both adequately supplied with gas and able to meet its LNG export commitments, the International Energy Agency said in its 2018 review of Australia Thursday. "Increasing LNG exports have created a tight supply in Australia's eastern market, which is characterized by weak regulation, poor transparency and low liquidity," the IEA said. "Market inefficiencies need to be addressed swiftly and transparency improved rapidly for domestic consumption and LNG exports to successfully coexist." The Australian Petroleum Production and Exploration Association welcomed the remarks, highlighting the "urgent need" to remove the bans and restrictions. "The message to policymakers from the IEA's Executive Director, Dr Fatih Birol, could not have been clearer," APPEA chief executive Malcolm Roberts said. "Dr Birol identified the number one step Australia can take to deliver secure and affordable energy -- removing bans on unconventional gas projects," he said. A mining and energy analyst with the Commonwealth Bank of Australia, Vivek Dhar, said moratoria effectively stifles exploration and delays potential upstream investment.
Venezuela cryptocurrency to draw investment from Turkey, Qatar-official (Reuters) - Venezuela’s new “petro” cryptocurrency will attract investments from Turkey, Qatar, the United States and Europe, the country’s cryptocurrency regulator said on Friday. The government of President Nicolas Maduro, which says the petro will help skirt financial sanctions by Washington, has scheduled the first petros sale for Tuesday. Skeptics say that concerns about Venezuela’s financial solvency will likely limit investor interest, while the U.S. Treasury Department has warned the petro may violate sanctions against the OPEC nation. “On Tuesday, there will be quite a few announcements about the start of the process,” Venezuelan Cryptocurrency Superintendent Carlos Vargas said on the sidelines of a political meeting in Caracas. “And there will surely be a lot of investors from Qatar, Turkey, and other parts of the Middle East, though Europeans and Americans will also participate.” He did not elaborate. The Venezuelan government has not provided full details about the petro. But advisers working for the government recommended that 38.4 percent of the petros should be sold in a private auction at a discount of 60 percent. Venezuela is suffering quadruple-digit inflation and chronic shortages of food and medicine, which have spurred increased incidents of malnutrition and preventable diseases. Maduro says his government is the victim of an “economic war” led by opposition politicians with the help of the government of U.S. President Donald Trump. Sanctions levied last year by Washington block U.S. banks and investors from acquiring newly issued Venezuelan debt, effectively preventing the struggling nation from borrowing abroad to bring in new hard currency or refinance existing debt.
Why Commodity Coins Are Gaining Popularity - Cryptocurrencies have become the most loved-and-hated topic in the financial world. Corporate coins, joke coins, government coins, and even commodity-backed coins are flooding the markets, and potential investors are scrambling to sift through the madness. No other coin, however, has drawn as much controversy as “El Petro.” In December, Venezuelan President Nicolas Maduro announced a plan to create an oil-backed cryptocurrency, El Petro. A plan which received harsh criticism from nearly every corner of the globe, even its own parliament declared the proposed coin illegal. From the beginning, El Petro was promoted under dubious circumstances. Maduro himself, in his original announcement, suggested that the coin was to be used to “overcome financial blockades” put in place by the west as a response to the Venezuelan government’s ongoing political turmoil. El Petro has been the focus of numerous warnings to investors from countries around the world. Even Venezuelan lawmaker Jorge Millan had strong words against the coin: “This is not a cryptocurrency, this is a forward sale of Venezuelan oil,” adding “It is tailor-made for corruption,” But that didn’t stop Maduro from pushing forward. In January, Maduro announced that over 800,000 young Venezuelans had already been recruited to mine the cryptocurrency. “We are going to call them a special cryptocurrency team…They will] set up cryptocurrency mining farms in all states and municipalities of the country,” Maduro said. And in preparation for the official pre-sale set to launch on February 20, Maduro took his campaign to the next level, approaching the Organization of Petroleum Exporting Countries (OPEC) with his idea. “I have explained to Mohammed Barkindo the goodness of the petro. The cryptocurrency is the world of the future. I am very excited as well as the people of Venezuela,” said Maduro.
Iraq exporting 100,000 b/d of fuel oil: sources - Iraq is exporting around 100,000 b/d of fuel oil from its southern terminals on the Persian Gulf, with much of the product shipped to Asia, sources close to the oil ministry said. Some 500,000 cu m of fuel oil is being shipped monthly from jetties at the Khor al-Zubair terminal, near the Umm Qasr port at the northern tip of the Persian Gulf, the sources said this week. The fuel oil is sold on an FOB basis, the sources said. Of the total, around 420,000 cu m was transported by pipeline from storage tanks at the Basra refinery, and another 80,000 cu m moved by trucks from Iraq's smaller refineries in the central and southern provinces. The oil ministry said February 13 it was also transporting fuel oil and other products by rail tanker from the 140,000 b/d Daura refinery near Baghdad, following the rehabilitation of the country's rail network. The new loading and unloading platforms at Daura and the rail link to the south will eventually allow Iraq to transport another 1,000 cu m/d of fuel oil and 4,000 cu m/d of other products from the refinery.
Iran's oil revenue plummets as US oil exports grow - Iran missed its oil and gas revenue targets by nearly 30 percent last year, while failing to grab enough money in taxes to make up the shortfall, according to its official news service.President Hassan Rouhani's administration "only managed to earn $19.44 billion from taxes and $13.06 billion by exporting oil and its byproducts, showing deficits of $7.34 billion and $5.3 billion, respectively," according to the Islamic Republic News Agency.The government had projected $18.36 billion from selling oil this year, according to the news service.In fiscal 2017, revenue from oil reached more than $24 billion in the wake of relaxed U.S. sanctions, 45 percent more than in fiscal 2018. Iran also had the benefit of not signing onto a Saudi-led pact to cut oil production among members and non-members of OPEC to drive crude oil prices higher.An oversupplied oil market cut many OPEC nations' budgets in half, forcing them to consider austerity measures, such as in Venezuela, or, like Saudi Arabia, create a long-term plan to move its economy away from oil. Iran's oil ministry had projected that oil revenue would surge to more than $40 billion in fiscal 2018. But the boom times appear to be over for the Islamic Republic, at least for now, based on the new report from the Central Bank of Iran. Increased pressure on Iran's oil revenue is expected to come from the U.S. The latest projections from the International Energy Agency show oil and natural gas production increasing from fracking in the U.S., which has remained profitable in the low oil-price environment.
Iran deepens freight discount to boost oil sales to India: sources (Reuters) - Iran has offered to raise the freight discount on oil sales to India in return for New Delhi agreeing to boost imports, as the OPEC member is keen to eat into the market share of other producers including top rivals Saudi Arabia and Iraq. Iran is pushing to retain customers for its oil in Asia, hoping concessions will boost the appeal of its crude compared with other Middle Eastern suppliers, even as the threat looms of potential further U.S. sanctions on the country. Since the lifting of sanctions on Iran in 2016 it has been offering India a freight discount linked to a formula translating into 105 percent of the Platts assessment. For 2017/18 Tehran had reduced the discount to 62 percent of the formula from 80 percent, but Iran has offered to change this if Indian refineries step up purchases, three sources familiar with the matter said on Saturday. “Now they are offering 100 percent discount, meaning a sum equivalent to 105 percent of the Platts freight assessment,” said one of the sources. Iran said it expected Indian orders to grow. “State-owned Indian companies are going to increase their level of Iranian oil purchase,” Iran’s oil minister Bijan Zanganeh told reporters after a meeting with Indian oil minister Dharmendra Pradhan in New Delhi. Indian refiners - state-owned and private - will buy about 500,000 bpd of Iranian oil in 2018/19, said Zanganeh, in India as part of a delegation led by Iranian President Hassan Rouhani.
Japan Confirms Oil From the Sanchi Is Washing Up On Its Beaches - The Japanese Coast Guard has confirmed that the oil that is being washed up on islands in the south of the country is "highly likely" to have come from the stricken Iranian tanker, the Sanchi .Samples of clumpy oil that washed up earlier this month on the shores of the Okinoerabu and Yoron islands chain "were found to be linked to the Sanchi's sinking" according to the Japanese Coast Guard. The islands are famous for their pristine beaches and seafood.Thursday, a Coast Guard spokesperson told the Reuters news agency that "Oily matter that arrived at the shores of the two islands is extremely likely to be linked to the Sanchi tanker incident, considering the similarity of the oil and the fact that there has not been any marine disaster involving oil spill in the nearby sea area." Earlier Friday, a coastguard spokesman Takuya Matsumoto said essentially the same thing to another news agency, AFP : "We are not aware of any other maritime accident in the region that resulted in oil leaks. So we have concluded that it is highly likely that the oil that reached (the two islands) is connected with Sanchi." The Sanchi sank on Jan. 14 in the East China Sea, carrying 136,000 tons of light crude oil called condensate. It also had nearly 1,900 tons of bunker fuel oil on board. Two weeks after the Sanchi sank, black clumps of oily matter started washing up on the shores of Takarajima island. It is likely this oil is the heavy fuel oil that was powering the ship, not the condensate.Since then oil debris has been found on 21 other islands that are part of a chain of islands that includes Amami-Oshima and Okinawa. Some 90 tonnes of oil debris has been collected so far. The oil washing up on the beaches is a significant setback for the authorities who originally said last month that there was little chance the spill would reach the county's shores.
One year on, OPEC gets closer to original target of oil cut pact (Reuters) - OPEC is closing in on its goal of reducing oil inventories held by industrialized nations to their five-year average, the original target of a supply-cutting pact with Russia and others, figures from the group’s head of research showed on Tuesday. Oil stocks in developed OECD economies, which were 340 million barrels above the five-year average in January 2017, were just 74 million barrels above that level last month, Ayed Al Qahtani, OPEC’s head of research, told a conference. The Organization of the Petroleum Exporting Countries is reducing output by about 1.2 million barrels per day as part of its deal with Russia and other non-OPEC producers. The pact began in January 2017 and will run until the end of 2018. A strong level of adherence by producers to their pledged cuts helped to erode the surplus. OPEC said their compliance in January was 133 percent, meaning they were cutting more than pledged and a figure which Al Qahtani said was a record high. “This conformity level has been very successful in withdrawing the overhang,” Al Qahtani told the Energy Institute’s IP Week, an annual conference of the oil trading industry in London. The stated goal of the supply-cutting deal was to reduce oil inventories to the five-year average. The surplus of 74 million barrels is the smallest yet reported since the cuts began. But OPEC officials are increasingly talking of looking at different metrics. The level of the latest five-year average may be higher than it was a year ago, even though the size of the surplus against that average is coming down, an OPEC source said. That means the figures give a more mixed picture for OPEC. Saudi Arabia’s Energy Minister Khalid al-Falih said last week that OPEC and its allies would need to consider how to adjust targets and should take into account non-OECD inventories, floating storage and oil in transit. United Arab Emirates Energy Minister Suhail al-Mazroui, the current OPEC president, also mentioned the possibility of looking at other metrics at a news conference in London earlier on Tuesday.
As Oil Stocks Drain, OPEC Searches for Its Next Fig Leaf -- There is no doubt that the output cuts made by OPEC and its friends, aided by a collapse in production from group member and historic quota cheat Venezuela, have drained a lot of excess oil out of the supply chain. Tankers floating full of crude off the coasts of Iran and South Africa have disappeared and total U.S. stockpiles are close to their lowest in almost three years. But now their goal is within sight, or it may already have been passed. And that creates problems for the producer group. If inventories are back where they say they want them, but prices haven’t recovered as much as they would like, they need to find a way to justify prolonging the cuts to boost their revenues. Since November 2016, OPEC has been able to get away with the idea of trying to return oil inventories to a five-year average level. That seems a very clear and precise target, but, as I wrote last month, it isn’t. And at this point, it's no longer possible to maintain the charade. The Joint Ministerial Monitoring Committee set up to oversee the OPEC+ output deal will discuss the inventory target when it meets in Saudi Arabia in April. My Bloomberg News colleague Grant Smith has written a very clear explanation of how they might shift the inventory goalposts. The trouble is, that some of the tweaks they might look at could end up indicating they have already overshot their target. Inventories can be measured in many different ways: the simple volume of oil in storage, the number of days of demand that volume could meet, or, like the International Energy Agency’s emergency stock-holding obligations, the number of days of imports they could cover. The choice of the period over which to average "normal" inventory levels will also have a big impact on determining when the target has been reached.
OPEC Considers Moving the Goalposts - Here's Where They Might Go - After a year of production cuts, OPEC and Russia are finally near their goal of shrinking the world’s swollen oil inventories. So why are they planning to change their target? The answer lies somewhere between the murky and incomplete nature of oil data and the competing interests within the producers’ group.The 24-country alliance wants to reduce oil stockpiles to their five-year average, a goal that is almost at hand according to figures from the International Energy Agency. Yet Saudi Arabia and Russia now say that metric is flawed -- distorted by years of excessively high supplies and patchy data outside developed economies.Choosing a different measure of success could further reinforce the need for supply curbs to continue for the whole of 2018 -- something Saudi Arabia is keen to ensure as it prepares the historic initial public offering of its state oil company. Other methods might indicate the rebalancing of the market is already complete, potentially allowing some producers to end their self-imposed restraint.Saudi Arabia Energy Minister Khalid al-Falih has said that, rather than just comparing inventory levels to their average, OPEC should consider how quickly they’re likely to be consumed. This gauge, known as forward demand cover, measures inventories in terms of the number of days they will last. There are good reasons for considering that measure -- it better reflects how consumption has grown over the past few years -- but wouldn’t necessarily back Al-Falih’s insistence that producers stick with the cuts all year. Inventories in developed economies equated to about 60.6 days worth of demand in December, according to IEA data, which is already back in line with the five-year average. OPEC hasn’t said it’s exclusively targeting inventories in the developed world, but in reality there’s little reliable data for anywhere outside the 34 countries that make up the Organization for Economic Cooperation and Development. Those stockpiles were 52 million barrels above the five-year average in December, according to the IEA. It’s harder, but possible, to compile a global picture. Could data from major consumers like China and India tell a different story?
OPEC Pops The Question - Will Russia Say "I Do"? -- OPEC is drafting an agreement to tie Russia into a so-called “super group” of oil producers.Details on the proposal are vague and the Kremlin’s willingness to consider such a betrothal is uncertain, despite some positive vibes between Russia and OPEC kingpin Saudi Arabia at the moment.In trying to formalize a permanent marriage to a powerful but unpredictable partner like Vladimir Putin, OPEC Secretary General Mohammed Barkindo is no doubt aware of the stakes of a divorce.Any end to the production cut pact is likely to be messy with several countries having touted in recent weeks their plans to boost their production capacity in short order.And for Saudi Arabia, it is counting on keeping Russia on side as its highly anticipated public listing of state oil company Aramco looks to be delayed.Talk of the super group “pushes away the conversation that [OPEC] wants to be avoided: what is the exit strategy?” noted veteran OPEC watcher Jamie Webster, senior director at Boston Consulting Group’s Center for Energy Impact. As the oil market has tightened, OPEC and its allies have remained coy on outlining how they plan to exit their output cut deal, save some vague pledges not to open the taps all at once. Rather, they have obfuscated on the matter – first by declaring that their target of drawing down inventories to the five-year average may be changed, and now by announcing that the draft agreement with Russia and the other non-OPEC partners is in the works. Perhaps it’s not a huge surprise, given that OPEC has never defined any exit strategy from previous production cut accords but has merely looked the other way on cheating until talk of the cuts simply faded away. Barkindo has made no secret of his desire to “institutionalize… a permanent framework” of cooperation with non-OPEC, as he said in London last October. The output cut deal, which is scheduled to run through the end of 2018, commits the 24-country OPEC/non-OPEC coalition led by Saudi Arabia and Russia to cutting 1.8 million b/d to help rebalance the market.
OPEC pact likely to evolve rather than terminate: Kemp - (Reuters) - "The lexicon of exit is not found in our vocabulary", OPEC Secretary-General Mohammad Barkindo told reporters on the sidelines of a conference in Cairo on Monday. Ministers from the Organization of the Petroleum Exporting Countries have been anxious to counter speculation about an early end to production curbs. Barkindo was reinforcing the message that the current curbs will be maintained until at least the end of this year and could be continued into 2019 ("Barkindo stresses ongoing cooperation, not exit", Argus, Feb. 12).OPEC will review progress towards its goal of eliminating excess global inventories at its next regular meeting in June, but ministers have downplayed suggestions the review could lead to an early exit from the accord.The Declaration of Cooperation signed in December 2016 between OPEC, led by Saudi Arabia, and selected non-OPEC producers, led by Russia, has become fundamental to OPEC's strategy for managing the oil market.Both sides appear satisfied with the results achieved so far and keen to extend their cooperation in the medium term.Global oil inventories have been cut to just over 100 million barrels above the five-year average, down from 340 million at the start of 2017. Benchmark Brent prices have risen by around $20 per barrel, or almost 50 percent, since the production cuts were announced, and futures prices have swung from contango into backwardation.Saudi Arabian Energy Minister Khalid al-Falih and his Russian counterpart Alexander Novak are "apostles to the value of cooperation", Barkindo told a separate conference in Riyadh on Wednesday. "They have proven to be the key strong pillars on which the historic OPEC and non-OPEC cooperation has been built" ("Introductory remarks by secretary-general", OPEC, Feb. 14).The agreement between 24 OPEC and non-OPEC oil producers is therefore likely to be extended and evolve rather than terminated.
Saudi Arabia Is Taking a Harder Line on Oil Prices - For decades, Saudi Arabia was the voice of moderation within OPEC, pushing back against the urging of members like Venezuela and Iran for higher oil prices. That role seems to be shifting. Thanks to OPEC-led production cuts, crude prices are double their level two years ago and bloated oil stockpiles are almost back to normal. Yet Saudi Energy Minister Khalid Al-Falih wants to go further. Producers should keep cutting for the whole year, even if it causes a small supply shortage, Al-Falih said. “If we have to overbalance the market a little bit, then so be it,” he told reporters in Riyadh last week.Saudi Arabia faces unprecedented pressures as Crown Prince Mohammed Bin Salman embarks on a program of sweeping economic reforms known as “Vision 2030” and includes the potentially record-breaking initial public offering of its state oil company. “They are definitely not a price dove anymore,” said Mike Wittner, head of oil market research at Societe Generale SA. “They have to think about their social costs, about Vision 2030, about the Saudi Aramco partial IPO or private placement. Al-Falih’s statement last week could not have been much clearer.” Previously content with oil at $60 a barrel, Al-Falih is now seeing $70 as the level where crude prices should trade, according to a person familiar with the matter, who asked not to be identified because the information was private. “If you’re Mohammed Bin Salman, and trying to radically reinvent your country” then “you need a certain price to make it work,”
How soon will electric vehicles make a significant dent in oil demand? -Khalid Al-Falih may be right when he claims the oil industry has nothing to fear from electric vehicles (EVs). Saudi Arabia’s oil minister unsurprisingly is a robust defender of the internal combustion engine (ICE). Contrary to the views of Tesla Inc.’s headline grabbing founder Elon Musk, the kingdom’s top energy official expects the conventional gasoline powered roa-d vehicle to remain the bedrock of passenger road transport for generations to come. “Today 6.5 billion people live in the developing world,” said Khalid Al-Falih, in his opening speech at the International Energy Forum in Riyadh last week. “This will rise to 8.5 billion by 2020. The reality is the dream for many of these individuals is to buy a motorbike, then a car. Given the issues of competitive products, these are unlikely to be electric vehicles.” Of course, Al-Falih has a vested interest dispelling concerns over peak oil demand despite global climate change concerns. The kingdom draws a large share of its wealth from the Ghawar field—the world’s largest single onshore deposit of crude. Although, critics will argue Al-Falih has his head in the sand he also makes a fair point. EVs are not the only solution to the world’s future mobility needs, or necessarily the best form of low-carbon transport. Neither is Al-Falih alone in this view. OPEC’s Secretary General Mohammed Barkindo has given an equally strong defense of oil’s role in powering future transport in the S&P Global Platts Changing Lanes mobility report published on February 19 at the London Oil & Energy Forum. “It is important to emphasize that oil is expected to remain the most important fuel in the global energy mix for decades to come,” said Barkindo in the report. “In the World Oil Outlook 2017, published last November, there is no peak oil demand in the forecast period to 2040.
Why The Next Oil Boom Will Be Fueled By Blockchain - Big Oil is due for a disruption.The world’s most important industry has been carrying on without any significant changes in its day to day routine for far too long.But now, the new tech on the block has its sights set on the multi-trillion-dollar oil and gas sector.It’s official: Blockchain technology has infiltrated Big Oil.The hype behind blockchain has reached a full-blown frenzy. And for good reason.The technology, which creates secure ledgers for digital transactions and rapidly accelerates the pace at which transactions can be made, has the potential to disrupt every major industry: real estate, shipping, banking and healthcare.Blockchain is truly revolutionary, and Big Oil is finally catching on.In an industry that has used technology to reduce breakeven costs to all-time lows, create gigantic drilling rigs run by robots, and even tap reserves located 10 miles below the sea, the oil and gas sector has been slow to jump on the blockchain bandwagon…until now.According to a report from the World Economic Forum from 2017, a digital transformation has already swept across the energy industry.Now, blockchain is taking it one step further.Majors like BP and Shell are making headlines with plans to utilize blockchain tech to completely transform how energy is bought and sold.Smaller players with big ambitions like Canada’s Petroteq are preparing to revolutionize the day to day operations of potentially every oil operation on the planet. Petroteq could utilize new technologies to tap massive new reserves of energy, such as the Utah oil sands, while radically reducing environmental risk.With U.S. President Donald Trump planning a trillion dollar infrastructure program, the possibilities for upgrading American oil and gas systems throughout the country are immense. Integrating blockchain into supply-line management and logistics could dramatically cut costs.
Hedge funds lighten bullish positions in oil: Kemp (Reuters) - Petroleum markets were hit by a heavy bout of profit-taking in the second week of February as hedge funds liquidated some of the record long positions they accumulated over the previous seven months.Hedge funds and other money managers cut their combined net long position in the six most important petroleum futures and options contracts by the equivalent of 152 million barrels in the week to Feb. 13.Fund managers have now cut the combined net long position in Brent, NYMEX and ICE, U.S. gasoline, U.S. heating oil and European gasoil by a total of 215 million barrels over the three most recent weeks.Even so, the combined net long position is still 959 million barrels higher than at the end of June 2017, when fund managers began to turn bullish (http://tmsnrt.rs/2BCCBz1).The most recent week saw large reductions in net long positions in Brent (-32 million barrels) and WTI (-31 million barrels).But in proportionate terms, there were even larger reductions in European gasoil (-38 million barrels), U.S. heating oil (-32 million barrels) and U.S. gasoline (-20 million barrels).Refined fuels accounted for 25 percent of hedge fund managers' net long position in the petroleum complex but almost 60 percent of the liquidation in the week to Feb. 13.The reduction in net long positions across the complex was the largest pull for nine months, according to position records published by exchanges and regulators.In every contract, the liquidation of long positions far outstripped the creation of new short ones, indicating fund managers were realising some profits after the strong rally in oil prices, rather than turning outright bearish.Portfolio managers' positioning remains very lopsided across the complex, with longs outnumbering shorts by a ratio of more than 10:1, down from almost 12:1 at the end of January, but still exceptionally high.The near-record imbalance remains a significant source of downside risk and could lead to a further sharp drop in oil prices if anything triggers further profit-taking. Fund managers still hold more than 1,400 million barrels of long positions in petroleum futures and options, a scale that was unprecedented until two months ago.
Oil prices hit highest level in nearly 2 weeks on Asian equity recovery - Livemint: Oil prices extended gains to hit their highest level in nearly two weeks on Monday, buoyed as Asian shares joined a global recovery in equity markets and as worries grew over tensions in the Middle East. Prime Minister Benjamin Netanyahu said on Sunday that Israel could act against Iran itself, not just its allies in the Middle East, after border incidents in Syria brought the Middle East foes closer to direct confrontation. US West Texas Intermediate (WTI) crude for March delivery was up 73 cents, or 1.2%, at $62.41 a barrel by 11.30am, after earlier touching its highest since 7 February. London Brent crude was up 52 cents, or 0.8%, at $65.36, after rising more than 3% last week. “The upside momentum since WTI hit last week’s low of $58 has been continuing,” said Tetsu Emori, CEO of Emori Capital Management in Tokyo. “Oil got mild support from gains in Asian equity markets, but has been getting pressure from the rise in U.S. rig count and a slight recovery in the dollar.” Trading is expected to be slower than usual due market holidays in the United States as well as Greater China. The US oil rig count, an indicator of future production, rose by seven to 798, its highest since April 2015, according to a weekly report from General Electric’s Baker Hughes unit. That marked the first time since June that drillers added rigs for four consecutive weeks, and the figure was well up on the 597 rigs that were active a year earlier as energy companies have boosted spending since mid-2016 when crude prices began recovering from a two-year crash.
Oil Prices Diverge On Mixed Data - WTI received a boost at the start of the week as Cushing inventories have dwindled amid greater pipeline connections and reduced flows from Canada. Exports are also up. Meanwhile, Brent dipped as European refiners enter maintenance season. Hedge funds and other money managers reduced their bullish bets on crude oil in the second week of February, which coincided with a dip in oil prices. After building up a near record bullish position, investors “cut their combined net long position in the six most important petroleum futures and options contracts by the equivalent of 152 million barrels in the week to Feb. 13.,” according to Reuters. It was the largest reduction in nine months. With the retreat in prices and the liquidation of some of the long bets, there is now a more balanced positioning from hedge funds and other money managers, reducing the risk of a further price correction. WTI is receiving a boost relative to other benchmarks because of a spike in U.S. exports over the past year. New pipelines have better connected oil from Texas shale fields to the Gulf Coast, allowing more cargo to be shipped overseas. That, in turn, has helped drain stockpiles in Cushing, OK, helping to push up WTI. The American benchmark recently traded at a premium to the Dubai benchmark for the first time in over a year. Exports are likely to pick up after the start of operations at the LOOP export facility in Louisiana, which can handle very large crude carriers (VLCCs). The U.S. will hold its largest ever lease sale for offshore oil acreage in March. The Interior Department announced plans last Friday to auction off 77.3 million acres of offshore waters on March 21, spanning much of the Gulf of Mexico.U.S. oil prices rise on Cushing draw, hopes of producer cooperation (Reuters) - U.S. crude hit a near two-week high in a choppy session on Tuesday amid inventory declines at a key storage hub and on expectations that top producers could extend cooperation beyond 2018, while Brent fell under pressure from a stronger dollar. The Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil producers, including Russia, will discuss extending their cooperation for many more years when they meet in June as they seek to avoid major market shocks, United Arab Emirates’ energy minister and OPEC President Suhail al-Mazroui told Reuters. Data from market intelligence firm Genscape showed that inventories at Cushing, Oklahoma, the delivery point for U.S. crude futures, fell 2.1 million barrels in the week to Feb. 16, according to traders who saw the data. The combination of a new pipeline running from the hub to Memphis, along with reduced flows from TransCanada’s Keystone pipeline, have sent stockpiles in Cushing to the lowest in about three years. Flows on Keystone pipeline were decreased after a leak in November. A strengthening dollar, which hit a six-day high, however, weighed on oil prices. [USD/] A more robust dollar makes oil and other dollar-denominated commodities more expensive for holders of other currencies. Brent crude futures ended the session 42 cents, or 0.6 percent, lower at $65.25 a barrel after trading between $65.81 and $64.78 a barrel. U.S. West Texas Intermediate (WTI) crude futures settled up 22 cents, or 0.4 percent, at $61.90 a barrel, as the March contract expired. Prices rallied to a high of $62.74 a barrel early in the session, the highest since Feb. 7. The most active U.S. crude futures contract for delivery in April settled up 24 cents at $61.79 a barrel. Front month U.S. crude’s discount to the second month flipped to a discount ahead of the March contract’s expiration, falling to a low of a discount of 10 cents per barrel, the widest since Dec. 11. Monday’s U.S. holiday for Presidents Day supported WTI’s performance compared with Brent as the U.S. markets caught up with Monday’s gains, Premiums for local North Sea grades are at multi-month lows.
Oil Prices Down In Asia Morning Due To Stronger U.S. Dollar -- Oil prices are down again Wednesday morning in Asia, driven by a recovery in the dollar which pulled down fuel demand. Crude Oil WTI Futures futures for April delivery were trading at $61.33 a barrel mid-morning in Asia, down 0.74%. Brent crude futures for April delivery, traded in London, were down 0.31% at $64.84 per barrel in mid-morning. Traders said the declines were due to U.S. dollar-denominated oil imports being more expensive for other countries. The dollar rebounded from three-year lows set last week as traders cut back on some of the bearish bets against the U.S. dollar. A continued dollar recovery will work against oil prices, but oil markets remain well supported due to a healthy demand-growth in Asia, particularly China, combined with a supply restraint by the Organization of the Petroleum Exporting Countries (OPEC). Saudi Arabia’s effort to clean up the global oversupply of oil is also helping to stabilize oil price volatility. The Kingdom has vowed to reduce its exports to below 7 million barrels per day (bpd) next month and to cut oil production by 100,000 bpd in March compared to the February level. Further supporting prices are rising tensions in the Middle East, especially along the border of Syria and Israel. While neither Syria nor Israel is a major player in the oil business, threat to oil anywhere in the Middle East tends to put upward pressure on oil prices. These mixed signals have caused oil prices to zigzag up and down over the past weeks, mostly between small rises and dips. That said, current prices have moved quite far from the highs of the beginning of February. WTI started February at $65.80 and Brent started at $69.65. The U.S., now the second-largest producer of oil in the world, continues to increase its oil production, further dragging prices down. The U.S. has increased its production by more than 20% since mid-2016 to more than 10 million bpd.
Oil largely steady amid forecast of U.S. crude build, stronger dollar (Reuters) - Oil prices were little changed on Wednesday ahead of data expected to show rising crude inventories in the United States and as the dollar strengthened from last week’s three-year lows. Brent crude futures settled 17 cents, or 0.3 percent, higher at $65.42 a barrel, after trading between $64.40 and $65.53. West Texas Intermediate crude (WTI) futures fell 11 cents, or 0.2 percent, to end at $61.68 a barrel, after trading between $61.86 and $60.92. U.S. crude inventories were forecast to have risen for the fourth consecutive week, increasing 1.8 million barrels last week, an extended Reuters poll showed. [EIA/S] Data on U.S. inventories from the American Petroleum Institute will be released at 4:30 p.m. EST (2130 GMT) and government figures are due on Thursday at 11 a.m.. Both reports were delayed a day due to a U.S. holiday on Monday. Rising U.S. shale output should lead to a modest inventory build, said Stewart Glickman, an energy analyst at CFRA Research in New York “U.S. shale continues to rise to the occasion,” he said. Higher oil prices and rising output should feed increased investment in drilling and production, in turn boosting shale output more, he said. U.S. crude oil production surpassed 10 million barrels per day (bpd) in November for the first time since 1970. Rising U.S. shale output has hindered efforts by the Organization of the Petroleum Exporting Countries (OPEC) and other producers, led by Russia, to reduce bloated global inventories and prop up oil prices by cutting output. The dollar index hit a one-week high after the release of minutes from the U.S. Federal Reserve’s January policy meeting. A stronger dollar makes oil and other dollar-denominated commodities more expensive for holders of other currencies.
WTI/RBOB Rebound After Surprise Crude Draw - Dollar strength today did not help the energy complex as WTI/RBOB slipped lower into tonight's API data, but a surprise crude draw sparked a rebound in oil prices after hours. API
- Crude -907k (+2.9mm exp)
- Cushing -2.644mm
- Gasoline +1.644mm
- Distillates -3.563mm
After 3 weeks of builds, API reports a crude draw this week and notable draw in Distillates inventories also... OPEC has “taken a lot of production off the table, but it’s just being replaced by U.S. production to a large degree,” Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York told Bloomberg. Cartel members recently sought to reassure investors about their resolve but “the market’s not buying it.” But prices kneejerked higher after tonight's API data showed a surprise (small) crude draw...
Supply glut fears nearly assuaged, OPEC now frets shrinking spare capacity - Having helped wrestle the oil market from its latest bust, OPEC is now setting its sights at avoiding the next one. While insisting that its work to drain oil inventories through output cuts remains far from done, the organization has in recent weeks shifted its rhetoric from that of a swing producer managing a supply glut to one trying to prevent a market squeeze. Ministers have begun to increasingly stress to the market the need to invest in additional production capacity to meet robust growing demand in the years ahead -- some $10 trillion needed through 2040 just to offset natural field declines, according to the UAE's Suhail al-Mazrouei -- with a tacit nod to the market's significant geopolitical risk exposure, particularly in Venezuela. OPEC's current spare capacity is shrinking, as it maintains its production cuts and global consumption has risen, raising the risk of a price spike that it would like to avoid for fear of demand destruction. "Building and holding ample spare capacity is needed to assure traders and investors that [the OPEC/non-OPEC coalition] has a buffer to offset unexpected tightness and geopolitical interruptions," said Bob McNally, a veteran OPEC watcher with consultancy Rapidan Energy. OPEC spare capacity stands at 3.24 million b/d, about 10% of the bloc's December production, according to the International Energy Agency, which defines it as production that can be reached within 90 days and sustained "for an extended period." The US Energy Information Administration estimates the bloc's spare capacity far lower at 2.04 million b/d, defining it more narrowly as production that can be brought online within 30 days and sustained for 90 days. The vast majority of that surplus capacity is in Saudi Arabia and its Gulf allies. This may very well explain OPEC's desire to make a permanent pact with Russia, the world's largest crude producer, and other allies, beyond their 1.8 million b/d output cut agreement, which expires at the end of 2018.
WTI/RBOB Jump After DOE Confirms Surprise Crude Draw, Production Slows - Following last night's surprise crude draw (from API), and USD weakness, WTI/RBOB rallied overnight, but faded into the DOE data. However, as DOE confirmed API's reported surprise crude draw (-1.616mm) and production slipped very modestly, prices jumped. DOE:
- Crude -1.616mm (+2.35mm exp)
- Cushing -2.664mm
- Gasoline +261k (+742k exp)
- Distillates -2.422mm (-1.1mm exp)
In quite a shocking moment - it seems API was right for once - DOE reports a 1.6mm crude draw - and RBOB prices are up as Gasoline saw a smaller than expected build. As Bloomberg notes, Cushing is being emptied at a very, very, very fast pace. It's the 9th consecutive week of crude draws, bringing the total to its lowest since December 2014.
Oil prices climb after unexpected drawdown in US crude stocks - Oil prices rose to two-week highs on Thursday, boosted by data showing a surprise draw in U.S. crude inventories and also by a drop in the dollar. West Texas Intermediate (WTI) crude CLc1 futures rose $1.09, or about 1.8 percent, to settle at $62.77 a barrel. U.S. crude traded between $60.75 and $63.09, its highest since Feb. 7. Brent crude LCOc1 futures rose 97 cents to settle up about 1.5 percent at $66.39 a barrel. It hit a two-week peak at $66.56. U.S. crude inventories USOILC=ECI unexpectedly fell 1.6 million barrels last week as net imports dropped to a record low and exports surged, while inventories declined further at the key storage hub in Cushing, Oklahoma, according to data from the Energy Information Administration (EIA). Crude inventories had been forecast to rise 1.8 million barrels, as stocks seasonally increase when refineries cut intake to conduct maintenance. “Weekly EIA data was particularly supportive to WTI considering U.S. and Cushing draws, a boost in crude exports above 2 million bpd and flat crude production,” . Crude stocks at the Cushing, Oklahoma, delivery hub for U.S. futures fell 2.7 million barrels last week, the ninth straight week of drawdowns, the EIA said. “The reason that the inventories continue to drop at Cushing is because the market remains backwardated and therefore it’s uneconomical to be storing crude,” . In a market structure called backwardation, prompt crude prices are higher than forward prices, discouraging storage. “It makes more sense to liquidate your on-hand inventories,” . U.S. net crude imports fell 1.6 million barrels per day to just below 5 million bpd last week, the lowest level since the EIA started recording the data in 2001. Exports of U.S. crude jumped to just above 2 million bpd, close to a record 2.1 million hit in October. That helped push net imports to the lowest level on record.
Oil Prices Rise As Bullish Sentiment Returns -- It was a bumpy week for crude benchmarks, although WTI and Brent jumped sharply on Thursday after the EIA reported a surprise drawdown in crude oil stocks. U.S. oil production also remained flat, halting, however briefly, the surge in oil production. “For a little bit of a bullish boost, you’ve got all the planets lined up here after this report,” Bob Yawger, director of the futures division at Mizuho Securities U.S.A., told the WSJ. Shale drillers are still having trouble posting profits and despite promises of focusing on shareholder returns this year, there is a divergence of strategies among the top shale companies. Reuters reports that an analysis of the top 15 largest independent shale companies finds that only five have started paying or raising quarterly dividends. Six of them have never offered a dividend or have not restored the cuts made since 2014, and the remainder have kept their payouts steady. Those that have boosted dividends recently have seen their share prices jump, while those that deferred have seen their valuations decline. The IEA says that non-OPEC supply growth – coming mainly from the U.S., Canada and Brazil – will be able to meet the increase in global demand for the next two years, putting OPEC in the difficult position of needing to keep the supply curbs in place longer than intended. Beyond 2020, however, the IEA says the oil market will face more challenges as mature fields suffer from decline and new sources of supply fail to keep up with strong demand. Bloomberg reports that some shale drillers in the Permian are supersizing their operations, with large wellpads drilling into multiple layers of the Permian all at once, rather than at a one-layer-at-a-time approach. They drill multiple wells that touch multiple layers in a single go, accessing the entire 3D “cube” of oil underneath the ground. One wellpad owned by Encana Bloomberg reports, was producing 20,000 bpd late last year. Still, the practice is controversial because it is expensive.
US oil rig count rises for fifth straight week -Baker Hughes - (Reuters) - U.S. energy companies added one oil rig this week, the fifth weekly increase in a row, as oil prices hovered at two-week highs. Drillers added one oil rig in the week to Feb. 23, bringing the total count up to 799, 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 five consecutive weeks. The U.S. rig count, an early indicator of future output, is much higher than a year ago when 602 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 near $63 a barrel on Friday, moving close to the peaks 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. Looking ahead, futures were trading at near $62 for the balance of 2018 and $57 for calendar 2019. In anticipation of higher prices in 2018 than 2017, U.S. financial services firm Cowen & Co said 53 of the roughly 65 exploration and production (E&P) companies they track, including Apache Corp, have already provided capital expenditure guidance indicating a 9 percent increase in planned spending over 2017. Cowen said the E&Ps it tracks planned to spend about $66.1 billion on drilling and completions in the lower 48 U.S. states in 2017, about 53 percent over what they planned to spend in 2016. There were 978 oil and natural gas rigs active on Feb. 23. On average, there were 876 rigs available for service in 2017, 509 in 2016 and 978 in 2015.
Rig Count Inches Higher As Oil Prices Stabilize - Baker Hughes reported a 3-rig increase to the number of oil and gas rigs this week. The total number of oil and gas rigs now stands at 978, which is an addition of 224 rigs year over year. The number of oil rigs in the United States increased by a single rig this week, and now stands at 799, or 197 over this time last year. The number of gas rigs, which rose by 2 this week, now stands at 179, or 28 rigs above this week last year. Canada lost 12 rigs this week; 9 for oil and 3 for gas. At 12:36 pm EST, the price of a WTI barrel was trading up $0.78 (+1.24%) to $63.55. The Brent barrel trading up $0.74 (+1.12%) to $66.85—both benchmarks up from last week. Oil prices dipped a couple of weeks ago after several weeks of EIA reporting 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 fell in the week ending February 16, to 10.270 million bpd—just a hair below last week’s figures—but still the second highest production figure for the US ever. Meanwhile, OPEC continues to sing the praises of its production cut efforts and is quick to point out at every turn that the market is indeed rebalancing. By basin, Cana Woodford and the Permian each added two rigs, while DJ-Niobrara, Haynesville, Utica, and Williston each gained one rig. The Marcellus basin lost two rigs. The Permian basin now has 129 more active rigs than it did a year ago—representing more than 50% of the total annual increase in rigs. At 1:07pm EST, WTI was trading at $63.63 (+$0.86) with Brent trading at $66.92 (+$0.81).
Oil Futures Lifted by Equities Rally - -- New York Mercantile Exchange spot-month oil futures rallied to better than two-week highs this afternoon on the back of higher equities, with investors less concerned that a Jerome Powell-led Federal Reserve would rush to raise interest rates as the U.S. economy strengthens. "A rebound in the stock market and reports of a Libyan oil supply outage sent oil higher," said analyst Phil Flynn at Prices Futures Group in Chicago. The Dow Jones Industrial Average was 347 points higher, the S&P 500 index traded up more than 40 points, and the dollar consolidated near Thursday's 10-day high. The stock market and oil futures have a correlative trading relationship, with equities seen as a barometer for investor sentiment. The stock market has been volatile this week on inflation concerns. On fundamentals, Libya's 70,000 bpd Elephant oilfield halted production on Thursday after armed guards who work for the facility decided to occupy it to protest their unpaid wages, Bloomberg reported, raising concern about Libyan exports to Europe and boosting Brent crude futures on the Intercontinental Exchange. Domestically, a report by Houston-based oil services firm Baker Hughes issued this afternoon showed the number of active oil rigs in the United States rose by only one this week to a 799 near three-year high. "The rig-count increase was modest, which is a sign that [oil] production is leveling off," said Flynn.
Oil rises further above $66 as Libyan outage, Saudi comments support - Oil prices rose on Friday to their highest in more than two weeks, supported by the shutdown of the El Feel oilfield in Libya and upbeat comments from Saudi Arabia that an OPEC-led effort to cut stockpiles is working. El Feel produces 70,000 barrels per day of crude. Production in OPEC member Libya has been running at about 1 million bpd, although it remains volatile due to unrest. "Libya is another outage," said John Kilduff, partner at investment manager Again Capital in New York. "This market has benefited from a series of them over the past several months now, whether it's the Keystone, the North Sea (Forties), and now this." Brent crude futures rose 92 cents to settle at $67.31 a barrel, a 1.4 per cent gain. The global benchmark's session high of $67.37 was its highest since Feb. 7. West Texas Intermediate (WTI) crude futures rose 78 cents to settle at $63.55 a barrel, trading between $62.33 and $63.73. Both benchmarks notched their second straight week of gains. Brent was up about 3.7 per cent, its largest weekly increase since the end of October. U.S. benchmark WTI posted a weekly rise of about 3 per cent. Prices were buoyed by comments from Saudi Arabia's energy minister Khalid al-Falih, who said he expected oil market inventories to continue declining. The Organization of the Petroleum Exporting Countries and other producers including Russia have cut output to support prices. They hope to reduce crude inventories held by industrialized nations to their five-year average.
Relax and invest, Saudi prince tells investors after corruption crackdown (Reuters) - Three months after Saudi Arabia detained scores of people in a crackdown on corruption, its rulers are trying to reassure investors that the kingdom remains open for business. Foreign and local investors have long complained about corruption, and confronting it is an important part of reforms unveiled by Crown Prince Mohammed bin Salman to transform the country and reduce the economy’s reliance on oil exports. Yet some business leaders were unsettled by the swoop on top princes, businessmen and government officials in November because of the secrecy around the crackdown and their suspicions that it was at least partly politically motivated. “This is not a recommendation for why you should invest in Saudi Arabia,” said a Western businessman with extensive contacts in the kingdom. “This whole thing has become one big ball of contradictions.” Saudi authorities are loathe to say they mishandled the anti-corruption campaign. But top officials, including Prince Mohammed, met senior local businessmen last month to reassure them that the crackdown was mostly over and that it was safe to do business, according to five Saudi and Western sources who spoke with people who attended the meetings. Most detainees have now been released. In front of global political and business leaders at the World Economic Forum in the Swiss town of Davos last month, Saudi officials highlighted the positives of the detentions, dismissing worries about the way the crackdown was conducted but conceding that it might have been sold slightly differently. “It’s true we could make mistakes here and mistakes there. Saudi Arabia is not a perfect country. Saudi Arabia is like any other country. But the ... road to success is always under construction and the whole momentum of Saudi Arabia is going toward that end,” Minister of Commerce and Investment Majid bin Abdullah al-Qasabi told a Davos session.
Munich Security Conference: Saudi Arabia sees nuclear energy as a way to save oil -- Saudi Arabia's foreign minister called on the U.S. to give it the same rights as other nuclear nations in its push to process its own nuclear fuel, revealing that it's currently in talks with 10 other countries should America refuse. Saudi Arabia plans to construct 16 nuclear power reactors over the next 20 to 25 years at a cost of more than $80 billion. It has invited U.S. firms to take part in the program but acceptance from Washington requires a country to sign a peaceful nuclear cooperation pact. Known as a 123 agreement, it separates civil and military nuclear facilities and aims to block the steps from nuclear fuel production to potential bomb-making applications. Countries like India have already signed up to such agreements with the U.S. Riyadh has previously stated that wants to tap its own uranium resources for "self-sufficiency in producing nuclear fuel," according to Reuters, and is not interested in diverting nuclear technology to military use. Its regional rival Iran is already one step ahead and is allowed to enrich uranium. show chapters Iran try to cyberattack us almost on a weekly basis: Saudi foreign minister 10:53 AM ET Sun, 18 Feb 2018 | 00:41 Speaking to CNBC at the Munich Security Conference, Adel Al-Jubeir told CNBC that Saudi Arabia was looking at a number of countries that have nuclear technology for peaceful purposes. "We are looking at the issue of the viability of building nuclear reactors in order to produce energy so that we can save the oil and export it in order to generate revenue," the foreign minister said. "The countries that we are talking to are probably roughly 10 countries or so around the world and we have not made a decision yet with regards to which path we will take and which country we will be focusing on more." When pressed on what Saudi Arabia would do if the U.S. failed to back its nuclear energy program, he said: "This is really something that's up to our nuclear energy professionals to deal with, but our objective is we want to have the same rights as other countries."
As Saudis Go Nuclear, U.S. Seeks an Edge Over Great-Power Rivals -- At a meeting of the International Atomic Energy Agency in Vienna last September, word spread that Saudi Arabia had identified a handful of countries that could build two nuclear reactors in the kingdom. The U.S. wasn’t among them -- until Energy Secretary Rick Perry buttonholed the Saudi delegates and told them America wanted in. Within weeks, a mostly U.S. consortium headed by Westinghouse Electric Co. had joined the race. Its executives have visited the kingdom. So has Perry, whose intervention was described by two people who attended the meeting. In the next few months, the Saudis are expected to narrow the field to two or three bidders.A glance at the current list of contenders shows the geopolitical perils that accompany this business opportunity. American allies South Korea and France are on it -- and so are China and Russia, recently designated by the Pentagon as the main U.S. threats. Reactor-building could become another arena of superpower rivalry. For the Saudis, seeking the technical expertise to move beyond oil and compete with arch-rival Iran, the U.S. is undoubtedly the main strategic partner. But unlike Washington, the kingdom also has cordial ties with the other two giants -- and reasons to keep them sweet. China is its best customer, and Russia is increasingly its partner in policing world oil output. Meanwhile President Donald Trump’s administration sees a chance to revive a moribund U.S. nuclear industry. Some analysts question whether that’s worth the risks that will come with the expansion of nuclear technology through the world’s most volatile region.“You’ve got Israel with nuclear weapons,” says Victor Gilinsky, a former commissioner of the Nuclear Regulatory Commission. “Turkey isn’t far behind. Iran has a nuclear program. Now they’re going to unleash Saudi Arabia? What are we creating here?”
US May Open Path For Saudi Arabia To Acquire Nuclear Weapons - Saudi Arabia is moving swiftly to become the next country in the Middle East with nuclear power. The Kingdom is on the verge of striking a deal with the US for the purchase of nuclear reactors despite concerns over its refusal to accept stringent restrictions against the proliferation of nuclear weapons. Crown Prince Mohamed Bin Salman, who is the de facto ruler of the country, has ambitious plans to diversify the country’s energy source and is in the market to purchase nuclear power reactors. The potential for lucrative deals is too good to be missed and the Trump administration is thought to be mulling over loosening US law to win Saudi contracts, worth billions. The Kingdom has refused to be bound by stringent US regulations that restrict reprocessing and enriching uranium for the production of nuclear weapons. With competitors like Russia and China waiting in the wings, Trump is keen to strike a deal with the Saudi’s and breathe new life into the American nuclear industry. Finalists to build nuclear power stations along the Kingdom’s desolate Arabian Gulf strip will be announced in the coming months, but it’s not certain if the US will be the one to strike the deal. Israel, despite having its own nuclear arsenal, is strongly opposed to any other country in the Middle East acquiring nuclear weapons and with alliances constantly shifting in the region it may try to derail any deal.US policy also seeks to limit nuclear weapons proliferation especially in the Middle East but Trump may have no option other than to lower restrictions with Saudi Arabia. Although the Saudi’s have insisted that their programme will be peaceful, they have also refused to rule out the right to enrich uranium to weapons grade. A senior Saudi official was quoted by the Wall Street Journal admitting as much.
The Post-Islamic State Marshall Plan That Never Was - Iraq needs billions of dollars to rebuild after the military defeat of the Islamic State, but the nations expected to step up and shoulder the financial burden of reconstruction have sent a mixed message of support, leaving the final outcome in doubt. In the weeks leading up to the conference, the threshold for making a public announcement at the conclusion of the event was also rolled back. The original goal of $20 billion dropped to $10 billion, and finally to $5 billion. Even then, it was unclear which speech would be given, according to a source familiar with the preparations. The World Bank estimates that Iraq needs nearly $88 billion to reconstitute damaged infrastructure, housing, and vital services — much of which is supposed to come from Iraqi government oil revenue. In the end, additional support pledged at the conference in Kuwait raised roughly $30 billion in a complex combination of loans, investment guarantees, and direct investment — short of the goal, but better than expected. That result was reflected in Secretary General António Guterres’ speech. “The response to this conference and to this appeal is an extraordinary proof of confidence in the government and in the people of Iraq,” he told the audience. An Iraqi official confirmed the $30 billion estimate but noted that the government had still not received official documentation of the pledges. Though this final number is considerably higher than originally anticipated, questions remain over whether cash-strapped Gulf states will make good on their promises, and whether private sector companies will begin to ramp up investments necessary to jump-start the country’s economy after years of war. Iraqi national elections are also scheduled for May, and the government must still shoulder much of the reconstruction burden itself.
Turkish Warships Threaten To Sink Italian Drillship In Cypriot Waters - Amid escalating tensions between Cyprus and Turkey in the Mediterranean Sea, the two countries appear headed towards an inevitable resource war. Just two weeks since we first reported on Turkey's aggression in Cypriot waters, KeepTalkingGreece.com reports that a serious incident took place at 10 a.m. on Friday morning, when five Turkish warships threatened to sink the drillship SAIPEM 12000 commissioned by the Italian energy company ENI. The drillship had set out to reach block 3 of Cyprus’ Exclusive Economic Zone (EEZ) in a new effort to reach Soupia target. SAIPEM could not reach its target due to Turkish threats. According to Cypriot and Turkish media, the captain of one of the Turkish warships contacted the SAIPEM and threatened to sink the drill ship if it should not change its route. The drill ship changed the route and making maneuvers through the Turkish warships turned to the West and left the area. screenshots from marinetraffic.com via newsit.cyprus Deputy Government Spokesman Victoras Papadopoulos told the Cyprus News Agency, that after consultations between Italian company ENI and SAIPEM 12000, the captain of the drillship tried once again to drive the ship towards the Soupia (Cuttlefish) target to conduct its drilling operations.
Turkish Forces Hit Kurds With Toxic Gas After Crossing Into Syria: Report - Turkish forces which entered Syria in late January have reportedly conducted a gas attack against Kurdish militias in the village of Aranda, sending at least six civilians to the hospital according to Syrian Kurdish forces and local media."Six civillians suffering from suffocation as a result of Turkish forces firing missiles containing poison gas," reports Dr. Joan Mohammed, director of nearby Afrin Hospital (via SANA)Another Doctor, Khalil Sabri, told local news "all of them suffer the same symptoms of suffocation, malaise, itching skin and burning in the eyes." At least two of the victims are listed in critical condition, while four are stable. Ruha, a child who was playing and singing, didn't know that Turkey& Jihadists will shell her house. Ruha got injured alongside her father yesterday when Afrin city center was shelled by the invaders.#Afrin#UNspeakUpForAfrin pic.twitter.com/SRwBVRXAGq— Can Êzîdxelo /Jan/ (@ezidxelo) February 15, 2018A spokesman for the Kurdish YPG militia in Afrin, Birusk Hasaka, confirmed to Reuters that Turkish forces hit a village in the northwest of the region, near the Turkish border. Meanwhile, "the Syrian Observatory for Human Rights told Reuters that Turkish forces and their Syrian insurgent allies hit the village on Friday with shells. The Britain-based monitor said medical sources in Afrin reported that six people in the attack suffered breathing difficulties and dilated pupils, indicating a suspected gas attack."
White House Dismisses Reports Of Turkish Gas Attack In Syria As "Extremely Unlikely" - According a new Associated Press report a White House official says the US thinks it is "extremely unlikely" Turkey used chemical weapons against Kurds. The comments came late on Saturday following widespread reports which emerged earlier in the day that Turkish forces launched a chemical gas attack on Kurdish militias in the northern Syria village of Aranda on Friday, sending at least six civilians to the hospital.In response, counter-terrorism expert Max Abrams appropriately quipped concerning the White House's hasty excusal of US ally Turkey as a culprit: sounds scientific, right? Investigative criteria is as follows: Turkey’s a NATO ally https://t.co/sbW1VD7E8I— Max Blumenthal (@MaxBlumenthal) February 18, 2018 Clearly, if a long-time US partner in Syria and NATO ally is to blame for a heinous chemical attack it couldn't possibly be true according to the White House version of events. Yet, imagine if this were Assad or Russia being blamed...
Public reports ‘clearly show’ Assad’s use of chemical weapons: McMaster- U.S. National Security Adviser H.R. McMaster said on Saturday that, despite denials, public reports showed that Syrian President Bashar al-Assad was using chemical weapons, and added that it was time for the international community to hold the Syrian government to account. “Public accounts and photos clearly show that Assad’s chemical weapons use is continuing,” McMaster said at a major international security conference taking place in Munich. “It is time for all nations to hold the Syrian regime and its sponsors accountable for their actions and support the efforts of the Organization for the Prohibition of Chemical Weapons,” he said. McMaster did not specify which public accounts or pictures he was referring to. Earlier this month, U.S. Defense Secretary Jim Mattis said the Syrian government had repeatedly used chlorine gas, but stressed that the U.S. did not have evidence of sarin gas use. French President Emmanuel Macron has said that “France will strike” if chemical weapons are used against civilians in the Syrian conflict in violation of international treaties, but that he had not yet seen proof this is the case. The Syrian government has repeatedly denied using chemical weapons and said it targets only armed rebels and militants. In recent weeks, rescue workers, aid groups and the United States have accused Syria of repeatedly using chlorine gas as a weapon against civilians in Ghouta and Idlib. Earlier this month, Syrian government forces, who are backed by Russia and Iran, bombarded the areas, two of the last major rebel-held parts of Syria. Diplomatic efforts have made scant progress towards ending a war now approaching its eighth year, which has killed hundreds of thousands of people and forced half the pre-war Syrian population of 23 million from their homes.
Tillerson throws Erdogan a bone in Syria | Asia Times: Until the outbreak of Syria’s civil war in 2011, Manbij was a forgotten and neglected city, famed more for its ancient past rather than any modern achievements. For the past six years, though, Manbij has risen to international fame as militarily and politically contested by the Turks, Iran, Russia, the United States, Islamic State of Iraq and Syria (ISIS) and, of course, Damascus. Located 30 kilometers west of the Euphrates River, it is northeast of the Aleppo Governorate, presently controlled by US and Kurdish forces. US Secretary of State Rex Tillerson agreed during a two-day visit to Turkey beginning on Thursday to finally allow Turkish-backed Free Syrian Army troops into Manbij, where they will be deployed side-by-side with American forces. The anti-ISIS Kurdish militias that have run Manbij since 2016, including the Syrian Kurdish YPG, a group Turkey considers a terror organization with links to the insurgent Kurdistan Worker’s Party (PKK), will be asked to leave and dispatch east of the Euphrates River. This is music to the ears of Turkish President Recep Tayyip Erdogan, who is known to have sought a military presence in Manbij for the past two years.
Russia Warns U.S. Not to ‘Play With Fire’ in Syria -- Russian Foreign Minister Sergei Lavrov warned the Trump administration not to “play with fire” as he lashed out at the U.S. over what he described as its “provocative” support for autonomy-seeking Kurds in Syria. “The U.S. should stop playing very dangerous games which could lead to the dismemberment of the Syrian state,” Lavrov said at a Middle East conference in Moscow on Monday, alongside his Iranian counterpart Mohammad Javad Zarif and a top adviser of Syrian President Bashar al-Assad. “We are seeing attempts to exploit the Kurds’ aspirations.” An armed clash earlier this month in which U.S. strikes may have killed more than 200 Russian mercenaries attacking American-backed forces inflamed a standoff between Moscow and Washington in Syria. Russia’s Foreign Ministry said it knows of five Russian deaths and the incident is still being investigated. While the U.S. accepted Russian assurances that it had nothing to do with the failed attack, the clash was the deadliest between citizens of the former foes since the Cold War. After seven years of war, Assad has managed to reassert control over a large part of his country. But the conflict is entering a dangerous new phase as outside powers confront each other, with tensions sparked by Iran’s growing influence and Turkey’s bid to crush Kurdish forces it says are linked to separatists inside its borders. The U.S. is setting up a 30,000-strong Kurdish-led border protection force in the northeast of Syria, which Assad’s backers Russia and Iran have condemned as an attempt to carve out an American zone of influence. Lavrov dismissed Western criticism of Iran’s role and demands for a pullout of Iranian troops and military advisers, saying they’ve been invited by the government in Damascus. Zarif for his part said Iran is concerned about a “new wave” of foreign intervention in Syria led by the U.S. after the defeat of Islamic State. He accused the U.S. of trying to capture Syrian territory by making use of proxies.
Foreign Powers Competing for a Slice of Syria - SPIEGEL - What do a counterfeiter from Syria, an Iraqi-Afghan militia fighter under Iranian leadership and a Russian Cossack have in common? More than you might think. They all took part in a strange offensive involving around 300 men on Feb. 7 -- an attack force that was bombed by the U.S. as it crossed a pontoon bridge over the Euphrates River in an effort to capture one of largest natural gas fields in eastern Syria for the Assad regime. Located near the city of Deir ez-Zor, the so-called Conoco field had been wrested from Islamic State (IS) last September by Kurdish-led troops -- with the help of U.S. Special Forces who have been stationed in the area since then. It's a confusing story, but it says a lot about the increasingly bewildering and dangerous state of affairs in the Syrian war. The advance on the Conoco field, during which around 100 of the attackers are thought to have lost their lives in the American airstrikes, is just one of several clashes between military forces in the country. Indeed, Syria has become a battleground for global and regional powers -- including the United States, Russia, Turkey, Iran and Israel -- who are using the country as a venue for the pursuit of their own interests. The danger of an unintended clash has become extreme. And the conflict has become even more difficult for outsiders to understand.The various international parties to this war have all, almost simultaneously, launched massive attacks in the past few weeks. For much of the last 28 days, the Turkish army has been attacking the Kurdish militia YPG in the northern Syrian city of Afrin. And the Israeli air force launched a wave of airstrikes, which, it says, destroyed half of all Syrian anti-aircraft capability, after one of its warplanes had been shot down during a response to an Iranian drone incursion on Israeli airspace. Then there was this mysterious clash near the natural gas field, which some reports have depicted as the deadliest encounter between Russian and American troops since the end of the Cold War. Russian mercenaries were reportedly found among the dead, with some sources claiming that up to 200 Russians lost their lives. Local sources from the main military hospital in Deir ez-Zor indicate the death toll was likely between 10 and 20.
Iran, Deeply Embedded in Syria, Expands ‘Axis of Resistance’ - NYT — (maps) When an Iranian drone flew into Israeli airspace this month, it set off a rapid series of strikes and counterstrikes that deepened fears over whether a new, catastrophic war was brewing in the Middle East.That flare-up ended quickly, if violently, with the drone destroyed and an Israeli jet downed after bombing sites in Syria. But the day of fighting drew new attention to how deeply Iran has embedded itself in Syria, redrawing the strategic map of the region.Tactical advisers from Iran’s Islamic Revolutionary Guards Corps are deployed at military bases across Syria. Its commanders regularly show up at the front lines to lead battles. Iran has built and continues to back powerful militias with thousands of fighters it has trained in Syria. And it has brought in new technologies, like drones, to spy on enemies and perhaps to attack them from the sky.Both Israeli officials and Israel’s enemies say that any new conflict between Israel and Iran, or any of its allies, could mobilize Iran’s expanding network of militant proxies in multiple countries, what Iran refers to as “the axis of resistance.” “If there is a war, it will be regional,” said Kamel Wazne, the founder of the Center for American Strategic Studies, in Beirut, who studies the policies of the United States and Iran in the Middle East. “Any confrontation will be with the whole resistance front against Israel and its backers.”
Kurdish Fighters Strike Deal With Syrian Army To Drive Turks Out - Confirming that the "enemy of my enemy is my friend", YPG Kurdish fighters in north-western Syria - who as a reminder are backed by the US, the country which for 7 years has waged a proxy war to overthrow president Bashar al Assad - have struck a deal with the Russia-backed Assad regime for Syrian forces to enter the Afrin region and repel a Turkish offensive which began last month.Badran Jia Kurd, an advisor to the Kurdish-led administration in northern Syria told Reuters that Syrian troops will deploy along several border positions and could enter the region within the next two days: "we can cooperate with any side that lends us a helping hand in light of the barbaric crimes and the international silence," Jia Kurd said. Meanwhile, a conflicting report from a senior Kurdish official comes from YPG representative Brusk Hasake in Afrin, who told Sputnik News "We have repeatedly said that Syrian Army has not entered [and] will not enter Afrin. If there is an agreement we will make a statement [on it]." As we reported at the time, Turkish ground forces crossed the Syrian border and pushed into northern Syria’s Afrin province on January 20, after Ankara launched artillery and air strikes on a U.S.-backed Kurdish militia it aims to sweep from its border as part of "Operation Olive Branch." Senior Kurdish official Badran Jia Kurd told Reuters that Syrian government forces could enter the Afrin region within days to repel the Turks, while Syrian state TV reports that Regime forces will enter "within hours."
Syria’s Assad to deploy troops to help Kurdish fighters battling Turkish forces in Afrin -- The conflict in Syria may escalate significantly after the Assad regime declared that it will send troops to help Kurdish fighters defending the town of Afrin against Turkish forces. The deployment, which may also include Iranian-controlled militiamen, will take place, said Damascus, after an agreement was reached with the People’s Protection Units (YPG) group, which has set up a Kurdish enclave across the Turkish border. “Popular forces will arrive in Afrin within a few hours to support its people’s stand against the Turkish regime’s attack on the area and its people,” announced Sana, the Syrian state news agency. The forces, continued Sana, will position themselves at the frontier – a move that opens up the possibility of direct clashes with the Turks and allied Syrian Arab militias. The reference to “popular forces” indicate that the initial units may not be regular Syrian army but paramilitaries composed of, among others, Shia Afghans recruited in Iran, and the Shabiha – the militia of Syria’s ruling Alawite community. Turkish foreign minister Mevlut Cavusoglu said in response to the Syrian action: “If they [the Syrians] are entering Afrin to protect YPG/PKK, nobody can stop the Turkish army.” However, he added that “there will be no problem” if the regime forces were being sent to control the Kurds. “We have always expressed our support for Syria’s territorial integrity. We are one of the countries with the utmost support for it,” he insisted. Nuri Mahmoud, a spokesman for the YPG, also spoke of “preserving the unity of Syria”. He said: “We are calling on the Syrian army to protect Afrin because we would love to preserve a unified Syria. Syrian soldiers have not arrived yet, but they will.”
Syrian conflict further escalates as pro-Syrian forces enter Afrin --With the entry of a convoy of militias backing the government of President Bashar al-Assad into the Syrian canton of Afrin on Tuesday and Turkish troops responding with heavy artillery bombardment, the danger of a direct military confrontation between Turkish and Syrian troops has increased.It opens the door to a further escalation in the civil war in Syria, where Turkish and Syrian armies, Iran-linked militias backing the Damascus government, Russian and US troops, and several proxy forces, including Kurdish nationalists and several Islamic groups, are present.According to Reuters, the pro-government forces were welcomed by the Kurdish People Protection Units (YPG), which have set up three autonomous cantons in northern Syria, including Afrin, since the onset of the Syrian conflict in 2011. Ankara regards this as a threat because of the links of the YPG to the Kurdistan Workers Party (PKK), which has been engaged in a guerilla war inside Turkey for three decades.On January 20, Turkey launched its Operation Olive Branch to clear YPG militants from Afrin. According to Turkish officials, this operation has cost the lives of 1,651 Kurdish fighters and 32 Turkish troops, while 7 Turkish civilians were killed and 125 wounded in cross-border attacks launched by the YPG. With its operation Euphrates Shield, the Turkish army began direct intervention in northern Syria in August 2016 to stop the YPG linking Afrin along the Turkish-Syrian border to other largely Kurdish-populated territories in northeastern Syria.Speaking to the parliamentary group of his ruling Justice and Development Party (AKP) earlier on Tuesday, Turkish President Recep Tayyip Erdogan said that Ankara had worked with Russia to prevent any deployment by pro-Syrian government forces. “Preparations in the field take some time. In the coming days we will lay siege to Afrin city. It’s very important that every place we go remains secure,” he said. “Thanks to the siege, the YPG will have no room to bargain with the Syrian regime.” In an attempt to belittle the growing danger of escalation, Erdogan stated later in the day that the issue of the entrance of the pro-Damascus militia in Afrin was “closed for now.” At a press conference with his Macedonian counterpart Gjorge Ivanov, he said: “Yesterday, we agreed on these issues in talks with Putin and Rouhani. Unfortunately, you know, these kinds of terrorist organisations have taken the wrong step with the decision.” On Monday, Erdogan had discussed the issue with Russian President Vladimir Putin and Iranian President Hassan Rouhani in separate telephone conversations.
It's not a war. It's a massacre': scores killed in Syrian Enclave -- Almost 200 civilians have been killed in dozens of airstrikes and shelling by forces loyal to Syria’s Bashar al-Assad in eastern Ghouta over two days of “hysterical violence”, which has led to warnings of a humanitarian catastrophe that could eclipse past atrocities in the seven-year war. The surge in the killing in the besieged region came amid reports of an impending regime incursion into the area outside Damascus, which is home to 400,000 civilians. More than 700 people have been killed in three months, according to local counts, not including the deaths in the last week. Amnesty International said “flagrant war crimes” were being committed in eastern Ghouta on an “epic scale.” Diana Semaan, the charity’s Syria researcher, said: “People have not only been suffering a cruel siege for the past six years, they are now trapped in a daily barrage of attacks that are deliberately killing and maiming them, and that constitute flagrant war crimes.” Seven hospitals have also been bombed since Monday morning in eastern Ghouta, which was once the breadbasket of Damascus but has been under siege for years by the Assad government and subjected to devastating chemical attacks. Two hospitals suspended operations and one has been put out of service. “We are standing before the massacre of the 21st century,” said a doctor in eastern Ghouta. “If the massacre of the 1990s was Srebrenica, and the massacres of the 1980s were Halabja and Sabra and Shatila, then eastern Ghouta is the massacre of this century right now.”
Syrian government offensive prompts calls for intensified US military intervention --Syrian government forces have launched an assault on the enclave of eastern Ghouta over recent days with the aim of recapturing it from Islamist rebels. US media outlets have seized on the escalation of violence to legitimize and call for the expansion of Washington’s illegal military intervention, which is aimed at toppling Syrian President Bashar al-Assad and installing a US puppet regime in Damascus.Syrian aircraft, backed by Russian planes, have conducted repeated air strikes on the area over recent days. According to a report by the British-based Syrian Observatory for Human Rights, upwards of 270 civilians, including more than 60 children, have allegedly been killed. The strikes, which have included the dropping of barrel bombs, have damaged hospitals and other critical infrastructure. Doctors Without Borders said that 13 of its facilities have been hit.Eastern Ghouta has been used as a military base by Islamist groups throughout the conflict. They regularly shell government-controlled districts in Damascus and have continued to do so during the latest offensive, killing at least 12 and injuring dozens more on Tuesday alone. Human rights groups such as Amnesty International issued statements condemning the civilian deaths and appealing for a ceasefire. United Nations officials described living conditions in Ghouta, where only one aid truck has arrived over the past three months, as “hellish.” With its trademark moral double standards and outright hypocrisy, the corporate-controlled media in the US has provided saturation coverage of the government offensive. The transparent aim is to whip up public support for a catastrophic escalation of the Syrian war that could put the lives of millions of people at risk.
Hezbollah Leader Threatens "We Will Open Fire" On Disputed Israeli Offshore Oil & Gas Operations - During a televised address in Beirut on Friday Hezbollah Secretary General Sayyed Hassan Nasrallah once again warned Israel to back off its claims over disputed oil and gas field just off the southern Lebanese coast, threatening that Hezbollah could "disable [Israel’s offshore oil installations] within hours." "If you prevent us, we prevent you; if you open fire at us, we will open fire," Nasrallah threatened. The dispute over the eastern Mediterranean gas field goes back to January 2017, but blew up starting in late January of this year as it has been put up for tender by Lebanon and is expected to be developed by an international consortium of energy companies. However, as we reported at the time Israel has aggressively pushed for major sectors of the field to be internationally recognized as lying within its rightful territorial waters, going so far as to warn "respectable" companies from participating in the tender, which would be a "major mistake". Israeli Defense Minister Avigdor Lieberman said in late January, "They [Lebanon] are announcing a tender on the gas field, including Block 9, which is ours by any definition," and Lebanese actions "very, very challenging and provocative conduct here." Though Israel and Lebanon have remained technically at war after the last major Israeli invasion in 2006, Lebanon has moved forward with the exploration without hesitation, and held a signing ceremony with three oil companies attended by President Aoun over a week ago. The companies are Italy’s Eni, France’s Total and Russia’s Novatek, according to the AP. Lebanon’s Energy Minister Cesar Abi Khalil told reporters at the signing ceremony that there is no reason "that they should not speed the process and they should start right away." Meanwhile Nasrallah's Friday speech made the gas dispute the central theme, and even warned Israel's American backers to not intervene. Appealing directly to Israeli leadership, the Hezbollah leader said, "If you prevent us, we prevent you; if you open fire at us, we will open fire."
Netanyahu says Israel could act against Iran's 'empire' (Reuters) - Prime Minister Benjamin Netanyahu said on Sunday that Israel could act against Iran itself, not just its allies in the Middle East, after border incidents in Syria brought the Middle East foes closer to direct confrontation. Iran mocked Netanyahu’s tough words, saying Israel’s reputation for “invincibility” had crumbled after one of its jets was shot down following a bombing run in Syria. In his first address to the annual Munich Security Conference, which draws security and defense officials and diplomats from across Europe and the United States, Netanyahu held up a piece of what he said was an Iranian drone that flew into Israeli airspace this month. “Israel will not allow the regime to put a noose of terror around our neck,” he said. “We will act if necessary not just against Iran’s proxies but against Iran itself.” For his part, Iran’s Foreign Minister, Mohammad Javad Zarif, called Netanyahu’s presentation “a cartoonish circus, which does not even deserve a response”. “What has happened in the past several days is the so-called invincibility (of Israel) has crumbled,” Zarif, who addressed the conference hours after Netanyahu, said, referring to the downing of the Israeli F-16, which crashed in northern Israel after a strike on Syrian air defenses. “Once the Syrians have the guts to down one of its planes it’s as if a disaster has happened,” Zarif said, accusing Israel of using “aggression as a policy against its neighbors” by regularly carrying out incursions into Syria and Lebanon. Israel has accused Tehran of seeking a permanent military foothold in Syria, where Iranian-backed forces support Syrian President Bashar al-Assad in civil war entering its eighth year. Netanyahu said that as the Islamic State militant group has lost ground, Iran and its allies were surging into territory, “trying to establish this continuous empire surrounding the Middle East from the south in Yemen but also trying to create a land bridge from Iran to Iraq, Syria, Lebanon and Gaza.”
The last days of Netanyahu | The Times of Israel - By now, the word “earthquake” has become so overused in describing the political scandals surrounding Prime Minister Benjamin Netanyahu that it’s hard for one to distinguish between a baby tremor being blown out of proportion, or actually an earth-shattering temblor with a tsunami roaring behind it. If papers can be believed, the one that struck Tuesday is The Big One, and their pages are filled with almost nothing else other than the news that Communications Ministry head Shlomo Filber is becoming or has become a state witness. (Never mind the fact that there is not a single source for the news, which doesn’t mean it’s not true, but that’s not quite how journalism is supposed to be done.) Piling on top of that is a fresh scandal in which an adviser for the Netanyahu family is alleged to have tried to bribe a judge to get the prime minister’s wife out of her own legal mess, all of it swirling into a morass that will leave Netanyahu’s term in rubble in the near future, according to the pundits. Yedioth Ahronoth says Filber’s testimony “is liable to be more dramatic than any others against Netanyahu” and Haaretz puts in its headline that Filber “will admit that the prime minister ordered to give favors to Bezeq.”Even Netanyahu-backing Israel Hayom plays up the story, though it seems to take aim at Filber’s trustworthiness, noting in its lead that he turned stoolie “after he claimed time after time that he did nothing wrong during his time running the Communications Ministry.”The real stars of Wednesday’s papers, though, are the pundits, who let loose with a furious barrage of columns predicting the imminent downfall of Netanyahu, taking precedence over even the news, and noting that there seems no end in sight to the pileup against the prime minister.“It’s over,” writes right-wing columnist Hanoch Daum in Yedioth, a sign that even many of Netanyahu’s backers are abandoning him. “How exactly it will end isn’t clear. The specific date his term will end is not certain, but those are just details … Maybe it will take months or a year, maybe it will be elegant or maybe degrading, maybe it will be a negotiated exit and maybe he’ll go to jail, maybe it will be bribery and maybe breach of trust, maybe he’ll do it himself and maybe it will take 60 state witnesses, but there’s really no point in putting too much energy into these questions for one reason: the party is over.”
China Steps Into The Middle East Maelstrom - The Middle East has a knack for sucking external powers into its conflicts. China’s ventures into the region have shown how difficult it is to maintain its principle of non-interference in the internal affairs of other states. China’s abandonment of non-interference is manifested by its (largely ineffective) efforts to mediate conflicts in South Sudan, Syria and Afghanistan as well as between Israel and Palestine and even between Saudi Arabia and Iran. It is even more evident in China’s trashing of its vow not to establish foreign military bases, which became apparent when it established a naval base in Djibouti and when reports surfaced that it intends to use Pakistan’s deep sea port of Gwadar as a military facility.This contradiction between China’s policy on the ground and its long-standing non-interventionist foreign policy principles means that Beijing often struggles to meet the expectations of Middle Eastern states. It also means that China risks tying itself up in political knots in countries such as Pakistan, which is home to the crown jewel of its Belt and Road Initiative — the China–Pakistan Economic Corridor (CPEC).Middle Eastern autocrats have tried to embrace the Chinese model of economic liberalism coupled with tight political control. They see China’s declared principle of non-interference in the affairs of others for what it is: support for authoritarian rule. The principle of this policy is in effect the same as the decades-old US policy of opting for stability over democracy in the Middle East.It is now a risky policy for the United States and China to engage in given the region’s post-Arab Spring history with brutal and often violent transitions. If anything, instead of having been ‘stabilised’ by US and Chinese policies, the region is still at the beginning of a transition process that could take up to a quarter of a century to resolve.There is no guarantee that autocrats will emerge as the winners. China currently appears to have the upper hand against the United States for influence across the greater Middle East, but Chinese policies threaten to make that advantage short-term at best.
Chinese Rainbow 4 drones in use by foreign powers have 96pc strike rate in combat situations, paper says | South China Morning Post: China has exported more than 30 Rainbow 4 (CH-4) military drones since the vehicles were introduced in late 2014, according to information contained in a submission paper for a domestic science award. Foreign buyers of the high-performance unmanned aerial vehicles included Saudi Arabia and Iraq, while “about 10” other nations were discussing possible deals, the document said. The Rainbow series of UAVs, which comprises five models, was designed and produced by the China Aerospace Science and Technology Corporation, the company behind the country’s space programme. The latest model, the Rainbow 5, went into commercial production in July. The CH-4 was developed as the People’s Liberation Army’s answer to the MQ-9 Reaper, a hunter-killer drone mainly used by the United States for reconnaissance and high-precision air strikes. The sales information was contained in a paper submitted by the Chinese Society of Aeronautics and Astronautics as part of its application for a State Scientific and Technological Progress Award, one of the country’s most prestigious science prizes. According to the document, the value of the export deals was US$700 million. While it did not elaborate, this figure is likely to include various aftersales and service fees, as the actual cost price for a single Rainbow 4 drone is about US$4 million. The paper said that the exported drones had been used for counterterrorism and border inspection missions, and had accumulated 10,000 flight hours over 1,000 sorties. They had also fired more than 400 missiles and had an accuracy of 96 per cent in combat, it said.
China's "AIG" Moment Arrives: Beijing Bails Out "Systemically Important" Anbang, Chairman Removed - A day after banning VIX, it appears China has finally reached its "Minsky Moment," or in the case of echoing America's demise, its "AIG Moment."According to the China Insurance Regulatory Commission website, China regulators to take control of Anbang Insurance from Feb. 23, 2018 to Feb. 22, 2019.Additionally, former Chairman Wu Xiaohui (who, as a reminder, is married to Deng Xiaoping's granddaughter, and was in talks with Jared Kushner for stake in 666 Fifth Ave) will be removed and prosecuted for alleged economic crime. China’s insurance regulator said Anbang violated insurance rules in fund use, according to the statement. “In view of the fact that Anbang Group acts in violation of the provisions of the Insurance Law and may seriously endanger the solvency of the company, in order to maintain the normal operation of the Anbang Group and protect the legitimate rights and interests of insurance consumers, CIRC decided in accordance with Article 144 of the Insurance Law of the People’s Republic of China to take over Anbang Group,” stated the announcement. The conglomerate has almost 2 trillion yuan ($316 billion) in assets and owns businesses spanning life and non-life insurance, asset management, financial leasing and banking, according to its website.
Maximizing returns: Chinese steel mills to ramp up output before curbs bite again (Reuters) - China’s steel producers are eager to unleash their mills’ capacity when this winter’s output curbs end next month, hoping for a repeat of last year’s record profits based on high margins and less competition as outdated plants were closed. China shut down up to half of its steel production this winter in 28 cities in the country’s manufacturing heartland in the north as part of an anti-pollution campaign. With margins still encouraging full output, China’s pent-up steel production should erupt when the curbs expire on March 15. Because of the curbs, China’s average daily steel output in December was the lowest in a year at 2.16 million tonnes, government data showed last month. Average daily output may rise to about 2.5 million tonnes if the mills quickly boost production when the restrictions are lifted, Wang Yingsheng, vice secretary-general of the China Iron and Steel Association told an industry conference in late January. With the government likely to re-impose the limits next winter, northern Chinese mills will have only about eight months to run at full speed, so plants are stocking up on raw materials to maximize production while the market conditions remain strong. “I think there could be restrictions again on mills in north China this year and they could increase output before the restrictions,” said a senior manager at a steel mill in southern China. “If the market’s good, every mill will try to run at full capacity in order to make more profit.”
China’s got a trade problem that can’t be solved by Belt and Road | South China Morning Post: You may recall a photo we published a while back of a group of cheerleaders waving China flags as a goods train pulled out of the station in London, destined for Beijing with British export goods, the Belt and Road in action. I laughed. I am sure I had company. Any good-sized container ship carries up to 100 times what such a train can carry to China and does it more efficiently and at much lower cost than the easily overcrowded track and different rail gauges will allow any train to do it on the journey. That’s Belt and Road for you, a storm of hot air that sycophants emit as evidence of their eagerness to obey commands from Beijing, a reactive measure started only because the national authorities were annoyed that a multinational trade pact proposed by the United States would exclude China. Well, if you exclude us, we’ll exclude you, they said. We’ll do business with Uganda and the stans instead, so there. And all I can say for this is that it has wasted much less money than it has wasted breath so far and may yet be wound down before real money is lost. But if the European Union is now to follow the recent US lead and seriously propose much tighter restrictions on imports from China, here are two charts to put the unimportance of Mauritius and Kyrgyzstan into perspective.
Japan, U.S., Australia and India look to establish alternative to China’s Belt and Road Initiative --– Japan, Australia, the United States and India are talking about establishing a joint regional infrastructure project as an alternative to China’s multibillion-dollar Belt and Road Initiative in an attempt to counter Beijing’s spreading influence, the Australian Financial Review reported Monday, citing a senior U.S. official. In an interview Monday, Australian Foreign Minister Julie Bishop confirmed that senior officials from the four countries are discussing establishing a joint infrastructure plan. The officials have discussed “a range of opportunities and challenges,” Bishop told Sky News. “There is an enormous need for infrastructure, particularly in our region.” The unnamed official was quoted as saying the plan involving the four regional partners was still “nascent” and “won’t be ripe enough to be announced” during Australian Prime Minister Turnbull’s visit to the United States later this week. The official said, however, that the project was on the agenda for Turnbull’s talks with U.S. President Donald Trump during that trip and was being seriously discussed. The source added that the preferred terminology was to call the plan an “alternative” to China’s Belt and Road Initiative, rather than a “rival.” “No one is saying China should not build infrastructure,” the official was quoted as saying. “China might build a port which, on its own is not economically viable. We could make it economically viable by building a road or rail line linking that port.”
Indian deal on key Iranian port a potential check on China’s regional ambitions | South China Morning Post: India has taken over a strategically important port in Iran, giving it a potential bulwark against China’s growing influence in the region and access to Afghanistan and Europe that bypasses Pakistan. India signed the lease on Saturday for Chabahar port in eastern Iran about 90km west of the Pakistani port of Gwadar, which is being developed by China. Gwadar is the centrepiece of a massive Chinese infrastructure programme in Pakistan and is expected to be the site of China’s second overseas military base, according to a US Department of Defence report last year. India and Iran signed the 18-month agreement for the first phase of the Chabahar port building after talks between Iranian President Hassan Rowhani and Indian Prime Minister Narendra Modi in New Delhi. Once completed, the port will open up a new sea-rail transport route between India, Iran and Afghanistan, bypassing rival and neighbour Pakistan. Indian officials said they hoped the route would boost annual trade with Afghanistan from US$700 million to US$1 billion in three years. New Delhi sent shipments of wheat aid to Afghanistan through Chabahar last year. The route will run roughly parallel with the US$62 billion China-Pakistan Economic Corridor that links Xinjiang in China to Gwadar, which China has leased for 40 years. The announcement from New Delhi comes as ties between India and China have been strained by territorial disputes and India’s suspicions that China is encircling India through investment in its neighbours under the “Belt and Road Initiative”.
Exchange Glitch Allows Traders To "Buy" $20 Trillion In Bitcoin for Free - One month after Japan was the location of the biggest ever cyber hack, when over $400 million worth ot NEM coins was stolen from the Tokyo-based Coincheck exchange, overnight another major technical error at a rival Japanese cryptocurrency exchange led to further questions about the safety and security of crypto investments.As a result of a "system glitch" at the Osaka-based Zaif cryptocurrency exchange, some customers were able to claim digital tokens for $0. The Asahi Shimbun reports that glitch - which lasted for 18 minutes from 5:40 p.m. to 5:58 p.m. on Feb. 16 - affected Zaif’s price calculation system, enabling seven customers to buy cryptocurrencies for free, with one client "purchasing" Bitcoin valued at 2.2 quadrillion yen ($20 trillion) and then attempting to cash in on it.The glitch was rectified by 7:34 p.m. the same day, and while the exchange voided the trades after discovering the error, it was still trying to resolve the issue with one customer who tried to transfer the "deeply discounted" bitcoins from the exchange, a spokesman told Reuters. The customer in question was quick to realize there was a glitch and immediately tried to cash out the newly "purchased" Bitcoins: this was noticed when an abnormally high quantity of the cryptocurrency appeared for sale on Zaif, and word soon spread on the Internet that around 2.2-quadrillion yen worth of Bitcoin was on sale there. Needless to say, such a sale would have been problematic as all bitcoins in circulation are worth just $187 billion.
A Massive U.S. Drone Base Could Destabilize Niger — and May Even Be Illegal Under Its Constitution - Late in the morning of October 4 last year, a convoy of Nigerien and American special forces soldiers in eight vehicles left the village of Tongo Tongo. As they made their way between mud-brick houses with thatched roofs, they were attacked from one side by dozens of militants, if not hundreds. By the time the fighting was over, five Nigeriens and four Americans were killed, their bodies left naked in the bush after the militants took their uniforms. The news went straight to the front pages in the United States and sparked a conflict between the family of one of the soldiers and President Donald Trump, after the president made insensitive remarks during a condolence call to the soldier’s widow. But the story also spread like wildfire throughout Niger, where the big news wasn’t so much that American soldiers had been killed, but that Americans soldiers were fighting in the country in the first place. “I was surprised to learn that Americans had died in the Tongo Tongo attack,” Soumana Sanda, the leader of an opposition party in the Nigerien Parliament and taekwondo champion, told me in an interview in his pristine and sparsely decorated office in Niamey, the country’s quiet capital on the banks of the Niger River. “That was the moment I found out, as a Nigerien, as a member of parliament, as a representative of the people, that there is indeed (an American) base with ground operations.” In fact, U.S. Special Operations forces have been in Niger since at least 2013 and are stationed around the country on forward operating bases with elite Nigerien soldiers. What happened in Tongo Tongo is just a taste of the potential friction and instability to come, because the pièce de resistance of American military engagement in Niger is a $110 million drone base the U.S. is building about 450 miles northeast of Niamey in Agadez, a city that for centuries has served as a trade hub on the southern edge of the Sahara Desert, not far from Mali, Algeria, Libya and Chad. In January, I hopped aboard an aging plane that followed a roundabout route to one of America’s largest-ever military investments in Africa, its latest battleground in an opaque, expensive, and counterintuitive war on the continent.
South Africa's Brand New President Wants To Confiscate Land From White Farmers - If you’ve been following much international news, you’ve probably heard that, after literally years of scandal, abuse, and incompetence, South Africa’s president Jacob Zuma was finally forced to resign last week.This is a big deal for South Africa.The country has been suffering for nearly a decade under Zuma’s corruption.And people are certainly hoping that the new President, Cyril Ramaphosa, will represent a positive, new chapter for South Africa.Yesterday Ramaphosa addressed the nation’s parliament in Cape Town and made clear that his priority is to heal the divisions and injustice of the past, going all the way back to the original European colonists in the 1600s taking land from the indigenous tribes. Ramaphosa called this “original sin”, and stated that he wants to see “the return of the land to the people from whom it was taken… to heal the divisions of the past.”How does he plan on doing that?Confiscation. Specifically– confiscation without compensation.“The expropriation of land without compensation is envisaged as one of the measures that we will use to accelerate redistribution of land to black South Africans.”Ramaphosa minced no words: he’s talking about taking land from white farmers and giving it to black South Africans. Astonishingly, he followed up that statement by saying, “We will handle it in a way that is not going to damage our economy. . .” Wow, what a relief. For a minute it sounded like South Africa wants to do what Zimbabwe did several years ago. Oh wait a minute. That’s exactly what Zimbabwe did. Seeking to correct similar colonial and Apartheid-era injustices in his country, Zimbabwe’s president Robert Mugabe initiated a land redistribution program in 1999-2000. Thousands of white-owned farms were confiscated by the government, and the farmers were forced out. . Zimbabwe’s world-class farmers were major food exporters to the rest of the region. But within a few years of Mugabe’s land distribution, food production plummeted. Without its professional, experienced farmers, the nation went from being an agricultural export powerhouse to having to rely on handouts from the United Nations’ World Food Programme.
Maduro reaches out to Trump on Twitter - Venezuela's President Nicolas Maduro took to the US president's favorite medium, Twitter, on Monday to ask him to start a dialogue between the two countries. "@RealDonaldTrump campaigned pledging to promote non-interference in the domestic affairs of other countries. It's time to keep your pledge," Maduro wrote, encouraging Trump to hold a meeting in Washington or Caracas. Maduro and senior government officials, including Attorney General Tarek William Saab, have alleged that the US is orchestrating an alleged plan for a "military invasion" of Venezuela from neighboring Colombia. "The military bombing, the military invasion, the blood and fire occupation of a peaceful country like Venezuela are being planned," Saab charged last week, an allegation Colombia has flatly denied. On a recent tour of Latin America, top US diplomat Rex Tillerson floated the idea of slapping sanctions on Venezuela's oil exports, the source of 96 percent of the country's revenues. Tillerson met in Bogota with Colombian President Juan Manuel Santos. The United States has already imposed financial sanctions on Venezuela, forbidding its citizens and companies to negotiate debt issued by the Maduro government and the state oil company PDVSA. Maduro has assured that he will travel to Lima in April for the Summit of the Americas, which Trump will attend.
There Is No Humanitarian Crisis in Venezuela, Says UN Expert - Alfred de Zayas, the independent expert of the United Nations (UN) on the Promotion of an International Democratic and Equitable Order, concluded after his visit to Venezuela that this country does not suffer a humanitarian crisis, unlike countries in Africa or Asia where there are wars and famine. "I have compared the statistics of Venezuela with that of other countries and there is no humanitarian crisis, of course there is scarcity, anxiety and shortages but who has worked for decades for the United Nations and knows the situation of countries in Asia, Africa and some of America, knows that the situation in Venezuela is not a humanitarian crisis, "Zayas said in an interview for teleSUR.The independent expert arrived in Venezuela on November 27 and held meetings with government officials, victims of human rights violations and the violence of the so-called guarimbas (violent protests by the opposition) in order to learn about the political, economic and social situation. social of the country. He explained that although many think that the country is on the verge of disaster, as media outlets do, "Venezuela suffers an economic war, a financial blockade, suffers a high level of smuggling and, of course, needs international solidarity to solve these problems. " He also believes that the international community should work in solidarity with Venezuela to lift the sanctions, "because these are the ones that worsen the shortage of food and medicine, it is unbearable to think that having a malaria crisis in the Venezuelan Amazon, Colombia has blocked the sale of medicines and Venezuela had to obtain it in India.
Canadians Have $230 Billion In Home Equity Loans – Raising Red Flags In Ottawa - Canadians are borrowing money against their homes in record amounts – a situation that is raising red flags among politicians and policy setters in Ottawa. Balances on Home Equity Lines of Credit (HELOCs) rose 7.2% in December 2017 from a year earlier, the fastest annual growth rate since 2012, and hitting a record amount of $230 billion, according to data released by the Office of the Superintendent of Financial Institutions (OSFI). All other types of consumer debt such as personal loans, credit cards, car loans and overdraft limits climbed just 3.2% over the same period, less than half the pace of HELOC growth, the same data showed. Canadians can tap HELOCs for up to 65% of the value of their homes, and the funds are most commonly used for renovations, investing and consolidating other forms of debt, according to a June 2017 report by the Financial Consumer Agency of Canada. “Houses are becoming piggy banks,” said Paul Gulberg, a Bloomberg Intelligence analyst following the release of the data from OSFI. “It’s either greed based or need based,” he added. The growth in the use of HELOCs raises red flags for policy makers in Ottawa. It’s a type of borrowing that may contribute to increased household vulnerabilities because it typically doesn’t require the principal to be repaid on a fixed schedule, the Bank of Canada said in its most recent financial system review. About 40% of HELOC borrowers don’t regularly pay down the principal on the debt. Of total loans secured to individuals for non-business purposes, those secured by residential property represent about 46%, the OSFI data shows. Compared to other loan types, such as car loans and credit cards, rates on HELOCs are typically cheaper, making them more attractive to consumers.
Canadians can't stop using their homes as piggy banks - Canadians are borrowing against their houses at the fastest pace in more than five years, as home equity lines of credit emerge as a preferred means of accessing funds.Balances of non-mortgage loans to individuals for non-business purposes, secured by residential properties, a category that includes HELOCs, jumped 7.2% in December from a year earlier, the fastest annual growth since 2012, reaching a record C$230 billion ($184 billion), according to data published on the website of the Office of the Superintendent of Financial Institutions.Borrowers can tap HELOCs for up to 65% of the value of their homes, and the funds are most commonly used for making renovations, investing and consolidating debt, according to a June 2017 report by the Financial Consumer Agency of Canada. "Houses are becoming piggy banks," said Paul Gulberg, a Bloomberg Intelligence analyst. It's "either greed based or need based." HELOCs can also be a red flag for policymakers.It's a type of borrowing that may contribute to increased household vulnerabilities because it typically doesn't require the principal to be repaid on a fixed schedule, the Bank of Canada said in its most recent financial system review. About 40% of HELOC borrowers don't regularly pay down the principal.Of total non-mortgage loans secured to individuals for non-business purposes, those secured by residential property represent about 46%, the data show. Compared to other loan types, such as auto loans and credit cards, rates on HELOCs are typically cheaper, making them more attractive to consumers. They also tend to be more sensitive to fluctuations in borrowing costs, because they’re usually tied to prime rates.
Liberals write off $200M in student loans feds will never collect – CBC - The federal government is writing off more than $200 million in outstanding student loan payments that officials will never be able to collect. Recently released spending documents show the government won't collect $203.5 million in debts from 34,240 students. It is the third time in the last four years that the government has had to write off outstanding student loans even as officials make concerted efforts to round up more money from borrowers.The government annually has to write off some of the $19 billion owing in student loans for a number of reasons: a debtor may file for bankruptcy, the debt itself passes a six-year legal limit on collection, or the debtor can't be found.The Liberals have looked to make it easier for graduates to pay off their loans — and for the government to collect the cash — by increasing the minimum annual income they have to earn before they are required to make debt payments.The limit is now set at $25,000. The most recent annual report on the Canada Student Loans Program said that in the 2014-2015 fiscal year, the government provided 489,000 full-time students with $2.7 billion in loans and a further $20.9 million in loans to 12,100 part-time students.Borrowers typically take between nine and 15 years to fully pay off their loan and the period usually overlaps with when Canadians are most likely to start a family.The Canadian Alliance of Student Associations called on the government late last month to also give new parents a break from student loan payments when they are on parental leave, even if they are receiving employment insurance benefits. Student groups have also asked the Liberals to make higher education more affordable, and have requested more financial help for Indigenous students.
Munich Conference: "For The First Time In Decades We Are Facing Threat Of Nuclear Conflict" - Over the past fifty years, the Munich Security Conference (MSC) has traditionally reflected the current state of world military affairs. Each February, more than 450 senior decision-makers from around the globe descend into Munich, Germany, to discuss current and future security challenges.And while there have been times in recent years when the MSC demonstrated signs of hope and optimism, none of that was evident this year. This year’s motto “To the Brink – and Back?”- which seems to be an accurate portrayal of the current geopolitical situations in most regions. After several days of senior decision-makers bickering back and forth, the negativity in the atmosphere only means one thing: A global conflict between nuclear superpowers is lingering.“I was hoping when I opened this conference on Friday that, in concluding the conference, I would be able to say we can delete the question mark. In other words: ‘We are back from the brink,'” former German diplomat Wolfgang Ischinger said in closing remarks of the MSC. “I’m actually not sure we can say that,” he added.The dangers of nuclear proliferation and talk of a “dire” global security situation dominated the security conference: from the ongoing war in eastern Ukraine, to U.S. allegations of Russia’s election-meddling, to territorial disputes between ex-Soviet republics, and even discussions about the escalating tensions between Israel and Iran: geopolitical doom and gloom was not short in all conversations during the meeting.And, in the latest escalation, Bloomberg reports that the most fiery subject of the conference were the tensions surrounding Russia and the U.S over nuclear arms controls.Addressing a conference hall in Munich packed with dignitaries, UN Secretary-General Antonio Guterres warned of the risks emanating from North Korea’s nuclear activities, which have ratcheted up tensions between Pyongyang and Washington."For the first time since the end of the Cold War, we are now facing a nuclear threat, a threat of a nuclear conflict," Guterres told the gathering in the southern Bavarian city.
Turkey Threatens To Invade Greece -Most of the areas within modern Greece's current borders were under the occupation of the Ottoman Empire from the mid-15th century until the Greek War of Independence in 1821 and the establishment of the modern Greek state in 1832. The islands, however, like the rest of Greece, are legally and historically Greek, as their names indicate. Turkey's ruling Justice and Development Party (AKP), however, and even much of the opposition seem intent on, if not obsessed with, invading and conquering these Greek islands, on the grounds that they are actually Turkish territory. Kemal Kılıçdaroğlu, the leader of the main Turkish opposition CHP party, stated that when he wins the election in 2019, he will "invade and take over 18 Greek islands in the Aegean Sea, just as former Turkish PM Bulent Ecevit invaded Cyprus in 1974." He said that there is "no document" proving that those islands belong to Greece. Meral Akşener, the head of the newly established opposition "Good Party," has also called for an invasion and conquest of the islands. "What is required must be done," she tweeted on January 13. The most garish muscle-flexing has come from Turkish President Recep Tayyip Erdoğan, of course, who seems emboldened by his military invasion of the Afrin region in northern Syria having gone virtually unchallenged. "We warn those who have crossed the line in the Aegean and Cyprus," Erdoğan declared, continuing: "Their courage persists only until they see our army, our ships and our planes... Whatever Afrin is to us, our rights in the Aegean and Cyprus are the same. Do not ever think that the natural gas exploration in the waters of Cyprus and the opportunistic attempts in the Aegean Sea drop off our radar. Our warships and air forces are keeping an eye on the area closely to intervene in every way when required."
German Political Landscape Crumbling as Merkel Coalition Forms - SPIEGEL ONLINE: Germany's big-tent parties have ensured political stability for decades. But they are rapidly losing power and influence. The Social Democrats are witnessing an open rebellion against party leadership while many conservatives are beginning to doubt Merkel's abilities. The conservative Christian Democrats are also seeing the authority of their once all-powerful chancellor being eroded, with discontent and the urge for change growing in the party base. Germany finds itself oscillating between a longing for stability and the desire for upheaval. Surveys show that support for both the CDU and the SPD has plunged, to the point that, were elections held today, it isn't even certain that a grand coalition would have a majority. DER SPIEGEL Support for the SPD and the conservatives is falling. Suddenly, upheaval is everywhere. Within the SPD, everyone seems to be fighting with everyone else, with a large number taking aim at acting Foreign Minister Sigmar Gabriel. Above all, the party base is in open revolt against the leadership. Within the Christian Democrats, meanwhile, Chancellor Merkel's authority is melting away. The Merkel era is drawing to a close and the upheavals caused by her efforts to modernize her party are now breaking into the open. The country is slipping into a crisis and Germany, the bastion of stability in Europe, is becoming politically unstable. And every month the country continues to be run by a provisional government is another month that Germany doesn't have a voice in Europe or the world. This is by no means purely a domestic development. The party system is currently being turn upside down across Western democracies. Owing to Germany's prosperity and the sedative power of its chancellor, it long appeared that Merkel had been spared by the international development. But the torturous wrangling to create a new government has now dashed that hope. In France, the two parties that once dominated the country now hold only just over a quarter of the seats in the national parliament. In Italy, the Five Star Movement, which doesn't seem to stand for much other than the desire for change and its loathing of the status quo and is led by a former TV comedian, appears to have strong chances of winning the election there in March.
Merkel-led coalition: Decisive times as SPD members vote on pact - Deutsche Welle -- The 463,723 party members of the Socila Democrats (SPD) have particularly important pieces of mail in their letterboxes — ballots asking them to decide on the coalition deal the SPD leadership hammered out with Chancellor Merkel's conservatives earlier this month. The SPD rank-and-file have until March 2 to submit their votes, and the result is expected to be announced soon thereafter. The vote is an all-or-nothing affair. If the SPD membership gives the thumbs up, Germany finally gets a new government — six months after the national election last September. If the members say no, the result will either be fresh elections or an uneasy attempt by Merkel to lead a minority government — in any case, further political uncertainty. Merkel's Christian Democratic Union (CDU) will convene for a party conference in Berlin on February 26, where delegates will be asked to approve the coalition. A clear majority for the deal is expected. Yet SPD approval is not a given. In the past, the SPD membership has approved deals with Merkel by wide margins, but this vote is likely to be very tight.
Merkel Is Forming A Coalition With The Wrong Party - The last time I looked at the miasma of German coalition talks the big takeaway was the mood turning against the Social Democrats (SPD).Today the latest polling confirms that the more Merkel tries to form a coalition with Martin Schultz and the SPD the more support the coalition loses.There have been two polls recently, one which grabbed headlines showing that anti-immigration, Eurosceptic Alternative for Germany (AfD) is now ahead of the SPD nationally, 16% to 15.5%. Another has AfD rising two points to 14%, though still four points behind the SPD.The takeaway from these polls is not whether AfD is or is not more popular than the SPD at this point. Coupling those results with the surprising rise of Angela Merkel’s Union party by two points in both polls a clear message from the German electorate emerges.They want a government formed because they are unaccustomed to being without one, but they don’t want another grand collation between Merkel and the SPD.That is the kind of formless, opinion-allergic government the German people are sick of. They had that for the past four years and all it got them was more subservience to both Brussels and Washington D.C.No, since Merkel has staunched the flow of immigrants into Germany – to help her re-election campaign – her leadership is, for now, acceptable to get things done. But, what the German people are telling everyone is that they want her to shift farther ‘right’ rather than left in order to appease the SPD.And that means a coalition with AfD, which, of course, is not possible with the current political leadership in Germany. And that’s why AfD continues to take a larger bite out of the electoral pie.
After Years of Crisis in Spain, Pensioners Next to Feel the Pain - Structural unemployment and falling wages, precarious jobs, an endless brain drain, a rapidly ageing population, and the government’s constant pilfering of the national pensions pot have all taken their toll on Spain’s social security system. As we warned last November, the country’s Social Security Reserve Fund, which was meant to serve as a nationwide nest egg to guarantee future pension payouts — given Spain’s burgeoning ranks of pensioners — has been bled virtually dry by the government.To avoid wiping out the fund altogether in 2017, the Spanish government extended a €10.1 billion interest-free loan to Spain’s social security system, which enabled it to pay out the two extra pension payments due in June and December. That way, only about €7.5 billion would be tapped from Spain’s public pension nest egg. Emptying the pot altogether last year would have been politically unpalatable, said El País. Instead, it will be emptied this year as the social security system racks up yet another massive annual shortfall. In 2016, the system registered its biggest deficit in its history (€18.1 billion), which was covered by the pension pot. In 2017, the deficit is estimated to be about €17 billion, according to the government. That’s roughly 1.5% of Spanish GDP. The deficit in 2018 is projected to be €18-20 billion.
Rising poverty gnaws at Italian social fabric as election nears (Reuters) - Italy holds national elections on March 4 and while much campaigning has focused on the divisive issue of immigration, pollsters say voters are most concerned about the economy, which has still not recovered from the 2008 financial crisis. The government argues that the worst is over, pointing to 14 straight quarters of economic growth, but many Italians have yet to feel the benefits of the upturn, helping to explain why the ruling centre-left Democratic Party is trailing in the polls. Italy’s economy is still six percent smaller than it was at the start of 2008, hobbled by a slew of old problems, such as a huge national debt mountain, a chronically slow justice system and stifling bureaucracy. By comparison, output across the 19-nation eurozone as a whole has grown five percent over the same 10-year period. This anaemic performance has pushed millions of Italians into poverty, stoking social discontent and fueling the rise of populist or anti-establishment parties, such as the far-right anti-immigrant League and the maverick 5-Star Movement. The 5-Star looks set to emerge as the largest party next month and says it will introduce a universal wage for the poor if it wins power. Other parties are also promising to unleash billions of euros of fresh spending to revive the economy -- money analysts say the country does not have. The number of Italians at risk of poverty has risen by more than 3 million since 2008, according to the Eurostat statistics agency, the largest increase seen in any EU nation. By contrast, 3.3 million Poles pulled clear of the poverty threshold. The number of Italians living in absolute poverty, defined as not having enough money to buy a basket of basic goods and services, rose to 4.7 million in 2016, according to the latest data from statistics office Istat, a three-fold increase in a decade.
Can a party founded by a comedian run a major European country? Italy may soon find out. - WaPo — Born on a comedian’s blog as an irreverent and profane call to arms against a corrupt and complacent political establishment, Italy’s Five Star Movement has long cherished its image as the ultimate renegade. But the outsiders could soon be marching in. With national elections only weeks away, Five Star consistently tops the polls. Its leaders, meanwhile, say they would consider teaming with rival parties to form a government — breaking their own long-held taboo. After nearly a decade of raging against the powerful, this Netizen band of rebels says it is ready to reign. The idea of a Five Star-led government is enough to send shivers down the spines of Italy’s political and financial establishment — and Europe’s, too. Given the party’s melange of ideas from right and left — including skepticism toward the euro, embrace of Russia and enthusiasm for Internet-enabled direct democracy — the euro zone’s third-largest economy would be in for a jolt if Five Star gets the chance to govern. Most analysts say that is possible but unlikely. Even if Five Star tops the March 4 vote, other parties are expected to team up to try to box the movement out of the government. That won’t be easy, however, given that the party’s share of the vote in pre-election polls hovers at nearly 30 percent — well ahead of any other in Italy’s fractured political landscape. Without Five Star involved, efforts to form a government could founder, with the deadlock ultimately ending in a rerun of the vote. The potential to disrupt Italian politics, either from within the government or from outside, is exactly what Five Star activists were seeking when the party got off the ground in 2009. An outgrowth of a blog penned by the bombastic comedian Beppe Grillo, Five Star tapped a rich vein of discontent in a country where politicians and corruption often have seemed inseparable, and where the economy had been ravaged by a global recession.
EU ignites Trump WAR: Brussels to slap trade sanctions on Harleys and Jack Daniels - BRUSSELS is gearing up for a bitter trade war with US and has pledged to fight fire with fire if Washington carries out its threat to introduce import barriers to steel and aluminium products from Europe. European Union trade officials have warned such a move would result in counter-tarrifs being slapped on exports from the US within days. They said iconic US products ranging from Harley-Davidson motorcycles to Jack Daniels whiskey would be targeted in any retaliatory strikes and that preparations for such a confrontation were in full swing.Analysts said the choice of products was significant as Harley-Davidson is based in Wisconsin, home state of Republican Speaker Paul Ryan, and Bourbon is mainly produced in Tennessee and Kentucky, home of Donald Trump supporter Mitch McConnell, who is the Senate Majority Leader. Officials in Brussels insist the list dates back to the last major commercial dispute when George W Bush was in the White House but acknowledged this had been recently adapted. The EU’s willingness and capability to react "immediately and adequately" in such a situation was made clear by European Commission President Jean-Claude Juncker last summer. A defensive backlash is allowed under World Trade Organisation (WTO) regulations although Brussels said it would also lodge an official complaint with officials from the global body. Steel and aluminium are particularly touchy subjects between the US, China and the EU because they are so closely linked to global over-capacity and prices are constantly under heavy pressure. The final decision on import tariffs lies with Mr Trump.
Macron launches campaign to privatise French railways - French President Emmanuel Macron’s government has begun a first series of talks on the French National Railways (SNCF) with management and the trade unions, a few days after Jean-Cyril Spinetta, a former CEO of Air France-KLM, delivered his report on the SNCF. The content and negotiating calendar are reportedly to be announced on February 26.Macron is moving to privatise the SNCF, citing a European directive mandating the opening of the French railways to private competition. It aims to destroy railworkers’ social rights—including a standard salary schedule, a retirement age of 52 for train drivers and 57 for other workers, and guaranteed lifetime employment—established after World War II.Spinetta submitted his 127-page report, commissioned by the government in October, on Thursday. While it claims to be modernising the SNCF in the interests of travelers, the report in fact calls for liberalising railway transport and transforming the SNCF into a private company ( soci é t é anonyme ), which has had disastrous consequences elsewhere in Europe. It would also allow the SNCF to hire large numbers of short-term contract or temporary labour. The report defends the decision to dismantle the public enterprise by claiming this is the only way to deal with the SNCF’s debts.It declares, “Within the framework of the law, it could be possible to end the hiring of workers with the [railworkers’] statute, while strictly preserving the individual rights of staff who still benefit from it. The new recruits could be hired…on the basis of contracts whose contents is still to be fully determined.” The report also proposes that the SNCF could “make use for two years of plans for voluntary departures.” The number of workers who would be expected to take a “voluntary” departure could be around 5,000. The report proposes to “concentrate rail transport on the areas where it is pertinent” and declares, “The decision to maintain lines inherited from a time when rail transport was the only means of transportation must be reconsidered.” To speak plainly, the state plans to shut down smaller, less profitable lines as well as many smaller train stations.
“Cash Must Not Be Made the Scapegoat” --The proposed EU-wide cash restrictions could come into effect as early as this year. But defenders of physical cash have an unexpected ally in their struggle: Yves Mersch, a member of the European Central Bank’s executive board. In a speech hosted by the Bundesbank last week, the Luxembourgian central banker exalted cash’s value as legal tender and heaped scorn on the oft-heard argument that its anonymity only helps criminals.“Protection of privacy matters to all of us. Privacy protects people from the risk of a surveillance state and thought police,” he told his audience. “No particular link can be established statistically between cash and criminal activities. The focus must be on the fight against crime. Cash must not be made the scapegoat.”One of the world’s biggest issuers of notes and coins, the Bundesbank was a fitting location for a speech on the virtues of physical money. In total, €592 billion of the €1.1 trillion of banknotes in circulation at the end of 2016 were issued by the Bundesbank.Judging by recent statements, the Bundesbank wants to preserve this arrangement. Bundesbank president Jens Weidmann, who is hotly tipped to replace Mario Draghi as ECB president in 2019, has warned that it would be “disastrous” if people started to believe cash would be abolished — an oblique reference to the risk of negative interest rates and the escalating war on cash triggering a run on cash. That didn’t stop five national governments — Cyprus, Bulgaria, Belgium, Portugal and Denmark — from approaching the ECB last year to consult on measures to limit the use of cash, according to Mersch. Meanwhile, Sweden is widely regarded as the most cashless society on the planet. “No cash accepted” signs are a common sight in shops and eateries as payments go digital and mobile, Bloomberg reports. A full 36% of the population never use cash, or just pay with it once or twice a year.
BoE’s Carney says Bitcoin has ‘pretty much failed’ as currency (Reuters) - Bitcoin has failed as a currency measured by standard benchmarks, and is neither a store of value nor a useful way to buy things, Bank of England Governor Mark Carney said on Monday. “It has pretty much failed thus far on ... the traditional aspects of money. It is not a store of value because it is all over the map. Nobody uses it as a medium of exchange,” Carney told students at London’s Regent’s University. But the crypto-currency’s underlying technology may still prove useful as a way to verify financial transactions in a decentralised way, he added in response to a question. The central bank governor also said that, to make Britain’s departure from the European Union in March 2019 as smooth as possible, British regulators intended to give financial institutions “the benefit of the doubt, beyond the last minute”. Sterling’s movements were largely driven by financial speculation over Brexit, and he said British and European officials were working hard to secure a transitional deal before the end of March. “Everyone is very focused on that. It obviously won’t be a hard, legally binding agreement. But I can tell you that if 28 leaders agree to something that has legal text associated with it, which will be part of the separation agreement, that should be good enough,” he said.
There can be no Brexit deal without Tory unity - In a hung parliament, recess takes on a particular importance for the government. It is a chance for ministers to travel, free from the fear that they might be called back for a crunch vote at any moment. Explaining to your European hosts, for instance, that you have to cancel all meetings with them and go home now, or else the government might fall, doesn’t send quite the right message. Helpful though it is, recess will get ministers only so far. Those doing the rounds of European capitals this week still don’t have a detailed Brexit position to sell to their counterparts. This is a problem. Next month’s European Council meeting is expected to set out the Commission’s mandate for the next stage of the negotiations, which will cover any UK-EU trade deal. Once these guidelines have been agreed, getting them changed will be nigh-on impossible. Yet still Theresa May doesn’t appear to be in a rush. Several members of the Brexit inner cabinet expected that their ‘away day’ — where they are supposed to thrash out the details of the UK’s negotiating position — would take place before parliament returns on Tuesday. But it isn’t going to happen until the end of next week. If the Brexit inner cabinet can come to an agreement then, which is far from certain, that will still need to be taken to the full cabinet before May publicly sets out the government’s view. Those close to May justify this timetable, saying that any deal with the EU will need the support of pretty much every Conservative MP to pass through the Commons. They argue that the willingness of the Labour party to oppose John Major in the 1993 Maastricht confidence vote shows the opposition will never miss an opportunity to bring down a prime minister, even at the risk of diplomatic chaos. So, the logic goes, Tory party unity is in the national interest. May will have to depend on every Tory and Democratic Unionist Party MP. The theory also goes that the Brexit inner cabinet is a proxy for the wider parliamentary party. If May can get them to agree on a position, then the rest will follow, so it is worth taking the time to try to find an acceptable accommodation.
Could Brexit leave us in a French Revolution scenario of having no bread to feed ourselves? - Irish Independent - Currently, not only do we not grow our own wheat for our own bread requirements, we don’t even mill our own flour to feed ourselves in this country. It’s practically all imported from the UK. In 2019, this could suddenly look quite a foolish policy and a worst-case Brexit scenario could leave us in a French Revolution scenario of having no bread to feed ourselves. "We were consistently able to supply milling wheat from the UK cheaper but very little has been grown in Ireland for 30 years. First it was the grain for flour, then it was easier to import the flour." Cost is the bottom line and most of the milling wheat we use is coming from Canada and the UK, where it's blended. So where does that leave us now that the UK are opening discussions to leave the party? While the outcome is unknown, I think what we can say is that whatever restrictions or barriers are applied to our food exports will also be applied to produce currently being imported from the UK to Ireland. At the moment, bread makers are just concerned with buying cheapest and selling under an Irish flag. My youngest son recently announced over breakfast: 'After Brexit, there will be no breakfasts'. All the cereal boxes in the press (except for the porridge oats which he classifies as more of a punishment than a breakfast) were produced in the UK.
I don’t like Brexit – I just don’t see how it can be stopped - If only Brexit would go away. It sucks the political oxygen away from the issues we should all be discussing: like low wages, insecure jobs and the housing crisis. It is a rallying cry for a noxious alliance of anti-immigrant demagogues and regulation-stripping free marketeers. The bigotry, xenophobia and racism stirred up by the official leave campaigns injected an ugliness into British politics which never dissipated, and left hate crimes surging. Many decent and honest people are committed to reversing the referendum result. They fear a completely unnecessary national tragedy is befalling Britain, driven by myths and lies, and believe economic turmoil and national isolation await. It is perfectly legitimate to seek to democratically challenge a referendum result. But it is difficult to see how the current strategy, communication and leadership of this cause achieve anything other than doom it to failure. First off, I’m not convinced by the campaign’s aim, and here’s why. Some stop Brexiters recite, almost as a mantra, that the referendum was only advisory (despite the government sending a pamphlet to every household in Britain promising them that the government “will implement what you decide”). If the referendum result was simply cancelled, it would be regarded as a coup against democracy not just by leave voters, but by many remainers. Alternatively, a second referendum could easily be framed as the establishment holding votes until it got the right result. It would mean an even more bitter campaign than the last, leaving deeper national divisions than ever. Either the last result would be reconfirmed, with rightwing Brexiteers more triumphalist and intolerant than ever; or – if remain scraped a narrow victory – furious Brexiteer demands for yet another referendum would be impossible to resist. Would it be best of three? Furthermore, a focus on overturning the referendum surely risks abandoning the debate over what sort of Brexit deal Britain negotiates to the Tory extremists.
Theresa May’s Brexit Vision Is Starting to Take Shape - As Theresa May retreats to the countryside with her Cabinet to thrash out differences on Brexit, it’s starting to become clearer what the prime minister wants the divorce to look like. Some in Brussels will call it cherry-picking, but May wants to stay very close to the European Union in some areas, while breaking free in others. With trade talks round the corner, a picture is emerging after Foreign Secretary Boris Johnson kicked off a series of big speeches last week. Next up is the U.K.’s chief negotiator. Last time David Davis spoke, he said very little would change after Brexit and that the important thing was just to win the freedom to ditch EU rules if a future government chose to. With just 13 months until Brexit Day, here’s where we are:
- 1. May wants to pick and choose EU rules. May wants to drop EU rules in some areas immediately, for example financial services and agriculture, according to officials familiar with her thinking. But in other areas, alignment with the EU is favored in the longer term. Rules are important because trade ultimately depends on it: keeping them should mean better access to the single market. But the EU says countries can’t pick and choose which bits of the single market they want access to -- it’s all or nothing.
- 2. Merkel indicates a tolerance for cherry-picking. German Chancellor Angela Merkel indicated on Friday that seeking a tailor-made deal after the split doesn’t necessarily mean “cherry-picking.” While the Commission says May has to choose between the kind of relationship Norway has with the bloc -- close economic ties but following rules it has no say in making -- or the trading relationship that Canada has, Merkel opened the door to something in between.
- 3. The latest fight is over enforcement. What the Cabinet is fighting over now is how the future relationship between the EU and U.K. should be enforced or policed, according to officials. It’s controversial because breaking free from EU institutions and courts was a massive issue in the referendum campaign -- where a big selling point for Brexit was “taking back control.” But a close trading relationship will probably require European regulators to have some say in enforcement, even if only indirectly.
- 4. Ireland is still a riddle. May promised that no hard border would emerge on the island of Ireland after Brexit. To guarantee that, she pledged that if no other solution was possible, the rules of Northern Ireland will remain aligned with those of EU member Ireland so that no border is needed. But she also promised that there would be no border between Northern Ireland and mainland Britain -- suggesting that the whole of the U.K. would have to keep its laws aligned.
Another Brexit Mess: “Grandfathering” Existing Free Trade Agreements Looks Unlikely -- Yves Smith - A good default assumption with Brexit is that nothing is simple. And as we are seeing again and again, the Government is making its difficult position even worse by acting as if things are or could be simple when there is no obvious mechanism for achieving that. One we will discuss today is the UK’s questionable assumption that the parties to the EU’s free trade agreements like South Korea could simply cut and paste “the UK” in place of “the EU” in existing agreements. We’ve discussed before in passing why these other countries might not want to be so accommodating. The UK needs a waiver and those usually come at a price of some sort. But it turns out that this is a very thorny issue, sufficiently so that we will wind up giving a superficial treatment. But for those with the appetite for more detail, we are embedding a report by Dr Michael Gasiorek and Peter Holmes of the UK Trade Policy Observatory, which discussed at length, with considerable additional detail, by Peter Ungphakorn at his trade β blog. It is telling that the UK Trade Policy Observatory paper was released in December yet its findings haven’t gotten much notice, particularly since all of these agreements become non-opeartive as far as the UK is concerned as of the end of March, 2019. An EU transition period will not apply to third-party pacts. Ungphakorn’s conclusion goes a long way toward explaining why the British officialdom has been averting its eyes from the free trade agreement thicket: Leaving the EU means the British government will either have to convert the EU’s free trade agreements with other countries into UK deals, or risk losing them, when Brexit is supposed to be about to allowing Britain more freedom to enjoy trade agreements with the world outside the EU. Free trade agreements among other things commit the parties to trying to reduce trade barriers and include specific measures to do so.
UK to EU: Play fair or we won’t pay our bill - Politico — The message is clear: Play fair or pay the price. Britain could refuse to pay its debts to the European Union after Brexit if Brussels reneges on its commitment to a future free-trade deal, according to three senior U.K. officials speaking on condition of anonymity. The proposal, which is likely to anger Brussels, is being considered in Whitehall as an emergency insurance measure to protect the U.K. from a significant political snag in the U.K.’s Brexit strategy. Under EU law, Brussels cannot agree a trade deal with the U.K. until it has left the bloc. However, this leaves the U.K. prime minister in the uncomfortable position of signing divorce papers — including committing to the “exit bill” — without a legal guarantee of what the new relationship will look like, something unpalatable to many MPs. One senior U.K. official explained that Brussels needs to realize that without assurances about future trade, the exit treaty would be voted down by MPs. “We need enough assurance on the future partnership to put it to the House of Commons,” the official said. “No one has decided how to hand over the cash,” the official added. Asked if the U.K. could hold back payment, he said: “That’s one of several things we could do, potentially.” Two other senior government officials familiar with the U.K. negotiating strategy confirmed holding back money was being considered as an emergency measure should Brussels not hold up its side of the bargain.
Ministers to thrash out Brexit plan at Chequers -- Theresa May plans to keep her cabinet ministers at Chequers on Thursday until they have outlined a Brexit plan that includes a high level of alignment between EU and UK rules. Mrs May hopes to unite her divided cabinet around a compromise that would see Britain promise to maintain European standards, in an attempt to reduce friction in the UK’s future trading relationship with the rest of the EU.But she will reassure Eurosceptic ministers, including foreign secretary Boris Johnson, that Britain should be able to move away from EU rules over time under a system of “managed divergence”.Mrs May’s allies say they expect the 11 members of the Brexit cabinet committee to agree the main points of the plan at Chequers, the prime minister’s country residence, on Thursday. The EU has already warned that Britain cannot expect full single-market access after Brexit, and that Brussels would oppose any deal allowing Britain to undermine the “level playing field” by aggressively cutting regulations.
‘No choice’ but for UK to impose budget on Northern Ireland, Bradley warns - The Northern Ireland Secretary has delivered her strongest warning yet that some form of direct rule will be imposed on the country.Karen Bradley announced that the UK Government "intends to take steps to provide clarity" on a Stormont budget."This is clearly not where I want to be, but I have no other choice," she said.Ms Bradley made the admission in Parliament, on the first day it reconvened since talks to re-establish an executive in the devolved assembly broke down.She said Northern Ireland "needs certainty and clarity" as it edged towards its 14th month without a government. The Staffordshire Moorlands MP also revealed she was "looking at proposals" to pause or cap Assembly members' salaries.And she gave a firm rebuttal to claims from some leading Brexiteers - including one of her predecessors Owen Paterson - that the Good Friday Agreement had "run its course"."The people of Northern Ireland have come so far in 20 years," she said."It is absolutely vital that we restored devolved government and we retain the Belfast Agreement." Ms Bradley added she would come back to Parliament to update MPs when she had more detail on a budget for Stormont.
Deal to restore power sharing in Northern Ireland collapses -- The latest attempt to revive power sharing in Northern Ireland collapsed last week, despite media reports that an agreement was imminent. Thirteen months after late Sinn Fein leader Martin McGuinness resigned from his position as deputy first minister of Northern Ireland, there is still no functioning government in Stormont. Theresa May’s divided and crisis-ridden Conservative government has been unable to impose terms on the party on which it relies to stay in power—Northern Ireland’s pro-Brexit Democratic Unionist Party (DUP)—which is now demanding the reintroduction of direct rule from Westminster. The prospective deal between the Irish nationalist Sinn Fein and the pro-British unionist DUP involved an Irish Language Act, an Ulster Scots Act and a Respecting Language and Diversity Act, as well as a proposed mechanism to prevent future collapsing of the devolved Northern Ireland Assembly. Sinn Fein was said to have agreed to DUP leader Arlene Foster remaining in office, dropping its previous demand for her removal. Whatever the truth of the negotiations, the dispute between all the parties centres primarily at this stage on Brexit and the status of Northern Ireland’s border with the Irish Republic, not on language. Brexit, or its consequences, underlay Sinn Fein’s decision to walk out of the Executive in late 2016, when a long-running scandal over the shameless manipulation of a government heating scheme was seized on as the pretext for Sinn Fein’s departure. Sinn Fein, along with 56 percent of Northern Ireland’s voters, supported the Remain camp, but the DUP supported and continues to support a “hard” Brexit in which the UK leaves both the European Union’s single market and customs union. Under such conditions, the Northern Ireland border becomes an external border of the EU. Brexit, moreover, particularly a “hard” Brexit, is likely to have a bigger impact on the Irish economy than on the British.
UK seeks flexibility on Brexit transition end date –The United Kingdom wants more flexibility on the length of a Brexit transition period, which could last longer than two years, according to its formal response to a draft EU text covering the period immediately after Brexit. According to the document, first published by Bloomberg, London says that although the transition is likely to last for two years, the duration should be determined by how long it takes to “prepare and implement the new processes and systems that will underpin the future partnership.” It adds that U.K. negotiators wish “to discuss with the EU the assessment that supports its proposed end date.”The document, details of which were first revealed by POLITICO, is a formal response by Brexit Secretary David Davis to EU proposals on the transition period beginning on March 29, 2019 . It was sent to the European Commission on Tuesday and will be officially announced later Wednesday. But the prime minister’s spokesperson played down the significance of the language on the length of the transition period. “There is nothing remotely new to any of this … the EU is talking about a period of around 21 months, we are talking about a period of around 24 months … we’re saying it will be a strictly time-limited implementation period and we’re working to a period of around 24 months.” Tory Euroskeptics are adamant that a transition should not last longer than two years. Another proposed change in the U.K. document is to delete a provision in the EU version of the text which would have prevented the U.K. from taking “any action or initiative which is likely to be prejudicial to the [European] Union’s interests in the framework of any international organization, agency, conference or forum.” In its strictest sense this could have stopped Britain from taking a contrary position to the EU at the U.N., World Trade Organization or other international bodies.
UK to lose EU rebate in 2021 ‘in extended Brexit transition’ -- The UK will lose its rebate from the EU at end of 2020 if it seeks to extend the Brexit transition beyond then, the Guardian has learned.The loss of the rebate, which to some has been a symbol of British influence in Europe since Margaret Thatcher demanded “our money back”, is expected to fuel Tory Brexiters’ demands to keep the transition period as short as possible.The rebate on the UK payments to the EU budget is worth £4.5bn a year on average. The money is never sent to Brussels, one aspect of the misleading claim on the leave campaign bus. A senior EU source said the rebate would go if the UK sought to extend the transition beyond 2020. That is because the UK is required to contribute to EU coffers during the transition period, but by 2021 Brussels is expected to have revised its budget without the UK. The EU27 aim to agree a new budget for 2021-7, a decision that will be taken without the UK. This requires a revision of the EU’s “own resources decision”, the law that enshrines the British rebate. Theresa May has said she wants a transition period of around two years, but in a paper released on Wednesday the government said it should be “determined simply by how long it will take to prepare and implement the new processes and new systems that will underpin the future relationship”.
EU27 rule out UK's preferred approach to future trade deal - The EU has ruled out the UK government’s preferred approach to a future trade deal, describing it as a risk to the European project, just as Theresa May is seeking to strike an agreement on the way forward within her cabinet. The inner cabinet is meeting at Chequers on Thursday to try to find an agreement among warring cabinet members on an approach sketched out to ministers by the prime minister’s Brexit adviser, Olly Robbins. Under what is understood to be Mays preferred model, the UK would be in regulatory alignment with the EU in some areas while finding different ways to achieve the same outcomes in other sectors. In the so-called third basket of sectors, the UK would in time diverge from the EU and go its own way under the model.Yet, with something close to incendiary timing, the European commission, hours abefore the cabinet get-together, has published a document ruling out the model.It is claimed by Brussels that such an approach would breach an agreement among EU27 leaders to prevent cherry-picking by the UK that it is said would pose a risk to the integrity of the single market.The document says: “UK views on regulatory issues in the future relationship including ‘three basket approach’ are not compatible with the principles in the [European council] guidelines.”The paper, discussed and agreed among member state diplomats, claims the model proposed by the UK would also appear to give the UK a say in EU decision-making. The paper responds that “no EU-UK co-decision” is possible and that the UK is either “in or out”.The document adds that the approach proposed by the UK would also have to involve a central role for the European court of justice. Even if the UK weakened its stance to allow this, the paper claims, there would be a problem in enforcing the court’s decisions without the rest of EU law being applicable.
Tories Double Down on Brexit Fantasies as EU Again Says “Nein” - Yves Smith - The Tories are taking delusion to a new level.The Cabinet met for 8 hours yesterday to hammer out a unified position on Brexit. The official version is that everyone emerged thinking they had gotten what they wanted.That simply means the bickering will be on hold for a bit. There is no way for the hard and soft Brexit factions of the Tories to reconcile their positions. And more generally, in negotiations when the two sides have meaningful differences in their position, a good deal is one where both parties come out feeling a bit bruised. They had to make meaningful concessions. So unless there was some blood on the floor and one side emerged a significant loser, differences were merely papered over. The Tories are unwilling to deal with Brexit in a serious manner because if and when they do, the two camps will have to duke it out. As Richard North put it:Rebellious Tory backbenchers can be full of fire and fury when their government has a big majority but, when the margin is slender and the opposition looks poised to win the next election, the MPs invariably rediscover the advantages of obedience, and put the party first.Right before the ministerial meeting started at Chequers, the EU put out a document that had been reviewed by member state diplomats, that reaffirmed the EU’s position on key issues. It is remarkable how many times the EU keeps repeating the same basic points about what the UK can and cannot expect to achieve, and the UK keeps acting as if it can demand something not on offer and have it delivered. One of the UK’s pet demands has been that it shouldn’t have to conform with EU rules all that tightly, yet should still have the benefits of streamlined (or per the UK pipe dream, frictionless) trade. The EU has said no to this and sadly saw the need to say no again.
UK’s hopes for post-Brexit trade deal an illusion – Donald Tusk - Theresa May’s reported agreement with her cabinet on a future trading relationship with the EU has been criticised as based on “pure illusion” by the European council president, Donald Tusk, as frustration with the UK erupted in Brussels. Reports that May’s inner cabinet had agreed on a policy of “managed divergence” during eight hours of talks at an awayday in Chequers were met with incredulity by EU leaders. Tusk told reporters on Friday: “I am glad the UK government seems to be moving towards a more detailed position. “However, if the media reports are correct, I am afraid the UK position today is based on pure illusion. It looks like the cake [and eat it] philosophy is still alive.“From the very start it has been a set principle of the EU27 that there cannot be any cherrypicking of single market à la carte. This will continue to be a key principle, I have no doubt.” Speaking at a summit of EU27 member states in Brussels, to discuss the EU’s budget and leadership post-Brexit, Leo Varadkar, the Irish taoiseach, also insisted that the single market was “not à la carte”.It is believed the British government is seeking to maintain frictionless trade in some sectors by staying in lock-step alignment with EU regulation, while opening up the prospect of diverging in other areas in order to gain a competitive advantage in the international marketplace. “It is not possible for UK to be aligned to EU when it suits and not when it doesn’t,” Varadkar said. “The UK position needs to be backed up with real detail that can be written into a legal treaty with the EU. We are well beyond the point of aspirations and principle. We need detail.”Senior EU diplomats said expectations were now low for Theresa May’s speech – planned for next Friday – in which she will offer her vision of Britain’s future trading relationship with the EU. Tusk revealed he would be meeting May at Downing Street ahead of her speech, but insisted that the EU would set out its stall on the future in March whether the UK had a viable proposal or not. “Our intention is to adopt these guidelines whether the UK is ready with its vision of our future or not. Naturally it would be much better if it were, but we cannot stand by and wait,” Tusk said.
Men paid twice as much as women at Barclays’ investment bank - Women working for Barclays’ investment bank earn on average half as much as their male colleagues, it has been revealed.Barclays yesterday became the first big bank to publish its gender pay gap. Nicky Morgan, chairwoman of the Treasury select committee, described the disparity as shocking and warned Barclays and other financial companies that they may have to explain their records to MPs. The mean gender pay gap in Barclays International, which houses the bank’s investment banking division, was 48 per cent, it said, meaning that the average hourly wage for a woman was just under half that of a man. The disparity was largely the result of a higher proportion of women in junior roles, Barclays said. There were more than four men to every woman in the highest 25 per cent of earners in its international division, and almost two women for every man in the lowest 25 per cent of earners in the unit.Under government rules introduced last year, all UK companies and public sector bodies with more than 250 employees have to publish data on the gender pay gap by April 5. Jes Staley, Barclays’ chief executive, said he would “love” the pay of men and women to be equal but that society overall had “a long way to go”. Barclays has various policies to encourage more women into senior roles, such as flexible working, he added. The bank aims to increase the percentage of female managing directors and directors to 26 per cent by the end of 2018 from 23 per cent at present. It pledged to make a third of board directors women by 2020, up from 21 per cent now. Barclays said that in its UK division, which houses its high street bank, the pay gap was 26 per cent.
Questions University College London must answer on eugenics conference - The exposure by a student newspaper that University College London (UCL) hosted an annual eugenics conference on four occasions led the university to promise an investigation. UCL claimed ignorance in January of the London Conference on Intelligence (LCI), which was attended by a range of fascistic individuals and organised by UCL honorary senior lecturer, James Thompson. Thompson asserts that global inequalities are the product of global variations in IQ. He claims that certain ethnic minorities are capable only of making a poor contribution to the UK, due to their asserted IQ deficiencies, and that those of a right-wing political disposition are genetically intellectually superior to those on the left. He advises screening African Americans on the basis that they are more likely to be psychotic than other population groups. In response to the revelations, UCL initially issued a short and equivocating statement. The only concrete action it took was to suspend Thompson’s room booking privileges and approach him for an explanation. Having come under pressure from students and academics after weeks of stonewalling, the university has since published two further comments. These finally and explicitly state that UCL does not endorse the London Conference on Intelligence and announce the formation of an inquiry team to “investigate the Conferences, the way in which they ostensibly breached external booking procedures and the circumstances in which the organiser [James Thompson] was awarded an honorary senior lectureship.” Such statements should be met with justified scepticism. In the first place, what circumstances could possibly have justified awarding an honorary position to an individual with views like Thompson’s?
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