Fed's QE Unwind Marches Forward Relentlessly - During the sell-off, it ignored the whiners on Wall Street. The fifth month of the QE-Unwind came to a completion with the release this afternoon of the Fed’s balance sheet for the week ending February 28. The QE-Unwind is progressing like clockwork. Even during the sell-off in early February, the QE-Unwind never missed a beat.During QE, the Fed acquired Treasury securities and mortgage-backed securities (MBS) guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae. During the QE-Unwind, the Fed is shedding those securities. According to its plan, announced last September, the Fed would reduce its holdings of Treasuries and MBS by no more than:
- $10 billion a month in Q3 2017.
- $20 billion a month in Q1 2018
- $30 billion a month in Q2 2018
- $40 billion a month in Q3 2018
- $50 billion a month in Q4 2018 and continue at this pace.
This would shrink the balance of Treasuries and MBS by up to $420 billion in 2018, by up to an additional $600 billion in 2019 and every year going forward until the Fed decides that the balance sheet has been “normalized” enough — or until something big breaks.For February, the plan called for shedding up to $20 billion in securities: $12 billion in Treasuries and $8 billion in MBS. On its January 31 balance sheet, the Fed had $2,436 billion of Treasuries; on today’s balance sheet, $2,424 billion: a $12 billion drop for February. On target! In total, since the beginning of the QE Unwind, the balance of Treasuries has dropped by $42 billion, to hit the lowest level since August 6, 2014:
Relying on the Fed's Balance Sheet - Last week’s 12th annual U.S. Monetary Policy Forum focused on the effectiveness of Fed large-scale asset purchases (LSAPs) as an instrument of monetary policy. Rarely is such a public policy discussion so timely and enlightening (for full disclosure, we are founding members of the USMPF panel).While there are notable disagreements, the report and discussion reveal a broad (if not universal) consensus on key issues:
- In a world of low equilibrium real interest rates and low inflation, policymakers could easily hit the zero lower bound (ZLB) in the next recession.
- At the ZLB, the Fed should again use a combination of balance-sheet tools and interest-rate forward-guidance to achieve its mandated objectives of stable prices and maximum sustainable employment (see our earlier post).
- Yet, significant uncertainties about the impact of balance-sheet expansion mean that LSAPs may not provide sufficient stimulus at the ZLB.
- Fed policymakers should undertake a thorough (and potentially lengthy) assessment of alternative policy tools and frameworks—ranging from negative interest rates to a higher inflation target to forms of price-level targeting—to ensure they remain as effective as possible.
The remainder of this post discusses the challenges of measuring the impact of balance-sheet policies. As the now-extensive literature on the subject implies, balance-sheet expansions ease financial conditions.
“A Skeptical View of the Impact of the Fed’s Balance Sheet”- William Dudley (speech excerpt) -The use of the Federal Reserve’s balance sheet has been an important element of U.S. monetary policy over the past decade. The start of the reversal of that expansion—the so-called process of balance sheet normalization—has been a key focus of the FOMC’s monetary policy deliberations over the past year. I am pleased that the start of this process—in contrast to the bond market taper tantrum of 2013—has been non-disruptive. The normalization process is now running in the background, essentially on autopilot, with short-term interest rates serving as the primary tool for adjusting the stance of monetary policy. Let me start with my main point: Although I agree with many of the authors’ findings in this year’s paper, I would take a much less skeptical view of the Federal Reserve’s balance sheet as a tool of monetary policy. While additional study of the effects of large-scale asset purchase (LSAP) programs should be encouraged—as it furthers our understanding of the use of these unconventional monetary policy tools—the paper’s findings do not, in my mind, invalidate the use of LSAPs when the Federal Reserve is operating at or close to the zero lower bound for short-term interest rates. That is the key issue—not the magnitude of the effects of LSAPs or whether short-term interest rates should be the primary tool of monetary policy. On the latter point, which is consistent with the FOMC’s statements about policy normalization, I see broad agreement.Concluding that LSAPs are less powerful than suggested by some of the estimates from the event study literature does not imply that there is no role for LSAPs at the zero lower bound. In such circumstances, LSAPs can be used to provide additional monetary accommodation by depressing bond term premia and the spread between agency mortgage-backed securities (MBS) and Treasury securities, as well as by strengthening the credibility of forward guidance on the path of short-term interest rates. This can provide support to asset values more generally and make financial conditions more accommodative.
Powell: Semiannual Monetary Policy Report to the Congress - Excerpts from prepared statement from Fed Chair Jerome Powell: Semiannual Monetary Policy Report to the Congress After easing substantially during 2017, financial conditions in the United States have reversed some of that easing. At this point, we do not see these developments as weighing heavily on the outlook for economic activity, the labor market, and inflation. Indeed, the economic outlook remains strong. The robust job market should continue to support growth in household incomes and consumer spending, solid economic growth among our trading partners should lead to further gains in U.S. exports, and upbeat business sentiment and strong sales growth will likely continue to boost business investment. Moreover, fiscal policy is becoming more stimulative. In this environment, we anticipate that inflation on a 12-month basis will move up this year and stabilize around the FOMC's 2 percent objective over the medium term. Wages should increase at a faster pace as well. The Committee views the near-term risks to the economic outlook as roughly balanced but will continue to monitor inflation developments closely. And on the balance sheet: The Congress has assigned us the goals of promoting maximum employment and stable prices. Over the second half of 2017, the FOMC continued to gradually reduce monetary policy accommodation. Specifically, we raised the target range for the federal funds rate by 1/4 percentage point at our December meeting, bringing the target to a range of 1-1/4 to 1-1/2 percent. In addition, in October we initiated a balance sheet normalization program to gradually reduce the Federal Reserve's securities holdings. That program has been proceeding smoothly. These interest rate and balance sheet actions reflect the Committee's view that gradually reducing monetary policy accommodation will sustain a strong labor market while fostering a return of inflation to 2 percent.
Powell Hawkish Highlights: Ignore Recent Volatility, Gradual Rate Hikes Will Continue - In advance of his first testimony before the House at 10am today, Fed Chair Jay Powell released his prepared remarks moments ago, as "some of the headwinds the U.S. economy faced in previous years have turned into tailwinds" and that the Fed can continue gradually raising interest rates as the outlook for growth remains strong, as and the recent bout of financial volatility shouldn’t weigh on the U.S. economy. Commenting on Trump's tax reform and policies, Powell said that "fiscal policy has become more stimulative and foreign demand for U.S. exports is on a firmer trajectory." He also glossed over the recent bout of volatility, "saying financial conditions remain accommodative." At the same time, he noted that "inflation remains below our 2 percent longer-run objective. In the FOMC's view, further gradual increases in the federal funds rate will best promote attainment of both of our objectives. As always, the path of monetary policy will depend on the economic outlook as informed by incoming data." Of particular interest to markets will be Powell's commentary on recent market events, which Powell is not too worried about: "After easing substantially during 2017, financial conditions in the United States have reversed some of that easing. At this point, we do not see these developments as weighing heavily on the outlook for economic activity, the labor market, and inflation. Indeed, the economic outlook remains strong." Looking forward, Powell said that "in gauging the appropriate path for monetary policy over the next few years, the FOMC will continue to strike a balance between avoiding an overheated economy and bringing PCE price inflation to 2 percent on a sustained basis." Also notable is his conviction that "the economic outlook remains strong" because "the robust job market should continue to support growth in household incomes and consumer spending, solid economic growth among our trading partners should lead to further gains in U.S. exports, and upbeat business sentiment and strong sales growth will likely continue to boost business investment." The Fed chair also said that “we anticipate that inflation on a 12-month basis will move up this year and stabilize around the FOMC’s 2 percent objective over the medium term,’’ and added that the lag in wages during the expansion was due to low gains in output per hour, or productivity, though a new wave of investment spending “should support higher productivity growth in time.’’
Fed’s concern over prospect of a wages movement jolts markets - Indications by the new chairman of the US Federal Reserve, Jerome Powell, that the Fed could lift interest rates as many as four times this year in response to concerns over a possible wages push by US workers led to sharp sell-off in financial markets on Tuesday and Wednesday. The Dow was down by 380 points Wednesday in volatile trading, with markets falling sharply towards the close of trading. Powell’s indication of faster than expected interest rate increases came in a question-and-answer session after he had delivered his prepared testimony at a semi-annual hearing of the House Financial Services Committee on Tuesday. Powell will appear before the Senate Finance Committee today, where he will be questioned further on his outlook for the US economy and the Fed’s monetary policy. The markets did not respond to Powell’s prepared testimony, but then moved sharply down, with the Dow finishing lower by almost 300 points for the day on Tuesday, in response to his replies to questions. Powell noted that in December the balance of opinion on the Fed’s policy-making Open Market Committee was for three rises in 2018. “But since then,” he said, “what we’ve seen is incoming data that suggests a strengthening in the economy. We’ve seen continuing strength in the labour market. We’ve seen some data that will, in my case, add some confidence to my view that inflation is moving up to target. We’ve also seen continued strength around the globe. And we’ve seen fiscal policy become more stimulative.” Powell said that when it came to projecting future rate increases at the Fed’s upcoming March meeting, at which a quarter percentage point rise is almost certain to be announced, he and other members of the Open Market Committee would be “taking into account everything that’s happened since December.”
PCE Price Index: January Headline & Core - The BEA's Personal Income and Outlays report for January was published this morning by the Bureau of Economic Analysis. The latest Headline PCE price index was up 0.37% month-over-month (MoM) and is up 1.65% year-over-year (YoY). The latest Core PCE index (less Food and Energy) came in at 0.27% MoM and 1.52% YoY. Core PCE remains below the Fed's 2% target rate. Revisions were made to figures for July through December. The adjacent thumbnail gives us a close-up of the trend in YoY Core PCE since January 2012. The first string of red data points highlights the 12 consecutive months when Core PCE hovered in a narrow range around its interim low. The second string highlights the lower range from late 2014 through 2015. Core PCE shifted higher in 2016 with a decline in 2017. The first chart below shows the monthly year-over-year change in the personal consumption expenditures (PCE) price index since 2000. Also included is an overlay of the Core PCE (less Food and Energy) price index, which is Fed's preferred indicator for gauging inflation. The two percent benchmark is the Fed's conventional target for core inflation. However, the December 2012 FOMC meeting raised the inflation ceiling to 2.5% for the next year or two while their accommodative measures (low FFR and quantitative easing) are in place. More recent FOMC statements now refer only to the two percent target.
How new Fed Chair Jerome Powell should get ready for the next recession - New Federal Reserve Chair Jerome Powell testified before Congress this week, roughly a month after replacing Janet Yellen. The key question many have is whether or not a change in personnel will mark a break with past policy. If it does, and if the Fed starts crediting arguments for raising interest rates that they correctly rejected before, then today’s low unemployment rate might be unfortunately short-lived.Under Yellen’s leadership, the Fed was notably “dovish” in that it strove to keep monetary policy expansionary with the goal of pushing unemployment down, rather than contractionary in the service of guarding against an outbreak of inflation. Her replacement, Jerome Powell, served on the Fed’s Board of Governors with Yellen between 2012 and early 2018. Powell was by most accounts supportive of the policy path blazed by Yellen, so in that sense a radical change in the Fed’s stance would be surprising. But Yellen wasn’t just a dovish vote on the Fed, she was an intellectual leader in the defense of expansionary monetary policy over the past decade. As a highly respected academic macroeconomist and policymaker, Yellen had the ability and confidence to push back hard on weak arguments about why the Fed should reverse course and begin worrying about containing inflation rather than pushing down unemployment. One of these weak arguments is that the Fed needs to raise rates faster and sooner so that when the next recession hits, there will be enough “room” to lower them. Proponents of this argument point out that in previous recessions the Fed lowered the short-term “policy” interest rates that it controls by 3–5 percentage points in an effort to restart growth. Today these rates are at 1.5 percent, and, they really can’t go much below zero for any extended period of time. This “zero lower bound” (ZLB) on interest rates is driven by the fact that once these rates hit zero, wealth-holders will just stop demanding bonds and will be happy to hold cash instead. This means that further Fed purchases of bonds to lower rates will have no effect. What hitting the ZLB means for policy is that we could enter the next recession without the ability of the Fed to lower policy rates as far as they have in the past.
Chicago Fed: Little Change in January - "Index points to little change in economic growth in January." This is the headline for this morning's release of the Chicago Fed's National Activity Index, and here is the opening paragraph from the report: "The Chicago Fed National Activity Index (CFNAI) ticked down to +0.12 in January from +0.14 in December. Two of the four broad categories of indicators that make up the index decreased from December, and two of the four categories made negative contributions to the index in January. The index’s three-month moving average, CFNAI-MA3, decreased to +0.17 in January from +0.43 in December. [Link to News Release] The previous five of six months were revised. The Chicago Fed's National Activity Index (CFNAI) is a monthly indicator designed to gauge overall economic activity and related inflationary pressure. It is a composite of 85 monthly indicators as explained in this background PDF file on the Chicago Fed's website. The index is constructed so a zero value for the index indicates that the national economy is expanding at its historical trend rate of growth. Negative values indicate below-average growth, and positive values indicate above-average growth. The first chart below shows the recent behavior of the index since 2007. The red dots show the indicator itself, which is quite noisy, together with the 3-month moving average (CFNAI-MA3), which is more useful as an indicator of the actual trend for coincident economic activity.
Chicago Fed "Index Points to Little Change in Economic Growth in January" -- From the Chicago Fed: Index Points to Little Change in Economic Growth in January The Chicago Fed National Activity Index (CFNAI) ticked down to +0.12 in January from +0.14 in December. This graph shows the Chicago Fed National Activity Index (three month moving average) since 1967. This suggests economic activity was above the historical trend in January (using the three-month average).According to the Chicago Fed:The index is a weighted average of 85 indicators of growth in national economic activity drawn from four broad categories of data: 1) production and income; 2) employment, unemployment, and hours; 3) personal consumption and housing; and 4) sales, orders, and inventories. A zero value for the monthly index has been associated with the national economy expanding at its historical trend (average) rate of growth; negative values with below-average growth (in standard deviation units); and positive values with above-average growth.
Q4 GDP Second Estimate: Real GDP at 2.5% - The Second Estimate for Q4 GDP, to one decimal, came in at 2.5% (2.54% to two decimal places), a decrease over 3.2% for the Q3 Third Estimate. Investing.com had a consensus of 3.0%.Here is the slightly abbreviated opening text from the Bureau of Economic Analysis news release:Real gross domestic product (GDP) increased at an annual rate of 2.5 percent in the fourth quarter of 2017 (table 1), according to the "second" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.2 percent. The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 2.6 percent. With this second estimate for the fourth quarter, the general picture of economic growth remains the same. [Full Release] Here is a look at Quarterly GDP since Q2 1947. Prior to 1947, GDP was an annual calculation. To be more precise, the chart shows is the annualized percentage change from the preceding quarter in Real (inflation-adjusted) Gross Domestic Product. We've also included recessions, which are determined by the National Bureau of Economic Research (NBER). Also illustrated are the 3.22% average (arithmetic mean) and the 10-year moving average, currently at 1.46%.
Q4 GDP Revised down to 2.5% Annual Rate --From the BEA: Gross Domestic Product: Fourth Quarter and Annual 2017 (Second Estimate) Real gross domestic product (GDP) increased at an annual rate of 2.5 percent in the fourth quarter of 2017, according to the "second" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.2 percent.The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 2.6 percent. With this second estimate for the fourth quarter, the general picture of economic growth remains the same. Here is a Comparison of Second and Advance Estimates. PCE growth was unrevised at 3.8%. Residential investment was revised up from 11.6% to 13.0%. Most revisions were small. This was at the consensus forecast.
Second Estimate 4Q2017 GDP Growth Slows to 2.5 %: The headline second estimate of fourth quarter 2017 Real Gross Domestic Product (GDP) marginally declined to a positive 2.5 % from the advance estimate's 2.6 %. Year-over-year growth was unchanged from the advance estimate. There was little change between the advance and this second GDP esitmate. The consumer spending declined from the previous quarter, but the real improvement came from fixed investment. I am not a fan of quarter-over-quarter exaggerated method of measuring GDP - but my year-over-year preferred method showed moderate acceleration from last quarter. Headline GDP is calculated by annualizing one quarter's data against the previous quarters data. A better method would be to look at growth compared to the same quarter one year ago. For 4Q2017, the year-over-year growth is now 2.5 % - up from 3Q2017's 2.3 % year-over-year growth. So one might say that the rate of GDP growth improved 0.2 % from the previous quarter. The same report also provides Gross Domestic Income which in theory should equal Gross Domestic Product. Some have argued the discrepancy is due to misclassification of capital gains as ordinary income - but whatever the reason, there are differences. This second estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. (See caveats below.) The table below compares the previous quarter estimate of GDP (Table 1.1.2) with the current estimate this quarter which shows:
- consumption for goods and services improved adding 2.6% to GDP.
- trade balance worsened removing 1.1 % from GDP
- inventory change removed 0.7 % from GDP
- fixed investment growth added 0.6 % to GDP
- federal spending added 0.5 % to GDP
The following is Table 1.1.2 before the annual revision: [click to enlarge] What the BEA says about the second estimate of GDP: The increase in real GDP in the fourth quarter reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, residential fixed investment, state and local government spending, and federal government spending that were partly offset by a negative contribution from private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased. Current-dollar GDP increased 4.9 percent, or $235.9 billion, in the fourth quarter to a level of $19,736.5 billion. In the third quarter, current-dollar GDP increased 5.3 percent, or $250.6 billion (table 1 and table 3). The price index for gross domestic purchases increased 2.5 percent in the fourth quarter, compared with an increase of 1.7 percent in the third quarter (table 4). The PCE price index increased 2.7 percent, compared with an increase of 1.5 percent. Excluding food and energy prices, the PCE price index increased 1.9 percent, compared with an increase of 1.3 percent.
Q4 GDP Revised Lower To 2.5% Despite Stronger Spending - In what may be the most unremarkable GDP revision in years, moments ago the BEA revised its initial Q4 2017 GDP estimate from 2.6% to 2.5%, lowering the number by fractions of a basis point, to 2.530% specifically, and in line with estimates. According to the Dept of Commerce, the downward revision reflected a downward revision to consumer spending on goods, and a small downward revision to inventory investment. These downward revisions were partly offset by upward revisions to consumer spending on services and to housing investment. The revision lower took place even though personal consumption, measured by PCE, rose at a 3.8% annualized rate, higher than the 3.6% estimate, and unchanged from last quarter despite reports that showed a sharp drop in retail sales to close the year. Core PCE was also in line with both expectations and the initial estimate at 1.9%. Nonresidential fixed investment, or spending on equipment, structures and intellectual property rose 6.6% in 4Q after rising 4.7% prior quarter, if also barely changed from the initial estimate. . Other revisions were similarly de minimis, with private inventories barely moving (from -0.67% to -0.70%), Net Trade also stayed the same as in the initial estimate, the same as government consumption. The changes, or lack thereof, are shown in the chart below.
Q4 Real GDP Per Capita: 1.74% Versus the 2.54% Headline Real GDP --The Second Estimate for Q4 GDP came in at 2.5% (2.54% to two decimals), down from 3.2% in Q3. With a per-capita adjustment, the headline number is lower at 1.74% to two decimal points. Here is a chart of real GDP per capita growth since 1960. For this analysis, we've chained in today's dollar for the inflation adjustment. The per-capita calculation is based on quarterly aggregates of mid-month population estimates by the Bureau of Economic Analysis, which date from 1959 (hence our 1960 starting date for this chart, even though quarterly GDP has is available since 1947). The population data is available in the FRED series POPTHM. The logarithmic vertical axis ensures that the highlighted contractions have the same relative scale. The chart includes an exponential regression through the data using the Excel GROWTH function to give us a sense of the historical trend. The regression illustrates the fact that the trend since the Great Recession has a visibly lower slope than the long-term trend. In fact, the current GDP per-capita is 9.3% below the pre-recession trend. The real per-capita series gives us a better understanding of the depth and duration of GDP contractions. As we can see, since our 1960 starting point, the recession that began in December 2007 is associated with a deeper trough than previous contractions, which perhaps justifies its nickname as the Great Recession. The standard measure of GDP in the US is expressed as the compounded annual rate of change from one quarter to the next. The current real GDP is 2.54%. But with a per-capita adjustment, the data series is lower at 1.74%. The 10-year moving average illustrates that US economic growth has slowed dramatically since the last recession.
Atlanta Fed GDP Forecast Plunges Below Consensus, Growth Halved In A Month - On February 1st, The Atlanta Fed's GDPNOW model forecast Q1 GDP growth in the US economy would be 5.4%... and the world (on the right) celebrated. As a reminder, that was the highest GDP forecast by the Atlanta Fed going back to Q1 2012: We warned at the time that GDPNOW tended to drift lower after an exuberant open... and sure enough, less than a month later, things have gone downhill fast! As of today, the latest forecast from The Atlanta Fed is just 2.6% GDP growth - a 52% tumble in expectations since the start of the month... After this morning's Advance Economic Indicators and durable manufacturing reports from the U.S. Census Bureau, the nowcasts of the contributions of real nonresidential equipment investment and real inventory investment to first-quarter real GDP growth declined from 0.45 percentage points and 1.20 percentage points, respectively, to 0.37 percentage points and 0.95 percentage points, respectively. The nowcast of first-quarter real residential investment growth declined from 0.6 percent on February 16 to -4.5 percent on February 26 after housing market releases from the Census Bureau and the National Association of Realtors. And now below the concensus blue-chip estimate. None of this should be a surprise - as this has been the pattern of the GDPNOW model's trajectory for multiple years - and in fact this level of GDP growth is equal to the growth seen in Q1 2017 on its way to new lows...
Fed Chair Admits "US Is Not On A Sustainable Fiscal Path -- Less than a week after Dallas Federal Reserve Bank President Robert Kaplan sounded the alarm over the level of debt that America's government is projected to carry, Fed Chair Jay Powell told Congress today that "the US is not on a sustainable fiscal path." Treasury yields were already spiking... Echoing the recent Goldman analysis, which warned that the recently implemented Republican spending plan could lead to an "unsustainable" debt load, Kaplan predicted the US fiscal future beyond 2 years: he said that while the corporate tax cuts and other reforms may boost productivity and lift economic potential, most of the stimulative effects will fade in 2019 and 2020, leaving behind an economy with a higher debt burden than before. "This projected increase in government debt to GDP comes at a point in the economic cycle when it would be preferable to be moderating the rate of debt growth at the government level," Kaplan said.And now Fed Chair Powell is confirming that view. However, as we pointed out previously, this sudden Fed anxiety comes nearly a decade after the US unleashed its biggest debt-issuance binge in history, doubling the US debt from $10 trillion t o $20 trillion under president Obama, which was only made possible thanks to the Fed's monetization of $4 trillion in deficits (and debt issuance). To summarize Kaplan's and Powell's view: when US debt doubled in the past decade the Fed had no problems, and in fact enabled it. And now, it's time to panic... And stocks rallied on this headline...
IMF chief sees growth, overheating, debt risks from US tax cuts (Reuters) - International Monetary Fund Managing Director Christine Lagarde said she saw positive and negative effects from a "complicated" U.S. tax overhaul, including a near-term growth bump that risks overheating the U.S. economy and a problematic rise in debt.Lagarde told Reuters in an interview on Thursday that tax cuts can lift the U.S. growth rate by about 1.2 percentage points over the three years through 2020, which should help boost global growth and trade for at least a few years.The massive tax overhaul, which cuts the top corporate rate from 35 percent to 21 percent and simplifies many provisions, met some of the IMF's advice that Washington adopt a simpler, more efficient business tax code. But Lagarde warned the plan threatened to stoke inflation."Because of the stimulus impact that it will have on growth, and because the U.S. economy is already growing at full capacity, it might very well have an overheating impact on the economy, which could in turn increase wages - good - increase inflation and entail a tightening of monetary policy, with interest rates rising," Lagarde said. The higher rates would nonetheless cause some capital outflows from emerging markets, Lagarde said. Sudden and massive outflows two decades ago prompted IMF bailouts and painful austerity for some southeast Asian countries, including Indonesia.
All Guns, No Butter: Military Contractors as Welfare Queens - Imagine for a moment a scheme in which American taxpayers were taken to the cleaners to the tune of hundreds of billions of dollars and there was barely a hint of criticism or outrage. Imagine as well that the White House and a majority of the politicians in Washington, no matter the party, acquiesced in the arrangement. In fact, the annual quest to boost Pentagon spending into the stratosphere regularly follows that very scenario, assisted by predictions of imminent doom from industry-funded hawks with a vested interest in increased military outlays.Most Americans are probably aware that the Pentagon spends a lot of money, but it’s unlikely they grasp just how huge those sums really are. All too often, astonishingly lavish military budgets are treated as if they were part of the natural order, like death or taxes. The figures contained in the recent budget deal that kept Congress open, as well as in President Trump’s budget proposal for 2019, are a case in point: $700 billion for the Pentagon and related programs in 2018 and $716 billion the following year. Remarkably, such numbers far exceeded even the Pentagon’s own expansive expectations. According to Donald Trump, admittedly not the most reliable source in all cases, Secretary of Defense Jim Mattis reportedly said, “Wow, I can’t believe we got everything we wanted” — a rare admission from the head of an organization whose only response to virtually any budget proposal is to ask for more. The public reaction to such staggering Pentagon budget hikes was muted, to put it mildly. Unlike last year’stax giveaway to the rich, throwing near-record amounts of tax dollars at the Department of Defense generated no visible public outrage. Yet those tax cuts and Pentagon increases are closely related. The Trump administration’s pairing of the two mimics the failed approach of President Ronald Reagan in the 1980s — only more so. It’s a phenomenon I’ve termed “Reaganomics on steroids.” Reagan’s approach yielded oceans of red ink and a severe weakening of the social safety net. It also provoked such a strong pushback that he later backtracked by raising taxes and set the stage for sharp reductions in nuclear weapons.
China Slams New "Unilateral" U.S. Sanctions On North Korea - China issued a stern rebuke of enhanced US sanctions on North Korea on Friday, saying the unilateral targeting of Chinese firms and individuals accused of supplying Pyongyang with prohibited cargo risks harming international cooperation on the problem. "The Chinese side firmly opposes the US imposing unilateral sanctions and 'long-arm jurisdiction' on Chinese entities or individuals in accordance with its domestic laws," said the Chinese Foreign Ministry in a statement. "We have lodged stern representations with the US side over this, urging it to immediately stop such wrongdoings so as not to undermine bilateral cooperation on the relevant area." The fresh sanctions were slapped on 27 companies and 28 ships linked to the North Korean shipping trade, while the U.S. urged the United Nations to blacklist entities known or believed to be smuggling prohibited cargo in or out of North Korea. Energy and shipping firms based in mainland China, Hong Kong, Taiwan and Singapore are primarily affected by the sanctions, which block US-held assets belonging to violators, and prohibit US citizens from conducting business with them. China is North Korea's largest trading partner, supplying 90 percent of North Korea's total trading volume according to the Council on Foreign Relations. "Today's actions will significantly hinder North Korea's ability to conduct evasive maritime activities that facilitate illicit coal and fuel transports," Treasury Secretary Steve Mnuchin told reporters on Friday. "And limit the regime's ability to ship goods through international waters." President Trump warned last week of a "phase two" that could be "very, very unfortunate for the world" if the new sanctions weren't adhered to. Beijing has pushed back, saying it has been "comprehensively and strictly implementing" UN Security Council resolutions, and "fulfilling its international obligations" in regards to the sanctions - preventing its citizens and companies to circumvent them. China says it will "seriously handle" violators in accordance with the law.
North Korea Warns Washington "Running Amok" Heralds "Dark Cloud Of War" -- In a suspiciously soft response - particularly after its ally China accused the US of "long-arm jurisdiction - North Korea criticized Washington's decision to impose sanctions on marine vessels supplying North Korea with banned goods that could help support its nuclear program, but said it would still be open to talks with its longtime geopolitical archnemesis. Instead of threatening a nuclear attack of its own, Pyongyang accused Washington of bringing "clouds of war" to the region by imposing "the largest-ever" sanctions, as RT reports. A statement published by state news agency KCNA hailed North Korea’s leadership for their "strong determination for peace, long-awaited inter-Korean dialogue and cooperation," which began to surface during the 2018 Pyeongchang Winter Olympics. The statement went on to say that Washington is violating the Korean Olympics truce and "is running amok to bring another dark cloud of confrontation and war over the Korean peninsula" by announcing new wave of sanctions against the North. We came to possess nuclear weapons, the treasured sword of justice, in order to defend ourselves from such threats from the United States,” the statement read, adding that “we will consider any type of blockade an act of war against us.” On Friday, Washington announced "the largest-ever set of new sanctions on the North Korean regime". The sanctions targeted the country’s industries and exports.
Dr. Strangelove in the Pentagon: Lowering the Nuclear Threshold and Other Follies of the New Nuclear Posture Review - The new Nuclear Posture Review, or NPR, is among the most soporific documents of our era.. The Stockholm International Peace Research Institute estimates that the United States devoted $611 billion to its military machine in 2016. That was more than the defense expenditures of the next nine countries combined, almost three times what runner-up China put out, and 36% of total global military spending. Yet reading the NPR you would think the United States is the most vulnerable country on Earth. Threats lurk everywhere and, worse yet, they’re multiplying, morphing, becoming ever more ominous. The more Washington spends on glitzy weaponry, the less secure it turns out to be, which, for any organization other than the Pentagon, would be considered a terrible return on investment. The Nuclear Posture Review unwittingly paints Russia, which has an annual military budget of $69.2 billion ($10 billion less than what Congress just added to the already staggering 2018 Pentagon budget in a deal to keep the government open), as the epitome of efficient investment, so numerous, varied, and effective are the “capabilities” it has acquired in the 17 years since Vladimir Putin took the helm. Though similar claims are made about China and North Korea, Putin’s Russia comes across in the NPR as the threat of the century, a country racing ahead of the U.S. in the development of nuclear weaponry. As the Washington Post’s Glenn Kessler has shown, however, that document only gets away with such a claim by making 2010 the baseline year for its conclusions. That couldn’t be more chronologically convenient because the United States had, by then, completed its latest wave of nuclear modernization. By contrast, during the decade after the collapse of the Soviet Union in 1991, Russia’s economy contracted by more than 50%, so it couldn’t afford large investments in much of anything back then. The Nuclear Posture Review also focuses on Russia’s supposed willingness to launch “limited” nuclear strikes to win conventional wars, which, of course, makes the Russians seem particularly insidious.
US media airs pretexts for preemptive attack on North Korea -- Over the past week, the New York Times and the Wall Street Journal have sought to manufacture justifications for the Trump administration to implement its threats to launch an illegal war of aggression to “totally destroy” North Korea.On February 27, a lengthy New York Times article featured allegations by unnamed “United Nations’ experts” that North Korea “has been shipping supplies to the Syrian government that could be used in the production of chemical weapons.” It asserted that “possible chemical weapons components” were “part of at least 40 previously unreported shipments by North Korea to Syria between 2012 and 2017 of prohibited ballistic missile parts and materials that could be used for both military and civilian purposes.”The article claims it “reviewed” a 200-page report by the purported UN experts. It admits that the document has not been officially released and, according to a UN official cited in the article, there are no plans to publish it. The article further concedes that “experts who viewed the report said the evidence it cited did not prove definitively that there was current, continuing collaboration between North Korea and Syria on chemical weapons” [emphasis added].In other words, the New York Times chose to highlight assertions contained in an unpublished report, without any other substantiation. The credentials of its unnamed authors are not identified, but they are eight, hardly impartial, members of a UN panel appointed to investigate “possible” violations by North Korea of the sanctions imposed upon it. Moreover, even the “experts” who allegedly read the report concluded that it proved nothing at all. None of this prevented the New York Times from headlining its article: “UN links North Korea to Syria’s chemical weapons program.” The newspaper repeats entirely unproven allegations that the Russian-backed Syrian government has used chemical weapons against rebel-held areas of the country. The sole aim of the article is to have readers conclude that sinister North Korean assistance is facilitating horrific crimes against civilians in Syria.
U.S. Escalates Threat Against Iran After Russia U.N. Veto - The United States has escalated international tensions with Iran, threatening unilateral action against the Islamic Republic on Monday after Russia vetoed a United Nations Security Council motion to call out Tehran for allowing weapons to fall into the hands of Yemen's Houthi group. “If Russia is going to continue to cover for Iran then the U.S. and our partners need to take action on our own. If we’re not going to get action on the council then we have to take our own actions,” said U.S. Ambassador Nikki Haley during a visit to the Honduran capital of Tegucigalpa. Haley did not specify what type of action she meant, however the Russian veto was a big blow to the United States which has been lobbying for months to hold Iran accountable at the U.N. - while also threatening to withhold waivers on U.S. sanctions unless the "terrible flaws of the Iran nuclear deal" are fixed. “Obviously this vote isn’t going to make the decision on the nuclear deal. What I can say is it doesn’t help,” Haley said. “That just validated a lot of what we already thought which is Iran gets a pass for its dangerous and illegal behavior.”President Trump warned European allies in January that they would need to commit to fixing the nuclear deal by May 12. President Donald Trump warned European allies last month that they had to commit by mid-May to work with Washington to improve the pact. Britain drafted the failed U.N. resolution in consultation with the United States and France. The initial draft text - to renew the annual mandate of a targeted sanctions regime related to Yemen - wanted to include a condemnation of Iran for violating an arms embargo on Houthi leaders and include a council commitment to take action over it. –Reuters Russia has questioned the findings of January U.N. report which concluded that Iran supplied the Houthi group with weapons in a proxy war between the Saudi-backed Yemeni government forces and Iranian-allied Houthi rebels in what appears to be another attempted regime change in the region.
Iran Bans Use Of US Dollars In Trade - In what may be a preemptive move against further US sanctions, Tehran announced that going forward, merchant purchase orders that are denominated in US Dollars would no longer be allowed to go through import procedures. According to the state-owned IRNA news agency, the policy is in line with an official request by the Central Bank of Iran and is meant to address fluctuations in market rates of the US dollar. Quoted by IRNA, the central bank director of Foreign Exchange Rules and Policies Affairs, Mehdi Kasraeipour, said the move had "become effective from Wednesday by virtue of a letter sent to the Ministry of Industry, Mines and Trade." The central banker further explained that the decision "wouldn’t create major trouble" for traders because the share of the greenback in Iran’s trade activities is already negligible. "It’s been for a long time that Iran’s banking sector cannot use the dollar as a result of the sanctions," said Kasraeipour. As part of a trade embargo, US banks are banned from dealing with Iran. "Considering that the use of the dollar is banned for Iran and traders are literally using alternative currencies in their transactions, there is no longer any reason to proceed with invoices that use the dollar as the base rate," Kasraeipour added. As part of the transition, Iranian merchants will need to inform their suppliers to change the base currency from the dollar to other currencies so that the related import documents could be processed at Iran’s entry points. It was unclear if cryptocurrencies are acceptable units, and whether Iran is developing its own version of the Venezuelan Petro. Merchants will also need to specify whether they would proceed with their payments through banks or currency exchange shops.
US military, Trump administration claim unlimited powers to wage war in Syria -- The Trump administration has asserted the power to expand the US war in Syria and effectively annex and occupy significant portions of the country without even the pretense of international authorization, congressional sanction or public debate.The New York Times reported the position, laid out in letters to Senator Tim Kaine from the Pentagon and the State Department, in a news article buried in its inside pages on Friday under the headline “Administration Says Syria Forces Don’t Need New Approval.” The letters underscore the dimensions of the assault on the Constitution by the White House, which is asserting inherent executive power to wage war not only in Syria, but by implication all over the world.Kaine, a Democrat from Virginia, has advanced a pro forma and hypocritical call for passage of a new Authorization for Use of Military Force (AUMF) to provide a legal fig leaf for war in Syria directed at bringing down the government of Syrian President Bashar al-Assad. The current US military escalation in Syria is the realization of a principal demand of the Democratic Party. It was at the center of the foreign policy agenda of the Hillary Clinton presidential campaign—Kaine was Clinton’s vice-presidential running mate—and would have been one of Clinton’s first acts as president. Just this past week, the Times published an editorial demanding an escalation of the war, complaining that Syria, Russia and Iran “have exploited the battlefield successes against ISIS…as the leaders of the United States and other world powers largely stand by, unwilling or unable to do anything to stop it.”According to the Pentagon letter, ongoing operations in Syria still fall within the framework of the supposed campaign to defeat ISIS, even though all cities and towns controlled by ISIS have been retaken. The Trump administration, as with the Obama administration before it, advances the absurd claim that the “war against ISIS” is justified by the 2001 AUMF against Al Qaeda, adopted more than 16 years ago, providing congressional sanction for the invasion of Afghanistan.
What Has $49 Billion in Foreign Military Aid Bought Us? Not Much - It’s a scene right out of the movie Groundhog Day. Every year around this time, the administration submits its annual request to Congress to appropriate billions of dollars for America’s allies and partners in the Middle East to finance their purchase of U.S. military training and equipment. Congress rubber stamps these requests with little regard for whether this assistance achieves U.S. foreign policy objectives. It does the same when the executive branch requests congressional approval of arms sales for cold hard cash. Such docility might be good industrial policy—after all, it creates jobs in key congressional districts, provides corporate welfare for America’s defense companies, and helps maintain the defense industrial base. But it makes for lousy foreign policy. The United States will continue to pour money down a rat hole until Congress and the executive branch better understand why these problems keep recurring and muster the political will to fix them. Based on our experience in the State Department, here is our diagnosis of the problem and some remedies for what ails U.S. military assistance in the Middle East. In the U.S. foreign policy toolkit, security assistance and arms transfers have become the instruments of choice for American diplomats and soldiers. Grant assistance and weapons sales are treated as Swiss Army Knives, all-purpose tools appropriate for use in virtually any scenario. In reality, U.S. military assistance promises more than it delivers. There is scant evidence outside of a few isolated cases that U.S. material support to Middle Eastern countries has fulfilled any of these purposes. Recipients of U.S. funding and weapons have largely failed to make major strides in their capabilities and, in some instances, may have even regressed. Despite $47 billion in U.S. military assistance over 40 years, the Egyptian military has struggled mightily to contain an ISIS-affiliate numbering no more than 1,200 militants. The Saudis barely used their American-made advanced combat aircraft in the U.S.-led anti-ISIS operation in Syria, and $89 billion in arms sales to the kingdom over the last 10 years has not prevented Riyadh from getting bogged down in an increasingly costly quagmire in Yemen with U.S.-supplied weapons. The U.S. has sold hundreds of billions of dollars in military hardware to Persian Gulf countries and yet collectively they are not capable of defending the free flow of oil from the Gulf against a militarily weaker Iran without U.S. assistance.
Did the Trump administration just announce plans for a trade war with ‘hostile’ China and Russia? | South China Morning Post: The Trump administration on Wednesday warned that it would vigorously defend US national interests against “hostile” powers such as China and Russia, vowing to use “all available tools” to combat unfair practices – a sign that the president may be preparing to erect new trade barriers. “Countries that refuse to give us reciprocal treatment or who engage in other unfair trading practices will find that we know how to defend our interests,” said the annual report to Congress on the president’s trade agenda. The report, the first by US Trade Representative Robert E. Lighthizer, comes as US President Donald Trump was expected to act on Commerce Department recommendations to impose new limits on imported steel and aluminium. Trump also is considering retaliating against China for forcing foreign companies to surrender their intellectual property and is seeking to renegotiate a pair of major trade deals. Other countries are frustrated as well. The only way to rein in China is by working with like-minded countries. “The tone is very different,” said economist Christine McDaniel of George Mason University’s Mercatus Centre. “I don’t think we’ve ever seen this aggressive and protectionist a tone before in a trade agenda.” Philip Levy, senior White House trade economist for President George W. Bush, said the Trump administration “comes off as belligerent” in the document. The 359-page report was made public as US officials were in Mexico City for the latest round of talks aimed at renegotiating the 1994 North American Free Trade Agreement. Trump has repeatedly threatened to quit the accord unless Mexico and Canada agree to concessions that return lost manufacturing jobs to the US
“Sonic Weapon Attacks” on U.S. Embassy Don’t Add Up—for Anyone - Scientific American -Heated charges have flown back and forth for months between the two countries that bracket the Strait of Florida. U.S. State Department officials contended Cuba staged a sonic attack on employees of the American embassy, causing a variety of neurological symptoms. Cuba has not only denied such an attack ever took place but has also emphasized the physical impossibility of a sound wave causing neurological damage trained on such a distant target. But physicians and scientists from both countries now appear to be in agreement on one critical point: Both sides acknowledge they are baffled as to what happened to 24 embassy employees who were diagnosed with mild traumatic brain damage between November 2016 and August 2017. The latest development is a preliminary publication in JAMA The Journal of the American Medical Association on Thursday, authored by the team of doctors at the University of Pennsylvania who examined 21 of the U.S. government employees. The study, commissioned by the federal government, found the patients had suffered from concussionlike symptoms—but without any blunt trauma to the head. The medical issues varied widely among the patients, and included cognitive difficulties and problems with balance, eye tracking, sleep disturbances and headache. Adding yet another element to the mystery, the new findings show normal MRI brain scans in all patients, and normal hearing in all but three individuals. The authors of the JAMA study also discount the likelihood of sonic injury, infection or toxic agents—and they even downplay the frequent suggestion of mass hysteria. Many of the findings in the new report echo a previous investigation carried out by Cuban officials. The new report’s inconclusiveness does little to break the impasse. The State Department has issued multiple warnings in recent months that U.S. citizens should not travel to Cuba, because numerous embassy employees here had been targeted in attacks. The culprit was thought to be some form of unidentified sonic weapon trained on embassy employees, primarily in their residences near the post, including at the Capri Hotel.
After testy call with Trump over border wall, Mexican president shelves plan to visit White House - WaPo - Tentative plans for Mexican President Enrique Peña Nieto to make his first visit to the White House to meet with President Trump were scuttled this week after a testy call between the two leaders ended in an impasse over Trump’s promised border wall, according to U.S. and Mexican officials. Peña Nieto was eyeing an official trip to Washington this month or in March, but both countries agreed to call off the plan after Trump would not agree to publicly affirm Mexico’s position that it would not fund construction of a border wall that the Mexican people widely consider offensive, said the officials, who spoke on the condition of anonymity to discuss a confidential conversation. Speaking by phone on Tuesday, Peña Nieto and Trump devoted a considerable portion of their roughly 50 minute conversation to the wall, and neither man would compromise his position. One Mexican official said Trump “lost his temper.” But U.S. officials described him instead as being frustrated and exasperated, saying Trump believed it was unreasonable for Peña Nieto to expect him to back off his crowd-pleasing campaign promise of forcing Mexico to pay for the wall. Both accounts confirm it was Peña Nieto’s desire to avoid public embarrassment — and Trump’s unwillingness to provide that assurance — that proved to be the dealbreaker. A physically slight man, Peña Nieto has been loath to put himself in an environment in which the more imposing Trump could play the bully. Peña Nieto’s style is exceedingly formal, and he is averse to verbal combat, making his carefully scripted public events the opposite of Trump’s often freewheeling appearances. “The problem is that President Trump has painted himself, President Peña Nieto and the bilateral relationship into a corner,” “Even from the get-go, the idea of Mexico paying for the wall was never going to fly. His relationship with Mexico isn’t strategically driven. It’s not even business; it’s personal, driven by motivations and triggers, and that’s a huge problem. It could end up with the U.S. asking itself, ‘Who lost Mexico?’ ”
Mexico City NAFTA Renegotiation Round: If No Progress on Major U.S. NAFTA Reform Proposals, What is Path Forward? – Lori Wallach, Public Citizen PDF - As the seventh round of North American Free Trade Agreement (NAFTA) renegotiation talks begin in Mexico City this weekend, Lori Wallach, director of Public Citizen’s Global Trade Watch, commented: “A NAFTA replacement deal that would enjoy bipartisan congressional support is entirely possible because U.S. negotiators have stood up to the interests trying to thwart real change and have resolutely pushed proposals to cut NAFTA’s job outsourcing incentives and the ISDS tribunals where corporations can attack our laws and to add stronger rules of origin and an accountability-injecting sunset clause.With time running short, the question is whether some of these U.S. proposals to restructure NAFTA can be agreed upon in Mexico City and progress made on adding strong labor and environmental standards with swift and certain enforcement to stop companies from moving U.S. jobs to Mexico to pay workers poverty wages and dump toxins and then import those products back for sale here.”Two major related questions loom over the seventh round of NAFTA renegotiations that will be begin this weekend: the timeline and whether the three countries can make progress on the elements of a deal that will be necessary for it to get through the U.S. Congress.The extended end-of-March deadline that the NAFTA countries set for completing a deal is fast approaching, as is the July 1 Mexican presidential election. The U.S. corporate lobby has battled against the proposals that U.S. Trade Representative (USTR) tabled at the October NAFTA round to restructure NAFTA’s investment, procurement and rules of origin terms and to add higher rules of origin and a review and sunset provision. Not surprisingly, given these changes are necessary both to deliver on President Trump’s campaign promises on NAFTA and to achieve a deal that can get through Congress, the administration has not budged on these proposals.
Pressure’s on Lighthizer in NAFTA round 7 --The outcome of talks unfolding in Mexico City this week could hinge on whether U.S. Trade Representative Robert Lighthizer will be willing to work with Canada's recent offers and others Mexico is expected to make. After the fall rounds ended in impasse and pessimism, with the Trump administration blaming its counterparts for refusing to engage, negotiators finally seemed to take a step forward in late January in the aftermath of the Montreal round, when Canada, in particular, began floating ideas for the first time to respond to U.S. priority issues like auto rules of origin and a five-year sunset provision. If Lighthizer doesn't demonstrate the U.S. is willing to compromise, the goal of reaching a deal at all, let alone by the end of March, feels increasingly unachievable, public- and private-sector sources close to the talks told Megan Cassella.“We still sit here wondering where the progress is going to be on the poison pills,” one U.S. industry source said. “If there is none — even if you go and close another chapter like anti-corruption or small- and medium-size enterprises — is it just window dressing?”Megan, who will be in Mexico City this week, has a full rundown on the Round 7 dynamic here. President Donald Trump’s planned meeting with Mexican President Enrique Peña Nieto in Washington was dropped after the two leaders clashed during a phone call last week over Trump sticking by his demand that Mexico will pay for a border wall. That news, from The Washington Post over the weekend, doesn’t seem like it would help to make Trump more likely to give Lighthizer a green light to give ground in Mexico City. “The problem is that President Trump has painted himself, President Peña Nieto and the bilateral relationship into a corner,” said Arturo Sarukhan, a former Mexican ambassador to the U.S., told the paper.
The Real Game Trump Is Playing on NAFTA -- As the United States, Canada and Mexico head into the seventh round of the renegotiation of the North American Free Trade Agreement, there is a question increasingly looming over the talks: Why hasn’t Donald Trump pulled the plug already? The president has made no secret of his loathing for NAFTA, calling it during the campaign “the worst trade deal in history.” He came very close to ending it nearly a year ago, in April 2017, but reportedly was talked down at the last minute by personal calls from Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto. . As recently as the last round in Montreal in January, Canadian officials were telling reporters in advance that they were certain Trump was on the verge of pulling the U.S. out of NAFTA. ..And yet, even with the president’s top trade negotiator acknowledging last month after the Montreal round that the talks are “progressing very slowly,” Trump now looks increasingly unlikely to leave the table. He told the Wall Street Journal that he was “leaving it a little bit flexible,” and acknowledged that it would be hard to conclude a new NAFTA prior to Mexico's general election on July 1. “There’s no rush,” he added. That could mean the talks will now drag on until 2019, since the new Mexican president will not even take office until December. Pulling out of NAFTA would generate a backlash within his own party, and would probably upset financial markets as well. But there is another possible explanation. Whether by design or by luck, Trump is already winning the NAFTA renegotiation. It turns out the uncertainty over NAFTA’s fate is Trump’s friend. It is part of what appears to be a systematic — U.S. trading partners might say predatory — strategy to shift investment dollars to the United States. I have had conversations with business leaders in recent weeks in which they all quietly acknowledge the same thing: Until they know what the new rules will be under NAFTA, they are likely to hedge their bets by locating new investments in the United States rather than in Canada or Mexico, just in case the rules change and they are frozen out of the largest North American market.
Peter Navarro, a trade skeptic in the White House, is promoted: -- NYTimes — President Trump could soon promote Peter Navarro, a trade policy adviser, to a more powerful position in the White House, elevating a longtime trade skeptic who has found himself sidelined by more pro-trade voices inside the White House. Mr. Navarro’s ascendance may signal that the balance of power is shifting toward those who have backed Mr. Trump’s get-tough approach to trade policy and away from those who have sought to restrain it. The president has agreed to promote Mr. Navarro to assistant to the president from his current role as deputy assistant, giving him more access to top strategy meetings, said two trade experts close to the White House, who requested anonymity to discuss plans that weren’t yet public. Natalie Strom, a spokeswoman, said the White House had no personnel announcements to make at this time. Mr. Navarro’s promotion was first reported by Inside U.S. Trade.
Let The Trade Wars Begin: Trump Says He Will Impose Steel, Aluminum Tariffs Next Week - Ignoring threats of a WTO challenge by the European Union and other potentially harmful countermeasures by China, President Trump is reportedly preparing to impose stiff tariffs on steel and aluminum on Thursday, according to Bloomberg.Trump has abruptly summoned steel and aluminum executives to the White House - telling them he could announce the tariffs at the meeting, the Wall Street Journal adds.Last week, media reports said Trump was leaning toward the stiffest trade protections from a bevy of options presented to him by the Commerce Department two weeks ago. These include a tariffs of 25 percent on steel and 10 percent on aluminum from all countries. However, other sources told WSJ that a final decision on tariffs had not yet been made, and that the meeting could just be an opportunity to consider alternatives.In its initial study, the Commerce Department and other agencies concluded that imports of cheap steel and aluminum harm US national security and military needs. While Trump is said to favor the broadest measures, Defense Secretary James Mattis has suggested that exemptions could be made. Commerce Secretary Wilbur Ross, a longtime steel executive, has also pushed for the toughest sanctions.The White House ordered the Commerce Department back in April to look into these issues under the seldom-used section 232 of the 1962 Trade Expansion Act. Update: In yet another sign that the tariffs could be unveiled as soon as today, Trump tweeted Thursday morning that "our steel and aluminum industries (and many others) have been decimated by decades of unfair trade and bad policy with countries around the world...We must not let our country, companies and workers be taken advantage of..."
Trade war? Trump orders big tariffs on steel, aluminum - Donald Trump declared Thursday the U.S. will impose steep tariffs on steel and aluminum imports, escalating tensions with China and other trading partners and raising the prospect of higher prices for American consumers and companies. With "trade war" talk in the air, stocks closed sharply lower on Wall Street. Trump said firm action was crucial to protect U.S. industry from unfair competition and to bolster national security. However, his announcement came only after an intense internal White House debate. It brought harsh criticism from some Republicans and roiled financial markets with concerns about economic ramifications. Overseas, Trump's words brought a stinging rebuke from the president of the European Commission. Though the president generally focuses on China in his trade complaining, it was the EU's Jean-Claude Juncker who denounced his plan as "a blatant intervention to protect U.S. domestic industry." Juncker said the EU would take retaliatory action if Trump followed through. Canada, the largest source of steel and aluminum imports in the U.S., said it would "take responsive measures" to defend its trade interests and workers if restrictions were imposed on Canadian steel and aluminum products. Should restrictions be imposed on Canadian steel and aluminum products, Canada will take responsive measures to defend its trade interests and workers." Trump, who has long railed against what he deems unfair trade practices by China and others, summoned steel and aluminum executives to the White House and said next week he would levy penalties of 25 percent on imported steel and 10 percent on aluminum imports. The tariffs, he said, would remain for "a long period of time," but it was not immediately clear if certain trading partners would be exempt. "What's been allowed to go on for decades is disgraceful. It's disgraceful," Trump told the executives in the Cabinet Room. "When it comes to a time when our country can't make aluminum and steel ... you almost don't have much of a country."
Steel, aluminum tariffs could boost jobs but hurt auto industry - President Trump said Thursday he will impose heavy tariffs on imported steel and aluminum that could increase American jobs in those sectors but also raise prices. The actions could hurt a number of industries including automakers and suppliers, boat and plane manufacturers and even beer companies. There's also concern the move could trigger a "trade war" in which countries would retaliate by imposing tariffs, or other measures, in response. Speaking to more than a dozen steel and aluminum executives at the White House, Trump said he would sign tariffs of 25% on imported steel and 10% on imported aluminum next week. "It'll be for a long period of time," Trump said during the meeting with executives from U.S. Steel, AK Steel, Arcelor Mital, Nucor and other producers. "We'll be signing it in. And you'll have protection for the first time in a long while, and you're going to regrow your industries. That's all I'm asking." The president also said that dumping of cheap, imported steel and aluminum "destroys our companies and our jobs." He added to the executives, "People have no idea how badly our country has been treated. ... Or if they did, then they should be ashamed of themselves because they've destroyed the steel industry, they've destroyed the aluminum industry and other industries, frankly."
Trump launches trade war - US President Donald Trump has taken a major step toward launching an international trade war by slapping a 25 percent tariff on steel imports and a 10 percent tariff on aluminium.The measures recall the Smoot-Hawley tariff of June 1930, which played a significant role in the economic and ultimately military conflicts of the ensuing decade. They were announced Thursday at a hastily convened White House meeting of 15 steel and aluminium executives.In imposing a global tariff hike, rather than selective measures, Trump took the toughest option presented to him in a report submitted by Commerce Secretary Wilbur Ross concerning action to be taken under “national security” provisions of legislation adopted in 1962.The military implications of the move are underscored not only by the legislation used to invoke it, but also by earlier remarks Trump made when commenting on the Ross proposals. He told a meeting with members of Congress last month that in a conflict “we don’t want to be buying steel [from] a country we are fighting.”The measures were announced after an internal battle within the administration in which Treasury Secretary Steven Mnuchin, National Economic Council Director Gary Cohn and Defense Secretary James Mattis, among others, reportedly opposed to the move.While the main fire of the rhetoric emanating from the White House has been directed against China—the announcement was made as a representative of the Chinese government was in Washington to discuss easing trade tensions—the measures will impact most heavily on some of America’s nominally closest allies, including Japan, South Korea, the European Union and Canada.Last month, Pentagon head Mattis said in a memo in response to the Commerce Department’s options that he was concerned about a global approach because of the “negative impact on our key allies,” and called for more “targeted” tariffs. But Trump told the industry executives he did not want any country excluded from the tariffs because if one country was exempted, others would try and obtain similar treatment. Trump said he would sign the order for the tariffs next week and the measures would be in place for a “long time.”
Trump’s Tariff Threat to Kick Off Trade War? --Yves Smith - Even though the business press and foreign officials have regularly raised the specter that, say, opposing what looks like dumping or predatory pricing or export subsidies could trigger an oh-to-be-avoided-at-all-costs trade war, Trump may finally be about to start the real deal. Yesterday, the Administration announced that it would impose 25% tariffs on imported steel and 10% on imported aluminum. The reaction was swift and decidedly unhappy. The Dow fell by over 2% and US business leaders started tearing their hair and rending their garments. From the Wall Street Journal: A cascade of industry trade groups moved quickly to denounce the moves, including beer and boat makers worried about costlier aluminum, and manufacturers of chemicals, air conditioners, and oil pipelines all concerned about pricier steel inputs.“It’s going to be expensive,” said Ed Bolas, chief financial officer at DyCast Specialties Corp., a Minnesota maker of parts for products including cutting tools and engines. “All of it will impact the consumer.”….The decision was controversial inside his own administration, coming over the objections of some top advisers, and surprising many in the White House who first learned of the plans from news reports Wednesday night. Mr. Trump’s Defense Department had weighed in against the move, with a memo cautioning against harm to “our key allies” like Canada and Japan. Trump has a well-established history of saying he will make big moves and then not delivering. Having said that, if it does follow through, the Administration will rely on a seldom-invoked section of WTO rules which allow members to impose tariffs. The Financial Times quoted EU trade commissioner Cecilia Malmstrom:Of particular concern, she said, was the Trump administration’s decision to use a national security statute to apply tariffs. That move would end a decades-old ceasefire on using a loophole in global trading rules intended to be employed only in times of war or other national emergencies. Ms Malmstrom said it also risked undermining the World Trade Organization and provoking other countries to do the same. The US has apparently tried to apply a little lipstick to this procedural pig. Again from the Journal: The president justified the tariffs by invoking a little-used Cold War era law that gives presidents broad discretion to curb imports deemed a threat to “national security.” The announcement was based on studies conducted by the Commerce Department, made public last month, which concluded metals imports had eroded the country’s ability to make its own weapons, tanks, and aircraft.
Trump made tariff decision in a fit of anger: NBC News -- President Donald Trump's decision on Thursday to impose hefty tariffs on imports of steel and aluminum was as much of a surprise for the White House as it was for everyone else, NBC News reported Friday.Trump unilaterally made the decision to announce the new taxes on foreign imports in a fit of rage about a number of other issues that were weighing on his administration. Citing an internal document, NBC reported that White House lawyers and staff had not conducted any review of the drastic change Trump suddenly made to U.S. trade policy. The day before, Trump campaign veteran Hope Hicks announced plans to resign as White House communications director. Hicks had reportedly been berated by Trump after she testified before the House Intelligence Committee that she had to tell "white lies" for the president.Trump had also recently resumed his ongoing attacks against his attorney general, Jeff Sessions, tweeting on Wednesday that Sessions' recent decision regarding a probe into potential FBI surveillance abuses was "disgraceful."And it was revealed this week that Trump's son-in-law, Jared Kushner, recently had his top-level interim security clearance downgraded — along with a number of other White House aides with the same temporary status.An official familiar with the president's state of mind said Trump became "unglued" by Wednesday evening. Incensed and looking for a new fight, Trump was spurred to start a trade war by his Commerce Secretary and White House trade director, both of whom have advocated for increased protections against foreign goods, two officials told NBC.
Wilbur Ross snuck industry execs into White House to manipulate ‘unglued’ Trump into tariff decision: report -- Commerce Secretary Wilbur Ross steered an angry President Donald Trump into backing an aluminum and steel tariff over the objections of other senior White House officials.Trump was furious Wednesday evening over Hope Hicks’ testimony before lawmakers, his ongoing feud with attorney general Jeff Sessions and what he perceives as unfair treatment of son-in-law Jared Kushner by White House chief of staff John Kelly, reported NBC News. “The president became ‘unglued,’ in the words of one official familiar with the president’s state of mind,” the network reported.That’s when Ross and Peter Navarro, the White House director for trade, pushed Trump to launch a trade war with the tariff.Ross had already set up a White House meeting with steel and aluminum executives for 11 a.m. Thursday, but a source told NBC News the commerce secretary hadn’t told other White House officials who was coming.That left the White House unable to conduct background checks on the executives to ensure the president should meet with them, and they were not able to be cleared for entry by the Secret Service. Kelly, the embattled chief of staff, was unaware of their names, NBC reported. The White House had no position papers or announcements ready for the tariff policy by late Wednesday, and the White House counsel’s office had already said they’d need at least two weeks to complete a legal review of the policy. Another White House official responded to NBC News by insisting the communications team, still led for now by Hicks, who announced her resignation Wednesday afternoon, was “well-prepared to support the president’s announcement.” The communications team also partially denied the report about Ross sidestepping procedures to bring in industry executives to meet with Trump. “Many of the attendees had been in the White House before and had already been vetted for attendance at a presidential event,” the communications team said.
Trump’s tariffs take a toll on trade relationships - President Donald Trump next week is set to finalize tariffs of 25 percent on steel imports and 10 percent on aluminum, setting the United States down an uncertain path in its relationship with trading partners. European Commission President Jean-Claude Juncker called Trump's decision "a blatant intervention to protect U.S. domestic industry" under the guise of national security. He said he would submit a proposal in the next few days to hit back at the U.S."We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk,” Juncker said. “The EU will react firmly and commensurately to defend our interests."The timing of the announcement also embarrassed Mexico and Canada, longtime allies and trading partners that are in the midst of the seventh round of talks with the U.S. to renegotiate NAFTA. Canadian Foreign Minister Chrystia Freeland said any restrictions against Canadian steel imports would be "absolutely unacceptable." She noted that Canada buys more American steel than any other country in the world, accounting for half of U.S. exports. Freeland vowed Canada would take “responsive measures” to defend its interests. Doug Palmer has the full story here.
Five takeaways on Trump’s tariffs | TheHill: President Trump’s plan to levy steep tariffs on steel and aluminum imports has rattled global markets, irritated members of his own party and sent key U.S. allies searching for an equivalent response. The announcement on Thursday came as a surprise to some in the White House, as a legal review on proposals sent to the president from the Commerce Department had yet to be completed. Here are five takeaways on the most dramatic step yet by Trump on trade — a central issue in his successful presidential campaign.
- Trump is picking a fight with Republicans. Trump and Republicans in Congress — with the exception of a handful of GOP lawmakers representing high-tax districts — were remarkably unified on December’s tax-cut package. The imposition of steep tariffs on steel and aluminum, in contrast, is intensely disliked by seemingly most of the GOP.
- There are deep divisions among Trump’s own team over the tariffs. A cadre of senior officials, including National Economic Council Director Gary Cohn, Defense Secretary James Mattis and national security adviser H.R. McMaster, oppose the tariffs and for more than a year had succeeded in holding them off.
- U.S. allies may be hit the hardest. Canada, which is the largest importer of steel and aluminum imports into the United States and the biggest consumer of U.S. goods, may bear the brunt of Trump’s tariffs.
- The tariffs aren’t that much of a surprise. Trump ran on a promise to protect U.S. workers, arguing they had been betrayed by politicians in both parties who had negotiated away their jobs. The steel and aluminum tariffs represent Trump’s effort to effectively fulfill a promise.
- Swing states may get the final say. Trump won the presidency because he captured victories in Pennsylvania, Wisconsin and Michigan, three states that a GOP presidential candidate hadn’t won in decades, as well as the perennial swing state of Ohio. The two senators from that state, Republican Rob Portman and Democrat Sherrod Brown, notably both offered various degrees of support for Trump’s move, insisting that it could help producers in their states competing with China.
Which Countries Will Be Hardest Hit From Trump's Tariffs - The Trump administration announced today that it will impose global tariffs on steel and aluminum imports; the proposed levels are 25% on steel imports and 10% on aluminum imports and the rates will apply to all source countries. While no normal declaration was made, the president said he would formally institute these tariffs next week and has promised that they would be in effect “for a long period of time.” The White House said the tariffs are needed to "protect American-based businesses and workers from cheap foreign steel" that it claims is unfairly subsidized. A Commerce Department report pointed to several mill closures in the past few years and the loss of several thousand jobs. “We are going to continue to protect American workers,” White House spokeswoman Sara Sanders said Thursday. And while Trump's stated intention behind the tariffs is to protect American jobs and domestic producers while punishing major foreign trade partners who "benefit" from US gullibility - i.e. China - not only is Trump unlikely to have much success, but the direct macroeconomic effects would be limited. For one thing, imports of steel and aluminum together account for only about 2% of total goods imports (figure 1). The U.S. imports four times as much steel as it exports, and imports are on the rise again. While the U.S. imports steel from more than 100 countries, three-quarters come from just eight countries (figure 2), according to the International Trade Organization. Furthermore, while Trump's trade war is clearly aimed at China, the top exporters to the U.S. in 2017 were Canada, followed by Brazil, South Korea, Mexico and Russia. Other notables include Turkey, Japan, Taiwan and Germany. China did not even make the top 10, coming in at 11th spot, despite producing half of the world's steel. Furthermore, as Marketwatch notes, the US already has restrictions on Chinese steel imports.
Trump steel tariffs: Trading partners threaten retaliation - BBC News: The main trading partners of the US have reacted angrily after President Donald Trump announced plans to impose tariffs on steel and aluminium imports. Canada and the EU said they would bring forward their own countermeasures to the steep new tariffs. Mexico, China and Brazil have also said they are weighing up retaliatory steps. Mr Trump tweeted that the US had been "decimated by unfair trade and bad policy". He said steel imports would face a 25% tariff and aluminium 10%. However, critics argue that the tariffs would fail to protect American jobs and would ultimately put up prices for consumers. The news sent shares in Asia down on Friday, with Japan's benchmark Nikkei 225 losing more than 2% by mid-morning. Shares in Japan's car-making giant Toyota were down more than 2% and Nippon Steel stocks down more than 4%. Toyota said the US decision would "adversely impact automakers, the automotive supplier community and consumers". On Friday, China urged the US to "exercise restraint in using trade protection tools". President Trump ordered an investigation into the industry last April under a clause of a 1962 law, which grants the White House authority to restrict imports in the face of a national security threat. The Commerce Department report found that imports were harming the domestic steel and aluminium industries, and could affect the defence industry, the Washington Post reported.
WSJ Editors: "This Is The Biggest Policy Blunder Of Trump's Presidency" - President Trump's decision to impose tariffs has prompted worldwide outrage from the establishment as a sign of impending trade wars and the end of the world as we know it. While many are purely political kneejerk reactions - just as anything Trump does is a negative (think "crumbs") to those on the 'other' side - The Editorial Board at The Wall Street Journal, believe that Donald Trump made the biggest policy blunder of his Presidency Thursday by announcing that next week he’ll impose tariffs of 25% on imported steel and 10% on aluminum.This tax increase will punish American workers, invite retaliation that will harm U.S. exports, divide his political coalition at home, anger allies abroad, and undermine his tax and regulatory reforms. Mr. Trump has spent a year trying to lift the economy from its Obama doldrums, with considerable success. Annual GDP growth has averaged 3% in the past nine months if you adjust for temporary factors, and on Tuesday the ISM manufacturing index for February came in at a gaudy 60.8. American factories are humming, and consumer and business confidence are soaring. Apparently Mr. Trump can’t stand all this winning. His tariffs will benefit a handful of companies, at least for a while, but they will harm many more. “We have with us the biggest steel companies in the United States. They used to be a lot bigger, but they’re going to be a lot bigger again,” Mr. Trump declared in a meeting Thursday at the White House with steel and aluminum executives. No, they won’t. The immediate impact will be to make the U.S. an island of high-priced steel and aluminum. The U.S. companies will raise their prices to nearly match the tariffs while snatching some market share. The additional profits will flow to executives in higher bonuses and shareholders, at least until the higher prices hurt their steel- and aluminum-using customers. Then U.S. steel and aluminum makers will be hurt as well.
Trump: "Trade Wars Are Good And Easy To Win" --In a tweet that knocked US stock futures even lower in pre-market trade, sending the Dow futs over 200 points lower, President Donald doubled down on his support for tariffs on aluminum and steel that triggered an outraged reaction in global markets, and acknowledged that what he has started is nothing short of "trade war." When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy! When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy! — Donald J. Trump (@realDonaldTrump) March 2, 2018 Most countries - including Canada, China and much of Europe - have already issued statements condemning Trump's decision, which also elicited outraged howls from economists and pundits, who argue that the tariffs will make American goods less competitive, and will dethrone the US from global trade flows as shown schematically in the chart below. Meanwhile, having set off on the war path, it is unlikely that Trump will revise his direction until this chart showing America's record trade deficit (ex petroleum) changes its direction...... or the market tumbles too far and the president is forced to admit defeat, just like president Bush's own mini trade war before him, who in 2002 imposed tariffs of as much as 30% on steel imports before reversing course the following year amid a tsunami of retaliation from trading partners, but not before the S&P tumbled more than 30%, the dollar plunged and bond yields were cut almost in half.
EU Threatens Iconic U.S. Brands After Trump Opens Door to Trade War - President Donald Trump set the stage for a trade war after slapping tariffs on steel and aluminum imports, daring other countries to retaliate and leading the European Union to warn that it would target iconic American brands. Hours after Trump tweeted that “trade wars are good, and easy to win,” European Commission President Jean-Claude Juncker said the bloc is prepared to respond forcefully by targeting imports of Harley-Davidson Inc. motorbikes, Levi Strauss & Co. jeans and bourbon whiskey from the U.S. Juncker’s threat heightened the prospects of a global free-for-all, as the World Trade Organization said the potential of escalating tensions “is real” and the International Monetary Fund warned the restrictions would likely damage the U.S. and global economy. Trump is facing anger from manufacturers and trade partners in Asia and Europe after announcing tariffs of 25 percent on imported steel and 10 percent on aluminum for “a long period of time.” He is expected to sign the formal order next week. Commerce Secretary Wilbur Ross said on Friday the president has chosen to impose the tariffs on all countries and products, dimming the hopes for nations such as Australia still pressing for an exemption.
EU says it will hit back at Donald Trump with tariffs on Harley Davidsons, Bourbon whiskey, and Levi's jeans - The European Union is to slap tariffs on stereotypical American products such as Harley Davidson motorbikes, Levi’s blue jeans and Bourbon whiskey in retaliation for Donald Trump’s new import tariffs, in a major escalation of the brewing trade war between the two powers. European Commission president Jean-Claude Juncker told German television that the EU would not “put our head in the sand” after Mr Trump announced the introduction of a 25 per cent “America First” import tariff on steel and 10 per cent on aluminium.“We will put tariffs on Harley-Davidson, on bourbon and on blue jeans – Levis,” Mr Juncker said on Friday speaking on German television.“We are here and they will get to know us. We would like a reasonable relationship to the United States, but we cannot simply put our head in the sand.”The European Commission said last night that it would formally announce details of policies targeting the US “in the next few days” to “rebalance” the global trade playing field after Mr Trump’s move.It also said it would raise a dispute over Mr Trump’s new policy at the World Trade Organisation in Geneva. Mr Trump tweeted today that trade wars were “good, and easy to win”, before turning his attention to attacking actor Alec Baldwin for his impersonation of the US president on a popular US late-night TV show.
Trump Roars, China Yawns, U.S. Shoots Itself in Foot - There's a strange thing about the fire and fury that President Donald Trump is planning to wreak on the foreigners killing American manufacturing: The foreigners don't seem to care. News of the planned 25 percent tariffs on steel and 10 percent levy on aluminum imports broke during the lunch break on the Shanghai Stock Exchange on Thursday. Shares in Baoshan Iron & Steel Co., China's biggest listed producer, promptly fell the most since, um, Wednesday. For all the sturm und drang coming out of the White House, China's trade in steel and aluminum with the U.S. isn't all that significant. The larger steel side of it represents about 0.2 percent of the global trade, and just 3.3 percent of China's exports to America, on a par with the trade in shoes. Electronics, machinery, furniture, clothing, toys and vehicles -- some of which contain substantial amounts of tariff-exposed metal -- are far more important. The thing that China's steelmakers care much more about is their domestic market, which consumes about half of the world's steel and has been doing rather well of late. It's true there is some connection between China's domestic market and the global one. When Beijing tried to rebalance the economy toward consumption and away from heavy industry in 2013, local demand suffered and exports rose. Still, the overwhelming majority of that product went to South Korea, alongside nations in south and southeast Asia and the Middle East that used Chinese steel to plug gaps in their own production as they increased capacity. The stream of metal that went to the U.S. during those years has already dwindled to a trickle as a result of existing trade actions. It's cheaper for U.S. consumers to buy things made abroad, and that's what they've been doing for many years. Little wonder, then, that U.S. steelmakers have been reluctant to invest, showing some of the lowest rates of capital spending and R&D globally. That refusal to spend now looks to have got its reward in the form of Washington's new protectionist stance. But the more innovative automotive, machinery and aerospace manufacturers that consume American metal are the ones employing more workers and showing better prospects for the country's economy. Lifting the materials costs they face by protecting inefficient local mills is only going to exacerbate their problems.
How a Trump trade war could slow down the global economy - Europe is preparing 25% tariffs on U.S. goods from Levi's to Harley Davidson bikes in a sign of brewing retaliation for President Trump's imposition of a levy on foreign steel, and economists are warning of a sharp hit to the global economy and markets. Economists tell Axios that, should Trump proceed with his 25% steel tariffs, and tit-for-tat retaliation cascade, there is serious risk of a blow to global GDP growth, which the International Monetary Fund had forecast at 3.9% for 2018 and 2019. Already, U.S. metals prices have surged since Trump's announcement. Aluminum, for instance, soared to a three-year high this morning, up by 11.8% since the president spoke, report the FT's Henry Sanderson and Neil Hume. John Ferguson, director of global forecasting for the Economist Intelligence Unit, tells Axios that, even short of a full-fledged trade war, a low-grade exchange of high tariffs could trigger prolonged stock market declines such as happened yesterday and today. That could cascade this way:
- Companies pull back capital spending plans
- Consumers, with less money in their pocket than expected, curtail their spending
- Global GDP growth, reliant on capital and consumer spending, suffers.
In one example of this already happening, Sweden's Electrolux announced it will hold off on a $250 million expansion of its appliance manufacturing plant in Springfield, TN., because of the tariffs, reports Rick Rothacker of the Charlotte Observer. "The impacts could add up to a meaningful slowdown in global GDP," Ferguson said.
Furious World Responds To Trump Tariffs, Vows Retaliation - Trump may think that trade wars are "good and easy to win" but the rest of the world, which just happens to have a record trade surplus with the US (excluding petroleum)... ... disagrees, and judging by the barrage of reactions overnight from manufacturers and trade partners from China to Europe, is rather furious ahead of Trump's import tariff order, expected to be signed next week. Start with China, the world’s largest steel producer however only the 11th largest US source of imported steel... ... where the official response was generally muted. Foreign Ministry spokeswoman Hua Chunying merely said in Beijing Friday that China urges the U.S. to follow trade rules. China's Ministry of Commerce added that US restrictions on steel trade hurt the global trade system, and that Chinese steel exports to the US do not "harm US security." Chinese industry insiders, however, were far less restrained. The U.S. measures "overturn the international trade order," Wen Xianjun, vice chairman of the China Nonferrous Metals Industry Association, said in a statement. “Other countries, including China, will take relevant retaliatory measures.” Also in China, the vice chairman of China Iron and Steel Association, Li Xinchuang, called the move "a stupid trade protection measure." Nations closer to the US, including strategic American allies, responded with bafflement and dismay seeing their industries threatened. “Steel and aluminum imports from Japan, which is an ally, do not affect U.S. national security at all,” Japan’s Trade Minister Hiroshige Seko told reporters in Tokyo Friday. Canada, which is the biggest foreign supplier of steel to the U.S. was furious: Ottawa said the US measures were unacceptable. Australian Trade Minister Steve Ciobo called the move “disappointing” and said his country is seeking an exemption. The Netherlands was especially vocal, and said it was "very disappointed" that the U.S. has announced trade measures against steel and aluminum against it and said it finds the reasoning behind the announced U.S. measures “invalid.” The French finance Minister Bruno Le Maire echoed the sentiment, warning Europe will retaliate with a firm joint response if the Trump administration goes ahead with its tariff plans. Le Maire told journalists that "all options are on the table" and Washington could expect a“strong, unilateral and coordinated” response from the European Union.
Ex-Trump adviser Carl Icahn sold $31m in shares days before steel tariff revealed - A billionaire investor and long-time ally of Donald Trump, sold more than $30m of shares in a company that depends heavily on steel, only days before the President announced plans to introduce tariffs on imports of the metal. Carl Icahn, who served as special economic adviser to the President before he resigned when a magazine article highlighted potential conflicts of interest, got rid of a total of$31.3m of stock in Manitowoc Company Inc. The company describes itself as a leading manufacturer of cranes and requires a large quantity of steel.Think Progress reported the 82-year-old began selling stocks on February 12, less than two weeks before the Trump administration announced its plan to impose taxes on imported steel and aluminium. It based its report on a filing submitted to the Securities and Exchange Commission on February 22, which showed Mr Icahn sold nearly a million shares of Manitowoc. Earlier this week, Mr Trump announced he was going to introduce a 25 per cent levy on important steel and 10 per cent on imported aluminium. While some welcomed Mr Trump’s proposal, many both within the US and overseas, criticised them and warned on a potential trade war.The report said Mr Trump’s decision resulted in the shares in steel and aluminium producing firms jumping. Meanwhile, shares of firms heavily depending on the substances, saw major declines. The value of Manitowoc Co fell by more than 6 per cent.
Security clearances downgraded for Kushner and other White House officials - Jared Kushner, senior adviser and son-in-law to President Trump, had his security clearance downgraded Friday, sharply limiting his access to some of the nation’s most sensitive secrets amid concerns raised by the ongoing investigation of his background, two White House officials said Tuesday. Kushner was one of several White House officials who received a memo Friday announcing that because of their interim security clearances, their status was being downgraded from the “Top Secret/SCI” level to the “Secret” level, a far lower level of access to classified information.The memo came after White House Chief of Staff John F. Kelly had set a Friday deadline for all staffers operating under an interim clearance to have their temporary clearance revoked, and after Kelly came under scrutiny for his handling of domestic-abuse allegations against former staff secretary Rob Porter — who had also been operating under an interim clearance. But there was uncertainty over whether Kushner would receive a special carve-out or exception. Politico first reported the news of the memo. Because he had an interim clearance, Kushner was not supposed to be able to see the president’s daily intelligence briefing or have access to other top-secret program information, one administration official said. But the rules were not enforced with regard to the access rules for the president’s son-in-law.
Jared Kushner Loses Access To Top Secret Intelligence - In a move that represents a serious blow to Trump son-in-law Jared Kushner's standing in the West Wing, Politico reports that all White House aides working on the highest-level interim security clearance were informed on Friday that they will have their clearance downgraded from "Top Secret/SCI-level" to "secret" - walling them off from the most sensitive information. Many had expected that Trump would grant Kushner a waiver, even though Trump himself said Friday that he would let Chief of Staff John Kelly decide if such an exception should be granted. Friday's memo was not signed by Kelly.The decision is the first major shakeup since the dismissal of former White House staff secretary Rob Porter, who was exposed for abusing both of his ex-wives. The FBI insinuated that it had informed the White House of Porter's conduct, appearing to contradict a timeline of events initially offered by Kelly. The White House has been reticent about the downgrade:White House press secretary Sarah Huckabee Sanders declined to comment on Kushner’s clearance status at a briefing Tuesday."We actually haven’t commented on Jared’s issue indicated, but we have commented on his ability to do his job. Which, he’s a valued member of the team and he will continue to do the important work that he’s been doing since he’s started in the administration." Kushner's attorney said the downgrade wouldn't impact Kushner's ability to continue to do his job.Kushner’s attorney Abbe Lowell said in a statement that Kushner "has done more than what is expected of him in this process."Lowell added that the changes would "not affect Mr. Kushner’s ability to continue to do the very important work he has been assigned by the president."Indeed, media reports indicated that White House staffers were already exploring workarounds to help Kushner continue to handle his sizable West Wing portfolio - which includes several sensitive foreign policy issues - without h aving a top-level security clearance. Kelly also issued a statement last week saying any changes to security clearance wouldn't impact Kushner's ability to do his job.
Foreign Officials Discussed How To Manipulate "Naive" Jared Kushner - Just hours after Politico reported that White House senior advisor and Trump son-in-law Jared Kushner had been stripped of his top-level security clearance, the Washington Post dropped a bombshell report that purports to provide an unprecedented level of insight into why Kushner wasn't granted an exemption. According to WaPo, officials in at least four countries have privately discussed how to manipulate Kushner by taking advantage of his "complex business arrangements, financial difficulties and lack of foreign policy experience." The story cited current and former US intelligence officials. Kushner's family business, the Kushner Companies, was famously having money troubles tied to 666 Fifth Avenue, "the most expensive building ever purchased", in New York City at least. Though earlier today the Wall Street Journal reported that the family business was planning to buy out Vornado Realty's stake in the building. The officials - who were not named or - were from China, the United Arab Emirates, Israel and Mexico.White House officials, including National Security Advisor HR McMaster were reportedly uncomfortable about some of Kushner's contacts, and eventually worked out a system where any contacts he had with foreign officials were to be carefully monitored. McMaster raised questions about some of Kushner's meetings, and why there weren't people with more foreign policy experience in the room with him.Officials in the White House were concerned that Kushner was “naive and being tricked” in conversations with foreign officials, some of whom said they wanted to deal only with Kushner directly and not more experienced personnel, said one former White House official. Kushner has an unusually complex set of business arrangements and foreign entanglements for a senior White House aide, experts have said. But his behavior while in office has only drawn more scrutiny and raised concerns that he would be unable to obtain a final security clearance, which he needs to perform the many jobs Trump has entrusted to him, from negotiating foreign trade deals to overseeing a Middle East peace process. White House officials said McMaster was taken aback by some of Kushner’s foreign contacts. “When he learned about it, it surprised him,” one official said. “He thought that was weird...It was an unusual thing. I don’t know that any White House has done it this way before.”
Kelly increasingly irked with Ivanka's White House role: report | TheHill: White House chief of staff John Kelly has been increasingly irked by first daughter Ivanka Trump 's role in the administration, according to CNN.Sources tell the news network that Kelly believes Trump is blurring the lines between first daughter and senior adviser to the president. Kelly has reportedly said privately that the first daughter is "playing government," and referred to her child tax credit as "a pet project." The report follows Trump's trip to the closing Olympic ceremonies in Pyeongchang, South Korea last week, which has reportedly sparked concerns among some in the White House, including Kelly. "This isn't like going to Italy. The stakes are far higher and more complex," a source close to President Trump told CNN. Kelly reportedly voiced his concerns behind closed doors about the first daughter's lack of diplomatic experience, but the White House insisted on Monday he was supportive of the visit. "General Kelly and General [H.R.] McMaster were supportive of the trip since the planning process began," White House press secretary Sarah Huckabee Sanders told CNN. "We all thought it was a great success. Ivanka was a great representative for the administration."
John Kelly Says He Was Aware Of Security Clearance Problems Last Year - A day after Chief of Staff John Kelly joked that his job is a "punishment from God" during a speaking even in Washington, Kelly reiterated to a group of reporters on Friday that he first became aware of the West Wing's reliance on interim security clearances shortly after accepting the job. He also insisted that former Staff Secretary Rob Porter resigned Tuesday evening, contradicting the White House's timeline, which said Porter left the following morning.Kelly's timeline on Porter resignation as of today: On Feb 6, Kelly got back from the Hill around 6pm. Heard of a second accusation of abuse. Talked to Porter. Porter resigned around 7:30pm that day.(that evening White House put out statement defending Porter)— Shannon Pettypiece (@spettypi) March 2, 2018 Though Kelly declined to provide an exact number of staffers who were working with interim clearances, he conceded that the total number was "more people than I was comfortable with." He told reporters he later approached the FBI with several questions about the process in the hope that it might get resolved. As the Washington Examiner points out, Kelly's candor about the number of administration officials who spent months accessing classified information without permanent clearances comes days after more than 30 aides to the president were reportedly downgraded from top secret interim clearances to lower-level "secret" clearances. Among those who lost their high-level clearances was presidential son-in-law and senior adviser Jared Kushner. Kelly also insisted that his version of events jibes with an explanation offered by FBI Director Christopher Wray during routine Congressional testimony two weeks ago.
Trump uses more lenient requirements for security clearances. Thank Obama - When President Donald Trump came into office last year he began granting White House security clearances to top aides using more lenient criteria than those of his predecessors.He can thank — or blame — Barack Obama for that.The Trump White House has been accused of being too generous in doling out access to the nation’s secrets. But it was Obama officials who altered the guidelines weeks before they left office in early 2017 to provide additional mitigating factors for employees seeking clearances. The guidelines now allow staffers with dual passports, tax problems and suspicious lie detector test results to receive clearances. They may not seem like major changes. But John V. Berry, a Virginia lawyer who represents people going through the security clearance process, described them as “big,” saying they offer people more chances to receive waivers and conditional clearances than before. “They’re easier in my opinion,” he said. “I don’t think you can argue that they’re tougher.” The White House came under fire this month for allowing Staff Secretary Rob Porter to handle the most sensitive documents seen by the president for more than 12 months using an interim clearance. That revelation came to light after both his ex-wives publicly accused him of domestic abuse and he quickly resigned.
Kelly, McMaster could soon resign over friction with Trump: Reuters | TheHill: Two of President Trump's top advisers could soon depart the White House, sources familiar with the situation have told Reuters. Four senior administration officials told the outlet that tensions between the president and national security adviser H.R. McMaster and White House chief of staff John Kelly have risen in recent weeks to the point that either man could be near resigning. The officials hedged their predictions, however, telling Reuters those tensions could blow over in the same way past feuds between Trump and his top aides have calmed. Asked about the possibility of either man departing the White House, deputy press secretary Raj Shah said, “The president has full confidence in each member of the team.” The Reuters report comes after Trump broke with McMaster on Saturday over whether indictments in special counsel Robert Mueller's investigation show “incontrovertible” evidence of Russia's election meddling. A report on Thursday also revealed that McMaster could soon return to the Pentagon. Defense and administration officials said a search is being conducted at the Pentagon for an appropriate military position for McMaster, allowing the three-star general to return to the Defense Department and earn his fourth star.
State Department Commits $40 Million For "Information Wars" - The Pentagon will allocate $40 million into an inter-agency unit housed at the State Department to counter online propaganda and disinformation campaigns conducted by foreign nations, in an effort to respond "aggressively" to attacks. The program was announced by the State Department this week in conjunction with the US Department of Defense, which will allocate the funds to the Global Engagement Center (GEC) - created in spring 2016 to replace the Center for Strategic Counterterrorism Communications (CSCC). The @StateDept is pleased to announce a new partnership with the @DeptofDefense for initiatives to counter propaganda & disinformation from foreign nations. @UnderSecPD said the transfer of funds announced today reiterates the U.S. commitment to the fight. https://t.co/oT1ffDZU7RDepartment of State (@StateDept) February 26, 2018"One of those initiatives is the creation of an Information Access Fund to support public and private partners working to expose and counter propaganda and disinformation from foreign nations."This funding is critical to ensuring that we continue an aggressive response to malign influence and disinformation and that we can leverage deeper partnerships with our allies, Silicon Valley, and other partners in this fight, said Under Secretary Goldstein. It is not merely a defensive posture that we should take, we also need to be on the offensive. Last year Secretary of State Rex Tillerson requested that $40 million be transferred from the Department of Defense, with an overall allocation of up to $60 million from the US Defense budget. The funding was authorized in a December 2016 defense bill signed by President Obama - which widened the scope of the center's activities.
Trump Blasts Sessions "Disgraceful" Investigation Into FISA abuses” - After a months-long detente between President Trump and his attorney general, former Alabama Senator Jeff Sessions, it appears tensions between the two men are flaring up once again.Trump supplied one of his harshest rebukes of Sessions in a mid-morning tweet, castigating him for asking the Inspector General - an "Obama guy", according to Trump - to "investigate potentially massive FISA abuse".Trump said the investigation will "take forever, has no prosecutorial power and already late with reports on Comey etc. Isn't the IG an Obama guy? Why not use Justice Department lawyers? DISGRACEFUL!"Why is A.G. Jeff Sessions asking the Inspector General to investigate potentially massive FISA abuse. Will take forever, has no prosecutorial power and already late with reports on Comey etc. Isn’t the I.G. an Obama guy? Why not use Justice Department lawyers? DISGRACEFUL!— Donald J. Trump (@realDonaldTrump) February 28, 2018Sessions announced yesterday afternoon that the DOJ would investigate potential abuses of FISA. At time, it wasn't clear whether Sessions had signed off on a formal investigation, but he did say that the DOJ's inspector general would take it up, per the Hill. Sessions similarly said on Fox News on Sunday that his department would look into the process for obtaining warrants under FISA..
AG Sessions Responds To Trump's Twitter Taunt --It looks like all those Saturday Night Live sketches portraying Jeff Sessions as an obsequious diminutive imp have gotten to the attorney general.mIn a stiffly-worded response to President Trump - who earlier today castigated the AG for ordering the Justice Department's inspector general, an Obama-era holdover, to investigate FISA abuses - Sessions defended his handling of the FISA investigation by saying he followed the "appropriate process" by ordering the IG to investigate and that, as long as he remains attorney general, he will "continue to discharge my duties with integrity and honor."AG SESSIONS STATEMENT: “We have initiated the appropriate process that will ensure complaints against this Department will be fully and fairly acted upon if necessary...." (1/2) https://t.co/MXsl6QF0r3 AG SESSIONS STATEMENT CT'D: "As long as I am the Attorney General, I will continue to discharge my duties with integrity and honor, and this Department will continue to do its work in a fair and impartial manner according to the law and Constitution. “ (2/2) https://t.co/MXsl6QF0r3 - Adam Levine (@cnnadam) February 28, 2018Of course, as one twitter user reminds us, Senate Republicans have said they will not confirm another AG nominee if Sessions is forced out.
Washington infighting intensifies with resignation of White House communications director - White House communications director Hope Hicks said Wednesday she would resign and leave her position within the next few weeks, the latest casualty in the Trump inner circle from the political warfare that is intensifying in Washington.Whatever the immediate circumstances or personal motives that may be involved, there is little doubt that Hicks was driven from her position by the assault on the Trump White House by the Democratic Party and its allies within the US intelligence apparatus, centered on unsupported allegations of Russian intervention into the 2016 elections to back the Trump campaign.The crisis atmosphere in the White House is suggested by the fact that Hicks was the fifth person to serve as Trump’s top communications official since December 2016, following Jason Miller, Michael Dubke, Sean Spicer and Anthony Scaramucci. At seven months, hers was the longest tenure of the five.Hicks announced her resignation less than a day after a nine-hour, closed-door appearance before the House Intelligence Committee, where she flatly refused to answer any questions about any event that took place in the White House since Trump’s inauguration on January 20, 2017. She did not explicitly invoke executive privilege, but said she was acting on instructions from the White House Counsel’s office. Hicks did answer questions about the Trump campaign and the transition period from the election to the inauguration, which took up the bulk of the session.B ut the panel’s top Democrat, Representative Adam Schiff, complained that the committee Republicans had refused to issue a subpoena to compel her to testify about such episodes as her role in crafting a statement by Trump, issued last June, in response to the revelation that several Russians had visited Trump Tower during the campaign and had a private meeting with then-campaign chairman Paul Manafort, Trump’s son Donald Jr. and son-in-law Jared Kushner.
Washington’s Fight Over Taxes Is Only Beginning - NYT — Never mind that “once in a generation” tax bill that just passed last year. Congress is headed for years more of big fights over taxes, particularly those for individuals. That tax battle is a byproduct of America’s polarized political climate and of the go-it-alone choices Republicans made to speed the 2017 law through Congress in less than two months. It is already complicating tax planning for companies and workers around the country, particularly in high-tax states like New York, Maryland and California, where lawmakers are actively pursuing workarounds for some provisions of the new federal law that limit state and local income and property tax deductions. It’s only going to get messier. “This legal regime is very unstable; Congress has created many, many problems,” both in the substance of the bill and the exclusion of Democrats in enacting it, said Rebecca Kysar, a professor and tax expert at Brooklyn Law School. “All of those dynamics are going to make for a very uncertain landscape going forward.” Democrats are evaluating how to “repeal and replace” the law, very likely by trying to keep breaks for the middle class but rolling back those for the rich and corporations. Party strategists expect that a replacement tax bill would be a top priority for Democrats if they manage to retake Congress in the fall, and a common cry for the party’s 2020 presidential contenders. “If Democrats run from this fight, they will end up regretting it,” “The fundamentals are on our side on this, and we need to talk about it.”
The killing of the American Dream and Trump’s Tax Reform (podcast) Tax Justice Network
Wealth of Congress: Richer Than Ever, but Mostly at the Very Top- The people’s representatives just keep getting richer, and doing so faster than the people represented.The cumulative net worth of senators and House members jumped by one-fifth in the two years before the start of this Congress, outperforming the typical American’s improved fortunes as well as the solid performance of investment markets during that time.The disparity becomes clear after examining the most recent financial disclosures of virtually every current lawmaker. The news is not likely to do them any good during a midterm campaign year when disapproval of Capitol Hill remains in record territory and sentiment remains strong that politicians in Washington are far too disconnected from the lives of their constituents.The total wealth of all current members was at least $2.43 billion when the 115th Congress began, 20 percent more than the collective riches of the previous Congress, a significant gain during a period when both the Dow Jones industrial average and Standard & Poor’s 500 index rose slightly less than 10 percent.Beyond that grand total, the median minimum net worth (meaning half are worth more, half less) of today’s senators and House members was $511,000 at the start of this Congress, an upward push of 16 percent over just two years — and quintuple the median net worth of an American household, which the Federal Reserve pegged at $97,300 in 2016. The financial disparity between those who try to govern and those who are governed is almost certainly even greater than that.
Supreme Court won't hear Trump bid to end DACA program - The Supreme Court said on Monday that it will stay out of the dispute concerning the Deferred Action for Childhood Arrivals program for now, meaning participants will still be able to renew their status. The move will also lessen pressure on Congress to act on a permanent solution for DACA and its roughly 700,000 participants -- undocumented immigrants who came to the US as children. Trump stands by campaign pledge of building wall, blames Democrats for stalled immigration debate Trump stands by campaign pledge of building wall, blames Democrats for stalled immigration debate Originally, President Donald Trump had terminated DACA but allowed a six-month grace period for anyone with status expiring in that window to renew. After that date, March 5, any DACA recipient whose status expired would no longer be able to receive protections. Monday's action by the court, submitted without comment from the justices, is not a ruling on the merits of the DACA program or the Trump administration's effort to end it. At issue is a ruling by federal District Judge William Alsup of the US District Court for the Northern District of California, who blocked the plan to end DACA and held that the Trump administration must resume accepting renewal applications. The action means the case will continue going through the lower courts. Alsup said a nationwide injunction was "appropriate" because "our country has a strong interest in the uniform application of immigration law and policy." "Plaintiffs have established injury that reaches beyond the geographical bounds of the Northern District of California. The problem affects every state and territory of the United States," he wrote.
Supreme Court Rebuffs Trump's DACA Challenge - In a decision that could allow DACA protections to remain in place past the March deadline, the conservative-majority Supreme Court has rejected a request to hear the administration's challenge to a judge's ruling - made earlier this year - mandating that the DACA program must remain in place until all litigation is resolved. Several state attorneys general sued to block President Trump's September decision to cancel the program. On Jan. 9, San Francisco-based US District Judge William Alsup ruled that DACA must remain in place while the litigation is resolved. A week later, the DOJ said it would ask the Supreme Court to overturn that decision. Judge Nicholas G Garaufis of Federal District Court in Brooklyn issued a similar ruling. "It defies both law and common sense for DACA ... to somehow be mandated nationwide by a single district court in San Francisco," Attorney General Jeff Sessions said at the time. There's ostensibly some truth to that: According to the New York Times, such nationwide injunctions from judges in individual cases, which have been used to block executive actions in both the Obama and Trump administrations, have been the subject of much criticism. As the Hill pointed out, the DOJ's request was unusual in that it asked the Supreme Court to jump ahead of the 9th Circuit Court of Appeals in reviewing the case. The nation's highest court typically will only bypass an appellate court when there’s an emergency involving foreign affairs, a serious separation of powers concerns or when it has already agreed to hear another case dealing with the same question.JUST IN: Supreme Court declines to hear Trump bid to immediately end program protecting 'Dreamers' from deportation pic.twitter.com/zpNDi4rMfn— Reuters Top News (@Reuters) February 26, 2018 The court said the government's request for the court to hear its case is denied without prejudice, and that the court expects the appeal will swiftly be handled by the Ninth Circuit.
What the SCOTUS decision means for “Dreamers” -- Now that the U.S. Supreme Court will not review the Trump administration's appeal on an injunction which has stopped Trump from rescinding DACA, the "Dreamers" will be able to continue to renew their visas until a final decision on the case — likely May or June of 2019. While court actions have bought Dreamers and Congress another year, saving Republicans and President Trump from the months of Dreamer deportation coverage ahead of midterm elections, it isn't a permanent solution. Undocumented immigrants who are eligible for DACA's protection but who are not currently enrolled in the program are still not permitted to apply. Only those who are already protected by DACA can apply for a two-year renewal once their visas are 150 or fewer days away from expiring. Both district courts that have issued injunctions on ending DACA have admitted that it is lawful for Trump to end the program, which started under Barack Obama. It's the administration's reasons for ending the program that haven't held up, meaning the Trump administration could hypothetically try again. Fast-forward to next year: If the appeals court decides that the Trump administration's decision to rescind DACA was lawful and Congress fails to find a solution, DACA will be gone and those "Dreamers" will again face losing their jobs and potential deportation once their visas expire.
GOP senators: 'Dreamers' deal will likely end up in funding bill | TheHill: Republican senators are predicting that a fix for a key Obama-era immigration program will end up in next month's government funding bill, as they search for ways to break a months-long stalemate. Several GOP senators said Monday that the mammoth bill, known as an omnibus, would likely be the vehicle for a deal on the Deferred Action for Childhood Arrivals (DACA) program. Sen. Lindsey Graham (R-S.C.) said that including a short-term deal on DACA in the omnibus was the most likely of three potential paths forward. "That's probably the most likely thing, when we write the funding of the government bill we'll extend DACA legislatively, making it legal for a year or two and kind of punting it," Graham told reporters. The other two options, in Graham's view, are Congress doing nothing or President Trump realizing there is a "sweet spot" that would pair a permanent fix for DACA with border wall funding.
Opinion analysis: Court tees up issue of the constitutionality of indefinite immigration detention for the 9th Circuit - ScotusBlog - Today the Supreme Court decided Jennings v. Rodriguez, a class-action challenge to provisions of the immigration laws allowing for immigrant detention. With President Donald Trump’s administration promising to increase the use of detention as a form of immigration enforcement, the case has great practical significance. As discussed in my preview of the argument, two Supreme Court cases decided at the dawn of the new millennium offer contrasting approaches to the review of decisions of the U.S. government to detain immigrants. In 2001, in Zadvydas v. Davis, the Supreme Court interpreted an immigration statute to require judicial review of a detention decision because “to permit[] indefinite detention of an alien would cause a serious constitutional problem.” Just two years later, the court in Demore v. Kim refused to disturb a provision of the immigration statute requiring detention of immigrants awaiting removal based on a crime. Relying on Zadvydas v. Davis, the U.S. Court of Appeals for the 9th Circuit affirmed a district court injunction that, in the words of the appeals court, avoided “a serious constitutional problem” by requiring bond hearings every six months for immigrant detainees. I noted in my argument analysis that during the reargument, some justices worried that the 9th Circuit had acted more like a legislature than a court in fashioning an injunction requiring bond hearings every six months. Such concerns carried the day. Justice Samuel Alito wrote for a 5-3 court. (Justice Elena Kagan recused herself, in all likelihood because she was involved in the case while serving as U.S. solicitor general.) Using a textual approach to interpreting the immigration statute, the majority found that nothing in the statute supports the imposition of periodic bond hearings as mandated by the court of appeals. The court held that, because the statute was clear, the 9th Circuit had misapplied the doctrine of constitutional avoidance. Alito emphasized that “a court relying on that canon … must interpret the statute, not rewrite it.”
Supreme Court rules immigrants can be detained indefinitely | TheHill: Immigrants can be held by U.S. immigration officials indefinitely without receiving bond hearings, even if they have permanent legal status or are seeking asylum, the Supreme Court ruled Tuesday. In a 5-3 ruling Tuesday, with Justice Elena Kagan recusing, the court ruled that immigrants do not have the right to periodic bond hearings. The ruling is a defeat for immigration advocates, who argued that immigrants should not be held for more than six months at a time without such a hearing.The Supreme Court ruling follows a Trump administration appeal of a ruling by the 9th Circuit Court of Appeals last year that imposed a rule requiring immigrants held in custody be given a bond hearing every six months, as long as they aren't considered a flight risk or a danger to national security. “To impose a rigid six-month rule like the Court of Appeals did is really a mistake,” acting Solicitor General Ian Gershengorn said in November 2016. In its ruling, the court affirmed the right of the government to detain immigrants while it determines whether they should be allowed in the country. "Immigration officials are authorized to detain certain aliens in the course of immigration proceedings while they determine whether those aliens may be lawfully present in the country," Justice Samuel Alito wrote in the majority opinion. The lead plaintiff in the class-action lawsuit, Alejandro Rodriguez, is an immigrant with permanent legal status who was convicted of possession of a controlled substance and joyriding. He was detained by immigration officials for three years without a bond hearing.
Media, Democrats silent as US Supreme Court rules immigrants can be indefinitely detained - In a 5-3 decision handed down on Tuesday, the United States Supreme Court ruled in Jennings v. Rodriguez that the government can arrest and indefinitely detain immigrants, depriving them of the fundamental right to bail.As a result, hundreds of thousands of immigrants will be locked up in internment camps as their immigration cases proceed, with no opportunity for release until their cases are decided—a process that often takes years. Roughly 450,000 immigrants were jailed in detention centers at some point during the last year, and that number will increase astronomically after yesterday’s ruling.The decision makes no distinction between undocumented immigrants and those with legal permanent residency. It means millions of immigrants living in the US are subject to arrest and indefinite detention.This milestone event has passed with virtually no comment in the corporate-controlled press. As of Tuesday evening, the online front pages of the Washington Post, CNN, MSNBC and Politico had no coverage of the ruling, while the New York Times had a single article far down its page. At the same time, these five sites featured a combined 23 front-page articles on the anti-Russia witch hunt. No major Democratic Party official has made a statement on the ruling, and the Twitter accounts of Bernie Sanders, Nancy Pelosi, Elizabeth Warren, Charles Schumer, Hillary Clinton and Barack Obama are all silent.
What is the Einstein visa? And how did Melania Trump get one? – BBC - Melania Trump obtained US citizenship on a visa reserved for immigrants with "extraordinary ability" and "sustained national and international acclaim", according to a report in the Washington Post. Nicknamed the "Einstein Visa", the EB-1 is in theory reserved for people who are highly acclaimed in their field - the government cites Pulitzer, Oscar, and Olympic winners as examples - as well as respected academic researchers and multinational executives. Mrs Trump began applying for the visa in 2000, when she was Melania Knauss, a Slovenian model working in New York and dating Donald Trump. She was approved in 2001, one of just five people from Slovenia to win the coveted visa that year, according to the Post. It gave her the right to sponsor her parents, Viktor and Amalija Knavs, who are now in the US and in the process of applying for citizenship. The reports of how Mrs Trump obtained her citizenship will rankle with some, at a time when her husband is railing against immigrants and attempting to scrap the right of new citizens to sponsor family members. And questions have been raised about her suitability for the extraordinary ability category.
Justice Department "Reviewing" Actions Of "Gang Lookout" Oakland Mayor - In the latest sign that Trump's Department of Justice isn't about to let "sanctuary cities" off he hook, the LA Times reported Friday that the agency is reviewing the actions of Oakland Mayor Libby Schaaf, who last weekend alerted residents in advance of an Immigration and Customs Enforcement raid in Northern California. “I think it's outrageous that a mayor would circumvent federal authorities and certainly put them in danger by making a move such as that," White House Press Secretary Sarah Huckabee Sanders told reporters.She said Schaaf's actions were under "review" but would not be more specific. Schaaf has defended her statement, saying she felt it was her duty to warn residents of the ICE action. Oakland, like many California cities, has declared itself a sanctuary for those here illegally, and officials there have vowed to fight President Trump's immigration crackdown.She has won praise from other officials in California. But the Trump administration has rebuked her. The burgeoning feud between ICE and the mayor of Oakland intensified Friday when the head of the agency accused Mayor Libby Schaff of helping more than 800 violent and dangerous undocumented immigrants avoid capture during a series of raids conducted over the weekend. Meanwhile, James Schwab, a spokesman for ICE in San Francisco - a field office that spans 49 counties from Bakersfield to the Oregon border. They include someone convicted of carrying a loaded firearm and selling drugs, and another suspected of transporting cocaine and having sex with a minor, he said.Immigration detainers lodged against them have been "repeatedly ignored," Schwab said. "Instead they have been released back into the community to potentially reoffend." He also said federal authorities were examining her actions. During the three days of raids, the agency arrested about 150 people - half of whom had criminal records.
President Trump’s Eleventh Wave Of Judicial Nominees -- Above the Law - The Trump Administration is moving so quickly on judicial nominations that I’m having a hard time keeping up. Not long after I posted my last exhaustive roundup on federal judicial nominees (see Part 1 and Part 2), the White House announced its eleventh wave of judicial nominees.There are nine nominees, four for the circuit courts and five for the district courts. Professor Carl Tobias of the University of Richmond, a leading analyst of the federal judiciary, shared these overarching thoughts with me:The most important aspect of the latest wave is that three of the appellate nominations show how White House consultation and cooperation with home state Democratic senators can yield highly qualified, conservative nominees, who in turn will smoothly secure confirmation. Illinois and Hawaii nominees illustrate this idea. Senators Durbin and Duckworth expressed strong support for the two Illinois nominees, as did Senators Schatz and Hirono for the Hawaii nominee. This shows that the process can work effectively to yield nominees whom both parties can support.The nomination of Andy Oldham for the Fifth Circuit means that Trump will have appointed five new judges to the court and further solidified its reputation as the most conservative appeals court in the United States. The Senate will return to confirming judges next week. Senate Majority Leader Mitch McConnell has given notice that five nominees will receive cloture votes on the Senate floor. I’ll now discuss the state of play in judicial nominations in more detail, proceeding circuit by circuit, as usual. If you have any comments, corrections, or additional information, please email me (subject line: “Judicial Nominations”).
FCC Net Neutrality Repeal Published in Federal Register, Triggering Deadlines for Challengers Lexology. On Thursday, February 22, 2018, the Federal Communications Commission (FCC or Commission) published the Restoring Internet Freedom Order (the Order) in the Federal Register.As we previously discussed, the Order effectively reverses the Commission’s 2015 Open Internet Order, reclassifying broadband Internet access service as a lightly regulated Title I “information service” and eliminating the 2015 Order’s open Internet rules (while retaining a modified version of the transparency requirement).The Order will not go into effect until after the Office of Management and Budget completes its Paperwork Reduction Act review, which could take several months. However, last Thursday’s publication is significant because it triggers deadlines for challenges to the Order, both in the courts and in Congress.The Federal Register publication gives litigants ten days to file petitions for review in federal courts of appeals if they would like to be included in a court lottery to determine the venue for consolidating the Order’s challenges. The following petitions have already been filed:
- New York District Attorney General Eric Schneiderman announced he and 22 other Democratic attorneys general filed a petition for review at the U.S. Court of Appeals for the D.C. Circuit;
- Public Knowledge, Mozilla, Vimeo, National Hispanic Media Coalition, and New America’s Open Technology Institute each filed petitions for review in the D.C. Circuit;
- The California Public Utilities Commission and Santa Clara County each filed appeals in the Ninth Circuit
In Latest Twist in Net Neutrality Battle, Court Rules FTC Can Regulate Internet Providers — A federal appeals court ruled that the Federal Trade Commission has jurisdiction over internet providers, a decision that has ramifications for the future ofnet neutrality. When the FCC repealed most of its existing net neutrality rules in December, it left it to the FTC to take up oversight of consumer complaints over internet service as well as the privacy practices of broadband providers.But the plan had a potential hitch: A lawsuit playing out in the Ninth Circuit Court of Appeals raised doubts about the future of the FTC’s authority to bring a lawsuit against certain broadband providers over their traffic management practices. After the FTC brought suit against AT&T Mobility over its data throttling practices, calling it “unfair and deceptive,” AT&T claimed that it was exempt from oversight. FCC Chairman Ajit Pai said the Ninth Circuit decision was “a significant win for American consumers.” “Among other things, it reaffirms that the Federal Trade Commission will once again be able to police internet service providers” after the FCC’s latest action on net neutrality, Pai said. “In the months and years ahead, we look forward to working closely with the FTC to ensure the protection of a free and open internet.”In the ruling, written by Judge Margaret McKeown on behalf of an en banc panel of the Ninth Circuit, the judges wrote that “permitting the FTC to oversee unfair and deceptive non-common-carriage practices of telecommunications companies has practical ramifications.”
Democrats submit plan to save net neutrality, still one vote short in Senate -Congressional Democrats today introduced legislation that would prevent the repeal of neutrality rules, but they still need more support from Republicans in order to pass the measure. Democrats have been promising to introduce a Congressional Review Act (CRA) resolution ever since the Federal Communications Commission voted to repeal its net neutrality rules in December. But lawmakers had to wait for the FCC's repeal order to be published in the Federal Register, which only happened last week. The CRA resolution would nullify the FCC's repeal order, allowing net neutrality rules that were passed in 2015 to remain in place. The resolution has public support from 50 out of 100 senators (all Democrats, all Independents, and one Republican), putting it one vote shy of passage in the Senate.Democrats will force a vote on the Senate version of the resolution sometime this spring, Sen. Ed Markey (D-Mass.) said today. "The grassroots movement to reinstate net neutrality is growing by the day, and we will get that one more vote needed to pass my CRA resolution," Markey said. "I urge my Republican colleagues to join the overwhelming majority of Americans who support a free and open Internet. The Internet is for all—the students, teachers, innovators, hard-working families, small businesses, and activists, not just Verizon, Charter, AT&T, and Comcast and corporate interests."
`NSA-proof’ Tor actually funded by US govt agency, works with BBG, FBI, DOJ – FOIA docs - The Tor Project, hailed as a bulwark against the encroaching surveillance state, has received funding from US government agency the BBG and cooperates with intelligence agencies, newly released documents reveal. Tor, free software which enables anonymous communication over the internet, is a “privatized extension of the very same government that it claimed to be fighting,” claims journalist Yasha Levine, who obtained 2,500 pages of correspondence about the project via Freedom of Information Act (FOIA) requests. Hailed as “NSA-proof” and used by journalists and whistleblowers alike to protect themselves and their sources from government retribution, Tor is painted in an entirely new light in the FOIA documents, which reveal cooperation between the software’s developers and US government agencies. The documents released by Levine mostly focus on how Tor received funding from the Broadcasting Board of Governors (BBG), which supervises Washington-funded media, including Voice of America and Radio Free Europe/Radio Liberty. But they also tell a story of how employees of the non-profit met regularly with the Department of Justice, the FBI, and other three-letter agencies for training sessions and conferences, where the agencies pitched their software needs, the documents show. Commenting on the potentially explosive contents, Levine wrote in a blog post published on his website: “Why would the US government fund a tool that limited its own power? The answer, as I discovered, was that Tor didn’t threaten American power. It enhanced it.” According to Levine’s research, Tor received “almost 100 percent” of its funding from three US government agencies: the Navy, the State Department, and the BBG. In collaboration with government agencies, Tor even drew up plans to deploy their anonymity tool to countries that Washington was actively working to destabilize – including China, Iran and Russia. Although Levine claims there was never any doubt that Washington had repurposed Tor as a “foreign policy weapons” – arming foreign dissidents with the power to communicate anonymously – he says that his document cache shows “collaboration between the federal government, the Tor Project and key members of the privacy and Internet Freedom movement on a level that was hard to believe.”
Dem governors band together to thwart Trump's policies - In the era of President Donald Trump, Democrats are the ones looking to return power to the states. On climate, guns, trade, infrastructure, immigration and more, they’ve gone from talking about the importance of a strong federal government to looking for any and every way to do the opposite of what the federal government is doing — and in many cases, to take action where the administration won’t. ..“We have a national administration that is not keeping with where the American people are, and when it becomes as evident as it is, then it’s incumbent on people with half a brain to figure out a way around that,” said Connecticut Gov. Dannel Malloy. Malloy is a member of the Climate Alliance, formed in the wake of Trump’s announcement that he’d withdraw the United States from the Paris climate agreement, and last week joined three other governors in forming States for Gun Safety. Both groups are explicitly aimed at taking action in opposition to policy being written in Congress and making agreements among states that circumvent Washington. Just as Democratic attorneys general have borrowed the strategies Republicans used in the courtroom against the Obama administration, Democratic governors are now learning from GOP counterparts who once turned down stimulus money and declined to open Obamacare exchanges.
Seven gun control measures Congress could consider after Florida shooting | TheHill: Congress will return to Washington this week under new pressure to take action on gun control following the mass shooting at a Florida high school. Lawmakers will have a range of potential policies to consider, as 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 and others have put both new and old ideas on the table in an effort to curb gun violence. It’s unclear which proposal — if any — will be able to overcome the thorny politics that have impeded past efforts to enact tougher gun laws in the aftermath of other mass shootings. Conservatives and the powerful gun lobby do not support some of the ideas that have been floated, while even the least controversial measure has been stalled in Congress for months. But there is a growing sense of momentum to tackle the divisive issue, partly because of the student survivors who have taken their emotional pleas directly to cable television, Florida’s capital and the White House. “I see Congress wanting to act now for the first time,” Trump told reporters Friday. Here are seven gun proposals that are now in the mix following the deadly school shooting in Parkland, Fla.
Trump-backed gun measure faces hurdle from three Republican senators - Three Republican senators are opposing a gun safety fix that's been eagerly embraced by most of Washington's power players. Sens. Rand Paul, Mike Lee and John Kennedy are against the current version of Sen. John Cornyn's bid to improve the accuracy of existing background check systems for firearm purchases. President Donald Trump reiterated his support for the plan Monday. Kennedy, R-La., told McClatchy on Monday that the U.S. needs "more idiot control, not more gun control." Trump on Monday cited Cornyn’s bill as among the steps he wants to take in the wake of the deadly Valentine's Day mass shooting at a Florida high school. Also backing the measure are Senate Majority Leader Mitch McConnell, House Speaker Paul Ryan and the National Rifle Association. But it takes 60 Senate votes to get legislation moving, and senators are eying strategies to delay or dramatically modify the current bill. So far, the measure is not on the Senate schedule.
Trump: 'Take the guns first, go through due process second' | TheHill: President Trump on Wednesday voiced support for confiscating guns from certain individuals deemed to be dangerous, even if it violates due process rights. “I like taking the guns early, like in this crazy man’s case that just took place in Florida ... to go to court would have taken a long time,” Trump said at a meeting with lawmakers on school safety and gun violence. “Take the guns first, go through due process second,” Trump said. Trump was responding to comments from Vice President Pence that families and local law enforcement should have more tools to report potentially dangerous individuals with weapons.“Allow due process so no one’s rights are trampled, but the ability to go to court, obtain an order and then collect not only the firearms but any weapons,” Pence said. "Or, Mike, take the firearms first, and then go to court," Trump responded.
"Take The Guns First" - Trump Breaks With Republicans Over Gun Control Plan - President Trump told a group of lawmakers that they must do something to keep guns away from mentally ill individuals - even if that means raising the minimum age for rifle ownership to 21, Bloomberg reports.His remarks appeared to contradict a CNN report from earlier in the week, which quoted anonymous White House aides saying Trump would soon walk back his support for raising the age limit. But on Wednesday, in what the New York Times characterized as a "shocking" break with his Republican Congressional allies, Trump told lawmakers during a televised meeting in the Cabinet Room that easing gun owners’ ability to carry concealed weapons across state lines, a provision of the House-passed gun bill and the NRA’s top legislative priority, should be part of a separate bill, a strategy favored by Democrats. The House bill combining background check provisions with the loosening of concealed carry rules has stalled in the Senate after passing the House. Instead, Trump said he supports the proposal from Sens. Joe Manchin, D-W.Va., and Pat Toomey, R-Pa., which he says is best positioned to pass. Sen. Amy Klobuchar agreed that the Manchin-Toomey bill is a "good place to start.""It would be so beautiful to have one bill that everyone could support," Mr. Trump said as Senator Dianne Feinstein, Democrat of California, sat smiling to his left. "It’s time that a president stepped up." Per the Times, Trump repeatedly suggested that the dynamics surrounding the gun control debate had shifted, in part, because of his presence in the Oval Office - a remark that earned him cheers from Democrats.WATCH: President Trump: "I like taking the guns early ... Take the guns first, go through due process second." pic.twitter.com/aydEZdAGq0— NBC News (@NBCNews) February 28, 2018Trump predicted his plan would pass with broad support, suggesting that he plans to win over a sizable chunk of the Democratic caucus.
Trump Stuns Lawmakers With Seeming Embrace of Gun Control — President Trump stunned Republicans on live television Wednesday by embracing gun control and urging a group of lawmakers at the White House to resurrect gun safety legislation that has been opposed for years by the powerful National Rifle Association and the vast majority of his party. In a remarkable meeting, the president veered wildly from the N.R.A. playbook in front of giddy Democrats and stone-faced Republicans. He called for comprehensive gun control legislation that would expand background checks to weapons purchased at gun shows and on the internet, keep guns from mentally ill people, secure schools and restrict gun sales for some young adults. He even suggested a conversation on an assault weapons ban. At one point, Mr. Trump suggested that law enforcement authorities should have the power to seize guns from mentally ill people or others who could present a danger without first going to court. “I like taking the guns early,” he said, adding, “Take the guns first, go through due process second.” The declarations prompted a frantic series of calls from N.R.A. lobbyists to their allies on Capitol Hill and a statement from the group calling the ideas that Mr. Trump expressed “bad policy.” Republican lawmakers suggested to reporters that they remained opposed to gun control measures. “We’re not ditching any constitutional protections simply because the last person the president talked to today doesn’t like them,” Senator Ben Sasse, Republican of Nebraska, said in a statement. Democrats, too, said they were skeptical that Mr. Trump would follow through. At the core of Mr. Trump’s suggestion was the revival of a bipartisan bill drafted in 2013 by Senators Joe Manchin III, Democrat of West Virginia, and Patrick J. Toomey, Republican of Pennsylvania, after the shooting at Sandy Hook Elementary School. Despite a concerted push by President Barack Obama and the personal appeals of Sandy Hook parents, the bill fell to a largely Republican filibuster.
Five takeaways from Trump’s meeting on guns | TheHill: President Trump shook up the gun control debate — and many members of his own party — with a televised White House meeting with lawmakers that lasted more than an hour on Wednesday afternoon.Trump expressed support for a number of gun control measures, including strengthened background checks and stricter age limits, even as he held fast to his insistence that schools should be made “harder” targets by permitting teachers and other personnel to be armed. The reverberations from the meeting will continue for days, but what were the main takeaways? There had been considerable skepticism over whether Trump was really intent upon taking action on gun violence, long a vexing issue in American politics, in the days immediately after the Feb. 14 Parkland, Fla., shooting. But his demand to get something done appeared both genuine and urgent during Wednesday’s meeting. He repeatedly made the point that other presidents had failed to make progress on the issue but that he intended to do so. Trump’s desire for action included some moves that will cause serious unease to the National Rifle Association (NRA) and other gun rights groups. Trump was dismissive of the idea of including so-called concealed carry reciprocity measures alongside broader legislation, arguing it would delay the effort to get something done. “You’ll never get it passed,” he told House Majority Whip Steve Scalise Stephen (Steve) Joseph Scalise (R-La.). Trump at times suggested that his predecessor, President Obama, had not asserted himself strongly enough in the push for gun control.
"There Aren't Votes For That" - GOP Senators Reject Trump's Gun-Control Proposal - President Donald Trump shocked his Republican allies in Congress on Wednesday when he said during a televised meeting with a bipartisan group of lawmakers in the White House Cabinet Room that lawmakers must support raising the age limit and confiscating guns from people deemed mentally ill, along with a host of other gun-control measures that would be anathema to most Republicans.During the meeting, Trump said he supports a Democratic proposal to use the Toomey-Manchin gun control proposal as a base bill and build on top of it. Meanwhile, lawmakers should consider a sweeping expansion of concealed-carry protections as part of a separate package. He also said an assault-weapons ban should be considered, to the visible delight of California Sen. Dianne Feinstein, according to the Hill.During the meeting, Trump said "it doesn't make sense" that an 18-year-old can buy an assault rifle capable of killing dozens, but must wait until they're 21 to purchase a hand gun. However, after the meeting, several lawmakers told reporters that they wouldn't support Trump's demands to "go big" on gun control.Even Florida Sen. Marco Rubio, who has recently expressed support for raising the age limit to 21, said he wouldn't support the Manchin-Toomey proposal, which would also help close the so-called "gun show loophole"."I haven't voted for it in the past, I'm not inclined to vote for it now,” Rubio told reporters after the meeting. He also noted that the shooters in recent mass killings did not buy their weapons at gun shows or from unlicensed dealers and wouldn’t have been stopped if Toomey-Manchin had been law.Rubio said “we’re better off” prosecuting straw purchasers who attempt to evade gun laws already on the books or tightening the current background-check system with the Fix NICS bill.However, some Republicans questioned Trump's sincerity and expressed doubts that Trump fully understands the Toomey-Manchin proposal. They predicted he would change his mind on comprehensive background checks.
Baffled Republicans distance themselves from Trump on guns | TheHill: House conservatives say they are baffled by President Trump’s recent support for a string of Democratic-backed gun control ideas, with some lawmakers even questioning how committed he is to protecting the Second Amendment. “I don’t know how he came unmoored,” said libertarian Rep. Thomas Massie (R-Ky.), one of the staunchest defenders of gun rights in Congress. “President Trump can do more damage than President Obama did to the Second Amendment with the bully pulpit, because Republicans instinctively rejected anything Obama put forward.” House Republicans expressed a mix of shock, frustration and disappointment that Trump endorsed a Democratic “wish list” of gun control proposals during a meeting on Wednesday at the White House. The ideas he spoke favorably of included imposing new age limits on gun purchases and taking guns away from dangerous people. Republicans in both chambers of Congress, and particularly the House, made clear they have little interest in adopting Trump’s “comprehensive” approach. “On a lot of these issues, where we believe that there is an infringement on Second Amendment liberties, we’re going to be opposed to those,” said Rep. Jim Jordan (R-Ohio), a member of the House Freedom Caucus, a band of roughly 30 conservative hard-liners.
Gun control hopes dashed as lawmakers signal shift to banking reform --In just three weeks, hundreds of thousands of demonstrators are expected to march on Washington to demand Congress act to prevent gun violence, in the aftermath of the Parkland massacre last month. But on Thursday, lawmakers left Washington after their first week back since the Florida school shooting – without a plan. There was a flurry of activity on Capitol Hill and a sense of urgency in both parties that inaction was no longer an option in the face of public outrage, led by the Florida students who survived the attack. But the Senate majority leader, Mitch McConnell, announced that the chamber would move on to banking legislation next week – extinguishing hope that lawmakers would act swiftly to pass gun legislation after the Valentine’s Day shooting that left 17 students and educators dead. “We’d love to do that at some point,” McConnell told reporters on Thursday. “I’m hoping there’s a way forward.” The timeline means Congress will probably be embroiled in a debate over guns for several more weeks. On 24 March, as many as 500,000 people are expected to attend the “March for Our Lives” rally against gun violence in Washington, organized by Parkland students. Some lawmakers hope the event will act as a deadline for legislative action. The Senate had appeared on track to move forward with a proposal most lawmakers viewed as modest at best, when the president upended the debate and demanded a stronger bill at a bipartisan meeting with lawmakers this week. During the televised meeting on Wednesday, Trump repeatedly embraced legislation that the National Rifle Association has long opposed. The bill, first introduced by the Republican senator Pat Toomey and Democratic senator Joe Manchin after the Sandy Hook elementary school shooting in 2012, would expand background checks to weapons purchased at gun shows and online. “If the president embraces something like Manchin-Toomey, a bill that had broad bipartisan support but couldn’t quite get to 60 votes, the president could really make the difference,” Toomey said
Justice Dept. urges Congress to rewrite law that handcuffed DEA’s opioid enforcement -- The Justice Department is urging Congress to rewrite legislation, passed at the pharmaceutical industry’s behest, that has undermined the Drug Enforcement Administration’s efforts against companies suspected of violating the law. Assistant Attorney General Stephen E. Boyd wrote in a letter Wednesday that the Justice Department seeks to bring the law “more in line with the original intent of Congress,” according to a copy obtained by The Washington Post. Boyd was responding to Rep. Greg Walden, (R-Ore.), chairman of the House Energy and Commerce Committee, which is investigating the opioid industry. “We believe the changes will make it easier to fight the opioid epidemic consistent with President Trump’s priorities to end this crisis,” said Justice Department spokeswoman Sarah Isgur Flores. The bill was approved by Congress and signed into law by President Barack Obama. Walden, who asked for the agency’s input last year, said Friday that he would consider amending the legislation. “After four months of repeated requests, DOJ finally offered specific feedback to this committee’s questions, stating they believe the law does impede the DEA’s ability to do its job,” the chairman said. “We appreciate their guidance and are actively working with DOJ and stakeholders to address their concerns.” Walden has sponsored several measures to address the opioid epidemic, and he plans to hold a hearing this month about the DEA’s enforcement efforts against the industry. The Ensuring Patient Access and Effective Drug Enforcement Act was pushed through Congress in 2016 by a small band of lawmakers backed by a powerful array of drug companies. The legislation was the subject of a joint investigation by The Post and “60 Minutes” in October.
Trump suggests death penalty to stop opioid epidemic - President Donald Trump on Thursday suggested using the death penalty on drug dealers to address the opioid epidemic, equating providing lethal drugs with murder. "We have pushers and drugs dealers, they are killing hundreds and hundreds of people," Trump said at a White House summit on opioid abuse. "If you shoot one person, they give you life, they give you the death penalty. These people can kill 2,000, 3,000 people and nothing happens to them." Trump said countries that impose the death penalty on drug dealers have a better record than the United States in combating substance abuse. "Some countries have a very, very tough penalty — the ultimate penalty — and by the way, they have much less of a drug problem than we do," he said.
Trump: U.S. Should Execute Major Drug Dealers -- Inspired by Singapore's policy of executing drug traffickers, President Trump is said to relish the idea of putting major dealers to death - who he is said to compare to serial killers, Axios reports. "He says that a lot," said a source who's spoken to Trump at length about the subject. "He says, 'When I ask the prime minister of Singapore do they have a drug problem [the prime minister replies,] 'No. Death penalty'." According to five sources who have spoken with Trump on the subject, it's no joke to the President - who says that a softer approach to drug reform where you show sympathy to the offenders "will never work." Trump feels that children need to be taught that they'll die if they fall into a life of drugs, and that drug dealers should be made to fear for their lives, according to the report - however he acknowledges that it would probably be near impossible to pass such a law in the United States. There are currently 33 countries for which drug crimes carry the death penalty - mostly located in Asia and the Middle East. Axios reports that Kellyanne Conway - who leads the White House's anti-drug efforts - clarified Trump's position, saying that Trump is talking about high-volume dealers who are killing thousands of people. The point he's making, she says, is that some states execute criminals for killing one person but a dealer who brings a tiny quantity of fentanyl into a community can cause mass death in just one weekend, often with impunity. "The president makes a distinction between those that are languishing in prison for low-level drug offenses and the kingpins hauling thousands of lethal doses of fentanyl into communities, that are responsible for many casualties in a single weekend."
Does The ACLU No Longer Defend Civil Liberty? -- Paul Craig Roberts -- Yesterday I received a 50-state survey from the ACLU. The envelope in which the questionnaire arrived said the survey was about how “to protect civil liberties during the Trump Presidency.” However, the survey (essentially a fundraiser) did not mention a single civil liberty contained in the Bill of Rights and added as amendments to the US Constitution. Nothing about the sweeping away by the criminal Bush regime of habeas corpus with indefinite detention. No mention of the criminal Obama regime’s kill list, which swept away due process by executing US citizens on allegation alone without trial, evidence, and conviction. Nothing about the sweeping away by both criminal regimes of the prohibition against spying on citizens without warrants. No mention of the shutdown of free speech and protest or of the destruction of civil liberties by unaccountable police who brutalize, rob, and murder Americans at will. In place of civil liberties, the ACLU has Identity Politics. The ACLU “civil rights” survey is concerned with the civil rights of illegal aliens, of women to have abortions and publicly financed birth control, the “fundamental rights of LGBT people,” and Muslim bans. The civil liberties listed in the Constitution do not qualify for concern; only invented rights that are not listed in the Bill of Rights. The letter accompanying the questionnaire does mention the First Amendment and suppression of free speech “emanating from the White House.” I mean, really, the Bush and Obama regimes decimated free speech and imprisoned whistleblowers.. By the time of Trump’s election, the First Amendment was a dead letter civil right. In the ACLU’s Identity Politics, white people, especially white heterosexual males, have no rights. They are not protected by quotas, political correctness, or hate speech prohibitions. Even men-hating white feminists jump on the anti-white bandwagon, denouncing white heterosexual–not homosexual–males as misogynist. The feminists reserve their hate for the men attracted to women.
FBI 'investigating if Russian money went to NRA's campaign to help elect Donald Trump'' - Activists are demanding the National Rifle Association (NRA) reveal if it received donations from Russia, after it was reported the FBI is investigating whether a Kremlin-linked Moscow businessman channelled money to the group’s campaign to help Donald Trump win the election.With the influence of the NRA under mounting scrutiny following a school shooting in Florida and the campaign led by students to change the country’s gun laws, campaigners say it is vital that investigators uncover if the powerful lobbying group group used any Russian money to help elect Republican members of Congress and Mr Trump during the 2016 race. It is against the law to use foreign money in federal election campaigns.It was recently reported the FBI was focusing its attention on Alexander Torshin, a former member of the upper house of Russia’s parliament and currently deputy governor of Russia’s central bank, who is said to have a close relationship with Russian President Vladimir Putin. The 64-year-old gun enthusiast is also said to be a Life Member of the NRA. Since McClatchy News first reported Mr Torshin and the donation were being investigated, campaigners have been seeking to pressure the NRA to come clean about its funding.Kristin Brown, co-president of the Brady Campaign to Prevent Gun Violence, told The Independent that the NRA, which was founded in 1871 as a recreational group designed to “promote and encourage rifle shooting on a scientific basis”, today got most of its funding from gun manufacturers. “NRA members should be outraged if even a portion of this alarming story is true. The NRA tells its members that it defends America’s freedoms,” she said of the McClatchy News report. “If the NRA is actually a front for Russian interests and interfered with our elections, actively or passively, then they have undermined the very democratic freedoms they purport to represent. We can only wonder how many true patriots will decide that this is the last straw and give up their NRA memberships.”
Democratic memo: FBI was investigating Trump campaign associates weeks before receiving dossier -- The FBI team investigating the 2016 Trump campaign's contacts with Russians had already opened inquiries into multiple people connected to the campaign when it received a controversial dossier alleging illicit ties between then-candidate Donald Trump and the Kremlin, a Democratic memo released by the House Intelligence Committee revealed Saturday.The dossier, compiled by former British spy Christopher Steele, wasn't provided to the FBI's counterintelligence team until mid-September 2016, according to the memo. By then, the counterintelligence investigation into Trump's campaign was seven weeks old. "The FBI had already opened sub-inquiries into ... individuals linked to the Trump campaign," according to the findings of the committee's nine Democrats. The committee posted the heavily redacted 10-page document Saturday after weeks of wrangling between the panel’s top Democrat, Rep. Adam Schiff of California, and Justice Department officials over the contours of classified material he hoped to release. It's unclear whether the memo was declassified by Trump or whether the redactions advised by the FBI and Justice Department omitted any remaining classified details in the Democratic document. But it opens a new partisan front in a battle that has consumed the House Intelligence Committee and has all but derailed its efforts to probe Russian interference in the 2016 presidential election. That probe has stalled even as special counsel Robert Mueller's criminal investigation into the Russian scheme has gained momentum, most starkly with last week's indictment of 13 Russians for mounting a complex operation to steal Americans' identities, stage campaign rallies in the United States and run a social media campaign that primarily supported Trump and opposed Democratic nominee Hillary Clinton.
Only a fool would voluntarily talk to Robert Mueller -- Special Counsel Robert Mueller wants to talk to President Trump as part of his probe into Russian election meddling. And Trump indicated last month that he wants to talk, too. "I'm looking forward to it, actually," the president said, taking pains to inform his assembled audience of journalists that this eagerness should be taken as evidence of innocence. "Here's the story, just so you understand," he instructed the press: "There's been no collusion whatsoever." Trump's attorneys are of a different mind. They've been negotiating the terms of the conversation with Mueller's team for some time, arguing — publicly, at least — that the special counsel has yet to present adequate evidence to justify a presidential interview. In private, I suspect their thinking is closer to that of ever-candid former White House communications director Anthony Scaramucci. "I actually don't want [Trump] to testify," he explained in a recent interview, “because, as a lawyer, I don't want him caught in a 'gotcha' moment where someone accuses him of lying where he may not remember something or something like that." The Mooch is right. Trump should not voluntarily speak to Mueller — just as you or I or anyone should never, ever voluntarily talk to cops or government investigators. This is not about Trump or Mueller. It's about how law enforcement works in America. And it is the advice of no less a legal luminary than Robert Jackson, the chief U.S. prosecutor at the Nuremberg trials who is also the only person in history to serve as a justice of the Supreme Court, U.S. solicitor general, and U.S. attorney general. As Jackson said, "Any lawyer worth his salt will tell [a] suspect in no uncertain terms to make no statement to police under any circumstances."
DHS: 'No intelligence' Russia compromised seven states ahead of 2016 election | TheHill: The Department of Homeland Security (DHS) is denying the accuracy of an NBC News report that alleged Russia breached voter sites or registration systems in seven U.S. states prior to the 2016 election. “NBC’s reporting tonight on the 2016 elections is not accurate and is actively undermining efforts of the Department of Homeland Security to work in close partnership with state and local governments to protect the nation’s election systems from foreign actors," DHS acting press secretary Tyler Q. Houlton said in a statement. His comments come after U.S. intelligence officials told NBC News that an analysis requested by President Obama in the last weeks of his administration showed that Russian operatives penetrated the websites or databases of Alaska, Arizona, California, Florida, Illinois, Texas and Wisconsin. The officials said that several states were warned about the breaches before the 2016 election, but none were told that Moscow was behind it. But DHS pushed back, saying in its statement: "We have no intelligence – new or old – that corroborates NBC’s reporting that state systems in seven states were compromised by Russian government actors. We believe tonight’s story to be factually inaccurate and misleading."
Contradictions In Seth Rich Murder Continue To Challenge Hacking Narrative - As rumors swirl that Special Counsel Robert Mueller is preparing a case against Russians who are alleged to have hacked Democrats during the 2016 election - a conclusion based solely on the analysis of cybersecurity firm Crowdstrike, a Friday op-ed in the Washington Times by retired U.S. Navy admiral James A. Lyons, Jr. asks a simple, yet monumentally significant question: Why haven't Congressional Investigators or Special Counsel Robert Mueller addressed the murder of DNC staffer Seth Rich - who multiple people have claimed was Wikileaks' source of emails leaked during the 2016 U.S. presidential election?Mueller has been incredibly thorough in his ongoing investigations - however he won't even respond to Kim Dotcom, the New Zealand entrepreneur who clearly knew about the hacked emails long before they were released, claims that Seth Rich obtained them with a memory stick, and has offered to provide proof to the Special Counsel investigation. Let me assure you, the DNC hack wasn’t even a hack. It was an insider with a memory stick. I know this because I know who did it and why. Special Counsel Mueller is not interested in my evidence. My lawyers wrote to him twice. He never replied. 360 pounds!https://t.co/AGRO0sFx7s https://t.co/epXtv0t1uN— Kim Dotcom (@KimDotcom) February 18, 2018 #SethRichpic.twitter.com/JjAp0n56JO — Kim Dotcom (@KimDotcom) March 2, 2018 Reminder: Here’s the first letter my lawyers wrote to Special Counsel Mueller regarding Seth Rich. We never received any reply. It’s astonishing considering my first hand knowledge of the DNC leak. https://t.co/TvpVaLsmzW — Kim Dotcom (@KimDotcom) March 2, 2018 I knew Seth Rich. I know he was the @Wikileaks source. I was involved. https://t.co/MbGQteHhZM — Kim Dotcom (@KimDotcom) May 20, 2017 On May 18, 2017, Dotcom proposed that if Congress includes the Seth Rich investigation in their Russia probe, he would provide written testimony with evidence that Seth Rich was WikiLeaks' source. In addition to several odd facts surrounding Rich's still unsolved murder - which officials have deemed a "botched robbery," forensic technical evidence has emerged which contradicts the Crowdstrike report. The Irvine, CA company partially funded by Google, was the only entity allowed to analyze the DNC servers in relation to claims of election hacking:
End Times at the OD Corral -- Kunstler - Personally, I believe that the plodding, implacable Robert Mueller, white knight of the Deep State, will flush the Golden Golem of Greatness out of office, probably on some sort of money-laundering rap having nothing to do with “Russian meddling.” Anderson Cooper will have a multiple orgasm. Rachel Maddow will don a yellow hard-hat and chain-saw a scale model of Mar-a-Lago to the glee of her worshippers. The #Resistance will dance in the streets. And then what?I doubt that Mr. Trump will go gracefully. Rather he’ll dig in and fight even if it means fomenting a constitutional crisis. He’ll challenge Mr. Mueller on veering into matters unrelated to alleged Russian pranks in the 2016 election. He may well attempt the self-pardoning gambit. He will have a lot of support out in the Deplorable gloaming. But, at some point, I expect a bipartisan consensus to emerge in congress that the guy has got to go. He’s making it impossible to conduct even the routines of bribery and domestic collusion that Washington exists for. Nobody is getting paid — at least not the bonuses they’re accustomed to seeing.The 25th amendment is still the best tool for the job. Unlike impeachment, it doesn’t require much in the way of standards of evidence or any Mickey Mouse niceties of due process. It doesn’t take months and months of tiresome legal gamesmanship, no committees or reports. You just get a small number of cabinet members and congressional leaders to agree that the President is “unfit” — which can mean anything, really — and he’s chopped. General Kelly may be enlisted to pry Mr. Trump’s smallish fingers from the doorjamb and shove him into the waiting limo in the porte cochère for the long sad ride up the Jersey Turnpike. Enter Mike Pence, slated to be a kind of combination Millard Fillmore / Herbert Hoover. Who knows what really lurks behind the bland Pencean facade, but on the off-chance that he may be a decent fellow of average intelligence, the fates have a way of casting such accidental leaders into ignominy despite their theoretical virtues. Surely, the Deplorables of Flyover Land will not like the dumping of their Golden champion one bit. I’d stay away from post offices and other parcels of federal property for a while. If a bunch decides to march on the nation’s capital, it will be a messier affair than anything the hippies pulled off back in the day, perhaps the first battle of Civil War 2.
What Mueller Has and What He’s Missing - Some Russians somewhere may have somehow meddled in the 2016 presidential election. But what Special Prosecutor Robert Mueller really has to answer, some 16 months after the voting, is whether Donald Trump knowingly worked with a foreign government to get elected in return for some quid pro quo—Russiagate. So where’s the proverbial beef?On February 22, Mueller handed down a 32-count indictment, following a similar one in October, that charged Paul Manafort and Richard Gates with financial crimes going back eight years or more, all related to work in Ukraine, none related to Russiagate. A day after the indictment, Gates pled guilty to financial conspiracy and lying to the FBI about a meeting five years ago. Manafort’s case is more complex: no trial date has been set, and it will likely take a year or more to conclude once started.Two weeks ago, Mueller dropped a multi-part indictment against 13 Russian citizens connected with a so-called troll farm. The indictment alleges the group bought Facebook and Twitter ads, planned small rallies, and otherwise “meddled” in the U.S. election. Deputy Attorney General Rod Rosenstein made clear there was no allegation in the indictment that any American, including on the Trump campaign, “was a knowing participant in the alleged unlawful activity.”Even if some connection to the Kremlin can be shown (it hasn’t been and since Mueller will never take this case to court—his defendants all live in Russia—it’s unlikely it ever will be), this “meddling” has no link to Trump or Russiagate. In fact, the social media campaign started when the U.S. was considering war in the Ukraine years before Trump announced his candidacy, and about half of its modest ad buys took place after the election was over. The troll farm itself was not much of a secret; the New York Times profiled the place in 2015. Mueller has also charged former Trump national security advisor Michael Flynn with a non-material lie. The FBI already knew the truth from surveillance: Flynn stepped into a perjury trap set up by Mueller. The likely sentence will be a fine. Flynn’s lie and the other accusations against him center on his work as an unregistered foreign agent for Turkey.
Mueller considers charges against Russians who leaked emails during the 2016 election - Special Counsel Robert Mueller is building a case against the Russians who hacked and leaked private information of several key Democrats during the 2016 election, NBC News reported. These new charges rely heavily on intelligence gathered by the CIA, the FBI, the National Security Agency (NSA) and the Department of Homeland Security (DHS), and target a different group of Russian actors than those indicted last month, according to NBC. A possible new indictment would include details on the Russian intelligence operation that released emails stolen from both the Democratic National Committee (DNC) and Clinton campaign chairman John Podesta, NBC reported. Democratic emails made public through website Wikileaks factored heavily in the 2016 election, embarrassing Democrats and adding fuel to the Trump campaign. Sources told NBC News that Mueller has long had sufficient evidence to make a case, but has been waiting for a strategic moment. Mueller's team has reportedly asked witnesses whether Trump was aware that the emails he repeatedly referenced throughout his campaign had been stolen and whether he was involved in their release, according to NBC News. President Trump has repeatedly denied collusion with Russian intelligence actors.
The Grammar of Russiagate - Closely observing the grammar of the Official Russiagate Narrative is revealing and instructive. It provides clues to the (language-)game being played. Consider what I call the insidious article, the. In the public prints and official pronouncements, it’s not enough to say Russians tried to muck around in the American election. It’s almost always the Russians. This is a subtle way to convey the idea that Vladimir Putin and his intel agencies were responsible. If a second-tier Russian oligarch who wishes to help Putin hires, on his own initiative, “a bunch of subliterate-in-English trolls,” in Masha Gessen’s words, and pays them the minimum wage to (again Gessen) “post[] mostly static and sort of absurd advertising,” that is treated as the equivalent of Putin’s executing a plan to destroy the American political system. There’s a big difference between Russians and the Russians, even if the grammar seems inconsequential. Then there’s the similar case of synecdoche, “a figure of speech in which a part is made to represent the whole or vice versa.” When you read in the newspaper or hear it said on CNN that Russia or Moscow or the Kremlin did such and such, you should call out, “Who exactly?” Countries, cities, and citadels cannot act. Only individuals do. Moreover, there’s a big difference between the GRU (Glavnoje Razvedyvatel’noje Upravlenije) and the IRA (Internet Research Institute), between Vladimir Putin and Yevgeny Prigozhin. But their acts are equally attributed to Russia. St. Petersburg (where the IRA is located) even becomes subsumed by Moscow. The Kremlin could refer to someone directly ordered by Putin or a rogue actor. But those distinctions are of little interest to those formulating or promulgating the Official Narrative. Finally, let’s turn to the word alleged. The word alleged seems almost completely lacking in the Russiagate conversation. The New York Times and other major news outlets have many times referred merely to “Russian interference in the 2016 election.” No alleged? Have those reporters actually seen the evidence the general public has been denied? If so, they haven’t said informed us of that fact.
Has Jared Kushner Conspired to Defraud America? - Marcy Wheeler - Amid the dizzying details of internet trolls, almost a million dollars’ worth of antique rugs and fake bank accounts, the indictments brought by Robert Mueller, the special counsel, in his investigation of Russian tampering in the 2016 election have one thing in common. Both the indictment of 13 Russians associated with a troll farm called Internet Research Agency and the indictment of President Trump’s onetime campaign chairman Paul Manafort accuse the defendants of pretending to engage in American politics in good faith but secretly serving someone else’s interest. In both cases, the charge, “conspiracy to defraud the United States,” is an assertion that they were really serving the interests of Russia or of a Russian-backed Ukrainian politician, and that by hiding their true intent, the defendants prevented the United States government from protecting our politics from undisclosed outside influence. That precedent, and the guilty plea to the same charge by Rick Gates, Mr. Manafort’s deputy, may pose a real danger to Jared Kushner, the president’s son-in-law and senior adviser. According to reports, Mr. Mueller appears to be assessing whether Mr. Kushner, in the guise of pursuing foreign policy on behalf of the United States, was actually serving the interests of his family and foreign governments. On Tuesday, The Washington Post reported that “officials in at least four countries” — United Arab Emirates, China, Israel and Mexico — “have privately discussed ways they can manipulate” Mr. Kushner by taking advantage of his “complex business arrangements, financial difficulties and lack of foreign policy experience.” The president gave his son-in-law an expansive foreign policy role, including an effort to negotiate peace between Israel and the Palestinians. The implication in the article is that the United States government has intercepted communications of foreign leaders talking about ways they could take advantage of Mr. Kushner, whose family real estate empire is facing substantial debt woes.
Kushner’s Business Got Loans After White House Meetings - NYT - Early last year, a private equity billionaire started paying regular visits to the White House. Joshua Harris, a founder of Apollo Global Management, was advising Trump administration officials on infrastructure policy. During that period, he met on multiple occasions with Jared Kushner, President Trump’s son-in-law and senior adviser, said three people familiar with the meetings. Among other things, the two men discussed a possible White House job for Mr. Harris. The job never materialized, but in November, Apollo lent $184 million to Mr. Kushner’s family real estate firm, Kushner Companies. The loan was to refinance the mortgage on a Chicago skyscraper. Even by the standards of Apollo, one of the world’s largest private equity firms, the previously unreported transaction with the Kushners was a big deal: It was triple the size of the average property loan made by Apollo’s real estate lending arm, securities filings show. It was one of the largest loans Kushner Companies received last year. An even larger loan came from Citigroup, which lent the firm and one of its partners $325 million to help finance a group of office buildings in Brooklyn. That loan was made in the spring of 2017, shortly after Mr. Kushner met in the White House with Citigroup’s chief executive, Michael L. Corbat, according to people briefed on the meeting. The two men talked about financial and trade policy and did not discuss Mr. Kushner’s family business, one person said. There is little precedent for a top White House official meeting with executives of companies as they contemplate sizable loans to his business, say government ethics experts. “This is exactly why senior government officials don’t maintain any active outside business interests,” . “The appearance of conflicts of interest is simply too great.”
The Knives Are Out For Kushner: Loans With Deutsche Under Scrutiny By Regulator - The knives are out for Jared Kushner. After losing his top secret security clearance and reportedly falling under intense scrutiny by Robert Mueller's probe, the New York Department of Financial Services has asked Deutsche Bank two local lenders for information about their dealings with Jared Kushner, the Kushner companies and his family, according to Bloomberg. Letters were sent by department superintendent Maria Vullo to Deutsche Bank, Signature Bank and New York Community Bank last week, said a person who had seen the letter which seeks a response by March 5. Vullo was appointed by New York's Democratic governor, Andrew Cuomo. The requested information is broad, and include the banks' processes for approving loans. Vullo requested copies of emails and other communications between the Kushners and the banks related to financing requests that have been denied or are pending. She also asked whether the banks have conducted any internal reviews of the Kushners and their companies and the results of any such inquiries revealed.The most detailed information about the Kushners’ finances can be found in their government disclosures. The couple had unsecured lines of credit of $5 million to $25 million each from Deutsche Bank, Signature Bank and New York Community Bank according to a late December filing. Deutsche Bank’s line of credit was extended to Kushner and his mother; lines from the other two banks were extended to Kushner and his father. Signature Bank also extended a secured line of credit to the couple of $1 million to $5 million, according to the disclosure. –Bloomberg A spokeswoman for the Kushner Cos, Christine Taylor, said “These type of inquiries appear to be harassment solely for political reasons.”
Citigroup’s Loan to Kushner: The Devil Is in the Details of Citi’s Sordid History - Pam Martens Last evening, the front page digital edition of the New York Times dropped another bombshell in what increasingly feels like a badly scripted daily soap opera that could perhaps be called “As the White House Turns” or “Days of Our Messed Up Lives.”The Times report focused on big loans that were made to Jared Kushner’s family business by two financial firms after he met at the White House with executives from those firms. There was a $184 million loan from private equity firm Apollo. There was also a $325 million loan by mega Wall Street bank Citigroup shortly after a visit by Citigroup’s CEO Michael Corbat to Kushner’s office at the White House in the spring of 2017.Despite nepotism laws governing the Executive Branch, Kushner is both the son-in-law to President Trump as well as a Senior Advisor. Despite White House ethics rules, Kushner continues to own a big chunk of Kushner Companies, the family’s sprawling real estate business. The Times’ article puts his ownership stake at “as much as $761 million.” The Times notes an additional conflict: that while Kushner is the point man for Middle East policy “his family company continues to do deals with Israeli investors.” Kushner is also the fellow who, according to May 2017 reports in the Washington Post and New York Times, met with Russian Ambassador Sergey Kislyak to attempt to set up a secret back channel of communications with Russians when he was part of the Trump transition team. According to an intercepted communication by U.S. intelligence officials, Kislyak reported back to Russia that Kushner had suggested using Russian diplomatic facilities located in the U.S. for these secret chitchats. Despite this, Kushner amazingly continued to be allowed to review Top Secret documents as part of his Senior Advisor role to the President. Kushner’s Top Secret clearance has now been stripped and according to media reports, is now less than that of the White House calligrapher.
New York is quietly working to prevent a major cyber attack that could bring down the financial system — Five months before the 9/11 attacks, US Secretary of Defense Donald Rumsfeld sent a memo to one of his advisers with an ominous message. "Cyberwar," read the subject line. "Please take a look at this article," Rumsfeld wrote, "and tell me what you think I ought to do about it. Thanks." Attached was a 38-page paper, published seven months prior, analyzing the consequences of society's increasing dependence on the internet. "[We] are concerned that US leadership, and other decision makers about Internet use, do not fully appreciate the potential consequences of the current situation," the report said. "We have built a network which has no concept whatsoever of national boundaries; in a war, every Internet site is directly on the front line. If we do not change course soon, we will pay a very high price for our lack of foresight." As hackers become more sophisticated and cyber attacks more routine, New York is on notice. Home to the most valuable stock exchange on Earth, New York City is the financial capital of the world. When the market moves here, it moves everywhere. So it was no surprise when in September 2016, Gov. Andrew Cuomo announced that the New York State Department of Financial Services (NYDFS) was gearing up to implement sweeping, first-of-their-kind cybersecurity regulations to protect the state's financial services industry — an unprecedented move no other state or federal agency had taken anywhere in the US.
Money Laundering Via Author Impersonation on Amazon? - Patrick Reames had no idea why Amazon.com sent him a 1099 form saying he’d made almost $24,000 selling books via Createspace, the company’s on-demand publishing arm. That is, until he searched the site for his name and discovered someone has been using it to peddle a $555 book that’s full of nothing but gibberish. Reames is a credited author on Amazon by way of several commodity industry books, although none of them made anywhere near the amount Amazon is reporting to the Internal Revenue Service. Nor does he have a personal account with Createspace. But that didn’t stop someone from publishing a “novel” under his name. That word is in quotations because the publication appears to be little more than computer-generated text, almost like the gibberish one might find in a spam email.“Based on what I could see from the ‘sneak peak’ function, the book was nothing more than a computer generated ‘story’ with no structure, chapters or paragraphs — only lines of text with a carriage return after each sentence,” Reames said in an interview with KrebsOnSecurity.The impersonator priced the book at $555 and it was posted to multiple Amazon sites in different countries. The book — which as been removed from most Amazon country pages as of a few days ago — is titled “Lower Days Ahead,” and was published on Oct 7, 2017. Reames said he suspects someone has been buying the book using stolen credit and/or debit cards, and pocketing the 60 percent that Amazon gives to authors. At $555 a pop, it would only take approximately 70 sales over three months to rack up the earnings that Amazon said he made.
Bitcoin Slides As Coinbase Informs 13,000 Customers Of Imminent Data Handover To IRS - As CoinTelegraph reports, US-based cryptocurrency exchange and wallet service Coinbase sent an official notice Friday, Feb. 23 to approximately 13,000 of its customers whose information it is legally required to turn over to the US Internal Revenue Service (IRS). The IRS had initially asked Coinbase in July 2017 to hand over even more detailed information on every one of its then over 500,000 users in an attempt catch those cheating on their taxes. However, another court order in Nov. 2017 reduced this number to around 14,000 “high-transacting” users, which the platform now reports as 13,000, in what Coinbase calls a “partial, but still significant, victory for Coinbase and its customers.”On Friday, Coinbase told the around 13,000 affected customers that the company would be providing their taxpayer ID, name, birth date, address, and historical transaction records from 2013-2015 to the IRS within 21 days.Coinbase’s letter to these customers encourages them “to seek legal advice from an attorney promptly” if they have any questions. Their website also states that concerns may also be addressed on Coinbase’s Taxes FAQ.The ongoing legal battle between Coinbase and the US government dates back to November, 2016, when the IRS filed a “John Doe summons” in the United States District Court for the Northern District of California. On Feb. 13, personal finance service Credit Karma released data showing that only 0.04 percent of their customers had reported cryptocurrencies on their federal tax returns so far this tax season.
Where Fed's Powell breaks from Yellen on banking policy — Federal Reserve Chair Jerome Powell largely hewed close to his predecessor Janet Yellen's positions in his first testimony Tuesday before Congress since being sworn in early this month, but also signaled important changes when it came to paying banks interest on reserves and other topics. In the nearly three-hour Humphrey-Hawkins testimony before the House Financial Services Committee, Powell faced several questions that Yellen did, and in many cases furnished identical answers: the debt ceiling, he said, cannot be breached; the threshold for "systemically important" banks should be raised; the Federal Reserve’s current makeup and monetary policy process has served the nation well; certain problems, such as fiscal policy, are outside the purview of the Federal Reserve. But Powell veered off in other areas. Following are key takeaways from his testimony: Fed paying interest on reserves not set in stone. Powell said the Fed is examining that question. “We have not made a decision in the longer run whether that will continue to be our framework, or whether we will return to something more like what we did before the crisis,” Powell said. “I don’t expect to be returning to that decision in the near-term. I will just say that our current approach seems to be working very well; it gives us control over rates in a way that markets seem to understand.” Powell’s comments come in stark contrast to Janet Yellen’s more forcible defense of interest on excess reserves, which she said earlier this year the Fed “absolutely need[s]” to implement it monetary policy objectives. (slides)
'We are not looking to relax regulation': Fed's Quarles — The Federal Reserve’s top regulator said Monday that he did not view the agency’s review of post-crisis regulations as an exercise in relaxing rules or reducing capital levels, emphatically pushing back against claims that certain proposals could lead to weaker supervision. “It’s not just semantically that I want to stress this: As we are looking at enhancing the efficiency of regulation, we are not looking to relax regulation,” said Federal Reserve Vice Chairman for Supervision Randal Quarles. “We are not looking to significantly reduce the level of risk-weighted capital in the [banking] system. That has been a strength … a global competitive advantage, relative to the capital levels of non-U.S. competitive institutions.” Speaking at a conference sponsored by the National Association for Business Economists, Quarles said the aim of current and any forthcoming regulatory proposals is simply to improve the efficiency of post-crisis regulation, not to ease or lower the requirements for their own sake. “We’re not looking to reduce capital, or really, I don’t view our objective as relaxing regulation,” he said. “We’re looking to achieve regulatory objectives in the most efficient way, and it would be the first time in the history of man since the expulsion from the Garden [of Eden] that a project like this [Dodd-Frank] has been undertaken that could not be improved and made more efficient.” Quarles added that areas the agency is reviewing, along with other regulators, are the supplementary leverage ratio and Volcker Rule, as well as previously announced changes to the transparency of the Fed’s stress testing models.
Supreme Court Narrows Dodd-Frank SEC Whistleblower Protections -- Jerri-lynn Scofield - The Supreme Court last week in a unanimous 9-0 decision narrowly interpreted the scope of Dodd-Frank anti-retaliatory whistleblower protections to apply only to those who reported their concerns to the Securities and Exchange Commission (SEC). In Digital Realty Trust v. Somers, the Court weighed in to resolve a split between the circuits as to whether the Dodd-Frank protections applied to whistleblowers who used their internal company complaint procedures, but failed to raise the problem with the SEC. Or, more precisely, as Justice Ruth Bader Ginsburg wrote in her majority opinion:The question presented: Does the anti-retaliation provision of Dodd-Frank extend to an individual who has not reported a violation of the securities laws to the SEC and therefore falls outside the Act’s definition of “whistleblower”? We answer that question “No”: To sue under Dodd-Frank’s anti-retaliation provision, a person must first “provid[e] . . . information relating to a violation of the securities laws to the Commission.” (citations omitted; opinion).Writing for the Scotusblog in an article headed,Opinion analysis: Whistling while you work is whistling in the wind – Dodd-Frank whistleblowers do need to inform the SEC Theresa Gabaldon summarized the alternative arguments for a broader interpretation of who would qualify for whistleblower protection. In the interest of keeping this post short and accessible to non-lawyers, I’ll not repeat those arguments here, but refer interested readers to that analysis. Instead, I wish to focus on the consequences of the opinion rather than parsing the arguments the Court considered in reaching its decision..I’ve previously written about the history of US financial incentives to encourage whistleblowers to spill the beans about fraudulent and corrupt practices. Such bounty systems date back to the US Civil War (as I discussed most recently New Dept of Justice Guidelines Will Stymie Whistleblowers). I’ve also written about the deficiencies in the SEC’s new highly-touted whistleblower program in SEC Takes Victory Lap for Pathetic Performance of Whistleblower Program— as with much of Dodd-Frank, these provisions represent a missed opportunity to create a whistleblower system that could have ferreted out more corporate corruption.
Trump SEC Fails to Pursue Aggressive Deregulatory Agenda (Albeit from Previous Pathetic Baseline) -- Jerri-lynn Scofield - The Wall Street Journal published a piece today, Trump’s SEC Makes Slow Progress on Trimming Rules, gently chiding the SEC for not pursuing an aggressive deregulatory agenda during Trump’s first year in office. Now, I can’t say that I’m wholly surprised by this state of affairs. As I wrote in a January 2017 post at the time Trump selected Jay Clayton, a partner at the white shoe law firm of Sullivan & Cromwell,to head the SEC– I’m going to go out on a limb here (irony alert), and suggest that Clayton won’t smash the securities law framework or necessarily go especially slow on enforcement– especially compared to the existing White/Shapiro baseline– precisely because he’s come from S & C– one of the leading law firms in the country, with an unparalleled securities law practice. Such a firm wouldn’t want to see the securities framework dismantled or appreciably diminished. Why? Well, that’s how its lawyers make their money: by advising clients how to comply with the law. If any significant element of the securities law framework is dismantled– there goes a huge chunk of S & C’s raison d’être. For a former S & C partner to willy nilly trash securities laws would be akin to a turkey voting for Thanksgiving. Let’s see what the WSJ has to say: Jay Clayton, President Donald Trump’s pick to lead the U.S. Securities and Exchange Commission, can point to a series of small, targeted actions aimed at easing the regulatory burden for companies nearly 10 months into his tenure. The SEC’s incremental progress stands in contrast to the early days of the Trump administration, which were punctuated by a swift succession of executive orders aimed squarely at deregulation. One order told regulators that any new rule would require the elimination of two old rules, while another called on the Treasury and Congress to roll back the Dodd-Frank financial overhaul law. However, those early announcements have yielded modest impact in the realm of financial regulation. The most ambitious effort to revoke and replace the Dodd-Frank law— Rep. Jeb Hensarling’s (R., Texas) Financial Choice Act—passed the House in June but failed to clear the Senate. The SEC has signaled more gradual action aimed at streamlining regulations for the coming year.
How the House can still have an impact on reg relief talks — As lawmakers and congressional staff try to move a bipartisan regulatory relief bill to the finish line in the Senate, the House has mostly stood on the sidelines. But no one expects the lower chamber to just rubber-stamp the deal. Most experts believe a final package will closely resemble the moderate version approved by the Senate Banking Committee in December. That bill, spearheaded by Chairman Mike Crapo, R-Idaho, was tailored to attract support from moderate Democrats. More than 30 amendments were offered to the bill during the panel vote, but the bipartisan coalition resisted efforts to change the bill.In that bipartisan spirit, House GOP leaders have abandoned an approach to dramatically roll back Dodd-Frank Act. But they still seem intent on looking for openings to augment the Senate bill. House Financial Services Committee Chairman Jeb Hensarling, R-Texas, had previously tried to advance his Dodd-Frank overhaul bill, the Financial Choice Act, but that was a nonstarter with Senate Democrats.Since then, the House committee has steadily moved piecemeal bills with bipartisan support, which total over 30. The choice for House leaders is whether to urge senators to incorporate such provisions in their bill, or pass a different version than the Senate and try supplementing the bill in a conference committee. But the ultimate strategy for House leaders is uncertain. Most observers believe the Senate still is in the driver's seat, and House leadership does not want to railroad any deal by focusing too much on controversial provisions. Some observers said there may be room for adding House provisions supported by members of both parties that would not trigger objections from moderate Senate Democrats."Chairman Hensarling has shrewdly been moving individual pieces of the FCA through HFSC and the House in order to demonstrate the significant bipartisan support for individual provisions,""There are perhaps three or four dozen such provisions that are fair game for consideration in conference, and many could conceivably be added without jeopardizing the 60 votes necessary to pass the conference report through the Senate."
House, Senate exploring how to expand reg relief bill: Top GOP leader — A top House lawmaker said Monday that there are bicameral discussions with the Senate to see if a narrowly tailored bill to roll back the Dodd-Frank Act can be expanded before the Senate votes on the deal. “Lot of conversations happening between House members and Senate members on expanding the package” before the Senate takes it up, Rep. Patrick McHenry, R-N.C., told reporters on the sidelines at an event here sponsored by the law firm Jones Walker. The base of the legislative discussions is a deal that Senate Banking Committee Chairman Mike Crapo, R-Idaho, negotiated with four moderate Democrats on the panel. The House passed a more far-reaching bill last summer, but that proposal was unable to garner enough Democratic support in the Senate to overcome the 60-vote filibuster threshold. The Senate package would raise the Dodd-Frank "systemically important financial institution" threshold from $50 billion in assets to $250 billion, giving banks below that higher threshold significant relief from stress testing requirements. The bill would also make a number of other changes for banks with less than $10 billion in assets, including granting "qualified mortgage" status for loans held on portfolio, and allowing those smaller institutions that hold a high level of tangible equity to be exempt from certain capital and liquidity requirements. McHenry, who is the House chief deputy whip and vice chairman of the House Financial Services Committee, told the conference attendees that he expects the Senate to take up the bill for a vote in March or April. He said he believes the bill will get enough Democratic support to get 70 or 80 votes in the upper chamber. Crapo negotiated the Senate bill with a core of moderate Democrats on his committee, including Sens. Heidi Heitkamp of North Dakota, Jon Tester of Montana and Joe Donnelly of Indiana.
U.S. regulators examine Wall Street's Volcker rule wish list (Reuters) - U.S. regulators are considering changes to the “Volcker rule” Wall Street has sought for years that would make it easier and cheaper for banks to comply and allow them more leeway in trading and investing, according to several regulatory and industry sources. Part of the Dodd-Frank reform law passed after the 2007-2009 financial crisis, the Volcker rule aimed to prevent banks, such as Goldman Sachs (GS.N) and JPMorgan Chase (JPM.N), from making risky market bets while accepting taxpayer-insured deposits. The rule forced many Wall Street banks, which before the crisis could gamble on their own account across various assets, to restructure their businesses, including overhauling their trading operations and hiving off billions of dollars’ worth of investment vehicles. Yet banks and some of their customers say the rule, which runs at more than 1,000 pages, is too much of a burden for the financial industry by limiting banks’ ability to facilitate investments and hedges for investors and depressing trading volumes in some assets. They also say the rule’s complexity and opacity makes it so difficult to satisfy that JP Morgan Chase chief executive Jamie Dimon was once quoted as saying traders would need a lawyer and a psychiatrist by their side to ensure they complied. While the changes being considered by regulators would not bring back the heady pre-crisis trading activity, they would help address some of these problems, people familiar with the discussions said. Modifications being considered include: scrapping the presumption that short-term trades are proprietary unless banks prove otherwise, making it clearer which types of funds banks are banned from investing in, permanently exempting some foreign funds from the ban, and anointing a lead regulator to oversee the rule’s enforcement. Congress is now considering a bill that would exempt lenders with under $10 billion in assets from the rule, but larger banks are lobbying for changes in how the rule is interpreted and applied to them. While financial regulators have said they agree on the need to revise the Volcker rule, some specific changes they are considering have not yet been reported.
Senate reg relief vote could come next week: Banking Committee chair -- Senate Banking Committee Chairman Mike Crapo, R-Idaho, said Tuesday that he is hopeful that a bipartisan deal to roll back Dodd-Frank Act regulations will be able to get a floor vote as soon as next week. “I am encouraged by the support that I tend to see developing on both sides,” Crapo said. “My hope is that we will see it come forward next week.” While the deal was delicately negotiated by Crapo and moderate Democrats on the banking panel, there appears to be bipartisan support for supplementing the bill with other legislative proposals that the House has put forward. However, it is unclear if any of those provisions will be able to be attached to the Senate bill without losing Democrat co-sponsors. “I think it will be an open process,” said Sen. Heidi Heitkamp, D-N.D., a member of the banking panel who co-sponsored the bill. The bill currently has support from 12 Senate Democrats and Sen. Angus King, I-Maine, who caucuses with the Democrats. The Republican caucus would presumably be in full support of the bill. Sen. Pat Toomey, R-Pa., said in an interview that it “would be nice” to expand the bill, but “I think it could be tough to get 60 votes” for measures that would amend the deal agreed to by the Senate co-sponsors. The House passed a much further-reaching bill — the Financial Choice Act — to overhaul Dodd-Frank last summer, but that piece of legislation did not have enough support in the Senate to become law. Instead, Financial Services Committee Chairman Jeb Hensarling, R-Texas, has broken up the package and moved pieces of it individually.
Dem v. Dem: Infighting over Dodd-Frank rollback escalates - Democrats on the Senate Banking Committee showed sharp differences with each other Thursday over the pending regulatory reform bill, with Wall Street hawks framing it as a giveaway to big banks while moderate supporters called it a sensible recalibration of a complex law. The differing visions, which were offered during a hearing with new Federal Reserve Board Chairman Jerome Powell, demonstrated escalating tensions among Democrats as the legislation nears a possible full chamber vote next week. Progressive groups have been blasting the bill, attempting to sway current supporters away from it. The committee’s top Democrat, Rep. Sherrod Brown of Ohio, likened the reform legislation to the tax bill the president signed last December that, he said, greatly benefited the wealthy. Brown also said the bill would enable the Fed to loosen regulations on foreign banks — which the central bank regulates as international holding companies — citing the Treasury Department’s desire to ease regulations on those entities. “Many, many of us in this body are concerned about this deregulation bill,” Brown said. “Especially when it comes to foreign banks, those banks that are huge, but their assets in this country are under $250 billion. They are both troubled and troubling banks, in their international operations.”
McConnell tees up likely Senate vote on reg relief — Senate Majority Leader Mitch McConnell, R-Ky., filed a motion on the Senate floor Thursday setting up a potential vote next week on a bipartisan regulatory relief package.The cloture motion moves the chamber closer to advancing the bill spearheaded by Senate Banking Committee Chairman Mike Crapo, R-Idaho, and co-sponsored by 12 Democrats. McConnell's move follows earlier comments by Crapo that signaled a vote for next week. The Democratic caucus is split on its support for the banking bill, which provides regulatory relief to small and midsize institutions. However, one of the most contentious portions of the bill would raise the Dodd-Frank Act's “systemically important financial institution” threshold from $50 billion in assets to $250 billion, which would help larger regional banks. Four moderate Democrats on the Banking Committee negotiated the deal with Crapo, while more progressive members of the Democratic Party say the bill goes too far. “There are parts of it that I like. I like what it does for the credit unions, but as a package I can’t support it,” Sen. Brian Schatz, D-Hawaii, said in an interview Thursday. The bill’s backers are hoping that testimony by Federal Reserve Board Chairman Jerome Powell in support of the bill on Thursday at the Banking Committee will help ensure its passage. However, it’s not clear if the delicately negotiated deal can be expanded to include other bipartisan provisions without losing Democratic supporters. If the bill becomes law it will mark the most substantial changes to Dodd-Frank since the financial reform law passed in 2010.
Treasury gets it right: Bankruptcy code, Dodd-Frank can work together- BankThink - I commend the Treasury Department for correctly answering the big question of how to structure a failure resolution regime for large, complex financial firms. Treasury’s new report rejects the mistaken answer that has been circulating among congressional Republicans and some think tanks: that it is a choice between an enhanced bankruptcy code or the Dodd-Frank Act. Treasury came to the correct conclusion: enhanced bankruptcy and Dodd-Frank. Pursuing a new chapter of the bankruptcy code to wind down large financial institutions doesn't have to mean getting rid of key Dodd-Frank provisions. Bloomberg News This is a big deal. It should finally put to bed calls to repeal Dodd-Frank’s “orderly liquidation authority” and provide an impetus for Congress to enact a responsible enhancement to make the bankruptcy code work better for financial institutions — what Treasury has termed Chapter 14 bankruptcy. The report is a rare twofer, moving one good idea forward and knocking one bad idea backward. When President Trump laid out his core principles for regulating the financial system in his Feburary executive order, many defenders of Dodd-Frank, including myself, were nervous. While the text of the order was broadly consistent with the substance of much of Dodd-Frank, Trump’s campaign rhetoric and the rhetoric of leading Congressional Republicans was not. The Treasury Department set out to write a series of reports to flesh out the executive order’s details — which is where the devils usually lie in financial regulation. The report on OLA was especially concerning for two key reasons. First, leading congressional Republicans such as House Financial Services Committee Chairman Jeb Hensarling, R-Texas, and Sen. Pat Toomey, R-Pa., have advocated repealing OLA. Second, unlike most of Dodd-Frank, repealing OLA would technically count as a budgetary savings under congressional accounting. This means that legislation to repeal OLA could be enacted under a reconciliation bill, which would be immune to filibuster in the Senate.
Treasury's bankruptcy plan would mean more, not fewer, bailouts - Adam Levitin -- The idea of resolving failed financial institutions in bankruptcy rather than through an administrative process like the Dodd-Frank Act’s “orderly liquidation authority” is a dangerous siren song in the financial regulatory world. The Lorelei of financial institutions, bankruptcy promises a transparent, predictable process that eliminates moral hazard by imposing losses on credits and shareholders. Financial institutions bankruptcy holds out the rule of law, rather than ad hoc bailouts and cronyism. Indeed, because of this, the Treasury Department recently fell for the idea of creating a new Chapter 14 bankruptcy process for financial institutions to complement the existing OLA for resolving large failed financial firms. Treasury claims that the presence of a Chapter 14 bankruptcy for financial institutions would make the likelihood of having to use Dodd-Frank’s authority more remote. The Chapter 14 proposal promises a world of market discipline that will prevent financial crises. In fact, it is a cover for a deregulatory agenda that will make crises more likely by undermining prudential regulation without replacing it with market discipline. And because Chapter 14 is unworkable as a practical matter, it will be a recipe for bailouts. The bankruptcy process will supposedly engender greater market discipline because it will force losses on creditors of failed financial institutions. If creditors will know that they will have to internalize the losses, they will lend prudently, making prudential regulations on banks unnecessary. Such market discipline would exist, however, only if Chapter 14 were a credible process, such that creditors truly believe that it will be used and that they will incur losses in a financial institutions bankruptcy. But it should be apparent to even the most casual observer that it is utterly lacking in credibility and, if enacted, would never be used. Chapter 14 lacks credibility for three reasons. First, large financial firms operate internationally — yet Chapter 14 does nothing to ensure coordination and cooperation from foreign regulators, who are likely to ring-fence assets in their jurisdictions at the first signs of trouble. A second problem with Chapter 14 is that it lacks a viable mechanism for financing the bankruptcy. Financial institutions need enormous liquidity to keep operating in bankruptcy and to maintain counterparty confidence — for JPMorgan, for example, that would be around $500 billion in high quality, liquid assets. Where the credibility of Chapter 14 truly fails, however, is in its insistence that regulators will permit market discipline to take its course when the effects are disruptive.
How S.2155 (the Bank Lobbyist Act) Facilitates Discriminatory Lending » Adam Levitin --If you think it's ridiculous that the CDC can't gather data on gun violence, consider the financial regulatory world's equivalent: S.2155, formally known as the Economic Growth, Regulatory Relief, and Consumer Protection Act, but better (and properly) known as the Bank Lobbyist Act. S.2155 is going to facilitate discriminatory lending. Let me say that again. S.2155 is legislation that will facilitate discriminatory lending. This bill functionally exempts 85% of US banks and credit unions from fair lending laws in the mortgage market. Support for this bill should be a real mark of shame for its sponsors. There's a lot of bad and whacky stuff in S.2155. Just start with its title. Why would anyone would want to throw more lighter fluid on an already supercharged economy? And isn't it practically daring the Fed to raise rates to offset whatever effect the bill has? Likewise, why do US banks possibly need any regulatory relief when they are at record profit levels--for both megabanks and community banks? This ain't an industry that's hurting. Turning tot he substance, S.2155 gets it wrong time and time again. Since 2010, megabanks (that is banks with over $50 billion in assets) have been subject to "enhanced prudential standards"--that is extra safeguards to make sure that they do not fail. S.2155 raises that the coverage threshold from $50 billion to $250 billion. Exempt institutions include bit players in the economy such as Deutsche Bank. Is it really wise to exempt large institutions from the additional post-crisis regulation? Firms like Countrywide and Washington Mutual were large enough to cause major economic problems, but they would be exempt from additional regulation under S.2155. The bad policy judgments in S.2155 aren't just limited to megabanks, however. S.2155 also sets up a lot of community bank failures. One of S.2155's moves is to exempt mortgage loans held in portfolio from the Dodd-Frank Act's "ability to repay" requirement on the theory that if banks have to eat their own cooking they'll be smart about it. I've got an S&L crisis that says otherwise.
Trump is tearing up the system that protects ordinary Americans from financial scams -- The Consumer Financial Protection Bureau under the guide of interim director Mick Mulvaney has moved to rein in many of the consumer protection and enforcement actions taken by his predecessor, Richard Cordray. The bureau has dropped cases against predatory payday lenders, reportedly rolled back its investigation of the Equifax data breach, and reformulated its mission to scale back its reach. Federal regulators in September released AIG from special government oversight mandated after the financial crisis and set aside a legal fight with MetLife. Enforcement actions at the Securities and Exchange Commission and Commodities Futures Trading Commission, Wall Street’s top regulators, have declined, meaning they appear to be going after fewer bad actors and imposing less fines. Mulvaney over at the CFPB hasn’t taken any enforcement actions since taking over at the CFPB in November. “The top line is that the Trump administration is probably the most anti-investor and consumer protection administration in decades, if not ever,” said Dennis Kelleher, president and CEO of Better Markets, a watchdog group that advocates for stricter financial regulations. “It’s hard not to concede that investor and consumer protections are not a priority for this administration.” Market regulation advocates see some signs of hope for investor protections, and some are tepidly optimistic about SEC Chairman Jay Clayton. Still, they say regulators under Trump aren’t falling over themselves to keep Wall Street in check and Americans’ pocketbooks protected, and Mulvaney at the CFPB has been especially aggressive in rolling back oversight and undermining the agency of which he is temporarily the head.
Wall Street suppressing its #MeToo reckoning: Elizabeth Warren, Senate Dems — Sen. Elizabeth Warren, D-Mass., and two colleagues are seeking more information from securities regulators about whether Wall Street firms are covering up signs of sexual harassment. In letters to the Securities and Exchange Commission and the Financial Industry Regulatory Authority, the three senators suggested that the relative lack of reports about s exual harassment on Wall Street recently are not because harassment isn't taking place. “Though sexual harassment in the entertainment and political industries has dominated the news, it is pervasive throughout the workforce,” said the letters from Warren, Sen. Catherine Cortex Masto, D-Nev., and Sen. Dianne Feinstein, D-Calif. “The world of finance is not immune from this harassment,” the senators added, while noting the “finance and insurance” sector had the ninth-most sexual harassment claims between 2005 and 2015, according to the Equal Employment Opportunity Commission. "The financial sector however has had fewer public revelations of sexual harassment than other industries," the senators wrote said. "This disparity is not, according to female employees, a sign that sexual harassment does not occur: in recent months, women in finance have anonymously reported being 'grabbed, kissed out of the blue, humiliated, and propositioned by colleagues and bosses' at work."The senators added that "the silence appears to result from strong ‘cultural and financial forces' in the industry that discourage speaking out, including payout of large settlements with non-disclosure agreements to harassment victims, class-action prohibitions, and forced arbitration."
Citigroup Is Refunding $335 Million to Credit Card Customers - Citigroup Inc., one of the world’s largest credit-card issuers, said it will refund $335 million to U.S. customers whose annual percentage rate should have been lower. The lender determined that a method it was using to calculate APRs didn’t properly reflect the full benefit customers should have received for good behavior, such as paying on time, the New York-based bank said Friday in a securities filing that disclosed the issue and the total cost. It’s currently reviewing accounts and plans to have refund checks in the mail by the second half of the year. The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 requires lenders to periodically review accounts whose APR had been raised to see if subsequent good behavior makes them eligible for a rate reduction. From 2011 to 2017, the bank delivered $3 billion in savings through such reviews. That was about 90 percent of what customers should have received.
WH quietly issues report to Congress showing benefits of regulations | TheHill: The White House on Friday quietly released its annual draft report to Congress on the costs and benefits of regulations and the results show that major rulemakings over the past decade have yielded great benefits. The findings are at odds with an administration that's pushing federal agencies to cut rules and ease excessive regulatory burdens it says were imposed by the previous administration. The Trump administration report says that from fiscal 2007 through 2016 the annual economic benefits of major rulemakings reviewed by the White House Office of Management and Budget (OMB) were estimated to be between $287 billion and $911 billion. The report found that from Oct. 1, 2006, to Sept. 30, 2016, the annual benefits of regulations outweighed the annual costs, which were estimated to be between $78 billion and $115 billion in 2015 dollars. The results, regulatory advocates say, seem to undercut the president's continued push for a policy requesting that two regulations be removed for every new rule proposed.
CFPB's Mulvaney jabs at Warren while endorsing credit unions - — Mick Mulvaney provided another reminder Tuesday — if one were needed — that he is not a typical banking regulator. The acting director of the Consumer Financial Protection Bureau, who also serves as head of the Office of Management and Budget, took shots at Sen. Elizabeth Warren, D-Mass., during a speech to credit union executives, dismissing her criticism of his leadership of the consumer bureau. "We get about one letter a week from her and she asks me why I have done what I have done," Mulvaney told the crowd, referring to Warren, who founded the bureau and helped to set it up. "We are progressively moving to a response that I want to send her, which is essentially to say, look, if you don’t like what I am doing, complain to the person who wrote the statute." Mulvaney's jab, though hardly unusual in partisan politics, is a clear sign of how the deterioration of relations among policymakers now includes even bank regulators. In the past, regulators have gone out of their way to seem above the political fray. While they were criticized, they usually responded obliquely or through intermediaries, and seldom if ever directly rebuffed a lawmaker of either political party. But Mulvaney does not appear interested in continuing that tradition. Last week he sent a letter to Warren in which he didn't respond to any of her questions about his policy changes at the bureau, instead objecting to her criticism of his actions. During his speech before the Credit Union National Association, Mulvaney said he is a credit union member and sought to make a distinction with other financial companies. “We recognize the fact that you all did not cause the financial crisis and that you should not be regulated … like the folks who might have done those things,” said Mulvaney, repeating a talking point often used by credit unions.
I’m a credit union CEO who agrees with Hatch: Tax big credit unions - As a credit union executive, I’m going to say something so blasphemous I’ll probably lose friends and colleagues in the credit union movement and have bankers cheering: Sen. Orrin Hatch may be right. On Jan. 31, Hatch, R-Utah, the chairman of the Senate Committee on Finance, sent a letter to National Credit Union Administration Chairman J. Mark McWatters expressing concern "that the credit union industry is evolving in ways that take many credit unions further from their original tax-exempt purpose.” Predictably, the trade associations countered with their well-practiced response to any hint of taxation talk by touting credit unions’ not-for-profit structure and their mission to promote thrift and access to credit for members of modest means. The problem with these well-worn arguments is they do not address the core issues raised by Sen. Hatch, which are similar to my concerns. And while they remain reticent to admit it publicly, I have colleagues from other small credit unions who share my frustrations. The problem with our movement is most of us have been indoctrinated to believe our common enemy are bankers — with their constant thump of the taxation war drums — when in fact the real threat to our future lies within our own industry. It’s no secret that for decades the credit union movement has been shrinking by nearly one institution each day as the result of mergers. However, since HR 1151 was signed into law by President Clinton in 1998, large, multiple common bond credit unions have continued to get larger by expanding their fields of membership, sometimes overlapping in predatory ways to the detriment to smaller credit unions that have stayed true to their original fields of membership.
Stockman: $1.8 Trillion in New Treasury Debt Will Hit Bond Pits “Like a Tornado” - Pam Martens - David Stockman, the former Director of the Office of Management and Budget under President Ronald Reagan who blogs at Contra Corner, appeared on CNBC yesterday to size up the market situation. Commenting on the new Chairman of the Federal Reserve, Jerome Powell, who gave testimony for the first time in his new role before the House Financial Services Committee yesterday, Stockman said he thinks Powell is “missing three giant skunks sitting on the wood pile.” The biggest skunk according to Stockman is an “epic monetary fiscal collision” that Stockman says he hasn’t seen before in his lifetime. Stockman explained that starting this October, which begins the Federal government’s Fiscal 2019, the government is going to borrow $1.2 trillion. Stockman called this “an astronomical number” given that the U.S. is ten years into an expansion. At the same time says Stockman, the Federal Reserve has pivoted to Quantitative Tightening (QT) “and they will be dumping $600 billion” of their bonds into the market at the same time as the government is pumping up debt issuance. (The Federal Reserve began trimming back its purchases of Treasury bonds in October of last year in order to normalize its bloated balance sheet that resulted from the financial crisis.) The Fed’s $600 billion combined with the $1.2 trillion from the government means that $1.8 trillion in Treasuries “will be looking for a home” in Fiscal 2019 said Stockman. This leads Stockman to believe that the market simply can’t clear all of this debt at anywhere near the 2.90 percent interest rate at which the 10-year U.S. Treasury has been trading. He says there is going to be a “monumental yield shock” that will take 10-year Treasury yields to 3 to 4 percent “and probably overshoot beyond that.” Another big skunk explains Stockman is that there will not be the help coming from other central banks around the world as there has been in the past decade. They’re also in wind-down mode.
The US may be where the bond bubble bursts thanks to 'aggressive debt issuance,' investor warns -- Rapidly mounting debt in the U.S. may be the trigger that bursts the bond bubble, one private equity investor told CNBC on Wednesday, echoing concerns of financial veterans Alan Greenspan and Paul Tudor Jones.Asked where he expected the catalyst to come from amid a gradually quickening bond sell-off, Jordon Kruse, managing director at Oaktree Capital Management said, "It wouldn't surprise me if it started off in the States."This is because "the aggressive nature of debt issuance in the last 10 years since the financial crisis is such that you have a very full market with a lot of fast money that's invested in debt," Kruse explained, naming exchange-traded funds (ETFs) and collateralized loan obligations (CLOs) as some of these investments.Several Wall Street observers have warned that a collapse in the debt market could be particularly nasty because current debt levels are so massive."There is almost twice as much non-investment grade debt outstanding today as there was in 2007, and it's about $2.4 trillion," Kruse, who runs a U.S. distressed private equity fund, said. "So the kindling for the fire is there, it's just a question of what the trigger is." The U.S. Treasury is set to issue nearly $1 trillion in debt in 2018, due in large part to the Trump administration's massive new stimulus programs requiring vast sums of borrowed money. Many fear this this issuance is ill-fated, given the recent surge in U.S. yields and Federal Reserve plans to raise interest rates and withdraw liquidity from the market after years of quantitative easing.
Problem with rising rates: Corporate America has binged on debt - Corporate America, egged on by ridiculously-low borrowing costs, has built up more debt than any time since the end of the Great Recession.The credit binge has allowed companies to grow faster, invest in the future and reward shareholders with huge dividends and share buybacks. Yet elevated levels of debt will also make businesses vulnerable when the next recession strikes or if borrowing costs spike because of rising interest rates. Either outcome will make it harder for Corporate America to pay back the $4 trillion of debt coming due by 2022. This risk has been underlined by the recent surge in Treasury yields and rising concerns that inflation could force the Federal Reserve to consider aggressive rate hikes. "Removing the easy money punch bowl could trigger the next default cycle," S&P Global Ratings wrote in a recent report titled "Debt high, defaults low -- something's gotta give." For nearly a decade, companies have taken advantage of extremely cheap money set by the Fed and foreign central banks trying to pump up sluggish growth. Excluding the highly leveraged financial sector, corporate debt relative to GDP matched an all-time high during the third quarter of 2017, according to an analysis of the most recent numbers by Informa Financial Intelligence. "It's certainly a reason to be cautious, particularly when we are long into this growth cycle and the Fed is raising rates," said David Ader, chief macro strategist at Informa Financial Intelligence. "Everything is fine and well -- until it isn't," he said.
Did The Fed Save Wall Street With A Temporary QE4? - The stock market suffered one of its most drastic falls on February 5, 2018. The price of gold rose but as equities started rebounding after the selloff, gold trended lower. However, something was quite bizarre with regards to the Fed’s balance sheet a week after the market meltdown. Recently published data shows that the Fed’s balance sheet increased by 14.1 billion during the week ending February 14th, 2018. By the looks of it, the Fed had reverted back to “quantitative easing” by printing money out of thin air by injecting $14 billion into the banking system by purchasing mortgage-backed securities. It’s important to realize, that the cash injected can be leveraged 10x. In other words, the $14 billion injected is $141 billion of leverage for the banks to use for activities such as propping up the stock market. However, most recently, the Fed’s balance sheet was reduced by $23.2 billion. By the looks of things, the Federal Reserve is serving Wall Street by providing a safety net around volatility. Which, of course, is driven by this ridiculous “wealth effect” policy that it has tried to achieve and preserve the last decade. It’s no surprise though, central banks are going to be central banks and continue to compound on disastrous and failed policy errors by repeating their old ones. So, the question is - what happens this week, following this plunge in the Fed b/s?
CEOs Choose Sides on Gun Control at Their Own Risk - It’s the newest question facing CEOs: Should they thrust their businesses into polarizing political debates?In the two weeks since a gunman killed 17 people at a Parkland, Fla., high school, many companies have taken a stand on gun control, prompted partly by a movement with the online rallying cry #NRABoycott.But when companies take sides in a charged issue, they often have to grapple with a new set of risks to their reputation and business, not least the risk of offending a sizable portion of consumers on the other side. On Wednesday, Walmart Inc. and Dick’s Sporting Goods Inc. DKS -0.84% —two of the biggest gun sellers in the U.S.—joined the growing list of companies taking action after the Florida massacre. Both companies said they would raise its minimum age for gun buyers at their stores to 21. Dick’s also said it would stop selling all assault-style weapons at its 35 Field and Stream stores and would no longer sell high-capacity magazines of ammunition. “We take seriously our obligation to be a responsible seller of firearms,” Walmart said in a statement. The retailer, which sells rifles, shotguns and ammunition in thousands of its stores, had stopped sales of assault-style rifles in 2015. “Gun violence is an epidemic that’s taking the lives of too many people, including the brightest hope for the future of America—our kids,” Dick’s Chief Executive Edward Stack said in a letter posted on Facebook and the company’s website. Many consumers took to Twitter and Facebook to either condemn or praise the move. Rival Academy Sports + Outdoors, in Katy, Texas, though, defended its gun sales. It said it is committed to the legal and safe transfer of firearms and favors strengthening the nation’s background-check system. Business leaders are increasingly under pressure, largely from younger generations of socially conscious and digital-media savvy consumers and employees, to take a stand on everything from immigration to gay rights to climate change. Nearly half of millennials, a generation largely born in the 1980s and 1990s, believe CEOs have a responsibility to speak up about issues important to society, according to a 2017 survey by Weber Shandwick. In contrast, only 28% of Generation Xers, now in their 40s and early 50s, and baby boomers agreed.
Guns pose a political risk for banks | American Banker -- In the wake of the horrific school shooting in Parkland, Fla., the debate over gun control has once again seared the nation’s conscience. Clearly, this is not the forum to engage in the gun debate. But like it or not, the debate is knocking on the industry’s door and bankers may need to decide whether or not to take a stand. In the past, banks have prudently avoided getting involved in partisan political issues that do not directly impact their institutions or the industry as a whole. This time feels different. In this case, the difference is the nature and intensity of the voices speaking out — the victims. They are passionate and articulate young people who have experienced horror firsthand and they are standing up. This group, which is adept at using social media, has the potential to mobilize a large portion of an entire generation to call for and create change. Only time will tell if this movement is both sustainable and effective. However, if it is, guns could become to millennials what Vietnam was to the baby boomers. So why should bankers care? Over the past year, I have repeatedly written about the difficulty banks will have navigating a shrinking neutral road in an increasingly partisan and toxic political environment. Indeed, there are times when silence and inaction actually increases reputational risk rather than diminishes it. Is this one of those times? Perhaps, especially if millennials make guns a watershed issue and a litmus test for institutional credibility.
These are the banks financing the assault weapons industry - Since the Parkland shooting, corporations with financial ties to the NRA have been subjected to intense scrutiny. In less than two weeks, consumers have convinced more than 20 companies to end relationships with a gun lobby that has encouraged the proliferation of assault weapons and aggressively blocked virtually all legislation to curb gun violence. Less attention has been paid to the banks supporting manufacturers that produce those weapons — especially the semi-automatic assault weapons used at Marjory Stoneman Douglas High School and in so many other mass shootings. On Saturday, one bank came forward to say it’s reconsidering its own relationship to gun manufacturers. “We are joining other companies in our industry to examine what we can do to help end the tragedy of mass shootings, and an immediate step we’re taking is to engage the limited number of clients we have that manufacture assault weapons for non-military use to understand what they can contribute to this shared responsibility,” Bank of America said in a statement to Axios on Saturday. A review of SEC filings and other public records revealed that Bank of America isn’t the only financial institution that finances the production of assault weapons. Five of the largest gun manufacturers are supported by over a dozen banks through varying types of credit arrangements.ThinkProgress reached out to all of the banks financing Remington Outdoor, Smith & Wesson, Sturm Ruger, Sig Sauer, and Vista Outdoor, the makers of the assault weapons used in Parkland, at Sandy Hook Elementary School, at Pulse nightclub in Orlando, at a church in Texas, and in countless other tragedies. The banks include:
Crypto poised to take over gun sales if banks bow out - In the wake of the recent deadly school shooting in Parkland, Fla., there seems to be a more heightened degree of citizen activism to counter gun-rights lobbyists — and their voices are causing more banks and other companies to question their associations with the National Rifle Association and gun sellers. Over the last few days, a number of companies with NRA affiliations have publicly stated that they will no longer be doing business with the organization, including First National Bank of Omaha, which cited customer feedback as its reason to review and ultimately terminate its contract with the NRA. And Bank of America has begun discussions with its gun manufacturer clients over the nature of their products. “An immediate step we’re taking is to engage the limited number of clients we have that manufacture assault weapons for nonmilitary use to understand what they can contribute to this shared responsibility,” Bank of America told Reuters. If more banks and payment companies join the chorus, it could create a void in the payment options for legal gun sales, not unlike what legal marijuana dispensaries face. And, just as in other high-risk — but nevertheless legal — markets, alternative options such as cryptocurrencies are already being used.
Self-Proclaimed Bitcoin Inventor Accused of Swindling $5 Billion of Cryptocurrency - Craig Wright, the self-proclaimed inventor of bitcoin, is accused of swindling more than $5 billion worth of the cryptocurrency and other assets from the estate of a computer-security expert. Wright, who claimed in 2016 that he created the computer-based currency under the pseudonym Satoshi Nakamoto, allegedly schemed to use phony contracts and signatures to lay claim to bitcoins mined by colleague Dave Kleiman, another cryptocurrency adherent, who died in 2013, according to a lawsuit filed by Kleiman’s brother.Kleiman’s family contends they own the rights to more than 1 million Bitcoins and blockchain technologies Kleiman mined and developed during his lifetime and that the assets’ value exceeds $5 billion, according to the Feb. 14 filing in federal court in West Palm Beach, Florida.“Craig forged a series of contracts that purported to transfer Dave’s assets to Craig and/or companies controlled by him,’’ lawyers for Kleiman’s family said in the complaint. “Craig backdated these contracts and forged Dave’s signature on them.’’ Wright, an Australian who lives in London, couldn’t immediately be reached for comment on the suit, which also accuses the entrepreneur of violating partnership duties to Kleiman and unjustly enriching himself at his colleague’s expense. There is no attorney listed for Wright on the docket. Wright and Kleiman formed a Florida-based company, W&K Info Defense Research LLC, in 2011 to focus on cybersecurity, according to the court filing. The pair controlled as many as 1.1 million Bitcoins at the time of Kleiman’s death, according to the suit. They were held trusts set up in Singapore, the Seychelles Islands and the U.K., the suit says.
Bitcoin as Prosecution Futures: Coinbase Agrees to Turn Customer Records Over to Department of Justice for Possible Tax Evasion -- Yves Smith - Even in the US, which so far has been more lenient toward cryptocurrencies than China, the noose is tightening. Top Bitcoin exchange Coinbase has decided that trying to defy the law, in terms of not complying with a IRS summons requiring it to turn over information about customers who had engaged in more than $20,000 in Bitcoin transactions in a year, was not a viable position. Apparently Coinbase had had the Silicon Valley libertarian chutzpah to think the rules didn’t apply to them. The IRS does not regard “disruption” as a tax exemption. Bizarrely, many people who use Bitcoin and other cryptocurrencies labor under the delusion that those transactions aren’t subject to tax reporting and tax compliance. As we reported at the time, in 2014, the IRS determined that Bitcoin was property, not a currency. That meant that gains on trading in Bitcoin are taxable the same way gains on trading in currency futures or selling a piece of land are.1 That means, and that means you, those transactions are reportable as income for US taxpayers. The supposed virtue of cryptocurrencies like Bitcoin is their Achilles heel as far as hiding from the taxman is concerned. The famed blockchain contains the full ledger for each coin, meaning the history of all transactions, and that record cannot be altered. The blockchain contains the date and time and the amount of each transaction, as well as the unique identifier for the wallet associated with that transaction. Knowing the wallet does not get you to the holder of the wallet, but it gets you a fair bit of the way there. As Lee Sheppard pointed out in Tax Notes last year:Moreover, many transactions are now settled off the blockchain and never recorded there. The exchange that processed the transactions would have the only records. From an investigatory standpoint, the blockchain’s limitations and the widespread practice of off-chain clearing combine to make the blockchain more like the Depository Trust Company, which holds publicly traded shares on behalf of brokers, who control information about beneficial owners. To find the owner, it is necessary to sue the intermediary in each case.That isn’t as far-fetched as you might think. The US Treasury’s Financial Crimes Enforcement Network had stated that cryptocurrency exchanges are money service businesses because they often convert the cryptocurrencies into money. That means in pretty much all cases they are obliged to register and to comply with anti-money laundering rules.
The SEC Is Finally Cracking Down On ICOs - The Securities and Exchange Commission repeatedly warned founders of shady initial coin offerings that they must abide by US securities rules - but most have been too busy making money hand over fist to listen. And now, it seems, the agency is finally ready to drop the hammer. After announcing a handful of limited actions against suspected ICO fraudsters late last year, the Wall Street Journal reported Thursday that the agency has sent dozens of subpoenas and information requests to the companies and advisers carrying out ICOs, which have already raised nearly $1.7 billion this year. Last year, ICOs raised $6.5 billion despite crackdowns in China and elsewhere. The subpoenas primarily include demands for information on the structure, sales and pre-sales of ICOs, WSJ reported. U.S. regulators have repeatedly put cryptocurrency companies and their advisers on notice in recent months about what officials say are widespread violations of securities rules designed to protect investors. "Many promoters of ICOs and cryptocurrencies are not complying with our securities laws," SEC chairman Jay Clayton said earlier this year. In another speech he said he has instructed his staff to be "on high alert for approaches to ICOs that may be contrary to the spirit" of those laws. One former SEC commissioner said ICOs are only seeing the tip of the iceberg in terms of civil - and possibly criminal - actions. "We’re seeing the tip of the iceberg … there is going to be a ton of enforcement activity," said Dan Gallagher, an SEC commissioner from 2011 to 2015 who now sits on the board of blockchain company Symbiont. Mr. Gallagher told an SEC conference in Washington last week that the largely unregulated token offerings are "the freaking Wild West—it is ‘Wolf of Wall Street’ on steroids." Bitcoin's explosive gains last year helped draw a flood of money into different crypto tokens. Even the most widely hyped (and ultimately successful) offerings often sport nonsensical White Papers. Often, the product exists only on paper.
Bill Gates: cryptocurrencies have ’caused deaths in a fairly direct way’ -- Bill Gates, the philanthropist and former chief executive of Microsoft, is concerned by the crytocurrency craze, saying that the anonymity offered by the new technology has “caused deaths in a fairly direct way”.Speaking during a Reddit AMA, Gates argued that “the government’s ability to find money laundering and tax evasion and terrorist funding is a good thing. “Right now cryptocurrencies are used for buying fentanyl and other drugs so it is a rare technology that has caused deaths in a fairly direct way.” In contrast to cash, which is also untraceable, cryptocurrencies can be used remotely, which removes another avenue of control, he added.Gates also suggested that investing in the sector is a bad idea: “I think the speculative wave around ICOs and cryptocurrencies is super risky”. In the group interview, Gates had harsh words for some other speculative technologies. Elon Musk’s Hyperloop concept, for instance, which involves using a railgun to fire a passenger compartment down a low-pressure tube at speeds of several hundred miles per hour, was dismissed: “I am not sure the Hyperloop concept makes sense,” he said. “Making it safe is hard.” But Gates was positive about the overall direction of technology, dismissing concerns that rising automation could have negative consequences for the wider economy, and citing natural language understanding as the technology he’s most looking forward to over the next decade.
Sheila Bair on Bitcoin: "We Shouldn't Ban It: The Green Bills In Your Pocket Don't Have Intrinsic Value, Either" - In a surprisingly forthright and honest interview between Barrons and Sheila Bair, the former FDIC chair who was responsible for big banks avoiding bank runs in the aftermath of the Lehman bankruptcy, discussed what she sees as the trigger for the next financial crisis, her thoughts on China's record leverage (and the recent promotion of Xi Jinping to emperor), how she views the current economy, on $1.3 trillion in student debt, and finally on bitcoin. While we will focus on the latter, here are some excerpts on the other key points. First, here is Bair on what she thinks will trigger the next crisis: I'd keep an eye on credit-card debt. Subprime auto has been a problem for a couple years, and valuations on loans used to finance leveraged buyouts are high. Any type of secured lending backed by an asset that is overvalued should be a concern. That is what happened with housing. Corporate debt also has not gotten as much attention as it should. It is market-funded, rather than bank-funded, but the banks still have exposure. Then there's cyber-risk. It took us so long to get around to the reforms postcrisis that we got a little behind on systemic cyber-risk, but regulators are very focused on it now. On China's risk to the global financial system: We look at their debt and wag our fingers and tsk, tsk. It is high. But they realize it is a threat to financial stability and are dealing with it. Last month, regulators took over privately held Anbang Insurance to keep it from collapsing. It is a sign they are continuing to crack down on reckless growth and excessive leverage. On Student Debt: That debt is all on the government's balance sheet, so no, not a market crisis. But there are parallels to 2008: There are massive amounts of unaffordable loans being made to people who can't pay them, and the easy availability of those loans is leading to asset inflation. In 2008, that was reflected in housing prices. Today, that's tuition. It's too easy to raise tuition because kids will borrow to pay for it. If the loan defaults, the primary beneficiaries -- educational institutions -- have no skin in the game, like in the mortgage crisis.
Citigroup Drove Puerto Rico Into Debt. Now It Will Profit From Privatization On The Island. -- One of the same banks that drove the Puerto Rico Electric Power Authority, or PREPA, into the red will now be paid to help auction it off to the highest bidder. Citigroup Global Markets Inc., or Citi, will be the main investment bank consultant in the restructuring and privatization of PREPA, the Washington-appointed Fiscal Control Board — the body now overseeing Puerto Rico’s finances — announced recently. Puerto Rico Gov. Ricardo Rosselló first announced the move toward privatization last month. “Citi will advise the Board on PREPA’s privatization,” the Fiscal Control Board wrote in a statement, “as well as the restructuring of PREPA’s debt pursuant to Title III proceedings in federal bankruptcy court. Citi will take the lead in identifying private sector solutions that fulfill the vision laid out by Governor Rosselló.” The board said it “welcomed … Rosselló’s call for PREPA’s complete transformation.” Citi is responsible for having underwritten large chunks of the utility’s $9 billion in debt, and at one point owned at least hundreds of millions of dollars in PREPA bonds directly, according to an analysis from the Action Center on Race and the Economy. Citi “has been profiting from helping push Puerto Rico over the edge for a long time,” said Carrie Sloan, ACRE’s research director.
Fintechs’ charter hopes may lie with new FDIC board — Among federal bank regulators, the Office of the Comptroller of the Currency has been the most active on fintech chartering options. But another agency, the Federal Deposit Insurance Corp., may provide crucial guidance for fintechs in the shorter term. The FDIC still has pending an application by Square for an industrial loan company, a limited-purpose bank typically chartered in Utah that receives deposit insurance. While it has been rare to see ILC entrants during years of controversy over the charter, observers hope incoming FDIC leadership will advance Square's bid, potentially opening the door for others. “I suspect how Square handles this [charter process] can provide a template for other firms,” said Brian Knight, director of the program on financial regulation and a senior research fellow at the Mercatus Center at George Mason University. Some in the fintech industry hope the Trump administration's regulatory appointees, who have generally been more supportive of the financial services industry, back some type of charter for the industry for the first time. The OCC has been developing a specialized fintech charter, but it is still unclear if the agency intends to move forward with accepting applications. Jelena McWilliams, Fifth Third Bank's chief legal officer who is awaiting confirmation as the FDIC's new chair, did not voice any hesitancy about approving new ILCs at her nomination hearing. If she and other FDIC board members approved the Square application, it would result in the first ILC approval since 2008.
Bank profits plummet 41% on tax reform law: FDIC report — Bank earnings fell nearly 41% in the fourth quarter from a year earlier, largely because of a one-time hit from the new tax reform law, the Federal Deposit Insurance Corp. said Tuesday in the Quarterly Banking Profile. Banks reported net income of $25.5 billion, a $17.7 billion drop from the fourth quarter of 2017. The decline was attributed to lower values of deferred tax assets thanks to the cut in the corporate tax rate in the reform bill passed late last year. The repatriation of income from foreign subsidiaries also had a negative effect on earnings. Were it not for the one-time hit related to the tax bill, bank earnings would have been down a mere 2.3% from a year earlier. The smaller drop in earnings was partly due to an increase in noninterest expenses and loan-loss provisions. “Despite the decline in net income, the banking industry continued to show steady improvement,” FDIC Chairman Martin Gruenberg said in a statement released Tuesday. “Loan balances grew, net interest margins increased, asset quality remained stable, and the number of ‘problem banks’ continued to fall.” The FDIC’s so-called problem-bank list fell by nine banks to 95, the lowest number since the fourth quarter of 2008.
Tax reform gut punch: Banks take a beating in FDIC 4Q report -- The tax reform law passed late last year, which significantly cut the corporate tax rate, has been widely popular among banks, but a one-time hit to the value of their deferred tax assets was felt far and wide.The Federal Deposit Insurance Corp. said Tuesday in the Quarterly Banking Profile that net income fell nearly 41% in the fourth quarter from a year earlier because of the tax law. The repatriation of income from foreign subsidiaries also had a negative effect. However, the industry also had much to be pleased about in the quarter, including better loan growth, a higher net interest margin, fewer "problem banks" and continued growth in the Deposit Insurance Fund. “Notwithstanding the one-time impact of the new tax law, the overall performance of the industry continued to be positive," said FDIC Chairman Martin Gruenberg. "Community banks also were affected by the new tax law in the fourth quarter, primarily from the one-time revaluation of deferred tax assets," Gruenberg added. "However, net interest income was up significantly at community banks, as net interest margins improved and their loan growth outpaced that of the overall industry."The average net interest margin rose to 3.31% in the quarter, a 15-basis-point increase from a year earlier. It was the highest quarterly net interest margin since late 2012. Yet there were some other hits that banks took to earnings besides the tax reform law. Banks set aside 8.9% more in their loan-loss provisions from a year earlier. Provisions totaled $13.6 billion in the quarter."More than one in three (38.9 percent) institutions reported higher loan-loss provisions than in fourth quarter 2016," the agency said.And banks also charged off $1 billion more in delinquent loans during the fourth quarter. Net charge-offs rose 8.6% from a year earlier, to $13.2 billion. “This marks a ninth consecutive quarter that net charge-offs increased," the FDIC report said.Here are some takeaways from the FDIC's fourth-quarter report:
February 2018: Unofficial Problem Bank list unchanged at 101 Institutions -- Note: Surferdude808 compiles an unofficial list of Problem Banks compiled only from public sources. Here is the unofficial problem bank list for February 2018. Here are the monthly changes and a few comments from surferdude808: Update on the Unofficial Problem Bank List for February 2018. The list had no removals or additions during the month, so the number of insured institutions on it remains at 101. However, aggregate assets had a small decline of $224 million to $20.5 billion as assets were updated with year-end figures. A year ago, the list held 155 institutions with assets of $41.8 billion. The FDIC will release industry results for the fourth quarter and provide an update on the Official Problem Bank list on February 27th.
FDIC's Gruenberg undecided about board seat after he gives up gavel — Federal Deposit Insurance Corp. Chairman Martin Gruenberg said Tuesday that he is on the fence about whether to serve on the agency's board for the remainder of the year even after he is replaced as head of the agency.Gruenberg's term as chairman officially expired in November, and the Trump administration's nominee to succeed him, Jelena McWilliams, appears to be close to Senate confirmation. However, Gruenberg's term as a member of the FDIC's board of directors does not expire until the end of this year. “Frankly, I am still trying to figure that one out,” Gruenberg told reporters Tuesday after the FDIC released its quarterly bank earnings report, indicating he has yet to make a decision about whether to stay on the board.
Capital One's debit card push, cost-cuts conspire against minorities, lawsuit says - Capital One Financial discriminated against blacks and Latinos by encouraging them to bank primarily by debit card, effectively denying them a broader array of banking products, two civil rights groups argue in a new lawsuit. In a suit filed this week in federal court in the southern district of Texas, the Houston NAACP and the League of United Latin American Citizens accused Capital One of violating the Fair Housing Act, the Equal Credit Opportunity Act and the Community Reinvestment Act. The $366 billion-asset bank’s “What’s in your wallet?” ads, often featuring black celebrities such as Samuel L. Jackson and Spike Lee, basically told those customers to transact largely with their debit cards, the suit said. At the same time, the bank closed full-service branches in predominantly minority communities, while keeping them open in white communities, the suit said. “Black and Latino customers are welcome to deposit their money with the bank but dare not apply for credit, a mortgage or a loan,” according to the suit, which requests class-action status. The lawsuit hinges largely on the report of a former Capital One employee, Laurie Vignaud, who worked on CRA efforts in the bank’s South Central territory. Vignaud, who is also listed as a plaintiff, said that she lost her job with Capital One after complaining that it was violating CRA by closing branches in certain areas.
Equifax to notify 2.4 million more consumers affected in hack - Equifax, the credit-reporting firm that suffered a massive data breach last year, said it will notify an additional 2.4 million U.S. consumers that they were affected by the hack. The customers were among the 145.5 million people whose identities were stolen last year, but Equifax was unable to confirm who they were at the time because only partial driver's license information was taken, the Atlanta-based credit-reporting company said Thursday in a statement. The consumers will be notified and the firm will offer them free credit-monitoring and identity-protection services. Equifax disclosed the cyberattack in September, resulting in Congressional hearings and the departure of then Chief Executive Officer Richard Smith. The stock also has taken a beating, slumping 21 percent since the disclosure. Paulino do Rego Barros Jr. was named interim CEO and the company hired Jamil Farshchi from Home Depot Inc. last month as chief information security officer in an effort to boost its oversight.
Equifax identifies additional 2.4 million customers hit by data breach - Credit score giant Equifax said on Thursday it had identified another 2.4 million U.S. consumers whose names and driver's license information were stolen in a data breach last year that affected half the U.S. population. The company said it was able confirm the identities of U.S. consumers whose driver's license information was taken by referencing other information in proprietary company records that the attackers did not steal."Equifax will notify these newly identified U.S. consumers directly, and will offer identity theft protection and credit file monitoring services at no cost to them," the company said. The new information is the latest blow to the industry giant, which lost three top executives — including its longtime CEO Rick Smith — in the fallout of the mega-breach that exposed private information belonging to 143 million people. The data breach, which was discovered July 29, included sensitive information such as social security numbers, birthdays, addresses, and in some instances, driver's license numbers. The company is continuing to work closely with the FBI in its investigation
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. 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.
Credit union execs endorse CFPB changes in Trump meeting — Credit union executives talked up a pending regulatory relief effort while endorsing a radical shift in direction by the Consumer Financial Protection Bureau during a meeting with President Trump and other top White House officials on Monday. Credit union representatives told the president they support recent actions by Office of Management and Budget Director Mick Mulvaney, who is also serving as acting director of the CFPB and has dramatically scaled back the CFPB's rule-writing and enforcement activities. The change in leadership at CFPB was described as a "breath of fresh air, because they are actually asking us for our input with respect to some of the things that are going on at credit unions," said Lisa Ginter, president and CEO of $2.2 billion-asset Community America Credit Union in Lenexa, Kan.
CFPB has plenty of options for slashing its budget - Mick Mulvaney, acting head of the Consumer Financial Protection Bureau, has made clear his desire to slash the agency's budget, but what he plans to cut to meet his spending goals is more of a mystery. Mulvaney grabbed headlines in January when he requested "zero" in additional funding for the bureau in the second quarter of the fiscal year, choosing to fund the bureau instead with a $145 million reserve account set up by his predecessor, Richard Cordray. But he has not revealed how much he will request from the Federal Reserve, which funds the CFPB's operations, for the rest of 2018, nor how he aims to fulfill a Trump administration promise of slashing the agency's budget by 30% next year. "Basically, it comes down to whatever funding request [he makes] for the final two quarters of the fiscal year, but no one knows what that will be, except that there's going to be a reduction in the funding they get," said John Pachkowski, an attorney and senior banking analyst at Wolters Kluwer Legal & Regulatory U.S. Mulvaney has signaled a pullback in overall funding for the CFPB, including freezing all enforcement actions and ordering an annual independent audit of the CFPB's operations and budget. His second-quarter budget of $145 million marked a 34% drop from the first-quarter budget of $217 million. In the CFPB's latest strategic plan, Mulvaney said he wanted align the bureau's resources to its mission and "promote budget discipline." As of last year, the CFPB estimated a $630.4 million budget for fiscal year 2018, which ends Sept. 30, but that estimate was during Cordray's tenure and few think Mulvaney will stick with that amount. He is expected to submit a funding request in April for the third quarter after the CFPB uses up the reserve fund. Many lawyers applaud the drop in funding because it signals a pullback in enforcement actions against financial firms.
CFPB should take back seat to bank regulators on supervision: Mulvaney - Mick Mulvaney, the acting director of the Consumer Financial Protection Bureau, said Thursday the agency may allow prudential regulators to take the lead on more supervisory matters to cut down on duplication and ease the burden of exams on financial firms.Mulvaney said regulators should strive to avoid overlapping exam processes, suggesting regulators like the Office of the Comptroller of the Currency and the Federal Reserve Board could have a greater supervisory role on consumer compliance matters. "There's no reason why folks have to go through sequential regulations for the same thing," Mulvaney said at a U.S. Chamber of Commerce event on small business lending. "We've already started to sit down with some of the other prudential regulators. I don't see why we can't work together on supervision."
AGs, not CFPB, should take greater role on enforcement: Mulvaney — The Consumer Financial Protection Bureau will let states more often take the lead on enforcing consumer protection laws, acting Director Mick Mulvaney said during an attorneys general conference on Wednesday. Mulvaney said the CFPB would no longer be “pushing the envelope” or “look to create law where there isn’t” through enforcement actions. His remarks were in response to criticism of the prior leadership at the CFPB, which under Richard Cordray was often accused of using enforcement actions to set new policy. Some of those actions were the subject of lawsuits that the CFPB lost. “I was shocked when I read through some of the factual allegations of some of the lawsuits that we had brought at the CFPB,” Mulvaney said. “We are going to be looking to the state regulators and state attorneys general for a lot more leadership when it comes to enforcement.” Mulvaney recently dropped a lawsuit in which former CFPB Director Richard Cordray sued four online tribal lenders in 2017 over allegations of illegally collecting debt in 17 states. He said he dropped the case because two state attorneys general in those jurisdictions filed briefs against the CFPB’s decision. “Why we think we know better or how to protect consumers in your state surprises me,” he said. “I don’t think we’ll being do much of that anymore.”Mulvaney said the CFPB would instead spend more time on cost-benefit analysis and take a more “quantitative” perspective on where they place priorities. For example, he said the most consumer complaints they receive are for debt collection. Only 2% of the complaints were related to payday-type loans last year, an area where the CFPB had sought to crack down.
New CRA proposal scheduled for release next month: OCC’s Otting - Regulators plan to have "an interagency redo" of Community Reinvestment Act rules out for distribution by the end of March, Comptroller of the Currency Joseph Otting said Tuesday. Speaking at a securitization industry conference in Las Vegas, Otting said reform of CRA regulations is a "key element" of how regulators are aiming to recalibrate rules a decade after the financial crisis.“We want to have a … measuring system so that there is no doubt about whether banks are in compliance,” Otting said of the CRA compliance process. He described the effort as one of several ways that regulation could be dialed back.“I don’t think there is any doubt” that the pendulum has swung too far in the direction of regulation, Otting said in response to a question from the head of the Structured Finance Industry Group. During the financial crisis, “regulators had to react almost like firemen running into a building to figure how to get banks through that period,” Otting said. But “tempo is important," he added. "Most banks will say the tempo is different [now]. There is more of a partnership with banks, as opposed to dictatorship.” Otting said the Office of the Comptroller of the Currency is also working with the Financial Crimes Enforcement Network on ways to give banks "variances" in complying with the Bank Secrecy Act, while still preventing bad actors from using the banking system to launder money.
Ben Carson’s HUD Spends $31,000 on Dining Set for His Office - Department of Housing and Urban Development officials spent $31,000 on a new dining room set for Secretary Ben Carson’s office in late 2017 — just as the White House circulated its plans to slash HUD’s programs for the homeless, elderly and poor, according to federal procurement records. The purchase of the custom hardwood table, chairs and hutch came a month after a top agency staff member filed a whistle-blower complaint charging Mr. Carson’s wife, Candy Carson, with pressuring department officials to find money for the expensive redecoration of his offices, even if it meant circumventing the law. Mr. Carson is also facing questions on another front. Under pressure earlier this month, he requested that HUD’s inspector general investigate his son’s involvement in a department-sponsored listening tour of Baltimore last summer. Department lawyers had warned Mr. Carson that including Ben Carson Jr., an entrepreneur who does business with the federal government, could create a conflict of interest. Mr. Carson “didn’t know the table had been purchased,” but does not believe the cost was too steep and does not intend to return it, said Raffi Williams, a HUD spokesman. “In general, the secretary does want to be as fiscally prudent as possible with the taxpayers’ money,” he added.
Puerto Rico – Here’s Why the New York Fed Does Not Feel Your Pain -- On Thursday, the President of the Federal Reserve Bank of New York, William C. Dudley, held a press conference to effectively tell Puerto Ricans to suck it up as they attempt to recover from an epic humanitarian crisis caused by Hurricane Maria, which devastated infrastructure and wiped out electricity to the entire Island in September. When it comes to corrupt Wall Street banks that are in the process of failing, the Federal Reserve can always find trillions of dollars to funnel into the banks’ coffers at almost zero interest rates to prop them back up. It does that through its power to electronically create money out of thin air. Take, for example, the $16 trillion it secretly lavished on Wall Street banks and their foreign counterparts during the financial crash of 2007 to 2010. For deviant banks and their shareholders, the Federal Reserve has a big heart, great sympathy and big purse strings. When it comes to the human suffering of Americans, it consistently turns its back. Consider how Dudley’s predecessor at the New York Fed, Tim Geithner, handled the housing crisis created by Wall Street banks. According to Neil Barofsky, the Special Inspector General of the Troubled Asset Relief Program, in his book Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street, this is what happened: the Fed created HAMP, ostensibly a program to provide housing relief to humans but it was secretly a delay mechanism to help the banks. Barofsky wrote in his book: “For a good chunk of our allotted meeting time, Elizabeth Warren grilled Geithner about HAMP, barraging him with questions about how the program was going to start helping home owners. In defense of the program, Geithner finally blurted out, ‘We estimate that they can handle ten million foreclosures, over time,’ referring to the banks. ‘This program will help foam the runway for them.’
Mortgage industry can't afford to fall behind on blockchain -- Blockchain technology is no longer breaking news. The financial services industry has been quick to adopt it in various areas. But mortgage lenders and servicers have been slower to implement this technology to solve lending challenges.Skepticism about the value of blockchain may be rooted in unease about its connection to bitcoin and other virtual currencies known as cryptocurrencies. The tools in blockchain — its highly advanced security and distributed ledger — are tools that exist today and can be employed to address problems in lending. And it all can be done in traditional U.S. currency.It should also be stated that blockchain is neither a software package nor a platform that can be bought. It is the application of existing technologies in a way that ensures better transparency and improved security. It also boosts the bottom line by reducing necessary manpower and man-hours.We, in the lending industry, have seen the benefits that can be brought about by automation and standardization of data. We also understand the need for improved transparency and accountability to better adhere to regulatory requirements. Any innovations in lending must also consider the overall cost — both direct and indirect — to all parties involved.With this in mind, there is a case for mortgage lenders to adopt blockchain tools. The first step begins with looking at problems with some basic understanding of the tools involved. Let's examine some elements of blockchain and how they can be applied to the mortgage industry. Blockchains provide improved safety and security. Data that may be stored on a loan origination or servicing platform is tagged to a highly secure shared data framework where the records are represented by unique metadata that is algorithmically defined. Loan balance information is represented by a string of 64 calculated characters called a "hash." The hash contains not just the loan balance but other data, such as its source.
Credit union execs favor GSE model with an explicit government guarantee - Most credit unions support the status quo when it comes to the government-sponsored enterprises because they are a primary outlet to get mortgages off of their balance sheets.Just under 60% of those surveyed by the National Association of Federally-Insured Credit Unions said they sold loans to Fannie Mae (39%), Freddie Mac (12%) or both (12%).Those credit unions on average sold 37.1% of their 2017 production to the GSEs, but 22% of the respondents said they sold proportionally more loans to the enterprises prior to the Great Recession.Among the three scenarios asked about housing finance reform, 71% of those surveyed support keeping the GSEs or creating a similar outlet to sell loans to with the entity having an explicit government guarantee.
FHA premium cut would make homes less affordable, not more - The upbeat outlook in the Trump administration’s budget on the Federal Housing Administration’s fiscal position has reportedly renewed calls for a cut to FHA insurance premiums charged to homebuyers. The reduction was originally pushed through by the Obama administration in its waning days, but the effort was suspended indefinitely by the Trump administration upon taking office. This was the right decision then, and it continues to be the right decision. Any premium reduction would have a pernicious effect on the purchasing power of first-time, low-income homebuyers and would endanger FHA’s mutual mortgage insurance fund. The suspended reduction would have been on top of an even larger cut made in 2015, which had a number of unintended consequences. At the time, the agency claimed that the premium drop would result in 250,000 new first-time buyers over the next three years and save each FHA buyer $900 annually. In new research by the AEI Housing Center, we along with our colleagues found that home prices went up by about 2.5% for FHA borrowers — that is because a portion of the premium drop pushed home prices higher due to the supply-constrained seller's market. FHA's premium cut increased buying power but did nothing to increase supply. In an odd, yet predictable twist, prices also went up for non-FHA buyers in neighborhoods with FHA-insured sales. After all, it is one housing market where borrowers, no matter the financing, compete for houses. This caused the non-FHA buyers, who did not receive the benefit of lower premiums, to largely offset the price increase by buying a home of lesser quality — perhaps a smaller home, a smaller lot or a home in a different location. They were the clear losers.
FHA eyeing further action on mortgages with PACE liens --So far, the Federal Housing Administration's opposition to financing energy efficiency retrofits through property assessments has focused on mortgage originators. The government-sponsored enterprise no longer insures mortgages on homes with existing Property Assessed Clean Energy liens.It has yet to take action when a homeowner with an existing FHA-insured mortgage obtains PACE financing. Dana Wade, the FHA’s acting commissioner and deputy assistant secretary, suggested that this could change. In an address Tuesday at the Structured Finance Industry Group’s annual conference in Las Vegas, Wade said the agency is looking into whether “further action” is needed. “PACE obligations were effectively given prime status over FHA mortgage insurance, [and] such loans were riskier for both taxpayers and borrowers,” Wade said. “There do remain concerns over PACE assessments that are placed on FHA loans after endorsement.”
USA Mortgage adopts ESOP to give ownership stake to its workers -- USA Mortgage's owner is offering an employee stock ownership plan with the aim of helping it staff up as it expands outside its home market. Full-time staff members now can receive shares in USA Mortgage's owner, DAS Acquisition Co., if they complete 160 hours of service and meet other qualifying criteria. Employees are fully vested in the plan after six years. "There is no better way to thank the people who have helped us achieve success as well as reward those who will be leading the charge in the future," Doug Schukar, founder of USA Mortgage owner DAS Acquisition Co. LLC, said in a press release. The terms of the company's recent 100% ownership transfer to the ESOP, which were based on an independent valuation of the privately held company, were not disclosed. Schukar plans to continue serving as CEO. "I have no plans to retire," Schukar said. "I will continue in a role that supports our growth."
Risky mortgages primed for comeback under Senate reg relief bill - Now that we’re at the top of the business cycle, it’s about time for amnesia to set in about the last financial crisis. Sure enough, that’s what’s happening with the Senate’s latest attempt to roll back key financial reforms. The Economic Growth, Regulatory Relief, and Consumer Protection Act, by Sen. Mike Crapo, R-Idaho, has made it to the Senate floor and is poised for a vote, with Republican and some Democratic support. This bill, if enacted, would make a terrible mistake by paving the way for another financial meltdown. When Congress passed the Dodd-Frank Act in 2010, it required lenders to first determine that loan applicants are able to repay before making them home mortgages. Lenders who fail to make this assessment can be liable to borrowers. Congress did provide lenders with some legal protection by insulating them from ability-to-repay claims by borrowers for loans meeting certain safety requirements set out in Dodd-Frank. These so-called “qualified mortgages” have important guardrails against a future spike in defaults, including stricter underwriting and safer loan terms. Congress carefully designed these protections to prevent a repeat of some of the biggest lending lapses culminating in the 2008 financial crisis. The Senate bill waters down these safeguards for banks with total assets of up to $10 billion by permitting them to make unaffordable mortgages, with no liability to borrowers, so long as the banks hold the loans on their books.
Freddie Mac: Mortgage Serious Delinquency Rate Decreased Slightly in January - Freddie Mac reported that the Single-Family serious delinquency rate in January was 1.07%, down from 1.08% in December. Freddie's rate is up from 0.99% in January 2017. Freddie's serious delinquency rate peaked in February 2010 at 4.20%. These are mortgage loans that are "three monthly payments or more past due or in foreclosure". The recent increase in the delinquency rate was due to the hurricanes - no worries about the overall market (These are serious delinquencies, so it took three months late to be counted). After the hurricane bump, maybe the rate will decline to a cycle bottom in the 0.5% to 0.8% range.
Fannie Mae: Mortgage Serious Delinquency rate decreased slightly in January -- Fannie Mae reported that the Single-Family Serious Delinquency rate decreased to 1.23% in January, down from 1.24% in December. The serious delinquency rate is up from 1.20% in January 2017. These are mortgage loans that are "three monthly payments or more past due or in foreclosure". The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%. By vintage, for loans made in 2004 or earlier (3% of portfolio), 3.31% are seriously delinquent. For loans made in 2005 through 2008 (6% of portfolio), 6.54% are seriously delinquent, For recent loans, originated in 2009 through 2017 (91% of portfolio), only 0.54% are seriously delinquent. So Fannie is still working through poor performing loans from the bubble years. The recent increase in the delinquency rate was due to the hurricanes - no worries about the overall market (These are serious delinquencies, so it took three months late to be counted).After the hurricane bump, maybe the rate will decline to 0.5 to 0.7 percent or so to a cycle bottom.
Mortgage payment gets back on track after Harvey and Irma - Hurricane-related delinquencies are subsiding somewhat, and pre-storm foreclosures that were put on hold are resuming.Serious delinquencies of 90 or more days were down by 19,000 compared to the previous month at 707,000, according to Black Knight's First Look report.Payments that were 90 or more days late and related to Hurricanes Harvey and Irma fell to 132,000 in January from 142,000 in December. Delinquencies of 90 days or more are still up by 43,000 from a year ago. In total, there were more than 2.5 million loans past due by 30 or more days in January, including foreclosures. That total was down more than 200,000 from December and down more than 100,000 from a year ago.Mortgages that are delinquent by 30 days or more but are not in foreclosure made up more than 4% of all loans in January. Loans in this category were down more than 8.5% compared to the previous month, but up more than 1% year-to-year.Foreclosure starts jumped 40% from December during January to 62,300. But foreclosure starts are down 11.51% year-over-year. Total loans in active foreclosure rose by 6,000 to 337,000.Florida, which was hit hard by Irma, continues to be the state with the largest percentage of severe delinquencies, but its share has fallen back below 4%. Florida also has seen the most deterioration in its percentage of noncurrent loans over the past six months. The prepayment rate slowed in the past month, falling almost 15% compared to December and almost 17% compared to a year ago.
Mortgage rates rise following new Fed chairman's testimony - The new Federal Reserve Board chairman's testimony in Congress was the driver of this week's mortgage rate increase, according to Freddie Mac. The 30-year fixed-rate mortgage averaged 4.43% for the week ending March 1, up from last week when it averaged 4.4%. A year ago at this time, the 30-year fixed-rate mortgage averaged 4.1%. Rates have increased the eight consecutive weeks. "Optimistic testimony on Capitol Hill from Federal Reserve Chairman Jerome Powell sent Treasury yields higher as Powell stated his outlook for the economy has strengthened since December," Len Kiefer, Freddie Mac's deputy chief economist, said in a press release. "Following Treasuries, the 30-year fixed mortgage rate jumped 3 basis points. The 30-year rate has been on a tear in 2018, climbing 48 basis points since the start of the year and increasing for eight consecutive weeks." The 15-year fixed-rate mortgage this week averaged 3.9%, up from last week when it averaged 3.85%. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.32%. The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.62% this week with an average 0.4 point, down slightly from last week when it averaged 3.65%. A year ago at this time, the five-year adjustable-rate mortgage averaged 3.14%.
MBA: Mortgage Applications Increase in Latest Weekly Survey -- From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey Mortgage applications increased 2.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 23, 2018. This week’s results include an adjustment for the Washington's Birthday (Presidents’ Day) holiday. .. The Refinance Index decreased 1 percent from the previous week. The seasonally adjusted Purchase Index increased 6 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 3 percent higher than the same week one year ago. ... The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) remained unchanged from last week at 4.64 percent, with points increasing to 0.63 from 0.61 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The first graph shows the refinance index since 1990.
Mortgage applications increase on higher purchase volume - Higher levels of purchase activity even with rising interest rates drove the increase in mortgage applications compared with one week earlier, according to the Mortgage Bankers Association.The MBA's Weekly Mortgage Applications Survey for the week ending Feb. 23 found that the refinance index decreased 1% from the previous week. This week's results include an adjustment for the Presidents Day holiday. The refinance application share decreased to 41.8% from 44.4% the previous week. The seasonally adjusted purchase index increased 6% from one week earlier. The unadjusted purchase index decreased 1% compared with the previous week and was 3% higher than the same week one year ago.
Black Knight: House Price Index up 0.1% in December, Up 6.6% year-over-year -- Note: Black Knight uses the current month closings only (not a three month average like Case-Shiller or a weighted average like CoreLogic), excludes short sales and REOs, and is not seasonally adjusted. From Black Knight: Black Knight HPI: U.S. Home Prices Ended 2017 Up 6.62 Percent from Start of Year, Gaining 0.1 Percent in December
• U.S. home prices edged up slightly in December, closing the year 6.6 percent above end of 2016Once again, this index is Not seasonally adjusted, and seasonally declines in some states is expected (so don't read too much into any regional declines). The year-over-year increase in this index has been about the same for the last year (close to 6% range). Note also that house prices are above the bubble peak in nominal terms, but not in real terms (adjusted for inflation).
• December marked 68 consecutive months of annual home price appreciation
• New York once again led all states in monthly gains, with home prices up 1.71 percent over last month
• Home prices fell in nine of the nation’s 20 largest states, while six others hit new peaks
• Likewise, while 11 of the 40 largest metros hit new home price peaks in December, prices fell in another 20
FHFA House Price Index: Index Up 1.6% in Q4 2017 -The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for December. Here is the opening of the report:U.S. house prices rose 1.6 percent in the fourth quarter of 2017 according to the Federal Housing Finance Agency (FHFA) House Price Index (HPI). House prices rose 6.7 percent from the fourth quarter of 2016 to the fourth quarter of 2017. FHFA’s seasonally adjusted monthly index for December was up 0.3 percent from November.“The fourth quarter showed absolutely no letup in the remarkable pace of home price appreciation through the country, “said Andrew Leventis, Deputy Chief Economist. “As we begin to track home prices in the first quarter, we will be interested to see whether new headwinds—higher mortgage rates and changes in tax laws—will lead to any moderation in the rate of price growth.” [Read more] The chart below illustrates the monthly HPI series, which is not adjusted for inflation, along with a real (inflation-adjusted) series using the Consumer Price Index: All Items Less Shelter.
Home Prices Continue Rise in December - With today's release of the December S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index were up 0.60% month over month. The seasonally adjusted national index year-over-year change has hovered between 4.2% and 6.2% for the last two plus years. Today's S&P/Case-Shiller National Home Price Index (nominal) reached another new high. The adjacent column chart illustrates the month-over-month change in the seasonally adjusted 20-city index, which tends to be the most closely watched of the Case-Shiller series. It was up 0.60% from the previous month. The nonseasonally adjusted index was up 6.3% year-over-year.Investing.com had forecast a 0.6% MoM seasonally adjusted increase and 6.4% YoY nonseasonally adjusted for the 20-city series. Here is an excerpt of the analysis from today's Standard & Poor's press release.The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 6.3% annual gain in December, up from 6.1% in the previous month. The 10-City Composite annual increase came in at 6.0%, no change from the previous month. The 20-City Composite posted a 6.3% year-over-year gain, down from 6.4% in the previous month.“The rise in home prices should be causing the same nervous wonder aimed at the stock market after its recent bout of volatility,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Across the 20 cities covered by S&P Corelogic Case Shiller Home Price Indices, the average increase from the financial crisis low is 62%; over the same period, inflation was 12.4%. None of the cities covered in this release saw real, inflation-adjusted prices fall in 2017. The National Index, which reached its low point in 2012, is up 38% in six years after adjusting for inflation, a real annual gain of 5.3%. The National Index’s average annual real gain from 1976 to 2017 was 1.3%. Even considering the recovery from the financial crisis, we are experiencing a boom in home prices." [Link to source] The chart below is an overlay of the Case-Shiller 10- and 20-City Composite Indexes along with the national index since 1987, the first year that the 10-City Composite was tracked. Note that the 20-City, which is probably the most closely watched of the three, dates from 2000. We've used the seasonally adjusted data for this illustration.
Case-Shiller: National House Price Index increased 6.3% year-over-year in December S&P/Case-Shiller released the monthly Home Price Indices for December ("December" is a 3 month average of October, November and December prices).This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index. From S&P: S&P CoreLogic Case-Shiller National Home Price Index Shows Home Prices End the Year 6.3% Higher than 2016The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 6.3% annual gain in December, up from 6.1% in the previous month. The 10-City Composite annual increase came in at 6.0%, no change from the previous month. The 20-City Composite posted a 6.3% year-over-year gain, down from 6.4% in the previous month.Seattle, Las Vegas, and San Francisco reported the highest year-over-year gains among the 20 cities. In December, Seattle led the way with a 12.7% year-over-year price increase, followed by Las Vegas with an 11.1% increase, and San Francisco with a 9.2% increase. Nine cities reported greater price increases in the year ending December 2017 versus the year ending November 2017 Before seasonal adjustment, the National Index posted a month-over-month gain of 0.2% in December. The 10-City and 20-City Composites both reported increases of 0.2%. After seasonal adjustment, the National Index recorded a 0.7% month-over-month increase in December. The 10-City and 20-City Composites both posted 0.6% month-over-month increases. Twelve of the 20 cities reported increases in December before seasonal adjustment, while all 20 cities reported increases after seasonal adjustment. The first graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000). The Composite 10 index is off 3.1% from the peak, and up 0.6% in December (SA). The Composite 20 index is off slightly from the peak, and up 0.6% (SA) in December. The National index is 7.0% above the bubble peak (SA), and up 0.7% (SA) in December. The National index is up 44.7% from the post-bubble low set in December 2011 (SA). The second graph shows the Year over year change in all three indices. The Composite 10 SA is up 6.0% compared to December 2016. The Composite 20 SA is up 6.3% year-over-year. The National index SA is up 6.3% year-over-year. Note: According to the data, prices increased in all 20 of 20 cities month-over-month seasonally adjusted.
Real House Prices and Price-to-Rent Ratio in December - It has been more than ten years since the bubble peak. In the Case-Shiller release this morning, the seasonally adjusted National Index (SA), was reported as being 7.0% above the previous bubble peak. However, in real terms, the National index (SA) is still about 11.1% below the bubble peak (and historically there has been an upward slope to real house prices). The year-over-year increase in prices is mostly moving sideways now around 6%. In December, the index was up 6.3% YoY. Usually people graph nominal house prices, but it is also important to look at prices in real terms (inflation adjusted). Case-Shiller and others report nominal house prices. As an example, if a house price was $200,000 in January 2000, the price would be close to $282,000 today adjusted for inflation (41%). That is why the second graph below is important - this shows "real" prices (adjusted for inflation). The first graph shows the monthly Case-Shiller National Index SA, and the monthly Case-Shiller Composite 20 SA (through December) in nominal terms as reported. In nominal terms, the Case-Shiller National index (SA) is at a new peak, and the Case-Shiller Composite 20 Index (SA) is back to March 2006 levels (and will probably be at a new high soon). \ The second graph shows the same two indexes in real terms (adjusted for inflation using CPI less Shelter). Note: some people use other inflation measures to adjust for real prices. In real terms, the National index is back to November 2004 levels, and the Composite 20 index is back to April 2004. In real terms, house prices are back to 2004 levels. This graph shows the price to rent ratio (January 2000 = 1.0). On a price-to-rent basis, the Case-Shiller National index is back to January 2004 levels, and the Composite 20 index is back to October 2003 levels. In real terms, prices are back to mid 2004 levels, and the price-to-rent ratio is back to late 2003, early 2004 - and the price-to-rent ratio has been increasing slowly.
Zillow Case-Shiller Forecast: More Solid House Price Gains in January -- The Case-Shiller house price indexes for December were released on Tuesday. Zillow forecasts Case-Shiller a month early, and I like to check the Zillow forecasts since they have been pretty close. From Aaron Terrazas at Zillow: December Case-Shiller Results and January Forecast: Why 2018 Looks A Lot Like 2017 The familiar patterns in the housing market that emerged in the second half of 2017 – lots of demand from home buyers, limited supply of homes available to buy, quickly rising prices and slow but steadily deteriorating affordability – are continuing to shape the start to 2018 as well. Zillow predicts the S&P/Case-Shiller national index will show a 6.4 percent gain in national home prices in January, a slight increase from the 6.3 percent annual gain home prices posted for December. The December increase was greater than November’s 6.1 percent annual gain. Case-Shiller will release January data on Tuesday, March 27.Case-Shiller’s 20-city composite index rose 6.3 percent year-over-year in December, a slight slowdown from November’s 6.4 percent annual growth. The 10-city composite index climbed 6 percent, the same rate as the prior month.Among cities included in the 20-city index, Seattle, Las Vegas and San Francisco reported the highest year-over-year gains in December, at 12.7 percent, 11.1 percent and 9.2 percent, respectively. The Zillow forecast is for the year-over-year change for the Case-Shiller National index to be slightly larger in January than in December. Zillow is forecasting a smaller year-over-year increase for both the 10-city index, and the 20-city index in January.
Housing Inventory Tracking --Bill Mcbride - Watching existing home "for sale" inventory is very helpful. As an example, the increase in inventory in late 2005 helped me call the top for housing. And the decrease in inventory eventually helped me correctly call the bottom for house prices in early 2012, see: The Housing Bottom is Here. And in 2015, it appeared the inventory build in several markets was ending, and that boosted price increases. I don't have a crystal ball, but watching inventory helps understand the housing market. The graph below shows the year-over-year change for non-contingent inventory in Las Vegas through January 2018, Phoenix and Sacramento, and also total existing home inventory as reported by the NAR (through January 2018).This shows the year-over-year change in inventory for Phoenix, Sacramento, and Las Vegas. The black line if the year-over-year change in inventory as reported by the NAR. Note that inventory is Sacramento was up 15% year-over-year in January (still very low), and has increased year-over-year for four consecutive months. However inventory is down Nationally, and down in Phoenix and Las Vegas. Inventory is a key for the housing market, and I will be watching inventory for the impact of the new tax law and higher mortgage rates on housing.
New Home Sales decrease to 593,000 Annual Rate in January -- The Census Bureau reports New Home Sales in January were at a seasonally adjusted annual rate (SAAR) of 593 thousand. The previous three months were revised up. "Sales of new single-family houses in January 2018 were at a seasonally adjusted annual rate of 593,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 7.8 percent below the revised December rate of 643,000 and is 1.0 percent below the January 2017 estimate of 599,000." The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate. Even with the increase in sales over the last several years, new home sales are still somewhat low historically. The second graph shows New Home Months of Supply. The months of supply increased in January to 6.1 months from 5.5 months in December. The all time record was 12.1 months of supply in January 2009. This is at the top end of the normal range (less than 6 months supply is normal). "The seasonally-adjusted estimate of new houses for sale at the end of January was 301,000. This represents a supply of 6.1 months at the current sales rate. " Starting in 1973 the Census Bureau broke inventory down into three categories: Not Started, Under Construction, and Completed. The third graph shows the three categories of inventory starting in 1973. The inventory of completed homes for sale is still low, and the combined total of completed and under construction is also low.
January housing: on new home sales, curb the Doom! -- With the release of New Home Sales, we have a more complete look at the status of housing in January. Two months ago, I suggested that you restrain your enthusiasm for a blowout number to the upside. Today, the opposite is also the case: ignore the Doomers' inevitable gloom about a big disappointment to the downside. First of all, let's put single family home sales in context. Below are new home sales (blue), single family permits (red), and single family starts (green) since their bottom in 2010: In case it isn't clear from that longer term look at the trend, here is the last 18 months: With a few pauses along the way (most of 2014 and 2017) due to temporary increases in interest rates, housing has plodded along at about 5% gains per year. This is most clear from single family permits, which are the least volatile measure of the three. Because of their great volatility, new home sales are best viewed as a 3 month moving average. Here they are only down slightly (644k) from their expansion high one month ago (650k). Meanwhile, median prices also declined this month, but the increasing trend is intact. Let's also compare with January's housing permits (red) and starts (green) for all types of housing: Here again the pause for most of 2017 with the recent new expansion highs are plainly visible. Going forward, I certainly expect the recent spike in interest rates to again take a bite out of sales as, sooner or later, will increased prices. As in 2014 and 2017, it will be a few months before it shows up in this data. But for now, despite the downside new home sales number today, the recent positive trend in housing is still intact.
A few Comments on January New Home Sales - Bill Mcbride - New home sales for January were reported at 593,000 on a seasonally adjusted annual rate basis (SAAR). This was below the consensus forecast, however the three previous months were revised up. I wouldn't read too much into one month of sales, especially in January. January is usually one of the weakest months of the year for new home sales, on a not seasonally adjusted (NSA) basis - and poor weather this year might have impacted sales a little more than usual. I'd like to see data for February and March before blaming higher interest rates, or a negative impact from the new tax law, as the cause of slower sales.This graph shows new home sales for 2017 and 2018 by month (Seasonally Adjusted Annual Rate). Sales were down 1% year-over-year in January. No worries - yet! And here is another update to the "distressing gap" graph that I first started posting a number of years ago to show the emerging gap caused by distressed sales. Now I'm looking for the gap to close over the next several years. The "distressing gap" graph shows existing home sales (left axis) and new home sales (right axis) through January 2018. This graph starts in 1994, but the relationship had been fairly steady back to the '60s. Following the housing bubble and bust, the "distressing gap" appeared mostly because of distressed sales. The gap has persisted even though distressed sales are down significantly, since new home builders focused on more expensive homes. I expect existing home sales to move more sideways, and I expect this gap to slowly close, mostly from an increase in new home sales. However, this assumes that the builders will offer some smaller, less expensive homes. If not, then the gap will persist.
NAR: Pending Home Sales Index Decreased 4.7% in January, Down 3.8% Year-over-year --From the NAR: Pending Home Sales Stumble 4.7 Percent in January - After seeing a modest three-month rise in activity, pending home sales cooled considerably in January to their lowest level in over three years, according to the National Association of Realtors®. All major regions experienced monthly and annual declines in contract signings last month.The Pending Home Sales Index, a forward-looking indicator based on contract signings, fell 4.7 percent to 104.6 in January from a downwardly revised 109.8 in December 2017. After last month’s retreat, the index is now 3.8 percent below a year ago and at its lowest level since October 2014 (104.1). The PHSI in the Northeast dropped 9.0 percent to 87.0 in January, and is now 12.1 percent below a year ago. In the Midwest the index fell 6.6 percent to 98.2 in January, and is now 4.1 percent lower than January 2017. Pending home sales in the South declined 3.9 percent to an index of 121.9 in January, and are now 1.1 percent lower than last January. The index in the West decreased 1.2 percent in January to 97.9, and is 2.5 percent below a year ago.This was well expectations of a 0.5% increase for this index. Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in February and March.
Construction Spending mostly unchanged in January --Earlier today, the Census Bureau reported that overall construction spending was mostly unchanged in January: Construction spending during January 2018 was estimated at a seasonally adjusted annual rate of $1,262.8 billion, nearly the same as the revised December estimate of $1,262.7 billion. The January figure is 3.2 percent above the January 2017 estimate of $1,223.5 billion. Private spending decreased and public spending increased in January:Spending on private construction was at a seasonally adjusted annual rate of $962.7 billion,0.5 percent below the revised December estimate of $967.9 billion. ...In January, the estimated seasonally adjusted annual rate of public construction spending was $300.1 billion, 1.8 percent above the revised December estimate of $294.8 billion. This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted. Private residential spending has been increasing, but is still 23% below the bubble peak. Non-residential spending is 6% above the previous peak in January 2008 (nominal dollars). Public construction spending is now 8% below the peak in March 2009, and 14% above the austerity low in February 2014. Year-over-year Construction SpendingThe second graph shows the year-over-year change in construction spending. On a year-over-year basis, private residential construction spending is up 4%. Non-residential spending is down 1% year-over-year. Public spending is up 8% year-over-year. This was below the consensus forecast of a 0.3% increase for January, however spending for the previous two months was revised up slightly.
US construction spending flat as commercial building falls | Fox News: The Commerce Department said Thursday that spending on the construction of single-family homes rose 0.6 percent, while apartment building fell. Construction of commercial projects, such as office towers and malls, fell 2.7 percent. Construction spending on new power plants plunged 6.2 percent. Construction spending rose in 2017 at the slowest pace in six years, as homebuilders have struggled to find enough workers and enough cheap land to build on. Total private construction fell 0.5 percent in January. States and the federal government have made up for some of the decline, increasing their construction spending 1.8 percent in January. Federal spending soared 14.9 percent to the highest level in more than seven years. Spending on highway and road building rose 4.4 percent and construction of schools increased 2.1 percent.
January 2018 Headline Construction Spending Growth Unchanged?: The headlines say construction was unchanged and within expectations. Our view is that this does not consider inflation, or the fact that the previous month's data was revised upward. There continues to be significant backward revision to the data - this month was downward. The rolling averages declined. Also note that inflation is grabbing hold - and the inflation adjusted numbers are showing contraction in this sector. The employment gains year-over-year are near the same than the year-over-year growth in construction spending.. Econintersect & US Census Analysis:
- Growth accelerated 1.1 % month-over-month and up 3.7 % year-over-year.
- Inflation adjusted construction spending down 0.9 % year-over-year.
- 3 month rolling average is 2.9 % above the rolling average one year ago which is a 0.6 % acceleration month-over-month. As the data is noisy (and has so much backward revision) - the moving averages likely are the best way to view construction spending.
- Backward revision for the last 3 months were upward
- Unchanged month-over-month and up 3.2 % year-over-year.
- Market expected from Bloomberg / Econoday -0.8 % to 1.2 % month-over-month (consensus +0.3).
Construction spending (unadjusted data) was declining year-over-year for 48 straight months until November 2011. That was four years of headwinds for GDP. This month's headline statement from US Census: Construction spending during January 2018 was estimated at a seasonally adjusted annual rate of $1,262.8 billion, nearly the same as (±1.0 percent)* the revised December estimate of $1,262.7 billion. The January figure is 3.2 percent (±1.3 percent) above the January 2017 estimate of $1,223.5 billion. -Spending on private construction was at a seasonally adjusted annual rate of $962.7 billion, 0.5 percent (± 0.7 percent)* below the revised December estimate of $967.9 billion. Residential construction was at a seasonally adjusted annual rate of $523.2 billion in January, 0.3 percent (±1.3 percent)* above the revised December estimate of $521.8 billion. Nonresidential construction was at a seasonally adjusted annual rate of $439.6 billion in January, 1.5 percent (± 0.7 percent) below the revised December estimate of $446.2 billion. In January, the estimated seasonally adjusted annual rate of public construction spending was $300.1 billion, 1.8 percent (±1.8 percent)* above the revised December estimate of $294.8 billion. Educational construction was at a seasonally adjusted annual rate of $76.7 billion, 2.1 percent (±3.8 percent)* above the revised December estimate of $75.2 billion. Highway construction was at a seasonally adjusted annual rate of $92.6 billion, 4.4 percent (±4.6 percent)* above the revised December estimate of $88.8 billion.
Worsening Lumber "Supply Crisis" Is Driving Record Home Prices Higher -- As we've repeatedly pointed out, home prices in the US have been climbing at a blistering pace (and, more importantly, much faster than wages) thanks to a shortage of supply. But builders trying to alleviate that shortage are struggling under some of the most adverse market conditions in more than a decade: To wit, a lumber shortage has pushed prices to their highest levels since the financial crisis as wildfires and a blossoming trade spat between the US and Canada have choked off some supplies.As a result, homebuilders are being forced to pass on thousands of dollars in additional costs to the buyers, perhaps one reason why new- and pending- home sales have fallen recently... Lumber prices started climbing last year thanks to wildfires destroying prime forest land along the Pacific Northwest, as well as a worsening trade spat over softwood lumber that dates back to the Obama administration. While US media was preoccupied with the California wildfires, Canada's Pacific coast saw its worst wildfires on record, too. Furthermore, Trump last year slapped tariffs on most types of lumber, with the highest rate at 24%, one of several protectionist moves against its northern neighbor. Material prices now rival labor shortages as builders’ main concerns, a National Association of Home Builders survey showed in January. Prices for common building varieties like spruce and southern pine are at or near records, according to price-tracking publication Random Lengths.Like all commodity producers and distributors, lumber suppliers have been struggling with higher transportation costs due to a shortage of drivers and, for major freight railroads, a shortage of cars and routes. Some lumber wholesalers, as well as market analysts, have described the situation as a supply-side "crisis.""We are in a lumber supply crisis," . "None of us have experienced a market like this.".... "People are screaming for their wood," ...
Personal Income increased 0.4% in January, Spending increased 0.2% - The BEA released the Personal Income and Outlays report for January: Personal income increased $64.7 billion (0.4 percent) in January according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $134.8 billion (0.9 percent) and personal consumption expenditures (PCE) increased $31.2 billion (0.2 percent). Real DPI increased 0.6 percent in January and Real PCE decreased 0.1 percent. The PCE price index increased 0.4 percent. Excluding food and energy, the PCE price index increased 0.3 percent. The January PCE price index increased 1.7 percent year-over-year and the October PCE price index, excluding food and energy, increased 1.5 percent year-over-year. The following graph shows real Personal Consumption Expenditures (PCE) through January 2018 (2009 dollars). Note that the y-axis doesn't start at zero to better show the change.The dashed red lines are the quarterly levels for real PCE. The increase in personal income was slightly above expectations, and the increase in PCE was at expectations.
January 2018 Headline Personal Income and Expenditures Improve: The headline data this month good month-over-month growth in income and expenditures - with expenditures year-over-year growth now well above income growth - with the savings rate remaining historically low. The savings rate declined and remains at 21st century lows. Consumer spending growth was lower than income growth year-over-year. The backward revisions are driving this analyst crazy - especially the year-over-year numbers which are jumping around massively..
- The monthly fluctuations are confusing. Looking at the inflation adjusted 3 month trend rate of growth, disposable income growth rate trend is slowing while consumption's growth rate is also slowing.
- Real Disposable Personal Income is up 2.1 % year-over-year (published 2.1 % last month and revised to 1.8 %), and real consumption expenditures is up 2.8 % year-over-year (published 1.7 % last month and revised to 2.9 %)
- The 4Q2017 GDP estimate indicated the economy was expanding at 2.5 % (quarter-over-quarter compounded). Expenditures are counted in GDP, and income is ignored as GDP measures the spending side of the economy. However, over periods of time - consumer income and expenditure grow at the same rate.
- The savings rate continues to be low historically, and marginally declined to 2.4 % this month [last month it was published the savings rate was 2.4 % - and is now revised to 2.5].
Real Personal Spending Drops Most In 2 Years As Savings Rate Jumps -Despite a slightly better than expected rise in personal income (+0.4% MoM), Real Personal Spending declined 0.1% in January - its biggest drop since January 2016. The was the bad news; the good news was in the nominal Personal Income number, which rose 0.4% MoM in January (vs 0.3% expected rise), the same growth as in December. The number got a big boost from the tax cuts which started filtering through to paychecks thanks to one-time corporate bonuses. As a result, worker pay adjusted for inflation and taxes rose 0.6%, the most since December 2012. Wages and salaries were adjusted up by $30 billion to reflect one-time bonuses given out in wake of tax cut legislation.Additionally, consumers benefited from the $115.5 billion annualized drop in personal taxes.Meanwhile, Personal Spending growth slowed to 0.2% MoM from 0.4% MoM in December.And with the PCE Deflator coming in hotter than expected at +0.4% MoM, real personal spending dropped the most in 2 years... Meanwhile, inflation continued to tick up if not at a runaway pace, with the PCE Price Index rising 0.4% M/M, and 1.7% Y/Y while the January PCE Core Price Index rose 0.3% M/M and 1.5% Y/Y.Commenting on the data, Bloomberg senior economist Yelena Shulyatyeva said that "The stall in retail sales in January was a precursor to a more pervasive pattern in overall household consumption. Weakness in personal spending should be temporary, likely the result of two factors: adverse weather hindered retail sales at the start of the month, and the January data may be payback after a stellar fourth-quarter performance. Robust disposable income growth, driven by tax cuts, will likely boost consumption as the first quarter progresses."It appears American consumers finally had their 'come to jesus' moment with credit excess as the savings rate jumped off record lows, also largely thanks to the tax-cut impact.
1 in 5 Americans have more credit-card debt than savings -- One in five Americans say they have more credit-card debt than they do in emergency savings, according to a report published Thursday from the personal-finance company Bankrate. Another 12% said they had no credit card debt, but they also had no savings. Bankrate surveyed 1,000 people during early February. But the report isn’t all bad news. More than half (58%) said they had more in emergency savings funds than in credit-card debt, the highest percentage Bankrate has ever had, tied with the amount who said this in 2015. Financial experts typically recommend that all consumers have three to six months’ worth of expenses saved in an easy-to-access emergency fund, to guard against any unexpected expenses. Bankrate did not ask exactly how much those surveyed had saved. “Unemployment is coming down, people are making more money, and they’re finally making progress on right-sizing the equation between credit-card debt and emergency savings.” Millennials were actually standouts for their good savings behavior, McBride said. Some 61% of millennials said they had more emergency savings than credit-card debt. Just 54% of the members of Generation X said they had more, compared to 56% of baby boomers and 67% of members of the Silent Generation. Millennials may be doing a good job saving because they had “a front row seat for the financial crisis,” he said. It can be tempting to pay down debt rather than save, but consumers really have to do both, McBride said. “That lack of savings can lead to even more debt.”
Consumer Confidence Highest Since 2000 -- The latest Conference Board Consumer Confidence Index was released this morning based on data collected through February 15. The headline number of 130.8 was an increase from the final reading of 124.3 for January, a downward revision from 125.4. Today's number was above the Investing.com consensus of 126.2. Here is an excerpt from the Conference Board press release.“Consumer confidence improved to its highest level since 2000 (Nov. 2000, 132.6) after a modest increase in January,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions was more favorable this month, with the labor force the main driver. Despite the recent stock market volatility, consumers expressed greater optimism about short-term prospects for business and labor market conditions, as well as their financial prospects. Overall, consumers remain quite confident that the economy will continue expanding at a strong pace in the months ahead.” The chart below is another attempt to evaluate the historical context for this index as a coincident indicator of the economy. Toward this end, we have highlighted recessions and included GDP. The regression through the index data shows the long-term trend and highlights the extreme volatility of this indicator. Statisticians may assign little significance to a regression through this sort of data. But the slope resembles the regression trend for real GDP shown below, and it is a more revealing gauge of relative confidence than the 1985 level of 100 that the Conference Board cites as a point of reference.
Michigan Consumer Sentiment: February Final Favorable - The University of Michigan Final Consumer Sentiment for February came in at 99.7, up 4.0 from the January Final reading of 95.7. Investing.com had forecast 99.5.Surveys of Consumers chief economist, Richard Curtin, makes the following comments:Consumer sentiment remained quite favorable in February, at its second highest level since 2004. Consumers based their optimism on favorable assessments of jobs, wages, and higher after-tax pay. The highest proportion of households since 1998 reported that their finances had improved compared with a year ago and anticipated continued gains during the year ahead. Economic news heard by consumers continued to be dominated by the tax reform legislation and net job gains, which was untarnished by the consensus view that interest rates would increase and stock prices would remain volatile. Although rising interest rates was seen as a reason to temper their longer term outlook for the overall economy, only a modest moderation in the pace of economic growth was anticipated. Although consumers expected the unemployment rate to dip below 4% in 2018, only modest wage growth was anticipated, and inflation expectations have remained unchanged. Interest rates, even when pushed higher in the weeks and months ahead, will not cause postponement of discretionary purchases as long as income continues to rise near its present pace. Personal tax cuts are crucial to spur additional spending, but unlike prior cuts that had an immediate positive impact, this tax cut has not generated universal support across partisan lines. Overall, the data signal an expected gain of 2.9% in real personal consumption expenditures during 2018. [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.
U.S. Light Vehicle Sales mostly unchanged at 17.1 million annual rate in February - Based on a preliminary estimate from AutoData, light vehicle sales were at a 17.08 million SAAR in February. That is down 1.4% year-over-year from February 2017, and down slightly from last month This graph shows the historical light vehicle sales from the BEA (blue) and an estimate for February (red, light vehicle sales of 17.08 million SAAR from AutoData).This was at the consensus forecast for February. Note that the increase in sales at the end of 2017 was due to buying following the hurricanes. Sales will probably decline again in 2018 after setting a new sales records in both 2015 and 2016. The second graph shows light vehicle sales since the BEA started keeping data in 1967.
Lines Out the Door and Strong Sales at Tampa Gun Show - NYT — The lines stretched out the door this weekend at a gun show in Tampa, Fla., as thousands of potential buyers and the merely curious waited for their turn to browse booths stocked with the latest firearms, ammunition, customizable holsters and patriotic paraphernalia. Inside, parents pushed their babies in strollers past T-shirts emblazoned with phrases like “I study triggernometry.” A nonprofit group in one booth was raffling off a rifle to raise money to battle child and animal abuse. On large signs by the entrance, the National Rifle Association was offering refunds on the $11 admission if shoppers signed up for a membership. Outside, Girl Scouts were selling cookies. But the deadly mass shooting a couple of hundred miles away at Marjory Stoneman Douglas High School cast its shadow. Both buyers and sellers were talking about the attack, as well as about the divisive debate that it had recently reignited. s And there, on many tables, were racks of AR-15s — variations of the hugely popular semiautomatic rifle used by the 19-year-old Parkland gunman.
Could credit-card companies ban gun sales? - If government officials won’t curb gun sales in the U.S., could companies that handle the payments for guns do it? That’s the idea Andrew Ross Sorkin, a columnist for The New York Times, suggested, as Americans debate gun-control laws a week after a shooter killed 17 people at South Florida’s Marjory Stoneman Douglas High School. “What if the finance industry — credit card companies like Visa, Mastercard, and American Express credit card processors like First Data and banks like JPMorgan Chase and Wells Fargo WFC effectively set new rules for the sales of guns in America?” he wrote. “Collectively, they have more leverage over the gun industry than any lawmaker. And it wouldn’t be hard for them to take a stand.” By refusing to process payments for firearms, or refusing to do business with retailers that sell guns, credit-card companies could make it much harder for Americans to get their hands on guns — unless of course they’re paying cash for them, Sorkin suggested. That’s an intriguing idea, but probably not a realistic one, said James Wester, the research director for worldwide payment strategies at International Data Corporation, a market research firm. That’s because the way companies work together to process payments makes it almost impossible to achieve. Payment companies like Visa and Mastercard set up business relationships with merchants, Wester said. They set rules for how their cards can be used, but they don’t approve or reject individual payments for particular items, he said. Instead, they process payments for any purchase from a specific merchant. In order to stop firearms sales from stores that sell other items, credit-card issuers would have to decide they will not do business with a merchant at all if they sell guns. “Payments are about huge volumes and tiny margins across those volumes,” Wester said. “Saying to large retailers, ‘We don’t want any of your business. We know you may sell one item we don’t approve of,’ is probably unrealistic.”
Google Censors Guns, Removes Shopping Results - On February 26, Twitter users LADowd and Xavier Dreyman noticed that results in the most-used search engine in the world were returning nothing in the “Shopping” tab when any query included a gun part, model, or manufacturer.His first result was for the rather broad term of “rifle scope”. This netted zero results while providing just two sponsored results below the main search. Curiosity must’ve taken over and he continued on looking for “remington razor” which also netted a whopping 0 results. Turns out, the problem was that Remington is most known for firearms.Twitter users became even more curious. Myself and others decided to test this and any shopping result for anything related to “Remington”, “Glock”, and “Colt” turns up nothing. Twitter user “Stigcicle” found a more concise list that includes censoring “Steyr”, an Australian town has the misfortune of sharing the name with a gun manufacturer. This includes shopping for parts for your Dodge Colt; if you still have one it is likely in need of many parts anyway. In order to verify, I took a video of the search results to confirm. Sure enough, it returns 0 results. In the wake of the Marjory Douglas Stoneman shooting that left 17 dead, renewed calls for gun control are center stage. So are the demands for consumers to boycott the NRA; companies that have business relationships are also facing mounting pressure from consumers and activists. However, Google’s actions in the wake of the this tragedy are not a surprise given the company’s known political stances. What is surprising is the action was taken in silence. In a time when so many are proud to announce their disagreements with the NRA, one cant help but wonder if this is Google’s way of testing the waters. After all, if it backfires, they can easily claim it was the mistake of some unaccountable department with nameless employees. If it wins, they claim victory. It almost looks strategic.
Companies Bow To Media Pressure, Sever Ties With NRA --Metlife, Hertz, Delta, United and a host of other companies are severing their ties with the NRA its refusal to support another assault weapons ban following the shooting at Marjory Stoneman Douglas High School in Parkland, Fla. But in an unprecedented step first reported by Axios, Bank of America said in a statement that it's reexamining relationships with clients who make AR-15s - the weapon that was used by shooter Nikolas Cruz to murder 16 of his teenage classmates and one adult. Companies have been bowing to social-media pressure and pulling out of their business partnerships - a trend that started when the First National Bank of Omaha tweeted that it would not be renewing its contract to produce NRA-branded Visa cards. Social media users like Joe Scarborough have been researching which companies have partnerships with the NRA, then tweeting their disapproval, forcing the companies to remove details of their relationship from their websites.Hey @FedEx, I’ve been a fan of your company from the start. Please do the right thing and stop supporting an organization that attacks America’s heroes who protect us from terror attacks. Please support our law enforcement officers so we cn keep supporting you. — Joe Scarborough (@JoeNBC) February 24, 2018As the Wall Street Journal reports, insurance giants Chubb Ltd. and Metlife, cybersecurity company Symantec Corp. and Enterprise Holdings - owner of the Alamo and National car-rental chains - have said publicly that they will end their partnerships with the NRA. Companies are reacting partly in response to a social-media movement to pressure or boycott entities with NRA ties, energized by the emotional calls for gun-control action from survivors of the shooting rampage at Marjory Stoneman Douglas High School in Parkland, Fla., and students around the country. On Friday, the hashtag “#BoycottNRA” was among the top trends on Twitter nationally.
Firmer pricing for transport costs point to another inflation factor (Reuters) - The drive for cost cuts and higher margins at U.S. trucking and railroad operators is pinching their biggest customers, forcing the likes of General Mills and Hormel Foods to spend more on deliveries and consider raising their own prices as a way to pass along the costs. Interviews with executives at 10 companies across the food, consumer goods and commodities sectors reveal that many are grappling with how to defend their profit margins as transportation costs climb at nearly double the inflation rate. Two executives told Reuters their companies do plan to raise prices, though they would not divulge by how much. A third said it was discussing prospective price increases with retailers. The prospect of higher prices on chicken, cereal and snacks costs comes as inflation emerged as a more distinct threat in recent weeks. The U.S. Labor Department reported earlier this month that underlying consumer prices in January posted their biggest gain in more than a year. As U.S. economic growth has revved up, railroads and truck fleets have not expanded capacity to keep pace - a decision applauded by Wall Street. Shares of CSX, Norfolk Southern and Union Pacific Corp have risen an average 22 percent over the past year as they cut headcount, locomotives and rail cars, and lengthened trains to lower expenses and raise margins. Quickening economic growth, a shortage of drivers and reduced capacity, and higher fuel prices have driven up transportation costs, prompting some companies to threaten to raise prices on goods ranging from chicken to cereal.
Advance Data Signals Biggest US Trade Deficit In 10 Years - For the fifth month in a row, the US trade balance went deeper into deficit (if the advance data holds), hitting a larger than expected -$74.4bn in January - the biggest deficit since July 2008 (in the middle of the last recession). Both imports and exports dropped in January:
- Exports fell 2.2% in Jan. to $133.922b from $137.004b in the prior month
- Imports fell 0.5% to $208.317b in Jan. from $209.263b in Dec.
But the overall picture is not pretty... As a reminder, the trade deficit was actually at a record high ex-petroleum in December...
Trade, Durable goods orders, Consumer confidence, Richmond Fed survey, Atlanta Fed nowcast --More signs of a slowdown as exports fall, which means less gdp, and consumer imports down, meaning personal spending was lower than expected, as discussed might be the case previously due to lower personal income growth: Exports came back sharply in January to feed an oversized $74.4 billion goods deficit in January, in what starts off another quarter of trouble for net exports and GDP. Exports fell 2.2 percent in the month with capital goods and industrial supplies posting sharp declines and easily offsetting a sizable gain for the smaller category of consumer goods. Imports also fell but much less so, down 0.5 percent with imports of consumer goods, which on this side of the ledger is the largest category, down 2.2 percent. Imports of capital goods were also down. Today’s report points to a beginning-of-the-year slowing for cross-border trade and a slowing lopsided against exports. Same here- lower than expected and at odds with the ‘surveys’ that show what I’ve called ‘trumped up expectations’: The major indications on the factory sector are mixed for January with more signs of moderation than acceleration in today’s durable goods report. Total orders sank a sharp 3.7 percent reflecting more than a give back for aircraft orders as the ex-transportation reading dipped an unexpected 0.3 percent. Unfortunately capital goods are part of the weakness, with core orders (nondefense ex-aircraft) down 0.2 percent in January following December’s 0.6 percent decline.Total shipments are another point of softness, up only 0.2 percent to begin the first quarter off slowly. And shipments of core capital goods, which are inputs into GDP business investment, begin the quarter with only a 0.1 percent gain. Total unfilled orders are another negative, down 0.3 percent and aside from a 0.6 percent gain in December are extending a surprisingly flat trend. One positive is inventory growth, up 0.3 percent and together with gains for this morning’s wholesale and retail inventories (released separately) are pointing to a quick start for first-quarter inventories.
Rail Week Ending 24 February 2018: A Marginally Worse Week: Week 8 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 contracted 2.0 %. 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 528,440 carloads and intermodal units, up 2.8 percent compared with the same week last year. Total carloads for the week ending February 24 were 251,970 carloads, down 1.3 percent compared with the same week in 2017, while U.S. weekly intermodal volume was 276,470 containers and trailers, up 6.7 percent compared to 2017. Four of the 10 carload commodity groups posted an increase compared with the same week in 2017. They included coal, up 781 carloads, to 85,600; petroleum and petroleum products, up 602 carloads, to 10,047; and farm products excl. grain, and food, up 103 carloads, to 16,494. Commodity groups that posted decreases compared with the same week in 2017 included grain, down 1,157 carloads, to 20,143; motor vehicles and parts, down 1,093 carloads, to 17,527; and nonmetallic minerals, down 1,044 carloads, to 31,511. For the first eight weeks of 2018, U.S. railroads reported cumulative volume of 1,980,887 carloads, down 2.4 percent from the same point last year; and 2,134,607 intermodal units, up 4.3 percent from last year. Total combined U.S. traffic for the first eight weeks of 2018 was 4,115,494 carloads and intermodal units, an increase of 1 percent compared to last year.
Wholesale Inventories Build Most In 3 Years, Signal Q1 GDP Boost - Wholesale Inventories rose 4.5% YoY in January - the biggest annual build since June 2015 - as it appears the nation's businesses are embracing the 'field of dreams' economy. The 0.7% MoM rise in inventories is almost double expectations. This better than expected inventory build will likely force an upside adjustment to Q1 GDP guesses (though Durable Goods disappointment may offset that).And while we are reflecting on Q1 - is it not somewhat off-putting that inventories surged but orders tumbled in January?
Headline Durable Goods Orders Down 3.7% in January -- The Advance Report on Manufacturers’ Shipments, Inventories, and Orders released today gives us a first look at the latest durable goods numbers. Here is the Bureau's summary on new orders: New orders for manufactured durable goods in January decreased $9.2 billion or 3.7 percent to $239.7 billion, the U.S. Census Bureau announced today. This decrease, down following two consecutive monthly increases, followed a 2.6 percent December increase. Excluding transportation, new orders decreased 0.3 percent. Excluding defense, new orders decreased 2.7 percent. Transportation equipment, also down following two consecutive monthly increases, led the decrease, $8.6 billion or 10.0 percent to $77.7 billion. Download full PDFThe latest new orders number at -3.7% month-over-month (MoM) was worse than the Investing.com consensus of -2.4%. The series is up 6.8% year-over-year (YoY).If we exclude transportation, "core" durable goods came in at -0.3% MoM, which was worse than theInvesting.com consensus of 0.4%. The core measure is up 6.9% YoY.If we exclude both transportation and defense for an even more fundamental "core", the latest number is up 1.6% MoM and up 7.3% YoY.Core Capital Goods New Orders (nondefense capital goods used in the production of goods or services, excluding aircraft) is an important gauge of business spending, often referred to as Core Capex. It is down 0.2% MoM and up 6.3% YoY. For a look at the big picture and an understanding of the relative size of the major components, here is an area chart of Durable Goods New Orders minus Transportation and Defense with those two components stacked on top. We've also included a dotted line to show the relative size of Core Capex.
ISM Manufacturing index increased to 60.8 in February --The ISM manufacturing index indicated expansion in February. The PMI was at 60.8% in February, up from 59.1% in January. The employment index was at 59.7%, up from 54.2% last month, and the new orders index was at 64.2%, down from 65.4%.From the Institute for Supply Management: February 2018 Manufacturing ISM® Report On Business® “The February PMI® registered 60.8 percent, an increase of 1.7 percentage points from the January reading of 59.1 percent. The New Orders Index registered 64.2 percent, a decrease of 1.2 percentage points from the January reading of 65.4 percent. The Production Index registered 62 percent, a 2.5 percentage point decrease compared to the January reading of 64.5 percent. The Employment Index registered 59.7 percent, an increase of 5.5 percentage points from the January reading of 54.2 percent. The Supplier Deliveries Index registered 61.1 percent, a 2 percentage point increase from the January reading of 59.1 percent. The Inventories Index registered 56.7 percent, an increase of 4.4 percentage points from the January reading of 52.3 percent. The Prices Index registered 74.2 percent in February, a 1.5 percentage point increase from the January reading of 72.7 percent, indicating higher raw materials prices for the 24th consecutive month. Comments from the panel reflect expanding business conditions, with new orders and production maintaining high levels of expansion; employment expanding at a faster rate to support production; order backlogs expanding at a faster rate; and export orders and imports continuing to grow faster in February. Supplier deliveries continued to slow (improving) at a faster rate. Price increases occurred across most industry sectors. The Customers’ Inventories Index indicates levels remain too low. Capital expenditure lead times improved by five days while production material supplier lead times extended four days during the month of February.” Here is a long term graph of the ISM manufacturing index. This was above expectations of 58.6%, and suggests manufacturing expanded at a faster pace in February than in January.
Markit Manufacturing PMI: "PMI close to three-year peak " - The February US Manufacturing Purchasing Managers' Index conducted by Markit came in at 55.3, down from the 55.5 final January figure. Today's headline number was below the Investing.com forecast of 55.9. Markit's Manufacturing PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction. Here is the an excerpt from Chris Williamson, Chief Business Economist at IHS Markit in their latest press release: “US factories are enjoying one of the best growth spells seen since 2014, boding well for the sector to make a solid contribution to GDP in the first quarter." “The survey’s output index readings for the first two months of 2018 are indicative of the sector growing at an annualised rate of just under 3%.” [Press Release] Here is a snapshot of the series since mid-2012.
Dallas Fed Manufacturing Outlook: Growth Accelerates in February -- This morning the Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for February. The latest general business activity index came in at 37.2, up from 33.4 in January. All figures are seasonally adjusted. Here is an excerpt from the latest report:Texas factory activity expanded at a faster pace in February, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose 11 points to 27.9, signaling a pickup in output growth.Perceptions of broader business conditions improved further in February. The general business activity index pushed up to 37.2, its highest reading in 12 years. The company outlook index climbed four points to 31.5, on par with its December 2017 reading, which was also the highest in 12 years.Expectations regarding future business conditions remained optimistic in February. The indexes of future general business activity and future company outlook slipped to 40.6 and 34.5, respectively, but both stayed well above their average readings. Most other indexes for future manufacturing activity also fell but remained highly positive. Monthly data for this indicator only dates back to 2004, so it is difficult to see the full potential of this indicator without several business cycles of data. Nevertheless, it is an interesting and important regional manufacturing indicator. Here is a snapshot of the complete TMOS.
Richmond Fed: District Manufacturing Firms Reported Robust Growth in February --From the Richmond Fed: Fifth District Manufacturing Firms Reported Robust Growth in February Fifth District manufacturing firms saw robust growth in February, according to the results from the latest survey by the Federal Reserve Bank of Richmond. The composite manufacturing index jumped from 14 in January to 28 in February, the second highest value on record, driven by increases in shipments, orders, and employment. The wages index remained in positive territory at 23, while the available skills metric dropped from −10 in January to −17 in February. Despite greater difficulty finding skilled workers, District manufacturing firms saw strong growth in employment and the average workweek in February. Survey results show that manufacturers expect to see continued growth in the coming months.Manufacturing firms saw growth accelerate for both prices paid and prices received, with each increasing at the highest rate since April 2017. Firms expect prices to continue to grow at a faster rate in the near future. This was the last of the regional Fed surveys for February. Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:
February Regional Fed Manufacturing Overview --Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia.Regional manufacturing surveys are a measure of local economic health and are used as a representative for the larger national manufacturing health. They have been used as a signal for business uncertainty and economic activity as a whole. Manufacturing makes up 12% of the country's GDP.The other 6 Federal Reserve Districts do not publish manufacturing data. For these, the Federal Reserve’s Beige Book offers a short summary of each districts’ manufacturing health. The Chicago Fed published their Midwest Manufacturing Index from July 1996 through December of 2013. According to their website, "The Chicago Fed Midwest Manufacturing Index (CFMMI) is undergoing a process of data and methodology revision. In December 2013, the monthly release of the CFMMI was suspended pending the release of updated benchmark data from the U.S. Census Bureau and a period of model verification. Significant revisions in the history of the CFMMI are anticipated." Here is a three-month moving average overlay of each of the five indicators since 2001 (for those with data). The latest average of the five for February is 21.1, down from the previous month's 21.5.
Chicago PMI Declines in February --The Chicago Business Barometer, also known as the Chicago Purchasing Manager's Index, is similar to the national ISM Manufacturing indicator but at a regional level and is seen by many as an indicator of the larger US economy. It is a composite diffusion indicator, made up of production, new orders, order backlogs, employment, and supplier deliveries compiled through surveys. Values above 50.0 indicate expanding manufacturing activity.The latest Chicago Purchasing Manager's Index, or the Chicago Business Barometer, fell in February to a value of 61.9 from 65.7 in January. Investing.com forecast 64.2.Here is an excerpt from the press release: “Disruptive weather conditions this month and large promotions at the back-end of last year appear to have weighed on demand and output in February, but despite the Barometer’s broad-based decline activity remains upbeat,” said Jamie Satchi, Economist at MNI Indicators.“That said, a large proportion of firms are anxious about the cost of input materials, and warn they could pass on these higher costs to consumers if inflationary pressures do not abate,” he added. [Source] Let's take a look at the Chicago PMI since its inception.
Jobless Claims Crash To New Lows Not Seen Since 1969 - Just when you thought it couldn't get any 'better'... it does...Initial Jobless Claims tumbled 15k to 210k this week - the lowest level since December 1969 As Bloomberg notes, the latest decline in weekly claims shows a tight labor market is increasingly pushing employers to hold on to existing staff amid a persistent shortage of qualified workers. The last time jobless claims were this low, Nixon was president, US performed a nuclear test at its Nevada test site to which Russia responded by testing its own nukes, and The Jackson Five made their first appearance on the "Ed Sullivan Show."
Millions Of Working-Age Men Will Never Return To The Labor Market, Fed Says - Given that the trend has only accelerated in recent years, we've report time and time again (and again) on the declining participation rate of healthy, working-aged men (typically defined as those aged 25 to 54).The labor force participation rate for prime-age men (age 25 to 54) has declined dramatically in the US since the 1960s. But in recent years, the declines have intensified. In 1996, 4.6 million prime-age men did not participate in the labor force. By 2016, this number had risen to 7.1 million. As the paper's author wrote in the excerpt: "Better understanding these men and the personal situations preventing them from working may be crucial in evaluating whether they are likely to return to the labor force."And in a perhaps more shocking finding, it's likely that many of these men will never return to the workforce due to a phenomenon called "job polarization"...In addition, I argue that “job polarization,” a phenomenon that describes declining demand for middle-skill workers in response to advancements in technology and globalization, has been a key contributor to the increase in nonparticipation among prime-age men. I show that if job polarization had not changed the composition of jobs in the labor market in the past two decades, 1.9 million more men would likely be employed in 2016, representing a 3.6 percent increase in overall employment of prime-age men. However, the effects of job polarization are unlikely to unwind any time soon—survey evidence suggests nonparticipating prime-age men are unlikely to return to the labor force if current conditions hold. But by taking a closer look at this trend, the researchers at the Kansas City Fed discovered that the numbers more or less line up with a trend that politicians have been lamenting for decades: The hollowing out of the American middle class. Indeed, the study discovered that, over the past two decades, unemployment gains were highest for men in the middle education group - those with a high school degree or some college....While the nonparticipation rates rose for all education groups over the past two decades...
Cash for all: Support mounts for universal basic income programs - Political philosopher and economist Karl Widerquist remembers a poll from 10 years ago that showed just 12 percent of Americans approved of a universal basic income. That's changed — and quickly. Today, 48 percent of Americans support it, according to a new Northeastern University/Gallup survey of more than 3,000 U.S. adults.The survey looked at universal basic income as a solution for Americans who have lost jobs to automation."It represents an enormous increase in support," said Widerquist, an associate professor at Georgetown University in Qatar and an advocate for a universal basic income. "It's really promising."Proposals for universal basic income programs vary, but the most common one is a system in which the federal government sends out regular checks to everyone, regardless of their earnings or employment.Pilots of such programs are underway in Finland and Canada. In rural Kenya, a basic income is managed by nonprofit GiveDirectly. India — with a population of more than 1.3 billion residents — is considering establishing a universal basic income.
Spending, work, and taxes -- Jared Bernstein -- Ed Lazear’s oped in the WSJ this AM made both resonant and discordant points, at least to my ears/eyes.The part that didn’t make sense to me was the idea that other countries are demonstrably worse off because they tax more and work less. Based on the data in the figure below, Lazear asserts that we in the US are better off because our relatively low taxes encourage “hard work” and “robust growth.”He’s conflating growth with welfare/well-being. All the other economies in the figure collect 30-40% of their GDP in order to support more robust (there’s that word again) public health care, education, safety net, child care, and other public goods expenditures. These are sovereign choices made by their citizens, based on their legit preferences. Before you assert that our model is better than theirs, ask the Canadians and Europeans if they’d like to trade some tax points of GDP for our health care system.From a welfare point of view, btw, Lazear’s argument is non-economic. In basic micro, work is a ‘bad’ and ‘leisure’ is a good. I don’t agree, for the record–life’s just more complicated than that–but elevating growth above welfare/happiness/cultural preferences/etc. can lead you astray. The resonant part is this: “…programs that we agree are useful must be financed.” That was the point of my earlier piece on how we either raise the revenue we need to meet our spending wants/needs our just consign ourselves to seas of red ink as far as the eye can see.Obviously, Lazear’s arguing for “aggressive cuts” in spending to meet our newly reduced revenue take. In this regard, his argument is, unsurprisingly, consistent with the R’s and Trump’s budget: we’ve cut the taxes; now we must cut the spending. But based on our aging demographics alone, simply maintaining the current services requires more, not less, revenues. Outside the pages of the WSJ oped page, the public will not support the tradeoff Lazear touts. He’s definitely right that spending requires taxes. It’s just his solution that’s off.
MIT Study: Median Uber and Lyft Profits Less Than Half Minimum Wage; 30% of Drivers Lose Money -- Yves Smith - We’ve said for some time that Uber and Lyft are exploiting the fact that their drivers don’t understand their own economics and don’t factor in the wear and tear on their vehicles. One former Uber driver did a back of the envelope work up and argued that you’d make more than minimum wage only if your car was more than six years old. The fact that only 4% of Uber drivers continue for more than a year suggests that working for these ride-sharing companies is an unattractive proposition. A large-scale study confirms these doubts about driver pay, and then some. A team from Stanford, under the auspices of MIT’s Center for Energy and Environmental Policy Research, obtained information from 1100 Uber and Lyft drivers using questionnaires and information about vehicle-specific operating costs, such as insurance, maintenance, repairs, fuel and depreciation. Their main finding: Results show that per hour worked, median profit from driving is $3.37/hour before taxes, and 74% of drivers earn less than the minimum wage in their state. 30% of drivers are actually losing money once vehicle expenses are included. On a per-mile basis, median gross driver revenue is $0.59/mile but vehicle operating expenses reduce real driver profit to a median of $0.29/mile. If you gross up the median hourly profit to gross revenue, using the same ratio for gross revenue versus net profit per mile, median gross revenue is only $6.86 an hour, still below minimum wage. These drivers would be better off doing almost anything else. Consider the safety risks. From Wired: Because the ridesharing industry is so new, the big companies don’t share specifics about incidents their drivers report. Still, online forums for drivers brim with descriptions of attacks on drivers by passengers, both verbal and physical, such as a driver posted a video of being spit on and punched. . Because drivers operate as independent contractors instead of employees, the companies can’t offer true safety training. Under federal law, training is a signifier that someone is an employee, and both Uber and Lyft have fought bitterly against re-classifying drivers as employees. By the very nature of how on-demand businesses operate today, drivers in many ways have to go it alone…
Even McKinsey Gets It: High Wages Improve Economic Performance - Marshall Auerback - “After a year-long analysis of seven developed countries and six sectors,” global management consultancy company McKinsey has “concluded that demand matters for productivity growth and that increasing demand is key to restarting growth across advanced economies.” Which means—surprise, surprise—higher wages for the workforce. The report was published in the Harvard Business Review. Their analysis marks a shift from the prevailing paradigm of the past several years in which poor productivity growth was viewed as largely a function of supply-side factors such as excessively “rigid” labor markets (hence the call to make it easier to hire and fire workers, and reduce unionization), insufficiently low tax rates (hence the drive to reduce corporate tax rates), a largely unskilled labor force (hence the push for more H1-B visas for Silicon Valley jobs), and too little global competition (hence the need for more, not less free trade). By contrast, the McKinsey analysis leads to a very different policy outcome—one that places demand management and full employment at the heart of macroeconomic policy-making. In fact, there is a historical basis to support the authors’ view that demand does matter when considering the issue of productivity. The post-WWII period until the OPEC induced recessions of the early-1970s was a time during which wage gains grew in line with productivity increases. The resultantly higher wages thus provided an incentive for firms to invest in labor-saving machinery, with the upshot that productivity growth surged further as a result. That all began to change some 40 years ago, as market fundamentalism and “supply-side” policies began to supersede traditional Keynesian demand management. The link between productivity and wage gains was severed (more national income went to corporate profits) and wage gains were suppressed (because labor was seen simply as a cost input, rather than a source of demand).
In order to write poetry, you must first invent the poet to write it. - Antonio Machado’s epigram goes: “in order to write poetry, you must first invent a poet to write it.” I take this as a general rule that crosses genres, and put it in radical juxtaposition with that debauched child of American transcendentalism: write what you know. The latter has always bugged me, on many counts. How do you know that you know is the epistemologically most basic. There is something imagination squeezing, a certain corseting of energy, that is at stake here. You would not advise a tennis player to play the game that she knows, or the plumber to confine herself to only the known, the expected. You’ll never play excellent tennis or do good plumbing that way. All concern acts that are elaborated in contexts full of unforeseen variables, which you bump into and learn from – for instance, you learn what you don’t know. Every time a car mechanic goes, “come on baby, work”, or a cook go, “it tastes done,” what is expressed is the essential duality of work, the fact that the material has a separate essence from the laborer, one that must be respected, must be persuaded to cooperate. To go at things with too much knowing is to go at them blindly, egotistically. Practical knowing is imagining and conjuring. In this sense, what Machado is saying applies to tennis and plumbing as well. Such is the power of the imagination that organizations are instinctively on guard against it. Engels recorded that factories in Northern England forbade their workers from singing – workers culled from an agricultural world in which singing was a basic working trait. I’m sure the factories came up with many a bogus reason, but the real one was fear – fear and the desire for power. A worker crushed into being an animated ball bearing is a worker who will not resist, who has no power over his or her work. The worker who imagines the better worker, the other worker, is on the road to power. Strip them of their imagination first – that is the social cost of doing business in the world of capitalism that Engels was describing. One that is very much with us.
Fears grow as rightwing billionaires battle to erode US union rights -- A 20-year campaign by rightwing billionaire donors to undermine trade unions and strike a blow at the progressive movement in America comes to a climax on Monday, in a hearing at the US supreme court.The nine justices of the nation’s highest court will hear arguments in Janus V AFSCME, a case that has the potential to strip unions of a major source of income. Should the court rule against the public sector unions – as many fear it will – they stand to suffer a decline in their 7.2 million-strong membership, and with it the withering of their political strength.Conservative activists and thinktanks, backed by corporate donors including the Koch brothers and the Bradley Foundation, have long been preparing for this moment, as part of a larger campaign to tilt the democratic process to the right. In just the past four years, the supreme court has considered three challenges to public sector unions.“The supreme court this time appears to be poised to knock the legs from under union advocacy, in what would be a major victory for the rightwing jurisprudential movement,” said Dan Weiner, senior counsel at the Brennan Center for Justice, a nonpartisan group.A Guardian review of public records shows that the Bradley Foundation, a Wisconsin-based mega-donor to rightwing causes, has invested heavily in the anti-union campaign. Since the 1990s, the donor has given $30.5m to 24 conservative groups that have supported the legal assaults against public sector unions that have reached the supreme court. The two sponsors of the Janus case, the National Right to Work Legal Defense Foundation and the Illinois Policy Institute’s Liberty Justice Center, have between them received $1.6m in Bradley donations since 2003. The Bradley Foundation was created in 1986 as a way of using the vast manufacturing wealth of two brothers, Lynde and Harry Bradley, to advance “the principles and institutions of American exceptionalism”. Though constituted as a tax-exempt, nonprofit entity,private correspondence reveals a frank exchange about the hyper-partisan and blatantly political ambitions it has for its $900m “charitable” reserves.
Argument analysis: Gorsuch stays mum on union fees – SCOTUSblog - The Supreme Court heard oral argument today in Janus v. American Federation of State, Municipal, and County Employees, a challenge by an Illinois child-support specialist to the fees that he is required to pay to the union that represents him, even though he does not belong to any union. Although this is the first trip to the Supreme Court for Mark Janus, the employee, it was the third time in four years that the justices have taken the bench to consider the issue presented by Janus’ case. After roughly an hour of sometimes testy debate in the courtroom, the outcome almost certainly hinges on the vote of the court’s newest justice, Neil Gorsuch – who did not tip his hand, opting instead to remain silent. The dispute before the Supreme Court today stems from the $45 that is deducted from Janus’ paycheck each month to go to the local branch of the union that represents him. Over 40 years ago, in a case called Abood v. Detroit Board of Education, the Supreme Court ruled that although it would violate the First Amendment to charge nonmembers for political activity such as lobbying, nonmembers can be required to pay fees, sometimes called “fair share” or “agency” fees, that cover the union’s costs to negotiate a contract that applies to all public employees. But Janus has urged the court to overrule its decision in Abood. He contends that even these more limited fees violate the First Amendment, because the issues commonly at the heart of contract negotiations for government employees – such as salaries, pensions and benefits for government employees – are inherently political. Therefore, he says, forcing him to pay an agency fee is no different from requiring him to pay to support a group that lobbies the government.
Crisis: Poverty Pay, Food Stamps At American Airlines - American Airlines, the world’s largest air carrier, is enjoying a boom in business. Everything is fantastic, as the company made almost $2 billion in profits in the fiscal year 2017 alone. The airline lobbied hard for tax cuts, which its executives are now receiving increased stock options and millions in bonuses. Meanwhile, in the tale of two economies, the airliner has a dirty secret that it does not want to share with the public: it pays poverty wages to thousands of its service professionals at Envoy Air, who make less than $11 per hour, and must rely on food stamps plus blood plasma donations to survive, said the Los Angeles Times. Envoy Air is a wholly-owned subsidiary of American Airlines, which provides support operations to the American Airlines route network under the American Eagle brand. Envoy has more than 3,800 passenger service workers at 100 locations across the country. Envoy agents are the lowest paid in the airline industry starting at $9.48 per hour — slightly above poverty pay levels. Envoy employees told the Communications Workers of America (CWA), the largest communications and media labor union in the United States, they must rely heavily on government assistance programs because their wages are at poverty levels, rather than a living wage. The terrifying aspect of this situation are the thousands of Envoy employees across the country, who are in poor economic standings and poor physical health. This could alter their critical thought process while handling commercial jetliners at airports, thus, perhaps, put passengers in danger.
Unprecedented shutdown of Baltimore Metro system due to hazardous track conditions -- The Maryland Transit Authority (MTA) announced earlier this month the closure of the entire Baltimore Metro SubwayLink for emergency repairs until March 11. Transit officials had been holding out for a scheduled August 2018 closure that would see major track replacements, but were made aware that 17 of 19 previously known worn segments of track had now reached “black condition” exposing the metro’s 40,000 daily passengers to imminent derailment if service continued.In an interview with the Washington Post, Rob Puentes, a rail safety and transportation expert at the Eno Center for Transportation, called the sudden month-long shutdown of an entire major urban metro system “unprecedented” in US history. “It’s the whole system and for a long time,” Puentes said. “There’s nothing like it in the country.”On Friday, February 9, MTA chief executive Kevin Quinn announced a temporary shutdown that would go through the weekend in order to investigate reports of extreme wear on 19 segments, including 11 curves in the metro track’s 15.5-mile run. On Sunday, February 11, the MTA announced a shutdown of service for one month ending on March 11.Riders were blindsided by the last-minute announcement, leaving many stranded waiting for a way to get to work. One Johns Hopkins Hospital worker, Edward Marshall, told a Baltimore Sun reporter, “This is a real inconvenience. You got hardworking people trying to get back and forth to work. I’ve been here 30 minutes waiting for a bus, and every bus that came is packed.” The current repair work is mainly rail replacements; 33,000 feet of new rail above ground in addition to 6,000 feet to be installed in curves within tunnels, according to the MTA. These repairs along with the still planned shutdown in August are estimated to cost the city $20 million. On February 12, Governor Larry Hogan announced $2.2 million would be used to run shuttle buses and connect Metro passengers with existing county and city bus routes and stations.
ICE carries out mass immigration roundups in Northern California - Over the past three days, Immigration and Customs Enforcement (ICE) agents have detained over 150 undocumented workers in a massive operation in Northern California.Since Sunday, dozens of ICE agents have conducted broad sweeps of immigrant communities, knocking on doors and arresting those who were unable to produce proper immigration documents. In some cases, ICE agents reportedly claimed to be police officers to induce immigrants to comply with their demands.The agency has claimed that if not for a last-minute warning by the mayor of Oakland, the sweeps would have captured another 800-plus people, representing an unprecedented attack on immigrant workers in the United States.On Sunday, a group of federal agents waited outside a Circle K convenience store in the town of Atwater until four construction workers came out with their morning coffee. The agents then surrounded the workers and demanded to know whether they “had permission to be here,” Miguel Botello, who is originally from Mexico told the Merced Sun-Star. One agent seized Botello’s wallet and, when he found Botello’s green card, “laughed and asked if it was fake.” After harassing Botello for several minutes, the agents arrested his three coworkers for failing to provide immigration documents.Botello’s encounter highlights the indiscriminate nature of immigration roundups, in stark contrast to ICE’s repeated claims that it only targets criminals. In fact, according to the agency’s own statement, only half of those arrested in this latest operation had any prior criminal record. This proportion is far lower than the agency has claimed in past operations, indicating a major intensification of the campaign of mass terror against immigrant communities by the Trump administration. Late Saturday evening, Oakland Mayor Libby Schaaf issued a press release warning that she had received credible information that ICE agents were planning a series of raids to round up undocumented workers in the San Francisco Bay Area, including Oakland. The press release said that the information came from multiple sources and that the raids could begin within 24 hours.
In wake of Parkland school shooting, Republicans and Democrats call for boosting police powers -- In response to public outrage over the school shooting tragedy in Parkland, Florida, federal and state authorities, along with the media, are calling for increased police powers, particularly in the nation’s schools. Protests by students broke out at many high schools and middle schools across the country last week in response to the latest in a string of school shootings in the US. According to the group Everytown for Gun Safety, so far this year there has been on average one school shooting every 63 hours, more than double the rate for the previous three years. Students are seeking a political road to address one of the most malignant expressions of the social breakdown in America. Stoneham Douglas pupils have been particularly outspoken in their anger over the inability of the authorities to protect students. They traveled to the state capital Tallahassee last week to lobby lawmakers and have made numerous television appearances. Parents, students and teachers are asking why the shooter, despite numerous tips to the FBI and local police and run-ins with school officials, was allowed to obtain weapons and carry out the horrific attack. The calls of grief-stricken parents and classmates of the victims for a ban on assault rifles and checks on the ability of the mentally unstable to obtain weapons are entirely understandable. However, these calls are being exploited by the Trump administration, Florida Governor Rick Scott and politicians of both-big business parties to demand an increased police presence on school grounds. Left in the hands of the parties of the ruling class, gun control, if enacted, will serve as a cover for increased militarization of the schools and society at large. What is not being addressed in the official debate are the social issues that lie at the root of repeated eruptions of mass violence in America.
Alabama death row inmate’s lawyer: “This was clearly a botched execution that can only be accurately described as torture” -- New details have emerged about the attempted execution of Alabama death row inmate Doyle Hamm last week. Hamm, 61, who has spent more than half of his life on death row, was subjected to about two-and-a-half hours of torture Thursday night in the Holman prison death chamber before prison officials called off the execution. Hamm was convicted and sentenced to death in 1987 for the robbery-murder of Patrick Cunningham, a motel clerk in Cullman County.“It was a gory, botched execution,” said Bernard Harcourt, Hamm’s longtime attorney, and a professor at Columbia University law school. “They gave up when they could not find a vein.” Harcourt had argued in appeals that because Hamm had cranial and lymphatic cancer and a history of drug use his veins could not support the lethal injection, and to attempt it would constitute cruel and unusual punishment, banned by the Eighth Amendment to the US Constitution. The gruesome spectacle in Alabama’s execution chamber was allowed to proceed after the US District Court in Birmingham prohibited the state from trying to access veins in Hamm’s arms and hands and ordered officials to try his lower extremities. At one point, the IV team turned Hamm over onto his stomach, slapping his legs trying to find a vein. After repeated attempts they stated aloud that they could not “get anything.” Other IV personnel next tried to gain central venous access by attempting to insert a catheter into Hamm’s right groin, causing severe bleeding and pain, according to Harcourt. The execution was called off at about 11:27 p.m., when Jefferson Dunn, commissioner of the Alabama Department of Corrections, determined there was insufficient time to begin the injection of the lethal injection drugs before Hamm’s execution warrant expired at midnight.
Paying people to live in rural areas --My state, Georgia, has created a Rural Development Council to address the issues facing rural Georgia. (For instance, access to health care is pretty bad.)The Council released its recommendations a while back, and among them is a plan to pay people to move to rural Georgia:To reverse the current population migration trend, the council proposes a "Rural Relocate and Reside” program designed to incentivize rural living, especially for professional, high wage earners through a local and state government partnership that
- Is available in counties experiencing less than five percent population growth over five consecutive years (currently 124 counties)
- Provides a one-time, per person/filing jointly 10-year income tax deduction up to $50,000 for new residents
- Allows local governments to pass a referendum to provide a one-time, 10-year, abated property tax exemption to provide more affordable housing and improved cash flow for new residents to pay back school loans/establish businesses/start medical practices
- Provides a one-time per person/filing jointly, 10-year state income tax exemption up to $100,000 where the local property referendum is in place to draw professional-level, high-wage earners
(There are other policy recommendations, too, like providing broadband internet access. No discussion of expanding Medicaid eligibility though.)
"It's Not Safe Here" - Activists Warn Illegal Immigrants To Avoid Florida As ICE Arrests Surge - Following the unveiling of a new partnership between ICE and local sheriffs departments, a coalition of nearly two dozen Florida-based activist groups has issued a travel warning to all black and brown people - especially illegal aliens - to take "great caution" while visiting the sunshine state. Florida, according to the group, saw the biggest jump in ICE apprehensions in 2017.Illegal aliens should take extra care when traveling through transportation hubs like Greyhound bus station and airports. According to PJMedia, these groups have staged events across the state to spread the word to illegal immigrants who are thinking about vacationing in Florida during Spring Break. They’re also posting information on which areas to avoid as 17 sheriffs across the state have agreed to cooperate with Immigration and Customs Enforcement - a partnership that has been challenged by the American Civil Liberties Union. Illegal immigrants should "reconsider visiting Florida and especially recommended to avoid high-risk areas, including ports, airports, and Greyhound stations."ICE immigration arrests during Obama’s presidency dropped from 297,898 to 110,104. That number has already rebounded to 143,470 under President Trump.
Parents who housed their three children, 11, 13 and 14 in a filthy four-foot-tall BOX in a garbage-covered corner of the Joshua Tree desert appear in court as friends insist ‘they are poor not abusive’ Daily -- Friends of the California couple that was arrested after authorities found that their three young children were living in a makeshift rectangular home made of plywood in the desert say that the kids were never abused and that their living conditions were a result of the family's extreme poverty.Mona Kirk, 51, and Daniel Panico, 73 were taken into custody in Joshua Tree, California on suspicion of willful cruelty to a child on Wednesday.Deputies located a travel trailer, which appeared to be abandoned, and a large rectangular box made of plywood on their property.They then found the children - ages 11, 13, and 14 - living in squalid conditions. Video and pictures taken at the scene show the area strewn with garbage and debris. Mattresses and plastic bags are seen inside the box the youngsters were kept in - in an area where temperatures reach up to 120 degrees.But friends and neighbors who know the family say that while their living arrangements do appear squalid, the children were never abused. Mike Reynolds, a neighbor who has never been on the property, told CBS Los Angeles that he has known the family for years. 'His family, they lived not too far from here and they lost their house. So he bought that lot and bought that trailers and moved up. There were living there and his goal was to build his dream house,' Reynolds said. He said there was nothing unusual about the property not being connected to running water and electricity.'We’re in the desert,' Reynolds said. 'People come up here to get away from it all. People come up here to live off of the grid.' Reynolds said that in his experience, he never thought the children were in danger. On the contrary, they looked healthy and safe.
Children Struggle To Hold Pencils Due To Excessive Use Of iPads -- Children struggle to hold and use pencils due to excessive use of touchscreen phones and tablets such as iPads, experts claimed. Overusing these devices damage children's dexterity, preventing the kids' finger muscles from developing in a way that would allow them to hold pencils correctly once they start school, according to healthcare experts."Children are not coming into school with the hand strength and dexterity they had 10 years ago," said Sally Payne, the head pediatric occupational therapist at the Heart of England foundation NHS Trust. "To be able to grip a pencil and move it, you need strong control of the fine muscles in your fingers." Parents find it easier to give iPads to children than giving them muscle-building play activities such as cutting and sticking, building blocks and pulling toys, Payne added. Without these types of activities, shoulder, wrist, and elbow muscles needed for writing do not develop. Some teachers even claimed that some children do not know how to receive a paintbrush or pencil.
After Years of Fighting, Idaho Retains Climate Change in Its Education Guidelines -A years-long battle over whether Idaho would require its science teachers to teach about global warming was resolved Thursday when the State Senate education committee voted to adopt standards that included sections on human-caused climate change. Idaho’s legislature had scrubbed all mentions of human-caused climate change from its teaching standards last year. The State Department of Education then put forth revised standards, but this month the House education committee voted to gut the supporting content, which was designed to help teachers assign coursework and included multiple mentions of climate change. On Thursday, the Senate committee approved the revised standards in full, including the supporting content, on a 6 to 3 vote that drew support from both parties. Because both chambers did not agree to reject the standards, they will go into effect. State Senator Janie Ward-Engelking of Boise, a Democrat on the education committee, said the supporting content was important to include. “When a new teacher comes in, they need to see all the concepts that they’re responsible to teach,” Ms. Ward-Engelking said. “To be honest, it’s kind of embarrassing that it’s been so controversial.” Emily Her, 17, a senior at Timberline High School in Boise who started a petition and appeared with her classmates at hearings to support the revised standards, said she was glad that all students in Idaho would learn about climate change. “It was definitely a group effort, and I was really happy that it paid off and that they decided to listen to us,” she said.
After Parkland shooting, dozens of US students arrested for social media posts - Some two weeks have passed since 19-year-old Nikolas Cruz opened fire at Stoneman Douglas High School in Parkland, Florida, killing 17 people, including 14 students. According to Educators School Safety Network, in the 15 days since the shooting, a daily average of 70 threats or violent incidents at schools has been reported across the country. By comparison, prior to the Parkland shooting, the group was recording an average of 10 to 12 incidents a day.Such “threats or incidents of violence” have been reported in all 50 states plus the territory of Puerto Rico, and over 460 schools have been impacted. Ohio leads the nation with 44 reported incidents in the last 15 days; Florida and Texas rank next with 33; Pennsylvania has seen 29 and Kentucky 28, respectively. The incidents tracked in the study range from false alarms and hoaxes to postings by disturbed and mentally unstable individuals who have been prompted to make threats or, apparently, make plans to carry out violent attacks.The authorities have responded with a hysterical law and order campaign resulting in the arrest and detention of dozens of teenage students across the country. Children as young as 13, including some with special needs, have been seized at their homes or schools by local police and charged with felonies. Scores of students have been suspended or expelled. Over half of the allegations are based on social media posts.This repressive response to the latest mass school shooting reflects, in different ways, the deeply dysfunctional and diseased state of American society. It is in keeping with a general increase in the presence of armed police at schools and other public places, part of an accelerating militarization of US society. It demonstrates the ever more pervasive and intrusive character of state surveillance of the Internet. It underscores the inability of the political system to advance any humane, rational and democratic policies to address the underlying social problems—the impact of permanent war and mass killing internationally and increasing poverty and social inequality at home—behind the epidemic of shooting rampages in the US. To the extent that the social media posts express genuine threats of violence, they reflect a malignant level of social alienation and depression among young people in the United States, which has seen a sharp increase in the rates of teen drug addiction and suicide in recent years.
Screen teenagers annually for depression, say US doctors -- Should teenagers face annual screenings for depression? Under new guidelines from an American doctors’ group, all children aged 12 and above would be questioned about their mental health every year. On Monday the American Academy of Pediatrics (AAP) published new guidance that adolescents should be examined every year from the age of 12 to ensure those with depression can get timely help.Meanwhile, on Friday, the UK government finished consulting on a green paper on adolescent mental health, which focuses on early intervention and suggests schools should play a more central role. Strategies include mental health awareness training for school staff and incorporating mental health into personal, social and health education lessons. Many teenagers are not diagnosed until adulthood, and doctors believe helping vulnerable teenagers early on could help prevent them suffering in silence. Mental health campaigners have said screening for depression is just one piece of the puzzle.“My depression started during my childhood and worsened from the age of 13, and I was admitted into hospital at 14,” said 21-year-old mental health campaigner May Gabriel.Gabriel said if she had been screened for depression at 12 she might have received treatment before she became so ill she attempted to take her own life. “Many young people are not sure where or how to get help, or even that they may need help, and integrating mental health with regular services in this way would enable more young people to get help.”
One Teacher’s Brilliant Strategy to Stop Future School Shootings—and It’s Not About Guns -- Every Friday afternoon, she asks her students to take out a piece of paper and write down the names of four children with whom they’d like to sit the following week. The children know that these requests may or may not be honored. She also asks the students to nominate one student who they believe has been an exceptional classroom citizen that week. All ballots are privately submitted to her. And every single Friday afternoon, after the students go home, she takes out those slips of paper, places them in front of her, and studies them. She looks for patterns. Who is not getting requested by anyone else? Who can’t think of anyone to request? Who never gets noticed enough to be nominated? Who had a million friends last week and none this week? You see, Chase’s teacher is not looking for a new seating chart or “exceptional citizens.” Chase’s teacher is looking for lonely children. She’s looking for children who are struggling to connect with other children. She’s identifying the little ones who are falling through the cracks of the class’s social life. She is discovering whose gifts are going unnoticed by their peers. And she’s pinning down—right away—who’s being bullied and who is doing the bullying.
Ohio Sheriff Offers Free Gun Training To 50 Teachers; Forced To Cap At 300 After Huge Response -- An Ohio sheriff who offered free firearms training to 50 teachers was forced to cap his offer at 300, after a flood of local school employees signed up in the wake of a Florida high school shooting that left 17 people dead. “We put it online, we thought we’d get 20 school teachers maybe. Within 20 minutes we had 40. Within an hour we had 100. Within four hours we had 200. By the next morning, at 300, we cut it off,” Butler County Sheriff Richard Jones said on “Fox & Friends.”If you listen 2 media teachers do not want to carry weapons in schools. We have over 300 said want 2.— Richard K. Jones (@butlersheriff) February 24, 2018School personnel start gun training in butler county Ohio Monday ccw. We will train this week over 120.— Richard K. Jones (@butlersheriff) February 24, 2018 The Parkland, FL shooting has renewed a national debate on the Second Amendment. Sheriff Jones noted that only a few schools in Ohio allow the concealed carry of a firearm, and that the plan to arm teachers would only work if "the school boards have the guts to make it a reality." Jones suggested that school staffers should go through mandatory firearms training to help them identify the sounds of gunfire. “We have to do something here because we can’t wait for our government to do anything. All they do is fight, they get nothing done,” he said.
Armed ‘Teacher of the Year’ Opens Fire in School -- President Trump’s proposal to arm teachers seemed nutty enough even before a second former high school teacher of the year was arrested for firing a gun inside his school.Both teachers were in Georgia, which generally prohibits people from carrying firearms on school grounds, The first was a star math instructor at Lithia Springs High School, 25 miles from Atlanta. He fired one bullet from a handgun in what may have been a suicide attempt back in August. The second was on Wednesday, when a star social studies teacher at Dalton High School, 90 miles from Atlanta. He was arrested for barricading himself in his classroom and firing a shot with a handgun for reasons yet to be determined.In between the two teacher-involved incidents, the mass shooting at a Florida high school prompted President Trump to propose arming educators:“Armed Educators (and trusted people who work within a school) love our students and will protect them. Very smart people. Must be firearms adept & have annual training. Should get yearly bonus. Shootings will not happen again - a big & very inexpensive deterrent. Up to States.”A considerable number of the Dalton students who were thrown into an understandable panic by the gunshot on Wednesday were quick to offer their opinion of the notion that Trump shares with the NRA. One who goes by the Twitter handle Chondi tweeted: “@NRA my favorite teacher at Dalton high school just blockaded his door and proceeded to shoot. We had to run out the back of the school in the rain. Students were being trampled and screaming. I dare you to tell me arming teachers will make us safe.”
All of West Virginia’s public school teachers are on strike - Thousands of public school teachers across West Virginia went on strike this week in protest over their pay and benefits, affecting more than 277,000 students. It began on Thursday, a day after West Virginia Governor Jim Justice, a Republican, signed legislation providing teachers, school service personnel, and state police with a 2 percent pay increase starting in July and scheduling 1 percent pay hikes for teachers in 2020 and 2021. The strike is poised to extend into Monday.Teachers’ unions say the raises won’t cover cost-of-living increases, and the bill doesn’t address other concerns related to public employee insurance programs, health care costs, and payroll tax deduction options. Christine Campbell, president of the American Federation of Teachers-West Virginia, told CNN that’s a reduction from an earlier version of the bill — which would have instead added a total 5 percent increase in wages. She also said teachers in surrounding states make $5,000 to $20,000 more than West Virginia teachers. In 2016, the average salary for West Virginia teachers ranked 48th in the country, according to the National Education Association, ahead of only Oklahoma, Mississippi, and South Dakota.Thousands of teachers, parents, and supporters descended on West Virginia’s Capitol in Charleston on Thursday and Friday to protest. “We’d like to have a decent wage. And we’d like to have our PEIA [Public Employee Insurance Agency] fixed. We want then to quit trying to take our seniority and attacking our leaders in legislation,” said Betsy Atwater, a Fayette County teacher, told local news outlet WOKW.
West Virginia might consider legal action to strong-arm its striking teachers - West Virginia state officials are threatening an injunction to strong-arm teachers into ending a strike that has closed schools in all 55 of the state's counties for a third day, CNN reported Monday.Because it is illegal for teachers to strike in West Virginia, the State Attorney General's Office could theoretically determine that teachers "could be punished by being denied pay, suspended, fired, barred from teaching in a public school for a year, hit with criminal misdemeanors, or even fined or jailed for refusing to comply with any potential court injunctions forcing them to return to work," the Charleston Gazette-Mail writes based on an opinion written during a similar strike in 1990.Superintendent of Schools Dr. Steve Paine confirmed "a decision will be made on Monday if an agenda item will be added to the State Board of Education meeting scheduled for Tuesday to discuss legal action," NPR reports. West Virginia Education Association President Dale Lee dismissed the threats, saying: "There's rumor out there that anybody who takes this action is going to be fired. That's not a major concern of mine, we have 727 vacancies right now." The strikes began after Gov. Jim Justice (R) signed legislation last Wednesday giving teachers a 2 percent pay increase this year, followed by 1 percent increases over the following two years. Teachers say the action is inadequate: "I knew teaching wouldn't make [me] billions, but I thought it would be enough,"
In West Virginia, Historic Statewide Teacher Walkouts to Head Into Fourth Day -- Thousands of teachers and other school personnel rallied outside in the West Virginia Capitol on Monday, where union officials announced that the first-ever statewide walkout underway would continue for a fourth day. "Our teachers and our public employees are getting less in pay per year every year, and people are fed up and fired up about it," said Morgantown High School art teacher Sam Brunett at a candlelight vigil Sunday outside the Capitol. The strike, which began Thursday, is indeed historic. The current action is taking place throughout the state's 55 counties, which means roughly 20,000 teachers are taking part.All 55 #WV county school systems are closed again today, Feb. 26. It's the 3rd day of a strike from teachers & school service workers.@MineWorkers President Cecil Roberts is among scheduled speakers for 2 p.m. rally at #WV Capitol.https://t.co/nPQxBAQ4it From @BradMcElhinny pic.twitter.com/T0aZ7yyBga— Shauna Johnson (@ShaunaJWV) February 26, 2018 West Virginia Public Broadcasting explained the reasons for the strike thusly:Leaders of teacher unions and their members are calling for salary increases, a permanent fix to healthcare through the Public Employees Insurance Agency and a stop to legislation on what they call attacks on seniority. They are also hoping lawmakers will walk away from a bill known as "paycheck protection" that would make union members opt-in yearly to have dues withdrawn from paychecks.West Virginia ranked 48th in the nation for average teacher pay in 2017.While Gov. Jim Justice has signed Senate Bill 267 calling for a salary increase of 2 percent this year with an additional 1 percent increase the following two years, teachers and their union leaders say that’s not enough -- especially considering teachers were offered a 2 percent increase last year in more economically troubling times. The West Virginia Center on Budget & Policy tweeted that the legislation "is not enough to keep with inflation":
West Virginia teachers defiant as unions, governor scramble to end walkouts - More than 20,000 West Virginia teachers and other school employees are continuing their statewide walkout for a fourth day today, demanding pay increases and an end to rising health care costs through the state’s Public Employee Insurance Agency (PEIA). The struggle is at a turning point. That the teachers’ strike—the first in West Virginia since 1990—has occurred at all, much less extended for the second time after the unions’ planned two-day walkout last week, is testament to the courage and militancy of the teachers and their determination to stop decades of declining living standards. Even though the West Virginia Education Association (WVEA) and the American Federation of Teachers-West Virginia (AFT-WV) have sought to limit and demobilize the struggle at every step, teachers are justifiably proud that the walkouts have shut schools across all the state’s 55 counties, expressed in the use of the hashtags #55proud and #shutWVDown. From the standpoint of the teachers, the unions’ strategy of collaborating with state Democrats and appealing to the state legislature for relief has proven to be a complete failure. The state’s billionaire governor, Jim Justice, and the Republican-controlled state legislature, with the backing of a significant section of Democrats, have offered an insulting four percent raise over three years, even though teachers are near the bottom in pay in the nation. Legislators from both corporate-controlled parties have refused to take an additional penny from the coal, natural gas, petrochemical and pharmaceutical companies that dominate the state economy and control the entire political establishment. Instead, teachers are now being threatened with strikebreaking injunctions, which could result in huge fines, firings or even mass arrests if teachers defy back-to-work orders. During a series of town hall meetings and tweets yesterday, Justice reiterated his opposition to any significant increases in pay or funding for the PEIA. If the state’s economy rebounds as expected, the governor claimed, he would like to come back with perhaps four percent pay raises in coming years. To pay teachers more now, he insisted, would “blow up” the state budget and would be “very, very dumb.”
Justice proposes 5% raise for WV school employees; strike set to end Thursday --With a proposal for an even higher pay raise next school year, this year’s statewide public school employees strike — the second teacher strike in West Virginia history and the first to also include school service personnel — is planned to end, at least for now. The strike began last Thursday, after one-day employee walkouts in at least 11 counties. Under the plan announced Tuesday, employees are to return to work Thursday. That’s according to Republican Gov. Jim Justice and leaders of the state’s three major school worker unions: the American Federation of Teachers-West Virginia, the West Virginia Education Association and the West Virginia School Service Personnel Association.Details were lacking in the news conference, which happened after 6 p.m. Justice took only a couple of shouted questions from reporters, Union leaders stayed longer to answer questions from the roomful of reporters, but they also cut off the news conference, saying they had to leave. While Justice said the continued closure of schools Wednesday was sort of a “cooling-off” day and because some schools had already announced they’d be closed Wednesday, Lee suggested Wednesday was also a delay to see how legislators would react. Justice, the union leaders, Justice lobbyist Larry Puccio, Justice special adviser Bray Cary and Justice Chief of Staff Mike Hall met behind closed doors Tuesday before emerging shortly after 6 p.m., with about 150 people gathered outside the door to the governor’s reception room.
West Virginia strike continues as teachers reject unions’ back-to-work order - The statewide strike by more than 30,000 West Virginia teachers and school employees is continuing today, with workers rejecting an agreement announced Tuesday by the trade unions and the state’s billionaire governor, Jim Justice. Thousands of teachers descended on the state capitol Wednesday—a day designated by the unions as a “cooling off” period—chanting “We got sold out,” “It’s not over,” “Where’s the union?” and “We’re not leaving.” Signs carried by teachers included, “I just won a chicken on Let’s Make a Deal” and “Cool down day is heating us up.”The continuation of the strike is a devastating repudiation of the American Federation of Teachers-West Virginia (AFT-WV) and the West Virginia Education Association (WVEA), which hailed the agreement with Justice as a major victory for teachers. The deal included a pledge for a five percent pay increase that might never be enacted and a token task force to investigate financing of the underfunded Public Employees Insurance Agency (PEIA), which manages health insurance covering teachers and state workers. AFT-WV President Christine Campbell defended the sellout Tuesday, saying, “This has been a huge step in the right direction. We have a commitment.” The national president of the AFT, Randi Weingarten, whose annual salary is more than $500,000, called the agreement “a starting point in terms of treating West Virginia’s teachers and school service personnel with the respect and dignity they deserve.”
All West Virginia schools closed today as teachers’ rebellion continues - The insurgent movement of teachers and other school employees in West Virginia continued Friday, with more than 30,000 public education workers staying off the job and forcing the closure of schools throughout the state’s 55 counties. Despite the efforts of the unions and the Democrats and Republicans to shut down the strike, the movement is gaining momentum with public school students joining protests at the state Capitol in Charleston today. After being forced to call a statewide strike last Thursday and Friday that was extended to Monday and Tuesday, the West Virginia Education Association (WVEA) and American Federation of Teachers-West Virginia (AFT-WV) abruptly announced that they had reached an agreement with the state’s billionaire governor, Jim Justice, on Tuesday night. WVEA President Dale Lee, AFT-WV President Christine Campbell and West Virginia School Service Personnel Association (WVSSPA) President Joe White then ordered their members to return to work Thursday after a “cooling-off period” Wednesday, without even allowing workers to vote. Union officials hailed the governor’s flimsy promise to get the state legislature to approve a one-time 5 percent raise and appoint a bipartisan task force, including union officials, to propose a solution to the long-underfunded Public Employees Insurance Agency (PEIA). This outraged striking teachers and other school workers who have been facing crushing healthcare costs as the state shifts the expense of substandard medical coverage onto workers’ backs. Strikers insisted they would not return to work without a long-term solution to the PEIA. Union officials hoped to use the “cooling-off period” Wednesday to badger and intimidate workers into giving up their struggle. Lee, Campbell and White stood side-by-side at the Capitol Wednesday and told workers they should return to work. Addressing school bus drivers, custodians and other school workers online later in the evening, White threatened that they would be hit with a legal injunction if they did not return to work.
The revolt of the West Virginia teachers - The strike of 30,000 West Virginia teachers and public school employees, now entering its seventh day, requires the urgent and active support of the entire working class. The issues on which the teachers are fighting are universal: declining wages, deteriorating social infrastructure, the attack on public education, growing social inequality and rising health care costs. The teachers’ repudiation of the agreement worked out behind closed doors by the trade unions and the state’s billionaire governor, Jim Justice, is a blow to the American Federation of Teachers, the National Education Association and their state affiliates. From the beginning of the struggle, the unions have sought to suppress, limit and redirect opposition behind the Democratic Party and fruitless appeals to state legislators. These maneuvers culminated in the deal with Justice, which failed to meet any of the basic demands of the teachers, coupled with an order to return to work. On Wednesday, teachers held impromptu meetings in the state capitol and decided to reject the call for an end to their struggle. County-by-county votes in every school district ended with the same result: the strike will continue; the schools will remain closed. The central demand of teachers is for full funding of the Public Employees Insurance Agency (PEIA), which manages health care for teachers and public employees. The effort to place an ever greater share of health care costs on the backs of workers is part of a national policy, supported by both Democrats and Republicans. There is a deliberate effort to reduce the life expectancy of the working class through the restriction of access to health care—a campaign that assumes a particularly catastrophic form in Appalachia, a center of the social crisis-fueled opioid drug epidemic. Tremendous pressure is being brought to bear upon the teachers. The union bureaucracy is counting on threats of fines and injunctions from the state, combined with further maneuvers in the state legislature, to force an end to the strike. Whatever its immediate outcome, however, the strike marks the beginning of an upsurge of the class struggle in the United States.
DC High School Graduation Rate To Plummet From 73% To 42% After Massive Fraud Revealed - Far fewer seniors attending D.C. Public Schools are on track to earn their diplomas this June after a graduation fraud investigation revealed that one in three students passed high school in violation of city policy. Data released Thursday by D.C. Public Schools show that just 42 percent of seniors are on track to graduate, vs. 73 percent in 2017. Meanwhile, 19 percent of students are considered "moderately off track," meaning they are failing one or two courses but could potentially earn a diploma through summer school or credit recovery programs. Even if all 19% of "moderately off track" students receive diplomas, the graduate is still tracking 12 percentage points lower than last year.The investigation into the fraud showed that students who were unqualified due to missing too many classes or improperly taking makeup classes were allowed to graduate. Adding to the mess, over a quarter of freshmen have "withdrawn or transferred" out of the D.C. Public Schools system. D.C. graduation rates reflect the percentage of students who receive their diplomas in four years. Twenty-six percent of students who started freshman year with the class of 2018 have either withdrawn or transferred out of the D.C. Public Schools system. The city still needs to determine how many of these students transferred to another school, and how many dropped out. –WaPo Due to the investigation, this is the first year that the city has released graduation projections months before diplomas are handed out, so it's difficult to compare to previous years. According to the D.C. Public School system website, 77 percent of the student population is economically disadvantaged.
University of Illinois graduate student workers go on strike --Graduate student workers at the University of Illinois at Urbana-Champaign (UIUC), the flagship campus of the state’s public university system, walked out on Monday, causing some classes to be moved or cancelled. The 2,700 workers, who teach students, grade papers, and perform other functions essential to the operation of the university, are frustrated by the university administration’s intransigence over pay increases and tuition waivers, which grad students depend on to fund the exorbitant cost of education. The strike is a healthy and welcome response to decades of attacks on public higher education, and takes place amid a resurgence of militancy among educators in the United States and around the world. More than 20,000 West Virginia teachers and school employees are currently on strike, along with 40,000 university lecturers in the United Kingdom. This follows a province-wide strike by 12,000 Ontario community college faculty members late last year. The Graduate Employees Organization (GEO) at UIUC, whose members include graduate assistants and teaching assistants, called the strike after a bargaining session on Sunday produced no “movement,” according to GEO co-president Gus Wood. The union has been negotiating with the university for 11 months. The grad student’s last, five-year contract expired on August 15. The GEO, which is affiliated to the American Federation of Teachers (AFT), has proposed a wage increase that would increase the minimum pay rate by eight percent from the current insultingly low level of $16,281 for a 50 percent Full-Time Equivalent (FTE) position or 20 hours per week. The GEO’s proposal would also see all other workers get a 3.75 percent increase in the first year and four percent in the second year of a two-year contract. Officials are offering a five-year contract, with a 4 percent increase in the minimum pay rate in the first year, and a pathetic 1.5 percent each of the last four years, with reappointed (returning) workers receiving a 3 percent increase in the first year.
University of Illinois strike exposes plight of graduate students, adjuncts --As the strike of graduate student workers at the University of Illinois at Urbana-Champaign (UIUC) enters a fifth day, it has highlighted many of the issues affecting higher education workers and students throughout the United States. Above all, the growth of inequality and the financial aristocracy’s demand for drastic reductions in spending on education have resulted in stagnant or even poverty wages for huge numbers of workers and educational opportunities increasingly shaped by corporate demands.In particular, the strike has brought attention to the vast expansion of poorly paid part-time and graduate student labor in colleges and universities in order to cut costs. As a result of this shift, full-time professors now comprise only a minority of total instructors, according to the American Association of University Professors (AAUP). Numbers from the Bureau of Labor Statistics indicate that in 2015 there were 121,120 graduate teaching assistants employed in higher education.UIUC is among the top ten schools in the country with the highest rates of employment of teaching assistants as the primary instructor, with 19 percent of classes taught directly by a teaching assistant, as noted by US News and World Report. The leaders, Purdue University—West Lafayette and the University of South Florida, are at 26 percent and 25 percent, respectively.The lack of full-time professor positions means that a large number of these graduate student workers earning graduate degrees will end up finding no opportunities outside of so-called “adjunct” positions. These part-time jobs, typically offering no health insurance or other benefits, usually pay by the course, at a median rate of $2,700 per course. Moreover, many people holding these positions are forced to hold down positions at multiple schools to find enough classes to teach to make ends meet. Various recent reports, including in theGuardian, report on workers holding these jobs who are homeless, or have had to resort to prostitution. The inadequacy of the $16,281 minimum pay rate for graduate employees at UIUC is made clear by the fact that it is actually $6,000 less than the university’s published annual cost of living for the Champaign-Urbana area. The low pay rate makes it effectively impossible for a graduate student worker to support a family or to live above poverty levels without taking out large student loans, which further limit their options upon graduation.
College enrollment surges among low-income students – The Greek philosopher Heraclitus once observed that nothing is permanent, except change. Such classical wisdom is once again evident in a recent release of data from the National Center for Education Statistics on the college enrollment patterns of recent high school graduates. Since 1975, when recordkeeping began, a student’s chance of enrolling in college rose reliably with his family’s income. No longer. Low-income students now enroll in college at a higher rate than their middle-income peers. Roughly 70% of students who graduate high school enroll in a college (either two-year or four-year) the following autumn, according to the most recent data. Wealthy students enroll in college at the highest rate, with 83% of recent high school graduates in the top quintile of the income distribution going on to college.But below the top quintile, reality diverges from the patterns one might expect. Among students in the bottom income quintile, that college-enrollment rate is 67%, compared to 64% for students from the middle three quintiles. While the difference is still within the margin of error, it marks an undeniable reversal of the historical norm.In rates of college enrollment, wealthy students have long outpaced their lower-income peers. But the gap is narrowing. In 1986, 73% of top-quintile high school graduates went on to college, compared to 37% of bottom-quintile graduates. That made for an “enrollment gap” between rich and poor students of 36 percentage points. But as of 2016, the gap has narrowed to just 16 percentage points. Most recent high school graduates who enroll in college go to a four-year school, though a substantial minority attend two-year colleges. Among recent high school graduates from families earning below $30,000 per year, 39% enroll in a four-year college, while another 24% enroll in a two-year college. By contrast, 61% of students from wealthy families (those earning above $100,000 per year) enroll in four-year schools and 21% enroll in two-year schools.
Texas Students Launch "No Whites Allowed" Magazine - A group of students at the University of Texas, San Antonio plans to start publishing a “No Whites Allowed” (NWA) magazine. According to a Facebook event titled “Zine Release,” the magazine will be revealed on March 1 at La Botanica, which describes itself as “Texas' first vegan restaurant with a full bar and performance and event venue.” “Thursday at La Botanica from 8-11pm there will be the NWA Zine release party! This zine specifically features and promotes black and brown lgbtqa creatives,” the description states. “We hope to showcase our talent and create an open space for our voices to be heard.”The description goes on to explain that “for a very long time, black and brown people, especially those who are queer, have been told that they don’t have a space. That they don’t have a voice or a say. With this we would like to create a space.”Student Kayla Ramey further elaborated on the event’s purpose in a comment. “I keep having to make this post but I'll try it one last time so everyone clearly understands. The name of the zine is No Whites Allowed. It's a zine for QPOC and by QPOC,” Ramey wrote, noting that while “white people are welcome to come to the event,” the “main goal is to celebrate and empower people that society routinely ignores and rejects.”“Support from white people and heterosexual people is appreciated but is not necessary for the success of this event,” she continued, stating in a second comment that “inclusion is not inherently good, and exclusion is not inherently bad.”
College Republicans have a climate change plan, even if their representatives don’t - According to the annual scorecard released this week by the League of Conservation Voters, Senate Republicans had an average all-time low score of 1 percent — “meaning they voted against the environment and public health” 99 percent of the time. Their party members in the House didn’t do much better, going green only 5 percent of the time, on average. But not all American conservatives feel the same way about the environment as the ones sitting in Congress. Take college Republicans, for instance.On Wednesday, a coalition of Republican, Democrat, and environmental groups from public and private colleges and universities across the United States unveiled a plan to tackle climate change. It’s the first time college Republicans have publicly backed a national climate policy. The Students for Carbon Dividends (S4CD) is a group of 33 student-led clubs that aim to harness the power of their academic institutions to shine a national spotlight on the climate. “S4CD makes clear to our fellow young Republicans that we no longer need to choose between party orthodoxy and the mounting risks facing our planet,” says Kiera O’Brien, vice president of S4CD and a sophomore at Harvard University. S4CD’s platform centers on a carbon-dividends tax pioneered by the Climate Leadership Council, an international policy institute whose founding members include former New York City Mayor Michael Bloomberg and British astrophysicist Stephen Hawking. The tax is known in conservative circles as the Baker-Shultz Plan — named after former Secretaries of State, James Baker and George Shultz.It would put a rising price on fossil fuels in order to limit consumption and decrease pollution. The money generated by the tax goes back to Americans through an annual carbon dividend: for an average family of four, that would come in the form of a yearly $2,000 check. The plan also includes a “border adjustment” — penalties on incoming products from foreign countries that haven’t adopted a similar tax plan..
Harvard Blew $1 Billion in Bet on Tomatoes, Sugar, and Eucalyptus - Six years ago, Jane Mendillo, then head of Harvard’s endowment, spent a week in Brazil, flying in a turboprop plane to survey some of the university’s growing holdings of forest and farmland. That year, Harvard began one of its most daring foreign adventures: an investment in a sprawling agricultural development in Brazil’s remote and impoverished northeast. There, workers would produce tomato paste, sugar, and ethanol, as well as energy after processing crops. The profits, in theory, could outstrip those of conventional stocks and bonds and keep the world’s richest university a step ahead of its peers. Harvard bet the farm in Brazil and lost. The university, which invested at least $150 million in the development, is now exiting, according to people familiar with the matter who requested anonymity because they aren’t authorized to discuss the investment. The venture contributed to the decision by its current endowment chief, N.P. “Narv” Narvekar, to write down the value of its globe-spanning natural resources portfolio last year by $1.1 billion, to $2.9 billion. Harvard, which manages $37.1 billion, has said those investments produced strong returns but now face “significant challenges.” Current and former officials otherwise declined to comment. Harvard made many mistakes over the last decade, according to Thomas Gilbert, a finance professor at the University of Washington, but almost all of them boiled down to a single miscalculation: the belief that its top money managers—who were paid $242 million from 2010 through 2014—were smarter than everyone else and could handle the risks almost all other endowments avoided. “They became loose cannons,” Gilbert says. “When you’re managing donor money, it’s appalling.”
Arizona Funds "Freedom Schools" To Counter Liberal Hegemony On Campus - Arizona colleges and universities are implementing new academic programs designed to broaden intellectual diversity by examining the importance of Western culture and America’s founding. According to The New York Times, the new initiatives, referred to by some as “freedom schools,” are backed by Arizona’s GOP lawmakers and funded by the state. Arizona State University describes its School of Civic and Economic Thought and Leadership as a “new kind of program” that “looks beyond time and borders to explore the fundamental questions of life, freedom, and governance.” The school explains that the new initiative “looks inward to the guiding principles of America’s founders and the leaders who have inspired us,” while also seeking to combine “classic works and altruistic statesmanship to develop a new kind of leader: trained in critical thought, humble about human imperfection, and ready for anything.”Last weekend, ASU’s newly-funded school hosted a conference that welcomed students and faculty to discuss “the meaning of the First Amendment on college campuses and free inquiry and intellectual diversity in higher education.” The conference included lectures by various experts from across the country and panels on free expression, diversity, and challenges in higher education. Other events addressed topics on “Negotiating Controversial Speakers on Campus,” “Freedom of Speech and Thought on Campus: What Role for the First Amendment?” and “State Legislative Remedies to Free Speech Challenges on Campus: Are They Consistent with Academic Freedom?”Alongside ASU’s School of Civic and Economic Thought and Leadership, The University of Arizona has also launched a new academic project called the “Department of Political Economy and Moral Science.” According to the school’s website, the new department was approved last October and will teach a variety of courses relating to Political Science, Philosophy, Economics, and Law.
Naval Academy Rocked By Drug Scandal; Drug Ring Bought Cocaine With Bitcoin - New revelations have surfaced in a drug scandal case festering at the United States Naval Academy in Annapolis, Maryland, involving a criminal ring of about ten midshipmen, according to Fox News. The United States Naval Criminal Investigative Service (NCIS) was briefed on the illegal activity three months ago when a fellow midshipman contacted authorities about a rogue group of midshipmen selling drugs on campus. Current reports estimate ten midshipmen were part of the elaborate scheme to supply midshipmen throughout the Naval Academy with powerful drugs including cocaine, lysergic acid diethylamide (LSD), and Ketamine. Fox News specifies the criminal ring used Bitcoins to purchase the drugs on the dark web then distributed the product throughout campus. Sources from within the academy tell Fox News that roughly two-dozen midshipmen are under investigation. No formal or pending charges have been brought against any midshipmen as the investigation expands. Second in command of the school, Capt. Robert B. Chadwick II conducted a surprise drug test for all 4,500 midshipmen at 5:30 a.m. Wednesday morning. Sources tell Fox News that drug tests are only given at the company level with about 150 midshipmen at a time. Chadwick’s response demonstrates that America’s most prestigious military academy has a massive drug problem. Several midshipmen informed Fox News that the investigation is situated around 23rd company of about 150 midshipmen. The midshipmen who provided Fox News spoke on the condition of anonymity because they are not permitted to talk with the media. Fox News has obtained the names of the midshipmen who have tested positive for drugs but says the names will be withheld as the investigation is ongoing.
The Student Loan Sweatbox - Student loan debt is growing more rapidly than borrower income. The similarity to the trend in home loan debt leading to the subprime mortgage bubble has been widely noted. Student loan debt in 1990 represented about 30% of a college graduate’s annual earnings; student debt will surpass 100% of a graduate’s annual earnings by 2023. Total student loan debt also reflects more students going to college, which is a good thing, but the per-borrower debt is on an unsustainable path. Unlike the subprime mortgage bubble, the student loan bubble will not explode and drag down the bond market, banks and other financial institutions. This is because 1) a 100% taxpayer bailout is built into the student loan funding system and 2) defaults do not lead to massive losses. Instead, this generation of students will pay a steadily increasing tax on their incomes, putting a permanent drag on home and car buying and economic growth generally. Student loan defaults do not result in home foreclosures and distressed asset sales. They result in wage garnishments, tax refund intercepts and refinancing via consolidation loans, and mounting federal budget outlays. In many cases, borrowers in default repay the original debt, interest at above-market rates, and 25% collection fees. In other words, defaulting student loan borrowers will remain in a sweatbox for most of their working lives. Proposals to cut back on income-driven repayment options will only aggravate the burden, further shifting responsibility for funding education from taxpayers to a generation of students. The only way out of the sweatbox for borrowers are 1) bankruptcy discharges granted based on “undue hardship”, a very tough standard, 2) discharges based on death or permanent disability, and 3) write-offs of balances after 20 or 25 years of income-based repayment, or shorter periods for some public service loan forgiveness programs. These write-off amounts are modest now, but are growing as the bubble grows.
Total Student Debt In America Now Exceeds The Cost Of Iraq War - We’ve all seen the headlines: the cost of university education in the United States has become completely debilitating. And student debt keeps rising to record high levels.It’s almost commonplace now for a 22-year old to graduate from university with $50,000+ in student debt.According to data from the Federal Reserve, the total amount of student debt in the United States is now $1.5 trillion. As SovereignMan.com's Simon Black notes, that’s more than the estimated $1.3 trillion in direct costs that the government spent fighting the War in Iraq. What’s probably even more bizarre is that the US government actually owns about 70% of those student loans– a total of $1.06 trillion. I discovered this over the weekend when I was reviewing the federal government’s recently published financial statements for fiscal year 2017. Student loans actually constitute the #1 asset of the US federal government, comprising about 30% of its balance sheet. In other words, young people of America owe more money to the federal government than the value of every tank, every bullet, every aircraft carrier, every acre of land in the national parks. That’s a pretty sad statement to make. And remember that student debt in America is a very special kind of debt: it chases you around forever. Thanks to a piece of legislation signed into law by Bill Clinton in 1998, student debt is almost impossible to ‘discharge’. So unlike just about every other type of debt like a home mortgage or medical debt, student debt is extremely difficult to wipe away through bankruptcy procedures. It’s more a form of indentured servitude than it is debt. There’s no escape.
Trump plan would protect student-loan debt collectors from state investigations - Student-loan debt collectors accused of misleading borrowers would get protection under a proposal from the Trump administration.The Department of Education may issue a statement that federal law prohibits state governments from regulating companies that collect student debt on the department's behalf, according to documents reviewed by Bloomberg. The proposal, which would reverse the department's position in 2016, could help publicly traded companies such as Navient Corp. and Nelnet Inc., which collect monthly payments and counsel borrowers. Former President Obama's administration was too aggressive in its efforts to tighten oversight of the companies, Mick Mulvaney, the new chief of the Consumer Financial Protection Bureau, has said. More than 1 million Americans annually default on loans made directly by the department, federal data show.The Education Department "seems to have taken a position that servicers are more important to the department than borrowers trying to repay the loans," said Whitney Barkley-Denney, a lawyer at North Carolina-based nonprofit Center for Responsible Lending.Some states said they would fill the void left by the federal government's shift. California, Connecticut and Illinois enacted new laws governing how companies may interact with student-loan borrowers. Attorneys general in Illinois, Massachusetts, Pennsylvania and Washington have filed lawsuits against the Education Department's loan contractors, alleging consumer abuses. Education Department representatives didn't respond to multiple messages seeking comment. Congressional Republicans, who have praised state regulation, have scheduled a Tuesday hearing in the House Oversight Committee to explore how states could lead in drafting "smarter" regulations.
Killing a Parasite — Canceling Student Debt, Part 1 - For families under age 35, growth in student debt outstrips by far the growth from any other debt source, including mortgage and credit card debt (source).In America today, 44 million people collectively carry $1.4 trillion in student debt. That giant pile of financial obligations isn’t just a burden on individual borrowers, but on the nation’s entire economy. In the world of parasites, the job of the parasite is to benefit from the harm it does to the host, but not to kill the host, at least not until the parasite is done with it: Unlike predators, parasites typically do not kill their host, are generally much smaller than their host, and often live in or on their host for an extended period. Parasitism is a type of consumer-resource interaction. The parasite first disables the host’s ability to reject the parasite, then derives its own energy (that which sustains it) by robbing the host’s energy system. It attempts to do this for as long as possible. The least parasitic are mortgage companies, in that mortgages typically don’t destroy incomes; they just feed off them. At the less gentle end of the parasitic spectrum are payday lenders and loan sharks, who actually disable the host’s income capability by extracting so much money that the host almost certainly goes bankrupt, often first drawing on the resources of others and transferring those resources to the parasite as well before they do.Not far up the parasitic scale from payday lenders and loan sharks are owners and beneficiaries of student debt, i.e. the lending companies.First, as the chart above shows, there’s a large and growing population of prospects in the student loan world. New hosts, it seems, are everywhere. Second, the loan amounts are extraordinarily large and extraordinarily long-lived (my emphasis throughout):
"CalPERS Is Near Insolvency; It Needs A Bailout Soon" - Former Board Member Makes Stunning Admission - Two weeks ago, in the aftermath of the February 5 volocaust, we quoted David Hunt, CEO of $1.2 trillion asset manager PGIM, who said ignore the volatility spike, the real financial timebomb was and remains public pensions: "if you were going to look for what’s the possible real crack in the financial architecture for the next crisis, rather than looking in the rearview mirror, pension funds would be on our list." In a brief discussion wondering what municipalities and states will do when local tax revenues decline and unemployment worsens, Hunt said "we're worried about those pension obligations.”He is hardly alone: having reported over and over and over (and over, and over) again that public pensions are in deep trouble, two days ago none other than Steve Westly, former California controller and Calpers board member - manager of the largest public pension fund in the US, made a stunning admission, confirming everything:"The pension crisis is inching closer by the day. CalPERS just voted to increase the amount cities must pay to the agency. Cities point to possible insolvency if payments keep rising but CalPERS is near insolvency itself. It may be reform or bailout soon."The pension crisis is inching closer by the day. @CalPERS just voted to increase the amount cities must pay to the agency. Cities point to possible insolvency if payments keep rising but CalPERS is near insolvency itself. It may be reform or bailout soon.https://t.co/RjThekwvNB— Steve Westly (@SteveWestly) February 22, 2018Westly was referring to an editorial laying out "the essence" of California’s pension crisis, exposed last week when the $350 billion California Public Employees Retirement System (CalPERS) made a "relatively small change" in its amortization policy.Specifically, the CalPERS board voted to change the period for recouping future investment losses from 30 years to 20 years. While this may not sound like much, the bottom line is that it would require the California state government and thousands of local government agencies and school districts "to ramp up their mandatory contributions to the huge trust fund."
Trump’s Social Security budget offers more work, less staff, longer waits - For the elderly and disabled who complain about poor Social Security assistance now, these might be the good old days. President Trump’s proposed fiscal 2019 Social Security Administration (SSA) budget would cut staffing, a recipe for long waits in agency offices and on the telephone for those trying to navigate the often-difficult world of old-age, disability, survivor and Medicare benefits. Retirement and survivor benefits would not be hit. Declining service is nothing new, but under Trump, there would be fewer federal employees to deal with an increasing number of people of retirement age. His budget request calls for almost 1,000 fewer full-time-equivalent work years in 2019 than this year. A full-time-equivalent work year is the amount of work a person toiling full time would do in one year. The amount of overtime allowed staffers to keep up with demand would be less than a third of that in 2017 and just over half the 2018 estimate. The advocacy group, National Committee to Preserve Social Security and Medicare, provides these stats to illustrate the problem: About 10,000 baby boomers hit retirement age every day. The increase in workloads coupled with a decrease in staffing led to a 627-day wait for disability applicants’ hearings in 2017. The three-minute telephone wait that callers had for SSA’s 800 number in 2010 was six times longer last year. Despite SSA attempts to direct traffic to its website, there were 2 million more field office visits in 2016 than 2015. “More than 16,000 visitors were forced to wait more than hour for service each day in August 2017,” the committee said. Promising to become “more efficient and effective” for the 71 million people who receive monthly benefits, Social Security Administration statements say Trump’s budget “will allow us to support our front line operations, such as our field offices, processing centers, and National 800 Number, by providing some critical hires and expanding our additional service delivery channels and online service options.” Sure, there will be support, but at what level? The support was too low even before Trump’s proposed 2019 cuts.
‘Pharmacy deserts’ a growing health concern in Chicago, experts, residents say - Even if she wanted to, Chatham resident Emma Washington, 77, cannot skip going to the pharmacy — she relies on 12 medications to stay alive. She typically visits the pharmacy at least three times every month, as she said her insurance does not often cover refills for all of the medicines she needs in one trip. Now, she must set take two buses to get there. Growing portions of Chatham and more than a dozen other poor Chicago neighborhoods, mostly on the city’s South and West sides, are becoming “pharmacy deserts,” say some public health experts. The term describes a community with limited access to a pharmacy, whether retail or independent. Hospital inpatient pharmacies are not typically included in these counts, as they dispense medicine only to hospitalized patients.In Chicago, research has shown most of these neighborhoods share a mix of characteristics: Their residents tend to be low-income, immigrants, and/or black and Latino. And, experts argue, given the widening scope of services many pharmacies are providing, including physicals, immunizations, drug counseling, sexually transmitted infection screening and other laboratory testing — even access to naloxone, the medication used to reverse opioid overdose — pharmacies are increasingly important pieces of the national conversation around health care, especially where health inequity already exists. “Even if medications are affordable, if the pharmacy isn’t accessible, they're not accessible.” In a study published in the medical journal Health Affairs in 2014, Qato and other researchers examined pharmacy access in Chicago neighborhoods from 2000 to 2012, finding that throughout the period the number of pharmacies was lower in minority communities than in white ones. Now, Qato is involved in a three-year program to further this research and develop solutions for growing pharmacy deserts in the city.
Study: Obamacare premiums to rise 18 percent, millions to lose health coverage from GOP changes — Obamacare premiums will rise an average of 18 percent next year due to GOP-backed changes to the health law, a new study finds.The Urban Institute released a new report on Monday that the combination of repealing Obamacare’s individual mandate and expanding access to cheaper health insurance policies known as short-term plans will lead to the premium increase. The study estimates that with the mandate’s elimination, as well as the reduced federal support of open enrollment, more than 6 million fewer people will have health insurance by next year.
Buffett-Dimon Health Venture to Go Beyond Just Squeezing the Middlemen - Warren Buffett’s health-care venture has far more ambitious plans than simply squeezing middlemen for better prices, the billionaire said. “It would be very easy I think to go in and shave off 3 or 4 percent just by negotiating power,” Buffett said Monday in an interview on CNBC. “We’re looking for something much bigger than that.”Buffett’s Berkshire Hathaway Inc., along with Amazon.com Inc. and JPMorgan Chase & Co., said in late January that they planned to start a joint venture to improve health care for their workers. While the companies didn’t give much detail at the time, the announcement prompted broad speculation and unease among investors, sending shares lower for health-system companies including insurers and pharmacy-benefit managers.Health-care spending is taking up an increasing proportion of the U.S. economy, and a goal of the venture is to “at least” halt that, Buffett said, adding that he hopes “we could find a way where perhaps better care could be delivered even at somewhat lesser cost.”The venture is initially being guided by three senior executives from the companies: Berkshire’s Todd Combs; Marvelle Sullivan Berchtold, a managing director at JPMorgan who previously worked at drugmaker Novartis AG; and Beth Galetti, a senior vice president for human resources at Amazon. Combs, who’s on the board of JPMorgan, has likely talked about the idea with Chief Executive Officer Jamie Dimon, Buffett said. “He participated probably more in the discussion than I did, but I love the idea of tackling what I regard as the major problem in our economy,” Buffett said. The billionaire said the venture expects to hire a chief executive within a year who will flesh out how the enterprise will proceed. And he cautioned that it will be a slow process before showing results.
How Companies Scour Our Digital Lives for Clues to Our Health - NYT - Your digital footprint — how often you post on social media, how quickly you scroll through your contacts, how frequently you check your phone late at night — could hold clues to your physical and mental health. That at least is the theory behind an emerging field, digital phenotyping, that is trying to assess people’s well-being based on their interactions with digital devices. Researchers and technology companies are tracking users’ social media posts, calls, scrolls and clicks in search of behavior changes that could correlate with disease symptoms. Some of these services are opt-in. At least one is not. People typically touch their phones 2,617 per day, according to one study — leaving a particularly enticing trail of data to mine. “Our interactions with the digital world could actually unlock secrets of disease,” said Dr. Sachin H. Jain, chief executive of CareMore Health, a health system, who has helped study Twitter posts for signs of sleep problems. Similar approaches, he said, might someday help gauge whether patients’ medicines are working. “It could help with understanding the effectiveness of treatments,” he said. The field is so new and so little studied, however, that even proponents warn that some digital phenotyping may be no better at detecting health problems than a crystal ball. If a sociable person suddenly stopped texting friends, for instance, it might indicate that he or she had become depressed, said Dr. Steve Steinhubl, director of digital medicine at the Scripps Translational Science Institute in San Diego. Or “it could mean that somebody’s just going on a camping trip and has changed their normal behavior,” he said. “It’s this whole new potential for snake oil,” Dr. Steinhubl said.
Blue Cross Pressures Employees to Donate to Opponent of Single-Payer Candidates -- Often, the structural problems that keep Democrats from embracing Medicare for All are hidden beneath the political surface. This week, however, Democratic candidate for governor in Michigan Gretchen Whitmer and Blue Cross Blue Shield of Michigan offered no such subtlety. Their very public collaboration is a case study in how industry money influences campaigns and elections. Whitmer does not support single-payer health care. She is, however, being challenged by two candidates who do: Abdul El-Sayed, and Shri Thanedar. This appears to have Blue Cross (the state's largest insurer) nervous enough to request that its 8,100 employees support Whitmer for Governor. In a letter signed by Blue Cross executives but paid for by the Whitmer campaign, Blue Cross employees were invited to a fundraiser on March 7 and were given suggested donation amounts based on job title. Significantly, the candidate's father, Richard Whitmer, was president of Blue Cross of Michigan for 18 years and even has a building named after him on Blue Cross's campus."This is a perfect example of how corporate politicians hold Democrats back, even as other party leaders, like Senators Cory Booker and [Kristen] Gillibrand, are calling for Medicare for All and no corporate money corrupting our politics," said Adam Joseph, communications director for the El-Sayed campaign, in an interview with Truthout. He is referencing the two senators' separate announcements from last week that they would reject corporate Pac money.
America Should Have Stayed Home This Flu Season -- Influenza isn’t just widespread — the strains in circulation are also severe. As the following chart illustrates, the share of doctor visits for flu and flu-like illnesses has not been this high since the 2009-10 season, when the flu hit early and hard but then quickly declined. (The flu season typically begins around October, peaks somewhere between December and February and peters out by the end of May.) Still, there’s some good news out this week. Data released Friday shows that, after a steep and steady rise over the past weeks, doctor visits for flu and flu-like illnesses are finally dropping. The CDC tracks “flu-like illnesses” because viruses other than influenza, such as respiratory syncytial virus, can provoke flu-like symptoms too. Making a definitive diagnosis requires lab testing that takes time and isn’t done in all cases. But what makes influenza on its own noteworthy is that it can become severe enough to kill you — and there’s a vaccine against it. On Feb. 16, the CDC released its latest data on the effectiveness of this year’s vaccine. The numbers showed that the U.S. flu vaccine’s overall effectiveness was 36 percent, which means that a vaccinated person reduced the risk of getting sick enough with the flu to seek a doctor visit by about one-third. But the vaccine was only about 25 percent effective against a strain called H3N2, a particularly nasty subtype associated with higher rates of hospitalizations and deaths than other strains. And that’s a problem, because the H3N2 strain has been the most predominant this year. “We see lower protection against the H3N2 strain than we see against others, and that’s a consistent finding from year to year,” .
Reduce crime and gun violence and stabilize neighborhoods: A randomized controlled study -- Residents who lived near vacant land that had been restored reported a significantly reduced perception of crime and vandalism as well as increased feelings of safety and use of outside spaces for socializing, according to a new study at Columbia University's Mailman School of Public Health. Police reports matched these perceptions showing significant reductions in overall crime, including gun violence, and nuisances. The findings are published online in the journal PNAS. Branas and colleagues at Penn, UCLA, Rutgers, and the U.S. Forest Service randomly selected 541 vacant lots that were then randomly assigned to receive restoration or as control sites. Crime data were gathered from police reports and 445 randomly sampled residents living near the lots were repeatedly interviewed. These data were analyzed 18 months before and after the restorations were completed. The researchers also placed anthropologists in two select neighborhoods to learn in even greater detail what residents were experiencing and how neighborhoods had been affected by the restorations.Residents living near treated vacant lots reported significantly reduced perceptions of crime (37 percent less), vandalism (39 percent less) and safety concerns when going outside their homes (58 percent less). More than three-quarters of the residents said they significantly increased their use of outside spaces for relaxing and socializing. In addition to a significant overall reduction in crime, police reports also indicated as much as a 29 percent reduction in gun violence, a 22 percent decrease in burglaries, and a 30 percent reduction in nuisances for neighborhoods below the poverty line. Nuisances included things like vandalism, noise complaints, public drunkenness, and illegal dumping.
1000% increase in Drug Addicted Babies in Florida – 2016 -- Janet Colbert of Stop The Organized Pill Pushers Blog:“The death rate from Opioids continues to escalate year over year due to Florida ignoring the opiate epidemic for so long. Since STOPPNow (Stop The Organized Pill Pushers) started posting, the death rate went from 7/day in Florida. to 14/day. To keep the pressure on the legislature, I (Janet Colbert) will keep the Stoppnow.com site updated when we have bills that will need support to become law.” Janet Colbert is a Neonatal Nurse in a Florida hospital caring for newborns who are addicted to opioids at birth.“Sun Sentinel; Gov. Rick Scott has called for $50 million and new legislation to fight the opioid abuse epidemic that has killed hundreds and overwhelmed morgues in South Florida.” Click on the picture to enlarge it.If you recall my way-to-long post: How Pharma Influences . . . The first line of the post: From 2006 to 2015, pharmaceutical companies spent $880 million in lobbying state and federal legislatures and contributing to campaigns to prevent laws restricting Opioid prescriptions. Their lobbying expenditures has outstripped those advocating for greater controls on prescriptions by 200 times giving them greater influence at the state level. Pharmaceutical companies spend almost twice as much every year as compared to what Florida will spend to fight the Opioid epidemic in Florida over a period of time.
Lead and Other Toxic Metals Found in E-Cigarette ‘Vapors’ -- Significant amounts of toxic metals, including lead, leak from some e-cigarette heating coils and are present in the aerosols inhaled by users, according to a study from scientists at Johns Hopkins Bloomberg School of Public Health.In the study, published online in Environmental Health Perspectives on February 21, the scientists examined e-cigarette devices owned by a sample of 56 users. They found that significant numbers of the devices generated aerosols with potentially unsafe levels of lead, chromium, manganese and/or nickel. Chronic inhalation of these metals has been linked to lung, liver, immune, cardiovascular and brain damage, and even cancers. The Food and Drug Administration has the authority to regulate e-cigarettes but is still considering how to do so. The finding that e-cigarettes expose users—known as vapers—to what may be harmful levels of toxic metals could make this issue a focus of future FDA rules.
What Poisons Are in Your Body? - NYT -- Almost a decade ago, I was shaken by my reporting on a class of toxic chemicals called endocrine disruptors. They are linked to cancer and obesity and also seemed to feminize males, so that male alligators developed stunted genitalia and male smallmouth bass produced eggs. In humans, endocrine disruptors were linked to two-headed sperm and declining sperm counts. They also were blamed for an increase in undescended testicles and in a birth defect called hypospadias, in which the urethra exits the side or base of the penis rather than the tip. Believe me, the scariest horror stories are found in urology journals. If you’re a man, you don’t wring your hands as you read; you clutch your crotch. So I eat organic to reduce exposure to endocrine disruptors in pesticides. I try to store leftover meals in glass containers, not plastic. I avoid handling A.T.M. and gas station receipts. I try to avoid flame-retardant furniture. Those are all common sources of toxic endocrine disruptors, so I figured that my urine would test pristine. Pure as a mountain creek. Following instructions, I froze two urine samples and Fed-Exed them off for analysis. I figured this was a report card I had aced. I had advised readers how to avoid all that harmful stuff. In my columns, But I had high levels of a BPA substitute called BPF. Ruthann Rudel, a toxicologist who is the head of research at Silent Spring, explained that companies were switching to BPF even though it may actually be yet more harmful (it takes longer for the body to break it down). BPF is similar to that substance that made those mice do back flips.“These types of regrettable substitutions — when companies remove a chemical that has a widely known bad reputation and substitute a little-known bad actor in its place — are all too common,” Rudel told me. “Sometimes we environmental scientists think we are playing a big game of whack-a-mole with the chemical companies.”
Stanford, MIT, Johns Hopkins University and Waterloo University eye Hong Kong as regional base for stem cell research | South China Morning Post: Stanford, Massachusetts Institute of Technology, Johns Hopkins University and Waterloo University want to form a consortium in the city to engage in biotechnology R&D, source says – but hurdles remain Four world-renowned universities are eyeing Hong Kong as a stronghold in Asia for developing cutting-edge stem cell research as the city’s financial chief is expected to announce incentives to make it easier for foreign research institutions to invest in innovation and technology locally, the Post has learned.An industry source said Stanford University, Massachusetts Institute of Technology and Johns Hopkins University in the United States, and Waterloo University in Canada, would like to form a consortium in Hong Kong to engage in biotechnology research and development. Another source close to the government confirmed that the four universities, which are leaders in stem cell research, had met Chief Executive Carrie Lam Cheng Yuet-ngor and expressed their interest in boosting scientific research in Hong Kong. It is understood Lam pledged to offer support to their joint project, and facilitate the setting up of their research centre at the Science Park in Sha Tin.They came up with the joint initiative after seeing the success of Sweden’s Karolinska Institute in establishing a research centre at the Science Park. “The universities found that the Karolinska Institute’s development model was successful and they are still looking out for donations,” the source said.
China spirals past US in genome research | Asia Times: The US government’s National Human Genome Research Institute (NHGRI) is studying if every American baby should undergo extensive DNA sequencing and analysis at birth, while China and other countries are already more advanced toward that goal despite rights concerns. DNA, the double helix of deoxyribonucleic acid, can reveal a person’s physical and psychiatric health, identity, relatives and other details. But databases of people’s DNA could also enable governments, police, hackers, corporations, forgers and others to abuse the information. “I do know that if you look in the last 15 years, the investment in genomics, in particular, have been more substantial in countries like China, South Korea, Singapore, and even places like Brazil,” NHGRI director Eric Green said in an interview. “Support for biomedical research in the United States has not really kept up with inflation, and other countries have taken our playbook and run with it more aggressively – by ‘playbook’ I mean genomic tools and technologies… We’re hoping to see similar increases in the future.” The world’s largest genetic research center is in Shenzhen. China’s databases hold an estimated 40 million people’s DNA samples. They include DNA from ethnic Uighurs in rebellious Xinjiang province, where 10 million Uighurs and other predominantly Muslim minorities live. Sequencing or identifying details of DNA, rights groups say, could be used to create bioweapons to kill specific ethnic groups or individuals.
Judge Says Public Doesn’t Need Cancer Warning Label - A California federal judge ruled on Tuesday that the public does not need a warning label to inform us that cancer -causing and harmful chemicals in glyphosate herbicides are in our food or products, temporarily relieving manufacturers from the responsibility of being honest with their customers. At a time when more and more American families are struggling with diseases and their high cost, one man decided that it was an injustice to the chemical companies to have to tell us about the presence of their chemicals . Senior United States District Judge William B. Shubb released his ruling regarding the case of Wheat Growers and Monsanto against the California Environmental Protection Agency (CA EPA), Office of Environmental Health Hazard Assessment ( OEHHA ) and the CA attorney general to remove glyphosate, the declared active chemical ingredient in Roundup , the most widely used herbicide in the world, from the CA Prop 65 carcinogen list, a law approved by California voters by ballot initiative in 1986. The judge ruled that OEHHA can keep glyphosate on the Prop 65 carcinogen list but the manufacturers such as Monsanto and food producers will not have to label their products with a warning label. Normally, the law states that products containing chemicals on the list, above a certain level, must label their products within a year from the listing. The temporary preliminary injunction granted by the judge halts the impending labeling by manufacturers of products and foods containing glyphosate and allows them not to inform their customers of this fact ... that glyphosate has been found to cause cancer in animals and to be a probable human carcinogen.
Dicamba Drift Could Put 60 Million Acres of Monarch Habitat at Risk - Dicamba —a drift-prone herbicide linked to millions of acres of off-target crop damage across in 17 states —destroys mostly everything in its path except the crops that are genetically engineered to resist it. It's so damaging that several states , including Arkansas, Tennessee and Missouri have introduced temporary bans on the weedkiller. There's now another reason to worry about the controversial chemical. It's particularly harmful to milkweed, the only host plant for the iconic and already at-risk monarch buttery . In a new report published Thursday, researchers with the Center for Biological Diversity warn that the expanded use of dicamba, which is projected to increase by nearly 100-fold on cotton and soybean fields, will put more than 60 million acres of monarch habitat at risk by 2019. Here are some key findings from the paper:
- Accelerating harm: In addition to 61 million acres of monarch habitat being directly sprayed with dicamba, an additional 9 million acres could be harmed by drift of the pesticide.
- Deadly timing: The timing and geographical distribution of dicamba use coincides precisely with the presence of monarch eggs and larva on milkweed.
- Double trouble: Dicamba degrades monarch habitat both by harming flowering of plants that provide nectar for adults as they travel south for the winter and by harming milkweed that provides an essential resource for reproduction.
- Greater menace to milkweed: Research has shown that just 1 percent of the minimum dicamba application rate is sufficient to reduce the size of milkweed by 50 percent, indicating it may have a greater impact on milkweed growth than the already widely used pesticide glyphosate.
Populations of the once-common butterfly have plummeted approximately 80 percent in just the last two decades. A major threat to the species is its loss of habitat due to the lack of availability of milkweed through land conversion for agriculture, removal of native plants and the use of pesticides .
California Court Ruling Ends Decades of State Pesticide Spraying -- A judge has ordered the California Department of Food and Agriculture to stop using chemical pesticides in its statewide program until the agency complies with state environmental laws. The injunction , issued late last week, is a sweeping victory for 11 public-health, conservation, citizen and food-safety groups and the city of Berkeley. The coalition sued the state after unsuccessfully attempting for years to persuade the agency to shift to a sustainable approach to pest control that protects human health and the environment.Despite thousands of comment letters urging the department to take a safer approach, officials in 2014 approved a program that gave them broad license to spray 79 pesticides, some known to cause cancer and birth defects, anywhere in the state, including schools, organic farms, public parks and residential yards.Spraying was allowed indefinitely and required no analysis of the health and environmental impacts of thechemicals at the specific application sites and no public notice or scrutiny of treatment decisions. Many of the pesticides are also highly toxic to bees , butterflies, fish and birds.This injunction follows a Jan. 8 ruling by Judge Timothy M. Frawley voiding approval of the agency's statewide program for numerous violations of state environmental laws, including relying on "unsupported assumptions and speculation" to conclude that pesticides would not contaminate water bodies. The ruling also cited the state's "woefully deficient" analysis of the cumulative danger of increasing the more than 150 million pounds of pesticides already being used in California each year. The court process culminating revealed not only far-reaching flaws in the state's analysis of the environmental harm caused by the department's pesticide use but also the agency's decades-long history of evading disclosure of the human health and environmental impacts of its activities by granting itself repeated "emergency" exemptions from environmental laws.
One in five Melbourne veggie patches contaminated with lead, study finds - One in five backyard vegetable patches across Melbourne tested as part of a new study are contaminated with levels of lead that exceed health guidelines.The number is worse in Sydney, where a similar previous study found 40 per cent of tested patches had levels of lead that exceeded guidelines.Lead contamination in soil can be absorbed by vegetables grown in it. Children who play in the soil are also at risk.Anyone with a veggie patch in the inner city is now being urged to get their soil tested. “These findings do not come as a surprise,” said RMIT Associate Professor Suzie Reichman, who led the study.“Given it’s all in urban Melbourne, and a lot of the sites in central Melbourne are older and used to be industrialised, it does not surprise us that we got this result.”Associate Professor Reichman’s team tested soil from 136 vegetable gardens across Melbourne, and found that 21 per cent had soil lead levels that exceed 300 milligrams per kilogram. Older houses that may have been painted with lead paint in the past, houses in industrial areas, and houses near roads tended to have soils with the highest lead levels.
EU-Wide Ban on Bee-Harming Pesticides Likely After Major Review - The European Food Safety Authority (EFSA) concluded in a new assessment that "most uses" of three widely used neonicotinoids —imidacloprid, clothianidin and thiamethoxam—pose a risk to wild bees and honeybees, which play a crucial role in pollination across the globe. The conclusion, based on analysis of more than 1,500 studies, will likely prompt a total ban on the pesticides from all fields across the European Union when the issue comes to a vote next month, the Guardian reported. The EU already banned the pesticides on flowering crops in 2013. But the new report suggests the existing ban is insufficient, as using the chemicals in any outdoor setting can pose a risk to bees. Thousands of studies have identified neonicotinoids as key contributors to declining pollinator populations. The chemicals have even been found to harm birds and aquatic invertebrates. "The availability of such a substantial amount of data as well as the guidance has enabled us to produce very detailed conclusions," said Jose Tarazona, head of EFSA's pesticides unit. "There is variability in the conclusions, due to factors such as the bee species, the intended use of the pesticide and the route of exposure. Some low risks have been identified, but overall the risk to the three types of bees we have assessed is confirmed."
Bayer to win EU approval for $62.5 billion Monsanto deal (Reuters) - German drug and crop chemicals maker Bayer is set to win conditional European Union antitrust approval for its $62.5 billion bid for world No. 1 seed company Monsanto, two people familiar with the matter said on Wednesday. The takeover, one of a trio of major deals in the agribusiness sector in recent years, would create a company with a share of more than a quarter of the world’s seed and pesticides market. Shifting weather patterns, competition in grain exports and a souring global farm economy have spurred consolidation among the major players, triggering protests from environmental and farming groups worried about their market power. Bayer has already pledged to sell certain seed and herbicide assets for 5.9 billion euros ($7.2 billion) to BASF (BASFn.DE) to address EU regulatory concerns. The company will also give BASF a license to its digital farming data, and it appears BASF will have exclusive access as Bayer has not offered a legal obligation to license to other rivals, a person with knowledge of the matter has told Reuters. Earlier on Wednesday, Bayer said additional antitrust concessions would include the sale of its vegetable seeds business, confirming a Reuters report. The European Commission, which is expected to issue a decision on the deal ahead of its April 5 deadline, declined to comment. Bayer also declined to comment on the sources’ comments, saying it continued a constructive dialogue with the EU competition watchdog. It added the regulatory process in Europe was further advanced than in the United States where the deal also requires clearance.
Study: climate change threatens major crops in California - California currently provides two-thirds of the country’s fruits and nuts, but according to a new study published Tuesday, by the end of the century California’s climate will no longer be able to support the state’s major crops, including orchards. The report, published in “Agronomy,” warns that the increased rate and scale of climate change is “beyond the realm of experience” for the agricultural community, and unless farmers take urgent measures, the consequences could threaten national food security. “For California, as an agricultural leader for various commodities, impacts on agricultural production due to climate change would not only translate into national food security issues but also economic impacts that could disrupt state and national commodity systems,” the report warns. The study, led by researchers from the University of California, Merced and Daviscampuses, looked at past and current trends in California’s climate and examined what impact record low levels of snowpack, and extreme events such as drought will have on crop yields over time. Climate scientist and author Peter Gleick called it the most important report he’s seen on the impact of climate change on California agriculture. California produces more than a third of the nation’s vegetables and two-thirds of its fruits and nuts. Irrigated crops account for nearly 90 percent of the harvested crops in the state. The total value of the state’s fruits and nuts in 2015 was $18.1 billion, nearly 67 percent of the country’s total value, according to a report issued by the California Department of Food and Agriculure.
Impact of climate change on health is ‘the major threat of 21st century’ - The health of millions of people across the world is already being significantly harmed by climate change, a major new report finds.From driving up the number of people exposed to heatwaves to increasing the risk of infectious diseases, such as dengue fever, climate change has had far-reaching effects on many aspects of human health in last few decades, the authors say.In fact, the effect of climate change on human health is now so severe that it should be considered “the major threat of the 21st century”, scientists said at a press briefing held in London.The report is the first from the Lancet Countdown on Health and Climate Change, a project involving 24 academic institutions and intergovernmental organisations from across the world. The project plans to release a report tracking progress on climate change and global health every year. The report uses a set of 40 indicators to track the effects of climate change on global health. The first of these indicators assesses the “direct impacts” of climate change on human health, including the effects of exposure to extreme heat and natural disasters.One of the report’s findings is that, from 2000 to 2016, the rise in the average temperatures that humans were exposed to was around three times higher than the rise of average global temperatures worldwide. This is shown on the graph below, where the rise in the global average surface temperature from 2000 to 2016, when compared to the average from 1986 to 2008 (red), is shown alongside the rise in the temperatures that humans are typically exposed to (blue).
The Secret Plan To Steal Earth’s Remaining Fresh Water - Lee Camp – video
Industrial tannery dump contaminates drinking water in west Michigan community --Industrial waste from a decades-old west Michigan tannery dump has contaminated drinking water in the area surrounding Plainfield Charter Township, located just north of Grand Rapids. According to officials from the Michigan Department of Environmental Quality (DEQ), the levels of certain toxic chemicals in residents’ drinking water is “off the scale,” and may be among the highest ever recorded in the United States.Plainfield Charter Township is among a number of cities and communities across the United States, including Flint, Michigan and Martin County, Kentucky, that have had their drinking water poisoned by corporate malfeasance and government indifference.The tannery dump was owned and operated by Wolverine World Wide, a footwear manufacturer based in Rockford, Michigan that produces Wolverine, Merrell, and Hush Puppies brand shoes. Records relating to the site indicate that it was used as an industrial sludge dump from 1938 until the 1970s. According to DEQ documents, Wolverine dumped sludge daily at the site throughout the 1960s.The waste was dumped into unlined trenches and covered with dirt, where it proceeded to work its way down into the groundwater supply. The sludge is highly contaminated with perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS), chemical compounds which are used in the waterproofing of leather. Though nearly all US residents are exposed to some level of PFOA and PFOS chemicals, high levels of chronic exposure have been linked to severe adverse health effects. According to an Environmental Protection Agency (EPA) fact sheet, PFOA and PFOS exposure has been linked to kidney and testicular cancer, liver tissue damage, damage to the thyroid and the immune system, developmental delays in children, and a number of pregnancy complications, including pregnancy-induced high blood pressure, low fetal birth weight and fetal skeletal variations.
EPA scientists find black communities disproportionately hit by pollution | TheHill: A study conducted by Environmental Protection Agency (EPA) scientists found that minority and poorer communities are disproportionately affected by air pollution relative to the overall population. The findings by five EPA scientists, published Thursday in the American Journal of Public Health, found that when looking at areas most affected by particulate air emissions, like soot, there were large disparities between communities differentiated by color and social strata. African-Americans faced the highest impact, with the community facing a 54 percent higher health burden compared to the overall population, the study found. Non-white communities overall had a 28 percent higher health burden and those living under the poverty line had a 35 percent higher burden. The report cited historical racism and economic inequality as major factors for the disparity due to the locations of facilities emitting particulate pollution, and used that knowledge as the basis for the study.The scientists concluded that measuring a community's impact solely on their socioeconomics may not be sufficient, as it found that African-Americans are more affected by air pollution than the impoverished. The study also found that the disparities held nationally and across states and counties. "This report illustrates how people of color and people with limited means have been grossly taken advantage of by polluters who don’t care about the misery they cause," Leslie Fields, director of Sierra Club’s environmental justice program, said in a statement. “Locating polluting facilities in low-income neighborhoods and communities of color means that people with marginalized identities experience more asthma, a greater likelihood of heart attacks, even premature death."
EPA Dissolves Program That Studies Effects of Chemical Exposure on Children - As the U.S. Environmental Protection Agency (EPA) under the leadership of Scott Pruitt moves to make it easier for big industry to dump dangerous chemicals into the nation's air and water, the agency announced late Monday that it is dissolving a program that funds studies on the effects of pollution and chemical exposure on America's children. Called the National Center for Environmental Research (NCER), the program previously provided millions of dollars in grants per year to researchers studying the effects of chemicals on children's health. The EPA's move, first reported by The Hill, will eliminate the NCER in the process of consolidating three EPA offices. Critics responded to the move with outrage, denouncing it as "truly wicked" and further proof of the Trump administration's willingness to sacrifice the health of the public in the service of its corporate-friendly deregulatory agenda. While the decision to dissolve the NCER was portrayed by the EPA as an effort "to create management efficiencies," experts argued that the move is perfectly in line with the Trump administration's push to gut funding for research programs and undercut the agency's ability to regulate and fine corporate polluters . "They make it sound like this is a way to create efficiency, but it masks what's happening to this actually programmatic, scientific function of NCER....That makes you think, 'Is this really just an efficiency argument masking their real intention to get rid of the research grant program, which they have said they want to do in the past?'" Tracey Woodruff, a former senior scientist and policy advisor at the EPA under Clinton and Bush, said in an interview with The Hill.
Crazy floods hit the Midwest when hardly anyone was looking -- While Americans gawked at T-shirt–clad New Yorkers reveling in 80-degree February heat, they missed the floods unfolding in northern Indiana, where people kayaked across grocery store parking lots. Goshen, Indiana declared a state of emergency on Wednesday as unprecedented floodwaters swept into the streets and emergency crews used boats to evacuate people from their homes. The rain came from a major storm system that swept through the middle of the country beginning on Monday. Rivers have swelled from Texas to Michigan, closing roads, causing car accidents, and shutting down schools. And the rainfall isn’t expected to stop completely until this weekend. In northern Indiana, the storm dumped its warm rain on more than a foot of snow. With the ground frozen, there was nowhere for the rainfall and snowmelt to go — except into streets, parking lots, and homes. Goshen’s outdoor pool was just about the only dry spot around. In the nearby city of South Bend, Indiana, the river swelled to 12.7 feet — almost two feet higher than the previous record from 1982, the National Weather Service reported. South Bend Mayor Pete Buttigieg called the event a 500-year flood — one so rare it should only occur about once in 500 years, according to flood-risk maps. Of course, climate change has other ideas. The flooding is a sign of what lies ahead for the region. The Environmental Protection Agency says that climate change has increased the frequency of floods and heavy precipitation events in Indiana. And Purdue University’s Climate Change Research Center predicts that climate change will bring more winter rains to Indiana, which could make flooding worse.
Spring is starting early in Ohio, but don't celebrate yet (Plain-Dealer) - Spring is ahead of schedule this year in the Buckeye State, a pattern Ohioans are likely to see continue because of climate change. While an early end to the snow and cold sounds ideal, a premature spring season is not necessarily a good thing, according to Jeff Rogers, state climatologist emeritus at Ohio State University.Ohio's 20-day early start to spring this year is confined to the southern portion of the state. "In central and northern Ohio spring has not yet fully arrived... but it has reached the Ohio River and extreme southern Ohio," Rogers told cleveland.com.How do we know? The start of spring is usually described in terms of phenology - key seasonal changes seen in plants and animals from year to year, also known as nature's calendar. This can be anything from blossoming trees, to the emergence of insects and the migration of birds, according to the National Phenology Network.
Scientifically-backed maps produced by the USGS-led USA National Phenology Network shows just how unusually early spring is arriving in Ohio in 2018. (USA Phenology Network, United States Geological Survey)Kelly Reardon, cleveland.com While most scientists use phenology to describe the onset of spring, many Ohioans associate spring with warmer temperatures and drenching downpours. In Cleveland, warm-ups and heavy rain are moving in earlier. Since 1956, when Cleveland's weather observations were officially moved to Cleveland Hopkins International Airport, the date of the first warm-up to at least 60 degrees is happening about 4.5 days earlier each decade.However, an earlier spring could cause some issues, says Rogers. An earlier spring causes the premature blooming of trees and fruit, making them later more susceptible to frost damage."In 2002, 2007 and 2012, an early spring with budding plants and trees was followed by periods of hard freezes, usually in April, that damaged or outright killed the young vegetation."
More flooding expected along the Ohio River in week of deadly weather - Forecasters expect flooding to persist through the week in the Cincinnati region, and authorities said Monday that will hinder efforts to assess damage. The National Weather Service said the Ohio River crested Sunday and was still well above flood stage Monday. Sunday's peak was more than 8 feet above flood stage and the highest crest since 1997.Meteorologist Kristen Cassady, in Wilmington, Ohio, said a couple of dry days will help, but rain expected later in the week could delay the receding. Monday commutes were complicated by closed roads east of Cincinnati and across the river in northern Kentucky, and some parking lots in downtown Cincinnati were flooded. The Ohio and other rivers caused basement flooding and sewage backups, as well as forcing riverfront businesses to close. "Until the water recedes, we simply will not know the extent of damages." Classes were canceled Monday at Ohio University in southeast Ohio. Rivers swollen by heavy rains and melting snow have been a nagging problem for days in the central part of the U.S. The governors of Missouri, Indiana and Illinois have declared disaster emergencies.In Michigan, river levels were dropping after flooding last week and over the weekend. In southwestern Michigan, where the body of a 48-year-old man was found in floodwaters Sunday in Kalamazoo, the Kalamazoo River was receding after peaking above a 1947 record. This follows weekend storms that included deadly tornadoes that ripped through the South. At least five people were killed. The Ohio River -- which borders Indiana and Kentucky -- has swollen because of relentless rain which resulted in the wettest February ever.
Winter Storm Riley Undergoes Bombogenesis Into a Strong Nor'easter With Damaging Winds, Coastal Flooding and Heavy Snow - Winter Storm Riley has bombed out and is clobbering the Northeast as an intense nor'easter with damaging winds and heavy, wet snow, as a significant, long-lived, destructive coastal flooding event is now underway. "Take this storm seriously!" the National Weather Service in Boston warned via Twitter. "This is a LIFE & DEATH situation for those living along the coast, especially those ocean-exposed shorelines." Another potentially record-breaking high tide is ahead for the New England coast Friday night around midnight, and it will be the highest tide of Winter Storm Riley. Low pressure just off the southern New England coast underwent explosive development known as bombogenesis, defined by a rapid drop in atmospheric pressure of at least 24 millibars in a period of 24 hours or less. From 7 p.m. EST Thursday to 4 p.m. EST Friday, the pressure dropped from 1000 millibars to 974 millibars, or a 26-millibar drop in only 21 hours.Winds remain dangerous in locations across New England and elsewhere in the coastal Northeast while well above average tidal levels persist. The intensity of snowfall is gradually decreasing across the Northeast as Winter Storm Riley is beginning to pull away from the coast. High winds are currently raking parts of the mid-Atlantic states, Appalachians and New England.A 93-mph wind gust was observed in Barnstable, Massachusetts, early Friday evening. On Nantucket Island, winds gusted as high as 89 mph while an 88-mph gust was reported in Woods Hole, Massachusetts.Winds gusted to 71 mph at Washington-Dulles and 62 mph at Reagan National Airport Friday morning. New York's JFK Airport gusted as high as 67 mph early Friday evening. A 74-mph gust was clocked atop Chickaree Summit, Pennsylvania.Dulles Airport reported gusts over 50 mph for more than 12 hours straight, a rare occurrence, according to the National Weather Service. Gusts up to 63 mph have buffeted Boston-Logan Airport, and trees have been downed in many parts of Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Pennsylvania, Ohio, Maryland, Virginia and North Carolina.
Nor'easter Live Updates: At Least 5 Die as Storm Topples Trees and Strands Travelers - A fierce nor’easter battered the Atlantic Coast on Friday, toppling power lines, stranding thousands of travelers, inundating coastal roads and homes with churning seawater and killing at least five people.The storm’s effects were felt as far south as Georgia and as far north as Maine. In Rhode Island, the winds were so severe that officials shut down the Newport Bridge. In New York City, most flights were grounded for a time on Friday afternoon. And in the Washington suburbs, downed trees were strewn across the streets.More than 3,000 flights were canceled and more than 3,500 others delayed across the country on Friday, according to FlightAware, many at coastal airports in the storm’s path. Amtrak suspended service along its Northeast Corridor, and at least one million people lost electricity. Meteorologists at the National Weather Service said coastal flooding had damaged homes, closed roads and sent at least one car floating down a street, warning that more water-related destruction could be forthcoming. At least five people died Friday in episodes related to the storm, the authorities said.In Putnam County in upstate New York, the sheriff said an 11-year-old boy died after a large tree fell and crashed into a home, trapping the boy underneath.A similar thing happened to a child in Chesterfield County, Va. The fire chief there said the child was in a bed when a tree limb struck the trailer the bed was in, fatally injuring him.A deputy police chief in James City County, Va., said that a 44-year-old man, who had been a passenger in a truck, died after the wind toppled a large oak tree onto the truck.In Baltimore County, Md., fire and police officials said that a 77-year-old woman had been fatally struck by a large tree branch. And a police sergeant in Newport, R.I., said that a man in his 70s was struck by a tree that fell in his yard.
Once-in-a-generation flooding possible in Boston — for the second time this year - Even by New England standards, the Nor’easter forecast to explosively develop Friday and Saturday is set to be a whopper. With onshore winds topping 70 mph, a stalling ocean storm that will linger for days, and the full moon Thursday night, the stage is set for a worst case-scenario coastal flood event.A four foot storm surge will accompany the beast of a storm, which will rapidly spin up south of Long Island Thursday night. The central pressure could drop thirty millibars in 24 hours, easily qualifying it as a “bomb cyclone.” The National Weather Service is warning that the seas could top 15.3 feet at the tidal gauge in Boston Harbor. Significant impacts will occur during the high tide Friday morning, which falls just before noon. Because the storm will stick around for several tidal cycles, it could reach this threshold again around midnight Friday and noontime Saturday.This 15.3 feet, if realized, will break the record for flood stage in Boston for the second time this year. The long-standing record of 15.1 feet, set during the Blizzard of ’78, was knocked out of its top spot by the 15.16 feet achieved during January’s “bomb cyclone.” Both systems brought massive coastal flooding in Eastern Massachusetts, wreaking havoc in shoreline communities and destroying a number of structures.Remember Jan. 4th? This storm has the potential of being worse! MODERATE to MAJOR coastal flooding, especially the E MA coastline. Latest tidal forecasts: both #BOSTON & #NANTUCKET expected to exceed crests observed on Jan. 4th, #BOSTON potentially breaking its tidal crest record pic.twitter.com/lxC83TeEv2— NWS Boston (@NWSBoston) March 1, 2018 Unfortunately, widespread destructive coastal flooding this weekend is looking unavoidable at this point. Friday’s event is a “perfect storm” for high-end coastal flooding in Southern New England. The ocean is already primed for big issues due to high astronomical tides. Onshore flows between 40 to 60 mph (and up to 80 mph on Cape Cod) will persist for upward of 24 hours, thanks to a stalling storm. These winds will pile water up along the coast, funneling it into bays, rivers, and inlets. Meanwhile, waves topping thirty-five feet are possible just a few miles offshore.
Snow storm hits Rome as deadly icy spell grips Europe - Romans have awoken to a rare snowfall, after an Arctic storm passing over much of Europe dumped enough snow to force schools to close and public transport to reduce services. Italy’s civil protection agency has decided to send in the army to clear streets in the capital after the snowfall paralyzed Rome with just a few centimeters (inches) of snow. Parks that usually stay green through winter were blanketed with snow, giving eager Romans a rare opportunity to go sledding. Rome saw its first snowfall since February 2012, with about three to four centimetres (1.2 to 1.6 inches) settling on the ground Sunday. It was zero degrees Celsius (32 degrees Fahrenheit) in Rome on Monday morning, with a low of minus six Celsius forecast until Wednesday. Two people have died of the cold in Poland since Saturday, bringing the winter’s toll to 48 since November, according to the centre for national security. In France, where temperatures were forecast to drop to minus 10°C (14 degrees Fahrenheit) and feel as low as minus 18 C over the coming days, emergency shelters were opened for the homeless. Britain’s weather service, the Met Office, issued a yellow weather warning on Monday and amber warnings for Tuesday and Wednesday, with more snow expected in eastern England. “This week looks like being the coldest period we have had in the UK for a number of years,” the Met said on Sunday. In Moscow, temperatures dropped to this winter’s low despite the approaching spring. The mercury in the Russian capital dropped to nearly -20 C (-4 F) on Sunday night, the coldest this winter, the Meteorological Office said Monday. Croatia, meanwhile, has been gripped by freezing weather, with even towns along most of the Adriatic coast waking up to temperatures below freezing. The spell of winter weather has closed schools in the northwest, and heavy vehicles were banned from all roads leading toward the coast.
Iceland among warmest places as big chill hits Europe - Iceland will be warmer than parts of the Mediterranean this week as an icy blast from Siberia brings bitter cold to Europe along with the risk of travel delays and power cuts. Very dry Arctic air from the east will drive weather conditions for the coming days after temperatures plunged to as low as minus 36 degrees Celsius (minus 32.8 Fahrenheit) in Finland -- more than 40 degrees below levels in Iceland, forecasters said. Energy prices jumped, with U.K. day-ahead electricity hitting a decade-high for the time of year. The biggest disruption is expected on Tuesday and Wednesday when “ heavy and persistent” snow may cause rail and air travel cancellations as well as some power cuts, according to the U.K.’s Met Office. Two grid operators in England are already reporting disruption to electricity supplies due to the “severe weather.” Power and gas prices for next-day delivery climbed as the coming days are predicted to be the coldest this winter, with parts of the U.K. braced for the chilliest weather since 1991. The freeze is being caused by a rare weather event known as a sudden stratospheric warming which allows a high pressure area to draw cold air from Siberia across to Europe. European gas contracts last week surged by the most in almost a decade as demand soared. Russia’s Gazprom PJSC reported record levels of exports to Europe, with flows on Saturday beating the previous daily record in December by 2.4 percent.Italy is on the lookout for extra supplies of liquefied natural gas cargoes after the Ministry of Economic Development declared state of early warning for gas on Friday.Norway’s grid manager, Statnett SF, ordered some users in Oslo to reduce power use this week due to forecasts for high demand. In France, where homes rely on electricity for heating, consumption is expected to rise to 93 gigawatts on Tuesday. The national record was 102 gigawatts in February 2012.
Europe is so cold now that the Arctic appears to be a warm escape — Much of Europe woke up Wednesday to yet another day of a cold spell that may have turned the streets of London, Rome and other capitals into pretty photo scenes but also has cost lives across the continent. Neither London nor Rome usually experience temperatures dropping below freezing during winters.Europeans seeking to escape the blast of icy air dubbed the “Beast from the East” to warmer places may want to think about heading north rather than south. As Europe is buried under snow, the Arctic is witnessing one of its warmest winters ever. In fact, parts of the Arctic Circle have been warmer than much of Europe over the past few days.Last Sunday, for example, the temperature in Britain fell to 23 degrees, while northern Greenland was at 43 degrees. On Wednesday, temperatures in Poland's capital Warsaw reached only 19 degrees at a time when the town of Sisimiut, to the north of the Arctic Circle in Greenland, still was over 21 degrees. And while temperatures there are expected to rise to almost 40 degrees on Thursday, they'll drop to 25 degrees in Berlin.“It’s never been this warm. It’s really, really unprecedented, I would say,” Ruth Mottram, a climate scientist for the Danish Meteorological Institute, told German broadcaster DW. While occasional warm winters in the Arctic have been observed since 1896, climate change scientists say that the current string of warm Arctic winters is part of a disturbing new pattern that could be linked to colder European temperatures. Storms that make temperatures rise in the Arctic can have the opposite impact in Europe, as they weaken the low-pressure zone known as “polar vortex” that usually keeps the icy air in the Arctic. Their impact can be felt in both places. While mayors across Europe are launching emergency schemes to shelter homeless people and prevent more freezing deaths, researchers in the Arctic fear ripple effects, saying the storms have “raised temperatures in the region close to the melting point, hindered sea ice growth while its associated strong winds pushed the sea ice edge back, leading to a record low spring sea ice pack in 2016,”
Some of the World’s Biggest Lakes Are Drying Up. Here’s Why. - National Geographic --We were driving on the lake bottom, yet we were more than 12,000 feet above sea level. Many of the fishing villages that have relied on Lake Poopó for thousands of years have emptied too, as we drove past clusters of abandoned adobe homes. Water that once spread across an expanse about the size of Rhode Island was gone. If water is life, this was the absence of both. Round the globe, climate change is warming many lakes faster than it’s warming the oceans and the air. This heat accelerates evaporation, conspiring with human mismanagement to intensify water shortages, pollution, and loss of habitat for birds and fish. But while “the fingerprints of climate change are everywhere, they don’t look the same in every lake,” In eastern China’s Lake Tai, for example, farm runoff and sewage stimulate cyanobacterial blooms, and warm water encourages growth. The organisms threaten drinking-water supplies for two million people. East Africa’s Lake Tanganyika has warmed so much that fish catches that feed millions of poor people in four surrounding countries are at risk. The water behind Venezuela’s massive Guri hydroelectric dam has reached such critically low levels in recent years that the government has had to cancel classes for schoolchildren in an effort to ration electricity. Even the Panama Canal, with its locks recently widened and deepened to accommodate supersize cargo vessels, is troubled by El Niño–related rainfall shortages affecting man-made Gatun Lake, which supplies not only water to run the locks but also fresh drinking water for much of the country. Of all the challenges lakes face in a warming world, the starkest examples are in closed drainage basins where waters flow into lakes but don’t exit into rivers or a sea. These terminal, or endorheic, lakes tend to be shallow, salty, and hypersensitive to disturbance. The vanishing act of the Aral Sea in Central Asia is a disastrous example of what can happen to such inland waters. . Africa’s Lake Chad is a sliver of its former self. Iran’s Lake Urmia has shrunk by 80 percent in 30 years. What remain are the carcasses of ships settled into the silt. Similar scenarios are playing out in terminal lakes on nearly every continent,
What went wrong in Capetown? - I asked that question of Mike Muller, who has been working on water issues there for decades. He referred me to this op/ed he wrote and — more important — the inadequate response from a local city councillor. Dry taps in two Southern African cities tell a worrying story about the failure of public officials to take a long-term view of water supply. But is it their fault alone? Or are citizens failing to hold them to account? And why is the business community, whose board agendas always include a risk-management item, not playing a more active role? Told that there is less than 100 days of water in their dams, the locals can be forgiven for worrying. However, they have made their (dry dam) bed and must now lie in it. This year’s “crisis” has been predicted for at least a decade and they failed to act. It will rain again in Cape Town, we just don’t know exactly when. Windhoek, Namibia, has just had a similar experience. In January, residents were told that there was only 30 days of water left in the local reservoirs. After that, there would not even be enough waste water to recycle in their world-famous treatment plant, which turns sewage into drinking water. Coca-Cola had already shut its canning plant; a local abattoir closed its doors; Namibia Breweries shifted even more production of Windhoek lager to Johannesburg. Things looked grim. And then, at the last minute, it rained. Not a lot, but in March when I visited the Von Bach reservoir, their equivalent of Cape Town’s Theewaterskloof Dam, it was almost 50% full. That will get them through one more season. More important, the crisis has triggered action. Long-postponed plans are now being dusted off to ensure that the city has the resources to meet its growing demands. Cape Town’s story is almost exactly the same. Ten years ago, the Department of Water Affairs and Forestry published a “reconciliation study” to show how Cape Town could get the water needed to meet rising demand. The Berg River Dam, just completed outside Franschhoek, would ensure that the city and surrounds would have enough water until about 2015. After that it would need new sources. More than 20 options were ranked in order of cost and readiness. Various Cape Town organisations were represented in the study team, including metro officials. And the information is on a public website, so no one can claim ignorance.
Greenwashed Timber: How Sustainable Forest Certification Has Failed - When the Forest Stewardship Council got its start in 1993, it seemed to represent a triumph of market-based thinking over plodding command-and-control government regulation. Participants in the 1992 Rio Earth Summit had failed to reach agreement on government intervention to control rampant tropical deforestation. Instead, environmental organizations, social movements, and industry banded together to establish a voluntary system for improving logging practices and certifying sustainable timber. The Forest Stewardship Council (FSC) soon set standards that seemed genuinely exciting to environmental and social activists, covering the conservation and restoration of forests, indigenous rights, and the economic and social well-being of workers, among other criteria. For industry, FSC certification promised not just a better way of doing business, but also higher prices for wood products carrying the FSC seal of environmental friendliness. A quarter-century later, frustrated supporters of FSC say it hasn’t worked out as planned, except maybe for the higher prices: FSC reports that tropical forest timber carrying its label brings 15 to 25 percent more at auction. But environmental critics and some academic researchers say FSC has had little or no effect on tropical deforestation. Moreover, a number of recent logging industry scandals suggest that the FSC label has at times served merely to “greenwash” or “launder” trafficking in illegal timber:
Why is California rebuilding in fire country? Because you’re paying for it -- The next fire may be worse. Sonoma has begun issuing building permits for houses to go back up. Rather than strengthening building codes, the county has weakened rules—passing temporary ordinances that let people expand their homes beyond their previous size and waiving development fees for new units. Other areas hit by fires in 2017, including Anaheim and Ventura, have similarly exempted homeowners from some zoning rules. Susan Gorin, one of Sonoma’s five elected county supervisors, represents some of the areas hardest hit by the fires. While acknowledging the dangers, Gorin, who lost her own home, says the county has made clear that residents will be allowed to rebuild. “One could make the argument that people were not meant to live in those environments,” she says. But she doesn’t feel it’s her place to make that call. “From my perspective, it is very difficult for governments or anyone to tell another person, another property owner, that they could not, should not, rebuild.” One of the issues, in Gorin’s view, is fairness: Why should the people whose homes burned be penalized and not those whose homes were spared? “It’s pretty hard to say what is defensible and what is not defensible,” she says. “Are we telling the fire victims that they can’t rebuild, but we’re going to let the other folks remain in place?” Ray Rasker has been thinking about this issue for years. As a consultant in Montana, he advises governments on how to reduce the damage from wildfires while allowing for development. He says officials’ motive for allowing rebuilding has less to do with fairness than it does with money. “The new cash cow is homebuilding,” Rasker says. “When they look at a new subdivision, they’re thinking tax revenues. And that clouds their judgment.” Rasker says part of the problem is perverse incentives: Local officials know that most of the cost of fire suppression and disaster recovery will be paid by state and federal taxpayers. But he warns that putting homes at the forest’s edge costs communities more than they realize. “The suppression cost is about 10 percent of the total,” he says. The rest is harder to see: reduced home values, lost tax revenue, higher insurance costs, closed businesses, even higher medical bills.
Judge Allows Trump to Waive Environmental Laws to Build Border Wall - A federal judge in San Diego ruled Tuesday that the Trump administration can waive a slew of environmental laws and other regulations to build the president's highly vaunted U.S.-Mexico border wall in California . Federal laws waived by the Department of Homeland Security for construction of a border wall include the Endangered Species Act , the Clean Air Act , the Migratory Bird Treaty Act , the Antiquities Act and many more. In his 101-page ruling, U.S. District Judge Gonzalo said the Department of Homeland Security has broad authority to issue waivers to build border barriers. "Both Congress and the Executive share responsibilities in protecting the country from terrorists and contraband illegally entering at the borders. Border barriers, roads, and detection equipment help provide a measure of deterrence against illegal entries," Curiel wrote. The decision from Curiel—the Indiana-born judge that Trump attacked for his Mexican heritage during the presidential campaign—is significant because it could allow the government to proceed with building the controversial wall in other border states.
Pebble Mine Threatens One of the Last Great Salmon Rivers - Since 2004, Alaska Natives, fishing councils and locals in the town of Dillingham have formed a rare alignment against a proposed gold mine near Bristol Bay and the headwaters of two of the last great salmon rivers on Earth.If Pebble Mine were to proceed, Northern Dynasty Minerals, a Canadian company, would detonate thousands of tons of explosives in this mossy tundra to create a nearly 4,000-acre open-pit gold and copper mine along the braided waterways and lagoons feeding Bristol Bay. A tailings pond would contain enough slurry laced with sulfuric acid to cover Iceland. The sole barrier protecting the nearly 60 million salmon spawning annually in the bay from the toxic water would be an earthen dam. If the dam failed—the area is located in one of the most active earthquake zones in North America—marine mammals, fish and dozens of species of birds, along with a booming fisheries economy worth upwards of half a billion dollars, could be devastated. That was the conclusion of a 2014 peer-reviewed study carried out by the EPA, which found that Pebble would do "irreversible" damage to the watershed and that there would be "complete loss of fish habitat due to elimination, dewatering, and fragmentation of streams, wetlands, and other aquatic resources." To underline its findings, the EPA invoked a rarely used provision of the Clean Water Act, with the aim of permanently imposing restrictions on the site. Then Donald Trump was elected president.
Lawmakers battle over bill to prevent breaching of dams — Three Republican U.S. House members are criticizing Democratic Sen. Patty Murray and other lawmakers for opposing their legislation that would prevent the breaching of four dams on the Snake River to restore endangered salmon runs. The three Republicans from the state of Washington support a bipartisan bill that seeks to maintain existing dam operations until at least 2022. Murray and two Democratic House members from the Seattle area are pushing an environmental study to examine alternatives for salmon recovery, including breaching one or more of the dams to aid fish migration to and from the Pacific Ocean. “It’s unthinkable that Seattle Democrats are putting politics over science when it comes to improving fish recovery efforts,” Reps. Dan Newhouse, Cathy McMorris Rodgers and Jaime Herrera Beutler said in a release this week. “Millions of dollars have been spent studying these dams and improvements have been made to improve fish survival rates.” The skirmish is the latest in a decades-long battle that pits environmentalists against users of the Columbia-Snake river system. Fish advocates blame the four dams, built in the 1960s and 1970s, with decimating iconic salmon runs in the river system. But supporters of the dams point to the benefits of hydropower and navigation provided by the dams, and say fish ladders and other methods of transporting salmon past the dams are helping restore the runs.
Coral Reefs at Risk of Dissolving as Oceans Get More Acidic, Finds Study -- Coral reefs could start to dissolve before 2100 as man-made climate change drives acidification of the oceans, scientists said on Thursday.Acidification will threaten sediments that are building blocks for reefs. Corals already face risks from ocean temperatures, pollution and overfishing.“Coral reefs will transition to net dissolving before end of century,” the Australian-led team of scientists wrote in the US journal Science. “Net dissolving” means reefs would lose more material than they gain from the growth of corals.Carbon dioxide, the main man-made greenhouse gas, forms a weak acid in water and threatens to dissolve the reef sediments, made from broken down bits of corals and other carbonate organisms that accumulate over thousands of years, it said.The sediments are 10 times more vulnerable to acidification than the tiny coral animals that also extract chemicals directly from the sea water to build stony skeletons that form reefs, the study said.Coral animals will be able to keep growing and replenish reefs long after sandy sediments start to dissolve, lead author Bradley Eyre, of Southern Cross University, told Reuters. “This probably reflects the corals’ ability to modify their environment and partially adapt to ocean acidification whereas the dissolution of sands is a geo-chemical process that cannot adapt,” he wrote in an e-mail. The report said it was “unknown if the whole reef will erode once the sediments become net dissolving” and whether reefs “will experience catastrophic destruction” or merely a slow erosion.
Scientists Haven't Seen a Single North Atlantic Right Whale Calf This Season - The North Atlantic right whale is already one of the most endangered whales, with fewer than 450 of the iconic marine mammals left on the planet.But the situation appears to be getting worse: Researchers tracking the whales ' usual calving grounds off Georgia and northern Florida have not seen a single calf yet this breeding season, which started in December and peaks in January and February.To compare, an average of 17 calves a year were born from 1990 to 2014. Only five were born in 2017. It would be "unprecedented" if no calves are born are this year, as Charles "Stormy" Mayo, director of the Right Whale Ecology Program at the Center for Coastal Studies in Provincetown, Mass, told the New York Times .He noted that it's possible that the whales moved somewhere else to give birth, or calves might be found later in the season, which lasts through the end of March."I will not be surprised, though I will be excited, if we see a calf or two in Cape Cod Bay," said Dr. Mayo, whose research team tracks the animals in the bay.The species has been struggling since the 1970s when they were first declared endangered. Last year, 17 of them died, or about 4 percent of its total population. Entanglements from lobster trap lines and other commercial fishing gear have been responsible for 85 percent of all North Atlantic right whale deaths since 2010. Climate change also makes matters worse . Experts say that if the current trend continues, the North Atlantic right whale could go extinct by 2040.
How France Exterminates Its Dolphins --From January through March, an average of 6,000 dolphins are killed each year on France's west coast by large industrial trawlers and vessels fishing in pairs (nets dragged between two trawlers). That number could be as high as 10,000, according to the Pélagis Observatory, based in La Rochelle. That's more than the number of dolphins killed each year in the Danish Faroe Islands and The Cove in Taiji, Japan, combined. These vessels fish mainly for sea bass, targeting spawning grounds during the breeding season. This practice not only threatens sea bass populations, but is also deadly to dolphins trapped and drowned in the nets as by-catch. While on patrol in the Rochebonne plateau this weekend, Sea Shepherd 's vessel the Bob Barker filmed the trawlers Jeremi Simon and Promethée pulling up their nets with two dolphins trapped inside. (video) One of the dolphins seemed already drowned, but the other, still alive, emitted whistles of distress that can be heard on the video. Instead of discarding the dolphins back into the water in front of the Sea Shepherd crew, the two dolphins were brought aboard one of the two vessels. This macabre scene is repeated every night, all year round along the French coast, peaking between January and March. The Pélagis Observatory has been publishing alarming reports about the declining dolphin populations for several years, without being heard. In a 2016 report signed by the French National Center for Scientific Research (CNRS), Pélagis and the University of La Rochelle, it is clearly stated that the mortality inflicted on dolphins by fishing vessels jeopardizes the survival of the population in the medium term.
The terrifying phenomenon that is pushing species towards extinction --There was almost something biblical about the scene of devastation that lay before Richard Kock as he stood in the wilderness of the Kazakhstan steppe. Dotted across the grassy plain, as far as the eye could see, were the corpses of thousands upon thousands of saiga antelopes. All appeared to have fallen where they were feeding. Some were mothers that had travelled to this remote wilderness for the annual calving season, while others were their offspring, just a few days old. Each had died in just a few hours from blood poisoning. In the 30C heat of a May day, the air around each of the rotting hulks was thick with flies. The same grisly story has been replayed throughout Kazakhstan. In this springtime massacre, an estimated 200,000 critically endangered saiga – around 60% of the world’s population – died. “The pattern was strange. They were either grazing normally with their newborn calves or dying where they stood, as if a switch had been turned on. I’ve never seen anything like that.” The saiga – whose migrations form one of the great wildlife spectacles – were victims of a mass mortality event (MME), a single, catastrophic incident that wipes out vast numbers of a species in a short period of time. MMEs are among the most extreme events of nature. They affect starfish, bats, coral reefs and sardines. They can push species to the brink of extinction, or throw a spanner into the complex web of life in an ecosystem. And according to some scientists, MMEs are on the rise and likely to become more common because of climate change. The scientists on the ground pinpointed blood poisoning as the cause, but were puzzled as to why whole herds were dying so quickly. After 32 postmortems, they concluded the culprit was the bacterium Pasteurella multocida, which they believe normally lives harmlessly in the tonsils of some, if not all, of the antelopes. They concluded that a rise in temperature to 37C and an increase in humidity above 80% in the previous few days had stimulated the bacteria to pass into the bloodstream where it caused haemorrhagic septicaemia, or blood poisoning.
Photos Show Venezuelan Zoo Animals Starving, Dying Amid Country's Food Crisis - Venezuela’s increasingly dire food shortage continues to drive thousands of human residents to neighboring countries, but animals trapped in the nation's zoos are also facing starvation at staggering rates.As hyper-inflation and a downward spiraling economy continue to wreak havoc on the country, photos emerged this week showing a wide range of rare beasts at the Zulia animal park visibly suffering from malnutrition. Bengal tigers, jaguars and several South American birds are among the animals shown suffering in the Maracaibo zoo from clear signs of starvation. Venezuelan animal rights leaders said ducks, pigs and goats are among the animals that have been slaughtered in order to feed the other animals in the zoo. A male and female couple of Andean condors brought into captivity in order to save the species from extinction have not been fed for weeks, El Pais reports. In two other cases of raw survival, a pair of crested caracaras and owls resorted to eating another bird of prey in their cage out of hunger. Animals in the zoo photos can be seen with their spines protruding under their skin and bones clearly present in their emaciated limbs.
Insects Feast on Louisiana Wetlands, Inviting the Gulf In - — Louisiana’s coast was already facing deadly threats: drowning from rising seas, beatings from hurricanes, poisoning from oil spills. Now it is being eaten alive. Vast stands of marsh grass have been transformed into empty mud flats and open water, and scientists believe that a plague of foreign insects is largely to blame. The tiny invaders have an insatiable hunger for roseau cane, a tall and hardy reed that binds together some of Louisiana’s most delicate stretches of coastline. The insect, first observed in 2016, could not have chosen a worse target. As the Louisiana coast disappears at a rapid rate — about 10 square miles a year — roseau serves as a living, growing bulwark against land loss. No one knows how or when the insect arrived, or what can stop it. It wasn’t until April that scientists could identify the pest: Nipponaclerda biwakoensis, commonly known as a scale. But by then it had spread over the lower Mississippi River Delta, consuming marshes that protect shipping channels, fishing and shrimping grounds, and hundreds of oil wells and pipelines. The scale may reverse decades of coastal restoration and undercut major elements of Louisiana’s 50-year plan to slow land loss and limit damage from major storms. “It very much looks like a cancer on our marshes,” said Todd Baker, a biologist who works for the state. “It should be a concern not only for the citizens of Louisiana but the country at large.”
Scientists Stunned by Off-the-Charts Arctic Temperatures, Record-Low Sea Ice -- Robert Rohde, a lead scientist at Berkeley Earth, commented that parts of the Arctic are seeing temperatures more than 60°F above normal for February. In translation? "The North Pole is warmer than much of Europe right now." Over the past few days, many climate scientists took to social media to express dismay over the Arctic's unseasonably warm temperatures and its record-low sea ice . At the height of winter, the region is clocking temperatures normally seen in May . "The northernmost permanent weather station in the world, just 440 miles from the North Pole, has warmed to 43°F today—in the middle of months-long darkness during what is normally the coldest time of the year," meteorologist Eric Holthaus tweeted Saturday. "This is simply shocking. I don't have the words," he added. "Just how hot is the Arctic now?" Peter Gleick, the president-emeritus of the Pacific Institute and a member of the U.S. National Academy of Science tweeted , "Hotter than ever measured in the winter. Human-caused climate change is beginning to radically transform our planet." Climate scientist Zack Labe, a researcher at the University of California at Irvine, shared several striking graphs of the Arctic's record-breaking heat.
North Pole surges above freezing in the dead of winter, stunning scientists - The sun won’t rise at the North Pole until March 20, and it’s normally close to the coldest time of year, but an extraordinary and possibly historic thaw swelled over the tip of the planet this weekend. Analyses show that the temperature warmed to the melting point as an enormous storm pumped an intense pulse of heat through the Greenland Sea. Temperatures may have soared as high as 35 degrees Fahrenheit (2 degrees Celsius) at the pole, according to the U.S. Global Forecast System model. While there are no direct measurements of temperature there, Zack Labe, a climate scientist working on his PhD at the University of California at Irvine, confirmed that several independent analyses showed “it was very close to freezing,” which is more than 50 degrees (30 degrees Celsius) above normal.The warm intrusion penetrated right through the heart of the Central Arctic, Labe said. The temperature averaged for the entire region north of 80 degrees latitude spiked to its highest level ever recorded in February. The average temperature was more than 36 degrees (20 degrees Celsius) above normal. “No other warm intrusions were very close to this,” Labe said in an interview, describing a data set maintained by the Danish Meteorological Institute that dates back to 1958. “I was taken by surprise how expansive this warm intrusion was.”2018 is well exceeding previous years (thin lines) for the month of February. 2018 is the red line. Average temperature is in white (https://t.co/kO5ufUWrKq) pic.twitter.com/cLeMxSxvWo— Zack Labe (@ZLabe) February 25, 2018Such extreme warm intrusions in the Arctic, once rare, are becoming more routine, research has shown. A study published last July found that since 1980, these events are becoming more frequent, longer-lasting and more intense. “Previously this was not common,” said lead author of the study Robert Graham, from the Norwegian Polar Institute, in an email. “It happened in four years between 1980-2010, but has now occurred in four out of the last five winters.”
Europe was colder than the North Pole this week--how could that be? -- Subfreezing temperatures have spread across much of Europe over the past week, stretching from Poland to Spain. Snow fell in Rome for the first time in six years. Norway recorded the lowest temperatures of the cold snap: minus 43 degrees Fahrenheit (minus 42 Celsius) in the southeast part of the country on Thursday. And on Friday, Britain and Ireland were buffeted by a storm that brought snow and high winds, along with cold that was expected to linger for days. If Europe feels like the Arctic right now, the Arctic itself is balmy by comparison. The North Pole is above the freezing mark in the dead of winter; there are no direct measurements there, but merging satellite data with other temperature data shows that temperatures soared this week to 35 degrees Fahrenheit (2 degrees Celsius). That is 50 degrees Fahrenheit above normal, and 78 degrees warmer than in parts of Norway. Are the Arctic and European weather patterns connected? Probably, according to Judah Cohen, a climatologist who is director of seasonal forecasting at Atmospheric and Environmental Research, a weather risk assessment firm. Dr. Cohen is the author of a 2017 study that linked a warming Arctic to the intermittent blasts of cold that those of us in the Northern Hemisphere have come to know as the polar vortex. The polar vortex is a low-pressure system that, as its name suggests, ordinarily rests over the North Pole. (There is also a polar vortex over the Antarctic.) When it behaves normally, the polar vortex helps trap cold air in the Arctic.“It’s locking in that cold air at the high latitudes in the Arctic region,” Dr. Cohen said, comparing the polar vortex to a dam holding back the frigid arctic air from the rest of the Northern Hemisphere. But sometimes that dam bursts as the polar vortex weakens and allows cold air to escape the Arctic to more temperate climes. This has always happened from time to time, but a growing body of research suggests that because of climate change the warming Arctic is weakening the polar vortex.
Arctic warmer than much of Europe is a worrying sign of climate change - "Freezing cold 'Siberian Express' is roaring towards Britain," screamed the front page of the Daily Express newspaper last Friday as a cold front, the so-called "Beast from the East," battered its way west. By the weekend, snow and temperatures of minus 5 degrees Celsius (23 degrees Fahrenheit) had hit Britain, while cities like Rome in southern Italy had transformed into a winter wonderland. This came soon after Moscow experienced a record whiteout during the "snowfall of the century."But the weather situation looked very different high up in the polar ice cap, where it's actually supposed to be freezing cold. In northernmost Greenland, it was 6 degrees Celsius above zero on Sunday. And it's consistently been above zero for the last fortnight. Arctic sea ice has also been retreating at record rates. "It's really quite remarkable for February, when it's dark permanently," said Ruth Mottram, a climate scientist for the Danish Meteorological Institute, which has been mapping average temperatures in the far northern Arctic. "It's never been this high at this time of year," Mottram told DW. "It's never been this warm. It's really, really unprecedented, I would say." Over the pole from Europe, nearly a third of the ice covering the Bering Sea to the west of Alaska has also disappeared. But this was no gradual process; the ice retreated over an astonishing eight days in mid-February, according to a report by Inside Climate News.At a time when sea ice is supposed to be experiencing peak winter growth, coverage in the Bering Sea is now 60 percent below its 1981 to 2010 average. Climate experts expressed shock at the level of Arctic warming. Robert Rohde, lead scientist at Berkeley Earth, a climate science consultancy in California, graphically illustrated the far northern temperature spike on social media.
Talk about unprecedented - Arctic Sea Ice - In the preceding post on Global sea ice minimum records getting broken for the third year in a row, I mentioned how the situation on the Pacific side of the Arctic was quite unprecedented, with the sea ice graph for the Bering Sea showing a sharp downturn (and even a small one for the Chukchi Sea). Well, there's an equally unprecedented event taking place on the Atlantic side of the Arctic as well. Yesterday, Prof. Dr. Lars Kaleschke from the University Hamburg tweeted out the following: There is open water north of #Greenland where the thickest sea ice of the #Arctic used to be. It is not refreezing quickly because air temperatures are above zero confirmed by @dmidk's weather station #KapMorrisJesup. Wacky weather continues with scary strength and persistence. pic.twitter.com/YMnvCD8XvL — Lars Kaleschke (@seaice_de) February 25, 2018 This probably has a lot to do with the splitting of the Polar Vortex due to a sudden stratospheric warming event a while back. I'm grateful for a bit of winter, finally, in my neck of the European woods, but not too happy about the consequences for the Arctic. The cause of all this heat and ice being pushed away from the northern coast of Greenland is an atmospheric set-up that during summer we'd be referring to as a Reverse Dipole (low pressure over the Canadian side of the Arctic, high pressure over the Siberian side). This animation of DMI SLP maps shows how the set-up got set up in the past 10 days, resulting in a pressure gradient as high as 75 hPa:
Ancient carbon is coming from Arctic soil--it might be fine, but it might be terrible - Scientists on Tuesday published new evidence that old or even ancient carbon, pulled out of the atmosphere and stored in the bodies of plants hundreds or thousands of years ago, is being set loose again from soils in the Arctic region. It’s a potentially worrying indicator that these “permafrost” soils may already be worsening the problem of climate change. However, scientists are still debating just how much old carbon Arctic soils should release normally even without climate change, leaving the ultimate significance of the findings unclear. The new study, which was published in the journal Environmental Research Letters, employed radiocarbon dating to examine the content of river and lake waters in Canada’s Northwest Territories in 2014. It found an increasing prevalence of older dissolved carbon and carbon dioxide in the waters as the summer advanced. The research also discovered one case of carbon in methane gas that was more than 2,000 years old. The new work isn’t definitive on the question of increasing permafrost carbon emissions — but it’s something to worry about, said Joshua Dean, the study’s lead author and a researcher at the Vrije University in Amsterdam. “I would say if you’re looking at anything pushing several hundred years old to a thousand years old, then you have to start wondering whether that should be coming out of this kind of system,” said Dean, who published the work with 11 colleagues from universities and institutions in Britain. Over thousands of years, the Arctic has stored up massive amounts of carbon as plants have died but have not fully decayed because of the region’s cold temperatures. As a warming climate thaws this permafrost, more and more of the older carbon will be broken down by microbes and released as carbon dioxide or methane, with the potential to greatly warm the planet. But it’s not clear how much carbon is vulnerable or how fast such a release could happen.
Has the Arctic Finally Reached a Tipping Point? - Something is not right in the Arctic. The recent wave of mild, humid air and its attendant impacts is disturbing. But this is the fourth winter where we’ve seen a veritable heat wave rack the Arctic. The warm temperatures have also been accompanied by moist air, which has helped form clouds and lock in temperatures up to 60 degrees Fahrenheit above normal for extended periods in a typically dry, frozen climate. Disappearing sea ice also means warmer ocean waters are exposed, further spinning the region out of whack. Climate change is warming the Arctic twice as fast as the rest of the world. We’ve known that for awhile. The big question now is whether it’s pushing the Arctic past a tipping point into a new, altered state after four unprecedented winters. And while scientists aren’t quite ready to say we’ve passed the point of no return, this unnerving string of winters has them quickly looking for more detailed answers about what’s happening so we can prepare for what comes next. “Until recently, the seasonal sea ice maximum was relatively ignored; the September minimum got the attention,” Mark Serreze, director of the National Snow and Ice Data Center, told Earther. “But that’s changing. Strange things are happening in winter.” This winter’s warm weather oddity is what NASA sea ice researcher Alek Petty called a “pincher attack.” In previous winters, the heat has largely entered the Arctic through the North Atlantic between Greenland and Europe. This winter, heat is pouring in there but also rushing through the Bering Strait from the North Pacific. The double dose of heat is what’s creating wild records across the region, and winter temperatures have never been higher in recorded history.
Melting Ice Could Release Hazardous Waste from Abandoned Cold War Site --The creation of Camp Century, from the outset, was an audacious scheme. Under the thick ice of Greenland, a scant 800 miles from the North Pole, the U.S. military built a hidden base of ice tunnels, imagined as an extensive network of railway tracks, stretching over 2,500 miles, that would keep 600 nuclear missiles buried under the ice. Construction began in 1959, under cover of a scientific research project, and soon a small installation, powered by a nuclear reactor, nested in the ice sheet.In the midst of the Cold War, Greenland seemed like a strategic point for the U.S. to stage weapons, ready to attack the USSR. The thick ice sheet, military planners imagined, would provide permanent protection for the base. But after the first tunnels were built, the military discovered that the ice sheet was not as stable as it needed to be: It moved and shifted, destabilizing the tunnels. Within a decade, Camp Century was abandoned. When siting the secret ice base, the military chose a spot where dry snow kept the surface of Greenland’s ice sheet from melting, and when the base was abandoned, its creators expected the remains to stay encased in ice forever. But decades later, conditions have changed, and as a team of researchers reported in a 2016 paper, published in Geophysical Research Letters, the now-melting ice sheet threatens to mobilize the dangerous pollutants left behind. This hazard-in-waiting is a new kind of environmental threat: In the past, there was little reason to worry about water-borne pollution on an ice sheet 100,000 years old. As Jeff D. Colgan, a professor of political science at Brown University, writes in an article released last week in the journal Global Environmental Politics, Camp Century represents both a second-order environmental threat from climate change and a new path to political conflict. “There are going to be a whole host of unanticipated problems that we never saw coming.”
Scientists have detected an acceleration in sea level rise -- In order to get a better sense of how oceans are changing everywhere, a complementary technology called satellite altimetry is used. Basically, the satellites shoot a radar beam from space to the ocean surface and watch for the reflection of the beam back to space. From this beam, the satellite can calculate the height of the water. Satellites can emit beams continuously as the satellite passes over open oceans, and can gather data far from shorelines. In doing so, they provide the equivalent of a global network of nearly half a million tide gauges, providing sea surface height information every 10 days for over 25 years. Just recently, in the Proceedings of the National Academy of Sciences, a paper has been published that collects all the available satellite altimetry data and asks whether the sea level rise is accelerating. The authors of the paper are a well-respected team and include Dr. Steven Nerem from the Cooperative Institute for Research in Environmental Sciences (CIRES) and Dr. John Fasullo, from the National Center for Atmospheric Research. The authors collected data from four generations of satellites that have carried out this altimetry task. The most recent satellite is called Jason 3, launched in 2016. The satellites generate the data shown below. While in any given year ocean levels may rise a bit or fall a bit, the authors focused on the long-term trend (the white line). They found that the long-term trend is, indeed, accelerating. The rate of acceleration is approximately 0.084 mm per year per year. That may not sound like much, but were this rate of acceleration to continue (a conservative estimate), the authors project that by the end of the century oceans with rise approximately 65 cm (more than two feet).
Seas Will Rise for 300 Years -- A striking new study published yesterday in the journal Nature Communications suggests that sea-level rise—one of the biggest consequences of global warming—will still be happening 300 years from now, even if humans stop emitting greenhouse gases before the end of the current century. What's more, the longer it takes to start reducing global emissions, the higher those future sea levels will be. The study suggests that for every additional five years it takes for emissions to peak and start falling—for instance, if emissions were to reach their maximum levels in the year 2030, as opposed to 2025—sea levels will rise an additional 8 inches by the year 2300. The study emphasizes an important scientific concern about the progression of climate change—that its effects don't always occur immediately, or even quickly in some cases. Even after humans stop emitting greenhouse gases into the atmosphere, global temperatures are expected to continue rising before they finally stabilize, potentially for decades. And even after temperatures stop rising, other effects of climate change may continue to go on for hundreds of years. Sea-level rise is one example. Rising seas are caused by the combination of a number of different processes, including the warming of the ocean, which causes the water to expand in volume, and the melting of glaciers—particularly from the massive Greenland and Antarctic ice sheets. Both of these processes may continue long after human-caused greenhouse gas emissions have come to a halt.The melting of the ice sheets, in particular, is a process that may be difficult to stop once it's set in motion. Even after global temperatures stabilize—and even if they stabilize within the 2-degree Celsius threshold outlined under the Paris climate agreement—the warming that occurs up to that point may destabilize the glaciers to an extent that continued ice loss becomes unstoppable far into the future.In short, scientists generally believe that current greenhouse gas emissions have already committed the world to significant levels of sea-level rise for generations to come.
Dire Consequences of Ignoring Trade in Climate Change Targets: On Track to 3.5 C Temperature Increase by 2100 -- Yves Smith - Economists have not been as vocal in the climate change debate as one might expect. That seems surprising given their eagerness to weigh in on topics like marital relations, which was once seen as outside their purview. Whether the world needs to curb growth in order to mitigate climate change would seem to be a centrally important issue for economists to consider, yet it has gotten at best passing interest. As we’ll discuss today, a 2016 paper by Servaas Storm and Goher-Ur-Rehman Mir, which has not gotten the attention it warrants, suggests that complacency is ill-advised.Both the Intergovernmental Panel on Climate Change and the Conference of Parties to the United Nations Framework Convention on Climate Change in Paris, commonly referred to as the Paris Agreement, focused on national targets that are ambitious: that of reducing carbon emissions by 50% by 2050. Many advanced economies have been patting themselves on the back for moderating their carbon emissions and relying more on “green” energy sources. However, these countries consider themselves to be responsible only for the carbon they produce, not the carbon they consume. As Storm and Mir explain, that difference is crucial. As we’ll discuss, economists’ faith in a model that has only weak empirical support (the Carbon Kuznets Curve), the choice not to hold countries responsible for trade in setting their emissions targets, and the reluctance of policymakers to admit that fighting climate change probably means accepting lower growth, have all supported making only modest responses to the threat of climate change even as temperatures are coming in at or just off record highs. The data in recent years are in line with the grimmer end of the range of climate change forecasts. And it’s hard not to notice the freakishly warm weather: I was just in Alabama, where it hit an unheard of 80 degrees in February, and the flowering trees are in bloom more than a month early.
Ryan Zinke Wins 2017 Rubber Dodo Award -- Interior Sec. Ryan Zinke is the winner of the Center for Biological Diversity's 2017 Rubber Dodo award. The statue is awarded each year to the person or group who has most aggressively sought to destroy America's natural heritage or drive endangered species extinct. "Ryan Zinke seems to wake up every day wondering how he can tear apart America's public lands , ramp up oil and gas development and put endangered species on a fast track to extinction," said Kierán Suckling, the Center for Biological Diversity's executive director. Zinke and President Trump announced massive cuts to Bears Ears and Grand Staircase-Escalante national monuments in Utah. Days later his Interior Department opened bids for the largest oil lease-sale ever offered in Alaska's National Petroleum Reserve—potentially turning over more than 10 million acres of prime wilderness and wildlife habitat to oil development. Zinke's Interior Department also proposed vastly ramping up offshore drilling in the Arctic , the Gulf of Mexico and along the West Coast and East Coast. If the plan is enacted, it could lead to more than 5,000 oil spills and contribute 49.5 gigatons of carbon dioxide pollution, the equivalent of the emissions from 10.6 billion cars driven for a year. He overturned President Obama's moratorium on federal coal leasing and wants to open three marine monuments to industrial commercial fishing: Northeast Canyons and Seamounts in the Atlantic; Pacific Remote Islands; and Rose Atoll in the South Pacific. Zinke's U.S. Fish and Wildlife Service this fall tried to roll back an Obama-era ban on trophy elephant imports from Zimbabwe; he has denied protections to species like the Pacific walrus. "Zinke's an extension of Trump's greed, callousness and corporate cronyism," Suckling said. "It's hard to imagine anyone else who has done more this year to drive our environment straight into the ditch, along with the future of America's wildlife and public lands."
Pruitt tapes revealed: Evolution's a 'theory,' 'majority religions under attack” - Environmental Protection Agency Administrator Scott Pruitt dismissed evolution as an unproven theory, lamented that “minority religions” were pushing Christianity out of “the public square” and advocated amending the Constitution to ban abortion, prohibit same-sex marriage and protect the Pledge of Allegiance and the Ten Commandments, according to a newly unearthed series of Oklahoma talk radio shows from 2005.Pruitt, who at the time was a state senator, also described the Second Amendment as divinely granted and condemned federal judges as a “judicial monarchy” that is “the most grievous threat that we have today." And he did not object when the program’s host described Islam as “not so much a religion as it is a terrorist organization in many instances.” The six hours of civics class-style conversations on Tulsa-based KFAQ-AM were recently rediscovered by a firm researching Pruitt’s past remarks, which provided them to POLITICO on condition of anonymity so as not to identify its client. They reveal Pruitt's unfiltered views on a variety of political and social issues, more than a decade before the ambitious Oklahoman would lead President Donald Trump’s EPA.
Trump’s Science Advisor, Age 31, Has a Political Science Degree - A job that's been held by some of the nation's top scientists is now occupied by a 31-year-old politics major from Princeton University. And it's unlikely to change soon, observers say, leaving President Trump without a science adviser as the administration wrestles with a severe outbreak of the flu, lead-poisoned drinking water and record-breaking disasters that many scientists say are sharpened by rising temperatures.More than a year into his term, Trump hasn't identified a potential nominee for the key position held by prominent scientists in Republican and Democratic administrations alike. And it stands to get harder. There's a razor-thin margin for Senate approval, and Trump's critics and supporters could complicate the confirmation of anyone who rejects mainstream climate science.That means the job falls to Michael Kratsios, the deputy assistant in the Office of Science and Technology Policy. At least for now. Kratsios graduated from Princeton in 2008 with a political science degree and a focus on Hellenic studies. He previously served as chief of staff to Peter Thiel, the controversial Silicon Valley billionaire and Trump ally. The vacancy might reflect Trump's skepticism on climate change. If the president believes that the Senate would balk at a nominee who questions widely accepted views on climate change, he might prefer to leave the post open, said William Happer, an emeritus physics professor at Princeton University who is considered a leading candidate for the job. Happer says the Earth is experiencing a "CO2 famine."
Midwest went from a climate leader to a Trump bulwark - Climate hawks thought they'd scored a major victory in 2007 when six Midwestern states and the Canadian province of Manitoba agreed to an economywide carbon cap-and-trade program. It was seen by many as a precursor to federal action.More than a decade later, the Midwestern Greenhouse Gas Reduction Accord has come to represent just the opposite.Cap and trade failed in Congress and was never implemented in the Midwest. Onetime Republican boosters, like former Minnesota Gov. Tim Pawlenty, recanted their support. Instead of implementing a regional emissions reduction program, Republican lawmakers and governors elected in the GOP wave of 2010 went on to fight the Clean Power Plan, former President Obama's initiative to curb carbon emissions from power plants. Even former supporters admit the idea of a Midwestern cap-and-trade program now seems far-fetched."I think we're probably a long way of getting back to that point," said former Wisconsin Gov. Jim Doyle, a Democrat who led efforts to implement the regional climate program. The Midwest's reversal on cap and trade demonstrates the wider challenges facing U.S. climate hawks. While states on the East and West coasts seek to take up the mantle of climate action during the Trump administration, plans for curbing emissions in the Midwest are notably scarce. Minnesota is the only Midwestern member of the U.S. Climate Alliance, a coalition of 16 states and Puerto Rico seeking to meet the targets of the Paris climate accord. (It is also the only state in the country that requires utilities to estimate the damage of carbon pollution.) Yet the Midwest represents a large slice of America's emissions pie. Coal and manufacturing, while diminished, remain crucial cogs in the region's economy and major emitters of greenhouse gases. Four of America's top 10 carbon-emitting states hailed from the region in 2015, according to the most recent federal figures.
12 hours of energy storage enough for U.S. to run on 80% solar+wind -- Scientists at the University of California, Irvine; the California Institute of Technology; and the Carnegie Institution for Science have released an analysis of the U.S. electricity grid managing expanding volumes of intermittent generation in the research journal Energy & Environmental Science.Geophysical constraints on the reliability of solar and wind power in the United States posits that the U.S. electrical grid could be 80% powered by a solar-heavy+wind power combination using just 12 hours of energy storage to smooth out the variability.The paper also shows that a wind-heavy+solar power electricity grid would require a nationwide high voltage DC (HVDC) network to move electricity from wind energy dense mid-western regions toward the coasts. The solar heavy network wouldn’t need energy storage with an HVDC network.To reach a 100% wind+solar U.S. electricity grid would require 3 weeks of energy storage. . Our team took a simplified approach aimed at understanding fundamental geophysical constraints on wind and solar power. We looked at solar and wind power availability on an hourly basis across the U.S. and determined how much of current electricity demand could be met by varying amounts of solar panels, wind turbines, and energy storage, in addition to changes in the electricity grid.The U.S. currently uses about 3,900,000 terawatt-hours (TWh) per year. A 12 hour chunk of that would be about 5.4 TWh. At a cost of $350 per kilowatt-hour (kWh), that would cost $1.9 trillion. If each of the 110 million single family homes in the U.S. were to install an energy storage system, and split the total volume needed with the electricity utilities, we’d need approximately 24kWh/home.
Hydropower supply dries up with climate change - Water powers around 70 percent of the world's renewable electricity, and more than 15 percent of the world's total power supply. It's cheap, and unlike solar and wind, can produce electricity on demand. But building hydroelectric dams also reshapes ecological systems, inundates landscapes, and has forced millions of people to abandon their homes. And now, water power faces an added complication: Climate change means some countries are experiencing severe droughts and reservoirs are drying up. "We cannot avoid the fact that climate change is having a remarkable impact on hydropower generation and it increases the challenge of managing hydro plants," This is a serious concern for southern and eastern African countries. Malawi relies on hydropower for 98 percent of its electricity supply. Last year, it suffered prolonged blackouts. According to the World Bank, less than 10 percent of Malawians have access to a power supply anyway, but key public infrastructure, such as hospitals, was badly hit. Hydropower makes up 95 percent of Zambia’s power supply — most of it from Lake Kariba, the world's largest man-made reservoir. But due to El Nino in 2016, water levels dropped to 13 percent of their usual capacity, Daisy Mukarakate, climate change program specialist with the United Nations Development Program Africa (UNDP), told DW.Richer countries have been hit too. Following four years of severe drought, a shortage of hydropower meant California had to use more gas to cover its electricity demand. That cost more than $2 billion (€1.6 billion) and led to a 10 percent rise in CO2 emissions, according to the Pacific Institute for Studies in Development, Environment, and Security.
Pollution watch: wood burning is not climate friendly --With snow on the ground, many people will have been huddling around a wood fire, but researchers are questioning if wood burning is really climate neutral. Burning wood is not CO2 free; it releases carbon, stored over the previous decades, in one quick burst. For an equal amount of heat or electricity, it releases more CO2 than burning gas, oil and even coal, so straight away we have more CO2 in the air from burning wood. This should be reabsorbed as trees regrow. For logs from mature Canadian woodland, it could take more than 100 years before the atmospheric CO2 is less than the alternative scenario of burning a fossil fuel and leaving the trees in the forest. This matters to prevent climate tipping points such as an ice-free Arctic or shifting monsoon patterns before the wider decarbonisation can take place following the trajectories of the Paris and Kyoto agreements. Critics of this view say that the trees would never have been left to grow, but would instead have been chopped down for wood or paper. It seems that wood burning is not climate neutral in the short term and requires an increase in forested area to be climate neutral in the longer term.
Trump to Convene White House Summit in Search of Biofuel Deal - President Donald Trump is bringing together senators warring over the future of the U.S. biofuel mandate in hopes of brokering a compromise on an issue that could complicate his political future in Pennsylvania and Iowa. Trump is set to preside over a White House meeting Tuesday that will focus on possible changes to the Renewable Fuel Standard, a 13-year-old requirement that refiners use biofuel, including corn-based ethanol. Administration officials are considering a menu of possible policy moves that could help lower oil companies’ compliance costs, following the bankruptcy of the largest refiner in the Northeast. "We are hopeful that the president can work the art of the deal in a manner that leads to a win-win solution," said Brendan Williams, vice president of government relations for New Jersey-based refiner PBF Energy Co. "There are a lot of ideas that would ensure our nation uses and produces robust volumes of ethanol, without maintaining a compliance system that puts refining jobs at risk and does nothing to support corn farmers. The Trump administration has limited room to maneuver. Renewable Fuel Standard policy is viewed as a zero-sum game in the nation’s capital, because almost every change to benefit one stakeholder disadvantages another. It’s politically fraught, pitting corn farmers in Iowa against laborers in Pennsylvania refineries. Farm groups have already warned the White House that any move to undermine the mandate will be seen as a betrayal in the Midwest. "Any action that seeks to weaken the RFS for the benefit of a handful of refiners will, by extension, be borne on the backs of our farmers," the National Corn Growers Association, the American Farm Bureau Federation and four other agricultural groups said in a letter to president.
Big Corn Says 'No Deal' After White House Biofuels Meeting(Reuters) - A meeting between President Donald Trump and senators representing both the oil and corn industries failed to yield an agreement on how best to lower the cost of the United States' biofuels policy to refiners. "No deal made," said Republican Senator Charles Grassley of Iowa, a key participant in the talks representing corn growers, in a post on Twitter after the meeting. Trump had called the meeting amid rising concern in the White House over the current state of the U.S. Renewable Fuel Standard (RFS), a law requiring refiners to mix biofuels such as corn-based ethanol into their fuel. The decade-old policy, intended to help farmers and reduce U.S. petroleum imports, has increasingly divided two of Trump's most important constituencies. A refining company in the key electoral state of Pennsylvania last month blamed the regulation for its bankruptcy. The meeting included Republican Senators Ted Cruz of Texas and Pat Toomey of Pennsylvania - both from major oil refining states - along with Grassley and Joni Ernst of major corn grower state Iowa. Environmental Protection Agency Administrator Scott Pruitt, Agriculture Secretary Sonny Perdue, and Energy Secretary Rick Perry were also due to attend, according to sources briefed on the meeting.Under the RFS, refiners must cover the costs of blending increasing volumes of biofuels such as ethanol into the nation's gasoline and diesel each year. To prove compliance with the EPA-administered program, they have to acquire credits called RINs, either by earning them through blending, or buying them. As biofuels volume quotas have increased over the years, so have prices for the credits. That has been good news for companies that blend the fuels, but refiners that do not have their own blending facilities are facing rising costs.
White House pushes for more talks after 'no deal' on biofuels (Reuters) - U.S. President Donald Trump has asked for more talks between representatives of the oil and corn industries after a meeting on Tuesday failed to yield an agreement on how to help refiners cope with the country’s biofuels policy. Trump has called the talks between Big Corn and Big Oil amid rising concern in the White House over the U.S. Renewable Fuel Standard (RFS), a law requiring refiners to mix biofuels such as corn-based ethanol into their fuel. The decade-old policy was intended to help farmers and reduce U.S. petroleum imports but has increasingly divided farmers and energy companies - two of Trump’s most important constituencies. A refining company in the key electoral state of Pennsylvania last month blamed the RFS for its bankruptcy. The meeting on Tuesday included Republican Senators Ted Cruz of Texas and Pat Toomey of Pennsylvania - both from major oil refining states - along with Charles Grassley and Joni Ernst of major corn grower state Iowa. “No deal made,” said Grassley in a Twitter post after the meeting, adding the proposals discussed were “not ‘win win’” and would “destroy ethanol demand.” Cruz issued a statement saying the meeting was “positive and productive” and added that Trump had requested another session this week. “After that meeting, I believe we are likely to arrive upon a win-win solution,” Cruz said. White House spokeswoman Sarah Sanders confirmed the Tuesday meeting on biofuels and said: “We’re going to continue having conversations.” Under the RFS, refiners must cover the costs of blending increasing volumes of biofuels such as ethanol into the nation’s gasoline and diesel each year. To prove compliance with the program, they have to acquire credits called RINs, either by earning them through blending or by buying them. As biofuels volume quotas have increased over the years, so have prices for the credits. That has been good news for companies that blend the fuels, but refiners that do not have blending facilities are facing rising costs.
Trump wades deeper into biofuel debate with second meeting (Reuters) - U.S. President Donald Trump on Thursday will gather rivals from the oil and corn industries for the second time this week as the administration seeks elusive common ground on reforms to the nation’s controversial biofuels law. The meetings come amid rising concern in the White House over the current state of the U.S. Renewable Fuel Standard (RFS), a law requiring refiners to mix biofuels such as corn-based ethanol into their fuel, which has increasingly divided two of Trump’s most important constituencies. A refining company, Philadelphia Energy Solutions in the key electoral state of Pennsylvania, last month blamed the regulation for its bankruptcy. A meeting earlier in the week ended with Iowa Republican Senators Chuck Grassley and Joni Ernst calling the White House efforts to help refiners cope with the regulation a threat to farmers, and vowing to fight proposed changes. Grassley and Ernst, along with Republican Senators Ted Cruz and Pat Toomey of refining states Texas and Pennsylvania, will be in attendance again on Thursday, according to two sources familiar with the planning of the event. A number of companies will also be represented. Executives from refiners Valero Energy Corp, Delta Air Lines’, Monroe Energy and PBF Energy Inc will be there along with a union representative from the bankrupt PES, the largest and oldest refiner on the East Coast, the sources said. The biofuel industry will be represented by officials from major producers POET and Green Plains Inc, along with others, the two sources said. Trump will be joined by U.S. Environmental Protection Agency head Scott Pruitt and Interior Secretary Ryan Zinke, who will be sitting in for U.S. Agriculture Secretary Sonny Perdue as he attends events in California, they said.
Diesel cars can be banned from German cities, court rules - (Reuters) - German cities can ban the most heavily polluting diesel cars from their streets, a court ruled on Tuesday, a move that could accelerate a shift away from the combustion engine and force manufacturers to pay to improve exhaust systems. The court said Stuttgart, which styles itself the birthplace of the modern automobile and is home to Mercedes-maker Daimler, should consider gradually imposing a year-round ban for older diesel models, while Duesseldorf should also think about curbs. Many other German cities exceed European Union limits on nitrogen oxide (NOx), known to cause respiratory disease. After the ruling, the northern city of Hamburg said it would start to implement limits on diesel vehicles from the end of April. There has been a global backlash against diesel-engine cars since leading German carmaker Volkswagen admitted in 2015 to cheating U.S. exhaust tests. The scandal has spread across the industry and boosted investment in electric vehicles. Paris, Madrid, Mexico City and Athens have said they plan to ban diesel vehicles from city centers by 2025, while the mayor of Copenhagen wants to ban new diesel cars from entering the city as soon as next year. France and Britain will ban new petrol and diesel cars by 2040. Bans in the home of some of the world’s biggest automakers are a further blow for the sector, and an embarrassment for Chancellor Angela Merkel’s government, which has faced criticism for its close ties to the industry. Germany has long promoted diesel to help cut carbon dioxide emissions and meet climate change goals, but the country now fears a shift away from the combustion engine could endanger hundreds of thousands of jobs. The ruling was praised by environmental groups but angered many politicians and business lobbies who said millions of drivers might end up unable to use or sell vehicles they bought in good faith. “Driving bans have a massive impact on our ownership rights, on mobility and on our profession,” said Hans Peter Wollseifer, president of the association of German tradesmen. “The carmakers are to blame for the diesel problem, not us tradesmen.”
Parts suppliers call for cleaner cars, splitting with their main customers: automakers - In the debate over how quickly to make American cars pollute less, the nation’s auto-parts makers are now in open disagreement with the automakers that buy the countless transmissions, turbochargers and other components that make up modern automobiles. Car manufacturers would like to roll back standards dating from the Obama administration that mandate a deep cut in auto emissions. The rules, which require automakers to nearly double the average fuel economy of new cars and light trucks by 2025, are the single biggest step the United States has taken to combat climate change. Automaker groups say the Obama-era rules fail to take into account the rising demand for larger vehicles, which pollute more and make progress on overall emissions more challenging. The Trump administration is reviewing the rules for possible revision. Tailpipe standards should “continue to make progress on reducing emissions,” a joint statement by parts suppliers said. Credit Melissa Lyttle for The New York Times But on Thursday, five groups representing the country’s major auto suppliers urged the country to stay the course. In an unusual joint statement, the suppliers said that it was “in the nation’s best interest” that the United States continue to develop and manufacture “the cleanest and most efficient vehicles in the world.” While they stopped short of directly criticizing automakers, which the parts suppliers rely upon for business, they came down clearly on the side of stringent emissions rules. Tailpipe standards should “continue to make progress on reducing emissions and oil consumption while saving consumers money at the gas pump,” the groups said. At stake is a measure that the Obama administration estimated would eliminate as much as six billion metric tons of greenhouse gas emissions and save consumers more than $1 trillion at the pump over the lifetime of the cars affected. Together, the nation’s vehicles now regularly emit more earth-warming gases than its power plants.
How Green Is Your Electric Car? - Trading in your gasoline-guzzling car for an electric vehicle is a lot like shifting the emissions from an exhaust pipe to a power plant. EVs run off electricity, and that electricity — unless you’re lucky enough to live in a place like Norway — is coming from a mix of emissions-intensive fossil fuels, nuclear and, to a lesser extent, renewable energy. So exactly how green your EV is depends on where you’re plugging it in. An electric car in Norway is probably the closest thing you’ll get to a true zero-emissions vehicle—because the European country draws almost all of its electricity from hydropower plants. But most of the world’s biggest EV markets rely largely on fossil fuels. China, by far and away the largest market for electric vehicles, depends on emissions-intensive coal. America’s hooked on natural gas. The U.K. and France benefit from emissions-free nuclear power. And that’s just the start. Even regions within a country rely on wildly different resources for power. Take the U.S., where California gets virtually none of its power from coal and Texas relies on the rock for more than a quarter. Also, not all fossil-fuel plants are created equal. Some states are stricter about the emissions these generators can spew than others. That’s why the emissions factor for power generation in cities across the U.S. can vary so greatly. Take into account power-plant emissions, and your electric car could easily be responsible for more than 100 grams of carbon-dioxide emissions for every mile driven. Not surprisingly, an electric car in China accounts for more than double the emissions than one in the U.K. That’s still better than the average internal combustion engine.
Big batteries becoming much cheaper -- Huge battery arrays are undermining peakers—the gas-fired power plants deployed during peak demand—and could in the future completely change the face of the power market. Batteries are hot right now. Energy storage was referred to as the Holy Grail of renewables by one industry executive, as it would solve its main problem: intermittency. No wonder then that everyone is working hard on storage. They are working so hard, it seems, that prices, which used to be a major obstacle along the path toward renewable energy storage gaining ground, have fallen much lower than the price of traditionally generated and stored energy, the Wall Street Journal notes in a recent story on giant batteries. One Minnesota utility, Xcel Energy, not long ago, carried out a tender for the construction of a solar + storage installation, receiving 87 bids whose average price per megawatt hour was just US$36. This compares with US$87 for electricity generated by peakers, with the price including the cost of construction and fuel purchases for the plant. But peakers are not regular power plants. They only work for a few hours a day when demand is at its highest, and this makes them less cost-efficient than regular power plants. Yet the fact that big batteries are beginning to make the construction of new peakers uneconomical could be a sign of what is to come: more and cheaper installations that use renewable energy to power tens of thousands of households.
The design and application of utility-scale battery storage varies by region – EIA - About two-thirds of utility-scale battery storage power capacity installed in 2016 in the United States is located in two electricity markets: the California Independent System Operator (CAISO), which covers much of California, and the PJM Interconnection, which covers all or parts of 13 eastern states and the District of Columbia. Utility-scale battery systems have been installed in these markets for different reasons. Utility-scale battery storage systems in California tend to serve energy-oriented applications, with smaller power capacities but longer discharge durations. Conversely, systems in PJM tend to serve power-oriented applications, with larger power capacities but shorter discharge durations. Unlike most electricity generators, which can be characterized by their power capacity, batteries are characterized by two metrics: power capacity and energy capacity. Power capacity, measured in megawatts (MW), is the maximum instantaneous amount of power that can be produced on a continuous basis. Energy capacity, measured in megawatthours (MWh), is the total amount of energy that can be stored or discharged by the battery. The PJM Interconnection currently has the most utility-scale battery storage capacity in both power and energy terms. In 2012, PJM’s ancillary services market introduced a frequency regulation product designed to compensate generation resources that can quickly adjust power output but are limited by the time they can sustain that output. Since then, utility-scale battery storage capacity in PJM has increased from 38 MW in 2012 to 274 MW in 2016. More than 90% of this region’s installed battery capacity assists with frequency regulation, which helps maintain the grid’s electric frequency on a second-to-second basis. Utility-scale battery storage installations in PJM tend to have relatively large power capacities, averaging 12 MW, and short discharge durations, averaging 45 minutes.
Power companies pull workers from Puerto Rico as many remain without power | TheHill: Power companies contracted by the U.S. government to restore power in Puerto Rico are pulling workers from the island, as many of the territory’s residents still lack power five months after the devastation of Hurricane Maria. The New York Times reported Monday that Fluor Corporation and PowerSecure, who had won contracts with the United States Army Corps of Engineers to restore power to the island, were decreasing the number of workers stationed there. The corps said it was starting a “responsible drawdown” of workers there after power was restored for 1.1 million people, or about 86 percent of customers in Puerto Rico. Local officials in the territory slammed the move, saying it was too soon for the companies to leave and that their work was incomplete. Jorge González Otero, the mayor of Jayuya, a town in central Puerto Rico where half of the residents still don’t have power, said the decision to pull workers was met with “indignation.” “Fluor was among the first companies to get here, about a month and a half ago,” González Otero told the Times, referring to his city. “They said the contract was over, and they left everything half-done.” “Imagine, I have people here without power for five months who are 80 years old, disabled, bedridden and they were just beginning to see people 50 meters away get their electricity back,” he continued. “They are growing desperate.”
Parts of Puerto Rico won't have power before late May, 8 months after Maria - ABC News: Some areas of Puerto Rico will not see power until as late as the end of May, about eight months after Hurricane Maria pummeled the island. Interested in Hurricanes?Add Hurricanes as an interest to stay up to date on the latest Hurricanes news, video, and analysis from ABC News. Hurricanes Add Interest In a series of tweets, the U.S. Army Corps of Engineers said today that “achieving 95% restoration in areas with challenging terrain like Arecibo and Caguas, will take until mid-April and late-May respectively.” About 95 percent of the island will see energy restoration by the end of March, the Army Corps of Engineers previously said. The island’s 3.5 million residents were plunged into complete darkness when Maria made landfall as a Category 4 storm on Sept. 20.
Trump proposes cuts to heating aid while US house fire deaths spike -- There have been 599 lives lost so far in 2018 across the United States, including 61 child fatalities, with this season’s severe winter and frigid temperatures driving the brutal escalation in fatalities. This a significant rise over the same period last year, which saw 490 lives lost with a toll of 52 children under 14 years old. The previous heating season saw a total of 1,239 perish in fires between September 15, 2016 and March 15, 2017. This will be far surpassed this year with 1,396 lives lost since September 15 of last year. Amidst the onslaught of debilitating injuries and unrelenting loss of lives caused by house fires, the Trump Administration is proposing to eliminate from the 2019 federal budget the lifeline for many low-income people, the Low Income Energy Assistance Program (LIHEAP). The program was funded with $3 billion for this season, a decline from $3.3 billion in the previous winter. The average amount of funds received by those that receive LIHEAP aid is a miserly $366. While more than 101 million Americans met the poverty guidelines to qualify, less than 17 million applied for the aid in 2016. Despite Trump’s tax giveaway to corporations and the wealthy utility companies are now demanding double-digit rate increases, illustrated by the example of National Grid, which provides services to customers in the northeastern US. Amongst an array of price hikes it is asking from the New York state Public Service Commission, long known as a rubber stamp, is a 20.5 percent raise in the natural gas delivery price.This year’s increase in fatalities from house fires has been concentrated in the southern US where colder than usual weather has far exceeded the capabilities of an already substandard housing stock, which is inadequately winterized, often lacking basic insulation, forcing residents to rely on space heaters to compensate.
EPA Moves to Overhaul Obama-Era Coal Ash Disposal Rule - The U.S. Environmental Protection Agency ( EPA ) is proposing major changes to Obama-era coal ashdisposal regulations, seeking to give states and utilities more leeway in how they dispose of coal ash, which can contain highly toxic substances such as arsenic, mercury and lead.The Scott Pruitt -led agency claims that the proposal, if finalized, can save the utility sector up to $100 million per year in compliance costs."Today's coal ash proposal embodies EPA's commitment to our state partners by providing them with the ability to incorporate flexibilities into their coal ash permit programs based on the needs of their states," Pruitt said in a statement Thursday.Coal ash is one of the largest types of industrial waste generated in the U.S. The nation's coal plants produce140 million tons of the toxic byproduct annually, and all that gets dumped into open-air pits and surface-waste ponds. Without proper management of these sites, the harmful contaminants can leach out and pollute waterways, ground water, drinking water and the air. As the EPA's own website points out , the need for federal action to help ensure protective coal ash disposal was highlighted by two large spills: the Kingston Fossil Plant spill in 2008, when 5.4 million cubic yards of coal ash was released from a failed dike into the Emory River channel in Tennessee; and the Duke Energy spill in 2014 , when 39,000 tons of coal ash spilled into the Dan River in North Carolina. The two spills "caused widespread environmental and economic damage to nearby waterways and properties," the EPA says. The Washington Post reported that industry officials had lobbied the Trump administration for the rule changes. They said the existing rule causes "significant adverse impacts on coal-fired generation in this country due to the excessive costs of compliance." Taking their concerns into account, Pruitt said in September it was "appropriate and in the public interest" for the agency to rethink the regulation.
Critics say Duke Energy’s $13 billion grid plan isn’t worth the price tag - Customer and clean energy advocates in North Carolina say Duke Energy hasn’t provided enough details or justification for its $13 billion grid modernization plan. A $13-billion grid modernization plan by Duke Energy doesn’t live up to its name and needs massive changes, customer and clean energy advocates say. The utility wants to recoup billions from North Carolina ratepayers to bury power lines, replace equipment, and install sensors to limit outages. The revamped grid would also better accommodate renewable power, according to the company. But critics, including the state’s ratepayer advocate and large electricity users like Google, argue the plan is vague, thinly justified, and will do little to benefit customers or clean energy. “It has very little to do with a clean grid,” said Caroline Golin, regulatory director with the advocacy group Vote Solar. “It has everything to do with investing in a gold-plated distribution infrastructure.” The grid improvements are part of a bid by Duke Energy Carolinas to raise residential electric rates 17 percent, the subject of formal hearings the North Carolina Utilities Commission is scheduled to hold next week. Advocates have urged the commission to split the grid investments from the larger rate case so they can be publicly vetted, a request the panel denied late Friday in a separate Duke ruling. But regulators made clear they would reassess after next month’s hearings, and they noted the company hasn’t yet provided “compelling evidence” its grid plan would deliver “meaningful benefits to ratepayers despite its cost.”
Coal country divides over an unrepentant boss’s Senate bid — The devastating explosion in the Upper Big Branch coal mine killed 29 men in 2010 and scarred West Virginia like few events in modern memory. Don Blankenship, the head of the mining company, went to prison over it. Not many people would call that a springboard for a career in politics. Yet when Mr. Blankenship emerged last year from his one-year sentence for conspiracy to violate mine safety laws, rather than express remorse or contrition over the tragedy, he announced a run for the United States Senate, in a state where coal has been as much a cultural identity as an economic one. His return to the public eye has reawakened painful memories in West Virginia, especially for relatives of the disaster’s victims. “You took 29 lives away from families like mine,” said Judy Jones Petersen in an interview, as if she were addressing Mr. Blankenship. Her brother, Dean Jones, was killed in the disaster. “Shame on you for coming back,” she said. At one of Mr. Blankenship’s meet-and-greet events with voters, a knot of protesters held signs: “You must be joking.” But in the coal fields, many people don’t think his candidacy is a joke at all. He has found support there for his claim to be a victim himself, pursued unfairly by federal prosecutors and mine safety inspectors. He brazenly calls himself a former “political prisoner.” “They railroaded him,” said Steve Blair, a retiree who worked in mines run by Mr. Blankenship when he was the chief executive of the Massey Energy Company, once the largest coal producer in central Appalachia. “The federal government turned everybody loose to testify against him, just to get rid of him.”
China's 2017 coal consumption rose after three-year decline, clean energy portion up (Reuters) - China’s coal consumption last year picked up for the first time since 2013, the National Bureau of Statistics said on Wednesday, despite Beijing’s push to promote less-polluting energy sources. The world’s biggest coal consumer used 0.4 percent more coal in absolute terms in 2017 compared to a year ago, the bureau said in its annual National Social and Economic Development communique, without giving the value of total coal consumption. However, as a portion of total energy consumption, coal usage fell 1.6 percentage points to 60.4 percent last year, while clean energy, including natural gas and renewables, rose 1.3 percentage points to 20.8 percent from 2016, the communique showed. That indicates the country remains on track to fulfil its promise to decarbonise its economy and reduce air pollution, as it vowed to cut the coal portion to below 58 percent of total energy consumption by 2020. Carbon intensity, the level of carbon emissions per unit of economic growth, dropped by 5.1 percent in 2017 compared to a year ago. Total energy consumption rose by 2.9 percent to 4.49 billion tonnes of standard coal equivalent which is still below the target of 5 billion tonnes by 2020. China had a total of 163.7 gigawatts (GW) of installed wind capacity and 130.3 GW of solar capacity by end 2017, up 10.5 percent and 68.7 percent compare to a year ago, according to data from the National Energy Administration (NEA). Natural gas and renewables consumption also increased after nearly 4 million households across the northern China were ordered by Beijing to convert from coal to electricity or natural gas in 2017 as part of its air pollution campaign.
China's January coal imports from Australia surge as blizzard hits (Reuters) - China’s coal imports from key supplier Australia surged in January from a year ago, customs data showed on Saturday, boosted by strong demand at utilities amid freezing weather. The world’s top coal consumer brought in 7.94 million tonnes of coal from Australia last month, data from the General Administration of Customs showed, up 9.4 percent from a year ago. That compares with 8.07 million tonnes in December. Indonesian coal supplies jumped almost 40 percent in January from a year ago to 5.04 million tonnes, one of the highest monthly totals for the country since 2014. The surge is a big recovery from December when delays at loading ports in Indonesia as a result of heavy rain slowed arrivals to just 1.7 million tonnes. Buyers of Indonesian coal had also been holding back orders of the fuel as new shipping rules for coal and crude palm oil issued by Jakarta are expected to restrict exports to Indonesian vessels. The regulation will take effect at the end of April. With several bouts of freezing weather sweeping across China in late January and early February, some coal-fired power plants warned of tight supplies of the fuel as their inventories fell below critical levels due to record daily consumption. Data released this month showed that China brought in a total of 27.81 million tonnes of coal in January, the highest level in four years. “Imported coal will continue to play a key role as a supplement of domestic coal until mid-March as heating demand in northern China remain robust,” said a Zhengzhou-based trader, adding coal imports may tighten again afterwards. The heating season typically ends on March 15 in northern China.
The Beast from the East and European Energy Security - European energy security is a subject I return to time and again normally prompted by some kind of event. This time it is severe cold weather and snow that has spread from Siberia over the whole of North and Western Europe, rather late in the season, at a time when gas storage is depleted. There are some compounding factors like the Groningen gas field in the Netherlands is substantially reduced and the UKs biggest gas storage facility – Rough – has been closed. Will the lights stay on? Probably yes, but only because governments may ask large industrial consumers to scale back or shut down their operations. At a time when social services are being cut to the bone, is this really the time for government energy policies to be eroding national GDP? This cold weather pattern has been christened the beast from the East by the British press. So what is it? Essentially atmospheric circulation has gone into reverse. Instead of receiving normally mild south westerlies, we are getting a very cold easterly air stream as Figure 1 shows. This post may seem rather disjointed and that’s because it is. I simply want to pull together a number of quite random observations starting with the UK grid that I have been monitoring in recent days. Next week maybe we will take a look at data for the whole of this week. Leo has noted in comments that Gridwatch has had record hits these past few days.
Czechs risk wrath of EU over nuclear power project — The Czech Republic looks set for a confrontation with the European Commission — and its anti-nuclear neighbors — over its ambitions to expand nuclear power.Prague wants to streamline a project to build a new reactor at the Dukovany nuclear power plant, 50 kilometers north of the Austrian border, to replace a Soviet-era reactor. That means persuading Brussels to exempt the project from strict EU rules on government bids.If it fails, the Czech government is considering striking a nuclear deal with Russia along the same contentious lines as Hungary, which signed with Moscow last year.The second option would raise trouble for the Commission, which reluctantly approved Hungary’s Paks II nuclear project last year following long negotiations with Budapest. The decision was widely criticized for seeming to appeal to political interests over technical merits and is now being challenged by Austria for breaching EU state aid rules. Austria and another Czech neighbor, Germany, strongly oppose any expansion of nuclear power in Europe. Kristýna Křižanová, adviser to the deputy minister of industry and trade, said talks with Brussels are “getting really complicated and we are not sure we will be granted the exemption.” She said the country is responding to Commission questions ahead of a March deadline before another round of talks. A previous effort by state-controlled utility CEZ to build two reactors at the Temelin nuclear plant turned into a fiasco. If that doesn’t work, the Czech government will consider other moves, including a direct government-to-government deal like Hungary’s €12 billion Paks. Budapest granted Russia’s Rosatom the contract to build the two reactors without a tender, arguing that the state-owned company was the only one that could fulfill the technical requirements to replace older Soviet-era units. Russia is also financing €10 billion of the project through a loan to Hungary.
India Needs At Least 300 Nuclear Reactors Over The Next 50 Years - If India is to have ample energy for its economic growth and that story includes high speed rail, electric cars, and other substitutions of electrical power for fossil fuels, it cannot afford not to get bullish on nuclear power. At present, some 40 reactor projects are ongoing or have been stalled due to legal complications but Delhi should not be thinking about 30 or 40 reactors – it should be considering 300 or 400. Even with such a massive investment over the next 50 years, nuclear power will still amount to less than 35 per cent of India’s total energy mix. Contemplating 400 reactors may seem lunacy at first but a closer consideration of the circumstances shows that these numbers are not fantastic. The ill-informed debate around nuclear energy – and admittedly the less than desired transparency of the government – has diverted attention from the scale of the energy crisis that awaits India. It is high time the authorities unequivocally embrace nuclear power and initiate a vocal programme to inform the public of the risks and benefits of the technology.
UAE to plug in first nuclear power reactor this year - The UAE is due to commission the Arab world’s first nuclear power reactor this year. Of the four nuclear reactors with a capacity of 1400 megawatt (MW) each at Barakah in Al Dhafra region of Abu Dhabi, the first one is getting ready and the remaining three reactors will go online by 2020. The state-run Emirates Nuclear Energy Corporation (Enec) said in January that Unit 1 is currently undergoing commissioning and testing, prior to regulatory review and receipt of the Operating Licence from the Federal Authority for Nuclear Regulation (FANR). Since its inception in 2009, Enec has focused on the safe delivery of the UAE Peaceful Nuclear Energy Programme. Unit 4 is more than 60 per cent complete, Unit 3 is more than 79 per cent, and Unit 2 more than 90 per cent, said an Enec press release issued in early January. All four units with a combined output of 5,600MW will deliver clean, efficient and reliable electricity to the UAE grid. When the four reactors are completed, the Barakah Nuclear Energy Plant will save up to 21 million tonnes of carbon emissions each year
New evidence of nuclear fuel releases found at Fukushima - Uranium and other radioactive materials, such as caesium and technetium, have been found in tiny particles released from the damaged Fukushima Daiichi nuclear reactors. This could mean the environmental impact from the fallout may last much longer than previously expected according to a new study by a team of international researchers, including scientists from The University of Manchester.The team says that, for the first time, the fallout of Fukushima Daiichi nuclear reactor fuel debris into the surrounding environment has been "explicitly revealed" by the study.The scientists have been looking at extremely small pieces of debris, known as micro-particles, which were released into the environment during the initial disaster in 2011. The researchers discovered uranium from nuclear fuel embedded in or associated with caesium-rich micro particles that were emitted from the plant's reactors during the meltdowns. The particles found measure just five micrometres or less; approximately 20 times smaller than the width of a human hair. The size of the particles means humans could inhale them.The reactor debris fragments were found inside the nuclear exclusion zone, in paddy soils and at an abandoned aquaculture centre, located several kilometres from the nuclear plant. It was previously thought that only volatile, gaseous radionuclides such as caesium and iodine were released from the damaged reactors. Now it is becoming clear that small, solid particles were also emitted, and that some of these particles contain very long-lived radionuclides; for example, uranium has a half-life of billions of years.
Will the U.S. Help the Saudis Get a Nuclear Weapon? - NYT Editorial Board - The last thing the Middle East needs is another country with the potential to build nuclear weapons. Yet that could happen if the United States mishandles Saudi Arabia’s plans to enter the nuclear power business and erect as many as 16 nuclear reactors for electricity generation over 25 years. The Saudis aren’t saying they want to become the second country, after Israel, to have a nuclear arsenal in the increasingly unstable region. They insist the reactors would be used only to generate energy for domestic purposes, so they can rely on their huge reserves of oil to generate income from overseas. Still, there are growing signs that the Saudis want the option of building nuclear weapons to hedge against their archrival, Iran, which had a robust nuclear program before accepting severe curbs under a 2015 deal with the United States and other major powers. Obama administration efforts to negotiate an agreement on transferring civil nuclear technology — required before a country can buy American nuclear technology — faltered over the Saudis’ refusal to make a legally binding commitment to forgo uranium enrichment and plutonium reprocessing, which could be used to produce fuel for nuclear weapons. The United Arab Emirates made a commitment like that in its 2009 agreement, setting the nonproliferation “gold standard” for civil nuclear cooperation deals. Now new negotiations are being pursued under a president who caters to the needs of American business and aggressively courts Saudi leaders. In theory, Mr. Trump is well-placed to cajole the Saudis to accept the gold standard. He can argue that it makes more sense for Riyadh to buy enriched fuels for the reactors from relatively low-cost foreign suppliers than to produce it in Saudi Arabia. Such an agreement will further cement ties with the United States, which has promised to protect the kingdom from its enemies. But there are questions about what limits the Trump administration would require, and the Saudis would accept, as part of the agreement the two sides are about to start negotiating.
The poison and the tomb: one family's journey to their contaminated home - It takes three days on the open sea to journey from the Marshall Islands capital to Enewetak Atoll. You can’t see the atoll until you’re just miles away as it’s only feet above sea level. As you get closer, the sun fades behind clouds and the islands are shrouded in mist. Beaches are fringed not by coconut palms but Australian pines, trees praised for soaking up salt-spray and airborne radionuclides. One of the two atolls handpicked for U.S. nuclear testing after World War II, Enewetak, was never famous enough to have a swimsuit named after it, like better-known Bikini. But the atoll consisting of 40 islands saw almost twice as many atomic tests. It’s the most remote atoll within the Marshall Islands, with Guam thousands of miles to the west and Japan thousands of miles to the north. It isn’t a place where most mothers would take their children. Brooke Takala-Abraham knows that. But with her husband Mores, sons Ahti and Aapo, niece Milan, two kittens, three dogs, a pickup truck, a Geiger counter, and food supplies to last a few months, she disembarks from a boat that’s also bringing provisions for about 600 people from Majuro, the Marshall Islands capital, to Enewetak’s main island. Between 1946 and 1958, the U.S. nuked the Marshall Islands 67 times: The effects could be compared to dropping 1.6 Hiroshima bombs every day for 12 years. When the tests ended in 1958, forced displacement and radiation poisoning had already changed the nation irrevocably. The Marshallese had no words then for the horrors that would result, like poison and cancer. Now, they face a new problem: the Armageddon of rising sea levels due to climate change. Yet another deluge of scientific terms washes over the islanders –some simply call it the “changing clouds.” Mores descends from a line of Enewetak chiefs. Much of the kingdom their children will inherit is laced with radioactive plutonium, one of the most toxic substances known to man, with a half life of 24,100 years. In Enewetak, people simply call it "the poison."
Residents worry coal mine will undo clean water efforts (AP) — As years of work to cleanse southeastern Ohio's Sunday Creek of acid mine drainage from old coal mines start to produce cleaner water and more fish species, a new coal mine is proposed to open in the region. The prospect of a new mine opening while work is underway to clean up years of pollution left from old mines has outraged some Athens County residents. Oxford Mining Co. plans to operate a surface mine on 299 acres in Trimble Township near Glouster. The company says in its permit applications that the Johnson Run mine is expected to operate for five years and employ about 100 workers. Permits are pending before the Ohio Environmental Protection Agency and the Ohio Department of Natural Resources' Division of Mineral Resources Management. Mining wastewater would be discharged into Johnson Run, which connects to Sunday Creek. Johnson Run and three other streams will be "impacted' by the mining work, as well as three wetlands, the company says in one of its permit applications. The Appalachian Ohio nonprofit organization Rural Action has been working for 20 years to clean up the Sunday Creek and Monday Creek watersheds, and in partnership with federal, state and local agencies, universities and other nonprofit groups has spent about $9 million to date on the efforts, said Michelle Shively, Rural Action's Sunday Creek Watershed coordinator. The restoration work in the southeastern Ohio watersheds has included the addition of treatment systems that neutralize the highly acidic, orange-colored, rotten-egg-smelling water spilling from abandoned mines and make it clean enough to support life. Of the $9 million, Shively said, more than $2.6 million has been spent cleaning up the Sunday Creek watershed, most of it focused on the creek's west branch. The results include significantly cleaner water and more aquatic life. The west branch has transformed from having no fish at all to now hosting 17 species, she said.
Learn facts about fracking to make an educated decision - Richland Source -- My family and I peacefully reside in the beautiful countryside around Loudonville. We believe that it is imperative to inform our neighbors and the community on the impact from extraction activities of the oil and gas industry (Cabot Oil) -- which are showing a high degree of "interest" in our area and are moving quickly to establish their presence. One needs only to visit Carroll County or any other nearby area to witness firsthand these issues. Our past travels in those areas as well as West Virginia and Pennsylvania provide stark examples of what full scale extraction practices have done to those regions, infrastructure, aesthetics, and quality of life. As one example of this devastation, please research the life-changing impact on the local water supplies in the areas where full scale fracking is being done. Where will the millions and millions of gallons of water needed to frack come from? By one estimate, Ohio has forever lost over 16 billion gallons of water due to oil and gas extraction. The resultant toxic water will be poisoned and removed from the water cycle--forever. We all make critical choices at critical points in our lives. As the Native American proverb states, "We do not inherit the earth from our ancestors. We borrow it from our children." Our family has chosen to become educated on these issues; we will not sell our health and our well being; some things are not for sale at any price! Our family is committed to be stewards, not pillagers, of these priceless gifts of land, water, air, and life that we ALL have been given.
Judges to hear appeal of Board of Elections' rejection of charter - The 4th District Court of Appeals today (Thursday) is scheduled to hear an appeal of the Athens County Board of Elections’ decision last July to reject an anti-fracking county charter proposal for the November 2017 ballot.The appellant, described as “a committee of petitioners for the county charter proposal,” on July 28, 2017, appealed Athens County Common Pleas Judge George McCarthy’s decision to uphold the Board of Elections’ July 10 decision to not place on the November 2017 ballot the Athens County Bill of Rights Committee’s proposed county charter.In anticipation of the appellate court hearing today, the ACBORC mailed out postcards last week urging supporters to “Please Come Protect Your Right to Vote” this morning at 8:30 at the Athens County Courthouse.This would be prior to a scheduled 4th District Court of Appeals’ hearing on the appeal sometime today (Thursday). The appeal is scheduled for discussion in the court along with three unrelated cases, though the order of discussion reportedly isn’t set till the morning.The ACBORC’s postcard reads, “You signed the petition to put the county charter on the ballot. But the Athens County Board of Elections refused to allow county residents to even vote on the issue!“We are appealing. Come support our legal team in the courtroom.”Last July, the Athens County Board of Elections rejected the charter as invalid by stating, among other things, that a proposed executive council (comprised of county elected officials who aren’t county commissioners) does not meet Ohio Revised Code requirements for a county executive under an alternative form of government. Judge McCarthy sided with the Board of Elections and upheld the rejection of the charter. In addition to filing an appeal of McCarthy’s decision with the 4th District Court of Appeals on July 28, the charter committee filed a protest of the elections board decision with Ohio Secretary of State Jon Husted.
US' Range Resources plays up Marcellus, downplays Terryville in 2018 gas outlook - US natural gas producer Range Resources sees future growth in the Appalachian Basin to serve LNG export demand even as it scales back output in the Terryville field in northern Louisiana because of disappointing results there, executives said Wednesday during an investor conference call. The outlook, shared during a call with analysts to discuss fourth-quarter 2017 financial results, highlights efforts by shale producers to increasingly focus on core assets, while shedding or reducing investment in operations that aren't hitting targets for returns. In Range's case, executives said that in addition to cutting the number of rigs it uses this year in the Terryville to one from the four it averaged last year, it also is in the process of identifying further assets to sell in the Midcontinent region and in northeast Pennsylvania, on top of the $70 million in sales last year. Its production focus will be on southwest Pennsylvania and the Marcellus, where it will devote 85% of its capital in 2018. Article continues below... Request a free trial of: Gas Daily Whether you’re a risk manager, research analyst, trader or broker, Platts Gas Daily brings you crucial competitive intelligence across the entire gas marketplace. To request a free trial of Platts Gas Daily, fill out the form below and someone from our team will be in contact with you to setup your trial. Start making decision with confidence in the natural gas market today. Request a free trial More Information "The Marcellus has continued to surprise us to the upside," CEO Jeff Ventura said on the call. Range has been betting that the pipeline buildout serving the resource-rich Marcellus in the US Northeast will trigger stronger financial returns in the years ahead, as growing midstream activity moves more gas, NGLs, and oil to domestic demand markets and for export. Range is among the shippers with commitments on Energy Transfer Partners' 3.25 Bcf/d Rover gas pipeline, which is designed to boost takeaway capacity from the Northeast to serve demand markets in the Midwest and Southeast. The completion of the second phase of the project in the second quarter of this year is expected to give a boost to Range's results.
LNG exports, Marcellus/Utica production driving physical gas flows, unprecedented constraints at Henry Hub. -- For decades, liquidity at the U.S. natural gas benchmark pricing location Henry Hub in Louisiana has been dominated by financial trades, with minimal physical exchange of gas, despite the hub boasting robust physical infrastructure, including ample pipeline connectivity. But that’s changing. Between the start of LNG exports from Cheniere Energy’s Sabine Pass LNG facility in February 2016, and the slew of pipeline reversals that are allowing Marcellus/Utica producers to target the new Gulf Coast demand, gas flows through Henry have been rising. In fact, more physical gas is moving through the hub than in nearly 10 years, to the point where a key pipeline interconnect is at capacity on many days, which historically was unheard of. Today, we begin a short series looking at the changing physical market at Henry. We first delved into Henry Hub in our series Henry the Hub, I Am I Am, including its formation as a trading location and the rationale behind its status as both a spot market and futures contract delivery point. In that same series, we also alluded to the potential for gas flows and market dynamics at Henry Hub to shift with the emergence of a new demand source right in its backyard — namely LNG exports — and the push among Marcellus/Utica producers to target that demand. Now, two years after the first export cargo left Cheniere’s Sabine Pass LNG facility in Cameron Parish, LA, we are starting to see the effects of that export demand and supply influx on Henry Hub, including increased flows and even constraints. In this series, we’ll dive into those flow dynamics. But first, it’s worth putting it into context by reviewing the salient features and historical role of the hub.
Natural gas expected to remain most-consumed fuel in the U.S. industrial sector - EIA expects a 40% increase in natural gas consumed in the U.S. industrial sector, from 9.8 quadrillion British thermal units (Btu) in 2017 to 13.7 quadrillion Btu in 2050, according to the Annual Energy Outlook 2018 (AEO2018) Reference case. By 2020, industrial natural gas consumption will surpass the previous record set in the early 1970s, according to the AEO2018 Reference case. The U.S. industrial sector consumes more natural gas than any other sector, surpassing electric power in 2017 and the combined residential and commercial sectors in 2010. In 2017, about two-thirds of total industrial natural gas consumption was consumed for heat or power applications—either for industrial processes, such as in furnaces, or for onsite electricity generation. Several industries including bulk chemicals, food, glass, and metal-based durables used natural gas for 40% or more of their heat or power applications in 2017. EIA expects that these industries will continue to use about the same proportion of natural gas for heat or power applications through 2050 because of the cost associated with fuel switching. Industrial fuel switching often involves changing manufacturing processes, which requires substantial capital investment in new equipment. As the largest natural gas consumer in the industrial sector, the bulk chemicals industry consumed 3.1 quadrillion Btu of natural gas in 2017, or the equivalent of about 3.0 trillion cubic feet. The bulk chemicals industry includes production of organic chemicals (including petrochemicals), inorganic chemicals, resins, and agricultural chemicals. In the AEO2018 Reference case, increases in the bulk chemicals industry’s consumption of natural gas outpaces overall growth in the industrial sector through 2050, with 51% growth compared with the sector average of 40%. Most natural gas in the bulk chemicals industry is used for heat or power applications, but about 25% of bulk chemical natural gas consumption is used for feedstocks in agricultural chemicals (i.e., fertilizer) and methanol production.
US Natural Gas Exports Hit An All-Time High -- HFIR Energy -- The weekly natural gas data will be released Thursday; Over at SeekingAlpha in a report dated today, February 27, 2018
- we expect a -84 Bcf change in the storage report for the week ended February 23, 2018
- a storage report of -84 Bcf would be compared to -7 Bcf last year and -118 Bcf for the five-year average
- LNG exports hit an all-time high yesterday
- but LNG demand won't increase from this level until 2019
- the elephant in the room for the rest of 2018 will still be just how fast lower 48 production grows
- After a month of delay, Cove Point LNG is kicking into high gear. Yesterday's reading had US LNG exports coming in at ~4 Bcf/d, the highest in history. Total US gas exports, as a result, pushed passed 8 Bcf/d marking a milestone.
For many Republicans, Trump’s offshore drilling plan and beaches don’t mix — After waiting in the morning chill for other lawmakers to speak, state Rep. Nancy Mace finally took the microphone. She was the General Assembly’s newest member, only four weeks on the job, “a baby among these folks,” she told the crowd. She was also a proud Republican in this very red state, the first woman to graduate from The Citadel military college, a former campaign worker for President Trump, a fiscal conservative who championed his tax overhaul — not the kind of politician demonstrators gathered at a rally organized by liberals were accustomed to hearing. But the words she roared into the mic set off a round of whistling, shouting and fist pumps. Like several GOP legislators who joined Democrats in stirring the crowd, Mace broke sharply with the president over his plan to offer oil and gas companies leases to drill a few miles off beaches that bring $20 billion in annual revenue to South Carolina and support 600,000 tourism jobs. “Eight to 10 million tourists a year come down to Charleston. They don’t want to come to see oil drilling off the coast,” said Mace, who represents an area that includes the city. The former military cadet laid down a gauntlet: “Ain’t gonna happen. Not on my watch!” As the Interior Department hosts public “listening sessions” through early March to explain its proposed five-year lease plan — which would open 95 percent of the nation’s outer continental shelf to potential drilling — a growing chorus of bipartisan opposition is finding its voice. At least a half-dozen similar rallies have taken place in other cities where sessions were held, including in New Jersey, Virginia, North Carolina, Georgia, Oregon and California. Mace’s defiance is an indication of how deep the opposition goes. Atlantic and Pacific coast governors, congressional delegations and attorneys general delivered the first waves of protests. Now state lawmakers, mayors and city councils are mobilizing in an attempt to stop the administration’s plan.
Commentary: Ban fracking in Florida? What's the urgency? - Naples Daily News The CEO of the Conservancy of Southwest Florida used this space on Feb. 12 to again strike fear into our citizens about the urgency of a fracking ban bill, accompanied by a litany of imagined risks of the process and damages to our ecosystem and freshwater supply that has never occurred over its years of use. All this while he stands by as we dump oceans of nutrient-laden freshwater into the Gulf of Mexico each year and irrigate thousands of golf courses in this state every day. And he expects you to believe that a few well stimulation jobs will damage our ecosystem and kill tourism. The only thing that will affect our tourism is a hurricane, and Irma did that last year. This constant barrage of toxic rhetoric, platitudes and fearmongering has been going on since the Dan A. Hughes Co. drilled an exploratory well for Collier Resources some four years ago that the Conservancy said was “fracked.” No chemicals were ever found in the aquifer, and a well drilled in an effort to show surface spills at the site contaminated the groundwater was bungled. The screwup cost hundreds of thousands of dollars and no fracking chemicals were ever found. The Conservancy never gives you both sides of this issue and invites speakers, sponsored by radical environmental groups, to scare you about the “evils” of fossil fuels and fracturing, then asks its members for more money to support its lobbying efforts in Tallahassee. Its leaders obviously don’t care or want you to hear about the science of this process. The U.S. will produce 10.3 million billion barrels (bbls) a day of oil this year; more than half is produced using the fracking/horizontal drilling process. No one has died, nor is there any credible evidence of the eco-damage or water contamination that Conservancy CEO Rob Moher speculates about.
Permit revoked for Energy Transfer Partners' Louisiana pipeline (Reuters) - A federal judge in Louisiana on Friday revoked a permit for Energy Transfer Partners’ Bayou Bridge crude oil pipeline, halting work on a portion of the project following protests by local and environmental groups. The decision by U.S. District Judge Shelly Dick in Baton Rouge underscores the growing clashes between energy pipeline operators expanding operations to accommodate new oil and gas flows from U.S. shale fields and environmentalists concerned about spills and other hazards. Energy Transfer Partners declined to comment, saying it would wait to review the judge’s opinion, which was not included with the order. Friday’s ruling granting a preliminary injunction requires the U.S. Army Corps of Engineers to revisit its approval of the pipeline’s construction through the Atchafalaya Basin, according to the decision. Energy Transfer Partners has suffered construction delays and court challenges to several other projects, including its Dakota Access crude pipeline and Rover natural gas line, which recently restarted construction in Ohio after regulators halted work following a drilling fluids spill. Environmentalists and local Louisiana fisherman filed the lawsuit against the U.S. Army Corps of Engineers, challenging its permit and citing risks to the environment, health and local economy. The pipeline route passes through the Atchafalaya Basin of southern Louisiana, a nearly 1 million-acre patch of swampland that is a critical component of the state’s flood protection system and a source of livelihood for the commercial fishing industry, according to the lawsuit. Once complete, the Bayou Bridge system will have capacity to transport up to 480,000 barrels of oil per day to refineries along the Mississippi River. It is projected to start service by the second half of 2018.
Federal Judge Blocks Construction of Bayou Bridge Pipeline -- Federal District Court Judge Shelly Dick on Friday halted the construction of the controversial Bayou Bridge pipeline across the Atchafalaya Basin. The decision grants a preliminary injunction to prevent ongoing irreparable harm to this ecological treasure while a lawsuit, filed Jan. 11, is being heard. Judge Dick found that the lawsuit filed by several groups— Atchafalaya Basinkeeper , the Louisiana Crawfish Producers Association (West) , Gulf Restoration Network , Waterkeeper Alliance and Sierra Club , represented by lawyers with Earthjustice—raises serious concerns and that the 162-mile pipeline would irreparably harm the Atchafalaya Basin. The groups recently presented live testimony during a hearing showing that the ancient cypress and tupelo trees slated to be turned into mulch while the pipeline right-of-way is being cleared would never return, including evidence that these old-growth trees are the Noah's Ark of the swamp—providing habitat for migratory birds, bears, bats and numerous other wildlife . In addition, the groups showed that pipeline construction would further degrade nearby fishing grounds that local commercial crawfishers rely on for their livelihood. "The court's ruling recognizes the serious threat this pipeline poses to the Atchafalaya Basin, one of our country's ecological and cultural crown jewels," said Jan Hasselman, attorney from Earthjustice representing plaintiffs in this matter. "For now, at least, the Atchafalaya is safe from this company's incompetence and greed."
The battle over the Bayou Bridge pipeline is heating up - A federal judge ordered a halt to construction on part of the Bayou Bridge Pipeline on Friday.The 163-mile crude oil pipeline in Louisiana would connect to the controversial Dakota Access Pipeline that drew crowds of protesters to North Dakota in 2016. Developer Energy Transfer Partners completed its 1,172-mile project to the north, but this last southern leg is seeing a bitmore pushback early on from the courts.The court-ordered injunction has been a point of celebration for those opposing the pipeline. When groups like Atchafalaya Basinkeeper and the Sierra Club filed the lawsuit in January, they requested an injunction—and they got it pretty quickly. U.S. District Court Judge Shelly Dick issued the injunction so quickly that she still hasn’t released an opinion on why, which isn’t uncommon, Earthjustice attorney Jan Hasselman told Earther.“It takes a while to get these things out,” he said. “If it takes another two weeks to issue an opinion, well, a lot of the harm will have occurred already.” The fact Dick issued the injunction at all, however, shows she expects the lawsuit to prevail, a factor required for her to issue a preliminary injunction, Hasselman explained. It also shows that the judge believes halting construction is in the public interest and that this construction would cause irreparable harm.
Company building Bayou Bridge pipeline seeks halt of work stoppage, says cost is almost $1M per day — As attorneys in a legal battle over the 163-mile Bayou Bridge crude oil pipeline awaited clarity on the sweep of a court-ordered shutdown Friday of construction, about 30 environmentalists took matters into their own hands Monday.Some of them sat on a piece of the future pipeline in this Assumption Parish community, briefly halting its continued construction east of Bayou Lafourche for about two hours until law enforcement ordered them to disperse and subsequent arrests of three of them shut down the protest.Environmental groups and crawfishermen sued the U.S. Army Corps of Engineers last month in an attempt to block a key permit over concerns the agency did not adequately consider the pipeline’s environmental impact to the Atchafalaya Basin, including the loss of ancient cypress and the effects of future oil spills.U.S. District Judge Shelly Dick in a preliminary injunction Friday halted pipeline construction by Bayou Bridge Pipeline LLC. In her ruling, Dick wrote she would provide written reasons for her order "as soon as possible." But, in the absence of them, Bayou Bridge lawyers argued in court papers filed Monday that her order did not extend beyond the Atchafalaya Basin into areas like Belle Rose, where construction could continue. A lawyer for the plaintiffs, however, said he interpreted the order to say all work should be halted until the case is decided. Bayou Bridge lawyers have also asked the judge to suspend her work stoppage order, saying the construction halt would cost the company almost $1 million daily. They have asked Dick to resolve that request by Tuesday and want the suspension of the work stoppage while they pursue an appeal with the U.S. 5th Circuit Court of Appeals.
Judge says she blocked Louisiana pipeline permit on 'irreparable harm' concern (Reuters) - A judge in Louisiana who halted development of a section of Energy Transfer Partners’ Bayou Bridge oil pipeline last week said on Tuesday that her decision was designed to prevent“further irreparable harm” to wetlands. U.S. district judge Shelly Dick on Friday issued a temporary injunction preventing work on an extension to the Bayou Bridge system, revoking a permit and siding with environmentalists and fishermen who have expressed concerns about its potential effect on the local economy and wildlife. The $750 million pipeline, which is already under construction, is intended to move crude oil from Lake Charles, Louisiana, to St. James, Louisiana, and pass through the Atchafalaya Basin, a nearly one million acre (400,000 hectare) wetland that is vital to the state’s flood protection system and commercial fishing industry. The court battle renews a struggle between the oil industry and environmentalists, who are using lawsuits to halt or delay new infrastructure projects. Energy Transfer Partners faced similar controversy over its Dakota Access Pipeline, which was temporarily halted following protests but ultimately began service last year. “Bayou Bridge Pipeline respectfully disagrees with the District Court’s ruling that the Army Corps of Engineers did not properly consider the limited impacts of construction in the Atchafalaya Basin,” a spokeswoman for Energy Transfer Partners said by email on Wednesday. The U.S. Army Corps of Engineers conducted two comprehensive environmental reviews that found no significant impact in the basin, she said. A representative for the U.S. Army Corps of Engineers declined to comment. Energy Transfer said this week that it was appealing the ruling.
State too cozy with Bayou Bridge pipeline owners, environmental groups say -- Environmental groups opposed to the Bayou Bridge Pipeline project say the state has had a too-cozy relationship with Energy Transfer Partners, the parent company of the pipeline -- while shunning contact with critics of the project.Louisiana Bucket Brigade released documents Thursday (March 1) that they say show the state Department of Environmental Quality was in close communication with the company, and sometimes borrowed the firm's language for its own descriptions of the project. The documents include several emails between the company and DEQ permit writers and other agency officials. Permits from DEQ and the U.S. Army Corps of Engineers were required for the 163-mile pipeline project. "State employees readily interact and quickly provide answers to queries from ETP representatives and employees, an ease of access (activist groups) do not have," the Bucket Brigade said in a statement. DEQ said Thursday that it's standard practice to communicate with permit applicants."We have to communicate with them to process their applications," DEQ spokesman Greg Langley said. It's also common to use information supplied by applicants in DEQ documents about the applicant's project, Langley said. "We didn't grant anybody special access," he said, stressing that DEQ held a public hearing on the pipeline. "We're always fair and equitable," he said. Last Friday, a U.S. District Court judge temporarily stopped the pipeline's construction though the environmentally-sensitive Atchafalaya Basin. Judge Shelly Dick said in her ruling that the corps was "arbitrary and capricious" in some of its decisions granting the pipeline construction permits. She agreed with environmental groups that the pipeline posed a threat to ancient cypress forests and waterways in the basin, home to one of the largest swamps in North America.
U.S. Interior panel recommends cutting offshore oil and gas royalties (Reuters) - A U.S. Department of the Interior committee voted on Wednesday to recommend to Secretary Ryan Zinke that the agency lower royalty rates for federal offshore oil and gas drilling, to spur production. The agency’s royalty policy committee voted unanimously to lower the rates to 12.5 percent through 2024. The existing rate of 18.75 percent was set during the administration of former President George W. Bush. The panel, which is made up of department and state officials, tribal representatives, and energy companies, also voted to increase the amount of acreage available for offshore oil and natural gas leasing in the outer continental shelf. The Houston meeting was aimed at updating around a dozen federal royalty rules, which guide energy and mineral production in the United States. The committee was formed last year to advise Zinke on whether the government was getting a fair price from resources companies for their use of public land. He will take its recommendations into account. The panel also voted to approve a proposal letting coal companies that mine on federal land set their own rates for coal used to calculate royalties. Zinke last year halted an Obama-era rule that had required coal companies to pay royalties on sales to their first unaffiliated customer. The rule, which had been intended to close a loophole that had let companies sell coal to its own subsidiaries at deflated prices, was criticized by Zinke as confusing. Randall Luthi, president of offshore energy lobby group the National Ocean Industries Association, said at the meeting that existing production offshore was“declining and at a very quick rate” and that lowering royalty rates should spur new activity.
Democrats warn against cut to offshore oil royalties (Reuters) - Top Democrats on the Senate and House natural resources committees urged the Interior Department to drop a proposed cut to offshore oil and gas royalties, warning such a reduction would shortchange U.S. taxpayers. The Interior Department’s Royalty Policy Committee is due to evaluate a proposal to lower the royalty rate companies pay on petroleum produced in federal offshore waters to 12.5 percent from 18.75 percent - part of a plan by the Trump administration to encourage more U.S. energy production. “This proposal would amount to a giveaway to some of the most profitable companies in the world and rob taxpayers of potentially billions of dollars of revenues over the life of the leases,” Senator Maria Cantwell of Washington and Representative Raul Grijalva of Arizona wrote to Interior Secretary Ryan Zinke. They said in the letter that the royalty committee appointed by Zinke - made up of members from the Interior Department, states, tribes and oil, gas and coal companies - was “stacked with resources extraction interests.” An Interior Department official did not immediately respond to a request for comment on the letter. The Western Energy Alliance, which represents oil and gas companies, brushed off arguments that the energy industry did not pay its fair share. “The oil and natural gas industry is the second largest source of revenue to the federal government after the IRS,” the group said in a statement. Zinke and the Trump administration last year launched the effort to reassess royalty rates, last set by the administration of President George W. Bush, in a bid to boost domestic production of energy resources. An offshore royalty cut could tempt drillers to bid more aggressively in future lease sales. The proposal is among a number of draft recommendations written by a royalty policy subcommittee at a meeting on Feb. 2.
SEC charges Texas oil operators with fraud, alleging investor cash used for booze, strippers -- The U.S. Securities and Exchange Commission has charged three oil and gas companies and its executives with fraudulently scheming to raise $11.7 million for drilling projects allegedly located in Kentucky and using investor money for booze, drugs and strippers. In a federal complaint filed Wednesday in U.S. District Court in Sherman, lawyers with the SEC's Fort Worth office say that AmeraTex Energy and Lewis Oil Company, which are based in North Dallas, and Lewis Oil Corp., which is headquartered in Albany, KY., perpetrated a fraud to sell unregistered securities to more than 150 investors in 36 states, made false statements to investors and diverted money raised for personal pleasures. SEC lawyers say several defrauded investors live in the Houston area. The companies could not immediately be reached for comment.
Oklahoma Toughens Oil Fracking Rules After Shale Earthquakes Climb - The Oklahoma Corporation Commission announced that all explorers within certain areas must use equipment known as a seismic array, which detects movement underground. The regulators also lowered the quake threshold for pausing work from 3.0 magnitude to 2.5, a level where humans can feel the earth move. The mandated delay is for at least six hours. Fracking, or hydraulic fracturing, loosens hydrocarbons from shale by blasting water, sand and chemicals underground. Since December 2016, Oklahoma officials have counted 74 earthquakes of at least 2.5 magnitude that may be linked directly to fracking, said Matt Skinner, a commission spokesman, in an email last month. "While more study needs to be done, the indications are that those operators who have their own seismic arrays and took actions when there were seismic events too small to be felt decreased the risk of having multiple, stronger earthquakes,” said Tim Baker, director of the commission’s oil and gas conservation unit, in a statement Tuesday. The new rules are designed to slow quakes in the so-called SCOOP and STACK shale plays, where wastewater disposal, long thought to be the main culprit for larger, more prevalent tremors in the northern half of the state, isn’t as much of an issue. That opens up the idea that fracking itself may be to blame. For Oklahoma, it’s a cautious move forward, limiting though not hamstringing an oil industry that has tripled its output in the past decade to 497,000 barrels a day and created thousands of jobs in the state.
U.S. court blocks Trump administration from ending oil, gas waste rule (Reuters) - A U.S. court temporarily blocked the Trump administration from delaying or ending an Obama-era rule aimed at preventing oil and gas leaks during production, according to court documents, marking the fourth time either Congress or the courts have upheld the rule’s implementation. The U.S. District Court for the Northern District of California, in an order filed on Thursday, granted the states of California and New Mexico’s bid for a preliminary injunction and denied the administration’s request to move the trial to another court venue in Wyoming. Its decision was part of a lawsuit filed by the two western U.S. states against U.S. Interior Secretary Ryan Zinke and the Bureau of Land Management in a case that was combined with another filed by a coalition of 17 groups, including the Sierra Club environmental advocacy organization and several tribal groups. The rule, finalized in November 2016, took effect in January 2017 and was aimed at reducing leaks of natural gas, or methane, that happen through venting and flaring during oil production on federal land. The Obama administration said that venting of methane cost taxpayers over $330 million a year in lost revenues from natural gas. In his ruling, U.S. District Judge William Orrick said he granted the request for an injunction given that the bureau’s “reasoning behind the Suspension Rule is untethered to evidence contradicting the reasons for implementing the Waste Prevention Rule,” adding that the plaintiffs were likely to prevail on the merits of their case. “They have shown irreparable injury caused by the waste of publicly owned natural gas, increased air pollution and associated health impacts, and exacerbated climate impacts,” the judge wrote in his decision.
Trump administration ordered to enforce limits on methane gas emissions - A San Francisco federal judge has ordered the Trump administration to enforce limits on emissions of climate-changing methane gas from wells on federal and tribal lands, saying the benefits to public health and the environment far outweigh the minimal costs to oil and gas companies of reducing pollution. “Weighed against the likely environmental injury, which cannot be undone, the financial costs of compliance are not as significant as the increased gas emissions, public health harms, and pollution,” U.S. District Judge William Orrick III said in a ruling late Thursday. He told the U.S. Bureau of Land Management to end its suspension of rules approved by President Barack Obama’s administration that require oil and natural gas producers on federal lands to reduce flaring and venting that lower gas production and leak methane, a potent source of greenhouse gases. The rules took effect in January 2017, but the Trump administration ordered them suspended last month for a year while it developed its own regulations. Those rules were announced this week. They include a repeal of the Obama regulations and an elimination of restrictions on methane emissions.
Global fossil fuel emissions of hydrocarbons are underestimated - Global levels of ethane and propane in the atmosphere have been underestimated by more than 50%, new research involving scientists at the University of York has revealed.These hydrocarbons are particularly harmful in large cities where, through chemical reactions with emissions from cars, they form ozone - a greenhouse gas which is a key component of smog and directly linked to increases in mortality. Ethane and propane escape into the air from leaks during natural gas extraction and distribution, including from fracking - the process of drilling down into the earth and fracturing rock to extract shale gas. This new study shows that global fossil fuel emissions of these hydrocarbons have been underestimated and are a factor of 2-3 times higher than previously thought. The authors of the international study involving researchers from York, Oslo and Colorado are now calling for further investigation into fossil fuel emissions of methane, a potent greenhouse gas which is emitted along with ethane and propane from natural gas sources. Co-author of the study, Professor Lucy Carpenter from the Department of Chemistry at the University of York, said: "We know that a major source of ethane and propane in the atmosphere is from "fugitive" or unintentional escaping emissions during fossil fuel extraction and distribution. If ethane and propane are being released at greater rates than we thought, then we also need to carefully re-evaluate how much of the recent growth of methane in the atmosphere may also have come from oil and natural gas development. The current policy case for fracking, for example, is partly based on the belief that it is less polluting that coal." The study used data collected from 20 observatories world-wide. The researchers from the University of York provided high-resolution data from a monitoring station in Cape Verde - a crucial location in the Atlantic which captures air blown over the Sahara, from North America, the Middle East and North Africa.
Trump EPA moves to roll back more clean air and water rules (AP) — The Trump administration said Thursday it is rewriting Obama-era rules governing pollution from oil and gas operations and coal ash dumps, moves that opponents say will significantly weaken protections for human health and the environment. The changes proposed by the Environmental Protection Agency are the latest in series of actions taken over the last year to roll back regulations opposed by the fossil-fuel industry. The agency said the revisions would save electric utilities $100 million per year in compliance costs, while oil and gas operators would reap up to $16 million in benefits by 2035. Environmental advocates predicted the revisions would lead to dirtier air and water. The 2016 standards governing leaks and emissions from oil and gas drilling operations sought to reduce the amounts of methane and volatile organic compounds, or VOCs. Methane is a potent greenhouse gas that traps heat in the atmosphere, contributing to climate change. VOCs are a component of ground-level ozone, air pollution that can aggravate asthma and contribute to early deaths from respiratory disease. In a statement, EPA Assistant Administrator for Air and Radiation Bill Wehrum said the changes will "provide regulatory certainty to one of the largest sectors of the American economy and avoid unnecessary compliance costs to both covered entities and the states." Prior to joining the Trump administration in November, Wehrum worked as a lawyer representing fossil fuel and chemical companies regulated by the EPA office he now leads. Environmental groups said the Trump rollbacks would let large-scale polluters off the hook."This move would put an estimated 25 million people who live in counties with dangerously unhealthy air at even greater risk from oil and gas related air pollution by rolling back measures that are flexible, cost-effective and that have been proven to work by leading states and responsible companies,"
These provocative images show Russian trolls sought to inflame debate over climate change, fracking and Dakota pipeline - Russian trolls used Facebook, Instagram and Twitter to inflame U.S. political debate over energy policy and climate change, a finding that underscores how the Russian campaign of social media manipulation went beyond the 2016 president election, congressional investigators reported on Thursday. The new report from the House Science, Space and Technology Committee includes previously unreleased social media posts that Russians created on such contentious political issues as the Dakota Access Pipeline, government efforts to curb global warming and hydraulic fracturing, a gas mining technique often called "fracking." One Facebook post created by a Russian-controlled group called "Native Americans United" shows what appears to be a young girl in a braid peering out over an unspoiled prairie. "Love Water Not Oil, Protect Our Mother, Stand With Standing Rock," a reference to an Indian tribe that opposed the Dakota Access Pipeline. The post also said, "No Pipelines. No Fracking. No Tar Sands." The 21-page report drew from documents submitted in the fall by Twitter and Facebook, which owns Instagram, for congressional investigations into the social media influence campaign during the 2016 presidential election. Those probes focused on the efforts by the Internet Research Agency, a troll farm in St. Petersburg that Special Counsel Robert Mueller indicted this month for disrupting and influencing U.S. politics. The committee's report found that, between 2015 and 2017, more than 9,000 posts and tweets dealt with U.S. energy policy produced by 4,334 Facebook, Twitter and Instagram accounts controlled by the Internet Research Agency. Twitter told the committee that more than 4 percent of tweets produced by the Russians dealt with energy and climate issues.
How much Canadian gas can the US west coast take? - As Canada’s natural gas exports to the Eastern U.S. have been pushed out by growing Marcellus/Utica gas supply, they’ve been flooding the U.S. West Coast. TransCanada is planning expansions of its Alberta system to send more gas across the western border, setting the stage for a showdown with Rockies gas supply. At the same time, the rise of renewable energy in California and the Pacific Northwest poses a constraint for gas demand growth in the region. Today, we look at recent shifts in border flows to the West Coast and prospects for future growth. This blog continues our series on Canada’s gas exports to the U.S., which have been under pressure from competing gas supply growth in the U.S. We began in Part 1 by looking at the macro fundamentals affecting the Canadian gas supply-demand balance, including growing gas production from the Montney and Duvernay shale plays in Alberta and British Columbia. While Canada’s gas demand is also rising — from oil sands production and gas-fired power generation — exports remain a necessary demand source for Canadian producers. However, the problem is that the U.S. will need less and less of that Canadian gas.
Steel tariffs may raise cost of energy projects and delay pipeline building, critics say- The U.S. oil and natural gas industry depends on specialty steel for many of its infrastructure projects, and U.S. steelmakers don't supply it, said Jack Gerard, the CEO of the American Petroleum Institute, a trade association for the industry."The actions taken today are inconsistent with the administration's goal of continuing the energy renaissance and building world-class infrastructure," Gerard said.The administration said Thursday it would slap a 25 percent tariff on imported steel and 10 percent on imported aluminum, beginning next week.Even before the announcement, opponents had voiced concerns that tariffs could raise prices for all kinds of consumer and commercial goods made from aluminum and steel.There are also doubts that U.S. steelmakers would be able to handle higher volumes and produce all grades of steel necessary for industrial production.The thickest energy pipelines use a grade of steel that is produced abroad. When President Trump signed an executive order approving the Keystone Pipeline last year, he made headlines by also mandating that steel for future pipelines will need to be "made in the USA." At the time U.S. steelmakers said they had the capability to produce the steel, they just needed time to increase their output. They argued that foreign competition and anti-competitive trade practices have put them at a disadvantage for years. "The real question is whether the U.S. steel industry has the capacity to supply every pipeline project in the United States,"
Trump rolled back pipeline safety regulations, benefiting equity firm that loaned money to Kushner - The equity firm magnate that advised the Trump administration on infrastructure and whose company gave a $184 million loan to Kushner Companies also benefited from three rule changes relaxing pipeline safety regulations. Last year, Joshua Harris, founder of equity firm giant Apollo Global Management, advised the Trump administration on infrastructure policy and discussed a possible White House job that never materialized, the New York Times reported Wednesday. During that time, Harris also met several times with White House advisor Jared Kushner. Shortly after those meetings, Apollo gave Kushner’s family real estate firm the nine-figure loan to refinance the mortgage on a Chicago skyscraper, according to the New York Times report. Harris’ company also has a number of large investments in energy companies that stand to gain from three Trump administration rule changes, including EP Energy and Northwoods Energy. Those ties were first revealed in a January 30 report published by the progressive think tank Democracy Forward. “It is a very serious conflict of interest when you have the president and other officials who work for him who are indebted to any business or any entity that wants something out of the United States government,” said Richard Painter, a former White House ethics lawyer under the Bush administration. “The whole thing stinks to high heaven.”Painter added that Kushner should leave the White House due to, among a host of other concerns, his financial conflicts. Painter says the law should be amended to limit incoming high-ranking government officials’ ownership of businesses with large amounts of debt.
OPEC to meet with U.S. shale firms in Houston on Monday - sources (Reuters) - OPEC will hold a dinner on Monday in Houston with U.S. shale firms, two industry sources said, the latest sign of the producer group widening talks about how best to tame a global oil glut. OPEC Secretary General Mohammad Barkindo plus other OPEC officials will attend the dinner, one of the sources said. A second source said the chief executives of U.S. shale companies of various sizes have been invited. The meeting will be on the first day of the CERAWeek energy conference in Houston. On Tuesday, OPEC representatives will hold a dinner with U.S. hedge funds who have invested in shale firms, one source said. A year ago, the Organization of the Petroleum Exporting Countries held unprecedented talks with fund executives and shale producers on the sidelines of the same event. “Shale has dramatically changed the world’s perception of fossil fuels,” said the chief executive of one shale company, declining to be identified by name. “We now have a seat at the table on pricing.” OPEC led by Saudi Arabia and non-OPEC Russia have reduced production during 2017-18 to prop up oil prices. The United States, which rivals Russia and Saudi Arabia for the position of the world’s largest oil producer, is not participating in cuts as its industry is represented by private producers who can be sued for collusion if they join the deal. The OPEC cut has boosted prices, which topped $71 a barrel this year for the first time since late 2014. But the rally is spurring renewed growth in shale output, offsetting the OPEC-led effort. The International Energy Agency said on Tuesday the United States will overtake Russia as the world’s biggest oil producer by 2019 at the latest, as the country‘s shale oil boom continues to upend global markets. OPEC officials say they are not worried about a renewed surge in shale swamping its efforts this year, but have urged shale producers to help curtail global supply. “It’s normal for shale oil, tight oil to increase in 2018 and whenever oil prices support it,” said Iraq’s national representative to OPEC, Ali Nazar, at an event in Berlin on Tuesday. “But we all should look with responsibility to the market in order to keep the balance in the market as much as we can so as not to harm investors.”
Alaska Legislature considers borrowing $1B to pay oil debt (AP) — The Alaska Legislature is considering a proposal to borrow up to $1 billion from global markets to cover a debt it owes to oil and gas companies. Gov. Bill Walker's administration said the borrowing could be a way to reduce that deficit at the expense of some longer-term risk, the Juneau Empire reported . Revenue commissioner Sheldon Fisher and tax division director Ken Alper presented the plan on Wednesday to the Senate Resources Committee. "The large, overarching goal of this is to provide additional stimulus into the economy," Fisher said. The state promised billions of dollars in tax credits to smaller oil and gas companies between 2003 and 2017. But when petroleum prices plunged, the state could no longer afford the program. The state has been paying only the minimum amount on what it owes for the past several years, as was required by state law. But as of Dec. 31, the state owes $806 million in credits. If estimates hold true, the debt will be closer to $1 billion once expected applications are filed this year.
U.S. to overtake Russia as top oil producer by 2019 at latest: IEA (Reuters) - The United States will overtake Russia as the world’s biggest oil producer by 2019 at the latest, the International Energy Agency (IEA) said on Tuesday, as the country’s shale oil boom continues to upend global markets. IEA Executive Director Fatih Birol said at an event in Tokyo the United States would overtake Russia as the biggest crude oil producer “definitely next year”, if not this year. “U.S. shale growth is very strong, the pace is very strong ... The United States will become the No.1 oil producer sometime very soon,” he told Reuters separately. U.S. crude oil output rose above 10 million barrels per day (bpd) late last year for the first time since the 1970s, overtaking top oil exporter Saudi Arabia PRODN-SA. The U.S. Energy Information Administration said early this month that U.S. output would exceed 11 million bpd by late 2018. That would take it past top producer Russia, which pumps just below that mark C-RU-OUT. Birol said he did not see U.S. oil production peaking before 2020, and that he did not expect a decline in the next four to five years. The soaring U.S. production is upending global oil markets, coming at a time when other major producers - including Russia and members of the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) - have been withholding output to prop up prices LCOc1.
Peak U.S. Shale Could Be 4 Years Away - U.S. shale production growth has outperformed even the most bullish forecasts, forcing OPEC and the International Energy Agency (IEA) to revise up American supply growth projections month after month.The U.S. Energy Information Administration (EIA) also expects shale/tight oil to continue to grow in all possible modeled scenarios for the next four years, according to its Annual Energy Outlook 2018 published this month.While the EIA is not predicting what will happen, it is modeling possible production scenarios under certain assumptions. Under one of those modeled projections—the Low Oil and Gas Resource and Technology case—the assumptions applied are lower resources and higher costs. In this model, U.S. tight oil production—including the plays Bakken/Three Forks/Sanish, Eagle Ford, Woodford, Austin Chalk, Spraberry, Niobrara, Avalon/Bone Springs, and Monterey—is expected to rise from 4.96 million bpd in 2017 to 5.59 million bpd in 2022, and then to start declining on a steady downward trend by 2050, when tight oil production is expected to be at 4.42 million bpd.This is one of the side cases in EIA’s models, and one of the most unlikely, because it assumes no technological breakthroughs, lower resources, and higher costs. Under this model, total U.S. crude oil production is pegged at 9.14 million bpd this year, while figures are currently available, showing that production is already above 10 million bpd and likely to average more than 10.5 million bpd this year. The Reference case scenario shows tight oil production jumping to more than 7 million bpd by 2025 and surpassing 8 million bpd in 2036, before starting to level off some time in the early 2040s. Total U.S. crude oil production in the Reference case is between 11 million bpd and 12 million bpd by 2050, “as tight oil development moves into less productive areas and as well productivity declines,” the EIA says. Sure, longer-term projections are much more uncertain than shorter-term forecasts, and U.S. oil production will depend on many factors—oil prices, the pace of technological advances, costs, well productivity, and U.S. and global oil demand growth, to name a few.
Warning Bells About Fracking and Earthquakes Growing Louder - Recent studies on hydraulic fracturing suggest the technology is causing more earthquakes than expected and that it doesn’t take the injection of much fluid to trigger a tremor. In addition, researchers warn that the industry’s increasing reliance on “supersized” fracking using massive volumes of fluid and sand in longer wells could increase seismic hazards across North America.A recent analysis of 300 hydraulically fractured wells near Fox Creek, Alberta, found that a modest injection of 10,000 cubic metres (2.6 million gallons) can cause an earthquake in geological formations containing faults. The larger the volume of fluids injected underground, the greater the number of earthquakes, the study found. “The rate of earthquake scales with the rising volume of injected fluids in sensitive areas,” said Gail Atkinson, one of the paper’s co-authors and a University of Western Ontario professor who holds a research chair in the hazards from induced seismicity. “The more fluid you inject, the higher the productivity rate of earthquakes. It is almost like a dial,” she said. “It implies that you can affect the rate of earthquakes by changing the injected volume.” But volume doesn’t seem to have any effect on the size of an earthquake that fluid injection might trigger if it hits a fault. In fact, no one can predict or model the potential severity of a tremor caused by oil and gas activities. In fracking operations, energy companies inject high volumes of highly pressurized fluid, sand and chemicals underground to force open cracks in rock formations. In recent years the volume and pressure used in fracking operations has doubled or tripled in both Canada and the U.S.
Oilsands pollution on collision course with Canada's climate plan -- Carbon pollution from oilsands expansion is radically undermining Canada's plan to fight climate change. On the present course, almost everything else in Canada would have to shut down for the country to meet its climate change targets.
- Accelerating climate failure — Oilsands expansion is devouring our national climate goals.
- Wildly unbalanced — Oilsands’ share of Canada’s climate budget is out of proportion to the relatively small contribution to jobs and GDP.
- Extreme actors — Canadians are outliers in both pace and scale of fossil carbon extraction compared to other countries.
To illustrate the accelerating threat posed by oilsands pollution, I created the chart below. It shows the percentage of Canada's climate targets eaten up by climate pollution from Alberta's oilsands industry.1 As you can quickly see, the oilsands’ share keeps rising relentlessly. Back in 1990, oilsands pollution caused two per cent of our country's total. Since then it has accelerated upwards, grabbing:
- 6% of Canada’s 2005 target set by the Mulroney government
- 9% of the 2010 target set by the Chretien government
- 15% of the 2020 target set by the Harper government
Alberta's "hard cap" allows just one industry to consume Canada's climate goals - by 2050 the oilsands industry will take up 78% of Canada's carbon budget The oilsands industry is projected to expand another sixty percent by 2030. At that level, oilsands will grab:
- 22% of our first Paris Accord target, in 2030
- 78% of Canada's 2050 target
Both Stephen Harper's Conservative government and Justin Trudeau's Liberal government agreed to Canada's 2030 target. The latest projections, however, expect us over-pollute by 125 million tonnes of CO2.1b Rising oilsands pollution makes up two-thirds of that failure.1c How much more of our nation's climate budget are we going to hand over to this single industry in a single province? Apparently, a whole lot more. Continuing at this capped level, the oilsands would gobble up 78 per cent of our nation's climate target for 2050.
Oil and Gas: Mexico annual oil output falls below 2 million barrels a day(AP) — Mexico's annual crude oil and gas output has fallen below 2 million barrels per day for the first time since comparable records were kept starting in 1990. State-owned oil company Petroleos Mexicanos reports on its website that average daily output in 2017 was about 52,000 barrels short of the 2 million mark. Production has fallen steadily after peaking at almost 3.4 million barrels per day between 2003 and 2005. The drop is largely due to the company's inability to find new reserves to replace aging, shallow water fields. The company was unable Monday to provide figures from before 1990, when crude output ran at about 2.5 million barrels per day.
Presidential frontrunner López Obrador backs off threat to undo Mexican oil privatization -- When he ran for president in 2006 and 2012 as the candidate of the once center-left Party of the Democratic Revolution (PRD), Andrés Manuel López Obrador (AMLO) raged against privatizing Pemex (Petróleos Mexicano), the Mexican state oil company, which had held a monopoly over crude production since 1938.In the 2012 election campaign, López Obrador called the plan of the current Mexican president, Enrique Peña Nieto of the Party of the Institutional Revolution (PRI), to invite foreign oil giants to enter into profit-sharing and production contracts with Pemex “the robbery of the century,” which he said would cost Mexico $40 billion a year.In December 2012, when the PRD signed on to Pena Nieto’s “Pact for Mexico” to liberalize the Mexican economy, the centerpiece of which was energy privatization, He rightly accused the PRD of abandoning the last of its social democratic pretensions. He led tens of thousands into the streets of Mexico City in protest. At that time, AMLO warned that if Mexico bought foreign gasoline instead of making it at home, Mexicans would pay 30 percent more for it. He projected a loss of $30 billion a year, which he said would starve the public budget of money needed for infrastructure projects, higher salaries for teachers and doctors, and social programs such as initiatives to reduce hunger and poverty. Now AMLO’s chief advisers in essence are signaling that all that is left of Lopez Obrador’s prior energy platform is that he would still seek to build two new refineries in order to increase Mexican gasoline production and thereby reduce dependence on the US for fuel imports.
Exclusive: U.S. mulls sanctions on Venezuela to put pressure on Maduro (Reuters) - The Trump administration is considering sanctioning a Venezuelan military-run oil services company and restricting insurance coverage for Venezuelan oil shipments to ratchet up pressure on socialist President Nicolas Maduro, a U.S. official said on Wednesday. With Maduro running for another term in an April election that Washington and its allies oppose as a sham, the United States is weighing sanctions that would target Venezuela’s vital oil sector beyond what has been done before, the official told Reuters. Some measures could come before the vote and others could be imposed afterwards. The official, who is close to U.S. internal deliberations on Venezuela policy and spoke on condition of anonymity, would not rule out an eventual full-scale ban on Venezuelan oil shipments to the United States, among the toughest of oil-related sanctions. “I think (it would cause) a fairly strong shock to the oil market in the short term,” the official said. The official stressed that no decisions have been made and that any U.S. action would take into consideration potential harm to ordinary Venezuelans, already suffering from food shortages and hyperinflation, and the country’s neighbors as well as the impact on the U.S. oil industry and American consumers. Venezuela was the fourth largest supplier of crude oil and products to the United States in 2017, according to the U.S. Energy Information Administration. Its crude oil sales to the United States last year were the lowest since 1991, according to Thomson Reuters trade flows data. “Oil sanctions are not taken lightly,” the official said. “This would be a fairly strong escalation for U.S. policy, whether it’s a complete oil sanction or salami slices of different graduated steps.”
Venezuelan Oil Production Could Further Collapse On New U.S. Sanctions - If the U.S. expands sanctions on Venezuela to include the oil industry and restricts U.S. exports of oil products that are crucial for diluting Venezuela’s extra-heavy oil, oil production in the country sitting on the world’s largest oil reserves would further collapse.According to data by the EIA compiled by Bloomberg, Venezuela’s imports of heavy naphtha from the U.S.—all of which comes from Gulf Coast refineries—are some 2 million barrels per month.Oil production in the Orinoco oil belt, responsible for half of Venezuela’s crude oil production of currently around 1.6 million bpd, depends on the imports of this heavy naphtha from the U.S., which is blended with the thick tar-like extra-heavy oil to allow it to flow through pipelines from Orinoco to Venezuela’s coasts for loading onto tankers.Earlier this month, U.S. Secretary of State Rex Tillerson said that the U.S. was considering extending sanctions against Venezuela to include imports of Venezuelan crude and exports of U.S. refined products to the troubled South American country. Currently, sanctions target separate individuals from the Nicolas Maduro government as well as a ban on U.S. banks and other institutions buying Venezuelan debt. According to analysts, while a U.S. ban on Venezuelan oil imports could hurt U.S. refiners, restrictions on U.S. oil product exports to Venezuela could push Venezuela’s oil production off the cliff.
Who pays the bill when fracking goes wrong? - The 1 Territory Research Team is releasing a paper that challenges the economic scenarois being put forward by gas industry corporations and other economic models for the Unconventional Fracturing of Shale Gas in the Northern Territory. The paper includes an economic model that has been constructed by Sue Fraser-Adams [1 Territory’s vice-president] that attempts to assess the cost of remediation of wells that fail over two specific periods of time, namely 24 years and 100 years in the future. The two major macro economic models that have been constructed to date. The first report, commissioned by APPEA (Deloitte Access Economics in July 2014 and the ACIL Allen Consulting Report dated October 2017 commissioned by the Scientific Inquiry into Hydraulic Fracturing in the NT) do not appear to include well remediation costs. The modeling shows that the cost could be significant. The results indicate that at a full development scenario of 67,000 wells over 24 years at a failure rate of 6%, the costs could be in the order of $4.5b. If a failure rate of 15% is used, the costs could be in the order of $11b. Over 100 years with gradually increasing failure rates to 20%, the cost could exceed $50b. The existing number of exploration and production wells that have already been drilled in the NT will over time also need remediation. On the assumption of a 6% failure rate, over the next 24 years, more than $16m could be required to be spent on well remediation and over 100, the cost could be over $1b.
NYMEX April gas settles 0.3 cent lower at $2.683/MMBtu -- The NYMEX April natural gas futures contract settled 0.3 cent lower Tuesday at $2.683/MMBtu on its first day as the front-month contract. Prices continue to be blocked on the upside by robust production, slowing demand and a mild weather outlook. The month of February has been bearish for the NYMEX front-month contract, as expectations of continued strong production outweighed strong demand and lower-than-normal storage inventories. With weather forecasts not as cold as some may have thought, the market is "resuming downward pressure" after the expiration of March as the front-month contract and the small rally that accompanied it, said Phil Flynn, senior market analyst at Price Futures Group. While the front-month contract is not "collapsing yet" based on the supply report, "expect a downside breakout" as $2.50/MMBtu levels are tested over the next few weeks, Flynn added. US gas production has remained strong throughout February. Over the past seven days, dry gas production has averaged 77.3 Bcf/d, compared with a 77.3 Bcf/d for the whole of the month. Output is 6.3 Bcf/d higher than the 71 Bcf/d average for February 2017, according to S&P Global Platts Analytics data. With the winter season quickly coming to a close, US demand is expected to dip compared with the average so far in February, as over the next seven days, demand is forecast to average 80.1 Bcf/d, an 8.5 Bcf/d drop from the 88.6 Bcf/d average so far this month, according to Platts Analytics data.
April NYMEX natural gas at $2.686/MMBtu searches for direction - NYMEX April natural gas futures inched up a fraction overnight in the US ahead of Wednesday's open, as lingering cold in weather outlooks suggest some late-season heating demand, while seasonal changes drive uncertainty in the market. At 7:05 am ET (1205 GMT), having closed 0.3 cent lower Tuesday, the contract was 0.3 cent higher at $2.686/MMBtu. Below-average temperatures dominate in the revised National Weather Service forecasts. Although the transition from winter to spring suggests higher low temperatures, colder weather in store could still inspire residual heating demand that would encourage storage withdrawals. Warmer weather that has helped trim natural gas consumption in recent days is expected to have encouraged a step lower in the rate of weekly storage draws to the 70s Bcf in the next US Energy Information Administration inventory data that will cover the week ended February 23, which would compare to a 118 Bcf five-year-average withdrawal. The EIA currently sees total natural gas inventories ending the traditional withdrawal season at 1,290 Bcf on March 31, which is 24% lower than the five-year average and the second lowest end-of-season level reported since 2010, with net storage draws matching the five-year average for the balance of the season.
NYMEX April gas settles 1.6 cents lower at $2.667/MMBtu The NYMEX April natural gas futures contract was relatively calm for the second straight day Wednesday, settling 1.6 cents lower at $2.667/MMBtu following a March front-month contract that experienced volatility over the same period. The NYMEX front-month contract may be hindered on both sides as an outlook for lower-than-average temperatures and low storage levels may be countering a rise in production and a fall in demand. February has seen large storage withdrawals, as current storage levels currently sit at an estimated 1.760 Tcf, a 19% deficit to the five-year average, according to the US Energy Information Administration. This trend may start to reverse as a consensus of analysts S&P Global Platts surveyed expects a 79-Bcf pull from storage for the week that ended February 23, which is below the 118-Bcf pull averaged over the past five years, according to EIA data. In tandem with low storage numbers, providing some price support could be cold weather on the horizon, as the most recent six- to 10-day National Weather Service outlook calls for lower-than-average temperatures across the Northwest, Southwest, Rockies, Midcontinent, and Southeast. Despite the expectation of some lower-than-average temperatures over the next week, US demand is forecast to fall 7.3 Bcf/d over the next seven days to average 80.9 Bcf/d, compared with a February average of 88.2 Bcf/d, according to S&P Global Platts Analytics. According to Platts Analytics, dry production is expected to average 78 Bcf/d over the next seven days, a rise of 500 MMcf/d from the 77.5 Bcf/d averaged over the previous seven days.
Forecasts show weak US February natural gas heating demand continuing into March - Floundering natural gas demand from the US residential-commercial sector in February, now forecast to continue through mid-March, is making a final gasp of winter weather-driven demand look increasingly unlikely this season. On Wednesday, US heating demand sank to its lowest since mid-February at an estimated 31.4 Bcf/d. It was a fitting end to a disappointing month for the US residential-commercial sector. In February, homes and businesses consumed an average 40.2 Bcf/d, underperforming the five-year average by over 5 Bcf/d, S&P Global Platts Analytics data shows. Looking ahead, demand during the first week of March is currently forecast to average just over 35 Bcf/d, widening its shortfall to the five-year average to roughly 7 Bcf/d. On Wednesday, a forecast published by the US National Weather Service showed that trend is likely to continue through the second week of March. In its eight- to 14-day outlook, the agency called for temperatures at or slightly below normal across most the Northeast and the Midwest, where heating demand is most sensitive to colder weather. Data from Custom Weather appeared to support that outlook, calling for US population-weighted temperatures to average just over 46 degrees Fahrenheit, less than 1 degree cooler than during the first week of March. Over a short 10-day period from late January to mid-February, increasingly bearish weather forecasts led a near-$1/MMBtu decline in benchmark spot prices at the Henry Hub.
Seesawing April NYMEX natural gas at $2.709 searches for direction - NYMEX April natural gas futures moved in a seesaw fashion overnight in the US ahead of Friday's open, as traders considered a changing fundamental landscape. At 6:50 am ET (1150 GMT) the contract was 1.1 cents higher at $2.709 while trading from $2.686/MMBtu to $2.728/MMBtu. The US Energy Information Administration's latest storage data outlined a net 78 Bcf withdrawal for the week ended February 23 that took total working gas stocks to 1,682 Bcf, or 680 Bcf below the year-ago level and 372 Bcf below the five-year average of 2,054 Bcf. While the reported inventory draw was on the high end of the range of estimates coming into the day and well above the 7 Bcf year-ago drawdown, it was well below the 118 Bcf five-year-average pull. Warmer weather that sapped heating demand is seen to have encouraged the week's storage withdrawal. "Next week's report is likely to show a below normal injection level as the weather has been mild for most of this week in the main natural gas consuming regions of the country," Energy Management Institute principal Dominick Chirichella said.
Russian natural gas flows to Europe lower in February as Ukraine transit dips - Russian gas flows to Europe in February via its three main pipeline routes amounted to 9.1 Bcm, according to data from S&P Global Platts Analytics, as mild weather across the continent in the first part of the month reduced demand for Russian deliveries. Flows averaged 324 million cu m/d -- up from January's 310 million cu m/d, which was the lowest monthly average since August 2016 -- but they were down on the February flows of 2017 when cold weather hit much of Europe. Deliveries via Nord Stream and Yamal-Europe to northwest Europe remained at close to maximum through February, and supplies picked up via Ukraine toward the end of the month when the "Beast from the East" cold weather front sent temperatures plunging from February 26. Russian gas supplies to Europe hit a new record high in 2017 due to high demand -- both in the winter to meet high demand and in the summer to replenish European storage stocks. Gazprom's gas has also been competitive with European hub pricing over the past few years given the low oil price environment combined with Gazprom's pricing structure leaning toward more hub indexation, with customer nominations increasing as a result. But the mild weather through January and most of February 2018 had a significant impact on Russian flows, especially through the Ukraine route to central Europe and Italy.
Ukraine shivers as Russia refuses to deliver gas - Ukraine on Friday urged schools to close and factories to cut production after Russia refused to restart natural gas deliveries, while residents shivered as the country strained to save on gas supplies. Russian gas deliveries to Ukraine were supposed to restart on Thursday following a foreign court ruling aimed at ending years of disputes between Kiev and Moscow, including two halts to Russian gas supplies to Europe through Ukraine. But Russia's Gazprom gas giant unexpectedly refused to resume deliveries, returning the prepayment for supplies made by Kiev, claiming amendments to a contract had not been completed. The decision coincided with freezing temperatures all over Ukraine, and the government called on Friday for measures to reduce consumption. "Starting today, we recommended ... to stop the work of kindergartens, schools and universities," energy minister Igor Nasalyk told lawmakers. And he urged Ukrainian companies to adjust their operations to save gas, while power companies were ordered to switch to fuel oil where possible. Nasalyk said these savings measures would be in effect until Tuesday, when temperatures are expected to rise. Gazprom director Alexei Miller said Friday that the company would immediately turn to the Stockholm arbitration court to break its contract with the Ukrainian operator Naftogaz, Russian news agencies reported.A ruling by the same court last year was meant to halt disputes over gas prices and shipments, which had often been a proxy for political disputes between Moscow and Kiev.The court set a price and ordered Kiev to resume purchases it had cancelled after Russia annexed the Crimea from Ukraine.Naftogaz said Friday that Gazprom had not only refused to resume deliveries meant for it, but lowered the pressure in gas pipelines by 20 percent and minimised sales to other customers. Gazprom was trying to portray Ukraine in a negative light and suggest that it was willing either to let its own population freeze or make it out to be "an unreliable transit company that takes the gas away" from European countries, Naftogaz said in a statement.
NW European natural gas demand hits six-year high, prices surge again - Demand for gas in northwest Europe is forecast to hit a six-year high of more than 1.42 Bcm on Wednesday, according to S&P Global Platts Analytics, as temperatures remain well below seasonal norms due to the Arctic weather front dubbed the "Beast from the East." Gas consumption in the main demand centers of the UK, Germany, France, Belgium and the Netherlands is estimated at 1.422 Bcm Wednesday, the highest daily demand in the countries since February 2012 when daily consumption peaked at 1.53 Bcm. Prices across Europe surged Tuesday, with all the main hubs assessed by S&P Global Platts at more than Eur34/MWh -- or $12/MMBtu. The UK NBP within-day price surged in early trading Wednesday to as high as 140 p/th -- or more than Eur54/MWh -- while the Dutch TTF day-ahead price was trading higher in early trade on Wednesday at above Eur37/MWh. European hub gas is currently the highest-priced hub gas in the world, with the hubs trading well above the most prompt Asian spot JKM price for the second half of March, which was assessed by S&P Global Platts at $9.95/MMBtu on Tuesday. But contracts to buy LNG are typically agreed well in advance, and with March contracts across the European hubs trading around $7/MMBtu, it was likely too late to agree a cargo ahead of the price spikes and trying to secure a cargo now based on the month-ahead price would not be competitive versus the JKM. Gas storage facilities across Europe are withdrawing at higher rates this week, with stocks at dangerously low levels.
LNG: the glut that was and may never be -- There was a certain air of triumphalism surrounding Anglo-Dutch major Shell’s statement in February that the world’s growing supply of LNG would be “comfortably” absorbed by rising demand in 2018, and that the much anticipated glut would never materialize. This glut has been much predicted, predicated on the apparent surplus of new LNG capacity coming on stream versus predictions of demand rising, but at a slower rate than supply. If Shell’s position holds, it is an important development because it could launch a new round of multi-billion dollar investments in LNG capacity, targeting an increasingly tight market between 2022-25. This would have profound effects on the fortunes of many countries, not least those on LNG standby such as Mozambique and Tanzania, not to mention Qatar’s expansion plans for the giant North Field, Russia’s Arctic LNG 2, and the raft of developers waiting to export the growing volumes of “free” associated gas emanating from the latest shale boom in Texas’s Permian basin. Of equal importance is that Shell’s statement justifies past spending because higher LNG prices mean that overspent LNG projects in Australia may be back in the money, while US LNG gets a wide open arbitrage to Asia. As US LNG production ramps up, producers there will be heavily dependent on this opportunity, which they hope will exist not as a function of below cost-recovery, must-run LNG production in the US — the glut scenario — but high prices in Asia as a result of strong demand growth. It is arguable that the glut hasn’t arrived because most promised US LNG capacity is not yet up and running, and because there is perhaps more flexibility, or less reliability, on the supply-side of an increasingly diverse set of LNG producers around the world.
European natural gas on the brink as ‘Beast from the East’ brings major cold snap - A major cold spell -- the first late-winter cold snap in Europe since 2013 -- triggered by a rare meteorological event over the Arctic is set to test European gas markets in the coming weeks, with prices already rising and storage levels at dangerously low levels in certain countries. The so-called “Beast from the East” weather front is expected to see temperatures plunge across Europe to lows of up to 12 degrees Celsius below seasonal norms, with gas demand set to soar. The European gas market is relatively tight for the time of year with storage stocks in several countries already at multi-year lows due to strong withdrawals already so far this month and during December on the back of below-average temperatures and several outages at the time. The cold snap is set to peak on February 27 and 28, though it is expected to continue into early March, according to the latest forecasts from the Weather Company. The risk of storage reservoirs running dry differs greatly between individual countries, dependent on current stock levels and flexibility from other sources of pipeline supply. With the loss of the long-range Rough reservoir, the UK was always keenly eyed by traders this winter with only seven medium-range facilities available during the high-demand period.
U.K. may run out of natural gas today, National Grid warns - U.K. gas system operator National Grid issued a rare “gas deficit warning” earlier today, indicating the country could run out of natural gas because demand is running high amid unusually harsh weather conditions. NGG estimates U.K. gas demand today of 404M cm, up from an initial forecast of 396M cm, while supply is forecast at just 376M cm; the system had opened more than 50M cm after an unplanned outage at the South Hook LNG facility added to other outages affecting domestic production. The “Beast from the East” is the most severe winter storm seen in the U.K. and much of Europe in many years.
UK looks to fracking as cold snap exposes its poor energy supply - — Britain’s natural gas fracking industry is using a cold snap that’s gripped large swathes of Europe this week and laid bare weaknesses in the UK’s energy supply to make its pitch.Britain’s natural gas market has been stretched to its limits as the coldest spell since 2010 tests the nation’s energy and transport network. UK pipeline manager National Grid Plc even urged industry to curb its gas usage while the cold weather persisted.As gas prices surged to record levels, industry bodies and Ineos Group called for Britain to improve energy security by producing more gas at home rather than rely on imports."The UK is worryingly dependent on gas imports and this is forecast to increase to 80% by 2035," said Ken Cronin, CEO of industry body UK Onshore Oil and Gas. "The need to ensure we have our own homegrown source of gas rather than pursuing this continued over-reliance on imports has today become very evident."Britain is Europe’s biggest gas consumer after Germany. Once a major producer, the UK increasingly relies on imports during winter months as output from the North Sea falls. It’s a risky dependency when it’s cold across Europe, such as this week when a mass of Siberian air pushed in from Italy to Scandinavia.On top of that, liquid natural gas (LNG) shipments to Europe this season have been scarce as a surge in demand in China pushed up the cost of the super-chilled fuel.Ineos, which is looking to develop its own shale resources, agreed to reduce its consumption by 20% at its Runcorn plant in the UK and said there is an "urgent need for increased domestic supplies of gas". "These supplies can be provided by shale and yet multiple projects are being held up at the planning and surveying stage," the company said by e-mail. "The resources beneath our feet can be used to create jobs, heat our homes and go a long way toward self-sufficiency."
UK regulator expects extra 2.8 billion barrels of oil and natural gas output - UK efforts to boost North Sea production are bearing fruit with production expected to recover this year after disruption in December, and an extra 2.8 million barrels of oil equivalent to be produced by 2050 thanks to a "maximizing recovery" strategy launched in 2014, regulator the Oil & Gas Authority said Thursday. In a report, the OGA said it now expected UK oil and gas production to total 11.7 billion barrels of oil equivalent in 2016-50. It said prospects had improved following a review carried out in 2014 intended to address the country's production decline, and the implementation of recommendations such as the creation of the OGA as a new regulator, and efforts to promote collaboration among companies. "The extra 2.8 billion barrels identified shows the future potential of the basin which could be boosted further through investment and exploration successes. 2017 continued to be a productive year and production levels are set to rise in 2018 as more new fields come on-line," OGA chief executive Andy Samuel said. "The OGA continues to work in partnership with industry and government in maximizing the economic recovery of our resources." As crude production in the North Sea continues to evolve, its role in an increasingly globalized market has started to shift, having an impact on Dated Brent and its position as a global oil benchmark. In this report, S&P Global Platts delves into the dynamics affecting the North Sea and Northwest Europe crude markets and the continuing evolution of Dated Brent. UK oil production was on track for a third successive annual increase last year until the Forties pipeline, which carries around 45% of the country's oil output, was shut in mid-December for nearly three weeks due to the discovery of a hairline crack.
Russia to Rescue as Europe Draws More Gas - Russia is sending more natural gas to Europe than ever before as a blast of Arctic air lifted demand for heat and electricity, underlining the region’s dependence on its eastern neighbor.The freeze severely tested Europe’s energy network over the past week. Spot gas prices tripled to a record, drawing in more Russian supplies by pipeline and prompting a tanker of the fuel in its liquid form to schedule arrival in the U.K. next week.With a dissipating capacity to store gas and few tankers of liquefied natural gas arriving this season, Europe and particularly the U.K. is increasingly reliant on Russia to feed its energy needs. Moscow-based Gazprom PJSC, the continent’s dominant supplier for decades, used the opportunity to crow about its essential role. “Only Gazprom is capable of increasing gas supplies to European customers to maximum levels at a breakneck speed,” Alexey Miller, the chief executive officer of Gazprom, said in a response to questions. “There’s no other supplier that could cope with the task.”Daily shipments from Russia’s state-controlled Gazprom skyrocketed to a record in February, according to the company’s data. Europe’s consumption jumped to highest level in at least five years during the week through Feb. 24, and this week’s cold snap drove demand higher still, according to estimates from London-based Marex Spectron Group Ltd. It will be the first seaborne gas delivery to the U.K. since Feb. 22, which was the only cargo that month.
The Pros And Cons Of Nord Stream 2 --There are few issues as divisive in the EU as the planned construction of Nord Stream 2, another direct gas infrastructure connection between Germany and the Russian Federation. With the climate of relations between Russia and the West just above the point of freezing, the agreement between Gazprom and its Western counterparts Shell, OMV, ENGIE, Uniper, and Wintershall has caused critics of closer relations with Russia to mobilize.While supporters of the project insist that it isn’t more than a commercial deal (mostly Western European countries and companies), opponents (Central and Eastern Europe) are convinced that the deal will give Moscow more unwanted influence. Here, we’ll discuss the arguments of opponents and proponents of the proposed gas infrastructure in order to make a modest recommendation regarding Europe’s common interest. Currently, over almost 40 percent of the gas consumed in the EU originates from Russia, making Moscow the biggest supplier, followed closely by Norway and Algeria. Even though many policy declarations were made to diversify and several serious crises involved Russia, the export of Siberian gas to Europe increased spectacularly — from 8 percent in 2017 to a record 195 bcm. The most important reasons behind this growth are the expanding economy of the Eurozone and domestic gas fields that are producing less. Although Europe currently possesses 208 bcm of LNG capacity, of that just 51 bcm was used in 2016. Most of the capacity was idle due to much cheaper pipeline gas, especially from Russia. Proponents, therefore, argue that Nord Stream 2’s importance will increase over the years as demand for imported gas will do the same. Opponents, however, argue that it is exactly these crises that have shown Russia’s real intention and the necessity to import less from Moscow.
Exxon quits Russian joint ventures, cites U.S. and EU sanctions (Reuters) - Exxon Mobil will exit some joint ventures with Russia’s Rosneft (ROSN.MM), citing Western sanctions first imposed in 2014, while the Russian company said the pullout will result in serious losses for its U.S. partner. Rosneft also said it would welcome Exxon’s return to the projects if the “legal possibility arises”. The move is an about-face for Exxon, which had opposed the sanctions over Russia’s invasion of Crimea and argued they unfairly penalized U.S. companies while allowing foreign energy rivals to operate in the country, the world’s largest oil producer. Yet the sanctions were effective in slowing work on a project by Exxon and Rosneft on what was hailed as a major discovery in the Kara Sea above the Arctic Circle. Rosneft, Russia’s largest oil company, said last year that it planned to return to operations at the project in 2019. Exxon’s exit from projects will not affect the Sakhalin project off the eastern coast of Russia, Exxon and Rosneft spokesmen said. Sakhalin-1 operates under a Production Sharing Agreement struck in the mid-1990s and currently produces around 200,000 barrels of oil per day. The joint ventures were reached when U.S. Secretary of State Rex Tillerson was Exxon’s chief executive. A Rosneft’s spokesman said ExxonMobil would incur serious losses because of the decision. . Rosneft also said in a separate statement that it would implement the projects on its own even though Exxon has decided to pull out of them.
Natural Gas Sets The Stage For Armed Conflict In The East Mediterranean - The efforts of individual countries to access the gas fields in the south-eastern part of the Mediterranean make the area very vulnerable to new conflicts and war and can also lead to a dispute within NATO and affect Europe’s energy security, putting the EASTMED pipeline in question. The war for natural resources is looming large. The first problem is the relationship between Cyprus and Turkey. Ankara, the only capital which recognizes North Cyprus, says that all activities related to the extraction of gas in the Cypriot area are an encroachment on the interests of North Cyprus. While Turkey does not recognize agreements between Cyprus and other countries on the issue of economic exclusive zone (EEZ) or licenses for gas exploration in Cypriot territorial waters, Nicosia holds the opposite opinion. It is worth mentioning that also in February a Turkish coast guard boat rammed a Greek patrol ship in the Aegean Sea, which shows that the Turkish government is willing to use military force. The deepening cooperation between Cyprus, Greece, Israel and Italy regarding the EastMed gas pipeline project is another flashpoint. The new pipeline, whose aim will be to supply gas from the Caspian Sea to Southern Europe, would weaken the transit role of the Turkish TANAP. Another potential conflict is the one between Turkey and Egypt over the rich Zohr gas field discovered only in 2015. Ankara does not recognize the 2003 Cypriot-Egyptian EEZ accords and the 2013 sea border agreements between Cairo and Nicosia, which assign the Zohr gas field to Egypt. The sea area between Israel and Lebanon is the most explosive area, which extends along the edges of three Lebanese gas exploration Blocks: 8, 9, 10 of which Block 9 is said to be the most profitable and is claimed by Israel. In the first half of February 2018, Lebanon signed a contract for exploratory and production works with Italian Eni, French Total and Russian Novatek. Since the works are to be carried out in Block 9, Israel described Lebanon’s action as “very provocative”, paving the way for a military showdown. In response to it, the Hezbollah leader Hassan Nasr Allah threatened to target Israeli offshore gas platforms. The Israeli media are already speculating about the third Lebanese war and suggest that the Hezbollah attack on Israel is inevitable. Gas deposits in the Eastern Mediterranean attract the attention of European, Russian, Iranian, Turkish and American armed forces. Cyprus occupies here a strategically important place. The number of players is a sum of the countries directly involved and their allies. Gas, like crude oil, has the potential of igniting a new wave of violent encounters between enemies and friends.
China's domestic LNG plants reopen after shutdowns as heating crisis eases (Reuters) - At least 10 of China’s domestic liquefied natural gas (LNG) plants have resumed output in the past week after the government cut off their supply, providing the first signs that the country’s gas supply crunch is starting to ease, company sources said. The return of the plants, which liquefy domestically produced gas that is then trucked to end-users, has raised LNG supply in China’s interior, pushing nationwide LNG prices lower. These restarts are also a sign that state-owned gas producers Sinopec and China National Petroleum Corp have resumed piping gas to the facilities after the government ordered them to divert shipments from the plants to residential users to make up a supply shortfall during the winter heating season. Yangcheng Shuntianda Gas Corp, based in China’s Shanxi province, southwest of the capital Beijing, has restarted its plant, with the capacity to liquefy 500,000 cubic meters of gas, after shutting in December, a sales manager at the company who only gave his surname of Wang told Reuters. “We lost 20 million yuan ($3.2 million) each month because we weren’t producing anything. Our boss was under extreme pressure from the bank to pay off loans,” said Wang. Yulin Huachen, which runs a similar-sized plant in neighboring Shaanxi province, resumed half of its production last weekend after closing for more than two months, said a company sales manager, who declined to be identified as he was not authorize to speak to the media. Sinopec and CNPC cut gas supplies to the LNG plants to meet the newly created demand from residential consumers. These buyers were converted to gas or electric heating ahead of this winter to reduce air pollution from coal-fired heating as part of the government’s war on smog. The companies could not cope with the extra demand because of inadequate infrastructure and insufficient domestic output.
Saudi oil minister hopes OPEC, allies can ease output curbs in 2019 (Reuters) - Saudi Arabia hopes OPEC and its allies will be able to relax production curbs next year and create a permanent framework to stabilize oil markets after the current supply cut deal ends this year, its oil minister said on Saturday. The Organization of the Petroleum Exporting Countries is reducing output by about 1.2 million barrels per day (bpd) as part of a deal with Russia and other non-OPEC producers. The pact, aimed at propping oil prices, began in January 2017 and will run until the end of 2018. Saudi Arabian oil minister Khalid al-Falih said OPEC and its allies were committed to bringing balance and stability to the market and that he hoped it would be possible to ease output curbs next year. “A study is taking place and once we know exactly what balancing the market will entail we will announce what is the next step. The next step may be easing of the production constraints,” he told reporters in New Delhi. “My estimation is that it will happen sometime in 2019. But we don’t know when and we don’t know how”. Falih said OPEC was determined to translate the success of the deal to curb supply into a permanent framework with other major producers. “What we want is an evergreen framework that brings producers from OPEC and non-OPEC (countries) together in a market monitoring fashion that allows us to take quick decisions,” he said. STEERING WHEEL “I think everybody has learnt, producers as well as consumers, that a market without a steering wheel is very destructive, very damaging to the interests of all,” he said.
Aramco IPO: Why Saudis Turned Oil Price Hawks - There's a neat story from the folks over at Oil Price about how the Saudis have done an about-face on the price of traded oil. For the longest time, they were considered as being among the least "activist" in the commodity cartel OPEC [Organization of Oil Producing and Exporting Countries]. That is, they did not push for boosting oil prices by crimping production of OPEC member countries. In recent years, though, that has changed as they've turned from "doves" content with a lower price of oil to "hawks" seeking to increase this price. The proximate cause of this apparent change of heart is the imminent initial public offering [IPO] of Saudi Aramco, the state-owned energy behemoth. Many of the specifics of that listing are not yet known: where the listing is to be made and how much of the company is to be floated: Saudi Arabia is undergoing a truly seismic shift in its economy, politics, and society, all thanks to the oil price crash of 2014. Crown Prince Mohammed bin Salman, commonly referred to as MBS, would likely not have had the opportunity to initiate the sweeping changes envisaged in Vision 2030 had it not been for the price collapse. Now, Riyadh needs oil prices to rise as high as possible for the plan to succeed — and is even ready to tip the market into a deficit to that end. Saudi Arabia used to be OPEC’s most influential price dove, according to Bloomberg’s Grant Smith. Now, the kingdom is focused on pushing prices as high as it can for a very simple reason: Aramco’s IPO. The change is rather dramatic. Consider the changing stances of Saudi Arabia and its ideological arch-rival within OPEC, Iran: When oil surged to almost $150 in 2008, attempts by Saudi Oil Minister Ali al-Naimi to cool the rally also faced opposition from other OPEC nations eager to enjoy soaring revenues. , Oil Minister Bijan Namdar Zanganeh of Iran -- an OPEC producer that often used to agitate for higher prices -- said that $60 was sufficient.
Hedge funds continue to exit oil but OPEC stems rout: Kemp (Reuters) - Hedge funds continued to take profits on their bullish positions in crude and especially refined fuels in the most recently reported week but supportive comments from OPEC helped steady oil prices.Hedge funds and other money managers cut their combined net long position in the six most important futures and options contracts linked to petroleum by the equivalent of 48 million barrels in the week to Feb. 20.The hedge funds' net long position has been cut in each of the four most recent weeks by a total of 263 million barrels, in what has been the largest drawdown for more than seven months.Most of the drawdown has come from the liquidation of bullish long positions rather than the establishment of new bearish short ones and it has been proportionately greater in fuels rather than crude.Portfolio managers have cut their net long position in U.S. heating oil by 58 million barrels, European heating oil by 45 million barrels and U.S. gasoline by 27 million barrels since Jan. 23.Over the same period, the net long position in Brent has been cut by 61 million barrels while WTI is down by 71 million barrels (http://tmsnrt.rs/2BTh857).Most of this liquidation seems to be attributable to profit-taking after the big rally in oil prices over the last seven months. Few fund managers have dared to initiate new short positions.Short positions across the whole of the petroleum complex total just 137 million barrels. Short positions in NYMEX WTI have fallen to just 30 million barrels, the lowest since July 2014.Fund positioning remains very stretched with longs outnumbering shorts by a ratio of almost 10:1, but down from almost 12:1 at the end of January. Despite the profit-taking, oil prices have steadied, probably owing to a combination of strong consumption growth, a continued fall in oil inventories, and supportive comments from senior OPEC leaders.
Fundamentalists complain about a new generation of commodity speculators (Reuters) - Traditional commodity traders are lamenting the rise of a new generation of hedge funds who show little interest in the fundamentals of conventional supply and demand analysis. The newcomers are blamed for distorting prices, making markets impossible to trade, and forcing the closure of some long-established specialist commodity funds. The target of this criticism is not always well-specified: it variously includes high-frequency computer-driven traders, momentum-chasing hedge funds and macro funds dabbling in energy markets. But the newcomers are operating on a scale never seen before in energy markets, with record open interest in futures and options contracts linked to crude oil and refined products. Money managers, a category which includes many hedge funds and other investors, have accumulated record positions in crude, gasoline and distillates since the middle of last year, according to regulatory data. By the end of January, money managers had established a bullish position in futures and options contracts equivalent to almost 1.5 billion barrels of crude, gasoline and distillates. The net long position was more than 400 million barrels higher than the previous peak in February 2017 and almost 700 million barrels higher than the peak before that in June 2014. "Who trades oil is changing," according to the Financial Times ("Fundamentals do not matter to new breed of oil speculator", Feb. 27). "Investors who bother little with details such as inventories and pipeline flows are replacing dwindling ranks of specialist commodity funds. The shift could alter the way prices are formed." Commodity specialists complain the prevalence of high-frequency trading has reached a tipping point, distorting prices and forcing the closure long-established hedge funds ("Data overload: commodity hedge funds close as computers dominate," Reuters, Feb. 12).
Oil Prices Climb On Monday As Asia’s Oil Production Drops - Oil prices are up Monday morning in Asia, boosted by a new report from Rystad Energy forecasting oil production in East and Southeast Asia will drop by 20 percent between 2017 and 2025. Crude Oil WTI Futures for April delivery were trading at $63.88 a barrel in Asia at 19:45am ET, up 0.52%. Brent crude futures for April delivery, traded in London, were up 0.39% at $67.30 per barrel. Oil production in Asia is eroding sharply due to natural depletion in mature oil fields. Total oil production in East and Southeast Asia is set to decline from 13.1 million barrels of oil equivalent per day (boe/d) to 10.4 million boe/d by 2025, according to Rystad Energy. Underpinning the decline in output is the diminishing volume of new oil discoveries in East and Southeast Asia. The past decade and a half has seen fewer and fewer new sources of oil, while the limited volume of new oil discovered may not translate into production. China’s oil production will decline the least, with the giant Changqing field continuing to support stable output and likely to contribute over 1 million boe/d over the next five years. With that said, China’s output has still declined quite a bit in recent years. The International Energy Agency (IEA) predicts China will produce an average of 3.8 million barrels per day (bpd) in 2018, down by 0.5 million bpd since 2015. Oil demand from East and Southeast Asia, on the other hand, is soaring. China emerged as a top buyer of U.S. crude last year. The shipment of crude oil that just left the newly upgraded Louisiana Offshore Oil Port (LOOP) also appears to be heading for China, and this will likely become an increasing trend. BP predicts that China and India alone would make up half of total growth in global energy demand over the next 30 years, according to its annual Energy Outlook, released last week. Oil markets are therefore well supported with Asia’s oil production dropping fast as its demand soars.
Crude Oil Prices Settle at 3-Week Highs Upbeat Saudi Comments – Crude oil prices settled at three-week highs supported by positive comments from Saudi Arabia on continued production cuts. On the New York Mercantile Exchange crude futures for March delivery rose 36 cents to settle at $63.91 a barrel, while on London's Intercontinental Exchange, Brent gained 23 cents to trade at $67.27 a barrel. "A study is taking place and once we know exactly what balancing the market will entail we will announce what is the next step. The next step may be easing of the production constraints," said Saudi Arabian oil minister Khalid al-Falih. The oil cartel together with Russia agreed in November to extend the 1.8 million bpd output cuts through 2018, to rid the market of excess supplies. The comments came a day after Baker Hughes on Friday showed the number of oil rigs operating in the US jumped by one to 799, the highest level since April 2, 2015. Sentiment on oil was also supported by expectations for an increase in crude demand as the cold snap engulfing Europe is expected to encourage some refiners to shelve plans momentarily to enter a period of maintenance. This time of the year traditionally sees refinery activity slow, this in turn, lowers demand for crude while raising the prospect of a build in supplies. Crude supplies unexpected fell last week, however, as producers were encouraged to sell rather than store crude as current prices traded at a premium to forward prices – a market structure known as backwardation. Despite the uptick in crude prices money managers appeared to be less bullish on the oil prices, reducing their WTI net-long position – the difference between bets on a price increase and wagers on a drop – for a fourth week in the period ended Feb. 20, according to U.S. Commodity Futures Trading Commission data.
Oil Market Fears: War, Default And Nuclear Weapons -- The U.S. is one of the few areas of the world in which there is an energy investment boom underway, a development that could smooth out the uncertainties of geopolitical events around the world. At the same time, outside of the U.S., there is a deterioration of stability in many oil-producing regions, aggravating risks for both oil companies and the oil market, according to a new report.Financial risk firm Verisk Maplecroft explores these two trends as they play out simultaneously. The U.S. shale sector has emerged from years of low oil prices, damaged but still intact. Importantly, the shale industry “can ride out price dips and respond quickly to upticks, weakening OPEC in the process,” James Lockhart-Smith, director of financial sector risk at Verisk Maplecroft, wrote in the report. Combined with deregulation at the federal level, the oil industry is in the midst of an investment boom in the U.S.Meanwhile, things are not so rosy elsewhere. Verisk Maplecroft surveyed a long list of countries, and produced its Government Stability Index (GSI), which uses some predictive data and analysts forecasts to take stock of geopolitical risk in various countries over the next few years.The results are not encouraging. The number of countries expected to see a deterioration of stability “significantly outnumber those we see becoming more stable,” the firm said. The reasons are multiple, including low oil prices, but also the erosion of democratic institutions. "We don't see increasing instability necessarily ending in coups or significant political upheaval, but a less predictable above-ground-risk environment is likely to emerge," Verisk Maplecroft’s Lockhart-Smith said. "Arbitrary decision making, possible measures to buy off key stakeholders or an inability to pass regulatory reforms will be the main risks to projects in these countries, as their governments seek to stabilise and maintain their influence." Not all of the countries expected to suffer from a decline in stability are that important for the oil market, such as Romania or Kenya. Also, some countries might be on an improving path, but at the same time present a downside risk that, while unlikely, could be huge.
OPEC Looks To Dial Back Production Cuts - Oil prices gained a bit over the past few trading days, after a surprise drawdown in crude stocks last week. But analysts see that to be a one-off, with expectations that inventories will resume climbing this week. . The IEA’s executive director said that the U.S. will surpass Russia to become the world’s largest oil producer “definitely next year,” if not in 2018. “U.S. shale growth is very strong, the pace is very strong ... The United States will become the No.1 oil producer sometime very soon,” Fatih Birol told Reuters. Saudi oil minister Khalid al-Falih said that he hopes that OPEC can relax the production limits next year, while putting in place a more permanent framework for cooperation between OPEC and the non-OPEC countries that are participating in the deal. “A study is taking place and once we know exactly what balancing the market will entail we will announce what is the next step. The next step may be easing of the production constraints,” al-Falih told reporters in New Delhi. “My estimation is that it will happen sometime in 2019. But we don’t know when and we don’t know how.” He went on to add that a longstanding cooperative agreement is a priority. “What we want is an evergreen framework that brings producers from OPEC and non-OPEC (countries) together in a market monitoring fashion that allows us to take quick decisions,” he said.
WTI Dips On Report OPEC-Shale Firms To Meet - WTI/RBOB prices limped lower after Reuters' headlines reported OPEC officials will meet with U.S. shale firms at a dinner Monday in Houston, citing two unidentified industry sources. With US crude output surpassing Saudi's and nearing Russia's, OPEC is desperate for US Shale firms to stop ruining the production-cut-deal party. As Reuters reports, OPEC Secretary General Mohammad Barkindo plus other OPEC officials will attend the dinner, one of the sources said. A second source said the chief executives of U.S. shale companies of various sizes have been invited.The meeting will be on the first day of the CERAWeek energy conference in Houston. A year ago, the Organization of the Petroleum Exporting Countries held unprecedented talks with fund executives and shale producers on the sidelines of the same event."Shale has dramatically changed the world's perception of fossil fuels," said the chief executive of one shale company, declining to be identified by name. "We now have a seat at the table on pricing."OPEC led by Saudi Arabia and non-OPEC Russia have reduced production during 2017-2018 to prop up oil prices.The United States, which rivals Russia and Saudi Arabia for the position of the world's largest oil producer, is not participating in cuts as its industry is represented by private producers who can be sued for collusion if they join the deal.
Oil prices dip before U.S. crude inventory data --(Reuters) - Oil fell on Tuesday, its first decline in five days, pressured by a firmer U.S. dollar and expectations that upcoming weekly data will show an increase in U.S. crude inventories. Brent crude settled at $66.63 a barrel, an 87 cent drop from Monday. U.S. West Texas Intermediate crude CLc1 fell 90 cents to $63.01. Those settlement prices represented a modest recovery from session lows, when benchmarks had slid more than a dollar. The dollar rose after Federal Reserve Chairman Jerome Powell said the U.S. central bank would stick with gradual interest rate increases. [FRX/] A strong dollar makes oil more expensive for buyers using other currencies. The oil market had put together a string of four straight days of gains before Tuesday’s pullback. “We got a little extended on the upside - we had a price advance of more than $6 a barrel in crude in less than two weeks,” said Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates. Analysts polled by Reuters forecast that data would show U.S. crude inventories rose by 2.7 million barrels last week. Industry group the American Petroleum Institute releases its weekly figures on Tuesday at 4:30 p.m. EST. The U.S. Energy Information Administration (EIA) data is out Wednesday morning. U.S. crude inventories have fallen more than 100 million barrels in 12 months to their lowest in three years. The EIA will release monthly data on crude supply on Wednesday, which analysts expect to include substantial upward revisions to U.S. oil output, perhaps to an all-time record. Soaring U.S. production has pressured oil futures at a time when OPEC members and Russia have reduced output in an attempt to support prices. The United States will overtake Russia as the world’s biggest oil producer by 2019, International Energy Agency (IEA) Executive Director Fatih Birol said on Tuesday. “U.S. shale growth is very strong... The United States will become the No.1 oil producer sometime very soon,” he said.
WTI/RBOB Extend Losses After Crude Inventory Build - WTI/RBOB prices sank today (amid OPEC and IEA comments and a dollar spike) ahead of tonight's inventory data. Following last week's surprise draw, API reported a crude build this week (though smaller than expected) and along with another gasoline build, sent energy prices lower. API:
- Crude +933k (+3mm exp)
- Cushing -1.277mm (-1.2mm exp)
- Gasoline +1.914mm
- Distillates -1.473mm
Following last week's surprise crude draw, expectations were for a sizable build but API data showed only a modest build (but still a build) and once again Gasoline inventories increased. If the Cushing data holds for tomorrow's DOE data, this would be 10th weekly draw in a row... “The comments from the IEA head about the pace of U.S. shale growth might have taken the wind out of the bull’s sails,” . Heftier stockpiles and a slide in refiner demand “should end up being a bearish factor for the market as well.” Prices had limped lower into the API data (with WTI back below $63), then confused algos briefly popped prices before they sank to the day's lows...
Libya Oil Field Is Said to Be Halted Amid Still-Fragile Recovery --A Libyan oil field halted production due to a labor dispute, underscoring the still-fragile nature of the North African country’s recovery from a domestic conflict. The company operating the 70,000 barrel-a-day El-Feel deposit, also known as Elephant, suspended output late Thursday after armed guards who work at the facility decided to occupy it to protest at unpaid wages, a person with knowledge of the matter said, asking not to be identified because they’re not authorized to speak to the media. Most workers were evacuated and the protesters threatened further action if their claims aren’t resolved. It wasn’t immediately clear when production might resume, or when the labor dispute might be resolved. The Petroleum Facilities Guard is seeking wages that have been held up for at least two years, the person said. The field is operated by Mellitah Oil and Gas B.V., which is jointly owned by Libya’s National Oil Corp. and Italy’s Eni SpA. Calls to the Libyan company weren’t answered on what is a weekend in the country. Eni officials didn’t immediately respond to requests for comment. Libya, a member of the Organization of Petroleum Exporting Countries, has struggled to boost oil production amid the lingering effects of civil war that began earlier in the decade. Its crude output averaged 828,000 barrels a day last year, the highest since 2013, according to data compiled by Bloomberg. Still, the country’s oil output remains well below where it was under the rule of dictator Muammar Qaddafi. Major oil fields including El-Feel and Sharara have experienced sporadic disruptions, occasionally setting back the revival.
Oil Dips as Industry Report Shows Swelling Spare US Oil Supply -- Crude slipped after an industry report was said to show an increase in U.S. crude stockpiles. Futures in New York fell from the settlement Tuesday after the American Petroleum Institute was said to have reported U.S. crude stockpiles expanded by 933,000 barrels last week. If confirmed in a government tally scheduled to be released on Wednesday, inventories will have racked up increases in four of the past five weeks. American crude explorers are driving “explosive growth” that will continue into next year, International Energy Agency Executive Director Fatih Birol said earlier in the day. Prices also were under pressure because of the strengthening dollar that diminished the appeal of the commodity as a store of value. As the Organization of Petroleum Exporting Countries works to trim output, producers are committed to bringing supply and demand into balance, United Arab Emirates Energy Minister Suhail Al Mazrouei said Tuesday in Abu Dhabi. Strong U.S. shale growth could delay those efforts, Birol said the same day in a Bloomberg Television interview. “The comments from the IEA head about the pace of U.S. shale growth might have taken the wind out of the bull’s sails,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund. Heftier stockpiles and a slide in refiner demand “should end up being a bearish factor for the market as well.” American explorers have expanded the fleet of rigs searching for domestic crude to the highest since 2015 as the OPEC-led supply curbs resurrected oil markets.
WTI/RBOB Tumble After Bigger Than Expected Crude, Gasoline Builds - WTI was higher and RBOB lower after last night's API (even as the USD rises) but both tumbled after bigger than expected crude and gasoline builds (and a new record high for US crude production). Bloomberg Intelligence Senior Energy Analyst Vince Piazza explained that the crude market is in a holding pattern with oil vacillating around $60 a barrel as E&Ps continue to imply higher output this year. U.S. production is poised to grow about 13% to 10.6 million barrels. Distillate demand remains robust, while summer driving season will be the next catalyst for gasoline use. Rising petroleum exports limit inventory bloat. Inventories are just 2% above the five-year norm. DOE:
- Crude +3.02mm (+3mm exp)
- Cushing -1.22mm (-1.2mm exp)
- Gasoline +2.48mm (+600k exp)
- Distillates -960k (-950k exp)
This is the 10th weekly drop in Cushing stocks in a row and 4th crude build in the last 5 weeks (seemingly signaling last week's draw as an outlier)... Total US oil inventory is now its highest since 2017... Gasoline exports dropped by nearly half last week to 536,000 barrels a day. Looks like the fog-related closures on the Houston Ship Channel could've had more of an impact than expected. Exports fell to the lowest level since early October. Once again all eyes were on US crude production (which dropped by a miniscule amount last week due to Alaska, while Lower 48 rose), and total US crude production rose to a new record this week...
Crude Oil Prices Settle Lower as Massive Build In Gasoline Supplies Weighs – WTI crude oil prices settled lower after data showed a large build in both crude and gasoline stockpiles as US output continued to rise. On the New York Mercantile Exchange crude futures for April delivery fell 2.17% to settle at $61.64 a barrel, while on London's Intercontinental Exchange, Brent fell 2.60% to trade at $66.69 a barrel. Inventories of U.S. crude rose by 3.019 million barrels for the week ended Feb. 23, exceeding expectations for a rise of 2.4 million barrels. Gasoline inventories – one of the products that crude is refined into – rose by 2.483 million barrels, confounding expectations for a decline of 190,000 barrels, while supplies of distillate – the class of fuels that includes diesel and heating oil – fell by 960,000 barrels, a steeper fall than the 709,000 million barrels forecast. The massive build in gasoline stockpiles garnered most of the attention as some market participants had expected that a slowdown in refinery activity - as refiners enter period of maintenance - would lead to fall in gasoline supplies. Also adding to negative sentiment was an uptick in domestic crude production to 10.3 million barrels per day as the US closes in on Russia as the world’s largest oil producer. That added to investor fears that a faster pace of US output would slow OPEC’s efforts to rebalance oil markets. “All the indicators that suggest continued fast growth in the U.S. are in perfect alignment; rising prices leading, after a few months, to more drilling, more completions, more production and more hedging,” the International Energy Agency said in the report.
Oil ends at 2-week low on fresh evidence of rising U.S. stocks and output - Oil prices on Thursday settled at their lowest level in about two weeks, a day after data showed a weekly rise in U.S. crude supplies and production, along with an unexpected climb in gasoline stockpiles. April West Texas Intermediate crude shed 65 cents, or 1.1%, settle at to $60.99 a barrel on the New York Mercantile Exchange. The contract marked its lowest finish since Feb. 14, after losing roughly 4.8% for the month. That was the first monthly loss since August. The global crude benchmark, May Brent fell 90 cents, or 1.4%, to $63.83 a barrel on the ICE Futures Europe exchange, its lowest finish since Feb. 13. Lead-month Brent fell about 4.7% in February, its first monthly loss since June. U.S. crude-oil stocks rose by 3 million barrels last week, while gasoline inventories rose 2.5 million barrels, the Energy Information Administration’s weekly report published Wednesday showed. “The weekly stock report was anything but positive,” said Tamas Varga, analyst at brokerage PVM. The rise in gasoline stocks was counter-seasonal as fuel inventories don’t typically build during the ongoing refinery maintenance period. “Refinery utilization is still low, so we should see lower stocks, but there is not yet strong demand,” said Ehsan Ul-Haq, director for crude oil and refined products at Resource Economist Ltd, adding that gasoline imports were also low. Gasoline demand typically starts to pick up ahead of the U.S. driving season, which starts on Memorial Day on May 28. Oil prices were also pressured by EIA data showing weekly U.S. crude production hit a fresh high of 10.283 million barrels a day.
Crude oil futures edge lower to $63.79/b at 1130 GMT, Mar 2, amid heightened risk sentiment - Oil prices were marginally lower in Europe's morning trading session Friday, after three straight days of losses amid bearish cues from crude inventory data this week and lower equities following President Trump's announcement on planned US steel and aluminum tariffs. At 1130 GMT, May ICE Brent stood at $63.79/b, down 4 cents from the overnight settle, while the NYMEX WTI front month contract was down 5 cents to $60.94/b. "The planned steel tariffs do not directly affect [crude oil] fundamentals. It is more about the broader trade environment," said Harry Tchilinguirian, senior oil analyst at BNP Paribas, adding that Trump's latest decision has the potential to damage relationships with the US's trading partners or even spark a trade war that could impact oil markets. The EU's response to the planned tariffs did not calm market participants. It said it would "act firmly", bringing forward "WTO-compatible countermeasures against the US to rebalance the situation." While the dollar eased from higher levels seen on Thursday, it remains a significant factor influencing the recent fall in oil prices, along with "the reality check in oil fundamentals that saw crude stocks picking up", according to Tchilinguirian. As of 1130 GMT, the Dollar Index was down 0.34, standing at 89.91. US crude inventories showed a stronger than expected build of 3.02 million barrels this week, EIA data showed, while the market will be looking for further direction on fundamentals from the Baker Hughes rig count numbers due out later today.
Oil Market Sentiment Sours Amid Global Financial Turmoil - Oil prices fell sharply at the close of the week, as the EIA reported a larger-than-expected build in crude oil inventories, while gasoline stocks also rose. Meanwhile, the surprise announcement that the Trump administration was planning harsh tariffs on imported steel led to a broad selloff in financial markets, particularly those in the industrial sector – with negative implications for commodities. An early morning tweet from President Trump, arguing that “trade wars are good, and easy to win,” doesn’t bode well for global equities and commodities. Venezuela is set to hold presidential elections on April 22, but because it is widely regarded as a rigged affair, the U.S. is gearing up for another round of sanctions on the struggling South American nation. No decision has been made, but among the measures could be a ban on Venezuelan oil imports into the U.S., a ban on U.S. diluent to Venezuela, a ban on oil tanker insurance, or some combination of those options, perhaps in several waves. Any/all of these sanctions would be crippling to Venezuela, which is already expected to see a decline of oil production by several hundred thousand barrels per day this year. U.S. sanctions could lead to wider losses. ExxonMobil and its partner Hess Corp announced its seventh major oil discovery in the Stabroek block off the coast of Guyana after it drilled the Pacora-1 exploration well. The well, according to the companies, will included in the third phase of development, which will ultimately lead to more than 500,000 bpd of new supply. After years of limbo, ExxonMobil decided to call it quits on its joint venture with Russia’s Rosneft, after initially pulling back following U.S. sanctions on Russia in 2014. Rosneft warned it would lead to “serious losses” for the oil major, but welcomed Exxon’s return if the “legal possibility arises,” Reuters reports. In 2014, Exxon was forced to end work just weeks after it and its Russian partner made a major discovery in the Russian Arctic.
Oklahoma adds 3 rigs as US rig count increases to 981- The number of rigs exploring for oil and natural gas in the U.S. increased by three this week to 981. That exceeds the 756 rigs that were active this time a year ago. Houston oilfield services company Baker Hughes reported Friday that 800 rigs drilled for oil this week and 181 for gas. Among major oil- and gas-producing states, Oklahoma increased by three rigs, Alaska and Pennsylvania each gained two rigs and New Mexico and Texas each increased by one. Colorado decreased by three rigs, North Dakota lost two rigs and Louisiana lost one. Arkansas, California, Ohio, Utah, West Virginia and Wyoming were unchanged. The U.S. rig count peaked at 4,530 in 1981. It bottomed out in May of 2016 at 404.
US Rig Count Inches Higher As Canadian Rig Count Slips - Baker Hughes reported another 3-rig increase to the number of oil and gas rigs this week.The total number of oil and gas rigs now stands at 981, which is an addition of 225 rigs year over year.The number of oil rigs in the United States increased by a single rig this week, and now stands at 800, or 191 over this time last year. The number of gas rigs, which rose by 2 this week, now stands at 181, or 35 rigs above this week last year.Canada lost another 4 rigs this week after losing 12 last week. The losses were 6 for gas, while oil gained 2.At 11:45 am EST, the price of a WTI barrel was trading down $0.22 (-0.36%) to $60.77—dollars below last week’s price. The Brent barrel was also trading down on the day, by $0.02 (-0.03%) to $63.81. That represents a $3 fall for the benchmark in a week. The market bristled in early trading after President Donald Trump on Thursday announced his plan for imposing tariffs on steel and aluminum. Many in the oil industry spoke out against the plan, on the grounds that the tariffs would kill jobs in the energy industry as costs for infrastructure projects would likely skyrocket. US crude oil production rose in the week ending February 23 to 10.283 million bpd—resuming its steadfast climb of recent weeks after a tiny hiccup last week when it fell from a high of 10.271 million bpd to 10.270 million bpd. This week is the highest production figure for the U.S. ever. By basin, the Marcellus gained two rigs. The Williston basin lost 2. Cana Woodford, DJ-Niobrara, and the Permian all lost a single rig. At 1:11pm EST, oil had rallied somewhat, with WTI trading at $61.14 (+$0.15) and Brent trading at $64.17 (+$0.34).
Crude Oil Prices Snap 2-Week Winning Streak as Oil Rigs Near 3-Year Highs – Crude oil prices snapped a two-week winning streak despite settling higher on Friday, as fears over rising U.S. oil output persisted after data showed the number of oil rigs rose to their highest in nearly three years.On the New York Mercantile Exchange crude futures for April delivery rose 26 cents to settle at $63.25 a barrel, while on London's Intercontinental Exchange, Brent gained 45 cents to trade at $64.28 a barrel.The number of oil rigs operating in the US rose by one to 800, the highest level since April 2, 2015, according to data from energy services firm Baker Hughes.That added to concerns that U.S. crude production may curtail major oil producers’ efforts to drain excess supply in the industry, as oil rig data often serves as an indicator of future production and demand.Much of rebound in oil prices seen Friday was said to be on dollar weakness, while the underlying sentiment on oil prices remained bearish as Energy Information Administration (EIA) data Wednesday showed U.S. stockpiles of crude continued to build for the second-straight week.Inventories of U.S. crude rose by 3.019 million barrels for the week ended Feb. 23, exceeding expectations for a rise of 2.4 million barrels. Gasoline inventories – one of the products that crude is refined into – rose by 2.483 million barrels, confounding expectations for a decline of 190,000 barrels.Also adding to negative sentiment was an ongoing uptick in U.S. crude production to 10.3 million barrels per day. That strengthened the U.S.’s position as the world’s second largest oil producer, as it closes in on leader Russia, fuelling investor fears that rebalancing in oil markets could face headwinds. Money managers have turned bearish on oil prices, reducing their WTI net-long position – the difference between bets on a price increase and wagers on a drop – for a second week in the period ended Feb. 23, according to U.S. Commodity Futures Trading Commission data.
Oil ends higher after rig data, but logs weekly loss - Oil futures maintained gains to snap a three-session slide after another small rise in the number of U.S. rigs drilling for crude, but suffered a down week.April West Texas Intermediate crude rose 26 cents, or 0.4%, to end at 61.25 a barrel on the New York Mercantile Exchange. That left the U.S. benchmark with a 3.6% weekly decline. The global crude benchmark, May Brent rose 54 cents, or 0.9%, to settle at $64.37 a barrel on the ICE Futures Europe exchange, trimming its weekly fall to 4%.Oil held on to gains after oil-field services firm Baker Hughes said the number of rigs drilling for U.S. crude rose by one unit to 800 this week. The firm’s weekly data on the number of rigs drilling for oil in the U.S. is seen as a bellwether for activity in the sector.Oil saw weakness in early action, attributed in part to President Donald Trump’s announcement Thursday that he would impose tariffs on steel and aluminum imports, stoking fears of a global trade war and contributing to a global equity selloff. But a weaker dollar appeared to help lift crude as the ICE U.S. Dollar Index, a measure of the U.S. unit against a basket of six major rivals, fell by around 0.4%. The dollar and commodities priced in the currency often exhibit an inverse relationship. A weaker dollar makes oil cheaper to buyers using other currencies. And while trade-war fears dented overall risk appetite, tariffs offer a reason to be bullish on crude, said Phil Flynn, senior market analyst at Price Futures Group, in a note. That is because the tariffs would raise the cost of production for crude given that steel is used in almost very part of the industry from production, refining and processing, and distribution of refined products. A surge in North American crude output also has the market worried, despite efforts by the Organization of the Petroleum Exporting Countries and external producers such as Russia to limit global crude production.
OPEC oil production drops to 10-month low - (Bloomberg) -- Crude production from OPEC countries fell to a 10-month low in February, mainly due to maintenance at a field in the United Arab Emirates and continued output declines in Venezuela. The Organization of Petroleum Exporting Countries and allies including Russia have defied the skeptics by going deeper than their pledged cuts and maintaining them for long enough to deplete bloated inventories and boost prices. While the group says it’s committed to the deal for the remainder of the year, it’s also contending with a record-breaking surge in U.S. output that could undermine its efforts.Output from the 14 members of OPEC fell 80,000 bpd to 32.28 MMbpd in February, according to a Bloomberg News survey of analysts, oil companies and ship-tracking data. That’s the lowest since 31.89 million in April.Venezuela’s output dropped by 30,000 bpd to 1.68 MMbbl. The Latin American nation is a big part of the reason for OPEC’s stellar implementation of promises to curb production. Its industry is suffering from a lack of investment and looming U.S. sanctions, sending output last year to the lowest since the 1980s.Oil production in the UAE fell last month due to maintenance at fields that produce the Das Blend, according to a person with knowledge of the matter. The survey found the Persian Gulf country pumped 2.8 MMbpd, a drop of 50,000 a day from January. Production in Saudi Arabia, OPEC’s largest producer, fell 80,000 bpd to 9.88 MMbbl, the survey found. Libya’s output rose 70,000 barrels a day to 1.05 million, the highest since 2013.
Jump in Islamic tax liabilities worries Saudi banks (Reuters) - A jump in retroactive Islamic tax liabilities faced by Saudi Arabian banks is creating concern about damage to their earnings and the government’s motives in demanding the money. While Saudi banks and other firms generally do not pay corporate tax, they are subject to an annual Islamic tax called zakat, a 2.5 percent levy on each bank’s net worth. Analysts say the way in which this is assessed can be complex and opaque. In the last couple of weeks, several major banks have disclosed that the government’s General Authority of Zakat and Tax (GAZT) is seeking additional zakat payments from them for years going back as far as 2002. In some cases, the demands exceed half of a bank’s annual net profit. The banks are challenging the assessments, but analysts said the issue could weigh on share prices in the banking sector, which is expected to attract billions of dollars of foreign investment as Saudi Arabia joins global equity indexes in the next couple of years. So far, only a few of Saudi Arabia’s 12 listed banks have disclosed retroactive zakat demands, but analysts predicted more would do so as they released full financial statements for 2017 in the coming weeks.
Mosques flattened in fresh Saudi airstrikes in Yemen: Saudi Arabian warplanes have flattened a mosque in Yemen's west-central Ma’rib Province, and stricken another in the northwestern Sa’da Province. The first attack targeted the mosque in Ma’rib’s Sirwah district, Yemeni news website Sahafah24 reported on Sunday. Yemen’s al-Masirah television network published a video released by the country’s War Media outlet showing the moment the structure fell into ruin. A day earlier, the aircraft targeted a mosque and other religious centers in Sa’ada’s Razih District. The Saudi military campaign was launched in March 2015 with the aim of reinstalling Yemen’s former Riyadh-backed government and crushing the country’s Houthi Ansarullah movement, which has been both running state affairs and defending the nation against the aggression. Around 13,600 Yemenis have so far lost their lives in the war, which also recruits many of Saudi Arabia’s regional allies, and enjoys logistical, political, and arms support from the United States and the United Kingdom Saudi Arabia has also imposed an all-out blockade over Yemen’s ports, saying it was aimed at preventing transfers of weapons to Ansarullah. The siege has been depriving the most impoverished Arab nation of direly-needed food and medicine.
'Survive or die together': More than 400 killed in Eastern Ghouta --More than 400 people have been killed in Eastern Ghouta, a monitoring group said, as Syrian government forces backed by Russian warplanes continued their aerial bombardment of the rebel-held area.The Syrian Observatory for Human Rights said on Thursday that at least 403 people were killed in the "hysterical attack" that began on Sunday, including 150 children. Almost 2,120 others were wounded.UN special envoy for Syria, Staffan de Mistura, stressed the urgent need for a ceasefire in comments made before Thursday's UN Security Council meeting. "The humanitarian situation in Eastern Ghouta is appalling and, therefore, we need a ceasefire that stops both the horrific heavy bombardment of Eastern Ghouta and the indiscriminate mortar shelling on Damascus," he said. He added the ceasefire needs to be followed by immediate, unhindered humanitarian access and a facilitated evacuation of wounded people out of Eastern Ghouta and warned against this being a repeat of Aleppo. Residents of Eastern Ghouta, the majority of whom are internally displaced, say there is nothing they can do and nowhere to hide. "Seeing a father or mother wailing and crying over their dead children, or a father carrying his son who has one leg amputated, or another screaming at God and then at people to help save his family who are all lying under the rubble of a building … I try to comfort them even though I want to sit and cry with them from the horror of what is happening all around us," . Rebel-controlled Eastern Ghouta, a mostly rural area on the outskirts of the capital Damascus, has been under government siege since 2013. About 400,000 Syrians live there. The siege has resulted in huge inflation of the cost of basic foodstuffs, a bag of bread now costs the equivalent of $5.
UN Security Council votes in favour of 30-day Syria ceasefire - The UN Security Council has voted in favour of a resolution calling for a 30-day ceasefire in Syria.The unanimously approved resolution, passed on Saturday, will allow for aid deliveries and medical evacuations to take place.The vote, held at around 2:30pm local time (19:30 GMT), had been delayed by more than 24 hours due to disagreements between Russia and other Security Council members over the wording of the resolution.A meeting was originally scheduled for 11am local time (16:00 GMT) on Friday.Nikki Haley, the US ambassador to the UN, criticised Russia for delaying the Security Council meeting saying it had "belatedly decided to join the international consensus"."Hardly anything in the resolution has changed except a few words and commas," she said following the vote."Every minute the council waited on Russia, the human suffering grew." Russia had objected to an earlier version of the resolution which called for an "immediate ceasefire" in Syria. The approved resolution calls for a ceasefire "without delay", he said. Syrian government warplanes launched attacks just outside of Damascus in the rebel-held enclave of Eastern Ghouta minutes after the vote was passed, according to the UK-based Syrian Observatory for Human Rights (SOHR).
Fighting continues in Syria after another UN ceasefire - Fighting continued in Syria over the weekend despite the latest United Nations Security Council ceasefire resolution that is supposed to allow for the evacuation of Ghouta, the eastern suburb of the capital, Damascus. The draft resolution urging a 30-day ceasefire throughout Syria was delayed from Thursday to Saturday due to Russian objections. Russia argued that the United States had forced delays by opposing amendments allowing for a continued military offensive against Islamist forces loyal to Islamic State and pro-Al Qaeda groups. Washington has relied on these forces to wage war against the Syrian government of Bashar al-Assad. Saturday’s resolution calls on UN Secretary General Antonio Guterres to report back to the council in two weeks on whether the terms of the ceasefire have been implemented. However, not only will the Syrian military campaign continue, but so too will fighting throughout the country. The ceasefire’s failure will again be attributed to the Assad regime and its main backer, Russia and used to demand a military response by the Western powers. But Syria’s terrible fate has been sealed by the escalating proxy war for its territorial division that has emerged from the civil war instigated by the United States.
US-Led Coalition Warplanes Strike Syrian Regime Forces - The last time the US-led coalition fighting ISIS in Syria conducted air and artillery strikes against pro-regime forces in Syria, in the oil-rich Deir Ezzor region, was on Feb. 7, when hundreds of pro-regime fighters were killed, the largest number of "pro-regime" casualties inflicted by the US-led coalition in one attack. The coalition described its action as carried out in "self defense", while the Syrian state news agency SANA described the action as an "aggression" by the coalition against "popular forces" who were fighting ISIS and the US-backed Syrian Democratic Forces. In a bombshell update one week later, it was revealed that among the casualties were hundreds of Russian mercenaries working on behalf of the Assad regime, and hired by the Wagner PMC (Private Military Group) - a shadowy organization often referred to as Russia’s answer to Blackwater. Adding to the mystery, is that the Wagner Group is believed to be funded by Yevgeny Prigozhin, a rich businessman close to President Vladimir Putin and also known as "Putin's Chef." Prigozhin was recently sanctioned by the US due to his links to the eastern Ukraine separatists. Unnamed US intelligence sources quoted by the Washington Post said Prigozhin was in close contact with the Kremlin in the run-up to the Feb 7 assault on the Syrian Democratic Forces base in Deir Ezzor region. According to the unconfirmed report, intercepted communications showed that Prigozhin was also involved in the operational planning with Syrian officials, ahead of the attack. Meanwhile, amid unconfirmed reports that more than 100 Russians had been killed, the Kremlin denied that any regular Russian military forces had been involved. It admitted only that there had been "several dozen" Russian casualties, but gave no further details.
Syria: Putin orders five-hour daily ceasefires in eastern Ghouta - Vladimir Putin has ordered a daily five-hour “humanitarian pause” in the besieged Syrian enclave of eastern Ghouta to begin on Tuesday, effectively replacing a United Nations security council resolution that had demanded a month-long ceasefire in the embattled region. The Russian president’s move, which was announced by his defence minister, Sergei Shoigu, highlighted in stark terms Russia’s primacy in Syrian affairs and the UN’s failure to impose an end to the fighting in the area bordering Damascus. More than 500 people have been killed in eight days of one of the deadliest bombing campaigns by the regime of Bashar al-Assad and his allies during the seven-year war. The move by Moscow follows mounting condemnation of the violence, with the UN secretary general, António Guterres, describing the situation in Ghouta as “hell on earth”. Shoigu said a ceasefire would begin on Tuesday in the Damascus suburb and would take place from 9am until 2pm (7am GMT to 12pm) daily, according to a transcript of his remarks published by the Russian news agency Interfax. Russia, a key ally of the Syrian regime, would also help create an evacuation route for civilians in the area, he added. The Syrian Observatory for Human Rights said calm had generally prevailed in eastern Ghouta since midnight, though four rockets had hit the town of Douma on Tuesday morning. The announcement on Monday came after at least 29 people were killed in eastern Ghouta despite a UN security council resolutionthat demanded an immediate cessation of the fighting. Local doctors and monitors said at least 18 people had been injured by a suspected chlorine attack in eastern Ghouta on Sunday evening. Residents have condemned the international community’s inability to put an end to the fighting.
US airstrike kills dozens amid mounting Western war propaganda over Syria --A US air strike in Syria’s eastern Deir Ezzor province killed at least 25 civilians Monday, the majority of them women and children.The American bombing raid, which struck the settlement of Dahra Alounik, was reported by the Syrian Observatory for Human Rights, a war monitoring group that is hostile to the Syrian government of President Bashar al-Assad.A Pentagon spokesman provided the standard and indifferent US military response to the exposure of such atrocities. “We take all allegations seriously and as we always do we will put it into our civilian casualty assessment and we will publish the results of those on a monthly basis,” Col. Ryan Dillon told the Reuters news agency.The American air strike was reported by the Turkish Anadolu agency to be part of a broader bombing campaign in Deir Ezzor aimed at halting the advance of forces loyal to the Assad government on strategically important gas and oil fields and facilities that had been under the control of the Islamic State of Iraq and Syria (ISIS), which handed them over to the US military and its proxy ground forces dominated by the Syrian Kurdish YPG militia.The same area saw a savage onslaught by US warplanes and artillery batteries on February 7 against a column of Syrian government forces in which at least 100 were killed, including a number of Russian military contractors. The latest killing of Syrian civilians by US bombs—carried out in open violation of a supposed 30-day truce mandated by the United Nations Security Council last Saturday—attracted scant attention in the Western media, which has returned to the kind of full-throated outcry over alleged atrocities by the Syrian government and its principal military ally, Russia, which has not been seen since the siege of Aleppo at the end of 2016.
Yet Another Senseless Mass Killing: Women And Children Among 25 Dead - This week, 25 people were slaughtered in yet another mass killing, and half of those deaths were women and children. But you won’t see these murders broadcast relentlessly on CNN, Fox News, MSNBC, nor discussed at length in social media threads. That’s because the U.S. military committed them in their crusade against the Islamic State’s “last enclave on the Euphrates in Syria,” Reuters reported Monday. It is for this reason that many Americans will dismiss comparisons between this type of mass killing and school shootings and other domestic mass atrocities. Their grossly overfunded (yet somehow financially irresponsible) military is fighting the good fight. If some innocent people have to die in the process Americans can feel safe in their homes and shopping malls, so be it. “Collateral damage” is just part of the price the world must pay for the United States to police it and keep it safe, even as the American military has racked up millions of civilian deaths during its reign as the global arbiter of morality and justice. Though the figures from this week’s deaths in Syria were reported by the Syrian Observatory on Human Rights — which, though cited often by mainstream media has questionable credibility — the evidence of similar killings from other sources is rampant. Whether bombing hospitals, funerals, schools, or flat out raping and murdering villages filled with civilians, the U.S. military’s brutalization of innocent people is not a rare occurrence. Aside from the callous apathy many Americans display in their dismissals and rationalizations for the loss of innocent life funded by their tax dollars, the popular notion that the military must murder civilians to win the greater moral battle is faulty, anyway. The U.S. killed as many as three million civilians in the Korean War to halt communism, yet to this day, North Korea remains oppressed under a dictatorial communist regime. In Vietnam, Cambodia, and Laos, the United States haphazardly killed civilians for years before retreating from the nations in defeat. Despite the thousands of people who died, the U.S. failed to achieve its objectives.
China senses and acts on US weakness in South China Sea | Asia Times: China is a rising power and it is only natural that it would seek to expand its areas of naval operations and political influence. However, arriving late to the geopolitical game, China does not want to play by the rules that have long been established but which Beijing did not help to formulate. China seems to think that, because it was once the center of its world, more respect for its exalted status is needed. And Beijing wants to unilaterally change the rules for international engagement for its own benefit. But that doesn’t work and neither does being a maritime bully. There are rising indications, however, that China intends to be just that. Beijing is likely thinking that it can get away with naval confrontations in nearby seas, due largely to a lack of effective counter responses to its current aggression in the East and South China Seas. Beginning in 2010, Beijing upped its assertiveness in claiming ownership to much of the South China Sea, eventually putting forward a claim that the waters within a ‘Nine Dash Line’ map have been Chinese since historical times. That sweeping claim intersects waters and territories claimed by Malaysia, the Philippines, Taiwan and Vietnam. Some readings of the broad map also put China in conflict with Indonesia over the gas-rich Natuna Sea. Beijing has since been building military outposts on reefs and man-made islets in that area – pieces of land that are not recognized as sovereign territory by the United Nations Convention on the Law of the Sea (UNCLOS). Some of those manufactured islets have recently been outfitted with landing strips capable of accommodating transport aircraft and jet fighters for even greater projection of power.
China will scrap limit on presidential terms, meaning Xi Jinping can stay on | South China Morning Post: China will remove the constitutional restriction on the maximum number of terms the president and vice-president can serve, Xinhua reported on Sunday, paving the way for President Xi Jinping to stay on beyond 2023. The official news agency said the ruling Communist Party had proposed removing the line that the president and vice-president “shall serve no more than two consecutive terms” from the constitution. Xinhua later released the full 4,480-word proposal in Chinese. The document, which will be considered by the legislature next month, was dated January 26 – a week after the party’s 200-strong Central Committee met to discuss revisions to the constitution. Xinhua did not say why it took a month to release the document to the public.Xi, 64, was re-elected as general secretary of the party in October and is expected to be handed a second term as president by the legislature during its annual full session starting on March 5. The party has in recent decades largely observed an unwritten retirement age of 68 for its top leaders, but its charter does not have any limit on terms. That means there are no restrictions on the general secretary position, but the Chinese constitution does limit presidents to a maximum of two five-year terms. Analysts said ending the two-term limit gives the strongest indication yet that Xi will stay in power longer than his recent predecessors at a time when the leadership was “fixated on stability”.
Ce*sored! China bans letter N (briefly) from internet as Xi Jinping extends grip on power - It is the 14th letter in the English alphabet and, in Scrabble, the springboard for more than 600 8-letter words. But for the Communist party of China it is also a subversive and intolerable character that was this week banished from the internet as Chinese censors battled to silence criticism of Xi Jinping’s bid to set himself up as ruler for life. The contravening consonant was perhaps the most unusual victim of a crackdown targeting words, phrases and even solitary letters censors feared might be used to attack Beijing’s controversial decision to abolish constitutional term limits for China’s president. The Communist party has painted the move - which experts say paves the way for Xi to become a dictator for life - as an expression of overwhelming popular support for China’s strongman leader. However, there has been widespread online push-back in China since it was announced on Sunday on the eve of an annual political congress in Beijing. In a blog post, Victor Mair, a University of Pennsylvania China expert, said censors had taken “quick, drastic action” after “the internet was flooded with complaints”. According to a list compiled by the China Digital Times website, search terms blocked on Weibo, China’s Twitter, included:
- - ‘Ten thousand years’ (万岁), which is China’s way of saying: ‘Long live!’ or ‘Viva!’
- - ‘Disagree’ (不同意)
- - ‘Xi Zedong’ (习泽东) - a hybrid of the names of Xi and Chairman Mao Zedong
- - ‘Shameless’ (不要脸)
- - ‘Lifelong’ (终身)
- -‘Personality cult’ (个人崇拜)
- -‘Emigrate (移民)
- - ‘Immortality’ (长生不老)
The name Yuan Shikai, a Qing dynasty warlord who unsuccessfully tried to restore monarch to China, was also banned as were the titles of two George Orwell books, 1984 and Animal Farm. Less clear is why censors took issue with the letter ‘N’. Mair speculated it was “probably out of fear on the part of the government that ‘N’ = ‘n terms in office’, where possibly n > 2”. Charlie Smith, the alias of the co-founder of GreatFire.org, a group which helps users track and bypass Chinese censorship, said he found that explanation plausible.“[Censors] probably determined it was sensitive and then moved to add that content to the blacklist so others would not be able to post something similar,” he said, noting that the seditious symbol had now been emancipated. “I doubt that they actually put that much thought into it so sadly, the letter ‘N’ was a temporary victim of this rash decision.”
How long does China’s President Xi Jinping plan to hold power? Here’s the magic number - China’s announcement last Sunday of its intention to remove the constitutional two-term limit for the presidency, clearing the way for President Xi Jinping to rule beyond 2023, has come as a surprise. As overseas media and analysts scramble to assess the implications and query the development, the answer to one of the biggest questions can in fact be inferred from his landmark marathon speech at the Communist Party’s 19th congress – a speech that gave him a stronger mandate for his second term as the party chief. On October 18, when Xi strode to the podium of the Great Hall of the People and delivered the extraordinarily long address that lasted nearly 3½ hours, he laid out an ambitious vision for the next 30 years. While his speech of more than 34,000 words was littered with landmark goals, the magic number was 2035 – the year Xi has promised China will basically achieve socialist modernisation, 15 years ahead of the schedule set by late paramount leader Deng Xiaoping back in the 1980s. Xi’s confidence in moving Deng’s schedule forward 15 years now takes on a special meaning and provides an intriguing indicator of how long he plans to be in power given the latest announcement. Many observers originally believed Xi would signal his intention much later in his second term, which would have seen him further tighten his grip on power. The fact that he has revealed his hand just as his second term has started highlights not only his dominance but also the urgency with which he must advance his agenda given his self-imposed deadline to restore China to its rightful place as a world power. In fact, of the trinity of leadership positions Xi has held, the presidency is largely a ceremonial role – albeit one that carries hugely symbolic significance. But the state constitution limits the presidency to two terms totalling 10 years and Xi will begin his second term in March. Just one day before the constitutional changes were made public on Sunday, Xi chaired a Politburo meeting to stress the important role of the constitution. “No organisation or individual has the privilege to overstep the constitution or the law,” he was quoted as saying.
Chinese steel flood is ebbing just as trade war looms - Andy Home (Reuters) It sounds like a lot of steel and it is, being equivalent to what the Czech Republic, the world’s 33rd-largest producer, churned out over all of last year. But everything about China’s steel sector comes in scaled-up size. It is, after all, the world’s dominant producer, accounting for just short of half global production. In the context of the last few years, however, those January exports were startlingly low. It was the smallest monthly outbound flow since February 2013. Exports fell by 30.5 percent last year and the trend appears to be accelerating. January’s exports were 36.6 percent off last year’s pace. The period of peak Chinese steel exports is now past. Unfortunately for China, and quite possibly everyone else, it will probably be too little too late for U.S. President Donald Trump. The U.S. Commerce Department’s“Section 232” report on U.S. steel import dependency gives him wide powers to penalize imports on national security grounds. His decision could come as early as Thursday. The mood music from Washington has not been conciliatory.
China manufacturing gauge suffers sharpest fall in 6 years - China’s official gauge of manufacturing activity suffered its largest fall since 2011 in February, an unexpectedly sharp slowdown that left it near the zero-growth level.The manufacturing purchasing managers’ index published by China’s National Bureau of Statistics on Wednesday dropped to 50.3, down a point from January and the largest fall in more than six years. The fall marked the gauge’s nearest brush with the 50-point mark that separates growth from contraction since August 2016.The figure was stark enough to unnerve European-listed mining stocks, which depend upon China for a significant part of their revenues. Mining stocks took the biggest toll on London’s FTSE 100 in morning trade, with losses of more than 2 per cent for Rio Tinto, Glencore, BHP Billiton and Anglo American.
Japanese, Chinese Data Disaster Crushes 'Global Synchronous Recovery' Narrative -European data has been gravely disappointing as Draghi tries to pull the region out of QE. And tonight we get confirmation of Asia's demise as first Japan and then China show signs of serious economic slowdowns. First Japan, which saw retail sales plunge 1.8% - 3 times worse than expected, in January - the biggest plunge since Feb 2016... But then Japanese Industrial Production crashed 6.6% MoM - its biggest collapse since the 2011 tsunami! And then China data hit... Even allowing for the lunar new year's distortions, Chinese PMI data is a disaster, piling on to the disaster that saw 1st Tier home prices sink most since 2015, and Anbang Insurance bailed out by regulators (due to liquidity concerns). While some suggested pollution curbs (or regulatory efforts to control debt and leverage) could be blamed for the declines, consensus economists were likely fully aware of the calendar and the government policies and still drastically misplaced their optimism. The Manufacturing PMI fell to 50.3, compared with a 51.1 forecast in Bloomberg’s economist survey and 51.3 the prior month. Under the hood in manufacturing, both imports and new export orders contracted (readings below 50), and input and output price growth slumped, with small enterprises dominating the collapse. The Non-Manufacturing PMI slipped to 54.4 from 55.3 the prior month, the statistics bureau said Wednesday. Selling prices contracted, as did employment, new export orders, and work backlogs The Composite index covering both services and manufacturing stood at 52.9, versus 54.6 in January. Numbers above 50 indicate improving conditions The Steel Industry PMI sunk to 49.5, below 50, signaling a contraction as output collapsed.
South Korean president holds talks with top North Korean officials - South Korean President Moon Jae-in met Sunday with a North Korean delegation that traveled across the Demilitarized Zone to attend the closing ceremony of the Pyeongchang Winter Olympics. The three-day visit takes place as the Trump administration in Washington continues to threaten the impoverished North with complete destruction.The North’s eight-member delegation is led by Kim Yong-chol, a high-ranking military official and chief for inter-Korean affairs. It includes Choe Kang-il, deputy director-general for North American affairs, responsible for negotiating nuclear issues and diplomacy with the United States.During Sunday’s meeting, the two sides reportedly discussed the prospects for North Korean-US talks. Moon’s spokesman Kim Eui-gyeom told the media: “President Moon pointed out that US-North Korea dialogue must be held at an early date, even for an improvement in the South-North Korea relationship, and the fundamental resolution of Korean Peninsula issues.”The response from the visiting Pyongyang officials was positive, according to the spokesman, who said: “The North Korean delegation also agreed that North Korea-US relations must develop along with the South-North Korea relationship while noting (the North) has enough intention to hold North Korea-US dialogue.” White House press secretary Sarah Sanders quickly issued a noncommittal response, saying: “We will see if Pyongyang’s message today, that it is willing to hold talks, represents the first steps along the path to denuclearization.” The Trump administration has insisted that North Korea show signs that it is committed to giving up its nuclear arsenal before negotiations can start. Last Friday, the US imposed a new round of sanctions and Trump again threatened North Korea with war if it did not denuclearise.
India To Build Major Overseas Military Base Off Africa To Combat China - India is preparing to construct a significant overseas military base on an island in Seychelles, an archipelago of 115 islands in the Indian Ocean, off East Africa to counter growing Chinese influence in the Indian Ocean. Last month, Seychelles and India signed a twenty-year agreement, permitting the Indian military to build an airbase and naval installations on Assumption Island, a small island in the Outer Islands of Seychelles north of Madagascar, said Seychelles News Agency.“This [agreement] reinforces our commitment to not only further deepen India-Seychelles relations, but to also take our partnership to another level,” Indian Foreign Secretary Subrahmanyam Jaishankar said in a statement.“The [mutual] co-operation is exemplified by the operationalization of the Coastal Surveillance Radar System [CSRS] in March 2016, and our commitment to augment the defense assets and capability of Seychelles,” he added. The agreement enhances India’s military capabilities and maritime surveillance of Seychelles’ Exclusive Economic Zone (EEZ) of 1.37 million square km. Assumption Island will serve as a strategic staging area for the Indian military, as the island chain resides between crucial global shipping lanes.
India regains title of world's fastest-growing major economy - India has regained its title as the world’s fastest-growing major economy, after figures confirmed it grew more than 7 per cent on an annualised basis in the three months to December, overtaking China after a year of lagging behind.Data released on Wednesday show the Indian economy grew at an annual rate of 7.2 per cent in the final quarter of last year, continuing its bounceback from a sharp slowdown in the middle of 2017. The Chinese economy grew 6.8 per cent on an annualised basis in the same period.The new figures came on the same day Beijing announced that last month its official gauge of manufacturing activity suffered its largest fall in seven years, a reflection of an economy that analyst believe is set to slow this year as the government focuses on mitigating financial risks.Although China’s economic growth accelerated to 6.9 per cent last year, several signs of slowing momentum have started to emerge, led by a fall in property sales and prices in many large cities in January. The manufacturing index showed small and medium-sized enterprises particularly hard hit. Chinese statistics are influenced to an uncertain degree in January and February by Chinese new year, which results in widespread factory closures. This year, as in 2017, the holiday fell in February.
America Has High Expectations for India. Can New Delhi Deliver? -- India is a big deal in Washington these days. The old stereotype of a desperately poor, frustratingly stubborn India has been replaced by that of a shiny, IT-savvy global power on the move. A wave of think tank reports, books, and op-eds identify India as a key component of U.S. grand strategy. Secretary of State Rex Tillerson and the National Security Strategy herald an important Indian role in containing China. India is part of “the Quad” of democracies worried about the rise of China, along with Japan, the US, and Australia. President Donald Trump has even encouraged a greater Indian role in Afghanistan. Two prominent scholars of Indian security recently argued that “India has emerged as a central partner in U.S. efforts to balance rising Chinese power in the Indian Ocean/Asia-Pacific region.” India is a ray of optimism about America’s ability to sustain its position in Asia. American administrations have been strongly pro-India since 2000, but the rise of China has heightened the urgency of the threats the United States faces in the region. Closer ties with India are seen by many as a key component of, in Ashley Tellis’ words, “protecting American hegemony” by keeping China out of the Indian Ocean, occupying its conventional forces, supporting American balancing efforts in Southeast Asia, and underpinning the broader American-led economic and political order in Asia. This strategic bet on India — providing diplomatic support and offering valuable deals in exchange for closer future ties — makes long-term sense and is worth continuing. But Washington should not talk itself into excessive optimism about India’s ability to help the United States manage the pressing challenges it faces in Asia in the years to come. India is a hard-pressed power, facing deep domestic challenges and tightly constrained by powerful adversaries on its borders. There are real limits to what it can deliver, yet these often seem better understood in Delhi than in D.C. American policymakers and analysts need to keep their expectations for India limited and realistic to avoid unpleasant surprises.
The Modi Government Is Hiding Information About Black Money Inside a Black Hole -- During his reply on the motion of thanks to the address of the president of India in the Lok Sabha on February 7, 2018, Prime Minister Narendra Modi compared his government’s efforts to curb corruption and flush out black money with the Swachh Bharat Abhiyan – the nation-wide mission launched to clean up cities, towns, villages and roads, build community toilets and end the practice of open defecation. He drew attention once again to his government’s emphasis on ‘transparency in governance’.But despite the clear signals from the topmost level of the government, key departments and agencies are failing to abide by this important principle.The Ministry of Finance and one national public finance institute under its control have both refused to reveal research reports on black money in the domestic sector under The Right to Information Act, 2005 (RTI Act).More interestingly, the special investigation team (SIT) on black money has claimed that it does not have a copy of the study reports on the nature and volume of black money in India prepared by at least three academic institutions. Neither the finance ministry nor the National Institute of Public Finance and Policy (NIPFP), which also responded to the same information request, are on the same page as to why this report cannot be made public. While the ministry is claiming parliamentary privilege over these reports, NIPFP is taking refuge under a confidentiality agreement it signed with the finance ministry.
Aadhaar: In the world’s biggest biometric ID experiment, many have fallen through the gaps – We look at some of the people who have been most affected by the introduction of Aadhaar, an identity system that is as large and diverse as India itself. It’s so vast in scope and ambition that, inevitably, there have been cracks that people have fallen through.When you’re poor, proving who you are can be a tense and frustrating process. This has always been true, but with Aadhaar, that process has become an inescapable part of life. If you’re a migrant trying to earn a living selling goods on the roadside, you’re asked to prove who you are before you can set up shop; if you’re disabled, you need to prove your disability to collect benefits. And for children who want to go to school – or their parents, who want their children to have a good education, to secure their future – it might seem like proving identity shouldn’t be more important than that right to learn. Unfortunately, it isn’t. In the age of digital identity systems like Aadhaar, even learning isn’t as easy to access as it once was. Padmaparna Ghosh speaks to parents, teachers, and social workers trying to get children the education that India deems a fundamental right. How do you prove who you are – even if all you want is your right to learn?
South Africa to cut diplomatic ties with Israel – The South African government is intending to cut diplomatic ties with Israel in protest of its treatment of the Palestinian people, the country’s Science and Technology Minister Naledi Pandor announced yesterday.Pandor informed parliamentarians of the government’s resolution during a ten-hour joint debate on South African President Cyril Ramaphosa’s State of the Nation Address (SONA) that he delivered last week.“The majority party has agreed, that government must cut diplomatic ties with Israel, given the absence of genuine initiatives by Israel to secure lasting peace and a viable two-state solution that includes full freedom and democracy for the Palestinian people,” she said.The comments were made in response to opposition leader Kenneth Meshoe, who had argued that it was disappointing that national and provincial authorities in South Africa had refused help from Israeli companies to address the country’s current water crisis. However, the proposal was applauded by parliamentarians and Pandor, who is expected to be appointed vice president in Ramaphosa’s new Cabinet, was given a standing ovation as she left the podium. The government’s decision was further confirmed on the South African Parliament’s official Twitter account. South Africa has been a staunch ally of the Palestinian struggle and regularly spoken out against the atrocities committed by the Israeli government. Last month, the South African representative to the UN told the Human Rights Council that Israel is the “only state in the world that can be described as an apartheid state”, just days after the ruling African National Congress (ANC) party called for government ministers to strengthen the country’s visa restrictions with Israel.
"Time For Reconciliation Is Over" - South Africa Votes To Confiscate White-Owned Land - Just as we warned was likely a week ago, the Parliament of South Africa voted this week in favor of a motion allowing lawmakers to amend the constitution to allow for the confiscation of white-owned farmland without any form of monetary compensation. The motion, brought by the Economic Freedom Fighter (EFF) leader Julius Malema (radical Marxist), was overwhelming adopted in parliament with a vote of 241 in support, and 83 against.According to News24.com, an English-language South African online news publication, there were only a few parties that were against the motion including the Democratic Alliance, Freedom Front Plus, Cope and the ACDP. The proposal will be sent to the Constitutional Review Committee which must report back to Parliament by late August. Confiscation of white-owned farmland was a major topic in the new president Cyril Ramaphosa’s platform, after he became the fifth President of South Africa since the 1994 democratic transition, in mid-February.“The time for reconciliation is over. Now is the time for justice,” Malema told the parliament. “We must ensure that we restore the dignity of our people without compensating the criminals who stole our land.”With over 50 million citizens in South Africa, Bloomberg indicates that a 2017 government report shows white people own 73 percent of farmland. White farmers own almost three-quarters of South Africa’s agricultural land, even after 23 years of government efforts to redistribute land to the black majority, City Press reported, citing a land audit by farm lobbying group Agri SA. Some 73.3 percent of agricultural land is owned by whites, down from 85.1 percent in 1994, the year South Africa first held democratic elections, the newspaper reported. Black ownership has increased markedly in some of the country’s most fertile provinces. Black farmers own 74 percent of the land in KwaZulu-Natal and 52 percent in Limpopo, City Press reported, citing the report to be released this week. Total acreage available for farming fell 4 percent over the 23 years reviewed, as mining and expanding municipalities took over agricultural land, according to economist Johann Bornman, who conducted the audit for the lobbying group.Last week, South Africa’s new president, Cyril Ramaphosa, said that he would return the lands owned by the white farmers since the mid-1600s to the black citizens of the country. He added the country’s agriculture (see below) must be preserved.
Venezuela says US sanctions hampering debt renegotiation (Reuters) - Venezuela’s foreign minister said on Tuesday that U.S. sanctions against the ailing oil nation are making foreign debt renegotiation more difficult and causing “panic” at global banks. Venezuela is undergoing a major economic crisis, with millions suffering food and medicine shortages, and President Nicolas Maduro’s socialist government is late in paying interest of some $1.9 billion on its debt. The U.S. government imposed financial sanctions on Venezuela in August, prohibiting dealing in new debt from the Venezuelan government or state oil company PDVSA, in an effort to halt financing that Washington said fuels a “dictatorship.” Venezuela has repeatedly said Washington is trying to force a default. “The renegotiation of external debt is underway, but it has been made more difficult by U.S. sanctions,” foreign minister Jorge Arreaza told reporters in Geneva. “It’s incredible how global banks have reacted with panic. If a bank somewhere in the world works with Venezuela, they feel they are going to be sanctioned.” According to Arreaza, global banks have opted to close accounts belonging to the government, business people and embassies. He added that some U.S. companies were unable to pay for Venezuelan oil. Earlier this month, U.S. Secretary of State Rex Tillerson raised the specter of sanctions on Venezuela’s oil industry. The OPEC nation obtains some 95 percent of its export revenue from oil, though production is down significantly in recent months.
Humanitarian aid system is a continuation of the colonial project - Al Jazeera - The global humanitarian community is again in confusion. The Oxfam sexual misconduct scandal has made headlines. Policymakers and humanitarian leaders everywhere talk about the need for change. Over the last 30 years or so, there have been many scandals, and much demand for reform. However, business just continues as usual. According to Reuters, during the last year the Save the Children Fund claimed they fired 16 staff members over reports of sexual harassment and Oxfam reported it dismissed 22 of its staff. There are similar reports by various humanitarian agencies. What is terrifying is that the same person who quit his role with Oxfam 2011 after being accused of using sex workers while working in Haiti, was engaging in similar acts in 2006 during his time working for the charity in Chad. Oxfam knew about this but went ahead and sent this person to work in Haiti anyway.Anyone connected to the humanitarian world knows about the scandals of sexual misconduct, corruption, discrimination, racism and many other issues in the system. In many ways, the Oxfam sexual misconduct scandal is just a symptom of the core illnesses that the humanitarian system is suffering from. Of course, the system is complex, and it is not easy to change. It is one of the very few careers one could enter without any formal qualifications. A colleague from Afghanistan once told me international humanitarian workers comprise three categories: missionaries (those who come to help and change the affected communities), misfits (those who do not fit in their own societies, so they become humanitarian workers) and mercenaries (those who come for the money). Of course, there are honest, committed and genuine humanitarian workers, however, they are a minority and most of the time leave the field in frustration.
Erdogan Sparks Outrage After Telling Sobbing Girl "If You Are Martyred We Will Honor You" - In what has been slammed as a bizarre act of propaganda, Turkey's president Recep Tayyip Erdogan sparked online outrage when during a public address urging the nation to prepare for mobilization, he invited a small girl in military uniform onstage and promised the sobbing child she would receive state honors if she is killed. While addressing a provincial congress of the ruling AKP party, the Turkish leader used the occasion to whip up public support for the ongoing military operation targeting Kurdish militias in Syria, and remind those who have completed their service but still had “active mobilization orders” to be ready to be recruited again if the situation requires. As he was speaking, a young girl who was present at the congress and was dressed in military uniform complete with a maroon beret worn by the Turkish Special Operations Forces, caught Erdogan’s attention, according to TV footage of the speech. He invited the young child to come to the stage next to him ,BBC reported. She did so reluctantly, at which point she burst out sobbing. "Look what you see here! Girl, what are you doing here? We have our maroon berets here, but maroon berets never cry,” the Turkish president told the weeping child quoted by the Daily Mail. "She has a Turkish flag in her pocket too,” Erdogan then told the audience, embracing the clearly uncomfortable girl. "If she is martyred, they will lay a flag on her, God willing," he then added in a bizarre twist: “She is ready for everything, isn’t she?” He made the comment on live television, in front of cheering supporters who urged him to carry on with the military offensive against Kurdish fighters in Syria's northern Afrin The confused girl only answered: “Yes.” Erdogan then planted a kiss on the girl’s face and let her go.
Putin reveals new Russian missile that can ‘reach any point in the world’ - CNBC - Russian President Vladimir Putin revealed a slew of new defense systems Thursday, including a new prototype missile that "can reach any point in the world" and a supersonic weapon that cannot be tracked by anti-missile systems.Delivering his annual State of the Union address, Putin announced increased capabilities in the defense sector, saying that Russia "should not forget about security," following a speech that had initially focused on domestic issues. Putin also said that, if attacked, Russia was ready to use nuclear weapons."We see increased opportunities with the armed forces," he said. "We've done a lot to strengthen our army and navy and they are equipped with modern weaponry."He showed the audience a video of how one of the prototype missiles would work, explaining that the new system would have no limitation on range. "It can attack any target, through the North or South Pole, it is a powerful weapon and no missile defense system will be able to withstand," the president said. Telling the audience that more was to come, Putin also said Russia had another weapon that was a "small nuclear power energy system" — a nuclear warhead — that can be deployed on a cruise missile system that can also, he claimed, "avoid all interceptors."He said the country had tested this cruise missile with the "nuclear power energy unit" in 2017 and it was successful. Russia would start manufacturing this now, he added."This is unheard of and nobody else has such a system in the world. They might create something like this in the future but by then our guys will have created something new as well."
Putin: "Russia's New Hypersonic Missile Can Rip US Air Defenses Apart" -- Russian President Vladimir Putin used his state-of-the-nation speech on Thursday to deliver a stern warning to the United States that Russia possesses hypersonic weapons that can render NATO’s U.S.-led missile defense system completely “useless.” “Efforts to contain Russia have failed, face it,” Putin declared in a two-hour speech at his annual state of the nation address in Moscow, Russia, which included computer simulations of new arms including hypersonic systems, intercontinental missiles, and underwater drones. Putin said the creation of hypersonic systems has made NATO’s U.S.-led missile defense shields in Europe utterly "useless," and means the era of the Western world attempting to prevent Russia’s expansion is over. “I want to tell all those who have fueled the arms race over the last 15 years, sought to win unilateral advantages over Russia, introduced unlawful sanctions aimed to contain our country’s development: all what you wanted to impede with your policies have already happened,” he said. Putin confirmed our thoughts about the era of hypersonic is now, and an arms race among major superpowers is well underway; he said, all countries with a high level of scientific potential “are actively developing hypersonic weapons.” Here is the bombshell: “Russia already possesses such weapons,” the president announced. He warned that the world’s leading armies (China, Russia, and the United States) are in a hypersonic arms race. The Russian possession of hypersonic weapons has spurred a modern, compact and hi-tech revolution of Armed Forces, Putin added.
Putin’s stunning revelations about new Russian weapons systems - If you have no read it yet, please check out Putin’s full address to the Federal Assembly. What stunned me, and many other, are the new weapon systems Putin has announced. First, he confirmed that the Sarmat ICBM would replace the old but already formiable SS-18 “Satan”. Then he turned to new weapon systems:
- A nuclear powered cruise missile with basically unlimited range
- A nuclear powered unmanned submersible with intercontinental range, very high speed, silent propulsion and capable of moving a great depths
- A Mach 10 hypersonic missile with a 2’000 kilometer range (named: Kinzhal)
- A new strategic missile capable of Mach 20 velocities (named: Avangard)
All of these systems can be armed with conventional or nuclear warheads. Just think of the implications! Not only does that mean that the entire ABM effort of the USA is now void and useless, but also that from now US aircraft carrier battle groups can only be used against small, defenseless, nations ! Right now I simply don’t have the time to write a full analysis of the stunning, truly tectonic, implications of this announcement, so I will turn to my naval warfare expert friend Andrei Martyanov and repost his initial reaction to just one of these systems:
Bill Black: Once a Poster Child for Austerity, Latvia Becomes a Hotbed of Corruption - naked capitalism - In this Real News Network interview, white-collar criminologist and associate professor of economics and law at the University of Missouri, Kansas City, Bill Black discusses how Latvia has emerged as a nest of banking corruption.
Brussels’ move on digital taxes raises transatlantic stakes - Tech giants like Google and Facebook may soon face a new tax in the EU that could deliver a major hit to their bottom line — as well as a radical shift in the way their tax bill is calculated.According to a 12-page draft report obtained by POLITICO Pro, the European Commission wants to tax digital companies’ gross revenues at rates between 1 and 5 percent, based on where their users are located and how much advertising revenue they bring in.If implemented, this move is bound to further ratchet up tensions between Europe and the United States.From its aggressive enforcement of antitrust regulations, most prominently in recent years against Google, to its crackdown on Apple‘s use of Ireland as a tax haven, to its stringent approach on online privacy, Brussels is pushing to set the rules for the global digital economy — often to the dismay of Silicon Valley and Washington. The Commission proposal, as first reported by Reuters and one of several options being floated, stems from a French-led effort to get more money from digital firms.President Emmanuel Macron last year won the backing of Germany and more than a dozen other EU countries, but fell short of winning unanimous backing after pushback from the United States and low-tax EU countries including Ireland.At a time when EU leaders are up in arms over U.S. President Donald Trump’s tax reform because it gives U.S. companies an incentive to repatriate overseas earnings, a European tax on digital companies’ revenue would offer a way of hitting back. Most of the firms concerned by the tax are Silicon Valley-based, and are sending billions of dollars in overseas-held cash back to the United States.
Denmark’s prime minister casts doubts on Margrethe Vestager’s EU career - Denmark's prime minister does not necessarily support the appointment of Margrethe Vestager for five more years as Denmark's EU commissioner. She would like to – and the majority of Danish voters, including the voters of Venstre, Denmark's liberal party – would prefer that Margrethe Vestager (member of the Danish Social Liberal Party) could keep her position in Bruxelles, when a new EU commissioner is to be appointed next year. The Danish prime minister, though, is not in favour. “The government has not yet discussed, who is going to be our candidate for commissioner. We will get back to that at a later point,” prime minister Lars Løkke Rasmussen said in an interview with Altinget. “If you look back in history, there seems to be a tradition that the parliamentary majority appoints a commissioner. I don’t know, if the Social Liberal Party is planning to become part of the majority behind the government,” prime minister Lars Løkke Rasmussen said. That is a clear signal that the next Danish commissioner will be a member of one of the three parties in the government coalition. No matter how popular Margrethe Vestager might be in Brussels and among the Danes. Two-thirds of Danes want Margethe Vestager to be reappointed A new opinion poll conducted by Norstat for Altinget shows that Liberals as well as Social Democrats like the idea of keeping Margrethe Vestager as commissioner after 2019. According to the opinion poll, 67 percent of the 1,000 Danish respondents support Margrethe Vestager and would like her to stay in the position as commissioner. As many as 79 percent of the social democratic and liberal voters would like to keep Margrethe Vestager as commissioner after 2019. The appointment will take place in the autumn of 2019.
Ultra Wealthy Are Being Lured to Italy by Low Tax Rates --Millionaires from Russia to Norway and the U.S. are seeking to take advantage of Italy’s low tax rates for the super-rich. In an effort to attract capital, Italy unveiled a measure last year allowing ultra-wealthy individuals taking up residency to pay a flat tax of 100,000 euros ($123,000) a year, regardless of their income. Around 150 people, including some with wealth of above the “hundreds of millions,” inquired about the measure, Fabrizio Pagani, head of the office of the Minister of Economy and Finance said in an interview in London. “We have people from U.K., Switzerland, Russia, from U.S., the usual suspects,” Pagani said. “But we have also Norwegians and some Dutch and not necessarily in finance. Some of those people are art collectors. We are talking about very, very rich people.” Italy, which is struggling to accelerate the recovery after years of recession, is racing to attract wealthy foreigners to boost the economy with investments, consumption and fresh capital. Countries such as Portugal have already been successful in luring high-net-worth individuals, offering tax benefits in a effort to shore up public finances. Italy is facing political uncertainty at the election on March 4 where no clear winner is expected to emerge. Under the tax measure, individuals are expected to move their residencies to Italy. Pagani said Milan, Venice and the glamorous area around the lakes at the foot of the Alps may become even wealthier. The number expected to take up the offer will grow “exponentially” as was the case in Portugal, he said.
Berlusconi Hopes to Play Kingmaker in Italian Election - A disillusioned electorate, multi-billion-euro campaign promises and the return of Silvio Berlusconi: Italy is muddling its way through a strange election campaign with an uncertain outcome. The consequences for Europe could be significant.The jobless rate in the European Union is 7.3 percent, while it is 10.8 percent in Italy. But Berlusconi radiated confidence. He had, after all, just repeated one of his greatest coups: Seventeen years earlier, at that same desk, in the presence of that same anchor, he had introduced his grab-bag of promises called "Contract with the Italians." That grotesque televised deal with the people contributed significantly to Berlusconi's return to the office of prime minister. It's as if time has stood still in Italy. Just recently, it seemed inconceivable that a man who served as prime minister four times and who - in addition to turning his country into the butt of myriad jokes - almost bankrupted Italy would once again be speaking of his political future at the ripe old age of 82. In 2013, Berlusconi was found guilty of tax evasion and had to resort to legal sleight of hand to narrowly avoid additional convictions for abuse of office and for paying for sex with an underage prostitute. He also isn't allowed to run for office himself on March 4; due to his conviction, he is banned from seeking public office until 2019. Despite all that, however, the center-right alliance Berlusconi leads - which includes, in addition to his own Forza Italia party, the far-right Lega Nord and the further-right Fratelli d'Italia - has good chances of emerging victorious from the approaching election. If the right doesn't end up with a majority, political gridlock could be the result, with three blocks of roughly equal strength standing face-to-face. March 4 isn't just a fateful election for the future of Italy. The future of the EU is also dependent on which direction the eurozone's third-largest economy chooses to take. And there is cause for concern: A trip through Italy this winter, including conversations with right-wing agitators in Ventimiglia and evangelists for internet democracy in the deep south, exposes a significant level of rage among the electorate. And resignation.
Italy's 5-Star rallies voters as rivals fret (Reuters) - Italy’s 5-Star Movement told roaring supporters it was close to winning a looming election at the end of campaigning on Friday as its main rivals worried about the anti-establishment party’s popularity. Pollsters predict Sunday’s parliamentary election will result in a hung parliament in which former prime minister Silvio Berlusconi’s alliance of center-right groups will be the largest bloc and 5-Star the biggest single party. The ruling center-left Democratic Party (PD) has failed to capitalize on a tentative economic recovery following the worst recession since World War Two, and the coalition it heads could end up in third place. “We are a step away from victory,” 5-Star leader Luigi Di Maio said at a rally in Rome’s Piazza del Popolo, where a crowd waved flags and chanted“honesty”, the group’s buzzword. A blackout on opinion polls was imposed two weeks ago, but parties have carried out their own surveys. Di Maio said he had read one showing the group could manage to form a parliamentary majority - an outcome that public polls have suggested is within reach only of the center-right. Rightist leaders accidentally revealed fears on Thursday that a 5-Star triumph in the south could endanger their chances. “They are doing really well, really well,” Giorgia Meloni, head of Brothers of Italy, told her allies at a joint rally in a private conversation that was picked up by an open microphone. Raffaele Fitto, head of the tiny“We’re With Italy” party, added that support for the PD was“collapsing” in the south. “Oh God,” said Matteo Salvini, leader of the anti-Europe, anti-immigration League, adding he hoped support for the PD remained above 20 percent to help hold off 5-Star. At Friday’s rally, comedian Beppe Grillo, who founded 5-Star in 2009 in protest against a cronyistic political class, acknowledged the more moderate stance the movement has taken under Di Maio, but said it should remember its roots. “Even if we go there and do amazing things, we have to remember our hearts, what drove us, the big speeches, the fighting talk,” he said.
Carles Puigdemont quits bid for Catalan presidency - CNN - Catalonia's former separatist leader, Carles Puigdemont, has withdrawn his candidacy for president of the Spanish region after months of political deadlock with Madrid. Puigdemont was the only candidate put forward by Catalonia's parliament in Barcelona and lawmakers were expected to vote him in for another term as president. But Puigdemont has been unable to overcome Madrid, which continues to seek the arrest of the separatist over his aggressive push to break Catalonia away from Spain. The independence drive plunged the country into its worst political crisis in decades.
Exclusive: Puigdemont vows to lead Catalan government in exile - The fugitive Catalan leader, Carles Puigdemont, has suspended his attempts to return to office but intends to preside over a government in exile and carry on his drive for independence from the safety of Belgium.Speaking to the Guardian a day after he announced he was stepping back from the presidency and anointing a jailed MP as his successor, Puigdemont said he would use a new “Council of the Republic” to coordinate and further the secessionist cause.“It’s like a government in exile,” he said. “It’s not in the shadows. We prefer to work in the free space without threats or fears. It must act without the problems of Spanish justice or police. It’s a cabinet or government that must represent … our political reality.“It will represent the diversity [of Catalonia]. I will invite all the other parties to take part. The council must have representation from local communities and civic society ... We will move from the old system of government for the people to a new system which is [government] with the people.” Puigdemont said he would serve as president of the council, adding that the separatist parties’ victory in last December’s snap election gave him the necessary legitimacy.On Thursday evening, Puigdemont said he had decided not to continue his bid for the regional presidency and suggested that Jordi Sànchez, an MP in his Together for Catalonia party, should be the candidate.However, Sànchez, the former head of the influential pro-independence Catalan National Assembly, is in a Spanish prison as part of an investigation into alleged sedition and rebellion in the run-up to last October’s unilateral independence referendum.Puigdemont admitted he had doubts as to whether Sànchez would be allowed out of prison to attend the investiture debate, but said the push for independence would continue.The deposed president also launched a blistering attack on King Felipe, accusing him of ignoring the constitution – something of which Puigdemont himself stands accused – and the Catalan people. He said the king, who has consistently supported the Spanish government, “has acted outside the Spanish constitution, outside the role of referee” which he should have adopted as monarch.
Angela Merkel names CDU members of possible German Cabinet - Deutsche Welle - In her bid to form a new government, German Chancellor Angela Merkel has tapped a younger rival, some old allies and a cast of moderates for what would be her fourth Cabinet. Could one of them be a potential successor? German Chancellor Angela Merkel on Sunday evening announced the six members of her conservative Christian Democratic Union (CDU) whom she would like to serve in her next Cabinet — if her grand coalition with the Social Democrats (SPD) is approved. Merkel said she had tried to strike a balance between experience and youthful energy in making her picks."I think we've got an effective team that's equal to the demands of the future," the 63-year-old Merkel said, adding that all of her proposed ministers are far younger than she is. But a youth movement probably wasn't Merkel's main concern in putting together a new team. Of the six names on her list, the one that stands out most is Jens Spahn, the chancellor's nominee for health minister. The 37-year-old not only represents a new political generation, but was also heavily critical of Merkel's welcoming policy toward refugees, and is rumored to have even met with leaders of the CDU's allied Bavarian party, the Christian Social Union (CSU), and the center-right Free Democrats for informal brainstorming sessions about a post-Merkel political order. Spahn is something of an oddball in the Merkel-led CDU. He is far more conservative than the chancellor. His nomination drew immediate criticism from the opposition Left party and Greens, who say he's far too close to Germany's mighty pharmaceutical industry. Among conservatives under 40, Spahn is seen as having the best chance to lead the party some day, and his nomination is being viewed as a concession by Merkel to the party's youth wing, the Young Union, which hasn't always been happy with her centrist policies. It is the first time that Spahn has been offered a job at the ministerial level, usually seen as a precondition for higher political functions such as party chair or chancellor candidate. At the same time, the head of the Health Ministry is hardly the most glamorous of posts and, as a member of her Cabinet, Spahn won't have many opportunities to criticize the chancellor. Moreover, if a new grand coalition government is formed as expected next month, Spahn could be somewhat isolated as one of its most conservative members.
Vast majority of German voters think SPD is unfit for government -- A new poll has called into question the SPD's ability to govern alongside Chancellor Angela Merkel's conservatives. Nevertheless, SPD voters see a grand coalition deal as the best way forward for their party. Germany's Social Democrats (SPD) were presented with a mixed bag of results in Thursday's DeutschlandTrend poll.While a majority of Germans (57 percent) said they believe the center-left party continues to understand the cares and concerns of the country's citizens, most people don't think the SPD remains united or credible.Worse for the party, however, is that almost 60 percent of voters said they do not think the SPD is fit for government.The poll, which was commissioned by German broadcaster ARD, comes just days before the party announces the result of the ballot vote on whether party members accept the grand coalition dealthe leadership hammered out with Merkel's conservatives last month. By contrast, three-quarters of voters said they thought that Chancellor Angela Merkel's conservative bloc was fit to govern Germany. This faith in the center-right comes despite its supposedly not understanding the concerns of German citizens, according to 55 percent of those surveyed.
German Left Party leader backs new attack on immigrants --On Saturday, Left Party parliamentary leader Sahra Wagenknecht defended the decision of Essen Tafel to limit its food handouts to Germans. This puts her in the front ranks of the anti-refugee campaign that blames the social crisis in Germany on impoverished foreigners.The Essen branch of the volunteer aid organization Tafel, which collects leftover food and distributes it to the needy, announced in December that it would register only German citizens at its issuing offices. The decision was implemented on January 10.The chairman of Essen Tafel, Jörg Sartor, justified the discriminatory decision on openly xenophobic grounds. German pensioners were avoiding coming to get the handouts because foreigners had not behaved properly, he claimed. There was a “taker gene” among the Syrians and Russian Germans, Sartor told newsweekly Der Spiegel. Some would jostle and push, he said, and they lacked “a culture of queuing.”While other branches of the Tafel organisation and representatives of many other relief organizations were outraged by the discrimination in Essen, a nasty campaign was started by the media and political circles to defend the preferential treatment being shown to those in need who have a German passport. The Left Party has now taken the lead in this xenophobic campaign. In an interview with broadcaster Deutschlandfunk, Wagenknecht described the criticism of the decision in Essen, much of which had come from Tafel members, as a “moralized debate” that was “unduly hypocritical.” Although no one should starve, she said, certain groups were in a special position. “I would prefer,” she declared, “that people who live in Germany, some of whom have been living here for a long time, often having paid contributions, who have also worked here, are not brought into such a competitive situation.”
Merkel Finally Acknowledges German "No-Go" Zones, Vows to Eliminate - Following approval from Germany's conservatives to cooperate with the Social Democrats (SPD) on several political impasses, German Chancellor Angela Merkel sat down with Germany's RTL Aktuell where she discussed a number of policy positions - including an acknowledgement of Germany's growing "no-go" zones, and the need to do something about them.Amid a spike in crime attributed to refugees, German officials been slowly acknowledging the negative impact of the flood of migrants taken in after the destabilization of Libya and similar regions - even going so far as to offer thousands of Euros to rejected asylum seekers. The scheme, which the government has dubbed “Your country. Your future. Now!” will run until February next year. Individual migrants can receive up to €1,000 ($1,185) if they voluntarily return home, while families can receive up to €3,000 to do the same. The assistance is meant to help reintegrate rejected asylum seekers in their home countries. -QuartzWhile on the topic of keeping Germany safe, Merkel said "It's always a point to me that internal security is the state's duty, the state has the monopoly of power, the state has to make sure that people have the right to it whenever they meet and move in a public space." (translated)Merkel then discussed Germany's "zero tolerance" policy of enforcement: "That means, for example, that there are no no-go areas, that there can be no rooms where no one dares to go, and there are such spaces, and you have to call that by name and you have to do something about it. And I think that Thomas de Maizière did a very good job as Minister of the Interior, but we also said now that we want a model police law, we can not stand by the different security standards in different states and that needs to be as unified as possible"
HNA via GAR? The mystery of Deutsche Bank’s largest shareholder - Who is Deutsche Bank’s largest shareholder? This should not be a difficult question and, at first, the answer seems straightforward: China’s HNA Group. The airline-to-finance conglomerate built up a 9.9 per cent stake then worth nearly $4bn in Deutsche last year, just shy of the 10 per cent threshold above which stake purchases must be approved by Germany’s financial watchdog. While this has fallen to 8.8 per cent in recent weeks, HNA should still be the largest single shareholder on paper. But, anyone with even a cursory interest in the deeply unusual Chinese company will realise things are a little bit more complicated than that. HNA is one of China’s largest private conglomerates and over the past few years it has been on a $40bn buying spree, snapping up businesses around the world, as well as building minority stakes in large listed companies like US hotel chain Hilton. This debt-fueled rise from a small regional Chinese airline to one of the country’s most prominent overseas deal-makers has left many observers asking several questions about a group whose true ownership is shrouded in mystery. Not least among them: what actually is HNA? The best capsule explanation we’ve seen of HNA’s complicated group structure comes from an investor presentation for a bond the group tried to issue in 2012. HNA Group is essentially part of an interconnected web of Chinese investment groups, both public and private. To outsiders this seems opaque and confusing, but investors should take comfort from close government relationships at many levels both above and within the HNA umbrella.
Four Ex-Deutsche Bank Traders Evade U.K. Euribor Case - Four traders charged in the U.K. for rigging interest-rate benchmarks at Deutsche Bank AG will escape prosecution after German officials refused requests to send them to London to face trial. Frankfurt prosecutors decided not to turn the men over almost two years after the U.K.’s Serious Fraud Office first sought extradition. The final decision on the former traders was made Wednesday after a court issued rulings that the alleged crimes had taken place too long ago to be tried, said Alexander Badle, a spokesman for the Frankfurt General Prosecutor. The decision means that only six of 11 traders from Deutsche Bank, Barclays Plc and Societe Generale SA charged with rigging Euribor will go on trial in April. A French court last year decided not to extradite the SocGen trader caught up in the case. The SFO charged the group in November 2015 with conspiring to “procure or make submissions” to manipulate the euro interbank offered rate, or Euribor, between 2005 and 2009. The scheme was investigated as part of a wider probe into benchmark rates, the most famous of which was Libor, a counterpart of Euribor. The SFO obtained European arrest warrants in March 2016 against five of the men who didn’t appear at a London court to face the charges. The German prosecutors made a final decision on three of the traders this week, but had previously ruled out extraditing the fourth man last year. The SFO declined to comment Friday. The four men, Andreas H., Joerg V., Ardalan G., and Kai-Uwe K., can’t be fully identified under German law. A lawyer for Joerg V. confirmed the decision and declined to comment further.
Brexit: Tory and Labour MPs sound alarm over moves to block Lords from changing Theresa May’s EU withdrawal plans - Rebel Tory and Labour MPs have raised fears the Government is trying to strip the House of Lords of its right to alter a critical part of Theresa May’s Brexit plans.MPs from both parties sounded the alarm over an apparent push to ensure the Lords is blocked from amending the Prime Minister’s approach to post-Brexit customs arrangements.They are planning multiple representations to Commons SpeakerJohn Bercow in a bid to prevent the move, which one MP branded as an “attempt to dodge scrutiny”. It opens up a new front in the battle over Ms May’s approach to the EU’s customs union, with rebel Tory MPs already threatening to force changes to her legislation in the Commons.Ms May has more chance of fighting off their bid in the lower chamber as she enjoys a slim majority there, but Tories in the Lords are heavily outnumbered, and ministers fear attempts to overturn Ms May’s plans could damage her ability to deliver them.The new row focusses on what was announced in the Queen’s Speech last year as the “Customs Bill”, but when it was eventually presented to the Commons it was instead named the The draft also carried a preamble showing the Government wants the legislation to carry “supply bill” status, which according to parliamentary privilege would make it harder – but not impossible – for the Lords to change. But it also makes it more probable that it could be designated “money bill” status, normally reserved for taxation and finance bills and something which more comprehensively blocks Lords action.
May’s carnival of indecision over Brexit has cost us dear -- Order the popcorn. The prime minister is scheduled to give another big Brexit speech this week, when the definitive strategy will finally be revealed. Expect another May special: vacuity on vacuity. Twenty months on from the referendum, this has become tedious enough for those of us in the UK. Increasingly we must wonder what damage this purgatory of indecision is doing to our standing on the world stage. The fear grows that even if some marvellous, mutually beneficial deal with the European Union is struck, the harm done to Britain’s reputation will be irreparable. If, in decades to come, we can trace a diminution of our national status back to Brexit, it may not just be the act of leaving that did for us but the manner of it. After the referendum that most romantic of Brexiteers, the MEP Daniel Hannan, said that we should do something “beautiful and bold”, for “the eyes of the world are on us, watching us to see whether we stumble”. Given the past year or so, these words conjure a man smiling broadly as he tapdances towards a banana skin. What have the eyes of the world seen? A country vaingloriously tooting its whistle and going over the top, to chaos and carnage. They saw months of crowing: Liam Fox saying an EU trade deal would be “one of the easiest in human history”; David Davis claiming the cards were “incredibly heavily stacked our way”; Boris Johnson with his infamous “have cake and eat it”. They saw that triumphalism falter in the face of reality: Davis admitting that the complexity of Brexit would make the moon landings look simple; the foreign secretary allegedly telling German diplomats that Brexit is a “mess”; May squandering months of negotiating time on the general election that bit back. And the eyes of the world have seen endless squabbles. Infighting within the party of government, in-infighting within the cabinet, even in-in-infighting within the prime minister’s own head. First she wanted “tariff-free trade with Europe”; more recently she wants a Brexit deal that is “as tariff free as possible”. First she said that those from the EU who arrive in the transition period would not be able to stay permanently; now we hear they will.
Tories seek legal advice on vote after Jeremy Corbyn backs customs union - Conservative MPs have sought legal advice about the prospect of Theresa May losing a parliamentary vote on a post-Brexit customs union as Jeremy Corbyn made clear that it had now the support of Labour, the Guardian understands. The opposition leader attempted to outflank the Conservatives with the business community by promising to place such an arrangement firmly on the table in a speech on Monday that won the cautious backing of industry representatives. Corbyn’s suggestion that Labour would pursue “a new, comprehensive UK-EU customs union” after Brexit was praised by the Confederation of British Industry (CBI) and the Institute of Directors (IoD), as well as the former Conservative chancellor George Osborne. He claimed the Tories had offered Labour an “open goal” by making no customs union a red line and Corbyn had “just kicked the ball into the back of it”. The development places May on a collision course with a number of her remain-supporting backbenchers, whose amendment to the trade bill calling for the government to pursue a customs union will now have the backing of the entire Labour party. The government has already moved to delay the vote until after May’s local election because of fears that it cannot be won. And now, in a sign of further concern about the impact of a defeat, senior Brexit Tory MPs have sought advice on whether the amendment is legally binding to assess whether May could accept it without having to fulfil its demands.
Corbyn’s Brexit Challenge: From the Frying Pan into the Fire? - Yves Smith - But the surface spectacle of Groundhog Day every day, as the Tories refuse to abandon their utterly unworkable Brexit fantasies, has persisted even as more and more energy has been building up in the system. The Ultras issue what has become bi-monthly threats to turf out Theresa May, yet always retreat because they can’t defenestrate her, plus they have no credible leadership candidate. Various members of Government make ridiculous Brexit pronouncements, which EU officials point out, sometimes not bothering to feign politeness, have already been rejected. But the clock keeps ticking. Brexit Day is barely over 13 months away, and the UK is as unclear about what it wants and unable to deal with the consequences as it was the day after the referendum. You’d think that business leaders would be demanding heads over the lack of preparation. So one would think that Jeremy Corbyn opening up the Brexit debate by giving a speech about a customs union rather than a hard Brexit would be a sign that reality is finally dawning in the UK, and that the many parties that would like to avoid a train wreck would jump on the bandwagon. And in one sense, they have. In a historical marriage of convenience, the biggest UK business lobbying group, the Confederation for British Industry, is stumping for Corbyn’s scheme, along with manufacturing group EEF and the technology organization TechUK. So what’s not to like? The wee problem is that the debate opening up does not look like a step towards progress and resolution. It looks instead like another flavor of incomprehension about how the EU and trade regimes work, and yet another set of incoherent and unworkable plans. Nicola Sturgeon nailed it: I welcome any Labour movement in right direction but, tbh, it still sounds very similar to the ‘have cake and eat it’ approach of PM. Why Labour doesn’t just embrace a single market/CU outcome in full is beyond me. https://t.co/pzIK24HIIT — Nicola Sturgeon (@NicolaSturgeon) February 26, 2018 In other words, the system is moving in a chaotic direction. Mind you, some sort of serious change could not be held off much longer. The EU had allowed Theresa May the remarkable face-save of an unworkable fudge on Ireland. The European Council politely (as in cunningly) said in its December statement that the UK would need to reduce its draft document to a proper legally implementable form by the March round of negotiations. As we said back in November, there is no way to square that circle.
Brexit Talks Might Fail: There's Just Not Enough Cake – Mish --We have come to a critical moment in Brexit negotiations. Everyone has a proposal but none of them work. Labour leader Jeremy Corbyn gave a speech in the UK laying out what he wants Brexit to look like. It is in contrast to what UK prime minister Theresa May wants.However, neither May's proposal nor Corbyn's proposal is acceptable to the EU. Corbyn is playing politics, and it may well lead to the collapse of the UK government, but it won't stop Brexit.I’m starting to think that these talks may fail. The U.K. has again offered close co-operation in good faith. Guy Verhofstadt responds by telling MEPs that Northern Ireland must have identical regulations to the Republic. He must know that no British government could accept that. pic.twitter.com/MEUL0MWLQY— Daniel Hannan (@DanielJHannan) February 27, 2018That's the short version. Eurointelligence provides the longer version.Jeremy Corbyn's speech was a bit of a downer in our view. He gave us Labour's version of having your cake and eating it: a bespoke customs union of the kind the EU is unlikely to agree to. He accepts partial regulatory alignment, but not membership of the single market. He insists on the UK having a say on future EU trade deals, which will be completely unacceptable to the EU. He reaffirmed yesterday that Labour will not be seeking a second referendum, or challenging Brexit in other ways. In fact, this should be the main headline. By coming out in favour of the customs union - however flawed it may be - Labour has closed the door on Brexit revocation. We very much liked Laura Kuenssberg's philosophical observation:"...if the EU says we can't have a say in a customs union, and Mr Corbyn says he wouldn't join a union if the UK wasn't given a say, what happens then? Nothing about what outwardly seems a softer Brexit is guaranteed. If the promise is an impossible one, is it really a promise at all?"We have heard a troubling comment on Sky News last night, which suggested that Corbyn's shift in position was due mostly to the local elections in May. Labour is hoping to win a number of outer London boroughs which had strong Remain majorities at the referendum.Corbyn's problem is essentially the same as Theresa May's: intermediate options work in British politics only, but not for the EU. This is why we have argued that the UK's choice is rather stark: it is a choice between a trading relationship based on WTO rules (either with or without an Article 50 agreement), or a customs union with full regulatory alignment in respect of the products that are traded and a complete abdication of external trade policy.
Barnier: open-ended Brexit transition ‘not possible’ - The EU chief Brexit negotiator Michel Barnier warned that the transition deal with the UK has not been reached yet as the two sides have "quite a lot of points of disagreements". Barner's warning hints at escalating disagreements between the EU and UK over the transition period, which British prime minister Theresa May wanted to secure by the EU summit at the end of March. However, Barnier pointed out that key disagreements remain, including the duration of the transition period, citizens' rights, and full respect of EU law. The French politician updated EU countries' ministers on Tuesday (27 February) in Brussels on the state of play of the talks. He said the UK wants an open-ended transition period, "which is not possible". The EU proposed a 21-month period after Brexit, ending on 31 December 2020 to coincide with the end of the EU's budget cycle. UK officials said they wanted a time-limited transition period, but have so far failed to come up with a concrete proposal on how long it should be. May had hoped for a flexible solution. Barnier reiterated that the UK will not be able to pick and chose from old or new EU legislation and will have to respect all of it. "Everybody is going to apply with the same rules, we cannot accept the risk of regulatory divergence during transition," Barnier said. Barnier also said the same rules should apply to EU citizens arriving to the UK for work before and during the transition period. The UK wants to end freedom of movement on Brexit day, as immigration was a key motivation behind the referendum victory in 2016. Barnier argued as EU rules fully apply during the transition period, free movement of people will also have to be respected. "In the light of these we have not reached transition yet, we are ready to discuss these right away," Barnier said.
Brexit withdrawal text: What it says and what it means - Politico - The European Commission issued a one-sided draft of a formal withdrawal agreement with the United Kingdom Wednesday, saying it hoped to accelerate the pace of negotiations. The 118-page document includes 168 articles. Text highlighted in gray reflects points that the EU says it has already agreed with the U.K. during Phase 1 of the talks, while the plain text reflects the EU’s preferred outcomes. None of it should come as any surprise to London, the bloc’s chief negotiator, Michel Barnier, said.But in fact, the highlighted text reflects the EU’s unilateral interpretation of what it believes it agreed with the U.K. — a reality evidenced by U.K. Prime Minister Theresa May’s swift dismissal of it as unacceptable. While May was referring specifically to provisions on Ireland, in fact there is deep disagreement on many points. If Barnier’s goal was to spark some new energy on the U.K. side, toward clinching a joint treaty by October, the result was more along the lines of a shot with a 50,000-volt Taser gun. Here are some of the key provisions in the EU text, interpreted and explained by POLITICO’s Brexit team:
Tories, Trapped by Their Red Lines, Again Blame EU as Clock Runs Down - Yves Smith - What they Tories have wanted to regard as the light at the end of the tunnel is instead a train bearing down on them. One of the reasons for a Brexit post today is that Theresa May is due to give a speech to Parliament today on the Brexit in light of the upcoming March round of negotiations. The EU, in what looks like an effort to force the Government out of its Groundhog stasis, released its draft of a treaty Wednesday. Some observers thought the publication might have been moved up, since some annexes that one would have expected to have been fleshed out a bit were blank. Even though the EU’s chief negotiator, Michel Barnier, denied trying to administer shock therapy to the UK, any bit of reality intruding into the Government’s and press barons’ fiercely maintained bubble would amount to that. And as much as the UK officialdom is in an uproar about some of the proposed terms, most of all over Ireland, the consternation is pathetic, a combination of ignorance and bad faith. From the very outset of Brexit, the only serious documents that have been presented have come from the EU. The best the Government has offered is loftily phrased handwaves. The fact that a major rounds of negotiations is fast approaching is no secret. The UK was tasked in the December Joint Agreement to codify its proposal for Ireland. It has yet to do so. The EU has asked the UK to state what wants in the way of a post-Brexit relationship. The very few ideas it has offered are too sketchy and non-starters. Yet having been told that, the UK keeps acting as if making the same bone-headed requests again will produce different answers. I hope when May speaks Friday, UK and any European readers will give their reactions. If nothing else, Barnier’s Wednesday release, which contained nothing of importance that was not expected or previously agreed, nevertheless makes it hard to May to try to get away with yet more empty reassurances. The hot button for the MPs is that 120 page treaty draft, which is subject to some tweaking before it is approved by the EU27, is that it set forth what the text clearly depicts as a fallback position on Ireland, as in what is proposed to take effect if no other deal is struck. The December Joint Agreement had sketched out three options, and this was one of them: what amounts to an Irish sea border, which would make Northern Ireland subject to EU regulations. Of course, that makes Northern Ireland less than a full-fledged member of the Union, a position that is unacceptable to the DUP and at the same time a very useful precedent for Scotland.
European parliament rejects UK's Brexit transition proposals - The European parliament has issued an embarrassing snub to Theresa May’s concessions over EU migrants, rejecting the UK’s offer in a move that casts fresh doubt on the prospect of reaching an agreement on the transition period by March. In a sudden volte-face on Wednesday, the Home Office slipped out a proposal paper on EU migrants who arrive after March 2019 under which they could secure five-year temporary residence permits, rather than the two-year ones previously proposed by ministers. Despite previously insisting during a trip to China that she wanted to treat EU nationals arriving during the transition period differently from those already in the country, the prime minister appeared to have responded to pressure to backtrack in the hope of sealing an agreement on the terms of the 21-month cushion after Brexit. But at a meeting of the European parliament’s Brexit steering group on Wednesday evening, led by the former Belgian prime minister Guy Verhofstadt, MEPs concluded that the UK had not gone far enough. Verhofstadt said in a statement that the UK’s position was unacceptable to the parliament, which will have a right to veto any withdrawal agreement. The body was unhappy with the UK’s revised proposal, under which EU migrants who come to live and work in Britain during the transition period would still not have the same rights once it ends to bring family to join them as EU nationals already resident in Britain who have secured “settled status”. They would instead have to pass a minimum income threshold test. The announcement will cast doubt on the prospects of reaching an agreement on the transition period by a European council summit at the end of March, as desired by the UK. The EU’s chief negotiator, Michel Barnier, has already warned in recent weeks that that goal is in doubt because of differences between the two sides. Verhofstadt said: “We have taken note of the UK government policy statement and the clarification it provides for EU citizens who will go to the UK during the Brexit transition period and will in principle have the right to settle permanently in the UK.
Theresa May’s Brexit speech gets short shrift from European Union - Speaking at Mansion House, UK Prime Minister Theresa May faced an uphill struggle to portray her Conservative government’s unity of purpose over Brexit. She did so after a politically disastrous week that began with Labour leader Jeremy Corbyn being praised by the main employers’ organisations. Corbyn declared that he would accept existing European Union (EU) trade arrangements in a two-year transition and then seek a modified customs union with the European Union and tariff-free access to the Single European Market. (May, who campaigned for Remain, wants the same thing but cannot accept the customs union because she would be removed as leader by her hard Brexit right-wing.) The week ended with a visit by European Commission President Donald Tusk, amid a mounting crisis over an EU draft transition agreement outlining a likely hard border for Northern Ireland should Britain continue to “cherry pick” which elements of the Single European Market arrangements it would accept. Tusk was scathing of May’s stated goal of “frictionless” trade with the EU and warned that the EC could only advise a customs union in Ireland as an alternative to a hard border. Despite the conciliatory tone of May’s speech, she failed to meet EU demands to flesh out what her government means by “ambitious managed diversion” as the basis for an interim Brexit agreement that is acceptable to her hard-Brexit critics. In response to Corbyn portraying Labour’s vision of Brexit as one “for the many, not the few,” she quoted her own soaring rhetoric on a similarly bogus theme when taking office eighteen months ago. But her references to heading a government “driven not by the interests of the privileged few,” “the powerful” and “the mighty,” would have solicited groans and boos from any but the selected audience she addressed. May reminded her European counterparts of her Munich Security Conference speech on the vital necessity of cooperation on military, policing and state spying. May gave no detail, but her Munich speech threatened the EU by tying security cooperation to a free trade agreement. However, even here she faces significant opposition in ruling circles.
Not time to nitpick on Brexit - Jacob Rees-Mogg - BBC News: Brexiteers will have some concerns with Theresa May's latest Brexit speech but "now is not the time to nitpick", Tory MP Jacob Rees-Mogg has said. Writing in the Daily Telegraph, the prominent Eurosceptic praised the prime minister and urged the EU to respond with "wisdom and not aggression". On Friday, Mrs May warned "no-one will get everything they want" from talks. EU officials are now scrutinising Mrs May's speech ahead of a fresh round of negotiations next week. Health Secretary Jeremy Hunt, told the BBC's Today programme the prime minister had shown in her speech it was possible to have "frictionless trade" with the European Union while leaving the single market and the customs union.Speaking at London's Mansion House, Mrs May set out the UK's hopes for a future EU economic partnership, calling for "pragmatic common sense" in negotiations. Single market access would be "less than it is now", she said, and the UK would have to pay into some EU agencies. But she said she would not threaten to walk out of talks and in a message to the EU added: "Let's get on with it." She said all sides of the argument had to now face "hard facts". Image copyright Getty Images Mr Rees-Mogg praised her "good speech", saying it delivered on the government's promise to take the UK out of the customs union, the single market and the European Court of Justice. "There are inevitably a few small points that will concern Leave campaigners but we must all recognise that everyone will have to give up something to get a deal, so now is not the time to nitpick," he wrote. Mrs May's address was also cautiously welcomed by pro-European Conservatives.
Brexit: rotten at the core - Despite being the usual cliché-ridden production, yesterday's speech from Mrs May contained a surprising amount of what might be described as technical detail on certain aspects of our post-Brexit trade with the EU. That is not to say that it in any way added clarity to the speech. Rather, reinforced the already well-established impression that our prime minister is totally out of her depth, calling for things which she has absolutely no chance of getting. A classic example of this came in the section dealing with goods, where the prime minister laid out a fundamental principle in her negotiating strategy, to whit that "trade at the UK-EU border should be as frictionless as possible". Needless to say, this oft-repeated motherhood and apple-pie aspiration is meaningless without the detail but, once Mrs May starts to add it, we quickly realise that any degree of "frictionless" trade, on the terms she is setting out, is virtually impossible. Sensibly, she tells us that "we don't want to see the introduction of any tariffs or quotas", and I don't see any problems with that. It can be delivered with a basic free trade agreement and it's technically uncomplicated. Where things are less easy though are in the area where goods require some form of prior approval before they can be freely circulated in the Single Market area. Here, Mrs May refers back to David Davis's speech in Vienna and declares that "we must ensure that, as now, products only need to undergo one series of approvals, in one country, to show that they meet the required regulatory standards". However, since we are to leave the Single Market, the only way that is going to happen is if the UK decides to accept products approved to EU standards, submitted to EU approval bodies by enterprises (or their representatives) which are established in the territories of the EU Member States. Under current EU law, there is no way that approvals by UK bodies will be accepted within the EU. In other words, we would have to hand over the entirety of our product approvals to the EU and accept its authority to tell our manufacturers what they can sell.
![[click to enlarge]](http://econintersect.com/images/2018/02/24472217ztemp.png){kind=link}
No comments:
Post a Comment