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

Saturday, March 17, 2018

week ending Mar 17

 $21 Trillion And Rising: How Central Banks Are LBOing The World In One Stunning Chart - Back in late 2016, we showed the unprecedented domination of capital markets by central banks using a chart from Citi, which had put together a fascinating slideshow asking simply "Where is the utility in marginal QE" and specifically pointing out that the longer unconventional monetary policy such as QE continues, the bigger its marginal cost, until eventually QE becomes a detriment A broad criticism of monetary policy, the presentation carried an amusing footnote: "This presentation does not change any of Citi’s existing, published views on the actual future path of monetary policy. It is merely intended as a contribution to the ongoing debate about the efficacy of available policy tools" -  after all, the last thing the market wanted is the realization that even banks no longer have faith in the central planners.Incidentally, Citi's broad critique of global QE took place when central banks owned just over $18 trillion in assets.Fast forward to today when in its latest update of central bank holdings, Citi shows that as of this moment not only has the total increased by another $3 trillion to a grand total of $21 trillion and rising, but that the big six central banks now own over 40% of global GDP, more than double the 17% they held before the financial crisis less than a decade ago. Which is remarkable in a world where there is still some confusion about what is behind the "global coordinated recovery", and where there are deluded people who claim that central banks are now out of the picture. It is also remarkable because now that central banks are gradually phasing out QE, it is the central bankers themselves who are terrified of what happens when the market starts selling; terrified that they have lost control. Recall that following stunning admission from Citi's Hans Lorenzen last November: In the context of a self-reinforcing, herding market, the pivot point where the marginal investor is indifferent between putting more money back into risk assets and holding cash instead is fluid. But when the herd suddenly changes direction, the result is a sharp non-linear shift in asset prices. That is a problem not only for us  trying to call the market, but also for central bankers trying to remove policy accommodation at the right pace without setting off a chain reaction – especially because the longer current market dynamics run, the more energy will eventually be released.

Fed Admits 'Yield Curve Collapse Matters' - As the US Treasury yield curve collapsed over the last year, various Fed speakers have promulgated the "it's probably nothing" or "it's different this time" narrative to divert attention away from the curve's almost-perfect record of predicting US economic recessions. Even US Macro data has started to disappoint (and stocks briefly caught down to it)... So, it is fascinating that none other than The San Francisco Fed has issued a report warning about the flattening of the yield curve..."[it] is a strikingly accurate predictor of future economic activity. Every U.S. recession in the past 60 years was preceded by a negative term spread, that is, an inverted yield curve.  Furthermore, a negative term spread was always followed by an economic slowdown and, except for one time, by a recession." Furthermore, as the two Fed authors explain below, the recent decline in the Treasury curve is sending recession probabilities notably higher...The predictive power of the term spread is immediately evident from Figure 1, which shows the term spread calculated as the difference between ten-year and one-year Treasury yields from January 1955 to February 2018, together with shaded areas for officially designated recessions. Every recession over this period was preceded by an inversion of the yield curve, that is, an episode with a negative term spread. A simple rule of thumb that predicts a recession within two years when the term spread is negative has correctly signaled all nine recessions since 1955 and had only one false positive, in the mid-1960s, when an inversion was followed by an economic slowdown but not an official recession. The delay between the term spread turning negative and the beginning of a recession has ranged between 6 and 24 months.

 On the deceleration of real M1 and M2 -- As we now have the data for consumer prices in February, this is a good time to look at real money supply, both M1 and M2. As readers of my "Weekly Indicators" columns now, I have voiced increasing concern over the deceleration in both of these series for close to a year. First it was M2, and then deceleration spread to M1. Real M2 briefly turned negative in 2010, sparking some concern of a "double dip" recession. But that wasn't confirmed by real M1 (which while decelerating, remained positive YoY), or a host of other leading indicators. Next, both really surged during an episode of "Europanic" during 2011-12, and except for another period of deceleration, particularly in M1 in late 2015, both were relentlessly positive since -- until March of last year: Here is a close-up since the end of 2016: Real M2 peaked last June and has been declining in the 8 months since. Real M1 last peaked two months ago. However, on a six-month average, real M1 is now unchanged. Next, here is the YoY calculation for real M1 and M2 since the Great Recession: Note that for real M2, a value of less than 2.5% is consistent with a subsequent recession. Thus the above graph subtracts that amount. The peak value of YoY M1 in the last 12 months was 6.9%. To show enough deceleration to make me change the rating on real M1 to neutral, YoY growth would have to slow to less than half of that amount, or 3.4%. It's not there now. Although one or the other of each of the real money supply measures has fallen into negative territory previously since 2008, with the exception of 2010 this is the only time that both have decelerated so close in tandem. Together with the increase in interest rates, with one exception -- the continuation of loose credit by the banks -- the financial background conditions for the economy are closer to turning negative than at any time since 2010, and before that, the Great Recession. 

    Atlanta Fed: GDPNow delines to 1.9% for Q1 --From the Atlanta Fed: GDPNow: The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2018 is 1.9 percent on March 14, down from 2.5 percent on March 9. After yesterday's Consumer Price Index release from the U.S. Bureau of Labor Statistics and this morning's retail sales report from the U.S. Census Bureau, the nowcast of first-quarter real personal consumption expenditures growth fell from 2.2 percent to 1.4 percent.

    Goldman, Atlanta Fed Slash Q1 GDP Forecasts Below 2.0% - From its exuberant 5.4% expectation for Q1 GDP at the start of February, The Atlanta Fed's guess has collapsed to just 1.9% as CPI and retail sales disappointments weigh on their outlook. Via Atlanta Fed, Latest forecast: 1.9 percent — March 14, 2018The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2018 is 1.9 percent on March 14, down from 2.5 percent on March 9. After yesterday's Consumer Price Index release from the U.S. Bureau of Labor Statistics and this morning's retail sales report from the U.S. Census Bureau, the nowcast of first-quarter real personal consumption expenditures growth fell from 2.2 percent to 1.4 percent.GDPNOW is now well below consensus expectations... Which is not entirely unexpected as we have seen this pattern of disappointment for the last 8 quarters...  And the weakness in recent US macro data suggests no rebound anytime soon... But it's not just The Atlanta Fed, Goldman has taken an ax to its forecast also:Today’s retail sales report was below even our own tempered expectations and followed similar weakness in January.We estimate that the February tax refund delays were larger in magnitude than the tax cuts boosting consumer paychecks. As these refunds arrive in consumer bank accounts this month, the combined fiscal impulse swings to a clear positive, and we expect March retail spending to pick up significantly as a result. Nonetheless, this potential improvement may arrive too late to prevent a significant deceleration in quarterly consumption growth (following +3.8% in Q4).  Accordingly, we lowered our Q1 GDP tracking estimate by two tenths to +1.8% (qoq ar). And this is the declining economic growth picture that The Fed is jawboning 5 rate-hikes into?

    US National Debt Hits $21 Trillion  - For 8 years, we took every opportunity to point out that under Barack Obama's administration, US debt was rising at a alarmingly rapid rate, having nearly doubled, surging by $9.3 trillion  during Obama's 8 years. It now appears that the trajectory of US debt under the Trump administration will be no different, and in fact based on Trump's ambitious fiscal spending visions, may rise even faster than it did under Obama.We note this because as of close of Friday, the US Treasury reported that total US debt has risen above $21 trillion for the first time; or $21,031,067,004,766.25 to be precise. Putting this in context, total US debt has now risen by over $1 trillion in Trump's first year... and the real spending hasn't even begun yet.What is amusing is that Trump - who has a tweet for every occasion - and who no longer even pretends to care about the unsustainability of US spending was extremely proud as recently as a year ago by how little debt has increased during his term. The media has not reported that the National Debt in my first month went down by $12 billion vs a $200 billion increase in Obama first mo. — Donald J. Trump (@realDonaldTrump) February 25, 2017We doubt today's milestone will be celebrated on Trump's twitter account.And while some can argue - especially adherents of the socialist Magic Money Tree, or MMT, theory - that there is no reason why the exponential debt increase can't continue indefinitely...

    February Budget Deficit Surges As Interest On US Debt Hits All Time High - February is traditionally not a good month for the US government income statement: that's when it usually runs a steep monthly deficit as tax returns drain the Treasury's coffers. However, this February was worse than usual, because as spending rose and tax receipts slumped, the US deficit jumped to $215 billion, the biggest February deficit since 2012.  According to the CBO, receipts declined by 9.4% from last year as tax refunds rose and the new withholding tables went into effect. On a rolling 12 month basis, government receipts rose only 2.1%, a clear slowdown after rising 3.1% in December after contracting as recently as March 2017. At this rate of decline, the US will post a decline in Federal Receipts by mid-2018. Outlays meanwhile rose by 2% due to higher Social Security and Medicare benefits rose and additional funds were released for disaster relief. Putting these two in context, in Fiscal 2000, Treasury receipts in the Oct-Feb period were $741.8 bn, nearly matching outlays of $741.6 bn. In Fiscal 2018 meanwhile, receipts in the Oct-Feb period are $1.286 tn while outlays are $1.677 tn. Receipts are growing an average 4% per year, while outlays are rising an average 7%. Here is a snapshot of February and Fiscal YTD receipts and outlays. But most troubling was the jump in interest on the public debt, which in the month of February jumped to $28.434 billion, up 10.6% from last February and the most for any February on record. In the first five months of this fiscal year, that interest is $203.234 bn, up 8.0% y/y and the most on record for any Oct-Feb period. The sharp increase comes as the US public debt rapidly approaches $21 trillion. And with the effective interest rate now rising with every passing month, it is virtually assured that this number will keep rising for the months ahead.

      Strong Demand For 10Y Treasury Auction Soaks Up Massive Debt Supply - Having earlier sold 3Y Notes and 6M Bills to a surprisingly eager market in two rather strong auctions, at 1:01pm the Treasury concluded today's sale of $145 billion in paper, with the sale of $51BN in 3M Bills and $21 billion in 10Y Notes, in two more strong auctions. The high yield of 2.889% was on the screws with the When Issued, and 9bps above February's 2.811%. It was also the highest yield since January 2014. The Bid to Cover was 2.50%, above last month's 2.34 and also above the 2.45% auction average. The internals were also on the strong side, with the Indirects taking down 66.2%, which slightly below February's 67.5% was above the 6 month average of 64.8%. Directs were awarded 6.5%, just higher than the 5.4% last month, leaving 27.3% for Dealer. Separately, the Treasury also sold $51.0b in 3M bills, at a bid-to-cover of 3.13, well above the 2.95 6 auction average. And refuting speculation that foreigners are fleeing Bills, Indirect bidders were awarded 44.7% of the takedown vs six previous auction average 41.5%. Overall, today's massive supply was soaked up without a glitch, and with far less concessions than many had expected. As a result, the TSY complex held gains after today's auctions, with muted price action following the 10Y auction, and with the 10Y yield lower on the day by ~0.5bp. 

      Trump’s Abrupt ‘Yes’ to North Korea: The 45 Minutes That Could Alter History - NYT— Summoned to the Oval Office on the spur of the moment, the South Korean envoy found himself face to face with President Trump one afternoon last week at what he thought might be a hinge moment in history. Chung Eui-yong had come to the White House bearing an invitation. But he opened with flattery, which diplomats have discovered is a key to approaching the volatile American leader. “We could come this far thanks to a great degree to President Trump,” Mr. Chung said. “We highly appreciate this fact.” Then he got to the point: The United States, South Korea and their allies should not repeat their “past mistakes,” but South Korea believed that North Korea’s mercurial leader, Kim Jong-un, was “frank and sincere” when he said he wanted to talk with the Americans about giving up his nuclear program. Mr. Kim, he added, had told the South Koreans that if Mr. Trump would join him in an unprecedented summit meeting, the two could produce a historic breakthrough. Mr. Trump accepted on the spot, stunning not only Mr. Chung and the other high-level South Koreans who were with him, but also the phalanx of American officials who were gathered in the Oval Office. His advisers had assumed the president would take more time to discuss such a decision with them first. Defense Secretary Jim Mattis and Lt. Gen. H.R. McMaster, the president’s national security adviser, both expressed caution. If you go ahead with this, they told Mr. Trump, there will be risks and downsides. Mr. Trump brushed them off. I get it, I get it, he said. Where others see flashing yellow lights and slow down, Mr. Trump speeds up. And just like that, in the course of 45 minutes in the Oval Office, Mr. Trump threw aside caution and dispensed with decades of convention to embark on a daring, high-wire diplomatic gambit aimed at resolving one of the world’s most intractable standoffs. 

      Not just theater: U.S. officials defend Trump-Kim meeting (Reuters) - U.S. officials on Sunday defended President Donald Trump’s decision to meet with North Korean leader Kim Jong Un, saying the move was not just for show and not a gift to Pyongyang. “President Trump isn’t doing this for theater. He’s going to solve a problem,” said Central Intelligence Agency Director Mike Pompeo on the “Fox News Sunday” program. The United States expects North Korea to halt all nuclear and missile testing in advance of any meeting, Pompeo and Treasury Secretary Steve Mnuchin said on Sunday news shows. The goal of the meeting remains denuclearization of the Korean Peninsula, something Kim has agreed to discuss, they said. Pompeo said U.S. military exercises in the region would continue in the lead-up to the talks. The Republican president agreed on Thursday to accept an invitation from the North Korean leader to meet by May after months of escalating tensions over Pyongyang’s advancing nuclear and missile programs. Trump would become the first sitting U.S. president to meet with a leader of the reclusive country. The two men would face each other after a public volley of insults, with Trump calling Kim “Little Rocket Man” and Kim referring to Trump as a “dotard.” No venue or date for the meeting has been determined, but Trump’s prompt acceptance set off a flurry of activity.The South Korean officials who carried Kim’s invitation to Washington will split up to visit the leaders of China and Japan this week to update them on the talks, a South Korean presidential official said on Sunday. China, North Korea’s main ally, has encouraged dialogue over Pyongyang’s nuclear program, and its state media on Saturday credited Beijing for helping ease tensions. “China continues to be helpful!” Trump tweeted on Saturday. North Korea’s leaders have sought a face-to-face meeting with a U.S. president for decades, but have been rebuffed over human rights concerns as well as the nuclear ambitions.

      CIA Director: US Will Make No Concessions Before North Korea Talks -- In the aftermath of Trump's unexpected announcement that at the invitation of Kim Jong Un, he would meet with the North Korean leader in what is set to be a historic meeting, the first of its kind between the leaders of the two nations at a still unknown location, it emerged that not even Trump's top diplomats were aware of the impromptu decision.According to press reports, Secretary of State Rex Tillerson said during his ongoing Africa trip that he spoke with President Trump on his decision to meet with North Korean dictator Kim Jong-un only after it was announced by South Korean officials and the administration. Speaking in Djibouti, Tillerson was asked about his months-long public position that the time was not right for sitting down with North Korea."With respect to talks with North Korea versus negotiations -- and I think this seems to be something that people continue to struggle with the difference," Tillerson replied. "My comments have been that we're -- the conditions are not right for negotiations, but we've been saying for some time we are open to talks. President Trump has said for some time that he was open to talks and he would willingly meet with Kim Jong-un when conditions were right and the time was right. And I think in the president's judgment, that time has arrived now."Tillerson then admitted that it was all Trump: "In terms of the decision to engage between President Trump and Kim Jong-un, that's a decision the president took himself," he added. "I spoke to him very early this morning about that decision and we had a good conversation. This is something that he's had on his mind for quite some time, so it was not a surprise in any way, because I think this has long been something. He's expressed it openly before about his willingness to meet with Kim Jong-un."

      Nixon WH lawyer: Trump is out of his league meeting with Kim Jong Un | TheHill: The former White House lawyer to President Nixon slammed President Trump for agreeing to meet with North Korean leader Kim Jong Un, saying Trump is “playing way out of his league.” “This is not a ‘Nixon to China’ moment,” John Dean tweeted Friday, in reference to Nixon’s historic weeklong visit to China during his presidency. “Trump is playing way out of his league and the world knows it. Kim knows it.” “Much can go very wrong and Trump won’t read a briefing book,” he continued. “Going to be interesting— and extremely dangerous. Kim will give him a parade and have his mind/heart.”

      A Bogus ‘Compromise’ Senate Bill Would Prolong Atrocities in Yemen - Sometimes the most important stories about what our government is doing don’t get a lot of media attention. That’s the case now, when the Senate is about to hold a historic vote that could decide whether millions of people live or die in the near future. The US military is directly participating in a war that has pushed those millions to the brink of starvation and caused the worst cholera outbreak in modern history. The war is in Yemen, and Saudi Arabia is leading the bombing and blockade that is denying people medicine and food as well as the fuel and infrastructure they need to pump clean water. The deprivation and destruction led to the cholera epidemic, which has sickened a million people and killed thousands. American military planes are not only providing midair refueling to the Saudi bombers but helping them with intelligence and targeting.  This constitutes military involvement under the 1973 War Powers Resolution, as well as Article I, Section 8 of the US Constitution, neither of which allows the executive branch to engage in such hostilities without the authorization of Congress. Any doubts about the constitutionality of US participation in the Saudi attempt to “starve Yemen into submission,” as a November New York Times editorial-board headline described it, were put to rest by a vote in the House of Representatives in November. The House voted 366 to 30 for a resolution that declared US military involvement to be unauthorized.  It is therefore illegal under US law. On February 28, Democratic Senators Bernie Sanders and Chris Murphy and Republican Senator Mike Lee introduced a bill to put an end to this illegal war. Under the War Powers Resolution, the Senate majority leaders cannot block a debate and vote on this legislation. And a number of experts believe it could pass; for one thing, the last vote in the Senate on arms sales to Saudi Arabia, in June, passed by a margin of only 53-47.  But the Saudis have a powerful lobby: They spent $16 million last year on lobbying and public relations that was recorded under the Foreign Agents Registration Act. This does not include other spending, such as contributions to think tanks (and that of their allies such as the United Arab Emirates). And along with the Saudis are the big military contractors that profit from these weapons sales.

      Trump Fires Rex Tillerson and Will Replace Him With C.I.A. Chief Pompeo -- President Trump on Tuesday ousted his secretary of state, Rex W. Tillerson, extending a shake-up of his administration, 14 months into his tumultuous presidency, and potentially transforming the nation’s economic and foreign policy.Mr. Trump announced he would replace Mr. Tillerson with Mike Pompeo, the C.I.A. director and former Tea Party congressman, who forged a close relationship with the president and is viewed as being more in sync with Mr. Trump’s America First credo. Mr. Tillerson learned he had been fired on Tuesday morning when a top aide showed him a tweet from Mr. Trump announcing the change, according to a senior State Department official. But he had gotten an oblique warning of what was coming the previous Friday from the White House chief of staff, John F. Kelly, who called to tell him to cut short a trip to Africa and advised him “you may get a tweet.” It was an abrupt end — after months of speculation — to a rocky tenure for a former oil executive who never meshed with the president who hired him. Mr. Tillerson clashed repeatedly with the White House staff and broke publicly with Mr. Trump on issues ranging from the dispute between Saudi Arabia and Qatar to the American response to Russia’s cyber aggression. “We were not really thinking the same,” Mr. Trump told reporters at the White House, explaining his decision to replace Mr. Tillerson. He added: “Really, it was a different mind-set, a different thinking.”  Mr. Trump announced his decision on Twitter. Mike Pompeo, Director of the CIA, will become our new Secretary of State. He will do a fantastic job! Thank you to Rex Tillerson for his service! Gina Haspel will become the new Director of the CIA, and the first woman so chosen. Congratulations to all!  — Donald J. Trump (@realDonaldTrump) March 13, 2018

      Trump Shuffles Team by Firing Tillerson and Tapping CIA's Pompeo -- President Donald Trump ousted U.S. Secretary of State Rex Tillerson on Tuesday, ending a rocky tenure in an abrupt move that stunned the former Exxon Mobil Corp. CEO and set in motion a shakeup of the administration’s foreign policy team. Trump announced Tillerson’s ouster in a tweet shortly before 9 a.m. after weeks of staff turmoil, saying he would nominate CIA Director Mike Pompeo as secretary of state. But it was several hours before Trump discussed his decision with Tillerson, who said he’ll hand over all responsibilities to Deputy Secretary John Sullivan at midnight Tuesday. Mike Pompeo, Director of the CIA, will become our new Secretary of State. He will do a fantastic job! Thank you to Rex Tillerson for his service! Gina Haspel will become the new Director of the CIA, and the first woman so chosen. Congratulations to all! — Donald J. Trump (@realDonaldTrump) March 13, 2018  In a farewell statement, Tillerson said the president called him “a little after noon time” from Air Force One en route to California. The top U.S. diplomat didn’t thank Trump or praise his leadership in his public comments, instead singling out the work of his State Department colleagues on high-profile issues including North Korea and counterterrorism.  The president’s move comes as his administration is preparing for high-stakes and historic talks between Trump and North Korean leader Kim Jong Un. Trump told reporters at the White House Tuesday that he and Tillerson had disagreements over key issues including the Iran nuclear deal. Tillerson, Trump said, “had a different mindset. I think Rex is much happier now.” The 65-year-old Tillerson took a middle-of-the-night phone call from White House chief of staff John Kelly on Friday during his Africa trip, telling him that the president was planning to replace him, according to two officials. . Still, a top State Department official said Tillerson was blindsided by Trump’s telling the world he was ousted in a tweet. “He had no idea that this was occurring," said Steve Goldstein, Tillerson’s undersecretary of state for public diplomacy and public affairs, who was fired by the White House hours later. “He did not know.”

      Trump ousts Tillerson, will replace him as secretary of state with CIA chief Pompeo - President Trump said Tuesday he has ousted Secretary of State Rex Tillerson and plans to nominate CIA Director Mike Pompeo to replace him as the nation’s top diplomat, orchestrating a major change to his national security team amid delicate outreach that includes possible talks with North Korea. Trump  Trump told reporters Tuesday that he ultimately decided to fire the secretary because they disagreed over strategy in key areas of foreign policy, such as the 2015 Iran nuclear deal, the approach to North Korea and the overall tone of U.S. diplomacy. Tillerson said he received a call from Trump around noon Tuesday, more than three hours after his firing was first reported by The Washington Post and announced minutes later in a tweet from the president. The shake-up left officials at the State Department and throughout the national security community flummoxed, and the circumstances of the firing were in dispute. White House officials said that — as Tillerson traveled through Africa last week — White House Chief of Staff John F. Kelly called to wake him up in the wee hours there Saturday to alert him that Trump had decided to replace him. Trump had told his chief of staff he wanted to announce he was replacing Tillerson on Twitter. Kelly urged him to hold off. Kelly then suggested Tillerson return to Washington as soon as possible. Tillerson cut his trip short Monday. But a top State Department spokesman offered a different version of events — and was swiftly fired for contradicting the White House. Steve Goldstein, undersecretary of state for public diplomacy and public affairs, said that Tillerson was “unaware of the reason” for his firing and had not spoken directly with Trump. He said Kelly told Tillerson in the call only that “he could expect a tweet” from the president, but it was not conveyed that the decision to fire him was final. “He found out that he was terminated today,” Goldstein said. Secretary of State Rex Tillerson did not directly respond to an Oct. 4 news report that he referred to President Trump as a “moron,” saying, “I’m not going to deal with petty stuff like that." (The Washington Post)  Goldstein’s dismissal, which came just before he was scheduled to brief reporters about the shake-up at Foggy Bottom, was confirmed by a State Department official. West Wing officials had accused him in recent weeks of privately criticizing White House decisions to reporters. Asked Tuesday about the accusation, Goldstein said: “I spoke for the secretary of state. That was part of my role as the undersecretary.”

      Deconstructing Rex Tillerson’s sacking The surprising part of US President Donald Trump’s move to sack Rex Tillerson as secretary of state is that it took place a full six months after the latter called him a “f***ing moron” at a Pentagon meeting. Tillerson should have thrown in the towel and walked away then. That’s probably what Trump would have preferred. On Tuesday, Trump merely said he and Tillerson “disagreed on things.” Iran was mentioned. Tillerson viewed the Iran deal holistically as the template of a bigger challenge, one requiring the US to push back at Iran’s regional surge, its backing of the Syrian regime and Hezbollah, its growing missile capability, and so on. But if Trump has so far desisted from jettisoning the Iran deal, it is not because Tillerson thought differently. Washington cannot act unilaterally where western interests are involved and, therefore, this is, per se, a “work in progress.” Conceivably, Trump’s main problem with Tillerson lay somewhere else – namely, the axis between Tillerson and US Defence Secretary James Mattis both at a personal level and systemically in terms of the relationship between the two key departments that formulate the US’ global strategies. It is revealing that in his “farewell” remarks on Tuesday, Tillerson made it a point to say: “I want to speak now to my State Department colleagues and to our interagency colleagues and partners at DOD and the Joint Chief of Staffs most particularly… To the men and women in uniform, I am told for the first time in most people’s memory the Department of State and the Department of Defense have a close working relationship…

      John Kelly: Rex Tillerson Was on the Toilet When I Told Him He’d Be Getting Fired - Reporters gathered at the White House on Friday were stunned when Chief of Staff John Kelly shared a very embarrassing story about outgoing Secretary of State Rex Tillerson.The reporters were there with senior White House officials for an off-the-record meeting with Kelly, who was attempting to tamp down speculation about an impending administration staff purge. The Daily Beast was not invited, but was briefed on its contents by three sources with knowledge of the meeting. According to those sources, Kelly recounted a very awkward conversation with Tillerson during which he informed the secretary that President Donald Trump would very likely soon fire him. The awkwardness was less a result of the contents of the conversation than its setting.Tillerson, Kelly told the room, was suffering from a stomach bug during a diplomatic swing through Africa, and was using a toilet when Kelly broke the news to him. Sources were stunned that, even in an off-record setting, Kelly would say this—to a room filled with White House officials and political reporters—about Tillerson, who does not officially leave the State Department until the end of the month. Kelly is routinely touted as one of the more mature members of Trump’s top brass and has often been branded as one of the “adults” in charge. The comment was especially bizarre given Kelly’s reported past cover for Tillerson. The chief of staff tried for months to keep the secretary of state in his post, The New York Times reported, and fumed at his dismissal.

      At Trump’s State Department, Eight of Ten Top Jobs Are Empty - The leadership of the U.S. State Department was already thin as Secretary of State Rex Tillerson flew back from an abbreviated trip to Africa on Monday night. Then came the bombshell: Tillerson was ousted, via a Twitter announcement by President Donald Trump. Tillerson had spent his weekend in Africa fighting for his job after a middle-of-the-night White House call warning him that Trump was looking to shake-up his staff. But after returning to Washington at 4 a.m. on Tuesday, Tillerson didn’t think any decision was imminent. Then came the president’s tweet, which said CIA Director Mike Pompeo would be nominated as Tillerson’s replacement.With his voicing cracking at a hastily arranged news conference, Tillerson praised his colleagues and urged senior staff to stay on through the transition. While he said he’d remain in his job through March 31, he said he was handing over all responsibilities to his deputy, John Sullivan. Sullivan won’t have a lot of company in the job. Eight of 10 top jobs at the State Department are now vacant, either because staff have left, been fired or the posts were never filled. Those vacant assignments include positions overseeing the agency’s role in U.S. trade policy, stopping the spread of nuclear weapons, refugee issues and efforts to counter human trafficking. After dismissing Tillerson, the White House also fired Steve Goldstein, Tillerson's undersecretary of state for public diplomacy and public affairs, and announced that State Department spokeswoman Heather Nauert would fill the post on an acting basis. Morale at the department was already low as staff rebelled against Tillerson’s planned restructuring, opposed Trump’s policies and watched experienced colleagues shifted into more menial jobs, like dealing with Freedom of Information Act requests. Some will be glad to see Tillerson gone. Most, though, will wonder if life will be any different under his successor.

      Where Does Mike Pompeo Stand on the Issues? Too Close to Trump -- President Trump announced on Tuesday that he would nominate Mike Pompeo, the director of the C.I.A., to be the next secretary of state now that Rex Tillerson has been pushed out. This is bad news for the country and the world. If confirmed, Mr. Pompeo will bring to the job not the discretion and objectivity of a former intelligence chief, but instead the habits of a fierce ideologue, which is precisely what he continued to be as C.I.A. director, typically a nonpartisan position. He has been the most political head of the agency since William Casey in the 1980s. Mr. Pompeo has repeatedly stepped out of the proper role of an intelligence director to be an advocate for hawkish policies. The ruthless partisanship he displayed as a congressman foreshadows how he will perform at the State Department.  Mr. Pompeo is a staunch defender of Mr. Trump and echoes his preferences on major national security and foreign policy matters. That’s likely the main reason he was given Mr. Tillerson’s job as the United States’ top diplomat. As secretary of state, Mr. Pompeo would reinforce Mr. Trump’s more destructive inclinations on several key issues:  In commenting to reporters on the appointment, Mr. Trump singled out the Iran nuclear agreement as an issue on which he disagreed with Mr. Tillerson, saying, “I think it’s terrible; I guess he thought it was O.K.” But with Mr. Pompeo, continued the president, “we have a very similar thought process.”  Mr. Pompeo has indeed been a fervent foe of the 2015 nuclear agreement. While in Congress, he pursued every possible avenue to discredit and undermine it. He talked of imaginary “secret side deals” that the Obama administration had allegedly made with Iran and has played down the costs of bombing Iran. As director of the C.I.A., Mr. Pompeo has likened Iran to the Islamic State and has tried to make a case that Iran is allied with Al Qaeda, even ordering another dive into already-exploited documents captured in the raid that killed Osama bin Laden, and then taking the highly irregular step of furnishing a cherry-picked result to an advocacy group that opposes the nuclear agreement.

      Russia Responds To Appointment Of Pompeo As New Secretary Of State - When Rex Tillerson was appointed Secretary of State in late 2016, there were howls of indignation from the "resistance" accusing Trump of adding yet another pro-Russian to his closest circle: after all, why else would Tillerson have been awarded the 2013 Russian Order of Friendship award, if not to further promote the Russian agenda, or so the thinking went. The WaPo even penned "What is the Russian Order of Friendship, and why does Rex Tillerson have one?" So it may be awkward to explain to the public why (and how) Tillerson himself is about to become the latest honorary member of the "resistance." Meanwhile, a just as relevant question is how Russia feels regarding the appointment of Tillerson's replacement: former CIA chief Mike Pompeo. According to the Moscow Times, Russian senators have expressed cautious optimism over Donald Trump's announcement of Mike Pompeo as the new U.S. Secretary of State. “Russia will cooperate with those who are appointed to this or another post in the Trump administration,” the state-run RIA Novosti news agency cited senior Federation Council senator Yevgeny Serebrennikov as saying Tuesday. Throwing some shade at failed attempts at detente between Putin and Trump, Serebrennikov addded that "we pursued and are pursuing a course to reduce tensions in relations between our countries, but our partners do not see this aspiration." The Federation Council's International Affairs Committee deputy chairman Vladimir Dzhabarov said that Pompeo "may have the chance to become a man who will stop our relations from dropping rock-bottom,” the RBC business portal reported. Meanwhile, Russian Foreign Ministry spokeswoman Maria Zakharova reacted to the news with an ironic “have they started blaming Russia for Washington’s staff reshuffles yet?” question in remarks to Interfax. 

      There’s a new secretary of state. Who cares? - Rex Tillerson’s sudden departure as secretary of state — alongside that of Gary Cohn last week as head of the National Economic Council — removes from the White House two of the only remaining pragmatists trusted by the rest of the world. With their departure, America’s credibility has taken another big hit. So too has the deeply held view in Washington that only American leadership can prop up global stability, so if America’s leadership wobbles, so too does the world. But what if the opposite is true? What if the world is capably transitioning from unipolarity to multipolarity, a new structure gradually being matched by new institutions that will guide the next geopolitical era?Surely this proposition strikes many in Washington as naive, even bizarre. They should get out more. It is much closer to the truth than they would care to admit. Just last week, all the original members of the Trans-Pacific Partnership trade agreement convened in Chile to sign the deal — except the United States. The trade zone America once supported as a means of boosting exports and liberalizing economies will now move forward and boost exports and liberalize economies, all without American support. TPP isn’t even the most important trade deal now underway. The Regional Comprehensive Economic Partnership — which includes every country in the India-Japan-Australia triangle, with China at the center — captures the largest share of global GDP of any economic zone. It’s being driven forward by Asians from the inside-out. Geopolitical wheels turn slowly, but they do turn. We live in a tripolar regional order in which no continent can fully dictate to the others, and new alignments can emerge among them. Take the Asian Infrastructure Investment Bank, surely the fastest-growing multilateral organization in the history of the world. It was founded in 2014 and now has 80 members, mostly countries spanning the breadth of Eurasia, the world’s largest landmass. European countries enthusiastically joined this new Chinese-sponsored institution despite American objections, accelerating the construction of a Euro-Asian Silk Road axis that now represents nearly $2 trillion in annual trade, far larger than the $1.1 trillion in annual transatlantic trade.

      Rand Paul opposes Pompeo nomination for secretary of state -- Rand Paul is vowing to do everything he can to stop Mike Pompeo from becoming secretary of state. The libertarian-leaning GOP senator said Wednesday that Pompeo’s earlier support for the Iraq War and defense of enhanced interrogation techniques — or torture, in the view of Paul and many other senators — is disqualifying. And the Kentucky senator indicated he may be willing to filibuster the nominations of both Pompeo and CIA director pick Gina Haspel, who he says is “gleeful” in her defense of torture techniques. Paul seemed to have no qualms about taking on President Donald Trump, giving a news conference on Wednesday and then launching into a flurry of media hits in opposition to Trump’s attempts to reshuffle his Cabinet after ousting Secretary of State Rex Tillerson. “People complain sometimes about the filibuster; they complain about trying to obstruct. I think the debate over whether or not America is a country in favor of torture or not is an important one,” Paul said. “I’m going to do everything I can to block them.” Paul’s opposition to Pompeo will be more immediately felt because he serves on the Senate Foreign Relations Committee, where the GOP enjoys just a one-seat advantage. With Paul opposed, Pompeo could receive an unfavorable committee verdict if Democrats join him in opposition, which would be a serious black mark on Pompeo's nomination. Pompeo’s previous pushes for regime change in Iran and his hawkish worldview are also at odds with Trump, and therefore he should not be given the job, Paul argued. 

      Trump taps torturer to head CIA - In replacing US Secretary of State Rex Tillerson with CIA Director Mike Pompeo Tuesday, US President Donald Trump tapped a more than 30-year CIA veteran, Gina Haspel, to head the premier US spy agency. In doing so, he is attempting to place the CIA back under the leadership of an individual who is directly implicated in the crimes of torture and forced disappearance, as well as the destruction of evidence of these crimes. Haspel, 61, joined the CIA in 1985.  Her rise within the agency was bound up with her participation in the criminal methods adopted by the CIA in the wake of the September 11, 2001 attacks, when thousands of individuals were illegally detained, forcibly disappeared and subjected to horrific forms of torture. Haspel ran one of the first secret prisons set up by the CIA, where alleged Al Qaeda suspects were brought under the “extraordinary rendition” program of abduction and extra-judicial transfer of individuals to third countries to be interrogated and tortured. Haspel oversaw operations at the “Cat’s Eye” secret prison in Thailand, where Abu Zubaydah and Abd el-Rahim al-Nashiri were taken after being kidnapped by CIA operatives. Secret records of this torture were released last year as a result of a Freedom of Information Act suit filed by the American Civil Liberties Union (ACLU) against the CIA. They reveal that the prisoners were subjected to prolonged confinement in boxes, as small as 21 inches wide, 2.5 feet deep and 2.5 feet high; walling, or having their backs and heads slammed repeatedly into a wall; and water boarding, a technique in which water is poured through a cloth placed over the victim’s mouth and nose, inducing drowning. Zubaydah was subjected to water boarding 83 times. While in CIA custody, he lost his left eye. Haspel ordered and supervised these acts of torture even under conditions in which she knew they were illegal and suspected that her victims had no information to give the CIA even if they wanted to.

      Gina Haspel, Trump’s Pick for CIA Director, Ran a Black Site for Torture - In May 2013, the Washington Post’s Greg Miller reported that the head of the CIA’s clandestine service was being shifted out of that position as a result of “a management shake-up” by then-Director John Brennan. As Miller documented, this official — whom the paper did not name because she was a covert agent at the time — was centrally involved in the worst abuses of the CIA’s Bush-era torture regime.  As Miller put it, she was “directly involved in its controversial interrogation program” and had an “extensive role” in torturing detainees. Even more troubling, she “had run a secret prison in Thailand” — part of the CIA’s network of “black sites” — “where two detainees were subjected to waterboarding and other harsh techniques.” The Senate Intelligence Committee’s report on torture also detailed the central role she played in the particularly gruesome torture of detainee Abu Zubaydah.  Beyond all that, she played a vital role in the destruction of interrogation videotapes that showed the torture of detainees both at the black site she ran and other secret agency locations. The concealment of those interrogation tapes, which violated multiple court orders as well as the demands of the 9/11 commission and the advice of White House lawyers, was condemned as “obstruction” by commission chairs Lee Hamilton and Thomas Keane. A special prosecutor and grand jury investigated those actions but ultimately chose not to prosecute.  The name of that CIA official whose torture activities the Post described is Gina Haspel. Today, President Donald Trump nominated Gina Haspel as the new director of the CIA, announcing the news on Twitter. Mike Pompeo, the previous director, was nominated to run the State Department to replace the ousted Rex Tillerson.

      Taibbi: Trump’s CIA Pick Took Part in Silencing Torture Suspect -- Last year, ProPublica reporter Raymond Bonner published a story about the August, 2002 interrogation of Abu Zubaydah, a Palestinian man the CIA believed was a top al Qaeda lieutenant. The report describes the "enhanced interrogation techniques" employed at a secret CIA "black site" prison in Thailand: As the CIA's video cameras rolled, security guards shackled Abu Zubaydah to a gurney and interrogators poured water over his mouth and nose until he began to suffocate. They slammed him against a wall, confined him for hours in a coffin-like box, and deprived him of sleep.  As Bonner describes, the CIA's "chief of base" or "COB," Gina Haspel – who was just named Trump's head of the CIA – "mocked" Zubaydah's complaints and accused him of faking. That the Bush administration relied upon some of Zubaydah's statements as justifications for invading Iraq is well known by now. Here's ProPublica on why Zubaydah might not have been such a great source: "It was clear that CIA analysts were wrong when they had identified Zubaydah as the number three or four in al-Qaida after Osama bin Laden. The waterboarding failed to elicit valuable intelligence not because he was holding back, but because he was not a member of al-Qaida, and had no knowledge of any plots against the United States." A trove of CIA cables about this idiotic incident came to light, among other things, as a result of a lawsuit, Salim v. Mitchell, in which the ACLU targeted the psychologists behind the CIA "torture" program. The "COB" comes up more than a few times in these cables.There are bound to be a lot of excerpts from these cables circulating in the news today, but one in particular stands out. It describes the attitude of the U.S. officials – presumably including Haspel – toward Zubaydah's future: [image]  Good to know we can make decisions like that about people whenever we feel like it! And we wonder why people around the world hate us so much.

      Despite Torture-Loving Pasts, Schumer Not Pushing Democrats to Oppose Pompeo or Haspel - The Senate's top Democrat is not calling on his fellow party members to oppose President Donald Trump's nominee for secretary of state—torture-praising Mike Pompeo—or his nominee to lead the CIA—"actual torturer" Gina Haspel.  Senate Minority Leader Charles Schumer of New York made his stance clear to reporters on Tuesday. Schumer said Pompeo and Haspel face “lots of outstanding questions," but hoped that if Pompeo is confirmed, he "will turn over a new leaf and will start toughening up our policies towards Russia and Putin."The instability of this administration in just about every area weakens America. If he’s confirmed, we hope that Mr. Pompeo will turn over a new leaf and will start toughening up our policies towards Russia and Putin.— Chuck Schumer (@SenSchumer) March 13, 2018Currently the CIA Director, Pompeo was picked to be the nation's top diplomat following the "twouster" of Rex Tillerson. Trump chose CIA deputy director Haspel to fill Pompeo's shoes at the agency. Both nominations drew criticism from a broad range of groups.Greenpeace USA Climate Director Naomi Ages, for example, said, "In addition to being a climate denier, like his predecessor, Pompeo is the Koch brothers' shill who will denigrate the United States’ reputation abroad and make us vulnerable to threats at home." Pompeo has also indicated he is open to the reauthorization of torture, and referred to CIA staff who waterboarded detainees as "patriots."

      As Trump Moves Toward War, "The Resistance" Refuses To Resist - Trump’s push to install Mike Pompeo as U.S. Secretary of State is a crystal clear indication that he’s begun the process of building his war cabinet. The next steps, likely to begin over the course of 2018, is to walk away from the Iran deal. I suspect relentless war propaganda to be unleashed simultaneously as the neocon/neoliberal/mass media war-monger alliance plays its well established role in selling the American public on another pointless and destructive war. My prior post discussed Pompeo in detail, so I don’t want to be repetitive, but to revisit: Pompeo has contempt for the First Amendment, referred to torturers as patriots, wants Edward Snowden executed and is an extreme warhawk when it comes to Iran. In other words, he’s your typical neocon lunatic who’s just a bit more rough around the edges publicly.  Switching gears a bit, today’s piece will zero in on Trump’s other desired appointment, Gina Haspel to head the CIA. Gina’s famous for running a CIA black site in Thailand where detainees were tortured. In fact, she performed her role with such gusto she was nicknamed “Bloody Gina” by colleagues, and also played a key role in destroying videotape evidence of the torture. Her promotion represents a bizarre way to “drain the swamp,” but I digress. What’s most interesting and extremely disturbing about the Pompeo and Haspel appointments, is the lack of resistance from “the resistance.” Here’s what I mean. From The Hill: The top Democrat on the Senate Intelligence Committee, Sen. Mark Warner (D-Va.), on Wednesday cited a “very good working relationship” with Haspel, currently the agency’s deputy director. Sen. Joe Manchin (W.Va.), a red-state Democrat who also sits on the Intelligence panel, said he was “very much open-minded.” Even one of the Senate’s harshest critics of “enhanced interrogation techniques” and the architect of the so-called torture report, Sen. Dianne Feinstein (D-Calif.), signaled a surprisingly open reception to Haspel that could pull others off the fence. “We’ve had dinner together. We have talked. Everything I know is she has been a good deputy director,” Feinstein said on Tuesday, adding, “I think, hopefully, the entire organization learned something from the so-called enhanced interrogation program.” Feinstein blocked Haspel in 2013, but now, under Trump, she’s open to an even bigger promotion.

      Trump to remove McMaster as national security adviser: report - President Trump has reportedly decided to remove H.R. McMaster as his national security adviser.The Washington Post reported Thursday evening that Trump is discussing potential replacements for McMaster, but is willing to take his time in removing him to ensure there is a strong successor. White House press secretary Sarah Huckabee Sanders pushed back on the report, saying "there are no changes" at the National Security Council.“Just spoke to @POTUS and Gen. H.R. McMaster - contrary to reports they have a good working relationship and there are no changes at the NSC,” she tweeted.Just spoke to @POTUS and Gen. H.R. McMaster - contrary to reports they have a good working relationship and there are no changes at the NSC.— Sarah Sanders (@PressSec) March 16, 2018Rumors of McMaster’s exit have swirled in recent weeks, though the White House earlier this month pushed back on reports his ouster was imminent.  McMaster, a three-star Army general, has had public disagreements with Trump over issues ranging from Iran to Russia. The president rebuked his national security adviser last month after McMaster said Moscow’s interference in the 2016 election was “incontrovertible.”  “General McMaster forgot to say that the results of the 2016 election were not impacted or changed by the Russians and that the only Collusion was between Russia and Crooked H, the DNC and the Dems,” Trump tweeted.

      Looks like Mattis is the grown up in the room - This is a very young Mike Pompeo when he was a first year cadet at West Point in 1983.  He concentrated his study there in Mechanical Engineering and graduated first in his class.  By the time he graduated the war in VN was long over.  He served just enough time to repay his service debt to the army, then resigned his commission to go to law school.  So, he never served in combat.  War is an abstraction to him.  In other words, this is probably a game for Pompeo, a power game played on a global map board. DJT in announcing Pompeo's nomination to the WH lawn press corps stressed that he and Pompeo had "great chemistry" and that they share the same view of the world.  In other words, Pompeo never disagrees with Trump.    Pompeo is well known for his hard line anti-Iranian views and his unshakable sympathy for Israel.  DJT professes the same views. At the UN Nikki Haley has now specifically threatened Syria and Russia with attack if the Syrian government does not halt its offensive in East Gouta and the Yarmouk camp. Both are near Damascus.  These two places are mainly defended by jihadis, the largest group of which is Hayat Tahrir al-Sham (HTS, the Al-Qa'ida branch in Syria.  You remember Al Qa'ida.  They were the people who attacked us on 9/11.  Her threat is for retaliation for use of chemical weapons (chlorine)or just plain old "inhuman suffering" inflicted on the "Syrian People."  This does not seem an idle threat given the number of times she has repeated it.  Someone is telling her to say this.  At the same time Russia has made it clear that they will fight to protect their ally and interests in Syria.  They have been quite plain spoken about that and they included both US aircraft and ships in the threat.  I note that the Admiral Essen, a Russian missile shooting frigate sortied from Sebastopol today.  I think that Pompeo's nomination and his eventual confirmation brings the world closer to a US-Russia war.  If that happens it will be difficult if not impossible to keep the war from escalating toward the use of nuclear weapons.  Israel wants war, a wrecking war with Iran.  Israel wants the US to win that war for Israel.  IMO Israel would be wrecked in such a war whatever the outcome.  This is an August, 1914 moment. 

      Seven days in March: The Trump administration and the breakdown of American democracy - The Trump administration has taken a series of actions this week that expose the authoritarian character of the government and the breakdown of democratic forms of rule in the United States.On Tuesday, Trump summarily fired Secretary of State Rex Tillerson, announcing that he would be replaced by close Trump supporter and current CIA Director Mike Pompeo. Tillerson reportedly learned of the change at the same time as the media, when it was announced in a 140-character tweet.The form of the change in personnel at the highest level of the state is significant. Trump treats his cabinet, and expects them to act, as an assemblage of courtiers, loyal only to him. The Secretary of State is the senior cabinet post, which historically carries with it the greatest prestige, and the occupant of this position is the fourth person in the legal line of succession to the presidency.Trump chooses ciphers, humiliates them publicly, and then throws them out as if they were pieces of garbage. He thereby demonstrates his contempt not only for individuals, but also the office they occupy. The same statement on Twitter announced the nomination of Pompeo to succeed Tillerson, the first time that an intelligence official has been elevated to the post of principal foreign representative of the US government. Trump also announced the nomination of CIA Deputy Director Gina Haspel to succeed Pompeo. Haspel is notorious for her role in directing the CIA’s rendition and torture program, including waterboarding at a secret CIA prison in Thailand.These are only the latest in a week of ominous decisions and actions emanating from the White House:

      • * The Justice Department filed suit against the state of California, seeking to use the courts to crush any opposition to intensified mass repression against immigrants. During a visit to southern California to view models of his proposed wall along the US-Mexico border, Trump declared that state officials were aiding criminals and putting the police at risk of being murdered by immigrants.
      • * Rejecting the urgings of many advisers, one of whom resigned in protest, Trump signed an order imposing tariffs on steel and aluminum imports, while boasting of his desire to start a trade war that would have incalculable effects on the world economy.
      • * Trump agreed to a summit with North Korean leader Kim Jong-un, without even informing his top military and diplomatic aides, in what is widely viewed as an effort to stage-manage an international provocation—through the summit’s collapse or failure—that would become the pretext for war.
      • * Addressing a campaign rally in Pennsylvania, Trump threatened the media, denounced political opponents in vulgar and racist terms, and called for the execution of drug dealers.

      All these events have a similar character: Trump conducts himself more and more in the manner of a Mussolini, putting into practice his frequent declaration during the 2016 campaign that only he could put right what is wrong about American society. He conducts himself, not as the elected representative of the American people, or even as the leader of one of the two main capitalist parties, but as a personalist ruler, an authoritarian of the Latin American or fascist type, the arbiter of all major social and political issues.

      "I'm In": Trump And Kelly Reach A Truce –- When White House Press Secretary Sarah Huckabee Sanders told reporters on Thursday that Kelly "is not going anywhere," it appears she meant it. Because less than a day after CBS speculated that Kelly could be the next senior White House staffer to be pushed out, the Wall Street Journal reported that President Donald Trump and Kelly have reached an (uneasy) truce. While Kelly's relationship with the president had deteriorated markedly by mid-week, the two men had a "productive" meeting on Thursday, and apparently ended it with an understanding that Kelly would remain on board - for now, at least. Jarred by the treatment of former Secretary of State Rex Tillerson, whom the president fired by tweet on Tuesday morning, Mr. Kelly suggested to colleagues that he may be the next to be pushed out of the White House. Mr. Kelly’s cryptic comments left several White House staffers with the impression that Mr. Kelly would force the issue with the president, and that they should start looking for new jobs, too.  The internal drama heightened when Mr. Kelly flew with the president to California on Tuesday, but returned alone and was working in his West Wing office on Wednesday morning. Mr. Kelly’s allies in the White House, however, said the chief of staff had always planned on flying the 4,500-mile round-trip between Washington and San Diego in less than a day.  This dance culminated on Thursday when "Trump and Kelly had a productive meeting that left both men reassured." Trump told advisers afterward that Kelly was “100% safe.” Kelly, according to the WSJ, told his associates that, at least for the moment, he and the president had patched things up. “I’m in,” Mr. Kelly told staff. But how long the peace lasts is anyone's guess:

      Kelly tells White House staff no more personnel changes coming - Chief of staff John Kelly briefed White House staff on Friday to reassure them that there will be no more dismissals at this time, according to a White House official.The White House is looking to tamp down the frenzy in Washington over speculation about a staff overhaul after President Trump’s abrupt firing of Secretary of State Rex Tillerson and a number of other departures sent the rumor mill into overdrive.“The chief of staff actually spoke to a number of staff this morning, reassuring them that there were no immediate personnel changes at this time and that people shouldn’t be concerned, that we should do exactly what we do everyday, and that’s come to work and do the best job we can,” said White House press secretary Sarah Huckabee Sanders. “That’s exactly what we’re doing and exactly what we’re focused on.”Sanders said she met personally with others who weren’t in the meeting to tell them the same. The Washington Post reported late Thursday that Trump has decided to remove national security adviser H.R. McMaster. The report said the White House is looking for a soft landing spot for the three-star general, and potentially some place where he could continue his military career and earn a fourth star.The White House disputed that report, with Sanders saying she spoke directly to Trump and relayed to McMaster that the president is not planning any changes to his National Security Council. “The president said that it was not accurate and he had no intention of changing and that they have a great working relationship and he looked forward to continuing to work with him,” Sanders said.

      Nikki Haley: US prepared for military action in Syria if UN doesn't act | TheHill: United States Ambassador to the United Nations Nikki Haley on Monday said the U.S. is willing to take military action to end the Syrian bombing of civilians if the U.N. is unable to do so. “When the international community consistently fails to act, there are times when states are compelled to take their own action,” Haley told the Security Council, noting that this is one of those times. “We warn any nation determined to impose its will through chemical attacks and inhuman suffering, but most especially the outlaw Syrian regime, the United States remains prepared to act if we must,” Haley said. “It is not a path we prefer. But it is a path we have demonstrated we will take, and we are prepared to take again.” Haley compared the current situation in Syria to a period last year when the Syrian government’s chemical weapon attacks led the U.S. to launch a missile attack against the Syrian military. The council passed a resolution calling for a ceasefire in late February but it has been unable to put an end to the Syrian government’s bombings or get the government to permit humanitarian access. U.N. Secretary-General António Guterres said the bombings in Ghouta have only gotten worse since the Security Council called for the ceasefire, noting that the Syrian government — helped by Russia and China — has significantly increased its controlled territory in the region.

      Iran, Syria and Saudi Arabia: Top three stunning admissions from the top U.S. general in the Middle East - The top U.S. general in the Middle East testified before Congress on Tuesday and dropped several bombshells: from signaled support for the Iran nuclear deal, admitting the U.S. does not know what Saudi Arabia does with its bombs in Yemen and that Assad has won the Syrian Civil War. U.S. Army General Joseph Votel said the Iran agreement, which President Donald Trump has threatened to withdraw from, has played an important role in addressing Iran's nuclear program. "The JCPOA addresses one of the principle threats that we deal with from Iran, so if the JCPOA goes away, then we will have to have another way to deal with their nuclear weapons program," said U.S. Army General Joseph Votel. JCPOA, or Joint Comprehensive Plan of Action, is the formal name of the accord reached with Iran in July 2015 in Vienna. Trump has threatened to withdraw the United States from the accord between Tehran and six world powers unless Congress and European allies help "fix" it with a follow-up pact. Trump does not like the deal's limited duration, among other things. Votel is head of the U.S. military’s Central Command, which is responsible for the Middle East and Central Asia, including Iran. He was speaking to a Senate Armed Services Committee hearing on the same day that Trump fired Secretary of State Rex Tillerson after a series of public rifts over policy, including Iran. 

      Russia Will Respond If US Attacks Syrian Government Forces - Recently,various US officials have been suggesting substantial attacks on the Syrian military are imminent. This talk of attacking Syria has provoked a warning from the Russian Foreign Ministry, and a second warning from top Russian generals. Russia’s military chief of staff warns Russia would retaliate “against the missiles and launchers used” by the US if such a strike threatens Russian forces in the country. That’s clearly a game-changer, as the US has previously believed that they could carry out the occasional attack against Syrian military targets with impunity. This was the case with the April tomahawk missile attacks against a Syrian air base done over a putative chemical weapon attack, which Russia criticized but didn’t act over. US officials have been drumming up multiple pretexts for another strike, including more poorly documented chemical weapons incidents, Syrian offensives against rebel factions in Eastern Ghouta, and Syrian airstrikes that are either near or in a de-escalation zone in the Daraa Province. With Russian Foreign Minister Sergey Lavrov warning of “grave consequences,” and the Russian military talking retaliation, it’s clear US strikes would not be consequence-free. Rather a US strike under any justification would risk a long feared direct war between the US and Russia. That’s a concern long-standing among US officials, and as recently as December, a top US general was warning US troops to prepare for a “big-ass war” with Russia. Even during the 2016 campaign President Trump made clear he was very aware of the risk of a Syria War leading to a Russia war. Trump will have to manage constant pressure to do more against Syria to avoid steering into such a disastrous conflict.

      Trump Administration Sanctions Russia for Interference in US Elections —The Trump administration slapped Moscow with its first sanctions for meddling in the 2016 presidential campaign and waging unrelated cyberattacks on critical U.S. infrastructure, punishing the Kremlin’s intelligence agencies and Russians already indicted by special counsel Robert Mueller. .In sanctioning five entities and 19 individuals Thursday, the Treasury and senior national-security officials accused the Russian government of ongoing attacks on the U.S. energy grid, and water, aviation and manufacturing facilities. Senior U.S. national security officials said those attacks gave Moscow access to the control systems that run some U.S. utilities and factories. Russia also targeted U.S. nuclear facilities for cyberattacks. The U.S. in addition cited a cyberattack last year known as NotPetya that crippled computer networks at multinational firms world-wide. And the administration pointed to the nerve-agent attack earlier this month in the U.K. that left a former Russia spy and his daughter in critical condition. Congress has expressed growing concern about Russian aggression and the Trump administration’s response to it. The concerns, playing out over the past few years, focus on Russia’s efforts to influence U.S. elections, cyberattacks on U.S. companies, Moscow’s involvement in war-ravaged Ukraine and Syria, and the U.K. nerve-agent attack.

      "Shocking And Unforgivable": Russia To Expel UK Diplomats, Expand US "Blacklist" As Crisis Deepens - As relations between Russia and the west crash to a new post-Cold War low in the aftermath of the nerve agent attack on a former Russian double agent in the UK, Russia was set to expel British diplomats in retaliation for Prime Minister Theresa May’s decision to kick out 23 Russians, while expanding its "blacklist" of US citizens in response to yesterday's Treasury sanctions, Russian Deputy Foreign Minister Sergei Ryabkov told Sputnik. After Theresa May cast blame on Moscow - and singled out Putin as the mastermind behind the attack - giving 23 Russians who she said were spies working under diplomatic cover at the London embassy a week to leave, Russia has denied any involvement, cast Britain as a post-colonial power unsettled by Brexit, and suggested London fabricated the attack in an attempt to whip up anti-Russian hysteria.When asked by a Reuters  reporter if Russia planned to expel British diplomats from Moscow, Russian Foreign Minister Sergei Lavrov smiled and said: “We will, of course.”Separately, discussing the response to Russian sanctions, Ryabkov said that "For our part, we have ensured parity in the number of individuals included in the sanctions lists from the very beginning. So we will replenish our ‘blacklist’ with another group of US individuals,” Ryabkov said.According to the deputy minister, Russia does not want to suspend dialogue with the United States, noting that the future retaliatory measures were not Moscow’s choice."We're only doing this because of US political stubbornness and unwillingness to perceive reality. We may take additional steps, which we will calibrate in accordance with our own interests and, of course, the need to not suspend dialogue completely in order to at least begin stabilizing bilateral relations with Washington … We reaffirm that our resolve will not be weakened by any opponents' intrigues, many of whom are beyond the Atlantic Ocean,” Ryabkov said.On Thursday, the US Treasury Department announced sanctions against 19 Russian individuals and five entities, including Russia's Federal Security Service and the Main Intelligence Directorate (GRU) for their alleged roles related to the interference in the 2016 presidential campaign in the United States.

      WATCH: Putin’s FULL Interview with Megyn Kelly on NBC -   (video & transcript)  Vladimir Putin interviewed by NBC anchor Megyn Kelly. The interview was recorded in the Kremlin on March 1, 2018, and in Kaliningrad on March 2, 2018. NBC showed an edited version only. The following transcript is courtesy of the Kremlin office of the President of Russia.

       Trump Tells Netanyahu: US To Withdraw From Iran Deal Unless "Significant" Changes Made - It has been nearly six weeks sine Vice President Mike Pence surprised Israeli lawmakers during a speech at the Knesset by declaring that the US would not recertify the Iran deal when it comes up for renewal again in May - leaving open the possibility that sanctions could be reimposed shortly after. And in the latest sign that, after loudly criticizing the Iran deal as one of the "worst deal ever", the Trump administration is planning to move ahead with its plans to reimpose sanctions, Axios reports that Trump told Israeli President Benjamin Netanyahu that he will demand "significant changes" to the deal in his negotiations over possible modifications as the different parties try to come to a "last chance" compromise to keep it intact.President Trump told Israeli Prime Minister Netanyahu in their meeting at the White House last Monday that he won't show flexibility in the negotiations with France, Germany and the U.K. on amending the Iran nuclear deal, two senior Israeli officials told me.The officials say Trump told Netanyahu that until now the three European powers only proposed "cosmetic changes" that he doesn't find satisfactory. Trump said he demands "significant changes" in the Iran deal itself and not simply the addition of a supplemental agreement between the U.S. and the European countries, according to the officials.The bottom line: Trump stressed that if his demands are not met, the U.S. will withdraw from the deal.

      Watch: Colonel Says Israel Is Dragging The United States Into World War III --  Israel is in the process of plunging America into a war with Iran that could destroy what’s left of the Middle East and ignite a third world war, Col. Lawrence Wilkerson, former chief of staff to Secretary of State Colin Powell, warned in Washington approximately a week ago. Wilkerson, a retired army colonel who now teaches at Washington-area universities, didn’t hold back in his critique of where the status quo is leading the United States via its client state, Israel.   At the annual Israel lobby conference at the National Press Club, sponsored by the Washington Report on Middle East Affairs and Institute for Research: Middle East Policy, Wilkerson explained that Israel is headed toward “a massive confrontation with the various powers arrayed against it, a confrontation that will suck America in and perhaps terminate the experiment that is Israel and do irreparable damage to the empire that America has become.”  One of the principal antagonists begging for a war with Iran that Wilkerson identified was none other than Avigdor Lieberman, Israel’s Russian-born Defense Minister. Wilkerson stated: “Lieberman will speak in April in New York City at the annual conference of the Jerusalem Post. The title is, ‘The New War with Iran.’ It is clear that he’s [at] the forefront of promoting this war. “And nowhere does my concern about such a war focus more acutely at the moment than Syria. As [the] president of France Emmanuel Macron described it recently, ‘The current rhetoric of the U.S., Saudi Arabia, and Israel is pushing the region toward conflict with Iran.’”

       We Made A Documentary Exposing The ‘Israel Lobby.’ Why Hasn’t It Run? - I was only somewhat surprised when I found myself standing next to Harvard law Professor Alan Dershowitz in the omelet line last Saturday.  Dershowitz had recently played a small role in an episode that was threatening the reputation of my long-time employer, Al Jazeera. So naturally, I leapt at the opportunity to defend it. The circumstances of the threat were these: In 2016, the award-winning Investigative Unit I directed sent an undercover reporter to look into how Israel wields influence in America through the pro-Israel American community. But when some right wing American supporters of Israel found out about the documentary, there was a massive backlash. It was even labeled as anti-Semitic in a spate of articles.    This uproar came at a time when due to an arbitrary blockade on Qatar imposed by the United Arab Emirates and Saudi Arabia, Qatar had been pursuing an end to its siege by appealing to the U.S.From reports in the Israeli press, I learned that Dershowitz had been brought to meet with the Qatari emir, and that the American Jews had brought up what they saw as Al Jazeera’s “anti-Semitism” in those meetings. Of course, our documentary is not anti-Semitic. It is an exploration of how Israel, a foreign government, influences U.S. foreign policy. But I decided to show it to Dershowitz to get his point of view, and I was pleased when he obliged. “I have no problem with any of the secret filming,” Mr. Dershowitz told me after watching nearly half of the documentary. “And I can even see this being broadcast on PBS. What I do take issue with is the lack of balance this program has, for example, not having a voice like me.”  I understood Dershowitz’s remarks as a qualified seal of approval, which heartened me. And yet, our documentary has now been elevated to the center of an international scandal, with Al Jazeera’s reputation in America seemingly hanging in the balance.

      British spy drama echoes through Washington | TheHill: The reverberations of an attempted murder of a Russian double agent in Britain are reaching American shores, sharpening questions yet again about President TrumpDonald John TrumpAccuser says Trump should be afraid of the truth Woman behind pro-Trump Facebook page denies being influenced by Russians Shulkin says he has White House approval to root out 'subversion' at VA MORE’s relationship with Russian President Vladimir Putin. British Prime Minister Theresa May told the U.K. parliament on Monday that it was “highly likely” that Russia was responsible for an attack that has left Sergei Skripal and his daughter critically ill. Skripal, a one-time Russian military intelligence officer, was an informant for British intelligence services around the turn of the century. Skripal and his daughter appear to be have been poisoned using a nerve agent at or near his home in Salisbury, a quiet cathedral city roughly 90 miles southwest of London. May asserted in her Monday statement that the nerve agent used was “military grade” and “of a type developed by Russia.”  White House press secretary Sarah Huckabee Sanders did not endorse the British government’s de facto position that Russia was responsible for the attack during Monday’s White House briefing.Sanders did call the attack “an outrage,” “reckless” and “indiscriminate,” but did not offer clarity on whether Trump shares the British assessment of Russian responsibility. Later Monday, Secretary of State Rex Tillerson was more forceful in his denunciation, saying the U.S. has "full confidence in the U.K.'s investigation and and its assessment that Russia was likely responsible."

      Haley: Vote With U.S. at U.N. or We'll Cut Your Aid - U.S. Ambassador to the United Nations Nikki Haley is proposing a sweeping reassessment of U.S. foreign assistance with a view to punishing dozens of poor countries that vote against U.S. policies at the U.N., according to a confidential internal memo drafted by her staff.The move to make foreign aid conditional on political support follows a U.S. decision to cut tens of millions of dollars in assistance to Palestinian refugees, a cut made in retaliation for Palestine’s sponsorship of U.N. resolutions denouncing U.S. President Donald Trump’s controversial recognition of Jerusalem as Israel’s capital. Haley now wants to apply a similar principle to decisions about aid to other needy countries.“It is the opinion of the U.S. mission to the U.N. that all U.S. foreign assistance should be reevaluated to ensure that taxpayers dollars are spent to advance U.S. interests, not to fund foreign legacy programs that provide little or no return on investment,” according to the 53-page memo, which was reviewed by Foreign Policy. The Palestinian aid cuts “should serve as a fulcrum from which we use our foreign assistance leverage and measure its impact.”The memo, titled “America First Foreign Assistance Policy” and marked sensitive, echoes Trump’s oft-repeated claim that the world takes advantage of U.S. largesse while opposing American goals. The proposal also underscores the dramatic shift in Haley’s own stance on foreign assistance; she began her term pledging to preserve humanitarian aid for Palestinian and Syrian civilians and to oppose “slash and burn” cuts at the United Nations. The document is part of a broader interagency review of U.S. foreign assistance initiated by Trump, who appealed to Congress during his State of the Union address to “pass legislation to help ensure American foreign-assistance dollars always serve American interests and only go to America’s friends.”

      Trump Tariffs May Threaten U.S. Auto Jobs, European Executives Warn - Wall Street Journal—European auto executives are warning that if President Donald Trump imposes prohibitive tariffs on automotive imports they could be forced to curb investment in their U.S. factories in the event of a trade war, which would threaten American jobs. . Mr. Trump ordered stiff duties on steel and aluminum imports last week, while giving allies, like the European Union, a chance to negotiate exemptions. Then, at a weekend rally in Pennsylvania, the president appeared to take aim squarely at Europe, threatening to extend tariffs to the continent’s car industry “They kill us on trade, he said. “We’re going to tax Mercedes-Benz... We’re going to tax BMW.” Under global trade rules set in 1994, the European Union imposes a 10% duty on cars and trucks from the U.S. and other countries, the maximum allowed. The U.S. applies a 2.5% tariff on imported passenger cars, the maximum it is allowed under the pact, and a 25% tariff on pickup trucks and work vans. Raising U.S. tariffs on imported cars could prove trickier than targeting steel and aluminium and have unexpected effects. If European car makers react by cutting investments in their U.S. plants, it could even hurt U.S. automotive exports. Germany’s big auto makers— Volkswagen AG , BMW BMW 0.23% AG and Daimler AG , which makes Mercedes—have built factories in the U.S. and Mexico capable of exporting to Europe and China, as well as supplying the local market. German car makers last year shipped 762,000 vehicles from their U.S. factories, of which more than 60% were exported to the EU, China and Southeast Asia, Mexico and Canada, according to the German Automotive Manufacturers’ Association. 

      Senate GOP leaders won’t try to block Trump’s tariffs --Republicans have been freaking out about President Donald Trump’s steel and aluminum tariffs all month. But don’t expect them to do anything about it just yet.GOP leaders are shying away from a direct confrontation with Trump over trade, and signaled Monday that they won’t try to pass legislation to override a president of their own party. They are instead hoping they can get the president to water down the tariffs as much as they can. Ultimately, they’re loath to risk a brutal showdown, even over an issue that’s provoked more GOP outrage toward Trump than any other one of his policies or controversies. So even though several senators are introducing proposals to stop Trump’s 25 percent tariff on imported steel and 10 percent tariff on imported aluminum, key Republicans are in no mood for a high-profile fight with Trump. “That’s clearly a long shot. But we’re trying as best we can to persuade folks in the administration to scale this back to make it less harmful,” said Sen. John Thune of South Dakota, the No. 3 GOP senator. “I don’t think we can rely on Democrats. And moving something across the floor takes 60. And then you’d have to override a veto.”

      U.S. Companies Will Get Few Exclusions to Tariffs, Officials Signal -- U.S. businesses seeking to avoid tariffs on imported supplies that incorporate steel and aluminum will face high hurdles under rules being developed by the Commerce Department, which is signaling it will grant exclusions only sparingly and based on national-security concerns. Commerce Department officials are preparing to release, either at the end of this week or early next week, a detailed blueprint for industry groups seeking exclusions, according to people familiar with the plans. President Donald Trump last week announced the tariffs on global steel and aluminum imports, of 25% and 10% respectively, to protect domestic metal producers. The move generated retaliation threats around the world and started a competition for countries and industries seeking exceptions to the trade barriers. U.S. importers would likely have to pay tariffs on metals imported this month after the barriers are implemented, even if they are applying for an eventual exclusion, according to people familiar with the discussions. It isn’t clear if the tariffs would be refunded if a company is subsequently granted an exclusion, the people said. More than a dozen Republican lawmakers who oversee trade policy wrote to Mr. Ross on Wednesday asking for tariffs to be repaid if companies get product exclusions in order to avoid a “chilling effect on commerce and jobs.” Commerce officials briefed congressional aides Tuesday. Commerce Secretary Wilbur Ross, along with officials from other agencies, will take into consideration arguments that are focused on national security, the legal basis for the tariffs under Section 232 of a 1962 trade law, according to people familiar with the process. 

      Trump Tariffs Not Such a Big Deal for U.S. Growth, Poll Shows Trade wars are bad but President Donald Trump’s steel and aluminum tariffs won’t have much direct impact on the U.S. economy unless the situation escalates, according to a new survey conducted by Bloomberg News.Roughly two-thirds of the 35 economists polled by Bloomberg expect the tariffs that Trump signed last week would cause a small decrease in jobs and a small drop in U.S. economic growth, which is enjoying its third-longest expansion on record. One economist predicted a small gain in jobs. No one thought there would be a large impact in either direction. “By themselves, the tariffs on steel and aluminum will likely have a modest impact on growth and inflation,” said Scott Brown, chief economist at Raymond James Financial in St. Petersburg, Florida. “The bigger concerns are retaliatory tariffs against U.S. exports, the possibility of a broader trade war, higher costs, and greater uncertainty for global business investment.”

      Canada touts military-strategic alliance with Washington to win exemption from Trump’s tariffs - American President Donald Trump’s announcement of an exemption for Canada from new US tariffs on steel and aluminum imports highlights Ottawa’s intimate military-strategic partnership with US imperialism and the determination of Justin Trudeau’s Liberal government to line up with Washington in its preparations for economic and military conflict with its main rivals, above all China. Trump confirmed the exemption last Thursday as he announced, in the name of “national security,” the imposition of 25 and 10 percent tariffs respectively on all steel and aluminum imports.Trump’s tariffs represent a major step in dismantling the “liberal” global trade order Washington long championed, and have provoked warnings from government and business leaders around the globe that the world risks becoming embroiled in trade war.Trump’s exemption for Canada and fellow North American Free Trade Agreement (NAFTA) partner Mexico, is not without a hitch, however. The White House has indicated its continuation is tied to a “successful” and speedy outcome of the ongoing talks to renegotiate NAFTA. In other words, Washington intends to use it as leverage in compelling Ottawa and Mexico City to bow to its NAFTA demands. These include: dramatically limiting Canadian and Mexican access to US government procurement contracts; a 50 percent US content and 85 percent North American content requirements for automobiles to be tariff-free; and the dismantling of Canadian barriers on dairy and poultry imports. At the same time, the exemption underscores that a key aim of Washington is to fashion NAFTA into an even more overtly protectionist trade bloc directed against Washington’s economic and military competitors, China and Russia, but also against the European powers, especially Germany.

      Trump boasted to donors about making up facts during talks with Trudeau: report | TheHill: President Trump said at a fundraising dinner that he made up facts during a meeting with Canadian Prime Minister Justin Trudeau, The Washington Post reported Wednesday. Trump told those at the dinner that he insisted that the U.S. had a trade deficit with Canada, but did not know if that was the case, according to leaked audio of the speech obtained by the Post. “Trudeau came to see me. He’s a good guy. Justin. He said ‘No, no, we have no trade deficit with you, we have none. Donald, please,’” Trump said. “Nice guy, good looking guy, comes in — ‘Donald we have no trade deficit.’”“I said, ‘Wrong Justin, you do.’ I didn’t even know. ... I had no idea. I just said ‘You’re wrong.’ You know why? Because we’re so stupid. ... And I thought they were smart. I said, ‘You’re wrong Justin,’” Trump continued. “He said, ‘Nope we have no trade deficit.’ I said, ‘Well in that case I feel differently,’ I said, ‘but I don’t believe it.’ I sent one of our guys out, his guy, my guy, they went out, I said ‘Check because I can’t believe it,’” he said. “‘Well sir you’re actually right. We have no deficit but that doesn’t include energy and timber … And when you do we lose $17 billion a year.’ It’s incredible." The Office of the U.S. Trade Representative states that the United States does, in fact, have a trade surplus with Canada, according to the Post. Trump also implied during the speech that he could pull U.S. troops stationed in South Korea if he didn’t strike a trade deal favorable to the U.S. with the country, the newspaper reported. 

      Negotiators meet as KORUS turns 6 - U.S. and South Korean negotiators meet in Washington today for the third round of talks on renegotiating the U.S.-Korea Free Trade Agreement, which President Donald Trump has threatened to terminate unless changes are made to reduce the U.S. trade deficit with the Asian ally. The meeting comes on the sixth anniversary of the pact going into effect in March 2012. KORUS has been under the shadow of a possible U.S. withdrawal since Trump took office in January 2017. While the pact’s most stalwart supporters acknowledge it has not worked as well as expected, they also believe withdrawing from the pact would be a terrible mistake, both economically and geopolitically.“Not everything with regard to KORUS is perfect and there are important areas where Korea has not met its commitments,” the U.S. Chamber of Commerce said in a blog post today that makes the case for staying in the agreement. “But it might come as a surprise that in six years KORUS is actually advancing many of the administration’s highest priorities and delivering wins for U.S. workers and the economy.” The business group outlined six ways it believes KORUS is having a positive impact: by growing exports, creating jobs, reducing the trade deficit, establishing enforceable rules in Asia, increasing American competitiveness and bolstering national security. “U.S. aerospace exports to Korea have doubled to $8 billion, and beef exports doubled to more than $1 billion,” the Chamber said. “U.S. services exports have increased nearly 25 percent, reaching $21 billion. All told, U.S. exports of both goods and services hit record levels in 2017, with its total growing by $8.5 billion — or 13.39 percent — to surpass the $70 billion mark for the first time ever.” On national security, the Chamber said preparations for a possible summit between Trump and North Korean leader Kim Jong Un highlighted the need for strong U.S.-South Korea ties. “KORUS symbolizes the partnership, trust and shared vision between the U.S. and South Korea that will be critical for any diplomatic success,” the group said.

      Trump’s Order Stops ALL Foreign Takeovers of Large US Tech Companies - President Trump signed a far-ranging executive order late Monday that blocked the $117-billion hostile takeover of Qualcomm by Broadcom, a Singapore-based company, on concerns over national security. This crushed any hopes that remained in some corners of seeing what would have been the largest tech deal ever. But the order was far broader: It blocked all such deals.The original Broadcom was a storied American company, dating back to the 1960s when it was part of Hewlett-Packard. It was turned lose in the 1990s as part of the dismantling of H-P and IPO’ed in 1998 as one of the dotcom darlings.In May 2015, Singapore-based chipmaker Avago Technologies announced that it would acquire Broadcom for $37 billion, the largest tech deal since the dotcom bubble. Thus Broadcom became a subsidiary of a foreign company that then took on Broadcom’s name. Then it was Qualcomm’s turn. Just imagine the fees for Wall Street, which loves these mega-deals. But the Trump White House is not so enamored with these foreign takeovers of US tech companies. Trump’s order said this:There is credible evidence that leads me to believe that Broadcom Limited, a limited company organized under the laws of Singapore (Broadcom), along with its partners, subsidiaries, or affiliates, including Broadcom Corporation, a California corporation, and Broadcom Cayman L.P., a Cayman Islands limited partnership, and their partners, subsidiaries, or affiliates (together, the Purchaser), through exercising control of Qualcomm Incorporated (Qualcomm), a Delaware corporation, might take action that threatens to impair the national security of the United States. And it isn’t just Broadcom that is targeted with this order. It’s all foreign takeovers of large US tech companies: The proposed takeover of Qualcomm by the Purchaser is prohibited, and any substantially equivalent merger, acquisition, or takeover, whether effected directly or indirectly, is also prohibited.

       Wall Street Stands To Lose Billions As Trump Hangs A "Not-For-Sale Sign" On US Tech - Broadcom executives should've seen this coming. For months now, Singapore-based Broadcom has pursued a merger with US-based Qualcomm, raising its bid for the largest US-based technology firm to $117 billion, which is developing chips that are expected to be integral to 5G network technology in the US. Then, national security issues reared their head.  Earlier this month, the Committee on Foreign Investment in the US inserted itself into the negotiations (following a request from lawmakers) by ordering Qualcomm to delay its March 6 shareholder meeting to give CFIUS more time to investigate the takeover bid.  Qualcomm had actively resisted the Broadcom's overtures, but the Singapore-based firm's willingness to repeatedly raise its bid, along with its plans to redomicile in the US, impressed upon investors that the company was committed to closing the merger. Then last night, President Trump definitively quashed the deal by issuing an executive order blocking the deal on national security grounds. The move, as many analysts noted, was unusual. But Kyle Bass of Hyman Capital anticipated the intervention, telling CNBC last week that QCOM's importance to 5G tech meant that "we can't possible let the Broadcom Qualcom merger to go through. And on Monday, the Treasury Department sent a letter to lawyers involved in the deal expressing concerns about Chinese competitors in 5G network development, which raises national security concerns over the Broadcom-Qualcomm merger.Broadcom said in a letter to Congress regarding its offer to acquire Qualcomm that the company would not sell any "critical national security assets" to any foreign companies.But clearly those assurances weren't enough. And today, as Bloomberg explains, Trump's swift rejection of the hostile takeover sent a clear message to overseas investors and companies: Any deal that could give China an edge in critical technology will be blocked on national security grounds. And right now, Qualcomm is locked in a race with China’s Huawei Technologies Co. over which company will dominate the development of next-generation wireless technology. By blocking the deal, Trump is sending a strong message to foreign firms: Vital American technology is not for sale.

      The Illusion Of Free Trade --The current trading system was never free; Trump’s tariffs merely change who gets what... Anything President Donald Trump does usually provokes a backlash from the status quo. In early March, the focus is on trade, as Trump walked the walk and slapped import tariffs on steel, aluminum, washing machines, and solar panels not just from China but also other countries. The backlash from popular media and the affected countries’ politicians blames Trump for ruining the beautiful “free trade” system built up around the World Trade Organization (WTO) and its predecessor the General Agreement on Tariffs and Trade (GATT). As with anything Trump says or does, it’s important to step back and look at the bigger context he’s acting within. The first big-picture news flash is that neither the WTO nor the GATT was “free.” Free trade is trade without government intervention. One country or industry may produce and export a lot of steel, but if it doesn’t get any subsidies and doesn’t have protective import tariffs, then it deserves to capture global market share because it’s the most competitive. It uses the locally given resources of labor and capital in the most productive way. Another country may be the best in producing solar panels, making it the world leader in solar panels. The two countries can swap steel and solar panels and balance their trade, with each country doing what it does best. If—and this is a big “if”—there is no government interference in the marketplace for money itself—in other words, if there is a global, sound money standard—then trade surpluses in one country would lead to money inflows and goods outflows, thus raising the price level and making exports naturally less competitive. In the deficit country, money would leave and goods would enter, lowering the price level and making its exports more competitive. Therefore, there would be no persistent deficits as we have seen with the United States and the rest of the world.

      U.S. Exports to China Crash in January 2018 - The year-over-year growth rate in the exchange rate-adjusted value of goods and services exported by the United States to China crashed in January 2018, which prompted President Trump to tweet, as many things do, the following comment on Twitter:  Here's the update to our chart tracking the year-over-year growth rate of trade between the U.S. and China showing the plunge:  We dug deeper into the U.S. Census Bureau's trade data for U.S. exports to China in January 2018, where we found the culprit responsible for crashing the year over year growth rate of U.S. exports to China: soybeans. Compared to January 2017, when the U.S. sent over $1.937 billion of soybeans to China, in January 2018, the U.S. sent just a little over $1.244 billion, where that $693 million year over year decline more than accounts for the overall topline $237 million decline in U.S. exports to China in the year over year numbers. For reference, in January 2017, the U.S. exported some $10.072 billion worth of goods and services to China, while in January 2018, the U.S. exported a total of $9.835 billion. Since we've already covered the story of what's really behind the reduction of U.S. soybean exports to to China following the 2017 harvest, we'll observe that one way that U.S. soybean producers can boost their numbers is to focus on improving the quality of their product and shipments.  But if President Trump really wants to reduce the trade deficit with China, a good place to begin would be to expand the range of goods and services that U.S. businesses export to China in larger numbers than they do today. Crude oil exports have been a good place to start, and without them, January 2018 would have been disastrous. Perhaps U.S. businesses with medical and surgical technologies to sell would be a promising area for expanding the breadth of U.S. exports to China. Or optical fibers. Or any one of several other U.S. product categories that proved to be unexpectedly popular with Chinese importers in January 2018. Instead....  In the both the ideal and in the real world, the correct goal is to expand the total volume of goods and services expanded between the two nations, where what the U.S. really benefits from a rising trend in the black line shown in the following chart.

      China Accuses US Of Fabricating Trade Data, Warns "Trade War Would Be A Disaster" - While Canada and Mexico and soon other US "allies" have so far been spared the brunt of the Trump import tariffs on aluminum and steel imports as a result of "indefinite" exemptions for the duration of Nafta negotiations, China - the country that is the target of Peter Navarro's trade scorn - has not been so lucky, and the result has been an outpouring of increasingly hostile jawboning by Beijing, which while taking the Trump gambit in stride so far, is clearly concerned how far Trump could ratchet up protectionist measures.As a result, on Sunday China said that it will not initiate a trade war with the United States, but vowed to defend its national interests in the face of growing American protectionism."There are no winners in a trade war, and it would bring disaster to our two countries as well as the rest of the world," China's Minister of Commerce Zhong Shan said at a briefing on the sidelines of the country's annual parliamentary session according to AP."China does not wish to fight a trade war, nor will China initiate a trade war, but we can handle any challenge and will resolutely defend the interests of our country and our people," he said.Shan's statement was Beijing's latest official remark on "problems in Sino-U.S. economic trade and cooperation," alluding to Trump's plan to impose tariffs on imported steel and aluminum. . Earlier in the week, China’s Foreign Minister, Wang Yi, vowed a "justified and necessary response" to Washington’s initiative, but that too has yet to take any concrete shape. Prior to signing the order, Trump urged Beijing to come up with a concrete proposal to reduce their trade deficit with the United States, although according to experts Trump tweeted a wrong number and meant for a $100 billion reduction in the US-Chinese trade deficit, rather than the $1 billion number he tweeted. “China has been asked to develop a plan for the year of a One Billion Dollar reduction in their massive Trade Deficit with the United States,” Trump tweeted. “Our relationship with China has been a very good one, and we look forward to seeing what ideas they come back with. We must act soon!”

      Trump demands aides pump up anti-China tariffs - President Donald Trump is getting ready to crack down on China. Trump told Cabinet secretaries and top advisers during a meeting at the White House last week that he wanted to soon hit China with steep tariffs and investment restrictions in response to allegations of intellectual property theft, according to three people familiar with the internal discussions.. During the meeting, which hasn’t been previously been reported, U.S. Trade Representative Robert Lighthizer presented Trump with a package of tariffs that would target the equivalent of $30 billion a year in Chinese imports. In response, Trump urged Lighthizer to aim for an even bigger number — and he instructed administration officials to be ready for a formal announcement in the coming weeks, according to two people involved in the administration’s trade deliberations. That sent senior officials at the White House, Treasury Department, State Department, Justice Department, the Office of the U.S. Trade Representative and other key agencies scrambling this week to finalize the proposal. Although the details are still in flux, aides said the administration is considering tariffs on more than 100 Chinese products ranging from electronics and telecommunications equipment to furniture and toys. Those tariffs are expected to be rolled out as soon as next week, the officials said, adding that the timing could slip. The pending announcement comes after Trump unveiled steep duties on steel and aluminum imports, infuriating Republicans in Congress and many of his own aides.   The president has long promised to get tough on trade, but the issue has provoked fierce division among his advisers. Now, as Trump looks ahead to the midterms and his own reelection campaign, the president has told people close to him that he will no longer allow his staff to stop him from moving forward with policy ideas he strongly supports. National Economic Council Director Gary Cohn, who strongly opposed the steel and aluminum tariffs, announced last week he will soon resign, and Secretary of State Rex Tillerson, who also privately expressed skepticism of Trump’s trade proposals, was fired on Tuesday. “I’m really at a point where we’re getting very close to having the Cabinet and other things that I want,” Trump said Tuesday. 

      The Trade War Escalates: Trump Demands Broader Tariffs Against China - Just when investors thought President Trump might be easing up on his protectionist push following the uproar caused by his decision to slap tariffs on steel and aluminum imports, Politico is reporting that Trump's next trade salvo will be explicitly directed at China. According to Politico, Trump last week told Cabinet secretaries and top advisers during a White House meeting that he wants to hit China with steep tariffs and other restrictions as retaliation for Chinese policies blatantly designed to siphon valuable intellectual property from US companies. The measures would be a follow up to an order issued by Trump over the summer, when he ordered the Commerce Department to launch an investigation into Chinese IP theft, using an obscure law that was frequently employed by the Reagan administration. Reuters is reporting that Trump is planning to impose tariffs on $60 billion of Chinese imports. The tariffs will primarily target technology and telecommunications imports - but would not be expressly limited to these sectors, according to one source.  Politico reported earlier that Trump rejected a plan for imposing $30 billion in tariffs on Chinese imports, saying they weren't big enough.

      Trump says pump up the China tariffs - President Donald Trump wants more tariffs. That was the message to U.S. Trade Representative Robert Lighthizer, who presented a tariff proposal that could end up hitting $30 billion worth of Chinese imports. But Trump wants a higher number before he takes action against China, under Section 301 of the Trade Act of 1974, as soon as the end of next week. In addition to the tariffs, the Treasury Department is still working to finalize what could be sweeping restrictions on Chinese investments as part of the upcoming trade action in response to alleged intellectual property theft, although they will likely only be introduced “in concept” as officials continue to consider how broad any action should be, according to an administration official familiar with the planning.  USTR has calculated tariffs equivalent to about $30 billion per year, which they say represents the market value of technology that U.S. companies are forced to hand over each year with little to no compensation in order to do business in China, according to two of the administration officials helping to plan the action. Additionally, many of those tariffs could target products China has designated for support through its Made in China 2025 plan, which Lighthizer has blasted as a prime example of China’s unbridled industrial policy.  Experts expect China’s retaliation to be swift and harsh, especially against U.S. exporters like U.S. farmers who rely on the Chinese market as a major destination for soybeans, pork and other commodities.  “I think China is going to have to respond. The question is, are they going to do that in a targeted way or are they going to escalate dramatically,” said Matthew Goodman, a senior adviser and Asian economic expert at the Center for Strategic and International Studies.

       LEAKED: Trump Threatens to Launch Trade War v. Rattled China Over IP Theft - This is the big one. It makes steel and aluminum tariffs look like a game.If this is true – it was leaked by a “source familiar with international trade” to the Nikkei Asian Review and isn’t based on a White House announcement – then it’s going to add a lot of fuel to the already heated trade dispute between the US and China, and may ultimately make the steel and aluminum tariffs look like a game.To punish China for its intellectual property theft, including IP infringements such as counterfeiting, and to retaliate against Chinese investment rules that require technology transfers to Chinese partners in order to set up shop in China, the Trump administration is considering a proposal by the Office of the US Trade Representative (USTR) that would impose:

      • Tariffs on a large variety of Chinese products, including tech products and consumer goods like clothing.
      • Restrictions on investment by Chinese companies in the US, the first impact of which we have already seen by Trump’s order yesterday blocking all Chinese takeovers of large US tech companies.
      • And limits on visas for certain Chinese nationals.

      The USTR also urged US allies, including Japan, to implement similar measures and synchronize their policies, according to the “source familiar with international trade,” cited by the Nikkei Asian Review. Germany, Japan, and other countries have long fumed over the required technology transfers to Chinese partners. At the same time, Chinese companies, often state-owned, have been on a shopping spree in Germany, going after robotics know-how and other industries, which has caused a lot of soul-searching in the business community in Germany. Japan too “has long opposed China’s intellectual property practices,” as the Nikkei put it. Now the USTR has asked these countries to do something about it.

      Here Comes The Main Event: Trade War With China, And What Is Section 301 - The recently announced global steel and aluminum tariffs (with various exemptions) by the Trump administration were just a (Section 232) preview of the main event: Trump's imminent trade war with China, which as Credit Suisse previews, will be unveiled any moment in the form of tariffs and restrictions on trade with China, reportedly in retaliation for Chinese IP violations. First, a reminder on the all-important Section 301: Section 301 of the 1974 Trade Act allows the President to, among other things, “impose duties or other import restrictions on the products of [a] foreign country,” if the President determines that that country is violating a trade agreement or “engages in discriminatory or other acts or policies which are unjustifiable or unreasonable and which burden or restrict United States commerce.“ The U.S. relied heavily on the provision during the Reagan era (an administration in which the current USTR Robert Lighthizer served as Deputy USTR) into the early 1990s, but it has been used infrequently since the World Trade Organization was formed in 1995 and provided a forum for dispute resolution. How will Section 301 figure in the upcoming US-Chinese trade war, and what are the key points:

      • Last August, President Trump instructed his U.S. Trade Representative Robert Lighthizer to initiate a Section 301 investigation into China’s forced technology transfer policies.
      • While the results of the 301 investigation are not due until August 2018, the President appears poised to act on the issue in the coming weeks.
      • The President is reported to be seriously considering a package of tariffs on Chinese imports (targeting between $30BN and $60BN worth).
      • Reports have stated that Administration officials have used China’s manufacturing roadmap, “Made in China 2025,” in deciding what goods to impose tariffs on. This will likely further concern Chinese leaders.
      • In addition, the Administration has discussed rescinding licenses for Chinese businesses and employing other such methods to restrict Chinese investment in the United States. The President’s recent decision to block a Singaporean company’s bid to takeover a U.S. company underscores his aversion to Chinese direct investment (the company had Chinese affiliations).
      • As part of the 301 action, the Administration has also reportedly discussed visa restrictions and a mandate that U.S. stock exchanges limit who can list in a U.S. market. It remains unclear whether the restrictions will go this far, but the President has, to date, been hawkish in his trade policy and there seem to be fewer and fewer moderating voices in the White House.
      • The 301 investigation and potential actions resulting from it seem to complement congressional efforts to restrict Chinese investment through legislation broadening the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS). We believe this legislation is on track to be signed into law in Q3 2018.

      Where Prices Are About To Surge: These Are The Imports From China Targeted By Trump -- Yesterday, in "Here Comes The Main Event: Trade War With China, And What Is Section 301", we wrote that Trump's recently announced global steel and aluminum tariffs were just a (Section 232) preview of the (Section 301) main course: Trump's imminent trade war with China, which will be unveiled any moment in the form of tariffs and restrictions on trade with China, reportedly in retaliation for Chinese IP violations. Today, Goldman's chief political economist Alec Philips, picks up on this and confirms that he too expects "the Trump Administration to announce tariffs on imports from China in coming weeks, as part of an intellectual property-related investigation that could also include restrictions on Chinese corporate investment in the US and restrictions on the export of intellectual property to China." And while the White House has not provided its own estimate of the cost of IP infringement, a frequently cited estimate from the Commission on the Theft of American Intellectual Property puts the annual cost to the US economy at $225bn overall. The US International Trade Commission (US ITC) placed the cost of lost sales, royalties, and licensing fees due to infringement by Chinese companies at $48bn in 2009 (or over $60bn in 2017, if held constant as a share of world GDP). This is confirmed by recent reports by Politico and Reuters suggesting that the categories of imports targeted could total $30bn to $60bn. This suggests that the Trump Administration might be leaning toward high tariff rates on a narrow segment of imports.But which Chinese imports will be targeted: that is a critical question as the resulting tariffs will send prices of the products surging, with significant downstream consequences for both US producers and consumers, as well as corporate margins.  Goldman here expects that USTR Robert Lighthizer will take the lead in developing the list, with input from White House trade adviser Peter Navarro and, ultimately, the President himself. The Treasury will play a larger role in determining the investment restrictions.With that in mind, in attempting to answer what goods might be targeted when/if Trump decides to follow through with Chinese import tariffs, Goldman has looked at imports from China in 57 categories. The answer is shown in the table below.

      Trade War: US Launches WTO Challenge Of Indian Export Subsidies - In a statement on the USTR website, Robert Lighthizer, announced that the United States has requested dispute settlement consultations with the Government of India at the World Trade Organization (WTO) challenging Indian export subsidy programs.  These programs are:

      • the Merchandise Exports from India Scheme;
      • Export Oriented Units Scheme and sector specific schemes, including Electronics Hardware Technology Parks Scheme;
      • Special Economic Zones;
      • Export Promotion Capital Goods Scheme;
      • a duty free imports for exporters program.

      These apparent export subsidies provide financial benefits to Indian exporters that allow them to sell their goods more cheaply to the detriment of American workers and manufacturers.     “These export subsidy programs harm American workers by creating an uneven playing field on which they must compete,” said Ambassador Lighthizer.  “USTR will continue to hold our trading partners accountable by vigorously enforcing U.S. rights under our trade agreements and by promoting fair and reciprocal trade through all available tools, including the WTO.”

      Lawrence Kudlow to Become Trump’s White House Economic Adviser -   Lawrence Kudlow, a conservative economic commentator whose career included jobs in the White House, Wall Street, radio and business television, will become one of President Donald Trump’s top economic advisers as director of the National Economic Council. Mr. Kudlow, 70 years old, said he was offered the job after a series of recent phone conversations with the president in which the two discussed differences of opinion about trade, among other things. Mr. Kudlow, who served as an informal Trump campaign adviser, has spoken out against the tariffs on steel and aluminum that Mr. Trump announced last week. A White House dispute over those tariffs played a role in the decision to step down by Gary Cohn, the previous NEC director. Mr. Trump called Mr. Kudlow on Sunday while the commentator, an avid tennis player, was on the court. “I thought he was calling to bawl me out because I was so critical,” he said. Instead, he said the president walked through his reasons for implementing tariffs. Mr. Kudlow said he spoke by phone again with Mr. Trump on Monday and again on Tuesday night, when he said the president offered him the position.  “I immediately accepted,” he said. The White House confirmed the appointment Wednesday afternoon. “We will work to have an orderly transition,” said press secretary Sarah Huckabee Sanders.  Despite differences on trade, Mr. Kudlow was a strong supporter of tax cuts and deregulation championed by Mr. Trump. The two also have a kinship in television; Mr. Kudlow is a longtime personality on CNBC and has his own radio program. He developed a relationship with Mr. Trump over the last 20 years by interviewing him on those shows. Mr. Kudlow’s appointment suggests Mr. Trump will continue to hear conflicting voices in the White House. The president has said he likes fielding competing views. In the tariff debate, Mr. Trump sided with trade skeptics who sought to crack down on cheap imports of steel and aluminum.  “The president wants to hear me, even if we disagree. He told me that several times,” Mr. Kudlow said Wednesday. Beyond trade, Mr. Kudlow, a former budget aide to President Ronald Reagan, has urged the Trump administration to pay more attention to rising budget deficits. He has also voiced unease with suggestions by Mr. Trump that a weak dollar could help the U.S. economy. But he was an early and outspoken supporter of tax cuts and deregulation.

      Trump names CNBC host Larry Kudlow as economic adviser, White House confirms   President Trump tapped CNBC commentator Larry Kudlow on Wednesday to head his National Economic Council, the post vacated when Gary Cohn resigned because of his opposition to the president’s steel tariffs.Kudlow has also been a staunch opponent of trade barriers. But Trump's appointment of his longtime friend and loyalist may say more about Kudlow's evolving views than Trump's. "If it comes to that, I would be in favor targeted tariff and tax increases on China until they play ball and come to the table with us," Kudlow told CNBC Wednesday. "I've known the president a long time. We have a mutual admiration society. He is the president. He has a different role, and I will abide by that."White House press secretary Sarah Huckabee Sanders confirmed the move after it was first reported by Kudlow's network. She said the timing of the appointment hadn't been determined. Trump had signaled Kudlow was the leading contender on Tuesday, saying he and Kudlow had come to an understanding on tariffs."He now has come around to believing in tariffs as also a negotiating point. I'm renegotiating trade deals and without tariffs we wouldn't do nearly as well," Trump said Tuesday.One of the first economists to back his 2016 campaign for president, Kudlow served as an informal economic adviser to the campaign. Kudlow, 70, worked in the Reagan administration as associate director for economics and planning at the Office of Management and Budget. As director of Trump's National Economics Council, he would likely be the president's most visible voice on issues of jobs, taxes and trade.Before joining the business news cable channel CNBC, Kudlow was chief economist at investment bank Bear Stearns & Co. In 1994, Kudlow publicly acknowledged to The New York Times that he had developed an addiction to drugs and alcohol at Bear Stearns, but that he had undergone 15 months of treatment at that point to kick the habits. In a tearful interview on CNBC, Kudlow thanked the network, which he said "gave me a second chance after my crash and burn."

      Trump Unveils "Phase Two" Of His Tax Plan - Speaking at a roundtable discussion on tax reform and tax cuts on Wednesday evening at Boeing in Missouri alongside Treasury Secretary Steve Mnuchin, President Trump hinted at his intention to eventually begin a "phase two" of his new tax plan. "We're actually going for a phase two, which, additionally to the middle class, will help companies. It's going to be something, I think, very special", Trump said. Underscoring the biggest accomplishment of his administration, Trump touted his tax reform plan as something "bigger than anything ever passed in the history of our country" and also went at Democrats for not having a single vote in favor of the tax reform plan. "Now they're regretting it," he said. Meanwhile, speaking on CNBC, Trump's new chief economic advisor Larry Kudlow shone some more light on what this next iteration of Trump's plan will be, saying that tax cuts for individuals should be made permanent under "phase two" of the tax overhaul. “Individuals deserve a permanent break,” Kudlow told a CNBC audience on Wednesday afternoon following Trump’s earlier comments that a second phase of tax changes would be coming, although he didn’t expect a phase two to cut the corporate rate further. "Talk about capital gains, possibly lowering the rate, but possibly indexing them for inflation, which is something many of us argued for years. We index, the individual code for inflation, because of the 70s experience, index capital gains because you are paying taxes on illusionary or inflationary profits, which is unfair to investors and its anti-entrepreneurship" Kudlow explained.

      Not Good Enough, Kamala Harris - On Wednesday night, Senator Kamala Harris went on MSNBC to talk about Attorney General Jeff Sessions’ attack on California’s laws shielding undocumented immigrants from the untrammeled threat of the Immigration and Customs Enforcement agency. Harris said most of the “right” things about how bad Sessions is and how immigrants deserve to be protected. But then, as a sharp-eyed Twitter usernoticed on Friday, MSNBC’s Chris Hayes asked her a good question: Should ICE even exist? Here is part of her response (emphasis mine):Well, certainly. When we’re talking about people who have committed serious and violent crimes—you know, I mean, Chris, you know my background. I’m a prosecutor. I believe that there needs to be serious, severe and swift consequence when people commit serious and violent crimes...and certainly if they are undocumented they should be deported if they commit those serious and violent offenses. So yes, ICE has a purpose, ICE has a role, ICE should exist. But let’s not abuse the power. Let’s not extend it to areas that are not posing a threat to the safety and the public safety of these communities. What Harris’ seemingly reasonable response misses—beyond the fact that there is an entire gigantic and ugly criminal justice system already dealing with serious and violent crimes, and that we don’t need to throw in a white nationalist goon squad on top of it—is that there is no way to prevent ICE from “abusing” its power. Abuse of power is baked into its very core. It exists to cause misery and terror, and has successfully carried out that task under both Democratic and Republican presidents. Under Donald Trump, it has shown beyond all possible doubt that it is too morally bankrupt to be reformed.Any serious defender of undocumented people in this country would look at ICE and know that it is a cancer that needs to be excised from the U.S. Pretending that the most diseased levers of state power can be molded into something better is a useless fantasy. ICE must be abolished. Anything less is not good enough.

       "How Dare She": ICE Director Slams Pelosi For "Terrorists" Remark - Acting Director of Immigration and Customs Enforcement (ICE) Tom Homan says his agency does not arrest law abiding people, following recent criticisms from House Minority Leader Nancy Pelosi (D-CA), Senator Dianne Feinstein (D-CA) and California governor Jerry Brown.  "How dare she say we are terrorizing communities," Homan said in response to March 7 comments by Nancy Pelosi following a series of arrests of undocumented residents by ICE.  "Just last week, President Trump decided to terrorize innocent immigrant families in the Bay Area with his unjust and cruel raids," Pelosi said on Wednesday, adding "[W]e will fight all cowardly attacks on our immigrant communities." "The President has now desperately decided to brazenly abuse the legal system to push his mass deportation agenda." Homan shot back, noting that ICE does not arrest innocent people, and that during the agency's recent operation in Los Angeles, 88% of the arrested offenders were convicted criminals - while overall, 81% of California arrests were also criminals. “Her quote was beyond the pale,” Homan said.The ICE director also noted that the agency was strictly enforcing existing immigration laws that Congress had empowered them to execute.  “If people don’t like it, people like Nancy Pelosi and Dianne Feinstein can certainly change the law, they are legislators,” Homan said - noting that Feinstein voted in favor of the Immigration Control and Financial Responsibility Act of 1996 - which gave ICE the authority to conduct such arrests.

      In name of fighting sex trafficking, US Congress set to pass internet censorship law --In the latest attack on internet freedom, the US Senate is expected to pass legislation as early as next week that, in the name of combating online sex trafficking, will further increase the powers of the state to censor the internet.The bill, named Allow States and Victims to Fight Online Sex Trafficking Act (FOSTA), allows for the prosecution of a broad array of websites and other online services if users of their platforms publish illegal content.The new law would represent a significant shift in the legal framework governing the internet, with far-reaching implications. Currently, under Section 230 of the Communications Decency Act of 1996, passed as the internet was emerging, websites and internet service providers are not, in general, legally responsible for content that users publish on their platforms. This means, for example, that if an individual publishes illegal or defamatory statements on Facebook, only that person, rather than Facebook itself, can be prosecuted. In a similar way, telephone network providers cannot be prosecuted for crimes that individuals coordinate over the phone.The FOSTA bill modifies the Communications Act to “prohibit construing section 230 to limit state criminal charges for conduct” that “promotes or facilitates prostitution” or “constitutes child sex trafficking.” In particular, an internet service or website can be prosecuted for “knowingly assisting, supporting, or facilitating” such activities.As always, the anti-democratic measure is framed in supposedly noble terms to provide it with a benign veneer. Who, after all, would oppose efforts to prevent the sexual exploitation of young children? But the real purpose of the bill is to enable a broad array of internet platforms and services to be targeted, censored and ultimately shut down based on material posted by lone individuals.Commentators have noted that the law will force websites, discussion forums, online marketplaces, and other services to impose far more onerous censorship of what content they allow users to publish, for fear of being prosecuted. Civil liberties and internet organizations have published statements opposing the legislation and warning about its anti-democratic implications.

       Entire broadband industry will help FCC defend net neutrality repeal  - The biggest lobby groups representing broadband providers will help the Federal Communications Commission defend the repeal of net neutrality rules in court. Yesterday, three trade groups that collectively represent every major home Internet and mobile broadband provider in the US filed motions to intervene in the case on behalf of the FCC. The motions for leave to intervene were filed by NCTA–The Internet & Television Association, CTIA–The Wireless Association, and USTelecom–The Broadband Association. (Yes, those are the organizations' correct names.)  NCTA represents cable companies such as Comcast, Charter, Cox, and Altice. CTIA represents the biggest mobile carriers, such as AT&T, Verizon Wireless, T-Mobile, and Sprint. USTelecom represents wireline telcos with copper and fiber networks, such as AT&T and Verizon. All three groups also represent a range of smaller ISPs. As intervenors in the case, the groups will file briefs in support of the net neutrality repeal order and may play a role in oral arguments. NCTA's motion noted that its members would once again be subject to "common-carriage regulation under Title II of the Communications Act" if the FCC were to lose the case. CTIA said that its members "would be adversely affected if the [net neutrality] Order were set aside and the prior Title II Order classification and rules were reinstated." Twelve lawsuits against the FCC seeking to overturn the net neutrality repeal have been consolidated into one case at the US Court of Appeals for the Ninth Circuit. The lawsuits were filed by more than three dozen entities, including Democratic attorneys general from 22 states, consumer advocacy groups, and tech companies such as Mozilla, Vimeo, and Etsy.The Internet Association—a lobby group for Amazon, Google, Facebook, Netflix, and other Web companies—previously announced plans to intervene in order to support the lawsuit against the FCC. The group hasn't filed its motion to intervene yet, though. The case could take about a year to decide if it lasts as long as the previous case that upheld the net neutrality rules in 2016.’

      Comcast ‘Blocks’ an Encrypted Email Service: Yet Another Reminder Why Net Neutrality Matters - For about twelve hours earlier this month, encrypted email service Tutanota seemed to fall off the face of the internet for Comcast customers. Starting in the afternoon on March 1, people weren't sure if the site was offline or if it had been attacked. Reddit threads speculated about the outage. Some said that Comcast was actively blocking the site, while others dismissed the claims altogether. Several tweets alerted the Hanover, Germany-based encrypted messaging provider to the alleged blockade, which showed a "connection timed out" message to Comcast users. It was as if to hundreds of Comcast customers, Tutanota didn't exist. But as soon as users switched to another non-Comcast internet connection, the site appeared as normal. "To us, this came as a total surprise," said Matthias Pfau, co-founder of Tutanota, in an email. "It was quite a shock as such an outage shows the immense power [internet providers] are having over our Internet when they can block sites...without having to justify their action in any way," he said. By March 2, the site was back, but the encrypted email provider was none the wiser to the apparent blockade. The company contacted Comcast for answers, but did not receive a reply. When contacted, a Comcast spokesperson couldn't say why the site was blocked -- or even if the internet and cable giant was behind it. According to a spokesperson, engineers investigated the apparent outage but found there was no evidence of a connection breakage between Comcast and Tutanota. The company keeps records of issues that trigger incidents -- but found nothing to suggest an issue. It's not the first time Comcast customers have been blocked from accessing popular sites. Last year, the company purposefully blocked access to internet behemoth for more than 13 hours.

      Trump: Get Ready For The "Space Force"; Mission To Mars "Very Soon" -  President Trump told a crowd of U.S. Marines at Miramar Air Station in San Diego of a proposal to expand the U.S. military's reach into space in order to engage in warfare, which would require a, drumroll.... "space force."   The President also said we're going to Mars "very soon."  “We are finally going to lead again,” Trump said. “You see what’s happening. You see the rockets going up left and right. You haven’t seen that in a long time. Very soon we’re going to Mars. You wouldn’t have been going to Mars if my opponent won. That I can tell you. You wouldn’t even be thinking about it. You wouldn’t be thinking about it,” he added. “My new national strategy for space recognizes that space is a war-fighting domain, just like the land, air, and sea. We may even have a space force, develop another one–space force.”.@POTUS: "My new national strategy for space recognizes that space is a war-fighting domain, just like the land, air and sea. We may even have a 'Space Force.'"— Fox News (@FoxNews) March 13, 2018“We have the air force. We will have a space force. We have the Army, Navy. I was saying at the other day because we are doing a tremendous amount of work in space. I said maybe we need a new force. We’ll call it the space force, and I was not really serious and that I thought what a great idea, maybe we’ll have to do that. That could happen. That could be the big breaking story,” said Trump.

      Trump Comments On Gun Control, Will Wait For Court Before Acting On Age Restrictions - After the White House announced last night declared that it would back a new Justice Department program to help states train teachers and other school personnel to carry guns, President Trump has weighed in personally in a series of tweets, saying the White House would "watch court cases and rulings" before making a final decision on whether to raise age limits for rifle purchases.Trump touted the "very strong improvement and strengthening of background checks" - a reference to the bipartisan "Fix NICS" bill that the administration has said it would support- and said "legislation would be moving forward," adding that "bump stocks will soon be out!"Also, "highly trained expert teachers" would be trained by the state to carry concealed weapons.Very strong improvement and strengthening of background checks will be fully backed by White House. Legislation moving forward. Bump Stocks will soon be out. Highly trained expert teachers will be allowed to conceal carry, subject to State Law. Armed guards OK, deterrent!.......— Donald J. Trump (@realDonaldTrump) March 12, 2018....On 18 to 21 Age Limits, watching court cases and rulings before acting. States are making this decision. Things are moving rapidly on this, but not much political support (to put it mildly).— Donald J. Trump (@realDonaldTrump) March 12, 2018Last night, Education Secretary Betsy DeVos said she will chair a government commission exploring steps to prevent school violence, per Politico."We are committed to working quickly because there’s no time to waste," DeVos said on a conference call with reporters. "No student, no family, no teacher and no school should have to live the horror of Parkland or Sandy Hook or Columbine again." The commission's work is expected to be completed within a year.

      Trump calls for execution of drug dealers at Pennsylvania rally -In a Saturday campaign rally in the suburbs of Pittsburgh, Pennsylvania, Republican president Donald Trump called for the execution of convicted drug dealers. This call came at a rally for a Republican congressional candidate in a district heavily affected by the closure of steel mills and the ravages of a drug epidemic that has claimed the lives of thousands in working-class communities.“Do you think the drug dealers who kill thousands of people during their lifetime, do you think they care who’s on a blue-ribbon committee?” the president rhetorically asked his audience. He continued, “The only way to solve the drug problem is through toughness… I don’t think we should play games.”Trump compared the supposedly lenient drug laws in the United States to the “zero tolerance” laws existing in countries such as Singapore and China, saying “I think it’s a discussion we have to start thinking about. I don't know if we’re ready—I don't know if this country’s ready for it.” Trump made similar comments at a White House summit late last month, presenting the execution of drug traffickers as a means of stemming the opioid epidemic. The Washington Post reported Friday that the White House was considering a new policy to allow prosecutors the right to pursue the death penalty against convicted drug dealers.

       Exclusive: Trump finalizing opioid plan that includes death penalty for dealers - The Trump administration is finalizing a long-awaited plan that it says will solve the opioid crisis, but it also calls for law enforcement measures — like the death penalty for some drug dealers — that public health advocates and congressional Republicans warn will detract from efforts to reverse the epidemic. The ambitious plan, which the White House has quietly been circulating among political appointees this month, could be announced as soon as Monday when President Donald Trump visits New Hampshire, a state hard hit by the epidemic. It includes a mix of prevention and treatment measures that advocates have long endorsed, as well as beefed-up enforcement in line with the president’s frequent calls for a harsh crackdown on drug traffickers and dealers.  Trump’s plan to use the death penalty in some cases found at least one fan among congressional Republicans: Rep. Chris Collins of New York, one of the president’s most consistent cheerleaders. “I’m all in on the capital punishment side for those offenses that would warrant that,” he said when asked about the plans Thursday afternoon. “Including drug cases. Yep.”   But several congressional Democrats said they were alarmed by Trump's plan to ramp up punishment. “We are still paying the costs for one failed 'war on drugs,' and now President Trump is drawing up battle plans for another," said Sen. Ed Markey of Massachusetts. "We will not incarcerate or execute our way out of the opioid epidemic."

      Andrew McCabe To Be Fired Days Ahead Of Retirement: NYT --Cruel and unusual? Perhaps. But The NY Times reports that Attorney General Jeff Sessions is reviewing a recommendation to fire the former F.B.I. deputy director, Andrew G. McCabe, just days before he is scheduled to retire on Sunday.As a reminder, McCabe stepped down in late January, though reports suggested McCabe was reportedly forced to step down. According to Fox News, McCabe was "removed" from his post as deputy director, "leaving the bureau after months of conflict-of-interest complaints from Republicans including President Trump."In both cases, his early departure suggests that he was forced out for a few reasons... Several media outlets reported that McCabe is using his remaining vacation days to go on "terminal leave" and that his official retirement from the agency won't happen until March, allowing him to collect the full pension. But that 'spotless record' may now be given the official 'black mark': As NYTimes details that Mr. McCabe is ensnared in an internal review that includes an examination of his decision in 2016 to allow F.B.I. officials to speak with reporters about an investigation into the Clinton Foundation. The Justice Department’s inspector general concluded that Mr. McCabe was not forthcoming during the review, according to the people briefed on the matter. Lack of candor is a fireable offense, but like so much at the F.B.I., Mr. McCabe’s fate is also entangled in presidential politics and the special counsel investigation.

      Ex-FBI Deputy Director Andrew McCabe fired - Attorney General Jeff Sessions fired former FBI Deputy Director Andrew McCabe late Friday, less than two days shy of his retirement, ending the career of an official who had risen to serve as second-in-command at the bureau.McCabe had more recently been regularly taunted by President Donald Trump and besieged by accusations that he had misled internal investigators at the Justice Department.McCabe had been expected to retire this Sunday, on his 50th birthday, when he would have become eligible to receive early retirement benefits.But Friday's termination could place a portion of his anticipated pension, earned after more than two decades of service, in significant jeopardy.A representative for McCabe said he learned from a press release that he had been fired by Sessions. A Justice Department spokesperson pushed back, saying, "Mr. McCabe and his attorney were informed in advance of any news media." The origin of his dramatic fall stems from an internal review conducted by Justice Department Inspector General Michael Horowitz. That report -- the details of which have not been publicly released -- is said to conclude that McCabe misled investigators about his role in directing other officials at the FBI to speak to The Wall Street Journal about his involvement in a public corruption investigation into the Clinton Foundation, according to a source briefed on it.

      Republicans on House Panel Find No Collusion Between Russia and Trump Campaign — Republican lawmakers on the House Intelligence Committee have drafted a report saying the panel’s yearlong probe into Russian election interference found no evidence that Moscow colluded with Donald Trump’s campaign or that the Kremlin favored Mr. Trump in the 2016 race. The panel found “bad judgment” and some “inappropriate meetings” between members of the Trump campaign and Russians, but no sign that those amounted to collusion, said Rep. Mike Conaway (R., Texas), who has been heading the probe since last spring. Mr. Conaway cited a much-scrutinized June 2016 meeting at Trump Tower in New York between a Russian lawyer linked to the Kremlin and top Trump campaign aides, including one of Mr. Trump’s sons and his son-in-law. “That meeting should never have taken place,” Mr. Conaway said. “But we can’t find anything that leads us to a collusion string.” In the 150-page draft report, which committee Democrats haven’t seen yet, Republicans wrote that Russia carried out an “active measures” campaign in the 2016 election and was likely to do so again in future elections, but said they saw no sign that Moscow was seeking to help Mr. Trump, Mr. Conaway said. The panel’s top Democrat, California Rep. Adam Schiff, in a statement Monday evening, called Republicans’ announcement a “tragic milestone for this Congress” and “yet another capitulation to the executive branch.” “By ending its oversight role in the only authorized investigation in the House, the Majority has placed the interests of protecting the President over protecting the country, and history will judge its actions harshly,” Mr. Schiff said.

      “No collusion” between Trump-Russia: House intel committee Republicans announce end of investigation - Republicans on the House Intelligence Committee have concluded their year-long investigation into Russian interference in the 2016 election. Their key finding: Neither President Donald Trump nor anyone involved in his campaign colluded with Russia. “We’ve found no evidence of collusion,” Rep. Mike Conaway (R-TX), the leader of the committee’s investigation, told reporters on Monday, adding that there was “perhaps some bad judgment, inappropriate meetings, inappropriate judgment at taking meetings,” but nothing that amounted to a coordinated and deliberate effort to work with Russians to win the White House. “[O]nly Tom Clancy or Vince Flynn or someone else like that could take these series of inadvertent contacts with each other, meetings, whatever, and weave that into some sort of a fiction and turn it into a page-turner spy thriller,” Conaway said.He also said that while Republicans on the committee agree that Russia did interfere in the 2016 presidential election, they “disagree with the narrative that they were trying to help Trump.” That directly contradicts the US intelligence community’s assessment from January 2017, which clearly states that Russia wanted Trump to win. It also contradicts special counsel Robert Mueller’s indictment of 13 Russians for working to help Trump win by sowing divisions via the internet. President Donald Trump tweeted about the news — in all caps, no less — claiming the committee concluded there was no collusion or coordination between his campaign and Russia. (Of course, that conclusion just came from Republicans on the committee and is not necessarily the judgment of committee Democrats.)THE HOUSE INTELLIGENCE COMMITTEE HAS, AFTER A 14 MONTH LONG IN-DEPTH INVESTIGATION, FOUND NO EVIDENCE OF COLLUSION OR COORDINATION BETWEEN THE TRUMP CAMPAIGN AND RUSSIA TO INFLUENCE THE 2016 PRESIDENTIAL ELECTION.— Donald J. Trump (@realDonaldTrump) March 13, 2018None of this is likely to satisfy Democrats on the committee, who have consistently argued that Republicans had no real intention of finding out the truth. For example, Democrats claim Republicans didn’t use the full power of the committee to subpoena documents or compel further testimony that key witnesses withheld from investigators.

        The Deutsche Bank-Trump Connection: Why House Probe Abruptly Shut Down -  Pam Martens - It now appears that a major contributing factor to the abrupt shutdown of the Russia-Trump probe by the House Intelligence Committee was a fear that the Committee was getting too close to Trump’s dealings with Deutsche Bank and Deutsche Bank’s dealings with Russia. The draft report released by the Democrats after belatedly learning that their Republican colleagues had abruptly ended the probe, included this paragraph: “Donald Trump’s finances historically have been opaque, but there have long been credible allegations as to the use of Trump properties to launder money by Russian oligarchs, criminals, and regime cronies. There also remain critical unanswered questions about the source of President Trump’s personal and corporate financing. For example, Deutsche Bank, which was fined $630 million in 2017 over its involvement in a $10 billion Russian money-laundering scheme, consistently has been the source of financing for President Trump, his businesses, and his family. We have only begun to explore the relationship between President Trump and Deutsche Bank, and between the bank and Russia.” Deutsche Bank’s “$10 billion Russian money-laundering scheme” which became known by the shorthand term “mirror trades,” was the subject of a May 23, 2017 letter sent by Maxine Waters, the ranking member of the House Financial Services Committee and other House Democrats to John Cryan, CEO of Deutsche Bank. The letter began: “We write seeking information relating to two internal reviews reportedly conducted by Deutsche Bank (“Bank”): one regarding its 2011 Russian mirror trading scandal and the other regarding its review of the personal accounts of President Donald Trump and his family members held at the Bank.” […] “Deutsche Bank’s failure to put adequate anti-money laundering controls in place to prevent a group of traders from improperly and secretly transferring more than $10 billion out of Russia is concerning. … , Deutsche Bank was involved in an elaborate scheme known as ‘The Russian Laundromat,’ ‘The Global Laundromat,’ or ‘The Moldovan Scheme,’ in which $20 billion in funds of criminal origin from Russia were processed through dozens of financial institutions.”  Waters has now come into Trump’s crosshairs. In a speech in Pennsylvania on Saturday evening, he referred to her as “a low IQ individual.” (The problem for Trump seems to be something very different: Waters’ ability to connect the dots and see a theory of the case that involves money laundering and quid pro quo.)

        Mueller Said To Be "Close To Completion" Of Trump Obstruction Probe - Over the weekend, the Wall Street Journal surprised its readers by reporting that President Donald Trump's legal team was working with Special Counsel Robert Mueller to reach an early close to his Russia probe, using the possibility of an interview with the president (and the implicit threat of Trump quashing the probe) as leverage to force Mueller into some kind of deal that, by the sound of it, would probably see Trump accept a slap on the wrist.However, no sooner had the WSJ story dropped than the New York Times appeared to negate it with a report of its own, penned by "Trump whisperer" Maggie Haberman. In it, Haberman writes that Trump is in talks to hire the veteran Washington lawyer who represented Bill Clinton during his impeachment trial. In its story, the NYT specifically reported that - if accurate - the hiring of attorney Emmet Flood would suggest that the prbe is unlikely to end anytime soon. President Trump is in discussions with a veteran Washington lawyer who represented Bill Clinton during the impeachment process about joining the White House to help deal with the special counsel inquiry, according to four people familiar with the matter. The lawyer, Emmet T. Flood, met with Mr. Trump in the Oval Office this past week to discuss the possibility, according to the people. Two people close to the president said that the overture to Mr. Flood did not indicate any new concerns about the inquiry. Still, it appears, at the least, to be an acknowledgment that the investigation is unlikely to end anytime soon. The NYT report infuriated Trump, who issued a scathing tweet accusing the paper of fabricating lies about him. The Failing New York Times purposely wrote a false story stating that I am unhappy with my legal team on the Russia case and am going to add another lawyer to help out. Wrong. I am VERY happy with my lawyers, John Dowd, Ty Cobb and Jay Sekulow. They are doing a great job and..... The writer of the story, Maggie Haberman, a Hillary flunky, knows nothing about me and is not given access.— Donald J. Trump (@realDonaldTrump) March 11, 2018 And as if the will-he-won't-he routine wasn't infuriating enough already, Bloomberg joined the fray today, publishing a report saying Mueller could be close to wrapping up parts of his investigation, while putting other pieces of the inquiry on hold for now.

        U.S. Media Long Carried Putin’s Water – Odd, Given Facebook Uproar - With special counsel Robert Mueller’s latest indictments of alleged Russian trolls, Facebook is facing heavy fire from prominent critics at the New York Times, Washington Post, and other legacy media for uncritically spreading Russian misinformation. But the probe's newly lengthened chronology, stretching back well before the 2016 campaign, suggests social-media mischief was only part of a deeper Russian propaganda effort in which those same news organizations were also willing and paid participants. In 2007, state-owned publisher Rossiyskaya Gazeta launched Russia Beyond the Headlines, a multi-page full-color broadsheet laid out just like a newspaper and distributed, typically monthly, as an insert by some of the most prestigious names in newspaper publishing, including London’s Daily Telegraph, Le Figaro in France and the Italian daily La Repubblica, reaching an audience estimated at nearly 6.5 million readers. In the United States, the Russian-state media entity partnered with the Washington Post until 2015 and with the New York Times, which confirmed it still bundles the insert into its regular paper. Angela He, manager of corporate communications for the Times, sent an email “confirming that we do run these ads” and that they conform to Times advertising acceptability standards, but declined to elaborate. Russia Beyond, as the insert was renamed in 2017, serves as a “gateway for all things Russia -- from culture, travel, education, language, ways to do business, and much more.” Only a small disclaimer right below the masthead, in light typeface, explains that it’s an advertising feature. Russia Beyond paints a picture of a normal country, with normal concerns, including reviews of Moscow’s trendy restaurants and reports from the latest ComiCon. The Russia depicted in its pages is a global actor in good standing, whose citizens don’t understand why the United States and European Union placed sanctions on their country in response to the invasion of Ukraine and annexation of Crimea.

        The Russians pretended to be Texans — and the Texans believed them - In early 2016, I was writing on Russia's relationship with American secessionists from Texas, Hawaii and Puerto Rico.  I eventually found my way to the "Heart of Texas" Facebook page (and its @itstimetosecede Twitter feed as well). Heart of Texas soon grew into the most popular Texas secession page on Facebook — one that, at one point in 2016, boasted more followers than the official Texas Democrat and Republican Facebook pages combined. By the time Facebook took the page down recently, it had a quarter of a million followers. Unlike other secession sites I'd come across, this one never carried any contact information, never identified any of the individuals behind the curtain. Even as it grew, there was nothing to locate it in Texas — or anywhere else, for that matter. It was hard to escape the suspicion that there might be Russian involvement here as well.  Its organizers had a strangely one-dimensional idea of its subject. They seemed to think, for example, that Texans drank Dr Pepper at all hours: while driving their giant trucks, while flying their Confederate battle flags, while griping about Yankees and liberals and vegetarians. But Heart of Texas, sadly, was no joke. At one point the page's organizers even managed to stir up its followers into staging an armed, anti-Islamic protest in Houston. As gradually became clear, this was part of a broader strategy. The sponsors of the page were keen to exacerbate America's own internal divisions. At certain moments they lent support to Black Lives Matter, while in others they would play to the latent (or obvious) racism of Donald Trump's base. Posts began to follow a perceptibly hard-right course, stressing Texas' status as a "Christian state," or touting the Second Amendment as a "symbol of freedom ... so we would forever be free from any tyranny." Fake Founding Father quotes mingled with anti-Muslim screeds and paeans to Sam Houston. And the number of followers steadily crept into the hundreds of thousands. Though the site's authors understood their audience well, there was something off about their writing. The page's "About" section proclaimed that "Texas's the land protected by Lord (sic)." Grammatical and spelling glitches were everywhere: "In Love With Texas Shape," "State Fair of Texas — Has You Already Visited?," "Always Be Ready for a Texas Size," "No Hypoclintos in the God Blessed Texas." Heart of Texas chugged on after the election, bringing in tens of thousands of new followers in 2017 who were unbothered by its mangled English, its rank nativism and its calls to break up the United States. And then, in August, it was gone. Just like that, the most popular Texas secession page on Facebook was revealed to be a Russian front, operated by the notorious Internet Research Agency, with Facebook removing all of the posts from public view.

        Let’s Get Real About Russiagate - When will we really know what happened with Russia and the 2016 election? The story lines proliferate so quickly that it’s a full-time job following them all. Quick: How did the Democratic memo refute the Nunes memo? Identify: Carter Page, George Papadopoulos, Felix Sater, Aras Agalarov, Reality Winner. Only a handful of diehards still maintain that Russia didn’t meddle in the election—OK, try to meddle. It does seem that evidence for Russia’s involvement is becoming stronger rather than weaker, a conviction hardly limited to fans of Hillary Clinton. Bernie Sanders himself said, “It is now clear to everyone that agents of the Russian government were, in a disgusting and dangerous manner, actively interfering in the 2016 elections in an effort to defeat Secretary Hillary Clinton.” But we still don’t know—and may never know—how much it mattered, or whether the Trump campaign actually colluded with the Russian government, or whether the Russians wanted Donald Trump to win or just intended to sow chaos or what.1 Nonetheless, it’s vital that we understand as much as we can about what happened, and that the Mueller investigation continue. I’m troubled by arguments on the left that wave away inconvenient facts because they don’t fit some desired outcome. That’s what I want to take on here. How do we know that Russiagate is trivial without knowing exactly what it was?

        Dem senator: Why is Trump silent on Putin blaming Jews for election interference? | TheHill: Sen. Richard Blumenthal (D-Conn.) slammed President Trump on Saturday for staying silent after Russian President Vladimir Putin blamed Russian minority groups, including Jews, for meddling in the 2016 U.S. election. “Repulsive Putin remark deserves to be denounced, soundly and promptly, by world leaders. Why is Trump silent? Intolerance is intolerable,” Blumenthal tweeted.Putin suggested in an NBC interview that Russian citizens from different ethnic background could be behind the 2016 U.S. election interference. “Maybe they are not even Russians, but Ukrainians, Tatars or Jews, but with Russian citizenship, which should also be checked,” Putin said. “Maybe they have dual citizenship or a green card, maybe the U.S. paid them for this. How can you know that? I do not know, either,” he added. The American Jewish Committee quickly condemned Putin's comments and urged him to clarify his comments. "President Putin suggesting that Russian Federation minorities, be they Ukrainian, Tatar, or Jewish, were behind U.S. election meddling is eerily reminiscent of the Protocols of the Elders of Zion," the group wrote on Twitter, referring to an anti-Semitic document originating in Russia in the early 20th century. Putin also told NBC he “couldn’t care less” if Russians had interfered in the U.S. presidential election. 

        The Intel Community Lie About Russian Meddling - Publius Tacitus - Americans tend to be a trusting lot. When they hear a high level government official, like former Director of National Intelligence Jim Clapper, state that Russia’s Vladimir ordered and monitored a Russian cyber attack on the 2016 Presidential election, those trusting souls believe him. For experienced intelligence professionals, who know how the process of gathering and analyzing intelligence works, they detect a troubling omission in Clapper’s presentation and, upon examining the so-called “Intelligence Community Assessment,” discover that document is a deceptive fraud. It lacks actual evidence that Putin and the Russians did what they are accused of doing. More troubling—and this is inside baseball—is the fact that two critical members of the Intelligence Community—the DIA and State INR—were not asked to coordinate/clear on the assessment. You should not feel stupid if you do not understand or appreciate the last point. That is something only people who actually have produced a Community Assessment would understand. I need to take you behind the scenes and ensure you understand what is intelligence and how analysts assess and process that intelligence. Once you understand that then you will be able to see the flaws and inadequacies in the report released by Jim Clapper in January 2017. The first thing you need to understand is the meaning of the term, the “Intelligence Community” aka IC. Comedians are not far off the mark in touting this phrase as the original oxymoron. On paper the IC currently is comprised of 17 agencies/departments:  […] But not all of these are “national security” agencies—i.e., those that collect raw intelligence, which subsequently is packaged and distributed to other agencies on a need to know basis. Only six of these agencies take an active role in collecting raw foreign intelligence. The remainder are consumers of that intelligence product. In other words, the information does not originate with them.

        FEC probes whether NRA got illegal Russian donations - The Federal Election Commission has launched a preliminary investigation into whether Russian entities gave illegal contributions to the National Rifle Association that were intended to benefit the Trump campaign during the 2016 presidential election, according to people who were notified of the probe. The inquiry stems in part from a complaint from a liberal advocacy group, the American Democracy Legal Fund, which asked the FEC to look into media reports about links between the rifle association and Russian entities, including a banker with close ties to Russian President Vladimir Putin. .A spokesman for the NRA and its lobbying arm, the Institute for Legislative Action, which together contributed $30 million to Trump’s presidential campaign, declined to comment on the FEC’s probe. An FEC spokesman also declined to comment, saying the agency is prohibited by law from confirming or denying any investigations until they’re complete. Under FEC procedures, the preliminary investigation is likely to require the NRA to turn over closely guarded internal documents and campaign finance records. Depending on what FEC investigators and lawyers find, the agency could launch a full-blown investigation, impose fines or even make criminal referrals to the Justice Department and Special Counsel Robert Mueller, people familiar with the probe said. 

        Mueller Subpoenas Trump Organization, Demanding Documents About Russia — The special counsel, Robert S. Mueller III, has subpoenaed the Trump Organization in recent weeks to turn over documents, including some related to Russia, according to two people briefed on the matter. The order is the first known instance of the special counsel demanding records directly related to President Trump’s businesses, bringing the investigation closer to the president.The breadth of the subpoena was not clear, nor was it clear why Mr. Mueller issued it instead of simply asking for the documents from the company, an umbrella organization that encompasses Mr. Trump’s business ventures. Mr. Mueller ordered the Trump Organization to hand over records related to Russia and other topics he is investigating, the people said.The subpoena is the latest indication that the investigation, which Mr. Trump’s lawyers once regularly assured him would be completed by now, will continue for at least several more months. Word of the subpoena came as Mr. Mueller appears to be broadening his inquiry to examine the role foreign money may have played in funding Mr. Trump’s political activities. In recent weeks, Mr. Mueller’s investigators have questioned witnesses, including an adviser to the United Arab Emirates, about the flow of Emirati money into the United States.Mr. Mueller has already indicted 13 Russians and three companies accused of meddling in the 2016 presidential campaign, and on Thursday, the Trump administration included them in sanctions it leveled at Moscow as punishment for interference in the campaign and “malicious cyberattacks.”  The Trump Organization has typically complied with requests from congressional investigators for documents for their own inquiries into Russian election interference, and there was no indication the company planned to fight Mr. Mueller’s order.  “Since July 2017, we have advised the public that the Trump Organization is fully cooperative with all investigations, including the special counsel, and is responding to their requests,” said Alan S. Futerfas, a lawyer representing the Trump Organization.  The White House press secretary, Sarah Huckabee Sanders, reiterated during her daily briefing that the president was cooperating with the special counsel inquiry and referred further questions to the Trump Organization.

        Robert Mueller's Subpoenas Cross Trump's Red Line - Last July, President Donald Trump warned the special counsel Robert Mueller that it would be a "violation" for him and his group of Justice Department investigators to examine the Trump family's finances. The president agreed with a New York Times reporter's question about whether doing so would amount to crossing a "red line." Mueller apparently has decided to cross that line anyway. The Times reported on Thursday that Mueller's team has subpoenaed Trump's company, the Trump Organization, for records pertaining to a number of business deals -- including some related to Russia.  Trump and his lawyers have thrown down all sorts of gauntlets around Mueller's probe. They have argued for a tight deadline leading to its conclusion; negotiated for where, when and how the president might agree to an interview with investigators; and pointed to areas that they think are off-limits.It would appear that Mueller, with the full force of the law and subpoena power behind him, intends to proceed as he sees fit.Mueller has already made it clear that he wouldn’t hesitate to look at Trump's business transactions. My Bloomberg News colleagues reported last July -- just a day after Trump conversed with the Times about that red line -- that Mueller was expanding the scope of his investigation to Trump's commercial dealings.Mueller's probe seems to be pursuing three primary questions. The first is whether Trump or his campaign worked with the Kremlin to tilt the 2016 election in Trump's favor. The second is whether Trump or his advisers obstructed justice to derail the federal investigation. The third involves the possibility of financial quid pro quos that Trump and his family members (especially his son-in-law, Jared Kushner) may have sought in exchange for public policy favors (like, for example, possibly lifting economic sanctions on Russia or shifting U.S. Ukraine policy).The quid pro quo stuff is likely to be all about money ultimately, and that's why the Times's scoop on Thursday is significant. Mueller is venturing into the Trump Organization itself, the nexus of all of the president's business deals. He's collecting records from a company that's inseparable from the president himself. No major transactions have occurred at the Trump Organization without Trump's blessing, and his unwillingness and failure to separate himself from his company since entering the White House makes that reality even more apparent.

        "If Mueller Doesn’t Get You, Stormy Will" Maxine Rages After Trump Knocks Her "Low IQ" -- Rep. Maxine Waters (D-CA) told MSNBC that she's "not intimidated" by President Trump, while repeating her own worn out threat that Trump's impeachment was just a matter of time.  Waters then suggested that if special counsel Robert Mueller's investigation doesn't result in an impeachment, Trump's alleged affair with porn star Stormy Daniels (real name Stephanie Clifford) will.  "This business about Stormy is not going away," Waters said. "If for some reason Mueller does not get him, Stormy will. So we know that this is going to go on.” As a reminder, Waters has been robotically repeating about Trump's imminent impeachment for over a year. Trump told a Pennsylvania rally on Saturday night that "We have to defeat Nancy Pelosi and Maxine Waters, a low IQ individual,” Trump then said - going back into another impression, this time of Waters:  “Do you ever see her? We will impeach him!” President Trump said mockingly. Waters hit back; "I’m not gonna run from it, I’m not intimidated by by him, and so he can keep calling names. I’ve got plenty for him. As a matter of fact, everybody knows he’s a con man, he’s been a con man all of his life."

        Trump lawyers reportedly weigh legal action to block Stormy Daniels' 60 Minutes interview - President Donald Trump’s legal team apparently wants to do anything in its power to prevent an interview with adult film star Stephanie Clifford, who goes by the name Stormy Daniels, from airing on 60 Minutes. The lawyers are now allegedly examining the possibility of taking legal action to prevent the interview from going on air, according to BuzzFeed News. “We understand from well-placed sources they are preparing to file for a legal injunction to prevent it from airing,” an unnamed source who is only identified as a “person familiar with the situation” told BuzzFeed News.It isn’t clear exactly what kind of legal arguments the lawyers could use to prevent the interview from airing. And it’s true that Trump’s lawyers are infamous for threatening legal action that never quite materializes. The interview is reportedly scheduled to air March 18 although CBS has not commented on the reports.

        Stormy Daniels Was "Physically Threatened," Lawyer Says - Stephanie Clifford, aka the adult film star known as Stormy Daniels, has been physically threatened, according to her lawyer, Michael Avenatti. Though he wouldn't elaborate on the circumstances surrounding the verbal attack, Avenatti said that they would press ahead with lawsuits against President Trump and his personal lawyer, Michael Cohen, in an attempt to invalidate an NDA she signed in the closing days of the November 2016 election. Avenatti also declined to reveal names. At the time, she also accepted a $130,000 "hush money" payment from Cohen in exchange for agreeing to stay silent about her relationship with President Trump, according to CBS.Daniels has offered to return the money, her lawyer said.Daniels is due in court on July 12 for the next hearing in her suit against Trump. According to her lawyer, the NDA Daniels signed isn't valid because Trump never signed it. Daniels has managed to raise tens of thousands of dollars on a crowdfunding platform by claiming that Trump and his legal team were "trying to silence me."Last month, Cohen succeeded in getting a judge to impose a restraining order on Daniels after she lost an arbitration hearing, preventing her from sharing her experiences with the media.However, despite this prior restraint, she has appeared on Jimmy Kimmel live, taped a "60 Minutes" interview with Anderson Cooper and authorized the publication of an interview with In Touch magazine that was conducted in 2011, before she signed the agreement, where she shared intimate details about her time with Trump.According to Daniels, her relationship with Trump began in 2006 at a golf tournament in Lake Tahoe and lasted for 18 months, until she broke it off when Trump failed to secure a spot for her on his TV show, "the Apprentice."  The scandal has drawn the scrutiny of a Washington Watchdog, which has filed a complaint with the Federal Election Commission alleging that the $130,000 payment to Daniels constituted a campaign expenditure that was not reported. Cohen has publicly testified that he made the payment out of his own funds.

        Stormy Daniels Faces $20 Million in Damages in Trump Lawsuit - Stormy Daniels may face more than $20 million in damages for violating a "hush agreement" that requires her to remain silent about an affair she alleges she had with President Donald Trump in 2006 and 2007. The potential damages against Daniels, an actress in adult films whose real name is Stephanie Cliffords, were disclosed Friday in a filing in federal court in Los Angeles by Essential Consultants LLC, an entity that was set up by Trump’s personal lawyer, Michael Cohen, in 2016 to pay her $130,000 in exchange for her silence. The company moved the lawsuit, filed by Daniels last week in California state court against Trump, to federal court, saying that neither Daniels, Trump nor the LLC are California residents and the amount of damages exceeds the $75,000 minimum for a case to proceed in federal court. Trump supports the transfer of the case between courts, according to Essential Consultants’ filing. “It could be a strategic move to intimidate them,”  Federal judges, who are appointed by the president, are perceived as somewhat more conservative than California state court judges, who are elected, according to Rothberg, who isn’t involved in the case. On top of that, the anti-Trump sentiment in California may have played a role in the decision, Rothberg said. Daniels faces $1 million in damages for each violation of the agreement, according to Friday’s filing. Essential Consultants said it will file a request at the earliest opportunity to force Daniels to arbitrate the case privately rather than to litigate it in open court. She sued on March 6 to nullify the confidentiality agreement she says she struck with Cohen in October 2016, before the presidential election, to keep quiet about the alleged affair. She argues the document is invalid because Trump didn’t sign it, even though she took the $130,000 offered in exchange for her silence.

        Vanessa Trump files for divorce from Donald Trump Jr.- Vanessa Trump filed for divorce against her husband Donald Trump Jr. late Thursday in Manhattan Supreme Court.“After 12 years of marriage, we have decided to go our separate ways,” the couple told Page Six in a joint statement. “We will always have tremendous respect for each other and our families. We have five beautiful children together and they remain our top priority. We ask for your privacy during this time.”The president’s daughter-in-law filed for an uncontested proceeding, meaning she’s not likely to fight her ex for custody of the couple’s five children or over their assets.Legal experts say the former couple likely has a prenuptial agreement. “Prenuptial agreements and confidentiality agreements are in the Trump dynasty DNA so I would be surprised if Donald Jr. went into the marriage completely naked,” said divorce lawyer Michael Stutman, of the firm Stutman Stutman & Lichtenstein LLP. He is not involved in the case.Vanessa and Don Jr., ​both ​40, were married in 2005.Page Six first reported that they were struggling with marital problems related to Don Jr.’s travels and controversial tweets.The filing comes the same day as special counsel Robert Mueller subpoenaed President Trump’s family business, demanding that the Trump Organization release information related to Russia.Don Jr. and his younger brother Eric Trump have been running their father’s company while he’s in office.

        The spread of true and false news online | Science - Abstract: We investigated the differential diffusion of all of the verified true and false news stories distributed on Twitter from 2006 to 2017. The data comprise ~126,000 stories tweeted by ~3 million people more than 4.5 million times. We classified news as true or false using information from six independent fact-checking organizations that exhibited 95 to 98% agreement on the classifications. Falsehood diffused significantly farther, faster, deeper, and more broadly than the truth in all categories of information, and the effects were more pronounced for false political news than for false news about terrorism, natural disasters, science, urban legends, or financial information. We found that false news was more novel than true news, which suggests that people were more likely to share novel information. Whereas false stories inspired fear, disgust, and surprise in replies, true stories inspired anticipation, sadness, joy, and trust. Contrary to conventional wisdom, robots accelerated the spread of true and false news at the same rate, implying that false news spreads more than the truth because humans, not robots, are more likely to spread it.

        Elizabeth Warren Says Democratic Votes for Wall Street This Week Are a “Stab in the Heart” - Sen. Elizabeth Warren told a gathering of progressive lawmakers Friday that seeing her colleagues vote to advance a Wall Street deregulation bill this week was a “stab in the heart.” This week, 16 Senate Democrats voted for the Economic Growth, Regulatory Relief, and Consumer Protection Act. It’s a cleverly misnamed bill that would peel back regulations on 25 of the 32 largest banks in the country, removing a slew of consumer protections while relaxing stress tests and other reporting requirements for a range of financial institutions that were developed in the aftermath of the Great Recession. Ten of those Democrats co-sponsored it. This morning at the Congressional Progressive Caucus strategy retreat in Baltimore, Warren, a Democrat from Massachusetts, used her keynote address to call them out. Speaking about a series of recently lost policy fights — on gun reform, the tax bill, the Deferred Action for Childhood Arrivals program, and more — Warren told the annual gathering of progressive elected officials and advocates, “Just this week we lost the first round in the battle of a bad banking bill — a bill that would take the reins off of Wall Street’s most reckless actors and put as greater risk of another financial crisis. When I saw a handful of my Democratic colleagues vote for it, it felt like a stab in the heart. Not for me, but for all the homeowners who were cheated and all the taxpayers who bailed out those banks. That is wrong.” While she was angry at Wall Street, she said, she felt most betrayed by her own colleagues. “It is so hard to fight against all the money and all the lobbying. It is so hard to fight when we fight and lose. It’s worse when some of our teammates don’t even show up for the fight,” she said. 

         The Economic Growth, Regulatory Relief, and Consumer Protection Act -- Or EGRRCPA, for short. That is the official name of S. 2155, a bill which seems to be tearing Senate Democrats apart. Republicans are uniformly in favor of the bill, which Bloomberg describes as "another faulty bank-reform bill." Some Democrats see it as needed regulatory relief for small banks, while others, including the one who used to blog here, see S. 2155 as a rollback of keys parts of Dodd-Frank for big banks that remain too big to fail. It is both. Indeed, if the bill were stripped of its title IV, I think most people could live with it. But title IV is a doozy.  Most notably, it raises the threshold for additional regulation under Dodd-Frank from $50 billion in assets to $250 billion. Banks with more than $50 billion in assets are not community banks.The banks in the zone of deregulation include State Street, SunTrust, Fifth Third, Citizens, and other banks of this ilk. In short, with the possible exception of State Street, this is not a deregulatory gift to "Wall Street," but rather to the next rung of banks, all of which experienced extreme troubles in 2008-2009, and all of which participated in TARP.My prime concern – given my area of study – is that these banks will no longer be required to prepare "living wills." That is, they will not have to work with regulators on resolution plans.How then do we expect to use Dodd-Frank's orderly liquidation authority if they fail? It would be impossible without advanced planning. Same for the misguided attempts at "chapter 14." I have real doubts about the wisdom of "bankruptcy for banks," but if it is ever to work, it will require lots of advanced planning (and luck).And we can't use the normal FDIC approach of finding another, bigger bank to take them over, because that would simply create another colossus, like Wells Fargo. Certainly we don't want that. Maybe a bailout then? Is that the "new" plan?

        Senate races toward final vote on reg relief bill -- — Senators on Tuesday continued debating a thicket of proposed additions to a crucial regulatory relief bill on their way to a final vote likely to occur as early as midweek. Among key items under debate are an amendment proposed Monday by Sen. Bob Corker, R-Tenn., dealing with custodial banks. Sen. Sherrod Brown, D-Ohio, the Banking Committee's ranking member, also offered an amendment aimed at preserving restrictions on foreign banks. In a floor speech on Monday, Brown said a measure inserted into the bill intended to ensure foreign banks do not gain a loophole from provisions in the Dodd-Frank Act did not go far enough. “There’s a new provision that provides some window dressing," Brown said. "This is a fig leaf of protection to try and convince the public that this bill doesn’t do what it actually does." After a cloture vote on Monday, the legislation sponsored by Senate Banking Committee Chairman Mike Crapo, R-Idaho, debate was to continue on the Senate floor on Tuesday, teeing it up for a vote as early as Tuesday or Wednesday. Republicans and Democrats are still negotiating which amendments will be considered, if any, but analysts expect the bill to eventually pass. The legislation would raise Dodd-Frank’s “systemically important financial institution” asset-size threshold from $50 billion to $250 billion and provide a number regulatory relief measures to financial institutions with less than $10 billion by providing exemptions and rolling back compliance requirements. The House approved a much further-reaching bill to overhaul Dodd-Frank in June, but that package went too far for Senate Democrats who hold substantial influence over what can be passed because of filibuster rules in the upper chamber. It’s unclear when the House will begin consideration of the legislation to amend Dodd-Frank, but House Financial Services Committee Chairman Jeb Hensarling, R-Texas, who authored the House legislation, has identified roughly 30 bills that have enjoyed bipartisan support but are not included in the Senate deal. However, moderate Democrats who support the Senate legislation have warned the House from going too far in expanding the bill to relax financial regulations. And in some cases, Republicans have also acquiesced to Democrats who have been critical of provisions that they say could help the biggest banks. 

        Relaxing regulations could make next crisis worse - The regulatory pendulum has swung in the banking industry’s favor since the 2016 presidential election. The industry has seen, for example, the appointment of bank-friendly officials like Randy Quarrels and Jerome Powell at the Federal Reserve Bank and Mick Mulvaney at the Consumer Financial Protection Bureau — and these individuals are likely to interrupt, rather than strictly apply, crisis-related regulations. As such, even absent outright repeal, the impact of these rules will be substantially reduced. The relaxation of leveraged loan guidelines enforcement is one illustration of this development.This swing is consistent with the historically cyclical nature of regulation. Regulation tightens following a crisis, creating a sometimes-justifiable industry backlash — and then loosens during the recovery.  Low loan losses, rising bank income and heightened competition increase risk appetites during an expansion. The increase is supported by backward-looking risk models, incentive compensation and rising collateral values. The process continues until an adverse event or loss triggers mean reversion. The recent sharp February market correction is a reminder of mean reversion. Economist Hyman Minsky noted that instability builds during an expansion, as a bubble is a boom until it bursts.  You can make money betting against the end of the world. And you are assured of losing money if you are complacent and ignore the inherent cyclicality of banking, believing “this time is different.” Yet bankers find it difficult to control themselves when risk seems remote and conditions appear favorable. As John Mack of Morgan Stanley argued on the heels of the financial crisis, regulators need to stay more involved. “We cannot control ourselves,” he said.  This problem grows as the last shock becomes more distant. It’s been ten years since the financial crisis and bankers’ sensitivity to risk has been substantially reduced. This is especially true as a number of battle-scarred bankers retire.   Nonetheless, we are closer to the end of the cycle than the beginning. The deeper we are into illiquid credits, products and structures, the more difficult it becomes to manage risk. This is compounded as regulatory constraints are relaxed.  Thus, bankers should be careful when they wish for relaxed regulation. They may just get it — along with some unpleasant (albeit unintended) consequences for themselves and their shareholders in the next downturn.

        Regulators need room to maneuver during next crisis - This paper has run two thoughtful articles by Adam Levitin and Aaron Klein commenting on the Treasury’s proposed restructuring of the government’s emergency authority to liquidate large failing financial companies under the “orderly liquidation authority” established by the Dodd-Frank Act.  The recently released Treasury report on OLA, which bluntly criticizes its “serious defects” and the “unchecked administrative discretion” it provides to the government, deserves significant credit and attention. Governments are rarely so accommodating and thoughtful when it comes to limiting their own authority. The stakes are significant since by authorizing the government to place the parent companies of banks, securities firms, insurance companies and asset management complexes into FDIC receiverships, OLA is the equivalent of economic martial law. Levitin, Klein, the Treasury and the Dodd-Frank Act offer different ways of handling large failing financial institutions that include OLA, a new Chapter 14 in the federal bankruptcy code or some combination of the two.  Another option, “do what it takes” — the one actually used in most previous financial crises in the last century — seems to have been dismissed from the discussion. It should not be.

        Elizabeth Warren on the banking deregulation bill and mortgage discrimination -  CSPAN - Senator Elizabeth Warren (D-MA) spoke on the chamber floor against S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection bill, which would ease banking regulations under the 2010 Dodd-Frank financial regulations law. She highlighted what she sees as mortgage discrimination in the proposed legislation.

        A Provision Hidden in the Banking Bill Could Hurt Black Homeowners - Imagine two families in Mobile, Alabama, trying to buy a home.  The only difference is that one family is white and the other is black. Today—50 years after the passage of the Fair Housing Act, 40 years after the passage of the Community Reinvestment Act, and a decade after the subprime-loan crisis—that black family would be 5.6 times more likely to be denied a conventional mortgage than that white family, a damning report released last month by the Center for Investigative Reporting found.Redlining and other forms of discriminatory lending practices remain a defining feature of the American housing market, and they have profound consequences in terms of wealth-building, equality, and equity. Yet a technical and mostly overlooked provision of a big piece of financial-regulatory legislation working its way through Congress might make such practices harder to identify, and thus harder for federal regulators to stamp out.   Its exact provisions are still uncertain, but the law will likely let smaller banks make certain risky investments; exempt certain institutions from a rule that restricts their lending, depending on what they hold in deposits; reduce the number of institutions labeled as systemically important; and put more responsibility on the Federal Reserve and other regulators to intervene in the event of a crisis. Then there are the provisions regarding redlining and discrimination in lending—ones largely overlooked, but potentially important. The legislation in process includes a number of technical changes that stand to put borrowers of color, mobile-home owners, and rural residents at risk. Chief among these is a change letting banks that make fewer than 500 mortgage loans a year report less data to the government on who they lend to and at what rates—data meant to help show whether financial institutions are discriminating against families of color. According to data from the Consumer Financial Protection Bureau, the legislation might exempt four out of every five banks and credit unions. Supporters of the provision have argued that the vast majority of mortgage loans would still be covered by these reporting requirements, which stem from the 1975 Home Mortgage Disclosure Act (HMDA) and were expanded by Dodd-Frank, and also argued that the intention is to make things easier for small banks without the resources to handle the data reporting. But fair-lending groups, civil-rights organizations, and Democratic politicians have pointed out that many financial institutions would still be able to discriminate and hide their discrimination—and the government, journalists, and housing activists would have fewer tools to detect troublesome patterns.

        Senate reg relief bill opens new front in credit-scoring battle — Among the several provisions in the regulatory relief bill, nearing passage in the Senate, is a new measure dealing with credit scores that some observers and stakeholders say is redundant.  A late addition to the legislation sponsored by Banking Committee Chairman Mike Crapo, R-Idaho, would direct the Federal Housing Finance Agency to review credit-scoring alternatives for Fannie Mae and Freddie Mac mortgage purchases. The FHFA currently relies on FICO’s classic scoring model. Yet the proposal, which reflects an earlier bill introduced by Sens. Tim Scott, R-S.C., and Mark Warner, D-Va., mandates a process the FHFA effectively has already launched. The agency is already seeking feedback on whether to adopt a new FICO score — known as FICO 9 — or a different model known as VantageScore 3.0, or some combination of both. “The Federal Housing Finance Agency has a process in place to try to broaden the factors it looks at in determining creditworthiness,” said Sen. Sherrod Brown, D-Ohio, the Banking Committee's ranking member, in a recent floor speech. (Brown opposes the overall reg relief bill.)The Senate bill, which is primarily focused on relieving aspects of the Dodd-Frank regulatory regime, adds a new layer to the intensifying battle between FICO and VantageScore — owned by the three main credit bureaus — to gain an upper hand. Some note that despite the FHFA’s current review process, the agency still has the leeway to go in a different direction. The bill appears aimed at forcing the agency and the government-sponsored enterprises to follow through on their stated aim to explore alternatives to the current regime. The bill could also speed up the FHFA’s schedule. The term for current FHFA Director Mel Watt expires in January 2019. Analysts say the legislation, if passed in its current form, is a win for VantageScore, which has more to gain from a deeper focus on credit-scoring alternatives.

        Senate passes rollback of banking rules enacted after financial crisis - The Senate on Wednesday passed the biggest loosening of financial regulations since the economic crisis a decade ago, delivering wide bipartisan support for weakening banking rules despite bitter divisions among Democrats. The bill, which passed 67 votes to 31, would free more than two dozen banks from the toughest regulatory scrutiny put in place after the 2008 global financial crisis. Despite President Trump’s promise to do a “big number” on the Dodd-Frank Act of 2010, the new measure leaves key aspects of the earlier law in place. Nonetheless, it amounts to a significant rollback of banking rules aimed at protecting taxpayers from another financial crisis and future bailouts. In a statement, White House press secretary Sarah Huckabee Sanders praised the legislation’s passage. “The bill provides much-needed relief from the Dodd-Frank Act for thousands of community banks and credit unions and will spur lending and economic growth without creating risks to the financial system,” she said. Given the bipartisan support for the bill, Wednesday’s passage was expected. But for the first time since Trump became president, the divisions lurking within the Senate Democratic Caucus burst into full view, with Sens. Elizabeth Warren (Mass.) and Sherrod Brown (Ohio) leading vehement opposition to the bill, even as supporters — including Democrats up for reelection in states Trump won — supported it with equal vigor. Warren and Brown argued the bill amounts to a gift to Wall Street that increases taxpayer risk while boosting the chances of another financial crisis. Supporters of the legislation — including endangered Democratic Sens. Heidi Heitkamp (N.D.), Joe Donnelly (Ind.) and Jon Tester (Mont.) — disputed that characterization, contending that the bill’s aim is to loosen onerous regulations on local banks and credit unions, freeing them to focus more on community lending, particularly in rural states. 

        Rollback of Dodd-Frank Provisions Clears Senate On 10-Year Anniversary Of Bear Stearns Collapse - A bipartisan bill which would relax restrictions placed on the financial industry during the credit-crisis has cleared the Senate with a vote of 67-31, on the 10-year anniversary of the collapse of Bear Stearns - but not before several changes to the original legislation were made, which would benefit big banks. "A bill that began as a well-intentioned effort to satisfy some perhaps legitimate community bank grievances has instead mushroomed, sparking fears that Washington is paving the way for the next financial meltdown," writes David Dayen of The Intercept. Key Provisions

        • Relaxes a host of reporting requirements for small - medium banks, and to a smaller extent, large banks
        • Eliminates a reporting requirement introduced by Dodd-Frank designed to avoid discriminatory lending
        • Relaxes stress testing requirements intended to show how banks would survive another financial crisis
        • Raises the threshold for banks which are not subject to enhanced liquidity requirements, stress tests, and enhanced risk management, from $50 billion to $250 billion - exempting several institutions which could pose systemic risks down the road.
        • Allows megabanks such as Citi to count municipal bonds as "highly liquid assets" that could be used towards the "liquidity coverage ratio," - assets which can be quickly liquidated during a crisis. 
        • Calls for a report on the risks and benefits of algorithmic trading within 18 months

        Introduced by Idaho Republican Mike Crapo and co-authored by North Dakota Democrat Heidi Heitkamp and several other Democrats, S.2155 was originally intended to relax regulations on community banks, credit unions, and so-called custodial banks - institutions which do not primarily make loans, but instead keep assets safe. In addition to relaxed reporting and disclosure requirements, the bill reduced the supplementary leverage ratio (SLR) - or how much equity they must have on hand compared to total assets (such as loans). As it was first written, the SLR modification would have benefitted just two U.S. banks; State Street and Bank of New York Mellon.  After a vociferous protest by Citigroup CFO John Gerspach, among others, the language in the bill was vastly changed - along with the definition of a custodial bank so as to include virtually any large financial institution, such as Citigroup.

        Senate Democrats join Republicans to gut Dodd-Frank banking regulations -The US Senate voted Wednesday by 67 to 31 to repeal major provisions of the Dodd-Frank Act, an Obama-era banking regulation law passed after the 2008 financial crisis.The bill was passed with bipartisan support, with 17 Democrats voting in favor. Democratic senators Heidi Heitkamp of North Dakota, Jon Tester of Montana, Joe Donnelly of Indiana and Mark Warner of Virginia joined Republican members of the Senate banking committee in support of the bill. Eleven Democrats had co-sponsored the bill when it first appeared before the full Senate in January, giving it a filibuster-proof majority and making its passage a foregone conclusion.Other Democrats who voted for the bill include Tim Kaine of Virgnia (Hillary Clinton’s running-mate in 2016), Debbie Stabenow of Michigan, Angus King of Maine (a nominal independent who caucuses with the Democrats), Claire McCaskill of Missouri, Bill Nelson of Florida, and Doug Jones of Alabama. The support by Jones is particularly significant, given the fact that Democrats hailed his victory over the fascistic Republican candidate Roy Moore, after a campaign focused largely on decades-old allegations of sexual misconduct against Moore, as a blueprint for the Democratic Party’s strategy in the 2018 midterm elections.  The bill increases the threshold from $50 billion to $250 billion for banks to be considered “systematically important financial institutions” and subject to closer regulatory oversight.  This was portrayed dishonestly by senators as an attempt to protect local “community banks” from the allegedly crushing costs of complying with financial regulations. “What I have said consistently is that Dodd-Frank was supposed to have stopped too big to fail, but the net result has been too small to succeed,” Heitkamp told reporters. In fact, companies exempted under the higher threshold include giant entities such as Barclays, American Express, BB&T and BMO.

        Highlights of the Senate banking bill - The Senate delivered a striking victory Wednesday to the nation’s banks by voting to scale back key regulations imposed under the Obama administration. The bipartisan legislation would soften the Dodd-Frank Act, the law enacted to prevent another market meltdown after the 2008 financial crisis. The bill, which faces an uncertain fate in the House, has been mainly sold as an effort to benefit small banks, especially those that serve rural America. Yet it would also aid many larger lenders on the premise that they face more regulation than their risks require. Critics like Sen. Elizabeth Warren (D-Mass.) say the legislation would expose consumers to unsafe financial products and increase the risk of bank failures.  Here are the highlights of what the Senate legislation would do:

        • 1. Big regional banks get a break. The provision that’s getting the most attention is a big deal for some household names in banking, such as American Express, Fifth Third and SunTrust.  It would allow the companies to escape rules that were intended to prevent the failure of the nation’s biggest banks. Among the safeguards that would be scaled back are the so-called stress tests that the Federal Reserve conducts to determine whether lenders have enough capital to operate through the next crisis. The bill would give them more flexibility to decide where to spend their money.
        • 2. Small lenders break freeThe bill contains several rollbacks for the smallest banks and credit unions, which have complained for years that they were unfairly swept up by rules intended to crack down on Wall Street. The magic number is $10 billion. Thousands of banks and credit unions with assets below that number will receive easier treatment under federal regulations intended to make sure they can weather downturns and don’t peddle risky mortgages. That includes removing requirements to prove they don’t engage in speculative trading. One of the bill’s most controversial proposals would scale back a requirement for banks to report mortgage data that consumer advocates say is critical for identifying housing discrimination. The bill’s backers have tried to make the community bank provisions the centerpiece of their case, arguing that the legislation would ease bottlenecks for mortgages and business loans, particularly in rural areas. Red-state Democrats helped draft the legislation.
        • 3. Don't be fooled: Even the biggest banks win. While the bill's supporters have tried to debunk the idea that it would help Wall Street, the legislation would clearly deliver benefits to the largest banks, including JPMorgan Chase and Citigroup. One provision would make it easier for giant banks to buy municipal debt to satisfy post-crisis rules requiring them to hold assets that they can quickly turn into cash during a meltdown. Another section would ease a regulation for so-called custodian banks that handle trillions of dollars in assets for pensions, mutual funds and other companies for safekeeping.
        • 4. Foreign banks left out — or are they? Progressive Democrats led by Sen. Sherrod Brown (D-Ohio) have warned that raising the threshold for tougher regulation on midsize and regional banks might also mean laxer oversight of big European banks like Deutsche Bank and Santander that have subsidiaries in the U.S.

        The Senate rolls back rules meant to root out discrimination by mortgage lenders The Senate on Wednesday passed a sweeping bill to weaken the government’s ability to enforce fair-lending requirements, making it easier for community banks to hide discrimination against minority mortgage applicants and harder for regulators to root out predatory lenders. The bill rolls back banking rules passed after the 2008 financial crisis, including a little-known part of the Dodd-Frank Act that required banks and credit unions to report more detailed lending data so abuses could be spotted. The bipartisan plan, the most significant revision of banking rules in the decade since the Great Recession, would exempt 85 percent of banks and credit unions from the new requirement, according to a Consumer Financial Protection Bureau analysis of 2013 data. The mortgage industry says the expanded data requirements are onerous and costly, especially for small lenders. But civil rights and consumer advocates say the information is critical to identifying troubling patterns that warrant further investigation by regulators. “The data operates as a canary in the coal mine, functioning as a check on banks’ practices,” said Catherine Lhamon, chair of the U.S. Commission on Civil Rights. “The loss of that sunlight allows discrimination to proliferate undetected.” For decades, banks have been required under the 1975 Home Mortgage Disclosure Act to report borrowers' race, ethnicity and Zip code so officials could tell whether lenders were serving the communities in which they are located and identify racist lending practices such as redlining.

         Think reg relief was hard to pass in Senate? Wait for House — The Senate may have been the easy part.  One day after the upper chamber passed a regulatory relief package, top House Republicans insisted that they plan to be involved crafting a final banking bill before it heads to the White House. That raises fresh questions about how quickly the most likely set of reforms since the Dodd-Frank Act can become a reality. Rep. Jeb Hensarling, R-Texas, chairman of the Financial Services Committee, told reporters Thursday that he is not ready to move forward on the Senate bill as it stands.   “We are not rubber-stamping the Senate bill, so we’re sending a message to the Senate that we stand ready to negotiate,” he said. The Senate bill, sponsored by Banking Committee Chairman Mike Crapo, R-Idaho, passed with bipartisan support following months of careful negotiation with more than a dozen moderate Democrats. But the delicately crafted deal, which makes targeted reforms of Dodd-Frank but leaves the law's basic frameworks in place, may not be enough to satisfy GOP members in the House. "I've talked to colleagues both on the [House Financial Services] committee and off the committee who look at this and say, why in the world is this viewed as a ceiling, not a floor?" said Rep. Bill Huizenga, R-Mich., who joined Hensarling at the press briefing. Any changes that expand the regulatory relief bill could pose new complications if it forces moderate Democrats in the Senate, who have already faced criticism for supporting Crapo's from within their own caucus, to sour on the deal. Most analysts still believe the odds favor the bill becoming law, but they warn that the process in the House could slow things down, delaying enactment. The Senate bill exempts community and regional banks from a number of Dodd-Frank rules, most notably raising the asset threshold — from $50 billion to $250 billion — under which "systemically important" banks face enhanced supervision. But House GOP lawmakers are eager to have a chance to put their mark on the effort. Hensarling has laid out a list of roughly 30 House provisions with bipartisan backing that he said he would like to include in discussions with the Senate. Among those measures are proposals that have received broad backing in the House, such as one involving Securities and Exchange Commission registration of certain brokers working with small businesses, which won a unanimous floor vote, as well as more controversial items.

        Hensarling’s last stand: Blocking banking bill -- Texas Republican Jeb Hensarling is standing in the way of President Donald Trump’s next big legislative victory. The outgoing chairman of the House Financial Services Committee, backed by House leadership, is refusing to rubber-stamp the landmark bank deregulation bill the Senate passed Wednesday night in an overwhelming, bipartisan vote after years of work. ..The White House wants a bill on Trump's desk as soon as possible. But Hensarling warned Thursday that the House would sit on the legislation until senators agree to negotiate how to expand the package to include proposals that would benefit more sectors of the financial industry. That’s something the lawmakers are showing no appetite for after a brutal floor debate leading up to the bill's passage. “Some seem to be under the impression that we are going to vote on their bill," Hensarling said. "They are under a misimpression." Hensarling's refusal to accept the Senate proposal — which already incorporates about 40 pieces of House legislation — is stoking fears among some in the Trump administration and in the financial industry that their big win may become mired in the House. For the conservative lawmaker, a legacy is on the line. He faces a brief window to put his imprint on the most important banking legislation since the 2010 Dodd-Frank law — probably the last major initiative he’ll deal with before he steps down in January. 

        How Well Does Financial Regulation Work? -- During former Federal Reserve Chairman Paul Volcker’s famous remarks to members of the Economic Club of New York after details about Bear Stearns’ rescue by JP Morgan Chase and the Fed came out ten years ago, he pointedly observed that such actions carried an “implied promise of similar action in times of future turmoil.” The Fed’s intervention is commonly remembered as the start of a cycle of institutional collapse and government bailouts that defined the 2008 financial crisis. Volcker went on to observe that such crises have in fact been a “recurrent feature of free and open capital markets” and that “any return to heavily regulated, bank-dominated, nationally insulated markets is pure nostalgia.”Volcker’s observations underscore that the question of whether anything has been learned from the recent financial crisis is overshadowed by a more pressing issue of whether anything at all has been learned from the long history of government intervention in financial markets. In our INET paper, “Corporate Scandals and Regulation,” we took on the question of whether regulators have been effective in overseeing financial markets over the last 200 years. Despite the voluminous literature on the economics of disclosure and financial reporting regulation, there is sparse empirical evidence on this topic in a historical, long-term context. We asked the question: “Are regulatory interventions in financial markets mere representations of delayed reactions to past market failures, or can regulators proactively preempt future corporate misbehavior?” From a public interest view, we would expect effective regulation to either prevent corporate misbehavior from occurring (ex ante) or quickly rectify observed transgressions (ex post). Have financial regulations anywhere been “effective” in this sense?

        FSOC will grant banks hearing process for shedding 'systemic’ label - The Financial Stability Oversight Council on Tuesday voted unanimously to establish a hearing process for "systemically important" bank holding companies that undergo a restructuring process to help determine whether they should retain their systemic label. The changes are effective immediately, according to a draft Federal Register notice, but the council will receive public comments on the changes for 30 days after the notice is published officially. The council said it “may make further amendments to reflect any comments received,” according to the notice. Sections I and VIII of the Dodd-Frank Act give the FSOC the power to designate nonbanks and so-called financial market utilities as systemically important financial institutions — a designation that brings with it heightened supervisory scrutiny from the Federal Reserve and other primary regulators. Dodd-Frank also designated any bank holding company with more than $50 billion in assets, as of Jan. 1, 2010, as a SIFI. But Section 117 of Dodd-Frank contemplates that a bank holding company subject to SIFI designation may opt to shed its holding company structure at some point in the future. Any formerly designated bank would automatically retain its SIFI designation, though the restructured former holding company may request a hearing before the FSOC on its future designation. That provision, known as the “Hotel California” provision in Dodd-Frank, was specifically included to prevent investment banks Goldman Sachs and Morgan Stanley — which had converted to bank holding companies during the financial crisis in order to avail themselves of federal emergency assistance — from converting back once the crisis had faded.

        Bank Financing: The Disappearance of Interbank Lending - Retail bank runs are mostly a thing of the past. Every jurisdiction with a banking system has some form of deposit insurance, whether explicit or implicit. So, most customers can rest assured that they will be compensated even should their bank fail. But, while small and medium-sized depositors are extremely unlikely to feel the need to run, the same cannot be said for large short-term creditors (whose claims usually exceed the cap on deposit insurance). As we saw in the crisis a decade ago, when they are funded by short-term borrowing, not only are banks (and other intermediaries) vulnerable, the entire financial system becomes fragile. This belated realization has motivated a large shift in the structure of bank funding since the crisis. Two complementary forces have been at work, one coming from within the institutions and the other from the authorities overseeing the system. This post highlights the biggest of these changes: the spectacular fall in uncollateralized interbank lending and the smaller, but still dramatic, decline in the use of repurchase agreements. The latter—also called repo—amounts to a short-term collateralized loan (for a primer on repo, see here). We start with the following chart showing changes in banks’ liability structure. The red line plots the fraction of domestically chartered commercial bank assets funded by interbank loans. After having trended modestly lower in the decade to 2008, the level began to plummet. Today, the amount of interbank lending is minimal, accounting for less than 0.3% of total assets. During this same period, the fraction of bank assets funded by deposits (the black line) rebounded sharply. After hitting a low of 59% in mid-2008, deposits now fund more than 76% of bank assets. While not displayed on the chart, we also note that total commercial banking system assets increased by more than 40% in the past decade, so the level of deposits rose by more than 80%. (Meanwhile, the FDIC reports that the insured fraction of domestic deposits fell modestly, from 63% to 59%.)

        Megabanks gird for battle over deposit pricing - Big banks have begun taking steps to protect their stockpiles of cheap deposits ahead of what could be as many as four Federal Reserve rate hikes this year. Over the last few months, at least two of the nation’s biggest banks — Wells Fargo and Bank of America — have tinkered with the way they set deposit rates, carving up a handful of key states into smaller markets, according to Informa Research Services, a Los Angeles data firm that tracks deposit rates and promotions. The move will let the two banks more efficiently counter attempts by local competitors, such as small banks and credit unions, to lure customers away with deposit promotions. Other big banks, meanwhile, are exploring new ways to use data and analytics to adjust rates for lucrative customer segments. For instance, some are offering promotions to affluent millennials who may be tempted to open higher-yielding accounts at online banks, observers said. Taken together, the moves illustrate how the industry’s biggest players are becoming more precise and tech-savvy in setting deposit rates — and how they plan to respond once the federal funds rate rises enough to spur more intense competition for consumer deposits. “Pricing is not just setting a rate sheet and pushing out to your branch and hoping it goes well,”

        Rate wars: Leaders and laggards in repricing consumer deposits - Let the rate wars begin. Since the Federal Reserve last raised interest rates, in December, a few banks and credit unions have aggressively increased the rates they pay on savings accounts, money markets and short-duration certificates of deposit. This new environment for deposit products creates risks for banks that stand pat. Many community banks have not yet passed along the Fed’s rate hikes to depositors, a decision that could lead them to lose customers to the banks and credit unions that are setting the pace. To be certain, only a few institutions have quickly raised deposit rates thus far. They are primarily online-only banks, including Goldman Sachs’ Marcus and Capital One 360, followed closely by some of the nation’s largest credit unions. Large, regional and midsize banks, to this point, have largely stayed on the sidelines. Data compiled by RateWatch provides some insight into the latest trends, including which depositories have been most aggressive in raising rates and which ones have lagged behind. Here are some of its key findings.  (slideshow)

        Banks wrestle with sense of futility on sexual harassment -As titans of entertainment and media resign over sexual harassment charges, many bankers argue that their industry already had its reckoning two decades ago and is largely free of the worst problems as a result.   But scratch beneath the surface, and there is a lingering feeling among many that harassment is not only present, but it may actually be inevitable, based on responses to a new survey that SourceMedia, the publisher of American Banker, conducted across the banking industry, including mortgages and payments professionals. “The banking community has a frat boy environment that can be hostile towards women,” a male banker in his 30s said in a written response to a survey question.  A female banker in executive management wrote that “it’s prevalent everywhere because it was allowed for so long.” Some experts argue that harassment is so entrenched, it will take significant time to root it out, if that is even possible. Attention surrounding “the issue of sexual harassment is here to stay for the foreseeable future,” said Stephen Hahn-Griffiths, chief research officer at the Reputation Institute. The mentality that there’s nothing that can be done to eliminate sexual harassment may pose a critical threat to banks and other companies, leading to a vast range of possible repercussions, including litigation, reputational risk and problems with recruiting, experts said. Indeed, reputational concerns are of a particular concern to banks, since they can quickly blossom into a safety and soundness issue. The #MeToo movement has already felled once highflying firms in the wake of revelations that they tolerated an executive's abusive behavior toward female employees.

        Exclusive: Wells Fargo faces sanctions for auto insurance payouts – sources  (Reuters) - U.S. regulators are preparing to sanction Wells Fargo for receiving commissions on auto insurance policies it helped force on more than half a million drivers, people with direct knowledge of the probes told Reuters. In July, Wells Fargo blamed a third-party vendor for wrongly layering insurance policies on its auto borrowers. Wells Fargo did not explain that it received payouts when those policies were written. The fact that Wells Fargo stood to profit from the insurance program will form the backbone of fresh sanctions against the bank, said people with knowledge of the matter who were not authorized to speak publicly. Those penalties would be the latest in a long-running scandal over how the nation’s third-largest lender treated its customers. The Office of the Comptroller of the Currency (OCC), Wells Fargo’s primary regulator, is asking the bank which executives knew about the payments and whether they should have been stopped sooner, said the sources. Wells Fargo does not comment on regulatory matters, Wells Fargo spokeswoman Catherine Pulley said. The bank received commissions from insurance partners in a program ended in 2013, she said. “We are sorry for any harm caused and are focused on the important work to complete our remediation process,” said Pulley. Wells Fargo’s auto insurance woes stem from a policy drivers must carry when they borrow money to buy a new car. It pays out to the bank when a car is stolen or destroyed. Wells Fargo required drivers to carry their own policies, but had a right to “force-place” a policy on borrowers who let insurance lapse. Insurers working for Wells Fargo pushed policies onto 570,000 customers who already had coverage and then delivered profits for the bank. 

        Justice Department Widens Wells Fargo Sales Investigation to Wealth Management -- A federal investigation into sales practices at Wells Fargo now includes the bank’s wealth-management business, extending the probe beyond the firm’s retail-banking unit where the problems originated, people familiar with the matter said. The Justice Department and Securities and Exchange Commission are conducting the investigation into the wealth-management business, these people said. Agents from the Federal Bureau of Investigation have been interviewing some wealth-management employees in the Phoenix area as recently as this week, some of these people said. Wells Fargo declined to comment. Officials at the Justice Department and SEC also declined to comment. Several U.S. attorney’s offices, as well as a bevy of federal and state regulators, have been investigating Wells Fargo since the fall of 2016 when the bank disclosed widespread sales-practices problems. Those included bank employees opening as many as 3.5 million accounts without customers’ knowledge or authorization. Wells Fargo has said it is cooperating with the investigations. Arizona was one epicenter of Wells Fargo’s retail-banking sales practices problems. Some employees in that region created fake email addresses using customers’ phone numbers to open banking accounts or opened two accounts for each customer, a practice known as a “double pack.” Some top executives from that region have since been fired by the bank. Prosecutors’ and regulators’ inquiries have largely centered on Wells Fargo’s retail-banking business, one of the largest in the U.S. by deposits. Late last year, though, the Justice Department told the bank to conduct an independent investigation into its wealth-management business after it received reports of problems there from whistleblowers, The Wall Street Journal reported earlier this month. The current investigation by the Justice Department and SEC is separate from the bank’s own inquiry, one of the people familiar with the matter said. The bank now faces state and federal investigations into its practices in auto-lending, mortgages, wealth and investment management and foreign exchange. 

        Despite woes, Wells Fargo gives CEO a $4.6 million raise — Well Fargo’s board of directors gave CEO Tim Sloan a $4.6 million raise last year, despite the bank continuing to face the fallout of its sales-practices scandal and a multitude of other issues. In its annual proxy to shareholders, Wells Fargo said Wednesday that Sloan made $17.6 million last year, up from $13 million in 2016. While Sloan did not get a cash bonus in 2017, the amount of the Wells Fargo stock awarded to him last year rose to $15 million from $10.5 million. His base salary also rose marginally. Sloan’s pay increase increase was about 35 percent, roughly equal to the pay increase that Bank of America CEO Brian Moynihan received, who made $21.78 million in 2017. JPMorgan Chase has not filed its proxy statement for this year yet. Its CEO, Jamie Dimon, received a pay package of $28 million in 2016. San Francisco-based Wells Fargo is facing several investigations into its business, most notably its opening of millions of fake accounts without getting customers’ authorization. The Federal Reserve took unprecedented action on Wells Fargo’s business in February, forcing the bank to replace four of its directors and capping its growth until the bank develops better risk-management practices. Along with the sales-practices issue, Wells Fargo is under investigation for forcing auto insurance policies onto roughly 800,000 auto loan customers who may have already had insurance elsewhere. In several thousand of cases, the additional cost of the insurance made the car loan payment unaffordable and those vehicles were eventually repossessed. And last year Wells Fargo had to offer refunds to customers after acknowledging that its mortgage bankers unfairly charged them fees to lock in interest rates on mortgages. The bank is also under investigation for possibly overcharging corporate customers foreign transaction fees. 

         Government needs to rethink cybersecurity approach - Attend any speech by a current or former defense official these days, and you will likely hear a description of the grave threat posed by cyberattacks, particularly to the financial system.  Yet to date those speeches have failed to question the existing paradigm for cyber defense: critical civilian infrastructures defending themselves; regulators supervising that defense; and law enforcement and intelligence communities providing ad hoc assistance. If we are to defend financial services and other civilian infrastructure (power, telecom), that paradigm should be rethought.   Consider that if a major U.S. bank suffered an anthrax or missile attack, no one would ask its regulators to testify about the attack, and no one would expect them to write more regulations to prevent a recurrence. But if a major U.S. bank were to suffer a cyberattack, that is precisely what would happen — even though the most serious attacks now generally come from foreign actors, including nation states and foreign crime syndicates.  Because they are on the hook, regulators are frequently establishing new standards for cyber defense and examining against those standards. They do so even though the firms they regulate are already devoting extraordinary resources to that task and have every incentive to do so. And those firms employ hundreds and in many cases thousands of cybersecurity employees to engage in this defense.  Given the complexity of the cyber arena and limited expertise of regulators in this area, those regulatory standards tend to be generic and simplistic — an especially bad fit for an ever changing cyber battlefield. Indeed, it is difficult to think of any area more poorly suited to traditional bank regulation than cyber security.  What is needed is defense, not regulation.

        Bank regulators vow more flexibility in vetting fintech partnerships - Officials of three federal bank regulatory agencies said Monday that they would be more flexible in applying third-party risk management guidance as more banks partner with fintech firms. Senior leaders at the Federal Reserve, the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau, who all spoke at a banking conference in Orlando, Fla., said they have been working with examiners to be more understanding of the budding partnerships forming between banks and fintech firms — and how to examine those relationships going forward. “We need to do a better job of educating our supervision staff, in some cases, in terms of interpretation of the guidance,” Dan Quan, who leads the CFPB’s Project Catalyst, said at the Consumer Bankers Association's annual conference. “There’s no such thing that’s called bright lines, so there’s a lot of flexibility, latitude that can be exercised.” 

        Google is banning all bitcoin, ICO, and cryptocurrency ads starting in June — Google plans to ban all cryptocurrencies and binary options adverts, and is cracking down on ads for other speculative financial instruments.Scott Spencer, Google's Director of Sustainable Ads, said in a blog post on Wednesday that the company has "updated several policies to address ads in unregulated or speculative financial products like binary options, cryptocurrency, foreign exchange markets and contracts for difference (or CFDs)."The new policies, which come into force in June, ban adverts for binary options and "cryptocurrencies and related content (including but not limited to initial coin offerings, cryptocurrency exchanges, cryptocurrency wallets, and cryptocurrency trading advice)." Google follows Facebook in banning cryptocurrency related advertising on its platform. Spencer said in his blog post that the crackdown is part of Google's efforts to protect consumers from "online scams."

        Bitcoin Sinks As Google Moves To Ban All Crypto, ICO Ads In June - Mimicking its biggest rival for ad dollars - Facebook - Google will ban online advertisements promoting cryptocurrencies and initial coin offerings, and "other speculative financial instruments" starting in June. Some aggressive businesses found a loophole: purposely misspelling words like "bitcoin" in their ads. A Google spokeswoman said the company’s policies will try to anticipate workarounds like this.The reaction was immediate across the crypto space but for now is somewhat subdued... Alphabet’s Google said the new policy will become effective in June across ads bought on its search and display-advertising network, as well as its YouTube unit.But, as The Wall Street Journal reports, the policy also will restrict ads for nontraditional methods of wagering on the future movements of stock prices and foreign-exchange, such as binary options and financial spread-betting, Google said.Google said last year it removed more than 130 million ads that were used by hackers to mine for cryptocurrency. That is a very small percentage of the ads run on Google’s ad network.The company’s director of sustainable ads, Scott Spencer, declined to comment on how much potential ad revenue the company would be turning away by enacting the new policy, saying the decision was made to prevent consumer harm. One wonders when the crackdown will start on inverse VIX ETFs, or just S&P ETFs, or brokerages? Aren't they all capable of doing consumers "harm"?

        Cryptocurrencies as Prosecution Futures: Judge Rules Manipulators Can Go to Jail -- The past three months have been tough on cryptocurrencies. Bitcoin is down 53% from its peak, Ethereum 48%, Ripple 78%. From the respective peaks among the three, $350 billion have evaporated. Those are just the three largest by market capitalization. New ones come on the scene all the time, still. There are about 1,550 of them. So the question is this: What caused prices to surge so far so fast? And why have they collapsed?Epic price manipulation is one of the reasons. That has long been known, propagated, praised, and lamented on crypto discussion boards. But it has become so spectacularly rampant – and the fiat currency amounts so large – that it has made its way into the mainstream media.There are the bots designed to inflate prices. And there are humans. And worries “that the prices of Bitcoin and other digital tokens have been artificially propped up by a widely used exchange called Bitfinex, which has a checkered history of hacks and opaque business practices,” the New York Times reported. “Could Price Manipulation Be Killing Bitcoin?” Vanity Fair asks. “Market manipulation a rising fear,” CBS reports. But it’s not a new phenomenon:A recently published academic paper in the Journal of Monetary Economics found that a single trader likely drove the price of bitcoin from $150 to $1,200 during a two-month period in 2013 on the Mt. Gox Exchange. Mt. Gox collapsed a year later after a theft of $460 million was discovered. And why would any of this surprise anyone? Unregulated digital entities, created by just about anyone out of nothing, that assume some value denominated in fiat currency simple because they’re being traded between anonymous people or bots whose only desire is to make prices go up, on unregulated opaque exchanges where everyone thinks price manipulation is good as long as it pushes up the price….

        Theranos Founder Elizabeth Holmes Was Just Charged With ‘Massive Fraud.’ Here’s What the SEC Says She Did -- On Wednesday, the U.S. Securities and Exchange Commission charged Theranos founder and CEO Elizabeth Holmes and former president and chief operating officer Ramesh “Sunny” Balwani with “massive fraud.” Theranos, a blood testing company, claimed that it could perform a wide-range of laboratory tests using just a finger prick’s worth of blood. The company was founded in 2003 by then-19-year-old Holmes, a Stanford dropout who was once seen as a Silicon Valley wunderkind. The claims, if true, would have been revolutionary. Investors poured money into Theranos. The company was once valued at $9 billion.The SEC settled with Theranos and Holmes, who did not deny or admit the allegations. In the settlement, which is subject to court approval, she will pay a “$500,000 penalty, be barred from serving as an officer or director of a public company for 10 years, return the remaining 18.9 million shares that she obtained during the fraud, and relinquish her voting control of Theranos by converting her super-majority Theranos Class B Common shares to Class A Common shares,” according to the SEC complaint.The commission is pursuing charges against Balwani, who left the company in 2016, in federal district court in Northern California.  The SEC alleges that Theranos made misleading media statements, investor presentations and more claiming that its blood testing technology (a machine known as the Edison) could perform far more laboratory tests than it really could. In reality, investors said, the company used traditional testing methods and machines built by other companies.

        Jay Clayton’s SEC Lets Theranos Founder Elizabeth Holmes Get Away With Brazen Fraud -  Yves Smith - I’ll be terse and limit myself to a few high level comments about the pathetic punishment meted out to Theranos founder Elizabeth Holmes. This case proves that the Trump SEC is setting new lows by giving get out of jail nearly free cards to fraudsters. Holmes settled with the SEC, paying a puny $500,000 when she raised and torched $700 million of investor funds. She also surrendered 18.9 million shares and give up control of the company by converting her Class B shares, which give her voting control, to Class A shares. She is also barred from serving as the director or officer of a public company for 10 years. That bizarrely means she remains as CEO of Theranos. She did not admit or deny guilt. The Department of Justice is dutifully reported by the press to be looking at a case against her. If you believe that, I have a bridge to sell you. The SEC refers cases to the Department of Justice when it thinks they merit criminal charges and the two agencies work together. It is possible that the Department of Justice could pursue FDA-related charges against Holmes, but the securities law claims were a slam dunk, and the Department of Justice is highly unlikely to pursue a case on its own, particular since it is plenty busy with things like suing California over passing legislation that defies its crackdown on sanctuary cities. We’ve embedded the filing at the end of the post for your entertainment. As bad as the overall picture is, some of the items in the SEC filing are eyepopping. Holmes told investors she expected to have over $100 million in revenues in 2014 when she had only $100,000. She told investors that her largely vaporware blood tests didn’t need FDA approval when they did (and why did no reporter bother to check that claim out?). She presented prospective investors with a binder of endorsements with pharma company logos. But only one was real. The rest were made up by Theranos and the put the logos on the page. Holmes also claimed that Theranos was making its own equipment. That should have elicited a lot more study from investors and the press, since that would require engineering expertise that was notably absent on the Theranos team, plus seeing the facilities where the equipment was being made should have been part of the usual investor dog and pony show and apparently wasn’t. It was disturbing to see so much of the press reports lead with the SEC’s line that the SEC had charged Holmes with “massive fraud” yet for the most part treat the punishment with “just the facts, ma’am” deference, as opposed to seeking expert comment on its suitability.

        A Bull Market For The History Books - Bear Market To Follow Shortly - If you’re getting the sense that stocks always go up, that’s because they’ve been doing so for a really, really long time. From CNBC today: On the bull market’s ninth birthday, here’s how it stacks up against history:

        • • The Dow has quadrupled during the bull market, which turned 9 on Friday.
        • • This is the biggest and longest bull market for the Dow post-WWII, according to Leuthold Group.
        • The bullish run in the Dow Jones industrial average — which celebrates its ninth birthday Friday — is the longest ever and the greatest percentage gain since World War II, according to Leuthold Group.
        • The corresponding run by the S&P 500, notes LPL Financial, is that benchmark’s second-largest and second-longest bull market ever, with only the 1990s stock market run led by technology stocks in the way.

        Despite a more than 10 percent correction in equities last month following a burst of bullish activity, Leuthold’s Doug Ramsey doesn’t think the bull is done yet.“Assuming the Dow Jones industrial average can exceed its late-January high on March 9th or thereafter, this cyclical bull market will become the first one ever to last nine years,” said Ramsey, his firm’s chief investment officer. “Historically, cycle momentum highs are usually followed by a push to even higher price highs over the next several months.”The Dow hit an all-time high of 26,616.71 on Jan. 26, the same day the S&P 500 clinched its own record of 2,872.87. The major indexes are off their record highs 6.4 percent and 4.6 percent respectively. This chart from Leuthold Group shows where the Dow bull market stacks up since 1900. It’s far and away the longest in modern financial times. In terms of percentage gains, it’s third behind two bull markets pre-WWII.

        The Everything Bubble Is Just Waiting For The Pin -- David Stockman - Yesterday we noted that financial markets have become completely uncoupled from reality and that the recent feeble bounces between the 20-day and 50-day chart points were essentially the rigor mortis of a dead bull. As it happened, we were able to share those sentiments with what remains of CNBC's audience of carbon-based units:As we also noted as per the chart point mavens, the 20-day average down at 2703 (red line) on the S&P 500 was supposed to represent "support" while the  50-day average (blue line) purportedly functioned as "resistance".  Well, upon the official announcement of the Donald's lunatic trade war, there she sat at yesterday's close---less than one point under the 50-day moving average at 2739.8 (blue line). But rather than "resistance", which the raging robo-machines ripped through today like a hot knife through butter, we'd say the blue line represents the last frontier of sanity. That's because a stock market trading at 25X earnings under today's baleful circumstances is nothing less than a brobdingnagian bubble (i.e. a huuuge one) frantically searching for the proverbial pin. We essay the razor sharp aspects of the pin below, but suffice it to say here that the cyclical calendar has just plain run out of time. It is way, way too late in the cycle at 105 months of age to be "pricing-in" anything except the end of the party. And this bubblicious party has embodied the most spectacular central-bank fueled mania yet---meaning that the morning after is going to bring a truly hellacious hangover.Among the many sharp edges of the pin are these:

        1. the virtual certainly of a recession within the next two years and a typical 30%-50% drop in earnings;
        2. the epochal Fed pivot to QT (with other major central banks to follow) and the consequent massive drainage of cash from the bond pits;
        3. the mad man in the Oval Office and (among other follies) his swell new Trade War, which absolutely will get out of hand globally;
        4. the impending "yield shock" which will thunder through the financial markets when Federal borrowing hits $1.2 trillion in the coming year--on the way to $2 trillion+ annual deficits as far as the eye can see;
        5. a deeply impaired underlying main street economy which is groaning under $68 trillion of public and private debt and a reverse robin hood financial regime that has left 80% of the population on welfare or struggling to make ends meet on earnings that barely keep up with inflation; and
        6. the swaying giant red elephant in the global economic room---meaning China's historically unprecedented and freakish explosion of debt, manic building, monumental speculation, systematic lying and fraud and serpentine centralized command-and-control that is destined to end in a spectacular implosion.

        Yet the financial system has been so corrupted by the central bank's long-running regime of financial asset inflation and price falsification that it no longer recognizes anything that is important, fundamental and persisting. Instead, owing to the cult of an ever rising stock market, Wall Street is hopelessly enthrall to recency bias and context-free short-term deltas in the incoming monthly data. The latter are virtually meaningless under today's central bank driven Bubble Finance regime, of course, because the direction of economic causation has been reversed.

        Equifax Executive Charged With Insider Trading - The Department of Justice on Wednesday charged Jun Ying, the former chief information officer of one Equifax business unit, with insider trading, claiming he knowingly sold shares before the company revealed a massive data breach last year.As has been reported, three Equifax executives sold shares worth almost $1.8 million in early August, during the period when the company had discovered the hack, but it had not yet been publicly disclosed, according to the Financial Times. Ying reportedly sold $1 million on stock after learning of the breach, prosecutors said.As we pointed out at the time, soaring put volume in Equifax shares ahead of the announcement was indicative of "massive insider selling" - which would suggest that the money disclosed so far is only the tip of the iceberg. The SEC said Ying had avoided more than $117,000 in losses by disposing of his shares before the breach became public."This defendant took advantage of his position as Equifax’s USIS Chief Information Officer and allegedly sold over $950,000 worth of stock to profit before the company announced a data breach that impacted over 145 million Americans," said Byung Pak, US attorney for the northern district of Georgia. According to Bloomberg, Ying allegedly used confidential information entrusted to him by the company to determine it had been hacked, the SEC said. The US Attorney’s office in Atlanta has also filed criminal charges against Ying.

        Equifax cites 'ongoing investigation' by CFPB, other agencies -- The Consumer Financial Protection Bureau is among several agencies conducting an "ongoing investigation" of Equifax related to last year's data breach, the credit reporting firm said in a securities filing Friday. The filing contradicts a recent press report indicating that the CFPB had dropped a probe into the credit bureau over the data breach in September that compromised the personal information of over 147 million Americans. The CFPB's press office sent an email to reporters Friday notifying them of Equifax's filing with the Securities and Exchange Commission, but declined to comment further.  "A number of U.S. federal, state, local and foreign governmental officials and agencies, including Congressional committees, the [Federal Trade Commission], the CFPB, the SEC, the U.S. Department of Justice and state attorneys general offices in the U.S. … continue to investigate events related to the 2017 cybersecurity incident, including how it occurred, the consequences thereof and our response thereto," Equifax said in the filing.  Last month, Reuters reported that acting CFPB Director Mick Mulvaney was not investigating Equifax, citing sources who said the agency had not ordered any subpoenas of the company or taken any sworn testimony from its executives.  Yet, far from abandoning its supervisory oversight of Equifax, the CFPB likely has taken a back seat to the Federal Trade Commission, which has jurisdiction over data breaches. The FTC issued a civil investigative demand to Equifax last year in coordination with the CFPB, which is why the bureau did not issue its own, separate subpoena, lawyers said.

        CFPB should make sure payday rule reboot meets consumer needs – Bank Think - National Consumer Protection Week gives us an important opportunity to reflect on whether we are truly listening to the wants and needs of American consumers.   The federal government and the entire financial services industry have a duty to help Americans understand their consumer rights so they can make well-informed decisions with their money — but it is unclear how often this is happening. To genuinely help consumers, recognition of the fundamental issues they face in their financial lives is essential.  Contrary to what many may believe, not every American has a bank account or credit card to cover financial gaps. For instance, according to a 2017 Federal Reserve study, more than 40 percent of Americans say they could not cover an emergency expense costing $400. In fact, there is a segment of the consumer population that is left out of the financial services sector altogether. Federal Deposit Insurance Corp. data show that more than 30 million U.S. households are unbanked or underbanked. Understanding how to help these individuals in managing their financial needs is a significant task.  Unfortunately, Washington has failed these consumers. As certain policymakers in our nation’s capital seek to create new consumer protection regulations, they have not spent the needed time and effort to listen to consumers’ financial needs and realities. On the contrary, many of these regulations only serve to harm consumers’ financial freedom and well-being.One example is the Consumer Financial Protection Bureau’s rule on small-dollar lending, which was finalized in late 2017. This rule would restrict access to short-term, small-dollar loans, leaving millions of consumers without a source of credit during their most dire financial situations. Small-dollar loans help hardworking Americans manage unexpected expenses or bridge financial gaps, such as an auto repair, rent payment or medical bills. Consumers value their access to these short-term credit sources, but they stand to lose it simply because Washington did not listen.

        CFPB invites comments on amending rules already in effect - The Consumer Financial Protection Bureau said Wednesday it is seeking feedback on whether it should amend any rules it has issued since it opened its doors. Major rules that the CFPB has already adopted include those governing mortgage servicing, mortgage origination, integrated mortgage disclosures, remittance transfers and prepaid accounts.  However, the bureau said it is not requesting feedback on its 2015 rule that expanded data collection under the Home Mortgage Disclosure Act, or its 2017 small-dollar payday lending rule, since both rules are being reconsidered.  The CFPB had already asked for public comments on its ability-to-repay and "qualified mortgage" standards, as well as remittance transfers and a mortgage servicing rule issued under the Real Estate Settlement Procedures Act. Those specific rules are subject to a five-year "look back" review mandated by Dodd-Frank, and many believe the CFPB will modify, expand or eliminate them. The request for feedback on adopted regulations is the eighth out of a dozen such requests that acting CFPB Director Mick Mulvaney has initiated so far as part of a public review of all the CFPB's processes. The bureau said in a press release that it is seeking comment on "whether it should amend any rules it has issued since its creation or issue rules under new rulemaking authority provided for by the Dodd-Frank Act."  The CFPB said feedback on adopted regulations should include whether rules have created "unintended consequences," or whether they overlap or conflict with other laws and regulations, thereby making "it difficult or particularly burdensome for institutions to comply."

        Five questions for CFPB nominee to replace Mick Mulvaney - President Trump could nominate a permanent director to lead the Consumer Financial Protection Bureau any day now. The eventual pick will likely encounter heavy scrutiny from senators and, if confirmed, would take the helm of an agency still defined by turmoil nearly seven years after its creation. Numerous names have emerged as front runners to replace current acting CFPB Director Mick Mulvaney. The two most cited in recent days are National Credit Union Administration Chairman J. Mark McWatters and Jonathan Dever, a Republican Ohio state representative whose Akron, Ohio-based law firm has defended consumers against foreclosure actions. An immediate question for a new director is whether the agency will continue initiatives launched by Mulvaney, who in just over three months has sought to transform the consumer bureau from the aggressive regulator led by former Director Richard Cordray into a more industry-friendly agency.  Though Republicans only need a simple majority to get a permanent CFPB director confirmed by the Senate, they have virtually no wiggle room because of Sen. John McCain's absence due to medical issues. Republicans may also try to move quickly before Sen. Thad Cochran, R-Miss., leaves on April 1, and any delay could be extended by the slowdown in congressional business as the midterm elections approach.Some have said the administration may opt for a nominee who could attract both Democratic and Republican support. But any Trump pick to lead the agency would be subjected to public grilling by Democratic senators, particularly Sen. Elizabeth Warren of Massachusetts, the CFPB's original architect."The nominee is going to have to walk a fine line to make it through the confirmation process," said Jean Veta, a partner at Covington & Burling LLP. If any nomination gets stalled or withdrawn, Mulvaney could potentially remain acting head of the CFPB well into 2019. Here are four questions for the next CFPB nominee:

        Federal court tosses out Obama-era rule requiring financial advisers to act in customers' best interests | TheHill: A divided federal appeals court on Thursday tossed out an Obama-era Labor Department rule that required financial investment advisers to act in the best interest of their clients. In a 2-1 ruling, the 5th Circuit Court of Appeals said the fiduciary rule bears the hallmarks of “unreasonableness” and constitutes an arbitrary and capricious exercise of administrative power. The lawsuit stems from a challenge the U.S. Chamber of Commerce and eight other business and financial groups brought against the rule. The groups argued the Labor Department erased universally recognized distinctions between salespeople and fiduciary advisers and reconfigured relationships among financial and insurance representatives and their customers in setting the new standards of conduct. In the rule, the Labor Department revised the meaning of an “investment-advice fiduciary” under the 1974 Employee Retirement Income Security Act to include brokers and insurance agents. The change made them subject to new limits on the types of services for fees or compensation they can provide when advising on individual retirement accounts. “Never before has the mere act of being a salesperson — of recommending the purchase of your company’s product — been deemed an act that marks you as a fiduciary,” the business groups argued in court documents. In a scathing majority opinion, Judge Edith Jones, a Ronald Reagan appointee, agreed. Chief Judge Carl Stewart, who was nominated to the court by President Bill Clinton, dissented from the court’s ruling. He said the department acted well within its regulatory authority to create new standards for financial investment advisers to better protect consumers as the retirement-investment market has shifted over the last 40 years toward individually controlled retirement plans and accounts. 

        Game of chicken: Ag lending threatened by report on poultry farming -  Agricultural lenders are facing yet another challenge. A report released last week by the Small Business Administration’s independent Office of the Inspector General questions the independent status of chicken farmers. The report, in a nutshell, determined that most chicken growers are tied so closely to larger poultry companies — the result of vertical integration efforts — that they operate more like subsidiaries than independent businesses. That could create a problem with lending under the SBA's 7(a) program, which is intended to assist small businesses and startups.  As a result, the SBA may consider barring future loan guarantees to growers who sell their production to a single company. Such a move would harm scores of community banks that count poultry lending as a lucrative line of business.Poultry makes up the bulk of agricultural loans backed by the agency. The SBA guaranteed more than 1,500 poultry loans totaling about $1.8 billion between fiscal years 2012 and 2016. The threat has gotten the attention of bankers' groups.The watchdog's report could be “extremely damaging to small banks and their communities," said Bill Holmes, president of the Arkansas Bankers Association. "We’re certainly going to respond."The findings create "some issues that need to be addressed ... and we’ll be happy to do that,” said Tony Wilkinson, CEO of the National Association of Government Guaranteed Lenders. “I doubt many lenders will be using their delegated authority [to make poultry loans] until this is cleared up.”The matter has also drawn the ire of the National Chicken Council, which represents entities that raise broiler chickens and make and market chicken products.The relationship between chicken growers and larger food companies “is no different than any other small business that enters into a contractual relationship to provide services to a larger company,” The report comes at a time when lawmakers are looking closely at the SBA’s enforcement of the “credit elsewhere” test, which is supposed to ensure that government guarantees go only to small businesses that cannot qualify for conventional bank credit. During an oversight hearing held by the House Small Business Committee in January, legislators repeatedly stressed the importance of limiting the availability of 7(a) loans to legitimate small businesses.

        Farmer Mac makes new business gains, sees spike in delinquencies - The Federal Agricultural Mortgage Corp. reported gains in new business volume, but also realized a big jump in 90-day delinquencies.Farmer Mac reported $1.6 billion in net new business volume, bringing total outstanding business volume to $19 billion by the end of 2017. The company's net income attributable to common stockholders for 2017 rose to $71.3 million, up from $64.2 million in 2016.In its farm and ranch portfolio, 90-day delinquencies spiked to $48.4 million in 2017, up considerably from $21 million as of the end of 2016. The 2017 delinquencies were made up of 51 delinquent loans, compared to 38 delinquent loans in 2016.Though the annual increase in 90-day delinquencies was due primarily to borrower-specific factors, the company anticipates macroeconomic trends and the cyclical nature of the agricultural economy to raise its 90-day delinquency rate closer to, and possibly above, Farmer Mac's historical average.The company's core earnings for 2017 were $65.6 million, up from $53.5 million in 2016. Net interest income grew to $157.6 million in 2017, increasing from $140.3 million from the year prior.

        Senate Expands ‘Lobbyist Bill’ to Deregulate Real Estate - naked capitalism Yves here. This Real News Network interview with Bill Black discusses how the a provision in law rolling back some critical features of the already-weak Dodd Frank reforms would greatly weaken supervision of commercial real estate lending. That may not seem like a big deal, until you realize that the crisis before the 2008 meltdown, the savings and loan crisis, was a commercial real estate crisis. Moreover, the label is somewhat misleading. Remember that Citibank nearly went under and had to be rescued by Saudi investor Al Waleed? It was commercial real estate lending that brought Citi to its knees. It had made a lot of junior loans to commercial real estate office developments in Texas that turned out to be “see throughs” (no tenants). And unlike residential real estate, where there is normally a 40% recovery in the event of foreclosure (it was lower in the crisis just past due to gross mismanagement of the properties by many mortgage servicers), you can have a more than 100% loss in commercial real estate, since a failed development often needs to be completely removed for the land to be sold. On top of that, the S&L crisis was far more serious than it appears in retrospect. Economists and pundits anticipate that it would inflict lasting damage to the economy. The big reason the US did better than expected was that Greenspan engineered a very steep yield curve, dropping short rates while (unlike Bernanke post crisis) allowing longer-term interest rates to stay relatively high. Banks were able to do dumb “borrow short, lend long” and earn exceptionally high profits by historical standards. That allowed them to rebuild their balance sheets much faster than anticipated.

        Will HMDA data carve-out for small banks make discrimination easier?  - BankThink - As critics of the Senate banking bill have rallied in recent weeks, an important argument has begun to gain traction: The legislation would make it easier for banks to discriminate. Opponents have pointed to a provision that, at first glance, seems straightforward enough — a carve-out for small lenders from certain mortgage data reporting requirements.  But the debate around this measure is more complicated than many realize. Every policy change comes with both benefits and costs — and this particular fight highlights how difficult weighing those costs and benefits can really be, even when it comes to what can seem like a harmless tweak.  The Senate bill calls for exempting banks and credit unions that provide fewer than 500 mortgages a year from having to report on a series of expanded data points required by the Home Mortgage Disclosure Act.  HMDA got its start in the 1970s as a way to help root out unfair — yet pervasive — lending practices and patterns that harmed minorities and other groups. In 2015, the Consumer Financial Protection Bureau added roughly 25 new data fields to the information already gathered under HMDA — a mix of data points required by the Dodd-Frank Act and added under the agency’s discretion. The data include items like borrower credit scores, mortgage loan terms and the points and fees assessed in a sale. It’s those 25 additional pieces of data that are at stake in the Senate bill — not all HMDA data (another 23 data fields), as some have suggested. And the exemption is only available for banks and credit unions, not other mortgage lenders.  “We're not talking about throwing out any existing, historical, always-reported HMDA data,” said Paul Merski, executive vice president of congressional relations and strategy for the Independent Community Bankers of America. “It's really disingenuous that many are saying the HMDA data is being thrown out.”

        Spike in construction lending one likely outcome of reg relief -  Construction lending by banks has been sluggish for quite some time, but the regulatory relief legislation that passed the Senate this week may help trigger a revival. Among the many provisions tucked into the bill that passed the Senate by a 67-31 margin was one that aims to clear up confusion about how banks treat certain construction loans deemed high-risk by regulators. The proposed changes to rules established by the Basel III regulatory regime could help grease the skids for banks to make more construction loans, since they’ll have a better idea what regulators want, said Christina Zausner, the head of industry policy and analysis at the CRE Finance Council, a trade group that represents commercial real estate lenders.  “It makes banks less afraid of having a difference of opinion with their examiners on” acquisition, development and construction loans, she said. “It ensures a greater degree of consistency.”  An overreliance on construction lending was a key contributor to community bank failures during the crisis, so Basel III put in place safeguards that among other things, required banks to set aside extra capital on construction loans on which borrowers are contributing less than 15% of their own money and the loan-to-value ratio on a nonresidential construction project is higher than 80%. But bankers have complained that the guidelines on what regulators dubbed “high-volatility commercial real estate loans” are overly confusing and have largely discouraged them from extending credit to these types of borrowers. They have balked, too, at the regulation’s stiff capital-reserve requirement, arguing that the capital could be better used elsewhere.  To be sure, banks have scaled back on all types of construction lending since the financial crisis. At the end of 2017, construction loans accounted for just 1.94% of the industry’s total assets, down from nearly 5% a decade ago.

        Will CRA finally get its makeover? — Regulators are working intently on a proposal to reform how they apply the Community Reinvestment Act after previous attempts to modernize CRA policy drew mixed reviews. The Office of the Comptroller of the Currency appears to be taking the lead on an effort to release a proposal within weeks, according to sources familiar with the matter. The goal is to revamp a CRA supervision and enforcement process that critics say has become too complex and outdated.Specifically, regulators are considering new metrics for CRA's four grading categories — which are now "outstanding," "satisfactory," "needs to improve" and "substantial noncompliance" — as well as whether to expand the CRA assessment area and the types of loans that count toward a bank’s CRA score, these sources said. Both industry representatives and advocacy groups are hopeful that this effort finally succeeds in bringing CRA policy more in line with business practices and community needs. Previous efforts in the last several years to improve CRA enforcement were seen by some as too timid. The last major reforms of the 40-year-old law were in 1995.  “We need a structured [CRA] system that is going to evolve as the customer needs have evolved,” said Wayne Abernathy, executive vice president for financial institutions policy and regulatory affairs at the American Bankers Association.  Abernathy said enforcement of CRA in recent years has focused too heavily on mortgage lending for low-to-moderate-income borrowers, rather than all lending in the broader community.

        Housing market needs an explicit government guarantee - A recent op-ed confirms what those of us who advocate for comprehensive reform of the government-sponsored enterprises as a means to build a long-term, sustainable housing finance system have long believed: Many calling for the recapitalization and release of Fannie Mae and Freddie Mac would do so without an explicit government guarantee. This would decimate the ability of community banks and smaller lenders to participate in secondary mortgage market and likely drive many of them out of the mortgage business.Let’s rewind for a moment. What is the key public policy objective regarding Fannie Mae and Freddie Mac? To create a stable secondary mortgage market that will provide sustainable, low-cost credit to qualified borrowers, avoid taxpayer-funded bailouts and efficiently utilize private capital. This is what the Mortgage Bankers Association and our numerous members, both large and small, are hoping to achieve.  MBA has long advocated for an explicit government guarantee on the securities. This would level the playing field and allow smaller institutions to compete with larger banks who have deep balance sheets to back their investments. It would also allow smaller lenders to offer competitive rates, benefiting consumers directly, because outside investors would have confidence that the loans are ultimately backed by the U.S. government, thus increasing liquidity in the secondary mortgage market. Additionally, MBA believes the explicit government guarantee should not be extended to the guarantors responsible for issuing the securities. Any government guarantee for the guarantors is nonsensical and would only harm taxpayers. Simply put there is no reason to back their corporate debt or equity.  However, moving from an implicit guarantee of the two companies to an explicit guarantee on the securities will provide catastrophic insurance for those securities. This in turn should provide a more stable and liquid market and lower risk to taxpayers.

        CMBS delinquency rates improve, except for retail property loans - With the exception of the troubled retail sector, delinquency rates across property types supporting commercial mortgage-backed securities were mostly flat to declining in February compared with January, Fitch Ratings said. February's total delinquency rate was 3.01%, down from 3.12% in January and 3.37% in February 2017. It was the eighth consecutive month of improved performance, the ratings agency said in a press release. The retail sector had a 5.83% delinquency rate in February, the highest among all the property types. This was up from 5.77% in January and 5.35% one year ago. There were a number of high-profile bankruptcy filings among retailers last year, including Toys R Us, which previously announced plans to close some of its stores but is now on the verge of liquidating all of its properties; others like Sears, J.C. Penney and Macy's announced store closings  

        December's serious delinquency rate hit an 11-year low for the month -- Though early-stage mortgage delinquencies inched up in December, serious delinquency and foreclosure inventory rates declined on an annual basis, according to CoreLogic's Loan Performance Insights Report.Early-stage delinquencies ticked up 0.1 percentage points to 2.3%, but the serious delinquency rate, describing mortgages 90 or more days past due (including foreclosures), dipped from 2.3% to 2.1% year-over-year in December. This was the lowest serious delinquency rate for the month of December since 2006.The share of mortgages 60-89 days past due also declined 0.1 percentage points to 0.8% Regardless of these changes, the overall delinquency rate of 5.3% in December 2017 remained unchanged from the percentage of mortgages in some stage of delinquency in December 2016.

        CoreLogic: "2.5 million Homes still in negative equity" at end of Q4 2017 -- From CoreLogic: Homeowner Equity Q4 2017 CoreLogic analysis shows U.S. homeowners with mortgages (roughly 63 percent of all properties) have seen their equity increase by a total of $908.4 billion since the fourth quarter 2016, an increase of 12.2 percent, year over year. In the fourth quarter 2017, the total number of mortgaged residential properties with negative equity decreased 1 percent from the third quarter 2017 to 2.5 million homes, or 4.9 percent of all mortgaged properties. Compared to the fourth quarter 2016, negative equity decreased 21percent from 3.2 million homes, or 6.3 percent of all mortgaged properties.Negative equity peaked at 26 percent of mortgaged residential properties in the fourth quarter of 2009, based on the CoreLogic equity data analysis which began in the third quarter of 2009.  CR Note: A year ago, in Q4 2016, there were 3.2 million properties with negative equity - now there are 2.5 million.  A significant change.

         Report of the 30-year mortgage's death was an exaggeration… If reform of the government-sponsored enterprises leads to the 30-year mortgage's demise, homebuyers' monthly payments could soar by $400, Zillow estimated. But lenders aren't convinced this housing finance staple is in danger of being replaced.  Taking away the 30-year mortgage at this time could bring back a sluggish housing market and even further reduce the for-sale inventory, Aaron Terrazas, senior economist at Zillow, said in a press release. "If monthly payments do rise and, more importantly, stay elevated, at some point we'd expect home prices to come down a bit in response to this decreased purchasing power, and some long-time owners could opt not to sell to preserve their smaller monthly payments."  That is a possibility the mortgage industry is discounting.  "The 30-year [conforming] fixed-rate mortgage isn't going away anytime in the foreseeable future," said Mat Ishbia, president and CEO of United Wholesale Mortgage. "That's not realistic. There is less than a 1% chance" of that happening. "Could the world we live in change? Yes, the world we live in changes every day. However, will this extreme of a change happen? No, it won't, it wouldn't be good for consumers, it's not good for the housing industry," he said.  The 30-year mortgage was created following the Great Depression in order to provide liquidity to a stagnant housing market where the predominant product was short-term interest only loans with balloon payments. The 30-year mortgage remains the best mechanism for creating liquidity in the housing market and allowing more people to buy homes, its supporters said. But there are proponents of eliminating the 30-year fixed-rate mortgage like the American Enterprise Institute. They argue the current product with its slow amortization period has resulted in higher default and foreclosure rates and instead replace it with a product that has a shorter duration. This would allow homeowners to build wealth quicker, which in turn would reduce the default and foreclosure risks.

        Mortgage rates are down for first time this year - After increasing for nine consecutive weeks, mortgage rates dropped for the first time in 2018, according to Freddie Mac's Primary Mortgage Market Survey.  For the week ending March 15, the 30-year fixed-rate mortgage averaged 4.44%, down from 4.46% from last week, with an average 0.5 point. During this same week last year, the 30-year fixed-rate mortgage averaged 4.3%. The 15-year fixed-rate mortgage averaged 3.9% with an average 0.5 point. Though the 15-year FRM was only 3.5% this time last year, it was still down from 3.94% from last week. Data about inflation was weaker than expected and that, along with the firing of Secretary of State Rex Tillerson, contributed to increased prices and lower yields on the 10-year Treasury, which is used as a benchmark for the 30-year fixed-rate mortgage.   “Tuesday’s Consumer Price Index report showed inflation is cooling down; headline consumer price inflation was 2.2% year-over-year in February, which was in line with the consensus forecast," said Len Kiefer, deputy chief economist at Freddie Mac, in a press release. "Following this news, the 10-year Treasury fell slightly. Mortgage rates followed Treasury's lower and ended a nine-week surge. The U.S. weekly average 30-year fixed mortgage rate fell 2 basis points to 4.44 percent in this week’s survey, its first decline this year,” he continued. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.67% with a 0.4 point this week, up from last week's 3.63% average. The 5-year ARM was 3.28% this time a year ago.

        MBA: Purchase Mortgage Applications Increase, Refinance Applications Decrease in Latest Weekly Survey --From the MBA: Purchase Apps Up, Refis Down in Latest MBA Weekly Survey Mortgage applications increased 0.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 9, 2018. .. The Refinance Index decreased 2 percent from the previous week. The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index increased 5 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, 4.69 percent, from 4.65 percent, with points decreasing to 0.45 from 0.58 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.

        Residential mortgage originations plummet as refis drop by 34% --  Residential mortgage originations fell 19% year-over-year in the fourth quarter of 2017, due primarily to a large drop in refinance volume, according to Attom Data Solutions. Over 1.9 million loans secured by residential property were originated in the quarter, with 818,158 of them being refinance loans. Refinance loan originations were down 34% from the previous year and 17% from the previous quarter. And with mortgage rates expected to increase this year, refinancing may look even less appealing and that would eliminate more potential candidates.  The number of purchase loans originated held pretty steady on an annual basis. In the fourth quarter, 791,637 purchase loans were originated, down only 1% year-over year, but down 22% quarter-over-quarter.By number of loans, Quicken Loans ended the quarter as the nation's most prolific mortgage originator, with 289,349 units (of which 213,227 were refis). Wells Fargo was second in terms of units at 245,643 (145,158 refis), but was tops by dollar volume, at $80.4 billion to Quicken's $64.5 billion,About 293, 570 home equity lines of credit were originated in the fourth quarter, down 25% from a nine-year high in 3Q17, and down 7% from the year prior. "The falloff in refinance originations continued for the third straight quarter, but purchase originations held steady compared to a year ago despite ballooning down payment amounts that make it more difficult for first-time homebuyers to compete — as evidenced by the three-year low in the share of FHA buyers,"  The median down payment for single-family homes and condos purchased with financing fell from a record high of 19,100 in the third quarter to 18,000 in the fourth quarter. Despite falling on a quarterly basis, it was still up 20% from $14,950 in the fourth quarter of 2016. Residential loans backed by the Federal Housing Administration made up 12% of all residential loans originated in the fourth quarter, down 12.3% year-over-year and 12.9% quarter-over-quarter. ‘

        Home prices soar high as Federal Reserve hopes to avoid big crash | TheHill: After the peak of the housing bubble in 2006, U.S. home prices fell for six years, until 2012. Are these memories getting a little hazy? The Federal Reserve, through forcing years of negative real short-term interest rates, suppressing long-term rates, and financing Fannie Mae and Freddie Mac to the tune of $1.8 trillion on its own vastly expanded balance sheet, set out to make home prices go back up. It succeeded. Indeed, it has overachieved. Average home prices are now significantly higher than they were at the top of the bubble, as shown by the S&P Case-Shiller national home price index. If you already own a home, the price boom makes you feel richer. But if you are trying to buy, it makes homes less and less affordable. home prices rise not only faster than inflation, but faster than your income. So far, we have spoken of nominal home prices. But since the old 2006 peak, we have had more than a decade of general inflation, as the Fed strives for perpetual depreciation of the dollar’s purchasing power at a rate of 2 percent a year. The aggregate increase of the consumer price index from 2006 to 2017 was about 24 percent. We need to consider home prices on a real, or inflation-adjusted, basis.From 1987 to 2000, the average inflation-adjusted annual increase in U.S. home prices was 0.3 percent. This 0.3 percent annual rate is the same as the very long term trend increase in U.S. real home prices, as calculated over the 117 years from 1900 to 2017, by the Credit Suisse global investment returns yearbook for 2018. In other words, in addition to giving you a nice place to live, it appears that over time on average, homes provide a good inflation hedge, plus a little, but not plus very much. After 2000, in real terms the housing bubble expanded and contracted quite symmetrically, bottoming out in 2012 just about on its trend line. But it did not resume its trend behavior. The Fed was on the case, and up real home prices went rapidly again, rising over 5 percent a year on average from 2012 to 2017. Their current real level is equal to that of mid-2004, when the bubble was already well inflated, and it is far over — 28 percent over — their trend line as extended from 2000. Nobel Prize winner Robert Shiller’s estimate of U.S. home price increases since 1953, compared to the increase in the consumer price index, shows that the two track very closely for decades. But they swiftly part company as the 2000s housing bubble inflated, get pretty close again by 2012 as home prices corrected, then once more dramatically diverged, and are now far apart. 

         Sound Familiar? Home Flipping In The US Hits 11-Year High - Last year, we noted that investors had started flipping homes as if it were 2006 all over again, with the number of homes flipped accounting for 6.1% of all US home sales. Back in 2006, the figure rose to a record 7.3%.What's worse, we pointed out that the cities with the highest rates of home-flipping were essentially the same cities that were the hardest hit by the crisis. Now, data provided by ATTOM Data Solutions - which maintains the largest database of US home sales - showed the home flipping reached a new peak, with 207,088 single family homes and condos flipped in 2017, up 1% from the 204,167 homes flipped during 2016. Again, that's the highest rate since 2006. That's 5.9% of all single family home sales.Meanwhile, a total of 138,410 entities (which includes both individuals, who typically buy and sell under the cover of an LLC, and institutions) flipped homes in 2017, up 4% from the 133,407 entities that flipped in 2016 to the highest level since 2007. That's a 10-year high.However, an executive at ATTOM Data Solutions assured readers that home-flipping today is "built on a more fundamentally sound foundation than the flipping frenzy that we witnessed a little more than a decade ago. The total dollar volume of financed home flip purchases was $16.1 billion for homes flipped in 2017, up 27% from $12.7 billion in 2016 to the highest level since 2007 — a 10-year high. Meanwhile, the total dollar volume of financed home flip purchases was $16.1 billion for homes flipped in 2017, up 27% from $12.7 billion in 2016 to the highest level since 2007 — a 10-year high.

        New Residential Housing Starts Down in February --The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for February new residential housing starts. The latest reading of 1.236M was below forecast of 1.290M and a decrease from the previous month's revised 1.329M. Here is the opening of this morning's monthly report:Privately-owned housing starts in February were at a seasonally adjusted annual rate of 1,236,000. This is 7.0 percent (±16.7 percent)* below the revised January estimate of 1,329,000 and is 4.0 percent (±12.2 percent)* below the February 2017 rate of 1,288,000. Single-family housing starts in February were at a rate of 902,000; this is 2.9 percent (±10.8 percent)* above the revised January figure of 877,000. The February rate for units in buildings with five units or more was 317,000. [link to report]  Here is the historical series for total privately-owned housing starts, which dates from 1959. Because of the extreme volatility of the monthly data points, a 6-month moving average has been included.

        Housing Starts decreased to 1.236 Million Annual Rate in February --From the Census Bureau: Permits, Starts and Completions Privately-owned housing starts in February were at a seasonally adjusted annual rate of 1,236,000. This is 7.0 percent below the revised January estimate of 1,329,000 and is 4.0 percent below the February 2017 rate of 1,288,000. Single-family housing starts in February were at a rate of 902,000; this is 2.9 percent above the revised January figure of 877,000. The February rate for units in buildings with five units or more was 317,000.  Privately-owned housing units authorized by building permits in February were at a seasonally adjusted annual rate of 1,298,000. This is 5.7 percent below the revised January rate of 1,377,000, but is 6.5 percent above the February 2017 rate of 1,219,000. Single-family authorizations in February were at a rate of 872,000; this is 0.6 percent below the revised January figure of 877,000. Authorizations of units in buildings with five units or more were at a rate of 385,000 in February. The first graph shows single and multi-family housing starts for the last several years. Multi-family starts (red, 2+ units) decreased sharply in February compared to January. Multi-family starts were down 18.7% year-over-year in February. Multi-family is volatile month-to-month, but has been mostly moving sideways the last few years. Single-family starts (blue) increased in February, and are up 2.9% year-over-year. The second graph shows total and single unit starts since 1968. The second graph shows the huge collapse following the housing bubble, and then - after moving sideways for a couple of years - housing is now recovering (but still historically fairly low). Total housing starts in February were below expectations, mostly due to a sharp decrease in multi-family starts (the reverse of January). Starts for December and January were revised slightly.

        Comments on February Housing Starts - The housing starts report released this morning showed starts were down 7.0% in February compared to January, and starts were down 4.0% year-over-year compared to February 2017.   The decline in starts was due to the volatile multi-family sector.  Single family starts were up 2.9% year. This first graph shows the month to month comparison between 2017 (blue) and 2017 (red). Starts were down 4.0% in February compared to February 2017. Note that February 2016 was a pretty strong month for housing starts, so this was a difficult comparison.  The next three months will be easier.   Through two months, starts are up 1.6% year-to-date compared to the same period in 2017.Single family starts were up 2.9% year-over-year, and also up 2.9% compared to January.Multi-family starts were down 18.7% year-over-year, and down 26.1% compared to January (multi-family is volatile month-to-month).Below is an update to the graph comparing multi-family starts and completions. Since it usually takes over a year on average to complete a multi-family project, there is a lag between multi-family starts and completions. Completions are important because that is new supply added to the market, and starts are important because that is future new supply (units under construction is also important for employment).These graphs use a 12 month rolling total for NSA starts and completions.  The blue line is for multifamily starts and the red line is for multifamily completions. The rolling 12 month total for starts (blue line) increased steadily over the last few years - but has turned down recently.  Completions (red line) have lagged behind - and completions have caught up to starts (more deliveries).  Completions lag starts by about 12 months, so completions will probably turn down in a year or so. As I've been noting for a few years, the growth in multi-family starts is behind us - multi-family starts peaked in June 2015 (at 510 thousand SAAR). The second graph shows single family starts and completions. It usually only takes about 6 months between starting a single family home and completion - so the lines are much closer. The blue line is for single family starts and the red line is for single family completions. Note the low level of single family starts and completions.  The "wide bottom" was what I was forecasting following the recession, and now I expect a few more years of increasing single family starts and completions.

        New Residential Building Permits: 1.3M in February The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for February new residential building permits. The latest reading of 1.298M was a decrease from a revised 1.377M in January and below the forecast of 1.320M. Here is the opening of this morning's monthly report: Privately-owned housing units authorized by building permits in February were at a seasonally adjusted annual rate of 1,298,000. This is 5.7 percent (±0.7 percent) below the revised January rate of 1,377,000, but is 6.5 percent (±2.4 percent) above the February 2017 rate of 1,219,000. Single-family authorizations in February were at a rate of 872,000; this is 0.6 percent (±0.9 percent)* below the revised January figure of 877,000. Authorizations of units in buildings with five units or more were at a rate of 385,000 in February. [link to report] Here is the complete historical series, which dates from 1960. Because of the extreme volatility of the monthly data points, a 6-month moving average has been included.

        NAHB Housing Market Index: "Builder Confidence Remains on Solid Footing" - The National Association of Home Builders (NAHB) Housing Market Index (HMI) is a gauge of builder opinion on the relative level of current and future single-family home sales. It is a diffusion index, which means that a reading above 50 indicates a favorable outlook on home sales; below 50 indicates a negative outlook.The latest reading of 70, down 1 from last month's revised number, came in below the forecast of 72.Here is the opening of this morning's monthly update: Builder confidence in the market for newly-built single-family homes edged down one point to a level of 70 in March from a downwardly revised February reading on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) but remains in strong territory.“Builders’ optimism continues to be fueled by growing consumer demand for housing and confidence in the market,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “However, builders are reporting challenges in finding buildable lots, which could limit their ability to meet this demand.” [link to report]  Here is the historical series, which dates from 1985.

        Hotels: Occupancy Rate Up Year-over-Year - From STR: US hotel results for week ending 3 March The U.S. hotel industry reported positive year-over-year results in the three key performance metrics during the week of 25 February through 3 March 2018, according to data from STR.
        In comparison with the week of 26 February through 4 March 2017, the industry recorded the following:
        • Occupancy: +1.7% to 65.9%
        • Average daily rate (ADR): +2.3% to US$126.06
        • Revenue per available room (RevPAR): +4.1% to US$83.04
        The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

        Michigan Consumer Sentiment: March Preliminary Exceeds Expectations --The University of Michigan Preliminary Consumer Sentiment for March came in at 102.0, up 2.3 from the February Final reading of 99.7. had forecast 99.3.Surveys of Consumers chief economist, Richard Curtin, makes the following comments:Consumer sentiment rose in early March to its highest level since 2004 due to a new all-time record favorable assessment of current economic conditions. All of the gain in the Sentiment Index was among households with incomes in the bottom third (+15.7), while the economic assessments of those with incomes in the top third posted a significant monthly decline (-7.3). The decline among upper income consumers was focused on the outlook for the economy and their personal finances. Consumers continued to adjust their expectations in reaction to new economic policies. In early March, favorable mentions of the tax reform legislation were offset by unfavorable references to the tariffs on steel and aluminum-each was spontaneously cited by one-in-five consumers. Importantly, near term inflation expectations jumped to their highest level in several years, and interest rates were expected to increase by the largest proportion since 2004. These trends have prompted consumers to more favorably cite buying as well as borrowing in advance of those expected increases. While income gains are still anticipated, the March survey found that the size of the expected income increase returned to the lows recorded in the past year. Among the top-third income households, income expectations fell more and inflation expectations rose more; as these households account for more than half of all consumption expenditures, the data suggest that the relative lull in consumption in the 1st quarter may persist for another quarter.[More...] See the chart below for a long-term perspective on this widely watched indicator. Recessions and real GDP are included to help us evaluate the correlation between the Michigan Consumer Sentiment Index and the broader economy.

        Retail Sales decreased 0.1% in February - On a monthly basis, retail sales decreased 0.1 percent from January to February (seasonally adjusted), and sales were up 4.0 percent from February 2017. From the Census Bureau report: Advance estimates of U.S. retail and food services sales for February 2018, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $492.0 billion, a decrease of 0.1 percent from the previous month, but 4.0 percent above February 2017. ... The December 2017 to January 2018 percent change was revised from down 0.3 percent to down 0.1 percent. This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline). Retail sales ex-gasoline were unchanged in February. The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993. Year-over-year change in Retail Sales Retail and Food service sales, ex-gasoline, increased by 3.9% on a YoY basis. The increase in February was well below expectations, however sales in January were revised up (although sales in December were revised down). A disappointing report.

        February Retail Sales: Down 0.1% MoM, Worse Than Forecast - The Census Bureau's Advance Retail Sales Report for February was released this morning. Headline sales came in at -0.1% month-over-month to one decimal. Today's headline number was below the consensus of 0.3%. Core sales (ex Autos) came in at 0.2% MoM. December figures were revised. Here is the introduction from today's report: Advance estimates of U.S. retail and food services sales for February 2018, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $492.0 billion, a decrease of 0.1 percent (±0.5 percent)* from the previous month, but 4.0 percent (±0.7 percent) above February 2017. Total sales for the December 2017 through February 2018 period were up 4.3 percent (±0.5 percent) from the same period a year ago. The December 2017 to January 2018 percent change was revised from down 0.3 percent (±0.5 percent)* to down 0.1 percent (±0.3 percent)*.  Retail trade sales were down 0.1 percent (±0.5 percent)* from January 2018, but 4.2 percent (±0.7 percent) above last year. Nonstore Retailers were up 10.1 percent (±1.4 percent) from February 2017, while Gasoline Stations were up 7.9 percent (±1.6 percent) from last year. [view full report] The chart below is a log-scale snapshot of retail sales since the early 1990s. The two exponential regressions through the data help us to evaluate the long-term trend of this key economic indicator.

        BLS: CPI increased 0.2% in February, Core CPI increased 0.2% -- From the BLS: The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in February on a seasonally adjusted basis after rising 0.5 percent in January, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.2 percent before seasonal adjustment.  The index for all items less food and energy increased 0.2 percent in February following a 0.3-percent increase in January. ... The all items index rose 2.2 percent for the 12 months ending February, a slightly larger increase than the 2.1-percent rise for the 12 months ending January. The index for all items less food and energy rose 1.8 percent over the past year, while the energy index increased 7.7 percent and the food index advanced 1.4 percent. This was at the consensus forecast of a 0.2% increase for CPI, and a 0.2% increase in core CPI.

        Consumer Price Index: February Headline at 2.2% - The Bureau of Labor Statistics released the Februrary Consumer Price Index data this morning. The year-over-year non-seasonally adjusted Headline CPI came in at 2.21%, up from 2.07% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 1.85%, up from the previous month's 1.82%.Here is the introduction from the BLS summary, which leads with the seasonally adjusted monthly data:The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in February on a seasonally adjusted basis after rising 0.5 percent in January, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.2 percent before seasonal adjustment. The indexes for shelter, apparel, and motor vehicle insurance all rose and contributed to the 1-month seasonally adjusted increase in the all items index. The food index was unchanged in February, as a decline in the index for food at home offset an increase in the food away from home index. The energy index increased slightly, with its component indexes mixed.The index for all items less food and energy increased 0.2 percent in February following a 0.3-percent increase in January. Along with shelter, apparel, and motor vehicle insurance, the indexes for household furnishings and operations, education, personal care, and airline fares also increased in February. In contrast, the indexes for communication, new vehicles, medical care, and used cars and trucks declined over the month.The all items index rose 2.2 percent for the 12 months ending February, a slightly larger increase than the 2.1-percent rise for the 12 months ending January. The index for all items less food and energy rose 1.8 percent over the past year, while the energy index increased 7.7 percent and the food index advanced 1.4 percent. [More…] was looking for a 0.2% increase MoM in seasonally adjusted Headline CPI and 0.2% in Core CPI. Year-over-year forecasts were 2.2% for Headline and 1.8% for Core.The first chart is an overlay of Headline CPI and Core CPI (the latter excludes Food and Energy) since the turn of the century. The highlighted two percent level is the Federal Reserve's Core inflation target for the CPI's cousin index, the BEA's Personal Consumption Expenditures (PCE) price index.

        February Producer Price Index: Final Demand Up 0.2% MoM -- Today's release of the February Producer Price Index (PPI) for Final Demand came in at 0.2% month-over-month seasonally adjusted, down from last month's 0.4%. It is at 2.8% year-over-year, up from 2.7% last month, on a non-seasonally adjusted basis. Core Final Demand (less food and energy) also came in at 0.2% MoM, down from the previous month and is up 2.5% YoY NSA. MoM consensus forecasts were for 0.1% headline and 0.2% core.Here is the summary of the news release on Final Demand: The Producer Price Index for final demand advanced 0.2 percent in February, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.4 percent in January and were unchanged in December. (See table A.) On an unadjusted basis, the final demand index increased 2.8 percent for the 12 months ended in February.In February, the rise in final demand prices is attributable to a 0.3-percent advance in the index for final demand services. In contrast, prices for final demand goods edged down 0.1 percent. The index for final demand less foods, energy, and trade services climbed 0.4 percent in February, the same as in January. For the 12 months ended in February, prices for final demand less foods, energy, and trade services increased 2.7 percent, the largest rise since 12-month percent change data were available in August 2014. More… The BLS shifted its focus to its new "Final Demand" series in 2014, a shift we support. However, the data for these series are only constructed back to November 2009 for Headline and April 2010 for Core. Since our focus is on longer-term trends, we continue to track the legacy Producer Price Index for Finished Goods, which the BLS also includes in their monthly updates. As this overlay illustrates, the Final Demand and Finished Goods indexes are highly correlated.

         U.S. import prices rise more than expected in February - (Reuters) - U.S. import prices rose more than expected in February as the largest increase in the cost of capital goods since 2008 offset a drop in petroleum prices, bolstering views that inflation will pick up this year.  The Labor Department said on Thursday that import prices increased 0.4 percent last month after a downwardly revised 0.8 percent surge in January. Economists polled by Reuters had forecast import prices climbing 0.2 percent in February after a previously reported 1.0 percent jump in January. In the 12 months through February, import prices increased 3.5 percent after rising 3.4 percent in the 12 months through January. Data this week showed steady gains in consumer and producer prices in January. Economists expect inflation will accelerate this year, driven by a tightening labor market, weaker dollar and fiscal stimulus. Inflation has undershot the Federal Reserve’s 2 percent target since mid-2012. Last month, prices for imported capital goods jumped 0.6 percent. That was the biggest increase since April 2008 and followed an unchanged reading in January. Prices of imported consumer goods excluding automobiles rose 0.5 percent, the largest gain since January 2014, after edging up 0.1 percent in the prior month. These price increases likely reflected the dollar’s depreciation against the currencies of the United States’ main trading partners. These higher prices will eventually filter through to core producer and consumer inflation. Imported petroleum prices fell 0.5 percent, the first drop in seven months, after rising 3.0 percent in January. Import prices excluding petroleum surged 0.5 percent after a similar gain in January. The price of goods imported from China rose 0.2 percent. Prices for imports from China increased 0.3 percent in the 12 months through February, the biggest advance since June 2014. The report also showed export prices gained 0.2 percent in February after rising 0.8 percent in January. Export prices increased 3.3 percent on a year-on-year basis after rising 3.4 percent in January.

         LA area Port Traffic Increases YoY in February - Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic. The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container). To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average. On a rolling 12 month basis, inbound traffic was up 2.1% compared to the rolling 12 months ending in January. Outbound traffic was down 0.4% compared to the rolling 12 months ending in January. The 2nd graph is the monthly data (with a strong seasonal pattern for imports). LA Area Port TrafficUsually imports peak in the July to October period as retailers import goods for the Christmas holiday, and then decline sharply and bottom in February or March depending on the timing of the Chinese New Year. Note: The Chinese New Year boosted inbound traffic in February, and will slow inbound traffic in March this year. Trade has been strong - especially inbound - and setting record volumes most months recently. In general imports have been increasing, and exports are mostly moving sideways recently.

        Rail Week Ending 10 March 2018: Growth Remains Mixed: Week 10 of 2018 shows same week total rail traffic (from same week one year ago) improved according to the Association of American Railroads (AAR) traffic data. The rolling averages remain mixed. We review this data set to understand the economy. If coal and grain are removed from the analysis for carloads, this week it expanded 0.6 %. We primarily use rolling averages the analyze the data due to weekly volatility. Intermodal transport growth remains strong year-over-year. The following graph compares the four week moving averages for carload economically intuitive sectors (red line) vs. total movements (blue line): A summary of the data from the AAR:For this week, total U.S. weekly rail traffic was 534,282 carloads and intermodal units, up 6.2 percent compared with the same week last year.Total carloads for the week ending March 10 were 256,075 carloads, up 1.6 percent compared with the same week in 2017, while U.S. weekly intermodal volume was 278,207 containers and trailers, up 10.8 percent compared to 2017.Six of the 10 carload commodity groups posted an increase compared with the same week in 2017. They included coal, up 4,134 carloads, to 83,696; chemicals, up 2,089 carloads, to 32,884; and farm products excl. grain, and food, up 829 carloads, to 16,882. Commodity groups that posted decreases compared with the same week in 2017 included motor vehicles and parts, down 1,573 carloads, to 16,818; grain, down 1,253 carloads, to 22,995; and miscellaneous carloads, down 951 carloads, to 8,876. For the first 10 weeks of 2018, U.S. railroads reported cumulative volume of 2,501,621 carloads, down 1.6 percent from the same point last year; and 2,692,349 intermodal units, up 5.6 percent from last year. Total combined U.S. traffic for the first 10 weeks of 2018 was 5,193,970 carloads and intermodal units, an increase of 2 percent compared to last year.Coal is over 1/3 of the total railcar count, and this week the EIA says coal production is 2.4 % lower than the production estimate in the comparable week in 2017.The middle row in the table below removes coal and grain from the changes in the railcar counts as neither of these commodities is economically intuitive.

        U.S. business inventories jump 0.6% in January, big rise in autos - Business inventories in the U.S. rose 0.6% in January, the Commerce Department said Wednesday. Inventories in December were also revised up to a 0.6% gain from the prior estimate of 0.4%. Sales fell 0.2% in the month after a 0.5% gain in December. The rise in inventories and the drop in sales brought up the ratio of inventories to sales to 1.34 in January from 1.33 in the prior month. That's how many months it would take to sell all the inventory on hand. One year ago, the ratio was 1.37. Auto inventories jumped 1.7% in January after falling 0.3% in December.

        Small Business Optimism Index Increased in February, "Difficulty of finding qualified workers" is Top Problem --From the National Federation of Independent Business (NFIB): February 2018 Report: Small Business Optimism IndexSmall business owners are showing unprecedented confidence in the economy as the optimism index continues at record high numbers, rising to 107.6 in February, according to the NFIB Small Business Economic Trends Survey, released today. The historically high numbers include a jump in small business owners increasing capital outlays and raising compensation.Job creation remained solid in the small business sector as owners reported a seasonally adjusted average employment change per firm of 0.22 workers, a strong showing and a repeat of last month. ... Fifty-two percent reported hiring or trying to hire (down 3 points), but 47 percent (90 percent of those hiring or trying to hire) reported few or no qualified applicants for the positions they were trying to fill. Twenty-two percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem (unchanged), exceeding the percentage citing taxes or the cost of regulation. This graph shows the small business optimism index since 1986.

        Silicon Valley VCs will not be riding to the rescue of the midwest’s startups anytime soon - It’s fashionable for Silicon Valley to talk about investing in flyover country these days. On a recent junket organized by Ohio congressional representative Tim Ryan, a gaggle of venture capitalists jumped aboard a luxury-appointed bus to tour the region. The plush accouterments included two mini refrigerators, vegan doughnuts and charcoal-infused kombucha. The crew traveled to Youngstown and Akron in Ohio; Detroit and Flint in Michigan; and South Bend, Indiana. The news was good. Startups were plentiful. Local officials were enthused. Places like Columbus, Ohio, it was implied, might one day come to resemble something like Palo Alto. “If it weren’t for my kids, I’d totally move,” Cyan Banister, a partner at Founders Fund, told The New York Times. “This could be a really powerful ecosystem.” What the VCs didn’t do (and have not done) was write many checks. The Wall Street Journal chronicled an exchange in Akron where local government officials pushed for investment in the region, and venture capitalists were clearly not interested. Local buy-in was needed first, they insisted. This was more than a matter of not wanting to go first (getting someone to write the first check is notoriously hard for entrepreneurs anywhere). It’s that the Bay Area still has little understanding, or faith, that midwestern startups are worth their time and dollars, an investor at a top Silicon Valley firm told Quartz. “I’ve never heard it mentioned in more than passing,” he said about investment opportunities in the midwest. Beyond a partner’s occasional trip to Chicago, interest in the region was minimal. “I don’t think it’s real,” he said. “I’m not super-bullish on tech hubs that are not the Bay Area.” They all lacked the tech ecosystem of New York, Boston and Silicon Valley, he said. Their biggest advantage? “It’s cheaper,” he said.

         Ford Recalls Over 1.3 Million Cars, Says Steering Wheels Can Come Off Ford is recalling over 1.3 million cars after the company found that two of their manufacturing plants rolled out vehicles with loose steering wheels. The problem is so bad that Ford is warning drivers their steering wheels could come off while customers are on the road.Ford Motor Company issued the March 14 recall that affects multiple versions of their Ford Fusion and Lincoln MKZ models in North America. According to Ford, the recall stems from “potentially loose steering wheel bolts that could result in a steering wheel detaching from the steering column.”  Ford added that if the flaw is not corrected the wheel may come off while someone is driving and “lead to a loss of steering control and increased risk of a crash.” In total, the recall includes 1,378,637 cars across the U.S., Canada, and Mexico however, less than 80,000 of those cars were sold outside of the United States. Ford promises to replace the loose bolts with a longer and “more robust” part at no cost to the owners.

        FIU bridge collapse: Several killed after pedestrian bridge at Florida college collapses - ABC News: A newly installed bridge touted as a feat of engineering collapsed on Florida International University's campus Thursday, killing several people. Aerial footage showed first responders tending to victims at the scene, searching for people in the rubble and loading others on stretchers into ambulances. They were able to pull at least two people were trapped, officials said. The collapse occurred at about 1:30 p.m., Miami-Dade Fire Rescue Chief Art Cruz said in a press conference Thursday afternoon. As of 5 p.m., a minimum of eight vehicles were trapped under the rubble, and eight people had been taken to the hospital, Cruz said. Some workers were on the bridge when it collapsed, but officials did not detail whether any of them were among the dead. More than 100 firefighters were on the scene working to find victims with the help of cranes and search dogs, and officials were working to stabilize the bridge. Their efforts are expected to be "long and arduous last well into the night, officials said. 

        Industrial Production Increased 1.1% in February -- From the Fed: Industrial Production and Capacity Utilization Industrial production rose 1.1 percent in February following a decline of 0.3 percent in January. Manufacturing production increased 1.2 percent in February, its largest gain since October. Mining output jumped 4.3 percent, mostly reflecting strong gains in oil and gas extraction. The index for utilities fell 4.7 percent, as warmer-than-normal temperatures last month reduced the demand for heating. At 108.2 percent of its 2012 average, total industrial production in February was 4.4 percent higher than it was a year earlier. Capacity utilization for the industrial sector climbed 0.7 percentage point in February to 78.1 percent, its highest reading since January 2015 but still 1.7 percentage points below its long-run (1972–2017) average. This graph shows Capacity Utilization. This series is up 11.4 percentage points from the record low set in June 2009 (the series starts in 1967). Capacity utilization at 78.1% is 1.7% below the average from 1972 to 2017 and below the pre-recession level of 80.8% in December 2007. Industrial ProductionThe second graph shows industrial production since 1967. Industrial production increased in February to 108.2. This is 24% above the recession low, and 3% above the pre-recession peak.

        The Big Four Economic Indicators: Industrial Production Up 1.1% in February -- Today's report on Industrial Production for February shows a 1.1% increase month-over-month, which was much better than the consensus of 0.3%. The year-over-year change is 4.35%, up from last month's YoY increase. The indicator is currently at an all-time high. Here is the overview from the Federal Reserve: Industrial production rose 1.1 percent in February following a decline of 0.3 percent in January. Manufacturing production increased 1.2 percent in February, its largest gain since October. Mining output jumped 4.3 percent, mostly reflecting strong gains in oil and gas extraction. The index for utilities fell 4.7 percent, as warmer-than-normal temperatures last month reduced the demand for heating. At 108.2 percent of its 2012 average, total industrial production in February was 4.4 percent higher than it was a year earlier. Capacity utilization for the industrial sector climbed 0.7 percentage point in February to 78.1 percent, its highest reading since January 2015 but still 1.7 percentage points below its long-run (1972–2017) average. [view full report] The chart below shows the year-over-year percent change in Industrial Production since the series inception in 1919, the current level is lower than at the onset of 8 of the 17 recessions over this time frame of nearly a century.

        Empire State Manufacturing Survey: Growth in March --This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions at 22.50 was an increase of 9.4 from the previous month's 13.10.The forecast was for a reading of 15.20.The Empire State Manufacturing Index rates the relative level of general business conditions in New York state. A level above 0.0 indicates improving conditions, below indicates worsening conditions. The reading is compiled from a survey of about 200 manufacturers in New York state.Here is the opening paragraph from the report.Business activity grew robustly in New York State, according to firms responding to the March 2018 Empire State Manufacturing Survey. The headline general business conditions index climbed nine points to 22.5. The new orders index rose to 16.8 and the shipments index advanced to 27.0—readings that pointed to strong growth in orders and shipments. Unfilled orders increased, delivery times lengthened, and inventories edged higher. Labor market indicators showed an increase in employment and hours worked. After reaching a multiyear high last month, the prices paid index moved up further, reflecting ongoing and widespread increases in input prices. The prices received index held steady and suggested moderate selling price increases. Firms remained optimistic about future business conditions, though less so than last month, and capital spending plans remained strong. [source] Here is a chart of the current conditions and its 3-month moving average, which helps clarify the trend for this extremely volatile indicator:

        Philly Fed Manufacturing Index: Continued Expansion in March - The Philly Fed's Manufacturing Business Outlook Survey is a monthly report for the Third Federal Reserve District, covers eastern Pennsylvania, southern New Jersey, and Delaware. While it focuses exclusively on business in this district, this regional survey gives a generally reliable clue as to the direction of the broaderChicago Fed's National Activity Index.The latest Manufacturing Index came in at 22.3, down from last month's 25.8 and has been positive for twenty-two consecutive months. The 3-month moving average came in at 23.4, down from 25.3 last month. Since this is a diffusion index, negative readings indicate contraction, positive ones indicate expansion. The Six-Month Outlook came in at 47.9, an increase from the previous month's 41.2.Today's 22.3 headline number came in below the 23.2 forecast at is the introduction from the survey released today:Results from the March Manufacturing Business Outlook Survey suggest continued growth for the region’s manufacturing sector. Although the survey’s index for general activity moderated, the indexes for new orders and shipments improved. The survey’s future indexes, measuring expectations for the next six months, reflected continued optimism. (Full Report) The first chart below gives us a look at this diffusion index since 2000, which shows us how it has behaved in proximity to the two 21st century recessions. The red dots show the indicator itself, which is quite noisy, and the 3-month moving average, which is more useful as an indicator of coincident economic activity. We can see periods of contraction in 2011, 2012 and 2015, and a shallower contraction in 2013. 2016 saw an improvement only to detract in the second half of 2017.

        Earlier: Philly and NY Fed Manufacturing Surveys Showed Solid Growth in March - Earlier from the NY Fed: Empire State Manufacturing Survey: Business activity grew robustly in New York State, according to firms responding to the March 2018 Empire State Manufacturing Survey. The headline general business conditions index climbed nine points to 22.5. The new orders index rose to 16.8 and the shipments index advanced to 27.0—readings that pointed to strong growth in orders and shipments. Unfilled orders increased, delivery times lengthened, and inventories edged higher. Labor market indicators showed an increase in employment and hours worked. After reaching a multiyear high last month, the prices paid index moved up further, reflecting ongoing and widespread increases in input prices. The prices received index held steady and suggested moderate selling price increases. Firms remained optimistic about future business conditions, though less so than last month, and capital spending plans remained strong. And from the Philly Fed: March 2018 Manufacturing Business Outlook Survey  Results from the March Manufacturing Business Outlook Survey suggest continued growth for the region’s manufacturing sector. ... The diffusion index for current general activity remained positive but declined, from 25.8 in February to 22.3 this month ... The firms continued to report increases in employment. Nearly 35 percent of the responding firms reported increases in employment, while 9 percent reported decreases this month. The current employment index edged slightly higher to 25.6, its highest reading in five months. Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:

        BofA Deposit Data Shows A Massive Jump In Wages And Salaries, But There's A Catch - BofA's US economist Michelle Meyer has used "anonymized and aggregated payroll direct deposit data" from Bank of America customer deposit accounts in the US to capture the turn higher in after-tax wages, if any. Well, as BofA's "chart of the month" below shows, there was a whopping 2.0% increase in the yoy pace of after-tax wages and salaries growth - rising over 5% - and was roughly 2x higher than what the BLS reported for that month. So all else equal, Americans are suddenly earning a lot more in after-tax income - arguably thanks to the Trump tax cuts which have substantially reduced tax withholdings. And, simply extrapolating historical income-spending correlations, one would assume recent spending has similarly soared as well. Well, one would be wrong, because the same Bank of America, this time using aggregated credit and debit car data, has found that retail sales ex-autos actually declined 0.2% in February. Strangely, this marks three consecutive months of sluggish retail sales readings after the spectacular performance in November. What is also notable is that while official Census data has tracked the BAC figures, it has recently run above the BAC data, which according to BofA suggests that the market is vulnerable for some softening in the Census data this month as well, as seasonally adjusted approximation slide back to reality. So what can explain this divergence between a surge in income and a slowdown in spending? Here BofA makes several argument, suggesting notable cross currents for the consumer in February - namely delayed tax refunds for lower income households but take-home pay was higher as withholding schedules were adjusted to reflect the tax legislation. Here is what BofA found: for taxpayers who claim the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC), the IRS instituted a tax refund hold which delayed the payment of refunds until late in February, similar to last year but in contrast to the trend in prior years. This is consistent with the IRS notice that households receiving the Earned Income Tax Credit or Alternative Child Tax Credit would see a delay. Here BofA did observe a sharp gain in refunds during the last few days of the month, but this is unlikely sufficient to underpin spending in the month. This likely means that "seasonal factors are therefore looking for relative strength which may be creating a downward bias this month." 

        Weekly Initial Unemployment Claims decrease to 226,000 -- The DOL reported: In the week ending March 10, the advance figure for seasonally adjusted initial claims was 226,000, a decrease of 4,000 from the previous week's revised level. The previous week's level was revised down by 1,000 from 231,000 to 230,000. The 4-week moving average was 221,500, a decrease of 750 from the previous week's revised average. The previous week's average was revised down by 250 from 222,500 to 222,250.Claims taking procedures in Puerto Rico and in the Virgin Islands have still not returned to normal.The previous week was revised down. The following graph shows the 4-week moving average of weekly claims since 1971.

         BLS: Job Openings Increased in January - From the BLS: Job Openings and Labor Turnover Summary - The number of job openings increased to 6.3 million on the last business day of January, the U.S. Bureau of Labor Statistics reported today. Over the month, hires and separations were little changed at 5.6 million and 5.4 million, respectively. Within separations, the quits rate and the layoffs and discharges rate were little changed at 2.2 percent and 1.2 percent, respectively. ... The number of quits was little changed at 3.3 million in January. The quits rate was little changed at 2.2 percent. Over the month, the number of quits was little changed for total private and for government. The following graph shows job openings (yellow line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.. Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers.Note that hires (dark blue) and total separations (red and light blue columns stacked) are pretty close each month. This is a measure of labor market turnover.  When the blue line is above the two stacked columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs.Jobs openings increased in January to 6.312 million from 5.667 in December.The number of job openings (yellow) are up 15.9% year-over-year. Quits are up 3.2% year-over-year. These are voluntary separations. (see light blue columns at bottom of graph for trend for "quits"). Job openings are at the highest level since this series started, and quits are increasing year-over-year.  This is a strong report.

        Job Opening Soar By 645,000 To All Time High 6.3 Million - Two months after the number of US job openings reported by the JOLTS dropped to a six month low amid a slowdown in hiring and quitting, all it took was one comprehensive data revision to set the seasonally-adjusted, statistically inferred US labor market back on track, and according to the latest JOLTS report, in January, the number of job openings soared from a downward revised 5.667 million to 6.312 million, a 645,000 increase, the second biggest monthly jump on record. The job openings level increased for total private (+608,000) and edged up for government. The job openings rate increased to 4.1 percent in January. The number of job openings increased in professional and business services (+215,000), transportation, warehousing, and utilities (+113,000) construction (+101,000), and several other industries. The number of job openings increased in the South, Midwest, and West regions. It wasn't just job openings that jumped: total hires rose as well, increasing from a revised 5.524 million in December to 5.583 million in January, the second highest on record after October's 5.609 million.  While the number of hires was little changed for total private, it rose for federal government (+10,000). The other closely watched category, the level of quits - which indicates workers' confidence they can leverage their existing skills and find a better paying job - reversed last month's increase, and in January declined modestly from 3.340MM to 3.271MM, suggesting workers were feeling just a little less confident about demand for their job skills than the previous month. Quits increased in arts, entertainment, and recreation (+13,000) but decreased in professional and business services (-71,000). The number of quits decreased in the West region. And with a total 5.4 million separations (a 3.7% rate), this means that there were 1.8 million layoffs and discharges in November, virtually unchanged from December. The layoffs and discharges rate was 1.2 percent in January, same as December.   The number of layoffs and discharges was little changed for total private and for government. The layoffs and discharges level increased in health care and social assistance (+52,000). Layoffs and discharges were little changed in all four regions. Putting all this in in context

        • Job openings have increased since a low in July 2009. They returned to the prerecession level in March 2014 and surpassed the prerecession peak in August 2014. There were 6.3 million open jobs on the last business day of January 2018, a new series high.
        • Hires have increased since a low in June 2009 and have surpassed prerecession levels. In January 2018, there were 5.6 million hires.
        • Quits have increased since a low in September 2009 and have surpassed prerecession levels. In January 2018, there were 3.3 million quits.
        • For most of JOLTS history, the number of hires (measured throughout the month) has exceeded the number of job openings (measured only on the last business day of the month). Since January 2015, however, this relationship has reversed with job openings outnumbering hires in most months.
        • At the end of the most recent recession in June 2009, there were 1.2 million more hires throughout the month than there were job openings on the last business day of the month. In January 2018, there were 729,000 fewer hires than job openings.

        BLS: Unemployment Rates Lower in 6 states in January; Alabama, California, Maine and Mississippi at New Series Lows -- From the BLS: Regional and State Employment and Unemployment Summary: Unemployment rates were lower in January in 6 states and the District of Columbia and stable in 44 states, the U.S. Bureau of Labor Statistics reported today. Sixteen states had jobless rate decreases from a year earlier and 34 states and the District had little or no change. The national unemployment rate was unchanged from December at 4.1 percent but was 0.7 percentage point lower than in January 2017.   Hawaii had the lowest unemployment rate in January, 2.1 percent. The rates in Alabama (3.7 percent), California (4.4 percent), Maine (3.0 percent), and Mississippi (4.6 percent) set new series lows. (All state series begin in 1976.) Alaska had the highest jobless rate, 7.3 percent. This graph shows the current unemployment rate for each state (red), and the max during the recession (blue). All states are well below the maximum unemployment rate for the recession. The size of the blue bar indicates the amount of improvement. The yellow squares are the lowest unemployment rate per state since 1976. Twelve states have reached new all time lows since the end of the 2007 recession. These twelve states are: Alabama, Arkansas, California, Colorado, Hawaii, Maine, Mississippi, North Dakota, Oregon, Tennessee, Texas, and Wisconsin. The states are ranked by the highest current unemployment rate. Alaska, at 7.3%, had the highest state unemployment rate. The second graph shows the number of states (and D.C.) with unemployment rates at or above certain levels since January 2006. At the worst of the employment recession, there were 11 states with an unemployment rate at or above 11% (red). Currently one state, Alaska, has an unemployment rate at or above 7% (light blue); And only Alaska is above 6% (dark blue).

        Postal-Service Workers Are Shouldering the Burden for Amazon  - Every day postal trucks drop off about 4,000 packages at a US Postal Service station in central Tennessee, where they’re unloaded by a team of around six USPS employees. Each person grabs a box, rushes to the only scanning machine, runs the bar code, and then places it in the proper gurney for its route. The process takes about 10 seconds, and it can be repeated as many as 200 times in an hour. “You’ll see all of us, management included, trying to get under the machine, scanning packages and then tossing them, trying to get through it,” said Amanda, a USPS clerk who works there. “I’m pretty sure every one of us has at least one repetitive-motion injury.” Around one-third of the packages Amanda handles are shipped by Amazon. As the Seattle-based tech giant commands an ever greater share of the retail market, the number of packages handled by the USPS keeps increasing. But employees say Postal Service management hasn’t responded to the surge in heavy items by investing in staffing or infrastructure. Instead, its leadership has cut costs and resorted to what union leaders call “management by stress.” “We absolutely don’t have proper staffing for the amount of packages we get,” said Amanda, who withheld her full name for fear of workplace repercussions. “Everyone in the office is overwhelmed by it, but the only way management’s going to respond is if you file an incident report. People are just so busy that they’ll say, ‘It’ll be fine tomorrow.’ It’s not.”  Amazon was able to make a deal to ship its packages through USPS at cut-rate prices, because the company preemptively sorts and labels packages by postal route. But transporting and distributing these packages still takes clerks like Amanda much longer than sorting letters, which can be fed through a machine. If the clerks are delayed, the station’s carriers will be delayed in starting routes, which are already longer than ever thanks to the packages filling up their satchels and trucks. Many won’t deliver their final box until well after the sun has set.

        Elderly in U.S. Are Projected to Outnumber Children - People over 65 years old would outnumber children by 2035, a first in U.S. history, according to updated projections released by the Census Bureau on Tuesday.The milestone would be the latest marker of the nation’s aging, which has accelerated with baby boomers’ move into their senior years and recessionary effects on births and immigration over the past decade.  The shift deepens challenges for fiscal policy and economic growth.Trends in birth and immigration have also slowed the rate at which the country is becoming more diverse. Whites who aren’t Hispanic will begin shrinking as a group by 2024. They would drop below half of the population by 2045, two years later than the bureau estimated just a few years ago. By 2020, less than half of those under 18 years old would be non-Hispanic white.  The Census Bureau projects the country would grow to 355 million by 2030, five million fewer than it had estimated three years ago. That is an annual average growth rate of just 0.7%, in line with recent rates but well below historical levels.  Unlike many European nations, the U.S. would continue to grow, reaching 404 million by 2060. It would rival fast-growing Nigeria as third-most-populous, after India and China, according to census and United Nations projections. “This is a country that should be grateful for all the immigration it’s had over the last 25 years,” said William Frey, a demographer at the Brookings Institution. “These projections put even more of an exclamation point on it.” Lower population growth could drag on economic growth. This year’s prime-age workforce—ages 25 to 54—is about 630,000 smaller than the Census Bureau projected it would be just three years ago. The bureau projects the prime-age workforce will grow 0.5% a year through 2030, down from a 2014 projected annual rate of 0.58% for the same period.  The growing elderly population will also put pressure on lawmakers to shift funding toward programs such as Medicare and Social Security, particularly because elderly Americans vote at high rates, said Kenneth M. Johnson, a demographer at the University of New Hampshire. “The share of population that’s the working share is going to matter a lot,” The projections are the first since 2015. They include revisions to birth and death and immigration rates, the key drivers of population growth.

        Illinois Passes 'Dog Chasing Its Tail' Legislation To Buy Receivables Owed By The State - You probably know Illinois has a huge backlog of unpaid bills - $8.7 billion as of yesterday. The state pays hefty late payment penalties on most of those bills. Through the first seven months of this fiscal year, the State spent $337.9 million on interest penalties, according to The Civic Federation. But you may not know that the Illinois Treasure sits, indefinitely and inexplicably, on roughly $11 to $15 billion of state money (not college savings account money or funds held on behalf of municipalities), mostly in near-cash short term investments. We’ve written often about the mystery behind that. Today, that balance is $15.3 billion. Well, a bill pending in the Illinois Senate would authorize the Treasurer to use that cash to buy invoices owed by the state. It’s Senate Bill 2858 and it raises all sorts of questions. For starters:

        • How much of his money would the Treasurer use for this? It’s the last money we have in the piggy bank, and the state ought to be extremely careful about how it’s used. The bill would exempt only money set aside for bond payments, which isn’t very much of what the Treasurer holds (less than $2 billion, I believe, based on data I got through a FOIA request a couple years ago).
        • Why give the Treasurer sole authority to decide how much of this money to use for this purpose? Treasurer Micheal Frerichs, in my opinion, is among the last people we should give that authority to. See our earlier articles about his grandstanding and playing activist social justice investor with our money.
        • Whose receivables would the Treasurer buy? Political friendlies? Those he deems most worthy? Would he buy them at a discount?
        • Why not just use the money to pay the bills directly? The accrual of late payment fees would be lower on what the Treasurer would buy under the proposed law, but why is that better than direct payment? The whole concept of buying your own invoices is like a dog chasing his tail.

        A nationwide reporting adventure tracks improbably frequent lottery winners - Columbia Journalism Review - Lawrence Mower of the Palm Beach Post in 2014 filed a public records request for 20 years of data on Florida Lottery winners. After analyzing the data, he found something unusual: A small number of lottery players were winning hundreds of times at almost inconceivably long odds. A statistician compared one frequent winner’s feat to picking one star out of 50 galaxies and “then having your friend guess the same star on the first try.” Mower’s subsequent exposé led to fraud investigations and major reforms in the Florida Lottery. His reporting found, among other things, that some players were “cashing” tickets for other players to help them avoid paying debts and taxes that would be deducted from their winnings.Intrigued, we wanted to chart new territory: to find out whether these repeat winning patterns exist across the country. We decided to submit public records requests in every state with a lottery—an adventure in itself given that FOIA laws vary significantly by state. In all, we sent more than 100 public record requests to lotteries for information about their winners, game odds, and investigative reports. Getting those records wasn’t simple, as we outline below. But first, a quick rundown of our findings: In total, we analyzed 11 million lottery prize claim records covering 36 of the nation’s 45 lotteries. What we found astonished us:

        • In the past seven years, nearly 1,700 Americans were frequent winners—which we defined as having claimed 50 or more lottery tickets each worth $600 or more.
        • Clarance Jones of Lynn, Massachusetts, the nation’s most frequent winner, claimed more than 7,300 tickets worth $600 or more in only six years.
        • Jones would have had to spend at least $300 million to have a 1-in-10 million chance of winning so often, according to a statistician we consulted at the University of California, Berkeley. (Jones did not respond to requests for comment.)
        • The odds are extraordinary even for winners with far smaller win tallies. According to the analysis, Nadine Vukovich, Pennsylvania’s most frequent winner, would have had to spend $7.8 million to have a 1-in-10 million chance of winning her 209 tickets worth $600 or more.
        • Of the nation’s 45 state lotteries, 10 states (Kansas, Ohio, Virginia, Pennsylvania, Oregon, Connecticut, California, Idaho, Minnesota, Washington) say they don’t systematically monitor frequent winning.

        Busting the Myth of ‘Welfare Makes People Lazy’ -- “Welfare makes people lazy.” The notion is buried so deep within mainstream political thought that it can often be stated without evidence. It was explicit during the Great Depression, when Franklin D. Roosevelt’s WPA (Works Progress Administration) was nicknamed “We Piddle Around” by his detractors. It was implicit in Bill Clinton’s pledge to “end welfare as we know it.” Even today, it is an intellectual pillar of conservative economic theory, which recommends slashing programs like Medicaid and cash assistance, partly out of a fear that self-reliance atrophies in the face of government assistance.Many economists have for decades argued that this orthodoxy is simply wrong—that wisely designed anti-poverty programs, like the Earned Income Tax Credit, actually increase labor participation. And now, across the world, a fleet of studies are converging on the consensus that even radical welfare programs—including basic-income programs and what are called conditional cash transfers—don’t make people any less productive.Most notably, a 2015 meta-study of cash programs in poor countries found “no systematic evidence that cash transfer programs discourage work” in seven different countries: Mexico, Nicaragua, Honduras, the Philippines, Indonesia, or Morocco. Other studies of cash-grant experiments in Uganda and Nigeria have found that such programs can increase working hours and earnings, particularly when the beneficiaries are required to attend classes that teach specific trades or general business skills. Welfare isn’t just a moral imperative to raise the living standards of the poor. It’s also a critical investment in the health and future careers of low-income kids.

        Crimes That Are Not Illegal -- It’s not illegal (yet) to carry cash – in any amount – so how is it that armed government workers have acquired the power to simply steal it?  It is not uncommon for armed government workers to “detain” people who’ve committed no violation of any statute nor given any tangible lawful reason to suspect they may have. It is enough, nowadays, for an armed government worker to claim that “someone called” – and even that excuse is not necessary, as a practical matter. Armed government workers are . . . armed. They are government workers. We are not permitted to ignore them. We do so at our peril. So, you have been “detained” or “pulled over” or perhaps forced to stop your car for a random inspection by armed government workers at a “checkpoint.” You are carrying a cash – perhaps more cash than can comfortably fit in your wallet. So you have it in an envelope in the glovebox or in a bag on the seat beside you or in a backpack, or whatever. But it’s simply cash – and regardless of the amount, it’s not illegal to carry cash. As if that mattered. The ugly fact is that cash in any amount is subject to “civil forfeiture” – the euphemism used by the armed government workers who perform this legalized theft. The claim used to justify the forfeiture is that mere possession of cash – especially “excessive” amounts of cash, but not necessarily – is inherently “suspicious.” Not of anything specifically. It is just “suspicious” to be carrying cash. And the exact amount which is “suspicious” – vs. not  – has never been defined in law. It is defined in practice according to the whim of armed government workers. Which means it can be any amount at all. It is a measure of tyranny when the law is whatever the enforcers of law say it is, according to their whim. And in the United States, today, an armed government worker has merely to declare that he regards the amount of cash he finds in your possession to be “suspicious” or “excessive” and – presto! – it is no longer in your possession. It is now in his possession. The pretext given is that the cash is presumptive evidence of illegal activity. The mere presumption of illegal activity is sufficient.  Let that sink in.

        Package Bombs Are Killing People in Texas but Donald Trump Hasn’t Said a Thing. There’s a Reason for That. -- I’ve written this story before – many times, in fact. It’s a story of white privilege and black pain. It’s a story of Islamophobia and bigotry. It’s a story about the United States of America. On Monday, bombs went off in Austin, Texas.That’s a big deal, right? Bombs – actual improvised explosive devices – going off in the middle of a major American city is a big fucking deal.They weren’t found by a bomb squad and safely disposed of by a brave crew or a high-tech robot. Nah, they were left on the doorsteps of people’s homes all over Austin. Made to look like mail, the packages were then picked up by a mix of everyday people – black and Latino, young and old – who were then torn to bits by explosive shrapnel.A report from ABC News outlined the level of sophistication of the explosives: The bombs had been designed by a “highly skilled” bomb maker – or makers —who used pieces of metal to generate shrapnel and set triggers that detonated the bombs with motion.Yeah, I’m pretty sure that’s a huge deal. Strangely, though, Donald Trump, the president of the United States, who campaigned on being tough on crime and terrorism, hasn’t said a word. He hasn’t tweeted concerns or condolences. Instead, he’s tweeting pictures of himself surveying border wall prototypes.  Here’s what I know and what makes living in this country so damn exhausting: If the victims were white and the suspects were known to be Muslims, the president of the United States would care. In these cases, however, with no profile of the attacker available and a trail of black and brown victims, it seems like this square peg doesn’t fit into the round hole of Trump’s agenda.

        Tens of thousands with outstanding warrants purged from background check database for gun purchases - Tens of thousands of people wanted by law enforcement officials have been removed this year from the FBI criminal background check database that prohibits fugitives from justice from buying guns.The FBI purged the names from the database after the Justice Department changed its legal interpretation of “fugitive from justice” to say it pertains only to wanted people who have crossed state lines. What that means is that those fugitives who were previously prohibited under federal law from purchasing firearms can now buy them, unless barred for other reasons. Since the National Instant Criminal Background Check System (NICS) was created in 1998, the background check system has prevented 1.5 million people from buying guns, including 180,000 denials to people who were fugitives from justice, according to government statistics. It is unclear how many people may have bought guns since February who previously would have been prohibited from doing so. After a gunman killed at least 26 people at a Texas church, Sen. John Cornyn (R-Tex.) on Nov. 7 said “there’s an opportunity for us here to work on a bipartisan basis” on legislation to improve the enforcement of background checks. Attorney General Jeff Sessions sent a memo Wednesday to the FBI and the Bureau of Alcohol, Tobacco, Firearms and Explosives instructing them to take several steps to improve NICS. The system, he said, is “critical for us to be able to keep guns out of the hands of those . . . prohibited from owning them.  The criminal background check system has come under scrutiny in recent weeks after the Air Force said it failed to follow policies for alerting the FBI about the domestic violence conviction of Devin P. Kelley, who killed more than two dozen churchgoers in Sutherland Springs, Tex., this month. Because his conviction was not entered into NICS, Kelley was allowed to buy firearms.  The interpretation of who is a “fugitive from justice,” a category that disqualifies people from buying a gun, has long been a matter of debate in law enforcement circles — a dispute that ultimately led to the February purging of the database. “Any one of these potentially dangerous fugitives can currently walk into a licensed gun dealer, pass a criminal background check, and walk out with a gun,”

        White House proposes arming teachers, backpedals on raising age to buy guns --The Trump administration on Sunday night proposed providing some school personnel with "rigorous" firearms training and backed a bill to improve criminal background checks on gun buyers, but backpedaled on the idea of increasing the minimum age to buy certain firearms -- a policy President Donald Trump had said he would support.The proposals, which come more than three weeks after the Parkland, Florida, school shooting, also include a plan to establish a commission chaired by Education Secretary Betsy DeVos that will recommend policy and funding proposals for school violence prevention, including possible age restrictions on some firearms purchases. The commission does not have a set timeline of when it will report its findings, although an official said it would be within one year."Today we are announcing meaningful actions, steps that can be taken right away to help protect students," DeVos said Sunday."Far too often the focus has been only on the most contentious fights -- the things that have divided people and sent them into their entrenched corners," she continued. "But the plan that we're going to advance and talk about is a pragmatic plan to dramatically increase school safety and to take steps to do so right away." The announcement of the commission comes less than a day after Trump criticized blue-ribbon committees at a rally in Pennsylvania, saying, "We can't just keep setting up blue-ribbon committees," adding that they do nothing but "talk, talk, talk."

        Black Children Will Be the Victims of Armed Teachers -  In her one-woman show Notes from the Field, Anna Deavere Smith exposes the consequences of America’s abandonment of our most vulnerable and troubled children. She reveals that what is now known as the “school-to-prison pipeline” is, in fact, the sum of our failures to meet the needs of our children — in particular, children of color. I found it brutally ironic that this show premiered on HBO just as the nation turned its attention to Parkland, Fla., where a 19-year-old living with mental illness went to his former high school and shot and killed 17 students and educators. More ironic still was that in response, the President of the United States called for teachers to be armed with high-powered weapons and floated to offer them “a little bit of a bonus” if they were willing to take up arms in the classroom. This would help schools become a “hardened target,” he said, using language peddled by the National Rifle Association. What should have been dismissed within hours as madcap rambling by our president has instead become the subject of serious policy discussions. Within days, Donald Trump’s words began to shape public policy in Florida and in Washington. Perhaps it is the logical next step in our cruel abandonment of our children to the criminal justice system that we would contemplate meting out in the schoolhouse the ultimate punishment — death — at the hands of teachers. But it is also madness.  And make no mistake: Although the perpetrators of mass school shootings have been almost exclusively white, there’s little doubt that arming teachers will lead disproportionately to the killing — by teachers — of children of color. The school-to-prison pipeline has been, without question, built on the foundation of racially discriminatory school discipline practices. Every study that has examined harsh school disciplinary policies has revealed that such policies are visited with greater frequency on children of color.

        3 students injured when California high school teacher fires gun during safety course -- Three students at a central California high school were injured Tuesday when a teacher fired a gun inside of a classroom during a firearms safety course, according to police and local reports. Dennis Alexander discharged a semiautomatic handgun as it was pointed at the ceiling, Seaside Police Chief Abdul Pridgen said. Three teens attending Seaside High School in Monterey County were hurt by debris falling from the ceiling, Pridgen added. One of the parents of an injured 17-year-old told NBC affiliate KSBW that the teacher had told the class that he was going to use the gun for a demonstration about how to disarm someone and was checking if the weapon was loaded. "It's the craziest thing," said parent Fermin Gonzales, who told KSBW that he only learned of his son's injury when the boy came home. "It could have been very bad." A picture obtained by KSBW showed the student with small red bruising to his neck, which Gonzales said appeared to be caused by a bullet fragment. The incident happened during Alexander's administration of justice course, said the Monterey Peninsula Unified School District. Alexander also teaches math, and is a reserve police officer for the Sand City Police Department and a Seaside councilman, KSBW reported.

        N.R.A. Proposes Having Second Armed Teacher in Every Classroom to Stop First Armed Teacher from Misfiring - Hours after an armed teacher in a Northern California classroom fired a gun and injured a student, the head of the National Rifle Association proposed placing a second armed teacher in every classroom, to shoot the first armed teacher before he or she can do harm. “Had there been a second armed teacher in the classroom to shoot the first armed teacher, this regrettable incident would never have occurred,” Wayne LaPierre said. “The only thing that stops a bad teacher with a gun is a good teacher with a gun.” The N.R.A. executive vice-president said, “In a perfect world, you would have a third armed teacher, in case the second one messes up, but right now I’d settle for two.” He blamed anti-gun activists for blocking measures that would allow multiple teachers with guns to shoot at one another and thus keep the nation’s classrooms safe. “It’s time to stop the madness,” he said. 

        Say No To 'Hardening' Schools With Zero-Tolerance Policies & Gun-Toting Cops" - Just what we don’t need: more gun-toting, taser-wielding cops in government-run schools that bear an uncomfortable resemblance to prisons. Microcosms of the police state, America’s public schools already contain almost every aspect of the militarized, intolerant, senseless, overcriminalized, legalistic, surveillance-riddled, totalitarian landscape that plagues those of us on the “outside.” Now the Trump Administration wants to double down on these totalitarian echo chambers. The Justice Department, headed by Attorney General Jeff Sessions, has announced that it will provide funding for schools that want to hire more resource officers. The White House has also hinted that it may repeal “Rethink School Discipline” policies, heralding a return to zero tolerance policies that treat children like suspects and criminals, especially within the public schools.As for President Trump, he wants to “harden” the schools.What exactly does hardening the schools entail? More strident zero tolerance policies, greater numbers of school cops, and all the trappings of a prison complex(insurmountable fences, entrapment areas, no windows or trees, etc.). Just when you thought this administration couldn’t get any more tone-deaf about civil liberties, they prove once again that they have absolutely no regard for the Constitution (especially the Fourth Amendment), no concept of limited government, and no concern for the growing need to protect “we the people” against an overreaching, overbearing police state. America’s schools today are already about as authoritarian as they come. Young people in America are now first in line to be searched, surveilled, spied on, threatened, tied up, locked down, treated like criminals for non-criminal behavior, tasered and in some cases shot. It used to be that if you talked back to a teacher, or played a prank on a classmate, or just failed to do your homework, you might find yourself in detention or doing an extra writing assignment after school. Nowadays, students are not only punished for minor transgressions such as playing cops and robbers on the playground, bringing LEGOs to school, or having a food fight, but the punishments have become far more severe, shifting from detention and visits to the principal’s office into misdemeanor tickets, juvenile court, handcuffs, tasers and even prison terms. Increasing the number of cops in the schools only adds to the problem.

        Here's How To Prevent The Next School Shooting, Experts Say - On the Friday after the deadly shootings at Marjory Stoneman Douglas High School in Florida, some of the leading experts in the field shaped a concise, eight-point "Call for Action To Prevent Gun Violence In The United States of America." About 200 universities, national education and mental health groups, school districts, and more than 2,300 individual experts have signed on to support this document in the weeks since.  Their topline message: Don't harden schools. Make them softer, by improving social and emotional health."If we're really talking about prevention, my perspective is that we should go for the public health approach," says Ron Avi Astor at the University of Southern California, who also helped draft the plan. A public health approach to disease means, instead of waiting for people to be rushed to emergency rooms with heart attacks or the flu, you go into the community: with vaccinations, screenings, fruits and vegetables, walking trails and exercise coaches. You screen and regulate environmental hazards, like a nearby polluting factory. You keep watch on reported cases of illness, to stop a new outbreak in its tracks.A public health approach to school shootings, Astor explains, would be much along the same lines.  Instead of waiting for people to, again, be rushed into emergency rooms, you go into the community with preventive resources. You do your best to lower the background levels of bullying and discrimination. You track the data and perform what is called "threat assessments" on potential risks.

        National Walkout Day: Students across US protest gun violence - Thousands of students across the nation walked out of classrooms and into a political firestorm Wednesday, marking one month since the bloody rampage at a Florida high school shocked the world and fueled their dynamic movement demanding an end to gun violence.  Students from about 2,800 schools marked National Walkout Day, many by leaving their classrooms at 10 a.m. to show solidarity for the 17 killed in the attack Feb. 14 at Marjory Stoneman Douglas High School in Parkland, Fla. In Parkland, students gathered on the football field, embraced and chanted, "MSD!" and "We want change!" Rejecting requests from administrators to return to classes, they joined students from a nearby middle school to walk 2 miles to memorials set up for the victims. "To the parents supporting their children walking out, thank you for raising this new generation of leaders," tweeted Stoneman Douglas student Cameron Kasky. "To the parents who didn’t support their children who walked out anyway, thank you for raising this new generation of leaders." At Columbine High School south of Denver, hundreds of students solemnly filed onto the soccer field for a short rally. They released balloons to memorialize the Parkland victims, along with the 13 people killed at their own school 19 years ago.  In Washington, several hundred students of all ages massed outside the White House, waving signs and shouting: "What do we want? Gun control! When do we want it? Now!" Bella Graham, a seventh-grader at Takoma Park Middle School in Maryland, said she needed to support the students in Parkland. “I shouldn’t have to be here,” said Graham, carrying a sign that read “An assault on our future” with a photo of a rifle. “I should be in school, but we have to stick up for ourselves and say enough is enough of this violence." While the protests rolled on, Democrats in the Senate gave speeches and read the names of young people killed by gun violence. Sen. Richard Blumenthal, D-Conn., where the Sandy Hook tragedy took place more than five years ago, said the protesting students' "energy and passion is a civics lesson for America."

        Thousands of students walk out of school in nationwide gun violence protest - Everywhere, it seemed, the students had had enough. At thousands of schools across the country, from Alaska to Florida and everywhere in between, students walked out of class Wednesday to protest gun violence and to mark one month since a mass shooting left 17 dead at Marjory Stoneman Douglas High School in Parkland, Fla.  The nationally organized walkouts, which come 10 days before a march on Washington organized by Stoneman Douglas survivors that could draw hundreds of thousands of students to the nation’s capital, are unprecedented in recent American history. Supporters say the protests represent a realization of power and influence by young people raised on social media who have come of age in an era of never-ending wars, highly publicized mass shootings and virulent national politics. Many of the participants said the focus on gun control was not an expression of party preference. What they are demanding from Republicans and Democrats alike is action on an issue they believe has been shuffled aside by lawmakers for too long. In an election year, with every member of the House and a third of the Senate running for office, the students are determined to make an impact. “We want our Congress to know that some of us will be old enough to vote in the midterm elections, and the rest of us are going to be able to vote in 2020 or 2022, and they’re going to lose their job if they don’t do what we want to keep us safe,” said Fatima Younis, a student organizer with Women’s March Youth Empower, one of the lead coordinators of Wednesday’s walkouts. The group is demanding lawmakers increase the age for people to purchase weapons, ban assault-style weapons and demilitarize police forces. In Washington, politicians and administration officials heard Wednesday’s message up close. Hundreds of high school and middle school students from local districts gathered at the White House carrying signs protesting gun violence and those who oppose gun-control measures. Just before 10 a.m. the crowd fell silent and sat down on Pennsylvania Avenue, their backs to the White House, with fists and signs held high. They sat quietly, one minute for each of the Stoneman Douglas victims. As the silence was broken at 10:17, the crowd began chanting, “We want change!”

        Nationwide protests, high school walkouts to oppose school shootings in the US -- Students at thousands of schools throughout the US walked out of class on Wednesday to protest school shootings in the wake of the massacre at Florida’s Marjory Stoneman Douglas High School.  Students at many schools left class at 10:00 a.m. local time for 17 minutes, one for each of the victims in Florida’s shooting. Other demonstrations were longer, with students gathering to give speeches on school violence and the broader social crisis in the US. At Cass Tech in Detroit, Michigan, several hundred high school students walked out and participated in a march in the neighborhood around the school. The protest was organized by the school and coordinated closely with the Democratic Party and the police, which attempted to keep the demonstration focused exclusively on the issue of gun control. Students’ signs, chants, and speeches were vetted in advance, and school officials worked to prevent students from speaking to the press. Democrat Michigan state legislator Sherry Dagnogo opened the rally, saying, “I’m going to Lansing [the state capital] today, and I’m going to talk to my members on both sides of the aisle, and I’m calling on them to pass bipartisan, sensible gun control.”  The students denounced the NRA and called for greater restrictions on guns, but many students also spoke about the broader social issues involved in the continuing wave of school shootings, including endless war. Noah told the WSWS, “There are many factors besides guns. With our country constantly at war that could be a reason some kids are violent. These wars should have stopped a long time ago. All the wars are doing is destroying more and more lives.

        Thousands of Students Protest Gun Violence - Each event had its own character. The Sebastopol rallies were relatively dignified and many protestors had taped their mouths. All corners of Santa Rosa High, in contrast, were full of students waving signs, chanting, and expressing a call to action and a show of force.An estimated 500 students, about a quarter of Santa Rosa High’s student body, joined the walkout. In nearby Petaluma around 2000 students from a dozen schools walked out. Some wore bright orange #Never Again shirts, a prominent hash-tag, according to the daily Press Democrat.Nearly all of the 1300 students at Sonoma Valley High School gathered with signs such as “I should be writing my term paper instead of my will” and “Never Again!” Some waved the American flag and shouted things such as “It’s time for the next generation to take over!”My feelings eventually ranged from a mixture of sadness—because these students needed to protest—to appreciation for their bravery against those who threaten the Earth’s future.“Too Young to Protest? 10-Year-Olds Beg to Differ” headlined a March 14 New York Times article. “It started last month as a writing exercise on the 1963 Birmingham Children’s Crusade, when more than 1000 students skipped school and marched to demand civil rights,” the article began. So the current marches have also been a history classroom.“The classroom assignment mushroomed into a plan—hatched by 10-and-11-year-olds—to stage a little civil disobedience of their own,”the article notes.“We Won’t Let the N.R.A. Win” headlines another Times article, written by three New Jersey high school students. “The killings of 17 people at Marjory Stoneman Douglas High School in Florida may be the massacre that finally gets federal and state governments to enact common-sense gun control laws,” the students commence their article. They remind us, “That should have happened after Columbine. It should have happened after Virginia Tech. It should have happened after Sandy Hook. But it didn’t. The Stoneman Douglas School is where our generation draws a line.” So they imagined and then created what some organizers describe as the National School Walkout.

        The significance of the mass student protests against gun violence in America -- Nearly one million students walked out of their classrooms to protest gun violence and mass shootings in America Wednesday, the one-month anniversary of the massacre at a high school in Parkland, Florida.Walkouts, rallies and demonstrations took place in every state as well as the US territory of Puerto Rico. Protests were also held internationally, including by students in Japan, Tanzania, Israel, Iceland, Mexico, Colombia, Australia, Germany and many other countries throughout Europe.Wednesday’s protests are a prelude to a demonstration organized by the Parkland student survivors for Saturday, March 24. At least half a million people are expected to march on Washington, DC, and nearly 800 demonstrations are planned in every US state and in dozens of countries around the world. The immediate focus of the demonstrations, heavily promoted by the Democratic Party and mainstream media, is on gun control. Within the political establishment, the “solutions” on offer are confined to either greater militarization and policing of schools or restrictions on the purchase of firearms, which will inevitably be used to increase the powers of the state.The Republicans and Democrats alike ignore the underlying causes of school violence—unprecedented social inequality, unending war, the consequences of the militarization of society and the defunding of education and social programs—because a serious examination of the roots of this social phenomenon would expose their own role in creating the social crisis out of which it has developed. Just as there are more fundamental causes behind the epidemic of school shootings, there are more fundamental causes to the eruption of large-scale protests among young people. There is a widespread sense among these young people that the ease and frequency with which they are massacred in American schools is symptomatic of the indifference and contempt with which the country’s ruling oligarchy regards their lives.

        Approximately 7000 pairs of shoes are displayed outside the Capitol in memorial to children killed by guns, March 13. -   The shoes represent the number of children who have been victims of gun violence since the December 2012 school shooting in Newtown, Conn.   March 13, 2018 Gizem Kara Batterman gathers with others to arrange about 7,000 pairs of shoes outside the U.S. Capitol. The display, titled “Monument for Our Kids,” symbolizes the number of children who have been victims of gun violence since the Dec. 14, 2012, school shooting in Newtown, Conn.

        De Blasio Bans Armed Guards From NYC Schools As Liberals Nationwide Push Its Expansion - In the wake of the Parkland shooting, a group of mothers from the area made a push to improve safety at schools.  Somewhat surprisingly, they decided to avoid gun control and partisan politics, as Alyssa Alhadeff opted to advocate for a more comprehensive (and politically neutral) goal:She’s launched a nonprofit called Make Schools Safe ( to lobby for measures to increase campus security such as metal detectors, armed guards, bulletproof doors and windows, and reduced access points. Although Alhadeff respects the fight for gun control, she feels she can most readily make a difference with these initiatives.The mom, who has two sons, ages 10 and 13, is currently in New York City promoting the nonprofit with the help of six girls between the ages of 14 and 18 — dubbed the Dream Team. All knew Alyssa, and most were there that tragic day. However, no one was likely to be as surprised as Alhadeff when New York City Mayor Bill de Blasio removed all NYPD police officers from NYC schools:The last NYPD cops assigned full-time to New York City public schools are being moved out — despite nationwide calls for heightened security in the wake of last month’s Florida shootings. “My colleagues think it’s outrageous — and really stupid,” teacher Arthur Goldstein said. “We’re not enthusiastic about arming teachers, but we liked having a cop around.”Why has de Blasio decided to direct his own city in opposition to a solution with bipartisan support?  Apparently it is because he believes firearms at schools are “terrifying”:  “There’s nothing more terrifying than putting more guns in our kids schools,” de Blasio said.

        NYC’s Fauxgressive Mayor De Blasio Turning into a Charter School Cheerleader -  Diane Ravitch -- De Blasio has closed many public schools in New York City. Unlike Bloomberg, he does not boast about it. When Bill de Blasio ran for mayor the first time, he sought my help. We met and spoke candidly. He told me he would strongly support traditional public schools. He said he would oppose the expansion of private charters into public school space. He promised to stop closing schools because of their test scores. His own children went to public schools. He would protect them and end the destructive tactics of Joel Klein, who coldly and cruelly closed schools over the tearful objections of students, parents, and teachers. I enthusiastically endorsed him. The campaign issued a press release. De Blasio was elected in 2013, and re-elected in 2017. I wanted him to succeed and to support public schools against the privatizers. He tried to stand up to the charters, but Eva’s billionaire backers rolled out a multi-million dollar TV campaign and donated huge sums to Governor Cuomo and key legislators. That ended de Blasio’s effort to block charter expansion. The legislature gave them a blank check in New York City, allowed them to expand at will, and even required the city to pay their rent in private facilities if it couldn’t provide suitable public space. Now his majority appointees to the city board rubber stamp charter co-locations and expansions. Although the Mayor and Chancellor Farina have tried to support struggling schools, they have not hesitated to close them when they don’t show test score gains. At the last meeting of the city’s Board of Education (which Mayor Bloomberg capriciously named the Panel on Education Policy to indicate its insignificance in the new era of mayoral control but which is still called the Board of Education in statute), the Mayor submitted a list of schools to close. Sadly, like Bloomberg, he has closed many schools. At the last meeting of the Board, one of the Mayor’s appointees, T. Elzora Cleveland, dissented and another abstained, denying the majority needed to close two of the schools on the Mayor’s list. Cleveland has resigned, and education activists assume she was forced out to make way for a more pliable board member.

        Preemption laws prevent cities from acting on everything from labor and employment to gun safety --On Valentine’s Day, a 19 year-old with a legally purchased AR-15 assault rifle stormed into Marjory Stoneman Douglas High School in Parkland, Florida and murdered 14 students, and 3 educators. In Florida, an AR-15 military-style assault rifle is easier to buy than a handgun. Understandably, many of the students who survived the mass shooting and the families of the 17 victims have called for a change in the law, arguing that it shouldn’t be so easy to legally purchase weapons that powerful. I write here not to weigh in on the merits of any given gun law, but to comment on the process of advocating for legislative change, and the challenges at the local level with the preemption laws on the books.In terms of advocating for a change in federal law, Congress’s ban on AR-15s and other semiautomatic assault weapons expired in 2004, and federal lawmakers have not been able to pass a similar ban since.In terms of advocating for change in state law, dozens of Florida high school students recently loaded onto buses and drove to the Florida state capital to lobby for a bill banning assault rifles, which was voted down by the state’s House of Representatives.In terms of advocating for a change in gun laws at the city and county level, the students, families of the victims, or anyone else won’t even have a chance because of Florida’s preemption law. “Preemption” in this context refers to a situation in which a state law is enacted to block a local ordinance from taking effect—or dismantle an existing ordinance. Florida’s 2011 amendment to its gun preemption law is unique: Not only does it prohibit local governments from regulating guns, it allows punitive measures against local elected officials for even trying. In Florida, local elected officials on city councils or other municipal bodies are subject to personal civil penalties of up to $5,000, can be sued and held personally liable for damages of up to $100,000, and even removed from office at the discretion of the governor. And, the preemption law requires elected officials to pay their own attorney’s fees if they are sued.

        The West Virginia teachers’ strike is over. But the fight for healthcare isn’t - Guardian - A wildcat teachers’ strike that roiled West Virginia for nine long days ended on Tuesday, after the state government passed a 5% pay hike. For a state that doesn’t even allow state employees to engage in collective bargaining, this amounts to a historic victory. Yet much remains undone.The strike was largely about healthcare benefits, which the deal mostly skirted. Even worse, the educators’ hard-won raise could come at the expense of other important state programs – potentially Medicaid, although this remains uncertain. Such an outcome only reaffirms a lesson made explicit throughout labor history: universal healthcare programs, rather than private benefits won through collective bargaining, must be a priority for organized labor.  Between rising healthcare costs on one hand and public austerity on the other, West Virginia’s teachers’ health insurance plans had grown gradually worse in recent years, reflecting the situation throughout much of the country. As one teacher told the Los Angeles Times, pay was “not what kept us out. It’s the insurance. That’s the big deal.”  A glance at the 64-page “Shopper’s Guide” teachers were forced to navigate illustrates just how hellish their options had become: in addition to rising monthly premiums, plan holders faced onerous deductibles, copays, and coinsurance for everything from prescription drugs to childbirth.    Most notoriously, they also faced coerced use of a patronizing app called Go365, a so-called “workplace wellness program”. “They implemented Go365,” one teacher told the New York Times “which is an app that I’m supposed to download on my phone, to track my steps, to earn points through this app. If I don’t earn enough points, and if I choose not to use the app, then I’m penalized …”  Such programs are being pushed on to workers everywhere. They were encouraged by the Affordable Care Act despite paltry evidence that they save money, much less improve health (although they may serve to push costs on to sicker workers). Workers, meanwhile, understandably find reporting their personal health information to their boss (much less being penalized for their cholesterol or BMI) paternalistic and Orwellian.

        West Virginia Teachers Win Raise — but Nation’s Rural Teachers Are Still Underpaid -- The longest teacher strike in West Virginia history came to an end when Gov. Jim Justice announced a deal on March 6 to grant the teachers 5 percent more in pay, but issues of pay disparities for rural teachers still persist.If those issues are not resolved, we could see rural teachers in other states follow the example of the striking teachers in West Virginia, where over half of all schools are considered rural. I make this observation as one who has specialized in the study of rural education. While the dramatic display of power by teachers in West Virginia was about better compensation, the reality is that the issue of teacher pay for rural teachers is complex.  In West Virginia -- where the average teacher salary of US$45,622 is the third lowest in the nation  -- the state legislature sets a general pay scale. The 5 percent raise that teachers won by way of their strike will apply to that scale.Wealthier districts within the state can supplement this salary, making their districts more competitive than neighboring ones. In West Virginia, counties experiencing population and economic growth, particularly near the District of Columbia, are able to raise their salaries to more competitive rates than the rest of the state. On the other hand, in isolated and poverty-stricken McDowell County -- the poorest county in West Virginia -- the district struggles to find teachers, particularly in hard-to-staff subjects like math and special education.The situation is similar in North Carolina, where wealthier districts located in urban and suburban areas poach experienced teachers from less affluent rural districts. Like West Virginia, this has exacerbated the state's rural teacher shortage. In the state of Pennsylvania, for example, schools are managed at the local level instead of at the county level, and rely on smaller community districts to set and maintain teacher salary scales.

        West Virginia teachers angry deal to end strike ignored soaring medical costs - More than a week has passed since 33,000 West Virginia teachers and other school employees returned to work after a nine-day strike to oppose crushing health care costs and stagnant wages. On Tuesday, March 6, the three main school employee unions—the American Federation of Teachers-West Virginia (AFT-WV), the West Virginia Education Association (WVEA), and the West Virginia School Service Personnel Association (WVSSPA)—announced an agreement with the state’s billionaire governor, Jim Justice, for a paltry 5 percent wage increase. The strike began not in the union offices, but through discussions of rank-and-file teachers and school workers in the state’s southern coal-mining regions, which have a rich tradition of class struggle and socialism. The unions attempted to end the strike without addressing health care costs and without a vote on February 27, but teachers again met among themselves and all 55 counties voted to continue the strike, which lasted another seven days. In the end, the unions, the state legislature, and the governor forced through the same sellout deal teachers had rejected a week prior. The wage increase is to be funded not by raising taxes on the billions in profits extracted by the giant coal and natural gas corporations, which control the state (Governor Justice himself, the state’s richest man, is a former coal baron with personal wealth of $1.6 billion), but rather through cuts to social spending. This includes the cancellation of a free community college tuition program and threatened cuts to Medicaid, the health care program for the poor that one-third of West Virginians rely upon. The teachers’ central demand for a fix to their underfunded health insurance program, the Public Employees Insurance Agency (PEIA), was completely ignored. Instead, a “task force” has been formed, supposedly to find additional funding for the PEIA by December. Teachers’ health care premiums and other costs have risen year after year.  Teachers and school workers contacted by the WSWS expressed widespread skepticism about the task force, the promise to fix PEIA, and the entire premise that there is “no money” to fund basic social rights like health care. Chelsea, a teacher from Raleigh County in southern West Virginia, said, “I don’t believe, with the state of our economy, that there is going to be a long-term fix” to PEIA.

        Teachers’ struggle spreads to Oklahoma, Kentucky and Arizona -- In the aftermath of the nine-day strike by West Virginia teachers and school employees, the movement of rank-and-file teachers to win significant wage improvements and defend public education is continuing to gain momentum in Oklahoma, Kentucky, Arizona and other states. The wave of protests and demands for statewide strikes takes place as the Trump administration prepares massive cuts to public education.In a Sunday night interview on CBS-TV’s “60 Minutes” program, US Secretary of Education Betsy DeVos decried the “billions and billions and billions of dollars” the federal government has spent on education, “with zero results.” DeVos continued, “We’ve begun looking at and rolling back a lot of the overreach of the federal government in education,” and declared, “We should be funding and investing in students. Not in school buildings, not in institutions, not in systems.”The billionaire heiress is a long-time enemy of public education well known for buying state legislators in her home state of Michigan and other states who advance the corporate-backed program of “school choice,” vouchers and charter schools. But this is not a solely a Republican agenda. It follows eight years of the Obama administration, which deliberately starved states and school districts of necessary funding while overseeing the destruction of hundreds of thousands of school employees’ jobs, a fall in real wages and a diversion of public money to charter schools and other for-profit schemes. Nearly a decade since the 2008 financial crash, many if not most states are still providing less school funding per pupil than they did before the Great Recession.

        Demands for teacher strike action expand across the US -- In the wake of the nine-day teachers strike in West Virginia, educators throughout the country are taking an independent initiative, organized largely on social media, to stand up against years of concessions and budget cuts. Strikes are currently threatened in Oklahoma (which saw a 15.6 percent drop in funding since 2008), Arizona (36.6 percent), and Kentucky (5.9 percent). Most states throughout the US have enacted cuts to per student spending for K-12 education, particularly since 2008—that is, throughout the Obama administration. Hundreds of thousands of educators were laid off, class sizes ballooned, and essential educational programs were cut. Teacher pay and benefits either stagnated or fell under state and local Democratic and Republican politicians. Far from resisting the assault on public education, the unions, including the American Federation of Teachers (AFT) and the National Education Association (NEA), have suppressed teacher militancy and crushed any strikes. Teachers’ long-stifled anger has begun to erupt in a rebellion against the straitjacket of the unions.

        Oklahoma state officials to join teachers’ strike if lawmakers don't meet demands | TheHill: State employees in Oklahoma voted Saturday to join a planned teachers' walkout next month if state lawmakers don't meet their demands for pay raises by April 2. NewsOK reports that the Oklahoma Public Employees Association board of directors voted to move forward with the strike set to begin next month unless lawmakers approve more than $213 million in state employee pay raises by then. Union officials told the website that they are beginning to work on work stoppage plans for use in the event of a strike next month. "We are going to have to design different plans for different types of (state agency) work sites, and that's what we are going to be doing over the next week," said the union's communications director Tom Dunning. Teachers in the state, which has the lowest education salaries in the nation, began planning a strike last week after a successful teachers' strike in West Virginia earlier this month led to lawmakers capitulating and agreeing to a statewide 5 percent raise for public employees. More than 25,000 people had joined the Facebook group “Oklahoma Teacher Walkout – The Time Is Now!” by last weekend, and local news service KTUL reported that a group had met to discuss plans for a strike. The teachers' plans to strike the first week of April is not a coincidence. That week marks the time Oklahoma's public school system begins standardized testing, a statewide effort that would be thrown into chaos by a work stoppage at even some schools.

        No More 'Doing More With Less': Oklahoma Teachers Could Be the Next to Strike - Shala Marshall has waited tables, tutored students, and sold cosmetics and consignment clothes throughout her 17 years of teaching. “My heart and my passion is in educating kids,” she told Rewire.News in an interview. “And no one goes into education for the money. We just don’t. We do it because we have a passion for kids, for helping kids, for helping kids learn.” Oklahoma teachers rank 49th overall in pay, according to figures released in 2017 from the National Education Association. Marshall, the recipient of the 2017 Teacher of the Year award for her school district and a statewide Teacher of the Year finalist, earns less than the average annual salary for teachers in the state. Across the state of Oklahoma, teachers say they are fed up with empty promises from their legislators. Emboldened by the gains made by their counterparts in West Virginia, who received the promise of a 5 percent pay raise, teachers across Oklahoma are contemplating a walkout next month if they don’t receive a pay raise.Teachers in Oklahoma haven’t received a pay increase since 2008. Though there have been attempts in the state legislature over the years to raise salaries, all have failed. Tax breaks for the oil and gas industry as well as for the state’s top income earners have forced drastic cuts to the state’s social services, including education.The lack of investment in education also extends to students. Per-pupil spending in Oklahoma ranks near the bottom of the country—the fourth lowest. Many school districts have gone to four-days-per-week instruction as a means to save money. The dismal public school system has left some students unprepared for college. Nearly four out of ten students educated in public schools must take remedial courses once they start university.  Now, the state’s largest teacher association, the Oklahoma Education Association (OEA), is calling for teachers to receive a $6,000 raise by April 1 or a walkout will occur.

        Oklahoma should prioritize students, teachers — not oil, gas companies | TheHill: On March 5, the superintendent of Tulsa Public Schools district, Deborah Gist, presided over what became a less than typical school board meeting. Gist rallied school board members to vote for a resolution supporting the thousands of Oklahoma teachers threatening a strike over low pay. In a written statement, the district mentioned “joining school districts … to advocate for a proposal to restore funding to education and increase teacher salaries.” Pinning the entire blame of Oklahoma’s current circumstances on one event or one person is difficult. But the most blame sits at the desks of Mary Fallin, governor of Oklahoma and the state legislators who have protected the oil and gas industry. Now, the state’s budget cannot accommodate for basic services like adequate education funding and decent teacher pay. Gov. Fallin, and her colleagues in the state legislature have intentionally left revenue-generating opportunities on the table. Chief among them is more appropriately taxing energy companies. Oklahoma ranks third in the country for producing natural gas, second in drilling rigs, and fifth in both crude oil production and reserves. Of the approximate $181 billion state GDP, $39 billion are attributable to the energy industry’s contribution. With such resources, tax revenue on such earnings would ordinarily return significant resources to the state. But Oklahoma stands apart. Energy companies in Oklahoma pay uniquely low taxes. Unlike in like Texas and North Dakota, companies drilling for oil and gas in Oklahoma pay no property taxes on reserves. Gross production taxes are usually excised on firms in addition to such taxes, but not in Oklahoma. So, the effective tax rate on firms is 3.2 percent on drilling compared to comparable states like Louisiana (13.3 percent), Arkansas (12 percent), or Texas (8.3 percent). Forgoing these revenues sting even more because state appropriations, adjusting for inflation, are still 15.6 percent below pre-recession levels (pre-2009). Many of the agencies under the 2018 budget will be cut by 4.9 percent and the most recent deal requires agencies cutting 1 to 2 percent from their remaining spending projections.

        Oklahoma Senate rejects pay raise as teachers ready for strike - With an April 2 strike date by teachers set, the Oklahoma legislature failed to pass a proposed 13 percent across-the-board pay hike for educators. Sentiment for a struggle is growing among teachers in the state for strike action over low wages and abysmal conditions in the schools. Oklahoma teachers have the lowest average pay in the US and have not had a raise in 10 years.The pay raise bill failed to get the required three-fourth majority to enact a tax increase. The bill contained a combination of regressive tax increases on cigarettes and motor fuel as well as levies on oil and natural gas production. The Senate bill, even if it had been enacted, would have provided for an increase only half the $10,000 annual raise teachers are demanding.Following the vote, Oklahoma teachers rallied Thursday at the state capitol in Oklahoma City and in several other cities to voice their demands, which also include lower class sizes and improved health care.Teachers have established several Facebook pages to press their fight. One group, Oklahoma Teacher Walkout—The Time is Now, has more than 68,000 members. Meanwhile, the Oklahoma City Public Schools and several other districts say they plan to suspend classes for multiple days if teachers walk out on April 2. However, several smaller districts have announced plans to stay open in the event of a strike. Oklahoma state employees are also advancing their own pay demands. Facing overwhelming sentiment for strike from workers, the Oklahoma State Employees Association board voted to join the teachers’ walkout if the legislature does not enact pay raises. There are about 32,000 state workers and they have not had an increase in 12 years, with some 25 percent earning less than $30,000 annually.

        Arizona teachers escalate their fight for education funding - Arizona educators have been galvanized by the growth of teachers’ struggles, with increasing demands for a statewide strike modeled after West Virginia. Hundreds continued their demonstrations at the state capitol building in Phoenix yesterday, as state legislators voted on increased tax credits for private schools, a measure which, should it pass, will further deplete the bankrupted public school system. Arizona slashed $1.5 billion from K-12 education during the 2008 recession, reducing per-student funding by 36.6 percent. In 2016, Proposition 123 restored only 18 percent of those cuts, leaving a net shortfall for education at over $1 billion. The measure, in response to a lawsuit over the state’s failure to adequately fund schools, took monies not from big business, but from the state land trust. Per-student spending now stands at $4,157, one of the lowest levels nationally, in one of the economically hardest-hit states in the US. A report by the Annie E. Casey Foundation last year shows that Arizona children ranked near the bottom of the nation in overall wellbeing. The survey measured the percentages of kids living in poverty, access to health care and early-childhood education and other indices. The state has 24 percent of children living in high poverty areas and was 46th in the rate of children ages 3 and 4 enrolled in preschool. On Monday, March 11 about 300 teachers protested outside the radio station KTAR in Phoenix as Republican Governor Doug Ducey spoke inside. Ducey’s administration has promoted school vouchers and refused to increase teacher salaries more than a derisory 1 percent. His response to the mounting protests has been to spend more than $1 million on TV ads to lie about his record on public education.

        Teachers in Jersey City begin strike as demands for walkouts expand across the US -- Approximately 4,000 public school workers in Jersey City, the second largest school district in the US state of New Jersey, walked off the job on Friday afternoon. It is the first strike at the city’s school system since 1998. In addition to teachers, school staff such as nurses, paraprofessionals, guidance counselors, administrative assistants and others joined the picket line. The strike is part of a growing wave of working-class opposition in the US and internationally, following the shutdown of the West Virginia teachers strike earlier this month. The teachers’ unions ended the West Virginia strike based on a rotten agreement that fails to address rising health care costs and pays for inadequate pay increases through cuts in social programs. However, the struggle in West Virginia, which temporarily broke out of the straightjacket of the unions, has inspired teachers throughout the country. Strikes of teachers are planned or threatened in Oklahoma, Pennsylvania, Arizona, Kentucky, Tennessee, Colorado and the US territory of Puerto Rico. The primary demand of Jersey City teachers, like their West Virginian counterparts, centers on the soaring cost of health coverage. Public employees in New Jersey have seen their premiums rise to as much as 35 percent of their salaries following the passage in 2011 of a draconian healthcare and pension “reform” bill known as Chapter 78. Chapter 78, enacted by then-governor Republican Chris Christie and the Democratic controlled legislature, is New Jersey’s version of austerity policies implemented after the 2008 crisis in state capitals around the country, whether headed by Democrats or Republicans. Nationwide, teachers have seen stagnant pay further eroded by escalating health care premiums, deductibles and co-pays. According to a report published on Vox, teachers on average are contributing nearly $1,500 more per year to premiums than 10 years ago, adjusted for inflation.

          Elites Impose Education Policies They Would Never Accept for their Children – Real News Network – video - In the final part of our interview with author Noliwe Rooks, we examine some of the reforms that the likes of Betsy DeVos have mandated for poor children but would never be accepted for the wealthy.

        School Daze -  Kunstler - Sunday night was Secretary of Education Betsy DeVos’s turn through the CBS 60-Minutes wringer of censure with a visibly frustrated inquisitor Lesley Stahl trying to hector her into self-incrimination. The sad truth about American schools is that they’re a mirror for the painful collapse of the society they supposedly serve — a process ongoing for decades before Ms. DeVos came on the scene. The expectation that some uber-regent can or ought to fix public education is bound to disappoint a news media searching for saviors. The further we leave the 20th century behind, the more anomalous its organizing principals look, especially the idea of preparing masses of young people for mass, regimented work at the giant corporate scale. There’s a big divergence underway between the promises of schooling and the kind of future that the 21st century is actually presenting — of no plausible careers or vocations besides providing “therapy” and policing for the discontented masses stewing in anomie and compensatory pleasure-seeking, with all its nasty side effects. In the meantime, we’re stuck with wildly expensive, out-of-scale, giant centralized schools where the worst tendencies of human status competition are amplified by smart phones and social media to all but eclipse classroom learning. Education in the years to come is destined to become more of a privilege than a right, and it will probably depend more on how much an individual young person really desires an education than just compelling masses of uninterested or indisposed kids to show up everyday for an elaborate and rather poorly supervised form of day-care. But it’s difficult to let go of old habits and obsolete arrangements, especially when we’ve spent countless billions of dollars on them.

        Betsy DeVos Is Now Fighting the Union at the Education Department - The union representing nearly 4,000 federal employees working for the U.S. Department of Education filed a complaint this week accusing the agency, run by Betsy DeVos, of union busting.The complaint, filed with the Federal Labor Relations Authority on Tuesday, comes after the Education Department effectively declared itself free from union mandates by imposing upon the agency’s 3,900 staffers a “collective bargaining agreement” that commands no union agreement at all. The move is a first, even for the boundary-pushing Trump administration. But DeVos has never been known for having positive relations with teachers unions. For decades prior to her joining the Trump administration, she funded politicians dedicated to weakening organized labor and backed school choice advocacy groups that depicted teachers unions as selfish enemies of deserving children.  On Friday, management officials at the Education Department informed their workers’ union, the American Federation of Government Employees Council 252, that they would no longer be bargaining with them. Instead, management issued a 40-page document the department is calling a “collective bargaining agreement.” This unilateral agreement supposedly took effect on Monday. Education Department staffers have been represented by the AFGE since 1982. “AFGE did not agree to these unilateral terms,” said Claudette Young, AFGE Council 252 president, in a statement. “The agency has imposed an illegal document that we had absolutely no bargaining over. It’s a total attempt to strip employees of their collective bargaining rights and bust the union. This is an attempt to tie our hands.”

        Visas Issued to Foreign Students Fall, Partly Due to Trump Immigration Policy — The number of visas issued to foreign students fell markedly last year amid stricter immigration policies, State Department data show, exacerbating financial challenges for some U.S. colleges and universities. Some of the slide can be attributed to stepped-up competition from schools in other countries and less support for foreign study by some governments. But immigration attorneys and school officials say Trump administration policies are making the U.S. a tougher destination for foreigners and point to stricter scrutiny of those who do apply.In the year ended Sept. 30, 2017, the State Department issued 393,573 student visas, known as F-1s. That was down 17% from the previous fiscal year and nearly 40% below the 2015 peak. The drop-off was particularly dramatic among Indian students this year, with a 28% decline in visas from the second-biggest feeder of foreign students at U.S. colleges.There was also a big drop from China—down 24% last year and the No. 1 source of foreign students in the U.S.—but much of that reduction can be traced to a 2014 change in visa terms for Chinese students. Their visas are now good for five years, instead of one, meaning there are fewer visa renewals but not necessarily fewer students.There were about 78,000 fewer visas issued in fiscal year 2017 compared with 2016 for all countries, including about 35,000 fewer from China. Setting aside visas from China, the overall drop in visas issued was 13% from 2016 to 2017. Universities say international enrollments help make for a richer cultural experience for all students on campus. They also boost schools’ finances amid state funding cuts; at public universities, nonresident students often pay two or three times as much as local students. Per-student funding at U.S. public colleges in fiscal 2016 was 15% below its 2008 level, according to the State Higher Education Executive Officers association.

        House Proposal Targets Confucius Institutes as Foreign Agents - A new draft proposal in the House of Representatives seeks to require China’s cultural outposts in the United States, the Confucius Institutes, to register as foreign agents.The effort, spearheaded by U.S. Rep. Joe Wilson (R-S.C.), targets any foreign funding at U.S. universities that aims to promote the agenda of a foreign government.  “The bottom line is transparency,” Wilson tells Foreign Policy in an interview. The draft bill does not single out Confucius Institutes by name, but according to Wilson it will apply to the Chinese government-run programs, which offer language and culture classes on more than 100 American college and university campuses. The institutes have come under increasing scrutiny in recent months due to their sometimes heavy-handed attempts to censor discussion of topics that the Chinese Communist Party deems off-limits, leading to growing concerns about academic freedom. Wilson’s initiative would clarify language in the Foreign Agents Registration Act (FARA), a Nazi-era law intended to combat foreign propaganda. FARA requires organizations and individuals engaged in lobbying or public discourse on behalf of a foreign government to register with the Department of Justice, and to disclose their funding and the scope of their activities. FARA does not prohibit such funding or activities but rather seeks to provide transparency about the true source of the messaging.

        Union betrays graduate workers’ strike at University of Illinois - Last Friday, March 9, marked the end of the 12-day strike by 2,700 graduate students and teaching assistants at the University of Illinois at Urbana-Champaign (UIUC). With a low turnout for the ratification vote, the Graduate Employees Organization/Illinois Federation of Teachers Local 6300 (GEO) pushed through a sellout agreement, which betrayed the principled struggle by graduate student workers. The extremely low-paid workers will get a 4.5 percent raise in the first year of the contract, followed by 2 percent increases in the second and third years. The previous minimum annual salary of a graduate student worker was $16,281, some $6,000 below what is called the minimum living wage in the area. This will only rise to $17,097 in the first year. Healthcare benefits for individual grad students will cover 87 percent of medical costs, up from 80 percent, but only 25 percent of the costs for dependents. In other words, workers will still make poverty wages while they pay large out-of-pocket costs for their partners and children.  Of even greater significance, GEO and the state affiliate of the American Federation of Teachers abandoned the strikers’ main demand: guaranteed tuition waivers, which defray a significant portion of the university’s ever-rising tuition fees. Workers struck to guarantee the right to these waivers not just for themselves, but for future students as well. The new contract states, “Future students would be governed by the new policy in place at the time of their enrollment.” Speaking on the five-year “guarantee,” GEO negotiator Bruce Kovanen said, “Most important from the union’s perspective, anyone with a 25 percent to 67 percent time appointment as a teaching assistant or graduate assistant will be guaranteed a waiver, he said. The type of waiver—full or base rate (similar to in-state tuition)—will depend on which program they’re enrolled in.” In other words, the union capitulated to the administration’s demand for a multi-tier tuition waiver system. While nominally guaranteeing waivers for current members, GEO gave the university the power to change the type of program a student is enrolled in at will, thereby reducing the amount of the waiver or eliminating it altogether.

        How a corporate cult captures and destroys our best graduates - George Monbiot - To seek enlightenment, intellectual or spiritual; to do good; to love and be loved; to create and to teach: these are the highest purposes of humankind. If there is meaning in life, it lies here. Those who graduate from the leading universities have more opportunity than most to find such purpose. So why do so many end up in pointless and destructive jobs? Finance, management consultancy, advertising, public relations, lobbying: these and other useless occupations consume thousands of the brightest students. To take such jobs at graduation, as many will in the next few weeks, is to amputate life close to its base. I watched it happen to my peers. People who had spent the preceding years laying out exultant visions of a better world, of the grand creative projects they planned, of adventure and discovery, were suddenly sucked into the mouths of corporations dangling money like angler fish. At first they said they would do it for a year or two, “until I pay off my debts”. Soon afterwards they added: “and my mortgage”. Then it became, “I just want to make enough not to worry any more”. A few years later, “I’m doing it for my family”. Now, in middle age, they reply, “What, that? That was just a student fantasy.” Why did they not escape, when they perceived that they were being dragged away from their dreams? I have come to see the obscene hours some new recruits must work – sometimes 15 or 16 a day – as a form of reorientation, of brainwashing. You are deprived of the time, sleep and energy you need to see past the place into which you have been plunged. You lose your bearings, your attachments to the world you inhabited before, and become immersed in the culture that surrounds you. Two years of this and many are lost for life.

        About a quarter of U.S. adults say they are ‘almost constantly’ online -- As smartphones and other mobile devices have become more widespread, 26% of American adults now report that they go online “almost constantly,” up from 21% in 2015, according to a Pew Research Center survey conducted in January 2018. Overall, 77% of Americans go online on a daily basis. That figure includes the 26% who go online almost constantly, as well as 43% who say they go online several times a day and 8% who go online about once a day. Some 11% go online several times a week or less often, while 11% of adults say they do not use the internet at all. Adults with mobile connectivity are especially likely to be online a lot. Among mobile internet users – the 83% of Americans who use the internet at least occasionally using a smartphone, tablet or other mobile device – 89% go online daily and 31% go online almost constantly. Among Americans who go online but not via a mobile device, by comparison, 54% go online daily and just 5% say they go online almost constantly. Younger adults are at the vanguard of the constantly connected: Roughly four-in-ten 18- to 29-year-olds (39%) now go online almost constantly and 49% go online multiple times per day. By comparison, just 8% of those 65 and older go online almost constantly and just 30% go online multiple times per day. Americans ages 30 to 49 are now about as likely as younger adults to use the internet almost constantly (36% versus 39%). The share of 30- to 49-year olds who say this has risen 12 percentage points since 2015. Meanwhile, the share of constantly online Americans ages 50 to 64 has risen from 12% to 17%. Other demographic groups that report going online frequently include college-educated adults, black adults, adults who live in higher-income households and non-rural residents.

        The Racial Dimension of Student Debt -- Gaius Publius - Compare the two charts above. They show median wealth of households headed by black individuals (top chart) and white individuals (bottom chart) between the ages of 25 and 40 in successive waves of the triennial Survey of Consumer Finances, with and without student debt. Student debt is increasingly burdening everyone, but that burden disproportionately weighs on black households. —Marshall Steinbaum (source) As an interim addendum to our short series, “Killing a Predator — Cancelling Student Debt” — Part 1 here,Part 2 here — consider the observation above by Marshall Steinbaum, one of the co-authors (with Stephanie Kelton, Scott Fulwiler, and Catherine Ruetschlin) of the Levy Institute paper on student debt cancellation we’ve been looking at. It comes from a more general piece Steinbaum wrote for the Roosevelt Institute discussing his Levy Institute paper. I’d like to focus here on just that observation.Before we look at more of what Steinbaum wrote, please note three things about the charts above.First, consider the differing degrees to which student debt subtracts from the wealth of young black households and white households. The takeaway from that should be: No, canceling student debt would not mainly benefit the rich. It actually disproportionately benefits black households when measured as a percentage of household wealth.Second, look at the vertical scales of the two graphs, their Y-axes. The numbers are not the same.  The top charted point (peak of yellow line) for young white households is $80,000. The top charted point (peak of yellow line) for young black households is slightly more than $18,000. That’s a peak-to-peak wealth differential of greater than 4:1.Worse, the actual wealth of these black households in 2016 is less than $4,000 (blue line, top chart), compared to more than $40,000 for white households in the same year (blue line, bottom chart). In other words, the 2016 wealth differential is more than 10:1.

        “The Bank Always Gets Paid,” Mr. Potter -- The first story is of an older man who took out a Parent Plus Loan for his daughter, who has since died, and he is paying off the loan through garnished Social Security checks.The second story is a time table and it is long. A younger person takes out a student loan for $10,000, graduates with a Bachelors degree, encounters many issues along the way, and works in the type of work which does not pay as well as many. The $10,000 debt turns into $30,000 over time. This is a well detailed story as told by Lynn a CPA. I plan to send this story to a few people I know to make a point. Monica’s story is one of most detailed accounts of student loan mischief and as close to fraud I have read. It is typical of what students face today. Obama took the student loan lending business away from commercial interests and kept it within the government. The only problem, he left the servicing of the loans to commercial interests, who are in it for the money, and prey on unknowing teenagers trying to go to college, and eventually a living. These loans have greater profitability in default and are impossible to escape unless a person is disabled or dead.

        Generational Disaster: Debt-Laden Millennials Set Back By $140,000 Vs Their Parents - Outstanding student debt has more than doubled since the 2009 lows alongside the world's biggest experiment in synthetic economic growth thanks to quantitative easing - standing at nearly $1.5 trillion.  And times are still "good" so to speak...As we reported in January, nearly 40% of student loans taken out in 2004 are projected to default by 2023 according to a report by the Brookings institute.This is a major problem - one which will either resolve through a resurgent economy, or tacking another Trillion plus onto the national debt once bankruptcy laws are changed and debt forgiveness becomes the next generation's problem (you don't actually think the banks will take the hit, do you?) Until then, young Americans are drowning in debt, unable to improve their standard of living, and are significantly worse off than their parents generation.  Millennials are now graduating with excessive levels of debt - often used not just for tuition, but living expenses as well. Their baby boomer parents, meanwhile, enjoyed entering into their 20s with little to no debt, significantly high purchasing power - enabling a typical family to afford a mortgage and a decent standard of living on one salary. Boomers, unencumbered by crippling debt, were also able to begin saving much earlier - thus taking advantage of compound interest. For example, say you graduate with $40,000 in debt and you owe a 4% interest rate for 15 years. While the federal government expects the loans to be paid back in 10 years, it takes the average Wisconsin graduate 19.7 years to pay off a loan for a bachelor’s degree. Therefore, it’s a reasonable example. In this mock example, monthly payments would be $295.88 and $53,257.53 in total. If you don’t have student loans at graduation like many baby boomers and you put $295.88 in a diversified portfolio which returns 6% per year, you will have $86,477.68 after 15 years. Therefore, the difference between someone with student loans and without them ends up being $139,735.21. The difference grows exponentially as the student loans grow because the interest paid and the returns on the potential savings increase. –UPFINA

         Pence: Abortion will end in U.S. 'in our time' - Vice President Pence predicted Tuesday that legal abortion would end in the U.S. "in our time." "I know in my heart of hearts this will be the generation that restores life in America," Pence said at a luncheon in Nashville hosted by the Susan B. Anthony List & Life Institute, an anti-abortion organization. "If all of us do all we can, we can once again in our time restore the sanctity of life to the center of American law." Pence has long championed anti-abortion policies, as a congressman, as the governor of Indiana and as vice president. He told the crowd he has seen more progress in the Trump administration's first year in office than he has in his entire life. Since President Trump took office last year, he has signed legislation reversing an Obama-era rule that blocked states from defunding Planned Parenthood and reinstated a ban on federal funds for global health programs that cover or promote abortions. But the political reality in the Senate has made it difficult for Congress to accomplish big priorities like defunding Planned Parenthood and banning abortions after 20 weeks of pregnancy.

        Trump Administration approves punitive work requirements for Arkansas Medicaid program --The Trump administration approved Arkansas’ proposed Medicaid work requirements scheme last week, making it the third state to receive such a waiver since the beginning of the year. The Centers for Medicare and Medicaid Services (CMS) did not decide upon other terms of Arkansas’ waiver requests, among which is a so-called partial expansion of Medicaid in the state. The state proposes that it would continue to receive the same amount of federal funding that it has received since it expanded Medicaid under the Affordable Care Act (ACA), while reducing eligibility to those on the federal poverty line. The poverty line for an individual is a laughable $12,140 for individuals and $25,100 for a family of four. The CMS could decide later to approve that part of Arkansas’ waiver. Such a decision would result in over 60,000 Arkansas residents losing Medicaid coverage immediately. Arkansas’ new eligibility requirements, scheduled to begin on June 1, are some of the strictest since CMS began granting waivers this year. Under the plan, all adult Medicaid participants under the age of 50 will be required to work 80 hours per month or engage in work-related activities unless exempted. They must report their hours electronically on the Arkansas Medicaid portal monthly. Those with exemptions must report every two months, providing documentation that they still qualify for their exemption. Participants who fail to meet the requirements or produce evidence of having met the requirements for three months will lose coverage for the remainder of the calendar year. This is the most punitive lockout period allowed to any state thus far.  According to the Center for Budget and Policy Priorities (CBPP), the new requirements will effectively force many eligible people off the rolls simply because they lack internet service. According to the CBPP, “electronic reporting will pose a particular challenge for people without Internet access. In Kentucky, 19 percent of non-elderly adult Medicaid enrollees lack any Internet access, and 42 percent don't have broadband access, recent research shows; access to the Internet in Arkansas is likely similar.”

        California: 18,000 Kaiser Permanente nurses authorize strike --On Tuesday last week, 18,000 California registered nurses (RNs) represented by the California Nurses Association (CNA) voted in favor of a strike at 21 Kaiser Permanente medical centers and dozens of medical offices and clinics.The CNA stated that the strike vote was primarily in response to Kaiser’s refusal to provide adequate staffing at its facilities, including charge nurses who provide bedside assistance and resource nurses who can support RN’s when they eat or take a break.Nurses also oppose the replacement of the current GRASP database management system with a new one known as EPIC, the latter of which the union says encountered numerous problems when it was implemented at Sutter Health hospitals.While Kaiser claims it is not proposing wage cuts, it is planning to lower the pay for new hires in Sacramento by 10 percent and those in Fresno and the Central Valley by 20 percent, saying that the pay cuts are justified by the lower cost of living in those areas. Kaiser Permanente is the largest managed care organization in the United States. At the end of 2017, it had 11.8 million members, 39 hospitals and 682 medical office buildings. The not-for-profit organization, according to Kaiser Permanente’s most recent annual report, had $3.6 billion in net income in 2017, up from $3.1 billion the previous year. However, none of these funds have been used to address staffing and other issues that have driven nurses to authorize a strike.

        Woman tried to save man found dead under bridge near Scripps Hospital in Hillcrest -- A woman says she tried to save the life of a man found dead under a bridge this morning. He was released from the hospital just hours before police found his body in Hillcrest. There was something about a man at the hospital that stood out to Megen Murray. "For whatever reason, I don't know why he caught my eye," said Murray. "I just watched the orderly wheel him outside."He was discharged from Scripps Mercy Hospital Wednesday night. He was still wearing a hospital gown when he was found.  "It was just unnatural to see a man in a hospital gown, in a wheelchair, sitting on the street."Murray says she tried to get the hospital to help, but she says they wouldn't listen. "Yep, he's homeless, he has nowhere to go, we dismissed him, if he wants he can come back in and be seen again but that was it," said Murray.She then took it upon herself to make him comfortable. "I said, 'I have these blankets for you,' and he looked at me and gave me the biggest smile. And then I said, 'I only have $5 cash on me, so here's $5.' I told him to put it in his pocket and said 'I'm sorry I cant do more."'The hospital told 10News the man was healthy enough to be released and aware of his surroundings. Seven hours later he was found dead after tumbling from the Washington Street bridge. Homeless patients are often discharged after being treated with nowhere to go. A new California Senate bill is trying to change that. The bill would require hospitals to coordinate with shelters to make sure the patient is cared for after they're released. 

        Martin Shkreli Proves that Your Life Is Meaningless to Elites - So, a lot of people are happy that that Shkreli, the infamous “pharma bro” who raised the price of Daraprim, a 62 year old life saving drug used for serious parasite infections and to treat HIV, by 5,500 percent has been sentenced to jail for seven years. The catch is that he was sentenced for securities fraud not for jacking up the price of the drug.   Yes, that’s because securities fraud is illegal, but killing people by jacking up drug prices isn’t. And that’s the point. Your betters don’t want someone cheating them, but they don’t care if you live or die. They really, really don’t. Understand that in the core of your being. There are others who have jacked up the price of life saving drugs. For example, Heather Bresch, the CEO of Mylan, who makes Epi-pens, isn’t in any danger of seeing the penitentiary. Then there are the jacked-up prices for insulin, which, while not quite so dramatic in percentage terms, comes to $400/month in the US, for a drug that the inventor gave away. People have definitely died, my “favorite” was a guy begging on Twitter for people to fund him or he couldn’t afford his insulin next month. He’s dead now. Yeah. Folks, they don’t care if you live or die. If dead means more money for them, they’re okay with it. This is true in the US, but it’s also true in Britain and increasingly true in the developed world. If your masters think you’re worth more dead than alive, dead is fine by them. 

        Insurers Game Medicare System to Boost Federal Bonus Payments - WSJ - - The number in the corner of Upton Martin’s Medicare plan card from Humana Inc. changed twice over the past four years. He didn’t think anything of it, and his coverage didn’t seem different in any way.The changes, though, were evidence of a lucrative maneuver that has allowed Humana and other providers of Medicare Advantage plans to collect additional revenue from the federal government. . Mr. Martin’s plan was set to be downgraded, which would have cost Humana its bonus. So the company merged plans covering Mr. Martin and more than a million others into different contracts with higher scores. That preserved the bonuses. The shift boosted the ratings of those plans without requiring any actual improvement in their performance on customer service, health screenings and other quality measures. Mr. Martin, a retired banker in Ashland, Va., says he hasn’t “noticed any changes at all.” The tactic, known as crosswalking, adds millions of dollars in federal payments to the companies that sell Medicare Advantage policies. For Humana, the shift is estimated to be worth nearly $600 million in revenue this year, according to JPMorgan Chase & Co. analysts. Other large managed-care companies, including UnitedHealth Group Inc., Aetna Inc. and Anthem Inc., also engage in the practice, according to an analysis of federal data by The Wall Street Journal. Insurers have used the maneuver to shuffle plans covering more members into higher-rated setups over the past few years—including around 1.45 million people for 2018.  The maneuver “is nothing more than gaming of the system,”

         NASA study reveals 7 percent of astronaut's genes changed after year in space - NASA took advantage of the unique opportunity of having a set of twin brothers as astronauts by studying each to take a closer look at the effects on the human body after spending a year in space.   For those in the dark on the U.S. space agency's study, astronaut Scott Kelly and his twin brother, Mark Kelly, took part in NASA's "Twin Study." The study looked at what a year in space did to Scott Kelly while Mark Kelly spent the year on Earth.   "By measuring large numbers of metabolites, cytokines, and proteins, researchers learned that spaceflight is associated with oxygen deprivation stress, increased inflammation, and dramatic nutrient shifts that affect gene expression," NASA reports in its preliminary findings.  "After returning to Earth, Scott started the process of readapting to Earth's gravity. Most of the biological changes he experienced in space quickly returned to nearly his preflight status. Some changes returned to baseline within hours or days of landing, while a few persisted after six months."   NASA clarifies in the report 93 percent of Scott Kelly's genes returned to normal after he came home, but that the missing 7 percent points "to possible longer-term changes in genes related to his immune system, DNA repair, bone formation networks, hypoxia, and hypercapnia."   The space agency reports that Scott Kelly's telomeres became longer while he was in space. Telomeres are chromosomes that shorten as a person ages, so that's why that change is such a noteworthy finding.   The space agency says there was "a more pronounced decrease' in his speed and accuracy after he landed, but chalked that up to adjusting to Earth's gravity and his busy schedule upon return. 

        Study: Eating Highly Processed Foods Linked to Increased Cancer Risk - The more highly processed foods you eat, the higher your risk of cancer . That's the takeaway from a new study that followed more than 100,000 French adults for eight years. It found that a 10 percent increase in consumption of foods like soda, sugary snack cakes, processed meats and breakfast cereals corresponded with a 10 percent increase in cancer risk. The study, published last month in the London-based medical journal BMJ, is the first of its kind to link increased cancer risk to all "ultra-processed" foods, not just processed meats. Ultra-processed foods are defined as foods that undergo multiple physical, biological and mechanical processes to be highly palatable, affordable and shelf stable. According to the U.S. National Cancer Institute, cancer is estimated to affect more than 1.6 million Americans each year, causing nearly 600,000 deaths. Dietary links to cancer have long been established, with about a third of cancer cases estimated to be preventable through more healthful diet and lifestyle choices. Diets high in fruits, vegetables, whole grains, nuts and legumes are known to reduce the risk of cancer, while those high in processed meats increase cancer risk. Learn about EWG's Cancer Defense Diet here. According to the study, ultra-processed foods make up a significant part of modern diets, contributing one-fourth to one-half of the calories of an average diet. Ultra-processed are often high in chemical additives and preservatives, and low in fiber, beneficial vitamins and minerals, and cancer-preventative plant compounds called phytonutrients .

        Impossible Burger Executive Grilled at Sustainable Foods Summit - An executive from a company selling a genetically engineered meat alternative faced tough questions at the Sustainable Foods Summit held in San Francisco at the end of January. Nick Halla, chief strategy officer of Impossible Foods, gave a presentation about his company's Impossible Burger as a sustainable solution to the problems of industrial meat production. He claimed their lab-created burger uses about 74 percent less water, generates about 87 percent fewer greenhouse gases and requires around 95 percent less land than conventional ground beef from cows. Halla said the Impossible Burger is seeing rapid acceptance in the marketplace, sold in many restaurants and "better burger" chains.  But Halla's PowerPoint slides didn't mention that the Impossible Burger's key ingredient is a genetically engineered protein called soy leghemoglobin or "heme." The presentation also didn't mention that the U.S. Food and Drug Administration told Impossible Foods that the company hadn't demonstrated the safety of heme after it applied to the FDA seeking GRAS (generally recognized as safe) status. Despite FDA's concerns, Impossible Foods sold its GMO-derived burger for public consumption anyway. Several audience members took Halla to task over Impossible Foods marketing its burger despite FDA concerns, short-term feeding studies, and lack of transparency about the use of the GMO ingredient. Mark Squire, owner and manager of Good Earth Natural Foods , said he read the FDA documents about Impossible Foods application for GRAS status and was "shocked that a company could come out with a new food additive and not have it subjected to government and long-term scrutiny." Pamm Larry, director of GMO-free California , asked Halla why his company had conducted such short, 14- and 28-day rat feeding studies of the product.

        Crowded Shelters and the Vicious Flu Brew Perfect Storm For The Homeless - For the general population, the flu represents a serious health concern. But for the homeless -- who deal with higher rates of chronic illness, fewer resources and crowded conditions in shelters -- catching the flu can be a matter of life or death.This year, the nation has experienced a vicious flu season on track to break recent records, according to the Centers for Disease Control and Prevention. Although the outbreak has shown signs of decline over the past two weeks, it is ongoing in 45 states and the District of Columbia, thousands of people have been hospitalized, and 114 children have died.If you're homeless, having the flu "might mean that you can't get up and manage to stay warm. You can't go get food. And if you have a substance abuse disorder and you need to maintain either alcohol or opioid use, then you go into withdrawal," said Eowyn Rieke, a board member of the National Health Care for the Homeless Council."The gravity of the flu for people who are homeless is enormous. And I think we often underestimate that."Avoiding the flu is just one of many health challenges for those who are homeless. Homelessness worsens depression and cognitive function, said Dr. Margot Kushel, a professor of medicine at the Zuckerberg San Francisco General Hospital and Trauma Center. Homeless people also have a harder time managing chronic diseases. Roughly two-thirds of the group cope with a chronic condition or a substance abuse disorder. Smoking is common. And 3 in 10 people who are chronically homeless have a serious mental illness, according to the Office of National Drug Control Policy.

        Fact Or Fearmongering? World Health Chief Warns Of Imminent Global Pandemic - According to a World Health Organization doctor, a global pandemic is imminent, and no one will be prepared for it when it hits. Dr. Tedros Adhanom, director-general for WHO, has said that the next outbreak that will hit us will be a “terrible” one, causing a large death all over the world. “Humanity is more vulnerable in the face of epidemics because we are much more connected and we travel around much more quickly than before,” said WHO specialist in infectious diseases Dr. Sylvie Brand.“We know that it is coming, but we have no way of stopping it,” said Brand. According to Dr. Tedros, the flu is extremely dangerous to everyone living on the planet. This fear was also promoted by experts at the World Economic Forum in Davos, Switzerland last month.The claims came exactly 100 years after the 1918 Spanish flu that claimed 50 million lives and killed three times as many people as World War I. A mutated strain is the most likely contender to wipe out millions because it can join together with other strains to become deadlier. “This is not some future nightmare scenario. A devastating epidemic could start in any country at any time and kill millions of people because we are still not prepared." "The world remains vulnerable. We do not know where and when the next global pandemic will occur, but we know it will take a terrible toll both on human life and on the economy,” said Dr. Tedros. However, not everyone is so sure of Tedros' terrible warnings... “Hidden underneath this fear-mongering message of a global pandemic is a far more sinister W.H.O. agenda,” warns Mike Adams, the Health Ranger, publisher of “The real agenda is a global push for blind, fear-based acceptance of unsafe, unproven vaccines that will be rolled out alongside the next global pandemic,” Adams warns. “Fear circumvents rational thinking, which is why the vaccine-pharma cartels routinely turn to irrational fear propaganda to demand absolute and unquestioning acceptance of risky medical interventions that should always be scrutinized for safety and efficacy.” –Natural News

        Deadly superbug just got scarier—it can mysteriously thwart last-resort drug - For the first time, researchers have discovered strains of a deadly, multidrug-resistant bacterium that uses a cryptic method to also evade colistin, an antibiotic used as a last-resort treatment. That’s according to a study of US patients published this week by Emory University researchers in the open-access microbiology journal mBio.The wily and dangerous bacteria involved are carbapenem-resistant Klebsiella pneumoniae or CRKP, which are already known to resist almost all antibiotics available, including other last-line antibiotics called carbapenems. The germs tend to lurk in clinical settings and can invade the urinary tract, bloodstream, and soft tissues. They’re members of a notorious family of multidrug-resistant pathogens, called carbapenem-resistant Enterobacteriaceae (CRE), which collectively have mortality rates as high as 50 percent and have spread rapidly around the globe in recent years. A 2013 report by the Centers for Disease Control and Prevention estimated that there were more than 9,300 CRE infections in the US each year, leading to 600 deaths. Both the CDC and the World Health Organization have listed CRE as one of the critical drug-resistant threats to public health, in need of "urgent and aggressive action."That’s what we knew about CRKP before this week. In the new study, the Emory researchers discovered two strains of CRKP—isolated from the urine of patients in Atlanta, Georgia—that can also resist colistin. But they do so in a poorly understood, surreptitious way. At first, they appear vulnerable to the potent antibiotic in standard clinical tests, but with more advanced testing and exposure to the drug, they reveal that they can indeed survive it. In mice, the strains caused infections that couldn’t be cured by colistin and the mice died of the infections. Mice infected with typical CRKP were all saved with colistin.

        Bottled water not safe from microplastic contamination - The revelation from a new global survey into microplastics in bottled water serves up a bitter irony. What we drink may well be contaminated. Possibly from the bottles themselves.  Advertisements for bottled water tend to play on themes of purity and healthy living.  But original research and reporting by the global journalism organization Orb Media, and shared with DW, muddies the association. The first of its kind on a global scale, the research tested bottled water from 11 brands bought at 19 locations in nine countries around the world for microplastics. The contaminant was identified in 93 percent of samples — in sometimes greatly varying quantities.In a world where, according to forecasts by online statistics portal Statista, we will be drinking 391 billion liters of bottled water in 2017 — up from 288 billion liters in 2012 — the study begs the question: Is consuming such tiny plastic particles safe? That's a tough question to answer. Despite the ubiquity of microplastics in the environment, toxicologists are still in the early stages of figuring out their potential threat to human health.

        WHO launches health review after microplastics found in 90% of bottled water - The World Health Organisation (WHO) has announced a review into the potential risks of plastic in drinking water after a new analysis of some of the world’s most popular bottled water brands found that more than 90% contained tiny pieces of plastic. A previous study also found high levels of microplastics in tap water.In the new study, analysis of 259 bottles from 19 locations in nine countries across 11 different brands found an average of 325 plastic particles for every litre of water being sold.In one bottle of Nestlé Pure Life, concentrations were as high as 10,000 plastic pieces per litre of water. Of the 259 bottles tested, only 17 were free of plastics, according to the study.Scientists based at the State University of New York in Fredonia were commissioned by journalism project Orb Media to analyse the bottled water. The scientists wrote they had “found roughly twice as many plastic particles within bottled water” compared with their previous study of tap water, reported by the Guardian.  According to the new study, the most common type of plastic fragment found was polypropylene – the same type of plastic used to make bottle caps. The bottles analysed were bought in the US, China, Brazil, India, Indonesia, Mexico, Lebanon, Kenya and Thailand.

        Lead Exposure Linked to 412,000 Premature Deaths in U.S. Each Year - Up to 412,000 deaths a year in the U.S. can be attributed to lead exposure, according to a new study published Monday in The Lancet Pubilc Health . Of that figure, exposure to the toxic metal may be an "important, but largely overlooked" risk factor behind the 256,000 annual cardiovascular disease deaths in the country, the authors found.“Our study findings suggest that low-level environmental lead exposure is an important risk factor for death in the USA, particularly from cardiovascular disease," the paper states. "It is not surprising that lead exposure is overlooked; it is ubiquitous, but insidious and largely beyond the control of patients and clinicians."  The researchers used data from the National Health and Nutrition Examination Survey to study the blood-lead levels of 14,289 people who were 20 or older between 1988 and 2011. Of the 4,422 people who died by the end of that period, those who had high lead levels (6.7 micrograms per deciliter) were at 37 percent greater risk of premature death from any cause and 70 percent times greater risk of cardiovascular death compared with people with lower lead levels (1.0 micrograms per deciliter). Based on these risk levels, the authors estimated that up to 18 percent of all deaths every year in the USA (or 412,000 out of 2.3 million annual mortalities) would be among people who had levels of lead above 1 micrograms per deciliter. Further, an estimated 28.7 percent of premature cardiovascular disease deaths (256,000 out of 892000) could be attributable to lead exposure.

        Testimony in Flint water hearings details social crime against city residents -- A key former water plant operator for the city of Flint, Michigan recently gave pretrial testimony that city and state officials pushed through the water supply switch, which resulted in at least a dozen fatalities and poisoning up to 100,000 others—knowing that the treatment facilities were woefully inadequate. In two days of courtroom questioning in late February, Michael Glasgow, a water quality supervisor for Flint, reiterated that his early 2014 email warnings about plant operational deficiencies were uniformly ignored at multiple levels of government in the days leading up to the switch.   Glasgow’s testimony was part of the concluding preliminary hearings for the prosecution of top Michigan state health official Nick Lyon. The former head of the state’s top public health agency, the Michigan Department of Health and Human Services (DHHS), is charged with involuntary manslaughter, stemming from the official cover-up of the outbreak of Legionnaire’s disease between 2014-2015, which resulted in at least 12 confirmed deaths and 80 illnesses. Lyon is one of 15 state officials who were charged in 2016 by Michigan Attorney General Bill Schuette with crimes related to the poisoning of the water supply in Flint. None have gone to trial yet, many are preparing to accept plea agreements for lesser charges, and several key officials involved, such as Republican Governor Rick Snyder and Democratic State Treasurer Andy Dillon, have yet to face any charges. Glasgow was one of the lower-level officials of the 15 charged with crimes, for tampering with evidence related to filing of altered reports on lead levels. Glasgow has maintained that he was ordered to tamper with reports from leading Michigan Department of Environmental Quality (MDEQ) officials above him. He accepted a plea agreement in exchange for his testimony against Lyon.

        Monsanto concealed effects of toxic chemical for decades, Ohio AG alleges - Ohio Attorney General Mike DeWine sued agricultural giant Monsanto on Monday, alleging the company concealed dangers posed by a toxic chemical compound it manufactured for nearly a half century. In the suit, filed in the Hamilton County Common Pleas Court in Cincinnati, prosecutors argued that the company should pay for the clean-up of what it says are dozens of rivers, lakes and other water bodies contaminated with polychlorinated biphenyls, or PCBs. “Monsanto should be held responsible for the damage it caused,” DeWine said in a statement. Scott Partridge, Monsanto's vice president of global strategy, gave a statement to NBC News saying: "Monsanto voluntarily stopped producing PCBs more than 40 years ago. Monsanto sold PCBs to many industrial and manufacturing customers, as well as the U.S. government, which put them to various uses and disposed of them in different ways. We are still reviewing this lawsuit, and we will defend ourselves aggressively." The company stopped manufacturing the chemical in 1977 and it was banned in 1979 by the Environmental Protection Agency. According to the suit, Monsanto produced nearly all of the PCBs — which were used in everything from lubricants to electrical equipment — in the United States between 1929 and 1977. The chemical has been linked to cancer, liver damage and other negative health effects, according to the Centers for Disease Control and Prevention. The suit alleges that Monsanto learned of PCBs’ toxic effects in the 1930s, yet it kept producing the compound while concealing its effects. The suit claims the company acknowledged that prolonged exposure could produce "systemic toxic effects" in an internal memo in 1937, so it undertook a "decades-long campaign of misinformation and deception."

        Poll: Farmers Overwhelmingly Oppose Bayer-Monsanto Merger - An overwhelming majority of surveyed farmers are concerned about the proposed Bayer- Monsanto merger and believe it will have a negative impact on independent farmers and farming communities, a recent poll has found ."We urge the Department of Justice to listen to farmers and the more than 1 million Americans calling on the department to block the Bayer-Monsanto merger. The only answer to this merger is NO," said Tiffany Finck-Haynes, senior food futures campaigner at Friends of the Earth .According to the poll, of the farmers who responded:

        • 93.7 percent are concerned about the proposed merger of Bayer and Monsanto (82.8 percent are very concerned/10.9 percent somewhat concerned).
        • 93.7 percent of farmers are concerned that the proposed Bayer-Monsanto merger will negatively impact independent farmers and farming communities (83.9 percent are very concerned/9.8 percent somewhat concerned).
        • The farmer's top three concerns of the merger are:
        • 91.9 percent of farmers are concerned that the merged company will use its dominance in one product to push sales of other products (79.6 percent very concerned/12.3 percent somewhat concerned).
        • 91.7 percent of farmers are concerned that Bayer/Monsanto will control data about farm practices (79.5 percent very concerned/12.2 percent somewhat concerned).
        • 89.0 percent of farmers think the merger will result in increased pressure for chemically dependent farming (77.1 percent very concerned/11.9 percent somewhat concerned).

        "This survey underscores what we've been hearing from our farm family members for decades—that overwhelming consolidation has substantially eliminated competition in the marketplace," said Roger Johnson, president of National Farmers Union. "Four or five firms dictate the prices that farmers pay for their inputs. Family farmers deserve fair prices, choices in what they plant, and the type of market competition that incentivizes firms to compete and innovate for their business. A Bayer-Monsanto merger stands to move each of these factors in the wrong direction, and that is away from competitive markets." "This merger will further concentrate ownership of our seed supply, inevitably leading to fewer seed variety options in the marketplace, less genetic diversity in our fields, and higher seed prices for farmers," said Kiki Hubbard of Organic Seed Alliance. "Seed prices have nearly quadrupled in the past 20 years, even though yield and the prices farmers receive for their crops have not. History shows us that mergers of this magnitude also reduce rather than inspire innovation."

        Brazil: Militant Women Occupy Pulp Mill to Protest Genetically Engineered Trees, Tree Plantations - More than one thousand women from the Rural Landless Workers Movement (MST) took over a pulp mill owned by Suzano Paper company in Mucuri, in Bahia, Brazil [1] to protest the company’s large-scale, industrial eucalyptus plantions and future plans for genetically engineered (GE) trees.The women cited the impacts on water caused by the plantations, including depletion of critical fresh water resources and contamination of water by aerial spraying of toxic agrochemicals on the plantations as reasons for the protest.Women of the MST and other social movements in Brazil have previously taken action against genetically engineered trees on many occasions in Brazil and the MST has previously stated that they will never allow GE trees to be planted on a large-scale in Brazil. [2]  Anne Petermann, Executive Director of Global Justice Ecology Project (GJEP), which coordinates the international Campaign to STOP GE Trees stated that,“GJEP has worked in solidarity with the MST in Brazil to stop the use of GE trees there since 2006.  We strongly oppose Brazil’s outrageous decision in 2015 to legalize genetically engineered eucalyptus trees.  Brazil’s irresponsible approval of this experimental tree is not only dangerous to forests and communities, but illegal. The MST are protesting some of the real consequences of the promotion of genetically engineered trees, the replacement of biodiversity with lifeless monocultures and the arrogance of multinationals as they disregard the rights of Indigenous and rural populations to clean water and clean soil.“Today’s action is a clear sign that the fight to stop GE trees in Brazil is far from over,” she added. The Brazilian Technical Commission on Biosafety (CTNBio) on 9 April 2015 ruled that Suzano’s subsidiary FuturaGene could legally sell and plant GE eucalyptus trees [3].  On the morning of 5 March, the original day of the CTNBio hearing on the issue, thousands of women from the MST and other social movements invaded a FuturaGene greenhouse [4] and destroyed the GE eucalyptus seedlings growing there.  Later that day, hundreds of members of La Via Campesina occupied and shut down the CTNBio hearing [5], forcing the meeting to be delayed one month.

        After Suzano pulp mill protest, women in Brazil occupy the company’s land in Bahia - Translated with Google Translate. See original article in Portuguese here.The National Day of Struggle of the Landless Women in the Extreme South of Bahia continues at full speed. After more than a thousand women protested at the factory of Suzano Cellulose and Paper on the morning of this Monday (5), in Mucuri, about a thousand women occupied, the same day, the farm Cielo Azul.The farm, which also belongs to Suzano, is located in the municipality of Teixeira Freitas and contains more than 1.2 thousand hectares of planted eucalyptus. The area is an old claim of the MST.In April 2012, the farm was occupied for the third time by Sem Terra, and the State and Federal governments committed themselves to settle about one thousand families, but the agreement was not fulfilled. This time, women occupy the area and are not expected to leave.The struggles of women in the extreme south of Bahia denounce the environmental impacts caused by the eucalyptus plantation in the region, the water crisis suffered by workers in the countryside and in the city and says not the expansion of monocultures and GE trees. With a camp set up inside area, Landless demand immediate expropriation.

        Angering Organic Farmers and Advocates, Trump's USDA Kills Animal Welfare Rule - Angering organic farmers and advocates, the Trump administration announced on Monday that it will officially withdraw a rule that would have added animal welfare regulations for meat, eggs and dairy marketed as "organic ." The U.S. Department of Agriculture (USDA) killed the Organic Livestock and Poultry Practices (OLPP) final rule after deciding that it "exceeds the department's statutory authority, and that the changes to the existing organic regulations could have a negative effect on voluntary participation in the National Organic Program," according to a USDA statement .  While Greg Ibach, undersecretary for the USDA's marketing and regulatory program, claimed that "the existing robust organic livestock and poultry regulations are effective," organic farmers, animal rights advocates and consumers who have supported the enhanced regulations—which were published on Jan. 19, 2017 and would have taken effect in May—expressed disappointment with the move."The decision nullifies 14 years of policymaking in a process mandated by Congress, and marks an about-face for the agency," Lynne Curry wrote for Civil Eats. The rule would have "specified a set of standards for organic livestock and poultry designed to minimize stress, facilitate natural behaviors and promote well-being,"

        Salt-Water Fish Extinction Seen By 2048 - CBS News -- The apocalypse has a new date: 2048.  That's when the world's oceans will be empty of fish, predicts an international team of ecologists and economists. The cause: the disappearance of species due to overfishing, pollution, habitat loss, and climate change. The study by Boris Worm, PhD, of Dalhousie University in Halifax, Nova Scotia, -- with colleagues in the U.K., U.S., Sweden, and Panama -- was an effort to understand what this loss of ocean species might mean to the world.The researchers analyzed several different kinds of data. Even to these ecology-minded scientists, the results were an unpleasant surprise."I was shocked and disturbed by how consistent these trends are -- beyond anything we suspected," Worm says in a news release."This isn't predicted to happen. This is happening now," study researcher Nicola Beaumont, PhD, of the Plymouth Marine Laboratory, U.K., says in a news release."If biodiversity continues to decline, the marine environment will not be able to sustain our way of life. Indeed, it may not be able to sustain our lives at all," Beaumont adds.Already, 29% of edible fish and seafood species have declined by 90% -- a drop that means the collapse of these fisheries.But the issue isn't just having seafood on our plates. Ocean species filter toxins from the water. They protect shorelines. And they reduce the risks of algae blooms such as the red tide. "A large and increasing proportion of our population lives close to the coast; thus the loss of services such as flood control and waste detoxification can have disastrous consequences," Worm and colleagues say.

        With Just 76 Orcas Left, Washington Gov. Orders Protections For Beloved Killer Whales -- Washington Gov. Jay Inslee signed an executive order this week to aid the recovery of critically endangeredsouthern resident killer whales and the Chinook salmon they eat.There are only 76 orcas left in Puget Sound, down from 98 in 1995. Their numbers have dipped due to pollution, underwater noise and disturbances from boat traffic, and lack of their favored prey. Recent deaths, particularly among calves, mothers and pregnant whales , appear to be driven by food scarcity . "The diets of southern resident orcas consist largely of Chinook salmon, but the Chinook are listed on federal and state endangered species lists," Inslee's office noted . "If the Chinook population continues to decline, the southern resident orca population will follow." Gov. Inslee signed an executive order Wednesday outlining a strategy for southern resident orca and Chinook recovery. State agencies have been instructed to outline immediate steps and long-term solutions to recover these species."The problems faced by orcas and salmon are human-caused, and we as Washingtonians have a duty to protect these species," Inslee said. "The impacts of letting these two species disappear would be felt for generations." The order also creates a task force that will propose funding and legislation to help southern resident orcas. Its first report, due Nov. 1, will highlight problems the whales face, including a lack of prey, toxic contaminantsand vessel traffic and noise.

        Should Some Species Be Allowed to Die Out? - As head of the Kauai Forest Bird Recovery Project, Crampton is tasked with saving the akikiki, along with the rest of the island’s endangered birds. Even by conservation standards, this can be dispiriting work. Of Kauai’s eight remaining native forest birds, four are listed as endangered or threatened, including a honeycreeper so rare that researchers have managed to find just 14 of its eggs in three years, of which only four have survived. When Crampton took over the program, in 2010, it was focused on protecting a reclusive bird known as the small Kauai thrush, which had been on the verge of extinction for years. Not long after she arrived, though, the situation changed. While thrush numbers were up, thanks in part to a successful captive-breeding program, the number of akikiki had plummeted. “The surveys weren’t picking up any akikiki,” Crampton told me, “like, none.” Because akikiki numbers dropped so rapidly — the population is estimated to have fallen by 83 percent in 10 years, thanks to a combination of avian malaria and invasive rats, leaving just 468 birds — the government approved a plan to start a captive-breeding program in 2015, using eggs harvested from nests in the wild. (When akikiki lose their eggs, they typically lay a second clutch, keeping population numbers stable.)    Under the rules of the Endangered Species Act, once a species is discovered to be at risk of extinction, government agencies are required by law to take steps to save it. For years, critics have challenged that mandate, arguing that it undercuts the ability to weigh a species’ value or to consider the economic impact of its preservation — for instance, the cost of prohibiting logging in a valuable tract of forest. Since Donald Trump took office, these objections have gained ground; there are currently six bills pending in Congress, all aimed at overhauling (some would say gutting) the Endangered Species Act.

        Wyoming Proposes Grizzly Bear Hunt for First Time in Four Decades - Yellowstone grizzly bears could be legally hunted for the first time in four decades under a proposal issued by Wyoming officials last week.The move comes less than a year after the iconic bears were stripped of Endangered Species Act protections.Wyoming Game and Fish Department's new draft regulation would allow the killing of up to 24 grizzly bears—that's 12 bears (10 males, two females) within the demographic monitoring area in Greater Yellowstone, plus another 12 bears of any sex outside the area."This draft was shaped by public input we received this fall and winter and the best available science. It contains proposed regulations that would ensure Wyoming will meet its commitment to manage for a healthy and viable population of grizzly bears inside the demographic monitoring area in northwest Wyoming," said Brian Nesvik, the Wyoming Game and Fish Department's chief game warden and chief of the wildlife division."We believe this proposal reflects the public support for using hunting as a component of grizzly bear management and has many provisions that will recognize this opportunity and keep the grizzly bear population recovered for generations to come." More than 50,000 grizzly bears resided between the Pacific Ocean and the Great Plains in the early 1800s but their numbers dwindled down to only 136 by 1975, when they were listed as "threatened" under the federal Endangered Species Act. Their federally protected status allowed the population to increase to about 700 or more today. But, citing success in conservation efforts, the Trump administration delisted the bears in June, thus allowing states to open up hunting season on the animals.

        Trump wildlife protection board has many trophy hunters — A new U.S. advisory board created to help rewrite federal rules for importing the heads and hides of African elephants, lions and rhinos is stacked with trophy hunters, including some members with direct ties to President Donald Trump and his family. A review by The Associated Press of the backgrounds and social media posts of the 16 board members appointed by Interior Secretary Ryan Zinke indicates they will agree with his position that the best way to protect critically threatened or endangered species is by encouraging wealthy Americans to shoot some of them. One appointee co-owns a private New York hunting preserve with Trump’s adult sons. The oldest son, Donald Trump Jr., drew the ire of animal rights activists after a 2011 photo emerged of him holding a bloody knife and the severed tail of an elephant he killed in Zimbabwe. Under Zinke, a former Montana congressman who is an avid hunter, the Fish and Wildlife Service has quietly moved to reverse Obama-era restrictions on bringing trophies from African lions and elephants into the United States.  Among Zinke’s appointees is Steven Chancellor, a longtime Republican fundraiser and chairman of American Patriot Group, an Indiana-based conglomerate that supplies Meals Ready to Eat to the U.S. military. According to Safari Club member hunting records obtained in 2015 by the Humane Society, Chancellor has logged nearly 500 kills — including at least 18 lions, 13 leopards, six elephants and two rhinos.

        Wild Boars Are Taking Over Japan as Population Ages, Disappears - As people slowly leave some Japanese towns and cities, wild boars are coming in to replace them.As the country’s aging population gradually dies, wild boars are filling the void, lured by rice paddies without human supervision and the hospitable landscape—where they find plenty of shelter and not enough people to deter them from coming. What used to be a problem just in southern Japan, with boar sightings and occasional attacks on humans, has blossomed into an issue for the entire country, according to a report in The Washington Post. Japan’s population has grown older in recent years: Estimates from the United Nations Population Division indicate that about 35 percent of the country was least 65 years old in 2017. And the agency projects that the problem will only get worse, and seniors will make up roughly half the country by 2050.  This goes against the worldwide pattern, in which people younger than 65 make up the large majority of the population, both now and in projected numbers for 2050. Wild boars, also known as Eurasian wild pigs, have moved in to supplant the shrinking population. In the Iwate Prefecture, authorities caught 94 boars last year, The Washington Post reported. That’s up from just two caught in 2011. On top of aging, Japan’s northern stretches have also faced depopulation linked to the Fukushima nuclear plant meltdown and the tsunami that destroyed coastal areas—both events related to a devastating earthquake in 2011, as The Washington Post points out. All of this, plus warmer temperatures and less snow, make the conditions right for wild boars.

        Widespread Drought Across US Stoking Fears That 2012's Devastation Will Repeat - Western Illinois might be close to the Mississippi and Illinois rivers, but it’s the driest part of the state this year.  “We really haven’t really had any measurable rain since the middle of October,” says Ken Schafer, who farms winter wheat, corn and soybeans in Jerseyville, north of St. Louis. “I dug some post-holes this winter, and it's just dust.” His farm is in an area that the U.S. Drought Monitor considers “severe.” Some of the nation’s worst areas of drought are in southwest Kansas, much of Oklahoma and a slice of Missouri. But several states are in some sort of drought, from Illinois to California, the Dakotas to Texas.  The worry also is widespread, considering the reach of this winter’s drought is even worse than in 2012, a year that brought the worst drought in the U.S. since the Dust Bowl and cost farmers, ranchers and governments an estimated $30 billion, according to the federal National Centers for Environmental Information. If things don’t get better, it’ll show in producers’ pocketbooks and on the taxpayers’ dime — a difficult thing to swallow considering the U.S. Department of Agriculture expects farmers’ incomes to be at a 12-year low even if crop yields stay high. “If this was July, we'd be hitting the panic button,” according to Illinois State Climatologist Jim Angel. “But in the wintertime, it's always kind of a little odd because droughts develop slowly and you know there's not much going on out there.”

        This is what a West without water will look like   -  The Southwest United States is wrapping up an abnormally dry winter. Nearly all of Utah, New Mexico, Colorado, Arizona, and California are facing drought conditions in 2018. About a quarter of the West’s drinking water relies on melting snow, which has been in short supply this year, to fill up reservoirs. While it’s unlikely that the Southwest United States is headed for a full-scale disaster like in Cape Town, South Africa, where residents have severely restricted water usage after three years of drought. But thanks to climate-changed linked droughts in the Southwest, water will become a precious commodity in this part of the US.  Within the next several decades, states in the Southwest will receive considerably less rain than they do now. The region is naturally dry, but over the last 100 years developers have turned sprawling deserts into communities with lush green grass and green golf courses. Historically, droughts aren’t unusual in this part of the US, but climate change is set to make them worse as less rains fall. Reservoirs will be dry, the agriculture sector will be forced to cut back on water usage, and individuals will be required to adopt conservation measures which can range from getting rid of lush green lawns to shorter showers. The five states currently facing droughts, plus Wyoming and Nevada, depend heavily on the Colorado River Basin, which includes the two largest man-made reservoirs in the United States, Lake Mead and Lake Powell, for water. The river is a lifeline, providing water to more than 40 million people. In 1922, seven states including California and Arizona, signed the Colorado River Compact which governed the allocation of water to the different states. But when leaders were dividing up the river, they overestimated how much water it could actually supply. Overallocation, coupled with development and growing populations, has left the river strained.

        Who owns water? The US landowners putting barbed wire across rivers -- As Scott Carpenter and a few friends paddled down the Pecos river in New Mexico last May, taking advantage of spring run-off, the lead boater yelled out and made a swirling hand motion over his head in the universal signal to pull over to shore. The paddlers eddied out in time to avoid running straight through three strings of barbed wire obstructing the river. Swinging in the wind, the sign hanging from the fence read “PRIVATE PROPERTY: No Trespassing”. One member of their party waded into the swift water to lift the wire with a paddle for the others to float under. As they continued downstream, Carpenter, a recreational boater from Albuquerque, looked over his shoulder a see a figure standing outside the big ranch house up the hill. He offered a wave, but received nothing in return. Sign up for monthly updates on America’s public lands It’s a scene playing out with increasing frequency in New Mexico, where a recent bid to legally privatize streams has public users like Carpenter more than a little alarmed, not least for the precedent it might set beyond the borders of this western state. While the fight over US public lands has reached a fever pitch unlike anything seen in recent decades, and the Trump interior department seeks to lease out vast areas to private interests for mining and drilling, the fate of public waterways has largely flown under the radar. Now New Mexico has become a battleground for that very issue, with the state government, landowners, and outfitters on one side of the fight and anglers, boaters, recreationalists and heritage users on the other. At the heart of the argument: who owns the water that has long been considered the lifeblood of the arid west. 

        February and Winter 2018 were warmer than average for the U.S. – NOAA - A warmer-than-average February in many parts of the country helped boost winter temperatures across much of the West and along the East Coast, bringing spring and even summer-like conditions in some spots. This contrasted with cooler-than-average conditions in the Northern High and Central Plains. Here’s how February and meteorological winter 2018 fared in terms of the climate record:   The average temperature during meteorological winter for the contiguous U.S. was 34.0 degrees F, 1.7 degrees above average, ranking it among the warmest third in the 124-year record, according to scientists from NOAA’s National Centers for Environmental Information. Much of the East Coast and West had a warmer-than-average winter.The average precipitation total for this winter was 6.26 inches, a 0.53 inch below average, ranking among the driest third in the record. The season was marked by regional precipitation extremes: Large areas of the West, Plains and Southeast were drier than average, while the Northern Rockies, Midwest and Lower-Mississippi Valley were wetter than average. The average temperature for the contiguous U.S. in February was 35.4 degrees F, 1.6 degrees above average, ranking among the warmest third. Abnormally warm conditions spanned the East and parts of the Southwest, with below-average temperatures in the Northern Rockies and the Great Plains. The precipitation total for the month was 2.84 inches, 0.71 of an inch above average, making it the sixth wettest February on record, the wettest since 1998. Record precipitation fell over a large part of the central U.S., yet parts of the West, Central Plains and Southeast were drier than average.

         U.S. weather forecaster sees 55 pct chance of La Niña waning during March-May (Reuters) - The current La Niña phase of the climate cycle will most likely transition during the March-May season to ENSO-neutral conditions, a U.S. government weather forecaster said on Thursday, a development that brings equatorial Pacific Ocean temperatures, rainfall patterns and winds closer to average. The ENSO-neutral condition, affected by neither the El Nino nor La Nina climate phenomenon, is expected to last into the second half of 2018, the National Weather Service's Climate Prediction Center (CPC) said. The CPC's monthly forecast pegged the chance of ENSO-neutral conditions at about 55 percent during the March-May period. The projection was unchanged from last month when the agency said the La Niña weather cycle was likely to transition into more neutral conditions by spring. La Niña is characterized by unusually cold ocean temperatures in the equatorial Pacific Ocean and is linked with floods and droughts. It is the opposite phase of what is known as the El Niño Southern Oscillation (ENSO) cycle. La Niña emerged in 2016 for the first time since 2012, before fading in early 2017. Typically less damaging than El Niño, La Niña tends to occur unpredictably every two to seven years. During a La Niña year, winter temperatures are warmer than normal in the Southeast United States and cooler than normal in the Northwest, according to the U.S. National Ocean Service. The Southwest typically sees drought conditions during a La Niña cycle as a high-pressure ridge prevents storms moving west from the Pacific to the states of New Mexico and Arizona. 

        Short-Lived La Nina Fades Away as Pacific Ocean Warms Up - The shortest La Nina in almost a decade has ended, just three months after it began. Sea surface temperatures have warmed steadily since December and are now in the neutral range, Australia’s Bureau of Meteorology said in a statement on Tuesday. Most models indicate a neutral pattern will persist into the Southern Hemisphere autumn and winter, it said. La Ninas happen when the Pacific’s surface cools and the atmosphere above it reacts, disrupting weather patterns around the world. The most recent event dried out fields from Kansas to Texas and parched soy crops in parts of Argentina. While the weak and short-lived La Nina had relatively little effect on Australian rainfall over the past summer, previous patterns have brought flooding rain to the country’s coal-mining regions and inundated farmland. The U.S. last week said there’s a 62 percent chance the Pacific Ocean would return to a neutral phase between April and June. Researchers have detected warmer water building below the ocean’s surface, according to the Climate Prediction Center. The latest La Nina was the shortest since 2008-09, according to the Bureau of Meteorology, citing records dating back to 1980. The Pacific Ocean slowly swings between three states, running from cold to normal to warm. 

        Natural disasters are costing farming billions of dollars a year -- Natural disasters from droughts to floods are costing farmers in poorer countries billions of dollars a year in lost crops and livestock, and it’s getting worse thanks to climate change.Agricultural losses from weather events in developing nations totaled $96 billion in a decade through 2015, with Asia accounting for half the amount, according to the United Nations’ Food & Agriculture Organization. In addition to climate issues, sectors from forestry to aquaculture face risks from problems such as market volatility, diseases and conflicts, the FAO said in a report.“This has become the ‘new normal,’ and the impact of climate change will further exacerbate these threats and challenges,” FAO Director-General Jose Graziano da Silva said in a statement. Natural disasters have become more frequent and intense since the 1980s, presenting challenges for about 2.5 billion people who depend on agriculture, the FAO said. Small-scale farmers, fishermen and other communities around the world generate more than half of all agricultural production, according to the Rome-based organization. Almost a quarter of all financial losses caused by natural disasters in the decade through 2015 were borne by the agricultural sector, the FAO study showed. About 4 percent of potential output is lost to disasters. An average of 260 natural disasters occurred in developing countries each year from 2005 to 2016, according to the FAO. Economic losses from climate- and weather-related events have been growing, and while the impact for 2017 hasn’t been calculated yet, the most violent hurricane season on record should confirm the trend, it said. “The rising incidence of weather extremes will have increasingly negative impacts on agriculture," Disasters often have long-lasting consequences on agriculture, including harvest and livestock losses, outbreaks of disease and damaged infrastructure and irrigation systems.

        First-of-its-Kind Study Points to Higher Levels of Ocean Microplastics - Scientists and environmentalists have raised the alarm about microplastics polluting our oceans. Now, researchers at the University of Manchester have revealed more details of how they might get there.The first ever catchment-wide microplastic study, published March 12 in Nature Geoscience , assessed microplastic contamination in the sediments of river beds along 40 sites in northwest England. Researchers discovered microplastics in every river bed they studied. But when they returned to the sites after a period of extensive flooding, they found that 70 percent of the microplastics had been washed out to sea. "We are only beginning to understand the extent of the microplastic contamination problem in the world's rivers. To tackle the problem in the oceans, we have to prevent microplastics entering river channels," Jamie Woodward, one of the study's authors and a professor at the University of Manchester, said in a universitypress release .On one site along the River Tame, the researchers found 50 percent more microplastic particles than had previously been recorded in one place, The Guardian reported . But the study's implications extend far beyond the Manchester watershed. Since flooding flushed 43 billion plastic particles out of the studied rivers, researchers concluded that the current five-trillion estimate for plastic particles in the oceans is far too low. "This is a small to medium sized catchment in the north of England, it is one flood event, it is just one year—there is no way that [five trillion global] estimate is right," Rachel Hurley, another of the study's authors, told The Guardian.

        A weaker Gulf Stream means trouble for Coastal New England – The rugged coast of New England has never recorded a one-two high-water punch like it’s gotten this winter with the nor’easters dubbed Grayson (4 January 2018) and Riley (2-3 March 2018). These storms produced two of the three highest water levels ever measured in Boston Harbor, and both of them produced widespread damage along the Massachusetts coast, with many water rescues carried out. Nearly a million people along the East Coast remained without power on Monday, reported shore. In the longer range, there’s a more ominous outlook. Sea level is expected to rise even faster along the Northeast U.S. coast than in most places around the world, thanks in large part to effects related to a weakening Gulf Stream. The renowned ferocity of nor’easters will thus play out atop a progressively rising sea surface, making coastal impacts progressively worse unless adaptation efforts can keep pace.  In records going back to 1921, here’s how the two big nor’easters of 2018 rank in terms of water levels in Boston Harbor:

        • Grayson: 4.88’ above MHHW (mean higher high water), highest on record; previous record 4.82’ on 7 February 1978 during the infamous Blizzard of ’78
        • Riley:  4.4’ above MHHW, third highest on record, behind only the Blizzard of ’78 and ahead of the 3.92’ observed on 2 January 1987.

        As shown in Figure 1 below, water levels on par with Grayson would be expected only about once every 100 years in Boston Harbor in today’s climate. The odds of getting two storms of the magnitude of Riley and Grayson in the same year are in the ballpark of several thousand to one—if we assume that the climate is not changing. Climate change makes such events more likely, though, through rising sea levels. Whether or not climate change makes intense nor'easters like Riley and Grayson more common is uncertain, as we discuss below.

        Gulf Stream emerging as sea level rise "wild card" for Hampton Roads  - Early in the fall of 2015, over a period of a few weeks, the tides in Hampton Roads rose well beyond what was predicted – as much as three feet higher, enough in some cases to flood low-lying roads throughout the region.Tal Ezer had an idea about what might be contributing to the problem, and the Old Dominion University oceanography professor knew where to look – an obscure website that compiles a daily average of waterpouring through a strait between Florida and the Bahamas. What it showed was a dramatic slowing in something known as the Florida Current, a section of the Gulf Stream, the mighty offshore river that rages up the coast before veering northeast toward the open Atlantic off Cape Hatteras.Hurricane Joaquin had been banging around the Bahamas around that time, and its fierce winds and the waves they created blasted hard against the headwaters of the Gulf Stream. As the current decelerated, water levels climbed higher along much of the East Coast. The episode drove home the importance of the Gulf Stream to coastal sea levels at a time when flooding is becoming more persistent. And it suggested something more ominous: If the current slackens permanently, as some climate change models predict, scientists say that’s bound to cause even more flooding in places like Hampton Roads. Only a small slowdown in the Gulf Stream could add more inches to the two to six feet of sea level rise already predicted before the end of this century. “For a place like Norfolk, this is a potential wild card that really needs to be considered,” said William Sweet, who researches tides, currents and sea level rise for the National Oceanic and Atmospheric Administration.

        Attack of the extreme floods - Extreme sea-level events can send water pouring over coastal barriers, swamping people’s homes and drowning crucial infrastructure. They’ve happened, for example, in New Orleans in Louisiana and the surrounding region — still recovering from more than US$100 billion in damages caused by Hurricane Katrina in 2005 — and in Jacksonville, Florida, where Irma swamped parts of the city under 2 metres of water, trapping residents and closing bridges and the city’s international airport.Globally, mean sea level is rising by just over 3 millimetres a year, as glaciers and ice caps melt and warming ocean water expands. Researchers have typically focused on understanding the causes and rate of that rise. But swelling seas are also expected to affect extreme sea levels, with devastating effects. In the coming decades, 100-year floods — those that have a 1% chance of hitting in a given year, or an average return interval of 100 years — could occur as often as every year or two. Across Europe, the cost of coastal flooding could rise by more than a factor of 20 by the year 21001. And in some regions, the intensity of what constitutes a 100-year flood will become much more severe.Wahl and a small band of colleagues say that more scientists need to pay attention to the shifting nature of these calamitous events and how they will affect those living near the coast. Such floods will be one of the biggest threats that humanity faces in the future, he says. “When we talk about flood risk, at some point we have to deal with extreme analysis. It’s those high-impact, low-probability events that we really have to worry about.” By combing historical records and using models to estimate the risk2, Wahl and others are making strides in predicting the dangers of such events. The conclusions vary with location. Some coastal communities will face a dangerous rise in the number of extreme sea-level events. Others are likely to be more prone to ‘nuisance’ flooding — inundations that swamp streets and make life difficult for residents but have less-dramatic overall effects.

        This dire ocean scenario is a stark reminder of why the world is trying to stop climate change -   Scientists on Thursday published an alarming scenario for what could happen to the planet’s oceans and fisheries by the year 2300 if very high levels of global warming are allowed to continue. The study finds that in a future world of extreme warming, after Antarctic sea ice collapses and oceans are altered, large volumes of essential nutrients could become trapped in the Southern Ocean. That could impair the growth of tiny marine organisms that form the base of the food chain in other parts of the world ocean, thus triggering a 20 percent decline in fishery yields overall, including a 60 percent drop in the Atlantic. This would occur because the Southern Ocean near Antarctica is a key site of “upwelling,” in which deep ocean waters, which have picked up such nutrients as phosphorous and nitrogen from the depths (which end up there after marine organisms die and their bodies sink), rise and deliver that biological bounty to the surface. Then, the nutrients enter the global ocean circulation and are carried northward to more moderate climes. But if warming gets severe enough, Southern Ocean upwelling can be suppressed by warm ocean surface waters. Meanwhile, many of the nutrients that do manage to rise will be consumed by the increasingly active biology of the mostly ice-free ocean around Antarctica — leaving far fewer nutrients for the rest of the world. In this case, as organisms in the Southern Ocean die, more nutrients again sink to the bottom of that ocean, and stay there. “So you have nutrients building up in the deep ocean, down where the biology can’t use them or get to them,” 

        Lakes on Greenland Ice Sheet Drain in Chain Reaction, Destabilizing Sheet and Raising Sea Levels --  A study published Wednesday in Nature Communications signals bad news for the Greenland ice sheet.A research team led by the University of Cambridge found that the lakes of meltwater that form on the ice sheet in the summer drain in a chain reaction that increases the flow of the ice sheet, destabilizing it and increasing sea level rise , the University of Cambridge reported in a press release .It had long been known that these lakes could drain quickly on an individual basis. They can last months, then drain through more than one kilometer (approximately 0.621 miles) of ice within hours. However, this study used a combination of observation and three-dimensional modeling to show that the lakes do not drain in isolation. Instead, the melting of one lake can trigger the melting of lakes up to 80 kilometers (approximately 49.71 miles) away.The process begins when a lake drains and the water it contained ends up on the bottom of the ice sheet. This causes the sheet to flow faster, which destabilizes it and leads to the formation of more fractures. Other lakes then drain through these new fractures in a chain reaction that can speed the flow of the ice sheet by up to 400 percent.

        Extreme winter weather becoming more common as Arctic warms, study finds  - The sort of severe winter weather that has rattled parts of the US and UK is becoming more common as the Arctic warms, with scientists finding a strong link between high temperatures near the pole and unusually heavy snowfall and frigid weather further south.A sharp increase in temperatures across the Arctic since the early 1990s has coincided with an uptick in abnormally cold snaps in winter, particularly in the eastern US, according to new research that analyzed temperature data from 1950 onwards.Extreme cold winter weather is up to four times more likely when temperatures in the Arctic are unusually high, the study found. Researchers compared daily temperatures from across the Arctic region with something called the accumulated winter season severity index, which grades winter weather based on temperature, snow fall and snow depth, across 12 US cities.“There’s a remarkably strong correlation between a warm Arctic and cold winter weather further south,” said Judah Cohen, a climatologist at Atmospheric and Environmental Research. “It’s a complex story – global warming is contributing to milder temperatures but is also having unforeseen consequences such as this.” The Arctic has just experienced its toastiest winter on record, with parts of the region 20C (68F) warmer than the long-term average, a situation scientists have variously described as “crazy,” “weird,” and “simply shocking”. The far north latitudes are warming around twice as quickly as the global average, diminishing glaciers and sea ice and imperiling creatures such as polar bears. Two large winter storms recently swept the US east coast in less than a week, unloading up to three inches of snow per hour in places, resulting in several deaths, thousands of cancelled flights, closed schools and snarled traffic.  The US storms follow freezing winds from Siberia – dubbed the ‘beast from the east’ – that battered parts of Europe, with the British army deployed to help liberate hundreds of stranded drivers on UK motorways. “This winter is a great example of what we can expect from climate change,”

        The fast-melting Arctic is already messing with the ocean’s circulation, scientists say -  Scientists studying a remote and icy stretch of the North Atlantic have found new evidence that fresh water, likely melted from Greenland or Arctic sea ice, may already be altering a key process that helps drives the global circulation of the oceans. In chilly waters on either side of Greenland, the ocean circulation “overturns,” as surface waters traveling northward become colder and more dense and eventually sink, traveling back southward toward Antarctica at extreme depths. This key sinking process is called convection. But too much fresh water at the surface could interfere with it, because with less salt, the water loses density and does not sink as easily. In the new research, Marilena Oltmanns and two colleagues at the GEOMAR Helmholtz Center for Ocean Research in Kiel, Germany, found that following particularly warm summers in the remote Irminger Sea, convection tended to be more impaired in winter. In some cases, a layer of meltwater stayed atop the ocean into the next year, rather than vanishing into its depths as part of the overturning circulation, which has sometimes been likened to an ocean “conveyor belt.” “Until now, models have predicted something for the future … but it was something that seemed very distant,” said Oltmanns, the lead scientist behind the research, which was published this week in Nature Climate Change. “But now we saw with these observations that there is actually freshwater and that it is already affecting convection, and it delays convection quite a lot in some years,” she continued. One caution is that this is an observational study, not a prediction for the future — and Oltmanns said “nobody really knows” how much freshwater is enough to significantly slow or shut down the circulation, which is technically called the “Atlantic meridional overturning circulation,” or AMOC. Still, it suggests that key processes that have raised long-standing concern are already happening. 

        U.S. Insurance Companies Underwrite Fossil Fuels, Deny Homeowners - U.S. insurance companies are trying to have it both ways on climate change , underwriting and investing in fossil fuel companies but raising premiums or denying coverage to homeowners impacted by increased floods and wildfires , Jacques Leslie wrote in an Op-Ed for The Los Angeles Times Tuesday. Leslie pointed to a December 2017 study by California's Department of Insurance which showed that instances in which insurance companies refused to renew coverage to homeowners in fire-prone counties increased by about 15 percent between 2015 and 2016. "Insurers are increasingly using computer models to assess the risk of fires for individual homes and deciding that homes in some areas face too high a risk," Insurance Commissioner Dave Jones said in a press release about the study. Jones recommended legislation that would ensure Californians living in high-fire-risk areas could continue to insure their homes. Meanwhile, a 2014 Ceres study found that the investment portfolios of the 40 largest U.S. insurance companies contained a higher proportion of oil and gas bonds than average, Leslie wrote. The attitude of U.S. insurance companies is particularly striking because, internationally, insurers are waking up to the real risks posed by fossil fuels. An insurance scorecard published in November 2017 by Unfriend Coal, which Leslie cited, found that 15 insurance companies are divesting $20 billion from coal companies and declining to underwrite coal projects.

        Puerto Rico Update: Forests, Power, Depopulation, and Privatization -  Lambert Strether - In this post, I’ll do a quick survey of the topics listed in the headline, starting with forests. When we get to power, we’ll see that restoration in the interior might be complete by May — just in time for 2018’s hurricane season! Weather Underground:  Much of the Caribbean lies in ruins after the terrific beatings administered by the twin demon Category 5 hurricanes of 2017, Irma and Maria…   The preliminary death toll from Harvey is 84, and is 95 from Irma. Hurricane Maria, though, may be responsible for over a thousand deaths. New research that has not yet gone through peer-review puts the indirect death toll from Maria in Puerto Rico at 1,085 and rising…  I say “survey” because I’m skimming the surface for each topic; if I dug deeper, I fear that the enormous tangle of pathways to misfortune that I’d find simply wouldn’t be tractable (as we will see Naomi Klein say, in her own way, when we conclude). That’s not good news for other portions of the continental United States that may will experience disasters[1].

        'Climate Change' Removed From FEMA's Strategic Plan --Last year, one of the hottest years in modern history, was also the costliest year ever for weather disasters, setting the U.S. back a record-setting $306 billion in spending aid and relief cost. But it appears the Federal Emergency Management Agency ( FEMA ), the agency that responds to hurricanes , flooding and wildfires , is ignoring a critical factor that exacerbates these natural disasters: climate change . On Thursday, FEMA released its Strategic Plan for the next four years, which replaces the Obama-era version that made repeat mentions of climate change. The new document does not mention the terms "climate change," " sea level rise " or even " extreme weather ." The only phrasing that comes close is "rising natural hazard risk" and "pre-disaster mitigation," without mentioning what drives those risks.  The plan states: "Disaster costs are expected to continue to increase due to rising natural hazard risk, decaying critical infrastructure, and economic pressures that limit investments in risk resilience. As good stewards of taxpayer dollars, FEMA must ensure that our programs are fiscally sound. Additionally, we will consider new pathways to long-term disaster risk reduction, including increased investments in pre-disaster mitigation."

        Pruitt’s Climate Change Debates Nixed by Kelly --White House Chief of Staff John F. Kelly put a stop to Environmental Protection Agency ( EPA ) head Scott Pruitt 's plan to hold nationally-publicized debates on the science of climate change , The New York Timesreported Friday. According to the Times , Pruitt had been developing the idea since before June 2017, when he told the board of the American Coalition for Clean Coal Electricity that the EPA was working on a "red-team-blue-team" challenge to mainstream climate science .Anonymous sources familiar with the matter told the Times that President Trump had liked the idea, but Kelly and other White House officials worried about its political consequences."Their main concern was that a public debate on science—particularly on an issue as politically charged as the warming of the planet—could become a damaging spectacle, creating an unnecessary distraction from the steps the administration has taken to slash environmental regulations enacted by former President Barack Obama," Lisa Friedman and Julie Hirschfeld Davis wrote in the Times.

        EPA’s Pruitt says ‘California is not the arbiter’ of the nation’s emissions standards -  Environmental Protection Agency Administrator Scott Pruitt said Tuesday that EPA is not planning to set stricter fuel economy standards beyond 2025 and questioned whether states such as California should be able to enact their own tougher emissions rules for cars and light trucks. In an interview with Bloomberg TV, Pruitt said that California — which has a waiver under the 1970 Clean Air Act giving it authority to set its own auto emissions standards — cannot dictate vehicle emissions across the country. The Obama administration reached a 2009 deal with California and the auto industry that set the first carbon limits on tailpipe emissions. In 2012, the EPA and the National Highway Traffic Safety Administration, a part of the Transportation Department, adopted rules requiring cars and light trucks to average 54.5 miles per gallon overall by 2025. President Trump and Pruitt announced last year that they would revisit the emission standards for model years 2022 to 2025, and EPA must announce by April 1 whether those limits can be attained or should be changed. “California is not the arbiter of these issues,” Pruitt said. While California sets state limits on greenhouse gas emissions, “that shouldn’t and can’t dictate to the rest of the country what these levels are going to be.” Officials in California, who are crafting their own vehicle standards through model year 2030, have suggested that they might be open to relaxing their 2025 standards in exchange for the federal government agreeing to establish national emissions limits that extend to 2030. But in his interview Tuesday, Pruitt indicated he had no interest in such a deal. “Being predictive about what’s going to be taking place out in 2030 is really hard,” he said. “I think it creates problems when you do that too aggressively. That’s not something we’re terribly focused on right now.” 

        Interior Officials Are Citing Coal Execs And Crank Bloggers To Defend Climate Stances ― Top officials at the Department of the Interior cited former coal executives and crank bloggers to challenge the overwhelming evidence of the threat posed by man-made climate change, according to department emails released through a Freedom of Information Act request by former Interior scientist Joel Clement.On Sept. 26, Indur Goklany, a science and technology policy analyst at the Interior Department, cited a study briefing from a group called CO2Science, highlighting a selective finding that some plankton communities may benefit from increased levels of carbon dioxide, which causes the oceans to acidify. CO2Science is the shortened nickname for the Arizona-based Center for the Study of Carbon Dioxide and Global Change, an oil-funded think tank run by former Peabody Energy executive Craig Idso. Rebekah and Robert Mercer, the hedge fund billionaires who bankrolled candidate Donald Trump’s presidential campaign and funded the right-wing news site Breitbart, donated $125,000 to the organization last year. On Aug. 14, Goklany ― whose degrees are in electrical engineering, according to his website ― sent an email to Doug Domenech, the assistant secretary for insular areas at Interior, which handles U.S. island territories like Guam. In the email, Goklany rejected data in a New York Times story detailing the threat Guam faces from climate change, claiming it “doesn’t show any acceleration in sea level rise due to man-made global warming or whatever.”He then linked to a “very good article” from “Watts Up With That,” a blog run by former television meteorologist Anthony Watts that promotes doubt over the existence and causes of climate change. The article ― a diatribe republished from another climate change denier website and written by Kip Hansen, a blogger whose primary concern appears to be challenging New York Times stories about climate change ― suggests, without evidence, that massive coral reef bleaching is a natural phenomenon, and states that the existence of mountains on Guam makes sea level rise unconcerning.

        Solar Geoengineering: Risk of ‘Termination Shock’ Overplayed, Study Says - Solar geoengineering, or "solar radiation management" (SRM), is perhaps the most controversial of the different ways of limiting human-caused climate change . A commonly voiced objection to the technique is the risk of "termination shock"—the rapid rebounding of global temperatures if SRM is deployed and then suddenly stopped. But a new research article, published in Earth's Future , argues that this risk has been "significantly overestimated." There are numerous ways to prevent termination shock from occurring, the researchers say, and also to ensure that an SRM program is resilient to physical, political or economic interruptions in the first place. However, despite their findings, the best way to protect against termination shock is "to cut CO2 emissions rapidly so that SRM is not needed for managing climate risk," the lead author told Carbon Brief .  SRM describes an array of methods—all of which remain hypothetical—for artificially reducing how much sunlight reaches the earth's surface in order to dampen global warming. These include "seeding" clouds, spraying aerosols into the atmosphere, or blocking sunlight with mirrors in space. Implementing SRM would require overcoming a series of technical, political and ethical challenges, which have been the subject of robust debate for some time.

        Massive X-Class Solar Storm To Slam Earth Tomorrow, Could Knockout Satellites, Power - A solar storm caused by an X-Class solar flare facing directly towards earth is likely to hit tomorrow. The brunt of the activity will be in the higher latitudes, however the aurora it generates could result in Northern Lights as far south as Michigan and Maine, as well as parts of Scotland and Northern England. #Solarstorm & #Aurora 5-day Outlook: Fast #solar wind hits this week! Expect storm levels at high-latitudes. #Aurora may reach northern USA. #Hamradio & #GPS issues on night side. In each table, top row shows what conditions are expected, bottom shows possible maximum activity. — Dr. Tamitha Skov (@TamithaSkov) March 13, 2018 The solar storm and #aurora that's due over the next few days. It also explains why Northern Greenland barely ever gets any #NorthernLights! — Alex Hibbert (@alexhibbert) March 13, 2018 The X-class flare was the first of two, according to NASA. It is the largest in 2018, as well as one of the largest in the sun's current cycle known as the solar minimum which began in 2007. The arrival of the storm could leave commercial flights and GPS systems vulnerable to disruption - however the storm is currently considered a G-1, or "minor geomagnetic storm," which could become more serious depending on how the charged particles hit the earth. Below is a visualization of a Coronal Mass Ejection (CME)

        Biofuels can help solve climate change, especially with a carbon tax - There has been extensive conversation recently about biofuels and how they may help solve the climate problem.The term “biofuels” has many meanings, but basically they are grown fuels (like corn ethanol) that we can use instead of fossil fuels (like petroleum). While biofuels can be any fuel produced from plant material, historically they have been produced from food crops such as corn and soy. But, new technologies are enabling biofuel production from non-edible gases, wood, and other plant waste material.The beauty of biofuels is that they suck carbon dioxide out of the air as they grow. When we burn them in our automobiles, we release carbon dioxide, but it is the same carbon that the plants absorbed while growing. Just on that basis, biofuels appear to be zero net emitters.But this view is too simplistic. It takes energy to grow biofuels; it takes fertilizer, tractors, transportation, and energy to convert the plants to liquid fuels. Planting and growing these crops can also change how much carbon is stored in the soil. And using existing food crops or arable land for biofuel production might lead to deforestation if farms are expanded elsewhere to make up for lost food production. So, if you want to accurately assess the impact of biofuels, you need to look at what’s called a “life cycle analysis,” which basically means the effort it takes to grow the crops, harvest them, convert them to fuel, transport them to distribution sites, and combust them.  The trick was finding clean crops that don’t need a lot of fertilizer, water, and other inputs. Corn ethanol for instance is not the best choice. You need so much water, fertilizer, and other costs, that it almost doesn’t make it worthwhile. But other crops such as switchgrass, grown on marginal lands, have real a potential. Marginal lands are farmlands that are not optimal for growing crops.  Our conclusion in 2009 was straightforward. Don’t use good cropland for biofuels. Rather, use marginal croplands, with minimal water and fertilizer, to create plants that can be converted to biofuels.

        Project Would Make '100-Year Battery' for Renewables Out of MT Landscape - A proposed project in central Montana would create a huge battery for renewable energy sources out of the natural landscape.  The Gordon Butte Pumped Storage Project is a closed-loop hydroelectric facility created from two reservoirs – one at the bottom of the ridge and the other 1,000 feet above it.  Sources such as wind and solar would pump water to the upper reservoir to create stored potential energy. When the wind stops blowing or the sun isn't shining, energy could be released.  Carl Borgquist, president and CEO of Absaroka Energy, the company heading the project, says it would make renewables more reliable and that the battery itself would be environmentally friendly."The first maintenance cycle on this facility is at year 27,” he states. “So this is a 100-year battery. It doesn't really wear out, ever. It can be cycled back and forth from complete discharge, let's say, back to full storage without creating any degradation."The facility would be located near Martinsdale. It's already received a license from the Federal Energy Regulatory Commission and is seeking financing for its $900 million construction. Absaroka is banking on the Pacific Northwest, where energy consumption is large and there is growing interest in powering the grid through renewables.Borgquist says the project may cost more to build than other batteries but that it is inexpensive to operate and cleaner, since it only uses water and not typical battery chemicals such as lithium. The project would also be situated near transmission lines that stretch from Colstrip in eastern Montana to the Northwest.

        Pumped hydro energy storage in Australia – Snowy 2.0 vs. sea water - To support a 100% renewable electricity sector Australia will need approximately 10 terawatt-hours of long-term energy storage. The multi-billion-dollar Snowy 2.0 pumped hydro project will supply only 0.35 terawatt-hours, a small fraction of this, and conventional pumped hydro potential elsewhere in Australia, including Tasmania, will not fill the gap. This post addresses the question of whether Australia might not do better to pursue sea water pumped hydro instead of Snowy 2.0-type projects. Sea water pumped hydro potential in Australia is limited by the lack of suitable coastal topography, but there are sites capable of storing very large amounts of sea water at distances of more than 20km from the coast. The question is whether these sites can be developed and operated at acceptable cost. First we must establish how much energy storage Australia will need to support all-renewables electricity mixes of the types envisioned by Blakers et al. I don’t have the data necessary to make a firm estimate, but in this previous post I estimated that between 2.8 and 4 TWh would be needed over a three-month period, which as I noted at the time “will underestimate long-term storage requirements, quite possibly by a large amount.” I have no way of knowing how much larger the amount might be, but 10 TWh (10,000 GWh) is a good round number, so in the absence of more definitive data I have used this as Australia’s “target”. First, the Snowy 2.0 pumped hydro project. Details are available in the Snowy 2.0 feasibility study and are summarized thus in Snowy Hydro’s summary web page:

        The Week of The Beast Unplugged -  Euan Mearns - From 26th February to 5th March 2018, the UK and indeed most of Northern Europe was gripped by severe cold weather blowing in from Siberia. The event was Christened the Beast From the East by UK press. The conditions were harsh, not just sub-zero temperatures and snow but high winds that created life-threatening conditions.In this post I present the electricity generating statistics for the month 13 February to 12 March. The key point I want to make is that during the week of The Beast the UK’s remaining 10.6 GW of coal ran flat out day and night for 8 days. I think the time has come for the UK Government and National Grid to explain how they plan to keep the lights on when they close down this coal capacity by 2022-2025. There are two main objectives of this post 1) to document the precarious state of the UK grid during late February and early March 2018 when easterly winds brought Siberia to Europe and the UK. All dispatchable sources of electricity were running flat out, we were running short of gas and asking industrial suppliers to reduce consumption.  And 2) to raise the question about how the UK grid could stay afloat without the current 10.6 GW of coal that the UK government proposes to close down by 2022-2025? A third equally important question is to examine the origins of the advice given to the UK government on energy policy. This advice places the economy and population in great peril and the motives of those giving it must surely be questioned.

        Statoil to rebrand as Equinor in green energy push (Reuters) - Norway’s Statoil plans to change its name to Equinor, reflecting its commitment to become a broad energy company rather than one focused only on oil, it said on Thursday. In a video posted on social media, Statoil presented the switch as a way to show its determination to develop investments in renewable energy. Reactions by various social media users were mixed. “Equinor sounds like a princess on a horse in Game of Thrones,” one Twitter user said. “Equi” is the genitive singular in Latin for “horse”. Others liked the change. “Congratulations on an exciting name change. The green shift is happening faster and faster. Norway must be a part of it. Good luck with the process,” tweeted Norwegian Culture Minister Trine Skei Grande. Equinor is a combination of “equi”, the starting point for words like equal, equality and equilibrium, and “nor” for Norway, the company said. “Reflecting on the global energy transition and how we are developing as a broad energy company, it has become natural to change our name,” Statoil CEO Eldar Saetre said in a statement. Rebranding would cost up to 250 million Norwegian crowns ($32.5 million), he later told a news conference. Statoil, which is headquartered in the port city and oil industry hub of Stavanger, has come to symbolize Norway’s rise in the past half-century to one of the world’s richest nations. Local newspaper Stavanger Aftenblad ran a straw poll asking readers whether they liked the name change, with 4,730 people saying “no” and 809 saying “yes”. 

        Cyberattacks Put Russian Fingers on the Switch at Power Plants, U.S. Says -- The Trump administration accused Russia on Thursday of engineering a series of cyberattacks that targeted American and European nuclear power plants and water and electric systems, and could have sabotaged or shut power plants off at will. United States officials and private security firms saw the attacks as a signal by Moscow that it could disrupt the West’s critical facilities in the event of a conflict. They said the strikes accelerated in late 2015, at the same time the Russian interference in the American election was underway. The attackers had compromised some operators in North America and Europe by spring 2017, after President Trump was inaugurated. In the following months, according to a Department of Homeland Security report issued on Thursday, Russian hackers made their way to machines with access to critical control systems at power plants that were not identified. The hackers never went so far as to sabotage or shut down the computer systems that guide the operations of the plants. Still, new computer screenshots released by the Department of Homeland Security on Thursday made clear that Russian state hackers had the foothold they would have needed to manipulate or shut down power plants. “We now have evidence they’re sitting on the machines, connected to industrial control infrastructure, that allow them to effectively turn the power off or effect sabotage,” said Eric Chien, a security technology director at Symantec, a digital security firm. “From what we can see, they were there. They have the ability to shut the power off. All that’s missing is some political motivation,”

        The Mountain West Is Experiencing A Second Gold Rush. This Time They’re Mining Bitcoin. -- On a cold, damp, February evening, roughly 70 residents of Bonner, Montana, population 1,633, filed into the cafeteria of the local elementary school to talk about their new neighbors. Specifically, they were there to complain about “the roar.”  Over decades, they’ve grown used to the sounds coming from the building when it was a lumber mill. But the new occupants were industrialists of a different sort, and the roar was the sound of rows of servers and fans feverishly whirring in an effort to solve complex cryptographic puzzles that could unearth digital money. In recent months, with bitcoin’s value and cultural prominence rising spectacularly, dozens of cryptocurrency mines have popped up in the rural West, following in the geographic footsteps of a previous gold rush. Lured by cheap rent and wide-open space, they’re bent on bringing “mining” back to a region that was largely defined by pulling precious materials from the earth — only this time, the gold is digital.  In January, an unknown company working in the blockchain space purchased 67,000 acres at the Tahoe-Reno Industrial Center in Nevada, right next to Tesla’s Gigafactory. At the end of February, a Utah-based company called Power Block Coin LLC announced a plan to invest $251 million over the next three years in Butte, Montana, to build a campus of mining data centers. And here in Bonner, a town of less than 2 square miles nestled along the winding banks of Western Montana’s Blackfoot River, one of North America’s largest bitcoin mines has set up shop. The locals have questions — about how it all works, about how cryptocurrency mining might revitalize the area’s sluggish economy, and most important, about whether it can be trusted to stay in the region for the long-term. Could a cryptocurrency boom could be the region’s best chance to revitalize old industry towns? Or it will these companies elbow their way in, only to disappear if and when the bubble bursts?

        EPA drops rule requiring mining companies to have money to clean up pollution - President Donald Trump's administration announced Friday that it won't require mining companies to prove they have the financial wherewithal to clean up their pollution, despite an industry legacy of abandoned mines that have fouled waterways across the U.S. The move came after mining groups and Western-state Republicans pushed back against a proposal under former President Barack Obama to make companies set aside money for future cleanup costs. U.S. Environmental Protection Agency Administrator Scott Pruitt said modern mining practices and state and federal rules already in place adequately address the risks from mines that are still operating. Requiring more from mining companies was unnecessary, Pruitt said, and "would impose an undue burden on this important sector of the American economy and rural America, where most of these jobs are based."The U.S. mining industry has a long history of abandoning contaminated sites and leaving taxpayers to foot the bill for cleanups. Thousands of shuttered mines leak contaminated water into rivers, streams and other waterways, including hundreds of cases in which the EPA has intervened, sometimes at huge expense.The EPA spent $1.1 billion on cleanup work at abandoned hard-rock mining and processing sites across the U.S. from 2010 to 2014. Since 1980, at least 52 mines and mine processing sites using modern techniques had spills or other releases of pollution, according to documents released by the EPA last year.

        Court: EPA broke law with smog rule delay | TheHill: The Trump administration broke the law when it missed a deadline last year in implementing the Environmental Protection Agency’s (EPA) ozone pollution rule, a federal court ruled Monday. EPA Administrator Scott Pruitt was supposed to announce by Oct. 1 which areas of the country were in compliance with the 2015 Obama administration rule. Pruitt later announced findings for areas that comply, but not for areas that do not. Judge Haywood Stirling Gilliam Jr. of the federal District Court for the District of Northern California said Monday that Pruitt broke the law, and ordered him to publish the findings for almost all of the rest of the country by April 30. “There is no dispute as to liability: Defendants admit that the administrator violated his nondiscretionary duty under the Clean Air Act to promulgate by October 1, 2017, initial area air quality designations,” Gilliam wrote, citing a January court filing by the Justice Department acknowledging that the EPA missed the deadline. An EPA spokeswoman said the agency is moving forward on the designations. The decision is one in a string of court losses the Trump administration has faced in its ongoing mission to change, delay or undo the Obama administration’s aggressive environmental agenda. Other recent decisions have faulted the Energy Department for blocking energy efficiency rules and both the EPA and Interior Department for delaying methane regulations. 

        Is coal waste leaching into America’s drinking water?   At more than 70 sites across the country, toxins like arsenic, mercury, and radium are leaching into groundwater from pond-like storage pits filled with the sludgy leftovers of coal burning. That’s the most alarming takeaway from reports that the coal industry was required to submit to the Environmental Protection Agency this month, part of the first-ever federal regulations of the waste product known as coal ash. And yet, one day after the data was made public, EPA Administrator Scott Pruitt announced his plan to overhaul President Barack Obama’s 2015 coal ash rule, which requires companies to continuously inspect coal ash storage pits for leaks and monitor the surrounding areas for contamination. Coal companies and electric utilities had told him in May that these requirements were too expensive, and in September he said it would be “appropriate and in the public interest” torethink them. Now, Pruitt is proposing more than a dozen changes, including giving states and power utilities more control over how they dispose of coal ash and how often they test for groundwater contamination. Scientists and environmental watchdogs have long known that coal ash pits—of which there are more than a thousand in the United States—were leaking toxins into groundwater. “The data released is consistent with data we’ve seen before, and also measured before, that showed shallow wells underlying most everywhere are being affected by leaking coal ash,” said Avner Vengosh, a geochemist and coal ash researcher at Duke University. But this new data puts a glaring spotlight on what scientists don’t know: Where, exactly, that contamination is going, and whether it’s affecting the drinking water of nearby communities. “This data is restricted to monitoring at the site of the coal ash ponds,” Vengosh said. “We don’t know whether drinking water wells nearby have been affected.”

        Coal exports produced record jump in production - Increased demand for coal exports offset a slight decline in domestic coal consumption to give 2017 the largest year-over-year tonnage increase since 2001, according to the Energy Information Administration. “Even though U.S. coal consumption decreased, higher worldwide demand for U.S. coal led to greater coal production,” the agency said. The final tally, which is still subject to revision, puts 2017 coal production at 773 million short tons, a 45 million ton increase over 2016. The international demand mainly came from Asia and Europe. Exports to Asia were about 31 million tons, twice the amount that was shipped in 2016, the agency said. European markets bought about 40 million tons, an increase of 13 million tons from 2016. By comparison, domestic consumption was about 719 million tons, a 12 million ton decrease from 2016.

        Coal miners put halt to South Africa renewables - Two unions representing coal interests have put a halt to the signing of 27 renewable energy power purchase agreements (PPAs), thus effectively stopping South Africa’s renewables industry in its tracks. The National Union of Metalworkers of South Africa (NUMSA) and Transform RSA NPC – went to the North Gauteng High Court in Pretoria at the eleventh hour to “obtain an urgent court interdict to prevent Eskom from concluding the power purchase agreements.” In a statement, NUMSA wrote, “NUMSA believes that the signing of these contracts would be detrimental for the working class of Mpumalanga and the country as a whole. The signing of the IPP means that Eskom will require less coal fired electricity. This is likely to lead to the closure of the coal fired power plants and the impact will be that at least 30 thousand working class families will suffer because of job losses.”

        Zimbabwe’s coal output set to quadruple - Zimbabwe has attracted around $300 million in its coal industry that will quadruple production next year versus 2017, its mining minister told an investment conference in London on Thursday. The country, which says its abundant mineral resources include more than 40 exploitable minerals, is seeking to lure foreign investment to reboot its economy after a coup that pushed out veteran leader Robert Mugabe last year. Minister of Mines and Mining Development Winston Chitando said interest had focused on coal, as well as on lithium and platinum. He was speaking to investors in London, attending his first conference on Zimbabwe outside Africa since taking office. In Cape Town in February, he had said battery mineral lithium was among the most popular deposits. He told London investors coal output in Zimbabwe would reach more than 8 million tonnes next year compared with around 2 million in 2017. Speaking to Reuters on the sidelines of the conference he said that followed investment of around $300 million. He did not name the investors. Zimbabwe says it is trying to develop solar power too, but needs to address its energy needs, which are responsible for around 25 percent of its import bill because of a shortfall in domestic generation. Many miners see a strong business model in coal as a high-margin business and a cheap way to generate power in remote African communities.

        South Australia poll offers voters a choice of clean or cheap power - South Australians go to the polls on Saturday in a tight race with big implications for national politics and foreign investment in a state with the most wind and solar power, but the highest electricity prices in the country. While its outcome will not dislodge Prime Minister Malcolm Turnbull, the vote presents a choice between renewable energy, pushed by South Australia’s center-left Labor government, and coal, backed by Turnbull’s conservative government, which has mocked the state’s “big experiment” in wind and solar energy. Labor and Liberals are running almost neck-and-neck, with support of 30 percent and 32 percent respectively, the latest Newspoll on the South Australian election showed.

        Czech Tycoon Earmarks $1.2 Billion to Buy Europe’s Old Coal Plants - Czech energy magnate Pavel Tykac is ready to spend 1 billion euros ($1.2 billion) of his own cash on aging coal and gas-fired power plants across Europe. He’s betting the dirty generators will be needed for decades to supplement the green power that’s taking a bigger role at utilities from Germany to Britain. “The media bubble around clean energy doesn’t reflect reality,” said Alan Svoboda, an executive director of Seven Energy, the utility and lignite miner owned by Tykac. “Our fundamental assumption is that these conventional assets will be needed in the near future to balance the grids.” Tykac is looking at potential acquisition targets in countries from Germany to the U.K. and Italy.  Governments across Europe are stepping up efforts to reduce pollution by phasing out coal use, unsettling the outlook for conventional power generators. RWE AG, Germany’s biggest energy producer, just added green generation assets to its fleet of coal plants in the utility industry’s biggest shakeup in years. But as solar and wind power flood Europe’s grid, Tykac and his team reckon fossil-fuel plants are still needed to make up the shortfall in generation when the sun isn’t shining or the weather is calm. This situation may last another two decades, especially after Germany shuts all its nuclear power plants by 2022, Svoboda said in an interview.

        South Korea fuel oil imports soar as coal, nuclear plants shut -South Korea’s move to shut coal-fired generators to control air pollution at the same time as nuclear reactors are going into scheduled maintenance is resulting in surging fuel oil imports. South Korea’s trade ministry said in February it would suspend five coal-fired power plants, with a combined capacity of 2.32 gigawatts, from March to June, part of a broad campaign to reduce pollution. That plan may backfire, at least in the short-term. A cold winter has raised power and heating demand, forcing utilities to burn more fuel oil in order to meet demand. A by-product of the crude oil refining process, fuel oil’s biggest use ahead of power generation is as a shipping fuel.  Fuel oil imports by power producers into Asia’s fourth largest economy have jumped to 200,000 tonnes in March so far, up from 92,000 tonnes in February, tender data compiled by Reuters showed. First-quarter fuel oil imports are expected at 417,000 tonnes, up 28 percent from a year ago and already more than 60 percent of the 660,000 tonnes taken for all of last year.  Burning fuel oil for power results in lower carbon dioxide emissions than coal-fired plants, but releases more toxic particles into the air.

        China Plans to Build Multiple Nuclear Reactors in 2018 - China’s plan to focus on nuclear power will include constructing six to eight new reactors and bringing five reactors online in 2018, the National Energy Administration (NEA) announced last week. With this plan in place, the country will raise its total nuclear-generating capacity by as much as 6 gigawatts. In its Energy Work Guidance Opinion for 2018, the NEA stated, “China’s installed nuclear generating capacity would be boosted by a total of 6 gigawatts this year with the start-up of the Sanmen 1 and Haiyang 1 AP1000s, the Taishan 1 EPR, the Tianwan 3 VVER-1000 and the Yangjiang 5 ACPR1000.” Beijing aims to raise the country’s total installed nuclear capacity from 35.8 gigawatts to 58 gigawatts by the end of the decade.

        Global demand rising for Russian-built nuclear power plants - Russia's state nuclear corporation Rosatom expects to sign foreign contracts worth $26 billion this year for the construction and maintenance of nuclear power plants, official data shows. According to its results for 2017, Rosatom’s portfolio of foreign orders for the next decade totals $133.6 billion. The company traditionally calculates its portfolio of orders for a period of 10 years. Head of Rosatom Alexei Likhachev told reporters that the firm hopes to exceed the $130-billion mark. The Russian company has recently inked agreements on nuclear cooperation with India, Iran, Egypt, China, and a number of other countries. It is bidding to construct 16 nuclear power plants in Saudi Arabia. The corporation will also help Japan to clean up after the accident at the Fukushima nuclear power plant. The assistance was offered by Russian President Vladimir Putin in 2017. Officials say the decommissioning of the wrecked Fukushima reactors will take several decades, and – according to some estimates – the cost could reach $200 billion. 

        Nuclear fusion on brink of being realised, say MIT scientists - The dream of nuclear fusion is on the brink of being realised, according to a major new US initiative that says it will put fusion power on the grid within 15 years. The project, a collaboration between scientists at MIT and a private company, will take a radically different approach to other efforts to transform fusion from an expensive science experiment into a viable commercial energy source. The team intend to use a new class of high-temperature superconductors they predict will allow them to create the world’s first fusion reactor that produces more energy than needs to be put in to get the fusion reaction going. Bob Mumgaard, CEO of the private company Commonwealth Fusion Systems, which has attracted $50 million in support of this effort from the Italian energy company Eni, said: “The aspiration is to have a working power plant in time to combat climate change. We think we have the science, speed and scale to put carbon-free fusion power on the grid in 15 years.” Fusion is the fundamental energy source of the universe, powering our sun and the distant stars. The process involves light elements, such as hydrogen, smashing together to form heavier elements, like helium, releasing prodigious amounts of energy in process. The promise of harnessing fusion energy is limitless, safe, zero-carbon energy. The problem is that the process only produces net energy at very high temperatures of hundreds of millions of degrees – too hot for any solid material to withstand. To get around that, fusion researchers use magnetic fields to hold in place the hot plasma, a gaseous soup of subatomic particles that fuels the process, to stop it melting through the metal reactor. The ultimate goal of fusion research, yet to be achieved, is creating a fusion reactor that produces more energy than it took to ignite and contain the process. 

         ‘Citizen scientists’ track radiation seven years after Fukushima -  Beneath the elegant curves of the roof on the Seirinji Buddhist temple in Japan's Fukushima region hangs an unlikely adornment: a Geiger counter collecting real-time radiation readings. The machine is sending data to Safecast, an NGO born after the March 2011 Fukushima nuclear disaster that says it has now built the world's largest radiation dataset, thanks to the efforts of citizen scientists like Seirinji's priest Sadamaru Okano. Like many Japanese, Okano lost faith in the government after the nuclear meltdown seven years ago. "The government didn't tell us the truth, they didn't tell us the true measures," he told AFP, seated inside the 150-year-old temple. Okano was in a better position than most to doubt the government line, having developed an amateur interest in nuclear technology two decades earlier after learning about the Chernobyl disaster. To the bemusement of friends and family, he started measuring local radiation levels in 2007, so when the disaster happened, he had baseline data. "The readings were so high... 50 times higher than natural radiation," he said of the post-disaster data. "I was amazed... the news was telling us there was nothing, the administration was telling us there was nothing to worry about." 

        US may want to keep Idaho nuclear waste plant running longer — U.S. officials are considering extending the use of an eastern Idaho nuclear waste treatment facility beyond its scheduled closure this year so it can repackage radioactive waste brought in from other states before it’s sent to a permanent disposal site in New Mexico. The U.S. Department of Energy’s Advanced Mixed Waste Treatment Plant at a site that includes the Idaho National Laboratory was originally set to stop operating after it finished treating waste from Idaho this year. But the Energy Department is considering keeping the $500 million plant that employs about 600 workers running. “The department has been looking at where to take waste from other DOE sites and treat it,” Energy Department spokesman Brad Bugger said last week. “Hanford has a very significant volume of waste that could be treated at Idaho.” Hanford, a sprawling Energy Department site in eastern Washington state that contains more than 50 million gallons of radioactive and toxic wastes in underground storage tanks, is a former nuclear weapons production area. The Idaho treatment plant handles transuranic waste that includes items like work clothing, rags, machine parts and tools that have been contaminated with plutonium, americium or other radioactive elements. The U.S. Nuclear Regulatory Commission says transuranic wastes take much longer to decay and are the most radioactive hazard in high-level waste after 1,000 years. The Idaho treatment plant compacts the transuranic waste, making it easier to ship and put into long-term storage at the Waste Isolation Pilot Plant in New Mexico

        Radiation Risk Rises with Polar Air Routes and Ultra-Long-Hauls - Ionizing radiation is a permanent feature of the upper atmosphere, where the protection we take for granted on the surface is significantly thinner. At airlines’ cruising altitude, particles periodically ejected by the sun and cosmic radiation coursing through the universe are 100 times more potent than down below. Still, the exposure for every extra-long trip across the globe is roughly equivalent to one X-ray. That is, except for two regions: the poles. The planet’s magnetic field helps to minimize radiation for most latitudes, but that shield tends to dissipate at extreme north and south. Airline employees are already the most vulnerable to workplace radiation, but the growing number of polar and long-haul routes may make the hazard worse. A flight from Germany to Southeast Asia can be just as long as one to the western U.S., but the risks can be very different, given that the latter goes “over the top” of the world. “If I go to Los Angeles or San Francisco, it’s going to be the highest dosage in our network, whereas when I go to New Delhi or Singapore, it’s about a third of those doses,” . “There’s no way you can be a pilot and not get this exposure.” Airline employees face more radiation exposure than radiology workers or nuclear power plant engineers, according to the National Council on Radiation Protection and Measurements. Such exposure is measured using the Sievert. A dose of 4 Sieverts or more at once is often fatal. A CT scan of your head is about 2 milliSieverts (mSv), or two-thousandths of a Sievert, roughly what you’d get going about your daily life for eight months. Generally, a U.S. pilot or flight attendant receives a cumulative annual exposure as high as 5 mSv.  “There’s no way you can be a pilot and not get this exposure.”

         New West Virginia law seen to help operators boost production - Natural gas producers in West Virginia hope that a new law passed by the state Legislature and signed by the governor will help spur production in the state, which in recent years has seen a dramatic ramp-up in gas output from the Marcellus Shale play. Governor Jim Justice signed Friday the co-tenancy bill, which would allow drilling to take place on a tract of land if 75% of royalty owners agreed. The legislation amends current state law, which had allowed owners of a small minority stake in a given tract block development of that land. The legislation gathered the support of producer groups in West Virginia. Charlie Burd, executive director of the Independent Oil and Gas Association of West Virginia, said the bill would make it easier for operators to acquire more individual tracts of land and to be able to accumulate those contiguous tracts in a way that would allow them to drill longer laterals, which are rapidly becoming the industry norm in the Appalachian Basin. "IOGA West Virginia is very excited to see that bill finally pass," Burd said in an interview. Burd said the legislature forged a compromise bill that would protect the rights of operators and the majority of royalty owners on a given tract of land, while protecting the rights of minority royalty owners and other stakeholders. "There was a lot of confusion in the past about what this bill would do. Those who oppose it still wanted to cause confusion up to the end, but it's a very simple bill," he said. Gas production in West Virginia has grown quickly in recent years as producer-backed pipeline capacity expansions and a buildout in gas processing infrastructure have enabled large Appalachian drillers such as EQT Energy and Antero Resources to bolster their output. A concentration of acreage among the state's top producers has also led to a trend of longer well laterals, driving efficiency gains and boosting initial production rates and ultimately recovered volumes from wells drilled, Platts Analytics has found.

        WV DEP orders Rover Pipeline to stop construction, citing multiple violations - State regulators have slapped a cease-and-desist order on a natural gas pipeline, citing multiple water pollution violations, according to a letter made public by the West Virginia Department of Environmental Protection. The 713-mile-long Rover Pipeline, which would transport 3.25 billion cubic feet of natural gas per day from processing plants in West Virginia, Ohio and Pennsylvania, received the order on March 5 from Scott Mandirola, director of the Division of Water and Waste Management, documents show. According to the order, DEP officials conducted inspections on four days in February, during which they said they found 14 violations in Doddridge, Tyler and Wetzel counties. The alleged offenses include leaving trash and construction debris partially buried on site, improperly installing perimeter control and failing to inspect or clean public and private roads around the construction site.  The pipeline, owned by Energy Transfer Partners, has been ordered to halt construction until state regulators inspect the site and determine that Rover Pipeline LLC is complying with the Water Pollution Control Permit issued Dec. 15, 2016. Rover also is tasked with submitting a plan of “corrective action,” due March 25, and installing devices to control erosion and sediment-water release. Energy Transfer Partners also owns the Dakota Access Pipeline — the subject of protests in North Dakota last year. The cease-and-desist order is the second the DEP has issued to the Rover Pipeline in the past year; state regulators cited the pipeline builders for similar violations in July 2017. Earlier that year, in April, the pipeline spilled more than 2 million gallons of drilling fluid in Ohio, eliciting scrutiny from regulators there. That’s a red flag, said Angie Rosser, executive director of the West Virginia Rivers Coalition. “When I see repeated violations, I say it’s time for this company to stop doing business in this state if they can’t do it responsibly,” she said.

        'The Harms of Fracking': New Report Details Increased Risks of Asthma, Birth Defects and Cancer - The most authoritative study of its kind reveals how fracking is contaminating the air and water – and imperiling the health of millions of Americans "Our examination…uncovered no evidence that fracking can be practiced in a manner that does not threaten human health," states a blistering 266-page report released today by Concerned Health Professionals of New York and the Nobel Peace Prize-winning group, Physicians for Social Responsibility. Drawing on news investigations, government assessments and more than 1,200 peer-reviewed research articles, the study finds that fracking – shooting chemical-laden fluid into deep rock layers to release oil and gas – is poisoning the air, contaminating the water and imperiling the health of Americans across the country. "Fracking is the worst thing I've ever seen," says Dr. Sandra Steingraber, one of the report's eight co-authors, a biologist who has worked as a public health advocate on issues like breast cancer and toxic incinerators. "Those of us in the public health sector started to realize years ago that there were potential risks, then the industry rolled out faster than we could do our science." In recent years, the practice has expanded from rural lands to backyards, farms, and within sight of schools and sources of drinking water. "Now we see those risks have turned into human harms and people are getting sick," says Steingraber. "And we in this field have a moral imperative to raise the alarm."

        From Asthma to Cancer, 'Blistering' New Report Details Human Cost of Fracking - A team of researchers on Tuesday released a " blistering " report on the serious public health threats—from headaches to asthma to cancer—posed by hydraulic fracturing, or fracking , a process of injecting a mix of water and chemicals into rocks to release oil and natural gas. The study described as "the most authoritative" of its kind—was published by Concerned Health Professionals of New York and Physicians for Social Responsibility. Researchers found that "by several measures, evidence for fracking-related health problems is emerging across the United States and Canada." Looking to Pennsylvania—a hotbed for fracking—as an example, the report says that "as the number of gas wells increase in a community, so do rates of hospitalization, and community members experience sleep disturbance, headache, throat irritation, stress/anxiety, cough, shortness of breath, sinus, fatigue, wheezing and nausea.""Drilling and fracking operations are also correlated with increased rates of asthma, elevated motor vehicle fatalities, ambulance runs and emergency room visits and gonorrhea incidence," according to the report, for which researchers analyzed thousands of journalistic investigations, government research and peer-reviewed scientific articles. The report also notes that levels of benzene "in ambient air surrounding drilling and fracking operations are sufficient to elevate risks for future cancers in both workers and nearby residents," and "animal studies show numerous threats to fertility and reproductive success from exposure to various concentrations of oil and gas chemicals, including at levels representative of those found in drinking water ."

        'Almanac' Compiles Health Risks From the Drilling Practice. — Health professionals have released their fifth compilation of data and reports showing the risks of fracking. Over the past five editions, scientific and medical findings in the compendium have grown, adding weight to the argument that oil and gas drilling are harmful to communities. One of the authors of the report, Sandra Steingraber, is a biologist and co-founder of Concerned Health Professionals of New York. She said people near fracking sites face the same kind of health risks, whether they're in Texas, Pennsylvania or North Dakota."We see signs of respiratory distress among people living close to drilling and fracking sites,” Steingraber said. “Most alarming to us, we see signs of impaired development among newborns born to pregnant women whose residences are close to drilling and fracking sites during their pregnancies." Steingraber said there are increased rates of illness and cancer near fracking sites, and there are greater risks in the air and water. Radioactive waste also is a concern.  She said there are more than 1,000 studies on fracking and 85 percent show the practice is harmful. The American Petroleum Institute disputes these reports, saying fracking is safe and also provides economic benefits to communities.  But the compendium found that work in this sector is dangerous, with four to seven times the number of on-the-job fatalities compared with the national average. It's even more dangerous in North Dakota, where fatality rates are seven times the average for the rest of the industry.  Steingraber said economic gains for towns and cities usually are temporary because fracking wells don't have long lifespans. She added that the man camps set up for operations fracture family structures and also harm nearby communities. "We see signs of increased sex trafficking, increased drugs, violent victimization, traffic fatalities go up, and so on,” she said. “And so, particularly for women's health and safety, it really takes a hit when fracking companies come into town."

        Schwarzenegger planning to sue oil companies for 'knowingly killing people all over the world’ | TheHill - Former California Gov. Arnold Schwarzenegger (R) is planning to sue oil companies, alleging they are "knowingly killing people all over the world." Schwarzenegger said during an interview with Politico's "Off Message" podcast that he is still working on the timing for his push, but he is now speaking with private law firms. "This is no different from the smoking issue. The tobacco industry knew for years and years and years and decades that smoking would kill people, would harm people and create cancer, and were hiding that fact from the people and denied it. Then eventually they were taken to court and had to pay hundreds of millions of dollars because of that,” Schwarzenegger, a global environmental activist, said.“The oil companies knew from 1959 on, they did their own study that there would be global warming happening because of fossil fuels, and on top of it that it would be risky for people’s lives, that it would kill.” Schwarzenegger accused oil companies of being irresponsible and vowed to go after them. "It’s absolutely irresponsible to know that your product is killing people and not have a warning label on it, like tobacco,” he said. “Every gas station on it, every car should have a warning label on it, every product that has fossil fuels should have a warning label on it.” He said he hopes to spread awareness about the harmful effects of fossil fuels. “I don’t think there’s any difference: If you walk into a room and you know you’re going to kill someone, it’s first-degree murder," he said during the interview. "I think it’s the same thing with the oil companies.”

        Bottled Water, Brought to You by Fracking? -- The new Food & Water Watch report Take Back the Tap: The Big Business Hustle of Bottled Water details the deceit and trickery of the bottled water industry. Here's one more angle to consider: The bottled water business is closely tied to fracking . The report reveals that the majority of bottled water is municipal tap water, a common resource captured inplastic bottles and re-sold at an astonishing markup—as much as 2,000 times the price of tap, and even four times the price of gasoline. Besides being a rip-off, there is plenty more to loathe about the corporate water scam: The environmental impacts from pumping groundwater (especially in drought-prone areas), the plastic junk fouling up our waterways and oceans, and the air pollution created as petrochemical plants manufacture the materials necessary for making those plastic bottles filled with overpriced tap water. There is a growing international awareness that plastic is a serious problem. In 2016, about 4 billion pounds of plastic were used in the bottled water business, and most of those bottles are not recycled—meaning they often end up in landfills or as litter. There's also the matter of whether we should be putting our drinking water in those bottles in the first place: The most common packaging (polyethylene terephthalate, or PET) includes compounds like benzene, and the bottles can leach toxins like formaldehyde and acetaldehyde. But perhaps the biggest problem is where we get all this plastic in the first place. Many of the raw materials used to create those plastic bottles come from fracking. In addition to air and water pollution, the fracking boom has delivered an abundant supply of the hydrocarbon ethane, which is used in petrochemical manufacturing to create ethylene, which is turned into plastic.

        On pipeline route, some well owners ok with Sunoco’s water; others are wary - A field outside Bob and Deborah Hoffman’s Delaware County home is filled with orange construction fencing, a 20-foot industrial curtain blocking their view of some surrounding houses, and hundreds of yards of steel pipeline waiting to be laid as part of the controversial Mariner East project. On the lawn about 50 yards from their front door is a squat black tub known as a water buffalo, from which the Hoffmans get their water while the pipeline company, Sunoco, prepares to drill an underground bore where the pipe will be installed. The temporary water supply is being provided to the Hoffmans and other owners of private water wells along the pipeline route because of concerns that their water could turn cloudy or become contaminated as the company drills a path through the local aquifer. That happened last summer in Chester County’s West Whiteland Township, where some private water supplies turned cloudy after Sunoco punctured an aquifer during horizontal directional drilling for the pipeline. That incident, and others like it along the cross-state pipeline route, led to a court agreement last summer requiring Sunoco to offer temporary water supplies to owners of private wells within 450 feet of a planned drilling operation. Many affected homeowners in West Whiteland were connected to public water instead, at Sunoco’s expense. In Delaware County, the Hoffmans aren’t thrilled by having the black plastic tank on their lawn, but they have no complaints about the quality of the water, which they use for drinking, cooking, bathing and laundry. The couple agreed to compensation from Sunoco, which took about a quarter-acre of their land for construction. “When they started the horizontal drilling process, they gave you the option of whether you wanted to use potable water since they would be coming within 100 feet of the well, and I thought: ‘Sure, why not?’”

        Bankrupt Philadelphia refiner settles biofuel obligation with EPA: court filing (Reuters) - The U.S. Environmental Protection Agency granted a bankrupt Philadelphia oil refining company a reprieve from complying with the nation’s renewable fuel laws, according to a settlement agreement filed on Monday. The refiner, Carlyle Group-backed Philadelphia Energy Solutions (PES), filed for bankruptcy protection in January and asked a judge to waive some $350 million in compliance costs under the U.S. Renewable Fuel Standard, or RFS. The EPA and PES agreed on Monday that the refiner would only have to satisfy about half those costs, but would face more scrutiny moving forward, court documents showed. The settlement is facing early opposition from ethanol groups. The settlement comes amid a fight between powerful corn and oil interests in Washington over the future of the RFS program. President Donald Trump has sought to bring the two sides together in recent weeks to come up with reforms that can lower the cost for refiners without hurting demand for biofuels, wading into an issue that divides two important constituencies. The PES bankruptcy - and the potential loss of 1,100 jobs in a key electoral state - had fueled calls for change. The RFS requires refiners to blend biofuels like ethanol into their fuel or buy credits from those who do. PES, which lacks blending facilities, entered into bankruptcy owing 467 million credits from 2016 and 2017, with only 210 million credits in hand, the filing showed. The EPA said PES could comply with the program by turning over its available credits and would be excused from any shortfall, a huge win for the refiner. It said the deal would cover the company up until the point it exits bankruptcy. After exiting bankruptcy, PES would have to comply with the law on a semi-annual basis as opposed to annually and submit itself to more EPA scrutiny. It would face penalties for non-compliance with the agreement. 

        Murphy Administration Settles MTBE Pollution Cases for $200 Million -The Murphy administration yesterday said it has settled cases with three oil companies who have agreed to pay nearly $200 million for polluting water with a potential human carcinogen. Attorney General Gurbir S. Grewal announced approval of draft settlements reached by the Christie administration to resolve natural-resources damage lawsuits against the three defendants involving contamination of groundwater with an additive to gasoline. The cases involve a decade-old lawsuit filed against nearly 50 companies alleging they were responsible for polluting state waters with the gasoline additive, methyl tertiary butyl ether (MTBE). The state Department of Environmental Protection has found the potential human carcinogen at over 6,000 sites. MTBE was an additive to gasoline approved by the federal Environmental Protection Agency in 1979 to help make the fuel burn cleaner and lower carbon monoxide pollution from vehicles. At the time, the state was not in compliance with federal health-quality standards for the pollutant. "These are important legal settlements on behalf of New Jersey citizens — not only in terms of dollars, but in terms of sending a message that we are committed to working with the DEP to protect our state's natural resources and hold accountable companies that pollute,'' Grewal said in a statement from his press office. The initial lawsuit was brought by the Corzine administration in 2007 under a natural-resources damage case, which allows the state to recover the costs for the spills and to restore the natural resources damaged by the pollution. 

        The power generation drivers of East Coast gas demand growth -  The worst of this winter’s cold has passed, but the impact of structural changes in U.S. power generation will be felt in natural gas markets for years to come. The generation mix has been changing rapidly in recent years, and the switch from coal to gas is happening at an even faster pace on the East Coast than in the country overall. This switch reflects both coal-plant retirements and ongoing competition between remaining coal plants and gas plants. But low-cost gas supplies in the Marcellus and Utica plays don’t always have ready access to the biggest consuming markets, and this winter, we saw how the increasing call on gas for Eastern power generation can stress the gas pipeline grid and cause price blowouts. Today, we continue a series on Eastern power generation and prices by untangling the sources and drivers of gas-fired generation growth in the region. In Part 1 of this series, we looked at the contagion in high East Coast gas prices this winter. We found that U.S. gas demand for power generation is increasing structurally, though volatile weather and gas prices can sometimes obscure this trend. Also, we noted that on the coldest days a high percentage of the gas flowing to areas with limited pipeline capacity is committed to serving residential and commercial heating customers. During these frigid periods, the power sector is sometimes forced to turn to more expensive alternative fuels such as imported liquefied natural gas (LNG) or fuel oil for power generation as far south as the Carolinas. Today, we’ll address the where and why of power demand growth for gas to date along with the prospects for continued growth.

        LNG tanker Patris scheduled to arrive at US Cove Point terminal in April: Platts cFlow - As Dominion Energy prepares for commercial service to start at its Cove Point LNG export terminal, a new tanker was listed Monday as headed to the Maryland facility, after a previous one changed its destination, data compiled by S&P Global Platts vessel tracking software cFlow shows.The BP chartered Patris, which entered service in February and was ordered by a partnership between K Line Shipping and Greek vessel owner Chandris, is currently in the Arabian Sea and scheduled to arrive at Cove Point on April 9, the data shows. It has a draught history that indicates the tanker is partly laden, which means it would be in a position to pickup LNG.Cove Point has both import and export capabilities. A Dominion spokesman did not respond to a request for comment, and previously the company has refused to provide any updates to the timing of commercial service. BP officials did not immediately respond to a request for comment on the Patris' plans. The company had previously said that commercial service at Cove Point, under contracts with Gail India and a joint venture involving Japan 's Sumitomo and Tokyo Gas, would begin in early March. There has been reduced feedgas activity at the facility since March 2 when Dominion shipped its first commissioning cargo, joining Cheniere Energy as the only US exporters of LNG produced from shale gas. Cove Point has not reported any feedgas volumes delivered to the plant since Dominion received regulatory approval on March 5 to begin commercial service for exports, data from S&P Global Platts Analytics shows.

        New York governor requests to exclude state from offshore drilling program  (Reuters) - New York Governor Andrew Cuomo on Friday said he had formally asked for the state to be excluded from a federal offshore drilling program that he said would threaten its ocean resources and endanger efforts toward a cleaner energy economy. “New York State strongly opposes the Department of the Interior’s National Outer Continental Shelf Oil and Gas Leasing Program as it poses an unacceptable threat to New York’s ocean resources, to our economy and to the future of our children,” Cuomo said in announcing the exclusion request. The five-year program, launched by the federal government in early January, proposes to make over 90 percent of the total U.S. offshore acreage available to oil and gas drilling. The plan would open two areas of the North Atlantic coast adjacent to New York State for fossil fuel exploration, according to a statement from Cuomo’s office. “As the number three ocean economy in the nation, New York stands to lose nearly 320,000 jobs and billions of dollars generated through tourism and fishing industries should the exclusion not be granted,” Cuomo said. “Instead of protecting our waters from another oil spill, like the one that devastated the Gulf, this new federal plan only increases the chances of another disaster taking place,” he said. Florida was granted exemption from the program on the grounds that the state relies heavily on tourism.  New York is one of several states that has asked to be exempted from the drilling plan, and Interior has said it is considering the requests and holding discussions with states as it finalizes the proposal over the coming months. 

        U.S. states slow Trump offshore oil drilling expansion plan (Reuters) - The Trump administration’s plan to broadly expand drilling in U.S. offshore waters is moving slowly due to opposition from coastal states and indifference from oil companies that have turned their focus to other opportunities. The administration hopes encouraging U.S. energy development outside of shale oilfields will further its goal of“energy dominance.” But existing Obama administration lease rules remain in place through 2022 unless the new rules gain approval. The Department of the Interior this year proposed opening vast new acreage in the U.S. outer continental shelf to drilling. The comment period wrapped up March 9. Still, Secretary Ryan Zinke said last week he remained deep in discussions with state governors, some of whom have thrown up roadblocks that would impede or bar drilling off their coasts. A new outer continental shelf lease program proposes 47 lease sales, including areas that had not been offered since 1983. At least 12 states have sought exemptions, and Zinke has agreed to exclude areas off Florida. “On the five-year plan we made everything available to look at,” Zinke told Reuters at the CERAWeek energy conference in Houston. Governors from across the West Coast and much of the East Coast are meeting with the Interior and objecting to areas off their states for drilling. State discussions could last through year end. So far, officials in Alaska, Maine, Georgia and U.S Gulf Coast states other than Florida have said they were open to expanding drilling. California and other states have said they would deny needed permits for onshore services or transport. “You can’t bring energy ashore unless you have access to state waters,” Zinke said. 

        Trump Rollbacks Target Offshore Rules ‘Written With Human Blood’ - While attention has been focused on President Trump’s disputed decision in January to reverse drilling restrictions in nearly all United States coastal waters, the administration has also pursued a rollback of Obama-era regulations in the Gulf. Those rules include safety measures put in place after the explosion and sinking of the Deepwater Horizon rig in 2010, a disaster that killed 11 people and resulted in the largest marine oil spill in drilling history. Smaller oil and gas companies, many backed by Wall Street and private equity firms, say they need the relief to survive financially, and the top safety official at the Interior Department appointed by Mr. Trump has appeared an enthusiastic ally. “Help is on the way, help is on the way,” the official, Scott Angelle, said in September at a gathering in Lafayette, La., of oil and gas executives from so-called independent companies, which focus on drilling alone rather than the extended drilling-to-gas-station operations of bigger competitors. But an analysis of federal inspection data by The New York Times found that several of the independent companies seeking the rollback, including Energy XXI, had been cited for workplace safety violations in recent years at a rate much higher than the industry average. Their offshore platforms suffer in some cases from years of poor maintenance, as well as equipment failures or metal fatigue on aging devices, records show.

        Norfolk approves gas pipeline construction beneath drinking water reservoirs  -The City Council approved an easement Tuesday night that will allow Dominion Energy and its partners to build a natural gas pipeline underneath two of Norfolk’s drinking water reservoirs in Suffolk.  The 600-mile Atlantic Coast Pipeline, which is expected to run between West Virginia and North Carolina, would include a spur through Hampton Roads to a terminal in Chesapeake.To get there, the pipeline would run beneath the Lake Prince and Western Branch reservoirs in Suffolk, which are on property owned by Norfolk and supply much of the city’s drinking water.The council had delayed the vote twice as Norfolk waited for approvals from the Virginia Department of Environmental Quality, which had been pending for months.The project recently cleared several regulatory hurdles, including with the state agency.The pipeline is being built by Dominion Energy and other companies through a firm called Atlantic Coast Pipeline LLC. On Tuesday, the council voted 5-2, with one abstention, to grant the company easements to build the pipeline beneath the reservoirs. In exchange, the company will pay the city $500,000, up from an initial offer of $150,000.

        Dominion fails in attempt to bar testimony on pipeline's potential $2.3 billion hit for ratepayers -   Utility regulators at the State Corporation Commission have refused Dominion Energy’s request to strike expert testimony that claims its contentious Atlantic Coast Pipeline will cost its Virginia ratepayers as much as $2.3 billion extra on their bills. In an order released Monday on Dominion’s integrated resource plan, the long-range forecast on how the company will meet customer needs between 2018 and 2032, the commission allowed testimony by natural gas industry analyst Gregory Lander to remain part of the record. Lander, retained by environmental groups opposed to the 600-mile project, which Dominion has said will cut utility bills and boost employment, used the company’s own data to predict the pipeline will increase bills for Dominion’s nearly 2.5 million ratepayers between $1.6 billion and $2.3 billion. Environmental groups, including the Natural Resources Defense Council in Washington and the Southern Environmental Law Center in Charlottesville, took it as vindication of claims that the pipeline is a bad deal for Virginia. Dominion has argued the pipeline, which originated in a 2014 request for proposals issued by Duke Energy and Piedmont Natural Gas, is necessary to provide supply diversity for power plants in Virginia and North Carolina, avoid service shutoffs when demand spikes during cold weather, and aid economic development. Opponents contend that the project — which has swollen from an estimated price tag of $5.5 billion to as much as $6.5 billion and comes with a 14 percent rate of return guaranteed for the developers by the Federal Energy Regulatory Commission — isn’t needed, particularly in Virginia. Potential expansion of the project to South Carolina has driven that argument. “This is a speculative pipeline in search of a market and that market is not Virginia,” said Walton Shepherd, a Natural Resources Defense Council lawyer. “Not only is the proposed pipeline unneeded, it would burden Virginia ratepayers and therefore the Virginia economy.”

        GOP now wants federal prosecutors to probe pipeline deal  (AP) — North Carolina Republicans continue to attack Democratic Gov. Roy Cooper over a $57.8 million agreement his office reached with utilities poised to build the Atlantic Coast Pipeline. Now, the GOP hopes that criticism will garner the attention of federal prosecutors.  State Republican Party leaders asked Tuesday for a federal investigation of whether Cooper broke the law with the memorandum of understanding, calling it possible extortion by the governor for his personal or political benefit. GOP lawmakers and their allies have been persistent in going after Cooper over the agreement, saying it put the governor in control of funds that should be expended by the General Assembly. The legislature passed a law last month taking effect later this week that would intercept money coming from the agreement and earmark it for school districts along the route of the natural gas pipeline.Cooper and his office have defended the agreement and said that nothing unlawful was done. He and other Democrats have dismissed the new law redirecting the funds as a partisan power grab by Republicans.The money in the memo would have gone to environmental mitigation, economic development and renewable energy, but it lacked many details on how the funds would be distributed. Cooper's office announced the agreement the same day as state regulators approved a key permit, leading critics to suggest the permit was conditional upon the agreement."It's an obvious to pay-to-play situation," state Republican Party Chairman Robin Hayes said during a news conference outside a Raleigh federal building before giving a written request for an investigation to the U.S. Attorney's Office. "This is not a message that builds confidence in our citizens and it definitely sends a negative note and message to potential businesses looking at North Carolina."

        The North Carolina fracking boom that didn't happen - Once expected to join to join the fracking boom, North Carolina is now farther away from taking the plunge and is now more remarkable for its growth in alternatives like solar and wind.The Oil and Gas Commission, created by the legislature in 2014 during a headlong rush to open up the state to oil and gas exploration, was effectively shut down in 2016 as one of three commissions ruled unconstitutional in the landmark case McCrory v. Berger.The case, filed by then-Gov. Pat McCrory against the legislature, hinged on whether the legislature could make the majority of appointments to a body carrying out executive-branch functions. The outcome of the case, eventually decided by the state Supreme Court, effectively ended the work of the three commissions.In the case of the Oil and Gas Commission, the successor to the state’s Mining and Energy Commission, the main executive-branch function was overseeing inland oil and gas exploration through hydraulic fracturing, or fracking. This form of exploration involves horizontal drilling, a practice that was previously banned in the state under a 1945 law. When the legislature lifted the ban in 2014, the change was heralded as transformational to the state’s economy.McCrory and other supporters of both offshore and onshore oil and gas development said the state would soon be among the top energy producing states.When new rules were announced in 2015, following a public comment period that took in tens of thousands of comments and included four public hearings around the state, North Carolina Petroleum Council (NCPC) Executive Director David McGowan said the shale energy industry would lead to job creation and additional state revenues.“Energy is essential for economic growth and job creation,” said McGowan said in a statement. “Today’s announcement is a win for the people of North Carolina, putting the state on the cutting edge of energy production in America.”Now, just shy of three years later, a court ruling continues to block the state from issuing any drilling permits or receiving applications. The running count for both items remains at zero. Although not specifically addressed by the court, the fracking rules themselves are also on hold and would require further legal action by the state to take effect.

        Colonial Pipeline to pay Alabama $3.3 million for 2016 spills: state official   (Reuters) - Colonial Pipeline Co will pay $3.3 million to the state of Alabama to cover damages and penalties from an explosion and a spill on its gasoline line in 2016, the state’s attorney general said on Thursday. A combined 11,800 barrels of gasoline were spilled in rural Shelby County, causing pump prices to soar in much of the southeastern United States, which depends heavily for supplies on the Colonial pipeline system, the largest refined product pipeline system in the country. The settlement includes a $1.3 million civil penalty and $1.8 million in projects for the state. “This agreement first and foremost addresses the environmental damage to land and water caused by significant gasoline spills in Shelby County during 2016,” Alabama Attorney General Steve Marshall said in a statement. A nine-man crew was working on the Colonial pipeline system at the time of the Oct. 31 explosion, killing a worker and sending five to the hospital. More than 4,400 barrels spilled. The explosion was caused by an accidental strike to the pipeline by excavating equipment, the statement said. In the September incident, nearly 7,400 barrels leaked below ground, and was discovered by a mining inspector who was nearby doing unrelated work. Reports indicate the leak was caused by pipe fatigue that resulted from improper compaction of soil below that portion of the pipeline, the attorney general’s office said. The 5,500-mile (8,850-km) Colonial Pipeline transports more than 3 million barrels per day of fuel including gasoline, diesel and jet fuel from the U.S. Gulf Coast to the New York Harbor area. The pipelines that were shut run from Houston to Greensboro, North Carolina. 

        LNG exports driving physical gas flows, constraints at Henry Hub, part 2. - Natural gas flows and market dynamics are shifting at national benchmark Henry Hub. Supply receipts at Henry this year to date have doubled since the comparable period last year to nearly 450 MMcf/d, on average. That’s also a five-fold increase from the same period in 2016. In fact, current gas flows through the hub are the highest we’ve seen since 2009. The last time we saw this level of flows through the hub was when Gulf of Mexico offshore gas production volumes — much of which hit the U.S. pipeline system in southern Louisiana — were still topping 6.0 Bcf/d. That was also before the Marcellus/Utica Shale gas supply ballooned, effectively emptying out the pipeline capacity that used to flow gas north from the Gulf Coast. Now, many of those pipelines have reversed flows and the hub is showing signs of becoming a destination market for that Northeast gas and other supply targeting LNG export demand on the Gulf Coast. Today, we continue our short series looking at the changing physical flows at Henry Hub. In Part 1 of this series, we reviewed the role that Henry Hub — located in Vermillion Parish, LA — has played in the U.S. gas market historically — as a liquid national benchmark and delivery point for futures contracts and physical trades, but one that does not see a lot of physical gas flows. In the physical market, Henry gas volumes change hands innumerable times in a single trading day but, more often than not, only on paper using a unique title transfer mechanism called Intra-Hub Transfer (IHT). Similarly, in the futures market, while the CME/NYMEX Henry Hub natural gas futures contract is grounded by the physical assets in Henry, contract settlements rarely end in physical delivery. Thus, overall, the volume of physical flows of gas through the hub has always been disproportionately much lower than traded volumes, whether in the futures or physical market. Not only that, but as Figure 1 below illustrates, until a couple of years ago, physical flows through the hub were at the bottom of a prolonged decline trend that goes back at least a decade.

        Company urges appeals court to lift halt to pipeline work (AP) — A company building a crude oil pipeline in Louisiana asked a federal appeals court Tuesday for an order that would allow it to immediately resume construction work in an environmentally fragile swamp. A three-judge panel from the 5th U.S. Circuit Court of Appeals didn't immediately rule after hearing arguments from attorneys for Bayou Bridge Pipeline LLC and environmental groups opposed to the project. The company is seeking an emergency stay that would lift a court-ordered halt in pipeline construction in the Atchafalaya Basin. Company attorney Miguel Estrada said "time is of the essence" because water levels in the basin are rising due to the rainy reason. A permit issued by the U.S. Army Corps of Engineers requires the company to stop construction if river levels reach a certain height. Estrada said the company could resume work for weeks before water levels reach that threshold and possibly remain above it for several months. "We're hoping we can make up the lost time," he added. In court filings, environmental groups' lawyers said water levels already have reached a level that makes it unlawful for the company to resume pipeline construction in the basin. After the hearing, however, Earthjustice attorney Jan Hasselman said the company can still do "a whole lot of damage" if the 5th Circuit lifts the stay and allows the company to resume clearing a path for the pipeline in most of the basin. "What they wouldn't be able to do is actually finish the pipeline because they're prohibited from digging under the levees in a couple other places," he added. "We're in flood season. They can't finish the project until the end of the year at the very best, so there's no reason to lift the injunction." 

        Appeals court lifts halt to Louisiana pipeline construction   — A company may resume construction of a crude oil pipeline in a Louisiana swamp that has been on hold for nearly three weeks, an appeals court ruled Thursday.A lower-court judge had suspended construction of the Bayou Bridge pipeline in the Atchafayala Basin, but a divided three-judge panel from the 5th U.S. Circuit Court of Appeals agreed to lift that order.It remains to be seen, however, how much work Bayou Bridge Pipeline LLC will be able to complete before rising water in the basin forces another work stoppage, possibly lasting for months. Construction in the basin began in January.On Feb. 23, U.S. District Judge Shelly Dick sided with environmental groups and issued a preliminary injunction stopping all Bayou Bridge pipeline construction work in the basin until a lawsuit the groups had filed against the project is resolved. Sierra Club and other environmental groups sued the U.S. Army Corps of Engineers in January, saying it violated the Clean Water Act and other environmental laws when it approved a permit for the project.The appeals court panel’s majority opinion said the company is likely to succeed on the merits of its claim that Dick abused her discretion in granting the injunction. Dick should have allowed the case to proceed “on the merits” and sought additional information about the “deficiencies” she identified in her ruling, the opinion added.Judge W. Eugene Davis of the 5th Circuit dissented, saying he agreed with Dick that an environmental assessment of the project by the Corps did not comply with the National Environmental Policy Act.Earthjustice attorney Jan Hasselman said the latest ruling is a setback but “not the end of this fight.”“We will keep fighting in court to protect the Atchafalaya Basin and demand that oil and gas companies ... finally be held accountable for decades of carelessness, incompetence and greed,” Hasselman said in an email.

        LNG and pipeline reversals turn Louisiana gas market upside down - There was a time many moons ago when vast quantities of natural gas from offshore Louisiana production flowed through scores of gas processing plants along the coast, then moved north and east in pipelines destined for the Northeast and Midwest. Those flow patterns have since been turned on their head, with offshore production steadily declining and the need for gas supplies for LNG exports along the coast ramping up, driving gas southward to meet that demand. That southbound gas includes Haynesville production — now back in growth mode — and a deluge of inflows from the Marcellus/Utica on reversed pipelines and new pipes. Supply in northern Louisiana will continue rising, while demand in southern Louisiana will do the same. With Henry Hub at the epicenter of this transformation, the consequences not only for Louisiana but for the entire natural gas market will be far-reaching. Today, we begin a series to examine how Louisiana natural gas flowed historically, the shifts that have already happened, the impact of more changes just ahead, and what it all means for the future of natural gas in Bayou Country. We’ve been talking a lot about the pieces of this puzzle for the past few months in the RBN blogosphere. Fill Me Up Buttercup covered pipeline projects bringing more gas to the Gulf Coast via routes through Ohio and the Atlantic Coast. In Back With a Vengeance, we examined the who, what, where and how of Haynesville’s natural gas production resurgence. The link between soaring Marcellus/Utica production and LNG exports was the subject of Toe Bone Connected to the Foot Bone, and we covered the critical role LNG exports will play in balancing the U.S. gas market in I'm Movin' Out. In the past couple of weeks, we turned RBN’s analytical microscope on the Henry Hub, in Roll With Me Henry, where we assessed how flow patterns are already shifting around the most important trading hub in North America. But there is far more to this story than these individual market developments suggest. When you put them all together and do a rigorous analysis of Louisiana natural gas pipeline flows and capacity constraints, you reveal a picture of dramatic change, one that effectively turns Louisiana upside-down in terms of gas supply and demand. Which, of course, will have repercussions on prices, transportation values and basis.

        US energy pipeline developers to seek exemptions to steel tariff (Reuters) - U.S. energy pipeline developers say they intend to pursue exemptions to the Trump Administration’s proposed steel tariffs, as concerns grow for those companies and from key exporters to the United States like South Korea. “We have a number of pipeline projects that would be impacted significantly by this cost increase,” said Adam Bedard, chief executive of Arb Midstream, an energy transportation and marketing company. If exemptions become available, “we’d certainly try and qualify for it.” He was referring to the U.S. Commerce Department’s effort to devise a procedure for companies to apply to avoid paying a 25 percent tariff on imported steel or 10 percent on imported aluminum. Commerce has 10 days to come up with the procedure to apply for exemptions from the steel and aluminum tariff declaration issued last week. There is a national security exemption for U.S. companies to buy steel items that domestic manufacturers do not produce in the volumes or quality required. The president also said exemptions would be available to certain countries. Imports account for 77 percent of the steel used in U.S. pipelines, according to a 2017 study conducted for the pipeline industry. Some manufacturers already have customers waiting two years for pipeline to construct lines to carry shale oil and gas from West Texas fields to U.S. Gulf Coast export hubs. Energy trade associations fought for a way around the tariff. They argued that U.S. manufacturers either do not offer key metal grades or diameters, or have long production times that would impede development of shale oil and gas pipelines. 

        Record crude and gas production leads to record NGL production at just the right time, part 2. With U.S. NGL production hitting a record high of just over 4.0 MMb/d in the fourth quarter of 2017 and ethane production also reaching record volumes at 1.6 MMb/d, the price for ethane has remained stuck at about 25 c/gal — where it’s been for the past two years, even though prices for other NGLs are up over the same period. The combination of roaring high-ethane-content Permian and SCOOP/STACK NGL volumes, coupled with steam cracker outages and construction delays due to Hurricane Harvey, have landed us here. So where do we expect the ethane market to go now as incremental cracker and export demand ramp up in 2018 and 2019? Today, we continue a series on our updated NGL market forecast, highlighting the NGL product whose market is going through the most changes: ethane.  This is the second blog in our series on growing NGL production. In Part 1, we looked at raw-mix NGL production growth, which we forecast to increase from the 4.0 MMb/d reported in November 2017 to average 4.4 MMb/d for the year 2018, and 5.7 MMb/d of produced NGLs in 2023 under RBN’s Growth Scenario. The biggest driver behind the jumps in NGL production in 2018 and 2019 will be ethane production.  Before we get into the details of ethane supply, demand and prices over the forecast period, let’s first look at where we are today and why.

        Shell Changes Mind On Convent Refinery -- Louisiana -- You may remember this story, reported some time ago:Shell became the sole owner of the Convent refinery in May 2017 after it completed the transaction for the separation of assets, liabilities, and businesses of Motiva Enterprises LLC with Saudi Aramco. Under that deal, Aramco got the biggest refinery in the U.S., Port Arthur in Texas, while Shell received the Norco and Convent refineries in Louisiana. Shell had planned to permanently decommission the Convent refinery:  Initial plans were to permanently decommission the gasoline unit as part of a project to integrate the Convent plant with the 225,800-bpd refinery in Norco, Louisiana, through a network of pipelines.Shell has now changed its mind. The refinery will undergo a major overhaul this summer; gasoline production will halt for an unspecified period of time.Oil major Royal Dutch Shell halted gasoline production at its Convent, Louisiana, refinery between Thursday and Friday.As of Friday morning, it was not immediately clear how long the gasoline producing unit with processing capacity of 92,000 bpd would remain offline.The gasoline-producing unit of the 227,586-bpd Convent refinery was scheduled to undergo a major overhaul this summer, after Shell dropped its plans to decommission it.  Shell plans to shut for a planned overhaul the gasoline producing unit at Convent for some six weeks starting in June, sources familiar with the refinery’s plans told Reuters last month.

        Top Exxon executive confirms Gulf Coast oil-refining expansion (Reuters) - A top Exxon Mobil Corp official confirmed a multi-billion dollar plan under consideration to double U.S. light crude oil refining capacity along the U.S. Gulf Coast to take advantage of the nation’s growing shale oil production. FILE PHOTO: An airplane comes in for a landing above an Exxon sign at a gas station in the Chicago suburb of Norridge, Illinois, U.S., October 27, 2016. REUTERS/Jim Young/File PhotoExxon’s proposed project, which has not received a final investment decision, would be the first major expansion of gasoline and motor fuels production in the nation in six years. Exxon’s Beaumont, Texas refinery could become the nation’s largest by capacity when the work is complete in the next decade. Exxon expects to add a crude distillation unit (CDU) at its 362,300 barrel per day (bpd) Beaumont refinery and boost refining capacity at plants in Baytown, Texas and Baton Rouge, Louisiana, Senior Vice President Jack Williams said in a presentation to Wall Street analysts last week. “It’s really a full Gulf Coast upgrade,” Williams said, according to a transcript of the meeting confirmed on Monday by Exxon. The project has been under consideration for several years because of the increase in output from Texas and North Dakota shale fields. “We know this is going to be a long-term resource,” he said. Sources familiar with Exxon’s plans told Reuters in February that the company was near a final investment decision for a project to expand crude oil processing capacity at the Beaumont refinery to as much as 850,000 bpd. Williams said the project would increase the integration of Exxon’s Gulf Coast operations by supplying its Baton Rouge and Baytown refineries with products made at Beaumont, reducing third-party purchases. He called the plan “perhaps my favorite example on integration” because it couples production and refining across business groups. Exxon plans to invest $9 billion in six refinery projects globally in the next eight years and forecasts returns from its downstream to grow by 20 percent on average, the company said. The expansion would offer a new outlet for the rising shale oil production from the Permian Basin in west Texas and New Mexico, which is expected to overwhelm U.S. refining capacity in the next few years, said an analyst from energy consultancy IHS Markit. 

        Refiners, traders brace for fuel-market volatility ahead of sulfur caps (Reuters) - Global executives and traders are bracing for higher volatility in fuel markets as they expect refiners to process more light crude oil in the lead-up to new rules aimed at slashing the use of dirty high-sulfur fuel oil in global shipping.  Beginning in 2020, shipping vessels will not be allowed to burn fuel with a sulfur content higher than 0.5 percent, down from 3.5 percent currently. The International Maritime Organization (IMO) plan is among the most significant changes in decades for global shipping and refining. Large shipping vessels have traditionally run on high-sulfur fuel oil, produced after refiners have made higher-quality fuels like diesel or gasoline. High-sulfur fuel emits more pollution. “I think there will be a lot of volatility and uncertainty around this,” Jeremy Weir, chief executive officer of global commodity trading firm Trafigura said at the CERAWeek conference in Houston. The IMO rule changes will likely prompt refiners to boost processing of sweeter crude grades because they produce cleaner, low-sulfur fuels, several executives said. Once the rules take effect, the shipping industry will need to switch to either marine gasoil, low sulfur residual fuel oil or a blend of high sulfur and ultra low sulfur fuel. This could boost margins for companies operating complex refineries with large coking capacity. Refiners will likely process an additional 2.5 million barrels of crude daily to make additional distillate, said Robert Herman, executive vice president of refining at Phillips 66. 

        Will US shale give the refining industry indigestion? -- By the end of this year, the US oil industry will be pumping 11m barrels a day of crude, the highest in its history and more than either Russia or Saudi Arabia. These barrels, boosted by the shale revolution and increasingly exported, are seen as critical for keeping the market well supplied as a fast-growing global economy lifts demand for diesel, jet fuel and petrochemicals. But in the industry debate is growing, some would say concern, over just how well-suited the shale oil coming out of the US is for meeting this rising demand. The issue, critics say, is that US shale is far lighter — having been released through narrow fissures in rocks by hydraulic fracturing — than gloopy tarry crudes most people think of when they picture a barrel of oil. This has potentially huge implications because refiners, who turn crude into usable products, have spent decades investing in plants capable of processing far heavier oils that were once expected to dominate supply. The lighter shale barrels, some say, are just not as good for making the products — especially diesel, jet fuel and other so-called middle distillates — that the world increasingly needs. They warn of a potential crunch in years to come caused not by an outright shortage of crude, but by refiners scrambling to compete for more conventional barrels as US shale is found wanting.  “The dirty secret of US shale oil is not many people want it,” “It’s wrong to say the US can add 1m-plus barrels a day of production capacity a year and it will immediately find a home in the world’s refining system.”

        Clean up your old oil pipeline, Minnesotans tell Enbridge -- Enbridge Energy wants to leave its aging Line 3 oil pipeline in the ground if it gets Minnesota regulators' approval to build a replacement across northern Minnesota.But with a decision on whether to approve the contentious project a few months away, a growing chorus of landowners and tribal groups is calling for Enbridge to remove the old pipeline if the new one gets the OK. They're concerned about potential pollution from the old pipe, that it could become buoyant and pop out of the ground or that it could potentially act as a water conduit underground."When you're done with something, clean it up. It's that simple," said Richard Shustarich, 77, who lives along the current Line 3 route just outside Grand Rapids, Minn.  He has no problem with pipelines. When he bought his small house on 20 acres a little over a decade ago, five oil pipelines already crossed the property. And he had no problem signing an easement to give Enbridge permission to add another line in 2010. He said they're a safer way to transport oil than trains. "I figured that was a smart way to do it," he said. "But I hadn't thought that Enbridge would disrespect the people who allowed them to go on their property, you know, for a few thousand bucks."

        State regulators approve environmental review for proposed Enbridge crude oil pipeline - State utility regulators on Thursday approved the environmental review of Enbridge’s proposed new crude oil pipeline across northern Minnesota, a milestone for the controversial project. By a vote of 5-0, the Minnesota Public Utilities Commission (PUC) deemed the environmental impact statement (EIS) for Enbridge’s proposed new Line 3 to be “adequate.” The PUC in December had voted 4 to 1 against the EIS, saying it was inadequate because of a handful of narrow concerns. The PUC sent the report back to its author, the Minnesota Department of Commerce, to address its questions. PUC members said they were satisfied with the answers. “The revised EIS before us addresses the significant environmental issues,” said PUC Commissioner Matt Schuerger. The EIS looks at myriad potential environmental effects of a new Line 3 but made no conclusions. In June, the PUC is scheduled to decide on a “certificate of need” for the project — essentially giving it a green light or killing it. Environmental groups and Indian tribes that oppose Line 3 have criticized the EIS on several fronts, including not adequately assessing potential oil spills into sensitive waters or wilderness areas. They continue to say the EIS is inadequate, and a legal challenge of the PUC’s decision is in the offing. The environmental activist group Honor the Earth plans to appeal the ruling to the Minnesota Court of Appeals, according to Paul Blackburn, an attorney for the group. 

        Who will speak for school kids subjected to fracking? -- Karla Scornavacco: My children's school is about to be fracked, and I never thought I'd say that living in Boulder County. "We need you to help us," said my 10-year old and classmates at a community meeting at a local coffee shop a few blocks from the school. She's learning to speak up, even heading to Greeley to support Bella Romero Academy, another school facing a 24-well pad of drills pumping an undisclosed concoction of chemicals into the earth with enough force to fracture rock formations thousands of feet deep. Yet, despite the need, who in the school district is speaking up for her? And what about the kindergartners, or future students? Will they get a chance to go to school free of benzene, toluene, or other cancer-causing chemicals drifting into their playgrounds?  The students of Escuela Bilingüe Pioneer are being placed in imminent risk of harm by Extraction Oil & Gas, and I worry that Boulder is overlooking this threat to the health and safety of our county's children. When the drills come to your own backyard, to your children's schools, to the soccer fields where your children play, the veil of denial quickly lifts. Questions for our new superintendent should include what they will do to protect the health and well-being of all the district's children, not just those living closest to the foothills. And how will curriculum leaders support students in learning both the science and politics behind this industry? Why are the wells nearer to a school with a higher percentage of students living in poverty? I'm taken aback that fracking wells dotting our district's borders is the new normal. In east Boulder County, we need the city's help in protecting our children, our schools, our livelihoods

        Standing Rock: Dakota Access Pipeline leak technology can't detect all spills - Nine months after oil starting flowing through the Dakota Access pipeline, the Standing Rock Sioux Tribe continues to fight the controversial project, which passes under the Missouri River just upstream from their water supply.  In a 313-page report submitted to the U.S. Army Corps of Engineers, the tribe challenged the adequacy of leak detection technology used by pipeline company Energy Transfer Partners. The tribe also questioned the company's worst-case spill estimate and faulted Energy Transfer Partners for failing to provide a detailed emergency response plan to the tribe showing how the company would respond to an oil spill.  "We wanted to show how and what we are still fighting here," said Doug Crow Ghost, water resources director for the Standing Rock Tribe. "It's an ominous threat every day that we live with on Standing Rock, not even knowing if the pipeline is leaking."  The leak detection system used by Energy Transfer Partners can't detect leaks that are less than 2 percent of the full pipeline flow rate, according to the report prepared by the tribe and outside experts. Assuming a flow rate of 600,000 barrels of crude oil per day, a leak of nearly 12,000 barrels per day could go undetected. 

        From North Dakota to Puerto Rico, controversial security firm profits from oil protests and climate disasters - TigerSwan, the mercenary security company best known for its efforts to suppress indigenous-led resistance to the Dakota Access oil pipeline, is stepping up its pursuit of profits in areas hit by climate change-driven natural disaster. Three blog posts published on TigerSwan’s website in February describe the firm’s response efforts in the aftermath of Hurricane Harvey in Houston, Hurricane Maria in Puerto Rico, and Hurricane Matthew in North Carolina in 2016. TigerSwan, according to the posts, assisted National Guard members in Houston and emergency managers in North Carolina by providing them with access to its GuardianAngel system for monitoring the movement of individuals and sensitive shipments. In Puerto Rico, the company’s work included tracking down the employees of an unnamed client. At Standing Rock, TigerSwan operatives hired by the pipeline company Energy Transfer Partners used militaristic tactics to disrupt the massive opposition to the project, sending infiltrators into resistance camps, conducting aerial surveillance, and engaging in propaganda efforts. The private security firm routinely coordinated with law enforcement, sharing equipment and intelligence and assisting with arrests. Although preventing water pollution was the Standing Rock movement’s rallying call, many of its organizers were also climate activists; the earliest DAPL opponents were veterans of the anti-Keystone XL pipeline movement, which centered on the harmful climate effects of carbon-intensive tar sands oil. In essence, TigerSwan has gone from suppressing a movement seeking to slow climate change to marketing itself as a company that can help clients survive climate change’s most severe consequences.

        Idle Chatter About Mark Papa's Concerns About Shale Oil -- March 11, 2018 --  Bruce Oksol -- This is an old story but it's getting a lot of press because Mark Papa spoke about it again at the recent oil conference. One can find the story everywhere; here's one link. I think he first spoke about this about a year ago. I may have even blogged about it then.  Simply stated: Mark Papa warns that US shale oil forecasts are too optimistic. He may be right. Look at this graph from this link: Note how "narrow" the band is for "tight oil" (the Permian, Eagle Ford, and the Bakken) compared to that large, large band labeled "other." I assume that's what Papa (former EOG/CEO) is looking at.  In the military when we had "information" or "intelligence" a big issue was whether the "information" or "intelligence" was "actionable." We have a lot of information but so what?  I'm not sure that Mark Papa's "concern" is actionable. After you read the articles about what he is saying, how will that affect what you do, with regard to anything? I honestly don't know.  One source said that Mark Papa said that the Bakken and the Eagle Ford were "long in the tooth." A reader sent me that link. I replied, not ready for prime time (and my reply does indeed miss what Mark Papa seems to be saying, but I will post it anyway): He may be correct. It all has to do with perspective. Oil companies are in the "E & P" business -- "exploration and production." From an "exploration" point of view, I think he's right on track. There's not much more "exploration" needed in North Dakota.  And production is going to depend on many factors:

        • price of oil
        • advances in technology
        • skill of geologists
        • completion strategies (fracking: number of stages; amount of proppant)
        • infrastructure (takeaway capacity)
        • state and federal regulations
        • extraction and production taxes

        To put all this in perspective, the Permian was a legacy play that was considered "dead" some years ago. The Bakken is now in the "manufacturing" stage which was predicted some years ago. I'm not sure what "actionable" information Mark Papa provides by saying the Bakken is long in the tooth without more specifics. I would be more interested in what his thoughts are about the Bakken with regard to max production in a "perfect oil" world.  Bentek provided that "analysis years ago: 2.2 million bopd. Right now, the Bakken is stuck at 1.1 million bopd but analysts expect the Bakken to set more production records as soon as this summer.

        U.S. Shale's Dirty (Big) Secret -- U.S. shale is surging, threatening to take even more market share away from OPEC. But the prospect of U.S. oil edging out barrels from the Middle East is not nearly as simple as it might seem. Oil coming from the major shale plays in the U.S. is light and sweet, while a lot of oil coming from OPEC is medium or heavy, and often sour. A lot of refining capacity along the U.S. Gulf Coast, built up over years and decades, is equipped to handle heavier forms of oil. Before the shale revolution, refiners made their investments in downstream assets assuming the oil they would be using would come from places like Saudi Arabia and Venezuela. Lighter shale oil is perfectly fine for making gasoline, but not the best for making diesel and jet fuel. Medium and heavy oil is needed for that. But refiners have a tidal wave of light sweet oil on their hands, perhaps too much. The U.S. refining industry could max out its ability to swallow up light sweet oil from the shale patch, as the FT reports, particularly as U.S. shale drillers are expected to add upwards of 4 million barrels per day (mb/d) over the next five years.Meanwhile, heavy crude production has waned as of late, with sharp declines in output in Venezuela and Mexico in the past few years. Shipments from Canada face a bottleneck because of fixed pipeline capacity. The result has been a somewhat tighter market for heavy oil, which refiners want to process into jet fuel and diesel.In the years ahead, demand for gasoline could start to slow down as vehicles become more efficient and EVs start to gain more market share. Meanwhile, diesel demand has grown much faster, and will likely jump in 2020 as new regulations on dirty fuels from the International Maritime Organization take effect. That could force the shipping industry to switch from residual fuels to diesel, perhaps adding as much as 2 mb/d of demand for diesel, the FT reports.In other words, volumes of lighter oil suited for gasoline production are soaring while production of medium and heavy oil used for diesel is flatter, even as diesel demand is poised to grow quickly. And refining capacity capable of handling light oil might not be up to the task.

        The US Market for Fracking Fluids 2017-2022 - For the first time in U.S. history, projections of oil and gas production place the U.S. as the largest oil producer in 2017 and a net exporter of natural gas in the early 2020s.1 The uptick in production sees the highest growth rate of oil from the Bakken Shale under the states of North Dakota and Wyoming, and gas from the Marcellus Shale under the states of Pennsylvania, West Virginia, Ohio, Virginia and New York.Fracking fluids mainly consist of a major solvent such as water, a proppant (typically sand), and a number of various additives which include gelling agents, iron controls, breaker fluids, corrosion inhibitors, friction reducers, surfactants, biocides, crosslinkers, acids, solvents, scale inhibitors, clay stabilizers and pH adjusters that all contribute to the efficiency of the fracking process. The fracking fluids are forced down a well with high pressure and aid in breaking through the porous rock formations that hold trapped oil and gas, facilitating their release and capture.Given the important role that the fracking fluids play in the hydraulic fracturing process, this study will provide an overview of the widely used hydraulic fracturing technologies in the U.S. This study provides a comprehensive overview of the fracking fluids market in the U.S., including the hydraulic fracturing technologies most widely used, the amount and type of production, and presents market forecasts over the five-year period from 2017 to 2022 for each major component and the specific additives in use. The research covers the market drivers propelling the growth of the fracking fluid industry, the industry structure, trends, and the company profiles of the major production operators and fracking fluid suppliers for the U.S. domestic market. Extensive analysis of the production of each type of hydraulic fracturing technology supports the estimated production growth rates for the specific fracking fluids presented.

        Zinke: Oil and gas exploration off the Pacific coast might not happen - Interior Secretary Ryan Zinke expressed doubt Tuesday that oil and gas exploration will happen off the Pacific coast as part of the Trump administration’s proposal to dramatically expand offshore leasing, saying California, Oregon and Washington have “no known resources of any weight” for energy companies to extract. Discussing the Atlantic coast while testifying before the Senate Energy Committee, the secretary similarly described Maine as a state with little recoverable oil and gas. Zinke stopped short of saying that the three Pacific states would be exempted from the president’s plan to offer leases on 95 percent of the outer continental shelf. But in his reply to a question from Sen. Maria Cantwell (D-Wash.), he acknowledged her state’s deep opposition. “I think I’m going to mark down Washington as opposed to drilling,” Zinke said after Cantwell asked him to extend the public comment period for the drilling proposal. It is clear “the state of Washington is deeply, passionately opposed to oil and gas drilling off the coast,” he continued, promising that will be reflected in the next draft of the plan. California and Oregon also are strongly against drilling off their shores, as are virtually all states along the Atlantic coast. Zinke’s suggestion that the Pacific coast could be spared from drilling came in the last stage of a hearing that at times was heated. The former Navy SEAL commander engaged in several sharp exchanges with Democrats, who criticized the cost of his air travel on private aircraft and seeming favoritism for the oil and gas industry. 

        US Interior Department to begin ANWR leasing preparations - The US Department of the Interior has begun preparations for oil and gas leasing in the coastal plain of the Arctic National Wildlife Refuge and will use a new, streamlined procedure for its environmental review, a top Interior official said Monday. "We expect to publish a Notice of Intent to begin an Environmental Impact Statement very soon. That will kick off a 60-day series of 'scoping' meetings, after which we begin preparation of the draft EIS," Joe Balash, DOI's assistant secretary for land and water management, said in an interview. Balash said the ANWR Environmental Impact Statement will fall under a new Interior Department policy of completing an EIS within one year and limiting it to 300 pages. In the past, EIS documents have exceeded 1,000 pages and have taken several years to complete. But if the EIS is rushed, it may provide openings for inevitable lawsuits filed by US environmental groups. "If the review is done in a way that circumvents existing laws and procedures, I'm sure our attorneys will consider litigation options," said Tony Iallonardo, spokesman for The Wilderness Society. Exploration in the 1.2 million acre coastal plain within the refuge, considered highly prospective by geologists, has been a political hot button for decades. Congress once granted approval, only to have President Bill Clinton veto the bill. A second attempt came near to passage under the second George W. Bush administration, but was defeated 51-49 in a Republican-controlled US Senate.A provision tucked into the federal tax bill Congress passed late last year granted approval and required the Department of the Interior to hold two lease sales of 400,000 acres within 10 years. The US Geological Survey has estimated the potential for discovery of up to 10 billion barrels of oil in the coastal plain.

        The trans-Alaska pipeline fights off 22 million cyber attacks--daily - The trans-Alaska pipeline has dealt with its share of problems — earthquakes, declining oil flow, even gunfire. But today, the pipeline is facing another, more modern threat: cyberattacks. Energy infrastructure is a tempting target for hackers, and the trans-Alaska pipeline is no exception. Alyeska, which operates the pipeline, now ranks cyberattacks as one of its top three risks. In the room where part of the pipeline’s cybersecurity team is stationed, Alyeska’s Bill Rosetti points at a wall of data flowing down three giant screens hanging above the cubicles. It’s all totally incomprehensible to a layperson. But for Rosetti and his staff, weird activity on one of the colorful charts rippling across the screens could indicate something serious. “The idea here is that we are looking for things to be normal,” Rosetti explained. “And anything that’s not normal is something that needs to be investigated.” Rosetti is Alyeska’s chief information officer. He’s in charge of keeping cyberattackers at bay. Rosetti takes that job seriously, because the trans-Alaska pipeline is getting hit by cyberattacks all the time — and not just a few. “We see about 22 million attacks a day,” Rosetti said. And that’s an average. “It can be six or seven million some days and 45 million the next,” Rosetti said. “I wish I could tell you why it changes that way, but I really don’t know.” Of course, there aren’t millions of people carrying out these attacks individually. These are mass, automated attacks, often coming from servers overseas. Rosetti said so far, none of the cyberattacks have been successful; Alyeska has never been breached. But the challenge is growing. Rosetti said the rate of cyberattacks has roughly doubled in the last five years.  As the energy industry settles into the Internet age, more of its machinery is controlled remotely by computers. If someone manages to breach those systems, there could be dangerous real-world consequences. “We think about what the worst case is so we can protect against the worst case. And I don’t want to share what that is,” Rosetti said. 

        Thousands march to protest Canada pipeline expansion project --  — Thousands of demonstrators marched Saturday to speak out against a pipeline expansion project that would nearly triple the flow of oil from Canada’s tar sands to the Pacific Coast. Indigenous leaders led the march in the Vancouver suburb of Burnaby after telling the crowd that the day’s event was a celebration of unity, but they should be prepared in the future to “cross the line” with potential arrests. “Our spiritual leaders today are going to claim back Burnaby Mountain,” Rueben George, a member of Tsleil-Waututh Nation, said before the crowd marched to the steady beat of drums and chants toward a site near Kinder Morgan’s storage tank farm in Burnaby. Many protesters carried signs that read, “Water is life,” ‘’No consent, no pipeline,” and “Keep it in the ground.” Others hoisted inflatable orcas and beat drums. The Trans Mountain pipeline expansion by the Canadian division of Texas-based Kinder Morgan would dramatically increase the number of oil tankers traveling the shared waters between Canada and Washington state. Prime Minister Justin Trudeau approved the project in late 2016, saying it was in Canada’s best interest. Kinder Morgan says it is moving ahead with preparatory work at two terminals in Burnaby but still needs to obtain numerous local permits and federal condition approvals to begin construction. The project has drawn legal challenges and opposition from environmental groups and Native American tribes as well as from municipalities such as Vancouver and Burnaby. It’s also sparked a dispute between the provinces of Alberta, which has the world’s third largest oil reserves, and British Columbia. 

        First Nations Build a 'Watch House' in Path of Kinder Morgan Pipeline -- The campaign against the controversial Kinder Morgan pipeline escalated Saturday when Indigenous leaders from across Canada and the U.S. came together to inaugurate Kwekwecnewtxw— "the place to watch from"—whilst others started building a traditional Coast Salish "Watch House" near the pipeline route.  Although the Watch House stands on the line of exclusion zone surrounding the pipeline, the local community have vowed to not move from the tower until Kinder Morgan is defeated. Building of the Watch House is expected to finish Monday. It will then become a focal point for resistance to the pipeline, which if completed, is expected to bring some 400 tankers a year to the ecologically and culturally sensitive coastline. The highly controversial $7.4-billion project was approved by Canadian Prime Minister Justin Trudeau's government in November 2016. It has subsequently been challenged in court by First Nations, the City of Burnaby, the City of Vancouver and the BC government. And Saturday the local community was out in force. Some 10,000 local supporters marched to the site in solidarity. Speaker after speaker then condemned the pipeline, criticizing Canadian Prime Minister Justin Trudeau's approval of the pipeline "a major step backwards" in both their relations with the Federal Government and also for the climate.  Grand Chief Stewart Phillip told the crowd: "We are gathering today to send a clear message to Kinder Morgan and Justin Trudeau that indigenous peoples across North America and British Columbians will never let this pipeline be built. I call on everyone in the crowd today and watching from home to join us in escalating action to stop Kinder Morgan in the coming days. Rachel Notley, we are not in the least bit intimidated by your desperate threats and we will not stop!"

        Canadian heavy pipeline crude oil drifts lower amid increased storage, rail drop - Canada's benchmark heavy pipeline crude drifted to the lowest in six sessions Thursday as the market digested news of additional storage tanks in Alberta, an anticipated drop in crude-by-rail volumes and insight into how much crude has flowed on the Keystone Pipeline after a temporary shutdown and restart in November. Crude-by-rail exports out of Canada dropped 11.3% in January from the previous month to 140,959 b/d, according to the latest statistics from Canada's Crude Oil Logistics Committee. Analysts had said they expected volumes to be flat or down in January after Canadian rail operators and clients reported delays due to extreme weather. Producers are counting on increased crude shipments by rail to alleviate inventories in Alberta after the temporary shutdown of TransCanada's Keystone Pipeline on November 16 led to a selloff that saw differentials for Western Canadian Select at Hardisty widen from around WTI CMA minus $14/b to a four-year low of WTI CMA minus $30.55/b on February 5. WCS at Hardisty on Thursday was assessed at WTI WMA minus $27/b. The 600,000 b/d Keystone Pipeline restarted on November 28 at reduced pressure, as mandated by the US pipeline regulator. TransCanada has declined to say what that reduction in pressure has meant for crude flows, but data from Canada's National Energy Board shows the company has the capability to run at normal volumes under the current restrictions. The Keystone Pipeline operated at 565,000 b/d in October, dropped to 298,000 b/d in November and then rebounded to 582,000 b/d in December, NEB data show. Throughput volumes in January are expected to be similar to the previous month, indicating that TransCanada is able to work around the pressure restrictions, said Kevin Birn, a senior analyst with IHS Markit. "The word out there is volumes in February and March will be lower, as TransCanada is carrying out a full integrity check on Keystone," he noted. 

        Canada Is Facing A Heavy Crude Crisis - Canada’s benchmark heavy crude oil widened its discount to WTI to the largest in six trading sessions on Thursday, as additional storage capacity in Alberta and data about lower crude-by-rail shipments added concerns over the domestic oil glut, as TransCanada’s Keystone Pipeline has yet to return to normal pressure levels following a leak and temporary shutdown last November.On Thursday, Western Canadian Select was trading at a discount of US$27 a barrel to WTI. The discount widened to the biggest level, US$30.55 a barrel, in four years on February 5, after a selloff following the temporary shutdown of Keystone in mid-November.This week, market participants were digesting news about increased storage capacity and January crude-by-rail data. Crude-by-rail exports out of Canada fell by 11.3 percent month on month in January to 140,959 bpd, according to the latest data by Canada’s Crude Oil Logistics Committee, quoted by Platts. Analysts had expected rail crude exports to be either flat or down, because Canadian rail operators and customers had reported delays in shipments due to extreme weather.In addition, Kinder Morgan Canada and Canadian midstream operator Keyera said earlier this week that they added two additional tanks at the Base Line Terminal for service ahead of schedule. The two tanks add an additional 800,000 barrels of crude storage to the 1.6 million barrels currently in operation.Meanwhile, data from Canada’s National Energy Board (NEB) showed that the Keystone Pipeline, which was restarted on November 28 after a shutdown on November 16, had throughput volumes of 582,000 bpd in December, following a slump to 298,000 bpd in November. Keystone was restarted at reduced pressure, as per U.S. regulation. TransCanada has managed to work around pressure restrictions and the January volumes are expected to be close to the December throughput, Kevin Birn, a senior analyst with IHS Markit, told Platts.“The word out there is volumes in February and March will be lower, as TransCanada is carrying out a full integrity check on Keystone,” Birn added.  Canada’s heavy crude is expected to remain at hefty discounts to WTI in the next few years, as takeaway pipeline capacity is unable to meet rising production from new oil sands projects sanctioned before the downturn.

        Panel of scientists to drill into safety and environmental impact of fracking -  Hydraulic fracturing, better known as fracking, is going under the microscope in B.C. as the provincial government forms a review panel to analyze safety and environmental concerns. B.C. Energy Minister Michelle Mungall announced on Thursday that she has appointed an independent scientific review of the natural gas extraction process to ensure it is meeting the province’s safety and environmental standards. Mungall said the panel of three experts in hydrogeology and geological engineering will be taking a further look at some of the issues surrounding gas leakages potentially caused by fracking. “There’s a lot of concerns about methane leakage, as well as water quality and water quantity,” Mungall said. “That’s some of the things that the hydraulic scientific panel is going 0t be looking at.” The energy minister said both industrial and environmental groups are in favor of the review panel being implemented. “I think industry wants to find a way they can reduce the environmental footprint,” Mungall said. “They want to make sure the water quality is strong and so do communities and so do environmental organizations.” 

        The value of U.S. energy exports to Mexico exceeded import value for third year in a row - In each of the past three years, the value of U.S. energy exports to Mexico has exceeded the value of U.S. energy imports from Mexico. Energy trade between Mexico and the United States has historically been driven by Mexico’s sales of crude oil to the United States and by U.S. exports of refined petroleum products to Mexico. As the United States has reduced crude oil imports from Mexico, the trade balance has shifted.  Through 2014, Mexico’s exports of crude oil to the United States were the most valuable component of bilateral energy trade, with the overall value of Mexico’s U.S. crude oil sales far exceeding the value of U.S. net sales of petroleum products, primarily gasoline and diesel fuel, according to data from the U.S. Census Bureau.  Starting in 2015, the value of U.S. energy exports to Mexico, including rapidly growing volumes of both petroleum products and natural gas, exceeded the value of U.S. energy imports from Mexico as volumes of Mexican crude oil sold in the United States continued to decline.   The value of U.S. energy exports to Mexico increased to a high of $25.8 billion in 2017, including $23.2 billion of petroleum products. Overall, this export value was more than twice as much as the $11.1 billion value of 2017 U.S. energy imports from Mexico. Based on the latest annual data from the U.S. Census Bureau, energy accounted for more than 10% of the value for all U.S. exports to Mexico and 4% of all U.S. imports from Mexico in 2017.  Crude oil makes up most of the U.S. energy imports from Mexico, averaging 608,000 barrels per day (b/d) in 2017. In 2017, Mexico was the source of 8% of U.S. imported crude oil, the fourth-largest share behind Canada, Saudi Arabia, and Venezuela.  Petroleum products such as finished motor gasoline, distillate fuel oil, and propane account for most of the value of energy exports from the United States to Mexico. In 2017, Mexico was the destination for more than 1 million b/d of petroleum products, up from 880,000 b/d in 2016. This level was 24% of all petroleum products exported from the United States. These exports were valued at more than $23 billion dollars in 2017.

        U.S. crude oil exports increased and reached more destinations in 2017 -  U.S. crude oil exports grew to an average of 1.1 million barrels per day (b/d) in 2017, the second full year since restrictions on crude oil exports were removed. Crude oil exports in 2017 were nearly double the level of exports in 2016. Increased U.S. crude oil exports were supported by increasing U.S. crude oil production and expanded infrastructure.  U.S. crude oil exports went to 37 destinations in 2017, compared with 27 destinations in 2016. Similar to previous years, Canada remained the largest destination for U.S. crude oil exports, but Canada’s share of total U.S. crude oil exports continued to decrease, down from 61% in 2016 to 29% in 2017. U.S. crude oil exports to China accounted for 202,000 b/d (20%) of the 527,000 b/d total increase. China surpassed the United Kingdom and the Netherlands to become the second-largest destination for U.S. crude oil exports in 2017. Many European nations are among the largest destinations for U.S. crude oil exports, including the United Kingdom, Netherlands, Italy, France, and Spain. India, which did not receive U.S. crude oil exports in 2016, received 22,000 b/d in 2017, tying with Spain as the tenth-largest destination.  Crude oil now makes up 18% of total U.S. petroleum exports, making it the third-largest petroleum export after hydrocarbon gas liquids (HGL) and distillate fuel. Before the restrictions on domestic crude oil exports were lifted in December 2015, most of the growth in U.S. petroleum exports was petroleum products—mainly HGLs (such as propane), distillate fuel, and motor gasoline. Previously, crude oil’s largest share of total U.S. petroleum exports was 13% in 1999, when total volumes of U.S. petroleum exports were less than 1.0 million b/d, which was much lower than the 6.3 million b/d total in 2017. Increasing U.S. crude oil production and expansions of U.S. pipeline capacity and export infrastructure facilitated increased crude oil exports. U.S. crude oil production reached 9.3 million b/d in 2017, a 0.5 million b/d increase from 2016. Several new or expanded pipelines came online in 2017 to move crude oil from producing regions, primarily the Permian basin of Texas and New Mexico, to the U.S. Gulf Coast. On the U.S. Gulf Coast, recently expanded crude oil export infrastructure in ports such as Corpus Christi and Houston, Texas, and in ports along the Mississippi River in Louisiana allowed larger volumes of crude oil exports.

        Investment in tight oil, oil sands, and deepwater drives long-term oil production growth - Upstream investment in crude oil and liquids production is highly sensitive to crude oil prices, particularly production of higher-cost resources from tight rock formations, oil sands, and offshore deepwater. In EIA’s International Energy Outlook 2017 (IEO2017) Reference case, increasing crude oil prices lead to more investment, driving production growth in these higher-cost resources. By 2040, EIA projects that the combined production from tight oil, oil sands, and offshore deepwater will reach 21 million barrels per day (b/d) and will account for almost a quarter of the world's total crude oil production. From 2010 to 2014, global investment in tight oil, oil sands, and offshore deepwater development increased from 20% to 30% of total upstream investment. Over that same period, combined production from these resources increased by 4 million b/d, reaching 12.2 million b/d and accounting for 16% of total global crude oil production. Following the decline in crude oil prices in 2014–2015, global upstream investment in these resources decreased from $280 billion in 2014 to $126 billion dollars in 2016.  IEO2017 projects that the Brent global benchmark crude oil price will increase throughout the projection period but will remain lower than prices during 2010–2014 in real dollar terms. For this reason, future investment growth in higher-cost resources is expected to be lower than in recent history. The IEO2017 Reference case projects global production of tight oil will increase by 3.3 million b/d, offshore deepwater by 2.7 million b/d, and oil sands by 1.4 million b/d between 2017 and 2040. Total production increases from these sources makes up nearly half of the long-term global liquids supply growth through 2040.  EIA expects a large share of global upstream capital investment to be concentrated in tight oil resources in the United States. Tight oil projects in the United States tend to have shorter payback periods because of lower service costs, high operator efficiency, exploitable resources that can be accessed through new technological advances, and a stable regulatory framework.  IEO2017 projects that investment in tight oil plays outside of the United States will be lower than investment in plays in the United States through 2025. Development of tight oil can be hindered by a lack of infrastructure and of experience in developing tight oil resources and by competing oil resources that can be produced at a lower cost than tight oil. After 2030, as oil prices continue to increase, more investment in these resources is expected to result in increased production.

        The Power Has Shifted In LNG Markets -  One of the most influential figures in the LNG market has claimed that a return to long-term LNG contracts is crucial for the sector.  It was a statement that most liquefied natural gas (LNG) buyers don’t necessarily want to hear; in fact, it goes against the fundamental changes currently underway in global LNG markets. Yesterday, Yury Sentyurin, the new head of the Gas Exporting Countries Forum (GECF), an industry group representing gas sellers, said, in comments carried by Bloomberg Markets, that LNG prices still need to be linked to oil prices to keep revenue predictable for producers, particularly since some US$8 trillion worth of investment in the fuel is needed by 2040. GECF members include Russia, Iran, Algeria and Qatar (currently the world’s largest LNG producer), and its headquarters are in Doha, Qatar. Sentyurin said that "[LNG] consumers should understand the peculiarities which producers face. Security of investment and supply can only be on the basis of long-term contracts closely connected to oil prices so we could plan further investments into crucial infrastructure." He added that continued expansion of supply is needed to meet demand that’s forecast to grow at an average of 1.6 percent per year until 2040. While Sentyurin is correct that the global LNG sector will need substantial infrastructure investment in the long term, even if his projection is more than two decades away, his comments that consumers should understand the peculiarities of producers misses the mark.. Since 2016, with Australia now poised to have as many as ten major LNG export projects operational, followed by the U.S. which now has two export projects on-stream and will have five export projects operational by the end of the decade, the market has switched from being stretched thin to being over supplied – all good news for buyers thereby changing the rules of the game. This is a development that has been hard for LNG exporters to accept, apparently including one of its representative groups, the GECF.

        LNG is the new shale oil with the U.S. as disruptor-in-chief: Russell (Reuters) - Crude oil is likely to spring to mind if one is asked to name a commodity where the United States is disrupting the market by becoming a swing producer and challenging traditional trade flows, especially in fast-growing Asian markets. But it’s increasingly likely that the United States is about to play the same role in liquefied natural gas (LNG), as it ramps up production in an already well-supplied market.  Investment in LNG projects fell off a cliff in recent years as the industry dealt with the ramifications of rapid supply growth, which has seen Australia add eight new large-scale plants, while the United States is busy commissioning the second of its new export projects, with five more to come by 2019. While Shell and others may well be correct about the need for new plants to meet demand by 2030, it’s the next couple of years that could prove challenging for the LNG industry. Most of the new capacity built in Australia was done under the old industry model where long-term offtake contracts, often linked to crude oil prices, allowed for the financing of billions of dollars of capital investment with extended payback terms. The model has been somewhat different in the United States, with far less of the upcoming production committed to buyers, meaning more will be sold at spot prices linked to U.S. benchmark Henry Hub natural gas. This is where the role of the United States in LNG starts to look eerily similar to the role its shale oil producers are playing in crude oil markets. Traditional exporters, such as Saudi Arabia and Russia, have found it tougher than expected to push crude oil prices higher, mainly because customers, especially in Asia have been able to turn to alternative suppliers. While the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, have met some success in draining excess global crude inventories, it’s come at the expense of market share in the fast-growing Asian demand region. 

        European traders store gasoline on tankers as glut looms (Reuters) - Traders are storing gasoline on tankers off Europe’s coast as they struggle to contain a steady rise in supplies since the start of the year that has weighed on prices. The unusual move reflects a recent weakening in the margin refiners make from converting crude oil into the road fuel as stocks in the Amsterdam-Rotterdam-Antwerp refining and storage hub in recent weeks reached their highest level since July 2016, according to data from PJK International. At least three 90,000 tonne tankers have been booked in recent weeks to store gasoline for up to 60 days off the Dutch coasts - Maersk Producer, Phoenix Dream and Maersk Promise, according to traders and shipping data. Gunvor had booked the three cargoes, the sources said. Traders said the drop in current gasoline prices had tipped the northwest European market into a contango that made it worthwhile to put cargoes of summer-grade gasoline into storage. Medium-range tanker freight rates have also fallen, making it cheaper to book these ships, ship brokers said. The stored fuel is believed to be summer-grade gasoline which will be kept until demand revives in the United States, which switches from winter-grade on May 1, traders said. “Typically, imports of summer grade product rise from mid-March onwards, with the vast majority of product heading into the Atlantic Coast originating from Europe,” Alphatanker said in a note. Northwest European gasoline refining margins, or cracks, fell to $1.67 a barrel on March 9, the lowest since December 2014, according to Reuters calculations amid a big selloff in winter grade gasoline prices. The selloff triggered strong demand for buying the motor fuel in the barge market with daily trading volumes hitting a record high of 66,000 tonnes on an Argus basis on Monday. 

        UK Gas Crisis: Out Of The Frying Pan Into The Fire  - For the ministers and officials assembled, it was an embarrassment all around. Late last week, as we were at the annual Windsor Energy Consultation (WEC) just outside London, British Gas Plc confirmed that the nation was facing a natural gas shortage as freezing temperatures grip the country. You see, blizzards, strong winds, drifting snow, and bitter cold recently brought Britain to a standstill as the weather system nicknamed the “Beast from the East” combined with winter storm “Emma” to create some of the most testing weather the U.K. has had to face in years.Now, I can attest first hand that this cold snap was not something to take lightly.   And nationwide, this “big freeze” has brought to light a very serious problem.And it’s one that is only getting worse… The unfolding gas crisis has brought about a renewed immediacy to a major political issue that has been percolating in the U.K. for some time now. You see, for the third year in a row, a portion of my two briefings (one to the plenary meeting; one to the ambassadors), was devoted to the growing global need for a new “energy balance.” Now, among the assembled officials and sector dignitaries at this year’s Windsor meeting, there was a widespread agreement that a global “energy balance” is necessary.But you wouldn’t know it looking at the situation developing currently. In fact, despite that agreement, the current gas crisis emerging in the U.K. actually results from a shocking referendum decision back in 2016… Delays in moving on still contentious (and well over budget) nuclear power plants combined with ongoing pipeline problems from the North Sea offshore fields has left any “energy balance” forward planning very much in limbo. The majority of demand in the U.K. is still covered by natural gas – both from the North Sea, which is becoming increasingly questionable when it comes to extractable volume, and expanded liquefied natural gas (LNG) imports.Unfortunately, the nation’s supply issues have been complicated by one event that has overshadowed everything else for more than a year and a half.I’m talking about “Brexit,” the British decision to leave the European Union. And the supply issue that followed this landmark decision is creating a major problem for British energy consumers.

        Britain at the mercy of Russian gas giants as gas reserves in Europe reach record lows - A cold snap next week could leave the country at the mercy of Russian gas suppliers, experts have warned. Plunging temperatures on Sunday and Monday are likely to send demand for gas soaring across the UK and Europe to heat and light homes. A report from the analysts S&P Platts warns that relying on Russia may be the only option for European nations if they suddenly need more as other suppliers are already running at or near capacity. Gas reserves across the continent are at record lows after cold spells and the closure of British storage facilities. But the report said: ‘Gas demand is set to rise again from the end of the week across north-western Europe, bringing potential large-scale gas withdrawals back into play and prompting a likely increase in nominations for Russian gas imports. ‘Given the surge in demand, Russian gas supplies are considered the only swing source of gas under current conditions. Domestic production and other import sources are effectively maxed out.’ Campaigners fear the growing reliance on imports leaves the UK vulnerable at a time of heightened political tension with Russia in the wake of the row over the poisoning of former double agent Sergei Skripal and his daughter in Salisbury. Official figures suggest only a small proportion of Britain’s gas comes from Russia directly. But many major pipelines across Europe start in Russia. This allows state-backed giants such as Gazprom effective control of European gas supplies.

        US gas cargo turns towards UK as Russia spat intensifies - The first tanker of liquefied natural gas to depart a new facility on the US east coast has changed course mid-Atlantic and is heading for the UK. The Gemmata LNG tanker, which left the newly opened Cove Point terminal in Maryland roughly 10 days ago, has turned north east 1,500km off the coast of Suriname and is said to be heading for the Dragon LNG terminal in south Wales. The FT reported this week that of the six LNG tankers that have made deliveries into the UK so far in 2018 three have carried cargoes originally from Russia, leading to questions about whether Moscow was gaining a foothold in the UK gas market after starting up the Yamal LNG facility in Siberia late last year. With tension between the UK and Russia at the highest level since the cold war, following the alleged nerve agent attack by Russia on a former spy in Salisbury, prime minister Theresa May said on Wednesday that “in looking at our gas supplies we are indeed looking at other countries”.

        NYMEX Apr natural gas up 1.5 cents at $2.747/MMBtu on lingering cold -- NYMEX April natural gas futures ticked higher in overnight US trading Monday on recent and expected late-season cold. At 7:20 am EDT (1120 GMT) the contract was 1.5 cents higher at $2.747/MMBtu. Colder weather bolstered heating demand to start March. The US Energy Information Administration's latest "Natural Gas Weekly Update" for the week ended March 7 reflects a 2% week-on-week rise in US gas consumption led by a 10% increase in residential/commercial demand attributed to a cool-down throughout much of the country. The National Weather Service sees below-average temperatures holding over most of the Northeast, a small area of the Midwest and nearly the entire West in the six-to-10-day period, then expanding to encompass all of the Northeast, much of the Mid-Atlantic and most of the Midwest in the eight-to-14-day period.  

        NYMEX Apr natural gas little changed at $2.678/MMBtu as market eyes weather -NYMEX April natural gas futures were little changed in overnight US trading as traders considered changing weather that spells diverging demand patterns. At 6:50 am EDT (1050 GMT) the contract was 0.3 cents lower at $2.678/MMBtu. Below-average temperatures continue to hold over much of the US in the latest projections from the National Weather Service, encompassing the entire eastern third of the US into most of the Midwest and a large section of the West in the six-to-10-day period then shifting in scope to grip nearly the entire northern US and the bulk of the Southwest in the eight-to-14-day period. Average to above-average temperatures span most of the west-central US and the balance of the West in the shorter-range view then settle over the south further out. Although lingering cold in store looks to generate late-season heating demand, higher outright temperatures look likely to limit this.

        Platts JKM: Apr LNG cargoes fall on weaker demand; May starts at $7.525/MMBtu  -The Platts JKM for LNG cargoes delivery in April ended its assessment period at $8.15/MMBtu Thursday, dropping 55 cents/MMBtu from Friday last week, as warmer weather and weak demand continued to weigh on the market. The Platts JKM for cargoes delivery in May, the new front month, was assessed $7.525/MMBtu Friday. As the market enters the shoulder months, downward pressure mounted with some cargoes heard remaining on offer for H2 April and May delivery. April requirements were heard largely covered and end-users appeared willing to postpone their procurements for better terms, adding downward pressure on the front end of the curve. In Japan, Kansai Electric restarted Ohi No.3 1.18-GW nuclear reactor Wednesday this week and plans to bring another one, Ohi No.2 1.18-GW reactor, online in mid-May. Indonesia's Bontang LNG was heard to have short-listed two April cargoes for potential award, with price level heard at $7.60-$7.80/MMBtu on a FOB basis, subject to government approval, market participants said. The potential loading dates remained unclear but expectations pegged the cargoes to likely be for late-April loading. The sell tender offered zero to one cargo a month between April and June and closed on March 13, with validity until April 11. The status of the remaining cargoes offered in the tender remained unclear.

        Exclusive: Vitol targets Southeast Asia's LNG boom with import projects (Reuters) - Vitol is targeting Southeast Asia’s booming liquefied natural gas (LNG) markets to boost sales and catch up with rival commodity traders by developing import projects in Pakistan and Bangladesh. In its biggest potential project, the trader is teaming up with France’s Total on a floating LNG import facility in Port Qasim, Karachi, industry and government sources said. The unusual alliance between the Swiss trade house and oil major shows how emerging markets’ appetite for gas is becoming a focal point for the global LNG industry as it faces years of strong supply growth. Rival trading houses Trafigura [TRAFG.UL] and Gunvor [GGL.UL] are already developing LNG projects in Pakistan and Bangladesh, betting the countries will account for a rising share of future profits and LNG trade. The Vitol-Total project joins around eight other proposed LNG terminals in Pakistan - largely clustered around Port Qasim - vying to tap into a market set to expand five-fold by 2022 to 30 million tonnes per annum. Floating terminals, known as FSRUs, are faster and less costly to set up than traditional land-based units and offer commodity traders a route into new markets, helping to absorb a growing LNG surplus on international markets. FSRU projects tend to cost around $250 million which factors in the full range of costs including chartering, port and pipeline infrastructure. In Bangladesh, Vitol is going it alone to develop a small-scale FSRU alongside the ageing Sangu gas platform in the Bay of Bengal, government officials and industry sources told Reuters.  With long-standing oil trading ties in Pakistan, Vitol aims to sell its gas through a nationwide network of 400 retail stations owned by local partner Hascol Petroleum. Pakistan boasts the region’s biggest natural gas-fueled vehicle fleet after China and Iran. A Pakistani official confirmed Vitol and Total were working together after their earlier attempts to join more advanced projects fell through. 

        Huge Chinese Demand Fuels The Next U.S. Gas Boom - China’s push for cleaner air and fuel is driving an unprecedented demand for natural gas, and the United States is well-positioned to seize this opportunity and export even more of its growing gas production to the thirsty nation. U.S. companies have plans for even more liquefied natural gas (LNG) export trains and facilities to come online in the coming years, and this winter’s surge in Chinese LNG demand and imports underpins a second wave of LNG investment in the United States, analysts and company executives believe. The Chinese push to cut pollution and make millions of households switch to natural gas from coal for heating resulted in China becoming the world’s second-largest LNG importer in 2017, outpacing South Korea and second only behind Japan, the U.S. EIA said last month. Chinese LNG imports surged 46 percent last year. And while China increased its domestic production and pipeline imports last year, it was not enough; natural gas shortages in northern China led to record levels of LNG imports during the winter. Overall, natural gas imports accounted for 40 percent of China’s 2017 natural gas supply, and LNG made up more than half of those imports. True, China is planning to hit an all-time high for natural gas production this year, which includes raising the share of gas in its energy mix—still, domestic production growth will be woefully insufficient compared to its soaring consumption. So, the United States is all too happy to step in to supply part of that demand. Cheniere Energy is one such supplier, which signed last month two long-term deals—through 2043—to supply LNG to China National Petroleum Corporation (CNPC), with the LNG price indexed to the Henry Hub price plus a fixed component. 

        China data: Jan-Feb crude throughput rises 7.3% on year to 11.6 mil b/d - China's refinery crude throughput rose 7.3% year on year to 93.4 million mt, or an average 11.6 million b/d, over January-February, according to preliminary data released Wednesday by the National Bureau of Statistics. The year-on-year growth over the two months was higher than the increase of 4.3% seen for the same period of 2017, while the total was just below China's record high refinery throughput of 12.08 million b/d last November. As a result of higher crude throughput over January-February, the country's gasoline, jet/kerosene and gasoil production increased 6.4%, 8.8% and 2.4% year on year, respectively, NBS said, without providing detailed numbers. The NBS combines preliminary data for January and February because of the Lunar New Year holiday, which usually falls on one of the two months and lasts seven days. More detailed data from the bureau, including production figures for oil products, is expected to be released in the next few days. According to an S&P Global Platts survey, Chinese state-owned refineries ran at an average rate of around 80% and 84% in January and February, respectively, compared with around 82% and 84% in the same period last year. Although state-owned refineries did not raise their run rates in January and February, the startup of two new units -- PetroChina's 13 million mt/year Yunnan refinery and CNOOC's expanded 10 million mt/year Huizhou phase 2 refinery -- in the second half of 2017 was believed to have pushed up the country's total refinery crude throughput since then. Meanwhile, China's independent refineries in eastern Shandong province ran at an average rate of 67.9% and 67.5% in January and February, respectively, both up more than 11 percentage points year on year, Platts calculations based on data from domestic information provider JLC showed.  

        Venezuela’s crude oil production declines amid economic instability - Venezuela’s crude oil production has been on a downward trend for two decades, but it has experienced significant decreases over the past two years. Crude oil production in Venezuela decreased from 2.3 million barrels per day (b/d) in January 2016 to 1.6 million b/d in January 2018. A combination of relatively low global crude oil prices and the mismanagement of Venezuela’s oil industry has led to these accelerated declines in production. Several factors indicate that Venezuela’s crude oil production will likely continue to decline. The number of active rigs has fallen from near 70 in the first quarter of 2016 to an average of 43 in the last quarter of 2017. Recent reports indicate that missed payments to oil service companies, a lack of working upgraders, a lack of knowledgeable managers and workers, and declines in oil industry capital expenditures have also contributed to production declines. Venezuela produces extra-heavy crude oil in the Orincoco Oil Belt area and heavily relies on imports of lighter liquids (diluents) to blend with this crude oil to make it marketable. Financial difficulties recently have occasionally prevented the state-owned oil company, Petroleos de Venezuela SA (PdVSA), from importing the necessary volumes of diluent to sustain production and exports.In addition to falling production, refiners in the United States and Asia have reported crude oil quality issues with imported crude oil from Venezuela, resulting in requests for discounts or discontinuation of purchases.  In EIA’s Short-Term Energy Outlook, Venezuela’s crude oil production will continue to fall through at least the end of 2019. Crude oil production losses are increasingly widespread and affecting joint ventures. With the reduced capital expenditures, foreign partners are reducing activities in the oil sector. Venezuela’s economy is heavily dependent on the oil industry, and production declines result in reduced oil export revenues. Venezuela’s economy contracted by nearly 9% in 2017, based on estimates from Oxford Economics.

        Venezuela’s Meltdown Comes At Convenient Time For OPEC - The pending collapse of Venezuela poses serious short- and long-term challenges for oil markets, but it also contains a silver lining for the OPEC cartel.Venezuelan oil production has been in decline for the past decade, but output has plunged rapidly in recent months as the OPEC member’s political and economic crisis intensifies bringing state oil company PDVSA to its knees. Venezuela production hit a three-decade low of 1.6 million barrels a day in January, down 20% from the same month a year earlier and off a whopping 600,000 barrels a day from its 2016 average of nearly 2.2 million barrels a day.The country’s situation will only get worse.Venezuelan production is likely to fall another 400,000 to 600,000 barrels a day this year – and that assumes President Nicolas Maduro’s beleaguered regime survives. Total collapse of the regime, which the United States could help bring about by imposing tough new sanctions on Venezuela’s oil sector, could see output ground to a complete halt.Much hinges on Venezuela’s presidential elections on May 20. If Maduro uses the election to further consolidate his grip on power, it could prompt Washington to slap the harshest of measures on Caracas. These could include an outright ban on imports of Venezuelan crude, or, more likely, an embargo on U.S. exports of light oil and refined products to the South American country.Venezuela’s woes have been flagged by the International Energy Agency as a major wild card in oil markets this year that have contributed to the recent firming of crude oil prices, which are sitting at comfortable $65 a barrel on the international benchmark. Recent gains by crude have been supported by over-compliance by Saudi-led OPEC with its production cut deal involving non-OPEC producers, including Russia, which has helped tighten supply-demand fundamentals significantly. But much ofOPEC’s stellar compliance lies with Venezuela’s faltering production.

        How Will OPEC React To Soaring Shale Production? --OPEC has finally acknowledged what everybody else had concluded some time ago: U.S. shale output is soaring. In its March Oil Market Report, OPEC revised up its forecast of non-OPEC supply for 2018 by 280,000 bpd, a major revision. That equates to year-on-year growth of 1.66 million barrels per day (mb/d). The group couched the change in boring technical jargon, noting that “the upward revision is mainly due to higher-than-expected output in 1Q18 by 360 tb/d in OECD (Americas and Europe), FSU and China.” But make no mistake, OPEC is conceding that U.S. shale is surging, which complicates the cartel’s calculations for rebalancing the oil market.Crucially, the forecast now acknowledges that oil supply will outpace demand this year, a conclusion that the IEA had been predicting for a few months.The trend is worrying for OPEC. The effects of the production cuts of 1.2 mb/d (plus nearly 0.6 mb/d from Russia and other minor partners) had little effect in early 2017, likely because of the ramp up in production and exports just prior to the implementation of the deal.However, as 2017 wore on, the cuts started to really bite. Inventories plunged toward the end of last year, tightening the market and forcing up oil prices. Some analysts have even predicted that the oil market could already be rebalanced.The IEA was an early spoilsport, however, predicting at the start of 2018 that despite the run up in prices, inventories would start climbing again in the first half of the year. In January, oil traders shrugged off this bearish assessment, driving Brent up to $70. From there, the rally stalled, and U.S. shale began to take off again, pushing prices back down. In subsequent weeks, the forecasts for U.S. shale growth have been ratcheted up leaps and bounds, and the expected strong gains in output from shale have transformed into expectations of a tidal wave of new supply that will push U.S. production over 11 mb/d by the end of this year. Most analysts have since followed in the IEA’s footsteps and offered their own takes on how fast U.S. shale would grow. OPEC is just getting around to acknowledging this fact. OPEC now says that global oil demand will rise by 1.6 mb/d this year, which will be more than offset by a global supply increase of 1.66 mb/d. Ultimately, this means that a little less OPEC production will be needed. The group revised down the need for its production by 200,000 bpd for 2018.

        Is OPEC moving the goalposts for its oil market scoreline? (Reuters) - Saudi Arabia’s proposals of new metrics to determine when the oil market is balanced signals a shift in OPEC’s targets for a pact on supply cuts that has almost achieved the initial aim of reducing bloated inventories. The Organization of the Petroleum Exporting Countries, Russia and nine other producers cut output from January 2017 by 1.8 million barrels per day (bpd) with the aim of reducing crude stocks in industrialized OECD nations to the five-year average. From a record 3.1 billion barrels in July 2016, OECD stocks dropped to 2.851 billion barrels in December, falling 216 million barrels during 2017 and now stand just 52 million barrels above the five-year average, International Energy Agency (IEA) data show. OPEC and its allies have been helped because the five-year average is a moving target and has risen even as output curbs were in place. The average climbed to 2.86 billion barrels in September 2017 from about 2.73 billion barrels when the supply pact was sealed in late 2016. “After a period of surplus, the target becomes easier over time as more surplus years are included,” said Standard Chartered head of commodities research Paul Horsnell. But as the OECD inventory target has shifted so has thinking in Saudi Arabia, the world’s biggest oil exporter that worked with Russia to forge the global pact on cutting supplies. Saudi Energy Minister Khalid al Falih says OPEC and its partners should look at metrics such as non-OECD inventories, oil in floating storage and crude in transit as they consider the future of the pact that is due to expire at the end of 2018. Those measures, however, are more difficult to monitor. Non-OECD oil demand has outstripped OECD consumption since 2014. But inventories in non-OECD nations tend to be held as strategic not commercial assets, making them less transparent and less likely to shift with changes to demand or supply. 

        The OPEC Deal Could Fall Apart In June - OPEC’s oil production cut agreement could start falling apart soon, as Saudi Arabia and Iran once again face off. This time, however, the spat is over determining what the best price level is for the commodity. That’s what Iran’s Oil Minister Bijan Zanganeh told the Wall Street Journal in an interview. The split, apparently, stems from Saudi Arabia’s insistence that crude oil should be kept closer to US$70 a barrel - a level Brent touched briefly early this year - and Iran’s equal insistence that US$60 is a better place for oil to trade at.This disagreement could see the cartel start unwinding the cuts as early as June, when it will meet with its partners to discuss progress and next steps. Zanganeh’s explanation of the Iranian stance is anything but a surprise: “If the price jumps [to] around $70 ... it will motivate more production in shale oil in the United States,” he told the WSJ.Zanganeh is not wrong, but the problem is that U.S. drillers have demonstrated that they could pump more at US$60 a barrel, too, so bringing prices closer to that level is not a guaranteed way to stymie U.S. oil production growth. Production has been growing steadily, last week hitting 10.37 million bpd. The oil production in the United States is not the only problem. The bigger problem is soaring U.S. exports that are eating away the market share of OPEC members. This could be the last drop to swing OPEC in Iran’s favor.Bloomberg quoted an ING analyst yesterday as saying that crude could fall below US$60 a barrel because of rising U.S. exports to Asia, a key market for every producer. The OPEC deal is under threat, ING commodities strategist said, because U.S. crude supplies are displacing OPEC’s. “The longer the deal goes on, it’s going to start falling apart. They continue to give market share away to the U.S.”

        Hedge funds resume liquidating bullish oil positions: Kemp - Hedge funds and other money managers cut their combined net long position in the six most important futures and options contracts linked to petroleum prices by 50 million barrels in the week to March 6. The reduction largely reversed an increase of 68 million barrels the previous week, according to position records published by regulators and exchanges (  Portfolio managers have now reduced their net long position in petroleum in five of the last six weeks by a total of 245 million barrels since Jan. 23.The most recent week saw a reduction in net length in NYMEX and ICE WTI (-17 million barrels), Brent (-5 million), U.S. gasoline (-10 million), U.S. heating oil (-5 million) and European gasoil (-13 million).Some of the froth has blown off the market in the last six weeks but the hedge fund community still has a very bullish bias towards oil prices.  Fund managers hold a net long position in the six major petroleum contracts amounting to 1,239 million barrels of oil, a level of bullishness that had never been seen until four months ago. Long positions still outnumbered short positions by a ratio of 10:1, down from a peak of almost 12:1 in January, but again a level of bullishness that was unprecedented until this year. With so many long positions already established, and few remaining short positions to cover, oil prices have struggled to rise further in recent weeks.Instead the market has seen a slow but steady liquidation with existing longs cut by a total of almost 250 million barrels (15 percent) since Jan. 23.

        How tight oil changed global petroleum pecking order --Times of India - A recent International Energy Agency report has said the US will account for most of the world's growth in oil supply in coming years. American output was at a record 10 million barrels a day November last, and expected to exceed 11 million this year. Here's how US became a big oil producer:  Contrary to popular notions, only two of the world's five largest oil producers are from West Asia. The US, Canada and Russia make up the Big 5 of petroleum producers and the US is expected to overtake both Russia and Saudi Arabia in oil production in 2018. Wars in Iraq and Libya in late 2000s, and the West's sanctions on Iran took away millions of barrels of crude from the market. That pushed its price to over $100 a barrel. The price shock came as a boon for US shale (tight oil). Unlike conventional production methods for oil wells, where break-even is much lower, shale oil companies require a certain threshold. This impetus came from the high crude prices, leading to US's shale oil boom.   Oil extraction by fracking is highly controversial because of the adverse environmental impact, including ground- and surface-water contamination, and air and noise pollution. There is tremendous opposition to extraction of oil by this method in other countries. Critics point out that the environmental impact far outweighs economic benefits.

        Oil prices settle lower as EIA data point to further gains in U.S. shale output - Oil futures settled lower Monday, as the latest data fed expectations that U.S. output will continue to rise this year, erasing some of the price gains scored late last week on a lower weekly U.S. oil-rig count. April West Texas Intermediate crude lost 68 cents, or 1.1%, to settle at $61.36 a barrel. The contract on Friday jumped over 3% to settle at $62.04 a barrel on the New York Mercantile Exchange, turning what would’ve been a weekly loss into a climb of roughly 1.3% from the week-ago settlement. May Brent crude fell 54 cents, or 0.8% to $64.95 a barrel. The contract rose 3% Friday, to end at $65.49 a barrel on the ICE Futures Europe exchange—up 1.7% for the week. Both WTI and Brent as recently as Thursday had marked their lowest settlements since mid-February. Crude production from seven major U.S. shale plays is expected to see a climb of 131,000 barrels a day in April to 6.954 million barrels a day, according to a monthly report from the Energy Information Administration released Monday. “The big take away is the implied annual rate of change,” James Williams, energy economist at WTRG Economics, told MarketWatch. “In the shale plays, the expected April production will increase oil at the annual rate of 1.5 million” barrels a day.Williams also pointed out that based on the figures, U.S. shale plays this year will “add enough to U.S. production to match all the oil Venezuela currently produces.”The report followed data from the EIA last week, which showed an increase of 86,000 barrels a day in total U.S. crude output for the week ending March 2. “That figure was close to in line with the February average weekly increase of 91,000 [barrels a day] and is still more than four times greater than the pace of production growth in 2017,” said Tyler Richey, co-editor of the Sevens Report.

        Crude oil futures markets await OPEC and IEA monthly reports -- Crude oil futures were slightly lower at midday in Europe Monday as the market awaited signals from the release of monthly reports from OPEC on Wednesday and the International Energy Agency Thursday. At 1129 GMT, May ICE Brent crude futures were down at $65.17/b, while the NYMEX April light sweet crude contract was lower at $61.79/b. "The inventory data will have some sort of effect but nothing major is scheduled that will really rock the boat," Global Risk Management's Michael Poulsen said. The next trigger for the industry will be the OPEC meeting on June 22 in Vienna, giving the market direction as to whether the existing production cuts will continue into 2019, Poulsen said. Should the cuts be eased, as suggested by Iranian oil minister Bijan Zanganeh to the Wall Street Journal over the weekend, that would curb the profitability for shale producers, lowering shale output. "If the price jumps [to] around $70/b, it will motivate more production in shale oil in the United States," Zanganeh told the WSJ, adding Iran would prefer an oil price of about $60/b. 

        Oil prices fall on relentless rise in US crude output (Reuters) - Oil prices fell on Tuesday, extending losses from the previous session, as the inexorable rise in U.S. crude output weighed on markets. . West Texas Intermediate (WTI) crude futures were at $61.25 a barrel at 0414 GMT, down 11 cents, or 0.2 percent, from their previous close. Brent crude futures were at $64.85 per barrel, down 10 cents, or 0.2 percent. Both crude benchmarks dropped by around 1 percent in their Monday sessions. “Oil prices fell on the back of concerns that surging U.S. production ... could push inventories in the U.S. higher,” ANZ bank said on Tuesday. U.S. crude oil production C-OUT-T-EIA soared past 10 million barrels per day (bpd) in late 2017, overtaking output by top exporter Saudi Arabia. U.S. production is expected to rise above 11 million bpd by late 2018, taking the top spot from Russia, according to the International Energy Agency (IEA). The rising U.S. output comes largely on the back of onshore shale oil production. U.S. crude production from major shale formations is expected to rise by 131,000 bpd in April from the previous month to a record 6.95 million bpd, the U.S. Energy Information Administration (EIA) said in a monthly report on Monday. “Oil prices moved lower ... after (the) Energy Information Administration published a report that crude production from seven major U.S. shale plays is expected to see a climb,” said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA in Singapore. That expected increase would top the 105,000 bpd climb in March from the previous month, to what was then expected to be a record high of 6.82 million bpd, the EIA said. 

        US shale oil will surge to nearly 7 million barrels a day in April - American shale drillers will take aim at the seven million barrels-per-day mark next month, as U.S. oil production continues to hit new record highs. Output from the nation's shale oil regions is poised to grow by 131,000 barrels a day next month, according to the U.S. Department of Energy's statistics arm. The Energy Information Administration sees drillers in the seven shale regions pumping 6.95 million barrels a day in April, up more than 25 percent from a year ago. April's forecast got a boost from upward revisions to EIA's projections for previous months. The Permian Basin in Texas and New Mexico will see production jump by 80,000 barrels a day, according to EIA's outlook. The basin remains the biggest driver of a recovery in U.S. shale output that began in late 2016. The Eagle Ford shale, also in Texas, is seen kicking in 23,000 barrels a day towards the regions' growth. Meanwhile, North Dakota's Bakken shale and the Niobrara region in Colorado and surrounding states will each grow output by 12,000 barrels a day, EIA projects. Drillers across these regions use advanced technology like hydraulic fracturing and horizontal drilling to fracture rock formations and extract oil and gas from the basins.

        March Madness Starts Early As Oil Price Fall On Relatively Light Volume -- March Madness started early in oil as prices fell on relatively light volume and focused on bearish news about ignoring bullish news at its own peril. Traders sold oil off on a report that showed an increase in supply in Cushing Oklahoma, but it is about time. The Nymex Storage hub has seen supply fall at a record pace in recent weeks and seeing that we are deep into refinery maintenance we should start to see the supply recover. Yet, they ignored a report about global oil inventory tightening. According to a report, OECD oil inventories for the first time in 3.5 years have fallen below normal because of a massive inventory draw of 46 million barrels in February which is 6 times the normal draw rate. The global oil balance remains in a sharp deficit despite gains in U.S. production. Oil bears have been bearish on hopes of rising shale production but what we are finding that light shale oil is not what refiners want. A must read in The Financial Times reports “In the oil market, not all barrels are created equal.  “The issue, critics say, is that U.S. shale is far lighter — having been released through narrow fissures in rocks by hydraulic fracturing — than gloopy tarry crudes most people think of when they picture a barrel of oil. This has potentially huge implications because refiners, who turn crude into usable products, have spent decades investing in plants capable of processing far heavier oils that were once expected to dominate supply. The lighter shale barrels, some say, are just not as good for making the products — especially diesel, jet fuel and other so-called middle distillates — that the world increasingly needs.” They warn of a potential crunch in years to come caused not by an outright shortage of crude, but by refiners scrambling to compete for more conventional barrels as U.S. shale is found wanting. This is another reason why we have warned not to put too much trust in shale. Shale oil is giving bears a false sense of security while we are seeing the demand for diesel rise and supply stay below normal. So, when we talk about global inventory we must remember that some of those lighter grades may not get used. It may give us an overinflated view of oil storage, meaning that supply is tighter than many thinks.

        Crude Oil Prices Turn Higher Ahead of API Report - Crude oil prices turned higher on Tuesday, as investors turned their attention to this week's U.S. supply reports, although ongoing concerns over U.S. production levels continued to weigh. The U.S. West Texas Intermediate Crude Oil WTI Futures April contract was up 50 cents or about 0.81% at $61.86 a barrel by 03:35 a.m. ET (07:35 GMT), off session lows of $60.80. Elsewhere, Brent oil for May delivery on the ICE Futures Exchange in London advanced 58 cents or about 0.89% to $65.53 a barrel. Oil prices initially came under pressure after the International Energy Agency (IEA) said in its monthly report on Monday that U.S. crude oil production jumped above 10 million barrels per day (bpd) at the end of 2017, overtaking output by top exporter Saudi Arabia. The IEA also said that U.S. production is expected to rise above 11 million bpd by late 2018, outpacing Russia. Separately, the U.S. Energy Information Administration (EIA) said that U.S. shale production is expected to rise by 131,000 bpd in April from the previous month to a record 6.95 million bpd. That would top the 105,000 bpd climb in March to what was then expected to be a record high of 6.82 million bpd. Fears that rising U.S. output could dampen global efforts to rid the market of excess supplies persist. The Organization of the Petroleum Exporting Countries (OPEC), along with some non-OPEC members led by Russia, agreed in December to extend oil output cuts until the end of 2018. Elsewhere, gasoline futures gained 0.41% to $1.904 a gallon, while natural gas futures were up 0.32% to $2.785 per million British thermal units. 

        WTI/RBOB Rise After Smaller Than Expected Crude Build - Anxiety over Rexit and growing concerns that global demand might not absorb swelling US supplies sent WTI/RBOB notably lower today but prices rebounded modestly after API showed notable product draws and smaller than expected crude build. “The EIA report yesterday about the expected increase in shale output next month certainly weighed on things,” John Kilduff, founding partner at Again Capital, said in a phone interview to Bloomberg. API:

        • Crude +1.156mm (+2.5mm exp)
        • Cushing -155k (unch exp)
        • Gasoline -1.262mm
        • Distillates -4.258mm - biggest draw since Oct 2017

        12th week in a row of Cushing stock declines but what was notable was a smaller than expected crude build and sizable product draws... WTI/RBOB prices lifted off the day's lows after the API data...

        Uncertainty Grips Oil Markets Ahead Of EIA Report -- Oil prices were flat on Monday before rising and falling on Tuesday morning. The uncertainty in markets is sure to continue as analysts await more direction from the upcoming EIA weekly data release. The dip in the rig count last week provided a jolt on Friday, but concerns about surging U.S. shale supply continue to linger.  President Trump’s decision to fire Sec. of State Rex Tillerson and replace him with current CIA Director Mike Pompeo caught the world (and Rex Tillerson) by surprise. The move is significant because Trump specifically cited his disagreement with Tillerson over the Iran nuclear deal as a key reason in the former Exxon CEO’s ouster. Replacing him with Mike Pompeo does not bode well for the nuclear deal, as Pompeo is a notorious hawk vis-à-vis Iran. The move increases the odds of confrontation between the U.S. and Iran, although Pompeo still needs to be confirmed by the Senate. . With U.S. oil production soaring, more of that oil will be exported. Some of it will head to Asia, where it will edge out OPEC for market share. This trend could begin to undermine the resolve of OPEC to continue the production cuts, according to ING Groep NV. “The longer the deal goes on, it’s going to start falling apart,” Warren Patterson, commodities analyst at ING, told Bloomberg. “They continue to give market share away to the U.S.” BP and Shell said that they have seen improved performances from legacy oil fields, which typically suffer from steeper decline rates. The IEA estimates that overall, the decline rate at mature fields was 5.7% last year, the lowest in a decade. The better performance comes as the industry tries to become more efficient at existing operations. “Companies are focusing on the basics,” Wael Sawan, executive vice-president for deep water at Shell, told Bloomberg. “So there was a massive re-focus on existing wells. It’s the cheapest and most profitable barrel that companies can access.”

        Oil market shrugs off rising threat to Iran deal: Kemp - (Reuters) - President Donald Trump's decision to replace his secretary of state with a more hawkish figure should have been bullish for oil prices since it increases the probability the nuclear deal with Iran will be abandoned in May. Failure to recertify the deal could lead to the re-imposition of secondary sanctions and pressure from the United States on other countries to reduce their purchases of Iranian crude again. But the decision to replace the secretary of state barely registered on the spot price of Brent crude and the six-month calendar spread continued to soften, suggesting that traders see little impact for the moment. In theory, failure to recertify could remove hundreds of thousands of barrels of crude from the market and cause a significant tightening of the supply-demand balance. For the time being, however, the Trump administration's increasingly hawkish position on Iran has not been enough to offset the impact of increasing supply from shale. Crude traders may be under-estimating the president's determination to end what he has termed a "terrible" deal and ratchet up the pressure on Iran. But the president and his new secretary of state, assuming the nominee is confirmed by the U.S. Senate, will still face the same diplomatic constraints in ending the deal and renewing the boycott of Iranian oil. European countries, including Britain, France and Germany, are no more eager than before to abandon the nuclear deal or re-impose broad economic sanctions. Russia is also unlikely to cooperate since relations and cooperation with the United States are at the lowest ebb since the end of the Cold War. And the United States has embarked on a trade war with China, which is further complicating a relationship already beset by multiple other disputes. In the circumstances, traders may have concluded even a failure to recertify the deal will not lead to the removal of a significant amount of crude from the market. They may also have concluded any loss of crude from Iran would be made up by increased production and exports from Saudi Arabia, Kuwait, the United Arab Emirates, Iraq and Russia.

        WTI Down, RBOB Up After Huge Gasoline Draw, Crude Build, Record Production -  WTI/RBOB prices held gains from last night's smaller-than-expected crude build from API, but prices action was mixed after DOE reported a bigger than expected crude build and bigger than expected gasoline draw (as production hit a new record high).Bloomberg Intelligence's Valle notes that maintenance season for refiners will deplete gasoline inventories over the coming weeks as the plants open space for summer components. Despite an improving outlook for demand, crack spreads haven't meaningfully recovered after falling more than $1.20 a barrel over the past month, though they may recoup some of their losses in coming weeks. Demand is up 3% in 2018 vs. the five-year average.“The oil market is more fragile than it seems,” said Norbert Ruecker, head of commodity research at Julius Baer Group Ltd. in Zurich. “Demand growth is strong, but supply is catching up.”  DOE:

        • Crude +5.022mm (+2.25mm exp)
        • Cushing +338k (unch exp) - first build since Dec 2017
        • Gasoline -6.27mm - biggest draw since Sept 2017
        • Distillates -4.36mm - biggest draw since Oct 2017

        Some stunning numbers here with a much bigger than expected crude build as products saw a huge draw (and Cushing stocks actually increased for the first time this year)... Bloomberg does have one major concern. Javier Blas issues a "statistical warning"... The EIA is again running a huge adjustment factor to hammer down its supply, demand, and stocks balance sheet into place. The adjustment was last week positive to the tune of 605,000 b/d (the only second time in 10 years the adjustment factor is positive by more than 600,000 b/d). The previous week, the adjustment was -570,000 b/d.

        Oil Prices Rise on Falling Fuel Inventory -- Oil prices rose Wednesday, recovering from losses in earlier trading as a drop in fuel stockpiles outweighed larger-than-anticipated increase in crude inventories and relentlessly rising U.S. production.Light, sweet crude for April delivery rose 25 cents, or 0.41%, to $60.96 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 25 cents, or 0.39%, to $64.89 a barrel on ICE futures Europe.U.S. crude futures initially tumbled after the U.S. Energy Information Administration reported that inventories of crude oil rose by 5 million barrels—double what analysts surveyed by The Wall Street Journal had anticipated, and significantly more than the 1.2 million-barrel build reported by industry group the American Petroleum Institute on Tuesday. But on the positive side for oil prices, consumers soaked up large amounts of fuel. Gasoline stockpiles dropped by 6.3 million barrels and diesel stockpiles fell by 4.4 million barrels—outpacing the drops analysts had been expecting. Gasoline futures rose 3.8 cents, or 2.01%, to $1.9243 a gallon. Diesel futures rose 1.32 cents, or 0.7%, to $1.8871 a gallon. The oil market continued to be caught between rising U.S. output and efforts by the Organization of the Petroleum Exporting Countries and other major producers to cut output. The EIA reported that U.S. production continued its relentless march higher, rising by 2 million barrels a day to yet another weekly record of 10.38 million barrels a day.The International Energy Agency and the EIA have both recently revised their U.S. oil production forecasts higher. Output has been helped by the 25% rise in oil prices over the past year, along with improvements in efficiency and technology. OPEC crude production continued to fall in February, dropping by 77,000 barrels a day compared with the prior month, to average 32.19 million barrels a day, the cartel said Wednesday in its closely watched monthly oil market report. But the group said total global oil supply rose last month, in a sign that U.S. shale production is undermining Saudi efforts to rebalance the market.In an unusual news release Wednesday, Saudi Arabia’s national oil company said it would continue cutting crude oil production, signaling its commitment to a production cap agreement after Iran called for gradually lifting output curbs.

        Oil edges up but rising crude supply checks gains (Reuters) - Oil prices edged higher in choppy trade on Thursday after the International Energy Agency said global oil demand is expected to pick up this year, but warned supply is growing at a faster pace.   Prices notched their second consecutive day of gains, as West Texas Intermediate (WTI) crude CLc1 futures rose 23 cents to settle at $61.19 a barrel, a 0.4 percent gain. Brent crude LCOc1 futures rose 23 cents to settle at $65.12 a barrel. Rising global oil demand, along with supply constraints from the Organization of the Petroleum Exporting Countries, has helped keep oil above $60 a barrel. The IEA said global crude demand would pick up this year, which was “reassuring” to investors. However, the IEA also noted rising supply, limiting crude gains. The IEA believes non-OPEC supply, led by the United States, will grow by 1.8 million bpd this year, while demand will grow by about 1.5 million bpd. The relentless climb in U.S. crude output C-OUT-T-EIA has loomed over markets, as production hit another record last week at 10.38 million bpd. OPEC on Wednesday raised its forecast for non-member oil supply this year to almost double the growth predicted four months ago. OPEC and other producers led by Russia began cutting supply in January 2017 to erase a global crude glut that had built up since 2014. This has been somewhat offset by surging U.S. crude production. Prices bounced around after the United States announced new sanctions against Russian individuals and groups, including Moscow’s intelligence services and a Russian propaganda organization. “The rising tensions between the West and Russia raise the potential for reduced trade flows and economic activity, which would diminish energy demand growth,”  Prices were supported in the morning by a pickup on Wall Street, but U.S. stocks retreated throughout the day. The Dow Jones Industrial Average was still up about 0.5 percent, but the S&P 500 edged lower.

        Oil price volatility at lowest since before the slump: John Kemp (Reuters) - If the oil market has felt unusually quiet in recent weeks and months, that probably reflects the almost complete lack of sharp daily price movements. While prices have soared by more than 40 percent since the middle of 2017, day-to-day volatility has fallen to its lowest level since 2014, with a relatively smooth and orderly upward adjustment in prices. Short-term volatility has been trending downwards since early 2016 and in January fell to its lowest since August 2014 ( The 20-day standard deviation of daily price moves expressed at an annualised rate -- one common measure of volatility -- dropped to only 13 percent in January from 80 percent almost two year earlier. Volatility in early and mid-January was in the bottom fifth percentile for any 20-day period since the start of 1990. The relatively sharp drop in oil prices at the start of February has since pushed volatility slightly higher, at least temporarily, but even that decline was relatively smooth. Volatility is still only in the 28th percentile of the post-1990 distribution and is set to decline again if the market’s more recent calm is sustained. There have been no significantly large daily price movements in Brent, up or down, since June 2017, which was the last time there was a daily move exceeding 2 standard deviations. The last really abnormal price move, exceeding 3 standard deviations and nearing 4, was all the way back in November 2016, when OPEC announced that it had reached agreement on cutting production. 

        Bearish News Fails To Subdue Oil Prices -- OPEC acknowledged this week that U.S. shale production was rising quickly, and suggested that supply growth would surpass demand this year. Trump’s recent tariffs have created fears of a global trade war, inventory declines have slowed and the rig count has risen once again. Despite all this bearish news, oil prices jumped on Friday, with WTI breaking above $62 and Brent nearing $66. Saudi Arabia dismissed concerns of a fraying OPEC deal, stating that the country would remain committed to the production limits this year. The response came after the Iranian oil minister suggested his country wanted to ramp up production, sparking speculation that the OPEC deal could begin to suffer, but Saudi Aramco said on Wednesday that its output would remain below 10 million barrels per day (mb/d). “Saudi Arabia continues to lead by example by producing below the production targets it agreed to,” the Saudi energy ministry said in the news release. That statement was unusual because the company typically does not publish what it will produce ahead of time.  The U.S. EPA chief Scott Pruitt indicated that the agency would battle with California over the state’s tighter fuel efficiency requirements for passenger vehicles. The EPA has an April 1 deadline to decide whether or not it wants to try to revise Obama-era fuel efficiency standards for cars and light trucks for model years 2022-2025. California has often led the nation in such standards, which have been credited with dramatically improving the efficiency of the nation’s auto fleet and slowing the growth of gasoline consumption. 

        Oil prices set for weekly drop as concerns about rising supply - (Reuters) - Oil prices were set to fall this week, with both benchmarks dropping slightly on Friday, on concerns among investors about rising supply from the U.S. and other nations threatening to undermine efforts by OPEC and other producers to tighten the market. West Texas Intermediate (WTI) oil futures for April delivery fell 3 cents, or 0.1 percent, to $61.16 a barrel at 0354 GMT, after settling up 23 cents on Thursday. WTI is set to fall 1.4 percent this week, reversing the previous week's 1.3 percent gain. Brent crude futures trading in London fell 7 cents to $65.05 a barrel after settling up 23 cents. Brent is down 0.7 percent for the week. Several reports this week renewed investor focus on the potential for rising supply to overwhelm the expected gains in crude demand for 2018. On Thursday, the International Energy Agency (IEA) said global oil supply increased in February by 700,000 barrels per day (bpd) from a year ago to 97.9 million barrels per day. The IEA also said supply from producers outside of the Organization of the Petroleum Exporting Countries (OPEC), led by the United States, will grow by 1.8 million bpd this year versus an increase of 760,000 bpd last year. The supply increase is more than the IEA's expected demand growth forecast for this year of 1.5 million bpd. The agency also reported that commercial oil inventories in industrialized nations rose in January for the first time in seven months. That directly undermines the efforts of producers led by OPEC and Russia, the world's biggest oil producer, to cut supply in order to reduce global stockpiles.

        Oil Prices Rise Despite Climbing Rig Count | - Baker Hughes reported another 6-rig increase to the number of oil and gas rigs this week. The total number of oil and gas rigs now stands at 990, which is an addition of 201 rigs year over year.The number of oil rigs in the United States increased by 4 this week, for a total of 800 active oil wells in the U.S.—a figure that is 169 more rigs than this time last year. The number of gas rigs rose by 1 this week, and now stands at 189; 32 rigs above this week last year.The oil and gas rig count in the United States has increased by 66 in 2018.Canada continued its severe losing streak, with a decrease of 54 oil and gas rigs on top of last week’s loss of 29 oil and gas rigs. Canada now has 57 fewer rigs than it did a year ago. Oil prices managed to climb this last week and were up today without any clear catalyst. What is clear is that while the threat of steel tariffs and strong U.S. crude oil production, which rose again in the week ending March 09 to 10.381 million bpd, seems to be limiting gains, there are insufficient catalysts to bring oil prices down.At 12:28 pm EST, the price of a WTI barrel was resilient, trading up $0.98 (+1.60%) to $61.84—a ~$.30 increase over last week’s prices. The Brent barrel was also trading up on the day, by $0.84 (1.29%) at $65.78—an increase of about $0.40 over last week’s level. At 1:07pm EST, both benchmarks had gained ground, with WTI trading at $62.29 (+$1.10) and Brent trading at $65.88 (+$0.93).

        Baker Hughes: US rig count gains 6 units to 990 - The US drilling rig count gained 6 units to 990 working during the week ended Mar. 16, data from Baker Hughes indicate. This total is up 201 units from a year ago.Offshore units were unchanged from last week with 13 rigs working in the Gulf of Mexico. A total of 973 rigs were drilling on land, up 6 from last week. The number of rigs drilling in inland waters was unchanged at 4 units.Rigs targeting oil were up 4 units to 800 and also up from the 631 rigs drilling for oil this week a year ago. Gas-targeted rigs were up 1 unit to reach 189. This time a year ago, 157 units were drilling for gas.Among the major oil and gas-producing states, Oklahoma saw the largest increase in rigs week over week with a 4-unit gain to reach 124 rigs working. North Dakota, at 53 units this week, was up 3. Texas was up 2 units this week to 492. New Mexico, Ohio, West Virginia, and Arkansas were each up 1 unit to respective counts of 88, 23, 17, and 1. California and Utah, at respective counts of 14 and 9, were both unchanged this week. Louisiana, at 57, and Wyoming, at 30, were down 1 unit each. Pennsylvania, Colorado, and Alaska were all down 2 rigs to respective counts of 40, 29, and 7. Canada lost 54 rigs to 219 working from a week ago. There are 57 fewer rigs working than this week a year ago. Oil-directed rigs decreased 52 units this week to 144, while those targeting gas fell 2 units to 75.

        WTI Suddenly Spikes Above $62 | Zero Hedge - WTI Crude futures just suddenly spiked above $62 (with no obvious news catalyst)... Bloomberg points to today's gains (pre-spike) as being driven by investors weighing surging U.S. crude production against a warning from the International Energy Agency of an impending shortfall in global supplies.“The market is probably less concerned about the rise in U.S. oil production because the global economy is doing quite well, so there is demand for the additional oil,” said Jens Pedersen, senior analyst at Danske Bank A/S.“It seems like oil has found its feet following a volatile start to the year.”But this is not the first sudden spike to run stops above $62.. “When the market falls into sideways trading in a band, you get a lot of price fluctuations that you have to turn a blind eye to,” s ays Gene McGillian, a market research manager at Tradition Energy in Stamford, Conn.  Perhaps of note is the 50-day moving average is at $62.61 (which would run the stops above this week's highs).  RBOB and Energy stocks are also spiking...  And Breakevens have picked up as oil spikes...

        Oil prices jump, Brent hits highest in more than 2 weeks - (Reuters) - Oil prices jumped on Friday, with Brent crude futures hitting their highest in more than two weeks as U.S. stock prices rose and investors covered short bets ahead of a weekend in which the U.S. news program “60 Minutes” will air an interview with Saudi Arabia’s crown prince. Saudi Crown Prince Mohammed bin Salman will be on “60 Minutes” on Sunday “comparing Iran’s Ayatollah to Hitler, and the battle in Ghouta, Syria, is ramping up,” sa “You can’t be short oil over the weekend with all that going on in the region.” Brent futures rose $1.09 to settle at $66.21 a barrel, a 1.7 percent gain. During the session, Brent hit $66.42, its highest since Feb. 28. U.S. West Texas Intermediate (WTI) crude futures for April, which will expire on Tuesday, rose $1.15 to settle at $62.34 a barrel, a 1.9 percent gain. WTI hit a high of $62.54, its highest since March 7. Brent futures gained 1 percent for the week, while WTI marked a weekly rise of 0.4 percent. It was the second straight weekly rise for both contracts. Gains on Wall Street also supported crude futures, which have recently been moving in tandem with U.S. stock indices. Hedge funds and other money managers cut their bullish bets on U.S. crude oil futures and options in the week to March 13, as crude prices fell for a second week, the U.S. Commodity Futures Trading Commission (CFTC) said. The speculator group cut its combined futures and options position in New York and London by 24,667 contracts to 453,864 during the period. The cuts marked the second consecutive week in which speculators cut their net long positions in the market. U.S. drillers added four oil rigs this week, bringing the total count to 800, General Electric Co’s Baker Hughes energy services firm said. It was the seventh U.S. rig count rise in eight weeks. On Thursday the International Energy Agency (IEA) predicted global oil demand would pick up this year, but supply is growing at a faster pace, which should boost inventories. The agency raised its forecast for oil demand this year to 99.3 million barrels per day (bpd) from 97.8 million bpd in 2017, and said it expected supply from non-OPEC nations to grow by 1.8 million bpd in 2018 to 59.9 million bpd, led by the United States.  

        OPEC Feb oil output 32.19 mil b/d, down 80,000 b/d from Jan: secondary sources - Months of confidence that global demand growth in 2018 will amply absorb any increases in non-OPEC supply appear to have finally eroded, with OPEC's analysis arm on Wednesday issuing its first mildly bearish outlook for the year. In its closely watched monthly oil market report, OPEC projected a year-on-year rise of 1.66 million b/d in non-OPEC supplies in 2018, while demand is seen increasing by 1.60 million b/d. This is the first report since OPEC began forecasting 2018 figures in July 2017 that its estimate of non-OPEC supply growth has exceeded its prediction of global demand, and it indicates that the bloc will have to maintain its production discipline if it wants the market's rebalancing to continue, though continued declines in Venezuelan output provide some cushion for other members. Non-OPEC supply in 2018 "is now expected to grow at a faster pace," the report stated, and will average 59.53 million b/d, a 280,000 b/d upward revision from last month's forecast, largely due to an increase in forecast US output. The report noted that oil prices over the past few months have been higher than they have been in more than two years "For 2018, higher growth is expected on the back of the projected increase in US shale production following a better price environment, not only for shale producers, but also for other countries, such as Canada, UK, Brazil and China," the report said. Global demand will hit 98.63 million b/d in 2018, a 30,000 b/d upward revision from February's report as OPEC continues to see healthy economic growth driving greater consumption, though it warned that rising interest rates and the recent decision by the US to impose steel and aluminum tariffs could dampen that momentum.Demand for OPEC crude will average 32.61 million b/d in 2018, the organization calculated, a 200,000 b/d decrease from last month's projection. Assuming OPEC keeps its production at the 32.19 million b/d in February as estimated by secondary sources used to track output independently in the report, the market will tighten significantly in the second half of the year, following stock builds in the first half. OECD commercial oil inventories rose 13.7 million barrels in January and remain 50 million barrels above the five-year average, OPEC estimated. The stocks represent 60.0 days of forward cover, 0.6 days lower than the five-year average.  

        Saudis To Join The Fracking Revolution - Saudi Arabia, the world’s third largest oil producer, plans to further its fossil fuel industry and invest in unconventional natural gas production, Bloomberg reported. Saudi Arabia’s state-owned oil giant Saudi Aramco will spend $300 billion over the next decade to boost natural gas exploration and production while maintaining spare oil production capacity. Part of the money will fund fracking projects in a shale field comparable to Texas’ Eagle Ford Shale — the most invested in oil and gas development in the world. Aramco General Manager of Unconventional Resources Khalid Al Abdulqader said Wednesday Saudi shale supplies are “huge.” Production will begin this month and hit target capacity by 2018’s end, Abdulqader said. The target capacity Saudi Arabia is aiming for is unclear, according to Bloomberg.Saudi Arabia has been trying to diversify its energy production for years in order to curb its reliance on oil while freeing up some of its reserves for export out of the country.“Saudi Arabia has an absolute dire need for gas. They want to shift their power more toward gas-based sources so they can free up oil for exports,” London-based BMI Research Oil and Gas Analyst Emma Richards told CNBC in 2015 when Saudi Arabia was starting up a pilot fracking project. “They’ve been investing quite heavily over the last few years in R&D in different kinds of fracturing technologies.”

        Saudi Aramco international listing looks increasingly difficult: sources (Reuters) - Saudi Arabia is increasingly looking to just float oil giant Saudi Aramco locally as plans for an initial public offering (IPO) on an international exchange such as London or New York hang in the balance, sources close to the process said. The kingdom is counting on being awarded emerging market status by index complier MSCI in June to help Saudi Aramco attract Western funds, in addition to cornerstone investors from China, Japan and South Korea, the sources said. “I would guess it is about evens that there will be no international IPO,” said a high-level source familiar with the preparations, saying they were proving to be a disappointment. Saudi Arabia is planning to list up to 5 percent of Saudi Aramco in an initial public offering that could value it at up to $2 trillion and make it the world’s biggest oil company by market capitalization. Saudi Energy Minister Khalid al-Falih said last week that Aramco was too important to risk listing in the United States because of litigation concerns, such as existing lawsuits against rival oil companies for their role in climate change. British officials have been told by Saudi counterparts London has a chance to secure the listing but only in 2019 at the earliest, according to the Financial Times, and sources told Reuters the kingdom was now focusing on a listing on the local exchange, or Tadawul. “The only thing we know today is that Tadawul will be the key listing location as our national exchange,” Falih told CNN. “We are waiting for the reforms to be in place and to join MSCI and Aramco listing in Tadawul will be catalytic for that capital market as we bring international capital to the kingdom,” he told the U.S. channel last week. 

        Aramco IPO Delayed Until 2019 As New York Listing Grows Increasingly Remote - For more than two years, investment bankers in the US and London have been salivating over the prospect that Aramco, the state-owned Saudi oil company that’s believed to be one of the most valuable companies in the world, could choose to list shares representing a 5% stake in the company on the London Stock Exchange, New York Stock Exchange, or Nasdaq. But despite reports that the royal family had “shortlisted” New York, London and Hong Kong as possible venues for the offering - news that intensified an already escalating geopolitical “Game of Thrones” between bankers and politicians - the Kingdom is continuing with a Financial Times-assisted campaign of mixed messaging, suggesting that the IPO could either be delayed for another year or two, or possibly being shelved indefinitely in favor of a direct sale to a coterie of Asian sovereign wealth funds or possibly even directly to the Chinese government (much to the US's chagrin). In its latest inside-baseball report on the endlessly fraught back-and-forth, the Financial Times is saying a public offering won’t happen until 2019 at the earliest - if it happens at all. However, in an unusual twist, the paper is sourcing its story to UK officials, not the Saudis, as has often been the case in the recent past.Saudi Aramco’s listing is unlikely to go ahead this year, according to British officials who have been warned by their Saudi counterparts that the world’s biggest flotation was expected to be delayed.Several people briefed on the talks said London still had a good chance of securing the listing, which Riyadh said could value the state energy company at $2tn, but any foreign flotation was likely to happen in 2019 at the earliest.Saudi Arabia wants to sell 5 per cent of the world’s largest oil-producing company as part of an economic reform programme driven by Mohammed bin Salman, the Saudi crown prince, who visited the UK this week.

        The Saudi Aramco IPO Math Problem: Cash > Barrels - Rule number one with an IPO: Don't announce a target value years ahead of the actual sale -- especially if one is tempted to use the word "trillion." That rule was broken way back with Saudi Arabian Oil Co., or Saudi Aramco. In early 2016, when Prince Mohammed bin Salman first unveiled plans to list shares in the oil behemoth, he boasted about a price tag of $2 trillion. A couple of years on, the IPO hasn't yet happened, and there are now signs it could be pushed into 2019. Naturally, it takes time to organize the sale of a company as big and complex as Aramco. But that $2 trillion figure may also be an obstacle in itself, especially as Aramco's IPO isn't just any share sale but a milestone in the prince's plans to remake his country. The figure looks like it resulted from a highly scientific process of multiplying Saudi Arabia's roughly quarter-trillion barrels of proved oil reserves by a multiple of $8. But the fact that Aramco is being privatized in the first place undercuts such simple valuation by reserves, because the IPO acts as a hedge against weaker long-term oil demand. It makes little sense to apply such blanket valuations against 60 years' worth of production (companies usually carry about 10 - 15 years of proved reserves on the books). As oil enters an era of greater competition between producers and with other fuels, investors largely want one thing from the majors: yield. Growth is nice to have, but what counts is how much free cash flow they can generate to fund dividends (hence, Exxon Mobil Corp.'s big spending plans have met with disdain). Aramco's stock would need to compete on those terms. Here are the free cash flow yields -- as a percentage of market capitalization -- for a selection of Aramco's likely peers:  Applying this to Aramco is tricky until that IPO prospectus turns up. Still, I've got an envelope on my desk, so I can sketch out some rough numbers on the back of it. WARNING: assumptions dump ahead.

        Cash-Flush Saudi Arabia Gifts Iraq World's Biggest Soccer Stadium - In mid-January, the Saudi government netted more than $100 billion in cash, stock, real estate and other assets stemming from the 2017 Saudi Arabian purge. We reported the total amount raised could have been enough to cover the country’s 2017 budget deficit, and then some.Last week, Saudi Arabia’s King Salman bin Abdulaziz Al Saud and Saudi Arabia’s Crown Prince Mohammed bin Salman went on a spending spree — purchasing $10 billion worth of Eurofighter Typhoon jets from the United Kingdom. Moreover, King Salman promised to construct the world’s largest football stadium in Baghdad.It is still unclear if the king or prince tapped into the $100 billion of purged assets or used their American Express Centurion card, also dubbed “The Black Card,” to buy Eurofighter jets and or the world’s largest stadium, as cardholders have no preset spending limit.There are many unanswered questions regarding how these deals transacted... Besides the acquisition of the Eurofighter jets - most likely headed to participate in the Yemeni Civil War, King Salman gifted Baghdad a monstrous 135,000-seat stadium after a friendly soccer match resulted in Iraq defeating Saudi Arabia 4-1, in late February. . According to Arab News, the official headline was announced on March 05 that King Salman would fund the construction of the new football stadium following a telephone call with Iraqi Prime Minister Dr. Haider Al-Abadi on March 04.

        Analysis: Iran reopens split with Saudis over OPEC oil output policy - Iran is stirring up potential OPEC trouble by reopening the debate over when to signal an end to the group's current production cut deal with Russia. There are good arguments for it to end soon if crude bursts through the $70/b level, but Tehran's dilapidated fields are in no shape to win a new market share battle. Iranian oil minister Bijan Zanganeh argues higher prices are reviving US shale at OPEC's expense. In a recent interview with The Wall Street Journal, he said the 14-member group may agree at its next meeting June 22 on a strategy for ending its cuts starting in 2019. Zanganeh insists Saudi is onboard with the idea, but his message contradicts recent signals of longer term cooperation between OPEC and producers outside the group led by Russia. Although Zanganeh may have a point about shale, Iran is powerless to halt its revival. The Islamic republic can probably only pump an additional 100,000 b/d above its current output level of around 3.83 million b/d, according to the latest S&P Global Platts OPEC survey. "I don't think Iran has the power to ruin the party," said Bassam Fattouh, director of the Oxford Institute for Energy Studies, noting that the normally hawkish country has not voiced concern about the impact of higher prices on supply and demand in the past. "Maybe it is an effort to present itself as a reasonable producer given that it has no real influence on market dynamics." Nevertheless, Zanganeh's remarks were enough to spook traders. Brent futures fell more than $1/b early Monday to approach $64/b before recovering later in the day. The International Energy Agency, in its medium-term oil market forecast released last week, is even less optimistic about Iran's oil industry. The Paris-based agency estimates Iran could sustain a crude production level of 3.85 million b/d in 2018 and 3.90 million b/d in 2019. Incremental gains, but hardly the heft to undo the cuts by Saudi Arabia alone. 

        Post Tillerson: Is The Iran Nuclear Deal (& Its Oil Production) At Risk? - President Donald Trump sacked Secretary of State Rex Tillerson via Twitter on Tuesday, replacing him with current CIA Director Mike Pompeo. The move has some grim implications for the U.S.’ approach towards Iran in the months ahead. Sec. of State Rex Tillerson has been panned as “at or near the bottom of the list of secretaries of state, not just in the post-Second World War world but in the record of US secretaries of state,” according to Paul Musgrave, a scholar of US foreign policy at the University of Massachusetts Amherst. Other foreign policy scholars came to the same conclusion. Tillerson presided over a dismantling of the U.S. diplomatic corps – upwards of 60 percent of the agency’s top career diplomats resigned – and will exit Foggy Bottom without any notable accomplishments. But, the dismal tenure for Tillerson could be followed by an even darker period in which the U.S. steps up confrontation on multiple fronts around the world. For all his faults, Tillerson, at least by comparison, was viewed as a relative moderate. He will be replaced by the current CIA Director Mike Pompeo, a notorious hawk who has politicized the CIA to great degree. And one of Pompeo’s top targets could be Iran. Pompeo has previously called for tearing up the 2015 Iran nuclear deal. “Pompeo has done nothing but talk about how we need to take the gloves off,” Stephen M. Walt, a professor of international relations at Harvard’s Kennedy School, told the New York Times. Indeed, the NYT notes that just days after Trump was elected, Pompeo wrote in Twitter, “I look forward to rolling back this disastrous deal with the world’s largest state sponsor of terrorism.” Pompeo has repeatedly signaled support for a harder line, whereas Tillerson appeared to be one of the few figures holding the administration back from taking aggressive action on Iran and North Korea. As such, heightened confrontation or outright conflict with Iran appears more likely. The President has to periodically recertify that Iran is complying with the terms of the deal, waiving U.S. sanctions for several months. Trump has done this several times, begrudgingly, in part due to Tillerson’s persuasion. With Tillerson out and Pompeo in, all signs pointing to the U.S. trying to rip up the agreement when the next recertification deadline arrives in May. 

        Saudi Crown Prince Says Will Develop Nuclear Bomb If Iran Gets One; Compares Ayatollah To Hitler - In a "60 Minutes" interview set to air on Sunday, the de facto leader of Saudi Arabia, Crown Prince Mohammed bin Salman, said his country would quickly obtain a nuclear bomb - if arch rival Iran successfully develops its own nuclear weapon.The Saudi crown prince, currently on a whirlwind global PR tour to relieve his western allies of the bitter aftertaste that resulted from last year's unprecedented extortion crackdown on Saudi Royals, which left many of them imprisoned in the Riyadh Ritz Carlton for months until they "agreed" to hand over their loot to the cash-depleted government, said that "Saudi Arabia doesn’t want to own a nuclear bomb. But without a doubt, if Iran develops a nuclear bomb, we will follow suit as soon as possible.”This is not surprising: last month we reported  that 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. Although the Saudis 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: “I’m not saying Saudi would want to enrich uranium tomorrow or anytime soon but they don’t want to be committed to anything that bans them from doing it. It is quite political,” the unnamed senior official said.His comments have stirred speculation that one of the purpose of the nuclear program is to compete with Iran and maintain an option to develop nuclear weapons. Today's MbS comments confirm that the nuclear arms race between Iran and Saudi Arabia is officially on, even as much of the Middle East is rapidly breathing down their neck.

         NATO Relocates Middle East Airbase from Turkey to Jordan At least one substantial part of an incredibly deadly and aggressive force has been gradually relocated, from an ‘uncertain’ and according to the West suddenly ‘unreliable’ country (Turkey), to the impoverished but obedient Kingdom of Jordan. It is now clear that NATO is not sure, metaphorically speaking, which direction is Turkey going to fly in, and where it may eventually land. It is panicking and searching, ‘just in case’, for an exit strategy; almost for an escape plan from the most important regional power. Entrance to Incirlik airbase, Turkey. Is the West really losing Turkey? Nobody knows. Most likely, nobody in Ankara is sure, either, including Mr. Erdogan. But what if … What if Erdogan moves closer to Russia, even to China? What if Turkey’s relationship with Iran improves? What if Ankara has finally gotten tired of being humiliated, for years and decades, by the European Union? And what if it does not want to follow Washington’s diktat, anymore? These ‘nightmarish’ scenarios are most likely turning many apparatchiks in Brussels, Washington and London, into insomniacs. NATO does not want to leave anything to chance. If not Turkey, then where? Where should all those nukes, fighter jets, bombers and ‘Western military advisors’ go? The Kingdom of Jordan seems to be the best candidate. Conveniently, it is greatly impoverished, and it has been historically submissive to its Western handlers. It is essentially dependent on foreign, mainly Western, aid and would do just about anything to please the rulers in Washington, London or Berlin. Most importantly for the West, Amman is sufficiently oppressive, lacking any substantial opposition. If dissent gets too vocal, its members get kidnapped and tortured. Therefore, it is natural that both Europeans and North Americans feel safe and at home here.

        Russia threatens counter-strikes on US forces in Syria --Amid rapidly escalating provocations against Russia by the US, Britain and other allies, General Valery Gerasimov, the chief of general staff of the Russian Armed Forces, vowed on Tuesday to attack any forces that directly or indirectly target Russian troops operating in Syria.Gerasimov told a gathering of his top commanders: “If the lives of Russian officers are threatened, the Armed Forces of the Russian Federation will retaliate against missile and launch systems.”The general’s statements are a direct warning that Russia will attack American warships or airbases that are responsible for any strikes. They were made in response to a series of unsubstantiated accusations by American officials that the Russian-backed Syrian government has used chemical weapons in its operations against US-backed rebel militias. On April 6, 2017, such allegations were used as the pretext by the Trump administration to fire dozens of cruise missiles against one of the Syrian military’s main airbases. According to reports at the time, Russia was informed shortly before the attack, so it could evacuate any personnel it had in the vicinity. On Sunday, US Defense Secretary Jim Mattis cited unconfirmed reports of chlorine attacks on the rebel-held Damascus suburb of eastern Ghouta and threatened the Syrian government with retaliation if they were confirmed. He said that President Donald Trump had “full political maneuver room” to take whatever decision he believed was appropriate.

        An Unprecedented Peace Offer to the Taliban -  NYT — On Feb. 28, President Ashraf Ghani of Afghanistan made the most comprehensive offer inviting the Taliban to join direct, formal peace talks with the Afghan government. The offer, made without preconditions, recognizes the role of the Taliban in Afghan politics and seeks to proceed toward a comprehensive peace agreement.President Ghani’s offer is the result of the Kabul Process, which saw delegates from 30 countries and international organizations — including the United Nations, NATO and the European Union — gather and deliberate in Kabul.The announcement of the peace initiative was preceded by months of national consensus building in Afghanistan. Members of the High Peace Council, the inclusive body of Afghan elders formed to steer efforts for peace and dialogue; the government’s chief executive, Abdullah Abdullah; and President Ghani had long deliberations and consultations with Afghan political figures, members of civil society, clergy, women and youth. They found overwhelming support for the initiative to reach a political settlement with the Taliban.The peace offer is underpinned by our belief in the common equality of all Afghans and their right to live in peace and dignity. We believe that this offer will give the Taliban the opportunity to organize as a legitimate political force, pursue their goals through peaceful means and join the political process.The Afghan government is firmly committed to addressing the core concerns and demands of the Taliban, including the future presence of the international military forces, amendments to our constitution and the release of Taliban prisoners.  The initiative also offers removal of the names of Taliban commanders from the sanctions lists maintained by the United Nations and others, which limit their movements and hinder their inclusion into mainstream Afghan society and polity.  Throughout the peace process and after the end of hostilities, the Afghan government will ensure the security of the Taliban and their families and help resettle former combatants as part of an agreement.

         Amid little scrutiny, US military ramps up in Afghanistan (AP) — The U.S. is bolstering its military presence in Afghanistan, more than 16 years after the war started. Is anyone paying attention? Consider this: At a Senate hearing this past week on top U.S. security threats, the word "Afghanistan" was spoken exactly four times, each during introductory remarks. In the ensuing two hours of questions for intelligence agency witnesses, no senator asked about Afghanistan, suggesting little interest in a war with nearly 15,000 U.S. troops supporting combat against the Taliban. It's not as if the war's end is in sight. Just last month the bulk of an Army training brigade of about 800 soldiers arrived to improve the advising of Afghan forces. Since January, attack planes and other aircraft have been added to U.S. forces in Afghanistan. But it's not clear that the war, which began in October 2001, is going as well as the U.S. had hoped seven months after President Donald Trump announced a new, more aggressive strategy. The picture may be clearer once the traditionally most intensive fighting season begins in April or May. Over the winter, American and Afghan warplanes have focused on attacking illicit drug facilities that are a source of Taliban revenue. The administration "not only faces a deteriorating security situation, it has no clear political, governance, or economic strategy to produce Afghan stability," Cordesman said. In his view, the U.S. military has been assigned a "mission impossible" in Afghanistan.

        China Reveals Largest Defense Budget In Three Years -- China’s government has been relatively vocal in transforming itself into a serious threat against the West — by modernizing its military in anticipation of future wars with Washington. It it therefore not surprising when the official Xinhua news agency reports that China will increase its defense budget by 8.1 percent in 2018, up marginally from last year’s 7 percent. China has undoubtedly given America’s military-industrial complex and clueless politicians in Washington a stern message, by increasing its defense budget to the highest levels in more than three years, even as the country insists it does not mean harm. According to the annual budget report, submitted to the first session of the 13th National People’s Congress Monday, the 2018 defense budget will be 1.11 trillion yuan (approximately 175 billion U.S. dollars). In 2017, the country spent roughly 1.02 trillion yuan (approximately 161.87 billion dollars) on its military budget in 2017, or about 1.3 percent of its gross domestic product (GDP). The United States is the only country that outpaces China in defense spending, with the Pentagon’s expenditures exceeding four times Beijing’s, according to the latest report of the 2018 Military Budgets via the London-based International Institute for Strategic Studies (IISS). In a speech at an annual Meeting of China’s National People’s Congress, Premier Li Keqiang suggested the country faced “profound changes in the national security environment,” requiring a stronger military. As we stated before the conference, geopolitical strategists are concerned about President Xi Jinping aggressive military buildup and power grab, which has put Beijing on a crash course for military conflict with Washington. 

        Is Beijing planning to take Taiwan back ... by force? -  South China Morning Post: Beijing is mapping out specific tactics to lure Taiwan into its orbit and possibly pave the way for forcible seizure of the self-ruled island, although there is no timetable for such a drastic move, according to a senior mainland Taiwan affairs adviser. Li Yihu, dean of Peking University’s Taiwan Studies Institute, said Beijing was reinforcing its “carrot and stick” approach to dealing with Taiwan’s independence forces after passing historic constitutional amendments on Sunday to remove presidential term limits on the mainland. Beijing has been using economic sweeteners or “carrots” such as offers of better paying jobs, access to bigger markets and equal treatment to lure Taiwanese to the mainland. Analysts have cautioned that if the sweeteners fail to work, the mainland could bring down its “stick” – moving to forcibly seize the wayward island. Li said that although he doubted that Xi had set a timetable for a Taiwan takeover, the Taiwan issue would remain prominent on the leader’s agenda. “Cross-strait unification is more urgent when the mainland’s economic power is rising,” Li said. Beijing’s involvement in the Taiwan issue has strengthened in tandem with the mainland’s growth. 

        What Does a Trump-Kim Meeting Mean for China? - When the news broke on March 8 that U.S. President Donald Trump had accepted an invitation to meet with North Korean leader Kim Jong-un, it was so unexpected that even U.S. Secretary of State Rex Tillerson seemed caught off guard. The announcement must have been doubly surprising, then, in China, where President Xi Jinping has shown no interest in meeting with Kim despite a nominal alliance between the two. In the Foreign Ministry’s regular press conference on March 9, spokesperson Geng Shuang officially welcomed the news of a potential Trump-Kim summit. “We welcome the positive messages conveyed by the U.S. and the DPRK on direct dialogues,” Geng said, referring to North Korea’s formal name, the Democratic People’s Republic of Korea. “The Korean Peninsula nuclear issue is moving in a right direction towards its settlement. We fully commend and support the efforts made by all relevant parties to resolve this issue through dialogue and consultation.” Later, Geng added that “China has stressed many times that the core of the Korean Peninsula issue is about the contradiction between the DPRK and the U.S. As parties directly concerned, the DPRK and the U.S. should conduct dialogue sooner rather than later.” Xi himself told Trump in a March 9 phone call that he “welcomed the prospect of dialogue between the United States and North Korea,” according to a White House statement. Despite those statements, China has cause to be concerned about the way the current round of diplomacy is unfolding. China is undoubtedly relieved that the threat of war over the North Korean nuclear issue has dropped markedly. However, the meetings and discussions that have reduced tensions have notably not included Beijing. Instead, inter-Korean dialogue has led the way, with South Korea in close communication with the United States. There’s little indication, however, that China’s own ally, North Korea, has been similarly briefing Beijing.

         Diplomacy begins in earnest to pave way for US-NK summit -  Korea Herald - With North Korea and the United States agreeing to hold a historic summit on North Korea‘s nuclear program, South Korea is campaigning to rally regional stakeholders’ support for what it sees as an ultimate opportunity to resolve the decadeslong security challenge. National Security advisor Chung Eui-yong and National Intelligence Service chief Suh Hoon returned home Sunday after wrapping up their two-day visit to Washington, DC, during which they relayed North Korean leader Kim Jong-un’s message, including an invitation for a summit, to US President Donald Trump. The summit is scheduled to take place by May. With the messages from both Washington and Pyongyang, South Korean envoys are to head to Tokyo, Beijing and Moscow this week. Suh will depart for Japan Monday on a two-day visit, while Chung will leave Monday to visit China and Russia. Whether Chung will meet with the Chinese and Russian leaders has not been confirmed, the presidential Blue House said. “I’d like to pay my utmost respects to President Moon Jae-in and President Trump’s strong resolve to promptly achieve the goal of denuclearization and establish peace on the Korean Peninsula,” Chung said. “We also appreciate North Korean leader Kim’s courageous decision.” A senior presidential official told reporters that Washington and Pyongyang will communicate with each other directly in the run-up to the summit, while the working-level talks -- including those concerning venue and agenda -- will be meditated by South Korea. Among the likely venue for the US-North Korea summit is the truce village of Panmunjeom located in the heavily-fortified demilitarized zone, where the two Koreas are to hold the third inter-Korean summit in April, the official said under the condition of anonymity. 

        US-North Korea meeting: N Korean Minister in surprise Sweden visit - BBC News: North Korea's foreign minister has attended talks in Stockholm with Sweden's Prime Minister Stefan Lofven, ahead of a possible meeting between US President Donald Trump and Kim Jong-un. Pyongyang said Ri Yong-ho's trip was for "bilateral relations and issues of mutual concern". Sweden has a long history of mediating between Washington and Pyongyang. Mr Ri had already met his Swedish counterpart Margot Wallstrom late on Thursday and early on Friday. Sweden's foreign ministry said their discussions would focus on tensions between the two Koreas, and Sweden's diplomatic work on behalf of the US in North Korea. Mr Ri's visit has been extended from the scheduled two days, and he will now stay in Sweden until Sunday, Sweden's SVT Nyheter reports. The agenda of the talks has broadened, the news site says. One topic is said to be confidence-building measures with the US, including the release of US citizens from North Korean detention.

        With World Focused On North Korea, Japan Quietly Expands Its Military Might - Washington claims China is rapidly expanding its military might, posing a threat to the US and its allies in the Asia Pacific region. Beijing is one of the focal points of America's national security plan that was unveiled in January, singled out along with Russia. The US military brass hats have raised the alarm over China’s recent defense budget hike, despite the fact that its per capita defense spending is lower than that of other major world powers. They say China is not transparent enough and that this further complicates the problem.Transparency is a good thing but it may not reveal the whole picture. One may appear to be open and above-board but still be hiding one’s real plans and intentions. For instance, Japan is ranked among the world’s ten most peaceful nations. Threatened by N. Korea and China, it appears to be an innocent victim looking to the US for protection.That’s one side of the coin. But there is also another side.  The Japanese constitution forbids offensive weapons.Aircraft carriers are generally considered to belong to this category, and for this reason they are called “helicopter destroyers” in Japan. For instance, the Izumo-class air-capable destroyers are as big as British Invincible-class aircraft carriers. The warships can be modernized to turn them into real flat tops and that’s exactly what the Japanese government plans to do. Defense Minister Itsunori Onodera said on March 2 that the military is considering the possibility of deploying US-made F-35B short takeoff and vertical landing (STOVL) fighters on the helicopter carriers. China has already expressed its concern over the plan.The F-35 Lightning II supersonic stealth aircraft can be easily configured to carry nukes. Arming the air-capable warships of a non-nuclear state with nuclear-capable aircraft constitutes a violation of the NPT Treaty, which prohibits nuclear states from transferring nukes to other recipients. It also bans non-nuclear states from acquiring them.The first land-based nuclear-capable F-35A variant fighter was delivered to Japan in late February. US military instructors would train Japanese military personnel to operate this offensive weapon. South Korea also plans to follow Japan’s example and put American aircraft on its aviation-capable ships. That’s how the policy of nonproliferation slowly begins to crumble. Japan uses Pyongyang’s nuclear ambitions to justify its plans to acquire US-made Tomahawk sea-based cruise missiles – another weapon that could potentially be nuclear tipped. The plans also include the acquisition of JASSM-ER and LRASM missiles, each of which has a range of roughly 900 km (559 mi). These are not defensive weapons. Last year, US President Trump said at a joint press conference with Japanese PM Abe that “Japan is going to be purchasing massive amounts of military equipment.”

        Arms trade growing rapidly in Asia and won’t stop anytime soon - IMPORTS and exports of weapons have grown over the past two decades and show no signs of slowing down in the near future, according to data released by a Swedish non-profit this week.Updated data on international weapons transfers from the Stockholm International Peace Research Institute (SIPRI) shows that the flow of arms to Asia and Oceania increased between 2008-12 and 2013-17.The region represented almost half (42 percent) of all global arms imports during the latter period.  Globally, international transfers of major weapons increased by 10 percent between 2008-12 and 2013-17, in what SIPRI said is a continuation of an upward trend that began in the early 2000s. Factors driving growth in the Asian weapons trade include the rise of China as a superpower, anxiety in East Asia over North Korea’s nuclearisation, territorial conflicts like that in the South China Sea, and the decades’ old tensions between India and Pakistan.

        Billion-dollar debts control the future of tech industry - There’s no understanding the future of technology without understanding the future of its funders. And they have changed dramatically over the last three decades. First it was the military. Then the venture capitalists. Today, another chapter begins: massive funds, with billions to spend and often linked to governments, are technology’s new masters.The undisputed leader is Japan’s SoftBank, which counts Uber, WeWork, Alibaba and Nvidia among its investments. Its companies make awe-inspiring robot dogs (Boston Dynamics) and offer dog walking as a service (Wag) for real canines. SoftBank’s model is simple: build stable, cash-generating businesses, such as mobile network operators; use them as collateral to borrow more funds – an investor presentation from last year put SoftBank’s “interest-bearing debt” at $125bn – and buy promising tech companies.Given historically low interest rates (and borrowing costs), SoftBank has used the financial crisis to its advantage. It got Apple, the chip-maker Qualcomm and various sovereign wealth funds to contribute to its flagship Vision Fund, which now stands at $98bn. Saudi Arabia committed $45bn; Abu Dhabi another $15bn. Bahrain is considering joining.SoftBank’s founder and CEO Masayoshi Son told Nikkei in October that new Vision Funds will be launched every two to three years. SoftBank wants to invest in 1,000 AI and robotics companies in the next decade to the tune of ¥100 trillion ($880bn). Who would provide that money? Well, Saudi Arabia wants to use the initial public offering of the oil giant Aramco – potentially worth $2 trillion – to boost its sovereign wealth fund. Other sovereign wealth funds will eagerly join. There’s still, however, much misunderstanding about what it is that they do. The largest sovereign wealth fund – Norway’s – has decent governance mechanisms and is prudent in its investments. It often divests from problematic industries and sticks to listed companies over startups. It bets with Norway’s own money only.

        Why Maharashtra’s farmers are protesting and why Mumbaikars are supporting them: After covering 180km on foot over five days, protesting farmers from across Maharashtra reached Mumbai yesterday and converged at Azad Maidan in south Mumbai by 7am this morning, so that rush hour commuters, especially students headed for Board exams, are not inconvenienced.This graceful gesture has won people's hearts, even as they try to understand what the farmers are protesting and what their demand are. Here's a 10-point guide that helps make clear who are the people who are protesting, which political parties are supporting them, what the Maharashtra government's response is and what people in the city are saying about the protests:
        1) Members of the All India Kisan Sabha (AIKS), the farmers' wing of Communist Party of India-Marxist (CPM), along with other farmers’ unions are the ones holding the protest march, which launched from Nashik last Tuesday. While police sources pegged the number of protesters at 15,000, unions claimed it was nearly 50,000; the actual number is likely 34,000. The farmers are scheduled to gherao the Maharashtra Assembly later today.
        2) Their demands include an unconditional waiver of loans as well as electricity bills; implementation of the Swaminathan Commission recommendations, including an announcement of minimum support price for agriculture produce + ; and a pension scheme for farmers.
        3) The reason for these demands is that crops have been destroyed on a large scale due to unpredictable weather and poor rainfall. While the state had announced a loan waiver scheme, the implementation has been patchy.
        4) Vishwanath Bagare (77) and Mirabai Mohan Badade (60) are among the thousands of farmers protesting. They said that they will not go home until their demands are met. Bagare’s 38-year-old son Somnath had committed suicide by consuming poison in 2011, as he was unable to repay the Rs 1.5 lakh loan taken in 2008.

        Massive protest in Mumbai shakes up Modi government | Asia Times: A massive protest by more than 40,000 farmers, who marched for days and arrived in Mumbai early on Monday morning, was a major embarrassment to both the Narendra Modi government and the BJP-led state government. The farmers found massive support from people along the way as they headed for Mumbai. Not wanting to create chaos in India’s financial capital, they marched through the night, also winning support from the city’s residents.On the heels of yet another “farmer-friendly” budget, presented by state finance minister Sudhir Mungantiwar on Friday, scores of farmers started walking towards Mumbai and reached the state government’s offices on Sunday night. Their intention was to surround the State Assembly on Monday in protest against what they call the government’s breach of promises to them. Their demands include the proper implementation of a farm loan waiver, adequate compensation for all farmers whose crops have failed and stopping forcible land acquisitions for the much-vaunted Delhi-Mumbai corridor. They also want the quick implementation of the Swaminathan Commission’s recommendations that suggest fair and remunerative prices be set at 1.5 times the input cost. They also demanded land rights for forest dwellers and a Rs2,000 (about US$30) monthly pension for all marginalized farmers aged more than 60. The 180-kilometer protest march was steered by the Communist Party of India (Marxist) farmers’ wing, the All India Kisan Sabha. The BJP’s ruling partner in the State — Shiv Sena and the opposition parties — Congress, Nationalist Congress Party and Maharashtra Navnirman Sena, have all extended their support to the farmers, their core voters. The rally is also embarrassing for the Modi government since they were banking on their votes to return to power in 2019. The federal government has been frequently accused of failing to address crisis in the agriculture sector or create new jobs. 

        RBI report says demonetisation led to fall in households’ financial assets - The Reserve Bank of India’s (RBI’s) recently published Quarterly Estimates of Households’ Financial Assets and Liabilities shows the total amount of households’ gross financial assets fell from Rs141 trillion in September 2016 to Rs137 trillion by end-December 2016. As a proportion of gross domestic product (GDP), the total amount outstanding in households’ financial assets fell from 95.2% of GDP in September 2016 to 89.2% by end-December 2016. At end-September 2017, the latest date for which the data is available, this metric was still below what it was in September 2016, as the chart shows. Another way of looking at the numbers is to see the rate of growth in household financial assets. At end-September 2017, the growth in amounts outstanding in household financial assets was 9.7% compared to a year ago. At end-September 2016, this growth was much higher, at 17.1% year-on-year. Clearly, demonetisation led to a slowdown in the growth of household financial assets. Compared to the rise in the outstanding amounts, the quarterly investment by households in financial assets is very volatile. The RBI report says, “Indian households are generally net savers and suppliers of financial resources for the rest of the economy. However, net financial assets of the households turned negative…in the third quarter of 2016-17, reflecting the transitory effects of demonetisation.” Demonetisation has led to a shift in the composition of households’ financial assets. By September 2017, currency holdings were down to 8.7% of GDP, compared to 10.6% in the pre-demonetisation quarter. The other clear trend is that households’ holdings of mutual funds have gone up, from 10.6% before demonetisation to 12.5% in September 2017. Indeed, the fall in currency/GDP is mirrored in the rise in mutual funds/GDP holdings of households. People have put their currency holdings to work in the financial markets, pushing them up.

        Ramaphosa's Racist-Marxist Distraction In South Africa - The controversial initiative to seize white-owned farms without compensation was proposed by the Marxist “Economic Freedom Fighters” (EFF) and quickly picked up by the ruling African National Congress (ANC), which argues that it needs to act in order to resolve the massive racial disparity in property ownership.Neighboring Zimbabwe attempted almost the exact same thing around the turn of the century but it failed for many reasons, though its new government is now reversing this policy and is instead seeking to court white farmers back to the country. The new South African government, meanwhile, is doing the opposite in what can only be regarded as an attempt to rejuvenate interest in the party by returning it to its Marxist roots, something that its strategists might believe can help it electorally in next year’s elections.Moreover, it should be said that President Cyril Ramaphosa might have more ulterior intentions in mind as well, since he himself came to power on the back of a so-called “deep state” coup in first becoming the party’s leader under contentious circumstances late last year and then soon thereafter replacing former President Zuma under a similarly controversial context. He might want to distract the masses from this “politically inconvenient” fact in order to build up greater “legitimacy” for himself. In addition, this new measure might take the population’s attention away from intertribal and xenophobic violence by temporarily uniting the country around a common cause that can easily mobilize the racial majority on economic pretexts, even if most of them never see any tangible benefit from these forthcoming land seizures. One of the unintended after-effects of the “successful” execution of this policy is that it might scare away international investors who could fear that Ramaphosa might expand what they view to be his extreme “economic nationalism” to the point of potentially nationalizing foreign companies in the future, possibly due to “bottom-up” pressure from the EFF and their “street supporters”. Once certain socio-economic policies such as racially targeted land seizure without compensation are unleashed, it could be very difficult to control them because they naturally inspire the disadvantaged majority of the country to dream big with unrealistically high hopes, sometimes causing a chain reaction that leads to the most unpredictable of consequences for the initiators of the said policy.

        The liberal international order mounts a comeback -WaPo - The defenders of what’s called the “liberal international order” have recently suffered setbacks from adversaries inside and outside their home countries. But those who want to see the Western-led post-World War II system survive or even thrive are plotting its resurrection. When the United States and European countries came together in the second half of the 20th century to build multilateral relationships and institutions to strengthen and spread liberal values such as rule of law, democracy, open markets and human rights, it was an aberration. The project ran counter to centuries of international politics based on brute strength, solipsism, greed and war. In France this weekend, former White House official Stephen K. Bannon told far-right nationalists that “history is on our side” — and he wasn’t entirely wrong. While Bannon was working to undermine what he and his like deride as “globalism,” a group of American and European officials, lawmakers and experts were meeting here to figure out how to save it. The German Marshall Fund’s Brussels Forum kicked off with a call to action. “We lost sight of what it took to create this international order and what an act of defiance of history and even defiance of human nature this order has been,” author Robert Kagan told the group. “We have the capacity to push back — we just need to understand the pushback needs to start occurring.” Internationalists share a realization that the order is at grave risk, and along with it the seven decades of relative growth, prosperity and peace it provided. Nationalism and populism are ascendant in the United States and Europe. Authoritarianism led by Russia and China is on the march around the world.

        U.S. Steel and Aluminium Tariffs: How Should the EU Respond? - President Trump’s proclamation that, because of national security concerns, he will apply a 25% tariff on all steel and a 10% tariff on all aluminium imports into the United States – except provisionally and dependent on NAFTA negotiations those from Canada and Mexico – affects, respectively 5.1 billion Euros and 1.1 billion Euros of EU exports. These are not trivial sums. However, the invocation of the national security exception in this case has implications that go far beyond narrow sectoral effects: it represents a challenge to the world trading system as we know it, and is, in fact, the challenge the President of the United States had promised many times during the election campaign and as a private citizen in decades prior. This note examines possible EU responses. Trump’s intended measure raises four issues for the EU. In order of increasing importance, they are: the effect on European industry; how to deter Trump’s broader protectionist thrust; how to use the WTO Dispute System in this case; and, how to prepare for the contingency of a post-WTO or truncated-WTO world. The rest of this note deals only with the larger of the two sectors, steel, for brevity’s sake and because the focus of the note is on principles.

        Which sectors would be most vulnerable to EU-US trade war? - In light of the introduction of trade tariffs on steel and aluminium in the US, and the subsequent possibility of trade war between the EU and US, it is useful to identify the potential points of future contention. The bubble chart below compares bilateral trade flows across the ten Standard International Trade Classification (SITC) macro categories of products. Bubbles are clustered by product, and their size is proportional to the value of the flow. Data are based on Eurostat Comext and refer to 2016.  The EU28 runs a surplus in most product categories, with the exception of mineral fuels, crude materials and commodities not elsewhere specified (n.e.s.), and in particular for products in which the US and the EU28 trade intensively, like machinery and transport equipment (+€50.8 billion) and chemicals (+€29.3 billion).Looking more in detail, the 10 most traded two-digit SITC products account for more than two thirds of all imports and exports between the US and the EU28. The two tables below summarise this information. With the exception of petroleum and related products (imported from the US) and specialised machinery (exported to the US), the same products are involved and it is interesting to look at major differences.In general, the EU28 tends to export systematically more than it imports, especially in the case of road vehicles (+€36.5 billion), driven by massive EU28 exports of passenger cars to the US (+€30.4 billion), and of medicinal and pharmaceutical products (+€16.6 billion). On the other hand, the US exports more than it imports from the EU in the case of other transport equipment (-8.5 billion), mainly due to trade in aircraft, spacecraft, and associated equipment (-12.7 billion), as well as for power-generating machinery and equipment (-6.5 billion). Particularly relevant may also be the trade in general industrial machinery and equipment, as well as in organic chemicals, because the EU28 exports to the US more than two times what it imports in those categories.

        Europhile reform dreamers wake up – there will be no ‘far-reaching’ reforms - Bill Mitchell - While I was in Finland the Finnish news media was agape over the – Joint Statement – released by 8 Finance Ministers from the smaller Northern EU Member States (March 6, 2018). The statement released by the finance ministers of Finland, Denmark, Estonia, Ireland, Latvia, Lithuania, the Netherlands and Sweden aired their views on how the Eurozone (EMU) might develop. Nobody should be under any delusion that significant reforms are going to come soon. These characters are locked into the austerity mindset and any claims that a new Macron-Merkel partnership will take the EMU into more progressive territory should be viewed as blind hope rather than bedded down in any realistic understanding of what is likely or possible.To set the discussion, recall on October 24, 2017, on Wolfgang Schäuble’s last day as German Finance Minister, that the staff at the Bundesfinanzministerium gave him a visual send-off (Source): 300 German Finance Ministry staff, imbued with Schäuble’s austerity mindset gathered in the grounds of the Ministry to form the “famous schwarze null”. While Schäuble left his position with Germany is poorer shape than when he took over and his partner Eurozone nations, definitely in worse shape, the fanatical commitment to permanent fiscal surpluses, no matter what, will persist.It defines modern German policy culture where the finance and central bank arms have converged on a common ambition.The other thing to remember with all this talk circulating about a potential new direction for Germany under its new coalition is that it is not a new coalition.The Social Democratic Party (SPD) have been in coalition with the Christian Democratic Union (CDU) between 2005 and 2009 and again since 2013. In other words, the GroKo (as it is being called – Große Koalition) has been in government for some years while Germany has gone off the rails with huge external surpluses, persistent fiscal surpluses, its labour market offering worsening conditions to workers, and its public infrastructure degrading so much that trucks can no longer cross key bridges.

        EU Preparing To Unleash First-Ever Regulations Targeting Search Engines - Roughly nine months after Google's parent company Alphabet was slapped with a 2.4 billion euro fine for "abusing its dominance in search," Brussels bureaucrats are reportedly preparing to take things a step further and unleash Europe-wide regulations for search engines and other online platforms and apps. According to the Financial Times, which broke the story, the regulations are meant to protect companies that rely on Google, Apple or Amazon to sell their services or products.European policymakers have been exploring ways to target "harmful" trade practices as many small firms in the region have complained that tech behemoths like Google have skewed search results to favor its own services over the services of its competitors. The issue has so far been left for members states to deal with. Of the largest European states, France has distinguished itself as among the most aggressive in trying to push back against the US-domiciled tech giants and their allegedly anti-competitive tendencies. The regulations are also notable in that they represent the most stringent rules governing search engines' behavior by a developed Western power.

        Slovakia journalist: Prime Minister Fico replaced amid scandal - BBC News: Slovakia's Prime Minister Robert Fico has resigned after the murder of a journalist sparked a political scandal. President Andrej Kiska said he would ask Deputy Prime Minister Peter Pellegrini to form a new government.Mr Fico had offered to resign on Wednesday if the ruling coalition was allowed to finish its term.The death of reporter Jan Kuciak has shone a spotlight on corruption in Slovakia, prompting nationwide protests.The 27-year-old was working on a story linking high-level political corruption in Slovakia with the Italian mafia when he was killed in late February.  His fiancée, Martina Kusnirova, was also murdered in an attack at their home. On 9 March tens of thousands of Slovaks joined a protest rally in the capital Bratislava, in what is thought to be the largest demonstration in the country since the fall of Communism in 1989. Seven suspects arrested in connection with the murders were released without charge last week, and President Kiska called for fresh elections or a "radical reconstruction" of the government to restore public trust. The prime minister argued those options would undermine the results of the 2016 elections, and accused the president of "dancing on the graves" of the victims.

        New German foreign minister threatens Russia and intensifies militarism - On March 14, the new German Foreign Minister Heiko Maas (Social Democratic Party, SPD) delivered his inaugural address in the so-called Weltsaal (World Hall) of the Foreign Ministry. He emphasized that the third grand coalition under Chancellor Angela Merkel (Christian Democratic Union, CDU) will accelerate Germany’s return to an aggressive foreign and great power policy.In his speech, Maas stressed the continuity with his two Social Democratic predecessors, Frank-Walter Steinmeier and Sigmar Gabriel, who in the last four years were among the architects of Germany’s shift to an aggressive foreign policy. “My predecessors have not only described our country’s growing responsibility, but they have above all seized on it,” said Maas. He wanted to “continue to do so” and to “recognize and accept joint responsibility, where it beckons us.”He added, “Of course, no country in the world needs a German foreign policy that overestimates itself. But what is just as wrong and, possibly even more dangerous in this world situation, is a foreign policy that ducks away.” Maas made clear what he meant by that. Among other things, the plans for upgrading Germany’s military capabilities and pursuing the great power aspirations outlined in the coalition agreement between the Christian Democrats and SPD must be implemented swiftly. “In building up a capable EU foreign policy and an effective EU security and defence policy ... important steps have been taken just in the last few months” and there should be “no let-up”. In the spring, Germany would “apply for a non-permanent seat on the UN Security Council” and must “prepare for tough decisions” to be taken there.While Gabriel had sharply criticized US foreign policy during his term of office—and also in his farewell speech on Wednesday—and had called for a lifting of sanctions against Russia, Maas has opted to pursue an aggressive anti-Russian course.

        Romanian court tells man he is not alive - In a case reminiscent of a Kafka novel, a Romanian court has ruled that a 63-year-old man is dead despite what would appear to be convincing evidence to the contrary: the man himself appearing alive and well in court. Constantin Reliu asked the court in the town of Barlad to overturn a death certificate obtained by his wife after he had spent more than a decade in Turkey, during which time he was out of contact with his family. The court told him he was too late, and would have to remain officially deceased. “I am officially dead, although I’m alive,” a bemused Reliu told local media outlets. “I have no income and because I am listed dead, I can’t do anything.” Reliu left Romania for Turkey in 1992, apparently to seek employment. He last returned to the country in 1999, and appears to have cut off all contact with his family. After years of silence from her estranged husband, Reliu’s wife obtained a backdated death certificate for him. The Romanian daily Adevarul said Reliu’s wife had argued in court that having heard nothing from her husband since 1999, she had assumed he had died in an earthquake while in Turkey. The paper said Reliu believes she sought the death certificate in order to annul the marriage and allow her to remarry. He may never have found out about his death in his homeland had he not been apprehended by Turkish authorities earlier this year and deported back to Romania because of expired documents. Reliu had planned to renew his passport in Romania and return to Turkey, but on arrival, he was detained by immigration officers who informed him he had died in 2003. Reliu said he wants to return to Turkey and has set up a small company there, but is now faced with a confusing legal battle to regain his identity and obtain a passport. 

        Brexit: People crossing Irish border would have to register in advance under plan being studied by Theresa May People crossing the Irish border would have to register in advance to avoid checks and delays after Brexit under a hugely controversial plan being considered by No 10. Anyone without “fast-track movement” clearance would have to use approved crossing points or would be “considered to have entered the state irregularly”, the study suggests. Despite Theresa May’s insistence that the border will continue to have no “physical infrastructure”, both CCTV and cameras to track vehicle number plates would be needed at some crossing points, according to the blueprint. Nevertheless, the Prime Minister has told MPs she has “asked officials to look at it very carefully”, adding: “I believe it gives some very good proposals for solutions.” The decision to consider the plan, put forward in Brussels, was strongly criticised by the Irish government, which told The Independent the proposals would break Ms May’s pledge of no “physical infrastructure and associated checks” after Brexit. Peter Hain, the former Northern Ireland Secretary, went further, warning the proposal to pre-register travellers “would be risking immediate civil unrest”. “If I was Northern Ireland Secretary and this report came on to my desk, its next stop would be the bin,” Mr Hain said.

        EU freezes Brexit talks until Britain produces ‘realistic’ Irish border solution - The EU has thrown down an ultimatum to Theresa May in Brexit talks, warning that it will not open discussions about trade or other issues until the Irish border question is solved. Speaking in Dublin alongside the Irish Prime Minister Leo Varadkar, European Council President Donald Tusk said talks would be a case of “Ireland first” and that “the risk of destabilising the fragile peace process must be avoided at all costs”. “We know today that the UK Government rejects a customs and regulatory border down the Irish Sea, the EU single market, and the customs union,” the Mr Tusk said. “While we must respect this position, we also expect the UK to propose a specific and realistic solution to avoid a hard border.  “As long as the UK doesn’t present such a solution, it is very difficult to imagine substantive progress in Brexit negotiations. “If in London someone assumes that the negotiations will deal with other issues first before the Irish issue, my response would be: Ireland first.” British negotiators have long been keen to move to discussions about trade and had hoped to do so after the March meeting of the European Council in two weeks, but Mr Tusk’s latest ultimatum suggests further delays could be in store. The EU says a withdrawal agreement must be negotiated by October to give it time to ratify the deal before the UK falls out of the bloc in March 2019. Mr Tusk recalled that the Good Friday Agreement, whose 20th anniversary is next month, had been “ratified by huge majorities north and south of the border”. “We must recognise the democratic decision taken by Britain to leave the EU in 2016 – just as we must recognise the democratic decision made on the island of Ireland in 1998 with all its consequences,” he said, in a play on the rhetoric used by Brexiteers regarding the 2016 EU referendum.

        Brussels fines Britain £2.4bn for customs fraud - Times - The European Commission fined Britain £2.4 billion yesterday, accusing the government of turning a blind eye to widespread customs fraud at ports. In a provocative move before the start of Brexit trade negotiations Brussels has written to the government demanding payment after an investigation by Olaf, the EU’s anti-fraud unit. It accused the UK of allowing Chinese criminal gangs to systematically undervalue goods imported into the EU through Dover and Felixstowe, avoiding billions of pounds in customs duty and VAT that should have been paid to Brussels. The EU claims that Britain was made aware of the fraud more than ten years ago but failed to take action, costing Brussels €2.7 billion in lost revenue. Normally the issue would be adjudicated by the European Court of Justice but Britain will almost certainly have left the EU before the case can be heard. As a result the fine is likely to become an issue in the divorce bill negotiations. It could also be used by the commission as evidence that the UK cannot be trusted to effectively enforce any “soft” customs border after Brexit. British authorities said that they did not accept the commission’s findings or the estimate of what it owed and would dispute the fine. “Their estimate is based on EU average prices and fails to take account of the substantial growth in the low-value end of the UK clothing market. Legitimate UK imports will in many cases have a price per kilogram below the EU average price.” Official figures obtained by The Times last year revealed that crime gangs, based in Britain but operating internationally, had doubled the volume of fraudulent freight they shipped into Europe through British ports over a three-year period. Suspicious shipments of clothing and shoes imported through Britain from China rose from 192 million kg in 2013 to more than 407 million kg in 2016. Investigators said that the gangs chose Britain because they were allowed to declare imported goods at impossibly low values.  duty is charged at 12 per cent of the declared value so the fraudsters could make huge savings by declaring in Britain.

        Brexit Rift Among Tories Revealed in Leavers’ WhatsApp Messages - A leak of WhatsApp chats from a Conservative Party group that favors a complete U.K. withdrawal from the European Union shows the breadth of animosity among factions in the governing party and the possible threat posed to a uneasy truce. The messages, published by BuzzFeed on Saturday, are from the WhatsApp forum of the European Research Group, which is led by Tory Jacob Rees-Mogg, one of the most vociferous anti-EU lawmakers. Rees-Mogg struck a conciliatory tone after a March 2 speech by Theresa May that seemed to secure a temporary reprieve from the Tory infighting. The leaked texts published by BuzzFeed target Tory colleagues who are pushing for the mildest form of Brexit, including Anna Soubry and Chancellor of the Exchequer Philip Hammond. BuzzFeed said ERG leaders it contacted didn’t respond to requests for comment on the texts. When enough Conservatives broke with May and joined the opposition Labour Party in December to give Parliament a final vote over the Brexit deal, Tory lawmaker Philip Davies wrote in the chat that the government had been pushed into a corner "because the rebels are all condescending arseholes,” BuzzFeed reported. “Being nice to them is very definitely a strategy that is not working,” texted Nadine Dorries, Davies’ fellow member of the ERG. In September, Davies vented his concerns over allowing free movement of European citizens in the U.K. after Brexit, likening concessions by May to the appeasing politics of the British cabinet towards Nazi Germany before the World War II. “We have rewarded the EU for their intransigence. It is pathetic to be frank -- a modern day Chamberlain.” 

        Money talks as Britain walks – which means we WILL get a good Brexit deal - Britain is the rock, and the EU the hard place.Theresa May is the poor soul caught in the ­middle, trying to work out how on earth to bridge the Grand ­Canyon-sized gap between them.In her trade deal talks, Theresa May is caught between a rock - Britain - and a hard place - the EU, says our columnist Tom Newton Dunn, but here's how to get a good trade dealThat’s the received wisdom anyway, after EU Council ­president Donald Tusk spelled out Brussels’ vision of a Brexit trade deal last week vastly more limited than Theresa May’s five days earlier.“A pick-and-mix approach is out of the question,” insisted Mr Tusk, throwing the PM’s intricate plan for the economy back in her face.Has mass depression set in among ministers? Might we just as well walk away now?Here’s the funny thing. Behind the scenes in Whitehall, there is optimism that a good deal is still very ­possible.EU Council ­president Donald Tusk might have closed doors, but he left Britain keys to open them, Government officials say privatelyNo10 officials privately say they are quite pleased with Tusk’s negotiating guidelines.The reason is, for all his morose scolding, Tusk might have closed doors, but he left Britain keys to open them.Soften your red lines and we’ll let you in, was Tusk’s real message.Intriguingly, I am being told by some surprising voices that the biggest key of all will be MONEY.What makes the EU go round? Money - either the rich member states dig deeper after Brexit, burdening their taxpayers, or the 19 poorest agree to get less.  Pounds Sterling, and lots of it, will unlock a good Brexit deal.

        Brexit: EU Tightens the Noose -- Yves Smith - It should come as no surprise that the European Council is getting hardnosed. What is surprising is that it has taken this long. Recall that the UK and EU were at loggerheads, with May looking terminally damaged via her inability to cow the EU with her Government’s bluster. Bizarrely, Barnier worked with May to craft an utterly unworkable fudge of Ireland that the UK press praised to the sky, as if she’d scored a tremendous victory. In fact, the European Council’s December guidelines said the Government needed to come back with a worked-out solution to Ireland by the March negotiating round, which is due to start in the next two weeks.  I was at a loss to understand why the EU, even minimally, reinforced the UK’s self-destrutive antics. The UK is as always mule-y, refusing to advance at all after the EU rejected of some of its demands. That might be a viable tactic if the UK could afford to run out the clock, but it’s the side that has much more to lose in a “crash-out” Brexit.   Both Vlade and PlutoniumKun highlighted that the EU has drawn a line in the sand, and unlike December, when it blinked on Ireland, is sending much stronger signals than ever that the UK needs to get real. As we’ve pointed out, the deadline for getting both the exit agreement and a transition deal in final form is October. The EU27 have approval processes that are rigid. There may be some limited room to push back the date for both sides to send the text out for ratification, but it’s unwise for the UK to presume that there is much latitude.  Specifically, as we’ve embedded at the end of the post, the General Secretariat of the European Council released its draft guidelines and European Council President Donald Tusk also made some statements to the press. The message was clear: the UK isn’t going to be cut any more slack. Even though I am loath to resort to framing like “losing patience,” since it implies that the EU negotiators are getting emotional, if you read the draft text, it is striking how often in the first pages it underscores that the EU is having to reaffirm things the UK has already been told. Tusk was similarly blunt. Not only did he say last week that Ireland had to be resolved first, but also that the UK’s financial services fantasies were a non-starter. We’ve said for quite a while that negotiating a pact around goods is far simpler, and could be done faster than one that included services, and therefore it was quite possible they’d be concluded separately. Tusk confirmed that reading. Per Politico:

        UK will be paying Brexit ‘divorce bill’ until 2064, says Treasury watchdog - New official data indicates that Britain will be paying its Brexitdivorce bill for 45 years after leaving the EU – until 2064. It is the first time the UK’s fiscal watchdog has set out how Britain would pay the bill Brussels is demanding London pay to meet its liabilities. The Treasury argued on Tuesday that ongoing payments are in the UK’s interests because they spread the financial burden, but they will likely anger Brexiteers who want a clean break from the EU. While the Chancellor highlighted slightly improved growth forecasts next year, over the broader period growth was largely flat, even falling from previous estimates once into the 2020s. Mr Hammond’s officials had been at pains to lower expectations ahead of the statement, saying the Chancellor would hold fire on spending announcements until the autumn. But with few announcements, focus shifted on to the new detail about the UK’s Brexit divorce bill. The Office for Budget Responsibility said Britain’s bill would be a total of £16.4bn in 2019 and 2020, as it continued to pay into EU budgets “as if it had remained in the EU”. After that, outstanding commitments would total £18.2bn between 2021 and 2028 – including around £7.5bn in 2021 alone. Although annual payments would fall sharply from around £3bn in 2023, they would continue for a further four decades, with around £500m still owed in the final year.

        Irish Prime Minister dismisses No 10 plan to register in advance to cross Irish border - The Irish Prime Minister has attacked a plan for people to register in advance to cross the border without checks afterBrexit, which is being studied by Theresa May.Leo Varadkar dismissed the idea – revealed by The Independent – as he turned on senior UK Cabinet ministers for failing to visit the border in order to understand it better.Under the plan, anyone without clearance for “fast track movement” would have to use approved crossing points or would be “considered to have entered the state irregularly”. CCTV and cameras to track vehicle number plates would be needed at some crossing points - despite the Prime Minister’s promise that the border will continue to have no “physical infrastructure”.Nevertheless, Ms May told MPs she has “asked officials to look at it very carefully”, adding: “I believe it gives some very good proposals for solutions.”The Independent’s story was raised with Mr Varadkar when he addressed an audience in Texas, part of a trip to the United States to celebrate St Patrick's Day.“It is not a solution that we envisage,” the Taoiseach said.He also seized on the fact David Davis, the Brexit Secretary, has not visited Northern Ireland since September 2016 – while Boris Johnson, the Foreign Secretary, has failed to make the trip at all since his appointment in July 2016. “I can't see anything negative in a British Cabinet minister viewing the border, seeing what it looks like,” Mr Varadkar said.

        Brexit: Theresa May warned hard Irish border can only be avoided if UK stays aligned with EU rules for time being Theresa May is warned today that her pledge of no hard border in Ireland after Brexit can only be achieved if the UK remains aligned with EU rules for the foreseeable future, in a hard-hitting report by MPs. There is “no evidence” of a technical solution to allow Northern Ireland to break free from the customs union and single market without the return of border posts and checks, their report concludes. The Government’s existing proposals are dismissed as “blue sky thinking” which would be impossible to implement before Brexit day, now just one year away. Crucially, the Northern Ireland Affairs Committee also rejects “a customs border down the Irish Sea” – requiring the entire UK to stay aligned with the EU. “The UK may need to remain in, or parallel to, the customs union and single market for the duration of the implementation period,” its report states. That transition period is intended to conclude at the end of the decade – but the EU is insisting on continued alignment with Northern Ireland, unless a different solution can be found by then. Significantly, Conservative and Democratic Unionist MPs on the Northern Ireland Affairs Committee have put their names to the report’s conclusions. Dr Andrew Murrison, its Tory chairman, said: “Brexit’s success or otherwise hinges on the UK-Ireland border. Everyone agrees that the border after Brexit must look and feel as it does today. “However, we have heard no evidence to suggest that there is currently a technical solution that would avoid infrastructure at the border.” And he added: “It is equally clear that regulatory and tariff alignment will be required during transition to avoid any hardening of the border before a definitive low-friction solution can be determined.”

        Assange Lashes Out: "Hypocritical Motherf*ckers... Remember How I Exposed Your Secret Deal With The Saudis" - Wikileaks founder Julian Assange lashed out at the UK government over Twitter on Friday after Britain's official UN account (UK Mission to the United Nations) tweeted "A free and independent media fulfils a vital role in holding the powerful to account and giving a voice to the powerless," with a link to a puff piece waxing eloquent over the UK's commitment to free speech. Assange - apparently not included in the UK's definition of "free and independent media" (facing arrest and detention should he leave the Embassy), fired off a stunning reply - claiming that the UK's has spent roughly twice as much spying on him as it has on their entire international human rights program. And that is exactly why you have detained me without charge for eight years in violation of two UN rulings and spent over 20 million pounds spying on me you hypocritical mother fuckers. Your entire international human rights programme is £10.6m you pathetic frauds. — Julian Assange ⌛ (@JulianAssange) March 9, 2018 Assange then followed up with "Remember how I exposed your secret deal to put Saudi Arabia on the Human Rights Council?" referring to a 2015 vote-trading deal in which the UK approached Saudi Arabia in secret, promising it a seat on the UN Human Rights Council in exchange for council support. Remember how I exposed your secret deal to put Saudi Arabia on the Human Rights Council? — Julian Assange ⌛ (@JulianAssange) March 9, 2018    Assange, 46, remains confined in the Ecuadorian embassy in London following a failed appeal of his arrest warrant for skipping bail to enter the embassy in 2012 to avoid extradition to Sweden over allegations of sexual assault (which Sweden has dropped).  The UN, meanwhile, has twice ruled that Assange's detention is unlawful. Despite this, the judge in his most recent appeal - Emma Arbuthnot, who said “I find arrest is a proportionate response even though Mr Assange has restricted his own freedom for a number of years." Judge Arbuthnot's impartiality in the Assange matter has been called into question, while her husband and ex-Conservative MP, Baron James Arbuthnot, is listed as the director of a security company along with the former head of MI6. Not exactly friends of WikiLeaks.

        Theresa May To Blame Russia For Nerve Gas Attack; "Full Spectrum" Of Sanctions To Follow - Barely a week after UK Home Secretary Amber Rudd warned the country not to "jump to conclusions" about who was behind a nerve gas attack on a former Russian double-agent, it appears Prime Minister Theresa May is about to do just that...In a late-breaking report, the Sun confirmed that May is preparing to name Russia as the perpetrator of the attack on Sergei Skripal, a spy who was turned over to the UK in 2010 as part of a swap with Russia, after receiving confirmation from her intelligence chiefs.An intelligence assessment explaining the findings is reportedly being delivered overnight, and will be on May's desk in the morning. The attack, which occurred at a shopping center in a quiet suburban area, led to the hospitalization of 21 people, and left Skripal, his daughter Yulia and a local officer who responded to the scene in critical - but stable - condition.  The "tell" - as it were - was the presence of certain chemicals which are believed to have been developed in a Russian laboratory. The announcement is expected to take place at 11 am during a meeting of May's National Security Council. A formal charge against Moscow could be unveiled before the House of Commons could as early as this afternoon. May might even go as far as blaming Russian President Vladimir Putin personally for ordering the hit.In their report to Mrs May, The Sun has learned that MI5 and MI6 chiefs will cite the very rare substance used on ex-spy Sergei Skripal and daughter Yulia as key evidence of the Kremlin’s involvement.It is believed to have been developed in the SVR Russian foreign spy service’s notorious Yasenevo laboratory.Mrs May will then summon an emergency meeting of her National Security Council at 11 am to decide on the scale of Britain’s retaliation. The result of the finding could be more economic sanctions against Russia (which is still facing sanctions tied to the annexation of Crimea).

        May Declares Russia "Clearly" Responsible For Spy Poisoning: "An Unlawful Use Of Force Against UK" - As previewed last night, Theresa May has officially blamed Russia for a nerve-agent attack on Sergei Skripal, a former Russian double agent, and his daughter Yulia, that led to the hospitalization of 21 people. In a speech to the House of Commons, May fleshed out the evidence that the UK has gathered to make its determination, while insisting that actions would be taken to hold the regime accountable - raising the possibility of more sanctions against Russia. May told lawmakers that it was "highly likely" that Russia was responsible for the attack, explaining how a known Russian nerve agent had been discovered by investigators at the scene of the attack in Salisbury. If Moscow is unequivocally proven to have masterminded the attack, May said the UK government would consider it "an unlawful use of force." The British PM told the House of Commons that the former spy was poisoned with “military-grade nerve agent of the type developed by Russia”, according to world-leading experts at Porton Down, the government’s chemical weapons research centre. However, instead of conclusively declaring that Russian President Vladimir Putin had authorized the attack, May said UK intelligence said there are two possibilities of the origin of this action: That the attack was ordered by the Russian state, or the Russian state lost control of these nerve agents, which were then utilized to attack Skripal. "Russia has previously produced this agent, and the government has concluded that it is highly likely that Russia was responsible," May said.She pointed out that the attack happened "against a backdrop of Russian state aggression" citing the annexation of Crimea and unrest in the Donbas region. May added that Russia has meddled in elections. "We will not tolerate such a brazen attempt to murder innocent civilians on our soil," May said. May said the British government had summoned the Russian ambassador to the Foreign Office and has given him a  36 hour ultimatum to explain how state developed nerve agent used in Salisbury, or face “extensive measures”.

        UK prime minister delivers ultimatum to Russia, heightening war danger -- British Prime Minister Theresa May told the House of Commons that Russia was “highly likely” to be responsible for deploying “a military grade nerve agent” against double agent Sergei Skripal, which she declared “an indiscriminate and reckless act against the United Kingdom.”May’s speech followed a meeting of the National Security Council to discuss Britain’s response to the poisoning of Skripal and his daughter, Yulia, just over a week ago. “It is now clear that Mr Skripal and his daughter were poisoned with a military-grade nerve agent of a type developed by Russia. This is part of a group of nerve agents known as Novichok,” May claimed. Her speech follows a wave of anti-Russia hysteria unleashed by the media, political and military establishment, including the mobilisation of 180 military personnel in the cathedral city of Salisbury. May did not provide a shred of evidence to support her claims that Russia had developed the chemical agent used in Salisbury. She simply asserted that because Russia can produce such a chemical, and because of “Russia’s record of conducting state-sponsored assassinations; and our assessment that Russia views some defectors as legitimate targets for assassinations…the government has concluded that it is highly likely that Russia was responsible for the act against Sergei and Yulia Skripal.” May said, “there are therefore only two plausible explanations for what happened in Salisbury on the 4 March. Either this was a direct act by the Russian State against our country. Or the Russian government lost control of this potentially catastrophically damaging nerve agent and allowed it to get into the hands of others.”

        Russia warns UK over ultimatums, points at nukes -  President Donald Trump says Russia must provide “unambiguous answers” on how a Russian-developed poison was used in England against a former Russian military intelligence officer who spied for Britain.Trump spoke by telephone on Tuesday with British Prime Minister Theresa May.  The White House says May and Trump also agreed on the need for “consequences” for those who use “heinous weapons in flagrant violation of international norms.”   May told British lawmakers on Monday it is “highly likely” that Russia is to blame for the attack this month on Sergei Skripal and his daughter Yulia in the city of Salisbury this month.British police and intelligence reports say the Skripals were poisoned by a military grade nerve agent produced in Russia. The Russian Foreign Ministry’s spokeswoman has warned Britain against putting ultimatums to Russia, reminding the U.K. about its nuclear arsenal.Maria Zakharova said in televised remarks Tuesday that “no one can come to parliament and say: ‘I give Russia 24 hours,’” a reference to British Prime Minister Theresa May giving Russia a deadline to explain how a Russia-designed nerve agent could have been used to poison former spy Sergei Skripal and his daughter.Russia has denied involvement and said it won’t respond to a British ultimatum unless it gets samples of the nerve agent in line with rules of the international chemical weapons watchdog. Zakharova said Britain mustn’t try to scare Russia and pointed to Russian President Vladimir Putin’s recent speech in which he presented a range of new nuclear weapons.

           Russia Threatens UK: "One Does Not Give 24Hrs Notice To A Nuclear Power" - On the heels of UK PM May's red hot rhetoric and ultimatum yesterday and Germany's pressure this morning, Russia has cranked up their response to '11' on the Spinal Tap amplifier of global armageddon. Having made clear this morning that: “We have certainly heard the ultimatum voiced in London,” Russia's top diplomat Sergey Lavrov said. “The spokesperson for the Foreign Ministry has commented on our attitude to this,” he added referring to Maria Zakharova branding of May’s appearance in Parliament as a “circus.” Russia faces warning from Germany too, as Reuters reports Merkel and May spoke this morning about the nerve agent attack. Merkel condemned the attack and stated that she was "taking very seriously the British government's view that Russia might be responsible." Merkel then said Russia "needs to give prompt answers to the British' justified questions." But then, Interfax reports Russian Foreign Ministry Spokeswoman Maria Zakharova turned up the heat dramatically, warning (or threatening): "One does not give 24 hours notice to a nuclear power" adding that the "Skripal poisoning was not an incident but a colossal international provocation." She also slammed the British for "not using a single international legal mechanism to probe the Skripal case." Additionally, in a series of tweets the Russian embassy in the UK said: “Moscow will not respond to London’s ultimatum until it receives samples of the chemical substance to which the UK investigators are referring. “Britain must comply with the Chemical Weapons Convention which stipulates joint investigation into the incident, for which Moscow is ready. “Without that, there can be no sense in any statements from London. The incident appears to be yet another crooked attempt by the UK authorities to discredit Russia. “Any threat to take ‘punitive’ measures against Russia will meet with a response. The British side should be aware of that. 

           Britain to expel 23 Russian diplomats after poisoning of ex-spy - — British Prime Minister Theresa May on Wednesday ordered the immediate expulsion of 23 Russian diplomats believed to be involved in espionage, in the first reprisals against Moscow for a chemical attack on a former double agent. May, speaking to Parliament, said the response would include a halt to high-level meetings between British and Russian officials and the cancellation of a planned visit to Britain by Russian Foreign Minister Sergei Lavrov. She also said the royal family and government ministers would boycott this summer’s World Cup soccer tournament in Russia. More countermeasures — some clandestine — are under consideration. The prime minister repeated the conclusion of British investigators that Russia had either deployed or lost control of a dangerous nerve agent used in the attack targeting former spy Sergei Skripal, 66, and his daughter, Yulia, 33. May said Russia’s dismissive response to her demand for an explanation has “demonstrated complete disdain for the gravity of these events.” “Instead, they have treated the use of a military-grade nerve agent in Europe with sarcasm, contempt and defiance,” she told lawmakers. The British leader gave no further details on the Russian diplomats ordered out of the country but said they were deemed “undeclared intelligence officers.” She called it the largest expulsion of Russian diplomats from Britain since Cold War-era retributions in the 1980s.   The Russians denounced May’s accusation as an “unprecedentedly crude provocation” and a new blow to relations.

          France, Germany, UK, US blame Moscow for ex-spy chemical attack – joint declaration - DW - France, Germany, Britain and the US have condemned a chemical attack on a Russian former double agent in the UK, blaming Moscow for the attack. NATO chief Jens Stoltenberg said the incident must have "consequences."  The leaders of France, Germany, the US and the UK jointly demanded "complete disclosure" from Russia on the Novichok nerve agent used in the attack on former spy Sergei Skripal, saying there is "no plausible alternative" to Moscow's involvement."This use of a military-grade nerve agent, of a type developed by Russia, constitutes the first offensive use of a nerve agent in Europe since the Second World War," they said in a statement on Thursday. The attack constituted "an assault on UK sovereignty" that threatened "the security of us all."  On March 4, Skripal, a 66-year-old former military intelligence agent who betrayed several Russian agents to British intelligence, and his 33-year-old daughter Yulia, were targeted in the attack. Both remain unconscious in intensive care.  Nick Bailey, the first police officer on the scene, is also in stable but critical condition. Up to 21 other people were treated for exposure, according to police. The joint statement called on Moscow to provide information on its nerve poison to the Organization for the Prohibition of Chemical Weapons (OPCW), especially after Russia claimed it destroyed all of its chemical weapons stockpiles last year. In an article for Germany's Frankfurter Allgemeine newspaper, British Foreign Minister Boris Johnson said London is working to give the OPCW "the opportunity to confirm our analysis independently."

          The Novichok Story Is Indeed Another Iraqi WMD Scam - As recently as 2016 Dr Robin Black, Head of the Detection Laboratory at the UK’s only chemical weapons facility at Porton Down, a former colleague of Dr David Kelly, published in an extremely prestigious scientific journal that the evidence for the existence of Novichoks was scant and their composition unknown. Yet now, the British Government is claiming to be able instantly to identify a substance which its only biological weapons research centre has never seen before and was unsure of its existence. Worse, it claims to be able not only to identify it, but to pinpoint its origin. Given Dr Black’s publication, it is plain that claim cannot be true. The world’s international chemical weapons experts share Dr Black’s opinion. The Organisation for the Prohibition of Chemical Weapons (OPCW) is a UN body based in the Hague. In 2013 this was the report of its Scientific Advisory Board, which included US, French, German and Russian government representatives and on which Dr Black was the UK representative: [The SAB] emphasised that the definition of toxic chemicals in the Convention would cover all potential candidate chemicals that might be utilised as chemical weapons.  The SAB states that it has insufficient information to comment on the existence or properties of “Novichoks”.  Indeed the OPCW was so sceptical of the viability of “novichoks” that it decided – with US and UK agreement – not to add them nor their alleged precursors to its banned list. In short, the scientific community broadly accepts Mirzayanov was working on “novichoks” but doubts he succeeded. Given that the OPCW has taken the view the evidence for the existence of “Novichoks” is dubious, if the UK actually has a sample of one it is extremely important the UK presents that sample to the OPCW. Indeed the UK has a binding treaty obligation to present that sample to OPCW. Russa has – unreported by the corporate media – entered a demand at the OPCW that Britain submit a sample of the Salisbury material for international analysis.  Yet Britain refuses to submit it to the OPCW.

          Why we must have the right to call Allah gay - In Britain in the 21st century you can be punished for mocking gods. You can be expelled from the kingdom, frozen out, if you dare to diss Allah. Perversely adopting medieval Islamic blasphemy laws, modern Britain has made it clear that it will tolerate no individual who says scurrilous or reviling things about the Islamic god or prophet. Witness the authorities’ refusal to grant entrance to the nation to the alt-right Christian YouTuber Lauren Southern. Her crime? She once distributed a leaflet in Luton with the words ‘Allah is gay, Allah is trans, Allah is lesbian…’, and according to the letter she received from the Home Office informing her of her ban from Britain, such behaviour poses a ‘threat to the fundamental interests of [British] society’. This is a very serious matter and the lack of outrage about it in the mainstream press, not least among those who call themselves liberal, is deeply disturbing. For what we have here is the ringfencing of Britain from anti-Islam blasphemy. The purification of the kingdom against those who would take the mick out of the Muslim faith. In refusing leave to enter to Ms Southern because she handed out those leaflets, the UK authorities are making it clear that this is a nation in which certain things cannot be said about Allah. They are sending a message not only to Ms Southern but to Britons, too: trolling of Islam is a ‘threat’ to society and counter to ‘the public policy of the United Kingdom’. They haven’t only banned one woman; they have sought to chill an entire sphere of ‘blasphemy’.

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