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

Friday, April 13, 2018

week ending Apr 14

Fed’s QE-Unwind Proceeds Despite Stock Market Sell-Offs - The sixth month of the QE-Unwind ended on March 31, which is reflected in the Fed’s balance sheet, released this week, for the week ending April 4. The QE-Unwind appears to be on automatic pilot, clicking along at the pace that accelerated in January, despite the sporadic stock market sell-offs since early February. During the years of QE, the Fed acquired a total of $3.4 trillion in Treasury securities and mortgage-backed securities. The MBS are backed by mortgages that are guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae. Now the Fed is shedding those securities at a rate that accelerates every quarter until it reaches its maximum pace of up to $50 billion a month in Q4 2018.By the end of the year, this plan would shrink the balances of Treasuries and MBS by up to $420 billion. In 2019, and going forward, up to $600 billion would come off the balance sheet per year, until the Fed deems the balance sheet to be sufficiently “normalized” — or until something big falls apart, whichever comes first.For Q1, the scheduled pace was up to $20 billion a month. So for March, we’re looking for a reduction of $12 billion in Treasuries and $8 billion in MBS. On today’s balance sheet, there are $2,413 billion in Treasuries, down $11 billion from February 28 ($2,424 billion). In total, since the beginning of the QE-Unwind, the balance of Treasuries has dropped by $53 billion, to hit the lowest level since July 16, 2014: The stair-step movement in the chart above is a result of how the Fed sheds securities. It does not sell them but allows them to “roll off” when they mature, which is mid-month and at the end of the month. In March, no Treasuries on the Fed’s balance sheet matured mid-month. But at the end of March, $31 billion matured. So the Fed replaced $19 billion of the maturing Treasuries with new ones directly via its special arrangement with the Treasury Department that cuts out Wall Street. Those $19 billion were “rolled over.” But it did not replace $11 billion of maturing Treasuries. Hence, they “rolled off.” The blue arrow in the chart above shows the March 31 roll-off. The chart below shows the lower highs and lower lows over the past few months. At the low in late October and early November, the Fed held $1,770.5 billion in MBS. This marked the starting point. The low in early March was $1,760. Today’s balance sheet shows $1,754.4 billion.

FOMC Minutes: "Monetary policy eventually would likely gradually move from an accommodative stance to being a neutral or restraining" Still on pace for 3 or 4 rate hikes in 2018.  Some excerpts: From the Fed: Minutes of the Federal Open Market Committee, March 20-21, 2018With regard to the medium-term outlook for monetary policy, all participants saw some further firming of the stance of monetary policy as likely to be warranted. Almost all participants agreed that it remained appropriate to follow a gradual approach to raising the target range for the federal funds rate. Several participants commented that this gradual approach was most likely to be conducive to maintaining strong labor market conditions and returning inflation to 2 percent on a sustained basis without resulting in conditions that would eventually require an abrupt policy tightening. A number of participants indicated that the stronger outlook for economic activity, along with their increased confidence that inflation would return to 2 percent over the medium term, implied that the appropriate path for the federal funds rate over the next few years would likely be slightly steeper than they had previously expected. Participants agreed that the longer-run normal federal funds rate was likely lower than in the past, in part because of secular forces that had put downward pressure on real interest rates. Several participants expressed the judgment that it would likely become appropriate at some point for the Committee to set the federal funds rate above its longer-run normal value for a time. Some participants suggested that, at some point, it might become necessary to revise statement language to acknowledge that, in pursuit of the Committee's statutory mandate and consistent with the median of participants' policy rate projections in the SEP, monetary policy eventually would likely gradually move from an accommodative stance to being a neutral or restraining factor for economic activity. However, participants expressed a range of views on the amount of policy tightening that would likely be required over the medium term to achieve the Committee's goals. Participants agreed that the actual path of the federal funds rate would depend on the economic outlook as informed by incoming data.

 JP Morgan fears Fed ‘policy mistake’ as US yield curve inverts -The US credit markets are flashing a rare warning of economic trouble ahead, signalling that the Federal Reserve risks blundering into another recession without a deft change of course.A blizzard of surprisingly poor data across the world suggests that the Fed’s liquidity squeeze is taking a greater toll than widely assumed, and that the institution’s staff model has so far failed to pick up the danger signs. US jobs growth fizzled to stall-speed levels of 103,000 in March. The worldwide PMI gauge of manufacturing and services has dropped to a 14-month low. The average "Nowcast" tracker of global growth has slid suddenly to a quarterly rate of 3.2pc from 4.1pc as recently as early February.Analysts at JP Morgan say the forward curve for the one-month Overnight Index Swap rate (OIS) – a market proxy for the Fed policy rate – has flattened and "inverted" two years ahead. This is a collective bet by big institutional investors and fund managers that interest rates may be falling by then.It is a market verdict that Fed officials have lost touch with reality in thinking that they can safely raise rates another seven times to 3.5pc by late 2019, as implied by the "dot plot" forecast. It is tantamount to a recession warning.“An inversion at the front end of the US curve is a significant market development, not least because it occurs rather rarely. It is generally perceived as a bad omen for risky markets,” said Nikolaos Panigirtzoglou, JP Morgan’s market strategist.“Markets have started pricing in a Fed policy mistake or have started pricing in end-of-cycle dynamics,” he said. Both possibilities are disturbing. The OIS yield curve has inverted three times over the last two decades. In 1998 it proved to be a false alarm because the Greenspan Fed did a pirouette and flooded the system with liquidity. In 2000 it was a clear precursor of recession. In 2005 it signaled that the US housing boom was already starting to deflate.

Why Yes, the FOMC Would Like Some Inflation Overshoot Now - The Fed claims it has a symmetric two percent inflation target.  Numerous Fed officials have repeated this point as well. They too see the inflation target as a symmetric one, an understanding that allows for an occasional inflation overshoot. Despite these claims, however, the Fed has persistently undershoot its inflation target.  Many observers, including myself, have taken this as evidence that the Fed's two percent target is more of a ceiling and not symmetric. This understanding has been borne out by the FOMC's own Summary of Economic Projections (SEP) forecasts for core PCE..And for the longest time, doing monetary policy right was not overshooting 2 percent inflation in the following year, as seen in the figure below. Keep in mind that at this horizon the Fed should have meaningful influence over inflation. It is hard to square these revealed preferences from the SEP with a symmetric inflation target. This is a point Narayana Kocherlakota has made many times and has been a source of frustration for many Fed watchers. Ryan Avent of The Economist, for example, has been asking the Fed for years to "try overshooting for once."  Well, ask no more. FOMC members in the March FOMC meeting finally decided it was time to give inflation overshooting a try. They did not say so explicitly, but did so implicitly via the SEP. For the first time since 2009, the SEP's central tendency forecast for core PCE inflation in the next year breached 2 percent. Specifically, this central tendency forecast for 2019 ranged from 2.0 to 2.2 percent. While this is not far above 2 percent it is progress and it is an inflation overshoot. 

Key Measures Show Inflation increased in March --  The Cleveland Fed released the median CPI and the trimmed-mean CPI this morning: According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.3% (3.0% annualized rate) in March. The 16% trimmed-mean Consumer Price Index rose 0.1% (1.7% annualized rate) during the month. The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics' (BLS) monthly CPI report.Earlier today, the BLS reported that the seasonally adjusted CPI for all urban consumers fell 0.1% (-0.8% annualized rate) in March. The CPI less food and energy rose 0.2% (2.1% annualized rate) on a seasonally adjusted basis. Note: The Cleveland Fed released the median CPI details for March here.  Motor fuel was down 45% annualized in March.

3Y Auction Prices At Highest Yield Since May 2007 -- While unlike a month ago, when the US Treasury had a record amount of Bills, Notes and Bonds for sale, the selling calendar is not quite as busy, there is still a deluge of paper for sale over the next few days, and after today's Bill auction, moments ago the US Treasury sold $30 billion in 3Y Notes at a yield of 2.450%, the highest since May 2007 (when 3Y issuance was briefly suspended until Nov. 2008), just barely tailing the When Issued by 0.1bps.The internals were in line, with a 2.85 Bid to Cover, below last month's 2.94 and the 6 month auction average of 2.97.Indirect bidders dipped modestly, down from 50.0% to 47.6%, the lowest since last Sept, with Directs taking down 11.6%, above the 6MMA of 9.0% leaving Dealers with 40.9%, the highest award since Sept. 2017. Overall, a mediocre auction to start this week's issuance, with all eyes now on tomorrow's 10Y auction as the Treasury ramps up supply to fund its $1+ trillion deficit.

Goldman: Economic Environment "Becoming Less Pleasant" - A few brief excerpts from a note by Goldman Sachs chief economist Jan Hatzius: Less PleasantThe 103k jobs gain in March was well below expectations. Part of the miss reflects a greater-than-expected payback for prior strength in weather-sensitive sectors such as construction and retail. But other industries were also soft, prior months were revised down on net ... While growth is looking softer, it remains far from soft. ... We view the widening of the LIBOR/OIS spread as a technical and mostly temporary consequence of the international provisions in the new tax law, rather than a sign of banking stress. ... Even if the LIBOR move is technical, one might worry about its direct impact on private-sector borrowing costs and hence aggregate demand. ... Following President Trump’s threat of tariffs on another $100bn of imports from China, the risk of a broader trade confrontation has grown. ... it is harder to rule out continued escalation to a level that does ultimately have a first-order impact on the economy, either directly or (more likely) via tighter financial conditions.  In the end, we think the environment is becoming less pleasant but the baseline outlook for the economy and monetary policy hasn’t really changed much. Growth is a bit weaker, inflation is a bit higher, financial markets are definitely more volatile, and economic imbalances (especially in government finance) are starting to become more visible.

Q1 GDP Forecasts --Here are few Q1 GDP forecast.From Merrill Lynch: We continue to track 1.8% for 1Q GDP. [April 13 estimate].  And from the Altanta Fed: GDPNow The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2018 is 2.0 percent on April 10, down from 2.3 percent on April 5. [April 10 estimate] From the NY Fed Nowcasting Report  The New York Fed Staff Nowcast stands at 2.8% for 2018:Q1 and 2.9% for 2018:Q2. [April 13 estimate] CR Note: It looks like another quarter around 2% or so, although there might still be some residual seasonality in the first quarter.

A debt crisis is coming. But don’t blame entitlements.   By Martin Neil Baily, Jason Furman, Alan B. Krueger, Laura D'Andrea Tyson and Janet L. Yellen -  The U.S. unemployment rate is down to 4.1 percent, and economic growth could well increase in 2018. Consumer and business confidence is high. What could go wrong?A group of distinguished economists from the Hoover Institution, a public-policy think tank at Stanford University, identifies a serious problem. The federal budget deficit is on track to exceed $1 trillion next year and get worse over time. Eventually, ever-rising debt and deficits will cause interest rates to rise, and the portion of tax revenue needed to service the growing debt will take an increasing toll on the ability of government to provide for its citizens and to respond to recessions and emergencies. None of that is in dispute. But the Hoover economists then go wrong by arguing that entitlements are the sole cause of the problem, while the budget-busting tax bill that was passed last year is described as a “good first step.” Entitlement programs support older Americans and those with low incomes or disabilities. Program costs are growing largely because of the aging of the population. This demographic problem is faced by almost all advanced economies and cannot be solved by a vague call to cut “entitlements” — terminology that dehumanizes the value of these programs to millions of Americans. The deficit, of course, reflects the gap between spending and revenue. It is dishonest to single out entitlements for blame. The federal budget was in surplus from 1998 through 2001, but large tax cuts and unfunded wars have been huge contributors to our current deficit problem. The primary reason the deficit in coming years will now be higher than had been expected is the reduction in tax revenue from last year’s tax cuts, not an increase in spending. This year, revenue is expected to fall below 17 percent of gross domestic product — the lowest it has been in the past 50 years with the exception of the aftermath of the past two recessions.  All of us have supported corporate tax reform. The statutory tax rate was too high, much higher than in other Organization for Economic Cooperation and Development economies. However, because of deductions and breaks in the tax code, the effective marginal tax rate was similar to the average among competitor economies. The right way to do reform was to follow the model of the bipartisan tax reform of 1986, when rates were lowered while deductions were eliminated. Instead, the tax cuts passed last year actually added an amount to America’s long-run fiscal challenge that is roughly the same size as the preexisting shortfalls in Social Security and Medicare.

US Deficit To Soar Over 40% In 2019, Exceed $1 Trillion By 2020: CBO - The Congressional Budget Office has hit President Trump with a double whammy in its latest report, calculating that the U.S. budget deficit will surpass $1 trillion by 2020, two years sooner than previously estimated, as tax cuts and spending increases will do little to boost long-term economic growth. Spending will exceed revenue by $804 billion in the fiscal year ending Sept. 30, jumping from a projected $563 billion shortfall forecast in June, the non-partisan arm of Congress said in a report Monday. In fiscal 2019, the deficit will reach $981 billion, compared with an earlier projection of $689 billion. Deficits were only set to surpass the trillion-dollar level in fiscal 2022 under CBO’s report last June.The U.S. cumulative deficit -- taking into account the new tax and spending legislation -- will be $11.7 trillion from 2018 to 2027, about $1.6 trillion larger than the CBO projection in June. The CBO forecast 2 percent less revenue and 1 percent more spending over the period, it said.Over the 2021–2028 period, projected deficits average 4.9 percent of GDP; the only time since World War II when the average deficit has been so large over so many years was after the 2007–2009 recession.As deficits accumulate in CBO’s projections, debt held by the public rises from 78 percent of GDP (or $16 trillion) at the end of 2018 to 96 percent of GDP (or $29 trillion) by 2028. That percentage would be the largest since 1946 and well more than twice the average over the past five decades   The tax-cut and spending legislation “provide fiscal stimulus, raising real GDP more than potential GDP in the near term,” the CBO said.“Over the longer term, all of those effects, as well as the larger federal budget deficits resulting from the new laws, exert upward pressure on interest rates and prices.” As Bloomberg reports, the Trump administration has said tax cuts will lead to faster economic growth that would offset deficit expansion. But, while CBO estimated that real gross domestic product will expand by 3.3 percent in the 2018 calendar year, they estimate that the economy will then slow to 2.4 percent in 2019 and 1.8 percent in 2020, based on the fourth quarter year-over-year figure. In June, CBO forecast 2 percent growth this year.

U.S. Deficit to Surpass $1 Trillion Two Years Ahead of Estimates, CBO Says - The U.S. budget deficit will surpass $1 trillion by 2020, two years sooner than previously estimated, as tax cuts and spending increases signed by President Donald Trump do little to boost long-term economic growth, according to the Congressional Budget Office. Spending will exceed revenue by $804 billion in the fiscal year through September, jumping from a projected $563 billion shortfall forecast in June, the non-partisan arm of Congress said in a report Monday. In fiscal 2019, the deficit will reach $981 billion, compared with an earlier projection of $689 billion. The nation’s budget gap was only set to surpass the trillion-dollar level in fiscal 2022 under CBO’s report last June. Deficits are growing as the Trump administration enacted a tax overhaul this year that will lower federal revenue and Congress approved a roughly $300 billion spending increase. The fresh CBO estimates could heighten investor worries as they weigh the potential impact that tariff threats between the U.S. and China may have on the world economy. The report includes new projections for the effects of the tax legislation -- saying it will increase the deficit by almost $1.9 trillion over the next 11 years, when accounting for its macroeconomic effects and increased debt-service costs. In December, Congress’s Joint Committee on Taxation had said the tax package would reduce federal revenue by almost $1.1 trillion over a 10-year period. “Today’s CBO report confirms that major damage was done to our fiscal outlook in just the past few months,” Michael Peterson, who heads the budget watchdog Peterson Foundation, said in a statement. “This is the first forecast to take into account the recent tax and spending legislation, and it’s clear that lawmakers have added significantly more debt on top of an already unsustainable trajectory.” 

White House Hoping To Trim At Least $120BN From $1.3TN "Omnibus" Spending Bill - Larry Kudlow took viewers by surprise during an appearance on "Fox News Sunday" this week when - after offering the usual boilerplate about the White House's trade beef with China - he mentioned that the White House was considering a "rescission bill" to strip some spending from the $1.3 trillion omnibus spending bill that President Trump signed into law last month.Congressional and West Wing sources have apparently confirmed as much with Bloomberg, which reported that the rescission bill - which could ultimately strip $120 billion from nondefense discretionary spending - was under serious consideration. With the CBO now projecting a $1 trillion budget deficit by 2020 - two years sooner than previously estimated - the urgency for the government to roll back some of its deficit-fueled spending has intensified. And bear in mind, the CBO is now estimating that there won't be a recession within the next ten years, which would make this the longest economic cycle without a contraction in US history.  As we noted earlier, according to the latest estimates, spending will exceed revenue by $804 billion in the fiscal year ending Sept. 30, compared with a projected $563 billion shortfall from June, the non-partisan arm of Congress said in a report Monday. In fiscal 2019, the deficit will reach $981 billion, compared with an earlier projection of $689 billion.Given the threat that swelling debts pose to the US financial system (not to mention the stock market), Bloomberg reported that the US is planning to ask Congress to pare back some of the domestic spending authorized by the bill.Meanwhile, the White House is hoping to leave military funding, funding for the opioid crisis and border security untouched.House Majority Leader Kevin McCarthy has been working with the administration on a rescission maneuver, though any attempts to roll back spending will likely be opposed by Democrats.For those who are unfamiliar with the obscure provision, here's an explanation of "rescission" courtesy of Bloomberg. The rescissions request makes use of an obscure provision in the 1974 Budget Act that allows the president to request the cancellation of some spending and gives Congress 45 days to approve the measure. Under a 1992 precedent in the Senate that limits debate, Republicans likely could pass the bill without any Democratic support. "The administration is working to identify potential rescissions and at this point, there is no completed list or dollar amount,"

 A balanced budget amendment would be extraordinarily dangerous for the economy – EPI - The House is set to take up a balanced budget amendment this week, which would limit federal spending in each fiscal year to federal receipts in that year. Putting aside for a moment the chutzpah of House Republicans trying to pass a balanced budget amendment (BBA) just a few months removed from their passage of a $1.5 trillion tax cut that went largely to the richest households and big corporations, the simple fact is that the economic consequences of a balanced budget amendment range from extremely bad to catastrophic. The reason for this is that a BBA would amplify any negative economic shock to the economy and would thereby turn run-of-the-mill recessions into disasters.  When the economy enters a recession, government deficits increase as tax revenues decline and government spending on programs such as unemployment insurance increase. These “automatic stabilizers” are incredibly important as they cushion the blow to the economy from a recession. For example, researchers at Goldman Sachs found that the shock to private sector spending from the bursting of the housing bubble was larger than the shock that led to the Great Depression of the 1930s. Given this larger initial shock, why didn’t we have another Great Depression, with unemployment rates approaching 20 percent and beyond, in 2009–10? The simple reason is that the mechanical increase in the deficit from tax reductions and increased transfer payments absorbed a lot (not enough, but a lot) of this shock, and automatic stabilizers were either non-existent or a lot smaller in the 1930s. Having these programs in place to absorb recessionary shocks is one of the great economic advances of the past 80 years—and getting rid of them by imposing a BBA makes as much sense as outlawing computers or antibiotics. To comply with a BBA as a recession approached, Congress would have to offset any mechanical increase in the deficit by raising taxes or cutting spending. The increased taxes or spending cuts would further drag on the economy, raising the deficit again and requiring still further tax increases or spending cuts. This vicious cycle would amplify the damage to the economy. Essentially this vicious cycle would lead to a large increase in the fiscal multiplier, with each dollar in spending cuts leading to output losses of about $2.50.

US Budget Deficit Hits $600 Billion In 6 Months, As Spending On Interest Explodes -- The US is starting to admit that it has a spending problem. According to the latest Monthly Treasury Statement, in March, the US collected $210.8BN in receipts - consisting of $88BN in individual income tax, $98BN in social security and payroll tax, $5BN in corporate tax and $20BN in other taxes and duties- a drop of 2.7% from the $216.6BN collected last March and a clear reversal from the recent increasing trend... ... even as Federal spending surged, rising 7% from $392.8BN last March to $420BN last month, the second highest monthly government outlay on record... ... where the money was spent on social security ($85BN), defense ($58BN), Medicare ($75BN), Interest on Debt ($33BN), and Other ($170BN).  The resulting surge in spending led to a March budget deficit of $208.7 billion, far above the consensus estimate of $186BN, and over 18% higher than $176.2BN deficit recorded a year ago. This was the biggest March budget deficit in US history.

Why trillion-dollar budget deficits may be on a fast track to $2 trillion: The recent Republican tax cuts and the bipartisan agreement to raise federal spending have done a number on already high budget deficits. But the outlook could be even worse than we thought. The nonpartisan Congressional Budget Office now projects that annual US budget deficits will cross the trillion-dollar mark in 2020, two years sooner than what the agency was projecting just 10 months ago. A trillion-dollar deficit is especially striking given that there is no recession or financial crisis driving the country to spend so much more than what it takes in. But it's not nearly as eye-popping as $2.1 trillion. Yet that's where budget deficits are headed as soon as 2028 if Congress decides to extend the tax cuts and higher spending levels past their respective expiration dates. Many of the tax cuts are set to expire after 2025, while higher spending levels expire after two years.Two days after CBO's latest projections came out, House Speaker Paul Ryan announced his retirement after serving in Congress for two decades. During that time, Ryan was chairman of both the House tax and budget committees and was the most high-profile deficit hawk in the Republican Party. Yet the annual deficit steadily rose as a share of the economy during his time as Speaker.   With or without Ryan, however, it's not crazy to think Congress could extend the costly tax and spending policies that would lead to $2 trillion deficits. Lawmakers in recent years have been loathe to let tax cuts expire. And cutting spending is not their strong suit. The 2001 and 2003 Bush tax cuts, for instance, were extended during the Obama administration and then largely made permanent when Congress faced the so-called fiscal cliff in 2012.  In 2011, Congress struck a much-criticized deal to force lawmakers to reduce deficits under threat of automatic cuts if spending caps were violated. Those caps, however, have been overridden a few times, most recently this winter, when lawmakers voted to raise limits on defense and nondefense spending.  And since 2013, instead of actively agreeing to increase the legal US borrowing limit to pay the country's obligations, Congress opted instead to just suspend the debt limit six different times. If lawmakers take the route of least resistance, the CBO estimates that in ten years, the debt — which reflects the accumulation of deficits over the years — could reach 105% as a share of the economy, higher than at any time except right after World War II. And it would be much higher than the 96% of GDP that the agency estimates if the tax cuts and spending increases expire as scheduled.

Every criticism of the Republican tax plan is proving true - During the abbreviated debate over the Republican tax plan, Democrats said the corporate beneficiaries of the tax breaks would use their windfalls on priorities such as stock buybacks. We now know, of course, that this prediction turned out to be true.  Critics of the GOP plan also said it included all kinds of sloppy and consequential errors that would need fixes, which is also happening.Dems also warned that Republican leaders would use the impact of the tax cuts as a pretext to go after social-insurance programs – sometimes called “entitlements” – such as Social Security. That, too, is coming true. And, of course, progressive opponents of the GOP tax breaks said the proposal would do real harm to the nation’s finances, and wouldn’t come close to paying for themselves. We can now add this to the list of things Dems got right and Republicans got wrong. Jon Chait had a good summary of the latest findings from the Congressional Budget Office.The new projections by the Congressional Budget Office, the first federal budget analysis to be released since the Trump tax cuts were passed into law, shows how fully the Republican government has operationalized its theory. CBO now estimates the 2018 deficit will be $242 billion higher than it had estimated last June, before the tax cuts. And the tax cut is the major reason: “Accounting for most of that difference is a $194 billion reduction in projected revenues, mainly because the 2017 tax act is expected to reduce collections of individual and corporate income taxes.”The deficit is expected to grow to more than 5 percent of gross domestic product. That would make sense if the country was spending to counteract a serious but temporary emergency, like a recession or perhaps a major war. There is no such emergency, though.The full CBO report is online here. Note that the budget office projects the annual budget shortfall will swell this year to $804 billion, before growing to $941 billion next year and $1 trillion in 2020. And as Slate’s Jim Newell explained, these are the “rosy” estimates.

The True, Accurate, and Only Answer to “How *Exactly* Will We Pay for Medicare for All?” -- So, how exactly do we “pay for” Medicare for All?

  • The same way that we just “paid for” $700,000,000,000 for a single year of military funding.
  • The same way that we just “paid for” $1,500,000,000,000 in tax cuts for the wealthy.
  • The same way that we “paid for” a $1,300,000,000,000 fighter jet in 2016.
  • The same way that the United States has always “paid for” all of the fantastically-expensive things that benefit the powerful: Immediately and without discussion. Because they want it.

In the richest country in the history of the world, with its abundant natural resources, and its millions of unemployed or unsatisfied citizens (waiting and willing, ready and able, and desperate to make it happen)…. It is time to stop talking about how we will “pay for” anything. If we can “afford” the fantastically-expensive programs that cater to the wealthy and the powerful, then we can sure as hell “afford” the moderately-expensive programs that the powerless need to survive, starting with Medicare for All. Millions of people are raising money on GoFundMe right now to fund their health care and life-saving medication. To my mind, that is not a functioning health care system. We must pass Medicare for all. pic.twitter.com/Xz0IqFtoZA — Bernie Sanders (@SenSanders) April 9, 2018   Spending even one more second discussing how we will pay for Medicare for All (or any program that benefits the powerless) is a supreme and cosmic waste of time. In fact, the entire “pay for” question is a sham and a scam, and a trap and a trick. It is cruel and unfair to the millions and millions of Americans that are suffering from ailments, stress, red tape, and bankruptcy.  Discussing how to “pay for” Medicare for All guarantees that we will never have Medicare for All. The “pay for” question is also a vast and intentional waste of time. The only thing we should be discussing is how to organize and march into the halls of Congress and demand that they give us Medicare for All — once and for all goddammit.

House Speaker Paul Ryan won't seek re-election - House Speaker Paul Ryan is not seeking re-election and will retire from Congress after this year, the Wisconsin Republican announced Wednesday. "You realize something when you take this job," Ryan told reporters on Capitol Hill on Wednesday morning. "It's a big job with a lot riding on you ... but you also know this is not a job that does not last forever. ... You realize you hold the office for just a small part of our history. So you better make the most of it."He reminded reporters that he took the job "reluctantly" in 2015, when he took over from John Boehner, but Ryan also said he has no "regrets.""I like to think I've done my part, my little part in history to set us on a better course," Ryan said.  Ryan's departure is a blow to GOP members who saw the Wisconsin Republican as a stable and policy-oriented leader in a party shaken by the tumultuous Donald Trump presidency. He has been a fundraising juggernaut ahead of the midterms this fall, and helped translate GOP agenda items into legislation such as a series of tax cuts and rolling back banking legislation put in place under Democrats.  In his prepared remarks, Ryan focused on the tax law that passed last year as a key legacy he left behind and spoke at length about his desire to go home to Wisconsin to be with his family. He said that the 2018 midterms and the chance that he wouldn't be speaker didn't factor at all into his decision to announce his retirement. "None whatsoever actually," Ryan said.

"Trump Fatigue" Was Behind Paul Ryan's Decision To Leave Congress -- As anybody with even a glancing familiarity with US politics might've guessed, Paul Ryan's decision to leave Congress - not to mention his position as Speaker of the House, a job that left him third in line to the presidency - was heavily influenced by his frustration with President Trump - a man whom he once disinvited to a gathering in Ryan's Congressional district after the "grab her by the p***y" bombshell dropped.  At least, that's what Politico surmised in a long-winded profile about Ryan that examines his rise in Washington from a Capitol Hill intern to leader of the Ways and Means Committee to vice presidential candidate and then, finally, speaker. In the words of an anonymous confidant quoted in the piece, Ryan has been suffering from a severe case of "Trump fatigue." That seems like a lifetime ago. Ryan once dreamed of defeating Trump; he has since merely hoped to contain him. The gentleman from Wisconsin has spent the bulk of his speakership babysitting a president whose intemperate instincts and deficit of fundamental policy knowledge threaten to derail the party—and potentially the government and the country—at any moment. Ryan has grown weary of keeping watch. He confided to friends that while spending more time with family was the No. 1 motivator behind his exit, Trump fatigue was a close runner-up. Trump won’t be Ryan’s problem for much longer. Kevin McCarthy and Steve Scalise, the speaker’s top lieutenants, have been shadowboxing for months and officially touched gloves Wednesday morning in a private meeting aimed at facilitating unity. It won’t last. Election Day is seven long months away, and factions are already emerging as the two men jockey—among donors, lobbyists and their fellow members—for support as the next Republican leader. One thing is certain: As McCarthy and Scalise campaign to lead the House GOP, they will do so as Trump Republicans. It’s his party now, without question or caveat.

North Korea tells U.S. it is prepared to discuss denuclearization: source (Reuters) - North Korea has told the United States for the first time that it is prepared to discuss the denuclearization of the Korean Peninsula when North Korean leader Kim Jong Un meets President Donald Trump, a U.S. official said on Sunday. U.S. and North Korean officials have held secret contacts recently in which Pyongyang directly confirmed its willingness to hold the unprecedented summit, the official told Reuters, speaking on condition of anonymity. The communications, still at a preliminary stage, have involved State Department officials talking to North Korea apparently through its United Nations mission, and intelligence officers from both sides using a separate backchannel, the official said. Until now, the United States had relied mostly on ally South Korea’s assurance of Kim’s intentions. South Korean envoys visited Washington last month to convey Kim’s invitation to meet. Trump, who has exchanged bellicose threats with Kim in the past year, surprised the world by quickly agreeing to meet Kim to discuss the crisis over Pyongyang’s development of nuclear weapons capable of hitting the United States. But North Korea has not broken its public silence on the summit, which U.S. officials say is being planned for May. There was no immediate word on the possible venue for the talks, which would be the first ever between a sitting U.S. president and North Korean leader. The U.S. official declined to say exactly when the U.S.-North Korea communications had taken place but said the two sides had held multiple direct contacts. “The U.S. has confirmed that Kim Jong Un is willing to discuss the denuclearization of the Korean Peninsula‎,” said a second U.S. official. 

North Korea’s definition of ‘denuclearization’ is very different from Trump’s — The White House is gearing up for President Trump to discuss denuclearization with North Korean leader Kim Jong Un at their much anticipated summit next month. But what does “denuclearization” mean? It depends on whom you are asking. To some in Washington, “the denuclearization of the Korean Peninsula,” as Trump tweeted late last month, means Kim handing over his nuclear weapons and missile systems and allowing international inspectors to check that the regime is keeping its word. To Pyongyang, it means something very, very different. It means mutual steps to get rid of nuclear weapons, including requiring the United States to take down the nuclear umbrella it has put up over South Korea and Japan. That is a difference in definition that could toll a death knell for the summit before it even starts. “The danger is entering into negotiations with unrealistic expectations that Kim is just going to hand over the keys to his nuclear kingdom. He won’t,” said Vipin Narang, an expert on nuclear nonproliferation at MIT.   At the very least, Kim would agree to relinquish his weapons only if the United States agreed to end its military alliance with South Korea, in place since the 1950-53 Korean War, Narang said. He would also likely insist the United States end its commitment to “extended deterrence” in South Korea and Japan — its threat of nuclear retaliation if its allies in Asia come under attack from North Korea.

US and North Korean officials discuss Trump-Kim summit --Behind-the-scenes talks are underway between US and North Korean officials over a possible summit between President Trump and North Korean leader Kim Jong-un. The talks about talks have been taking place as Trump instals two militarists—Mike Pompeo and John Bolton—as secretary of state and national security adviser, respectively.  During his Senate confirmation hearing on Thursday, Pompeo re-affirmed his support for military action to end the so-called North Korean nuclear threat. He said he was “not optimistic,” based on past record, that the Pyongyang regime would agree to dismantle its nuclear program. Pompeo insisted that the US would not “provide rewards” before “we get that outcome permanently, irreversibly.” He was “hopeful that President Trump can achieve that through sound diplomacy.” The US is effectively demanding that North Korea destroy its nuclear arsenal and dismantle its nuclear facilities ahead of any easing of crippling sanctions or moves to end decades of US-led diplomatic isolation and military threats. Previous denuclearisation deals with North Korea in 1994 and 2007 were sabotaged, not by Pyongyang, but by Washington—leading to deep suspicion in North Korea. While claiming he did not support “regime-change” in Pyongyang, Pompeo made clear that the US would attack North Korea if it did not bow to Washington’s demands. He said Trump would not allow North Korea to have “an arsenal of nuclear weapons capable of striking the United States of America,” adding that Defence Secretary James Mattis “has been directed to present to the president a set of [military] options,” should diplomatic efforts fail. Bolton took over this week as Trump’s national security adviser—a post that does not require congressional confirmation. Prior to his nomination, Bolton was contemptuous of any suggestion of talks with Pyongyang and pushed for a military attack on North Korea. He wrote a Wall Street Journal commentary in February setting out a phony legal argument to justify such a war and emphasising it could “not wait until the last minute.” The character of the proposed Trump-Kim summit is underscored by the fact that Pompeo and Bolton are in charge of preparing it. Whether by design or accident, the proposal for a meeting, possibly in late May or early June, took the focus off the Korean Peninsula as the Trump administration prepared to launch its war on Syria, risking conflict with nuclear-armed Russia. In the lead-up to a summit, North Korea agreed to postpone any nuclear or missile testing.

Trump warns Assad: 'Big price to pay' for fatal Syria attack — President Donald Trump on Sunday condemned a "mindless CHEMICAL attack" in Syria that killed women and children, called Syrian President Bashar Assad an "animal" and delivered a rare personal criticism of Russian President Vladimir Putin for supporting the Damascus government.  As Washington worked to verify the claim by Syrian opposition activists and rescuers that poison gas was used, Trump said there would be a "big price to pay" for resorting to outlawed weapons of mass destruction. A top White House aide, asked about the possibility of a U.S. missile strike in response, said, "I wouldn't take anything off the table."  Just over a year ago, Trump ordered dozens of cruise missiles to be fired at a Syrian air base after declaring there was no doubt Assad had "choked out the lives of helpless" civilians in an attack that used banned gases. White House advisers said at the time that images of hurt children helped spur the president to launch that air strike, and television new shows on Sunday aired similar depictions of suffering young Syrians.  "Many dead, including women and children, in mindless CHEMICAL attack in Syria," Trump tweeted. "Area of atrocity is in lockdown and encircled by Syrian Army, making it completely inaccessible to outside world. President Putin, Russia and Iran are responsible for backing Animal Assad. Big price to pay. Open area immediately for medical help and verification. Another humanitarian disaster for no reason whatsoever. SICK!"  The developments come as Trump has moved to dramatically scale back U.S. goals in Syria, pushing for a quick military withdrawal despite resistance from many of his national security advisers. Trump has given no formal order to pull out the 2,000 U.S. troops in Syria or offered a public timetable.  But Trump has signaled to his advisers that, ideally, he wants all troops out within six months.

Timelines Of ‘Gas Attacks’ In Syria Follow A Similar Scheme - An alleged new 'chemical incident' in Syria reminds of a similar series of events we saw last year. We are told to believe that each time the U.S. pulls back from the war on Syria the Syrian government is responding with a 'chemical attack' that pulls the U.S. back in.

Trump Threatens Putin, "Animal Assad" Over Syrian "Chemical Attack"; Russia Warns Of "Grave" Response If US Launches Strike - On Saturday night, an alleged chemical attack on a rebel-held town in eastern Ghouta reportedly killed dozens of people, according to US-linked medical services with Washington immediately responding that the reports - if confirmed - would demand an immediate international response.  The Syrian regime, whose overthrow the US failed to achieve in the course of the 6 year proxy war in order to facilitate the transport of Qatari natural gas to Europe, denied its forces had launched any chemical attack as the reports began circulating and said the rebels were collapsing and fabricating news. The Syrian state news agency SANA said Jaish al-Islam was making “chemical attack fabrications in an exposed and failed attempt to obstruct advances by the Syrian Arab army,” citing an official source. Meanwhile, Reuters said it could not independently verify the reports. Others did the same: The Syrian Observatory said it could not confirm whether chemical weapons had been used in the attack on Saturday. Trump already did his part on Sunday morning, when he tweeted several statements on the alleged attack as if it was already confirmed, just as one would expect to accelerate the escalation: Many dead, including women and children, in mindless CHEMICAL attack in Syria. Area of atrocity is in lockdown and encircled by Syrian Army, making it completely inaccessible to outside world. President Putin, Russia and Iran are responsible for backing Animal Assad. Big price to pay. Open area immediately for medical help and verification. Another humanitarian disaster for no reason whatsoever. SICK!As for Russia, its Defense Ministry immediately denied and dismissed as false reports that the Syrian government had carried out a chemical attack in Eastern Ghouta's Douma: "We strongly refute this information," Major General Yury Yevtushenko, head of the Reconciliation Center in Syria, said in a statement on Sunday. "We declare our readiness, after Douma is liberated from the militants, to immediately send Russian radiation, chemical and biological protection specialists to collect data that will confirm the fabricated nature of these allegations," he stated. And, knowing where this is all headed, Russia’s Foreign Ministry says in statement on website that reports of chemical weapons attack in rebel-held town of Douma are fabricated, and any military operations against Syria on false pretenses may lead to “gravest consequences,”

CIA stages gas attack pretext for Syria escalation --The US media has seized on the latest claims by CIA-backed groups of a poison gas attack on civilians to demand a further escalation of the US-led war for regime-change in Syria and an increased confrontation with Russia.The Syrian government claims that one of its airbases, in Homs province, has already come under missile attack. While the Pentagon is denying that it has launched any strikes on Syria yet, the rhetoric of the Trump administration indicates that preparations are being made for stepped-up military operations.As with previous allegations of chemical weapons’ use, the public is being inundated with unverified footage of suffering victims, while government officials and the corporate media, prior to any investigation and without any substantiation, declare the government of Bashar al-Assad and its Iranian and Russian allies to be guilty of a war crime.Within minutes, the New York Times and the Washington Post dashed out breathless articles placing the blame for the alleged attack at the feet of the Syrian and Russian governments. The Guardian declared in an editorial that “Syria’s renewed use of chemical weapons against its own people at the weekend is shameless and barbaric.”The current claims are no more credible than those that preceded it. The official narrative that Assad carried out a gas attack in Eastern Ghouta in 2013 was used to prepare a massive US air strike that was canceled at the last minute by the Obama administration—a retreat that earned Obama furious recriminations that continue to the present. Subsequent investigations proved that the attack was actually launched by US-backed “rebels” in conjunction with the Turkish government.The alleged gas attack that was used in April 2017 to justify the major US cruise missile assault on a Syrian air base was similarly exposed to have resulted from an air strike on a “rebel” poison gas facility. The previous pretexts for military escalation were staged by the CIA and its proxy forces in Syria. The latest provocation is no different.

Warning of 'Serious Consequences' If US Attacks Syria, Russian Says Chemical Attack Possible False Flag Operation -  Staking out its position ahead of an emergency UN Security Council meeting later in the day, Russian government officials early on Monday are warning the U.S. government and President Donald Trump from direct retaliation or further intervention in Syria following an alleged weekend gas attack outside Damascus that has caused heartbreak and uproar inside the war-torn nation, across the region, and beyond.While Trump declared Sunday there would be a "big price to pay" for whoever was responsible for Saturday's attack in the city of Douma—where local aid groups said at least 49 people were killed and footage emerged of people, including young children, who appeared to be victims of a chemical weapon or agent—the Russian foreign ministry responded by warning of "most serious consequences" if the U.S. took military action against the Syrian government of President Bashar Al-Assad before all the facts are known. Western intervention, whether by the U.S. or NATO countries, warns Iranian foreign minister, "will definitely increase the complexity of the situation in this country and region." In the midst of what foreign policy analyst Phyllis Bennis described to Common Dreams as an "extremely perilous moment" in the region and for global conflict between major powers, the foreign ministry in Moscow said in a statement that elements of the chemical attack were "fabricated"—suggesting it was a false flag operation perpetrated by rebel militant forces within Syria—and designed to provoke further intervention or a retaliatory strike against Assad's forces. "It is necessary to warn again that military intervention under invented and fabricated pretexts in Syria, where at the request of the lawful government there are Russian military personnel, is absolutely unacceptable and can lead to the most serious consequences," read the statement. "The aim of these false speculations, that have no basis, is to shield the terrorists and the irreconcilable radical opposition, who reject a political solution, at the same time while trying to justify possible armed strikes from outside."

US "Will Respond" To Syria Gas Attack Regardless Of Security Council's Decision -  US Ambassador to the UN Nikki Haley said during an emergency meeting of the UN Security Council on Monday that the US would retaliate against the attack in Syria regardless of what the UN Security Council decides. "History will record this as the moment when the Security Council either discharged its duty or demonstrated its utter and complete failure to protect the people of Syria. Either way, the United States will respond." Before heading into his Monday afternoon cabinet meeting, President Donald Trump condemned a chemical weapons attack in Ghouta, Syria during an impromptu press conference. The president said "even with the world as bad as it is, you just don't see things like that" before saying he'd decide on a response "probably by the end of today."  With Trump and his most trusted advisors still debating the proper response, several anonymous Pentagon officials have told the Washington Examiner that the US is considering several options including a missile barrage similar to the strike carried out on a Syrian air base last year. The Israeli F-15s launched a lethal strike on a Syrian airbase early Monday, killing 14 people with the US's tacit approval. The options being considered now are similar to the options that were provided to the president before last year's strike. The US has several ships armed with tomahawk cruise missiles stationed in the region - including the USS Donald Cook, a guided-missile destroyer that just completed a port call in Cyprus and got underway in the eastern Mediterranean. The ship is within range of Syria and could presumably strike at any target the president orders.

US Says No Evidence Assad Behind Chemical Attack; But Will Retaliate Regardless Of UN Decision - The initial U.S. government assessment of the chemical attack in Syria has concluded that some type of nerve agent was used - however the specific agent used is unknown, government sources told Reuters, adding that the U.S. government "had not yet conclusively determined whether the attack was carried out by President Bashar al-Assad's Syrian government forces." The revelation makes Israel's Monday morning strike on Syrian military positions known to house Russian forces all the more troubling, as this appears to be yet another kneejerk rush by the West to conduct major foreign policy maneuvers based on contested events before all the facts are in. Following last April's Kahn Shaykhun chemical attack in Syria, President Trump notably launched 59 Tomahawk missiles within 48 hours of the incident despite conflicting reports pouring in from several sources over key details.  The West has similarly imposed a variety of sanctions on Russia after determining that the Kremlin was behind the March 4 poisoning of former double-agent Sergei Skripal in Salisbury, UK. In fact, the chief scientist from the UK's Porton Down military laboratory facility, Gary Aitkenhead, told Sky News (in a statement which was later retracted) that they had been unable to prove that the novichok nerve agent used to poison Sergei and Yulia Skripal came from Russia.  Considering that, according to The Telegraph, Skripal has reported ties to former MI6 agent Christopher Steele, and the UK's own chemical experts can't identify the source of the poison, further investigation is clearly warranted before slapping sanctions around.  So while the UK moves to aggressively disarm their citizens - recently going on an "anti-knife" campaign, they are at the same time provoking a potentially far deadlier conflict with a nuclear superpower using flimsy evidence. Meanwhile, President Trump tweeted several statements regarding the alleged attack as if it was already confirmed, just as one would expect to accelerate the escalation:

State of Failure – Kunstler - Fool me once, shame on you; fool me twice, shame on me, the old saying goes. So, tread carefully through the minefields of propaganda laid for the credulous in such low organs as The New York Times. There are excellent reasons to suppose that the American Deep State wishes strenuously to keep meddling all around the Middle East. The record so far shows that the blunt instruments of US strategic policy produce a consistent result: failed states. Syria was well on its way to that sorry condition — prompted by an inflow of Jihadi maniacs fleeing our previous nation un-building experiment in Iraq — when the Russians stepped in with an arrantly contrary idea: to support the Syrian government. Of course, the Russians had ulterior motives: a naval base on the Mediterranean, expanded influence in the region, and a Gazprom concession to develop and manage large natural gas fields near the Syrian city of Homs, for export to Europe. The latter would have competed with America’s client state, Qatar, a leading gas exporter to Europe. But the US objected to supporting the government of Bashar al-Assad, as it had previously with Saddam Hussein and Muammar Gaddafi, as well as Russia’s presence there in the first place. So, the US cultivated anti-government forces in the Syrian civil war, a hodgepodge of Islamic psychopaths variously known as ISIS (Islamic State of Iraq and the Levant), Daesh, al-Qaeda, al-Nusra, Ansar al-Din, Jaysh al-Sunna, Nour al-Din al-Zenki, and what-have-you.  Surely by now the American public has developed some immunity to claims of nefarious doings in foreign lands (“weapons of mass destruction,” and all). The operative sentence in that New York Times report is “…Syrian forces hit a suburb of Damascus with bombs that rescue workers said unleashed toxic gas.” Yeah, well, how clear is it that the toxic gas was contained in the bombs, or rather that the bombs dropped by the Syrian military blew up a chemical weapon depot controlled by anti-government Jihadis? Does that hodgepodge of maniacs show any respect for the UN, or the Geneva Convention, or any other agency of international law? As in many previous such incidents, we don’t know who was responsible — though there is plenty of reason to believe that parties within the US establishment are against Mr. Trump’s idea of getting the hell out of that place, and might cook up a convenient reason to prevent it.  Lastly, how is it in Bashar al-Assad’s interests to provoke a fresh international uproar against him and his regime?

Trump threatens Syria strike, cancels summit travel (AP) — After threatening a military strike against Syria, President Donald Trump on Tuesday cancelled plans to travel to South America later this week, choosing to stay in the United States to manage the response to an apparent chemical weapons attack. White House spokeswoman Sarah Huckabee Sanders said Tuesday that Trump will not attend the 8th Summit of the Americas in Lima, Peru or travel to Bogota, Colombia as planned, remaining in the United States to "oversee the American response to Syria and to monitor developments around the world." The decision marks the first time an American president has not attended the summit. Vice President Mike Pence will travel in Trump's place. Trump on Monday promised a decision on Syria within hours, declaring that Russia or any other nation found to share responsibility for Saturday's apparent chemical weapons attack on civilians will "pay a price." The White House sharply rejected any suggestion that Trump's own words about pulling U.S. troops out of Syria had opened the door for the attack, which killed more than 40 people, including children. Trump, asked whether Russian President Vladimir Putin bore any responsibility, responded, "He may, yeah, he may. And if he does it's going to be very tough, very tough." He added, "Everybody's gonna pay a price. He will. Everybody will." 

Trump’s Rush to Judgment on Syria Chemical Attack - Scott Ritter - On Sunday, President Trump announced his intention to make those responsible for an alleged chemical weapons attack on Douma, including the Syrian government and its Russian and Iranian allies, pay a “big price” for their continued disregard for international law. The next day U.S. Ambassador to the United Nations Nikki Haley declared that “The United States is determined to see the monster who dropped chemical weapons on the Syrian people held to account.” President Trump reinforced his call for action on Monday, noting that the United States would not sit back in the face of the alleged use of chemical weapons by Syria. “It will be met, and it will be met forcefully,” the president said, adding that those responsible for the attack will be held accountable, whether it was Syria, Russia, Iran or “all of them together.” Trump noted that a decision to use military force would be made “over the next 24 to 48 hours.” The pronouncements of imminent military action by the United States are not made in a vacuum. Russia, which has considerable military forces deployed inside Syria, including advanced military aircraft and anti-aircraft missile batteries, has rejected the allegations of chemical weapons use by Syria as a “fabrication,” and promised that any attack on Syria would result in “serious repercussions.” Russian forces inside Syria have reportedly been placed on “full alert” as American naval vessels capable of launching cruise missiles have arrived off the Syrian coast.  The United States and Russia appear to be heading toward a direct military confrontation that, depending on the level of force used and the number, if any, casualties incurred by either side, carries with it the risk of a broader conflict. While Russian (and Syrian) claims of innocence regarding the alleged chemical weapons attack cannot be accepted at face value, the fact that the United States has not backed up its own claims with anything other than a recitation of accusations made by rebel groups opposed to the regime of Bashar al-Assad is problematic insofar as it shows a rush to judgment on matters of war. Given the potentially devastating consequences of any U.S.-Russian military clash over Syria, it would be better for all parties involved to wait for a full and thorough investigation of the alleged attack before any final decision on the use of force in response is made.

America’s Three Bad Options in Syria - Chemical weapons are again suspected to have been used in Syria, apparently by government forces, circumstantial evidence suggests. Again, many Americans, particularly in Washington, have responded with calls to do something. And, again, punitive airstrikes against the Syrian government are the most discussed option.  That Americans so often arrive at the same policy of limited airstrikes tells us a lot about why the Syria problem is so difficult.  What Americans may be confronting — whether they want to or not — is the reality that some problems can’t be fixed by the sort of low-cost, low-risk solutions to which they grew accustomed in the brief moment of American global hegemony after the Cold War. It feels impossible that something could be beyond easy American resolution, so the problem must be that the president lacks proper will or resolve to see that resolution through.  To understand this, it helps to divide possible American responses into three categories, each of which comes up against hard problems that are structural to the Syrian war. Option category #1 could be termed the sort of limited, punitive strikes that Mr. Obama was pressured to execute and that Mr. Trump saw through last year. Such action is meant to impose a modest cost on Mr. Assad or to send a message that future chemical weapons use will not be tolerated. At the same time, it is meant to avoid any risk of changing the course of the war, which could lead in unanticipated directions — like embroiling the United States in a larger conflict, or collapsing the Syrian government, which could, in turn, spread chaos that would risk millions of lives.Option category #2 might describe the policies that Mr. Obama favored: actions that make the war costlier for Mr. Assad — arming anti-government rebels, for instance — so as to pressure the Syrian leader into complying with American demands. Option category #3 would be attacks that go beyond what the Russians and Iranians can match, which is likely to mean either a full intervention or strikes that existentially threaten the Syrian government.

 In Syria, Trump Faces the Limits of Bluster - Editorial Board, NYT - A world grown numb to the slaughter of civilians in Syria has been roused in the last 48 hours by photographs on social media of lifeless men, women and children in the rebel-held town of Douma, many with white foam coming from their mouths and nostrils, victims of chemical weapons. Outraged Western nations blame President Bashar al-Assad’s regime and demand retaliation.  Russia and Iran, Mr. Assad’s callous enablers, have denied that he has once again used these horrific weapons on his own people. But Douma is surrounded by Syrian forces, whom experts have blamed for most of the 85 chemical attacks in the country over the past five years. Syria had a major chemical weapons program before pledging to surrender it after chemical attacks in 2013, a commitment it failed to fully honor. President Trump took limited military action against Syria after a chemical weapons attack last year, largely ignored the issue after that and then last week surprised his military commanders by announcing plans to soon withdraw 2,000 troops in the fight against the Islamic State. Mr. Trump vowed on Sunday on Twitter that there would be a “big price to pay” for the latest killings, estimated at up to 70 people dead,according to aid groups. But the president should know by now that tough talk without a coherent strategy or follow-through is dangerous.What to do next in Syria is a crucial test for Mr. Trump, who has shirked America’s traditional leadership role. He has tried to seem like a macho leader who would aggressively use American power where President Barack Obama wouldn’t, while talking about pulling out of the Middle East and walking away from international commitments. With such inconstancy, he will not be able to stop the violence in Syria, and with no clear, unified plan with the Western allies, he will only empower Mr. Assad.

Trump Tells Russia to ‘Get Ready’ for Missiles Coming at Syria - President Donald Trump said relations with Russia are worse than they have ever been and warned the country to "get ready" because a volley of U.S. missiles would soon be sent into Syria in response to a suspected chemical weapons attack.“Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and “smart!,” Trump wrote on Twitter. “You shouldn’t be partners with a Gas Killing Animal who kills his people and enjoys it!”Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and “smart!” You shouldn’t be partners with a Gas Killing Animal who kills his people and enjoys it!— Donald J. Trump (@realDonaldTrump) April 11, 2018A strike that hits Russian assets in Syria -- even if unintentionally -- could result in a dangerous game of one-upmanship, potentially dragging the U.S. further into a conflict the president wants to leave. Oil prices rose after Trump’s remarks, while U.S. stock futures fell and the Russian ruble slumped to the lowest level in 16 months.Russia has strengthened Syria’s air-defense capabilities, deploying S-400 missile batteries after U.S. strikes a year ago hit a Syrian base.  “The most important thing about a U.S. strike is the potential for Russian casualties as a result of any military activity there,” said Ayham Kamel, head of Middle East and North Africa research at Eurasia Group. “That is where there’s a risk of an escalatory cycle that would be much more meaningful than attacking Assad’s forces.”

Trump warns Russia to ‘get ready’ for US missiles in Syria - Donald Trump has warned Russia that it should be prepared for US missiles in Syria after a threat from Moscow that it would shoot down any western strikes.In a tweet today President Trump suggested that American intervention would be the consequence of Russia partnering with Assad in a chemical attack on a site in the eastern Damascus suburb of Douma.  Mr Trump’s threat follows a warning from one of Russia’s ambassadors that it will target any missiles and the “sources” from which they were fired. “If there is a strike by the Americans, then . . . the missiles will be downed and even the sources from which the missiles were fired,” Alexander Zasypkin told Hezbollah’s al-Manar TV. The envoy to Lebanon said he was repeating a warning given by a previous statement from the Russian armed forces chief and President Putin.  The World Health Organisation said today that officials wanted to check reports from medics in Douma that up to 500 people had flocked to their clinics in the hours after the attacks with “respiratory distress, central cyanosis (blue skin or lips), excessive oral foaming, corneal burns, and the emission of chlorine-like odour”.The assault appears to have been carried out with a mix of chlorine and sarin nerve agent, US officials say.Suspicion has fallen on President Assad, who has denied that his forces were responsible. “Every time the Syrian Arab Army advances in its fight against terrorism, claims emerge of chemical weapons use,” a Syrian foreign office official told the state-controlled news agency SANA. General Sir Richard Barrons, a former commander of the Joint Forces Command, said Mr Zasypkin’s comments appeared to be a threat of war. He told the BBC Radio 4 Today programme: “I hope the ambassador has chosen his words very carefully because what he’s actually saying is, if the US and allies decide to strike against Syrian chemical weapons and delivery aircraft, not only are they going to try and shoot down the missiles in flight — which they are capable of doing but won’t be with total success — but by saying the words ‘launch platforms’, he’s saying they are going to try and sink ships, sink submarines and shoot aircraft out of the sky — that’s war.” The Russian S-400 air defence system has been in Syria for more than a year and poses a threat to the modern jets used by the US and its allies. The Syrian regime’s capability was degraded by Israeli airstrikes last month.

The World's Two Superpower Countries Are Walking On The Edge Of The Abyss In Syria - For the first time since he is in office, the US President Donald Trump has launched a clear threat in the direction of his Russian counterpart Vladimir Putin saying “he will pay a price”. This menace is related to the claim that the Syrian army had launched a chemical attack against the city of Duma, in eastern Ghouta, the last stronghold of Saudi Arabia’s proxies close to Damascus.Trump is maybe thinking of bombing the Syrian Army positions spread throughout the Syrian geography, or perhaps even the Al-Muhajereen President’s palace in Damascus- of course, without necessarily saying when and where his army will strike. On the other side, Russia is saying it won’t stand still and will respond to any threat against its soldiers. Indeed, Russian officers are deployed in every single Syrian unit on the ground and in command and control headquarters in the Levant, coordinating and participating in attacks against jihadists since September 2015. Therefore, it is almost certain that any direct hit against the Syrian Army will cause Russian casualties.Such an act of war may trigger a Russian response by President Putin who will certainly not want to look weak in front of Russian politicians, the Russian military and in front of his own people. Russia has just returned to the international arena, not only as a country in possession of nuclear weapons, but also as a country trying to create a world balance and put an end to the US unilateral dominance that Washington enjoyed since the Perestroika in 1991.But how could the US benefit from military action in Syria?The mainstream media, the think tank generously financed and nourished by Saudi Arabia, Qatar and Bahrein, Trump’s team and the intelligence community- are all asking the US President to go to war in Syria to change the regime of President Bashar al-Assad and replace it with “freedom fighters” that the same Donald Trump is very familiar with and has specifically criticised. These rely on a video by activists close to the jihadists, claiming civilians were killed by a chemical attack on the city of Duma, which has gone viral on social media.

Trump Threatens to Bomb Syria Without Any Investigation into Alleged Chemical Attack - naked capitalism - Yves here. Real News Network helps cut the fog around the state of play in Syria via an interview with Patrick Cockburn. (interview and transcript)

A few cruise missiles from Trump won’t stop Syria’s war crimes - Editorial Board, WaPo - HAVING DECLARED that Syria will pay a “big price” for its latest use of chemical weapons, President Trump will deal another blow to U.S. global leadership if he does not follow through. But a few cruise missiles won’t change anything in Syria. What’s really needed is a concerted strategy for protecting the vital American interests wrapped up in the multi-sided Syrian war — something Mr. Trump, despite the urging of many of his advisers, has failed to develop.  At the least, Mr. Trump should learn a lesson from this latest Syrian war crime. He declined to respond to seven previous, smaller chemical attacks this year. Then he loudly announced he intended to pull out U.S. forces and “let the other people take care of” Syria. He should not have been surprised that the ever-opportunistic regime of Bashar al-Assad responded by dumping toxic chemicals on the Damascus suburb of Douma. More than 500 people, most of them women and children, were treated for symptoms, and at least 48 died. Mr. Trump, who criticized President Barack Obama for allowing red lines in Syria to be crossed with impunity and for telegraphing military plans in advance, ought to recognize that the Assad regime and its Russian and Iranian allies are as happy to take advantage of his fecklessness as they were of Mr. Obama’s.  A U.S. military response to the Douma attack could serve a minimal purpose if it deters the regime from employing chemicals in future offensives. That would require punishment comparable to that inflicted by Israel in recent raids, which took out a big part of the Syrian air force and, on Monday, targeted Iranian forces on a Syrian base.  But the reality Mr. Trump has not yet faced is that as long as the dictator he called “Animal Assad” remains in place, Syria’s wars will continue, breeding Islamist terrorists and propelling refugees toward Europe. Mr. Trump does have an advantage that Mr. Obama lacked: Thanks to the capture by U.S. and allied forces of a large part of eastern Syria, the United States has the capacity to stabilize at least part of the country and has leverage in demanding an acceptable outcome to the war.

Bolton And Mattis Feud Over Syria Strike As Assad Evacuates Weapons - The latest reports rolling in from Syria suggest that both the Assad regime and Hezbollah have evacuated weapons from likely targets, after CNBC revealed that the U.S. has selected 8 targets to strike, including two airfields, a research center and an alleged chemical weapons facility - after US officials told a reporter they were "fairly confident" the Syrian regime had been behind a gas attack in a rebel-held suburb of Damascus.Mr. Assad was moving to protect his air force by moving planes to a Russian-operated base equipped with sophisticated air defenses, according to pro-regime media. –WSJ The Wall St. Journal also reports that broad plans are being crafted by the U.S., France and Britain for a military strike, while President Trump told reporters on Thursday "We’re looking very, very seriously, very closely at that whole situation, and we’ll see what happens, folks, we’ll see what happens. It’s too bad that the world puts us in a position like that."  Adding to the tension in the region is a UK cabinet decision to back military action against the Syrian government, a day after Theresa May said she was ready to strike "without parliamentary approval."  Several local sources report that both the regime and Hezbollah evacuated weapons and some personnel from the Qamishli airport to Damascus #Syria. Meanwhile, newly minted National Security Advisor Mattis and the Chairman of the Joint Chiefs of Staff Dunford are reportedly "concerned with managing escalation and preventing blowback on US troops," while John Bolton is known for getting very excited at the prospect of a good ol' fashioned regime change.

Opposing forces mobilise for war in Syria -- The US, France, Britain, Saudi Arabia and other American allies internationally continue to threaten military action against the Assad government in Syria over the unsubstantiated and dubious allegations that its armed forces used chemical weapons last weekend in the now re-captured city of Douma.In response, the Syrian military, backed by Russian and Iranian forces, along with Shiite-based militias from Iraq and Lebanon, are preparing their defences and a potential counter-offensive, that could include attacks on US and allied forces in the Mediterranean, the Gulf states and Iraq.Syrian forces are reportedly on high alert, and moving aircraft and other key military assets to bases that are protected by advanced Russian-manned missile defence systems. Senior government personnel, including Bashar al-Assad and his family, have been secured in safe locations out of fear of US assassination attempts.Vassily Nebenzia, Russia’s ambassador to the UN, yesterday hit back at allegations of a chemical attack. “Our military, radiological, biological and chemical unit was on site with the alleged chemical accident [in Douma] and it confirmed that there were no chemical substances found on the ground,” he stated.The Russian army has dispatched military police squads to protect the scene, ahead of Moscow’s proposed inspection of the site, and verification that the claims are false, by the Organisation for the Prohibition of Chemical Weapons (OPCW)—the Netherlands-based agency established in 1997 to monitor the international ban on chemical weapons. Contradicting the Russian and Syrian government denials that any chemical weapons were used, the World Health Organisation (WHO) is continuing to assert—based on information from its “local partners”—that up to 500 people were sickened by toxic chemicals and as many as 43 died. The WHO press release provided no details concerning its “local partners.” The original source of the video purporting to show victims of a chemical weapon attack was the US-funded “White Helmets”—part of the anti-Assad and Islamist-dominated rebel militias who were defeated in Douma and agreed to withdraw just days after the alleged incident. A leading Russian politician aligned with President Vladimir Putin, Andrei Krasnov, declared yesterday that if the allegations of a chemical attack are used as the pretext for an attack on Syria, it will be viewed “not just as an act of aggression but as a war crime of the Western coalition.”

Momentum builds toward US-led strike on Syria --The momentum toward a US-led attack on the Assad government in Syria continued to build over the past 24 hours, with American, French and British warships deploying in the eastern Mediterranean and aircraft being primed for operations at various bases in Europe and the Middle East.The military preparations are being accompanied by diplomatic efforts by the Trump administration to cajole the Russian government of President Vladimir Putin to do nothing while the imperialist powers inflict death and destruction on its Syrian ally. Russia has deployed thousands of troops and significant air and naval assets to support Assad’s forces in the now seven-year civil war against US and European-backed "rebels," which include Al Qaeda affiliates and other Islamist militias.The build-up for an attack is proceeding even as its ostensible justification—that Assad’s forces used banned chemical weapons last weekend in the city of Douma—has been exposed as having just as little credibility as the imperialist claims in 2002–2003 that Iraq had “weapons of mass destruction.”Russian inspection teams found no evidence of chemical weapons use in Douma and Russian military police are protecting the alleged site of the incident to prevent any attempt by Syrian "rebels" to contaminate it. On Russia’s initiative, a team from the Netherlands-based Organisation for the Prohibition of Chemical Weapons (OPCW) is due to arrive in Syria on Sunday to conduct its own inspection. Such is the absence of any evidence of a chemical attack that US Defense Secretary Jim Mattis refused Wednesday to accuse the Assad government. “We are still assessing the intelligence, ourselves and our allies. We’re still working on this,” he told journalists. Remarkably, Mattis made this statement just hours after Trump tweeted that Russian forces in Syria should “get ready,” because missiles would be coming “nice, new and ‘smart.’”

War with Syria — What Is It Good For? We May Soon Find Out - Gaius Publius - Two data points to keep in mind as you contemplate the next Middle East escalation — or rather, as you contemplate the effects of the escalation while others contemplate the escalation itself. You and your preferences are not a factor in their contemplation; they will wage war when and as they choose.First this, from Pentagon chief James Mattis at the end of February 2018 via NewsweekLost in the hyper-politicized hullabaloo surrounding the Nunes Memorandum and the Steele Dossier was the striking statement by Secretary of Defense James Mattis that the U.S. has “no evidence” that the Syrian government used the banned nerve agent Sarin against its own people.This assertion flies in the face of the White House (NSC) Memorandum which was rapidly produced and declassified to justify an American Tomahawk missile strike against the Shayrat airbase in Syria.Mattis offered no temporal qualifications, which means that both the 2017 event in Khan Sheikhoun and the 2013 tragedy in Ghouta are unsolved cases in the eyes of the Defense Department and Defense Intelligence Agency. Regular readers of our reports were alerted to this deception as early as last April. Among the many pieces presenting contrary evidence was this oneNext this, on Trump’s recent about-face on war with Syria (via email from Kevin Fathi):  On Sunday I got a call from Mike Doherty. The current state senator and former U.S. Army officer was livid about President Trump’s about-face on Syria. “In the 2016 campaign, his major promise was ending these stupid foreign wars,” said the Warren County Republican. “If he breaks that promise with his base, I think he’s finished.” As of early last week, Trump sounded like he was sticking to his promise to pull U.S troops out of Syria. On Tuesday, he met with his generals in what was supposed to be a private meeting on the issue. On Wednesday, leaks from that meeting were widely reported in the press. The reports said his call for a rapid withdrawal of troops from Syria “faced unanimous opposition from the Joint Chiefs of Staff, the Pentagon, the State Department and the intelligence community.” There are two points made above. One, Trump’s about-face reportedly occurred as a result of “unanimous opposition from the Joint Chiefs of Staff, the Pentagon, the State Department and the intelligence community.  And two, “In the 2016 campaign, his major promise was ending these stupid foreign wars,” said the Warren County Republican. “If he breaks that promise with his base, I think he’s finished.”

"There Wasn't A Single Corpse": Russia Claims 'White Helmets' Staged Syria Chemical Attack -  Russia claims that the reported chemical attack in Syria last Sunday was staged by the "white helmets," a US-funded NGO lauded by mainstream media for their humanitarian work, while long-suspected of performing less-than humanitarian deeds behind the curtain.  Speaking with EuroNews, Russia's ambassador to the EU, Vladimir Chizov, said "Russian military specialists have visited this region, walked on those streets, entered those houses, talked to local doctors and visited the only functioning hospital in Douma, including its basement where reportedly the mountains of corpses pile up. There was not a single corpse and even not a single person who came in for treatment after the attack." "But we've seen them on the video!" responds EuroNews correspondent Andrei Beketov. "There was no chemical attack in Douma, pure and simple," responds Chizov. "We've seen another staged event. There are personnel, specifically trained - and you can guess by whom - amongst the so-called White Helmets, who were already caught in the act with staged videos." Russia said it sent experts in radiological, chemical and biological warfare - along with medics, in order to inspect the Eastern Ghouta city of Douma where the attack is said to have taken place.  Russia's Defense Ministry said in a statement that the experts "found no traces of the use of chemical agents," following a search of the sites, adding "All these facts show... that no chemical weapons were used in the town of Douma, as it was claimed by the White Helmets."  “All the accusations brought by the White Helmets, as well as their photos… allegedly showing the victims of the chemical attack, are nothing more than a yet another piece of fake news and an attempt to disrupt the ceasefire,” said the Russian Reconciliation Center. Meanwhile, UK Prime Minister Theresa May told President Trump on Tuesday that Britain would require more evidence in last weekend's suspected chemical attack before committing to a military strike against Syria, reports The Times.

Trump Is Blinking on Syria – Russian Ability to Hit Back Is Too Risky for Him - It is now becoming quite clear that the US and Israel do not hold enough cards in Syria, and have been out-manouvered by Russia/Iran/Syria. The US will either not strike at all, or like a year ago, make symbolic strikes where they have warned the Russians of targets, avoiding any Russian fatalities. All of Trump's terrifying bluster of yesterday was just that, bluster. Consider the following: The Syrians / Iranians / Russians have won the war on the ground, and a few missile strikes at military targets are not going to change that reality. We carried an article this morning by the excellent Indian analyst M.K. Bhadrakumar, who is always worth reading, where he explains the reality of this most convincingly. RI deputy editor Marko Marjanovic makes a similar point in another excellent article this morning - the strikes will not impede the Russian goal of winning the war, so if there are strikes, the rational response would be to ignore them, and get on with crushing Al Qaeda, which they are doing very effectively (they've already destroyed ISIS). Also very interesting is this explanation on Russian television recently from an expert on Israeli intelligence and military issues, Yakov Kedmi. Mr. Kedmi has become a regular on the top Russian political analysis shows, earning respect from viewers for his hype-free explanations of what the reality is on the ground in the Middle East. . He explains some very simple facts which no doubt have been explained to Trump by his admirals and generals, when he has time to sit down and focus for a few minutes in between the madness of having to deal with Mr. Mueller, endless scurrilous and likely untrue allegations trumpeted in the media, and actually running a country. That he is able to focus on anything for more than a few minutes is astounding.

US Military Killed 'A Couple Hundred' Russians In Syria Airstrikes, Pompeo Says As Trump Considers New Attack -- Prospective Secretary of State Mike Pompeo told lawmakers Thursday that the U.S. killed up to 200 Russian in airstrikes conducted against forces loyal to Syrian President Bashar al-Assad in February. U.S. officials have so far remained silent about the number of casualties inflicted by a coalition assault on pro-Syrian government fighters that the Pentagon claimed opened fire on allied Syrian Democratic Forces in the eastern province of Deir Ezzor. Both a U.S.-led coalition and the Russia-backed forces supportive of Assad are battling the Islamic State militant group (ISIS) in the region, but recent tensions have produced fears of an open conflict between Washington and Moscow."In Syria, now, a handful of weeks ago, the Russians met their match. A couple hundred Russians were killed," Pompeo said during his confirmation hearing in Washington. CIA Director Mike Pompeo testifies before a Senate Foreign Relations Committee confirmation hearing on Pompeo’s nomination to be secretary of state on Capitol Hill in Washington, April 12, 2018. Pompeo has vowed to take a tough stance against Russia at a time of volatile relations between Washington and Moscow. CIA Director Pompeo was named as Trump's choice to replace former Secretary of State Rex Tillerson, who reportedly found out he was out of the job in February through the president's Twitter account. The shakeup was followed by another high-profile switch, when Trump announced he wanted former U.S. Ambassador to the U.N. John Bolton to take the place of National Security Adviser H.R. McMaster. 

U.S. Walks Back Claim that Syrian Government Carried Out Chemical Weapons Attack --While Trump blamed the Syrian government for the alleged recent chemical weapons attack, U.S. officials made it clear today that we don’t yet know what happened. The New York Times reports:“We are continuing to assess intelligence and are engaged in conversations with our partners and allies,” [White House spokeswoman Sarah Huckabee] Sanders said in a statement. .. The Trump administration has not yet confirmed the use of chemical weapons by the Syrian regime. Reuters notes:“I believe there was a chemical attack and we are looking for the actual evidence,” [Secretary of Defense] Mattis told lawmakers, adding he wanted inspectors in Syria “probably within the week.” In a separate article, Reuters writes:The United States is still assessing intelligence about last weekend’s suspected chemical weapons attack in Syria, U.S. Defense Secretary Jim Mattis said on Wednesday, striking a cautious tone hours after President Donald Trump threatened missile strikes.Asked if he had seen enough evidence to blame Syrian President Bashar al-Assad’s forces for the attack, Mattis said: “We’re still assessing the intelligence — ourselves and our allies. We’re still working on this.” He did not elaborate. And see this.

Warmonger’s Remorse -- Kunstler -- I don’t know about you, but for a couple of days there I expected to wake up to the sight of mushroom clouds billowing across the horizon, all our exceptional hopes, wishes, troubles, and cares as a nation gone up in a vapor. I think it was the Defense Secretary, nickname “Mad Dog,” who put the kibosh on the latest neocon temper tantrum against Bashar “The Animal” al-Assad. General Mattis told the House Armed Services Committee that the US was, er, “still looking for evidence” of an alleged poison gas attack against civilians in Douma, Syria. That phrase “still looking for evidence” sounds like an elliptical way of saying we have no idea what, if anything, might have actually happened over there, just possibly even nothing at all. The Russians were busy looking for evidence on the ground in and around Douma, and they claimed to have found nothing — no traces of poison gas, no corpses, no gassing victims in the local hospital — and put out a call for international inspectors to come have a look. No reply on that from our side. Which does raise the question: are we even interested in the truth? Maybe not. Also apparently not in the strange case of the poisoned Skripals that preceded the incident (or not) at Douma, and which touched off an expulsion orgy of Russian Diplomats among the US and our allies. Sergei Skripal, a Russian/British double-agent who had been exchanged to Britain in a spy-swap, fell ill along with his daughter, Yulia, on a park bench after lunching in quaint old Salisbury, Wiltshire, UK. The supposed weapon in that case, Novichok, an advanced neurotoxin that kills instantly, was found on the doorknob of the Skripal house, and yet the couple made it downtown, enjoyed a leisurely meal, and took a post-luncheon stroll. Casual observers did note that Salisbury is only a ten-minute drive from the UK’s Defence Science and Technology Laboratory, where military poisons are stored and evaluated, and after two weeks of idle chatter, scientists there released a galling report that they could not determine the origin of whatever knocked out the Skripals.  In any case, it didn’t kill them. Yulia Skripal was released from the hospital this week and is, apparently, some sort of hostage of the British government. You’d suppose that in a free country, Yulia might be interested in talking to the press, and certainly vice-versa, but she is incommunicado and was whisked away under guard to some mysterious hideaway.  There was chatter in the US media that the Skripals might be sent here under some sort of US witness program. It looks like the US and Britain are running out of rugs to sweep stuff under.

Ron Paul Rages: Assad Gassing His Own People Is "Total Nonsense” -- Former Congressman Ron Paul has strongly argued following the alleged chemical gas attack blamed on the Syrian government that it makes no logical sense for Assad to order a gas attack, and has called the accusations a telltale sign of a false flag attack meant to provide justification for the U.S. military to maintain a presence in Syria.An incident will occur and somebody will get blamed and it’s usually a false flag,” said Paul.“Right now, recently, it’s all been in Syria, ‘Assad did it! Assad did it!’” explained the former congressman. “No proof at all.”“The way the people that perpetuate these false flags [sic] say that Assad is gassing his own people, at the same time, he’s winning the war and the people are flocking back in to go to the territories that he has returned to the government of Syria,” explained Paul.“But, nevertheless, he’s out there gassing his own people, which makes no sense whatsoever and fewer and fewer people are believing this.”Paul, who founded the Ron Paul Institute for Peace and Prosperity in 2013 after leaving the U.S. House, presented his analysis via the Ron Paul Liberty Report, describing how foreign policy goals related to Saudi Arabia and Iran, and Russia, as well as the influence of neoconservatives, oil interests, and the military-industrial complex play into the current paradigm we see playing out in Syria.During an appearance on RT, Paul further elaborated. “This whole idea that all of a sudden Assad’s gassing his own people, I think, is total nonsense,” Paul said, pointing out that “over and over again” the US has claimed the Syrian or Russian government has been complicit in previous gas attacks in Syria – and the alleged poisoning of Sergei and Yulia Skripal in London — but “nothing panned out.” Or as Paul put it, one “fake news” story after another. The libertarian icon then reasoned that the rush to condemn the Syrian government without evidence is meant to provide a justification for those wanting the US to remain in Syria and topple the Syrian government in hopes of installing a more western-friendly regime that is not within Russia or Iran’s sphere of influence. Paul argued that, while it provides little to no strategic benefit for Assad to gas his own people, it would greatly benefit those that are pushing for regime change – especially after Trump recently said he would like to remove U.S. troops from Syria.

Defense Secretary urges caution on possible military strike on Syria -  NY Times —— Defense Secretary Jim Mattis sought on Thursday to slow down an imminent strike on Syria, reflecting mounting concerns at the Pentagon that a concerted bombing campaign could escalate into a wider conflict between Russia, Iran and the West. During a closed-door White House meeting, officials said, Mr. Mattis pushed for more evidence of President Bashar al-Assad’s role in a suspected chemical attack last weekend that would assure the world that military action was necessary. Despite the caution, two Defense Department officials predicted it would be difficult to pull back from punishing airstrikes, given President Trump’s threat on Twitter a day earlier of American missiles that “will be coming, nice and new and ‘smart.’” Mr. Mattis publicly raised the warning on Thursday morning, telling the House Armed Services Committee that retaliation must be balanced against the threat of a wider war. “We are trying to stop the murder of innocent people,” Mr. Mattis said. “But on a strategic level, it’s how do we keep this from escalating out of control — if you get my drift on that.” Hours later, after Mr. Mattis detailed his concerns at the White House, the president’s top national security advisers ended an afternoon meeting without a decision to attack, said Sarah Huckabee Sanders, the press secretary. Diplomatic efforts continued deep into the evening, with Mr. Trump agreeing in a phone call with Prime Minister Theresa May of Britain that “it was vital that the use of chemical weapons did not go unchallenged,” Downing Street said in a statement. The two leaders committed to “keep working closely together on the international response,” the statement said.

Russia says Britain helped fake Syria chemical attack, calls for emergency UN meeting to ‘avert danger of war’ - The US State Department says it is "confident" the Syrian Government was responsible for a suspected chemical weapons attack in the rebel-held Syrian town of Douma one week ago. But Russia's Defence Ministry claimed Britain was involved in "faking" the attack, which a Syrian medical relief group said killed at least 60 people, including children."We can say that the Syrian Government was behind this attack. We know that this was a chemical weapon that was used. The exact kind or the mix, that we are still looking into. A lot of this stuff is classified at this point," State Department spokeswoman Heather Nauert said.White House press secretary Sarah Huckabee Sanders said United States officials at various levels were still consulting with allies about possible retaliatory military strikes."We also hold Russia responsible for their failure to stop chemical weapons attacks from taking place," Ms Sanders said. US President Donald Trump threatened missile strikes on Syria in a tweet on Wednesday, warning Syria's main ally Russia to "get ready".

Russia Has "Irrefutable Evidence" UK Staged Syrian Chemical Attack - As the blame game over the alleged chemical attack in Syria escalates ahead of what is expected to be an imminent, if contained, air strike campaign by the US, UK and/or France against Syria, on Friday morning, Russia's foreign minister Sergey Lavrov said Moscow had "irrefutable evidence" that the attack - which allegedly killed more than 40 people in an April 7 chemical weapons strike on the former rebel outpost of Douma  -was staged with the help of a foreign secret service. "We have irrefutable evidence that this was another staged event, and that the secret services of a certain state that is now at the forefront of a Russophobic campaign was involved in this staged event," he said during a press conference according to AFP. Speculation that said "certain state" was the UK was confirmed shortly after, when Russia's defense ministry alleged that Britain was involved in the suspected chemical attack. According to defense ministry spokesman, Major General Igor Konashenkov, the Kremlin has evidence that Britain was behind the attack.Quoted by Reuters, he said: "We have... evidence that proves Britain was directly involved in organising this provocation."As RT further adds, the Russian Defense Ministry presented what it says is "proof that the reported chemical weapons attack in Syria was staged."It also accused the British government of pressuring the perpetrators to speed up the “provocation.” During a briefing on Friday, the ministry showed interviews with two people, who, it said, are medical professionals working in the only hospital operating in Douma, a town near the Syrian capital, Damascus.During a briefing on Friday, the ministry showed interviews with two people, who, it said, are medical professionals working in the only hospital operating in Douma, a town near the Syrian capital, Damascus.In the interviews released to the media, the two men reported how footage was shot of people dousing each other with water and treating children, which was claimed to show the aftermath of the April 7 chemical weapons attack. The patients shown in the video suffered from smoke poisoning and the water was poured on them by their relatives after a false claim that chemical weapons were used, the ministry said.“Please, notice. These people do not hide their names. These are not some faceless claims on the social media by anonymous activists. They took part in taking that footage,” said Konashenkov.

US and allies launch strikes on Syria chemical weapons sites - BBC News: President Donald Trump says he has approved US military strikes against Syrian chemical weapons sites, in collaboration with the UK and France. The strikes are in response to an alleged chemical attack on the Syrian town of Douma last week. "A combined operation with the armed forces of France and the United Kingdom is now underway," President Trump said in an address to the nation. Explosions were reported near the Syrian capital Damascus. UK Prime Minister Theresa May confirmed British involvement, saying there was "no practicable alternative to the use of force". But she also said the strikes were not about "regime change". The strikes were ordered "on targets associated with the chemical weapons capabilities" of the Syrian government, Mr Trump said. The US president said the purpose was "to establish a strong deterrent against the production, spread and use of chemical weapons". "These are not the actions of a man, they are the crimes of a monster instead," he said of Syrian President Bashar al-Assad. Syria has denied carrying out the attack and its ally, Russia, warned that Western military strikes would risk starting a war.

Russia Responds: "We Are Being Threatened. A Predesigned Scenario Is Being Implemented" - After the a joint force of US, French and UK fighter jets and ship launched an attack which as Mattis said, "used a little over double the number of weapons this year than we used last year", and amid unconfirmed reports that the Syrian air force managed to shoot down one or more Tomahawk missiles, the question everyone was asking is whether Russia has responded, and if so, how.The answer, for now at least, is that Russia has not activated a response, although that may soon change.  Here is the statement from Russia's ambassador to the US, Anataloy Antonov, posted on Facebook:The worst apprehensions have come true. Our warnings have been left unheard.A pre-designed scenario is being implemented. Again, we are being threatened. We warned that such actions will not be left without consequences.All responsibility for them rests with Washington, London and Paris.Insulting the President of Russia is unacceptable and inadmissible.The U.S. – the possessor of the biggest arsenal of chemical weapons – has no moral right to blame other countries.Despite repeated warnings from Russia, President Trump ordered American forces, along with their British and French allies, to strike military targets in Syria on Friday night; as noted previously, during a press conference late on Friday, General Joseph Dunford, Chairman of the Joint Chiefs of Staff, the Russian military operating in Syria was not notified about the American targets in advance told reporters following the attacks. The US "specifically identified” targets to “mitigate the risk of Russian forces being involved," Dunford said. "We used the normal deconfliction channel to deconflict airspace. We did not coordinate targets.”

Trump Attacks Syria With Chemical Experts on the Way - President Donald Trump on Saturday (Syria time) ordered air strikes against Syria in retaliation for an alleged chemical weapons attack last weekend outside Damascus.“I ordered the United States armed forces to launch precision strikes on targets associated with the chemical weapon capabilities of Syrian dictator Bashar al-Assad,” Trump said from the White House. The strikes were carried out together with Britain and France, he said.  CNN reported explosions at a research facility near Damascus. At a news conference later, Pentagon officials said this “phase” of the missile strikes against three so-called chemical research targets, one in the center of the Syrian capital, were completed and “no additional attacks are planned.”U.S. officials said Russia had been told of the military operation but Gen. Joseph Dunford, chairman of the joint chiefs of staff, told a press conference Friday night (Washington time) that Moscow was not informed of the Syrian targets. Russia had vowed to shoot down incoming U.S. and allied missiles as Russian military personnel are embedded with the Syrian Arab army at various locations in the country.U.S. military analysts say the U.S. wanted to avoid hitting Russian targets, but once unleashed, military action can lead to unintended consequences. A team of experts from the Organization for the Prohibition of Chemical Weapons was on its way to Syria after accepting an invitation from the Syrian government to study soil and other samples in Duma, the Damascus suburb where the alleged attack took place. It’s not clear whether the U.S.-led operation would complicate their mission as the team was due to arrive later on Saturday. It is also not certain whether the timing of the U.S.-led attack was intended to prevent the team from gathering evidence to prove whether or not chemicals were used. The OPCW does not assess blame.

The pundits were wrong about Assad and the Islamic State. As usual, they’re not willing to admit it - The Islamic State is a shadow of its former self. In 2014, the extremist group seemed to make substantial inroads in achieving its stated goal of a caliphate. It boasted tens of thousands of fighters and territorial control over an area roughly the size of South Korea. By almost every metric, Islamic State has collapsed in its Syria stronghold, as well as in Iraq. As a former foreign fighter recently admitted, "It's over: there is no more Daesh left," using an Arabic acronym for Islamic State. The rollback of Islamic State must come as a shock to the chorus of journalists and analysts who spent years insisting that such progress would never happen without toppling the regime of Bashar Assad — which is, of course, still standing. A cavalcade of opinion makers long averred that Islamic State would thrive in Syria so long as Assad ruled because the Syrian Arab Army was part of the same disease. John Bolton, former United Nations ambassador under George W. Bush, insisted in the New York Times that "defeating the Islamic State" is "neither feasible nor desirable" if Assad remains in power. Writing in the Wall Street Journal, Sens. John McCain and Lindsey Graham asserted that "defeating Islamic State also requires defeating Bashar Assad." Kenneth Pollack of the Brookings Institution prescribed a policy of "building a new Syrian opposition army capable of defeating both President Bashar al-Assad and the more militant Islamists." Similarly, Max Boot, a contributing writer to this newspaper, argued that vanquishing Islamic State was futile unless the U.S. also moved to depose the "Alawite regime in Damascus." Like other regime-change salesmen, he pitched a no-fly zone across the country to facilitate airstrikes against the Assad government, while boosting aid to the so-called moderate rebels. Prominent Syria analysts also claimed that Assad supported, even sponsored Islamic State. CNN's Michael Weiss pushed the line that Assad and Russian President Vladimir Putin would not fight Islamic State and that Syria and Russia were the group's "unacknowledged air force." His co-author, Hassan Hassan, contended that the Syrian regime must go because "Assad has never fought [Islamic State] before."

Iran Warns U.S. Would "Regret" Pulling Out of Nuclear Deal Soon After Doing So -- Iranian President Hassan Rouhani has threatened that the United States would "regret it" and suffer consequences of pulling out of the nuclear deal “less than a week“ after doing so if the US follows through on a plan it is considering to impose stricter sanctions on Iran by May 12.At a conference to mark National Nuclear Technology Day in Tehran, Rouhani escalated the tone of his rhetoric toward the United States as President Trump ramps up rhetoric of his own, amid growing expectations that the deal won't make it through Trump's first term in office. "We will not be the first to violate the accord but they should definitely know that they will regret it if they violate it," Rouhani told a conference to mark National Nuclear Technology Day in Tehran. “We are much more prepared than they think, and they will see that if they violate this accord, within a week, less than a week, they will see the result."Iran has come out and stood firm on their position not to alter the accord that was put into place in 2015 between Iran and China, the U.S., U.K., Russia, France and Germany. Iran makes the point that all other parties involved have agreed that Iran has held up their end of the bargain and that the United States would ultimately be the party that looks foolish in a situation where they try to impose stricter sanctions in violation of the initial agreement.

Qatar Charm Offensive Appears to Have Paid Off, U.S. Officials Say - — Qatar may score an important victory on Tuesday if President Trump, as expected, tells the leader of the tiny Persian Gulf nation that he now views Qatar’s rivals as stonewalling a solution to an important regional dispute.Mr. Trump will host Emir Tamim bin Hamad Al-Thani at the White House, shifting from describing Qatar as a “funder of terror” to what a senior administration official on Monday said was sympathy with Doha’s continued struggle under a four-nation embargo led by Saudi Arabia and the United Arab Emirates that was imposed in June.With urgent conflicts piling up across the Middle East, Mr. Trump is eager to resolve the Sunni Muslim regional feud as he considers the imminent prospect of launching a punishing military strike in Syria over a suspected chemical weapons attack. Qatar is host to al-Udeid Air Base, which is home to nearly 10,000 American troops and is the overseas headquarters for United States Central Command that would launch any strike against Syria.Over the past year, the emir has spent millions of dollars hiring lobbyists and flying influential American power brokers to Qatar in a charm offensive to win over the Trump administration — and deflate his rivals’ efforts to dethrone him. Riyadh and Abu Dhabi h ave accused Doha of financing terrorism, cozying up to Iran and harboring fugitives, and the embargo forced changes to airplane routes and severed Qatar’s only land border.

Kudlow hopes China can still come to the trade table - Top White House economic adviser Larry Kudlow said Sunday the door is still open to avert a trade war with China after it and the U.S. have both threatened tariffs on a wide swath of imports. “Hopefully, in just the next two months, the Chinese will come seriously back to the table,” Kudlow said on “Fox News Sunday.” “President [Donald] Trump has told me … he likes President Xi [Jinping], they get along, he respects President Xi as a negotiator. But they have got to play by the rules. After touting on Friday a “trade coalition of the willing” to take on China, Kudlow on Sunday said the U.S. has been approached by Japan, Europe, Australia and Canada — though he declined to say whether any is threatening tariffs, as opposed to World Trade Organization action. “My ‘trade coalition of the willing’ will put the whole world behind the United States actions against China,” he said. The director of the National Economic Council also reiterated his belief that “we’re not going to end up in a trade war,” emphasizing that Trump’s proposed tariffs on $150 billion worth of Chinese goods, including $100 billion of goods cited Thursday, were still just a proposal. “I don’t think there’s any trade war in sight,” Kudlow said. “It’s a long process. There’s several months here. We put out papers, we take public comments, we then review the public comments, and then decisions will be made. So far, no tariffs and no action has been enacted.”“We have had to go in and fire a shot across the bow,” he said. “China's behavior is 20 years now. It’s more than unfair trading practices: It’s illegal trading practices.” “You have to take certain risks as you go in,” he added. “We’re taking them.” 

China Says US Trade Talks Currently 'Impossible'  -- China warned on Monday that trade talks with the United States were "impossible" under current conditions after President Donald Trump reassured markets by suggesting that the dispute could be resolved. The two sides have announced tit-for-tat tariffs and threatened to hit each other with more duties, raising the prospect of a trade war that could rattle the global economy. Asian markets rose on Monday after Trump tweeted that he saw an end to the escalating dispute before the higher tariffs threatened on hundreds of billions of goods would come into effect. But China's foreign ministry was less sanguine. "Up to now, Chinese and U.S. officials have not held any negotiations on the trade dispute," foreign ministry spokesman Geng Shuang told reporters during a regular press briefing. "Under the current conditions, it is impossible for the two sides to have any negotiations on this issue," Geng added. A few hours later, Trump returned to tougher talk with an early-morning tweet railing against China's duties on U.S. cars. "When a car is sent to the United States from China, there is a Tariff to be paid of 2 1/2%. When a car is sent to China from the United States, there is a Tariff to be paid of 25%," Trump tweeted. "Does that sound like free or fair trade. No, it sounds like STUPID TRADE -- going on for years!" 

 China Studying Yuan Devaluation As Retaliation To Trade War; CNH Slides - Last week, with the tit-for-tat Chinese trade war escalating following Trump's threat to raise Chinese imports tariffs by another $100BN, we said that it is time to buy some Yuan puts, ahead of a potential Chinese devaluation. Overnight we got a clear lesson why this highly convex trade would be prudent in the current trade war environment, when Bloomberg reported at 3am EDT that China is "evaluating the potential impact of a gradual yuan depreciation" citing people familiar with the matter said, as the country’s leaders are weighing their possible responses in the escalating trade war with President Trump. As a reminder, a devaluation was one of the "nuclear" retaliation options listed here on Friday, and is certain to provoke an even harsher response by the US. Still, this appears not to have spooked senior Chinese officials who are reportedly studying a "two-pronged analysis of the yuan that was prepared by the government": one part looks at the effect of using the currency as a tool in trade negotiations with the U.S., while a second part examines what would happen if China depreciates the yuan to offset the impact of any trade deal that curbs exports. Still, the analysis doesn’t mean officials will carry out a devaluation, which would require approval from top leaders. In kneejerk response, both the onshore and offshore yuan weakened as much as 0.2% to 6.3186 per dollar in onshore trading and 6.3211 for the offshore pair. At the same time, the dollar climbed against the yen and other EM currencies in response: "USD seems to be regaining some ground on the back of the headline" “The story seems to suggest that the Chinese are discussing the idea of FX depreciation rather than work on an imminent change in FX policy." 

New PBOC Governor Rules Out Currency Depreciation In US-China Trade War -- While the entire world was transfixed on the speech from China's president Xi Jinping on Tuesday morning at the Bo’ao Forum, which sent futures surging due to its allegedly, if erroneously, "conciliatory" note, far fewer paid attention to the new PBOC Governor Yi Gang, who today spoke at the same forum on monetary policy and further opening up of the financial sector. Unlike Xi's speech, which was was repeat of what Xi said in Davos in January, Yi' speech was far more important as it actually unveiled Chinese strategy in the context of currency wars.First and foremost, Governor Yi stated for the record that the Chinese currency will not be used in a trade conflict. While there had been several recent media reports about China looking into this possibility, most recently from Bloomberg, Goldman notes that factors that support a view that adoption is unlikely include:

  1. An active CNY depreciation would risk further escalation of trade tensions, and the senior leadership, including President Xi, has been generally conciliatory; it's easier to justify direct quid pro quo tariffs as a countermeasure to tariffs imposed by the US.
  2. Depreciation has debatable effects on trade; many officials do not believe exchange rate changes are that effective in supporting export growth.
  3. Given the experience of 2015-16, the risk of self-fulfilling depreciation could be on policymakers' minds.
  4. Actively managing the CNY weaker would be awkward after the government has commented extensively that it is no longer actively managing the exchange rate. We believe this is especially the case after Governor Yi’s recent promotion as he is a strong believer of a more market-based way to manage the economy.
Governor Yi's statement does not mean that the RMB will not depreciate against the dollar, but just that China will not actively intervene in the market to use currency as a tool during the conflict. Indeed, if the broad dollar strengthens, Chinese policymakers might be happy to see it as there has been a growing sense the the RMB has been moving too much in one direction against the dollar.

"We Understand The Chinese Government Has Halted Purchases Of US Treasuries": SGH -- On Friday, we reported that among the five "nuclear" options available to Beijing to retaliate against Trump's latest $100BN in proposed import tariffs, was the choice whether to sell US Treasuries. But what if Beijing did not want to unleash a full-blown market nuke, and instead was hoping for a targeted, EMP hit?  Then it would simply stop buying US paper, instead of dumping it outright; in the process it wouldn't hurt the US too much - avoiding a furious tit-for-tat response - but would still send a clear signal to the White House, whose fiscal spending plan will more than double net Treasury issuance this year from under $500BN to over $1 trillion, and which needs every possible marginal buyer of US paper, both domestic and foreign. Which is precisely what a new report by SGH Macro Advisors claims.According to the consultancy, a long-time favorite of macro hedge funds, Beijing has twice threatened deliberately targeted tit-for-tat punitive measures against the US to date: "first, in response to the Trump Administration’s threat of steel and aluminum tariffs, and second, in response to broader measures aimed at $50 billion of products that lie directly at the heart of Chinese technology transfers, intellectual property violations, and strategic, “Made in China 2025” plan."But even as US cabinet officials lined up yesterday to calm jittery equity markets, SGH says in a note released over the weekend that "China had already signaled an aggressive and potentially more ominous escalation in the developing trade wars to the White House":  From what we understand, the Chinese government has halted its purchases of US Treasuries. Despite the direct encouragement, according to Chinese sources, by US Treasury Secretary Steve Mnuchin for China to "stay put,” Beijing has apparently discontinued purchases of US Treasuries “for the past few weeks.”

China Cannot Use Its Treasury Holdings As Leverage. Here’s Why – Ed Harrison - When China builds a trade surplus, it accumulates dollars. And it has to do something with those dollars. That means its purchase of US dollar assets is non-discretionary unless it revalues its currency. Every time there is some kind of dispute between China and the United States, a litany of voices emerges to warn of spiking interest rates. These warnings are wrong-headed. And this post is going to explain why. We went through this very same exercise in 2010. And Michael Pettis’s commentary is useful in this context. Let me quote from Michael and explain what it means in today’s context:  If China runs a current account surplus, it must accumulate net foreign claims by exactly that amount, and the entity against which it accumulates those claims (adjusting for actions by other players within the balance of payments) ultimately must run the corresponding current account deficit. And as long as China ran the largest current account surplus ever recorded as a share of global GDP, and the US the largest current account deficit ever recorded, and especially since China also ran an additional capital account surplus (i.e. other non-PBoC agents ran a net capital inflow), it was almost impossible for the PBoC to do anything but buy US dollar assets. Given the sheer amounts, a substantial portion of these assets had inevitably to be USG bonds. The source of acrimony between China and the US is China’s trade surplus with the US. Now, when China builds this surplus, it accumulates dollars. And it has to do something with those dollars. And so, for a large portion of that dollar hoard, the Chinese have decided to store it as Treasury bonds. We don’t have to argue the merits of the Trump trade position here. It’s irrelevant regarding China’s accumulation of Treasury securities or mortgage-backed securities. Note that now it is Germany instead of China that has the largest current account surplus. And the EU has drawn Trump’s ire for this reason. This was not a discretionary lending decision. It is the automatic consequence of China’s currency regime, in which it pegs the RMB to a foreign currency, in this case the dollar. Why? Because when the PBoC decides on the level of the RMB against the dollar, it does not do so by passing a law, and making it a capital crime for anyone to trade at a different price. What it does is far simpler. It offers to buy or sell unlimited amounts of RMB against the dollar at the desired price. No one will sell dollars for less than what they can get from the PBoC, nor will anyone buy dollars for more than what they can pay the PBoC, so all transactions get done at that price. That is how the PBoC (or any other central bank that intervenes in the currency market) sets the foreign exchange value of its own currency.

Top Trump aide lays out driving forces of trade war against China --One of President Trump’s key economic advisers has made clear the indissoluble connection between the US trade war measures against China and the striving by American imperialism to maintain its global dominance, if necessary by military means.This is laid out in a comment piece by White House National Trade Council Director Peter Navarro published in the Financial Times on Monday. After pointing to the threat posed to American economic dominance by China’s move to expand the development of high-tech products, he writes:“It is not just American prosperity at risk. Mr Trump’s National Security Strategy describes a National Security Innovation Base that provides the intellectual know-how and human capital to ensure that the US remains safe. The IP [intellectual property] that China is now trying to take is the very heart of this concept and a key to continued US military dominance. Because of the high stakes involved, last August, Mr. Trump directed the US Trade Representative, Robert Lighthizer, to consider investigating China’s unfair technology transfer policies and practices.”Navarro’s reference to the National Security Strategy, issued last December, is ominous, and it makes clear the link between economic and military warfare. That document declared that the US has entered a new era of “great power competition” with “revisionist states,” signalling out Russia and China. The results of Lighthizer’s China investigation came last week with the proposed imposition of tariffs on $50 billion worth of Chinese goods covering some 1,333 products. Significantly, the proposed measures did not cover Chinese-made and -assembled consumer goods including furniture, clothing and devices such as iPhones, which are among the largest contributors to the US trade deficit, but rather intermediate products that form part of global supply chains.

Disagreeing With Krugman: Is China Stealing Knowledge? - Dean Baker -- I would agree with pretty much all of Paul Krugman's criticisms of Donald Trump's trade war with China, but I would strongly disagree with one of his criticisms of China. He tells readers: "In some ways, China really is a bad actor in the global economy. In particular, it has pretty much thumbed its nose at international rules on intellectual property rights, grabbing foreign technology without proper payment." The issue here is who set the rules and what is proper payment.  The problem is that it was largely the United States that has set the rules in this story and it is demanding ever more money for items protected by its patent and copyright monopolies. We do this through our control of trade arrangements, most importantly the WTO where we had the TRIPS provisions inserted as a late entry to the Uruguay Round that was concluded in 1994. These rules were about forcing developing countries to pay more money to companies like Pfizer and Microsoft for everything from drugs and medical equipment to seeds and software. It shouldn't be surprising that developing countries like China might not like these rules.  The idea that developing countries would seek to get around rules established by their richer counterparts should not be alien to people in the United States. The United Kingdom had made it illegal to transfer blueprints for steam engines out of the country in order to preserve its competitive advantage. Francis Lowell famously memorized plans on a trip there in order to build the first steam-powered factory in the United States. The United States refused to recognize UK copyrights for much of the 19th century. So if China is not following the rules today, it has an important role model it can point to.

Trade war backfire: Steel tariff shrapnel hits U.S. farmers -- Lucas Strom, who runs a century-old family farm in rural Illinois, canceled an order to buy a new $71,000 grain storage bin last month - after the seller raised the price 5 percent in a day. The reason: steel prices jumped right after U.S. President Donald Trump announced tariffs. Throughout U.S. farm country, where Trump has enjoyed strong support, tariffs on steel and aluminum imports are boosting costs for equipment and infrastructure and causing some farmers and agricultural firms to scrap purchases and expansion plans, according to Reuters’ interviews with farmers, manufacturers, construction firms and food shippers. The impact of rising steel prices on agriculture illustrates the unintended and unpredictable consequences of aggressive protectionism in a global economy. And the blow comes as farmers fear a more direct hit from retaliatory tariffs threatened by China on crops such as sorghum and soybeans, the most valuable U.S. agricultural export. A&P Grain Systems in Maple Park, Illinois - the seller of the storage bin Strom wanted to buy with a neighboring farmer - raised its price two days after Trump announced aluminum and steel tariffs on March 1 to protect U.S. producers of the metals. Strom and his neighbor backed out. “Would that price destroy us? No,” Strom said. “But these days, you have to be smart about your expenses.” The metals tariffs also hitting makers and sellers of farm equipment, from smaller firms like A&P Grain to global giants such as Deere & Co (DE.N) and Caterpillar Inc (CAT.N). Such firms are struggling with whether and how to pass along their higher raw materials costs to farmers who are already reeling from low commodity prices amid a global grains glut. The world’s two largest economies have threatened each other with tariffs on tens of billions of dollars of goods recent weeks. Trump imposed tariffs of 25 percent on steel and 10 percent on aluminum in a move mainly aimed at curbing imports from China.

Farmers’ Anger at Trump Tariffs Puts Republican Candidates in a Bind  — As President Trump moves to fulfill one of the central promises of his campaign — to get tough on an ascendant China — he faces a potential rebellion from a core constituency: farmers and other agricultural producers who could suffer devastating losses in a trade war. Mr. Trump’s threat to impose tariffs on Chinese goods came with a presidential declaration that trade wars are good and easily won. But the action has injected damaging uncertainty into the economy as Republicans are already struggling to maintain their hold on the House and the Senate in a difficult election year. While the battle for control of the House will be waged in large part in the suburbs, rural districts in Southern Illinois, Iowa, Arkansas and Missouri could prove important. And control of the Senate could come down to Republican efforts to unseat Democrats in North Dakota, Indiana, Missouri and Montana — all states staring down the barrels of a trade war’s guns. With farmers angry and worried as China vows to retaliate, many Republicans find themselves torn between loyalty to a president who remains broadly popular in rural states and the demands of constituents, especially farmers, to oppose his tariffs. In North Dakota, a major soybean-producing state, Representative Kevin Cramer, a Republican who is running for the Senate, sounded restrained this past week when he urged Mr. Trump to “take a more measured approach” to China. By Friday, he sounded panicked. “I contacted @SecretarySonny to urge him to use every tool in the Farm Bill, including Commodity Credit Corp programs, to protect ag producers from effects resulting in potential trade actions against China,” he wrote on Twitter, referring to Agriculture Secretary Sonny Perdue. “Farmers must know the Admin has their back & I urge them to act swiftly.” China’s aggressive response to Mr. Trump’s tariffs is aimed squarely at products produced in the American heartland, a region that helped send him to the White House. A trade war with China could be particularly devastating to rural economies, especially for pig farmers and soybean and corn growers. Nearly two-thirds of United States soybean exports go to China. 

As U.S. and China trade tariff barbs, others scoop up U.S. soybeans (Reuters) - Escalating tensions between the United States and China have triggered a flurry of U.S. soybean purchases by European buyers, in one of the first signs that trade tariff threats lobbed between the world’s top two economies are disrupting global commodity trade flows. News of the sales, confirmed by the U.S. Department of Agriculture on Friday, helped to underpin benchmark Chicago Board of Trade soybean prices after U.S. President Donald Trump threatened to slap tariffs on an additional $100 billion of Chinese goods. The USDA said 458,000 tonnes of U.S. soybeans were sold to undisclosed destinations, which traders and grains analysts said included EU soybean processors such as the Netherlands and Germany. If the entire volume is confirmed to be going to the European Union, it would be the largest one-off sale to the bloc in more than 15 years, according to USDA data. Traders and analysts said the unusual trade flows were likely to continue in the near term, benefiting U.S. Gulf Coast shippers and likely hurting exporters in the U.S. Pacific Northwest, the No. 2 bulk grain outlet that relies heavily on Chinese demand. Trade tensions between Washington and Beijing have rattled markets over the past week. Soybean prices tumbled by as much as 5 percent after China threatened to levy extra duties on U.S. shipments, though the market ultimately ended the week down about 1 percent. The United States is the second-largest soybean exporter in the world after Brazil. China is by far the top buyer, importing about two-thirds of all soybeans traded globally. The big U.S. soybean sales come at a time when U.S. shipments are traditionally costlier than newly harvested soybeans shipped from Brazil, the world’s biggest exporter. But accelerated buying of Brazilian beans by Chinese importers, weary of potentially paying steep tariffs on U.S. purchases, has sent Brazilian export premiums to historic highs. 

New study shows Trump’s massive tariffs will hurt the economy and cost 79,000 US jobs - President Donald Trump has touted his recent decision to impost tariffs on imports of steel, aluminum, and some Chinese goods as a way to support American workers and invigorate the US economy.But a new study by the conservative-leaning Tax Foundation found that not only would Trump's new tariffs actually damage the US economy, they would also cost tens of thousands of American jobs over time.The Tax Foundation's Kyle Pomerleau and Erica York on Thursday released their report on the tariffs."Our analysis finds that the $37.5 billion in tariffs would lower GDP and wages by 0.1 percent, lower employment by the equivalent of 79,000 fewer full-time jobs in the long run, and make the US tax burden less progressive," the analysts said.Pomerleau and York pointed to existing economic literature showing how tariffs affect economies. They determined a few ways the tariffs could ultimately depress economic output:

  1. Increase prices: By making imports more expensive or driving people to more expensive US-made goods, businesses would see costs increase and in turn decrease their investment to compensate for the higher prices. That would spur higher costs for consumers.
  2. Increase the value of the dollar: While a boost in the value of the dollar would offset any price increases, it would also make US-made goods more expensive abroad and depress economic activity of export-heavy businesses.

Either way, the analysts said, overall economic activity among consumers and businesses would decline. Lower economic activity in turn means less hiring, since businesses would invest less on things like labor. The decline in labor spending would mean 79,000 fewer jobs are created in the long-run according to the study.

Coalition of Industry Groups to Fight Trump Tariffs Is Growing -  A coalition of diverse business groups that banded together to oppose President Donald Trump’s proposed tariffs on Chinese products has grown to more than 100. Organizations representing retail, agriculture, technology, manufacturing and other industries are now working against the tariffs and sent a letter opposing them to the leaders of the House Ways and Means Committee in advance of a hearing on Thursday. That’s up from 45 groups that signed a letter March 18 to the president urging him not to act. “There’s a sense of urgency on this issue, and the growing coalition is a sign that the business community is united against the proposed tariffs,” said Bethany Aronhalt, a spokeswoman for the National Retail Federation. The coalition, organized by the federation and the Information Technology Industry Council, say the proposed tariffs on $150 billion in Chinese goods are counterproductive to the goal of holding Beijing accountable for intellectual property theft and other trade practices. They’re seeking to keep specific items off a list of more than 1,300 products targeted for tariffs -- and trying collectively to keep levies from being imposed at all. The coalition’s letter to the Ways and Means Committee encourages Congress to work with the Trump administration to “develop and execute a strategic policy to effectively address the longstanding problems in China” with clearly defined objectives, deadlines and immediate negotiations. “Congress must ensure that hardworking families in the United States are not forced to pay the price for China’s bad behavior,” the coalition said in the letter. The industry groups warn that China’s promised retaliation with levies on agricultural products and other goods will ultimately be passed along to consumers. That would harm the American economy, cost jobs and erase benefits from the tax overhaul last year, the coalition said. “Everyone loses in a trade war,” the coalition added.

US- China Trade Talks Break Down After US Rejects "Frustrated" Beijing's Offer To Cut Deficit - While much of the overnight session was market by the previously discussed buying euphoria that sent futures over 1% higher after Monday's disappointing close following a "conciliatory" speech by China's president Xi who - once again - promised to open China's economy and lower import tariffs, there was a moment of sheer angst when just before 4am ET, Bloomberg almost broke the narrative of Xi trade war "reconciliation" when it reported that trade talks between the US and China broke down last week after the Trump administration demanded that China curtail support for high-technology industries, which in turn spiked the JPY, if only briefly. As Bloomberg details, the tentative negotiations broke down when Liu He, a vice premier overseeing economics and finance, told officials last Thursday that Beijing had rejected a U.S. request to stop subsidizing industries related to its “Made in China 2025” initiative, a key target of Peter Navarro's ire which he has accused China of using to force companies into transferring technology in areas like robotics, aerospace and artificial intelligence.  Curiously, China's rejection of U.S. demands came after Beijing had already offered to narrow the trade deficit by $50 billion, including by importing more liquefied natural gas, agricultural products, semiconductors and luxury goods. The plans also included opening the financial sector at a faster rate and giving U.S. companies more access to China’s booming e-commerce market, the person added. In other words, China was willing to make a major concession in the escalating trade war, but the Trump administration rebuffed it when it considered that Beijing would not taper the "2025" initiative, and also coincides with Trump's escalated demand last Thursday that called for an addition $100 billion in tariffs .After negotiations collapsed, vice premier Liu reportedly said President Xi Jinping was ready to fight back hard if Trump wanted a trade war.

Donald Trump praises Xi Jinping’s ‘kind words’ in fresh sign of trade detente -  President Donald Trump on Tuesday praised the “kind words” from Chinese leader Xi Jinping and pledged “great progress” in the looming trade dispute between the world’s largest economies. Still, the White House also admonished China to take concrete action on US complaints about unfair trade practices. Donald Trump. File photo: Gage Skidmore.Xi earlier Tuesday pledged to open Chinese markets and lower tariffs, remarks that helped global investors breathe a sigh of relief after weeks in which Beijing and Washington appeared on a collision course. “Very thankful for President Xi of China’s kind words on tarrifs [sic] and automobile barriers… also, his enlightenment on intellectual property and technology transfers,” Trump said on Twitter. “We will make great progress together!” Trump predicted, hailing the speech in which Xi renewed a commitment to lower car import tariffs. But following Trump’s tweet the White House made clear it wants to see changes enacted in China. “We’re encouraged by the words but we want to see concrete steps and concrete action,” Press Secretary Sarah Sanders said.“We want to see more than just the rhetoric,” she added, and until that happens the planned tariffs will enter into force. 

China Says Xi Speech Was "Not A Concession" To Trump, Denies Any Trade Talks Took Place - Last week, in an attempt to soothe jittery markets, Trump's chief economic advisor Larry Kudlow said the US and China would probably strike an agreement to stop tariffs from being imposed - though he admitted that talks hadn't started just yet.Well, more than a week later, the two sides have apparently made zero progress toward a deal, because early Thursday, Beijing hit back with a pair of announcements that are sure to pop the bubble of trade-war optimism that has buoyed markets this week, according to CNBC.First, China's Ministry of Commerce confirmed that there have not been any trade negotiations between the two sides at any level recently. It added that the liberalization measures touted by President Xi Jinping and PBOC Gov. Yi Gang pertained solely to China proactively opening up its market - not trade. But in one of the strongest hints that China doesn't intend to surrender even an inch of ground to the US - though it recently ruled out currency manipulation as a means of retaliation - the MoC confirmed that China will not hesitate to retaliate should the US escalate its trade spat with Beijing.When Xi said earlier this week that China intends to lower some import duties on automobiles, he wasn't making a concession to the US - rather, lowering autos tariffs was part of China's liberalization plan all along. Following Xi's speech, President Trump tweeted that he was "thankful" for the president's kind words. Trump had earlier criticized China in a tweet for maintaining its 25% import tariffs on cars compared with the US's 2.5% duties, touting this as an example of "stupid trade."  MoC spokesman Gao Feng, speaking during his regular press briefing, said it's unreasonable to have tariffs be completely equal for both sides, and that there is no requirement for tariff equalization between two countries according to the rules of the WTO. Gao added that Beijing has been unwilling to negotiate because it believes Washington hasn't been sincere.

White House Plans More Tariffs On China, Confident Threats Are Working - It appears that what we have here is another failure to communicate.  President Trump said this morning that China is negotiating with US over trade "very hard" and "very long."Which is odd, since Gao Feng, China's commerce ministry spokesperson, complained President Donald Trump’s government has “shown no sincerity,” according to the official Xinhua News Agency, and said that the two sides have yet to start and trade negotiations.However, despite China's claims that negotiations are impossible under “unilateral coercion” by the United States, The Wall Street Journal reports  that the Trump White House, confident that its hard-line strategy is succeeding, is planning to ratchet up the pressure on China by focusing on new tariffs and threatening to block Chinese technology investment in the U.S., according to officials familiar with the strategy.Administration officials familiar with the U.S. strategy say that the U.S. trade representative, as early as next week, will detail which products are on the list of $100 billion in Chinese goods subject to 25% import tariffs.Ironically, US equity markets are poised back at the level reached right before Trump's calls for $100 billion in tariffs...Which perhaps gave The White House the confidence to push further?Business groups in Washington, D.C., have been lobbying hard, telling the White House that tariffs are counterproductive. But administration officials have come to the opposite conclusion:  They believe the threats are working.   “China basically surrendered [with the Xi speech] and he [Trump] is probably going to put even more pressure on them before he accepts whatever their bottom line becomes,” said a person familiar with White House views.Administration officials argue the Chinese are already bending to the U.S.’s will:“It was the most conciliatory thing we’ve heard since the whole discussion began,” said a White House official. “Up to then, it was mean, nasty, cruel name-calling.”WSJ notes that for its part, China is looking to line up other countries against the U.S., Chinese officials said - especially in Europe, whose companies could benefit should China react to the stepped up pressure by retaliating against the U.S. Beijing has already responded to early volleys from Washington in the trade conflict with retaliatory tariffs of its own.

Trade Wars Just Beginning... In A Fight Over An Indefinitely Shrinking Pie - From a growth perspective, it doesn't matter if the world is 7.5 million or 7.5 billion persons...it only matters how many more there are from one year to the next.  Economic growth (or the ability to consume more...not produce more) is about the annual growth of the population among those with the income, savings, and access to credit (or governmental social pass-through programs).  That's what this trade war is all about and why it's just beginning.  First it was a fight for decelerating growth...but now it's about a shrinking pool of consumers. Nowhere is this decline in potential consumers more acute than East Asia (China, Japan, N/S Korea, Taiwan, plus some minor others).  I have previously detailed China's situation HERE but the chart below shows the broader East Asia total under 60 year old population (blue line) and annual change in red columns.  Peak growth in the under 60yr/old population (consumer base) took place way back in 1969, annually adding 22 million potential consumers.  As recently as 1988, an echo peak added 19 million annually but the deceleration of growth since '88 has been inexorable.  Then in 2009, decelerating growth turned to decline and the decline will continue indefinitely. What began as a gentle decline is about to turn into progressively larger tumult.  By 2030, the under 60yr/old population will be 9% smaller than present.  East Asia's domestic consumer driven market is collapsing in real time and it's reliance on exports greater than ever. The chart below shows the total 0-65 year old global population (minus Africa and India...blue line) and the annual change in that population in the red columns.  Why excluding Africa/India?  Because they represent nearly all global population growth, consume less than 10% of the global exports, and haven't the income, savings, or access to credit to consume relative to the rest of the world.  Growth (x-Africa/India) peaked in 1988, annually adding 52 million prime consumers.  However, the annual growth of that population has decelerated by 2/3rds to "just" 17 million in 2018.  Before 2030, the under 65 year old population will peak and begin shrinking.

Why the U.S. Targeted This Russian Oligarch - What's happening to Rusal, the world's second-biggest aluminum producer, and other assets partly owned or controlled by Oleg Deripaska, marks an important change in the U.S. sanctions regime for Russia: For the first time, the sanctions actually bite. An example is being made of a billionaire who isn't part of President Vladimir Putin's inner circle, but whose business is unpopular with the administration of President Donald Trump.Previous U.S. sanctions have concerned Russian companies and individuals with little or no business in the U.S. That's not the case with Deripaska. His holding company, En+, owns 48 percent of Rusal, and in 2017, 14.4 percent of that company's revenue — $1.4 billion — came from the U.S. The company has told customers not to pay what they owe it while it studies the sanctions' effect, because the sanctions could turn out to mean that no transactions with Rusal property, including cash, can be conducted in the U.S.  That could make any payment to Rusal in U.S. dollars illegal, no matter where in the world it came from. The U.S. Treasury Department has allowed time for the Deripaska-related companies to wind down their businesses, but it makes sense for Rusal in particular to get a clear understanding of what's going on. And in any case, it's being told overnight to get rid of a large chunk of its aluminum export business. In just one day, on Monday, according to the Bloomberg Billionaires Index, Deripaska lost almost 15 percent of his net worth, about $1.1 billion. That's harsh — and, if the U.S. regulator's goal is to hurt Putin's cronies, it’s also hard to understand.

Senators: Trump is reconsidering his stance on TPP trade deal - President Donald Trump has directed his top trade and economic advisers to take a fresh look at the Trans-Pacific Partnership trade agreement he withdrew from in his first week in office, Republican senators said Thursday. "He said he's going to deputize (National Economic Council Chairman) Larry Kudlow and (US Trade Representative) Robert Lighthizer to look at re-entering the TPP negotiations," Republican Sen. Ben Sasse of Nebraska said Thursday after meeting with Trump at the White House. "Clearly, it's a deliberative process and the President is a guy who likes to ... entertain a lot of different ideas," said Sasse, who has been critical of the administration's withdrawal from the trade deal and other protectionist moves. "But he multiple times reaffirmed the point that TPP might be easier for us to join now once the TPP-11 is aligned and we might be the 12th party to those negotiations, as opposed to the long process that it took to get to TPP."  Sasse said Trump looked directly at Kudlow during the meeting and told him to "get it done."White House spokeswoman Lindsay Walters confirmed the senators' accounts of Trump's comments. "Last year, the President kept his promise to end the TPP deal negotiated by the Obama administration because it was unfair to American workers and farmers. The President has consistently said he would be open to a substantially better deal, including in his speech in Davos earlier this year. To that end, he has asked Amb. Lighthizer and Director Kudlow to take another look at whether or not a better deal could be negotiated," Walters said in a statement.

Trump to explore entering Pacific trade pact he once called 'a disaster' | TheHill: President Trump on Thursday instructed top administration officials to explore re-entering the Trans-Pacific Partnership (TPP) — a trade pact he pulled the U.S. out of last year while calling it a “disaster.” Speaking after a trade meeting with Trump, Republican senators said the president told White House National Economic Council Director Larry Kudlow and U.S. Trade Representative Robert Lighthizer to look into joining the deal, which 11 other Pacific Rim nations signed in March.“The president multiple times reaffirmed in general to all of us and looked right at Larry Kudlow and said, ‘Larry, go get it done,' " Sen. Ben Sasse (R-Neb.), a vocal proponent of free trade, told reporters at the White House. Sasse cautioned that Trump “is a guy who likes to blue-sky a lot and entertain a lot of different ideas,” suggesting the president could eventually change his mind. White House spokeswoman Lindsay Walters said the president would only re-enter TPP if the deal was made "substantially" better. "He has asked Amb. Lighthizer and Director Kudlow to take another look at whether or not a better deal could be negotiated,” she said in a statement. If the U.S. were to re-enter the TPP, it would be a remarkable about-face for Trump, who repeatedly blasted the trade pact during his 2016 presidential campaign. During the 2016 race, Trump called the TPP a “disaster” that is backed by “special interests who want to rape our country.” 

TPP Nations Welcome Trump’s Interest, Don’t Want Renegotiation - Members of an 11-nation Asia-Pacific trade pact said Friday they opposed any renegotiation of the deal to accommodate the U.S. should it decide to rejoin at a later date.Ministers from Japan, Australia and Malaysia welcomed President Donald Trump directing officials to explore returning to the Trans-Pacific Partnership, a pact he withdrew from shortly after  coming to office. But they also cautioned against making any significant changes."We welcome the U.S. coming back to the table but I don’t see any wholesale appetite for any material re-negotiation of the TPP-11,” Australia Trade Minister Steven Ciobo said Friday.Toshimitsu Motegi, Japan’s minister in charge of TPP, also said it would be difficult to change the deal, calling it a "balanced one, like fine glassware." Malaysia’s International Trade and Industry Minister Mustapa Mohamed echoed these remarks, saying that renegotiation would "alter the balance of benefits for parties.”In a Twitter post on Thursday night, Trump said the U.S. "would only join TPP if the deal were substantially better than the deal offered to Pres. Obama. We already have BILATERAL deals with six of the eleven nations in TPP, and are working to make a deal with the biggest of those nations, Japan, who has hit us hard on trade for years!"

Preliminary Nafta Deal Won't Be Ready In Time For Pan-American Summit - The three ministers responsible for representing their respective countries during the seemingly never-ending Nafta talks (what round of talks is this, anyway? Third? Fourth? We forget...) met in Washington on Friday for a last-minute push toward the elusive "agreement in principle" that President Trump had hoped to unveil at this week's pan-American summit in Lima, Peru.However, despite the White House's willingness to cave on one of its most controversial demands pertaining to automobile tariffs, the three sides once again failed to come to a consensus regarding the broad strokes of the deal. Now, Reuters is reporting that - while significant progress has been made this week - talks between the three countries aren't advanced enough for a big announcement at this week's summit, according to two people familiar with the discussions.Talks to rework the North American Free Trade Agreement (NAFTA) are not advanced enough for the United States, Mexico and Canada to announce a deal "in principle" at this month’s Summit of the Americas in Lima, according to two people familiar with matter.The ministers responsible for NAFTA met on Friday in Washington, and said progress had been made on reworking the accord.But there was still too much to do unveil an agreement at the April 13-14 summit, the sources said, speaking on condition of anonymity due to the sensitivity of the matter.U.S. President Donald Trump, his Mexican counterpart Enrique Pena Nieto and Canadian Prime Minister Justin Trudeau are due to attend the Lima gathering, and officials have held out hope for substantive progress on the renegotiation before the meeting.Spokespeople for the Mexican economy ministry and Canada’s foreign ministry declined to comment. A spokeswoman for the office of US Trade Representative Robert Lighthizer did not respond to a request for comment on Sunday.

White House Tries to Pull Nafta Back From Brink as Deadlines Loom - After months of fraught negotiations and stalled talks, the Trump administration is aiming to announce a preliminary deal on the North American Free Trade Agreement this month, moving to resolve one trading conflict as a separate clash with China looms.  A final agreement is far from guaranteed, but the White House is revising some of its more aggressive demands, particularly related to automobiles, which had been a source of tension with Canada and Mexico. A new proposal would require an automobile to contain components made by workers earning a specific wage level to qualify for Nafta’s preferential tariffs. The administration had previously demanded that vehicles contain a large percentage of auto parts produced in the United States.The new proposal is aimed at stopping United States automakers from shifting production to Mexico in search of cheap labor, according to people familiar with the plan. President Trump, who earlier this week called Nafta an “embarrassment,” said at an event in West Virginia on Thursday that a deal could be announced shortly. “We’re working very hard on Nafta with Mexico and Canada,” he said. “We’ll have something I think fairly soon.” Mr. Trump said that his aides were pushing to have something concrete finished before next week’s Summit of the Americas in Peru but that a quick deal was not assured. “They said, ‘Oh, let’s have Nafta before.’ I said, ‘Don’t rush it. We’ll take it nice and easy, get it done right or we’ll terminate it,” the president said. The talks, which appeared to be on the brink of collapse just a few months ago, kicked back into gear in recent weeks as political and practical realities prompted a newfound urgency among American negotiators. For a revised Nafta to be approved by the current Republican-controlled congress, the Trump administration would probably have to finalize it before the end of May to allow time for congressional review given the House and Senate calendar.

Texas National Guard Deploying To Border Within 72 Hours; DOJ Enacts "Zero Tolerance" Policy - Arizona and Texas will be sending 400 National Guard members to the southern border in response to President Donald Trump's Wednesday Executive Order directing the troops to "assist the border patrol" in guarding the nation's existing border fence - and of course the many miles of completely unprotected crossing zones. The troops will be armed for self defense "depending on the mission set," according to Brig. Gen. Tracy Norris, commander of the Texas Army National Guard, who added that it was "premature right now to know what the cost will be" of the overall operation.“Tonight there are National Guard troops moving in support of the border security mission,” said chief Pentagon spokesperson Dana White, who added ""The National Guard's efforts will include aviation, engineering, surveillance, communications, vehicle maintenance and logistical support." The deployment will be a joint effort between Trump's federal imitative and state-level management under what's known as Title 32. Governors will retain control of the National Guard troops, however the federal government will finance the patrols. 150 Arizona Guard members from will deploy next week, while the Texas National Guard confirmed a deployment of 250 troops over the next 72 hours as an "initial surge" which began shortly after 7 p.m. Friday at the Armed Forces Reserve Center in Austin, according to a Guard spokesman.  Brig. Gen. Tracy Norris, commander of the Texas Army National Guard, said the deployment would begin meeting “the priorities of the governor and the president in securing our border.” In addition to troops, the Guard said it would send ground surveillance vehicles and light and medium aircraft. -New York Times.

DHS Creates Database To Track Journalists, Bloggers, "Media Influencers", Calls Critics "Conspiracy Theorists" - The Department of Homeland Security (DHS) wants to track the vast networks of journalists, bloggers and other "media influencers" through a massive, searchable database that will allow them to monitor "any and all" trends in real time, according to a publicly posted job listing.  Apparently the NSA doesn't share their toys with DHS...  The DHS "Media Monitoring" initiative is currently seeking a contractor who can provide DHS with the ability to track over 290,000 global news sources in more than 100 languages - including online, print, broadcast, cable, radio, trade and industry publications, traditional news sources and social media platforms.  “Services shall provide media comparison tools, design and rebranding tools, communication tools, and the ability to identify top media influencers,” according to the job call, in order to help DHS agencies fulfill "a critical need to incorporate these functions into their programs in order to better reach federal, state, local, tribal, and private partners." The department's "Statement of Work for Media Monitoring Services" requires the following:

  • Ability to track global online sources for coverage relevant to Washington and the six media hubs:
    •    Ability to track > 290,000 global news sources
    •    Ability to track online, print, broadcast, cable, radio, trade and industry publications, local sources, national/international outlets, traditional news sources, and social media
    •    Ability to track media coverage in > 100 languages, including Arabic, Chinese and Russian. Translation function to instantly translate these articles to English.
    •    Ability to create up to 20 searches with each unlimited keywords
    •    Unlimited coverage per search (no cap on coverage)
    •    Ability to change the searches at keywords at any given time
    •    Ability to create unlimited data tracking, statistical breakdown, and graphical analyses on any coverage on an ad-hoc basis

Database of journalists, editors, correspondents, social media influencers, bloggers, etc. The chosen contractor must be able to develop a "password protected, media influencer database" which can perform searches in various languages, and present contact details and any other information that could be relevat, including publications that this influencer writes for, and an overview of the previous coverage published by the media influencer." 

DHS defends media-monitoring database, calls critics “conspiracy theorists” - Earlier this week, Bloomberg Law uncovered a Department of Homeland Security job listing for a "media-monitoring services" request to keep tabs on more than 290,000 "global news sources" and develop an extensive database for an unconfirmed number of "media influencers." After news outlets reported about the amount of data sought by this job listing, DHS Press Secretary Tyler Houlton issued a response on Friday to verify its legitimacy and allege that the data project's aims will be "standard practice."What's more, Houlton added, "Any suggestion otherwise is fit for tinfoil hat-wearing, black-helicopter conspiracy theorists."DHS' contract listing, posted on Tuesday, seeks a firm to deliver "media-comparison tools, design and rebranding tools, communication tools, and the ability to identify top media influencers" for a span ranging from one to five years, all with the aim of tracking "any and all media coverage related to the Department of Homeland Security or a particular event." Part of that data-combing effort would include the development of a "database" that gathers intel about "journalists, editors, correspondents, social media influencers, bloggers, etc.," including locations, beats, reporter "types," contact details, overviews of each "influencer's" previous coverage, current publications, and "any other information that could be relevant."The firm would also be expected to deliver an app-based framework that DHS staffers could use to parse "online articles and social media conversations" and/or receive automatic alerts through internal smartphone alerts, SMS, email, or Whatsapp messages. DHS only specifies "password protection" for this app's security protocol, as opposed to any additional data or networking safeguards.Despite what some reporters may suggest, this is nothing more than the standard practice of monitoring current events in the media. Any suggestion otherwise is fit for tin foil hat wearing, black helicopter conspiracy theorists. https://t.co/XGgFFH3Ppl — Tyler Q. Houlton (@SpoxDHS) April 6, 2018

Former intelligence heavyweights endorse Trump’s CIA pick - More than 50 former US national security officials and lawmakers endorsed Gina Haspel, President Donald Trump's controversial pick to head the CIA, in a letter sent Monday to the Senate Intelligence Committee.Former directors of the CIA and national intelligence, secretaries of state and lawmakers who have chaired the Senate and House intelligence committees make up the list of signatories. The top intelligence officials include former CIA Directors John Brennan, Leon Panetta, Jose Rodriguez, George Tenet, Michael Hayden and former President Barack Obama's Director of National Intelligence James Clapper."Ms. Haspel's qualifications to become CIA Director match or exceed those of most candidates put forward in the Agency's 70-year history," they write. "She has spent more than 30 years of her life quietly serving America and the CIA, routinely stepping up to handle some of the most demanding assignments around the globe." Officials within the Trump administration have been concerned that Haspel, who is currently the agency's deputy director, may have trouble being confirmed for the director position due to her role in the CIA's past controversial interrogation and detention program, including her oversight of a CIA "black site" in Thailand in 2002.  The letter does not address these issues but says Haspel is a leader who "has what it takes to make tough calls in times of crisis."

New California Bill Would Eliminate Free Speech, Require "Online Fact Checkers" -- California Senator Richard Pan, the infamous fascist who forced a mandatory vaccination law through in order to rake in money from big pharma, has decided there should no longer be free speech for anyone other than the government.  Pan’s new bill proposes to require “online fact checkers” to verify content before anything can be posted on the internet.  Anyone who has ever said tyranny cannot come to America has been proven wrong. Pan’s new bill would basically outlaw questioning the government’s official narrative, and is reminiscent of the book burning days of Nazi Germany. The bill supposedly only targets social media in California, but as Jon Rappaport points out, once you read the bill, it applies to the whole of the internet.This isn’t some sort of prank either.  The leftists in power are getting desperate in their attempt to control information and produce propaganda and this is just more evidence of such.  We experienced evidence of this yesterday when SHTFPlan reported that the Department of Homeland Security has been instructed to compile a database of all journalists and online “media influencers.”But that’s all beginning now, here, in the “land of the free.” Last week, SHTFPlan interviewed Sarah Leach who was detained without charges for survivalist posts on her own Facebook page. But we are expected to believe that DHS has no nefarious reasoning for compiling a list of all journalists, bloggers, podcasters, or as they like to call them: “media influencers”?FedBizOpps.gov posted a relatively benign-sounding subject: “Media Monitoring Services” by DHS. Of course, the government always makes basic human rights violations sound benign when we all know they are anything but. The details of the attached Statement of Work outline a plan to gather and monitor the public activities of media professionals and influencers and are enough to cause nightmares of constitutional and basic fundamental human rights proportions, particularly as the freedom of the press is under attack worldwide. Yes, that includes in the United States.  And “attack” is not hyperbolic. –SHTFPlan

 Trump signs executive order attacking US social programs -- The Trump administration Tuesday initiated an assault on the social programs that serve the country’s poorest citizens, ordering departments throughout his cabinet to seek out new ways to gut existing programs and impose onerous work requirements for continuing assistance. The executive order, titled “Reducing Poverty in America by Promoting Opportunity and Economic Mobility,” orders the departments of Treasury, Agriculture, Commerce, Labor, Health and Human Services, Housing and Urban Development, Transportation, and Education to review all public assistance programs with the aim of determining which programs currently have work requirements attached to them. For those programs that lack such requirements the executive order demands that they either be eliminated or consolidated with programs that do, except where forbidden by law. The order requires the cabinet secretaries of these departments to issue a report within 90 days outlining which programs will be eliminated and what new restrictions will be imposed. Medicaid, food stamps, housing assistance and welfare programs all face being substantially diminished by the president’s order. The order also requires the various departments to identify which programs undocumented immigrants may benefit from, so that administrative or legislative action can be taken to prevent them from doing so. Within the order, Trump lays out nine “principles of economic mobility” for how the order should be implemented. These “principles” consist of various right-wing talking points thinly cloaked in bureaucratic jargon. These include principle (ii) which reads, “Promote strong social networks as a way of sustainably escaping poverty (including through work and marriage),” which implies that unemployment and broken families are the cause, rather than the result, of poverty and economic dislocation.

States Could Drug Test People on Food Stamps Under Rumored Trump Administration Policy -- Under the Trump administration, states may soon be allowed to require some people on food stamps to pass a drug test before they can receive their benefits, reviving a pointless and stigmatizing policy that has long been favored in conservative circles.  PBS NewsHour reports that the administration is working behind the scenes to roll out the policy. It wouldn't apply to everyone who gets food stamps — people with disabilities or with children would not be drug tested, according to the report.   In fact, one official told PBS that only 5 percent of recipients would be affected by the changes to the program. Even among this narrow group, states are unlikely to find much drug use. When Florida tried to implement a version of drug testing for benefits, researchers actually found that people who use food stamps are less likely to use drugs than the rest of the population. Since such small portion of recipients would be tested, and an even smaller portion of those people are likely to be using drugs, it's unclear why this policy would be necessary or cost-effective. And food stamp recipients aren't the only people who receive government benefits. Should anyone who drives on government-funded roads or CEOs of companies enjoying tax loopholes be forced to undergo drug testing as well?  No one ever suggests these ideas, because they're obviously ridiculous. If someone is addicted to drugs, most people think they need help and support, not to have their benefits ripped away.

Democrats ask if military job was dangled to Manafort lender -- In the days after Donald Trump was elected president, a Chicago banker and campaign economic adviser named Stephen Calk called U.S. Army personnel to discuss the confirmation process for a high-level position, according to Defense Department documents obtained by congressional Democrats.  About that time, Calk's bank, Federal Savings Bank in Chicago, provided the first of several mortgage loans, totaling $16 million, to former Trump campaign chairman Paul Manafort. Special Counsel Robert Mueller is investigating whether the loans were made as part of a "quid-pro-quo arrangement to secure Mr. Calk a job in Mr. Trump's administration," specifically the post of Army Secretary, The Wall Street Journal reported in February. In a letter sent to Calk on Thursday, Representatives Elijah Cummings and Stephen Lynch sought records related to the banker's communications with Manafort and the Trump campaign and about his bank's loans to Manafort. Cummings is the ranking Democrat on the Oversight Committee, and Lynch is the ranking member of the subcommittee on national security. "We now request information directly from you about why you were seeking that information and whether your actions were related to a quid pro quo with President Trump's campaign chairman, Paul Manafort," the letter says.  Among other items, the lawmakers are seeking all communications between Calk and Manafort, Trump campaign and transition officials, and the Defense Department. They are also requesting all documents and attachments related to the loans.

After Months Of Stalling, DOJ Hands Over Memo That Helped Launch Russia Probe - After more than eight months of waiting - a period that saw the official closure of the committee's probe into Russian electoral interference - House Intelligence Committee Chairman Devin Nunes has finally managed to pry the (mostly unredacted) electronic communication, shared with the FBI by one of America's "intelligence partners", from the grip of the DOJ.Nunes subpoeanad the DOJ for all documents used to justify the initial FISA warrant against Trump advisor Carter Page and other threads of the initial Russia collusion probe, which was supposedly launched during the summer of 2016 shortly after Trump secured the GOP nomination. That probe has since morphed into the investigation being led by Special Counsel Robert Mueller, according to the Hill.   While it's widely known that the Steele dossier was one of these documents, the FBI has long contended that there was another factor - evidence that George Papadopoulos boasted about knowing of a Russian plot to release stolen Hillary campaign emails before it was carried out. Papadopoulos was later indicted and is now cooperating with the Mueller.The document in question is a two-page "electronic communication" that was supplied to the FISA court. B ut here's the catch: The Hill provides no details about the document or what it represents.Nunes and members of his committee were supplied with a heavily redacted version of the document last year, but Nunes complained that it was virtually indecipherable. The only redactions in the draft distributed to members of the committee were "narrowly tailored" to "protect national security interests" so as not to "undermine the trust" between the US and this foreign nation.

FBI raids offices, home of Trump's personal lawyer: sources (Reuters) - The Federal Bureau of Investigation on Monday raided the offices and home of U.S. President Donald Trump’s personal lawyer Michael Cohen, law enforcement sources said, in a dramatic new development in a series of probes involving close Trump associates. Cohen’s lawyer, Stephen M. Ryan, said that U.S. prosecutors conducted a search that was partly a referral by the Office of Special Counsel, Robert Mueller. Mueller is investigating whether members of Trump’s 2016 campaign colluded with Russia during the U.S. presidential election. Trump has called the probe a “witch hunt” and denied any collusion. “Today, the U.S. Attorney’s Office for the Southern District of New York executed a series of search warrants and seized the privileged communications between my client, Michael Cohen, and his clients,” Ryan said in a statement. “I have been advised by federal prosecutors that the New York action is, in part, a referral by the Office of Special Counsel, Robert Mueller,” Ryan said.  Monday’s raids were first reported by The New York Times. Cohen has been at the center of a controversy surrounding a payment to porn star Stormy Daniels, who has alleged that she had sex once in 2006 with Trump and was paid money shortly before the 2016 election to keep quiet about it.  Cohen did not immediately respond to Reuters for a request for comment. A spokesman for Mueller had no comment.

 FBI raids home, office of Trump’s personal attorney --The political conflict within the US ruling elite escalated to new levels Monday, with FBI agents in Manhattan raiding the home and office of Michael Cohen, the personal attorney of President Donald Trump, and the president denouncing his own attorney general, Jeff Sessions, as well as Special Counsel Robert Mueller, whose investigation indirectly triggered the raid.The raid was reported by the New York Times Monday afternoon and quickly became the subject of non-stop coverage on the television networks. Cohen is allegedly under investigation in connection with the payment of $130,000 in hush money to adult film actress Stormy Daniels. The payment was made during the final weeks of the 2016 election campaign to insure her silence about a ten-year-old relationship with Trump.Both the scale of the raid and the nature of the materials seized are extraordinary. FBI agents reportedly entered Cohen’s home on Park Avenue, a room he was temporarily occupying at the Loews Regency Hotel, and his office in Rockefeller Center. They took not only documents related to the payment to Daniels, but records of communications between Cohen and Trump that would normally be considered protected under attorney-client privilege. The Washington Post reported that the FBI took from Cohen’s office his personal computer, his phone and personal financial records. The newspaper claimed, citing “a person with knowledge of the case,” that Cohen is under investigation “for possible bank fraud, wire fraud and campaign finance violations.” The campaign finance violation charge would relate to the payment to Daniels, made 12 days before the election, from what Cohen claimed were personal funds. If he was not reimbursed by Trump—and the president claimed not to have known of the payment—the $130,000 could be construed as a donation to the campaign, far exceeding the $2,700 legal limit.

‘A bomb on Trump’s front porch’: FBI’s Cohen raids hit home for the president -- President Trump has howled in all caps for nearly a year as the Justice Department has delved deeper and deeper into his orbit. Special counsel Robert S. Mueller III indicted his former campaign chairman. Then he secured a guilty plea from his former national security adviser. All the while, Mueller and his investigators have spent hours questioning White House officials about whether the president had sought to obstruct justice.But the FBI’s seizure on Monday of privileged communications between Trump and his private lawyer, Michael D. Cohen — as well as documents related to a $130,000 payment to Stormy Daniels, the adult-film actress who has alleged a sexual affair with Trump — was a particularly extraordinary move that opens a whole new front in the converging legal battles ensnaring the administration.Cohen is Trump’s virtual vault — the keeper of his secrets, from his business deals to his personal affairs — and the executor of his wishes. “This search warrant is like dropping a bomb on Trump’s front porch,” said Joyce White Vance, a former U.S. attorney in Alabama. Mark S. Zaid, a Washington lawyer, said the seizure of Cohen’s records “should be the most concerning for the president.”   “You can’t get much worse than this, other than arresting someone’s wife or putting pressure on a family member,” he said. “This strikes at the inner sanctum: your lawyer, your CPA, your barber, your therapist, your bartender. All the people who would know the worst about you.” The president spent much of Monday afternoon glued to the television. Aides said Trump watched cable news coverage of surprise raids on Cohen’s Manhattan office, home and hotel room by FBI agents, who took the lawyer’s computer, phone and personal financial records after a referral from Mueller.  “It’s a disgraceful situation.” “I have this witch hunt constantly going on,” Trump said. “That is a whole new level of unfairness,” he added, leaving no doubt that he views Monday’s actions as a personal affront. Trump called Cohen “a good man” and went on to criticize Attorney General Jeff Sessions, saying he had made “a very terrible mistake for the country” by recusing himself from the Russia probe.

Trump Blasts "Disgraceful" FBI Raid Of Lawyer's Office: "A Whole New Level Of Unfairness" - As many probably suspected, Trump attorney Michael Cohen is under investigation for possible fraud and campaign finance violations, the Washington Post reported.The FBI has seized documents - including emails, tax documents and other records - related to Cohen's $130,000 payment to adult film star Stormy Daniels.Meanwhile, President Trump has stepped up to defend his longtime personal attorney, calling the raid "a whole new level of unfairness" and going as far to say it was an "attack on our country, on what we stand for before heading into a meeting with top military leaders." He also described the special counsel's team as "the most conflicted group of people I've ever met" and said the raid was "a disgraceful situation."  Trump added that the raid happened after Deputy AG Rod Rosenstein - who is supervising the Mueller probe - approved a referral that Mueller brought to the US Attorney for the Southern District of New York. Jeff Sessions also came under fire as the president bashed him once again for recusing himself from the Mueller probe. Trump also exclaimed that "no one is looking at the other side" referring to Clinton's 30,000 missing emails."I have this witch hunt constantly going on," he said. Of course, Trump has every reason to defend Cohen. As Trump's longtime lawyer, Cohen knows where the bodies are buried. And the fact that the FBI likely seized privileged material between the president and his lawyer is certainly troubling.

Michael Cohen Has a Big Problem - Whatever evidence federal prosecutors have collected concerning Michael Cohen, President Trump’s longtime attorney, it is most likely extraordinarily strong. Before federal agents raided Cohen’s home, hotel room, and office Monday afternoon, they would have had to convince high-ranking officials at the Department of Justice and a federal judge that a search warrant was necessary to obtain the evidence sought. “Doing a search warrant rather than a subpoena suggests the investigators thought Cohen, if given a subpoena, would possibly destroy evidence or withhold key evidence, particularly if it were incriminating,” Clinton Watts, a former FBI agent and a senior fellow at the Foreign Policy Research Institute, said. Under normal circumstances, obtaining a search warrant on an attorney for the subject of a federal investigation is an incredibly aggressive move. When the attorney’s client is the president of the United States, the stakes couldn’t possibly get any higher. “These things are not anonymized, so you know you’re talking about Michael Cohen, the longtime attorney for the person who is now president of the United States, so you know you’re in very deep water,” John Q. Barrett, a former associate special counsel in the Iran-Contra affair and a law professor at St. Johns, said. “Any law-enforcement official would proceed very carefully.”

What about attorney-client privilege? How the FBI can obtain a warrant for Cohen’s office - The news that the FBI raided the offices of President Trump's personal attorney Michael Cohen Monday caused many people to wonder how such a raid could be justified given the protections afforded under attorney-client privilege. "If by raiding the office of @realDonaldTrump's attorney, the @fbi violated Trump's attorney-client privilege, this is about to get really ugly," tweeted conservative Fox News host Laura Ingraham. Right-wing commentator Kurt Schlichter said "federal agents are stealing and reading communications between an attorney and his client" and radio host Buck Sexton said, "Attorney client privilege is apparently meaningless in this era of get Trump at all costs." But former U.S. attorney and deputy assistant attorney general Harry Litman said the way the FBI handled the raid actually showed the seriousness with which the Department of Justice treats material that might be protected by attorney-client privilege.  "It’s very unusual for the Department of Justice to permit prosecutors to raid an attorney’s office and that’s because you want to be careful not to get privileged material," said Litman, who teaches at the UCLA School of Law and continues to practice at the law firm Constantine Cannon. In order to get the OK to raid Cohen's office, prosecutors would have had to get approval from high up — in this case from Deputy Attorney General Rod Rosenstein — and demonstrate to a federal magistrate both probable cause and the need for a warrant instead of a subpoena (such as a concern that Cohen might destroy evidence), Litman explained. In addition, the probable cause would have to relate to a crime centered on Cohen, not Trump or someone else. "You can’t use it as end run around to get to the client," Litman said.  There will also be a "taint team" to examine everything before it is handed over to prosecutors to make sure that those conducting the case never see any material that might be "tainted" by attorney-client privilege. 

Reasons Behind FBI Raid On Michael Cohen Revealed - Initial reports about the FBI's early morning raid of Trump lawyer Michael Cohen's office, home and hotel room suggested that investigators were looking for evidence of bank fraud and violations of federal elections rules - though it was initially unclear if the raid pertained to Cohen's $130,000 payment to former adult film actress Stormy Daniels, or if it was related to Cohen's status as a subject in the Mueller probe. But rather than let the confusion fester, the New York Times has dispelled the uncertainty with another anonymously sourced report offering more details about the FBI's goals. As it turns out, FBI agents were searching for records regarding payments made to two women who had claimed they had affairs with President Trump, as well as information pertaining to the publisher of the National Enquirer, and his role in paying off one of the women. As we first learned during the campaign, National Enquirer owner David Pecker reportedly paid off former Playboy model Karen MacDougal, who had an affair with Trump around the time his youngest son, Baron, was born, offering her $150,000, purportedly to write a fitness column for his magazines. And while we learned yesterday that Deputy Attorney General Rod Rosenstein had signed off on Special Counsel Robert Mueller's request to transfer evidence gleaned from the Trump Organization to Geoffrey Berman, the interim US Attorney for the Southern District of New York, today we learned that Rosenstein personally signed off on the FBI's raid of Cohen's offices. As the Times explains, raiding a lawyers' office and searching their files is incredibly sensitive. Authorizing a search would require approval at the highest levels of the DOJ - particularly given the sensitivity of the subject at hand. Rod J. Rosenstein, the veteran Republican prosecutor handpicked by Mr. Trump to serve as deputy attorney general, personally signed off on Monday’s F.B.I. decision to raid the office of Mr. Cohen, Mr. Trump’s personal attorney and longtime confidant, several government officials said.  Furthermore, Rosenstein's involvement - as well as the involvement of top prosecutors and officials in Washington and New York - make it difficult for Trump to cry partisanship because all of the people involved with these decisions are Republicans.

    Here's Why The Cohen Raid Will Keep The Trumps Up At Night - The FBI raid on the offices of Trump lawyer Michael Cohen - one of the president's closest and longest-serving confidants - has rattled investors, political analysts and even the president himself as many have determined - correctly, it seems - that these raids represent nothing short of a major turning point in the long-running Mueller probe. Since investigators must convince a judge that there's a high possibility they will discover evidence of criminality before receiving approval for a search warrant, the criminal stakes for Cohen - who has been accused by a watchdog group of lying under oath and of violating campaign finance laws in connection with his $130,000 Stormy Daniels payoff - have never been higher. And in a 13-part twitter thread published this morning, Adam Davidson (the New Yorker staff writer and host of popular podcast Planet Money) explained exactly why the raid on Cohen's office is such a watershed moment in the probe. The upshot, is that, other than Don Jr. or Ivanka turning states' witness against their father, Cohen is the former Trump Organization dealmaker who is most likely to provide investigators with evidence of criminality. As Davidson explains, Cohen's role within the Trump administration was never that of a typical attorney - the firm had other attorneys who handled the legal grunt work.Cohen's role could best be described as "roving dealmaker" - perhaps the only resident dealmaker in the Trump Organization who wasn't a member of the Trump family.Because of this, Cohen had a front-row seat when the Trump Organization turned to shady third-tier oligarchs - a group that includes corrupt politicians, sanctions violators and money launderers - for financing after the president rescued his business from the brink of bankruptcy in the 1990s.If Cohen were to flip, he could provide damning testimony against Don Jr. and Ivanka.

    White House Says Trump "Certainly Believes" He Can Fire Mueller - In comments that are guaranteed to infuriate both Democratic and Republican lawmakers, Press Secretary Sarah Huckabee Sanders said President Trump believes he has the authority to dismiss Special Counsel Robert Mueller."He certainly believes he has the power to do so," Sanders said, in response to a reporter's question during the daily press briefing, which was a marked departure from her stance from three weeks ago, when she said that the president had no plans to fire Mueller, citing a statement from White House lawyer Ty Cobb.Last night, Trump left the door open to firing Mueller after saying that the FBI raid on Cohen was a "disgrace.”"We’ll see what happens," Trump said, referring to Mueller’s future as special counsel.Those comments were in response to news that FBI agents had raided the home, office and hotel room of Trump's personal attorney, Michael Cohen. FBI agents reportedly seized emails and other documents from Cohen's law office - a cache that likely includes privileged communications between Cohen and Trump, his only client.

    Trump Said To Consider Firing Rosenstein - Earlier today we speculated that following the report that Rod Rosenstein had personally approved the raid on Trump's personal lawyer Michael Cohen, that Trump would likely seek to terminate the Deputy AG, especially after the NYT's report that on Monday night Trump had engaged in an angry public tirade that continued in private at the White House "as the president fumed about whether he should fire Mr. Rosenstein." The NYT also said that last night, the president lashed out at Mr. Rosenstein for having “signed a FISA warrant,” in reference to the role Rosenstein played in authorizing the wiretap of a Trump associate in the Russia inquiry.Now, it is CNN's turn to double down on the speculation, with a report that Trump is considering firing Rod Rosenstein, "a move that has gained urgency following the raid of the office of the President's personal lawyer."Such an action could potentially further Trump's goal of trying to put greater limits on special counsel Robert Mueller.Terminating Rosenstein is just one of the contemplated options in the aftermath of the Cohen raid: Trump could also fire Attorney General Jeff Sessions CNN reports, even though Rosenstein is his most likely target.To be sure, it won't be the first time Trump has come close to terminating the Deputy Attorney General: last summer Trump also came close to firing Rosenstein, but instead he ordered Robert Mueller to be fired, then backed down after the White House counsel refused to carry out the order according to the NYT, which also reported that in December Trump told advisers Mueller’s investigation needed to be shut down following the launch of several probes aimed at Trump's financial estates; he later backed down. Several months later, Trump once again feels emboldened as his legal advisers are reportedly telling him they now have a stronger case against Rosenstein. They believe Rosenstein crossed the line in what he can and cannot pursue.  The legal advisers also believe they have successfully argued to the American public that the FBI is tainted and think they can make the same case against Rosenstein.

    Bannon Urges Trump To Fire Rosenstein To "Cripple" Mueller Probe - An unexpected actor has re-emerged in the Trump-Mueller-Rosenstein hate triangle.According to Bloomberg and WaPo, President Trump discussed firing Deputy Attorney General Rod Rosenstein with White House aides on Wednesday, as a "chorus advisers and allies" urges him to hinder and thwart Mueller's investigation of Russian interference.The biggest voice to emerge from said chorus? That of Trump's former chief strategist, Steve Bannon, who said he told White House officials that the president should fire both his lawyer Ty Cobb and Rosenstein to cripple Mueller’s inquiry. According to Bannon, the White House should crease cooperating with Mueller and assert executive privilege to silence aides who might speak with the special counsel, even retroactively, for those who’ve already been interviewed.In a WaPo interview Bannon said Trump "wasn’t fully briefed by his lawyers on the implications" of not invoking executive privilege and added that it was a "strategic mistake to turn over everything without due process, and executive privilege should be exerted immediately and retroactively." Bannon also said that Trump’s lawyer Ty Cobb should be fired immediately.“You have to get rid of Rosenstein, maybe Mueller, and Ty Cobb,” Bannon said. “Get this into the political process. You can’t fight on the Michael Cohen thing every day.” Later, speaking to Bloomberg, Bannon added that "they crossed the red line by subpoenaing the Trump Organization records and doing the raid on Michael Cohen," Bannon told Bloomberg News in an interview. "They’re into dark territory now. So let’s make this political, shift this thing back to Capitol Hill, take the moral high ground. Let’s take a delaying action and give voters an up-or-down vote on Trump in November.". Also on Wednesday, Joe diGenova, an attorney who was nearly added to Trump’s legal team last month, said on Fox News that Sessions should fire Rosenstein.

    Raid on Trump’s Lawyer Sought Records on ‘Access Hollywood’ Tape … The F.B.I. agents who raided the office and hotel of President Trump’s lawyer, Michael D. Cohen, were seeking details on his relationship with the Trump campaign and his efforts to suppress negative information about Mr. Trump, according to three people briefed on the matter.Prosecutors are interested in whether Mr. Cohen, who had no official role in the 2016 campaign, coordinated with it to quash the release of anything detrimental to it and whether that violated campaign finance laws — a new front in the investigation into Mr. Cohen.The warrant executed Monday by the agents was striking in its breadth, according to those people. It demanded documents related to the “Access Hollywood” tape in which Mr. Trump was heard making vulgar comments about women, and to other materials related to secret agreements Mr. Cohen made with women in exchange for them not speaking publicly about sexual encounters with Mr. Trump.The warrant also covered emails and other documents that could reveal Mr. Cohen’s private communications with Mr. Trump during a tense period in the presidential campaign when Mr. Trump confronted the possibility of embarrassing details of his extramarital affairs. And it delved deeply into Mr. Cohen’s past, including documents about Mr. Cohen’s personal and business finances, including his work as a New York taxi fleet manager.The additional details the agents were seeking came a day after it was revealed that the authorities sought documents from Mr. Cohen related to payments made to two women who claim they had affairs with Mr. Trump, Karen McDougal and Stephanie Clifford, the pornographic film star known as Stormy Daniels, as well as information on the role of the publisher of The National Enquirer in silencing the women. Though the raids on Mr. Cohen’s office and hotel room were overseen by Mr. Khuzami, people close to Mr. Trump and Mr. Cohen regard the investigation as a surreptitious attempt by the special counsel, Robert S. Mueller III, to pry into Mr. Trump’s personal life by using other prosecutors as his proxy in focusing on a lawyer who has represented him for more than a decade.

    Trump lawyer Cohen seeks delay in porn star's lawsuit (Reuters) - President Donald Trump’s personal lawyer, Michael Cohen, on Friday filed for a 90-day delay in porn star Stormy Daniels’ defamation lawsuit, citing Monday’s raids on his home, office and hotel room by U.S. prosecutors.  Cohen had already notified U.S. District Court in Los Angeles on Thursday that he intended to request a stay in Daniels’ lawsuit against him and Trump “on the grounds that an ongoing criminal investigation overlaps with the facts of this case.” The Friday motion said that because of that overlap, “Mr. Cohen’s Fifth Amendment rights may be adversely impacted if this case proceeds,” a reference to the possibility that his testimony could be used by prosecutors to build a related criminal case against him. Cohen, who has denied wrongdoing, has been at the center of a controversy surrounding a $130,000 payment to Daniels, whose real name is Stephanie Clifford. She has alleged that she had sex once in 2006 with Trump and was paid shortly before the 2016 election to keep quiet about it. Daniels claims Cohen’s denials portray her as a liar and sued for defamation. Her allegation was based on a Feb. 13 statement by Cohen that she said hurt her reputation.   Cohen has admitted making the payment to Daniels and said he paid from his own pocket from a personal home equity loan. The Federal Bureau of Investigation raided Cohen’s offices and home on Monday as part of a probe into possible bank and tax fraud and possible campaign law violation connected to the payment, a source familiar with the investigation told Reuters. 

    Wall Street’s Insidious Connection to the FBI’s Raid on Trump’s Lawyer -- Pam Martens - The Federal courts and U.S. Attorney’s Office for the Southern District of New York function as a protection racket for Wall Street. For decades, the U.S. Attorney’s Office for the SDNY has been populating itself through a gold-plated revolving door to Wall Street’s biggest and coziest law firms. This ensures that Wall Street’s darkest secrets never see too much sunshine in the court of public opinion and that Wall Street’s titans never see the inside of a jail cell. (See related articles below for an in-depth understanding of the problem.) According to CNN reporting, the Michael Cohen law office that was raided was located at the global corporate law firm of Squire Patton Boggs. The 1500-lawyer firm had announced a “strategic alliance” with Cohen in April of last year, a few months after Trump’s inauguration.  When queried about the raid by news media yesterday, Squire Patton Boggs said that its relationship with Cohen is over, without commenting on why Cohen still has an office there.  According to Legal Week, Squire Patton Boggs is advising Cambridge Analytica on the U.K.’s investigation into its harvesting of data from Facebook and its potential role in manipulating voters in the Brexit vote that took the U.K. out of the European Union. Cambridge Analytica is also under investigation in the U.S. by the Federal Trade Commission for harvesting data from Facebook without users’ permission and potentially using that data to assist the Trump campaign. Trump’s major donor, Robert Mercer, funded Cambridge Analytica. Facebook CEO,  The man currently in charge of the U.S. Attorney’s Office for the Southern District of New York has not been vetted or confirmed by the U.S. Senate. He’s serving as an interim U.S. Attorney. His name is Geoffrey Berman and he is a Trump supporter who donated $5400 to Trump’s campaign on July 28, 2016. At the time of his appointment, Berman was also a fellow shareholder and law partner of Rudy Giuliani at the giant law firm, Greenberg Traurig. Berman had worked there for more than a decade. Giuliani is a longstanding Trump ally and loyalist and a former head himself of the U.S. Attorney’s Office for the SDNY.

    Trump's personal lawyer attacked by U.S. prosecutor over materials found in raid - (Reuters) - A U.S. prosecutor on Friday attacked a claim by President Donald Trump’s longtime personal lawyer Michael Cohen that many of the materials seized this week in FBI raids on Cohen’s office and home as part of a criminal investigation should remain private. Prosecutors also confirmed in a court filing on Friday that they have been investigating Cohen for months, largely over his business dealings rather than his legal work. Uncertainty over exactly what FBI agents seized from Cohen comes as Trump faces an intensifying probe by Special Counsel Robert Mueller into whether his presidential campaign colluded with Russia. The raids were partly a referral by Mueller’s office. U.S. District Judge Kimba Wood in Manhattan ordered Cohen to appear in court on Monday afternoon, after holding three hearings on Friday into his request for a temporary restraining order (TRO) blocking prosecutors from reviewing seized materials. Assistant U.S. Attorney Tom McKay accused Cohen of trying to invoking “wildly overbroad” claims of attorney-client privilege to avoid the disclosure of thousands of allegedly privileged communications related to the president and other cases. These could include claims by Stormy Daniels, the adult film star who claimed to have had a sexual encounter with Trump in 2006. 

    Trump Pardons Libby, Sending Message to Mueller’s Targets - Real News Network video - Marcy Wheeler says Trump is dangling the Scooter Libby Pardon before those caught up in the web that Robert Mueller is investigating.

    Comey Likens Trump to Mafia Boss in Excerpts of Tell-All Book - President Donald Trump blasted James Comey as a “slime ball” as the former FBI director said to this day he doesn’t know if salacious accusations involving Moscow prostitutes in a controversial dossier on Trump are true.  Comey revealed that the president -- whom he likens in a new book to a Mob boss -- at one point last year mulled asking the bureau to investigate the allegation.  Trump fought back on Twitter Friday morning after excerpts of Comey’s first TV interview were aired, labeling the man he fired as “a proven LEAKER & LIAR” and saying that “virtually everyone in Washington thought he should be fired for the terrible job he did until he was, in fact, fired.” Comey said in excerpts of an ABC News interview aired on the "Good Morning America" Friday that Trump repeatedly asked about the dossier allegations that Russians had videotape of a 2013 encounter with prostitutes in Moscow during the Miss Universe pageant involving urination.  Trump was briefed by Comey before his inauguration about the allegation and immediately went into damage control mode, Comey said. The lawman said he told Trump, “I’m not saying we credit this. I’m not saying we believe it. We just thought it was important that you know.”In a subsequent meeting with Trump, Comey said the president worried about a "1 percent chance" that First Lady Melania Trump would believe the reports were true. "I remember thinking ‘how can your wife think there’s a 1 percent chance you were with prostitutes peeing on each other in Moscow?’" Comey said. "I’m a flawed human being, but there’s literally zero chance that my wife would think that was true. So what kind of marriage to what kind of man does your wife think there’s only a 99 percent chance you didn’t do that?" The White House fired back within moments. Trump didn’t mince words, calling Comey an “untruthful slime ball” on Twitter. “His handling of the Crooked Hillary Clinton case, and the events surrounding it, will go down as one of the worst “botch jobs” of history. It was my great honor to fire James Comey!”

    Comey Compares Trump to “Mob Boss” as RNC Launches “Lyin’ Comey” Website --  Pam Martens - The Republican National Committee (RNC), the organization that provides leadership and funding for the official Republican Party of the United States, has put its reputation on the line along with every Republican that’s running for public office in November by setting up an official RNC website calling former FBI Director James Comey “Lyin’ Comey.”It has been the longstanding position of President Donald Trump that Comey is a liar. Trump fired Comey in the midst of the FBI’s investigation into Russia’s involvement in the 2016 presidential election and has disparaged him ever since. Comey is highly respected by the rank and file of the FBI, the most esteemed law enforcement agency in the United States.The RNC has apparently taken Trump’s personal loyalty pledge – the one Comey says he refused to take when asked by the President. But there’s no escape hatch for the rest of the Republican Party if Special Counsel Robert Mueller’s probe exposes the President as the serial liar, and potentially worse. (The Washington Post has already chronicled 2,001 lies the  President told in his first year in office.) Donald Trump’s lawyer, Michael Cohen, who has admitted to paying $130,000 in hush money to porn star Stormy Daniels to keep her allegations of an affair with Trump from going public, is the Deputy Finance Chairman of the RNC. Cohen is perhaps not the best person to have his fingers tied to the money of the RNC. He is being investigated by Mueller over multiple hush money payments by Trump or surrogates. Cohen’s office, hotel room and home were raided by the FBI on Monday. Last night the Washington Post reported that Cohen frequently tape recorded phone calls and maintained those recordings in a digital archive. The Post article raises the prospect that the FBI may have seized those recordings in their raids. The article also pointed out that attorney-client privilege would not apply to the tapes if the “conversation was conducted to further commission of a crime or fraud.” The same theory would hold true for any documents seized by the FBI.

    GOP Committee Chairmen Seek Comey Memos From Justice Department - Three Republican House committee chairmen asked the Justice Department on Friday to turn over copies of memos former FBI Director James Comey said he wrote about his Oval Office conversations with President Donald Trump."There is no legal basis for withholding these materials from Congress," said the letter by the committee chairmen -- the Judiciary panel’s Bob Goodlatte, Intelligence’s Devin Nunes and Oversight and Government Reform’s Trey Gowdy. The letter is addressed to Deputy Attorney General Rod Rosenstein, who is overseeing Special Counsel Robert Mueller’s investigation.Democrats on the Judiciary Committee had previously made a similar request, but Republicans on the committee blocked it in July 2017.The Republican interest in obtaining the memos comes amid news reports on Comey’s memoir, "A Higher Loyalty," which is set to be formally released next week.Comey has said he wrote the memos after his conversations with Trump. He testified to the Senate Intelligence Committee that Trump had asked him in February 2017 to shut down the federal investigation into former National Security Adviser Michael Flynn. Comey was fired in May 2017.The three House committee chairmen asked the Justice Department to produce the memos by the the close of business on Monday. Those that contain classified material should be produced in their original form and also in a declassified version, the letter said. Previously, the chairmen said, the FBI had only allowed select Intelligence Committee members to read the memos in a secure location. Senate Judiciary Chairman Chuck Grassley’s staff has seen seven Comey memos in a secure location at the FBI, he wrote in January.

    Watchdog: Fired FBI official McCabe leaked to media to help himself - The Department of Justice’s inspector general concluded that fired FBI Deputy Director Andrew McCabe made a leak to the media “designed to advance his personal interests at the expense of Department leadership,” according to a copy of the report obtained by The Hill. The report from Inspector General Michael Horowitz makes the case that McCabe authorized disclosures to the media that were designed to combat the perception that he had a conflict of interest in overseeing dual FBI investigations related to former Secretary of State Hillary Clinton.  “We concluded that McCabe’s decision to confirm the existence of the [Clinton Foundation] Investigation through an anonymously sourced quote, recounting the content of a phone call with a senior Department official in a manner designed to advance his personal interests at the expense of Department leadership, was clearly not within the public interest exception,” Horowitz wrote.McCabe has disputed the charges as politically motivated. His attorney responded immediately on Friday that the report “utterly failed to support the decision to terminate Mr. McCabe.”Michael Bromwich, McCabe’s attorney, also blasted the process by which he was terminated as “unprecedented, unseemly and cruel.” The press disclosures in question were made to Wall Street Journal reporter Devlin Barrett shortly after he wrote a story detailing political donations from Clinton ally and former Virginia Gov. Terry McAuliffe to the failed state Senate campaign of McCabe’s wife, Jill. At the time, the story created a political uproar about McCabe’s impartiality.

    Trump Ecstatic After OIG Releases Report Which Led To McCabe Termination - The Justice Department Office of Inspector General (OIG) delivered a scathing report to Congress on Friday, accusing former FBI Deputy Director Andrew McCabe of repeatedly misleading investigators. McCabe was fired on March 16 after the OIG found that he "had made an unauthorized disclosure to the news media and lacked candor - including under oath - on multiple occasions." Needless to say, President Trump - who is waging open war with Comey, McCabe and much of the FBI's past and present leadership - was delighted by the release of the OIG report, which prompted the following outburst: ""DOJ just issued the McCabe report - which is a total disaster. He LIED! LIED! LIED! McCabe was totally controlled by Comey - McCabe is Comey!! No collusion, all made up by this den of thieves and lowlifes!" DOJ just issued the McCabe report - which is a total disaster. He LIED! LIED! LIED! McCabe was totally controlled by Comey - McCabe is Comey!! No collusion, all made up by this den of thieves and lowlifes!— Donald J. Trump (@realDonaldTrump) April 13, 2018   We assume today's report (found below in its entirety) only covers McCabe, and is not the all encompassing "OIG Report" probing the FBI's conduct during the Clinton email investigation. Nowhere in the report, for example, is any mention of the FBI altering Hillary Clinton's exoneration letter, effectively decriminalizing her mishandling of classified information. Of note, the OIG launched a separate probe in late March covering alleged FISA abuses by the DOJ and FBI.

    Please Chill the Fuck Out About the Pee Tape -- The "pee tape," for the uninitiated, refers to the allegation that Trump was filmed ordering prostitutes to pee on a hotel bed in Moscow. This was the juiciest part of the "Steele dossier," a 2016 collection of raw intelligence compiled former British government spy Christopher Steele, who at the time was being paid by anopposition research firm hired by Democrats. The dossier was published by BuzzFeed just after the election; subsequently, some parts have reportedly been corroborated by the FBI and others have been found to be false.In the dossier, an unnamed "close associate of Trump who had organized and managed his recent trip to Moscow" reported that "Trump's (perverted) conduct in Moscow included hiring the presidential suite of the Ritz Carlton Hotel, where he knew President and Mrs. Obama (whom he hated) had stayed on one of their official trips to Russia, and defiling the bed where they had slept by employing a number of prostitutes to perform a 'golden showers' (urination) show in front of him. The hotel was known to be under FSB [Russian security services] control with microphones and concealed cameras in all the main rooms to record anything they wanted to." A female hotel staffer and another unnamed source backed up this account and said it had happened probably in 2013. (A fourth source, described as a former top Russian intelligence official, said that Trump's behavior had given the Russians unspecified "embarrassing material" they could use to blackmail him.) When BuzzFeed released the dossier in January 2017, it sparked a lot of discussion, but nothing has stuck in the public imagination like the idea that the Russians have an incriminating golden showers video with which to blackmail Trump. And Comey has given everyone an excuse to talk about the pee tape again—in his book, he writes that the president asked him to prove disprove the allegation because Trump thought there might be a "one percent" chance his wife would think it was real. In an excerpt of an ABC interview that will air Sunday, Comey expanded on this account, telling George Stephanopoulos, "I honestly never thought these words would come out of my mouth, but I don't know whether the current president of the United States was with prostitutes peeing on each other in Moscow in 2013."

    Facebook a big contributor to the committees in Congress that will question Mark Zuckerberg — Members of the House and Senate committees that will question Facebook CEO Mark Zuckerberg about user privacy protection next week are also some of the biggest recipients of campaign contributions from Facebook employees directly and the political action committee funded by employees.  The congressional panel that got the most Facebook contributions is the House Energy and Commerce Committee, which announced Wednesday morning it would question Zuckerberg on April 11.Members of the committee, whose jurisdiction gives it regulatory power over Internet companies, received nearly $381,000 in contributions tied to Facebook since 2007, according to the Center for Responsive Politics. The center is a non-partisan, non-profit group that compiles and analyzes disclosures made to the Federal Election Commission.The second-highest total, $369,000, went to members of the Senate Commerce, Science and Transportation Committee, which announced later that it would have a joint hearing with the Senate Judiciary Committee to question Zuckerberg on Tuesday. Judiciary Committee members have received $235,000 in Facebook contributions.On the House committee, Republicans got roughly twice as much as Democrats, counter to the broader trend in Facebook campaign gifts. Of the $7 million in contributions to all federal candidates tied to the Menlo Park, Calif.-based social network, Democrats got 65% to Republicans' 33%.Of the 55 members on the Energy and Commerce Committee this year, all but nine have received Facebook contributions in the past decade. The average Republican got $6,800, while the average Democrat got $6,750.Committee Chairman Greg Walden, R-Ore., received $27,000, while Rep. Frank Pallone of New Jersey, the top-ranking Democrat, got $7,000. Walden and Pallone jointly announced that the committee on April 11 will question Zuckerberg "to shed light on critical consumer data privacy issues and help all Americans better understand what happens to their personal information online."

    Facebook can’t catch a break: Medical data-sharing plan halted - Facebook has been in contact with “several major US hospitals” as part of now-cancelled plans to combine patients’ anonymized information with Facebook’s own user data as part of a research projectHowever, according to CNBC, the plan has been “put on pause” in the wake of the Cambridge Analytica debacle.“This work has not progressed past the planning phase, and we have not received, shared, or analyzed anyone’s data,” an unnamed Facebook spokesperson told CNBC.“The medical industry has long understood that there are general health benefits to having a close-knit circle of family and friends,” Facebook added in a statement. “But deeper research into this link is needed to help medical professionals develop specific treatment and intervention plans that take social connection into account.”The setup reportedly would have “obscured” any personal information but also sought to match individuals via hashed names located in both datasets.The plan, which was to be headed by Freddy Abnousi, an interventional cardiologist, was designed to figure out whether this “combined information could improve patient care.” Previously, Dr. Abnousi was involved in a “hear-through-your-skin” project, according to Business Insider.

    Facebook could face record fine, say former FTC officials - WaPo - Facebook’s disclosure this week that its search tools were used to collect data on most of its 2.2 billion users could potentially trigger record fines and create new legal vulnerability for not having prevented risks to user data, three former federal officials said.The three former officials, all of whom were at the Federal Trade Commission during the privacy investigation that led to a 2011 consent decree with Facebook, said the company’s latest mishap may violate the decree’s provisions requiring the implementation of a privacy program.The language was written to require Facebook to identify and address emerging threats to user privacy as its business practices changed over the 20-year term of the consent decree, said David Vladeck, who was head of the FTC’s bureau of consumer protection when the decree was drafted and signed by Facebook. That meant the company was required to limit its sharing of user data and prevent outsiders from improperly gaining access, he said.“Is it possible that this episode is also a violation of the consent decree? I would say yes,” said Vladeck, now a Georgetown University law professor.  He predicted Facebook may face fines of $1 billion or more for this and a previously reported mishap in which a political consultancy, Cambridge Analytica, improperly gained access to information on as many as 87 million Facebook users, of whom 71 million are Americans. “The agency will want to send a signal … that the agency takes its consent decrees seriously,” Vladeck said.

    Apple Co-Founder Deletes His Facebook Page -  Elon Musk isn't the only Silicon Valley luminary to delete Facebook pages (or rather, the pages belonging to Tesla and SpaceX) in response to the widening scandal over how Facebook stores, shares,  leverages and sells its users' personal data: on Sunday, Woz also deactivated his account saying the social network had brought him "more negatives than positives.""I am in the process of leaving Facebook. It's brought me more negatives than positives. Apple has more secure ways to share things about yourself. I can still deal with old school email and text messages."Apple co-founder Steve Wozniak explained his decision in an email to USA Today, saying Facebook makes a lot of advertising money from personal information voluntarily shared with the company.  Woz said he'd rather pay for Facebook - adding that Apple "makes money off of good products, not off of you. As they say, with Facebook, you're the product."

    Facebook, Google, Apple, and Amazon have too much power — so it’s time for regulators to take on tech’s titans - - In an extended interview with Facebook's Sheryl Sandberg last week, the National Public Radio host Steve Inskeep asked whether she or her fellow executives at the company had ever asked themselves whether the social-networking giant they oversaw had become too powerful.Sandberg, Facebook's chief operating officer, assured Inskeep that was something she and her colleagues had in fact thought about. But she didn't exactly say what conclusion they had reached.  So let me answer that for her: Yes, Facebook has become too powerful. And so too have Google, Amazon, Apple, and maybe a few other tech giants. Their power is having negative effects in a wide range of areas. Facebook's and Google's duopoly control of digital advertising is helping to kill off much of the publishing industry. Facebook's unprecedented scale and the sheer amount of data it has on its users have made it a target for propaganda artists seeking to influence national elections. At the same time, Amazon's growing market dominance is undermining the traditional brick-and-mortar retail industry. Apple is siphoning off nearly all of the profits in the smartphone industry, hindering other companies' ability to innovate or compete.More broadly, there's growing evidence that the outsize market dominance of a handful of giant US companies is the cause of the slow economic growth we've seen in recent years and the multiyear stagnation in workers' wages. It's long past time for government antitrust regulators to step in. Because the companies are distinct from one another and exercise their control in different ways, the actions regulators must take will vary. Regardless, we as a society need to get serious about these companies' power — and constrain it.

    The Orwellian Danger Of Facebook - Virtually every month it seems, new controversies emerge swirling around Facebook, Google, Amazon, Twitter and other Silicon Valley companies. The latest controversy, which involved allies of Donald Trump swiping personal data from as many as 87 million Facebook users in the US presidential election, is yet another window into the nature of these companies. Before that there was the scourge of fake news and Russian propaganda bots that had spread across the Facebook platform like a metastasized cancer. And before that Google being fined €2.4 billion by the European Commission for manipulating its search results in favor of preferred companies. In the case of Facebook, we are left with the daunting question of whether Mr. Zuckerberg and his computer geniuses really understand their own creation. Facebook’s AI has been built (or more accurately, cobbled together) over several years by hundreds of different developers and programmers. Professor Zeynep Tufekci from Harvard University describes the Facebook algorithm as “giant matrices, maybe millions of rows and columns, and not even the programmers understand anymore how exactly it is operating.” There are so many variables that go into its complex and proprietary sorting that Facebook cannot say with authority why something will or will not appear in a user’s news feed, or how and why suddenly Russian trolls and their bots were able to manipulate the algorithms to reach nearly half of all US voters with targeted fake news. (This included such whoppers as the Pope had endorsed Donald Trump for president, which received nearly 2m Facebook “engagements” (total number of shares, likes and comments) in the three months leading up to the U.S. election).

     “Testimony of Mark Zuckerberg Chairman and Chief Executive Officer, Facebook” (PDF)

    Transcript of Mark Zuckerberg’s Senate hearing - WaPo - Facebook chief executive Mark Zuckerberg appeared before the Senate's Commerce and Judiciary committees Tuesday to discuss data privacy and Russian disinformation on his social network. Below is a partial transcript of the hearing. This file will be updated as the hearing continues.

    Senate fails its Zuckerberg test - Mark Zuckerberg emerged unscathed from Tuesday's Senate committee hearing, and he did so in large part because most of the senators who asked him questions had no clue how Facebook worked, what the solutions to its problems are, or even what they were trying to achieve by calling its CEO to testify, other than getting some good soundbites in.What the first day of the Zuckerberg hearings made clear is that many American lawmakers are illiterate when it comes to 21st century technology.As a result, the issue that was supposed to be the focus of the hearing -- "social media privacy and the use and abuse of data," as Sen. Chuck Grassley put it -- was but one among many. And at the moment when the country needed a smart conversation about privacy, what it got was meandering questions and misfires.There were exceptions to the rule: Most notably, California Sen. Kamala Harris, who pressed Zuckerberg on his failure to explain how extensively Facebook tracked user activity beyond Facebook-owned platforms and why the company did not inform users in 2015 that their data had been shared with Cambridge Analytica.But on multiple occasions, it seemed like lawmakers were simply asking Zuckerberg how Facebook worked. Several questions displayed an ignorance about the very basics of the platform and its business model.  "How do you sustain a business model in which users don't pay for your service?" Sen. Orrin Hatch asked.  "Senator, we run ads," Zuckerberg replied. In one of the most memorable exchanges, Sen. John Kennedy began by telling Zuckerberg that Facebook's user agreement "sucked," then listed off a number of steps Facebook should take to improve data privacy -- only to be repeatedly told by Zuckerberg that those measures were already in place. Kennedy: "Are you willing to go back and work on giving me a greater right to erase my data?" Zuckerberg: "Senator, you can already delete any of the data that's there or delete all of your data." Kennedy: "Are you willing to expand my right to prohibit you from sharing my data?" Zuckerberg: "Senator, again, I believe that you already have that control...." Kennedy: "Are you willing to give me the right to take my data on Facebook and move it to another social media platform?" Zuckerberg: "Senator, you can already do that...."

    Facebook CEO presents plans for mass censorship at Senate hearing --Facebook CEO Mark Zuckerberg used his appearance Tuesday before the Senate Judiciary and Commerce Committees to outline a plan for mass censorship on the world’s largest social media platform. Zuckerberg explained how every single statement made by the company’s 2.2 billion users is analyzed and vetted by artificial intelligence systems, then reviewed by an army of some 20,000 censors. If the company finds a statement to be “sensational” or “divisive,” the user will be flagged as a “bad actor,” and either have their posts blocked, be reported to the government, or both. Since the 2016 election, Zuckerberg said, the company had undergone a transformation. “We are going through a broader philosophical shift in how we approach our responsibility as a company,” Zuckerberg said.It is “not enough to build tools” and let users do what they want with them, Zuckerberg said. “We need to make sure they are used for good” by “policing” the Facebook “ecosystem.”The ability to “police” all the content on Facebook was impossible until the rise of artificial intelligence, Zuckerberg said. “From the beginning of the company in 2004, we didn’t have AI technology that could look at content people were sharing.” But the rapid development of artificial intelligence now allows Facebook to screen and understand every single post and message on its platform.“By the end of this year we’ll have more than 20,000 people working on security and content review,” Zuckerberg said. “So when content gets flagged to us we have those people look at it.” He bragged that Facebook’s artificial intelligence tools now succeed in flagging 99 percent of “terrorist propaganda” before users ever see it. By “rolling out AI tools,” Facebook can “proactively police and enforce” all content, Zuckerberg said.

    Jason Kint: Here are 5 ways Facebook violates consumer expectations to maximize its profits - Nieman Labs - As the Facebook scandal continues to snowball, COO Sheryl Sandberg and CEO Mark Zuckerberg have finally admitted publicly they have a lot of work to do to restore trust in, and combat abuse of, their platform. Those are facts supported by independent research from Edelman.  Facebook and Google, more than any other two companies, have controlled and influenced the trust issues now being surfaced across our industry which impact the publishers and advertisers who choose to associate with their platforms.In 2014, I wrote about Facebook’s questionable practices in The Wall Street Journal, focusing on Facebook’s mining of user’s browsing history. We argued that people do not expect Facebook to track them across the web and within apps in order to target advertising to them. Unfortunately, the backlash was slow to build (except for those most intimately involved in consumer privacy and regulation) and Facebook continued its practices. The 2016 election and the Cambridge Analytica scandal dramatically changed that. Although Facebook recently added the ability for users to opt out (via a deeply buried setting) and announced new “controls” and “settings” are coming, the fact that it takes an avalanche of bad press and a #DeleteFacebook movement to motivate them to act in their consumers’ best interests clearly shows their products are designed to maximize profit rather than behave according to consumer expectations. At Digital Content Next, we wanted to get a clearer picture of how consumer expectation does (or does not) align with Facebook’s data practices. So last week — at a time when consumer expectations of Facebook are likely at an all-time low — DCN surveyed a nationally representative sample to find out just exactly what people expect from Facebook.1 Here’s how they responded.

    Live updates from Day 2 of Mark Zuckerberg’s testimony to Congress Recode (transcript)

    Mark Zuckerberg’s Facebook hearing was an utter sham -- Zephyr Teachout -- On Tuesday, Mark Zuckerberg was in the hot seat. Cameras surrounded him. The energy in the room – and on Twitter – was electric. At last, the reluctant CEO is made to answer some questions!Except it failed. It was designed to fail. It was a show designed to get Zuckerberg off the hook after only a few hours in Washington DC. It was a show that gave the pretense of a hearing without a real hearing. It was designed to deflect and confuse.Each senator was given less than five minutes for questions. That meant that there was no room for follow-ups, no chance for big discoveries and many frustratingly half-developed ideas. Compare that to Bill Gates’ hearing on Microsoft, where he faced lawyers and staff for several days, or the Kefauver hearings, which were over a year. By design, you can’t do a hearing of this magnitude in just a couple of hours.  The worst moments of the hearing for us, as citizens, were when senators asked if Zuckerberg would support legislation that would regulate Facebook. I don’t care whether Zuckerberg supports Honest Ads or privacy laws or GDPR. By asking him if he would support legislation, the senators elevated him to a kind of co-equal philosopher king whose view on Facebook regulation carried special weight. It shouldn’t. Facebook is a known behemoth corporate monopoly. It has exposed at least 87 million people’s data, enabled foreign propaganda and perpetuated discrimination. We shouldn’t be begging for Facebook’s endorsement of laws, or for Mark Zuckerberg’s promises of self-regulation. We should treat him as a danger to democracy and demand our senators get a real hearing.

    Mark Zuckerberg Is Either Ignorant or Deliberately Misleading Congress -- After watching the Facebook founder and CEO’s 48-hour trip to Capitol Hill, there are two possible conclusions: either Mark Zuckerberg deliberately misled Congress, or Mark Zuckerberg knows very little about his own company. Both are bad.Again and again, before both Senate and House committees, Zuckerberg pleaded ignorance about the company he created and has controlled for 14 years. Zuckerberg wasn’t dodging questions about obscure corners of the company or corporate minutiae, but the most plainly fundamental aspects of Facebook’s business and privacy policies. Rather than the congressional beatdown many had expected, the most striking aspect of Zuckerberg’s testimony wasn’t his painful apologias or excuse-spinning, but his ability to spend nearly 10 hours saying almost nothing. The hearings may prove to be a sea change moment for Facebook and the greater data-mining industrial complex, but it would be hard to say the public learned much of anything.When Sen. Kamala Harris asked Zuckerberg, on the subject of Cambridge Analytica, whether the company had any conversations about whether to inform the 87 million users affected, the CEO replied, “I don’t know if there were any conversations at Facebook overall because I wasn’t in a lot of them,” and finally “I don’t remember a conversation like that.”When asked by Sen. Maria Cantwell whether Facebook employees had helped with Cambridge Analytica’s work: “Senator, I don’t know.”When asked about the role of Palantir, a data-mining defense contractor co-founded by Facebook board member and early Zuckerberg ally Peter Thiel: “I’m not really that familiar with what Palantir does.” Zuckerberg acted similarly confused when asked whether Facebook does things it openly says it does on its own website. When Sen. Roger Wicker asked Zuckerberg if he could confirm whether “Facebook can track a user’s internet browsing activity, even after that user has logged off of the Facebook platform,” the CEO replied, “Senator — I — I want to make sure I get this accurate, so it would probably be better to have my team follow up afterwards.”The answer is categorically, unequivocally yes, according to Facebook.com: “If you’re logged out or don’t have a Facebook account and visit a website with the Like button or another social plugin, your browser sends us a more limited set of info.”

    Here’s how much Facebook donated to every lawmaker questioning Mark Zuckerberg - Facebook founder and CEO Mark Zuckerberg is testifying before the House Committee on Energy and Commerce today, fresh off the heels of a grueling five-hour joint session before the Senate Judiciary and Commerce committees yesterday. In total, Zuckerberg will face questions from nearly 100 legislators, and many of those legislators have received thousands of dollars from the company Zuckerberg runs. Over the last 12 years, Facebook has spent $7 million in campaign contributions. Historically, Facebook has donated slightly more to Democrats than Republicans, but overall, the platform’s political footprint is small in Washington, DC relative to its market cap, which is currently calculated at about $400 billion. That’s not unusual for technology companies: Amazon spent $4 million in campaign contributions over 20 years, and it has a market cap of nearly $700 billion. (Note, however, that Alphabet, Inc., with a market cap just over Amazon’s, appears to be outspending Facebook in DC by an order of magnitude.) According to data from the Center for Responsive Politics, since 2014, Facebook has contributed a total of $641,685 to the members of Congress that Zuckerberg is facing this week. The top recipients of that money include Sen. Cory Booker (D-NJ), Sen. Kamala Harris (D-CA), and Rep. Anna Eshoo (D-CA).

    The biggest Black Lives Matter page on Facebook is fake: For at least a year, the biggest page on Facebook purporting to be part of the Black Lives Matter movement was a scam with ties to a middle-aged white man in Australia, a review of the page and associated accounts and websites conducted by CNN shows. The page, titled simply "Black Lives Matter," had almost 700,000 followers on Facebook, more than twice as many as the official Black Lives Matter page. It was tied to online fundraisers that brought in at least $100,000 that supposedly went to Black Lives Matter causes in the U.S. At least some of the money, however, was transferred to Australian bank accounts, CNN has learned. Fundraising campaigns associated with the Facebook page were suspended by PayPal and Patreon after CNN contacted each of the companies for comment. Donorbox and Classy had already removed the campaigns. The discovery raises new questions about the integrity of Facebook's platform and the content hosted there. In the run-up to Facebook CEO Mark Zuckerberg's testimony before Congress this week, Facebook has announced plans to make the people running large pages verify their identity and location. But it's not clear that the change would affect this page: Facebook has not said what information about page owners it will disclose to the public -- and, presented with CNN's findings, Facebook initially said the page didn't violate its "Community Standards." Only after almost a week of emails and calls between CNN and Facebook about this story did Facebook suspend the page, and then only because it had suspended a user account that administrated the page.

    I Downloaded the Information That Facebook Has on Me. Yikes. -- When I downloaded a copy of my Facebook data last week, I didn’t expect to see much. My profile is sparse, I rarely post anything on the site, and I seldom click on ads. (I’m what some call a Facebook “lurker.”)  But when I opened my file, it was like opening Pandora’s box.With a few clicks, I learned that about 500 advertisers — many that I had never heard of, like Bad Dad, a motorcycle parts store, and Space Jesus, an electronica band — had my contact information, which could include my email address, phone number and full name. Facebook also had my entire phone book, including the number to ring my apartment buzzer. The social network had even kept a permanent record of the roughly 100 people I had deleted from my friends list over the last 14 years, including my exes.There was so much that Facebook knew about me — more than I wanted to know. But after looking at the totality of what the Silicon Valley company had obtained about yours truly, I decided to try to better understand how and why my data was collected and stored. I also sought to find out how much of my data could be removed. How Facebook collects and treats personal information was central this week when Mark Zuckerberg, the company’s chief executive, answered questions in Congress about data privacy and his responsibilities to users. During his testimony, Mr. Zuckerberg repeatedly said Facebook has a tool for downloading your data that “allows people to see and take out all the information they’ve put into Facebook.” (Those who want to download their own Facebook data can use this link.)

    Here's The Personal Data That Facebook Keeps Even After You Delete It - During his appearances before Congress earlier this week, Facebook CEO Mark Zuckerberg repeatedly insisted that Facebook doesn't share user data with outside companies (though until recently it would allow advertisers to pay to use data from "third party" providers while targeting ads on Facebook's platform) and that the company allows users to delete their data any time.But as Kevin Roose, a personal tech columnist for the New York Times, pointed out in a recent column, this is an overstatement, at best - and an outright distortion, at worst. Roose describes himself as an irregular Facebook user, someone who rarely logs in and rarely posts, but occasionally uses his account to keep up with friends and family. Yet, when he downloaded the entire cache of data that Facebook had collected on him over the years, he was alarmed to discover that the company had kept data that he believed he had deleted long ago.Of course, Roose isn't the first person to point out the dizzying amount of data that Facebook and Google collect on their users (both companies have made the caches available to download in the wake of the Cambridge Analytica scandal).But Roose's examination of his data shows how Facebook refuses to delete data from its servers as a general rule - even when a user deactivates their account or deletes - for fear that it might become useful for targeting ads at some point in the future.

    Facebook Uses Artificial Intelligence to Predict Your Future Actions for Advertisers, Says Confidential Document - Since the Cambridge Analytica scandal erupted in March, Facebook has been attempting to make a moral stand for your privacy, distancing itself from the unscrupulous practices of the U.K. political consultancy.  But in reality, a confidential Facebook document reviewed by The Intercept shows that the two companies are far more similar than the social network would like you to believe. The recent document, described as “confidential,” outlines a new advertising service that expands how the social network sells corporations’ access to its users and their lives: Instead of merely offering advertisers the ability to target people based on demographics and consumer preferences, Facebook instead offers the ability to target them based on how they will behave, what they will buy, and what they will think. These capabilities are the fruits of a self-improving, artificial intelligence-powered prediction engine, first unveiled by Facebook in 2016 and dubbed “FBLearner Flow.” One slide in the document touts Facebook’s ability to “predict future behavior,” allowing companies to target people on the basis of decisions they haven’t even made yet. This would, potentially, give third parties the opportunity to alter a consumer’s anticipated course. Here, Facebook explains how it can comb through its entire user base of over 2 billion individuals and produce millions of people who are “at risk” of jumping ship from one brand to a competitor. These individuals could then be targeted aggressively with advertising that could pre-empt and change their decision entirely — something Facebook calls “improved marketing efficiency.” This isn’t Facebook showing you Chevy ads because you’ve been reading about Ford all week — old hat in the online marketing world — rather Facebook using facts of your life to predict that in the near future, you’re going to get sick of your car. Facebook’s name for this service: “loyalty prediction.”

    A Google computer scientist says his new lip-reading technology has terrifying implications for fake news | South China Morning Post: In an era of fake news, we can still rely on our own eyes to spot the truth, right? Wrong. Computer scientist Supasorn Suwajanakorn, now a research resident at Google Brain, has created a new kind of lip-reading technology that can make a fake video of just about anyone that looks and sounds almost exactly like them. All the programme needs is a few photos and videos to learn from. Suwajanakorn demonstrated the tool onstage in Vancouver at the 2018 TED Conference on Wednesday. He said the new system, which he created as a PhD thesis project at the University of Washington, uses a neural learning network to mimic movements in the mouth and teeth of a person from video footage. In essence, the computer algorithm teaches itself to imitate exactly how a person talks by watching them over and over again. Suwajanakorn has already successfully created fake videos of celebrities like Tom Hanks and former president Barack Obama using only images and videos that are readily available online. He said it doesn’t really matter what kinds of facial expressions a person makes or which words they say. All that matters is that the system has enough data to pick up on a speaker’s mannerisms by studying the subject’s teeth, lip movements, and jaw shape. From there, the possibilities for fake videos become endless.

    Don’t Give Away Historic Details About Yourself - Krebs on Security - Social media sites are littered with seemingly innocuous little quizzes, games and surveys urging people to reminisce about specific topics, such as “What was your first job,” or “What was your first car?” The problem with participating in these informal surveys is that in doing so you may be inadvertently giving away the answers to “secret questions” that can be used to unlock access to a host of your online identities and accounts.I’m willing to bet that a good percentage of regular readers here would never respond — honestly or otherwise — to such questionnaires (except perhaps to chide others for responding). But I thought it was worth mentioning because certain social networks — particularly Facebook — seem positively overrun with these data-harvesting schemes. What’s more, I’m constantly asking friends and family members to stop participating in these quizzes and to stop urging their contacts to do the same. On the surface, these simple questions may be little more than an attempt at online engagement by otherwise well-meaning companies and individuals. Nevertheless, your answers to these questions may live in perpetuity online, giving identity thieves and scammers ample ammunition to start gaining backdoor access to your various online accounts.

    Turn On, Tune In, Drop Out Of Social Media - As the Facebook fracas unfolds, the agenda-setting members of the press have been inclined to frame Cambridge Analytica as an isolated incident. This belies the fact that mass surveillance is a fundamental aspect of social media's business model, and that social media users cannot have their cake and eat it too, despite what tech CEOs might claim. In lieu of regulatory measures, protecting your privacy online entails swallowing a bitter pill: opting out of social media.While the pool of Facebook accounts suspected of being harvested by Cambridge Analytica continues to grow it’s important to recognize that there’s more to this story than a cabal of shady republican operators. By focusing on Cambridge Analytica and its parent company, SCL, the major news outlets are creating the perception that what’s happening is the work of a few bad apples. When the reality is that the underlying problem is systemic in nature. It’s not just the GOP. Political influence operations are a bipartisan affair. According to a number cruncher who worked for the Democrats, the 2012 Obama campaign aggregated almost five times as much Facebook data as Cambridge Analytica. It’s just that in Obama’s case Facebook execs decided to turn a blind eye. As the source explained, “they allowed us to do things they wouldn’t have allowed someone else to do because they were on our side.” In the aftermath of the Cambridge Analytica revelations, Zuckerberg has hired public relations experts and launched an extensive damage control campaign. Note, for example, the tacit assumption baked into the title of Brian Chen’s piece in the New York Times: “How to Protect Yourself (and Your Friends) on Facebook.” Are editors at the Times alleging that users can have their cake and eat it too? Reading down into the article, Chen acknowledges that truly protecting your data would entail deleting your Facebook account. This frank admission underscores the fact that it’s nearly impossible for social media users to escape data collection. After all that’s how social media companies make their money. Well over a hundred billion dollars per year. Your online activity inside their walled internet gardens as well as your dopamine addiction to “tweets” and “likes” are their income stream

     Regulatory bar for megabanks will ‘remain very high’: Fed's Powell -  Federal Reserve Chairman Jerome Powell said he has yet to hear a compelling argument for why the largest banks should receive substantial regulatory relief, noting that by all indicators they are very profitable and competitive in the global marketplace. “Our expectations of the largest most complex systemically important firms are the highest — they’re very high, and they’re going to remain very high,” Powell said. “As you look around the world, U.S. banks are competing very, very successfully. They’re very profitable. They’re earning good returns on capital. Their stock prices are doing well.”   Powell said he has found nothing to support the argument that regulations are hurting the largest banks, either domestically or overseas. If such proof is presented in the future, he said, he would be willing to consider it. “I’m looking for the case for, some kind of evidence that — and I’m open to this — some kind of evidence that regulation is holding them back,” Powell said. “I’m just not really seeing that case as made at this point. But again, we’re open to what evidence comes in.” Powell was sworn in as chairman of the Fed in February after being nominated to succeed Janet Yellen. Some Democrats in the Senate — most notably Sen. Elizabeth Warren of Massachusetts — criticized his nomination because they feared he would loosen post-crisis regulations on the largest banks. But Powell has pushed back against that premise recently. Last month, in his first press conference as chairman, he said the Fed was “fully prepared” to apply macroprudential requirements on banks with assets of less than $250 billion if a Senate bill raising the threshold for systemically risky banks is enacted.  Powell also said during the event that he has delegated many of the responsibilities for regulatory policy and payments to other governors but that the role of the head of the central bank is different. “I chaired most of the committees during my time" as governor, "but it’s a very different job,” he said. “I chaired the committee that oversees the reserve banks and the board’s operations, the committee that oversees supervision of the banks, and the one that oversees the payments system — all that stuff, I’ve handed all of that off. And so my focus is on the economy, monetary policy and the institution. So it’s a much … it’s a different thing.”

    Fed unveils capital proposal aimed at simplifying stress tests  — The Federal Reserve Board released a proposal Tuesday to modernize its stress testing regime by replacing many of the existing post-stress minimum capital levels with a so-called “stress capital buffer,” which officials say would simplify and refine the stress testing program.  Federal Reserve Vice Chairman for Supervision Randal Quarles said the proposal would simplify the Fed’s examination process in a way that does not generate additional risk to the financial system. “Our regulatory measures are most effective when they are as simple and transparent as possible, and this proposal significantly simplifies our capital regime while maintaining its strength,” Quarles said in a press release. "It is a good example of how our work can be done more efficiently and effectively, and in a way that bolsters the resiliency of the financial system.”

    Mnuchin's ill-advised plan on nonbank SIFIs -- In March, the Senate passed the Economic Growth, Regulatory Relief, and Consumer Protection Act, which raises Dodd-Frank’s asset threshold — above which banks face enhanced regulatory standards — from $50 billion to $250 billion.   But the $50 billion threshold for banks is not the only one of its kind under threat.  Treasury Secretary Steven Mnuchin, who heads the Financial Stability Oversight Council, said at a January hearing that he intends to raise a lesser-known $50 billion threshold if the Senate legislation is enacted. This threshold is used by the FSOC to narrow the universe of companies considered in the first stage of the council’s multistage designation process for systemically important nonbank financial companies.  Increasing this threshold fivefold would allow massive asset managers, hedge funds and other nonbank financial companies to escape even a cursory look as to whether they pose financial stability risks. Mnuchin also included this recommendation in a November 2017 Treasury report — and the FSOC can make this change without legislative approval.The FSOC was created by the Dodd-Frank Act to help identify and mitigate threats to financial stability — particularly those that emerge outside of the traditional banking sector. The collapse of nonbank financial companies like AIG, Lehman Brothers, Bear Stearns and Merrill Lynch during the 2007-08 financial crisis made it clear that these systemically important nonbanks were drastically under-regulated. Dodd-Frank gave the FSOC the authority to subject such nonbank financial companies to enhanced oversight by the Federal Reserve Board. Unlike with systemically important banks, Dodd-Frank did not provide any statutory quantitative thresholds above which nonbank financial companies would be considered systemically important. The FSOC has the discretion to designate companies based on its analysis of whether material distress at the company — or the nature, scope, size, scale, concentration, interconnectedness or mix of the activities of the company — could threaten financial stability.

    Minneapolis Fed’s TBTF plan has some GSE-sized holes - The Federal Reserve Bank of Minneapolis this winter finalized its “Minneapolis Plan to End Too Big to Fail” — that is, a plan intended to end the problem of “too big to fail” financial institutions, including both banks and nonbank financial companies.  But here is something remarkable: Fannie Mae and Freddie Mac, among the most egregious cases of “too big to fail,” appear nowhere at all in the plan.  Have the Federal Reserve Bank of Minneapolis authors forgotten how Fannie and Freddie blew masses of hot air into the housing bubble, then crashed, then got a $187 billion bailout from the U.S. Treasury? Have they not noticed that Fannie and Freddie remain utterly dependent on the credit guaranty of the Treasury, remaining TBTF to the core? Since the plan focuses on excessive leverage as the fundamental cause of “too big to fail” risk, have they not considered that Fannie and Freddie each had capital of less than zero at the end of last year, so they had infinite leverage along with their $5.4 trillion in liabilities?Defenders of Fannie and Freddie will cry that they can’t build capital when the Treasury takes all their profits every quarter. But whoever may be to blame does not change the overwhelming fact: the government-sponsored enterprises are “too big to fail.”   The Minneapolis plan notes that, under the current regime, firms “can continue to operate under their explicit or implicit status as TBTF institutions potentially indefinitely.” This is true — and it is especially true of Fannie and Freddie. So the plan should say instead: “Under the current regime, banks and nonbank financial firms, including notably Fannie Mae and Freddie Mac with their $5 trillion in risk exposure, can continue as TBTF institutions potentially indefinitely.”

    Goldman Dodges MiFID Regulation By Recreating Dark Pools Under A New Name - It wouldn’t be the investment banking industry if large investment banks weren’t constantly thinking of new schemes to skirt regulation for monetary benefit. Which is why it should come as no surprise to anyone that Goldman Sachs has already created, and is likely working on fine-tuning, a method for skirting dark pool trading rules that have been established in Europe.That’s right, folks. Forget about “dark pools“ and say hello to "stock auctions". What is the point of "stock auctions"? Basically to be able to place dark pool trades - where orders are kept "off the market" and quiet, almost the exact same way dark pool trades happen. But by giving these transactions a new name, Goldman Sachs thinks it has found a “work around" for MiFID II rules. Bloomberg reported on the emergence of these new auctions this morning, stating:Goldman Sachs Group Inc. is taking on the exchanges to win the business of fund managers eager to keep their stock trades hidden in the era of MiFID II price transparency.The bank has set up a so-called periodic auction service that matched its first trades on March 21, allowing investors to buy and sell shares without tipping their hand to the rest of the market. Exchanges began offering the service earlier. Europe’s largest dark pool, run by Cboe Global Markets Inc., is now doing more business through periodic auctions than it is through its dark markets.For those who are really looking to have a laugh today, Goldman states that these auctions actually make trading more transparent.“The launch represents the first bank-led periodic-auction book,” David Shrimpton, a managing director at Goldman Sachs, said by email. “The product will enable our clients to trade in a fair, multilateral and transparent environment.” Only in the world of Goldman Sachs would brokering orders off of major exchanges for the purpose of keeping them confidential be more transparent.

    Bankers welcome new capital proposals but want regulators to go further -  If there’s something that policymakers and bankers have in common, it’s their refusal to accept an initial offer when they sense a good opportunity. Such was the industry’s reaction Friday to the latest moves by bank regulators to ease post-crisis capital rules. During quarterly earnings calls, executives welcomed two separate proposals that, in some cases, would trim the capital cushions that banks have spent the past decade building up. Still, one of the nation’s most prominent bankers made it clear that, while the proposed changes are a step forward, regulators could go much farther.  JPMorgan Chase Chief Financial Officer Marianne Lake reiterated the company’s previous calls for regulators to overhaul a capital surcharge for global systemically important banks, or G-SIBs. Now that regulators are open to reconsidering other big-bank capital rules, the surcharge should also be on the agenda, she said.  Robert Reilly, CFO at PNC Financial, said Friday that the company is still reviewing the proposal. Under the plan, the buffer could “theoretically could be higher” than 2.5%, depending on scenarios that the Fed uses for the annual stress tests, he said.  Bankers were more welcoming, however, of a separate proposal, issued Wednesday by the Fed and the Office of the Comptroller of the Currency, to change how they calculate the so-called “enhanced supplementary leverage ratio.” “We would applaud the increased flexibility that it can grant us,” said John Gerspach, chief financial officer at Citigroup. As of March 31, Citi’s supplementary leverage ratio was 6.7%, down from 7.27%.

    Congress won't repeal Dodd-Frank. Why does Paul Ryan say it will? -  Earlier this week, on the heels of his retirement announcement, Paul Ryan boasted on Fox News that the House is “going to be repealing and replacing Dodd-Frank.”  At the time, the comment seemed potentially innocuous — perhaps someone leaning on a well-worn, if inaccurate, phrase in the spur of the moment.   But in light of a report on Twitter this morning that Marc Short, the White House’s director of legislative affairs, used similar language in describing the administration’s near-term priorities, the phrasing is beginning to look more like strategic messaging. I asked Short for the WH’s legislative priorities. He said: Dodd Drank repeal, VA Choice and nominations. When I pointed out he did not mention infrastructure, he said: “I prioritized what we have to do in the next six weeks or so.” — Eamon Javers (@EamonJavers) April 13, 2018 A White House spokeswoman did not respond immediately to a request to comment on or clarify the statement. The comments in some ways mirror the worst fears of progressives, who warned the bill was a gift to Wall Street and a gutting of Dodd-Frank, in the lead-up to a Senate vote on the package.  Some of the most controversial provisions in the legislation include raising a key Dodd-Frank threshold for heightened regulations from $50 billion to $250 billion, changing how a certain capital cushion is calculated and removing some requirements on data collection used for monitoring discriminatory practices. These provisions have rightly been debated by lawmakers and advocates on both sides of the aisle, but they fall far short of a significant unwinding. The legislation doesn’t touch, for example, Title VII of the law, which focused on cleaning up the regulation of derivatives, or the creation of the Consumer Financial Protection Bureau — two core aspects of the financial reform law. Nor does it strip the Federal Deposit Insurance Corp. of its powers to unwind a large banking company, another key component of the original law. Supporters of the bill argue it’s primarily aimed at helping small and regional banks.

    Fed, OCC back proposal to ease big-bank capital measure — without FDIC - — The Federal Reserve Board and the Office of the Comptroller of the Currency proposed changes to the way they apply a capital backstop to the largest systemically important firms, replacing a static leverage ratio with a more dynamic ratio that takes each bank’s risk profile into account. Members of the Fed board were split on the measure, however. Chairman Jerome Powell and Vice Chairman for Supervision Randal Quarles voted in favor, but Gov. Lael Brainard voted against it. Meanwhile, the Federal Deposit Insurance Corp., which helped drive the discussion on developing a tough leverage ratio for big banks following the crisis, apparently balked at the proposal due to the likelihood that it would lower capital levels."Strengthening leverage capital requirements for the largest, most systemically important banks in the United States was among the most important post crisis reforms," FDIC Chairman Martin Gruenberg said in a statement released after the proposal was issued. In the notice of proposed rulemaking released Wednesday, the Fed and OCC suggested that the existing 2% "enhanced supplementary leverage ratio" that is applied to global systemically important banks, or G-SIBs, be replaced with a ratio made up of half of the bank’s applicable risk-based capital surcharge. That surcharge ranges from 1% to 4.5%, though no U.S. bank has a surcharge at the top of that range. The U.S. version of the surcharge differs from the international Basel rule in that it penalizes bank reliance on short-term wholesale funding. JPMorgan Chase has the highest surcharge, at 3.5%, followed by Morgan Stanley, Citigroup and Bank of America with 3% each, though those surcharges are still in the process of being phased in. The Fed and OCC said in a statement that the purpose of the proposal is to make the eSLR less static while also maintaining the safety of the financial system. The two agencies estimated only a modest reduction in capital allocations as a result of the rule.

    Banks were told tax reform would spur lending. They’re still waiting -- So much for high hopes for accelerated loan growth at community banks. Just a few months ago, many industry observers predicted blowout first-quarter results from smaller institutions, largely based on optimism after the passage of sweeping tax reform. The mood now, given bankers' commentary and fears of a trade war, is more subdued.  So expect analysts to ask more questions about pent-up demand during upcoming quarterly conference calls.  “It appears that the tax cut has not spurred on loan growth, so I think people will be looking forward to see how pipelines are building ... and if we’re starting to see signs of that potential benefit,” said Brian Zabora, an analyst at Hovde Group.  "We were expecting the tax cuts to free some pent-up demand and get some businesses investing," said Joseph Gladue, an analyst at Merion Capital Group. "Increased uncertainty may have muted some of the benefit" of lower taxes. Recent data from the Federal Reserve and guidance from bankers also indicate tempered growth.

    Wells Fargo faces $1 billion fine to settle loan abuses   (Reuters) - Two U.S. regulators have proposed Wells Fargo & Co (WFC.N) pay $1 billion in penalties to resolve probes into auto insurance and mortgage lending abuses at the third largest U.S. bank, overshadowing its first quarter results. The San Francisco-based lender, which reported a quarterly profit, said it may have to restate results to reflect the final settlement. The proposed penalties were reported earlier this week by Reuters. Analysts said that while the $1 billion penalty would not make a significant dent to its balance sheet, it may take the bank some time to repair the damage to its reputation. Shares of the bank fell 3.4 percent to $50.89. “Operationally, Wells Fargo can recover, but reputationally and how a billion dollars will weigh on them - only time can tell,” said Art Hogan, chief market strategist at B. Riley in Boston. “Companies have come back from worse than this but right now they’re still in the eye of the storm,” he added. The bank, still smarting from a prolonged sales scandal in its retail banking business, found inconsistencies at its auto lending and mortgage in the summer of 2017 - leading to further probes by regulators. To appease investors and regulators, the bank overhauled its operational structure, shook up its board and hired a new compliance officer. But this failed to impress the U.S. Federal Reserve, which imposed restrictions in February on the bank’s growth, forbidding it to expand its balance sheet beyond 2017 levels until it makes internal changes that addressed risk management. “A bank’s balance sheet is the engine for profit growth,” said Kyle Sanders, analyst at Edward Jones. “The constraints on Well’s ability to take on deposits and make new loans will likely result in lagging earnings growth for Wells relative to peers in the near-term.”

    How Much Are Banks Exposed to Subprime? More than we Think - Wolf Street - A couple of days ago, when I wrote about the soaring delinquency rates in subprime auto loans – the worst since 1996 – and the collapse of three specialized small subprime lenders, I stumbled over a special nugget.  One of the collapsed small lenders, Summit Financial Corp, when it filed for bankruptcy on March 23, disclosed that it owed Bank of America $77 million. This loan was secured by the auto loans Summit had extended to subprime customers, who’re now defaulting in large numbers. In the bankruptcy documents, BofA alleged that Summit had repossessed many of these cars without writing down the bad loans, thus under-reporting the losses and misrepresenting the value of the collateral (the loans). This allowed Summit to borrow more from BofA to fund more subprime loans, BofA said. Summit is just a tiny lender and doesn’t really matter. But there are a whole slew of these nonbank lenders, specializing in auto loans, revolving consumer loans, payday loans, and mortgages. Some of these nonbank lenders specialize in “deep subprime.” And some of these lenders are fairly large. Since the Financial Crisis, big banks have mostly avoided subprime lending. Instead, they’re lending to the companies that then provide financing to subprime customers. And BofA is finding out just how much risk it was taking with its loan to Summit that was secured by now defaulting auto loans that were secured by cars that, once repossessed, are worth only a fraction of the loan value when they’re sold at auction. How much banks are exposed in this manner to subprime loans – not just auto loans, but also subprime mortgages, and subprime consumer loans – is somewhat of a mystery. But some clues are percolating to the surface. According to an analysis by the Wall Street Journal of regulatory filings, bank loans to nonbanks lenders have surged sixfold since the Financial Crisis to nearly $345 billion at the end of 2017. Here are the top contenders:

    1. Wells Fargo: $81 billion, up from $14 billion in 2010
    2. Citigroup: $30 billion
    3. Bank of America: $30 billion
    4. JP Morgan: $28 billion
    5. Goldman Sachs: $22 billion
    6. Morgan Stanley: $16 billion.

     Lower exam fees in OCC’s future: Otting — Comptroller Joseph Otting says he plans to use the current era of strong profitability, risk management and high capital within the industry to keep agency costs in check, resulting in lower exam fees for national banks next year. Speaking at American Banker’s Retail Banking conference, Otting said he’s using his past experience as a banker to “really look hard at our cost structure.” “We have the most capital, some of the cleanest loan portfolios we’ve had with some of the highest reserves,” Otting said. “We are now reentering a period that harkens back to pre-crisis returns on capital and profitability.”

    5 items on OCC chief’s reg relief to-do list — Comptroller of the Currency Joseph Otting laid out an ambitious regulatory reform agenda Monday, telling a group of community bankers that he is committed to upgrades for the Community Reinvestment Act, new flexibility in Bank Secrecy Act compliance and other measures.  Otting, who spoke at a meeting of the Independent Community Bankers of America, has come to the regulatory forefront like other Trump administration appointees pledging to take financial services policy in a different direction compared with the Obama era. In addition to reforms related to CRA and BSA, Otting also articulated the Office of the Comptroller of the Currency's new openness to small-dollar lending, and said the agency wants to give more decision-making authority to examiners in the field. Here are some highlights from his remarks.

    • Otting said the OCC was looking into how to cut the costs of complying with the Bank Secrecy Act and anti-money-laundering regulations, known as BSA/AML. The bank regulators work with the Financial Crimes Enforcement Network to examine financial institutions for compliance with BSA/AML, but Otting said it has become “incredibly expensive and very difficult” to be in compliance..
    • The first policy that Otting said the agency is seeking to revamp is CRA enforcement, which both bankers and consumer groups argue has become outdated with a grading system for banks that is inconsistent and unclear. Otting said the agency is looking to create a uniform grading system for banks of all sizes that will take a bank’s community reinvestment lending activities and “divide it by one item on the balance sheet, whether that’s deposits, Tier 1 capital or total assets.”
    • The OCC now welcomes small-dollar lending. In a reversal from post-crisis regulatory policy under the Obama administration, Otting said the OCC now sees no problem with banks getting back into small-dollar consumer lending, specifically for loans between $500 and $5,000.
    • Another significant change for the OCC under Otting will be shifting the decision-making authority from Washington back to the examiners in charge, called EICs, at the banks.
    • OCC is still uncertain about fintechs entering the banking system. One area that Otting said the OCC has not yet made a decision on is whether to allow fintech firms to obtain federal charters to operate more like banks. Former Comptroller Thomas Curry was considering whether to create a special-purpose charter for fintech firms. Many bankers have said they would be open to such a charter so long as the fintech firm was required to comply with all of the same regulations as banks..

    With Ryan departing, it’s now or never for reg relief  — Ahead of a toss-up race for control of the House this fall, Speaker Paul Ryan’s decision to retire leaves the financial services industry in uncertain territory. Wednesday’s announcement, anticipated by some for months, could heighten pressure to move a pending regulatory relief bill as soon as possible — well ahead of the November elections that will determine which party leads the chamber next term. Ryan joins a wave of Republican lawmakers who have announced they will not seek re-election next year, including several leaders on banking issues, such as Rep. Jeb Hensaring, R-Texas, chairman of the Financial Services Committee, and Sen. Bob Corker, R-Tenn., a senior member of the Banking Committee. In addition to Ryan, Rep. Dennis Ross, R-Fla., announced Wednesday that he would join those retiring at the end of the year. Ross, a member of the House banking panel, introduced a bill late last year to overturn the Consumer Financial Protection Bureau’s payday lending rule using the Congressional Review Act.  With leadership of the House now up for grabs by either party, the financial services industry is also bracing for a potentially dramatic shift in focus from lawmakers after eight years of solid GOP control. Should Democrats take control of the House, it’s likely that Rep. Maxine Waters, D-Calif., an outspoken critic of some of the country’s largest banks, is poised to take over the Financial Services Committee.   Yet most immediately, the industry remains focused on enacting a bipartistan bill — which has already passed the Senate but has some skeptics in the House — overhauling parts of the Dodd-Frank Act. Hensarling, backed by GOP leaders, has said he will not move the legislation without allowing House members to put their imprint on the bill — a move that has frustrated some industry leaders anxious to see the bill signed into law.

    The trickle-down for banks from Facebook’s scrutiny on Hill --  It would be easy for bank CEOs to breathe a sigh of relief that, after years of getting pummeled by lawmakers in high-profile, televised hearings, it was someone else’s turn this time.  But while it may have felt satisfying to watch another CEO — not to mention a fresh-faced tech billionaire — handle the pressure of the congressional hot seat, such a reaction misses the bigger takeaway for banks from Mark Zuckerberg’s appearance on Capitol Hill Tuesday afternoon.  That is: Attitudes about data privacy — both in Congress and among the general public — are changing, and banks better listen up.  During hours of questioning from the Senate Judiciary and Commerce committees, the Facebook CEO apologized repeatedly for not doing enough to protect the personal information of his company’s users. The hearing came amid revelations that Cambridge Analytica, a data firm with ties to President Trump’s 2016 campaign, improperly accessed the data of as many as 87 million users.  What made his appearance different from other CEO drubbings in Congress, though, was the sense that it marked the beginning of a much broader public policy debate about how companies should use the personal data they have on customers — and what kind of consent they should they should obtain in doing so.  Banks clearly have a big stake in that conversation. More so than other types of companies, they view themselves the preeminent gatekeepers of personal information.  “This privacy issue is a big deal,” Jamie Dimon, chairman and CEO of JPMorgan Chase, said last month when asked what advice he would give Facebook as it navigates its recent debacles. “All of that data, location, shopping, sites, places you visit — all of that information is being accumulated and sold and marketed around the world.”

     Is Finra’'s dire warning about data aggregators on target?  The Financial Industry Regulatory Authority recently issued a strongly worded warning to investment companies and investors about the dangers of sharing account data with aggregators so consumers can access third-party services. Letting data aggregators gather account information can expose consumers to privacy, security and other risks, the self-regulatory organization for securities brokers said.“These include potential vulnerability to cyber fraud, unauthorized transactions and identity theft," Finra said. "A key risk is that the aggregators could be storing all consumer financial information or security credentials in one place, creating a new and heightened security risk for consumers.”In issuing the warning, Finra waded into a debate that has been going on for more than two years among banks, fintechs, aggregators and regulators including the Consumer Financial Protection Bureau.Al Pascual, senior vice president of research and head of fraud and security at Javelin Strategy & Research, thought the message was timely and echoes concerns banks have expressed. “Finra’s warning is prudent, especially as more and more fintechs have joined the wealth management and investment space,” he said. “These organizations are unregulated, but are being trusted with access to investors’ financial accounts. If these organizations are compromised in a breach, or if their apps are vulnerable, the credentials for a variety of investors’ accounts — including traditional bank accounts — could be misused and leave investors exposed to financial losses where they have limited recourse.”

    JPMorgan sued over 'sky-high' fees for cryptocurrency buys - JPMorgan Chase was sued for charging "sky-high" interest rates and fees to customers who used their credit cards to buy cryptocurrencies such as bitcoin. Brady Tucker, a Chase credit card customer in Idaho, claims the bank began treating his cryptocurrency buys as cash advances in January rather than purchases, and charging him interest rates of as much as 30 percent a year and additional fees. Tucker, who is seeking class-action status for the suit filed Tuesday in federal court in Manhattan, said he had routinely made purchases of cryptocurrency through Coinbase and other exchanges on his credit card and would pay them off by the end of the billing cycle without incurring finance charges. He says he and other credit card holders were "duped." "Chase silently smacked them with instant-cash-advance fees, plus much higher interest rates than normal, and left them without any recourse," Tucker said in his suit, which seeks a refund of all related fees plus $1 million in damages.Representatives of JPMorgan Chase didn't immediately respond to a call seeking comment.An increasing number of banks that issue credit cards are taking measures to limit or block cryptocurrency purchases. The case is Brady Tucker v. Chase Bank USA NA, 18-cv-3155, U.S. District Court, Southern District of New York (Manhattan.)

    Sell all crypto and abandon all blockchain - Blockchain hype is an essential part of the crypto-craze, and its fading is cause to expect the eventual crash.The reason is a relationship between a beguiling, but wrong, idea about technology, and the value it has injected back into crypto-currencies such as Bitcoin and Ethereum. Break that cycle, and you unspool the loop that's spun itself into a boom.It goes something like this:Crypto-currency prices attracted attention. Serious people recognised a fad, seeing the inherent and fatal contradiction of something trying to be both a speculative asset and a currency useful for buying wheelbarrows, lattes or running shoes. No-one uses gold bars from the safe for petty cash.The underlying technology was neat, however. The distributed ledger which underpins Bitcoin has some cool features we’ll get into below, which led many to adefault intelligent-sounding position: “Bitcoin is the perfect bubble, but blockchain is a remarkable solution”.Banks, companies and investors threw real money at developing blockchain products. Doing so was entirely rational. The world’s biggest fortunes were made from exciting new technologies!  Then came the key development, a rush of initial coin offerings known as ICOs, which further inflated the crypto-currency and blockchain bubbles.

    Blockchain is not only crappy technology but a bad vision for the future --Blockchain is not only crappy technology but a bad vision for the future. Its failure to achieve adoption to date is because systems built on trust, norms, and institutions inherently function better than the type of no-need-for-trusted-parties systems blockchain envisions. That’s permanent: no matter how much blockchain improves it is still headed in the wrong direction.This December I wrote a widely-circulated article on the inapplicability of blockchain to any actual problem. People objected mostly not to the technology argument, but rather hoped that decentralization could produce integrity.Let’s start with this: Venmo is a free service to transfer dollars, and bitcoin transfers are not free. Yet after I wrote an article last December saying bitcoin had no use, someone responded that Venmo and Paypal are raking in consumers’ money and people should switch to bitcoin. What a surreal contrast between blockchain’s non-usefulness/non-adoption and the conviction of its believers! It’s so entirely evident that this person didn’t become a bitcoin enthusiast because they were looking for a convenient, free way to transfer money from one person to another and discovered bitcoin. In fact, I would assert that there is no single person in existence who had a problem they wanted to solve, discovered that an available blockchain solution was the best way to solve it, and therefore became a blockchain enthusiast. The number of retailers accepting cryptocurrency as a form of payment is declining, and its biggest corporate boosters like IBM, NASDAQ, Fidelity, Swift and Walmart have gone long on press but short on actual rollout. Even the most prominent blockchain company, Ripple, doesn’t use blockchain in its product. You read that right: the company Ripple decided the best way to move money across international borders was to not use Ripples.

     Mix of Morons, True Believers & Spaghetti-Code Algos Tripled the Price of my Stock-Scam Hero in 3 Days before Getting Gored by the SEC Wolf Richter - This is just too funny. Longfin [LFIN], my favorite “blockchain company” and hero among scam stocks that I have lambasted since December, is at it again. But this time, it’s likely the last time.On April 2, I published a piece titled, “What Kind of Hyper-Enthusiastic Market is this that Blindly Keeps Pursuing Scams to Make a Fortune Overnight, even if They Already Crashed the First Time?” It was all about Longfin, which went public on the Nasdaq last December, though it has nothing in the US, and whose CEO lives in Singapore.On Friday, April 6, at 10:30 a.m., the Nasdaq halted trading in LFIN after shares had tripled in three days, reaching a market cap of $2.1 billion. The tripling occurred after shares had crashed 89% in the prior seven trading days.Minutes after the trading halt, the SEC announced that it had “obtained a court order freezing more than $27 million in trading proceeds from allegedly illegal distributions and sales of restricted shares of Longfin Corp. stock involving the company, its CEO, and three other affiliated individuals.” Take a look at the chart, depicting the last two weeks, including the 89% seven-day plunge and the 250% three-day surge, with the trading halt Friday morning. In terms of dollars, shares went from $73 to $8 in seven days, and then from $8 to $28.19 in three days, when trading was halted:

     Chapter 11 bankruptcies are up 63% from a year ago -New Chapter 11 bankruptcies in the US spiked 63% year-over-year in March to 770 filings, the highest number of filings for any month since April 2011 (when there had been 789 filings as companies were still trying to emerge from the Great Recession). This chart shows Chapter 11 filings back to 2011, based on data from the American Bankruptcy Institute. The last six Marches are marked with red dots. The year-over-year jump of 299 filings in March is the second largest year-over-year jump for any month since the Great Recession. It is behind only the jump of 366 filings last December, which had set a post-recession record. The yellow dots represent the last six Decembers (more on that in a moment): A company files for Chapter 11 bankruptcy protection from creditors in order to try to restructure its debts under the supervision of a judge. This normally involves are large reduction in debt and the transfers of part or all of the ownership of the company from pre-bankruptcy owners (shareholders) to creditors. Most often, shareholders lose everything. Some unsecured creditors too lose everything. Secured creditors are often made whole. And many creditors in between get a haircut, in return for some ownership. The hope is that the company can “emerge” from bankruptcy with less debt and keep operating.Bankruptcy filings are seasonal and usually peak in April, along with tax season. So the March jump doesn’t augur well for April.The low points in Chapter 11 filings normally occur late in the year, before or in December, except last December when filings spiked 61% from November, to the highest level for any month since April 2013. In March, it got worse when Chapter 11 filings spiked to the highest level for any month since April 2011.While the December 2017 spike was truly special, in January and February, filings were close to where they’d been a year ago, and I thought, OK, maybe December was just a blip. But now there’s the March spike, the second highest spike since the end of the Great Recession.

    SBA plan to share disaster-relief lending is bust so far -It has been seven months since the last of three big hurricanes hit the U.S., but a pilot program designed to give banks a chance to make federally backed disaster loans has yet to take its first application. What’s more, the pilot was established only last fall even though Congress directed the creation of a program just like it a decade ago.What happened?The Small Business Administration introduced its Express Bridge Loan program in mid-October, shortly after hurricanes Harvey, Irma and Maria did serious damage in Texas, Florida, Puerto Rico and elsewhere. One of the key ideas behind the program was to ease the burden on the federal government immediately after a disaster when it is still getting its relief operations in place; the SBA has traditionally made such loans, not banks.The program gives lenders that already participate in SBA Express the authority to make small disaster-relief loans to their small-business customers after a presidentially designated disaster. The maximum loan size is $25,000, and credits would carry a 50% SBA guarantee.  The SBA wants to see the pilot succeed, but by the time it was rolled out, businesses’ need for small-dollar emergency loans had passed, an agency spokeswoman said in an email this week in response to questions from American Banker.

    With help from regulators, small-dollar loans can work for banks, borrowers -- We have all been there: an inopportune flat tire, a refrigerator on the fritz or a hefty medical cost arising out of the blue. Compounding these challenges, nearly half of American families do not have the necessary savings on hand to cover a $400 emergency expense. In these situations, banks, much like they have done in the past, can play a vital role by helping families overcome these challenges, but regulators must allow banks to help instead of sending Americans facing financial hardships to other less-regulated, more-costly lenders.  Thankfully, now we have regulators serving who recognize consumers’ need for short-term, small-dollar credit. Until recently, a Washington-knows-best mentality was pervasive throughout the regulatory agencies when it came to small-dollar loans. In 2013, the Office of the Comptroller of the Currency issued guidance that effectively sidelined banks and prevented them from offering small-dollar loans to consumers. Taking the first step to reverse this trend, former acting Comptroller Keith Noreika revoked the guidance. Now, Comptroller Joseph Otting has spoken out on the need to “clarify” the OCC’s support for bank offered small-dollar loans. Updating the OCC’s guidance is an important step toward allowing banks to once again help consumers in need — but in Washington it is never that clear-cut.Over the years, regulatory agencies have produced competing and conflicting directives in the small-dollar lending space. During former Consumer Financial Protection Bureau Director Richard Cordray’s final days in office, a rule was released that essentially mimicked and reapplied aspects of the OCC’s now revoked 2013 guidance. The end result: Consumers who need access to safe, affordable short-term loans continue to be forced into the waiting arms of riskier, more costly payday and other fly-by-night lenders.

    The government’s top consumer watchdog hasn’t taken a single enforcement action since Trump’s pick took over - It’s been 135 days since Mick Mulvaney took over at the Consumer Financial Protection Bureau, the US government’s top consumer watchdog. During that time, according to the Associated Press’s Ken Sweet, he has not taken a single enforcement action against any bank, lender, credit card company, or any other entity within his purview. Nothing.  Mulvaney, the Office of Management and Budget director who took over as interim CFPB director in November after Richard Cordray stepped down, has made no secret of his distaste for the agency he temporarily runs. Mulvaney, who once described the CFPB as a “sick, sad” joke, has sought to rein in the agency and overhaul its mission. Since taking over, he has reportedly scaled back an investigation into the Equifax data breach, relaxed restrictions on often predatory payday lenders, and recommended Congress pursue sweeping changes to the CFPB’s powers. The AP report points out another area where Mulvaney is taking a hatchet to the CFPB — or, rather, sitting on his hands: The agency under Mulvaney has not pursued a single enforcement action since he took over. It has imposed no fines or penalties, required no fixes or redress, and filed no lawsuits against bad actors. Per the AP:  A review of a CFPB database obtained by the AP through a Freedom of Information request shows zero enforcement actions have been taken since Nov. 21, 2017, three days before Cordray resigned. Either every member of the consumer finance industry became a model citizen overnight when Mulvaney took over in November or the former South Carolina Congress member is looking the other way.

    House Dems to CFPB’s Mulvaney: Where are the enforcement actions? — House Democrats on Wednesday hammered the Trump administration's acting director of the Consumer Financial Protection Bureau for ignoring what they view as the agency's core purpose.  Much of Mulvaney's first appearance this week in two days of hearing focused on the bureau's lack of new enforcement actions in his nearly five months on the job. Mulvaney told the House Financial Services Committee that the agency has about 100 ongoing investigations into financial firms and 25 that have proceeded to litigation. But that did not appease Democrats who said those investigations were started under former CFPB Director Richard Cordray, under whom the agency would often publicize at least one enforcement action per week.

    Mulvaney’s proposed CFPB reforms are bad for small business, too - Mick Mulvaney is something of a novelty among Washington bureaucrats: He seems to want less power.  Mulvaney, as acting director of the Consumer Financial Protection Bureau, just proposed watering down his own agency in order to make it less capable of fulfilling its mission to protect consumers. In doing so, he showed he has no regard for the millions of American small businesses that need fraud protection and want to see Wall Street held accountable for practices that harm our economy. Not one of Mulvaney’s recommendations would help the CFPB do its job better. He asked lawmakers to put the agency at the mercy of politics by subjecting it to congressional appropriations, instead of funding it through the Federal Reserve as it is now, and said he wants CFPB rules to be subjected to legislative approval. He also believes the president should have direct oversight of the bureau’s director, including the option to remove the director for purely political reasons. Finally, Mulvaney asked for more policing of the agency through the creation an inspector general’s office housed at the agency that would monitor the CFPB’s work. Ever since its establishment under the Dodd-Frank Act, the CFPB has been a popular Republican villain — even though it exists to curb many of the abuses that contributed to the 2008 financial crisis. Given its mission of consumer protection, and particularly its work to prevent predatory lending practices, entrepreneurs overwhelmingly support the agency. In fact, Small Business Majority’s opinion polling found 84% of entrepreneurs support the CFPB and believe it’s needed to prevent predatory financial practices and to ensure all financial institutions treat small businesses and consumers fairly. What’s more, nearly six in 10 entrepreneurs agreed that, for too long, Wall Street banks and financial companies wrote their own rules, leaving small businesses and consumers vulnerable and without protection.

    New twist in CFPB fight: Judges question Mulvaney’s dual role — A panel of judges remained skeptical of claims by Leandra English, deputy director of the Consumer Financial Protection Bureau, that she is the rightful head of the agency. But they didn’t sound convinced that current acting Director Mick Mulvaney is, either.English had already faced long odds to unseat Mulvaney as head of the agency, and oral arguments Thursday before the U.S. Court of Appeals for the D.C. Circuit did not appear to reverse that.The judges suggested that even if they granted English's request to remove Mulvaney as acting director, that does not necessarily mean she could take his place.   "All injunctive relief against Mr. Mulvaney does is tell him he can’t show up at work,” said Judge Thomas Griffith, who sits on the three-judge panel hearing the case.English, appointed as deputy director just as then-Director Richard Cordray stepped down last year, claims the 2010 Dodd-F rank Act gives the agency's reins to its No. 2 in the absence of a Senate-confirmed successor. But the Trump administration, arguing the 1998 Federal Vacancies Reform Act allows the president to choose an acting director, appointed Mulvaney, who heads the Office of Management and Budget. In January, a lower-court judge sided with the administration. But the judges also questioned whether Mulvaney’s appointment conflicts with his other job as head of the OMB, since Congress went to substantial pains to ensure that the bureau was independent from the executive. Judge Judith Rogers asked Deepak Gupta, principal at Gupta Wessler and English's attorney, to what extent his argument relied on the idea that Dodd-Frank envisioned the CFPB as an independent organization, specifically as independent from the OMB. “I think the appointment of Mr. Mulvaney highlights the principal argument we’re making the problem with how it destroys the statutory design that Congress had for this agency,” Gupta said. “But it’s particularly notable in this regard that Congress had provision to insulate the bureau from the director of the Office of Management and Budget.”  Rogers suggested that means a more viable approach would be for the president to appoint someone other than the OMB director.

    Two trade groups sue CFPB over payday rule -- Two groups representing the payday lending industry sued the Consumer Financial Protection Bureau on Monday to invalidate the agency's rule imposing tough restrictions on small-dollar loan providers.The lawsuit, filed in the U.S. District Court for the Western District of Texas, alleges that the CFPB rule is "arbitrary, capricious, and unsupported by substantial evidence," and therefore in violation of the Administrative Procedure Act.The plaintiffs, the Community Financial Services Association of America and the Consumer Service Alliance of Texas, also argue in the lawsuit that the CFPB's structure is unconstitutional, violating the separation of powers principle.

    CFPB pursues fine against Wells Fargo that could reach $1B: report  - The Consumer Financial Protection Bureau is seeking to fine Wells Fargo up to $1 billion for alleged abuses related to auto insurance and mortgage lending, Reuters reported Monday.According to the Reuters report, which cited unnamed sources, acting CFPB Director Mick Mulvaney is pursuing a settlement with Wells in the coming days over claims the bank wrongly placed customers into force- or lender-placed auto insurance, and charged improper fees for modifying home loans of consumers in bankruptcy. The news of more potential enforcement problems for Wells could keep the pressure on the bank's management amid persistent governance issues. Speculation about the CFPB penalty also comes just days before Mulvaney starts two rounds of congressional hearings — his first devoted to his role as the bureau's acting chief. (Mulvaney also serves as director of the Office of Management and Budget.)  The news of more potential enforcement problems for Wells Fargo could keep the pressure on the bank's management amid persistent governance issues. Bloomberg News"We don’t believe this will be the final policy risk for Wells Fargo from its consumer banking troubles as both the far left and far right are pushing the issue," said Jaret Seiberg, a policy analyst at Cowen Washington Research Group."We believe more management changes could occur. We also note banks typically will not take these disputes to court."  Seiberg said the bank may have to take more drastic measures for its regulatory troubles to go away.

     Wells Fargo reportedly facing huge fine for mortgage lending and auto insurance problems: The Consumer Financial Protection Bureau is considering fining Wells Fargo & Co. hundreds of millions of dollars for its mortgage-lending and auto-insurance abuses — following up on a threat by President Trump to take aggressive action against the bank. The agency is in talks with the San Francisco bank over penalties for the problems, Reuters reported Monday, citing two unnamed people with knowledge of the discussions. CFPB acting Director Mick Mulvaney is pushing for fines as large as $1 billion, Reuters said. A CFPB spokesman did not immediately respond to a request for comment. A Wells Fargo spokeswoman declined to comment.Mulvaney, the White House budget chief, has been critical of how aggressively the independent agency was run under the Obama administration. But the large fines would align with Trump's public vow in December that Wells Fargo would face stiff penalties for charging fees to certain homebuyers to secure low mortgage rates. Trump said on Twitter that regulators would "make penalties severe" when companies are "caught cheating."

    No shortage of ideas on CRA overhaul as official plan remains mystery -- Bank regulators have not even proposed a plan yet for overhauling the Community Reinvestment Act, but stakeholders likely to weigh in on the plan are already establishing battle lines. At an event Monday on the CRA reform effort, participants dug into the need for a long view on modernizing enforcement of the 1977 law, how CRA can combat redlining, potential changes to banks' assessment areas and developing a system to measure a bank's CRA commitment. “The ‘how much’ question comes up quite frequently from our financial institutions,” said Govetta Gardineer, senior deputy comptroller for compliance and community affairs at the Office of the Comptroller of the Currency. Comptroller of the Currency Joseph Otting said soon after being sworn in that reforming how the CRA is implemented is among his top priorities. Bloomberg News “It would be nice if we had a quantifiable method that the banks understood, the regulators understood, and that community advocates understood as well on how you calculate how much is enough.” Gardineer sat on a panel of stakeholders discussing their priorities for how to better implement the CRA, as the OCC and other agencies are mulling a proposal to reform their CRA policy for the first time in over two decades. She said those who will be submitting feedback on the plan need to take a long view in their comments. The implementing regulations for the 1977 law have not been substantially revisited since 1995, Gardineer said, so stakeholders should consider not only how to update them for the immediate term but how the landscape might change down the road. “Twenty-three years is a long time to go without making any changes in a regulation that has this type of grounding in economic development and meeting financial needs,” Gardineer said. “In the unlikely event that we don’t open this up again for another 23 years, we need to think not just about today, but we need to be looking toward the future.” 

    CRA’s black box could prove difficult to open - On April 3, the Treasury Department released a memorandum to the federal banking agencies with its findings and recommendations for reform of how those agencies administer the Community Reinvestment Act.  Whether it was the odd format (a memorandum), or just the press of other business, the Treasury’s effort did not receive the attention it deserved. Below are three observations. First, the quality of the work is exceptional, and its assessment non-partisan. While the memorandum makes recommendations, it focuses mainly on information gleaned from interviews with almost 100 diverse stakeholders in the area. In many cases, Treasury reports that banks, consumer advocates and community advocates all see the same problems. It is heartening to see a policy document that bases its recommendations on facts, rather than doing the reverse.Second, it paints a bleak picture of a system lacking objective standards, with compliance determined subjectively and unpredictably. “[B]anks remain unclear about whether more complex, innovative, or infrequent types of products and services will receive credit…. This is the case even if it is clear that potential activities would be responsive to, or geared toward meeting the needs of, the communities they serve,” the report said. The report added: “Treasury’s review of examiner guidance provided little clarity for the issues raised by stakeholders. When seeking to understand the level of activity a Large Bank needs to undertake to satisfy the Lending Test, guidance was absent on both the quality and quantity of activity required.” Third, one question left open by the memorandum is how to engage the rationale put forward by the banking regulators in defense of subjectivity and opacity of the existing CRA examination process. As the report notes: “The CRA regulators recognize these challenges, yet stated that they are hesitant to provide specificity on scoring and rating determinations due to varying performance contexts and concerns that quantitative guidance could be perceived as the creation of federally mandated credit allocation requirements.”

    Grading Treasury’s CRA reform memo: ‘Incomplete’ -- The Treasury Department’s long-awaited memo on reforming the Community Reinvestment Act was long on glittering generalities but sadly short on specifics, which probably explains why the report punted the real job of making reforms to the regulators. Putting on my CRA Professor hat, I would grade their effort as “Incomplete.” While the Treasury addressed several important issues, these are the top five critical omissions from its CRA reform playbook:

    • 1. CRA requirement for credit unions. Massachusetts’ state CRA law has proven that different credit unions have markedly different CRA performance. Taxpayers of all states should benefit from the public knowledge of which credit unions are doing the best (and worst) jobs of serving their communities. Credit unions are the beneficiaries of federal deposit insurance, and this fact alone should justify a CRA requirement for them.
    • 2. Consolidation of CRA regulatory oversight in one agency.  The Treasury Department missed an opportunity to back a key reform that would improve supervision: transferring the entire CRA function of the three prudential regulators to the Consumer Financial Protection Bureau.  My analysis of the last 28 years of CRA performance evaluations (since CRA ratings became public in 1990) has documented that the Federal Deposit Insurance Corp., Office of the Comptroller of the Currency and Federal Reserve have been incapable of consistency in this critical function.
    • 3. Economic incentives for earning an Outstanding CRA rating. The lack of any real motivation for banks to try to achieve an Outstanding CRA rating is a major public policy failure. Most bankers tell me they only want a Satisfactory rating to “blend in with the other 90% of banks.” They also say there is “only one way to go when you are at the top.” Most importantly, they tell me it costs their bank money to get and maintain the highest rating, not just in making contributions to community groups but internally with staff and other expenses.
    • 4. Specific quantitative guidelines on key CRA metrics. Bankers need and deserve specific quantitative CRA guidelines. My decades of research on thousands of completed exams have resulted in these ratings guidelines for both the loan-to-deposit and assessment area penetration ratios of the Lending Test: 80% for an Outstanding rating, 65% for High Satisfactory (HS), 50% for Low Satisfactory (LS), 25% for Needs to Improve (NI), and Substantial Noncompliance (SN) below that.
    • 5. Specific assessment area recommendations for nationwide banks. This omission was particularly disappointing. Modernizing banks’ assessment areas to account for technological changes and there being less emphasis on branch banking is on any CRA reform advocate’s to-do list. But Treasury provided no real guidelines on how to rethink assessment areas.

    Analysts expect to give high credit rating to GSE successors - The future secondary mortgage market entities will receive high investment grade ratings, even as there is no clarity on their scope or form, Fitch Ratings said. These bodies, whether they are totally new entities, a recast Fannie Mae and Freddie Mac or some hybrid of both that comes out of the housing finance reform process, will be appropriately capitalized, have ample access to the capital markets and be regulated by the government, said a report from analysts Bain Rumohr, Christopher Wolfe and Joo-Yung Lee. Those reasons provide support for a high investment grade rating. "The timing and scope of prospective reform remains unclear," Fitch said in an accompanying press release. "The U.S. government is unlikely to vacate its role of supporting the residential mortgage market given how entrenched Fannie Mae and Freddie Mac remain in housing finance and the importance of the 30-year mortgage to the U.S. housing market." The two government-sponsored enterprises ratings are directly linked to the U.S. sovereign rating because of the implicit guarantee and meaningful financial support provided by the government.  

    MERS to offer eNote one-stop shop for small digital mortgage lenders -- Tech vendors Merscorp Holdings and eOriginal have developed a suite of tools for small and midsize mortgage lenders to close fully electronic loans.Those small and midsize lenders  typically lack the people and resources to do multiple integrations with different providers of the services need to create an e-note, said Merscorp Chief Operating Officer Brendon Weiss."This service is adding the e-note creation, the signing of the note and the management of that note in an e-vault all in one bundle," he said. "We're able to combine the integration to the MERS eRegistry with the integration of this new service, so that there's only one integration that an originator needs to go through in order to generate a note, sign a note, value the note, register the note and manage the note for the life of the loan or for the period of time that originator has control of the note."The technology behind eNote Solutions comes from eOriginal."It is being able to bring all of the value of that e-note both for the originator and the secondary market — whether that be the warehouse lender or the investor — to the masses, so they can get that same benefit that the larger players can get," said Simon Moir, eOriginal senior vice president and general manager.

     As Harvey's impact fades, certain delinquencies remain elevated - Local delinquencies that rose in Hurricane Harvey's wake may be lower than they were right after the storm, but they are still higher than they were a year ago. The Houston area's 30-day-plus delinquency rate in January was 9.1%, according to CoreLogic's Loan Performance Insights Report. In January 2017, it was 5.9%. In contrast, the 30-day-plus delinquency rate in the U.S. as a whole dropped to 4.9% in January 2018 from 5.1% a year earlier, and the serious delinquency rate that fell to an 11-year low last month remained unchanged. "Except for the metropolitan areas affected by natural disasters, most of the country has seen delinquency and foreclosure rates move lower over the past year," Frank Martell, president and CEO of CoreLogic, said in a press release. The U.S. delinquency rate for loans late by 30 to 59 days dropped to 2% from 2.1% a year ago, and the delinquency rate for loans 60 to 89 days late fell to 0.7% from 0.8% during the same time period. Similarly, the delinquency rate for loans 90 to 119 days late declined to 0.4% from 0.5% between January 2017 and January 2018, and the 120-day-plus delinquency rate of 1.6% is down from 1.9% 12 months prior. In comparison, the delinquency rate for loans late by 90 days or more was the same as it was in January 2017 at 1.5%. But the rate at which loans went into foreclosure was lower at 0.6% in January 2018, compared to 0.8% in January 2017. 

    Regulators are fueling another housing boom -- Just 11 years after the last housing bubble burst, the United States is in the midst of yet another boom — both caused by errant federal housing policy and inflated by regulatory malpractice.  For decades, Congress has mandated any number of credit-easing policies because they appear to make buying a home more affordable at seemingly no cost. But, as the last housing bust proved, there is no free lunch. These mandates result in unsustainable price increases and price volatility by increasing demand when supply is constrained. This same process is being repeated today. But the cost is anything but free as these mandates make housing less affordable and promote instability. Regulators enforce these mandates by requiring agencies like the government-sponsored enterprises Fannie Mae and Freddie Mac to loosen credit standards in order to garner more business with higher risk borrowers. In the last boom, the Department of Housing and Urban Development forced the GSEs to compete for subprime borrowers with both the Federal Housing Administration and private lenders.  Yet this federally mandated credit easing coincided with a seller’s market — when there is less than six months of for-sale inventory at the current sales rate. In a seller's market, the seller has pricing power because the supply of homes is low relative to overall demand. Therefore, credit easing was quickly capitalized into higher — not more affordable — home prices. The added buying power merely allowed lower-income buyers to inflate the price boom, at the expense of a greater debt burden and higher risk. Since the marginal buyer determines not only price levels, but also the degree of volatility in the market, the result was financial instability.

    Rust Belt Cities Need Investment, Not Gentrification Worries —There is a type of neighborhood that you never hear about in the gentrification story mostly told by writers living in the coastal centers of power. It is the type of neighborhood where the majority of ordinary people in ordinary cities like Akron actually live.This type of neighborhood is a lower-income, working-class, mixed-race community, comprised primarily of single-family homes, many of which are owner-occupied.The standard gentrification narrative is typically about affluent newcomers displacing existing lower-income residents—driving up housing prices, rents, and property taxes to stratospheric heights.But there are millions of people throughout the cities of the Rust Belt living in neighborhoods with the opposite problem. They are lower-income, working-class homeowners, living in deteriorating homes, with no foreseeable prospects for property appreciation.The working poor living in these neighborhoods typically cannot afford to reinvest much in their property to begin with, and even the few who can often choose not to, because they will never come close to getting their money back. These are places where the property values are so low that people have to sell their houses at a loss—if they can even find anyone interested in buying them at all—and where there is little economic incentive for homeowners to improve their properties.  Consequently, over time, these houses begin a long and tortuous cycle of decline and neglect, as they transition from owner-occupancy, to reputable rentals, to disreputable rentals, to vacancy, tax delinquency, abandonment, and eventual demolition – often at public expense.

    Run-up in foreclosure timelines reverses course - Foreclosure timelines that rose notably during the past year fell back to 2016 levels during the first quarter of 2018, according to Attom Data Solutions.  The average foreclosure time was 791 days during the first quarter, down from 1,027 in the fourth quarter of 2017 and from 814 during the first quarter of last year.  Average foreclosure timelines haven't been below 800 days since the third quarter of 2016 when it took an average of 625 days to foreclose. Foreclosure timelines typically lengthen during the fourth quarter, in part due to grace periods lenders and secondary market mortgage investors like Fannie Mae and Freddie Mac give borrowers during the holidays. Timelines subsequently accelerate in the first quarter.  The average foreclosure timeline incorporates a wide disparity between states. In Virginia it took just 193 days on average to foreclose in the first quarter, while in Hawaii it took 1,765 days.  This means borrowers in states hit by the unusually severe hurricane season last year may be going through the foreclosure process at drastically different speeds. Florida, parts of which were hit hard by Hurricane Irma, on average processed foreclosures within 1,247 days during the first quarter. Texas, parts of which were hit hard by Hurricane Harvey, on average is taking 427 days to process foreclosures.  More recent foreclosures are now playing a more prominent role in overall foreclosure activity. "Less than half of all active foreclosures are now tied to loans originated during the last housing bubble, one of several data milestones in this report showing that the U.S. housing market has mostly cleared out the backlog of bad loans that triggered the housing and financial crisis nearly a decade ago,"

     MBA: Mortgage Applications Decrease in Latest Weekly Survey, Purchase Index Down YoY --From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey: Mortgage applications decreased 1.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 6, 2018.... The Refinance Index decreased 2 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 0.5 percent lower 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) decreased to 4.66 percent from 4.69 percent, with points increasing to 0.46 from 0.43 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.The first graph shows the refinance index since 1990. Refinance activity will not pick up significantly unless mortgage rates fall 50 bps or more from the recent level.

    Tax Reform: Effect on Home Prices; No material price effect so far, though it is still early after reform - The Tax Cuts and Jobs Act enacted in December was the largest change to the U.S. tax code in more than three decades. Tax reform has touched every person and industry. Let’s examine how it affects housing decisions made by families. Overall, tax reform has lowered personal income taxes, not necessarily for each taxpayer but in the aggregate. An increase in after-tax income, at the margin, generally increases the amount of shelter consumed and the likelihood of being a homeowner. Economists refer to this as the ‘income effect’. Thus, the increase in after-tax income should be a net plus for housing demand and homeownership, holding all else constant. But all else is not constant. Tax reform also lowered the maximum loan size for interest deductibility on new first-mortgage debt to $750,000, eliminated deductibility for some second liens, and capped the annual deduction for state and local income and property taxes at $10,000. Further, the hike in the standard deduction will substantially reduce the number of tax filers who itemize, and lower marginal tax rates reduce the value of deductions for those who do itemize. By raising the after-tax cost of homeownership, tax reform is expected, at the margin, to lower the amount of shelter consumed by owner-occupants and tilt tenure choice toward renting rather than owning. Economists refer to this as the ‘price effect’ because the relative cost of owning versus renting has changed. Whether the ‘income’ or the ’price’ effect is stronger will determine whether demand for shelter and homeownership rates rise, fall, or are largely left unchanged.

    What's the Richest ZIP Code in America? This Tiny Island - The richest ZIP code in America is just as exclusive and elite as the people who live there. Fisher Island, located just off the coast of Miami, is accessible only by ferry or water taxi and is a haven for the world’s richest.The 216-acre island has diverse residents, representing over 50 nationalities and professions ranging from professional athletes and supermodels to executives and lawyers.  The average income in Fisher Island, ZIP code 33109, was $2.5 million in 2015, according to a Bloomberg analysis of 2015 Internal Revenue Service data. That’s $1 million more than the second-place spot, held by ZIP code 94027 in Silicon Valley, also known as the City of Atherton on the San Francisco Peninsula. The area’s neighbors include Stanford University and Menlo Park, home to Facebook and various tech companies. While the IRS data only provide the averages of tax returns, which can be skewed by outliers, Fisher Island is the only ZIP code in the Bloomberg analysis where more than half of all tax returns showed an income of over $200,000.

    Leading Index for Commercial Real Estate Increases in March - Note: This index is possibly a leading indicator for new non-residential Commercial Real Estate (CRE) investment, except manufacturing.  From Dodge Data Analytics: Dodge Momentum Index Climbs in March The Dodge Momentum Index moved 6.1% higher in March, rising to 155.0 (2000=100) from the revised February reading of 146.0. The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. March’s gain was the result of a 9.6% increase in the commercial component – more than erasing the 5.1% decline it had seen the previous month. The gain in the institutional sector meanwhile was milder, moving 1.6% higher, following an 8.1% gain in February. During the first nine months of 2017, the overall Momentum Index made little progress. However, planning activity shot up in the fourth quarter, with that impetus continuing into the first three months of 2018. In the latest quarter the Momentum Index gained 5.1%.   This graph shows the Dodge Momentum Index since 2002. The index was at 155.0 in March, up from 146.0 in February. According to Dodge, this index leads "construction spending for nonresidential buildings by a full year". This suggests further growth in 2018

    Hotels: Occupancy Rate Down Year-over-Year - From HotelNewsNow.com: STR: US hotel results for week ending 31 March  The U.S. hotel industry reported mixed year-over-year results in the three key performance metrics during the week of 25-31 March 2018, according to data from STR.
    In comparison with the week of 26 March through 1 April 2017, the industry recorded the following:
    • Occupancy: -2.8 to 66.4%
    • Average daily rate (ADR): +3.6% to US$130.81
    • Revenue per available room (RevPAR): +0.7% to US$86.90
    STR analysts note that performance in many major markets was affected by a drop in group business due to the Easter holiday.
    emphasis added The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

    Hotels: Occupancy Rate Down Year-over-Year -- From HotelNewsNow.com: STR: US hotel results for week ending 7 April -- The U.S. hotel industry reported mostly negative year-over-year results in the three key performance metrics during the week of 1-7 April 2018, according to data from STR.  In comparison with the week of 2-8 April 2017, the industry recorded the following:
    • Occupancy: -2.7 to 68.3%
    • Average daily rate (ADR): +0.7% to US$128.84
    • Revenue per available room (RevPAR): -2.0% to US$88.03
    STR analysts note that performance in many major markets was affected by a drop in group business due to the Easter holiday calendar shift. The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

    Trump Tower Fire Death Update: Trump Lobbied Against Proposal to Make Sprinklers Mandatory: President Donald Trump previously lobbied against a proposed bill requiring high-rise buildings, like Trump Tower, to install life-saving sprinkler systems. A fire in his 5th Avenue building Saturday, with no sprinklers present, left one person dead and multiple firefighters injured. Then one of New York’s most prominent real estate developers, Trump in 1999 rang city officials to argue against proposed legislation that would have required high-rise landlords to install the systems following fatal high-rise fires in Brooklyn and Manhattan. The December 1998 blazes killed nine people, including seven firemen.According to a 1999 New York Post report, Trump was the most prominent member of a powerful real estate lobby opposed to reform, and complained he couldn’t afford to install sprinklers. At $4 per square foot, he argued that the sprinklers were too expensive to install in an entire building.  The Mayor Rudolph Giuliani era bill was eventually altered to exclude older buildings such as Trump Tower (built in 1979 and opened in 1983), or buildings for which permits had already been submitted, such as Trump’s 72-floor tower opposite the UN building in New York, Trump World Tower.

    Counting the millions of evictions - Credit Slips - The Eviction Lab, a project led by sociologist Matthew Desmond (author of Evicted), have performed the invaluable and impressive task of gathering landlord-tenant eviction records from every county in the nation for the past 16 years. The sobering results, released today (NY Times story) paint a picture of widespread housing insecurity in the wealthiest nation in the world. Each year nearly a million renter households are evicted by court order, and more than twice that number are summoned to court to face eviction.  The project's web page offers a variety of data reports at the state level, and the promise of many more critical analyses to come. Among the questions that researchers may explore using these data include the rate of housing loss for African-American and Latino families, the impact of the 2008 mortgage foreclosure crisis, and foreclosures generally, on renter households, the efficacy of state and local rental housing subsidy programs, whether gentrification results in displacement, and the location of neighborhoods facing high concentrations of evictions and housing abandonment.  Security of housing tenure is not only a fundamental human right, but a necessary condition for the protection of other political and socio-economic rights. Millions of evictions are the sad and now visible legacy of decades of cuts to public and subsidized housing and basic income support for the poor.

     Crisis: Debt-Ridden Millennials "Hitting Pause Button On Major Life Events" - Millennials - the generational demographic cohort following Generation X, born between the early 1980s and mid-90s - outnumber Generation X and the Baby boomers. Millennials have been referred to as “echo boomers” due to an acceleration in birth rates starting in the boom years of the early 1980s via interest rate suppression, which continued into the late 90s before the unraveling of the Dot-com bubble. This generation is now coming of age and will be a majority of the labor force by mid-2020s. Their influence in American society is starting to be realized, although it is leaving a negative mark on the economy as one thing is obvious: Millennials and debt go hand-in-hand.  According to NBC News/GenForward survey, the most common form of debt for 18-to 34-year-old Americans is credit card debt. Approximately, 75 percent of the millennial cohort have financial obligations, and they are ‘pausing major life events’ because they are too broke, the report noted. A quarter of millennials have racked up over $30,000 in bills, including 11 percent who have over $100,000 in debt. Shockingly, only 22 percent of millennials are debt free. As a result of all this madness, savings is not hip with the millennials, which has limited their economic mobility and left many unprepared for the next financial disaster. In a Central Bank boom/bust economy, each generation throughout the past century has experienced some form of deleveraging. What happens next, well, you guessed it — millennials could be the next generation to feel the wrath of natural selection through a deleveraging period, as it all depends on when the next recession strikes. The survey confirms that millennials have the weakest balance sheet, with credit cards playing an even more significant role than pesky student loans. In a period of wage stagnation along with nearing the latter stages of the second longest economic expansion in U.S. history, credit card debt is the most significant liability on the millennials’ balance sheet. Meanwhile, as the homeownership rate for millennials has rapidly declined, only 20 percent said they have a mortgage or home loan.

     Michigan Consumer Sentiment Slips in April --The University of Michigan Preliminary Consumer Sentiment for April came in at 97.8, down 3.6 from the March Final reading of 101.4. Investing.com had forecast 100.6.Surveys of Consumers chief economist, Richard Curtin, makes the following comments:Consumer sentiment slipped in early April, largely reversing the gains recorded in the prior two months. The small decline was widely shared by all age and income subgroups and across all regions of the country. Importantly, confidence still remains relatively high, despite the recent losses that were mainly due to concerns about the potential impact of Trump's trade policies on the domestic economy. Uncertainty surrounding the evolving trade policy has caused many small (and at times inconsistent) changes in expectations. Spontaneous references to trade policies were made by 29% of all consumers in early April, with nearly all the mentions negative (27% out of 29%). The Expectations Index was just 64.2 among those who made negative comments about trade policies, while among those who made no mention of trade policies, the Expectations Index was 93.9, a substantial difference. Consumers who negatively mentioned trade policies also anticipated that the year-ahead inflation rate would be 0.4 percentage points higher than among those who did not spontaneously mention Trump's trade policies; there was a differential of 0.2 percentage points for long term inflation expectations. There were other factors responsible for the small overall April decline, the most important was the expectation of rising interest rates, which slightly slowed the anticipated pace of growth in the economy. Overall, the data are consistent with a growth rate of 2.7% in consumption from mid-2018 to mid-2019. [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.

    Chain Store Sales April 12, 2018: Chain stores are reporting mostly higher sales results in March which is no surprise given this year's early Easter which pulled April sales forward. This calendar effect will be adjusted for in the government's month-to-month data but adjustments for big effects are sometimes less than perfect. That said, today's results point to a rise in unadjusted retail sales for March which, after adjustment, may prove to be closer to steady than a big gain or loss. Definition Monthly sales volumes from individual department, discount, apparel, and drugstore chains are usually reported on the first Thursday of each month. Chain store sales correspond with roughly 10 percent of retail sales. Chain store sales are an indicator of retail sales and consumer spending trends. There is no official composite number for each month's sales, merely sales figures for individual chains. Also, which chains release monthly numbers varies over time as corporate policies sometimes change in regard to providing monthly numbers to the public in addition to quarterly data. Why Investors Care

    Retail defaults soar to record high in 2018 - KYMA: Financial stress in the retail industry is at a historic high. Moody's said in a report on Tuesday that retail sector defaults hit a record high during the first three months of 2018 as the rise of e-commerce and decline of malls continues to eat away at profits. Struggling Sears and bankrupt Claire's are among the nine retailers that defaulted on their debt during the first quarter despite the healthy overall economy. All but one of the retailers are based in the United States. Retailers accounted for one-third of all corporate defaults this year, underscoring the pain this pocket of business feels as customers flock to Amazon and other online shopping hubs. "Stresses in the retail sector have weighed on the operating earnings of department stores, discount stores and drug stores in particular," Sharon Ou, a Moody's senior credit officer, said in the report. Moody's cited the "fallout of changing consumer behavior and advancing e-commerce for traditional brick-and-mortar retail." Four retailers defaulted during February and another four defaulted in March -- tied for the most in a single month since December 1998. And that's on top of the 13 retail defaults in 2017, including one by bankrupt Toys R US according to Moody's. The retail defaults pushed the default rate of high-risk US corporate borrowers to 3.9%, compared with 3.4% at the end of 2017, Moody's said. Much like a consumer who fails to pay off loans, companies that default on their debt often encounter trouble finding financing in the future. The latest retail trouble included Sears Holdings, the owner of Sears and Kmart, which has been fighting off bankruptcy rumors for years. Sears refinanced nearly $500 million in debt last month, but credit ratings firms ruled the deal a "distressed exchange" (essentially a default). Claire's, the mall-based ear piercing hub, filed for Chapter 11 bankruptcy in March. Slumping mall traffic made it difficult for Claire's to pay down a mountain of debt taken on following a 2007 leveraged buyout by private-equity firm Apollo Management. Two holding companies that control Tops Markets, a supermarket chain that filed for bankruptcy in February, also defaulted. Department store chain Bon-Ton Stores went bankrupt in February. A pair of mall owners are in talks to save Bon-Ton from liquidation, according to CNBC. 

    Chap. 11 Bankruptcies Spike 63% From Year Ago - Highest level since April 2011. It’s not just the Brick & Mortar Meltdown anymore. New Chapter 11 bankruptcies in the US spiked 63% year-over-year in March to 770 filings, the highest number of filings for any month since April 2011 (when there had been 789 filings as companies were still trying to emerge from the Great Recession).  This chart shows Chapter 11 filings back to 2011, based on data from the American Bankruptcy Institute. The last six Marches are marked with red dots. The year-over-year jump of 299 filings in March is the second largest year-over-year jump for any month since the Great Recession. It is behind only the jump of 366 filings last December, which had set a post-recession record. The yellow dots represent the last six Decembers (more on that in a moment): A company files for Chapter 11 bankruptcy protection from creditors in order to try to restructure its debts under the supervision of a judge. This normally involves are large reduction in debt and the transfers of part or all of the ownership of the company from pre-bankruptcy owners (shareholders) to creditors. Most often, shareholders lose everything. Some unsecured creditors too lose everything. Secured creditors are often made whole. And many creditors in between get a haircut, in return for some ownership. The hope is that the company can “emerge” from bankruptcy with less debt and keep operating. Bankruptcy filings are seasonal and usually peak in April, along with tax season. So the March jump doesn’t augur well for April.

    Online gaming could be stalled by net neutrality repeal, ESA tells court -- A video game industry lobby group is joining the lawsuit that seeks to reinstate net neutrality rules in the US, saying that the net neutrality repeal could harm multiplayer online games that require robust Internet connections.The Entertainment Software Association (ESA) yesterday filed a motion for leave to intervene so that it can support the case against the Federal Communications Commission. The lawsuit, filed by a mix of Democratic state attorneys general, tech companies such as Mozilla, and consumer advocacy groups, seeks to reverse the FCC's December 2017 vote to eliminate net neutrality rules. The ESA said its members will be harmed by the repeal "because the FCC's Order permits ISPs to take actions that could jeopardize the fast, reliable, and low-latency connections that are critical to the video game industry." The net neutrality rules prohibit Internet service providers from blocking or throttling lawful Internet traffic and prevent paid prioritization deals in which ISPs would charge online services for better access to Internet users. The rules are technically still on the books until after the US Office of Management and Budget approves some "modified information collection requirements." While music and movie streaming providers can use buffering to account for network problems, the ESA said that "games cannot be buffered to compensate for problems with the broadband connection." But it isn't just online gaming that the ESA is worried about—the net neutrality repeal could also harm downloads of large games, the ESA said. "Degradation of consumers' traffic could also impact game distribution networks, which depend upon adequate and consistent bandwidth to deliver large file downloads in a timely manner," the group wrote. "ESA therefore supports enforceable open Internet protections that have helped fuel dynamic growth, competition, and innovation in the video game industry."

     BLS: CPI decreased 0.1% in March, Core CPI increased 0.2% -- From the BLS: The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.1 percent in March on a seasonally adjusted basis after rising 0.2 percent in February, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.4 percent before seasonal adjustment.A decline in the gasoline index more than outweighed increases in the indexes for shelter, medical care, and food to result in the slight seasonally adjusted decline in the all items index. The energy index fell sharply due mainly to the 4.9-percent decrease in the gasoline index. The index for food rose 0.1 percent over the month, with the indexes for food at home and food away from home both increasing   The index for all items less food and energy increased 0.2 percent in March, the same increase as in February. ... The all items index rose 2.4 percent for the 12 months ending March, the largest 12-month increase since the period ending March 2017 and higher than the 1.6-percent average annual rate over the past 10 years. The index for all items less food and energy rose 2.1 percent, its largest 12-month increase since the period ending February 2017.I'll post a graph later today after the Cleveland Fed releases the median and trimmed-mean CPI. This was close to the consensus forecast of no change for CPI, and a 0.2% increase in core CPI.

    Consumer Price Index: March Headline at 2.36% --  The Bureau of Labor Statistics released the March Consumer Price Index data this morning. The year-over-year non-seasonally adjusted Headline CPI came in at 2.36%, up from 2.21% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 2.12%, up from the previous month's 1.85% and above the Fed's 2% PCE target. Here is the introduction from the BLS summary, which leads with the seasonally adjusted monthly data:The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.1 percent in March on a seasonally adjusted basis after rising 0.2 percent in February, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.4 percent before seasonal adjustment.A decline in the gasoline index more than outweighed increases in the indexes for shelter, medical care, and food to result in the slight seasonally adjusted decline in the all items index. The energy index fell sharply due mainly to the 4.9-percent decrease in the gasoline index. The index for food rose 0.1 percent over the month, with the indexes for food at home and food away from home both increasing.The index for all items less food and energy increased 0.2 percent in March, the same increase as in February. Along with shelter and medical care, the indexes for personal care, motor vehicle insurance, and airline fares all rose. The indexes for apparel, for communication, and for used cars and trucks all declined over the month.The all items index rose 2.4 percent for the 12 months ending March, the largest 12-month increase since the period ending March 2017 and higher than the 1.6-percent average annual rate over the past 10 years. The index for all items less food and energy rose 2.1 percent, its largest 12-month increase since the period ending February 2017. The energy index increased 7.0 percent over the past 12 months, and the food index advanced 1.3 percent. [More…] The first chart is an overlay of Headline CPI and Core CPI (the latter excludes Food and Energy) since the turn of the century. The highlighted two percent level is the Federal Reserve's Core inflation target for the CPI's cousin index, the BEA's Personal Consumption Expenditures (PCE) price index.

    US Consumer Prices Dip In March But 'Verizon Effect' Leaves Inflation At 13-Month Highs -- Consumer prices dipped MoM 0.1% in March (the biggest drop in a year)... ... even as Core CPI rose 0.2% M/M as expected, but the notable event this month was that the distortions of the "Verizon effect" have finally faded from the numbers, pushing annualized CPI YoY from 2.2% to 2.4% - the highest since Feb 2017. As UBS notes, today's CPI was effected by the 'Verizon effect', which was a statistical adjustment which lowered CPI without any prices actually falling. It is one reason the Fed does not focus on CPI. However, CPI is still the favored inflation measure of financial markets. So which prices went up, and where did they drop?

    • The index for meats, poultry, fish, and eggs increased 0.8 percent in March.
    • The index for cereals and bakery products rose 0.4 percent, as did the index for nonalcoholic beverages.
    • The index for dairy and related products also rose in March, advancing 0.3 percent.
    • The fruits and vegetables index declined 0.7 percent in March
    • The shelter index increased 0.4 percent, with the indexes for rent and owners' equivalent rent both rising 0.3 percent.
    • The index for lodging away from home increased 2.3 percent in March
    • The medical care index rose 0.4 percent, with the hospital services index rising 0.6 percent, the physicians' services index increasing 0.2 percent, but the index for prescription drugs declining 0.2 percent.
    • The index for motor vehicle insurance continued to rise, increasing 0.3 percent.
    • The airline fares index increased 0.6 percent.
    • The indexes for alcoholic beverages and household furnishings and operations both increased 0.1 percent in March
    • The apparel index fell 0.6 percent in March
    • The index for communication declined 0.3 percent.
    • The used cars and trucks index fell 0.3 percent in March
    • The indexes for education and for tobacco also declined in March.
    • The gasoline index fell 4.9 percent in March
    • The index for natural gas also declined in March, falling 1.2 percent

    Expect a Core CPI of 2.4% in 2018 -- In a low inflation world firms tend to raise prices once a year — typically in the first quarter or the first quarter of their fiscal year. Consequently, over half of the annual increase in the not seasonally adjusted core CPI occurs in the first quarter and doubling the first quarter increase gives an amazingly accurate estimate of the annual rise in the core CPI. This year the first quarter rise in the not seasonally adjusted core CPI was 1.2% as compared to 0.9% in 2017. This implies the core CPI will be up 2.4% in 2018 versus 1.8% last year. This would be the largest annual increase in the core CPI in a decade.

    PPI-FD April 10, 2018 --  Producer prices rose 0.3 percent in March which is 2 tenths above Econoday's consensus with ex-food & ex-energy also up 0.3 percent and ex-food, ex-energy & ex-trade services up 0.4 percent, both of which are 1 tenth above consensus. Part of the pressure does reflect a jump in steel mill products, up 1.9 percent in the month with steel scrap up 4.3 percent. This is no surprise given reports out of the factory sector that steel and aluminum prices jumped in initial reaction to tariffs imposed by the Trump administration. Another source of pressure, and one not related to tariffs at least in March, was a 2.2 percent wholesale jump in food prices which includes a 32 percent snapback in vegetables which plunged 27 percent the month before. Energy held down prices in the month, slipping 2.1 percent following February's 0.5 percent dip. And much of today's report doesn't show much pressure at all, including only a 0.2 percent gain for the closely watched trade services subcomponent which tracks price effects at retailers and wholesalers. This year-on-year rate is up only 2.0 percent in contrast to the 3.0 percent overall rate. Still 3.0 percent is noticeable growth though this reading peaked back in November last year at 3.1 percent. There are hints right now of building capacity stress tied to longer delivery times and lack of highly skilled labor but the pressures are still modest and as yet aren't raising the heat on the Federal Reserve to pick up its rate hike path.

    March Producer Price Index: Final Demand Up 0.3% MoM - Today's release of the March Producer Price Index (PPI) for Final Demand came in at 0.3% month-over-month seasonally adjusted, up from last month's 0.2%. It is at 3.0% year-over-year, up from 287% last month, on a non-seasonally adjusted basis. Core Final Demand (less food and energy) also came in at 0.3% MoM, up from the previous month and is up 2.7% YoY NSA. Investing.com MoM consensus forecasts were for 0.1% headline and 0.2% core.  Here is the summary of the news release on Final Demand: The Producer Price Index for final demand advanced 0.3 percent in March, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.2 percent in February and 0.4 percent in January. (See table A.) On an unadjusted basis, the final demand index increased 3.0 percent for the 12 months ended in March. In March, 70 percent of the rise in the final demand index is attributable to a 0.3-percent advance in prices for final demand services. The index for final demand goods also climbed 0.3 percent. The index for final demand less foods, energy, and trade services rose 0.4 percent in March, the same as in both February and January. For the 12 months ended in March, prices for final demand less foods, energy, and trade services increased 2.9 percent, the largest advance since 12-month percent change data were available in August 2014. More…  The BLS shifted its focus to its new "Final Demand" series in 2014, a shift we support. However, the data for these series are only constructed back to November 2009 for Headline and April 2010 for Core. Since our focus is on longer-term trends, we continue to track the legacy Producer Price Index for Finished Goods, which the BLS also includes in their monthly updates.  As this overlay illustrates, the Final Demand and Finished Goods indexes are highly correlated.

    US wholesale inventories increase solidly in February - U.S. wholesale inventories increased a bit less than initially estimated in February, but still suggested that inventory investment would contribute to economic growth in the first quarter after being a drag on output in the prior period. The Commerce Department said on Tuesday that wholesale inventories rose 1.0 percent instead of the 1.1 percent jump it reported last month. That was the biggest increase since October 2013. Stocks at wholesalers increased 0.9 percent in January. The component of wholesale inventories that goes into the calculation of gross domestic product - wholesale stocks excluding autos - surged 1.1 percent in February. Inventory investment subtracted 0.53 percentage point from fourth-quarter GDP growth. The economy grew at a 2.9 percent annualized pace in the October-November period. A report last week showed manufacturer inventories increased 0.3 percent in February after rising 0.4 percent in January. Wholesale auto inventories dipped 0.1 percent in February, matching January’s fall. There were increases in inventories of furniture, lumber and computer equipment. Sales at wholesalers rebounded 1.0 percent in February after slumping 1.5 percent in January. Sales of motor vehicles jumped 1.4 percent in February after gaining 0.3 percent in the prior month. At February’s sales pace it would take wholesalers 1.26 months to clear shelves, unchanged from January. 

    Aluminum, steel tariffs driving up raw material costs for trucks, trailers -- FreightWaves President Donald Trump’s America First agenda has hit some recent criticism with his approach to tariffs and trade policies, with critics saying the tariffs on steel and aluminum imports could ultimately raise the costs of goods made in the U.S. A brewing trade way with China with each country exchanging potential tariffs to the tune of billions of dollars has further rattled markets and free trade advocates. On the flip side, supporters say that it is about time the U.S. cracks down on countries importing cheap goods that jeopardize American jobs.For those in trucking, the tariffs and tough trade talk have real-world operational impacts, such as higher costs, shifting freight flows, and potentially lower freight volumes. While those costs are difficult to ascertain until the tariffs are fully implemented, it’s safe to say that there would be an impact.It’s the impact of the steel and aluminum tariffs, though, that will have a near-term effect on the industry. “The proposed tariffs have totally disrupted the domestic material and component markets which were already running at maximum capacity,” Charles D. Willmott, chief sales officer for trailer maker The Strick Group, tells FreightWaves. “We are seeing dramatic increases in material and component prices across the board, particularly with flat steel, steel sheet, and components composed largely of steel as previous foreign materials customers rush to take domestic supply. We are also hearing of allocation programs being set.”

    Trucking Hiring, Logistics Payrolls Surged Last Month -Trucking companies boosted payrolls at the fastest pace in nearly three years in March as transportation and logistics companies added 9,800 jobs to keep up with a booming U.S. shipping market. The trucking sector added 6,700 workers last month, the Labor Department said in its monthly jobs report released Friday, bringing hiring at fleets to 18,500 new jobs for the first quarter, the strongest quarterly job growth for trucking since 2012. Parcel carriers added 5,800 jobs last month while warehouse and storage payrolls rose by 2,500. Both sectors are benefiting from robust growth in e-commerce retail sales. The strong hiring at logistics-focused operations came despite slowing jobs growth in the broader U.S. economy, which added 103,000 jobs last month, and in the manufacturing and other goods-producing sectors that feed shipments into domestic and international supply chains.  Trucking’s hiring blitz comes amid strong growth in U.S. freight demand. A robust U.S. economy, along with new safety regulations that require truckers to electronically track work, has pushed fleets to add drivers at a faster rate. “Transportation providers and warehousers are doing what they have to do just to meet the demand,” said Avery Vise, an analyst at transportation research firm FTR. “They’re scrambling to fill positions that are needed just to keep the economy moving.”

     Port of Long Beach: Record Port Traffic in Q1 2018 -- From the Port of Long Beach: Port of Long Beach Breaks 1st Quarter Record  The Port of Long Beach has completed its best-ever first quarter, with marine terminals handling almost 1.9 million twenty-foot equivalent units (TEUs) January through March. The quick start is 19.4 percent more than the first quarter of 2017, the Port’s busiest year ever.  The previous first quarter record was set in 2007. March throughput reached 575,258 TEUs, an increase of 13.8 percent compared to the same month last year. “Our March cargo jumped despite the shipping slowdown during the Lunar New Year holiday in China,” said Port of Long Beach Executive Director Mario Cordero.

    LA area Port Traffic Decreases YoY in March - Note: The Chinese New Year boosted inbound traffic in February, and slowed inbound traffic in March this year.  Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic. The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container).To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average. On a rolling 12 month basis, inbound traffic was down 1.0% compared to the rolling 12 months ending in February.   Outbound traffic was down 0.2% compared to the rolling 12 months ending in February.  The 2nd graph is the monthly data (with a strong seasonal pattern for imports).  Usually imports peak in the July to October period as retailers import goods for the Christmas holiday, and then decline sharply and bottom in February or March depending on the timing of the Chinese New Year. Trade has been strong - especially inbound - and setting record volumes most months recently.  In general imports have been increasing, and exports are mostly moving sideways recently.

    March 2018 Import and Export Price Year-over-Year Inflation Rate Advances: Year-over-year import and export price inflation moderately grew. Because of backward revisions - the year-over-year import and export prices were little changed from where we thought we were last month. Import Oil prices were down 0.6 % month-over-month, and export agricultural prices were up 0.6 %. with import prices up 3.6 % year-over-year; and export prices up 3.4 % year-over-year.. There is only marginal correlation between economic activity, recessions and export / import prices. Prices can be rising or falling going into a recession or entering a period of expansion. Econintersect follows this data series to adjust economic activity for the effects of inflation where there are clear relationships. Econintersect follows this series to adjust data for inflation.

    Import, Export Price Gains Accelerate Year-Over-Year -- Despite a modest disappointment in import prices MoM (and beat in MoM export prices)... Under the hood:

    • Import prices ex-fuels rose 0.2% after rising 0.5% in Feb.
    • Import prices ex-petroleum rose 0.1% after rising 0.4% in Feb.
    • Industrial supplies prices fell 0.1% after no change in Feb.; first decline since July
    • Capital goods prices rose 0.2% after rising 0.4% in Feb.
    • Auto prices fell 0.2% after rising 0.2% in Feb.
    • Consumer goods prices fell 0.1% after rising 0.6% in Feb.

    But, Import and Export prices both accelerated in year-over-year gains in March (import from +3.4% to +3.6%, and exports from +3.2% to +3.4%). And of course, the big global driver is China, which has started to export deflation again...

    Subprime new-car buyers suddenly go missing from U.S. showrooms -- The American consumers who were stretching themselves to buy or lease a new car are starting to go missing from showrooms. Rising interest rates and new-vehicle prices are squeezing shoppers with shaky credit and tight budgets out of the market. In the first two months of this year, sales were flat among the highest-rated borrowers, while deliveries to those with subprime scores slumped 9 percent, according to J.D. Power. The researcher’s data highlights what is happening beneath the surface of a U.S. auto market in its second year of decline after a historic run of gains. Analysts believe automakers likely will report sales in March slowed to the most sluggish pace since Hurricane Harvey ravaged dealerships across the Texas Gulf Coast in August.“There’s not a bubble of subprime. But as interest rates rise, it’s going to affect” those customers first, said Dan Mohnke, senior vice president of U.S. sales for Nissan Motor Co. When the recession hit a decade ago, many Americans who had been affluent enough to buy new vehicles suffered investment and job losses that hurt their credit scores. During the recovery, lenders took chances on consumers with lower FICO scores, partly on the notion that borrowers prioritize car payments ahead of other expenses. Several financial companies started to tighten their standards more than a year ago.“Subprime losses increased maybe to pre-recession levels a year or so ago,” said David Goff, vice president of marketing for Westlake Financial Services in Los Angeles. “That caused you to require a little bit more from the subprime customer. And those people, instead of buying a new car, are switching over to a used car.” Through February, sales of vehicles priced at $40,000 and up rose by 4 percent, J.D. Power said, while those priced at less than $20,000 fell by 19 percent.

    Subprime Auto Implosion In Full Effect As Lenders Start Dropping Like Flies - We are in the midst of watching the subprime auto lending bubble burst in its entirety. Smaller subprime auto lenders are starting to implode, and we all know what comes next: the larger companies go bust, inciting real capitulation.  In addition to our coverage out just days ago talking about how the subprime bubble has burst and, since then since has been crunched even further, additional reports today are showing that smaller subprime lenders are starting to simply implode after being faced with losses and defaults. In addition to losses and defaults, Bloomberg reported this morning that there have been allegations of fraud and under reporting losses, tactics that are clearly reminiscent of <throw a dart at any financial crisis/bubble burst over the last 30 years>:Growing numbers of small subprime auto lenders are closing or shutting down after loan losses and slim margins spur banks and private equity owners to cut off funding.  Summit Financial Corp., a Plantation, Florida-based subprime car finance company, filed for bankruptcy late last month after lenders including Bank of America Corp. said it had misreported losses from soured loans. And a creditor to Spring Tree Lending, an Atlanta-based subprime auto lender, filed to force the company into bankruptcy last week, after a separate group of investors accused the company of fraud. Private equity-backed Pelican Auto Finance, which specialized in “deep subprime” borrowers, finished winding down last month after seeing its profit margins shrink. The pain among smaller lenders has parallels with the subprime mortgage crisis last decade, when the demise of finance companies like Ownit Mortgage and Sebring Capital Partners were a harbinger that bigger losses for the financial system were coming. In both cases, rising interest rates helped trigger more loan losses. “There’s been a lot of generosity and not a lot of discretion on the part of lenders and investors,”  “There’s going to be more capitulation.”

    When Will Self-Driving Cars Be 'Ready'? | WIRED -- For the people who develop self-driving cars—the software engineers, the hardware tinkerers, the welders and the bumper-affixers, the C-Suite execs and the marketing folks paid to sell it all—the rest of the world is bit like like a kid-crowded backseat. Are we there yet? the globe asks.  Sometimes, the public is excited, because autonomous vehicles promise to, perhaps, one day banish dangerous drunk, drowsy, and distracted drivers in favor of precise machines.  Sometimes, the public is fearful, because loosing new technology on public streets can be frightening. Just last month, a self-driving Uber testing in the Phoenix metro area struck and killed a woman as she crossed the street.  Either way, people want to know when autonomous vehicles will get here, when they will be ready. Here’s the unsatisfying but correct answer: never. “The technology is constantly being updated,” says Nidhi Kalra, a roboticist who co-directs the Rand Corporation’s Center for Decision Making Under Uncertainty. “Sometimes we will talk about it as if, ‘We have this self-driving car, we have this product.’ But with software updates, there’s a new vehicle every week.”  This is what differentiates the autonomous vehicle from even the most advanced cars rolling off the production lines in places like Detroit: so. much. software. More than half a million lines of code will power the various systems and algorithms that could one day help self-driving cars go anywhere. That includes localization systems, overlaid with high-definition maps to help the vehicles understand where they are. And perception systems, which help vehicles determine exactly what’s going on around them And planning systems, which synthesize all that info and actually chart the vehicle’s journey from this intersection to that one. Add in weather, terrain, and car cultures that differ from city to city, and you can see why companies like Waymo are only testing in specific places. Testing everywhere would be nigh-impossible. And just like your iPhone, your Snap app, or your Tesla, these cars have code that will get updated, and updated a lot.

    Small Business Optimism Index decreased in March, "Difficulty of finding qualified workers" is Top Problem --From the National Federation of Independent Business (NFIB): March 2018 Report: Small Business Optimism IndexThe 104.7 March reading, down from 107.6 in February, remains among the highest in survey history and for the first time since 1982, taxes received the fewest number of votes as the number one problem. Job creation remained solid in the small business sector as owners reported a seasonally-adjusted average employment change per firm of 0.36 workers, one of the best readings in survey history. ... Twenty-one percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem, exceeding the percentage citing taxes or regulations. Thirty-five percent of all owners reported job openings they could not fill in the current period.This graph shows the small business optimism index since 1986.The index decreased to 104.7 in March. Usually small business owners complain about taxes and regulations.  However, during the recession, "poor sales" was the top problem. Now the difficulty of finding qualified workers is the top problem.

    Weekly Unemployment Claims: Down 9K, Slightly Worse Than Forecast --Here is the opening statement from the Department of Labor:In the week ending April 7, the advance figure for seasonally adjusted initial claims was 233,000, a decrease of 9,000 from the previous week's unrevised level of 242,000. The 4-week moving average was 230,000, an increase of 1,750 from the previous week's unrevised average of 228,250.Claims taking procedures in Puerto Rico and in the Virgin Islands have still not returned to normal. [See full report]This morning's seasonally adjusted 233K new claims, down 9K from the previous week's figure, was slightly above the Investing.com forecast of 231K.Here is a close look at the data over the decade (with a callout for the past year), which gives a clearer sense of the overall trend in relation to the last recession.

    Weather Adjusted Employment --Note: Before the employment report is released each month, Chicago Fed economist Francois Gourioprovides an estimate of the impact of weather on employment (this has been very useful). After the employment report is released, the San Francisco Fed has a model that shows weather adjusted employment. See: Weather-Adjusted Employment Change:  The approach involves estimating the short-run effects of unusual weather on employment growth at the county level using historical data from January 1990 through December 2015. We then use the statistical model to estimate the effect of unusual weather in recent months on employment growth at the county level. We aggregate these county-level effects to the national level, weighting counties by employment levels, to yield estimates of the effect of unusual weather around the country on national employment growth. Finally, we translate these growth effects into level effects using the level of employment in November 2015 as an initial base. The figure and table present three employment change series for the past six months. The first (left) group is the official BLS series. The other two are alternative estimates of weather-adjusted employment change calculated using our county-level statistical model estimated over the January 1990–December 2015 period. The second set of bars is shows the most recent county-level series (also shown in Figure 2 of van der List and Wilson 2016). The third set of bars is an extension of the county-level model that allows for each weather variable to have different marginal effects in each of the Census Bureau’s nine regions. For example, an inch of snowfall can have a different effect on employment growth in the South Atlantic region than it does in New England. This graph from the San Francisco Fed show employment gains as reported by the BLS (left graph), and two weather adjusted graphs. The San Francisco Fed estimates weather reduced March employment by about 100,000 jobs. There is also a table at the weather adjusted website.

    BLS: Job Openings "Little Changed" in February --From the BLS: Job Openings and Labor Turnover Summary: The number of job openings was little changed at 6.1 million on the last business day of February, the U.S. Bureau of Labor Statistics reported today. Over the month, hires and separations were little changed at 5.5 million and 5.2 million, respectively. Within separations, the quits rate was unchanged at 2.2 percent and the layoffs and discharges rate was little changed at 1.1 percent. ... The number of quits was little changed at 3.2 million in February. The quits rate was 2.2 percent. The number of quits was little changed for total private and for government. Quits decreased in other services (-41,000). The number of quits was little changed in all four regions.  The following graph shows job openings (yellow line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.   This series started in December 2000.  The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers.  Note that hires (dark blue) and total separations (red and light blue columns stacked) are pretty close each month. This is a measure of labor market turnover.  When the blue line is above the two stacked columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs. Jobs openings decreased in February to 6.052 million from 6.228 in January.  The number of job openings (yellow) are up 7.7% year-over-year. Quits are up 6.3% year-over-year. These are voluntary separations. (see light blue columns at bottom of graph for trend for "quits"). Job openings are near the highest level since this series started, and quits are increasing year-over-year. This was a solid report.

    Job Openings Tumble By 176,000, Led By Food Service And Construction Workers -- One month after the BLS reported that according to last month's JOLTS survey, the number of job openings soared from 5.667 million, a six-month low which spooked analysts into wondering if the labor market is peaking, to 6.312 million, a 645,000 monthly increase and the second biggest monthly jump on record, the latest, just released JOLTS report predictably showed a sharp contraction, as the number of job openings dropped from a downward revised 6.228 million to 6.024 million, a drop of 176K, as the series becomes increasingly volatile.The job openings rate dropped from 4% to 3.9%, while the number of job openings edged down for total private and was little changed for government. Job openings increased in a handful of industries, including finance and insurance (+69,000) and state and local government education (+31,000); openings decreased in a greater number of industries with the largest decreases being in accommodation and food services (-91,000), construction (-56,000), and wholesale trade (-38,000). The number of job openings decreased most in the West region.It wasn't just job openings that dropped: total hires declined as well, sliding from a revised 5.574 million in January to 5.507 million in February, still just shy of the highest print on record which was last October's 5.609 million.  Thenumber of hires was little changed for total private and for government. Hires decreased in educational services (-48,000). The number of hires was little changed in all four regions. Meanwhile, the other closely watched category, the level of quits - which indicates workers' confidence they can leverage their existing skills and find a better paying job, also known as the "take this job and shove it" indicator- reversed last month's decrease and in february rose modestly from 3.191MM to 3.210MM, suggesting workers were feeling just a more less confident about demand for their job skills than the previous month. t. Quits decreased in other services (-41,000). The number of quits was little changed in all four regions And with a total 5.2 million separations (a 3.5% rate), this means that there were 1.6 million layoffs and discharges in February, virtually unchanged from January. The layoffs and discharges rate was 1.1 percent in February. The number of layoffs and discharges decreased in state and local government education (-13,000). The number of layoffs and discharges decreased in the Northeast region.

     Philly Fed: State Coincident Indexes increased in 46 states in February - From the Philly Fed:The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for February 2018. Over the past three months, the indexes increased in all 50 states, for a three-month diffusion index of 100. In the past month, the indexes increased in 46 states, decreased in two, and remained stable in two, for a one-month diffusion index of 88. Note: These are coincident indexes constructed from state employment data. An explanation from the Philly Fed: The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing by production workers, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s index matches long-term growth in its GDP.Here is a map of the three month change in the Philly Fed state coincident indicators. This map was all redduring the worst of the recession, and all or mostly green during most of the recent expansion.  Once again, the map is all green on a three month basis.And here is a graph is of the number of states with one month increasing activity according to the Philly Fed. This graph includes states with minor increases (the Philly Fed lists as unchanged).

    Do the Employed Get Better Job Offers? – NY Fed - In a previous post, we examined the job search behavior of workers, both on the job and while unemployed. We found that job seeking is pervasive among employed workers, and that searching while employed is more effective than searching while unemployed in producing employer contacts and job offers. But how do the offers received through “on the job” searches compare to those received while unemployed? What do their wages look like, how do they compare in terms of nonwage benefits, and how much bargaining between employers and job applicants is involved? In this post, we shed some light on how job offers may vary depending on the employment status of the job seeker. As in our previous post, we use novel data from a job search supplement to the New York Fed’s Survey of Consumer Expectations that has been fielded every October since 2013. To ensure a sufficiently large sample of offers, we pool data from four successive waves of the survey supplement, covering the period 2013-16. The supplement offers a detailed and extensive view of the job search process and provides information on the number, type, and characteristics of offers received, regardless of the job seeker’s employment status. The findings discussed in what follows are based on a sample of 3,447 individuals aged 18-64 (excluding the self-employed), and on two associated samples of job offers received: the first one consists of 337 offers received by survey respondents over the prior four weeks, while the second takes a longer view and considers 862 offers received over the six-month period preceding the survey. We also use two separate definitions of labor force status, corresponding to each sample of job offers: when we look at offers received in the last four weeks we consider labor force status (employed, unemployed, out of the labor force) four weeks prior to the survey interview; when we analyze offers received in the last six months we use information on labor force status at the time of the offer (employed vs. non-employed). The goal is to have as accurate a measure as possible of the job seeker’s labor force status when they actually received the job offer. More details on the data, the survey methodology, and our definitions are described here.

     What if the absence of strong unions is at the heart of much of what has gone wrong? - Jared Bernstein --Okay, I realize the question posed in the title sounds awfully sweeping and reductionist.  But stick with me for a moment. First, by “what has gone wrong,” I mean the erosion of institutions whose purpose is to even out inherent power imbalances that arise in all societies and are particularly steep in our current moment. When institutions such as the vote, the courts, labor standards, anti-discrimination laws, regulations against monopoly power and reckless finance, and anti-poverty policies are under siege, a significant swath of the public, and particularly nonwhites and those with low incomes, has little recourse against the actions of those who would disenfranchise them. While the union movement has always had its problems — no institutions are immune from their own internal power imbalances — it has always existed, back to the guilds of the Middle Ages, as a counterfoil to dynamics that today take the form of rising inequality, the defunding of a government that is increasingly dysfunctional, nonrepresentative elections, and the unfettered rise of corporate power and finance. How does this link to the teachers’ labor actions in West Virginia, Oklahoma, Arizona and Kentucky — none of which are radical hot spots? The connections are critical, not just because they underscore the deep and pervasive social damage done by the growing imbalances, but because they crystallize these problems in ways in which we can all relate. In Oklahoma, disinvestment in public schools has gone on for so long that volleyball games get rained out because of a leaky gym. Textbooks and computers are ancient; one former teacher told of students “stuck with history textbooks so old that they say Bill Clinton is president.” Some districts have had to go to four-day weeks. Teachers’ salaries have, of course, been a key issue in these walkouts, but striking teachers have also insisted on reinvestment in support staff and overall funding for supplies and school infrastructure.

     Real wages for mid-wage workers actually haven’t grown much over the past couple of years. - Jared Bernstein -  We always talk a lot about wage growth on jobs day because, you know, it’s jobs day. But later in the month, when the inflation numbers for the previous month are released, we should really say something about real, as in inflation-adjusted, wage growth. After all, what matters most to people is the buying power of their paychecks, right? When the BLS real earnings report came out yesterday, I saw that Trump’s economic advisers tweeted out this pat-on-the-back: But their claims should not be taken seriously. First, these are jumpy, monthly numbers, so you want to look at the longer-term trend, and second, the bit about prices falling is particularly weird. Deflation is clearly not upon the land—that’s a monthly blip. The figure below plots the real, hourly wages for middle-wage workers: the 82% of the workforce that are production workers in factories and non-managers in services. Since around 2016, real wages have actually pretty stagnant. It’s bad economics to measure trends over presidential terms, but given the CEA’s tweet, note that since December 2016, the real hourly wages of middle-wage workers are up only 0.2%. These folks are working more hours per week, so their real weekly earnings did a tiny bit better, up 0.5%, but the technical term for that is bupkes.

    Massive Minimum Wage Study Finds Significant Gains for Low-Income Workers and Few Downsides --A new study on the minimum wage confirms previous research that found the policy raises wages for low-income workers without reducing total employment. The paper may finally start to convince conservative critics of the minimum wage to reconsider their views.Economist and blogger Tyler Cowen was one of the first to write about the study. As a libertarian, he's long been critical of policies like the minimum wage, and the new study hasn't made him a believer. But he does acknowledge that the new research is "thorough and detailed." He writes:"...[O]n the pro-minimum wage side, you should consider that those immediately affected by the wage hike do seem better off, and their higher income in the meantime may itself bring some efficiency-enhancing gains."The study is indeed impressive. Census researchers Kevin Rinz and John Voorheis used data from the bureau's Annual Social and Economic Supplement, which surveys more than 75,000 households. The authors then link this data with administrative filings from the Social Security Administration on wages and track the changes between 1991 and 2013. The study stands out for covering such a large number of people over such an extended period. "[R]aising the minimum wage increases earnings growth at the bottom of the distribution, and those effects persist and indeed grow in magnitude over several years," the authors write. At the same time, there's little indication that other people will lose their jobs as a result of the minimum wage—the outcome conservatives always warn about.

    Three More Reasons for Wealth-Deprived Americans to Take to the Streets - The rest of America has been left behind, but their voices are getting louder. It’s starting to happen, as teachers around the country are fighting back against income and wealth inequality. At least 3 of every 4 Americans have been cheated out of a share of U.S. productivity since the 1980s. The approximately one of four Americans who have prospered, especially those in the top 5%, generally don’t seem to care much about inequality, and instead hang onto delusions about their own self-worth and the struggles of people who “don’t work hard enough.” The rest of America has been left behind, but their voices are getting louder.

    • (1) In Just the Last 3 Years, the Richest 5% Gained an Average of $800,000 While the Poorest 50% LOST Wealth. This information comes from the 2017 Global Wealth Databook, and is summarized here. Incredibly, the richest 5% of Americans increased their average wealth from about $4 million to nearly $5 million since the end of 2014.Meanwhile, the average household wealth of the poorest 50% actually went DOWN by about $200. The middle class (50-90%) increased their wealth by anywhere from $6,000 to $26,000 during that financially productive time.
    • (2) The Wealth Owned by 90% of Us in the 1980s Has Been Redistributed to the Richest .1%.  The charts below from the World Inequality Lab reveal this terrible truth about the past 35 years:  The richest 125,000 households owned 7 percent of the wealth then, 22 percent now.  The poorest 112,000,000 households owned 37 percent of the wealth then, 23 percent now.  So nearly 15 percent of our nation’s total household wealth — $14 trillion! — has been transfered from middle-class America to people with an average net worth of $75 million.
    • (3) Businesses Cheat on Taxes Even More Than We Thought We Knew.  It was recently reported by Sam Pizzigati that only 1 percent of wage-based income goes unreported on federal tax filings, while the percentage for self-reporting entities ranges from 16 percent for partnerships to a stunning 63 percent for nonfarm proprietors. The overall tax gap (difference between what’s owed and paid on time) is estimated to be close to a half-trillion dollars per year. That’s nearly half the entire safety net.

    ICE Executes Largest Single Workplace Raid In A Decade; 86 Illegals Arrested -- Immigration and Customs Enforcement (ICE) agents arrested 97 immigrants at a Grainger County, Tennessee meatpacking plant late Thursday in what civil rights organizations are calling the largest single workplace raid in a decade, reports the Washington Post. At least 86 of the immigrants were in the United States illegally.  The Homeland Security Investigations arm of ICE executed a federal criminal search warrant on the Southern Provision meat packing plant in a joint operation with the Internal Revenue Service and the Tennessee Highway Patrol.Ten people were arrested on federal criminal charges, one person was arrested on state charges and 86 immigrants were detained for being in the country illegally, Tammy Spicer, a spokeswoman for Immigration and Customs Enforcement, said in a statement Friday. All of those arrested were in the country illegally, she said. Most were from Mexico.The National Immigration Law Center and other immigrant advocates said the Tennessee raid was the largest since the George W. Bush administration and deployed many of the tactics of that era, with a surprise blitz of the factory, a helicopter and streets blocked by state and local authorities. ICE officials would not say where the raid ranked in terms of size. –WaPo   Acting ICE director Tom Homan said last year that the agency planned to "significantly" increase operations targeting businesses which employ illegal immigrants, however he said the department's strategy would be different than those employed under president Obama. “Now we’re going to prosecute the employers who knowingly hire illegal aliens,” Homan said last year. “We’re going to detain and remove the illegal alien workers.”

     Urban Bungle: Atlanta Cyber Attack Puts Other Cities on Notice - Soon after Atlanta City Auditor Amanda Noble logged onto her work computer the morning of March 22, she knew something was wrong. The icons on her desktop looked different—in some cases replaced with black rectangles—and she noticed many of the files on her desktop had been renamed with “weapologize” or “imsorry” extensions. Noble called the city’s chief information security officer to report the problem and left a message. Next, she called the help desk and was put on hold for a while. “At that point, I realized that I wasn’t the only one in the office with computer problems,” Noble says. Those computer problems were part of a high-profile “ransomware” cyberattack on the City of Atlanta that has lasted nearly two weeks and has yet to be fully resolved. During that time the metropolis has struggled to recover encrypted data on employees’ computers and restore services on the municipal Web site. The criminals initially gave the city seven days to pay about $51,000 in the cryptocurrency bitcoin to get the decryption key for their data. That deadline came and went last week, yet several services remain offline, suggesting the city likely did not pay the ransom. City officials would not comment on the matter when contacted by Scientific American. The ransomware used to attack Atlanta is called SamSam. Like most malicious software it typically enters computer networks through software whose security protections have not been updated. When attackers find vulnerabilities in a network, they use the ransomware to encrypt files there and demand payment to unlock them. Earlier this year attackers used a derivative of SamSam to lock up files at Hancock Regional Hospital in Greenfield, Ind. The health care institution paid nearly $50,000 to retrieve patient data.   Several clues indicate Atlanta likely did not pay the attackers, Williams says. “Ransomware gangs typically cut off communications once their victims get law enforcement involved,” he says. “Atlanta made it clear at a press conference soon after the malware was detected” that they had done so. The length of time it has taken to slowly bring services back online also suggests the cyber criminals abandoned Atlanta without decrypting the city’s files, Williams says. “If that’s the case, the city’s IT staff spent the past week rebuilding Atlanta’s online systems using backed-up data that had not been hit by the ransomware,” he says, adding that any data not backed up is likely “lost for good.”

    U.S. Governor Orders Over 100 Bridges Closed. The Bridges “Create Extreme Peril to the Safety of Persons and Property' - Mississippi governor Phil Bryant issued an emergency declaration this week, ordering the closure of at least 102 locally maintained bridges in his state due to safety concerns.The move was prompted by Bryant receiving a letter on April 5 from the acting administrator of the Federal Highway Administration, Brandye Hendrickson. In the letter, Hendrickson warned that the bridges must be closed or the administration would “be compelled to follow-up with consequential actions.” According to the US Department of Transportation, Mississippi was the only state to receive such a letter. In Bryant’s order, he stated that the bridges “create extreme peril to the safety of persons and property.” The Mississippi Department of Transportation is authorized to implement the closures, and its executive director praised the governor’s actions, saying: “MDOT is thankful for the governor’s strong support of public safety while protecting federal transportation funds that come into the state. The state and MDOT cannot afford to lose any money for roads and bridges.” While Mississippi lawmakers have been hesitant to raise taxes for such repairs, many have been holding out to see if President Trump’s anticipated infrastructure plan might provide a lifeline.

    California to vote on breaking up into 3 states - Should there be three Californias instead of just one? You may soon have a chance to decide. A Bay Area venture capitalist backing a ballot measure to divide California into three states said Thursday it has received more than enough signatures to qualify for the November ballot. If enough of the more than 600,000 signatures are verified by the California Secretary of State, it would give residents their first chance since before the Civil War to vote on whether to divvy up the most populous U.S. state, which critics have argued has grown too big to be governable. “This is an unprecedented show of support on behalf of every corner of California to create three state governments that emphasize representation, responsiveness, reliability and regional identity,” venture capitalist Tim Draper, chairman of the “CAL 3” campaign, said in a statement. The CAL 3 campaign plans to deliver the 600,000-plus signatures, which Draper said represent all 58 counties, next week. Draper noted it is nearly twice as much support as the 365,880 required by state law to get the initiative on the ballot. The Secretary of State’s office counties have a month to verify the signatures.

    Junk Cities: Insolvency Crises in Overlapping Municipalities - Adam Levitin, Credit Slips - I have a new paper out on municipal insolvency. It's called "Junk Cities:  Resolving Insolvency Crises in Overlapping Municipalities," 107 Cal. L. Rev (forthcoming 2019).  The paper is co-authored with Aurelia Chaudhury and David Schleicher. The launching point for the paper is the observation that there are frequently overlapping local government jurisdictions--cities, counties, school districts, water districts, park districts, hospital districts, sewer and sanitary districts, forest preserves, etc. These overlapping jurisdictions share a common revenue source--the same set of taxpayers. This means that they have correlated exposure to economic downturns or population declines. It also means that they face a common pool problem in terms of revenue generation, and they frequently lack coordination mechanisms whether formal or informal (such as political "machines"). The correlated economic exposure plus the common pool problem for revenues increases the likelihood of simultaneous financial crises for these overlapping jurisdictions. Chapter 9 bankruptcy, unfortunately lacks the tools to deal with the inter-governmental coordination problem. The techniques used for handling multi-entity debtors in Chapter 11--joint administration, deemed consolidation for voting and distribution purposes, and (in the extreme) full substantive consolidation do not work for municipalities that lack common corporate control and have much clearer separation of assets and liabilities.  Chapter 9 does not currently have the capacity for considering a shared revenue source that is not an asset per se.  Our paper identifies the nature of the overlapping municipal financial crisis problem, discusses why Chapter 9 is inadequate, and proposes a number of solutions ranging from incremental doctrinal improvements in Chapter 9 to the adoption of a "Big MAC Combo" (or perhaps a "supersize Big MAC") mechanism for coordinating the finances of overlapping municipalities. The abstract is below the break. 

    Legislature proposes finding out why a staggering number of Native American women in Minnesota are murdered or go missing - Mysti Babineau’s mother went missing when she was 2 years old.  The police never found her. Babineau, a member of the Red Lake Nation in Minnesota, was thrust into the foster care system. She was raped when she was 9, and when she was a middle schooler she was attacked with a knife, giving her a scar she still bears on her shoulder today. When she was 20, Babineau went missing herself. She was kidnapped in Isanti and brought to St. Paul, where she was raped and beaten. She believes she would have stayed missing or been found murdered if she hadn’t managed to escape from her assailants. Babineau and others were in front of the Minnesota House Public Safety Policy and Finance Committee to tell their stories as part of an effort to pass a bill that would create a task force on missing and murdered Native American women in Minnesota. Despite making up less than 1 percent of the Minnesota population — there are around 28,000 Native American women and girls in Minnesota, according to the American Community Survey — Native women in the state are murdered at far higher rates than the national average, said Mary Kunesh-Podein, DFL-New Brighton, a member of the Standing Rock Lakota tribe and the author of the bill. Between 1990 and 2016, the homicide rate for Native women in Minnesota was seven times that of white women, according to the Minnesota Department of Health.  It’s the first time the idea for such a task force has been brought to the Legislature, and so far it's garnered bipartisan support. The bill is moving through committees in the House, though it doesn’t have a companion proposal in the Senate, and is being considered for possible inclusion in a broader House public safety proposal this year. The task force would cost less than $200,000 for the first two years and report annually to the Legislature, according to the House DFL Caucus.

    New York Just Passed A Bill Banning Cops From Having Sex With People In Custody - Anna Chambers says two on-duty NYPD cops raped her while she was in custody; their lawyer says it was consensual.State lawmakers in New York passed a bill Thursday to prohibit cops from having sex with people in custody, closing a legal loophole that has let police avoid sexual assault convictions by claiming sex with detainees was consensual. The bill was introduced in response to allegations that two on-duty New York City Police Department officers raped a handcuffed woman in their police van in September.In February, BuzzFeed News reported that New York was one of 35 states that do not explicitly deem encounters between cops and those in their custody as sexual assault. In the weeks since, legislators in at least six states have introduced or begun drafting bills to change these statutes.  Of at least 158 law enforcement officers nationwide charged since 2006 with sexual assault, sexual battery, or unlawful sexual contact with somebody under their control, at least 26 have been acquitted or had charges dropped after claiming the encounters were consensual, according to a BuzzFeed News review of a Buffalo News database. The bill passed Thursday states that someone in police custody lacks the ability to consent to sex with an officer. The loophole in New York law first drew public attention after an 18-year-old woman, who uses the pseudonym Anna Chambers, reported she was sexually assaulted by two detectives who'd detained her after finding weed and loose pills in the car she was in. DNA from a rape kit matched narcotics detectives Eddie Martins and Richard Hall. Both have pleaded not guilty to rape and other charges and are awaiting trial. While the men have yet to give their accounts of the incident, Martins’ lawyer, Mark Bederow, summed up their defense by claiming, “There was no nonconsensual sexual encounter.”

    Feds Seize Backpage.com In Prostitution Crackdown - The takedown of Backpage (and the probable impending indictment of its owners) is perhaps the last gasp for sex workers hoping to operate "indoors" using the Internet. Instead, many will be forced back into the street, where data collected by researchers universally shows their rates of violence and death are much higher.In an op-ed published by the LA Times back in February - back when the debate of FOSTA was still raging - Alison Bass, author of a book about sex workers, argued that the crackdown on websites serving as a venue for sex workers was harmful to the workers, while doing little to combat sex trafficking - which is the whole point of the crackdown.Bass uses the example of thereviewboard.net, a website where sex workers posted advertisements and clients reviewed their services. Following a police raid, the people operating the site were arrested and charged with promoting prostitution - a felony charge.The site was shut down under the auspices of fighting sex trafficking - but there's scant evidence sex traffickers were actively using the site. Instead, it robbed local sex workers of a tool to better screen clients and avoid dangerous environments like strangers' vehicles and the streets.There's one big problem with that narrative: There's little evidence that these web sites abet sex trafficking. But we do know that shutting them down these makes life more dangerous for sex workers.The ability to advertise online allows sex workers to more carefully screen potential customers, negotiate safe sex (i.e. sex with condoms), and work indoors. Researchers conclude that when sex workers can't advertise online, they are often forced to work on the street, where they are more likely to encounter violent clients. They also are more likely be dependent on exploitative pimps to find customers."Now these women have one less safe advertising venue," Savannah Sly, a Seattle sex worker and president of Sex Workers Outreach Project, said after thereviewboard.net was shuttered. Ditto for the sex workers who advertised on Rentboy.com, myRedbook.com and Backpage.com. "What the removal of these advertising sites do is remove low-risk clients from the client pool," Sly added. "And because you have reduced demand, you're more likely to agree to see the guy who is more dangerous."

    Lawsuit accuses Washington, D.C. of destroying personal belongings of the homeless -- On March 28, a class action lawsuit was filed in US District Court for the District of Columbia challenging the D.C. government’s practice of throwing out the personal belongings of the homeless. The lawsuit asserts that the city is violating the 4th Amendment’s protections against unreasonable searches and seizures, as well as ignoring the city’s own protocol requiring that possessions confiscated during the clearing of homeless encampments be stored for up to 60 days.  Specifically, the lawsuit states that the city “has followed a consistent practice of destroying unattended belongings whenever the owner is absent for some or all of a clearing,” including “tents and other shelters, bicycles, blankets, clothing, identification documents, medications, Social Security cards, medical and court records, family photographs, letters, and other personal belongings.”  Such actions put the homeless “in grave danger of suffering irreparable harm through loss of personal property that is necessary for survival or that cannot be replaced,” the suit states. As a remedy, the two named plaintiffs, Shanel Proctor and Charlaine Braxton, are seeking a permanent injunction against the District to prevent further destruction of homeless people’s possessions. Proctor and Braxton allege in the lawsuit that their tents, mattresses, food, clothing, electronics, and identity documents were either lost or destroyed during numerous city-led clearings of their encampment in 2016 and 2017, a fate suffered by other homeless residents living there. The lawsuit also asserts that since November 2016, D.C. has conducted approximately 70 encampment clearings.

    Video shows U.S. agents trying to dump injured man over Mexican border — A video obtained by NBC News shows U.S. Border Patrol agents attempting to break international law by forcing an injured and mentally unstable man back into Mexico by falsely claiming that he is not in their custody, failing to identify him and assuming he is Mexican because "he looks like it."U.S. Customs and Border Protection (CBP) provided the video after a whistleblower first alerted NBC News to the existence of the footage. The anonymous videographer was ready to film the encounter because Mexican agents had identified the area as a place where American agents frequently tried to deport migrants covertly, according to a source close to the Mexican government. The incident occurred at the U.S.-Mexico border in Calexico, California, on March 27, 2017, and sparked a complaint by Mexican officials to CBP, which launched an investigation that ended with the agents being reprimanded, but ultimately keeping their jobs.Under an agreement between the U.S. and Mexico, Mexican nationals must be properly repatriated through the Mexican consulate, a process that includes fingerprinting and confirming the person's identity. Only then can they be sent back across the border on foot or by other means.If a migrant is not Mexican, such as the tens of thousands crossing from Central America each month, the migrant must be deported by plane back to his or her home country. The identities of the persons in the video are unknown to NBC News and CBP is withholding their names for privacy reasons.

    'Better financially' to kill suspects than wound them: sheriff -- The sheriff of a California county with an outsized number of police shootings once said that it was “better financially" to kill suspects than wound them. Kern County Sheriff Donny Youngblood was looking for an endorsement in 2006 when he posed the question, “When a deputy shoots somebody, which way is better financially? To cripple them or kill them for the county?”  “Kill them?” someone off camera asks before Youngblood answers “Absolutely.” "Because if you cripple them you have to take care of them for life and that cost goes way up," he said.  The damning video was released Monday by the Kern County Detention Officers Association, one of three officers’ unions that had endorsed Youngblood’s upcoming election opponent and chief deputy Justin Fleeman. Officers said that the county force, once labelled “America’s deadliest police," was "in desperate need of positive changes." The Guardian profiled the county after 13 people were killed by police in 2015. The county had less than 900,000 residents at the time, but more fatal shootings than New York, which had nine the same year.   Monday’s video, reportedly taken during an endorsement consideration interview, also saw Youngblood turn the loss of life at the hands of the police into a matter of dollars and cents.“When a guy makes a bad shoot on somebody and kills them, $3 million dollars and the family goes away,” he said, comparing it to a jailhouse beating where many officers are present. Youngblood then went on to compare the costs of killing someone versus wounding.

     Puerto Rico's warring creditors duel over sales tax revenue - (Reuters) - Puerto Rico bondholders in court on Tuesday denounced the island’s sales tax authority, COFINA, as a sham “end-run” around its constitution, in a creditor battle for control of the bankrupt, storm-ravaged island’s future tax revenues. At a hearing in federal court in New York, a lawyer for a group of general obligation (GO) bondholders said Puerto Rican leaders created COFINA in 2006 so they could issue new bonds without technically violating the island’s constitutional limit on government debt sales. The dispute is central to sorting out Puerto Rico’s $71.5 billion in debt, about half of which is owed to GO and COFINA bondholders. Each side is owed about $18 billion and claims an ironclad right to the sales tax revenue. The outcome will determine which group recovers more of its investment, and which side will have a claim on decades of future sales tax. “It would ascribe incompetence” to assume a legislature that wanted to limit the government’s debt capacity would then let a separate agency exceed that limit by billions of dollars, attorney Mark Stancil told Judge Laura Taylor Swain. “COFINA was an end-run around the debt limit,” Stancil said. Puerto Rico’s legislature created COFINA as the island slid toward a financial cliff and needed to raise cash. To ease nervous investors, lawmakers secured COFINA’s debt with sales tax revenue, and declared COFINA the owner of the revenue. Antonio Yanez, a lawyer advocating for COFINA’s estate, said that structure was legal. “It is Puerto Rico law that COFINA owns the pledged sales tax,” Yanez said at Tuesday’s hearing. “The idea was that COFINA would be separate from the commonwealth.”

    Proposed Illinois budget continues assault on workers and sets stage for November elections - Illinois government Bruce Rauner released his fiscal year (FY) 2019 budget proposal on February 14. It largely enshrines and extends the savage cuts to state health care and human services programs imposed by his administration during the multi-year budget impasse. Rauner is betting that his continued intransigent opposition to social spending will earn him the continued support of the financial aristocracy in the November gubernatorial election, allowing him to eke out a win against the Democratic candidate, billionaire J.B. Pritzker.Rauner, himself a billionaire investor, proposes that for fiscal year 2019 the state slash spending on human services, medical care, public health, education and other social services. Part of the savings would go to lowering the state income tax rate from 4.95 percent to 4.7 percent, which would largely benefit only the extremely wealthy.Under his budget, human services spending would be $6.3 billion, a $300 million decrease from 2015, the last time the state passed a full budget, even without taking into account real cuts in service delivery resulting from inflation in the intervening years. Among programs slated for cuts are infant mortality prevention, autism and epilepsy services, and addiction prevention. Child-care for low income families is cut by $96 million, described by the Rauner administration as “rightsizing.”Rauner has tried to sell the budget with the claim that it increases primary and secondary education spending. However, although his proposal increases spending by $98.1 million, once inflation is taken into account, the real result is at least a $57.1 million decrease, according to the Center for Tax and Budget Accountability (CTBA). Furthermore, the budget would begin a shift of teacher and other educator pension costs from the state to local school districts, colleges and universities. This would lead to about $547.1 million in pension costs to be absorbed by school districts throughout the state, inevitably requiring them to carry out further cuts and layoffs.

    Outrage Follows Puerto Rico’s Announcement It’s Closing Nearly a Third of Its Public Schools --Teachers unions and outraged citizens in Puerto Rico are vowing to fight the government's newly-announced plan to close nearly a third of its public schools. Puerto Rico's Education Department said Thursday that 283 schools would close by the start of the new school year, leaving open just 828. "I don’t even know where the schools they're being located to are," said Haydee Del Valle, a parent of a 12-year-old who attends one of the schools slated for closure. "I don't know if they're too far away from us or if the school bus they take now will be able to take them there," she told NBC News. "This makes me sad because this is a great school." "We know it's a difficult and painful process," said Education Secretary Julia Keleher, a charter school proponent. She added, "Our children deserve the best education that we are capable of giving them taking into account Puerto Rico's fiscal reality."The announcement of which schools would be closed follows Gov. Ricardo Rossello signing into law controversial education "reform" legislation that will include charter schools at 10 percent of the island's schools and private school vouchers for 3 percent of its students. It also comes on the heels of Jose Carrion, the chair man of the unelected board overseeing the debt-burdened island's finances, declaring, "Broad and deep reforms are vital to Puerto Rico's future." The Puerto Rico Teachers Association (Asociación de Maestros de Puerto Rico) immediately denounced the announcement.Aida Diaz, president of the union, said, "The harm that the education secretary is causing children and their parents is immeasurable." "No one in their right mind acts the way she's acting," Diaz continued, referring to Keleher. "This unjustified school closure responds to her exclusive work forwarding an agenda in favor of private companies that she will enrich by turning over our children's public education funds to them."

    The Corporate Plan to Groom U.S. Kids for Servitude by Wiping Out Public Schools -  Lynn Parramore -   It was the strike heard ‘round the country. West Virginia’s public school teachers had endured years of low pay, inadequate insurance, giant class sizes, and increasingly unlivable conditions—including attempts to force them to record private details of their health daily on a wellness app. Their governor, billionaire coal baron Jim Justice, pledged to allow them no more than an annual 1% raise—effectively a pay cut considering inflation—in a state where teacher salaries ranked 48th lowest out of 50 states. In February 2018, they finally revolted: In a tense, four-day work stoppage, they managed to wrest a 5% pay increase from the state. Teachers in Oklahoma and Kentucky have now revolted in similar protests. It’s the latest battle in a contest between two countervailing forces: one bent on reengineering America for the benefit of the wealthy, the other struggling to preserve dignity and security for ordinary people. If the story turns out the way the Jim Justices desire, the children of a first-world country will henceforth be groomed for a third-world life. After five years of research and the publication of The One Percent Solution, Lafer concluded that by lobbying to make changes like increasing class sizes, pushing for online instruction, lowering accreditation requirements for teachers, replacing public schools with privately-run charters, getting rid of publicly elected school boards and a host of other tactics, Big Business was aiming to dismantle public education. The grand plan was even more ambitious. These titans of business wished to completely change the way Americans and their children viewed their life potential. Transforming education was the key. The lobbyists and associations perfected cover stories to keep the public from knowing their real objectives.  Step one was to raise fears about an American educational crisis that did not, in fact, exist. Lafer notes, for example, that the reading and math scores of American students have remained largely unchanged for forty years. Nonetheless, the corporate-backed alarmists worked to convince the public that the school system was in dire condition. Step two was to claim that unproven reforms to fix the fictional crisis, like online learning, were sure to improve outcomes, despite the fact that such schemes go directly against hard evidence for what works in education and deny students the socialization that is crucial to a child’s progress. Sometimes the reformers said the changes were needed because of budget deficits; other times, they claimed altruistic aims to improve the quality schools. In Lafer’s view, their strategy had little to do with either.

    Oklahoma’s striking teachers are intoxicated by their own demands | TheHill: Oklahoma’s teachers have just completed the first week of a statewide “walkout,” with no resolution in sight. (It’s a “walkout,” not a “strike,” as public-employee strikes are illegal in Oklahoma.) Ironically, the state’s teachers had won much of what they wanted before the walkout even began. On Friday, March 23, the Oklahoma Education Association (OEA), the state’s largest teachers union, issued an ambitious list of demands: a $10,000 pay raise for teachers; $5,000 raise for school-support personnel; $200 million over three years in additional local-school funding; a 5 percent cost-of-living increase for retirees; and $500 million over three years to “fully staff state agencies” and raise state employee pay by $7,500 a year. In OEA’s estimation, this total package would cost more than $1.4 billion over three years. In response, on Thursday, March 29 the Oklahoma legislature enacted a new teacher-pay scale that boosted average teacher pay by $6,100 — or 16 percent. This represented a remarkable win for teachers: In 2016, Oklahoma’s average teacher salary of $45,276 ranked 49th nationally, according to the National Education Association (NEA). The raise was funded via new taxes on gas, tobacco, and oil production, along with a new limit on income-tax deductions. Yet, teachers were not placated — and on Monday, April 2, they started the walkout. The next day, Oklahoma Governor Mary Fallin signed a $2.9 billion appropriations bill for education funding in fiscal year 2019 — a 19.7 percent boost in spending over the current fiscal year, which ends June 30. The legislation includes $353.5 million for teacher pay (funding the $6,100 average raise); $52 million for support personnel pay; $50 million for textbooks and general state aid; and $24.7 million for health-care benefits. Fallin signed additional legislation providing a $1,250 annual pay bump for school-support personnel and tiered raises for state employees ranging from $750 to $2,000.

    Unions seek to hijack, shut down Oklahoma teachers strike as support for expanded struggle grows - As the strike by tens of thousands of Oklahoma teachers and support staff enters its second week, workers face a critical crossroads. While teachers are determined to expand the fight in defense of public education, the unions are doing everything they can to hijack the struggle, shut it down, and impose a sellout.The courageous stand taken by educators, following the nine-day strike in West Virginia, has won widespread support in the working class across the United States and internationally. It takes place amidst a resurgence of class struggle throughout the world.The strike was initiated and driven by teachers, who have resisted the efforts by the unions—the American Federation of Teachers (AFT) and the National Education Association (NEA)—to end the strike without addressing teachers’ main demands.Now, the unions hope to shut down the strike with minor additions to the rotten bipartisan deal—initially hailed by the unions as “historic”—that teachers already overwhelmingly rejected on March 29 in pushing to strike. These would provide a few tens of millions of dollars in school funding, which will be paid for through regressive taxes that will hit the working class hardest, including the legalization of “ball and dice” casino gambling.The unions have dropped any reference to the workers’ demands for a $10,000 pay raise for teachers, $5,000 for school support staff, and at least $200 million in additional funding. Instead, Oklahoma Education Association (OEA) president Alicia Priest indicated on Friday that the OEA has backtracked even from the “bottom line” it previously set to end the strike, including repeal of a capital gains tax cut.

    Mass turnout at state capitol as Oklahoma teachers’ strike enters second week --In one of the largest turnouts since the statewide strike by Oklahoma teachers began on April 2, thousands of educators and their supporters protested inside and outside the state capitol in Oklahoma City Monday, as the walkout by nearly 40,000 teachers began its second week.The Tulsa World, which wrote that there was “no end in sight” for the strike, reported that the walkout had shut down school districts serving at least 500,000 of the state’s 700,000 public school students on Monday. Scores of districts, including Oklahoma City, have announced that schools will also be closed at least through Tuesday because of the walkout.Despite efforts by the unions to wear down strikers by isolating their struggle and limiting it to impotent appeals to a hostile state legislature, teachers have remained resolute in their demand for a $10,000 pay increase and restoration of school funding to pre-2008 levels. The strike was launched after teachers rejected a last-minute deal, hailed as “historic” by the unions, that would have left the state still near the bottom in terms of teacher pay and per-pupil spending.Thousands of teachers marched the 14 miles from the Oklahoma City suburb of Edmond to the state capitol Monday, while a delegation of teachers from Tusla continued their 110-mile trek to the capitol. Daisy, who teaches in Edmond, told the World Socialist Web Site, “There were way more people than have ever been here since it started. We have to stand strong. We walked today with my colleagues, teachers and community members. There were more than 1,400 people who marched.” While the unions have promoted state Democrats as the champions of public education, the school crisis in Oklahoma, like the rest of the country, is the product of a bipartisan assault on public education by both big-business parties. School funding has been reduced by 30 percent over the past decade, even as Republican Governor Mary Fallin and her Democratic predecessor, Brad Henry, slashed taxes on the oil and gas industry and cut income and capital gains taxes for the richest state residents.

    Oklahoma teachers’ strike continues as governor rejects funding demands - The Republican governor and state legislature in Oklahoma have refused to budge on any new school funding measures as the strike by tens of thousands of teachers enters its eighth day today. Nearly 40,000 educators in the southwestern state walked out on April 2 to demand a $10,000 raise and the restoration of school funding, which has been cut by nearly 30 percent over the last decade.After more than a week of mass protests inside and outside the state capitol in Oklahoma City, Governor Mary Fallin signed a bill Tuesday repealing a $5 hotel/motel tax. The Oklahoma Education Association (OEA) had called on Fallin to maintain the tax as part of funding proposal that the union said would be enough to end the strike. Republican leaders of the state House of Representatives have also rejected out-of-hand the OEA’s proposal to remove reductions on capital gains taxes, saying they would not even hear a bill before the legislature adjourns on May 25.The OEA has sought to hijack the powerful strike by Oklahoma educators and shut it down based on maneuvers with state Democrats and Republicans to add approximately $50 million to a spending bill. The was rejected as wholly inadequate by teachers who face not only near poverty wages, but overcrowded classrooms and a chronic shortage of supplies. Teachers want at least $200 million in additional funding and a $5,000 raise for the even more poorly paid school aides and other support staff. Ignoring the demands of striking teachers, OEA President Alicia Priest reiterated that the union would call the strike off if the governor and state legislature came up with $50 million more. “They’ve passed $456 million. We’ve asked for $506 million in the first year. And when you do the math, that does break down to $50-million,” Priest told local media outlet News 9 Tuesday. “So, we’re 90 percent of the way there.” Referring to the rejection of the unions’ proposals, Priest added, “That’s just one route on a roadmap to get to a final destination. There are many other routes to get there.”

    Oklahoma teachers denounce Oklahoma Education Association’s move to end strike -- Oklahoma teachers voiced their anger and determination to continue their more than a week-and-a-half long strike following a back-to-work order announced by Oklahoma Education Association (OEA) President Alicia Priest Thursday afternoon. Teachers have been on strike since the beginning of April, demanding a $10,000 pay increase and the restoration of a decade of funding cuts. Educators have been using social media to organize protests and walkouts in defiance of the unions, which have sought to head off the insurgent movement at every opportunity by cutting backroom deals with Republican Governor Mary Fallin and the Democrats and Republicans in the state legislature.  In signs of opposition to the unions’ efforts to wind down the strike, students and teachers at Moore Public Schools walked out Thursday after being called back to work. Schools in Oklahoma City are scheduled to reopen on Monday, and Tulsa schools are set be back in session on Tuesday. Smaller school districts across the state have already returned to regularly scheduled classes. In response to the fraudulent claim by Priest that 70 percent of teachers want to end the walkout, teachers posted on social media insisting that this was not true. “As an OEA member, I didn’t get a poll,” said Gabrielle. “I got a survey from the NEA how the OEA is representing us. I was never asked in the last 24 hours whether or not the walkout should continue. And that really upsets me…. So I won’t be at school Monday or on Tuesday. I’ll be at the Capitol because the fight is not up.”

    Behind Oklahoma's teacher strike: years of tax cuts and an energy slump - - Thousands of Oklahoma teachers this week poured into the state capitol in a second week of a strike for more school funding and higher pay.The strikes have their origin in more than a decade of tax cuts spearheaded by some Democrats and Republican legislators, as well as a downturn in global energy prices. Oklahoma is one of the nation's five largest producers of crude oil, and the energy sector accounts directly or indirectly for about one quarter of its jobs, according to at least one estimate.The one-two punch of tax breaks and falling energy prices has triggered a series of a state budget crises over the past four years, forcing lawmakers to scramble for emergency revenue measures and reducing the pay of Oklahoma teachers to the second-lowest level of any state in the country, with an annual average of $45,276. About a decade ago, Oklahoma drew about an average amount of tax revenue per resident, compared with the rest of the country. But because of a series of budget cuts starting in 2005, tax holidays for the energy sector and the drop in global energy prices, the state now ranks 44th of the 50 states on this metric. “Some states, like Kansas, just jumped right off the revenue cliff,” said David Blatt, who runs the Oklahoma Policy Institute, a think tank. “But we've been slowly sliding down the mountain.”Oklahoma has seen the steepest cuts to per-pupil school funding over the last decade, according to the Center on Budget and Policy Priorities, a left-leaning think tank. Oklahoma has cut its per-student funding by 28 percent over the last 10 years, adjusted for inflation. The only other state that comes close to that reduction is Texas, which has had a 16 percent decline in per-pupil funding since 2008. (These numbers do not account for Oklahoma's teacher pay increase approved this March.)

    Striking Teachers in Coal and Gas Country Are Forcing States to Rethink Energy Company Giveaways - Like most billionaires, Oklahoma oilman Harold Hamm is not accustomed to doing things for himself. For that, there are people: people to drill wells, people to clean up after him, people to drive him from here to there, and — almost certainly — people to write laws.  For years, those laws did well by him. Oklahoma’s gross production tax — the levy applied to fossil fuel extracted from the ground — was set at 2 percent for the first three years of a well’s production, giving it the the lowest effective tax rate on oil and gas of any major producing state as of 2017.  As teacher unrest spread from West Virginia to Kentucky to Oklahoma, educators in the Sooner State began to zero in on the tax breaks for oil and gas producers, arguing that teacher salaries and school spending could be lifted with a modest boost in the tax.   So, Hamm took matters into his own hands, showing up personally at the Capitol as the state legislature debated raising the rate from 2 to 5 percent.  Raising taxes in Oklahoma requires a three-quarters majority, yet with Hamm looking down from the gallery on his people in the Capitol, they defied him.  Hamm would have to pay up to help the teachers get a $6,000 raise — an amount the teachers themselves, among the lowest paid in the nation, deemed insufficient to solve the state’s education funding crisis. As of Wednesday, they’re in their 10th day on strike.  As in West Virginia and Kentucky, the fight over public funding for basic needs is inextricably linked to the politics of energy in Oklahoma.

    Oklahoma walkout in danger as Arizona, Kentucky teachers press for strike action - The powerful strike by Oklahoma teachers, now in its ninth day, is in danger of being betrayed and shut down by the unions before teachers win their demands for a $10,000 pay increase and the restoration of school funding cuts over the last decade.  Rank-and-file teachers denounced the Oklahoma Education Association (OEA) for collaborating with school officials and the media to encourage a back-to-work movement to end the strike. “OEA circulated fliers today saying we are at 95 percent of our demands, which is not true,” Ashley, a teacher from Norman, Oklahoma told the World Socialist Web Site Teacher Newsletter. “They are ready for it to end, the teachers are not,” she said. From the beginning, the OEA and the smaller Oklahoma City American Federation of Teachers (AFT) opposed the strike, which only occurred because tens of thousands of rank-and-file teachers pushed for it on social media after the nine-day strike by West Virginia teachers. In a last-minute effort to prevent the walkout, the unions hailed as “historic” an insulting pay and funding bill, passed by Democrats and Republicans, which would have left the state still near the bottom in the US in terms of teacher pay and school funding. While thousands of teachers, students and their supporters from all over the state have repeatedly turned up at the capitol in Oklahoma City, the unions have sought to wear them down by encouraging false hopes that they could obtain increased funding by appealing to the governor and state legislature. Predictably, Republican Governor Mary Fallin and the state legislators have refused to do so.  After Fallin repealed a motel/hotel tax Tuesday and said she would not even entertain overturning a reduction in capital gains taxes, OEA President Alicia Priest dropped those demands as the prerequisite to end the strike, and said that the only way to improve education was to vote for the Democrats in November. Then on Tuesday OEA functionaries circulated a leaflet to protesters at the state capitol announcing that virtually all of its demands had been met.

    Nashville parents, teachers and students decry public school cuts - Public schools in Nashville, Tennessee face proposed cuts to free food programs and elimination of funding for schools with impoverished students, while teachers have seen a paltry 2 percent raise in a city which experienced the greatest one-year jump in the cost of homes of any municipality in the nation.Teachers, backed by many parents, packed a recent school board meeting to complain of proposed cuts to remedial reading programs and a “robbing Peter to pay Paul” strategy of shifting Title 1 funds from 49 schools with less than 75 percent of its students impoverished to 87 schools with a poverty rates of 75-100 percent among students. The previous threshold was 50 percent.Title 1 is a federal program enacted in 1965 to provide federal funding assistance for schools with low-income students.There is also a proposal to begin charging for pre-kindergarten education.Another parent told the board she and her husband were teachers and with both their salaries they made too much for assistance, making it impossible for them to afford the pre-K fees for one child “except by living from paycheck to paycheck.”This teacher echoed the stories of teachers in Arizona and Oklahoma holding second jobs like driving for Uber or Lyft or having to give blood to pay for car repairs. The school system also announced that it will need to scale back use of a federal program providing free lunch to students. Currently the program provides free lunch to all students. Next year, however, the program will only be offered in 74 schools, and those needing assistance in the other 75 schools will have to file paperwork for free or reduced lunches.

    Revealed: Secret rightwing strategy to discredit teacher strikes - A nationwide network of rightwing thinktanks is launching a PR counteroffensive against the teachers’ strikes that are sweeping the country, circulating a “messaging guide” for anti-union activists that portrays the walkouts as harmful to low-income parents and their children. The new rightwing strategy to discredit the strikes that have erupted in protest against cuts in education funding and poor teacher pay is contained in a three-page document obtained by the Guardian. Titled “How to talk about teacher strikes”, it provides a “dos and don’ts” manual for how to smear the strikers. Top of the list of talking points is the claim that “teacher strikes hurt kids and low-income families”. It advises anti-union campaigners to argue that “it’s unfortunate that teachers are protesting low wages by punishing other low-wage parents and their children.” The “messaging guide” is the brainchild of the State Policy Network (SPN), an alliance of 66 rightwing “ideas factories” that span every state in the nation. SPN uses its $80m war chest – funded by billionaire super-donors such as the Koch brothers and the Walton Family Foundation that flows from the Walmart fortune – to coordinate conservative strategy across the country. Another financial backer of SPN is the billionaire DeVos family of the Amway empire. Betsy DeVos is the current education secretary in the Trump administration. SPN’s previous campaigns have included a plan to “defund and defang” public sector unions. Now it is turning its firepower on the striking teachers. 

    Portion of Redacted Harvard Admissions Data Will Become Public - A small, redacted portion of more than 90,000 pages of Harvard admissions documents—including applicants’ files and internal correspondence between admissions officers—will become public information in coming months after a judge’s ruling in a lawsuit against Harvard Tuesday.At an April 10 hearing at the U.S. District Court in Boston, Judge Allison D. Burroughs ruled that, within the next two months, lawyers for Harvard University and advocacy group Students for Fair Admissions must file two near-identical sets of previously confidential Harvard admissions documents—one unredacted set to be filed under seal and one redacted version of the set to be filed publicly. These filings could total thousands of pages but will only comprise "a small fraction" of the 90,000 total pages of documents designated as "Confidential" or "Highly Confidential" that the University has given over as part of the ongoing lawsuit, according to a filing made by Harvard lawyers last week. Nonetheless, most of the confidential information related to Harvard's admissions will not be contained in these filings. If the case goes forward, much of that information could become public at a later trial.

    Is This the Hardest Course in the Humanities? - For most of my professional life, the future of the humanities was a conceptual matter. That’s no longer the case. When enrollments are down, majors are down, funding and jobs are down, adjuncts are up, and departments are being closed, abstract debates over which new theory or interdisciplinary vision is on the rise don’t much count. When a formation as renowned as the Humanities Center at the Johns Hopkins University is proposed for shutdown (it later was saved in modified form), we know that the prosperity of the humanities doesn’t rest with people at the top. No, it depends on the people at the bottom, undergraduates who vote with their feet. If an English department’s chairman tells the dean, "We’ve got to hire someone in this new area of ____," the dean replies, "But you can’t even get your existing courses half-filled." If, however, a parent calls and grumbles, "I’m paying lots of money, and my daughter can’t get into any of the English classes she wants," well, that calls for action.It’s a situation that few humanities professors are equipped to overcome. Graduate school and assistant professorships don’t impel you to attract freshmen and sophomores. Instead you learn how to impress senior professors. But right now, nothing is more crucial than the preferences of 19-year-olds.The measure of success for the humanities: Do undergraduates want to come? And as humanities enrollments have slipped, in some places precipitously, instructors have felt pressure to make their courses more relevant and less rigorous. The typical student searching for a course of study won’t be attracted by syllabi filled with old plays and 400 pages of reading each week. Contemporary and multicultural materials, more media, less reading and fewer writing assignments, and definitely no poetry — that’s the prescription for building enrollments.

    Hunger And Homelessness Are Widespread Among College Students, Study Finds  --As college students grapple with the rising costs of classes and books, mortgaging their futures with student loans in exchange for a diploma they're gambling will someday pay off, it turns out many of them are in great financial peril in the present, too. More than a third of college students don't always have enough to eat and they lack stable housing, according to a survey published Tuesday by researchers at Temple University and the Wisconsin HOPE Lab.Overall the study concluded 36 percent of college students say they are food insecure. Another 36 percent say they are housing insecure, while 9 percent report being homeless. The results are largely the same as last year's survey, which included fewer students. The 2018 numbers are even higher when broken out to include only community college students. Forty-two percent indicated they struggled the most to get adequate food, as measured by the researchers' scale. Nine percent said they had gone at least one day during the last month without eating because they lacked the money. And 46 percent said they had difficulty paying for housing and utilities.Sara Goldrick-Rab, professor of higher-education policy at Temple University and the lead author of the report for the past three years, told NPR that while conditions remain dire for students from low-income families, the burden of covering these basic necessities is spreading into the middle class. For poor students, she said, "It really undermines their ability to do well in school. Their grades suffer, their test scores appear to be lower, and overall, their chances of graduating are slimmer. They can barely escape their conditions of poverty long enough to complete their degrees."

     Class-action lawsuit against student loan giant brings hope to borrowers in bankruptcy - A recent court ruling may offer hope for thousands of struggling borrowers looking to escape education-related debts. A Texas bankruptcy judge denied a request by student loan company, Navient, last month to dismiss a class-action lawsuit accusing the firm of illegally collecting on loans that were discharged in bankruptcy. Navient is appealing.Patricia Christel, a spokeswoman for the Navient, declined to comment on pending litigation, but noted in an email that the company supports reform “that would allow federal and private student loans to be dischargeable in bankruptcy for those who have made a good-faith effort to repay their student loans over a five-to-seven year period and who still experience financial difficulty.”The decision last month means the case can move forward and it also offers the opportunity for an appellate court to weigh in on whether loans historically viewed as exempt from bankruptcy discharge can actually be wiped away in the process.“This is one to watch for potential,” said John Rao, an attorney at the National Consumer Law Center and expert on consumer bankruptcies.The ruling comes as lawyers across the country are increasingly looking to challenge the conventional wisdom that any type of student loan isn’t dischargeable in bankruptcy. It also comes as the Department of Education is reviewing the high standard student loan borrowers must meet in order to have their debts discharged in bankruptcy.This case centers around a very specific type of debt — and a small share of Navient’s private loan portfolio — money loaned to borrowers to pay for unaccredited programs, such as bar exam study courses and K-12 educational expenses. The lawyers representing the class estimate that about 16,000 borrowers fall into this category, according to Austin Smith, one of those attorneys. But if the appellate court rules in favor of the plaintiffs that could indicate that borrowers with similar loans from other companies could also be entitled to relief. “If I were advising other companies who have these loans and have taken similar positions as Navient — I would be worried,” said Dalié Jiménez, a professor of law at the University of California-Irvine’s School of Law.

    States have a $1.4 trillion pension problem: In most states, public pension funds don't have enough money to pay for benefits they've promised to government workers. The problem is getting worse. Overall, the shortfall across states grew by $295 billion between 2015 and 2016, according to a new report from The Pew Charitable Trusts. All together, state pension plans had just $2.6 trillion to cover a cumulative liability of $4 trillion. "Many state retirement systems are on an unsustainable course," the report said. Colorado, Connecticut, Illinois, Kentucky, and New Jersey have less than half of the assets needed to pay promised benefits and another 17 states have less than two-thirds. One driver of the growing shortfall was the low investment return in 2016. The median return was 1%, while states had projected a 7.5% return. But the gap can't be blamed on the stock market entirely. Many states simply don't contribute enough money. Twenty-three states still would have fallen short of what they needed even if their investment assumptions had been correct in 2016, according to the report.There's no one-size-fits all approach to fix the pension problem. States with well-funded plans vary in the benefits they offer, investment choices, and assumptions they use to determine how much they need to contribute. 

    More US states imposing Medicaid work requirements - With little attention from the media or the Democratic Party, the Trump administration and state governments are carrying out a ruthless campaign against Medicaid, the insurance program for the poor, disabled and elderly that is jointly administered by the federal government and the states. More than 75 million Americans are currently covered by Medicaid and the Children’s Health Insurance Program (CHIP).   US Supreme Court decision ruled that the ACA’s individual mandate, which requires those without insurance to purchase private health insurance or pay a penalty, was constitutional, but left it up to the states to decide whether or not to expand Medicaid. To date, 32 states and the District of Columbia have expanded the program, while 18 states, mostly led by Republicans in the South and Midwest, have not.Some Republican-controlled states are now considering expanding Medicaid, but these moves come with attached stipulations, such as work requirements, aimed at limiting b  enefits and forcing recipients off of the rolls. The Trump administration’s Centers for Medicare and Medicaid Services (CMS) in January 2017 announced that it would allow states to impose work requirements.  On Tuesday, Trump took his crusade for work requirements one step further. He issued an executive order to six government departments to review all public assistance programs, with the aim of determining which programs currently have work requirements attached to them. Cabinet secretaries are required to issue reports listing programs to be eliminated and new restrictions to be imposed. A new report from the Center on Budget and Policy Priorities (CBPP) reveals that even people who work will be at serious risk of losing their health insurance under the new Medicaid work requirements. The analysis concludes that a significant number of poorer people on Medicaid who are regularly working might not meet the strict requirements imposed on them. By the CBPP’s estimate, one in four people who worked enough hours over the course of the year to meet the work requirements in Kentucky, the first state to impose them, would have at least one month in which they fell below the state’s 80-hour monthly work requirement, therefore putting them at risk of losing coverage. People working lower-wage jobs are more likely to have irregular working hours and gaps in their employment.

    Goldman Sachs: Curing Patients’ Illnesses Is Bad for Business - In a recent report for its biotech clients, investment bank Goldman Sachs frowned on a new type of genome therapy that could permanently cure disease. As CNBC originally reported, Goldman Sachs published a report on April 10 called “The Genome Revolution,” which evaluated the question, “Is curing patients a sustainable business model?” Analyst Salveen Richter explained that new forms of long-term cures involving gene therapy may be good for humanity, but bad for capitalism. “The potential to deliver “one shot cures” is one of the most attractive aspects of gene therapy, genetically engineered cell therapy, and gene editing. However, such treatments offer a very different outlook with regard to recurring revenue versus chronic therapies,” Richter wrote. “While this proposition carries tremendous value for patients and society, it could represent a challenge for genome medicine developers looking for sustained cash flow.” In the report, Goldman Sachs pointed to pharmaceutical giant Gilead Sciences, which makes Harvoni — a hepatitis C treatment. Harvoni has been proven to be especially effective in curing hepatitis C, particularly with patients who have cirrhosis, curing 92 to 100 percent of patients according to MedPage Today. Gilead’s sales peaked at around $12.5 billion in 2015, but due to patients being cured and no longer needing the treatment, sales are expected to be just under $4 billion in 2018. “[Gilead] is a case in point, where the success of its hepatitis C franchise has gradually exhausted the available pool of treatable patients,” the report read. “In the case of infectious diseases such as hepatitis C, curing existing patients also decreases the number of carriers able to transmit the virus to new patients, thus the incident pool also declines … Where an incident pool remains stable (eg, in cancer) the potential for a cure poses less risk to the sustainability of a franchise.”

    California bill would create health care price controls — California's government would set prices for hospital stays, doctor visits and other health care services under legislation introduced Monday, vastly remaking the industry in a bid to lower health care costs. The proposal, which drew swift opposition from the health care industry, comes amid a fierce debate in California as activists on the left push aggressively for a system that would provide government-funded insurance for everyone in the state. Across the country, rising health care costs have put the industry, lawmaker and employers and consumers at odds. The proposal in California would affect private health plans, including those offered by employers and purchased by individuals. A nine-member commission appointed by the governor and legislative leaders would set prices for everything from a physical exam to an allergy test to heart bypass surgery. No other state has such a requirement. "If we do not act now, I'm concerned that health care prices will become unsustainable," Assemblyman Ash Kalra, a freshman Democrat from San Jose who wrote the legislation, said in a news conference in Sacramento. The measure faces an uphill battle in the Legislature, where lawmakers are generally cautious about making drastic changes to the health care system and are already juggling a wide range of ambitious proposals. The proposal is backed by influential unions including the Service Employees International Union, Unite Here and the Teamsters. The unions are frustrated that health care costs are gobbling an increasing share of employee compensation. "Every dollar that we spend on rising health care prices is a dollar that comes out of a worker's pocket," said Sara Flocks, policy coordinator for the California Labor Federation, a union coalition. "This is something that is eating up our wages and it is increasing income inequality. This is a fundamental question of fairness." Health care providers say price controls would encourage doctors to move out of state or retire, making it harder for people to see a physician when they're sick, and force hospitals to lay off staff or, in some cases, close their doors.  

    Opioid Lawsuits: DoJ Seeks to Participate in Settlement Talks -- Jerri-lynn Scofield -  The Washington Post ran a long feature yesterday, As the opioid epidemic rages, the fight against addiction moves to an Ohio courtroom, discussing the role of ongoing litigation in assigning blame and assessing damages for  the opioid crisis.  Multiple lawsuits seek to hold pharma companies and other defendants accountable for the costs and consequences of the opioid epidemic. Unsurprisingly, given the scale of the crisis, there are numerous deep-pocketed targets. These lawsuits have been filed by the Department of Justice (DoJ); state attorneys general; and plaintiffs’ attorneys on behalf of cities, counties, local municipalities and Indian tribes. In this post, I’ll focus on this third category.  Contrary to a bizarre claim in the Post piece that claims multi-district litigation (MDL) actions are rare, it’s not out of the ordinary  for lawsuits that involve multiple plaintiffs, located in many jurisdictions that consider common issues, to be consolidated in one federal lawsuit, before one judge. The MDL procedure  is intended to increase efficiency, lower costs, and forestall multiple lawsuits throughout the country from resulting in  numerous contradictory outcomes. In the opioid action, more than 400 lawsuits have been consolidated into an MDL before federal district court judge Dan Polster who sits in the northern district of Ohio. Judge Polster has pressed the parties to concentrate on achieving a rapid settlement of these claims, rather than engaging in interminable litigation.  As the New York Times reported in March, in Can This Judge Solve the Opioid Crisis?: During the first hearing in the case, in early January, the judge informed lawyers that he intended to dispense with legal norms like discovery and would not preside over years of “unraveling complicated conspiracy theories.” Then he ordered them to prepare for settlement discussions immediately. Polster believes that once necessary preliminary fact gathering and theory formulation has occurred, as litigation proceeds,  it yields diminishing returns, and thus, the parties should move to resolve their dispute as quickly as possible. He believes that when parties have gotten this far down the road in a lawsuit, they already have at least 80 percent of the information they need to negotiate; the longer litigation continues, he said he has found, the more entrenched each side can become.   Although not a party to any of the MDL lawsuits before Judge Polster, the DoJ on 2nd April filed a motion seeking to involve itself in settlement negotiations, as summarized in  this Wall Street Journal account,  Justice Department Asks to Join Opioid Settlement Talks:

    How the Reformulation of OxyContin Ignited the Heroin Epidemic - NBER - We attribute the recent quadrupling of heroin death rates to the August, 2010 reformulation of an oft-abused prescription opioid, OxyContin. The new abuse-deterrent formulation led many consumers to substitute to an inexpensive alternative, heroin. Using structural break techniques and variation in substitution risk, we find that opioid consumption stops rising in August, 2010, heroin deaths begin climbing the following month, and growth in heroin deaths was greater in areas with greater pre-reformulation access to heroin and opioids. The reformulation did not generate a reduction in combined heroin and opioid mortality—each prevented opioid death was replaced with a heroin death.

     Older Americans Are Hooked On Vitamins Despite Scarce Evidence They Work - More than half of Americans take vitamin supplements, including 68 percent of those age 65 and older, according to a 2013 Gallup poll. Among older adults, 29 percent take four or more supplements of any kind, according to a Journal of Nutrition study published in 2017.Often, preliminary studies fuel irrational exuberance about a promising dietary supplement, leading millions of people to buy in to the trend. Many never stop. They continue even though more rigorous studies — which can take many years to complete — almost never find that vitamins prevent disease, and in some cases cause harm. “The enthusiasm does tend to outpace the evidence,” said Dr. JoAnn Manson, chief of preventive medicine at Boston’s Brigham and Women’s Hospital.  There’s no conclusive evidence that dietary supplements prevent chronic disease in the average American, Manson said. And while a handful of vitamin and mineral studies have had positive results, those findings haven’t been strong enough to recommend supplements to the general U.S. public, she said. The National Institutes of Health has spent more than $2.4 billion since 1999 studying vitamins and minerals. Yet for “all the research we’ve done, we don’t have much to show for it,” said Dr. Barnett Kramer, director of cancer prevention at the National Cancer Institute.

    Drinking more than five glasses of wine a week could knock years off life, study suggests - Drinking six glasses of wine a week is too much despite government guidelines suggesting it is a safe limit, a major new study has found. Research from the University of Cambridge and the British Heart Foundation, which looked at 600,000 drinkers across the world, discovered that anything more than five glasses of wine, or pints of beer, is dangerous to health, and could be knocking years off a person’s lifespan. The authors calculated that having 10 or more drinks per week was associated with up to two years shorter life expectancy, which equates to losing 15 minutes of life for each unit above the safe amount, the equivalent of smoking a cigarette. Dr Angela Wood, from the University of Cambridge, lead author of the study said: “The key message of this research is that, if you already drink alcohol, drinking less may help you live longer and lower your risk of several cardiovascular conditions.” On the advice of Chief Medical Officer Dame Sally Davies, Britain lowered guidelines in 2016 recommending that both men and women should drink no more han 14 units of alcohol each week. Prior to that the men were advised no more than 28 units and women 21. Dame Sally Davies, the Chief Medical Officer advised that alcohol guidelines be lowered in 2016 Credit: Jonathan Brady PA However the new study suggests the upper safe limit of drinking was about five drinks per week, the equivalent of 12.5 units or just over five pints of four per cent beer, or five 175ml glasses of 13 per cent wine. The researchers found that drinking more than that was associated with a higher risk of stroke, heart failure, fatal aneurysms and fatal hypertensive disease. It challenges the widely held belief that moderate drinking is beneficial to cardiovascular health. 

    Hot-air dryers suck in nasty bathroom bacteria and shoot them at your hands - Washing your grubby mitts is one of the all-time best ways to cut your chances of getting sick and spreading harmful germs to others. But using the hot-air dryers common in bathrooms can undo that handy hygienic work. Hot-air dryers suck in bacteria and hardy bacterial spores loitering in the bathroom—perhaps launched into the air by whooshing toilet flushes—and fire them directly at your freshly cleaned hands, according to a study published in the April issue of Applied and Environmental Microbiology. The authors of the study, led by researchers at the University of Connecticut, found that adding HEPA filters to the dryers can reduce germ-spewing four-fold. However, the data hints that places like infectious disease research facilities and healthcare settings may just want to ditch the dryers and turn to trusty towels. Indeed, in the wake of the blustery study—which took place in research facility bathrooms around UConn—"paper towel dispensers have recently been added to all 36 bathrooms in basic science research areas in the UConn School of Medicine surveyed in the current study,” the authors note.

    MIT severs ties to company promoting fatal brain uploading - The MIT Media Lab will sever ties with a brain-embalming company that promoted euthanasia to people hoping for digital immortality through “brain uploads.”  The startup, called Nectome, had raised more than $200,000 in deposits from people hoping to have their brains stored in an end-of-life procedure similar to physician-assisted suicide.  MIT’s connection to the company came into question after MIT Technology Review detailed Nectome’s promotion of its “100 percent fatal” technology. Under a subcontract, MIT was receiving approximately $300,000 from a federal grant won by Nectome to develop methods of brain preservation and analysis. According to an April 2 statement, MIT will terminate Nectome's research contract with Media Lab professor and neuroscientist Edward Boyden. MIT’s connection to the company drew sharp criticism from some neuroscientists, who say brain uploading isn’t possible. “Fundamentally, the company is based on a proposition that is just false. It is something that just can’t happen,” says Sten Linnarsson of the Karolinska Institute in Sweden. He adds that by collaborating with Nectome, MIT had lent credibility to the startup and increased the chance that “some people actually kill themselves to donate their brains.” “It is so unethical—I can’t describe how unethical it is,” says Linnarsson. “That is just not something we do in medical research.”

     Ditch trade deal with Trump rather than accept chlorinated chicken, Britons say - The British public are overwhelmingly willing to ditch plans for a post-Brexit trade deal with the United States in order to protect the UK’s high food safety standards, new polling seen by The Independent shows.The finding amounts to a public vote of no confidence in Theresa May’s Brexit trade strategy, which aims to paper-over a potential hit to EU commerce by having “global Britain” sign deals with other countries around the world – the richest of which is the US.  American trade negotiators are expected to demand Britain opens its markets to US foodstuffs that are currently illegal under EU rules as the price of a free trade agreement. Practices banned in the EU but currently widespread in the US including chlorine-washed chickens, hormone-treated beef, meat from animals fed on chicken faeces and crops washed with controversial herbicide chemicals.  A recent US trade department appraisal of EU safety regulations complained of “costly and burdensome” stipulations in European regulations on meat and described aspects of the EU’s regulations on the use of chemicals as “simply unnecessary”. When asked whether ditching current standards would be a price worth paying for a deal, a full 82 per cent of the public said keeping current regulations in place should take priority – even if they killed a deal – compared to just 8 per cent who said a free trade agreement with the US should go ahead. Theresa May’s trade chief, Liam Fox, has defended the possible legalisation of banned US agricultural practices, telling MPs that he was “a great believer in giving the public a choice over what they are eating” and that “there are no health reasons why you couldn’t eat chickens that have been washed in chlorinated water”.

    The $66 billion Bayer-Monsanto merger just got a major green light — but farmers are terrified -- A blockbuster deal between Bayer and Monsanto appears to be moving ahead.On Monday, the US Department of Justice approved the German pharmaceutical and chemical group's bid to buy the US seed giant for more than $60 billion, The Wall Street Journal reported. Bayer agreed to sell off additional assets to alleviate anti-trust concerns.  The two companies first announced the potential deal in September 2016, saying the move would boost agriculture research and innovation. "The whole point here is that the business combination between Monsanto and Bayer will allow the companies to invest in and create more innovation, and it's going to take a huge amount of innovation in order to double the world's food supply." Farmers aren't so sure. "From my perspective, they're saying the exact opposite of what most people in the industry actually believe," Clay Govier, a farmer in central Nebraska, told Business Insider in January 2017. Govier is the fifth generation to work on his family farm of 3,000 acres, which primarily grows corn and soybeans. The farm has used Monsanto products for at least 12 years, and Govier's family expects seed and chemical prices to increase due to the merger. That could put many small family farms in tough positions.  According to the US Department of Agriculture, farm production in the US has consistently shifted away from smaller farms, to larger ones. With the increasing consolidation of the agriculture supply industry (Monsanto-Bayer is the biggest of three major mergers — preceded by Dow-DuPont and Syngenta-ChemChina), Govier doesn't expect things to get easier anytime soon.

     'Merger From Hell' Reportedly Approved by DOJ, Pushing Agrichemical Chokehold on Food System - Watchdog groups sounded alarms on Monday after the Wall Street Journal reported that the proposed mega-merger of Bayer and Monsanto has cleared its final regulatory hurdle in the U.S. The reported approval from the Justice Department came "after the companies pledged to sell off additional assets," the Journal reported, and despite concerns raised by hundreds of food and farm groups. It also comes weeks after the European Commission gave its thumbs up."The approval of the third supersized seed merger, after ChemChina-Syngenta and Dow-DuPont," said Wenonah Hauter, executive director of Food & Water Watch , "leaves farmers vulnerable to price gouging for seeds and other supplies and strengthens the hold a few dominant corporations have over the entire food system." "The Justice Department's rubber stamping of these three seed mega-mergers transforms the already concentrated agrichemical and seed market, effectively reducing the number of competitors from six to three," she added. Because it will make it harder for farmers to acquire non-genetically modified seeds to plant, it "makes it harder for agriculture to get off the GMO -chemical treadmill that just keeps increasing in speed," she said.

    Environmentalists and Farmers Seek Court Decision Halting Use of Dow’s 'Agent Orange' Pesticide -  Late Wednesday, a coalition of environmental organizations and farmers represented by the Center for Food Safety (CFS) and Earthjustice filed new legal papers in federal court seeking the reversal of Scott Pruitt and the Trump Environmental Protection Agency's (EPA) approval of Dow Chemical's toxic pesticide, Enlist Duo . The novel pesticide is a combination of glyphosate and 2,4-D, to be sprayed over the top of corn, cotton and soybeans that are genetically engineered by Dow with resistance to both pesticides.  "Our filing reveals that EPA approved Enlist Duo despite its significant harms to health, environment, farms, water, and endangered species," said Sylvia Wu, CFS attorney and counsel for the coalition. "EPA's job is protecting the environment, human health, and farmers, not blindly do the bidding of pesticide companies. The court must stop its use."In early 2017, EPA dramatically expanded approval of Enlist Duo use to 34 states and for use on cotton, only one year after a court sent back EPA's previous approval . The two chemicals in Enlist Duo do more damage when used together than the net damage they do when used separately. Dow markets Enlist Duo and its companion Enlist crops as a quick fix for the "superweeds" epidemic created by prior genetically engineered "Roundup Ready" crops, genetically engineered to withstand what would otherwise be a toxic dose of the herbicide glyphosate, the active ingredient in Monsanto's Roundup. Repeated use of Roundup on these crops has resulted in the proliferation of glyphosate-resistant superweeds which now infest over a hundred million acres of U.S. farmland. These superweeds now require an even more toxic combination of herbicides, like Enlist Duo, to take them out, driving a dangerous spiral of increasing weed resistance and pesticide use.

    Report: Monsanto May Leave India After Losing GMO Cotton Patent - On Wednesday, the Delhi High Court ruled that the biotech giant cannot claim patents for Bollgard and Bollgard II, its genetically modified cotton seeds, in the country. Citing India's Patents Act of 1970, the court said that plant varieties and seeds cannot be patented, thereby rejecting Monsanto's attempt to block its Indian licensee, Nuziveedu Seeds Ltd., from selling the seeds. "What it means is effectively Monsanto has no patent on seeds in India and they have never had it. They have tried to hoodwink the seed companies and farmers for years claiming they have a patent and making huge amounts of money from that," Diya Kapur, a lawyer for Nuziveedu Seeds, told Bloomberg . As Dilsher Dhillon wrote in Business Insider India , Wednesday's verdict could prompt Monsanto to pull out of the country: With the latest ruling, Monsanto's claims against Nuziveedu for unpaid royalties have been waived because its patents are invalid. It will now have to settle for the rates decided by the government. This is a significant blow for Monsanto, the world's largest seed producer, as it currently licenses its seeds to nearly 50 domestic companies through its local joint venture with Mahyco Seeds Ltd. It could, in all probability, lead to the company's complete exit from India.  Monsanto had already threatened to stop business in India after the government imposed price controls on cotton seeds in 2016.

    Look Only at What The System Does (Pesticides and Bees) --The goal of technocracy in general and its agricultural manifestation in particular is to replace all natural processes with technospheric ones. Soil ecosystems and the ecological cycles of carbon and nitrogen are wiped out and replaced by synthetic fertilizer. The balancing of “pest” insects and “weeds” within a biodiverse ecology is wiped out and replaced by pesticides. Diverse and resilient landrace and heirloom genetics are wiped out and replaced by the hyper-narrowed genetics of hybrids and genetic engineering, eventually by synthetic genomes. Whole foods themselves are wiped out and replaced by manufactured calorie packs. Tang is indeed the quintessential “food” of this ideology.It follows that insect pollinators are to be wiped out and replaced by synthetic modes of pollination. When we understand technocracy’s goals this way, we understand why the system continues its drive to maximize pesticides in spite of the proof going back to the 1940s that pesticides kill and impair bees. Technocracy wants to wipe out bees, and no amount of rational argument about how suicidal this is for humanity will change this imperative, any more than rational argument works in the cases of soil health, pest control, genetic diversity. You want to know the truth? Never listen to what anyone who represents power says about what power wants to do. This is always a lie. Look only at what power consistently does. Look at the consistent results of this pattern of action, and then assume those results to be the real goals of the campaign.

    Drug Waste Flushed Into World's Freshwater Ecosystems to Rise 65% by 2050 - It's no surprise that chemicals can get flushed into our water supply from the pills we take. But as the world's population grows, the rampant consumption of pharmaceuticals has become an emerging threat to the world'sfreshwater ecosystems, researchers said.The research , presented at the European Geosciences Union General Assembly on Tuesday, warns that if no action is taken to mitigate the flow, the amount of drug waste entering waterways such as rivers and lakes could increase by 65 percent by 2050, endangering fish and other species' health. To develop a model showing global "hotspots" of water with high concentrations of pharmaceuticals, the researchers analyzed the global consumption of diclofenac, a common painkiller used by millions across the globe, and its occurrence in freshwaters.Diclofenac has been identified as an environmental threat by the European Union and the U.S. Environmental Protection Agency. Its use as a livestock drug has been linked to the collapse of vulture populations in South Asia. Scientists have also observed the anti-inflammatory drug bioaccumulating in fish in the Great Lakes, but its impact is unclear.According to the AFP's report on the new study, more than 10,000 kilometers (6,200 miles) of rivers around the world have concentrations of diclofenac above the EU "watch list" limit of 100 nanograms a liter. In the U.S., only half of the prescription drugs in sewage are removed by treatment plants. Contamination levels are higher in Latin American, African and Asian countries, where wastewater is not widely treated and filtering drugs can be technologically unavailable or expensive.

    Michigan Gov. Declares Flint Water Safe, Stops Free Bottled Water, But Residents Aren’t So Sure - Declaring Flint 's drinking water now safe, the Michigan government announced Friday that it would stop providing free bottled water to the city's residents, Reuters reported .   A statement from the office of Republican Governor Rick Snyder said that tests taken over the past two years had shown the water to be just as safe as or safer than the water of other Michigan cities.  "The scientific data now proves the water system is stable and the need for bottled water has ended," Snyder said in a statement reported by Reuters, adding that the water now meets national safety standards.  The Flint water crisis began in 2014 when the city switched its water source from Lake Huron to the Flint River in a money-saving move that ended up costing at least 12 lives by causing an outbreak of Legionnaires' disease.  The Flint River's more corrosive water also caused lead to leach from the pipes into the drinking supply, which is especially harmful for the cognitive development of children.  In January 2017, more than 1,700 Flint residents sued the U.S. Environmental Protection Agency ( EPA ) for damages, accusing the EPA of failing to inform them of the crisis and failing to force city and state officials to act.  Community members and advocates now say it is too early for the state to stop supplying bottled water. CNN reported that Dr. Mona Hanna-Attisha, one of the first to sound the alarm about the crisis when she noticed the rising lead levels in the blood of children she treated, tweeted disapproval. "This is wrong. Until all lead pipes are replaced, state should make available bottled water and filters to Flint residents," she wrote.  Michigan State Representative Sheldon Neeley, a Democrat whose district includes Flint, agreed, calling the decision cruel according to Reuters.

    Michigan governor ends state water distribution in Flint --  Hundreds of cars lined up at the four remaining water distribution centers in Flint, Michigan after Governor Rick Snyder announced last Friday that the state would cease distributing bottled water by Friday, April 13 or even sooner if remaining supplies run out.  To justify this latest provocation against the residents who have suffered from years of lead-poisoned water, Snyder said the latest tests by state Department of Environmental Quality (DEQ) show lead in water at the rate of 4 parts per billion (ppb), which is less than the 15 ppb considered an “action level” by the US Environmental Protection Agency’s Lead and Copper Rule. Scientists have said no amount of lead in water is safe.The DEQ, moreover, is the same agency that lied to the public, saying the water was safe to drink for more than a year even as residents complained and protested about foul-smelling and discolored water coming out of their taps. In effect, the Snyder administration is now saying to residents: “We don’t care if you trust your water or trust us. It’s time to pay up!”In a vote of no confidence, those residents who were able took their cars and lined up for the last remaining water bottles. Some of the backups at the distribution centers were almost a mile long. A YouTube video showed the vehicle line ups. “It’s a form of terrorism that they are carrying out,” longtime Flint resident Gladyes Williamson told the World Socialist Web Site. “They need to put someone in jail. They are terrorizing people with fear. People are waiting one, two or three hours just to get water.”

    Fear and Fury in Michigan Town Where Air Force Contaminated Water - Anthony Spaniola knew something was off with his town's water.   Until last summer Spaniola was concerned but didn't think the situation was out of control. Then he saw foam on Van Etten Lake. The unsightly ivory-colored meringue that rimmed the shore is a visible illustration of an ongoing national health and environmental disaster related to perfluorinated compounds. PFAS, as this group of chemicals is collectively called, are used to manufacture rain-repelling, stain-deflecting, heat-resisting consumer and industrial products like Teflon skillets, Gore-Tex jackets and fire retardants. There's a good chance that every home in America has products strengthened with one of the compounds. Some studies have found that over decades of low-level exposure in drinking water—in parts per trillion even—the chemicals are associated with a higher risk of kidney and testicular cancers, thyroid disease, high cholesterol, hormone disruption and other ailments. Developed for durability, they do not easily break down once set loose from the production line. In Oscoda the source of contamination is well documented. The chemicals are flowing underground, mostly unimpeded, from the former Wurtsmith Air Force Base where PFAS compounds, sprayed for decades during training exercises to extinguish petroleum fires, soaked into the groundwater. The closer regulators look, the more they find groundwater contaminated with PFAS, not just in Oscoda, but nationwide on military bases and industrial sites, and in towns that border them.

    East Kentucky residents hit by rate hikes and shutoffs of undrinkable water -- The working-class residents of Martin County, Kentucky have been battling contaminated water and a collapsing water infrastructure for years in this former coal mining region. Now, to add insult to injury, they are being forced to pay more for undrinkable water. The situation is part of a water crisis throughout the United States, which was brought to national and international attention by the protests and scientific exposures triggered by the lead poisoning of the water in Flint, Michigan. A study published February in the journal Proceedings of the National Academy of Sciences (PNAS) found that water contaminants cause 16 million cases of acute gastroenteritis each year. Between 9 and 45 million people were affected by drinking water quality violations across the US during each of the past 34 years.Last month, Kentucky’ Public Service Commission (PSC) announced its approval of a water rate increase and water surcharge that will sharply raise monthly water bills resident must pay. The increase includes a 17.5 percent hike for basic service and maintenance, plus an additional surcharge, which the Martin County Water Authority will use to pay off its $900,000 debt to bondholders. According to the PSC Press release of March 16, 2018, “The PSC granted Martin County Water an annual revenue increase of about 26.5 percent, consisting of an increase in base rates and a separate surcharge that will be used by the utility to pay its creditors. The average monthly residential bill will rise by $11.17, or about 28 percent, going from $39.90 to $51.07.” The county authorities have sought to claim that the increase is far less than the 49 percent hike they originally sought. However, as one worker explained on the Martin County Water Warrior Facebook page, “If your average water bill is $30, for example, this is what the PSC ruling did to you. $30 + 17.5% = $35.25 plus the $4.19 surcharge puts your bill at $39.44. A flat 50% increase would put a $30.00 water bill at $45. Only about $5 less. They did no favors for Martin County.”

    California’s Dwindling Snowpack: Another Year of Drought, Floods, Wildfires and Mudslides? - California is likely facing another year of water woes. The Sierra Nevada snowpack, which supplies up to a third of California's water, is exceptionally meager this year. Experts found around half as much snow on the mountains as they typically would in early April, when the snowpack is historically most voluminous.  Not only does the dwindling snowpack put California's water supply at risk, it also portends more floods , wildfires and mudslides over the coming year. This is precisely what makes climate change so dangerous. Even small changes in weather can have cascading effects, multiplying the risk of natural disaster.  Climate change is depriving California of needed precipitation, and it is also causing more precipitation to come down as rain instead of snow. The result is that, over time, the Sierra Nevada see less and less snow , with consequences for the Golden State. Every spring and summer, that snow melts, feeding the streams and rivers that supply California's reservoirs. Less snow means less water for farms and cities. Making matters worse, warmer temperatures mean that snow melts in late spring and early summer, leading to shortages later in the year.

     A Month's Worth of Rain Will Hit California This Weekend - You can see it on satellite imagery—a chaotic blur of wind and water shaped like a giant alien starfish over Australia, extending a tentacle diagonally across the Pacific and right into the Golden Gate. It’s called an atmospheric river, over a thousand miles of water and wind.This weekend is going to be as wet as an entire typical April. On the official scale, the storm will probably top out at “strong”—it might have enough water vapor transport to rate as “extreme,” but probably won’t reach “exceptional,” the real freak-out level of flood danger. That means several inches of rain. This is how California gets most of its disastrous floods, but also most of its drinking water. It’s a crazy way to do business, but understanding these atmospheric rivers might be the key to making sure the human race doesn’t die of thirst.Atmospheric rivers come ashore on nearly every west-facing coastline on Earth. A few times a year one of them does what this weekend’s storm will do: shotguns over Hawaii and into Northern California. “It tails all the way back into the tropics, almost to the date line,” says Michael Anderson, the California State climatologist. “It’s going to come through pretty quick.” Onshore, the fast, wet air from one of these so-called Pineapple Expresses ricochets upward off the coastal mountain ranges like a tennis ball catching the top of the net. The air rises; the water falls. That’s called “orographic enhancement,” and it’s how you get massive bursts of rain and floods.

    Trump budget cuts could cause hundreds of plant extinctions in Hawaii -  President Trump’s budget cuts could doom nearly 200 Hawaiian plant species to rapid extinction, conservationists warn. “They’d be gone within five to ten years,” says botanist Joan M. Yoshioka. “Some within a year. Some would be extinct within a month.”  As you might expect in a place often referred to as “the extinction capital of the world,” many of Hawaii’s plants are already critically endangered and depend on direct intervention actions for their long-term survival. “A lot of our species are so rare they’re down to one population that’s less than a quarter-acre in size,” says Yoshioka, statewide manager for Hawaii’s Plant Extinction Prevention Program. “Some are down to the last handfuls of individuals.”  All told 239 Hawaiian plant species now have populations of 50 or fewer individuals in the wild. The 11-member team of the Plant Extinction Prevention Program protects 190 of those species. Working on a shoestring budget of just $1.1 million a year, the team does whatever it can to save them, including collecting seeds and cuttings for propagation, replanting new populations in the wild, building and maintaining fences to block out invasive pigs and other herbivores, and even going so far as to help pollinate some species by hand. Their journeys often take them to the most remote areas of the island chain, including steep cliffs and places probably never before seen by other human eyes. They’ve discovered more than a dozen new species in the process.  “Without the program there wouldn’t be any of those triage-type emergency actions,” Yoshioka says. “So the potential for one feral pig to destroy an entire species is a very real threat and one we experience every single day.”  About 70 percent of the program’s budget comes from U.S. Fish and Wildlife Service grants through the Cooperative Endangered Species Conservation Fund, which provides conservation funding to states and territories. That nationwide fund, initially proposed for a 64 percent reduction, barely survived the federal 2018 budget, which passed just a few weeks ago.

    Iran Struggles With Potentially Explosive Environmental Crisis - Iranian leaders are struggling, three months after anti-government protests swept the Islamic republic, to ensure that environmental issues that helped sparked a popular uprising in Syria in 2011 leading to a brutal civil war don’t threaten the clergy’s grip on power.Like Syria, Iran has been confronting a drought that has affected much of the country for more than a decade with precipitation dropping to its lowest level in half a century. Environmental concerns have figured prominently in protests in recent years, often in regions populated by ethnic minorities like Azeris, and Iranian Arabs.Unrest among ethnic minorities, who account for almost half of Iran’s population, takes on added significance with Iran fearing that Saudi Arabia’s activist crown prince, Mohammed bin Salman, and the Trump administration’s antipathy towards the Islamic republic bolstered by the appointment of a hardliner, John Bolton, as the president’s national security advisor.Bolton has called for regime change in Iran, aligning himself with a controversial exile opposition group, while Prince Mohammed is believed to have tacitly endorsed thinking about stirring unrest among Iran’s ethnic minorities even if he has yet to decide whether to adopt subversion as a policy.Iran has repeatedly accused Saudi Arabia in the past year of supplying weapons and explosives to restive groups like the Baluch and the Kurds. Yet, concern about environmental degradation and its potential political fallout goes beyond fear that it could facilitate interference by external powers. Demonstrators in the province of Isfahan last month clashed with security forces after they took to the streets to protest water shortages. The protest occurred some three months after Iran was wracked by weeks of anti-government demonstrations.

    How the Tokyo 2020 Games are killing rainforests in Malaysia and Indonesia - South China Morning Post: It came as no surprise that Tokyo 2020 Olympic Games organisers and Tokyo governor Yuriko Koike made a commitment to making sustainability an integral part of the Games. But as construction begins on facilities to support the mammoth undertaking that comes with hosting the Olympics, environmental groups are already up in arms about its effect on mother nature, specifically rainforests in the region. Last week, Rainforest Action Network (RAN), a US-based NGO, delivered a petition with more than 110,000 signatures to Olympic authorities, including the International Olympic Committee (IOC), calling for “zero rainforest destruction” in the building of Tokyo 2020 facilities. The petition came after officials confirmed in February that at least 87 per cent of the plywood panels used to construct the New National Stadium, where the opening and closing ceremonies will be held, were derived from timber in Malaysia and Indonesia, home to 10 per cent of the world’s remaining rainforests. They also said other facilities, such as the Olympic Aquatics Centre, Ariake Arena and the Sea Forest Waterway, were similarly using wood from these rainforests. US-based RAN was one of more than 40 NGOs that called on the IOC in 2016 to ensure Tokyo would not source wood from endangered tropical forests in Malaysia and Indonesia. 

    Death by Plastic: 64 Pounds of Trash in Whale's Digestive System -- A sperm whale found dead in southern Spain was killed after ingesting 64 pounds of mostly plastic garbage, a necropsy of the marine mammal recently revealed.  The 6-ton, 33-foot-long juvenile male beached near a lighthouse in Cabo de Palos in the region of Murcia in February.An examination of its digestive tract uncovered items such as plastic bags , raffia sacks, ropes, pieces of nets and even a plastic jerry can, authorities said Friday.  Experts at Murcia's El Valle Wildlife Recovery Center, which carried out the necropsy, said the whale was unable to expel or digest the trash, causing it to die from peritonitis, or an infection of the abdomen. Sperm whales, which can measure up to 67 feet long, are listed as "vulnerable" to extinction.This grisly death has prompted the government of Murcia to launch a new campaign to combat ocean plastics. According to Spain's English publication, The Local , the program encourages Murcia residents to responsibly dispose of their garbage and to volunteer for beach clean-ups along the coast. It also involves new research programs to help monitor the extent of plastic waste off the coast and its effect on marine life ."The presence of plastics in seas and oceans is one of the biggest threats to the conservation of wildlife in the world," Consuelo Rosauro, Murcia's regional government's environment minister, said of the initiative. "Many animals get trapped in the rubbish or ingest great quantities of plastics, which end up causing their death," she added.

    Seas are rising too fast to save much of the Mississippi River Delta, scientists say --  The state of Louisiana is proceeding with ambitious plans to redirect the Mississippi River and rebuild some of its rapidly vanishing wetlands — but even this massive intervention may not be enough to save the most threatened lands from fast rising seas, scientists concluded in a study published Wednesday.  The study uses a methodology called “optical dating” to study how the river built an area called the Lafourche subdelta in coastal Louisiana, where the Mississippi dumped loads of sediment as much as 600 years ago, when it changed paths. The technology lets scientists identify the last time that long-buried sand was exposed to sunlight and, therefore, determine the rate at which the river naturally built up land by carrying sediment downstream. “What we found was that, on average, it produced somewhere between 6 and 8 square kilometers of land per year, and the shoreline migrated seaward by somewhere between 100 and 150 meters per year,”   “But the problem is that if you put that in the context of the rates of wetland loss that we’ve seen over the last century, it doesn’t even come close,” he added. The study reports that wetland loss at present is more like 45 square kilometers a year, or more than one acre an hour (an acre is close to the size of a football field).

    The oceans’ circulation hasn’t been this sluggish in 1,000 years. That’s bad news - The Atlantic Ocean circulation that carries warmth into the Northern Hemisphere’s high latitudes is slowing down because of climate change, a team of scientists asserted Wednesday, suggesting one of the most feared consequences is already coming to pass.The Atlantic meridional overturning circulation has declined in strength by 15 percent since the mid-20th century to a “new record low,” the scientists conclude in a peer-reviewed study published in the journal Nature. That’s a decrease of 3 million cubic meters of water per second, the equivalent of nearly 15 Amazon rivers.The AMOC brings warm water from the equator up toward the Atlantic’s northern reaches and cold water back down through the deep ocean. The current is partly why Western Europe enjoys temperate weather, and meteorologists are linking changes in North Atlantic Ocean temperatures to recent summer heat waves.  The circulation is also critical for fisheries off the U.S. Atlantic coast, a key part of New England’s economy that have seen changes in recent years, with the cod fishery collapsing as lobster populations have boomed off the Maine coast.Some of the AMOC’s disruption may be driven by the melting ice sheet of Greenland, another consequence of climate change that is altering the region’s water composition and interrupts the natural processes. This is “something that climate models have predicted for a long time, but we weren’t sure it was really happening. I think it is happening,” said one of the study’s authors, Stefan Rahmstorf of the Potsdam Institute for Climate Impact Research in Germany. “And I think it’s bad news.”

    Dangerous climate tipping point is ‘about a century ahead of schedule’ warns scientist - New research provides strong evidence that one of the long-predicted worst-case impacts of climate change — a severe slow-down of the Gulf Stream system — has already started.The system, also known as the Atlantic Meridional Overturning Circulation (AMOC), brings warmer water northward while pumping cooler water southward.“I think we’re close to a tipping point,” climatologist Michael Mann told ThinkProgress in an email. The AMOC slow down “is without precedent” in more than a millennium he said, adding, “It’s happening about a century ahead of schedule relative to what the models predict.”The impacts of such a slowdown include much faster sea level rise — and much warmer sea surface temperatures — for much of the U.S. East Coast. Both of those effects are already being observed and together they make devastating storm surges of the kind we saw with Superstorm Sandy far more likely. The findings come in two new studies published this week. One study published in the journal Nature, titled “Observed fingerprint of a weakening Atlantic Ocean overturning circulation,” was led by the Potsdam Institute for Climate Impact Research. It finds that the AMOC has weakened “around 15 per cent” since the mid-twentieth century, bringing it to “a new record low.” Another new study in the same issue of Nature “supports this finding and places it in a longer climate history context,” as Potsdam’s Stefan Rahmstorf notes at RealClimate.  A video from Potsdam Institute explains how we know the slowdown is being driven by human-caused climate change: The observed fingerprint of temperature changes in the Atlantic are precisely what the models predicted would happen when the slowdown began in earnest.

    Ocean circulation is changing, and we need to know why - Nature - The Atlantic meridional overturning circulation (AMOC) has spurred scientific interest and human imagination for decades. A complex and fundamental system of ocean currents, including the wind-driven Gulf Stream, the AMOC influences the exchange of heat between the tropics and high latitudes. Driven mainly by cold, dense water in the salty Greenland and Labrador seas sinking to the bottom of the North Atlantic Ocean, the circulation regulates temperature and so serves as a global thermostat.  But for how much longer? Potential sharp changes in the circulation have been identified as a possible tipping point in Earth’s physical systems.  Ice-core records from Greenland suggest that abrupt shifts in circulation strength triggered dramatic temperature fluctuations during the last glacial period. Climate fluctuations on such a scale have, fortunately, not occurred in the present Holocene interglacial era. Still, signs of a markedly weakening AMOC, reported in 2005 (H. L. Bryden et al. Nature 438, 655–657; 2005), provoked concern that the circulation might be on the brink of tipping into a weak phase once again, possibly as a result of human-induced climate warming.    Researchers have now gone back and taken another look. In a paper in Nature this week, scientists present palaeo-oceanographic evidence that deep convection of surface waters in the North Atlantic — the engine that keeps the AMOC in constant motion — began to decline as early as around 1850, probably owing to increased freshwater influx from Arctic ice that had melted at the end of a relatively cold period called the Little Ice Age (D. J. R. Thornalley et al. Nature 556, 227–230; 2018). This could have caused a weakening in the ocean circulation. In a second paper, researchers used global climate models and data sets of sea surface temperature to date the onset of the weakening to more recent times, around the mid-twentieth century (L. Caesar et al. Nature 556, 191–196; 2018). According to their models, the slowdown was about 15%; was most pronounced during winter and spring; and has led to a cooling of sea surface temperatures in parts of the northern Atlantic, together with a slight northward shift of the mean Gulf Stream path. This, the authors say, is probably a consequence of anthropogenic climate change.

    March is 3rd warmest on record, many contrasts (WMO)  March 2018 was the third warmest on record, according to the European Centre for Medium Range Weather Forecasting Copernicus Climate Change service.Although not as exceptional as the values for March 2016 and March 2017, it was in line with the upward trend of 0.18°C per decade seen in global temperature data from 1979 onwards, according to the monthly report.March 2018 was colder than the 1981-2010 average over almost all of Europe. Only in the far north and over the far southeast of the continent was it warmer than average. Below average temperatures occurred over almost all of northern Russia and over the northern USA and southern Canada.Within Europe, Spain had 163 mm of rainfall – more than three times the long-term average of 47 mm (1981-2000), making it one of the wettest months of March on record, according to the national meteorological service AEMET. In France, Mediterranean regions saw two to four times more rain than average.  The ECMWF Copernicus Climate Change report said temperatures were substantially above average over a large region stretching from north-eastern Africa through the Middle East and into China and the Indian sub-continent. Many parts of south and west Asia and the Middle East had a heatwave peaking 28-31 March.Pakistan, for instance, had a heatwave, especially in the Sindh province, with temperatures up to 45°C. At least 34 meteorological stations broke temperature records for March,, with temperatures more than 10°C above the monthly average, according to the Pakistan Meteorological Department.    There were above average temperatures in the Arabian Gulf. Bahrain had a mean temperature of the month was 24.6°C which is 3.6°C above the long-term normal and goes on record as the highest mean temperatures for the month of March since 1902.

    Marine Heatwaves Now Longer, Hotter and More Intense - It's not just land-based heatwaves that have become more intense and frequent . Marine heatwaves are similarly on the rise as a direct result of warming oceans , according to a new international study. The research , published Tuesday in the journal Nature Communications , shows that from 1925-2016, the frequency of marine heatwaves increased on average by 34 percent and the length of each heatwave increased by 17 percent. In all, the number of marine heatwave days has increased 54 percent per year. These bursts of ocean heat can have widespread effects on underwater ecosystems, marine life and coastal communities. As a press release for the study detailed, a 2011 marine heatwave in Western Australia shifted ecosystems from being dominated by kelp to being dominated by seaweed. That shift remained even after water temperatures returned to normal.  Warm waters in the North Pacific from 2014-2016 led to fishery closures, mass strandings and harmful algal blooms along coastlines. In 2015, the U.S. West Coast's mysterious "blob" of water, up to 4°C warmer than the surrounding Pacific, became tied to unusual weather across the country.

    Algae, Impurities Darken Greenland Ice Sheet And Increases Melting - The Dark Zone of Greenland ice sheet is a large continuous region on the western flank of the ice sheet; it is some 400 kilometers wide stretching about 100 kilometres up from the margin of the ice.Some previous theories have attributed this darkening to water on top of the ice sheet - often seen as strikingly sapphire blue ponds, rivers and lakes. But a new study in Nature Communications provides a new hypothesis based on the character of the impurities on the ice surface itself. "What we show is that the Dark Zone is covered in a finely distributed layer of dust, and black carbon, which provide nutrition for dark coloured algae. These are the main cause of the darkening," says professor Alun Hubbard, the co-author of the study and professor at CAGE (the Centre for Arctic Gas Hydrate). The Dark Zone is literally a dirty belt of the melting area - the ablation zone - of the ice sheet. The darker this ablation zone is, the more of the sun's energy it absorbs, and the faster the ice melts.Albedo is a measure of the reflectance of the ice sheet. It is the major factor governing how much incoming solar radiation is used to melt the ice and is the main positive feedback in Arctic climate change. Bright white surfaces, like snow or pure ice, reflect the sun's energy, but dark surfaces absorb it."The fact that a large portion of the western flank of the Greenland ice sheet has become dark means that the melt is up to five times as much as if it was a brilliant snow surface. " says Hubbard. The ice algae seem to be one of the major players in this scheme - even the slight increase of the atmospheric temperature and liquid water production seems to promote algae colonization across the ice surface. "The algae need nutrients and food, essentially dust, organic carbon, and water. In summer, these are plentiful and the algal bloom takes off. Because algae are dark in colour - they reinforce the dark zone. Thereby you get a positive feedback effect where the ice sheet absorbs even more solar radiation producing yet more melt."

    'Nothing even comes close': Western Alaska sea ice at lowest extent since 1850, database indicates - A scientist with the National Weather Service said the amount of sea ice off Western Alaska coasts this spring was the lowest in more than 150 years of record-keeping. The long-term look is based on the online Sea Ice Atlas created in 2014 by the University of Alaska Fairbanks, said Rick Thoman, a weather service climate scientist. The database provides a long-term look at coastal sea ice from sources such as recent satellite data and historical records that include whaler's logs and Danish and Norwegian ship records. [Amid warm winter, scientists say Alaska sea ice conditions are 'shockingly bad'] There's no record of a February or March like Western Alaska coastal villages just witnessed, with limited to no sea ice, Thoman said. "Nothing even comes close," he said. Having open water instead of sea ice outside Little Diomede Island in the Bering Strait is unheard of for February, but waves pummeled the village of Diomede in one storm caught on a video that made headlines, said Thoman. Other coastal villages also had waves where there should have been coastal sea ice, he said. "I have very high confidence saying there's never been a February like this, back to 1850," he said. Or March, for that matter.

    Alaskan Glaciers Have Not Melted This Fast in at Least Four Centuries -  Rising temperatures are causing glaciers in Alaska's Denali National Park to melt faster than at any time in the past 400 years, according to new research. The study was published in the Journal of Geophysical Research: Atmospheres, a journal of the American Geophysical Union in March. The Earth science organization released details about the research Tuesday."We have not seen snow melt like this in at least four centuries," lead author Dominic Winski, a glaciologist at Dartmouth College, told USA Today .For the study, Winski and 11 other researchers examined ice cores drilled from the summit of Mt. Hunter in June 2013.The ice cores gave the scientists a record of temperatures and climate conditions on the mountain dating back to the mid-17th century. For instance, dark bands of ice with no bubbles indicated that snow on the glacier melted in past summers before re-freezing. When analyzing the bands, the scientists determined that the site's summers are at least 2.2-3.6 degrees Fahrenheit warmer now than summers during the 18th, 19th and early 20th centuries. Additionally, rising temperatures are melting 60 times more snow on Mt. Hunter than at the start of Industrial Revolution 150 years ago.

    Arctic lake's ecosystem changes after 1 degree of warming, study shows - Canadian scientists thought one of the Arctic's largest lakes could handle small changes in climate, but it turns out that's not the case.  A study published recently in the journal Nature Communications, found that it only took 1 C of warming in the last 18 years to change the ecosystem in Lake Hazen on Ellesmere Island in Nunavut — which holds more water than any other lake in the High Arctic.  "We think on a global average we're going to see at least one and half, two degrees, maybe even more, warming by the end of this century," explained Igor Lehnherr, the study's lead researcher from the University of Toronto.  "We saw here, in this particular example, that one degree was sufficient to have widespread impacts throughout the entire watershed or ecosystem," he said. Beginning around 2007, the glaciers feeding the lake started melting more in the summer than they were growing in the winter. Meltwater and sediment flow into the lake at 10 times the historic rate, making the water cloudy and affecting its quality.  Contaminants, like mercury, previously contained in the ice and permafrost, are now melting into the water as well, the study said. Lake Hazen is also becoming ice-free more often, which means more light penetrates into the lake, allowing for algae to grow in places it never did before.

    Thanks to Climate Disruption, Earth Is Already Losing Critical Biosphere Components -- Based on years of research for my forthcoming book, The End of Ice, along with my work compiling these monthly climate disruption dispatches for four years now, I know that by 2050, we will be inhabiting a dramatically different planet. I believe we will already have tens -- if not hundreds -- of millions of climate refugees from sea-level rise and conflicts born of lack of food and water. What we currently call extreme weather events (massive floods, droughts, hurricanes) will have long since become the norm. In the US, growing food in the Midwest and the central valley of California will be extremely difficult, if not largely impossible, due to shifting weather patterns of rainfall and drought. Some swaths of the world, including the Gulf states in the Middle East and parts of the US Southwest, will be largely uninhabitable due to simply being too hot. Greenland and the Antarctic will both be experiencing dramatically advanced melting, and most of the glaciers in the contiguous 48 US states will have long since ceased to exist. And given that we are officially already amidst the Sixth Mass Extinction Event of the planet, which humans triggered, the biological annihilation that comes with this is happening apace. This portrait might seem far-fetched to some. But to understand that this is our future, all we need to do is look at what is already happening around the planet.  In early March, Arctic sea ice hit record lows for that time of year. Along with stunningly warm temperatures for the region (which scientists called "crazy, crazy stuff"), researchers there are continuing to scratch their heads about the dramatic ACD-fueled changes besetting the Arctic. The biosphere is convulsing. Unchecked ACD -- which appears likely to continue, since governments (particularly that of the United States) are not preparing to undertake the kinds of drastic mitigation measures that might have any impact -- will dramatically degrade global fish catch over the coming centuries, and may well reduce total oceanic plant life for a millennium, according to a recent study. The study also noted that these changes cannot be reversed until the climate cools.

    This environmental group is launching its own satellite to learn more about greenhouse gas leaks - When the Environmental Defense Fund told commercial space guru Tom Ingersoll that it wanted to launch a satellite to measure methane from oil and gas operations, he says his reaction was “Whoa! You guys want to do what?” Yet that’s what the EDF is doing. It is well on its way toward raising about $40 million. It has tapped into the work of Harvard University researchers to fine tune sensors. And it has reached out to Ingersoll and others in the commercial space business to create a device that will be able to measure methane emissions on a 125-mile wide swath with pixel resolution of less than five-eighths of a mile. EDF will also get support from TED Talks, which hopes to spur fundraising for a variety of causes through its “Audacious Project.” The satellite will enable EDF to more accurately measure methane emissions, which account for a quarter of global greenhouse gas emissions. The results could be sobering. In February, EDF estimated methane emissions from Pennsylvania’s shale oil and gas sites may be more than five times higher than what oil and gas companies reported to the Pennsylvania Department of Environmental Protection. The EDF analysis estimates Pennsylvania’s oil and gas operators emit more than 520,000 tons of methane a year, primarily from leaky, outdated and malfunctioning equipment. This wasted gas causes the same near-term climate pollution as 11 coal-fired power plants and results in nearly $68 million worth of wasted energy resources, the environmental group said.

    Solar geoengineering ‘too uncertain to go ahead yet’ -  Progress to deploy solar engineering, experimental technology designed to protect the world against the impact of the changing climate, must pause, a former United Nations climate expert says, arguing that governments need to create “effective guardrails” against any unforeseen risks.Janos Pasztor, who served as a UN assistant secretary-general on climate change, is using a speech to Arizona State University, broadast via Facebook Live by ASU LightWorks, 6:30-8pm Arizona time (9:30pm EDT – US Eastern Daylight Time) today, to warn the world that governments are largely ignoring the fundamental question of who should control geoengineering, and how.There are widespread misgivings, both among scientists and more widely, about geoengineering, with many regarding it as at best a strategy of last resort to help to avoid calamitous climate change. Mr Pasztor’s warning comes as researchers prepare for what is thought to be the world’s first outdoor experiment on stratospheric aerosol injection (SAI), one type of solar geoengineering. The test is due to take place later this year over Arizona. Pasztor heads the Carnegie Climate Geoengineering Governance Initiative(C2G2), an initiative of the New York-based Carnegie Council for Ethics in International Affairs. The Initiative wants solar geoengineering deployment to be delayed until the risks and potential benefits are better known and governance frameworks are agreed.

    Geoengineering risks losers as well as winners for climate and wildfire risks - Artificially altering the climate system to limit global warming to 1.5C could increase the risks of wildfires in some areas, new research suggests. While the international community is already aiming to limit global warming to below 2C by reducing greenhouse gas emissions, the more ambitious aim of a 1.5C limit is known to be challenging to reach in this way. An additional method to further limit warming might be to release sulphur dioxide high in the atmosphere, to produce a thin veil of droplets that would reflect some sunlight back to space and help keep the Earth cool. However, the new research suggests that this method of geoengineering could also introduce its own new impacts by shifting global rainfall patterns. The research by scientists at the University of Exeter and the Met Office Hadley Centre, carried out as part of the EU-funded project HELIX, looked at the implications of this for global patterns of wildfire using computer models of the global climate. Their simulations suggested that, while the cooler global temperatures would overall lead to lower fire risk at 1.5C global warming compared to 2C, some regions would actually see an increase in fire risk because of drier and warmer conditions locally.

    Chief of Staff Advised a Resistant Trump to Fire the EPA chief - John F. Kelly, the White House chief of staff, told President Trump last week that Scott Pruitt, the embattled administrator of the Environmental Protection Agency, needed to go following damaging allegations about ethical infractions and spending irregularities, according to two officials briefed about the conversation.But Mr. Trump, who is personally fond of Mr. Pruitt and sees him as a crucial ally in his effort to roll back environmental rules, has resisted firing him, disregarding warnings that the drumbeat of negative headlines about the administrator has grown unsustainable and that more embarrassing revelations could surface.White House officials said Friday that Mr. Trump continues to believe that Mr. Pruitt has been effective in his role, and they stressed that it was up to the president alone to decide his fate.“No one other than the president has the authority to hire and fire,” Sarah Huckabee Sanders, the White House press secretary, told reporters. “The president feels that the administrator has done a good job at E.P.A.”She said the White House, which has been conducting an internal investigation into Mr. Pruitt’s conduct, was “continuing to review any of the concerns that we have.” Earlier, in a brief interview, Ms. Sanders said that Mr. Pruitt’s success in achieving items on the president’s agenda — including rolling back a large number of environmental regulations — may weigh heavily as a counterbalance to allegations that he misused taxpayer dollars.“He likes the work product,” she said of Mr. Trump.  Conservatives have, for the most, part rallied around Mr. Pruitt, but late Friday saw the first signs of a fissure. Representative Trey Gowdy, Republican of South Carolina and the chairman of the House Oversight Committee, has started to investigate Mr. Pruitt’s condo deal, an aide to the committee confirmed. Asked about Mr. Pruitt at an event on Friday evening, Mr. Gowdy said, “I don’t have a lot of patience for that kind of stuff. You’ve got to be a good steward of taxpayer dollars,” according to a video an activist took of the interaction that was distributed by Friends of the Earth, an environmental group.

    Dems ramp up bid to oust Pruitt | TheHill: Senate Democrats are escalating their efforts to oust Environmental Protection Agency (EPA) Adminstrator Scott Pruitt with a formal resolution calling on him to resign or be fired. Democrats said Wednesday that between his aggressive deregulatory agenda and numerous scandals in recent weeks, Pruitt has no place at the EPA. The senators plan to introduce in the coming days a “sense of the Senate” resolution calling for Pruitt to be removed.“I believe it is time for his imperial tenure to end,” Sen. Tom Udall (N.M.), top Democrat on the Appropriations Committee subpanel overseeing the EPA’s budget, told reporters Wednesday on Capitol Hill. “Not only has Scott Pruitt undermined critical environmental and health protections, he appears to be ignoring basic ethics rules that protect taxpayers from fraud and abuse,” Udall said. “Scott Pruitt has misused taxpayer dollars while enhancing his own personal perks. He has terrorized staff and he has driven out great institutional knowledge. He has illegally delayed implementation of new and existing law," he continued. Pruitt has been under fire in recent weeks due to reports that he paid the wife of a prominent energy lobbyist $50 a night for the use of a condo and overspent taxpayer money on a round-the-clock security team and first-class travel. In addition, his deregulatory efforts at the EPA are unpopular with Democrats. 

    Republicans stand by Pruitt as ethics probes expand — Congressional Republicans are standing by Environmental Protection Agency chief Scott Pruitt as he fends off a barrage of ethics troubles, a testament to their support for his agenda and reluctance to wade into a nasty confirmation fight over who might replace him. While they flinch at repeated revelations about Pruitt’s ethics and questionable spending on security and travel, Republicans say Pruitt has led administration efforts to ease federal regulations on manufacturing, mining and other industries. Conservative groups also have weighed in on Pruitt’s behalf, citing actions to roll back President Barack Obama’s Clean Power Plan, block new restrictions on a range of U.S. waterways and relax fuel-economy standards for cars and trucks. Kentucky Sen. Rand Paul tweeted that Pruitt “is likely the bravest and most conservative member” of President Donald Trump’s Cabinet, while Texas Sen. Ted Cruz said the EPA chief was being “bullied by the Obama groupies” in the news media and Congress. Sen. John Barrasso, R-Wyo., chairman of the Senate Environment Committee, said Monday that Pruitt has accomplished key priorities as EPA head, mainly in reversing “punishing regulations” imposed under Obama. Barrasso said he saw the positive impact of Pruitt’s actions late last month as he and Pruitt toured a Wyoming coal mine. More than 100 conservatives, including the heads of the American Legislative Exchange Council and Conservative Action Project, along with former attorney general Edwin Meese III and former GOP Sen. Jim DeMint of South Carolina, sent a letter Friday hailing Pruitt. “President Trump campaigned on reducing Washington’s bureaucracy, and Administrator Pruitt has been instrumental to that effort,” they wrote.

    Former Coal Lobbyist Confirmed as No. 2 at EPA - The Senate voted on Thursday to confirm former Inhofe staffer and coal lobbyist Andrew Wheeler to the position of deputy administrator of the U.S. Environmental Protection Agency ( EPA ), to serve as Scott Pruitt's second in command.Democrats Heitkamp, Manchin and Donnelly joined with Republicans to give approval for Wheeler to move into a position regulating the industry on whose behalf he was just lobbying (for Murray Energy.)And because Wheeler would become acting administrator in the event that Pruitt resigns or is fired, Senator Ed Markey (D-MA) likened it to "a shadow confirmation vote for the next administrator of the EPA.""Andrew Wheeler's coal credentials are without equal. He is, without question, a member of the coal industry's Hall of Fame," said Markey, the AP reported ."Sadly, I am concerned that Andrew Wheeler's background means that he will never understand that saving coal is not the job of the EPA," Markey added. "It is the EPA's job to regulate coal to protect public health and the environment."According to the AP, environmental groups said that Pruitt and Wheeler could be a devastating combination."Before the Trump administration, it would have been inconceivable that a coal and chemical industry lobbyist with a long history of hostility toward environmental policy would be the No. 2 at EPA," said Ken Cook, president of the Environmental Working Group .

    Trump’s Climate Change Denial Is Already Reshaping Public Opinion -- A new Gallup survey shows that independent voters are less concerned about climate change than they were a year ago. In the last year, independents have become less likely to accept that global warming is happening and that humans are the cause, and less likely to perceive that there’s a scientific consensus about global warming.In 2017, 71 percent of independent voters were aware that most scientists believe global warming is occurring; this year it’s 65 percent. There has long been a significant gap between public perception of global warming and the scientific consensus: Between 90 percent and 100 percent of climate scientists agree humans are causing global warming, with studies converging on 97-percent consensus. But surveys since 2010 offered hope that the “consensus gap” had been shrinking over the last eight years. Gallup’s new data indicates this trend has reversed. The consensus gap widened over the last year.Independents aren’t the only ones on the move. The American public has become more polarized on climate change in the last year: Climate concern and acceptance has dropped among Republicans, and Democrats have become more accepting of climate change.There are a few ways to account for these shifts in public opinion. One is the cues we’ve heard from our political leaders, which are a leading driver of people’s concerns and perceptions about climate change.

    Col. Larry Wilkerson: Pentagon Plans for Climate Change Despite White House – Real News Network, transcript and video- - In a business as usual scenario, climate change could displace as many as 143 million people by 2050, according to a recent report by the World Bank. As sea level rises, many of those climate refugees will be displaced from coastal areas around the world, including in Florida and Louisiana. Despite the geopolitical and instability that such a displacement is likely to generate, the Trump administration recently removed climate change from the list of threats to national security. But has that altered the U.S. military's preparation and management of climate change risk?  With us to discuss this and related issues is Colonel Larry Wilkerson. Larr is former chief of staff to the Secretary of State Colin Powell. He is now a distinguished professor at the College of William and Mary. Thank you so much for joining us again, Larry.

    The Climate Change Hypocrisy Of Jet-Setting Academics -- Recently, we witnessed a fascinating conversation among a few of our professorial colleagues about their frequent flyer status on a prominent airline. Two of them had achieved “Diamond” status ― the very top of the priority boarding pecking order. They spoke the most and were the loudest. The others, with either Platinum or Gold frequent flyer medallions, also noted how “busy” they were with “all this travel.”The group casually mentioned the various benefits ― such as seating upgrades and access to airport lounges ― that come with their statuses, but the bragging was not really about those perks. It was about importance and recognition. After all, only the most successful academics fly around the world, attending conferences, participating in workshops and giving lectures. Congratulations all around!Also recently, 13 major universities launched the University Climate Change Coalition, or UC3, which seeks to “help local communities achieve their climate goals and accelerate the transition to a low-carbon future.” Several of these institutions are also participating in the Climate Leadership Network, a larger group of colleges and universities that have made a commitment to “take action on climate and prepare students through research and education to solve the challenges of the 21st century.”  But while these universities are working to help their communities take on climate change, academics are accumulating big carbon footprints with their jet-setting professional styles. As The New York Times noted, “Your Biggest Carbon Sin May Be Air Travel.”

    World's Most Powerful Wind Turbine Installed in Full View of Trump's Scottish Golf Course - The world's most powerful wind turbine was successfully installed Monday off the coast of Aberdeen,Scotland .  This is just the first of 11 turbines that will stand at Vattenfall's future European Offshore Wind Deployment Centre (EOWDC), Scotland's largest offshore wind test and demonstration facility. Incidentally, the project was at the center of a contentious legal battle waged— and lost —by Donald Trump , before he became U.S. president. Trump felt the "ugly" wind turbines would ruin the view of his Menie golf resort. But in 2015, the UK Supreme Court unanimously rejected his years-long appeal against the offshore wind farm.

    White House Abruptly Orders EPA To Loosen Clean Air Rules In Polluter Giveaway - With little notice, President Donald Trump ordered the Environmental Protection Agency on Thursday to dramatically overhaul national clean air standards and make it easier for industry to pollute in areas where it’s already dangerous to breathe. The executive order ― titled “Promoting Domestic Manufacturing and Job Creation ― Policies and Procedures Relating to Implementation of Air Quality Standards” ― reverses an Obama-era decision. The 2015 decision allowed the EPA to intervene in states that fail to meet National Ambient Air Quality Standards, forcing them to adopt federal regulatory plans to reduce ozone emissions that generally come from power plants, refineries and cement factories.It opens the door to drastic changes in how science is used to set clean air rules, disqualifying huge amounts of peer-reviewed public health research in favor of industry-backed studies in a move that builds on steps EPA Administrator Scott Pruitt has already taken.The order requires the EPA to speed up reviews of state plans to reduce air pollution, setting a strict 18-month deadline, and complete reviews of all pre-construction permits for industry within a year. Construction permitting is primarily a state-level issue; the language in the order, critics say, appears to be a dog whistle to polluters, suggesting the EPA would pull back on any oversight. “The purpose is that if states make determinations that are somewhat less than the rigor of what might be expected, EPA won’t second guess it,” Stan Meiburg, a former acting deputy EPA administrator who spent 39 years at the agency, told HuffPost by phone. “It’s a go-ahead for industry that if they take their best shot at states, the EPA won’t be getting in the way.”  The order instructs the EPA to consider what countries that don’t border the United States are doing to reduce pollution, allowing the agency to compare U.S. regulations to those in developing nations like China and India. It also directs Pruitt to allow states to trade pollution permits, a move environmentalists warn could make offsets nearly impossible to track and police.

    Portugal reaches 100% renewables, ends fossil fuel subsidies -Portugal’s renewable energy sources generated enough power to exceed total grid demand across the month of March, a new report has found, setting a standard that is expected to become the norm for the European nation.According to Portuguese grid operator, REN, renewable energy output over the month reached 4,812GWh, surpassing the nation’s total electricity needs for March, which only topped 4,647GWh.In that time, power generated by Portugal’s hydroelectric dams accounted for 55 per cent of monthly consumption – boosted by drought-breaking rainfall of four times the monthly average – and wind power, 42 per cent.The achievement comes nearly one year after hydro, wind, and solar power helped push the Iberian country to run on 100 per cent renewable electricity for 107 hours straight. Last March, however, the average renewables supply was 62 per cent. The new record coincides with the move by the Portuguese government, last Tuesday, to suspend annual subsidies of around €20 million for guaranteed power supplies paid to producers – most of which goes to fossil fuel plants left in stand-by mode.

    Big UK electricity producers may be told to cut output as solar and wind power surges -- Major gas and nuclear power plants may be ordered to cut back on production this summer – to make room for wind and solar. The National Grid – which oversees the UK’s electricity generation network – said growing supply from smaller wind and solar farms that bypass the grid would see demand fall.“Increased supply and demand variability caused by these periods of low demand and high levels of renewable generation can create operability challenges,” it said.“As a result, we may need to take more actions to curtail generation and possibly instruct inflexible generators to reduce their output in order to balance the system.” Such has been the growth in the recent years of solar and wind power generators serving localised areas that demand for electricity from the traditional power stations that feed into the National Grid has fallen away. Earlier this week, the first of 11 giant wind turbines – the largest in the world – was installed in the sea off Aberdeen. Vattenfall, the company behind the wind farm, said just one rotation of its huge blades would provide enough electricity to light up the average UK home for a day. The drive the make homes more energy efficient – through such simple measures as better insulation – and the industry’s efforts to reduce carbon emissions is also seeing demand for electricity through the grid fall.

    Los Angeles painting city streets white in bid to combat climate change - California officials are hoping their latest attempt to stem the rising tides of climate change leads to a more socially conscious -- and cooler -- summer.Officials in Los Angeles have been painting streets white to reduce the effect of urban "heat islands" and combat the effects of climate change.The LA Street Services began rolling out the project last May, which preliminary testing shows has reduced the temperature of roadways by up to 10 degrees. The project involves applying a light gray coating of the product CoolSeal, made by the company GuardTop."CoolSeal is applied like conventional sealcoats to asphalt surfaces to protect and maintain the quality and longevity of the surface," according to the company website. "While most cool pavements on the market are polymer based, CoolSeal is a water-based, asphalt emulsion."  While each coasting could can last up to seven years, they are also pricey, with the estimated cost of $40,000 per mile, the L.A. Daily News reported.

    French government launches brutal attack on environmental protest camp -- On Monday morning the National Gendarmerie, France’s militarized police, deployed nearly 2,500 heavily armed officers to brutally attack an environmentalist camp in Notre-Dame-des-Landes near the city of Nantes. Scenes resembling civil war unfolded as bulldozers and armored vehicles moved into the camp to destroy a colony of about 100 huts and makeshift homes that protesters and farmers have built since they set up the camp 10 years ago.By mid-morning some 10 huts had been destroyed, along with a watchtower erected by the activists to guard their site, regional security official Nicole Klein told the media. Six people living in one of the shelters were evicted, she said, claiming that they had refused an offer by the government to be rehoused. While journalists were banned from the site when the operation began, videos give an impression of the scale and brutality of the operation to clear out the camp.   The anarchist farmers and activists, called “zadistes” in France, set up the camp in 2008 to block the construction of an international airport to serve the Atlantic coast. The site had been earmarked for a new airport nearly five decades ago, before the French government finally abandoned plans to construct the controversial hub earlier this year. The government of French President Emmanuel Macron argued that since the decision had been taken to drop the plans to build the airport, the “zadistes” (from Zone to Defend or ZAD) had to leave.

    U.N. shipping agency under pressure to tackle growing CO2 emissions - The United Nations’ shipping agency is under pressure this week to agree on a plan to cut carbon emissions from the sector, following years of slow progress, but the strategy could fall well short of what is required to limit global warming. The shipping sector, along with aviation, avoided specific emissions cut targets in a global climate pact agreed at the end of 2015, which aims to limit a global average rise in temperature to “well below” 2 degrees Celsius from 2020. Shipping accounts for 2.2 percent of world CO2 emissions, according to the International Maritime Organization (IMO), the U.N. agency responsible for regulating pollution from ships. This is around the amount emitted by Germany, according to the latest EU data available, and is predicted to grow significantly if left unchecked. The European Commission estimates that air and marine transportation could contribute as much as a third of all emissions by 2050. The IMO is meeting in London this week to develop a initial strategy to cut emissions. A final plan is not expected until 2023. The strategy should include a global emissions reduction goal for the sector which is in line with temperature limits agreed under the global climate deal and a list of short-, mid- and long-term measures to ensure this goal is met. A spokesman for the European Commission said EU countries, along with the Marshall Islands, support a goal of cutting emissions by 70 to 100 percent by 2050, compared with 2008 levels. Norway has proposed a 50 percent cut by 2050, while another proposal backed by Japan - which is also chairing this week’s talks - and other countries aims for a 50 percent cut by 2060. These targets would not be ambitious enough to keep global temperature rise to “well below” 2 degrees C, some environmental groups and countries argue. Countries such as Brazil, Saudi Arabia and Panama are also opposed to the EU’s proposal of a loftier target, sources say.

    Shipping industry faces calls to clean up emissions - BBC News: The global shipping industry is facing calls to follow the example of the car industry and cut its carbon emissions. The International Maritime Organisation's environment committee is meeting in London this week to try to agree a global plan for reducing emissions levels. Without a clean-up there are warnings that shipping could account for almost a fifth of carbon emissions by 2050. Container ships use fuel that has 3,500 times more sulphur than car diesel. International shipping carries about 90% of world trade but there has been no regulation of carbon emissions. This is despite a provision under the 1997 Kyoto Protocol that gave responsibility for handling carbon emissions from marine fuels to the International Maritime Organisation (IMO), the United Nations division responsible for global shipping. It has proposed a 50% cut in emissions by 2050, a move that does not go far enough for certain Pacific island nations that are most threatened by rising sea levels. Monday's meeting of the IMO's Marine Environment Protection Committee will hear a proposal that emissions should be cut by as much as 70% to 100% by that time.There is opposition to this from Panama, Brazil and other countries that depend on income from shipping, which say their economies could be damaged if action is too hasty. Shipping was excluded from the Paris Agreement on climate change. Christiana Figueres, a former UN chief negotiator on climate change and an architect of the Paris Agreement, told BBC Radio 4's Today programme that some countries were already taking action. "One very interesting announcement made last week came from [South] Korea, which is ordering more than 200 new ships for its fleet. These are 30% larger and 30% more efficient," she said. The largest container ship currently operating carries just over 20,000 containers. 

    Is The IEA Biased Towards Fossil Fuels? - The International Energy Agency has long received criticism for its energy forecasts, which, as is typical with any long-term projections, often miss the mark. But a new report accuses the Paris-based energy agency of helping to lock in fossil fuel energy investments at a time when the IEA itself should be helping governments transition to clean energy.The report, from Oil Change International, says that the IEA’s New Policies Scenario (NPS), “the world’s foremost guide to decisions on energy policies and investments, steers those decisions towards levels of fossil fuel use that would cause severe climate change.”Oil Change International estimates that global greenhouse gas emissions under the NPS would breach the carbon budget needed to keep warming below 1.5 degrees Celsius by 2022. The carbon budget for the 2-degree C scenario would be exhausted by 2034.Put more bluntly, the report says that of the IEA’s recommendation for the amount of investment needed in upstream oil and gas through 2040, an estimated 78-96 percent of that is “incompatible” with the goals laid out in the Paris Climate Agreement. In other words, while the IEA repeatedly states that governments need to transition to cleaner forms of energy, it is also pushing recommendations for oil and gas investments that would blow up any chance of achieving those goals. Oil Change International says the IEA is recommending some $11.2-$13.8 trillion in upstream oil and gas investment through 2040 in excess of what would be required to halt dangerous levels of global warming. “This excess investment should be urgently redirected into clean energy,” the report argues.

    EPA official blew off scheduled meeting with toxic Appalachian coal town - On Thursday night, Environmental Protection Agency (EPA) Administrator Scott Pruitt’s point person for the EPA’s Superfund program failed to show up at a scheduled meeting with residents of a West Virginia town contaminated by toxic chemicals. Albert Kelly, senior adviser for the agency’s Superfund program, stayed behind in Washington to help Pruitt deal with the fallout from the barrage of controversies facing the administrator. Instead, the EPA sent Kelly’s top assistant, Nick Falvo, to Minden, West Virginia, to hear from residents about why they believe the town should be placed on the Superfund program’s National Priorities List (NPL). The meeting, held in the sanctuary of the New Beginning Apostolic Church in Minden, attracted approximately 60 community members. Falvo told residents that Kelly would come back to visit Minden himself “once the storm in D.C. clears up,” referring to scandal-plagued Pruitt. This will hopefully be sometime next month, he said. Minden is a town struggling with toxic contamination from PCBs — polychlorinated biphenyls, a highly toxic industrial chemical — that were stored at an old equipment site starting in the 1960s and later dumped in an abandoned mine. Minden is now a toxic wasteland where residents are afraid to drink the water and let their children play in their yards. Residents fear the PCBs are making them sick and killing them. 

    Rising Costs, Not Natural Gas, Main Driver of Coal Mine Closures - A new study finds rising production costs, not cheap natural gas, was the lead factor that drove thousands of coal mines across Appalachia to close.  The analysis, published last week by the nonpartisan, environmental think tank, Resources for the Future, scrutinized the impact that natural gas prices, stagnant electricity demand and rising costs had on the ability of coal mines to stay in business.   The researchers created a model that allowed them to study different factors that affected the profitability of coal mines using public data from the Mine Safety and Health Administration, U.S. Energy Information Administration and information reported by public coal companies in their annual reports to the Securities and Exchange Commission.They examined how low natural gas prices, electricity demand, and production costs affected mines that closed over the course of a 10-year period starting in 2002. Ian Lange, director of the minerals and energy economics program at the Colorado School of Mines, and lead author of the study, said while low natural gas prices and lackluster electricity demand definitely played a role in mine closures, the researchers found rising costs was the biggest factor in two-thirds of mines closures. Part of the reason costs climbed at Appalachian coal mines is tied to the region’s long history of extracting the resource.  Compared to other regions of the nation that produce coal, like the Powder River Basin in Wyoming and Montana, coal fields in central Appalachia requires more labor and resources to extract.“  In central Appalachian coal is deeper in the ground and the seams are thinner,” said John Deskins, an associate professor of economics at West Virginia University. “Because we’ve been mining coal for so long and so aggressively, we’ve already taken out all the easier to get coal.”

    EPA issues first license key to climate-friendly coal plants -  The Environmental Protection Agency approved the first license for a technology that is key to making coal-fired power plants more environmentally friendly. The license allows carbon dioxide to be injected underground in North Dakota. "This marks the first time any state has received primacy for Class VI UIC wells, which are used for the long-term storage of carbon dioxide captured from industrial and energy-related sources," the EPA said in making the announcement.  The licensing process was developed 10 years ago by the Obama administration's EPA. Although North Dakota is a large shale oil and natural gas producer, it does produce a big chunk of its power from coal and had been interested in capturing carbon to meet former President Barack Obama's climate regulations. Both Democrats and Republicans in the state were highly critical of the lack of fairness under the climate rules, which acted to prohibit the state's use of clean coal. EPA Administrator Scott Pruitt emphasized the reasons for the license in making Tuesday's announcement, which is to ensure carbon dioxide does not pollute the state's water table. “By allowing North Dakota to protect its underground sources of drinking water, we are practicing cooperative federalism and increasing the state’s involvement in local environmental protection," Pruitt said. "EPA will work with the state to ensure a smooth transition and that all North Dakotans continue to have safe drinking water.”

    Coal baron: Subsidize coal ‘to make sure grandma doesn’t die on the operating table’ - Bob Murray, the chief executive of coal giant Murray Energy Corporation, issued a grave warning to the nation’s leading renewable energy conference on Tuesday. Subsidize coal-fired power plants, he said, or grandma gets it. “You have a responsibility in this room to make sure grandma doesn’t die on the operating table,” Murray, 78, told an audience of energy analysts, investors and executives packed into the ballroom of the Grand Hyatt New York in midtown Manhattan. In an impassioned 15-minute speech at the annual Bloomberg New Energy Finance summit, Murray repeatedly dismissed the threat of climate change and instead cautioned that the electrical grid risked collapse without reliable energy from coal-fired plants. He cited dramatic winter weather such as the “polar vortex” of 2014 or last January’s “bomb cyclone,” both of which brought Arctic temperatures to parts of the United States, as examples of times when alternatives like wind, solar and natural gas failed to compete with coal. “That’s a crude way of putting it, but we were very close to it during this polar vortex and during this bomb cyclone,” he said. He pointed to a Department of Energy report stating that coal prevented widespread blackouts on the East Coast, though grid operators contested the findings to The Washington Post. One environmentalist accused the report of cherry-picking data and called it an “advocacy piece masquerading as analysis.” The Union of Concerned Scientists dubbed it a “bogus study to prop up coal plants.”

    U.S. Coal Mogul Murray Wants to Run Power Plants Too - Murray Energy Corp. Chief Executive Officer Bob Murray wants to buy coal-fired power plants to shore up his mining company. An acquisition could happen as early as this year, allowing the company to mine coal, transport it to plants and then burn it to generate power, Murray said on the sidelines of the Bloomberg New Energy Finance Future of Energy Summit in New York. “It’d be the culmination of my life’s work,” he said. “It’s a new concept. If you control the fuel supply, you can price it how you want it.” Murray has mulled such a purchase for at least 15 years but has come close only twice -- both in the past couple of years. The problem has been money, as utilities typically sell off the sites’ capacity payments when they close coal fired plants. That creates cash-flow problems for a potential buyer that could fester for several years. He has his eye on five different plants, including some of the assets of bankrupt FirstEnergy Solutions -- the W.H. Sammis plant in Ohio and Bruce Mansfield facility in Pennsylvania, both of which are for sale. Also attractive is FirstEnergy Corp.’s Pleasants Power Station, he said. The West Virginia facility is scheduled to close in early 2019. “If you can dig coal out of the ground, you sure as heck can run a power plant,” he said. “We can run power plants better than the utilities can.” 

    Lithuania dismantling transmission lines to prevent Belarusian nuclear power entering the EU --By 2020 Lithuania is expected to have finished dismantling Europe’s largest power transmission line (PTT), which links the country with Belarus – reported Euroradio, citing Lithuania’s Energy Minister, Žygimantas Vaičiūnas.By dismantling the power lines, Lithuania hopes to prevent the export of electricity from the Belarusian Nuclear Power Plant (BelNPP) to EU countries. Furthermore, Lithuania is engaged in talks with the EU to ensure equal competitive conditions for EU producers and those from third-world countries. Vilnius also intends to prevent electricity from BelNPP or other similarly hazardous power plants from entering the EU market (Lithuania itself intends to build a new modern nuclear power plant to replace the Ingalina NPP that was closed in 2009 – JAMnews).Lithuania’s project will amount to almost EUR 30 million. The project provides for the reconstruction of two substations in the north-eastern part of Lithuania and the dismantling of a 750kV power transmission line heading to Belarus. Lithuania shares as many as five power transmission lines with Belarus. The major and the most powerful of them is a 750kV transmission line, which is a part of the so-called ‘nuclear power plant circle’. Minister Vaičiūnas specified that there were no other similar power transmission lines in Europe. After it is dismantled, the other four power transmission lines (two of them with a capacity of 330kV and two with a capacity of 110kV) will be operating as long as Lithuania remains within a common synchronous area with Russia and Belarus. After the power grids are synchronized with Europe, there will be neither technical, nor commercial power flow.

    Plans for Welsh nuclear power plant delayed by seabirds - Plans for a nuclear power station on the Welsh island of Anglesey have been delayed by concerns over the plant’s impact on colonies of protected seabirds. The proposed twin reactors at Wylfa were given the green light by the UK’s nuclear regulator in December, with backers hoping to win financial support from the government. The Welsh plant would have a capacity of 3GW, similar to the 3.2GW of the nuclear power station being built at Hinkley Point in Somerset. Horizon Nuclear Power, a subsidiary of the Japanese conglomerate Hitachi, told planning authorities it would submit its planning application for the Wylfa plant by the end of March, which it called a “major milestone”. But the company postponed submitting the development consent order because it needs to thrash out the impact building the power station will have on colonies of sandwich, Arctic and common terns. The species are protected under the EU birds and habitats directive.

    Meltdowns, Waste, and War: Here Are the Real Risks of Nuclear -  Yves Smith - Is it any wonder that nuclear power scares people? The word nuclear alone conjures up a parade of terrors: the sinister radiation, the whiff of apocalypse, and the tendency to go boom. Those are the obvious sci-fi horrors. But nuclear power comes with plenty of other risks that aren’t so obvious: the hazards of uranium mining, the fouled water, and the radioactive waste. So do these horrors mean nuclear power shouldn’t be part of our tool kit for fighting climate change? After all, it doesn’t produce greenhouse gases. That’s why some have pushed to keep existing nuclear power plants open, and even build more. Often, nuclear nightmares are considered in isolation rather than weighed against the alternatives. Nobody, for instance, wants to get stuck with nuclear waste that stays radioactive for 10,000 years — but perhaps some would prefer that to coal waste, which contains mercury and lead and remains toxic forever. When it comes to nuclear power, the risks appear right from the beginning of the process with uranium mining. And they continue to pop up throughout the nuclear life cycle, from enrichment and reactor operation to the radioactive waste at the end. It’s a process fraught with hazards.  The writer Peter Hessler visited the uranium towns of Utah and Colorado and met men breathing through oxygen respirators and women who had buried miners after they suffered agonizing deaths. One described her uncle’s decline to Hessler: “His lungs just crystallized and he was spitting up this bloody stuff. They told us it was parts of his lungs.”  Officials saw early on that the work posed a hazard, says Stephanie Malin, a sociologist at Colorado State University, but they didn’t tell the miners or the people living in the surrounding communities.  “They made recommendations — better ventilation in the mines, radiation monitors,” Malin says. “But these recommendations were made in classified public health documents in the 1950s. The government responded by not doing anything until the 1970s.”

    The simple argument for keeping nuclear power plants open - David Roberts - About a year ago, the utility giant Exelon announced that it would close down the Three Mile Island nuclear plant in 2019. Last week, FirstEnergy followed suit, announcing that it would close three nuclear power plants of its own — Beaver Valley, Davis-Besse, and Perry — by 2021. All four of these plants, located in Ohio and Pennsylvania, operate within the PJM Interconnection, a mid-Atlantic energy market that covers around 65 million people. Here is a visual representation of how much zero-carbon energy will be lost to the PJM grid if all four of these nuclear plants close on schedule, courtesy of the consultancy GPG. Together, the four nuclear plants produced 40 terawatt-hours of energy in 2017 — more energy than was produced by PJM’s entire fleet of wind and solar plants (30 TWh). Here’s my question: Why aren’t climate hawks freaking out about this?Imagine a great hurricane was forecast to strike the mid-Atlantic in four years, crushing millions of wind turbines and solar panels, wiping out all of PJM’s installed renewable energy capacity. Wouldn’t climate hawks treat that as a grave danger? If climate change is indeed an existential threat, isn’t the loss of 40 TWh a year of carbon-free energy a four-alarm emergency?Yet no one seems to be treating it that way (except the owners of the plants in question). With a few exceptions, environmental groups are silent on the closures, or even support accelerating them.  That is nuts.

    New Jersey Legislature Saves Nuclear - -- In an expensive bid to keep nuclear energy alive, New Jersey legislators passed a massive subsidies bill to keep several reactors in the state up and running for the foreseeable future.The New Jersey state Senate and Assembly overwhelmingly passed S-2313/A-3724 on Thursday — legislation calling for a $300 million annual subsidy to keep three nuclear reactors from closing down. New Jersey power company Public Service Enterprise Group own and operate the three reactors — two located in a Salem plant and another at Hope Creek. Democratic Gov. Phil Murphy has not yet officially declared if he will sign the bill but has been a nuclear energy proponent since his time in office and is expected to sign it into law.Subsidy costs will ultimately be passed down to energy consumers, where the average New Jersey household will likely see their electricity bill rise $30 to $40 more annually. Commercial businesses will see a much larger increase in their electricity costs. The added expense, however, are a burden lawmakers prefer to combat rather than becoming more dependent on fossil fuel energy. Nuclear energy comprises roughly one-third of all energy consumed in New Jersey. If the three reactors shut down, tremendous energy consumption would be directed toward fossil fuel sources.

    Energy Secretary Rick Perry voices doubt on utility's plea to save coal and nuclear   - Energy Secretary Rick Perry voiced doubt Monday that he would approve a plea by a Ohio utility to save its coal and nuclear power plants. "My job is to find solutions to challenges that face us," Perry said after addressing the Bloomberg New Energy Finance conference in New York. "The 202(c) may not be the way we decide is most appropriate — the most efficient way to address this. It is not the only play." Ohio utility First Energy recently petitioned Perry to use his authority under section 202(c) of the Federal Power Act to order grid operators to keep its nuclear and coal plants online. The company said this month that it would close three of its nuclear power plants in Ohio and Pennsylvania in the next several years before announcing that its subsidiary First Energy Solutions filed for bankruptcy protection. The 202(c) petition came soon after the bankruptcy filing.President Trump mentioned the First Energy petition in making public remarks in West Virginia last week. Trump said the administration would "be looking at that as soon as we get back."

    Perry says he may not declare an electric grid emergency | TheHill: Energy Secretary Rick Perry said Monday that he may not declare there is an emergency in the Northeast’s electric grid. FirstEnergy Solutions, a power generating company, asked for such a declaration last month, saying that it plans to close its coal and nuclear power plants, which would devastate the PJM Interconnection grid that runs from Ohio to New Jersey and many other nearby states.The relief FirstEnergy requested “may not be the way that we decide that is the most appropriate, the most efficient, way to address this. It is not the only way,” Perry said at a New York City event hosted by Bloomberg New Energy Finance. Nonetheless, the request for Perry to use his power under section 202(c) of the Federal Power Act and mandate higher electricity payments to coal and nuclear plants in the region is “an issue in front of [the Energy Department] that is being looked at as we speak,” he said. FirstEnergy’s request has been criticized by free-market advocates, environmentalists and advocates for numerous competing electricity sources like wind, solar and natural gas, who say it’s not the federal government’s job to bail out uneconomic companies. But Perry said coal and nuclear plant closings are a major problem. “My responsibility is to make sure that when the demand is there for this country, whether it’s an economic demand, whether it’s a personal demand or whether it’s a national security demand, that when that event occurs, we have the power,” he said. Perry said that while he sympathizes with the need to prevent coal and nuclear plants from closing, he might not endorse FirstEnergy’s plan.

    Near Miss at Line 5. Great Lakes Crown Jewel at Risk -- Eclectablog: Last week, 550 gallons of coolant containing the carcinogenic solvent benzene were released into Lake Michigan from an electrical transmission cable running under the Straits of Mackinac. It happened because a ship went through the Straits dragging its anchor.  Enbridge Energy clearly had an “oh shit!” moment since the twin oil pipelines they own that run under the Straits were just a few hundred yards away. Sure enough, after an inspection, they found three dents in the two pipelines which carry nearly 1 million gallons of petroleum per hour. The pipelines, part of Enbridge’s Line 5, are 65 years old.As I wrote in 2015, it doesn’t take much imagination to understand the utter catastrophe that would result if this pipeline, like the Enbridge pipeline that dumped over a million gallons of tar sands crude into the Kalamazoo River in 2010, were to rupture. Imagine the scenario of this happening in February when the Straits of Mackinac are covered in eight feet of solid ice and when the only ship traffic is through a narrow channel created by a Great Lakes icebreaker. It’s no wonder that University of Michigan researchers called the Straits “the worst possible place for an oil spill in the Great Lakes.” It’s worth noting that the Line 6B spill cost well over $1,000,000,000 (yes, that’s a BILLION dollars) to clean up.  For their part, Enbridge says that Line 5 is one of the “most inspected pipelines” in America. However, there is literally no plan in place to deal with a pipeline rupture that will adequately protect the Great Lakes so essentially what they are telling us is that they will know they exact moment when they begin to destroy this precious and valuable ecosystem and fresh water supply. Nearly a million gallons of oil would erupt into Lake Michigan per hour until they could get it under control. Given that it took them 17 hours after the Kalamazoo pipeline ruptured before they notified anyone, we have no way of knowing when they would actually tell the world that they had created the most catastrophic man-made disaster in Michigan history.

    Pennsylvania Superior Court Rules That Fracking Natural Gas From a Neighboring Property Is Trespassing - Last week the Pennsylvania Superior Court issued an opinion that could have major ramifications for the hydraulic fracturing industry in the state: It states a company trespassed on a family's land by extracting natural gas from beneath their property while operating a fracking well next door. The Briggs family owns about 11 acres of land in Harford Township in Susquehanna County. When Southwestern Energy began operating an unconventional natural gas well on the adjacent property in 2011, the Briggs declined to lease their mineral rights to the company for development. In 2015, they filed a complaint that Southwestern was trespassing by extracting gas from beneath their property without a lease. Southwestern didn't dispute they'd removed natural gas from beneath the Briggs' land, but argued they weren't trespassing due to the "rule of capture," which says the first person to "capture" a natural resource like groundwater, gas or oil owns it, regardless of property lines. A lower court agreed with Southwestern and issued a summary judgment in their favor, but last week's Superior Court opinion overturns that decision, stating that the rule of capture shouldn't apply to unconventional natural gas drilling because of key differences in the method of extraction. "Unlike oil and gas originating in a common reservoir, natural gas, when trapped in a shale formation, is non-migratory in nature," the opinion states. "Shale gas does not merely 'escape' to adjoining land absent the application of an external force. Instead, the shale must be fractured through the process of hydraulic fracturing; only then may the natural gas contained in the shale move freely through the 'artificially created channel[s].'" Ultimately, the Court said, "In light of the distinctions between hydraulic fracturing and conventional gas drilling, we conclude that the rule of capture does not preclude liability for trespass due to hydraulic fracturing."

    Pennsylvania court possibly stands fracking on its head - A Pennsylvania court last week handed down an opinion which has the potential to set horizontal drilling back decades, and possibly halt natural gas/natural gas liquids drilling in the “Keystone State.”  The state Superior Court slammed shut a producer’s ability to drill laterals into commodities in property it does not control. The so-called Rule of Capture – which traces its roots in the oil and gas industry back to the days of Col. Edwin Drake, effectively has been tossed out by the court, which could lead to numerous lawsuits, and stunt the future growth of oil and gas production, some experts tell Kallanish Energy. “This ruling absolutely can be a very big deal (to the oil and gas industry),”  Houston-based Southwestern Energy Production began drilling in 2011 on property adjacent to an 11-acre parcel Adam Briggs, his wife, Paula, and his siblings, Sarah and Joshua, own in Susquehanna County. The siblings brought suit in 2015 in county court against Southwestern, alleging the independent producer drilled two wells on the property it leased, but was drilling laterally into the Marcellus Shale in the Briggs’ property, never compensating them for the gas produced.  In effect, Southwestern allegedly was trespassing. The Susquehanna County court dismissed the lawsuit last August, after finding Southwestern was not required to pay the Briggs family based on the legal principle known as the “rule of capture.” Multiple appellate courts have found the rule of capture means one property owner can drill a well a short distance from a neighbor and use it to extract oil or gas from the neighbor’s property without paying them. But until this ruling, no court had clarified the rule of capture doesn’t apply to horizontal drilling, according to attorney Robert J. Burnett. “This is a very significant decision – it makes crystal clear that in Pennsylvania, the rule of capture no longer is available when it comes to horizontal drilling,” Burnett, chairman of the Oil and Gas Practice Group at Pittsburgh law firm Houston Harbaugh.

    More Than 40,000 Comments Support A Complete Fracking Ban In The Delaware River Watershed -- National environmental organizations, anti-fracking groups, community organizations, and residents announced recently that their members had submitted at least 40,000 comments to the Delaware River Basin Commission (DRBC) in support of a full ban on fracking and all drillingrelated activities, including wastewater treatment and water withdrawals. The coalition also submitted a letter signed by 126 groups, representing millions of members, making the same demand.Even though more than 40,000 comments were filed during the comment period, a DRBC press release states it received less than 9,000. The discrepancy is due to the fact that the DRBC counted thousands of individual comments submitted by members of organizations as a single comment. This serves to severely diminish the widespread support across the region, and the country, for a full ban. (See below for examples.)“People trusted that their comments to DRBC would be fairly represented in the record, but DRBC is playing with the figures to bury the bold numbers that prove the fierce opposition of the public to fracking, and the dominant all-out demand for a complete ban on fracking, on frack wastewater dumping, and on water depletion that would stimulate fracking in other watersheds. The people have spoken and we’re going to be heard, no matter how anyone spins the truth - we want DRBC to ban fracking, to ban it all,” said Tracy Carluccio, Deputy Director, Delaware Riverkeeper Network. The comments came after months of educating on the need for a comprehensive ban on fracking activities in the Basin, which is a source of clean drinking water for over 17 million residents in the region.

    Analysis: WB XPress work could affect West Virginia supply, prices - Columbia Gas Transmission is warning shippers about pipeline outages linked to construction work on its WB XPress expansion, which could have significant market impacts over the next month. At least some impacts are likely to begin Monday with an outage at Columbia Gas' Broad Run interconnect with Tennessee Gas Pipeline in West Virginia that's scheduled to continue through April 19. As Columbia Gas ties in the new Elk River compressor station with existing infrastructure, receipts and deliveries at Broad Run will be cut to zero with a high impact expected to firm shipping services, according to the company's planned service outage schedule. Over the past 30 days, Columbia Gas has delivered more than 400 MMcf/d, on average, to the Broad Run interconnect with Tennessee, with the gas sourced largely from West Virginia production receipts. On Monday, no initial production effects were observed in West Virginia, according to S&P Global Platts Analytics data, but they could become apparent during later intraday flow-nomination cycles. The potential for stranded production in West Virginia could also pressure upstream hub prices this week, though no immediate impacts were observed in early trading across Appalachia Monday. Another, potentially more consequential, maintenance linked to construction work on the WB XPress will cut deliveries from Columbia Gas to Cove Point Pipeline next month. From May 1 to 11, Columbia Gas will shutter its Loudoun interconnect with Cove Point, cutting deliveries from the upstream supply pipeline to zero. Over the past 14 days, feedgas consumption at Cove Point has averaged more than 600 MMcf/d.

    Landowners continue to fight Mountain Valley Pipeline — As the tree-sitters continue to stake their claim up high, residents near the proposed path of the Mountain Valley Pipeline (MVP) are making their voices heard on the ground.The $3.5 billion project aims to place a 42-inch diameter pipeline to transport West Virginia natural gas more than 303 miles to southern Virginia. Since receiving approval from the Federal Regulatory Commission in mid-October, opposition has grown.  Monroe County resident Becky Crabtree lives in an over 100 year-old farmhouse near the foot of Peters Mountain. The pipeline’s path will go through her sheep field, over Wilson Mill Road twice, then across the mountain. It is also proposed to go underneath the Appalachian Trail. Crabtree said they purchased the land several years ago to ensure their children would have future homesites. “We picked out the land specifically for that reason. The pipeline goes right through our youngest daughter and her husband’s selection for a home. We’re further concerned because of the things we don’t know. We don’t know what lies under the surface. We’re obviously in a karst area, you can see the limestone outcroppings, we have sinkholes.” Maury Johnson also lives in Monroe County and will be directly affected by the pipeline. On Friday, he led a group of reporters and local politicians on a tour of various locations in the path of the project, including Crabtree’s land. He is also concerned about the sinkholes, which are visible from the road. “They want to go through the edge of it (sinkhole). You cannot put equipment on this terrain, heavy equipment will crush this. The roofs of these caves are not that deep. The DEP calls this Swiss cheese (because) from space it looks like Swiss cheese.” Johnson also worries about other geologic factors he’s noticed. According to the West Virginia Geological and Economic Survey, Monroe County is close to a seismic zone in neighboring Giles County, Va. A magnitude 3.2 earthquake was recorded on September 13, 2017 with the epicenter in Pearisburg, Va. That was less than 20 miles from the Monroe County line.

    Construction kicks up on big WV pipeline projects - Two major natural gas pipelines originating in West Virginia are moving forward with construction activities after focusing on cutting trees through the winter months. Mountain Valley Pipeline will extend 42-inch diameter natural gas pipeline over 303 miles to transport West Virginia natural gas into southern Virginia. The pipeline developer says the $3.5 billion project is on pace for completion this year after felling trees in areas considered to be sensitive habitats for bats and migratory birds. Atlantic Coast Pipeline would run 600 miles from West Virginia through Virginia and into southeastern North Carolina, delivering up to 1.5 billion cubic feet of Marcellus shale gas. That $5.1 billion project is on track for completion in 2019, developers say. Each project is meant to move West Virginia natural gas to eastern markets, potentially generating higher prices. But there is also focus on how the enormous projects may affect the landscape and waterways as construction commences. Mountain Valley Pipeline says it remains on target for completion late this year. “Mountain Valley Pipeline is pleased to report 100 percent completion of all tree-felling activities requiring time-of-year restrictions related to endangered bats,” stated Natalie Cox, a spokeswoman for MVP. “The project team continues to conduct tree-felling and related activity in accordance with state and federal laws, and the project remains on target for a late 2018 in-service.” Mountain Valley Pipeline was the focus of protesters in treetop platforms this winter in Monroe County, where trees were being cleared for a path through the Jefferson National Forest. The protesters were aiming to make MVP miss a March 31 deadline to clear trees in the area.  

    Mountain Valley Pipeline proposes expansion into N. Carolina (AP)(AP) — Developers of the Mountain Valley Pipeline announced plans Wednesday to extend the project currently proposed to carry natural gas through West Virginia and Virginia into North Carolina. A news release Wednesday laid out plans for an extension called MVP Southgate. The new segment would receive gas from the Mountain Valley Pipeline mainline in Pittsylvania County, Virginia, and extend approximately 70 miles (113 kilometers) south to new delivery points in Rockingham and Alamance counties in North Carolina. PSNC Energy, a natural gas service company, has already signed up for capacity on the Southgate project, and additional customers will also have the chance to subscribe, according to the news release. PSNC president and chief operating officer, Rusty Harris, said in a statement that its customers benefit from the company having supply diversity. This project will help ensure low costs for customers and enhance service reliability,” he said in a statement. The approximately 300-mile (483-kilometer) Mountain Valley Pipeline has drawn strong opposition from environmental groups, and the new addition is likely to do the same. “These fracked gas pipelines are dangerous and not necessary for meeting our state’s energy needs. They pollute our air and water, and serve no purpose other than lining the pockets of the polluting corporations that run these dirty projects through our most vulnerable communities,”   The Mountain Valley Pipeline is a joint venture of a number of energy companies: EQT Midstream Partners; NextEra US Gas Assets; Con Edison Transmission; WGL Midstream; and RGC Midstream.

    ACP Pipeline Questioned on Environmental Justice — The Atlantic Coast Pipeline, LLC, (ACP) is a new underground natural gas transmission pipeline project that is proposed to run approximately 600 miles through West Virginia, Virginia, and North Carolina (Atlantic Coast Pipeline to build $5 billion natural gas system, 2015). In August 2016, the Federal Energy Regulatory Commission (FERC) established an environmental review timeline that included the delivery of draft and final environmental impact statements (EISs) required by the National Environmental Policy Act (NEPA).    The draft EIS claims that because “impacts would occur along the entire pipeline route and in areas with a variety of socioeconomic backgrounds,” there is consequently “no evidence that [the pipeline] would cause a disproportionate share of high and adverse environmental or socioeconomic impacts on any racial, ethnic, or socioeconomic group” (FERC, 2016, p. 4:413). FERC does not explain the factual basis for this conclusion; the criteria for establishing “disproportionate impact” on populations are not stated in the document. Our test results suggest that in Northampton County disproportionately large numbers of American Indian residents and African American residents live within 1 mile of the pipeline route, whereas in Robeson County, disproportionately large numbers of American Indian residents and Hispanic/Latino residents live within 1 mile of the pipeline route. Our county-level demographic analysis points to broader-scale spatial inequities. If pipeline risks are indeed uniform along the entire route, as FERC (2016) argues in its environmental justice analysis, then our analysis provides evidence of disproportionate exposure of certain groups to pipeline impacts. In Robeson County, the census tracts within 1 mile of the pipeline route also have a significantly higher mean SoVI score relative to census tracts outside of 1 mile of the pipeline route.

    Estimating Dominion Cove Point Liquefaction Feedgas Volumes - Everyone in the North American gas industry knows that a big wave of U.S. LNG exports is coming. Although Cheniere Energy’s Sabine Pass terminal in southwestern Louisiana started shipping out LNG in 2016, exports really started having a major impact in 2017 — increasing demand for U.S.-produced gas, providing an outlet for Marcellus and Utica supplies, and affecting physical flows at the Henry Hub and in south Louisiana more generally. But with the first four liquefaction trains at Sabine Pass all but fully ramped up, attention in recent months has been turning to the next facility being commissioned: Dominion’s Cove Point terminal on Chesapeake Bay in Maryland, which exported its first cargo in early March. But tracking gas pipeline flows into the Cove Point plant has not been easy, and in today’s blog, we consider the various possibilities and discuss our view of how best to monitor the amount of LNG feedgas going into Cove Point. We covered the specifics of Cove Point in our Down by the Seaside blog last year. The terminal — located in Maryland’s Calvert County — has long played a role as an import facility serving demand in the U.S. Northeast. It was originally designed to regasify LNG and move it into the U.S. gas pipeline system, and included seven storage tanks totaling 14.6 Bcf, six electric generation units and a tunnel connecting the offshore pier (where the tankers docked for offloading). However, with the emergence of shale gas, particularly the growing Marcellus/Utica production nearby, imports have all but dried up, with the import terminal now almost exclusively used for sending out gas on peak winter days. And, last month, in early March, Cove Point became the second major LNG facility in the Lower 48 (after Cheniere Energy’s Sabine Pass LNG) — and the first on the East Coast — to export U.S.-produced gas.

    US EIA sees natural gas production breaking records even as it trims back forecast - US dry natural gas production is on pace to break records in 2018 and 2019, the US Energy Information Administration said in its April short-term energy outlook, even as the agency trimmed its natural gas production estimates for the second quarter and full year 2018. EIA also sees US natural gas consumption rising over the next two years, with power generation use serving as the leading driver. "This year's [dry gas] production is poised to increase by 7.5 Bcf/d over 2017 levels to an average just above 81 Bcf/d day," EIA Administrator Linda Capuano said Tuesday. The April outlook lowered by 1.15 Bcf/d to 86.51 Bcf/d the natural gas marketed production estimate for the US in the second quarter, and lowered the Q3 production forecast by 0.33 Bcf/d to 88.22 Bcf/d. The full-year forecast for 2018 dropped by 0.80 Bcf/d to 87.03 Bcf/d. Nonetheless, total marketed production was seen rising to 87.03 Bcf/d in 2018 and 89.08 Bcf/d in 2019, from 78.93 Bcf/d in 2017, according to the April report.  Overall, EIA expects US natural gas consumption to rise by 4.2 Bcf/d (5.7%) in 2018 and by 0.7 Bcf/d (0.9%) in 2019. EIA lowered its natural gas consumption estimates by 0.10 Bcf/d to 69.77 Bcf/d for Q3. It raised the consumption estimate for the full year 2018 by 0.26 Bcf/d to 78.45 Bcf/d. Exports are seen rising to historic levels in 2018 and 2019. "US natural gas trade was almost balanced between exports and imports in 2017, but in this forecast, EIA expects that the United States will see net natural gas exports climb above 4 Bcf/d by 2019 as LNG terminals continue to come online,"

    By some measures, U.S. natural gas production set a record in 2017 -  Two out of three of EIA’s measures of natural gas production in the United States set records in 2017. U.S. natural gas production measured as gross withdrawals reached 90.9 billion cubic feet per day (Bcf/d) in 2017, the highest volume on record according to EIA’s Monthly Crude Oil, Lease Condensate, and Natural Gas Production Report. U.S. natural gas production measured as marketed natural gas production also reached a new high, but dry natural gas production did not exceed 2015 levels. EIA’s Monthly Crude Oil, Lease Condensate, and Natural Gas Production Report collects monthly oil and natural gas production data from a sample of operators of oil and natural gas wells in 15 states, the Federal Offshore Gulf of Mexico, and collectively from the remaining states and the Federal Offshore Pacific.Starting in July 2017, U.S. natural gas gross withdrawals increased for five straight months, ultimately reaching a record monthly high of 96.7 Bcf/d in December 2017. Marketed natural gas production also reached an annual record high of 78.9 Bcf/d in 2017 and monthly record high of almost 84.0 Bcf/d in December 2017. Marketed production reflects gross withdrawals minus natural gas used for repressuring reservoirs, quantities vented or flared, and nonhydrocarbon gases removed in treating or processing operations. Dry natural gas production in 2017 remained lower than previous highs set in 2015 on an annual level at 73.6 Bcf/d. Dry natural gas is consumer-grade natural gas, or marketed production minus extraction losses. As natural gas production increased, the volume of natural gas exports—both through pipelines and as liquefied natural gas (LNG)—also increased. Total natural gas exports grew 36% in 2017, with LNG exports nearly quadrupling. The United States became a net natural gas exporter in 2017 for the first time in nearly 60 years.

    Interior's Zinke sees 'little' demand for new U.S. offshore drilling (Reuters) - U.S. Interior Secretary Ryan Zinke said on Friday that he sees little demand from oil and gas companies for new offshore drilling leases, which could pose problems for his plan to ramp up output from federal waters. The comments come just three months after Zinke had proposed opening nearly all U.S. ocean coastlines to drilling, in a bid to raise domestic oil and gas production. The plan sparked immediate protests from coastal states, environmentalists and the tourism industry. Zinke said a record-sized U.S. auction of offshore oil leases in the Gulf of Mexico, held in March, showed “modest to little” interest from drillers, and he added the likelihood for strong demand elsewhere is small. “If you don’t have the infrastructure, it’s more expensive,” Zinke said at an offshore wind power conference in Princeton, New Jersey, responding to a question about the possibility of drilling off the East Coast. Zinke also noted the strong political opposition to drilling, and said governors have significant leverage in controlling their waters. California, which has not allowed drilling off its coast since the 1980s, has said it would block any oil from new leases in the Pacific from reaching its shores. Florida, meanwhile, convinced Zinke to remove its offshore waters from consideration shortly after the drilling proposal was announced over concerns about its tourism industry. Officials in many other states have also urged Zinke to drop them from the drilling plan. He has said he will meet with them as he finalizes the proposal over the coming months. Last month’s Gulf of Mexico sale, the largest U.S. offshore lease sale on record, brought in $124.8 million, as just 1 percent of the 77 million acres (31.2 million hectares) offered found bidders. 

    U.S. Gulf of Mexico crude oil production to continue at record highs through 2019 - U.S. crude oil production in the Federal Gulf of Mexico (GOM) increased slightly in 2017, reaching 1.65 million b/d, the highest annual level on record. Although briefly hindered by platform outages and pipeline issues in December 2017, oil production in the GOM is expected to continue increasing in 2018 and 2019, based on forecasts in the EIA’s latest Short-Term Energy Outlook (STEO). EIA expects the GOM to account for 16% of total U.S. crude oil production in each year. Based on STEO’s expected production levels at new fields and existing fields, annual crude oil production in the GOM will increase to an average of 1.7 million b/d in 2018 and 1.8 million b/d in 2019. However, uncertainties in oil markets may still affect long-term planning and operations in the GOM, and the timelines of future projects may change accordingly. In 2016, producers brought seven new projects and expansions online and ramped up production in 2017, collectively contributing to an average of 126,000 b/d of production in 2017. Another two projects came online in 2017, contributing 10,000 b/d of new production last year. EIA expects these nine projects to ramp up over the next two years. Producers expect four new projects to come online in 2018 and six more in 2019.  Because of the amount of time needed to discover and develop large offshore projects, oil production in the GOM is less sensitive to short-term oil price movements than onshore production in the Lower 48 states. In 2015 and early 2016, decreasing profit margins and reduced expectations for a quick oil price recovery prompted many GOM operators to pull back on future deepwater exploration spending and to restructure or delay drilling rig contracts, causing average monthly rig counts to decline through 2017.

    Chevron, Exxon seek 'small refinery' waivers from U.S. biofuels law (Reuters) - Global energy giants Chevron Corp and Exxon Mobil have asked U.S. regulators for exemptions to the nation’s biofuels policy that have historically been reserved for small companies in financial distress, according to sources familiar with the matter. The requests will add fuel to a raging dispute between Big Oil and Big Corn over how the Trump administration should manage the U.S. Renewable Fuel Standard - a 2005 law that requires oil refiners to mix biofuels such as corn-based ethanol into the nation’s fuel supply, or buy government-awarded credits from other energy firms who do the blending. The U.S. Environmental Protection Agency (EPA) has already issued an unusually high 25 hardship waivers to small refineries in recent months, according to an agency source, driving blending credit prices down and helping the oil industry reduce compliance costs. But the agency won’t name the firms receiving the exemptions, citing a concern over disclosing private company information. Both Chevron (CVX.N) and Exxon (XOM.N), among the world’s most profitable energy companies, have asked EPA for waivers for their smallest facilities - Chevron’s 54,500 barrel-per-day refinery in Utah and the Exxon’s 60,000 bpd refinery in Montana, two sources briefed on the matter told Reuters on condition of anonymity. The exemptions would free the plants from their obligation to hand in blending credits earned or purchased for 2017, which came due this year, the sources said. The disclosure of the Chevron and Exxon applications, which have not been previously reported, follow a Reuters report this month that the EPA has exempted three of ten refineries owned by Andeavor (ANDV.N), one of the biggest U.S. refining companies. The waivers could save Andeavor $50 million or more in regulatory costs for the company’s 2016 obligations under the biofuels law. 

    Saudi Aramco studying chemical plant addition at Port Arthur refinery: sources (Reuters) - Saudi Aramco is studying a multi-billion dollar plan to build a petrochemical plant at the Port Arthur, Texas, refinery operated by its subsidiary Motiva Enterprises, sources familiar with the company's plans said on Saturday. Aramco is scheduled on Saturday to sign agreements in Houston with Honeywell UOP to study an aromatics unit and with Technip FMC for a unit to produce polymers from ethane, the sources said. The aromatics unit Honeywell UOP is studying would convert benzene and paraxylene, byproducts of gasoline production, into 2 million tons annually of feedstocks for chemicals and plastics, according to the sources. The unit Technip FMC is studying would convert ethane into 2 million tons a year of ethylene, which is used to make plastics, the sources said. The agreements with the two companies include technology licenses for proprietary systems they produce, the sources said.

    Corpus Christi port starts study for VLCC-loading facility on USGC island: CEO The Port of Corpus Christi Authority is carrying out a feasibility study to fully load VLCCs without reverse lightering from an island near the Gulf of Mexico, port CEO Sean Strawbridge said Wednesday. This would provide a major boost for US crude competitiveness in global export markets, particularly in Asia and Europe. "Our plan is to develop the Harbor Island where we own 250 acres of land and have the right of way to build pipelines," Strawbridge told S&P Global Platts. "We have also begun initial works for the permitting process to dredge to a depth of 75 feet that will allow for full loading of VLCCs." Construction of an offshore buoy at the island to load VLCCs is also an option. But no final decision has been taken yet, as such an initiative would entail a detailed permitting process, he said. Building on an offshore floating platform with a pier is not currently being considered, Strawbridge said. The Harbor Island, located at the end of the Corpus Christi Ship Channel and at the junction of the Redfish Bay and the Gulf of Mexico, will also be developed as a site for the storage of 20 million barrels of crude and for blending of varying slates, he said. Harbor Island would be the second port in the US - after the Louisiana Offshore Oil Port - that will have the capability to fully load VLCCs.

    Permian Natural Gas Is Increasingly Headed To Somewhere In Middle America - Permian Basin natural gas production is growing at a torrid pace. After starting 2017 just below 6 Bcf/d, production is set to breach the 8-Bcf/d mark soon on its way to 10 Bcf/d by the end of 2019. Pipelines flowing out of the basin are coming under increasing strain, and just about every single gas pipeline leaving the Waha hub in West Texas is now being utilized at levels not witnessed in years — if ever. Even routes north from the Permian to the Midcontinent and Midwest markets, traditionally only attractive on the coldest winter days, are starting to look viable year-round. Today, we look at recent gas-price and flow trends in the Permian natural gas market. Permian Basin natural gas has been the subject of many RBN blogs over the last 18 months. Back in January, we looked at gas pipeline takeaway capacity and planned expansions in Help on the Way. Last fall, we analyzed Permian natural gas flow patterns and prices in Witchy Waha. And last summer, we wrote a four-part series, It Was Good Living With You, (W)aha, in which we outlined our viewpoint that Permian gas production is set to grow to levels certain to create gas takeaway constraints in the basin. That view still holds, and over the course of these blogs, two factors have remained constant: (1) natural gas production in the Permian has grown faster than expected, and (2) regional gas basis prices continue to deteriorate. With production curtailments now likely a fait accompli before pipeline expansions bring new takeaway capacity to the basin, the Permian gas market is progressing deep into its lineup of pipeline takeaway options. This blog will look at the most recent development in the Permian gas takeaway end-game: surging volumes headed north on the pipelines that lead to the Midcontinent and Midwest end-use markets.

    Permian bottleneck could impact global oil market - The Permian basin is driving U.S. shale growth, with expectations that the basin will add enormous volumes this year, keeping the oil market well-supplied. But the Permian’s pipeline network is already filling up, forcing steep discounts for oil, and threatening to derail the aggressive growth projections for the region.  The EIA predicts the Permian will hit 3.156 million barrels per day (mb/d) of output in April, an increase of 80,000 bpd from March, and up a shocking 850,000 bpd from a year ago. Shale E&Ps and the oil majors are pouring in billions of dollars into the region, and two out of every three rigs the industry is adding is going into the Permian.But the shale basin is getting crowded, which not only means skyrocketing prices for land and a search for opportunities along the periphery, but also rapidly shrinking availability on the Permian’s pipeline network. “As these fringe areas begin to get exploited, we are seeing more and more crude that needs to find a pipeline to Cushing or the Gulf Coast,” John Zanner, energy analyst for RBN Energy, told Reuters.Oil market analysts knew that new pipeline capacity would be necessary in order to move all of the oil out of the Permian. But few expected the region to run out of pipeline space so quickly. “At the end of 2017, there was just 160 kb/d of line space available out of Western Texas. This small surplus is likely to turn into a deficit in the second half of 2018,” the IEA wrote in its March Oil Market Report. “The pipeline gap could widen further until mid-2019, in turn reducing the price of WTI Midland relative to Cushing.” “Other bottlenecks, such as shortages of sand and labour, as well as mounting demands for investor returns, could also slow growth, but most likely beyond 2018. For now, US producers continue to ramp up activity,” the IEA wrote in its March Oil Market Report. The IEA was spot on, except that the bottleneck the agency predicted is already starting to materialize. Even late last month when the IEA warned about pipeline issues, the thinking was that bottlenecks would start to form in mid-2018. But according to Genscape, and reported on by Reuters, pipeline utilization in the Permian has jumped to 96 percent over the past month. Genscape says the Permian has 3.175 mb/d of pipeline, rail and local refining capacity combined. That’s a problem given that the EIA sees production jumping to 3.156 mb/d in April.

    Texas producing more oil with fewer people, rigs -- Both Texas and the nation are producing more oil than nearly ever, but they're doing so with far fewer workers and drilling rigs. Texas is producing more oil now than at any point in 2014 when oil was last priced above $100 a barrel, and the industry is doing so with more than 25 percent fewer people and almost half the rigs, according to the Texas Petro Index calculated by economist Karr Ingham. Today's rigs are more automated and each of them are able to drill more wells from single locations, as well as produce more oil per well by drilling longer horizontal laterals and using hydraulic fracturing, called fracking, to unlock the petroleum from shale rocks. "The implications are striking: record crude oil and natural gas production at significantly lower prices, rig counts, and number of industry workers," Ingham said. "It means that fewer employees are needed to produce more crude oil in Texas and the U.S. than has ever been produced."

    STACK/SCOOP Production Doubles - Well design continues to improve across the unconventional US. We have analyzed this across the Permian, Eagle Ford and Bakken confirming the presupposition as true. Enhanced completions work was implemented by EOG Resources (EOG) in the Eagle Ford. It moved sand heavy fracs to the Bakken's Parshall Field next. Both were unbelievably successful. The implementation meant operators would need to use massive volumes of sand. This was cost effective, and frac sand is cheaper than ceramics. Other operators have started using this design, and implemented to a large degree. This isn't the case for all operators, but all are using more than 50% of the time. This is why production per foot should improve in 2018. This is without further stimulation improvements. We don't know if operators can improve stimulation from here, but recent EOG completions in New Mexico are showing promise. We have also seen some excellent work by Concho (CXO) across the Delaware Basin. There is upside to implementing design this year, with the possibility of further stimulation improvements as a variable difficult to assess.Well design improvements have improved economics and decreased payback times. This should put a ceiling on oil prices, but not in a bearish fashion. The reasons for this is the decrease in world inventories.  Shorter term we see WTI hitting a high between $70/bbl to $75/bbl.  There is little production data available on the STACK/SCOOP. The play is interesting, as we have seen very good economics. Others believe it is only good in a very small core position. We pulled 12 month production data of all SCOOP/STACK locations in 2016. The average 2016 horizontal produced 24 MBO and 436 MMcf. As a comparison, we pulled the data on 420 2017 locations. There are relatively large differences in production based on BOE. The best locations produced over 600 MBOE in under one year of well life. The SCOOP/STACK does not produce a lot of oil. It does produce significant volumes of condensate (which is better in some respects), NGLs and natural gas. The best well produce over 120 MBO, but those locations are few and far between.

    Increase In US Exports Rendering Once Crucial Cushing Data Irrelevant - Houston is quickly becoming the new benchmark for oil, while Cushing is losing its relevance to the industry.  Cushing wasn't just relevant to the industry for storage purposes, but also for sector wide data purposes. According to Reuters, it "got its distinction in the early 1920s when tanks sprung up to store oil en route from Oklahoma and Texas to major metropolitan areas and refineries in the Midwest. In 1983, it became the delivery point for the newly-launched WTI futures contract CLc1." For years, Cushing oil inventories were a staple for any business, trader or entity that dealt in the commodity, not to mention those who actively traded it on a daily basis. Cushing inventories were once the key indicator the the supply of crude oil held in the United States.  Decades ago, Cushing was seen as a fairly easy way to measure oil supply because the United States was not exporting any oil, but rather only importing it. This made it a novel and effective idea to have one major storage point to reference when trying to help gauge the amount of supply the United States had, which could quickly be used by traders and those in the industry to help with price discovery on oil futures contracts. Just as the trading market for oil futures has evolved, replacing open outcry with computers, so has the efficiency and method with which we collect oil inventory data. Cushing seems to be “slowly going the way of the buffalo“ while focus turns further south. Reuters reported about Cushing's storage this morning:  But those tanks could soon drain to levels near effectively empty, even as U.S. oil production soars past a new record of 10.4 million barrels per day.Oil supplies have fallen before in Cushing for a variety of seasonal or market-driven reasons. But this time, there is no shortage of crude in the market. In fact, U.S. production is straining pipeline and storage capacity.The declining volumes stored at Cushing reflects a more permanent shift, underscoring the hub’s waning influence as the primary measuring stick for the U.S. oil market and the leading barometer of future supply, demand and prices.

    Four Earthquakes Rattle‬ Northern ‪Oklahoma in 24 Hours - A 4.3 magnitude earthquake that rattled Northern Oklahoma early Monday morning was the fourth temblor to strike the region in the past 24 hours.  In fact, a dozen-plus earthquakes have been recorded in the Sooner State since Friday.  The U.S. Geological Survey recorded the latest quake at 5:22 a.m. local time near the city of Perry, Oklahoma. It's one of the largest in the state so far this year and it woke people up as far away as Kansas City, according to the area's National Weather Service.  The 4.3 came less than an hour after a magnitude 3.3 (highlighted in blue below) struck in the same vicinity.  The threshold for damage starts around 4.0. A tremor at that magnitude feels like a heavy truck striking a building. Mike Honigsberg, the emergency management director for the city of Enid and Garfield County, said there are no immediate reports of injury and he is asking residents to submit damage reports to him. The alarming flurry of earthquakes shaking Oklahoma in recent years has been tied to the large volume of fracking wastewater dumped into the state's injection wells. State regulators have directed oil and gas producers in the state to close wells or reduce injection volumes. The regulations have worked to a certain degree . While Oklahoma has dropped from two earthquakes per day to fewer than one per day, some of the post-regulatory quakes have been large and damaging.  Two big ones happened in 2016: the 5.0 magnitude earthquake that struck Cushing, one of the largest oil hubs in the world, and a 5.8 that hit near Pawnee, the largest ever recorded in the state.

    Trump wants to use oil and gas money to fix national parks. Some Democrats aren’t game. -  Repairing worn-out infrastructure across 417 national park sites can be costly, and the National Park Service is facing a whopping $11.6 billion maintenance backlog. That Grand Canyon pipeline alone has broken more than 80 times since 2010. So the Trump administration, with the help of Congress, is getting resourceful: It now wants to pay for the park upgrades with money the government collects from the development of oil, natural gas, wind and solar energy on public lands.“It’s a creative way of solving a problem, and it really solves the problem,” Rep. Rob Bishop (R-Utah), head of the House Natural Resources Committee and an administration ally, said in an interview with The Washington Post.The plan to push revenue from royalty payments and lease sales into park repairs is designed to appeal to most fiscal conservative Republicans and enough environmentally minded Democrats to get it across the finish line.The logic is straightforward, Interior Secretary Ryan Zinke said. “I think if you’re going to gain resource and wealth from public lands, then a fair proposition is, you should also contribute to the maintenance backlog and preservation of those lands,” he recently told the Senate Energy and Natural Resources Committee.But some Democrats worry about tying the viability of the park system to expanded drilling on- and offshore, one of President Trump’s highest energy priorities. Since most energy revenue comes from oil and gas, they note, the nation may come to depend on ever more fossil-fuel development to finance one of the most popular parts of the federal government.

    Conservation Groups: Fracking, Drilling Would Ruin Public Lands Near Colorado's Great Sand Dunes National Park -- Conservation groups are calling on the Trump administration to cancel plans to lease thousands of acres of federal public lands for oil and gas development near western Colorado's Great Sand Dunes National Park and Blanca Peak without fully analyzing environmental or cultural harms. WildEarth Guardians , the Center for Biological Diversity , Friends of the Earth , Rocky Mountain Wild , San Luis Valley Ecosystem Council , Sierra Club , and Wild Connections , submitted extensive comments Friday on Interior Secretary Ryan Zinke 's proposal to auction off 21,000 acres of public lands in Colorado in September. Of the lands nominated for auction, 18,000 acres are located near Great Sand Dunes National Park and Blanca Peak. In the comments, the groups noted that the Bureau of Land Management conducted little to no analysis on the potential harm from drilling and fracking to Colorado's air, water, night skies, wildlifehabitat, cultural resources or the national park. "The area near Great Sand Dunes National Park is uniquely beautiful and very susceptible to the harms from drilling and fracking," said Becca Fischer, a climate guardian with WildEarth Guardians. "Once BLM leases these lands, it cannot close the door to noise pollution, light pollution, and threats to our clean air and water. Yet, the BLM failed to conduct a meaningful analysis of these impacts.""This fracking plan would ruin some of Colorado's most scenic, remote and valuable wildlife habitat," said Diana Dascalu-Joffe, a senior attorney with the Center for Biological Diversity. "Unfortunately nothing is more important to the Trump administration than fossil fuel industry profits."

    Three Colorado Democrats debate fracking as they run for governor of Colorado -- During their first televised debate, former State Treasurer Cary Kennedy, ex-state Sen. Mike Johnston, and current Lt. Gov. Donna Lynne drilled down on whether and how to further regulate fracking in Colorado. And the answers weren’t entirely expected. During Wednesday evening’s debate, Lynne was less forceful than Johnston and Kennedy about creating laws distancing drilling from schools or houses, and she insisted, in a way the others did not, that public health and safety is already a priority in the state when it comes to energy development. Johnston was the only candidate who said he wanted state laws for so-called setbacks, and Kennedy said if she were governor she would have done more than the current governor to stop a pending appeal of a court ruling that says the state’s regulatory body must put public health and safety first. That body, the Colorado Oil and Gas Conservation Commission, is made up of a governor-appointed panel of nine commissioners that is funded largely by the oil-and-gas industry. Its stated mission suggests a balancing act between public health, the environment, and oil-and-gas development. “We are as committed to protecting public health and the environment as we are to fostering the responsible development of Colorado’s oil and gas resources,” reads the COGCC’s mission in part.  But a Colorado Court of Appeals decision says the agency’s mission should be to put health and safety first. That ruling was appealed in May of last year by Republican Attorney General Cynthia Coffman, a staunch defender of oil-and-gas companies. Coffman, who is also running for governor, has referenced her appeal during her campaign, saying that no other candidate has “stepped up and done more on behalf of the oil and gas industry than I have as attorney general.”

    Facebook's Cambridge Analytica scandal extends to local issues — like fracking -- Cambridge Analytica (CA) is a political consulting firm that has been making a lot of headlines of late. The company stands accused of illegally obtaining the Facebook data of as many as 87 million of the social media platform's users. It's also the firm that Donald Trump's campaign used during the 2016 election, and if CA's own hype is to be believed, it's the main reason Trump now occupies the White House. Skeptics claim that CA's use of big data from Facebook is no different than that of the many other consulting companies that have turned to Zuckerberg's platform in their efforts to manipulate voters through microtargeted messaging.   But CA claims it is different. The company says it can use the vast amounts of information that each of us exposes daily online to psychographically target each of us. In other words, the company believes it can expose individuals of its choosing to specific information and images (propaganda) that, based on the targeted person's psychological profile, will make them like or dislike a particular candidate or vote a certain way on, say, a ballot measure — like an oil and gas setback initiative. While such claims may seem like some fictional dystopian nightmare, they are certainly far more serious than that, and the future is now. Thanks to Facebook, anyone who built an app on the platform in the early days or has enough money to buy the data can now know who your friends are, what you like, what you watch and what websites you visit. They can know your race, sexual orientation, how you vote, if you vote and, in some instances, who you voted for. They can know your fears and your secret desires. Thanks to GPS tracking, these companies even know where you go, where you shop, whose house you visit, what hotel room you stay in and for how long, and where and what you like to eat. And worse, thanks to recent disclosures by Facebook, we now know that for the 80 percent of Facebook users who use an Android phone, they also know every person and phone number you have called or texted in the past several years. But the truly scary part of this privacy fiasco is what these psychologists, turned ad men, turned political manipulators can do with all your information. With 30 “likes” they can know as much about you as a good friend. A few hundred of such clicks and they rival your significant other. 

    Those living near oil and gas facilities may be at higher risk of disease - People living near oil and gas facilities along Colorado's Northern Front Range may be exposed to hazardous air pollutants, including carcinogens like benzene, that could pose health risks above levels deemed acceptable by the U.S. Environmental Protection Agency, according to researchers at the Colorado School of Public Health, Boulder County Public Health, CU Boulder, the National Aeronautics and Space Administration (NASA) and the University of California Irvine.The study, led by the Colorado School of Public Health at the University of Colorado Anschutz Medical Campus, used ambient air samples to estimate and compare risks for four residential scenarios. They found the lifetime cancer risk of those living within 500 feet of a well was eight times higher than the EPA's upper level risk threshold."We found that air pollutant concentrations increased with proximity to an oil and gas facility, as did health risks," the study said. "Acute hazard indices for neurological, hematological and developmental health effects indicate that populations living within 152 meters (500 feet) of an oil and gas facility could experience these health effects from inhalation exposures to benzene and alkanes."  The cancer risk estimate of 8.3 per 10,000 for populations living within 500 feet of an oil and gas facility exceeded the U.S. EPA's 1 in 10,000 upper threshold, according to study published recently in the journal Environmental Science & Technology. "Our results suggest that Colorado's current regulations that specify a 500 foot distance between a newly drilled oil and gas well and an existing home may not protect people from exposures to hazardous air pollutants that could impact their health," "Our previous work shows that thousands of people along the Front Range of Colorado live closer than 500 feet from a well and related infrastructure and that the population living close to these facilities continues to grow."

    Colorado Residents Becoming Upset Over Dangerous Drilling & Fracking - Fracking on Boulder County open space could begin within the year. If you’re reading this article, you’re likely aware of this threat because the Camera has been covering it. But many Boulder County residents do not follow local news closely and thus do not know that after our county spent over $500 million to protect land from development, the oil and gas industry still has the legal right to frack it. Several oil and gas companies now want to frack Boulder County open space. And they will — unless enough of us act to stop them. Crestone Peak Resources, a way too pretty name for a company that contributes heavily to climate change while polluting our water and air, has submitted a comprehensive drilling plan to the Colorado Oil and Gas Conservation Commission (COGCC). In it, they lay out their plan to drill on Boulder County Open Space.  Another oil and gas company, 8 North, a subsidiary of Extraction Oil and Gas, also wants to drill our public lands. The COGCC will hold hearings at the end of April about 8 North’s plan. You can sign up to speak at these hearings or you can just watch the proceedings. The schedule hasn’t been set yet, so watch the COGCC’s website for more information on this.So how can Crestone and 8 North get away with drilling on protected land? While you and I were busy with our daily routines, paid oil and gas lobbyists were cozying up to Colorado state legislators — they’ve been doing this for decades. As a result, many pro-oil and gas laws were passed, among them preemptive state laws that favor the fossil fuel industry. What this means is that oil and gas laws at the state level can nix those at the local level.Those laws are why it doesn’t matter that cities in Boulder County have voted to ban fracking. Those laws are why the county commissioners could impose only a moratorium on fracking, not an outright ban. This is why the county commissioners cannot impose another moratorium on fracking without getting our county sued for millions of dollars. The oil and gas industry is rich and powerful and for them, profits always come first. They get what they want. They have for over a hundred years.

    Preliminary research says fracking harms the psychosocial well-being of rural communities -- Ag Week -- A recent review of published research and policy literature concerning the mental health consequences to rural — and often agricultural — communities in which fracking has been undertaken to extract oil and natural gas indicates initial temporary benefits of this industry, usually followed by longer-term detriments to most communities. This analysis of available research studies was undertaken by the Committee on Rural Health of the American Psychological Association, beginning in 2015 and culminating some two years later in a recent publication by Jameson Hirsch and others in the International Journal of Mental Health and Addiction. The full report can be found online: DOI 10.1007/s11469-017-9792-5.  According to the article summary, "The process...known as hydraulic fracturing, or fracking, is a controversial energy acquisition technique often viewed with disdain by the public, due to its potential for environment harm. However, the mental health and psychological well-being of fracking communities, including potential benefits and detriments, are often overlooked.  "We reviewed the literature on the association between fracking and psychological functioning, finding that although people living in fracking communities may experience some minimal benefits such as land lease income or infrastructure development, they may also experience worry, anxiety and depression about lifestyle, health, safety and financial security, as well as exposure to neurotoxins and changes to the physical landscape. "Indeed, entire communities can experience collective trauma as a result of the 'boom/bust' cycle that often occurs when industries impinge on community life. Impacted communities are often already vulnerable, including poor, rural or indigenous people, who may continue to experience the deleterious effects of fracking for generations. "An influx of workers to fracking communities often stokes fears about outsiders and crime: yet it must be recognized that this population of mobile workers is also vulnerable, often ostracized and without social support.

    World May Hit 2 Degrees of Warming in 10-15 Years Thanks to Fracking, Says Cornell Scientist - In 2011, a Cornell University research team first made the groundbreaking discovery that leaking methane from the shale gas fracking boom could make burning fracked gas worse for the climate than coal.  In a sobering lecture released this month, a member of that team, Dr. Anthony Ingraffea, Professor of Engineering Emeritus at Cornell University, outlined more precisely the role U.S. fracking is playing in changing the world’s climate. The most recent climate data suggests that the world is on track to cross the two degrees of warming threshold set in the Paris accord in just 10 to 15 years, says Ingraffea in a 13-minute lecture titled “Shale Gas: The Technological Gamble That Should Not Have Been Taken,” which was posted online on April 4.  That’s if American energy policy follows the track predicted by the U.S. Energy Information Administration, which expects 1 million natural gas wells will be producing gas in the U.S. in 2050, up from roughly 100,000 today.  An average global temperature increase of 2° Celsius (3.6° Fahrenheit) will bring catastrophic changes — even as compared against a change of 1.5° C (2.7° F). “Heat waves would last around a third longer, rain storms would be about a third more intense, the increase in sea level would be approximately that much higher and the percentage of tropical coral reefs at risk of severe degradation would be roughly that much greater,” with just that half-degree difference, NASA‘s Jet Propulsion Laboratory explained in a 2016 post about climate change. A draft report from the Intergovernmental Panel on Climate Change (IPCC), which was leaked this January, concludes that it’s “extremely unlikely” that the world will keep to a 1.5° change, estimating that the world will cross that threshold in roughly 20 years, somewhat slower than Ingraffea’s presentation concludes. “Whereas the worst-case scenario brought us to 1.5 degrees Centigrade in 2040,” he adds, “we’re almost there today.”

    U.S. Bank Raises $2 Billion in Oil and Gas Pipeline Finance Despite Pledging to Stop -Since revising its environmental policy last year, U.S. Bank financed more than $2 billion to companies building oil and gas pipelines , including an estimated $480 million to Energy Transfer Partners, new analysis released Thursday by Oil Change International concludes .U.S. Bank CEO Andrew Cecere won praise from indigenous rights and climate advocates in April 2017 when he announced to shareholders that U.S. Bank would "not finance the construction of oil and gas pipelines." Days later, U.S. Bank issued a revised environmental policy significantly narrower in scope than what Cecere described, limited to only project financing which had never been a significant line of business for the bank.New research conducted by Oil Change International shows that since Cecere's promise, U.S. Bank financing activity with oil and gas pipeline builders has continued apace. The analysis comes days ahead of the U.S. Bank annual shareholder meeting in Albuquerque, New Mexico where pipeline opponents plan to question executives about Cecere's empty promise."U.S. Bank says trust and ethics are its core values, but its actions seem to show the opposite" said Brant Olson, U.S. program director for Oil Change International. "Adopting a meaningless policy to create the impression of care for the environment paints a troubling picture of U.S. Bank's priorities."The analysis released Thursday finds that since announcing its commitment in April 2017:

    • U.S. Bank has participated in dozens of deals with pipeline companies, worth more than $40 billion, with U.S. Bank's estimated financial commitment totaling more than $2 billion.
    • U.S. Bank has served as a bookrunner or manager, meaning it was a lead financial institution, on numerous pipeline deals totaling more than $17 billion, of which U.S. Bank raised more than $930 million.

    Of particular interest is financing for pipelines being built by Energy Transfer Partners (ETP), a company notorious for its controversial role in building the controversial Dakota Access Pipeline . In addition to the Dakota Access Pipeline, Energy Transfer Partners is seeking to build numerous oil and gas pipelines throughout the U.S. which have been met with massive resistance as well as numerous construction mishaps, violations and mandated work stoppages.

    Keystone Pipeline Spilled 407K Gallons in South Dakota, Double Previous EstimateTransCanada's Keystone crude oil pipeline leaked 9,700 barrels (407,400 gallons) on rural farmland near the city of Amherst last year—nearly twice the original estimate of 5,000 barrels (210,000 gallons), a company spokeswoman told the Aberdeen American News .  The Nov. 16 incident was already considered the largest spill in South Dakota, but its new estimate makes it the seventh largest inland spill in the whole U.S. since 2010, the South Dakota publication noted.  TransCanada shut down the 590,000 barrel-per-day pipeline, which runs from Alberta to refineries in Illinois and Texas, immediately after detecting a pressure drop in their operating system. Operations restarted about two weeks later. Federal investigators said construction damage when the pipeline was built in 2008 was likely to blame.  TransCanada  Repairs and cleanup efforts have since been made. The Calgary-based energy company said there was no impact to groundwater based on its own sampling.  The spill drew fierce outcry from environmentalists and pipeline opponents, especially as it happened just days before Nebraska's Public Service Commission would decide on whether its controversial sister project—the Keystone XL (KXL) Pipeline—will go forward. "We need to stop all expansion of extreme fossil fuels such as tar sands oil—and we need the finance community to stop funding these preventable climate disasters—disasters for the climate, the environment and Indigenous rights," Scott Parkin, Rainforest Action Network 's Organizing Director, said then.  The regulators ultimately approved the KXL's " mainline alternative route " later that November. President Trump overturned President Obama's rejection of the KXL by signing an executive order in March 2016 to help push the project forward.

    Bakken Oil Production Improves 24% Year Over Year -- US operators continue to improve well economics. The move to enhanced completions increases oil production per location, and we are still seeing improved production per foot. Most operators are still moving to these designs. This should continue to support improved production from US operators in 2018. Higher oil prices are also bullish. Horizontals are producing more oil and operators receive more per barrel. Oil bears believe a rise in US production will push down oil prices. This may be the case, but if demand continues, not until after driving season.  Refineries are behind the curve, so to speak. It will have to play catch up, as world demand has increased at a healthier clip than expected. This could push WTI to $75/bbl by the 4th of July. We have covered oil production improvements in the Midland and Delaware Basins of the Permian. The Bakken is also improving. This is done with a large inventory of the best geology already completed. We pulled 620 horizontals completed in 2016. McKenzie County has seen the most activity with 310. It is followed by Mountrail and Williams. Operators are sticking on and close to the Nesson Anticline. This area has the best geology and well pressures. The table below provides the 2016 well count and total production.  There are a couple of areas to the north (Divide) and south (Stark) where operators are developing due to lower costs. These locations produce less oil, but payback times have been decent at today's oil price.

    Bakken 2.5: Evolution Of Completion Strategies -- April 10, 2018 - I just posted this earlier, but it is important enough, for archival purposes, to get its own stand-alone post.
    This data will not be updated. I track the Monroe wells elsewhere. This is huge, huge news. Look at these wells (commentary follows):

    • 22891, IA/947, CLR, Monroe 1-2H, 35 stages,  3.3 million lbs, t8/12; cum 296K 10/16;
    • 30253, 3,225, CLR, Monroe 6-2H, Banks, 4 sections, a huge well; first two full months, 50K+; 150K in first three months; from a November 4, 2016, sundry form -- "CLR .... requests a waiver to plug and reclaim an abandoned well ... the well will be completed once commodity prices improve ..." Spud August 15, 2015; reached KOP on August 18, 2015; KOP curve drilled in 36 hours; wellbore landed 18' into the middle Bakken; the rig was then skid over to the Monroe 7-2H; background gas averaged 600 units; a high formation gas of 1106 units was observed when traversing the upper Bakken shale; the 13,537' long lateral began drilling on October 17, 2015; reached TD on October 23, 2015; 78 stages; 11 million lbs; "... plug & perf completion; 15% 100-mesh & 85% (40/70) natural white sand; t10/17; cum 243K 2/18;
    • 30251, 2,313, CLR, Monroe 7-2H, Banks, 4 sections, 78 stages; 16.6 million lbs, unspecified mix of mesh and 40/70, a huge well; two of first three months, close to 50K+/month; about 130K first three months; t10/17; cum 200K 2/18;
    • 30254, 1,302, CLR, Monroe 8-2H, Banks, 4 sections, 53 stages; 10.7 million lbs, 28% mesh/72% 40/70; t1/18; cum 15K 2/18;
    • 30252, 1,823, CLR, Monroe 9-2H, Banks, 4 sections, 53 stages; 16.2 million lbs; 19% mesh & 81% 40/70; t1/18; cum 30K 2/18;
    • 33098, SI/NC, -->1,858, CLR, Monroe 10-2H1, Banks, 4 sections, Three Forks B1, 82 stages; 10.6 million lbs; "plug and perf completion; pump 25% 100-mesh & 75% (40/70) natural white sand, started off slow, but 45K in fifth month; t10/17; cum 101K 2/18;
    • 33097, 1,594, CLR, Monroe 11-2H1, Banks, 4 sections, Three Forks B1; 82 stages; 16.5 million lbs; "... 12 toe stages with ball & sleeve then 70 stages utilizing plug & perf with unspecified mix of mesh and 40/70 sand, t10/17; cum 72K 2/18;

    2018 Oil & Gas Projects To Break Even At $44 Per Barrel - New oil and gas projects to be sanctioned this year will likely have a 15-percent lower breakeven level than last year’s, at US$44 per barrel of oil equivalent, Wood Mackenzie sees as many as 30 new projects coming on stream this year, but notes that most of these will be small-scale ones, signaling the lingering wariness among oil and gas players of major investments. This is a continuation of a trend started after the 2014 price crash, which saw last year’s average capex per major project—deposits with commercial reserves of 50 million boe or more—drop to US$2.7 billion from US$5.5 billion on average for the last 10 years. Wood Mac’s analysts note, the oil and gas industry has paid much more attention to brownfield developments and production expansion projects, with offshore operators increasingly turning to subsea tie-ins instead of tapping new fields. Again, this is a sign of the new cost discipline that oilfield operators have been forced to apply amid the price crisis from the last three years.

    Will Shale Become The Next Victim Of The China-US Trade War? - One can hardly call it a trade war just yet—posturing for a trade war may be a more apt label—but the U.S. Shale industry, which has enjoyed a mighty good run in the last year, may soon find itself the next target as China and the United States face off in the fight to flesh out new trade terms.Not a day has gone by in the last couple of weeks without hearing the latest round of threats, promises—and analysis of said threats and promises—as the Trump administration clamors for better trading terms between the two nations. It’s a trade war. It’s not a trade war. China has too much to lose. The United States has more to lose than it thinks. U.S. oil exports are at an all-time high, and with this prestige comes a unique vulnerability—a vulnerability that was nonexistent in the days of domestic-use only. Back in 2013, the United States was exporting between 43,000 and 58,000 barrels per day—with Canada being the only recipient, thanks to an export ban implemented by the United States in 1975. In late 2015, however, the United States removed the ban, opening up its oil exports to other nations. For week ending March 30, 2018, US crude oil exports reached an average of 2.175 million bpd—a meteoric rise for a nation that for years kept its oil close to home.  This rise in U.S. oil exports has shifted the global oil industry. Where the United States was once, for the most part, a non-entity in global price setting in the industry, now it has achieved major price-setting prowess. In fact, US crude oil production, and its subsequent exports, is giving OPEC and Russia, et al, a run for their money as the production cut pact tries desperately to rebalance the market overhang. But this newfound power is also fraught with challenges, as the United States finds itself susceptible to geopolitical risks as it ships more crude abroad.One large importer of U.S. crude oil is none other than China—the third largest importer of U.S. crude behind Canada and Mexico, at 15.7 million barrels in January—the latest data available from the EIA. While China may be the third largest importer of U.S. crude oil, the volumes exported to China still represent less than 10 percent of the total volume exported.  Still, that volume represents a value of over $1 billion per month, and that doesn’t even touch on the hundreds of millions taken in from China for LNG shipments.

    Diversified E&Ps nearly complete transitioning; growth around the corner, part 3. -- Defying predictions of widespread bankruptcies and credit defaults, the U.S. exploration and production companies (E&Ps) we track returned to profitability in 2017 through a strategic transformation that featured the “high-grading” of portfolios, impressive capital discipline and an intense focus on operational efficiencies.  However, the road to recovery has been longer and more challenging for some companies, particularly a few of the E&Ps in our Diversified Peer Group, whose output and reserves are more balanced between oil and gas. Their portfolio realignments have been the biggest among our three peer groups — collectively they have shed $36 billion in assets and 3.6 billion barrels of oil equivalent (boe) in proved reserves over the last three years. Today, we continue our review of how rebounding oil prices are affecting E&P cash flow, this time focusing on producers with a rough balance of oil and natural gas assets. The Diversified Peer Group’s 2017 results and 2018 guidance show that the 17 companies have moved along the same general path to recovery as the overall E&P sector, although the degree of the Diversified companies’ rebound to date has fallen short of that accomplished by the Oil-Weighted and Gas-Weighted peer groups. After bleeding a total of $80 billion in red ink in 2015 and 2016, the Diversified group reported $2.5 billion in pre-tax operating losses on substantial asset impairments from divestitures, compared with a combined $3.4 billion in profits for the remaining E&Ps. Based on 2018 guidance, the group’s annual production has nearly stabilized at just under 1,800 MMboe (red rectangle in Figure 2) after 4% and 5% contractions in 2016 and 2017, respectively. In comparison, the Oil-Weighted group is guiding to 11% output growth and the Gas-Weighted group is expecting 12% growth. Like the rest of the industry, the Diversified producers are maintaining impressive capital spending discipline despite higher oil prices, which will generate a $6.1 billion — or 49% — increase in free cash flow.

    Short Term Energy Outlook -- EIA -- April 10, 2018 - Summer Fuels Outlook:

    • EIA is forecasting retail prices for regular-grade gasoline to average $2.74 during the summer of 2018, which tops last summer’s average by 32 cents. The forecast attributes this increase, in large part, to higher Brent crude oil prices, which are reaching average spot prices not approached since 2014.
    • Increased prices throughout 2018 will likely increase annual U.S. household spending on motor gasoline by about $190, approximately 9% higher when compared with 2017. 
    • Despite higher prices, EIA’s forecast expects gasoline consumption to increase in 2018. Americans are set to consume roughly 9.6 million barrels per day throughout the summer of 2018, which would be an increase of about 20,000 barrels per day from last summer’s record average.
    • Consumers could see higher electricity bills this summer because temperatures are forecast to be a bit hotter than last summer. The short-term outlook expects residential electricity bills to average $142 per month, which would be up from last summer’s average by 3.4%.
    • The short-term outlook continues to see natural gas gaining in its share of electric power generation. With a warmer summer expected in 2018, EIA expects electric generation from June through August to top last year’s levels by more than 2%. Of total electrical generation over the summer, natural gas will account for 36%, 2% higher than last year, while coal’s share will drop by 2% to 30%.
    • The short-term outlook continues to forecast that Brent crude oil spot prices will average $63 per barrel in both 2018 and 2019, while West Texas Intermediate will remain below $60 per barrel, averaging about $4 per barrel less than Brent in both years.
    • EIA continues to forecast record crude oil production in the United States for both 2018 and 2019, largely as a result of horizontal drilling and hydraulic fracturing in tight rock formations, especially in the Permian region. 
    • April’s short-term outlook expects U.S. production to average 10.7 million barrels per day in 2018, which would be a new record and represent an increase of nearly 15% from 2017 to 2018.
    • U.S. dry natural gas production also remains on pace for record levels in both 2018 and 2019, according to the forecast. This year’s production is poised to increase by 7.5 billion cubic feet per day over 2017 levels to an average just above 81 billion cubic feet per day.
    • The April short-term outlook maintains the forecast for U.S. natural gas net exports increasing to historic levels in both 2018 and 2019. 
    • U.S. natural gas trade was almost balanced between exports and imports in 2017, but, in this forecast, EIA expects that the United States will see net natural gas exports climb above 4 billion cubic feet per day by 2019 as LNG terminals continue to come online.

    US EIA revises 2018 gasoline forecast, calls for higher prices (Platts)-- The US Energy Information Administration has revised its forecast for average 2018 gasoline prices up 1.6% to $2.64/gal, it said in its most recent Short Term Energy Outlook. The latest projection was met with mixed reactions from US market sources Wednesday. The EIA's previous Short Term Energy Outlook, released March 5, projected that the average cost of regular grade gasoline at the pump, including taxes, would be $2.60/gal for 2018. April's forecast, released Tuesday, raised that figure to $2.64/gal. In addition, the EIA expects the retail price of all US gasoline, including premium grades) to average $2.76/gal in 2018. Americans are consequently expected to pay about 9% more for gasoline this year compared with 2017, EIA said. The latest gasoline forecast calls for stronger transport fuel prices mainly due to expectations of higher crude oil values. April's Short Term Energy Outlook raised the expected average price for WTI crude oil and Brent crude oil by 2.1% and 2%, respectively. Meanwhile, the forecast for average US gasoline consumption did not change between April and March. One US market source, a trader active in the US Gulf Coast, said he was not surprised by the expectations of higher gasoline in April's Short Term Energy Outlook: "It looks accurate." A second US gasoline source said the revised forecast "makes sense" given that "crude is rallying." Platts data show that from March 5 through April 10 the May NYMEX WTI crude oil futures contract has rallied $3.12/b, settling at $65.51/b on Tuesday. A third source, who trades gasoline along the US West Coast, said he found the forecast "surprising." He said that it seems a bit counterintuitive because "oil production and refining are at almost record levels" and yet gasoline "prices keep going up."

    US crude stocks build as exports fall, output rises - US crude stocks saw a larger-than-expected build last week as exports fell sharply, and domestic production topped 10.5 million b/d, Energy Information Administration data showed Wednesday. Crude stocks rose 3.306 million barrels to 428.638 million barrels the week ending April 6, EIA data showed Wednesday. Analysts surveyed Monday by S&P Global Platts were looking for a build a of 100,000 barrels. The five-year average for the same period showed an increase of 1.9 million barrels. This build marked a reversal from the week prior when record-high US crude exports and a drop in imports led to a draw of 4.62 million barrels. Last week saw imports rebound 752,000 b/d to 8.65 million b/d, while exports plunged 970,000 b/d last week to 1.205 million b/d. Exports have averaged 1.5 million b/d year to date, double the amount from 2017 during the same period. Imports have averaged 7.8 million b/d so far this year, versus 8.1 million b/d in 2017. With US crude production climbing further into record-high territory last week, flows have adjusted to encourage a drop in net imports. Output rose 65,000 b/d to 10.525 million b/d the week ending April 6, a year-on-year increase of 1.29 million b/d. Despite far greater supply, US inventories have fallen by nearly 105 million barrels since last year. One reason why has been the shift in crude differentials to encourage exports and discourage imports. The Brent/WTI spread was trading Wednesday afternoon at $5.33/b, compared with $2.44/b a year ago. That spread had been around parity to $3/b from late 2015 until August 2017 when it began to widen. A premium for Brent over WTI provides an incentive for US producers to export crude. In a similar vein, Gulf Coast crude prices have strengthened to draw barrels there for export, refining or storage purposes. 

    How Much Longer Can Pemex Hang On? - During its heyday in the 1980s, Mexico’s state-owned oil empire, Petroleos de Mexico (Pemex), was the third largest oil producer in the world. That was before the rot of chronic mismanagement, unfettered corruption, and declining oil reserves began to set in. The company, now in its 80th year, excels in only two areas: accumulating massive losses — both in money and stolen oil — and clocking up new record levels of debt.For the fourth quarter of 2017 the company posted a zinging loss of 352.3 billion pesos ($18 billion), blaming a weaker peso exchange rate, new reporting rules and higher financing costs. The loss compares to a profit of 72.6 billion pesos in the year-ago period. While the group’s sales increased by some 30% over the duration of 2017, largely due to higher oil prices, costs ballooned by 115%.“Pemex has been roiled by external factors such as the oil crisis of 2015, but it has also been hit by the fact that there have been constant changes in the general management,” says energy analyst Arturo Carranza. The group has had three different management teams in just five years. According to the new boss, Carlos Treviño, installed at the end of 2017, the company’s financial condition is stabilising and the debt situation is now being handled much better.Whatever Pemex’s new top management might say, the group’s vital signs are still extremely weak. Between 2016 and 2017, its production of crude oil slid 9.5%, from 2.15 million barrels per day to 1.95 million, its lowest level since 1980. Its average daily level of natural gas extraction also fell 12.5% to 5.06 billion cubic feet per day. But it’s Pemex’s burgeoning debt load that is of greatest concern. In the last five years alone Pemex’s total debt has increased by $38 billion, from €64 billion in December 2012 to $102 billion in December 2017. That’s almost the equivalent of 10% of Mexico’s GDP. And it doesn’t include the company’s pension liabilities, which are estimated to be worth an additional 9% of GDP.

    Kinder Morgan halts most work on disputed Canada pipeline expansion  (Reuters) - Kinder Morgan Canada on Sunday suspended most work on a C$7.4 billion ($5.8 billion) oil pipeline expansion that has become the focus of protests, a move underscoring uncertainty over major energy projects in Canada. Company Chairman Steve Kean said he would scrap plans to nearly triple the capacity of the Trans Mountain pipeline, which takes crude from Alberta’s oil sands to a facility in the Pacific province of British Columbia, unless the various legal challenges could be resolved by May 31. The announcement was a blow to the Liberal government of Prime Minister Justin Trudeau, which approved the project and says it is in the national interest. The project - considered crucial for an oil industry hit by transportation bottlenecks - is fiercely opposed by British Columbia’s left-leaning New Democratic government, many municipalities, some aboriginal groups, and environmental activists concerned about possible oil spills. “We will be judicious in our use of shareholder funds. In keeping with that commitment, we have determined that in the current environment, we will not put KML shareholders at risk on the remaining project spend,” Kean said in a statement. The firm is currently carrying out preliminary work and has not started construction. Many in the energy industry are concerned about whether any new pipelines can be built in Canada, which sits on the world’s third largest proven reserves of crude and is the single largest exporter of energy to the United States. Although the federal government has the power to approve major pipelines, the 10 provinces enjoy broad responsibility for resource development. That can result in deadlock when a province opposes a decision made by Ottawa. 

    Opposition Forces Kinder Morgan to Halt Trans Mountain Pipeline -- Environmental and indigenous groups are cheering after Kinder Morgan announced Sunday it was halting most work on its controversial Trans Mountain expansion pipeline project, citing continuing opposition.   "This is a sign that organizing works, and it could well be the beginning of the end for this dangerous pipeline," declared Clayton Thomas-Muller, a Stop-it-at-the-Source campaigner with 350.org.   "This is huge," added British Columbia-based advocacy group Dogwood. In the company's statement announcing the move, chairman and CEO Steve Kean said Kinder Morgan was suspending "all non-essential activities and related spending" as a result of the "current environment" that puts shareholders at risk. "A company cannot resolve differences between governments," he added, referencing resistance from BC lawmakers that is at odds with support for the project coming from Ottawa and neighboring Alberta. "While we have succeeded in all legal challenges to date, a company cannot litigate its way to an in-service pipeline amidst jurisdictional differences between governments," Kean said. Unless legal agreements are reached by May 31, Kean said that "it is difficult to conceive of any scenario in which we would proceed with the project." (There are still 18 pending court cases that could thwart the project, the Wilderness Committee noted.) BC Premier John Horgan, for his part, said in a statement Sunday, "The federal process failed to consider BC's interests and the risk to our province. We joined the federal challenge, started by others, to make that point."  "We believe we need to grow the economy, while protecting the environment. We want to work to address these challenges together. But we will always stand up for British Columbians, our environment, and the thousands of jobs that depend on our coast."

    Kinder Morgan to suspend all non-essential spending on Trans Mountain project -  The Alberta government is prepared to buy a stake of the Trans Mountain pipeline expansion to ensure it gets built, Premier Rachel Notley said Sunday. In a rare show of being on the same page, United Conservative Party Leader Jason Kenney agrees. The $7.4-billion Kinder Morgan project may be scrapped entirely unless agreements can be reached by May 31 to resolve uncertainty created by British Columbian government opposition to the project, the company announced Sunday. In a news release, Kinder Morgan said without an agreement in place, “it is difficult to conceive of any scenario in which we would proceed with the project.” Notley came out swinging late Sunday afternoon, her comments aimed squarely at B.C. Premier John Horgan. It wasn’t wrath — she’s not even angry, she said, just calmly trying to get on with the job at hand — but it was a direct message. Horgan may think he can harass the project without economic consequences for his province, Notley said, “but he is wrong.” Her government will introduce legislation to turn off the taps to B.C. in the coming days, she said, giving Alberta the power to impose serious economic consequences on the province should it continue on its present course. And if Horgan thinks he can mess with the project via legal means, Notley says, he’s wrong again. “Let me be absolutely clear — they cannot mess with Alberta,” she said, adding her government is prepared to invest public money in the pipeline project. “If we take that step, we will be a significantly more determined investor than British Columbia has dealt with up to this point,” Notley warned. “Never count Alberta out. This pipeline will be built.” 

    Disaster Hits Canada's Oil Sands - Kinder Morgan said it would halt nearly all work on a pipeline project that is crucial to the entire Canadian oil sands industry, representing a huge blow to Alberta’s efforts to move oil to market.  Kinder Morgan’s Trans Mountain Expansion is the largest, and one of the very few, pipeline projects that has a chance of reaching completion. Alberta’s oil sands producers have been desperate for new outlets to take their oil out of the country, and the decade-plus Keystone XL saga is the perfect illustration of the industry’s woes. Keystone XL is still facing an uncertain future, and with several other major oil pipeline projects already shelved, there has been extra emphasis on the successful outcome of the Trans Mountain Expansion. That is exactly why Canada’s federal government, including Prime Minister Justin Trudeau, has gone to bat for the project.   But, despite federal approval, Trans Mountain still faces a variety of obstacles that have bedeviled the project for some time. It appears that opposition from First Nations, environmental groups, local communities affected by the route, and the provincial government in British Columbia have forced Kinder Morgan to throw in the towel, at least for now.  Kinder Morgan said on Sunday that it suspended most work on the $5.8 billion Trans Mountain Expansion.  Environmental groups hailed the announcement. “The writing is on the wall, and even Kinder Morgan can read it. Investors should note that the opposition to this project is strong, deep and gets bigger by the day,” said Mike Hudema, climate campaigner with Greenpeace Canada, according to Reuters. Kinder Morgan’s CEO Steve Kean said the project would be scrapped unless the legal challenges could be resolved by May 31. The announcement sparked a sense of panic among various Canadian politicians. Alberta’s Premier Rachel Notley, not surprisingly, sounded more alarmed. She took to Twitter to not only lash out at British Columbia, but also vow that her province would push the pipeline, even if it meant taking a public stake in the project.

    Canada explores options as Kinder Morgan halts pipeline work (Reuters) - The Canadian government on Monday said it was considering all its options on the Trans Mountain pipeline expansion, including a possible investment of public funds to ensure construction goes ahead, after Kinder Morgan Canada halted most work on the project and set a May 31 deadline to scrap the plan. Canada’s Natural Resources Minister Jim Carr, when asked whether the federal government would invest in the C$7.4 billion ($5.8 billion) project, told the Canadian Broadcasting Corporation: “We are looking at all options — that’s on the table. We’re not ruling anything out. We are doing an assessment of what might be necessary, working with the government of Alberta.” Carr’s comments follow Alberta Premier Rachel Notley’s pledge on Sunday that the oil-rich province was prepared to invest in the pipeline to ensure the project moves ahead. Kinder Morgan Canada said on Sunday that it would scrap plans to nearly triple the capacity of its existing Trans Mountain pipeline, which extends from Alberta to British Columbia’s coast, unless various legal and jurisdictional challenges could be resolved by May 31. The project was approved by the federal government in 2016, but that approval is being challenged in court by First Nation groups and local municipalities, and British Columbia is eyeing whether it has jurisdiction to block increased oil shipments through its territory. To go ahead, the company needs more certainty, said Kinder Morgan’s Chief Executive Steve Kean in a conference call on Monday, which could mean “some kind of preemptive action” to make clear Canada’s jurisdiction over the project. 

    As Kinder wavers, oil-rich Alberta considers buying pipeline to port - Alberta Premier Rachel Notley says the province will buy the Trans Mountain pipeline project outright, if that's what it takes to get it built. On Tuesday morning, Notley said the federal government should be willing to put money into the project as well. Then, in a statement issued later in the day, the premier said buying the pipeline is one of many options being considered to get construction ramped up on the project, which would triple the amount of oil going from Alberta to the B.C. coast. Notley said over the weekend the province was looking at taking an equity stake in the line, but didn't talk about buying it completely. The pipeline builder, Kinder Morgan, announced it was scaling back on the federally approved $7.4-billion project because of opposition and delays from the B.C. government. Kinder Morgan has given the federal government until May 31 to offer concrete assurance the line will get built, and Notley has repeatedly called on Prime Minister Justin Trudeau to take action. "We are considering a number of financial options to ensure that the Trans Mountain expansion is built, up to and including purchasing the pipeline outright if were to come to that," Notley said Tuesday in the statement. "But it is not the only model we're considering." 

    Alberta willing to buy Trans Mountain pipeline if necessary, premier says - Alberta, the landlocked Canadian province that’s home to the oil sands, would be willing to buy out Kinder Morgan Inc.’s Trans Mountain pipeline if that’s the only way to salvage the critical export route. “We are considering a number of financial options to ensure that the Trans Mountain expansion is built, up to and including purchasing the pipeline outright,” Alberta Premier Rachel Notley said in a statement. Kinder threatened to abandon the $5.7 billion project, which would triple the pipeline’s capacity, unless obstacles to the plan are resolved by May 31. The warning came amid strident opposition and legal challenges from British Columbia, the Pacific coast province it traverses. The expansion would allow the system to move an additional 590,000 barrels a day of crude from the oil sands to a terminal near Vancouver, where it could be sent to Asia and reduce Canada’s dependence on American buyers. The Houston-based company’s ultimatum has stirred concerns across the nation as government officials and business leaders decried the risks to a project that was already approved federally in 2016 and that the energy industry is counting on to carry more crude to refiners abroad. Meanwhile, B.C. Premier John Horgan accused Kinder Morgan Tuesday of “deliberately trying to dial up a crisis within our Canadian federation.” 

    Canada's Trudeau to press British Columbia to accept pipeline: source (Reuters) - Canadian Prime Minister Justin Trudeau is set to pile pressure on British Columbia’s provincial government to drop its resistance to a pipeline project, but will try to avoid tougher measures that might alienate voters who helped his Liberals win power, a source close to the matter said on Wednesday. Trudeau is racing against time. Kinder Morgan Canada said it would scrap the C$7.4 billion ($5.9 billion) Trans Mountain pipeline expansion from Alberta to the west coast unless all legal and jurisdictional challenges facing the project are resolved by May 31. The pipeline, which Canada’s oil industry considers crucial, is opposed by British Columbia’s left-leaning New Democratic provincial government. Environmentalists and aboriginal activists are mounting frequent protests and British Columbia police have arrested about 200 people around Trans Mountain facilities since mid-March. Trudeau’s Liberals picked up seats in the province in the last election, but the federal NDP - which opposes the pipeline - remains a force there. This could make Trudeau’s federal government cautious as it is locked in a rare standoff with a provincial counterpart. British Columbia opposes the expansion, citing fears that the risk of a spill in the Pacific province is too great. Ottawa insists it has jurisdiction over the project and Trudeau is under huge pressure to crack down. For now, he will press the provincial government, pointing to polls showing most Canadians want the expansion to go ahead.   Morneau gave strong hints that Ottawa may intervene by providing financial assurances to Kinder Morgan, which has voiced concerns about committing additional resources to the project given the heated opposition.

    Ottawa eyes financial backing to save troubled Trans Mountain pipeline — Finance Minister Bill Morneau says the federal government will act on the Trans Mountain pipeline project in “short order,” sending the strongest signal yet that it will move to financially backstop the project to reduce the risks for its American-based backer.Speaking after a late-day meeting with Alberta Premier Rachel Notley, Morneau said the federal Liberals have the “tools” to make the contested project a reality but said the government has not yet made a decision on what steps it will take.But he immediately ruled out one option — a referral of the legal dispute around Trans Mountain to the Supreme Court of Canada — a measure floated earlier in the day by NDP Leader Jagmeet Singh as a way to clear up questions of jurisdiction.“We don’t see a need to refer something to the Supreme Court of Canada when we already know it’s a federal jurisdiction. That, from our standpoint, is not a course of action that makes sense,” Morneau said. Prime Minister Trudeau Justin Trudeau has declared that the project will get built, despite the opposition of the minority NDP government in B.C.  But that vow has taken on added urgency in the wake of Kinder Morgan’s announcement on Sunday that it was suspending non-essential work on the pipeline, citing “extraordinary political risks” caused by B.C.’s opposition to the expansion. The company has set a May 31 deadline to get “clarity” around the project. Notley has already said her government is open to buying the Trans Mountain pipeline — meant to move Alberta oil to port near Vancouver for shipment overseas — to ensure the expansion goes ahead.

    Canada's Trudeau to meet premiers on pipeline strife (Reuters) - Canadian Prime Minister Justin Trudeau will break off a foreign trip to hold an emergency meeting with the premiers of two provinces locked in a worsening dispute over an oil pipeline, officials said on Thursday. The unexpected development is a sign of the pressure building on Trudeau to solve a problem that could turn into a constitutional crisis. The federal Liberals are pitted against the Pacific province of British Columbia, which opposes plans by Kinder Morgan Canada to almost triple the capacity of its Trans Mountain pipeline from Alberta to the west coast. Ottawa, which approved the project in 2016, insists it has jurisdiction. The British Columbia government disagrees, citing the risk of a spill. Kinder Morgan Canada, fed up with the delays, is threatening to walk away unless the dispute is settled by May 31. Trudeau left on Thursday for a nine-day trip, starting with a summit in Peru on Friday and Saturday. He has invited Alberta Premier Rachel Notley - who backs the pipeline - and British Columbia Premier John Horgan to come to Ottawa on Sunday. Trudeau will resume his international trip after the meeting. Both premiers said they would attend the Ottawa session but made clear they were sticking to their positions. “This likely is not going to be the end of the story. It’s a first step,” a senior government official told Reuters, saying Trudeau would outline the various financial, regulatory and legal options for handling the crisis. 

    Out of the LOOP: The Fatal Flaw of Alberta's Oil Export Expansion -- Two weeks ago, the first supertanker capable of holding two million barrels of oil departed for the first time from America’s newly upgraded—and only—terminal able to dock and load crude-carrying behemoths of this size. Bound for China, the inaugural run signals a major shift in global oil shipping patterns, economics, and the highly competitive oil refinery business.  The LOOP terminal is a speculator’s venture on steroids. Built with private capital, it is North America’s first oil port dedicated to the planet’s largest crude tankers, handling bi-directional oil flows. Any VLCC from any country can now unload or load at LOOP. They can bring oil from the Persian Gulf, Nigeria, Russia, or Brazil. They can carry it—two million barrels at a time—to China, India, Indonesia, or Europe, at a shipping price lower than smaller tankers. And because the LOOP bi-directional pipeline can pump oil at a mind-bending 100,000 barrels per hour, supertankers can arrive with one load for refining and take off with another, by barely dropping anchor.That will likely prove fatal to Alberta’s plans to expand unrefined bitumen exports either by the proposed Trans Mountain pipeline to the British Columbia coast, or the proposed Keystone XL pipeline because:

    • • Potential foreign refiners and customers will demand that future oil price, quality, shipping costs, and delivery speeds match those that LOOP can offer.
    • • For marine safety reasons, the maximum oil tanker cargo allowed through B.C.’s Burrard Inlet is an Aframax class ship at 80% capacity carrying 550,000 barrels, only about one-quarter the load of a VLCC. That means a refiner in Asia would need to book and pay for four tankers to ship the same amount as from the LOOP terminal, then wait longer for the full order to arrive.
    • • The diluted bitumen Alberta wants to export has chemical and combustion properties that make it far inferior to the higher-quality oil LOOP has access to from U.S. formations in the Dakotas and Texas, or OPEC countries, or North Sea producers. Tar sands/oil sands bitumen can be upgraded and refined, but that adds significant costs and requires dedicated facilities.
    • • The terminus of the Keystone XL will be refineries on the Texas Gulf Coast near Houston which are notconnected to the LOOP. Even if future Alberta bitumen were to be refined there, it would take three fully-loaded Aframax tankers leaving Texas for ship-to-ship transfers to each VLCC.

      Why Don’t Governments Limit Oil Production to Meet Climate Targets? -- The climate change component of Canada’s oil pipeline debate largely revolves around two big questions: should our country restrict the production of fossil fuels? And, if it does, does that mean other jurisdictions will just produce more and fill the gap?This argument to restrict production is often called “supply side environmentalism” and it’s been pretty unpopular with economists and pundits who warn against restrictive supply-side policies as inefficient and overly moralistic.But climate policy experts Fergus Green (of the London School of Economics) and Richard Denniss (of the Australia Institute) are questioning that. In their new paper for the journal Climatic Change the pair contend that policies such as supply bans, production quotas, supply taxes and subsidy reductions for fossil fuels should most certainly be part of the policy picture. Here’s a breakdown of some of the key points in their piece, “Cutting with both arms of the scissors: the economic and political case for restrictive supply-side climate policies.”

    New Zealand Bans New Offshore Oil and Gas Exploration - New Zealand will no longer offer new permits for offshore oil and gas exploration, Prime Minister Jacinda Ardern announced Thursday. "The whole world is going in this direction," Ardern said. "We all signed up to the Paris agreement that said we're moving towards carbon-neutrality, and now we need to act on it."The ban only affects future permits for offshore oil and gas exploration and will not affect the existing 22. This could allow exploration to feasibly continue in a 38,000-square-mile area until the existing permits expire, which could be "as far out as 2030," the government acknowledged. Permits for onshore oil and gas exploration will also continue.The energy industry and the opposition party were alarmed by the announcement. New Zealand Oil & Gas told Reuters they were not warned about the new policy."We note that the announcement is a sudden change of policy, which has not been consulted on and appears to conflict with the government's pre-election promises," the company said. The center-right National Party condemned the ban, calling it " economic vandalism " and claiming that it made no environmental sense.

    US crude oil exports to Europe increasing on wider Brent/WTI spread - The recent widening of the spread between Brent and WTI crude benchmarks, combined with spring refinery maintenance in the US Gulf, has helped increased US crude exports to Europe in April, pressuring an already well-supplied sweet crude market, traders said.
    Although Brent's premium to WTI has fallen 95 cents/b since the start of the year to $5.24/b, it has increased $2.21/b since the start of March, and follows a premium of around $3.00/b throughout much of February.As Brent's premium has risen, WTI-based domestic sweet grades have become more competitive with Brent-based North Sea, Mediterranean and West African grades in export markets.  Additionally, decreased demand from US Gulf Coast refineries amid spring turnaround season has left more volume available for the export market.Offers of US crude have been flooding the European market in recent weeks, with volumes expected to arrive from the third decade of April and into the first half of May, trading sources said.Both delivered and FOB offers have been seen, with US Gulf crudes offered into Northwest Europe and Mediterranean at Dated Brent plus $1.20-$1.40/b the week before last, sources said, before dropping to Dated Brent plus 40-60 cents/b last week. “There is pretty much everything offered -- WTI, Eagle Ford, Mars, also Canadian [heavy crudes]...there is a decent volume available," a crude trader said, adding he saw pressure starting to build on light sweet, Mediterranean crudes including Azerbaijan's Azeri Light, Kazakhstan's CPC Blend and Algeria's Saharan Blend.

    German-US tensions grow over expansion of Nord Stream pipeline - With a potential trade war looming between the EU and the United States, the conflicts within the EU, and between Germany and the US over the planned expansion of the Russian-German gas pipeline Nord Stream is escalating. Potential US sanctions against the project could dramatically intensify the economic and political tensions between the United States and Germany, in particular.  Since 2011, the Nord Stream pipeline, which has a capacity of 55 billion cubic meters per year, has been delivering gas from Russia directly to Germany via the North Sea, circumventing traditional transit countries like Ukraine and Belarus. In the summer of 2015, the Russian gas company Gazprom announced the construction of additional pipelines, known as Nord Stream 2. Apart from Gazprom, the project involves Wintershall, a subsidiary of the leading German chemical company BASF, the German energy company Uniper, as well as the French firm Engie (formerly GDF Suez), Austria’s OMV, and the British-Dutch Shell. Construction of the $11.5 billion project is scheduled to begin in late 2018 and be completed by 2019. Gas deliveries are set to start in 2020. The project has, from the very beginning, sparked political tensions within the European Union as well as between Germany and the United States. Several Eastern European states, especially Poland and the Ukraine, as well as the United States, have opposed the project with growing hostility as a cornerstone for a German-Russian axis and a means to economically leverage Eastern European EU member states, which remain highly dependent on Russian gas deliveries and, as is the case with Ukraine, on revenues from Russian gas transit to the EU. Now, the conflict has resumed renewed force amid conditions of an escalating war drive against Russia and a looming trade war between the EU and the United States. In recent weeks, both the Finnish government and German authorities have given the green light to the construction of the pipeline. Permissions still need to be given by Finland (for underwater construction), Russia, Sweden and Denmark. According to Gazprom, the project is proceeding as planned. The Ukraine is set to lose significant amounts of money. According to an expert questioned by Russia Today, only 15 billion cubic meters of gas would pass through Ukraine annually if Nord Stream 2 were built, down from currently 90 billion cubic meters per year.

    Russia Gas Link ‘Not Possible’ If Ukraine Is Harmed, Merkel Says - German Chancellor Angela Merkel said a new Russian natural-gas pipeline is impossible if it leaves Ukraine empty-handed, shifting her rhetoric on a project criticized by President Donald Trump.Merkel said political considerations must play a role on Nord Stream 2, which would double an existing pipeline’s capacity to almost 30 percent of European Union demand. In the past, she has portrayed Nord Stream primarily as a business venture driven by private investors.“I made it very clear that a project such as Nord Stream 2 is in our view not possible without clarity on how Ukrainian transit will proceed,” Merkel said Tuesday in Berlin alongside Ukrainian President Petro Poroshenko. “This isn’t only about an economic project. There are political factors to be considered.”Nord Stream 2, opposed by countries such as Poland and the Baltic states for increasing EU reliance on Russian gas, won German construction approval in March. Trump said last week that the pipeline means Germany will be paying “billions of dollars” to Russia and “that’s not right.”An industry group that promotes economic ties with Russia pushed back after Merkel’s comments, saying Nord Stream guarantees western European energy security and that 4 billion euros ($4.9 billion) already invested in the project would be at risk. “To change the legal foundation retroactively for political reasons would damage the trust in legal certainty,” Wolfgang Buechele, chairman of the German Committee on Eastern European Economic Relations, said in an emailed statement.

    BP to develop the second phase of its giant fracking project in Oman - BP is set to begin the second phase of development at its sprawling Khazzan gas field in Oman to produce a total of 1.5bn cubic feet per day (cfpd) of gas.The Ghazeer project is set to come onstream in 2021 following the start-up of phase one of the Khazzan project in September 2017.The phase one development is made up of about 200 wells and recently reached its design capacity of 1bn cfpd of gas. Ghazeer will add a further 0.5bn cubic feet to daily gas volumes as BP drills another 100 wells.The Oman Oil Company Exploration & Production holds a 40 per cent interest in the $16bn (£11.3bn) project, which was BP's biggest unconventional gas project outside the US last year.BP used the fracking know-how it picked up extracting shale gas in the US to unlock the Khazzan field's tight gas reserves, which require both vertical and horizontal wells to be drilled.Yousuf Al Ojaili, the president of BP Oman, said: “Following the successful startup of Khazzan, we are pleased to announce the sanction of Ghazeer, BP’s first project FID [final investment decision] of 2018."Through the transfer of industry-leading skills and technology from BP’s global portfolio, we look forward to futher developing this gas field that is expected to support Oman’s energy needs for many decades to come," Al Ojaili said. Both phases of the project are expected to deliver total production of 10.5 trillion cubic feet of gas and around 350m barrels of condensate through to 2043, when the agreement with the government of the Sultanate of Oman ends.

    India, Aramco to partner on $44 billion refinery-petchem project (Reuters) - Saudi Aramco on Wednesday signed an initial deal with a consortium of Indian refiners to build a $44 billion refinery and petrochemical project on India’s west coast, as the kingdom moves to secure buyers for its crude in a market awash with oil. Top executives of Aramco and India’s Ratnagiri Refinery & Petrochemicals - a joint venture of Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum Corp - signed a memorandum of understanding to take equal stakes in the project in Maharashtra state. The project includes a 1.2-million-barrels-per-day (bpd) refinery integrated with petrochemical facilities with a total capacity of 18 million tonnes per year, the officials said on the sidelines of the International Energy Forum. Aramco, the world’s biggest oil producer, is expanding its footprint globally by signing new downstream deals and boosting the capacity of its existing plants ahead of an initial public offering that is expected later this or next year. Days earlier, state oil giant Aramco sealed refining and petrochemicals deals worth about $20 billion in France and the United States. The Indian plant will be one of the largest refining and petrochemical complexes in the world, built to meet fast-growing fuel and petrochemicals demand in India and elsewhere. “Large as this project may be, it does not by itself satisfy our desire to invest in India ... We see India as a priority for investments and for our crude supplies,” Saudi Energy Minister Khalid al-Falih said. “We’re very much interested in retail ... We want to be consumer-facing,” he said. Saudi Aramco will supply at least 50 percent of the crude to be processed at the planned refinery, he said. Aramco may introduce at a later stage a strategic partner to share its 50 percent stake, Falih said. “We have somebody in mind and we will announce in due course,” Aramco Chief Executive Amir Nasser said, without elaborating. 

    'Fat and lazy' LNG buyers need producers help to boost demand: Russell (Reuters) - Buyers of liquefied natural gas (LNG) have grown “fat and lazy” on expectations of a surplus of the super-chilled fuel and they now risk a shortage in the early years of the next decade. There’s no surprise that this was the view of a LNG project developer, expressed at this week’s LNG Asia Pacific Congress, hosted in Singapore by IBC. The perspective of buyers was somewhat different, with some recognizing that prior forecasts of a large surplus were unlikely to materialize, given rising demand in several Asian countries that are new to the LNG market. But the common theme among those building import terminals and associated infrastructure was that LNG producers should participate in developing markets, otherwise the anticipated surge in demand may not occur. There are at least 14 LNG import terminals being planned or developed in South and Southeast Asia, the region that, along with China, provides the bulk of the optimism for LNG demand in the next decade. But the nature of these projects and the associated infrastructure may give some pause for thought to those who take the view that this is locked-in future demand that will eat up any LNG surplus. Pakistan has plans to build new import capacity of 9 million tonnes per annum, double its current capacity, but this will be developed largely by private operators. The market for new LNG in Pakistan is also dependent on associated infrastructure, such as building residential connections in new housing estates, and ensuring that power plants are built to replace inefficient and increasingly costly oil-fired generators. In India, additional LNG is mainly targeted at industrial and residential users, as well as the fertilizer industry, and again, installing the associated infrastructure to distribute the re-gasified LNG becomes the key. With governments across South and Southeast Asia finding it increasingly beyond their budgets to fund all the required infrastructure, it will fall to the private sector to stump up the money. Even China, which boosted LNG demand by 46 percent last year, will rely on smaller companies to boost demand in coming years, with most of the planned import capacity being developed by operators outside the state-owned majors.

    Sinopec to cut Saudi crude imports for May in response to high OSPs: official (Reuters) - China’s Sinopec, Asia’s largest refiner, plans to cut Saudi crude oil imports loading in May by 40 percent after oil company Saudi Aramco set higher-than-expected prices, an official from trading arm Unipec said. “Our refineries think that these are unreasonable prices as they do not follow the pricing methodology,” the official, who declined to be named, said on Monday. India’s Mangalore Refinery and Petrochemicals Ltd (MRPL) has also cut its annual oil import deal with Saudi Aramco by about 22 percent to 70,000 barrels per day, two company sources said, adding it would instead step up purchases from Iran like other state-run refiners. Asian oil traders have struggled to understand how Saudi Arabia derived its official selling prices (OSPs) for May after the world’s top oil exporter unexpectedly raised the price for its flagship Arab Light crude sold to Asian refiners. Separately, trading sources at two North Asian refineries said on Tuesday they each planned to reduce May orders from Saudi Arabia by 10 percent. The sources, who declined to be named, said they would implement operational tolerances built into long-term supply contracts that allow adjustments in monthly crude deliveries according to changes in available supply or demand. Saudi Aramco did not respond to a request seeking comment on Sinopec’s planned cuts. 

    Saudi efforts to raise crude prices get Chinese slap: Russell (Reuters) - Saudi Aramco may have shot itself in the foot by unexpectedly increasing the price of its crude oil to Asia, with a major Chinese refiner responding by sharply cutting back on the volume of cargoes from the world’s top exporter. Sinopec, Asia’s largest refiner, aims to slash its crude oil imports from Saudi Arabia’s state producer by 40 percent in May, according to an official from the company’s trading arm Unipec. Such a large cut sends two very clear messages to Aramco, the first being that Sinopec didn’t agree with the price hike, and the second that the Chinese refiner feels it can make up any shortfall from other suppliers. It’s an almost unprecedented response by a significant buyer of Saudi crude, and it underlines the extent to which the market was caught by surprise by Aramco’s decision to increase the official selling prices (OSPs) for May-loading cargoes. And it’s not just Sinopec that is sending a message, with trading sources at two North Asian refiners saying they also plan to reduce volumes from Saudi Arabia by 10 percent in May. Aramco boosted the OSP for its benchmark Arab Light grade for Asian customers for May cargoes to a premium of $1.20 a barrel over the average of quotes for regional grades Oman and Dubai, up 10 cents from the prior month. The market had been expecting a cut of between 50 and 60 cents a barrel, based on movements in the price curve between front- and third-month cash Dubai prices. Unlike Brent and West Texas Intermediate, the two largest global crude benchmarks, the Dubai market is in contango, where prices for later-dated cargoes are higher than those for immediate delivery. This suggested to the market that Aramco would lower their OSP, as the company usually sets its OSPs in line with changes in the pricing structure for Dubai crude. Aramco doesn’t disclose reasons for changes in its pricing, leaving the market somewhat nonplussed at the action. The most plausible explanation for the deviation from previous practice is that Aramco is doing its best to keep oil prices high ahead of its planned initial public offering (IPO). The listing, which is slated for later this year but is probably more likely in 2019, needs a strong oil price to be successful, with a figure above $70 a barrel seen as a minimum. 

    Russia Considers $50B Investment In Iranian Oil & Gas - Russian energy companies could spend as much as US$50 billion on oil and gas exploration in Iran, a presidential aide told media. Yuri Ushakov said companies including Rosneft, Gazprom, Gazprom Neft, Lukoil, Zarubezhneft, and Tatneft were “systemically working on development of fields in Iran.”  The official’s comments come after Zarubezhneft became the second company—after French Total—to sign the new petroleum contract devised by Tehran to lure international oil and gas companies back into its oil and gas.  During a visit of Russia’s President Vladimir Putin in Iran last November, the two countries signed six preliminary agreements on oil and gas projects that would see up to US$30 billion in Russian investments flow into Iran’s energy industry. Russia is a natural partner for Iran in energy, unlike Western oil supermajors that are wary of investing in the country over fears that Washington may reimpose economic sanctions that could force them to abandon any deals struck with the country.

    After winter gas crunch, China pumps for underground storage (Reuters) - On one of the many mountains in southwest China’s sprawling region of Chongqing, a dozen wells in an exhausted gas field are this week starting to take in fresh fuel piped in from Central Asia’s Turkmenistan, thousands of miles away. For the next six months, state energy giant PetroChina, operator of the Xiangguosi storage facility, will also inject gas from Myanmar to fill the vast chambers 3,000 meters (9,900 ft) under the mountaintop. China is aiming to turn hundreds of tapped and some still producing wells into storage facilities after a severe winter supply crunch left it short of the clean-burning fuel. Beijing is trying to switch more of its energy use to gas from coal to help clear up the foul air in the country’s north. The drive to fill up the country’s 25 underground gas storage sites before winter arrives will also bolster imports of liquefied natural gas in the world’s No.3 gas user. Consultancy Wood Mackenzie expects imports to touch 48-49 million tonnes this year, up a quarter from last year’s record level. China’s underground gas storages (UGS) can barely cover 5 percent of its total consumption, lagging behind the international average of 10-12 percent and leaving it vulnerable to supply shocks or extreme weather conditions. While the state planning agency has stressed the urgency of adding underground facilities, China’s regulated gas pricing and near-monopoly in key distribution infrastructure remain hurdles to clear for the business to flourish. Led by PetroChina, China has embarked on a building boom over the next 5-8 years, spending over $10 billion to nearly double gas stores. 

    Hedge funds rotate from WTI to Brent in search for roll yield (Reuters) - Hedge funds trimmed their bullish position in crude oil and fuels in the most recent week after increasing it significantly over the previous fortnight.But the overall reduction conceals a sharp shift away from U.S. light crude (WTI) and towards the international marker Brent, according to an analysis of position data published by regulators and exchanges.Hedge funds and other money managers cut their net long position in the six most important futures and options contracts linked to petroleum by 43 million barrels in the week to April 3.Portfolio managers cut their net long position in WTI (NYMEX and ICE) by 48 million barrels while trimming their net long in Brent by just 4 million barrels (https://tmsnrt.rs/2GPRVs8).  The fall in WTI net length was the largest one-week reduction since the end of August, when hurricanes disrupted the U.S. refining system, and continues a trend evident in recent weeks.Funds have been steadily cutting their exposure to WTI over the last two months while maintaining a strong bullish position in Brent.The net long position in WTI has fallen by 105 million barrels since it peaked on Jan. 23 even as the net position in Brent has risen by an extra 27 million barrels over the same period.The result is that the position in Brent now looks exceptionally stretched while positioning in WTI looks far less lopsided.Fund managers now hold almost 21 long positions in Brent for every short position, a record imbalance, up from a ratio of 11:1 on Jan. 23. By contrast, funds hold fewer than nine long positions in WTI for every short, down from a ratio of almost 12:1 in late January.

    Oil prices rebound as U.S., China trade tensions ease for now - Oil prices settled higher Monday, to recover much of what they lost last week, as U.S.-China tensions appeared to ease, but concerns over U.S. production growth lingered in the wake of a hefty weekly rise in domestic rig activity. The gains, however, were “still smaller than Friday’s declines, so it remains to be seen if this is a trading bounce or the start of a more serious advance,” he said. “With trade in the spotlight all week, we could see significant volatility and swings in both directions.”On the New York Mercantile Exchange, May West Texas Intermediate crude rose $1.36, or 2.2%, to settle at $63.42 a barrel. The contract fell 2.4% on Friday to tally a loss of roughly 4.4% for last week. June Brent crude, the global benchmark, added $1.54, or 2.3%, at $68.65 a barrel on ICE Futures Europe, after losing 3.2% last week.Oil prices declined Friday, and suffered their worst weekly declines in two months. Prices had followed equity markets lower amid growing fears of a trade war between the world’s two largest economies.On Monday, crude oil tracked global stock prices higher on signs over the weekend that President Donald Trump’s administration may be softening its stance in the trade spat with China, though remarks from China’s foreign ministry and a tweet from Trump suggest the dispute could easily heat up again. “The market is currently concerned for the escalating China-U.S. trade war tensions—and with good reason since this [would] be bad for global growth and oil demand growth further down the line,” said Bjarne Schieldrop, chief commodities analyst at SEB Markets. “However, oil market fundamentals are tightening, and oil prices look set to be squeezed higher as long as OPEC sticks to its cuts.”

    Crude Jumps As Saudis Signal 'Ambition' For $80 Oil Price - WTI crude prices are up overnight, extending post-XI-sprech gains following headlines that Saudi Arabia wants to get oil prices near $80 a barrel to pay for the government’s crowded policy agenda (and costly war with Yemen) and support the valuation of state energy giant Aramco before an IPO. Bloomberg reports that in conversations with OPEC delegates and oil market participants, Saudi officials had been careful to avoid pinpointing an exact price target. Yet people who have spoken to them said the inescapable conclusion from the conversations was that Riyadh is aiming for $80. The private discussions, relayed by several people who met the Saudis over the last month and asked not to be named to protect their relationship with the kingdom, chimes with the hawkish tone in public from Saudi officials. Of course, none of this is new, and is all dependent on Russia playing along (less likely as they are affected by western sanctions) and Shale supply stalling (unlikely if prices rise)... This echoes MbS' recent comments in a Time Magazine interview last week... "We believe oil prices will get higher in this year and also get higher in 2019, so we are trying to pick the right time," he told the magazine in reference to the IPO. Riyadh, which initially targeted the second half of 2018 for the listing, is now aiming for next year. 

    Oil surges more than 3 percent as trade war fears recede (Reuters) - Oil prices surged more than 3 percent on Tuesday as investors grew more confident the United States and China would resolve their trade dispute without damaging the global economy, while Middle East tensions and a weak dollar also supported prices.  Brent crude futures jumped $2.39, or 3.5 percent, to settle at $71.04 a barrel. This was its largest single-day percentage gain since September.   In post-settlement trading, Brent hit $71.34, its highest since December 2014. West Texas Intermediate crude futures gained 3.3 percent, or $2.09, to settle at $65.51 a barrel.  President Xi Jinping on Tuesday promised to open China’s economy further and lower import tariffs, striking a conciliatory tone on the trade tensions between his country and the United States. Prices of both crude benchmarks have risen more than 5 percent in the past two trading days. Both have erased their losses from last week, when concerns over a possible trade war between the two largest economies contributed to declines of more than 4 percent.  Middle East tensions also supported prices, said Phillip Streible, analyst at RJO Futures in Chicago. “Oil markets are getting a bounce on increasing speculation about Trump and Syria,” Streible said.  U.S. President Donald Trump promised a swift response to a suspected chemical attack in Syria. Such a response is likely to increase the push for the United States to exit the Iran nuclear deal, Streible said, given Iran’s support of the Syrian government.  Departures from the accord would result in renewed sanctions against Iran, which would hurt its oil industry. Also supportive to crude prices was the weakness of the U.S. dollar. The dollar fell against a basket of major currencies, hitting its lowest in nearly two weeks. Because oil is dollar-priced, a stronger greenback makes purchases in other currencies more expensive. The U.S. Energy Information Administration said it expected domestic crude oil production to rise by 750,000 barrels per day (bpd) to 11.44 million bpd next year, more than previously expected.

    WTI/RBOB Slide After Surprise Crude Build | Zero Hedge - The last two days have seen WTI/RBOB prices soar (as trade-war fears ebb and Saudi hopes for higher prices) but they gave a little back after API reported a surprise crude build and notable Gasoline build. API:

    • Crude +1.758mm  (-1.25mm exp)
    • Cushing +1.452mm (+2mm exp)
    • Gasoline +2.005mm
    • Distillates -3.849mm

    Last week's surprise Crude draw (and expectation of a draw) was turned around as API reported a surprise 1.758mm barrel crude build... Notably the Brent-WTI spread widened above $5...As Bloomberg reports, Chinese President Xi Jinping said zero-sum mentalities were “out of place” and backed dialogue to resolve disputes, dissipating fears of a trade spat with the U.S. Meanwhile, Saudi Arabia is said to want to get prices near $80 to fund spending and support the valuation of its state oil giant’s initial public offering.Whether oil prices are up on fundamentals or not, "it’s a risk-on type day,” said Bob Yawger, director of futures at Mizuho Securities USA Inc. in New York. “The biggest correlation is to the equity markets." In two days, the oil market dispelled the pessimism of two weeks largely dominated by concerns over U.S.-China tensions and a buildup of stockpiles at America’s largest distribution hub in Oklahoma.

    Why Is U.S. Oil So Cheap? - The price differential between the two most important crude oil benchmarks is widening again, a reflection of a divergence in the supply fundamentals between the U.S. and the rest of the world. At the beginning of 2017, WTI and Brent traded closely, with just a slim price differential. The spread blew out in late summer after Hurricane Harvey, which devastated the U.S. Gulf Coast and put refineries and ports out of business for several weeks.  However, earlier this year, the gap narrowed sharply.  And yet, over the past week, the Brent-WTI disparity has widened once again, opening up to over $5 per barrel, about twice as much as just a few weeks ago. The divergence is a reflection of rising supplies in the U.S. at a time when the oil market looks rather tight pretty much everywhere else. U.S. shale continues to expand at a torrid pace, up around 400,000 bpd since the end of 2017. The rig count has exploded, as most shale companies believe they can make money with WTI north of $60.  Meanwhile, inventories have already declined around the world, and crucially, OPEC continues to demonstrate impressive cohesion, keeping the oil cuts in place across the board. Catastrophic production losses in Venezuela has resulted in an OPEC compliance rate well in excess of 100 percent. Moreover, looking forward, the two benchmarks could diverge even more. The U.S. will likely try and ratchet up pressure on Iran. Trump’s staff reshuffling has resulted in a new hawkish team that will probably look to re-impose sanctions on Iran, which could knock some oil supply off of the market. At the same time, oil production in the Permian is rising so quickly that the region is starting to run up against pipeline limits. Soaring output has the Permian drowning in supply. The bottleneck has already forced a discount of oil in Midland relative to WTI, and with the pipeline system virtually maxed out, U.S. shale producers might be forced to slow down on the production gains. Too much supply in the U.S. and tightening supplies elsewhere is exactly why the WTI discount to Brent has spiked.

    Trade spat poses risk to tightening US crude stocks - A potential trade war between the US and China could threaten global oil demand and even target US crude exports, curbing flows that are needed to absorb booming US shale production and limit inventory builds. That would mark a turnaround, as stocks have tightened relative to the five-year average since in mid-September, falling to a deficit the last three weeks, Energy Information Administration data shows. The amount of crude in storage equaled 425.33 million barrels the week that ended March 30, less than 1 million barrels above the level at the end of 2017. That is unusual because crude stocks typically build sharply the first three months of the calendar year. For the same period, stocks increased 56.5 million barrels in 2017 and by 50.1 million barrels on average from 2013-17. Analysts surveyed Monday by S&P Global Platts expect crude stocks built 100,000 barrels last week. The five-year average shows a build of 1.9 million barrels. Inventories sit at the lowest level for this time of year since 2014, even though US production has exploded. The latest EIA weekly estimates pegged output at 10.46 million b/d, a year-on-year increase of 1.2 million b/d.Elevated exports have allowed US production to skyrocket without the corresponding build in storage levels. US crude exports have averaged 1.52 million b/d year to date, about double the level for the same period a year ago. Exports were 2.175 million b/d the week ending March 30, beating the previous record high set the week late October at 2.133 million b/d. In this environment, an escalation between Washington and Beijing over trade casts a large shadow in both direct and indirect terms. 

    U.S.-China trade spat could dent oil demand, says IEA - The world’s robust appetite for oil could be significantly dented by the escalating trade dispute between the U.S. and China, the International Energy Agency warned Friday.In its closely watched monthly oil market report, the IEA said it continued to expect global oil demand to grow by 1.5 million barrels a day in 2018, but cautioned that potential U.S. and Chinese trade tariffs posed a “downward risk” to the forecast.The Trump administration’s planned tariffs on Chinese imports and retaliatory measures announced by Beijing would weigh on the global economy, with “strong consequences for oil demand,” the agency said. The IEA estimated that a reduction of 1% in world gross domestic product growth would reduce oil demand growth by around 690,000 barrels a day.  “Oil demand would suffer the direct impact of lower bunker consumption and lower inland transportation of traded goods, reducing fuel oil and diesel use,” the report noted.  An expanded version of this report appears on WSJ.com

    Oil Prices Soar On Waning Trade War Fears -  Brent oil prices surged above $70 per barrel on Tuesday as concerns of a trade war once again receded. Brent has gained 4.5 percent over two trading days. China’s President helped allay fears by promising to open China’s economy and lower import tariffs. The see-sawing on trade has pushed oil benchmarks all over the place. “It’s not so much ‘risk on/risk off’, as it is ‘trade war on/trade war off’ and, at the moment, we’re ‘trade-war off’,” London Capital Group’s Jasper Lawler told Reuters. In a major blow to Canada’s oil sands industry, Kinder Morgan Canada announced that it would suspend all non-essential work on the Trans Mountain Expansion, and would ultimately scrap the project entirely if regulatory concerns could not be addressed by May 31. KML’s share price fell by as much as 19 percent on Monday. The expansion would add 590,000 bpd of takeaway capacity from Alberta’s oil sands and remains the most important midstream project for the entire industry right now. However, despite the backing from the federal government and the provincial government of Alberta, British Columbia has held up the project. Alberta’s Premier floated the idea of taking a direct stake in the project in order to push it forward. If the project fails, the midstream bottlenecks for Alberta’s oil industry will likely persist for years.    Hedge funds and other money managers have amassed bullish positions in oil futures since the end of 2017. However, while long bets have remained elevated, the shorts have liquidated more recently, pushing net-length even higher. The buildup is mostly occurring in Brent, as opposed to WTI. The bullishness is a sign of optimism regarding the trajectory of oil prices, but it also represents a significant risk, exposing the oil market to a price correction if sentiment sours.

     Soaring US oil exports may derail the crude rally, Oil Price Information's Tom Kloza says -- The U.S. is exporting crude oil at a record pace with no signs of slowing down. That has the potential to unbalance a global oil market in recovery, says energy expert Tom Kloza. "The exports are what we need to focus on through the next 30 days," Kloza, co-founder of the Oil Price Information Service, told CNBC's "Futures Now" last week. High U.S. production could decide how oil prices trade in the second half of this year and through 2019, he added. Domestic exports have not dipped below 1 million barrels a day since late November, as U.S. oil producers fill the void left by reduced capacity from Mexico and Venezuela. Higher demand for petroleum and gasoline in South America has also boosted appetite for North American oil. U.S. crude oil exports rose to 2.175 million barrels per day, or more than 15 million a week, at the end of March. That marked its highest level on record. "We think that number is going to go up to probably 20 million or more [a week], get to maybe 2.5 million barrels a day," said Kloza. "The United States is in essence going to be exporting more than the United Arab Emirates, Kuwait, Nigeria, those individual countries." Rising U.S. production and exports comes at a time when other oil producers are ramping up their own activity, said Kloza. Russia recently had "the highest output in about 11 months and there's some hints that maybe they're not going to be in this long-term supply cutting agreement with the Saudis," said Kloza. On top of that, "we're going to see higher production from Kazakhstan, from Brazil, from the United States, and from Canada."

    Saudi Arabia Signals Ambition for $80 Oil Price - Saudi Arabia wants to get oil prices near $80 a barrel to pay for the government’s crowded policy agenda and support the valuation of state energy giant Aramco before an initial public offering.In conversations with OPEC delegates and oil market participants, Saudi officials had been careful to avoid pinpointing an exact price target. Yet people who have spoken to them said the inescapable conclusion from the conversations was that Riyadh is aiming for $80.The private discussions, relayed by several people who met the Saudis over the last month and asked not to be named to protect their relationship with the kingdom, chimes with the hawkish tone in public from Saudi officials.Oil extended gains. London’s benchmark Brent crude futures rose as much as 2.3 percent to $70.21 a barrel. In an interview with Time magazine last week, Saudi Crown Prince Mohammed bin Salman made the first public statement linking his expectation of higher oil prices with the timing of the initial public offering of Saudi Aramco. "We believe oil prices will get higher in this year and also get higher in 2019, so we are trying to pick the right time," he told the magazine in reference to the IPO. Riyadh, which initially targeted the second half of 2018 for the listing, is now aiming for next year. Saudi Oil Minister Khalid Al-Falih has also sounded increasingly hawkish in public, suggesting that OPEC should keep tightening the oil market even through the cartel is close to meeting its goal of cutting crude inventories in industrialized countries back to their five-year average. In an interview in New York last month, he said today’s price near $70 a barrel hadn’t been sufficient to stimulate investment in the industry, which remains significantly below levels seen before 2014’s price crash.

    Saudi Arabia happy with oil market, won't let another glut form (Reuters) - Saudi Arabia’s energy minister said on Wednesday that the world’s biggest exporter of oil will not sit by and let another supply glut surface, but also does not want oil prices to rise to “unreasonable levels”. Members of the Organization of the Petroleum Exporting Countries (OPEC) are seeking a close balance between supply and demand, Khalid al-Falih said, speaking on the sidelines of the International Energy Forum, a gathering of oil producers and consumers in New Delhi. Falih also told reporters he was happy with the current state of the oil market. OPEC, Russia and several other non-OPEC producers began to cut supply in January 2017 in an effort to erase a global glut of crude that had built up since 2014. They have extended the pact until the end of 2018. “I think a lot of the glut has been cleared,” said Falih. Asked if he was happy with the current market, he replied, “Yes, I am.” Brent crude was trading above $70 a barrel on Wednesday, though easing away from the 2014 highs it matched in the previous session, as escalating Middle East tensions were offset by increasing inventories and production in the United States. OPEC and its partners meet to decide oil policy in June and next week a ministerial panel gathers to review the market. The remarks from Falih suggest big changes in the supply cut agreement look unlikely for now. Asked if India, a major consumer, would be happy with oil at $80 a barrel, Falih said no specific price was aimed for, and he was concerned about declining output in some producing countries and a lack of investment in new supplies. “There is no such thing as a target price by Saudi Arabia,” he said. “We’re seeing many regions declining. The only way to offset this is for the financial markets to start financing and funding upstream projects.” “I don’t know what is the price that will provide that equilibrium. All we know is in 2018 we’re still not seeing that.” 

    OPEC does not want to move oil prices 'to any unreasonable level': Falih - While "sympathetic" to the consumer impact of the recent oil price rise, Saudi Arabia remains concerned that upstream investments had yet to reach a "reasonable level," Saudi energy minister Khalid al-Falih said Wednesday, shrugging off any suggestion of an early end to OPEC's output cuts. "Since 2013-2014 we have seen a rapid drop off in investment which we believe will bite the consumers and the industry as a whole," Falih said at a media briefing at the International Energy Forum. "We are trying to signal to the market, to the investors, to the financial community, to international oil companies to put investments back into the upstream." But he also sought to reassure the market that OPEC, which along with 10 non-OPEC allies led by Russia is in the midst of a 1.8 million b/d production cut agreement, would not allow prices to spike or crater through its actions. The goal is to create market stability so that upstream investment can occur to meet the projected 1.5 million b/d of increased demand in the foreseeable future, Falih said. "What we are trying to do is not move the prices to any unreasonable level," he said. "What we are trying to do is make sure that supply and demand are closely matched so that markets are not worried about gluts and oversupply and continued investment will flow into the industry." To that end, Saudi Arabia and Russia are leading discussions on extending the OPEC/non-OPEC coalition's alliance "to monitor the market and take action where necessary to maintain stability, which is good news for producers and consumers," Falih said. He added: "We will not sit by and let another glut resurface in the coming years and bring the market through the roller coaster that we have seen before." 

    Houthis fire ballistic missiles at Saudi capital and oil sites - Saudi Arabia's air defence forces intercepted a ballistic missile over Riyadh on Wednesday, state media said, after at least three blasts were heard and three clouds of smoke were seen in the sky above the capital. Yemen's Houthis targeted Saudi Arabia's defence ministry and other targets in Riyadh with Burkan-2 ballistic missiles on Wednesday, the group's Al Masirah TV said on Twitter.There were no immediate reports of damage. Saudi state media said air defences had intercepted a missile over the capital.Masirah TV also reported the Houthis had fired missiles at Saudi Aramco oil facilities in Najran and Jazan.The Saudi coalition fighting the Houthis in Yemen meanwhile said its air defences had shot down two unmanned Yemeni drones in the south of the country.The first targeted Abha international airport in Asir province, while the second was approaching a "civilian object" in Jizan province.The Houthis have said they targeted areas of southern Saudi Arabia with Qasef-1 drones.According to a 2017 report by Conflict Armament Research, the Qasef-1 is "consistent with descriptions and imagery" of an Iranian drone, the Ababil-T.Qasefs do not carry missiles but have previously be used as "suicide drones" to target Saudi air defences in Yemen, the research group said. But the latest use inside Saudi territory appears to have widened Houthi tactics, and comes only weeks after Houthi forces fired several ballistic missiles at Riyadh, killing one civilian.

    Oil price increase: Market hits highest level since 2014 amid Middle East tensions: Oil prices jumped to their highest level since 2014 Wednesday, as worries about fighting in the Middle East spooked markets. The day began with President Donald Trump tweeting to threaten a missile attack on Syria in response to reports of a chemical attack by government forces there earlier this week. Later, Saudi Arabia's air defense reported that it intercepted missiles heading towards its capital Riyadh. Saudi Arabia has been defending itself against missiles launched by Iranian-backed Houthi rebels in Yemen in recent weeks. The price of oil futures rose more than 2% In midday trading, topping $67 a barrel for the first time since December 2014. Syria is not a major oil producer, especially after years of civil war there. But its allies Russia and Iran are both major global producers. Trump's tweet taunted Russia about its claims it would shoot down any US missile attack on Syria. Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and "smart!" You shouldn't be partners with a Gas Killing Animal who kills his people and enjoys it!— Donald J. Trump (@realDonaldTrump) April 11, 2018

    Oil hits a 3-year high after Trump warns of missiles - Oil hit its highest level in more than three years Wednesday after Saudi Arabia said it intercepted missiles over Riyadh and international tensions about Syria grew. Both U.S. crude and global benchmark Brent traded at the highest levels since 2014 as concerns about airstrikes drove the market higher. Geopolitical concerns overshadowed global crude inventories as the markets' main driver. "A bearish inventory report was quickly negated on word of intercepted rockets over Riyadh, which just adds to the recent spike in geopolitical tensions," said Anthony Headrick, energy market analyst and commodities futures broker at CHS Hedging LLC. Prices began to rally as U.S. President Donald Trump threatened to fire missiles at Syria in response to a suspected chemical attack last week. Prices climbed further as Saudi Arabia's air defense forces intercepted a missile over the capital Riyadh on Wednesday, Saudi-owned broadcaster Al Arabiya said, after at least three blasts were heard in the city. Brent crude jumped to a high above $72 a barrel, its strongest since early December 2014, after Trump's comments, while U.S. crude rose above $67 a barrel. Gold rallied for a fourth day as investors ditched risk-linked assets such as equities. Brent rose $1.59 on the day to $72.63 a barrel, while U.S. crude futures rose $1.62 cents to $67.13 a barrel, a 2.5 percent gain. Some major airlines were re-routing flights on Wednesday after Europe's air traffic control agency warned aircraft flying in the eastern Mediterranean to exercise caution due to possible air strikes on Syria.

    Potential for big oil price spike grows after provocative missile strikes --The missile attacks by Iran-aligned Houthis aimed at Saudi Arabia's civilian areas and oil facilities have proven unsuccessful, but they are a provocation at a time when the Middle East is already at risk of a widening conflict.With oil prices at a three-year high, it's possible prices could flare up even more if hostilities spread beyond Syria or Yemen, two hot spots that are seen as proxy wars pitting Iran against both Israel and Saudi Arabia.The U.S. is set to strike Syria in the very near future because of its chemical attack on civilians, and both Russia and Iran have said they stand with Syria. "We're at the pivot point. It's a binary outcome. If it's a pinprick in Syria, we've seen the price gains. We'll sell off afterwards. If Iranian assets, in particular in Syria, get hit, it's a game changer," said John Kilduff, energy analyst and founder of Again Capital.U.S. oil prices are up nearly 8 percent this week so far, as tensions rose surrounding Syria. West Texas Intermediate futures temporarily rose above $67 per barrel, and Brent crude futures were above $72 per barrel. "Now you're talking about $75 WTI being on the table, and $80 Brent," said Helima Croft, global head of commodity strategy at RBC. She said oil would rise much higher if the proxy war escalates to a real war between Iran and Saudi Arabia or Israel.Trump said the U.S. would respond in Syria, after its government allegedly again used chemical weapons against civilians Saturday, killing dozens and wounding hundreds more. Syria has denied it.  "The issue you get into is if there's a strike on Iranian assets in Syria, a direct hit on Saudi, or a scenario where the Saudis and Israelis team up to take it to Iran directly, that's where you get into triple-digit oil price land," said Kilduff.

    US oil prices tilt higher by the finish to hold ground at 3-year highs - Oil prices settled on a mixed note Thursday, with the global crude benchmark ending slightly lower, but the U.S. benchmark shifting higher late in trading session to hold ground at a more than three-year high.Investors followed developments in the Middle East, including the possibility of a U.S. strike on Syria, which have the potential to disrupt the flow of crude in the region. U.S. West Texas Intermediate crude got a boost from reports Thursday afternoon that the Saudis intercepted another missile attack, this time over Jazan. That followed reports Wednesday that the Saudis shot down a missile over Riyadh.“Tensions surrounding Syria, and separately, Saudi Arabia, have invited a geopolitical fear bid into the market, helping push futures up to the new highs,” Tyler Richey, co-editor of the Sevens Report, told MarketWatch.Traders also weighed data from the monthly report from Organization of the Petroleum Exporting Countries, which said the group’s crude production fell in March, but total global supplies climbed on the heels of rising output from non-OPEC producers. May West Texas Intermediate crude rose 25 cents, or 0.4%, to settle at $67.07 a barrel on the New York Mercantile Exchange. It marked its highest settlement since Dec. 3, 2014, for the second session in a row.  June Brent crude, the global benchmark, declined by 4 cents, or less than 0.1%, to $72.02 a barrel on ICE Futures Europe. It pared much of its earlier losses, after ending at a more than three-year high of $72.06 Wednesday. President Donald Trump tweeted early Wednesday that the U.S. relationship with Russia “is worse now than it has ever been, and that includes the Cold War.” He appeared to suggest that a strike against Damascus might be imminent, in a separate tweet. Geopolitical risks overshadowed what was a “relatively bearish set of inventory data” Wednesday from the Energy Information Administration, “which reported a move higher for U.S. crude stocks alongside continued gains from the production side,”

    Crude oil prices ease but set for highest weekly gain since July - Oil prices edged lower on Friday but are set for their biggest weekly gains since last July following a jump to a more than three-year high earlier in the week on tensions over Syria and shrinking global oil inventories. NYMEX crude for May delivery was down 23 cents, or 0.3 percent, at $66.84 a barrel at 0148 GMT, after settling up 25 cents on Thursday. London Brent crude was down 25 cents, or 0.3 percent, at $71.77 after settling down 4 cents. Both contracts are set to rise around 7 percent for the week, the biggest weekly gain since July. A global oil stocks surplus is close to evaporating, OPEC said on Thursday, citing healthy energy demand and its own supply cuts while revising up its forecast for production from rivals who have benefited from higher oil prices. OPEC and its oil producer allies are poised to extend their supply-cutting pact into 2019 even as a global glut of crude is set to evaporate by September, OPEC Secretary-General Mohammad Barkindo told Reuters in an interview. Oil prices jumped on Wednesday to their highest level since late 2014 after Saudi Arabia said it intercepted missiles over Riyadh and U.S. President Donald Trump warned of military action in Syria, both of which raised concerns about possible supply disruptions.

    Has The World Started To Kick Its Oil Addiction? - Until a decade ago, most of the world was a captive customer of oil - consumers would pay any price for gasoline and oil demand was soaring regardless of the surging oil prices.  But recently, many countries around the world have started to show more sensitivity to oil prices - oil demand grows as their economies grow, but oil demand is also more susceptible to oil price swings, with the oil price-consumption correlation behaving more like an everyday product, according to data by Washington-based ClearView Energy Partners and research by Bloomberg Gadfly columnist Liam Denning. Although it’s at least a decade or more too early to call the end of the world’s oil addiction, the research and data suggest that in a growing number of large oil-consuming economies oil demand now correlates negatively with oil prices. In other words, consumption drops when prices rise and vice versa - a common economic concept applicable to almost every other product on the market. With oil, this has not always been the case. ClearView Energy and Denning analyzed data for three 10-year periods ending in 2006, 2011, and 2016, respectively. During the first 10-year period until 2006, countries comprising four-fifths of oil demand, including the United States, India, China, and Russia, showed a positive correlation between oil demand and their gross domestic product (GDP) and between demand and oil prices. In the decade before the financial crisis in 2007-2008, oil demand soared almost everywhere in the world, despite the fact that oil prices were also rallying.  The second 10-year period in the research coincides with the 2007-2008 financial crisis and the recession that followed. During the 10 years through 2011, U.S. oil demand decoupled from American economic growth and started to react to the resurgence of oil prices that began in 2009. In that period, the U.S. shifted away from being a ‘captive’ customer of oil to look more like Germany or Japan, where the link between GDP and oil consumption has weakened.  Then, in the third period—the ten years through 2016—even oil demand in China and India looked like more responsive to the prevailing oil prices. In those countries and other developing economies, oil demand growth is still closely connected with the GDP growth. But oil demand has started to show some negative correlation with oil prices, suggesting that consumption is more susceptible to the price of oil than it was in the previous decades.

    Demand Growth for Oil Consumption Looks Bleak...But Price May Be Another Matter - Organic demand or population growth alone (absent surging debt) among the consumer base that consumes in excess of 90% of global oil, is collapsing.  I have detailed this previously; The Most Important Economic Charts...Aren't Economic Charts , Trade Wars Just Beginning...The War Is a Fight Over an Indefinitely Shrinking Pie , and Global Growth in Energy Consumption (& Economic Growth) is All About China...Nothing but China ).  This article focuses solely on the demand side of oil (but the situation is similar for most commodities or assets for that matter) and details the decelerating number of potential consumers versus forecasts of continued trend growth in consumption. However, I make no predictions regarding the oil price outlook as there are far too many other factors regarding; supply, currencies, geo-politics, cap-ex for exploration, depletion rates of existing fields, and far more.  My sole focus and point is that growth in demand is fast waning but that price is an amalgam of demand with many other factors that may result in a rising price despite declining and soon to be falling organic demand. Two regions of the world represent nearly all population growth but consume relatively small quantities of oil.  I have grouped Africa and S. Asia (India, Pakistan, Afghanistan, Nepal, Bhutan, Sri Lanka, Bangladesh) as a single unit versus the remainder of the world.  These two regions are collectively slightly more than 40% of the total world population but consume just under 10% of the world oil output. Neither Africa nor S. Asia have the relative income, savings, nor access to credit to consume anywhere near the levels seen in most of the rest of the world.  Given they are currently relatively minor consumers, even a relatively high rate of growth will not offset the decelerations and declines among the vast majority of oil consumers elsewhere. This means we can focus on the 60% of the world population that consume 90%+ of the global oil output.  The chart below shows the total under 65 year old population excluding Africa/S. Asia (blue line) and the annual change (red columns).  Growth among this cadre continues decelerating and by about 2026 will begin declining for an indefinite period.

    Geopolitical Risk Sends Oil Soaring - Oil prices added to their gains on Friday, with Brent holding at multi-year highs. The possible trade war poses a threat to demand, but for now, the market is focused on geopolitical dangers in the Middle East. Oil prices are set to post their strongest weekly gain since July.The IEA said in a new report that the U.S.-China trade war could result in lower oil demand. The agency kept its forecast of oil demand growth at 1.5 million barrels per day (mb/d) but noted that the trade war represented a serious “downward risk” to that projection. The IEA said a 1 percent decline in global GDP growth would translate into lower oil demand growth by 690,000 bpd. Meanwhile, the IEA said that OPEC has largely accomplished its goal of draining global inventories back to the five-year average.   OPEC production fell by 200,000 bpd in March, on the back of declining output in Venezuela, Libya, Iraq, Angola and Saudi Arabia. The group’s production levels are now at a one-year low at 31.958 mb/d.  Saudi Arabia’s energy minister said that OPEC would not sit by and allow an oil supply glut to return, although the cartel would also not let oil prices jump to “unreasonable levels.” Khalid al-Falih said he was content with the current state of the oil market, according to Reuters. “I think a lot of the glut has been cleared,” said Falih. When asked if $80 per barrel was an appropriate price for oil, al-Falih said “There is no such thing as a target price by Saudi Arabia,” before adding that upstream investment is falling short of what might be needed in the future. “We’re seeing many regions declining. The only way to offset this is for the financial markets to start financing and funding upstream projects. I don’t know what is the price that will provide that equilibrium. All we know is in 2018 we’re still not seeing that.”

    US Rig Count Climbs As Oil Rallies - Baker Hughes reported a 5-rig increase to the number of oil and gas rigs this week. The total number of oil and gas rigs now stands at 1008, which is an addition of 161 rigs year over year.The number of oil rigs in the United States increased by 7 this week, for a total of 815 active oil wells in the US—a figure that is 132 more rigs than this time last year. The number of gas rigs fell this week, still at 192; 30 rigs above this week last year. The oil and gas rig count in the United States has increased by 85 in 2018.While US drillers seem determined to add rigs, Canada—who is suffering from a rather tumultuous war in its country over pipeline infrastructure as well—continues to lose rigs (a common seasonal event), with a decrease of 9 oil and gas rigs this week, after losing 191 rigs in the previous five weeks. At just 102 total rigs, Canada now has 16 fewer rigs than it did a year ago.  Oil prices were trading up on Friday, as the Syria standoff shows no signs of abating, assisted in part by an apparent easing of tensions surrounding the China/US trade dispute. West Texas Intermediate trading up $0.48 (+0.72%) at $67.56 at 12:24pm EST. The Brent benchmark was trading up $0.73 (+1.01%) at $72.75. Despite the price upswing, pressures remain, in large part thanks to growing US production, which rose again in the week ending April 06, reaching 10.525 million bpd—the seventh build in as many weeks—less than a half million bpd off the 11.0 million bpd forecast that many predict for 2018.At 8 minutes after the hour, WTI had slipped slightly, trading up 0.48% at $67.39, with Brent trading up 0.82% at $62.61.

    US Oil Rig Count Jumps To 815 - U.S. energy companies added oil rigs for a second week in a row, following through on plans to spend more on drilling this year with crude prices at three-year highs, Baker Hughes, a GE company (NYSE: BHGE) said April 13.Drillers added seven oil rigs in the week to April 13, bringing the total to 815, the highest since March 2015, BHGE said in its weekly report. More than half the total oil rigs are in the Permian Basin in West Texas and eastern New Mexico. Active units there increased by one this week to 445, the most since January 2015.The U.S. government expects oil output in the Permian to rise to a record high near 3.2 million barrels per day (MMbbl/d) in April, about 30% of total U.S. oil production.            The U.S. rig count, an early indicator of future output, is much higher than a year ago when 683 rigs were active. Energy companies have steadily hiked spending since mid-2016 as crude prices have recovered from a two-year slump.U.S. crude futures traded at about $67 per barrel this week, their highest since December 2014. Looking ahead, crude futures were trading around $66 for the balance of 2018 and $61 for calendar 2019.In anticipation of higher prices, U.S. financial services firm Cowen & Co. said 58 of the roughly 65 E&P companies it tracks have already indicated an 11% increase this year in planned capital spending. Cowen said E&Ps that have reported capital plans for 2018 expected to spend a total of $80.5 billion in 2018, up from an estimated $72.4 billion in 2017.

    Oil logs strongest weekly performance in over 8 months -Crude-oil prices rose for a fifth straight session Friday, with U.S. benchmark crude tallying a gain of nearly 9% for the week, driven by fears of a U.S.-led military conflict in Syria. A report from the International Energy Agency on Friday also indicated that OPEC soon will have succeeded in reaching its target for reducing the global supply glut. May West Texas Intermediate crude tacked on 32 cents, or 0.5%, to settle at $67.39 a barrel on the New York Mercantile Exchange. For the week, the U.S. oil benchmark rallied by roughly 8.6%, which was the strongest weekly percentage performance since late July of last year. June Brent added 56 cents, or 0.8%, to $72.58 a barrel on ICE Futures Europe. For the week, in the international benchmark was up about 8.2%. On Friday, the IEA indicated that global oil stockpiles are dwindling and approaching the five-year average (http://www.marketwatch.com/story/us-china-trade-spat-could-dent-oil-demand-says-iea-2018-04-13) the Organization of the Petroleum Exporting Countries is targeting. "It is not for us to declare on behalf of the Vienna agreement countries that it is 'mission accomplished,' but if our outlook is accurate, it certainly looks very much like it," the IEA said in its report. The Vienna agreement refers to the group of OPEC and non-OPEC countries that in 2016 agreed to cut output in an effort to reduce a global supply glut that had dragged oil prices substantially lower. The IEA report echoes the monthly data from OPEC earlier this week (http://www.marketwatch.com/story/opec-oil-output-falls-in-march-as-us-shale-production-grows-2018-04-12), which showed the group's output declined by 201,000 in March and that the supply surplus is evaporating. The IEA also noted that the continuing U.S.-China trade spat could dent oil demand (http://www.marketwatch.com/story/us-china-trade-spat-could-dent-oil-demand-says-iea-2018-04-13). 

    OPEC Oil Production Slides As Venezuela Output Tumbles - OPEC's April monthly report was released this morning and unveiled more of the same: expectations of rising global demand (which will soon be dented as global growth fizzles, impacting the need for commodities, especially in China and EMs), coupled with declining production by OPEC producers (really Venezuela whose oil output is collapsing as the insolvent, hyperinflating state grinds to a halt), even as shale producers continue to win market share from OPEC, but really mostly Saudi Arabia.We start at the top, where OPEC optimism once again dominated, as the cartel sees a tighter market with rising demand even as its own output drops largely thanks to one nation:

    • 2018 world oil demand estimate raised by 60k b/d, to 98.70m b/d, revised higher by 1.63mmbpd
    • 2018 world oil demand y/y growth little changed at 1.63m b/d, or 1.7%

    At the same time, March non-OPEC supply was seen 380kbpd higher M/M, with total non-OPEC supply averaging 66.2mln bpd. Most of this was Shale.In total, world oil supply in March increased by 180k bpd to average 98.15mln bpd, an increase of 2.15mln bpd Y/Y. And yet, at the same time, the OPEC-14 group crude output fell 201k b/d in March to 31.958m bpd, the lowest in one year. While several nations saw their production decline in March, including Angola, Venezuela, Algeria and Saudi Arabia, it was and continues to be a Venezuela story.  Amusingly, OPEC Sec Gen Barkindo steamrolled through the nuances, and claimed that OPEC production cut compliance had soared to 150% in March, when all he meant was that Venezuela production continues to plunge. Barkindo also said that a longer-term alliance between OPEC/Non-OPEC to be discussed in June, and said he was Barkindo confident the supply cut deal will be extended beyond 2018, adding that he sees the oil market rebalancing in Q2/Q3 2018, whereas previously he saw it rebalancing by end-2018.

    IEA says 'mission accomplished' for OPEC as oil stocks shrink (Reuters) - OPEC and its allies appear to have accomplished their mission of bringing global oil stocks to desired levels, the International Energy Agency said on Friday, signaling that the markets could become too tight if supply remains restrained. A flag with the Organization of the Petroleum Exporting Countries (OPEC) logo is seen during a meeting of OPEC and non-OPEC producing countries in Vienna, Austria September 22, 2017. REUTERS/Leonhard Foeger The IEA, which coordinates the energy policies of industrialized nations, said global stocks in developed countries could fall to their five-year average - a metric used by OPEC to measure the success of output cuts - as early as May. “It is not for us to declare on behalf of the Vienna agreement countries that it is ‘mission accomplished’, but if our outlook is accurate, it certainly looks very much like it,” the IEA said in its monthly report. Vienna-based OPEC has reduced production in tandem with Russia and other allies since January 2017 to prop up global oil prices, which soared above $70 per barrel this month, giving a new boost to booming U.S. shale oil output. But as oil production collapsed in OPEC member Venezuela and still faces hiccups in countries such as Libya and Angola, the oil exporter group is producing below its targets, meaning the world needs to use stocks to meet rising demand. On Thursday, the Organization of the Petroleum Exporting Countries said in its monthly report that oil stocks in the developed world were only 43 million barrels above the latest five-year average. The Paris-based IEA put the figure at just 30 million barrels as of the end of February. The IEA said that even though non-OPEC output was set to soar by 1.8 million barrels per day this year on higher U.S. production, it was not enough to meet global demand, expected to rise by 1.5 million bpd or around 1.5 percent.

    OPEC political crises threaten to double its million-barrel cut - The deal OPEC struck in 2016 to clear a global glut by halting a significant chunk of oil production took almost a year of bargaining and brinkmanship. By year-end, the group may have lost the same amount of crude unintentionally. OPEC is already cutting daily production by much more than its pledged 1.2 MMbbl. Venezuela’s economic crisis is battering its oil industry and pushing output to the lowest level in decades, with a further decline likely. If U.S. President Donald Trump also re-imposes sanctions on Iran, the cartel’s unplanned losses could swell to double the targeted cut. That would pose a dilemma for Saudi Arabia and Russia, the leaders of the cuts agreement. Should they let the oil market get even tighter, but run the risk that higher prices hurt demand or spur an even bigger wave of American shale-oil? Or should they fill the gap by increasing production, but in the process unravel their historic agreement prematurely?

    OPEC switches operational target from inventories to investment: Kemp (Reuters) - OPEC appears to be reformulating its target in terms of upstream investment rather than oil inventories, according to an analysis of recent statements made by ministers from member countries.“There is no such thing as a target price by Saudi Arabia,” the kingdom’s energy minister, Khalid al-Falih, told reporters on Wednesday (“Saudi Arabia happy with oil market, won’t let another glut form”, Reuters, April 11).“We’re seeing (production in) many regions declining. The only way to offset this is for the financial markets to start financing and funding upstream projects,” Falih observed.“I don’t know what is the price that will provide that equilibrium. All we know is in 2018 we’re still not seeing that.” Falih’s comments suggest the kingdom is now targeting a sustainable level of exploration and production – and prices will have to rise further to incentivise it.The new weight attached to sustainable investment echoes comments made by other ministers from the Organization of the Petroleum Exporting Countries in recent weeks.“We will know we have a good price when the market is balanced and we have enough investments. We need to have more investments coming”, the UAE energy minister said on April 11 ("UAE says producers trying to define structure for long-term alliance", Reuters, April 11). “There has been a clear recovery in oil prices. But it has not been met with an increase in investments ... Investment has been very low,” Qatar’s energy minister said on April 5.“Investors are still cautious and over-conservative. We need to restore investments,” he added ("Qatar says too early to exit OPEC oil cuts as investment still low", Reuters, April 5). The emphasis on investment stands in marked contrast to the previous focus on reducing oil inventories in the OECD industrialised countries to the five-year average.“Almost the single metric that we look at is global inventories and of course the most transparent and trustworthy is the OECD inventories,” Falih said as recently as December. The recent shift from inventories to investment is consistent across multiple ministers, which suggests it is the result of private discussions within OPEC (https://tmsnrt.rs/2GU0ZQL). Focusing on investment is not new for the organisation. The need for prices high enough to support sustainable investment in production has been acknowledged since OPEC was created..

    Saudi Prince Bets Big On Branson's Virgin Group To Transform Economy - Virgin Group Ltd., a British multinational venture capital conglomerate established by Sir Richard Branson, had a very productive first week in April - from Virgin Hyperloop One’s full-scale test of futuristic travel pods to Virgin Galactic’s rocket-powered test flight into the upper limits of the stratosphere. The purpose behind Branson’s scramble to conduct the grandest show in just a few days, with innovative and emerging technologies, is due to the Crown Prince of Saudi Arabia Mohammad Bin Salman Al Saud (MbS) inspection of the company’s research and test facilities in the Mojave Desert, early last week. Unbeknownst to many, Saudi Arabia’s sovereign wealth fund made financial arrangements in the fourth quarter of 2017 to invest more than $1 billion in Virgin Group’s space companies, which would allow the kingdom to diversify away from its oil-dependent economy. Nevertheless, the country’s Public Investment Fund is still waiting for the regulatory approval from the United States Government. On Tuesday, we reported how Branson and his Hyperloop One team showed MbS a full-scale test of the Hyperloop, a new revolutionary form of transportation to move passengers and/or freight in travel pods through vacuum-sealed tubes at extraordinarily high speeds. While the Saudi sovereign wealth fund is preparing to inject Virgin Group Ltd.’s space companies with a billion dollars, Virgin Hyperloop One executives pitched MbS on installing the Hyperloop throughout the kingdom to dramatically reduce travel time. Executives told MbS, the new rapid form of transportation would stimulate economic growth and lead to further diversification of Saudi industries. As MbS prepares for Vision 2030, which primarily ushers in a complete transformation of the country’s economy; Virgin Galactic could enable a space-centric entertainment industry to flourish in the Kingdom. This could be a gamechanger for the oil-dependent economy, as human spaceflight and the launching of commercial satellites would be the dominant industry.

    Iran's rial hits new lows on Trump worries (Reuters) - Iran’s currency fell at least 5.5 percent on Sunday, extending a slide to a new record low on continued concerns over a return of crippling sanctions if U.S. President Donald Trump carries out his threat to exit a nuclear deal with Tehran. The U.S. dollar jumped 2,990 rials to 54,700 rials on the open market in the capital Tehran, the official news agency IRNA reported. Parliament on Sunday invited the economy minister and the central bank governor to attend a closed session on Tuesday to discuss the accelerating fall of the national currency, Iranian news agencies reported. The rial had fallen to 47,000 to a dollar in early February from about 36,000 in mid-September on concerns about Iran’s agreement with world powers to curb its nuclear programme in return for the lifting of most international sanctions. Trump said in January that “disastrous flaws” in the agreement had to be fixed or Iran would face a U.S. exit. Since last year, the central bank has allowed the rial to depreciate gradually to compensate for Iran’s high inflation and to help to make exports more competitive. But the drop has accelerated in the past few months, creating a problem for authorities who contained a wave of popular protests against economic hardship and corruption in December and January. 

     Iran Threatens To Restart Nuclear Enrichment, Can Begin "Within Four Days" - Iran is threatening to restart its controversial nuclear enrichment program, as the head of the Islamic Republic's Atomic Energy Organization (AEOI)( revealed on Sunday that they have maintained the ability to quickly restart the full-scale enrichment of uranium "within 4 days," reports FARS news. "If senior Islamic Republic officials issue an order to resume the 20% enrichment, we can do it in Fordo within 4 days," said Ali Akbar Salehi, head of the AEOI - referring to the Fordo nuclear facility in northern Iran. Of note - 20% enrichment is considered above the required level for nuclear energy production, however it is still well below the 80-90% required for a nuclear weapon. Salehi said his statement should be seen as a warning not to discard the nuclear deal - and revealed that Iran had made "more extensive progress in other parts of its nuclear activities" which "go beyond the previous levels" according to FARS. Meanwhile, in a Monday speech at the "National Atomic Energy Day," Iranian President Hassan Rouhani declared that Iran's nuclear industry is moving along "faster than before."  "I want to clearly say to the Iranian nation that our nuclear industry is moving faster than before with more energy, accuracy and more exact calculation," the Iranian leader said, speaking from Tehran. Rouhani was quoted as saying Iran needs "both hard and soft power," while pursuing "constructive engagement" with the rest of the world.

    Syrian military airport ‘struck by missiles’ after Trump vows Assad will pay ‘big price’ for alleged chemical weapons attack - Independent - A military airfield in Syria has come under missile attack, the country’s state media has reported – days after the government of Bashar al-Assad was accused of launching a chemical weapons strike that left 40 dead.At least 14 people were killed in the missile strikes on the Tiyas airport near Homs, known as T4, including some members of a Shia militia supporting the Assad regime, a monitoring group said. The Syrian state broadcaster said there had been casualties but provided no further details. The strike came after Donald Trump threatened Syria and its allies would pay a "big price" for an alleged chemical weapons attack that aid groups said killed dozens of people in the besieged Damascus suburb of Eastern Ghouta. But Pentagon officials and other Western allies of the US, including France, denied carrying out the attack on T4.  The Russian military said on Monday that two Israeli F-15 war planes carried out the strikes. Interfax cited the Russian Defence Ministry as saying the Israeli war planes had carried out the strikes from Lebanese air space, and that Syrian air defence systems had shot down five of eight missiles fired. Asked about the Russian statement, an Israeli military spokesman said he had no immediate comment.

    Israel Told US Officials About Plans To Strike Syrian Airbase -- While the US didn't directly order the airstrike against Syria's T-4 airbase late Sunday night (Russia and the Syrian government had initially blamed the attack on the US), American officials reportedly confirmed to NBC News that the US had been informed of the impending strike by its ally, Israel.Israel carried out the strikes against Syrian base, two U.S. officials tell @NBCNews, and the US was informed of the forthcoming strikes in advance. https://t.co/FKrc4V1ZM1— NBC News (@NBCNews) April 9, 2018The pre-dawn attack was intended as retaliation for a poison gas attack on the last rebel stronghold near Damascus. That attack has been blamed (with no supporting evidence) on the Syrian regime.Since 2012, Israel has launched more than 100 airstrikes on Syrian territory. Israel had previously struck the T-4 base in February after an Iranian drone purportedly violated Israeli airspace.The T-4 base is near the Shayrat air base, which the US struck with nearly 60 tomahawk cruise missiles last year in response to another chemical attack that was blamed on the Syrian government (again, with no evidence). President Trump threatened both "animal Assad" and Putin following the attack, saying there would be a "big price to pay"  for masterminding the attack.

    Turkish, Russian and Iranian presidents meet in Ankara -- On April 4, Recep Tayyip Erdogan, Vladimir Putin and Hassan Rouhani—the presidents of Turkey, Russia and Iran, respectively—came together in Ankara to discuss developments in Syria as well as the relations between the three countries. According to the joint statement issued after the summit, “The presidents rejected all attempts to create new realities on the ground under the pretext of combating terrorism and expressed their determination to stand against separatist agendas aimed at undermining the sovereignty and territorial integrity of Syria as well as the national security of neighbouring countries.”Erdogan, Putin and Rouhani also “reaffirmed their determination to continue their cooperation in order to ultimately eliminate Daesh/ISIL, the Nusra Front and all other individuals, groups, undertakings and entities associated with Al Qaeda or Daesh/ISIL.”The Ankara summit, the second between the three countries, was part of the so-called Syria peace talks in Astana, Kazakhstan, bringing together different factions fighting in Syria. The first summit was hosted by Russian President Vladimir Putin in November in the Black Sea city of Sochi.The tripartite summit came amidst the US-British-led aggression against Russia over the poisoning of the former Russian agent Sergei Skripal and ongoing disputes within the ruling elites of the imperialist countries over the Syrian war and their attitude towards Russia and Iran.With NATO and European Union states expelling Russian diplomats, Turkey, an important member of the alliance since 1952, refused to “express solidarity” with Britain and other NATO countries. On March 26, Turkish Deputy Prime Minister Bekir Bozdag stated that Ankara will not take any actions against Moscow. “Relations between Turkey and Russia are currently positive and good,” he said. “In this sense, Turkey is not planning on taking any decisions against Russia.”

    US Deploys Truman Carrier Strike Group And 7 Warships With Cruise Missiles To Mediterranean - The Harry S. Truman Carrier Strike Group (HSTCSG) is being deployed to the Mediterranean Wednesday, where it will join the USS Donald Cook off Syrian territorial waters. The aircraft carrier will be accompanied by guided-missile destroyers USS Arleigh Burke (DDG 51), USS Bulkeley (DDG 84), USS Forrest Sherman (DDG 98) and USS Farragut (DDG 99), as well as the guided-missile cruiser USS Normandy (CG 60). The Destroyers USS The Sullivans (DDG 68) and USS Jason Dunham (DDG 109) will join the HSTCSG later, according to a statement by the US Navy.

    Syrian Pro-Government Forces Evacuate Airports, Military Bases Ahead Of Airstrikes - In light of this morning's jawboning by Trump, who vowed that an attack with US missiles "nice and new and “smart!" is imminent, and following overnight unconfirmed reports that US warplanes are massing over the Syria-Iraq border, it will hardly come as a surprise that Syrian soldiers and pro-government forces are getting the hell out of dodge.According to Reuters, which cites the (highly conflicted) Syrian Observatory for Human Rights, Syrian pro-government forces are evacuating main airports and military air bases ahead of possible U.S. strikes.While the report has yet to be confirmed, amusingly Reuters clarified that "the Syrian army could not be immediately reached for comment." It's also not immediately clear what they would say: "yes, we are retreating, have a good day."Ironically, the Syrian army has one person to thank for the advance notice of an imminent attack: the same one who back in 2013 said: " I would not go into Syria, but if I did it would be by surprise and not blurted all over the media like fools."   No, dopey, I would not go into Syria, but if I did it would be by surprise and not blurted all over the media like fools. — Donald J. Trump (@realDonaldTrump) August 29, 2013  According to Pro-opposition sources, the Syrian regime has also evacuated the Jomrayah Research Center near Damascus, which is tied to Syria's ballistic program, and was targeted twice by Israel in 2015. Pro-opposition source claims the Syrian regime has evacuated the Jomrayah Research Center near #Damascus pic.twitter.com/xLG2aa4uW0 — Michael A. Horowitz (@michaelh992) April 11, 2018One lingering question is whether Russian armed forces are doing the same, and if not, what the odds are that a US strike could result in a lethal outcome involving US troops, unleashing an armed conflict between the two superpowers.For now, Russians appears to not be in a rush, and while there has been a downtick in airstrikes from the Syrian air force, Russian strikes are  still ongoing:

      UK Moves Submarines Next To Syria, Strikes May Begin As Soon As Thursday - Shortly after Theresa May declared that she could act in Syria without approval from Parliament, the Telegraph is reporting that the prime minister has ordered UK submarines to travel within striking range of Syria, and adds that strikes could begin as early as Thursday, which is when May will call an emergency cabinet meeting over Syria.  With the US's Truman carrier still a month away, the "coalition" will rely on UK and French ships. US air support will likely also be involved, suggesting that any attack on Syria may be based on a joint UK-French naval operation, with US air support.Meanwhile, as reported earlier, President Bashar al-Assad has already started moving aircraft and military vehicles away from air bases that could become targets for the coalition's bombs.  Mrs May hardened her stance towards Syria as she said the UK, US and France were “rapidly reaching” a clear picture of who was responsible for last Saturday’s chemical attack on Douma, Eastern Ghouta.  Mrs May said "all the indications are that the Syrian regime was responsible", adding: "The continued use of chemical weapons cannot go unchallenged."  Sources indicated to the Telegraph that Mrs May has now abandoned any intentions of seeking the backing of Parliament - which does not sit until Monday - for military action. There are reports that President Bashar al-Assad has already started moving aircraft and vehicles away from air bases that are likely to be targeted, and both Mr Trump and President Emmanuel Macron of France have stressed the need to act swiftly.

      Video Shows Israeli Forces Shooting a Palestinian, Then Rejoicing – NYT - As Palestinians mourned the deaths of about 30 people over the last two weeks, shot by Israeli forces during protests along the border with Gaza, grainy video footage surfaced on Monday appearing to show Israeli troops shooting a Palestinian man across the border fence at a time when he posed no obvious threat — and then rejoicing. In the video, the man is standing motionless, just inside Gaza. An Israeli sniper is told to take him down. A shot rings out and he falls to the ground. Another soldier who appears to be videoing the scene whoops with excitement. “Wow, what a video! Yay!” he exclaims, adding an expletive. “What a video legend.” The Israeli military contends that it has fired judiciously and precisely to prevent damage to the border fence or harm to its soldiers as protesters, spurred on by Hamas, the Islamic militant group that controls Gaza, have hurled stones and firebombs and rolled burning tires. Israel says it also acted to prevent a mass breach of the border that would have led to greater bloodshed and to block Hamas, which Israel, like much of the western world, classifies as a terrorist group, from using the protests as a cover for armed attacks. The latest footage, however, comes after a series of earlier videos from the Gaza side appeared to show unarmed protesters being shot, and after a Gazan journalist wearing a protective vest clearly marked with a “PRESS” sign was killed on Friday. 

      China Posts First Trade Deficit Since February 2017 As Exports Tumble, But Not Because Of Trade War - Overnight, China surprised the market with its first trade deficit in more than a year amid escalating trade frictions with the United States, however there may be less than meets the eye here, at least for now.China's state customs announced that in March export growth unexpectedly dropped -2.7% Y/Y, far below the consensus estimate of an increase of 11.8%.  Looking at the details, for exports to major destinations, exports growth dropped broadly. Specifically, for major DMs, exports to EU, US and Japan decelerated -7.0% yoy, -5.6% yoy and -3.7% yoy, respectively. For major EMs, exports to ASEAN grew by 1.4% yoy from a strong increase of 36.2% yoy in February. At the same time, import growth rebounded 14.4% Y/Y, more in line with expectations of a 12.0% rebound, although in Yuan terms imports rose a slower-than-expected 5.9%, missing expectations for 7.5%.For commodity imports, growth went down both in volume and value terms broadly. Specifically, in volume terms, iron ore imports contracted 10.2% yoy, vs. +0.9% yoy in February; crude oil imports grew 0.6% yoy, vs. +1.5% yoy in February; steel products imports decreased by 5.1% yoy, vs. -5.8% yoy in February. In value terms, iron ore imports continued to contract by -19.3% yoy, vs. -5.4% yoy in February; crude oil imports grew 19.1% yoy, vs. +26.4% yoy in February; steel products imports increased by 11.3% yoy, vs. +11.5% yoy in February.Of note, the country imported 5.66 million tons soybeans in March, down 11 per cent yoy and a 18% plunge compared to last month, while crude oil imports increased over 7% month-on-month in March to 39.17 million tons, equivalent to 9.22 million barrels per day, which is the second highest on record only after the 9.57 million barrels per day set in January this year.As a result of the plunge in exports and stable imports, the world’s second largest economy recorded a trade deficit of $4.98 billion in March, the first deficit since February 2017, compared to a $27.5 billion surplus expected by the market and $33.75 billion surplus in February, shows the data released by China’s state customs on Friday.

      US/China trade threats likely to slow global growth: Kemp (Reuters) - Trade tensions between the United States and China are likely to have an adverse impact on global growth even if the threatened tariffs are never imposed. Conflict between the world's two largest economies is creating significant uncertainty for businesses that threatens their global supply chains and future investment plans. Senior U.S. officials have emphasised the tariffs are only a proposal at this stage and could be averted by a settlement between the two countries. But the disjunction between hardline rhetoric and aggressive tariff proposals on the one hand and reassurance to investors and businesses on the other has whipsawed the financial markets. Equity indices and commodity prices have alternated between selloffs and rallies as traders try to estimate the probability tariffs will be imposed. In reality, the direct economic damage done by tariffs would be fairly small, though the impact on some firms and sectors would be more concentrated. Bilateral trade of around $700 billion between the two countries represents only a small percentage of the gross domestic production of the United States ($19 trillion) and China ($11 trillion). But the threat of tariffs will have a much more damaging and chilling impact on investment decisions that depend on global supply chains - even if the import taxes are never actually imposed. For multinational businesses considering the location of new manufacturing facility, the threat of tariffs is likely to cause at least an additional pause before the project is given the go-ahead. If decisions are delayed, the result will be a slowdown in investment, at least in the short term, with negative implications for growth. U.S. officials have indicated it could take six months or more to reach a final decision on tariffs which implies an extended period of damaging uncertainty. 

      In Direct Rebuke To US, China Installs Radar Scramblers On Spratly Islands - As we've documented again and again (and again and again), China's military buildup in the Pacific, particularly surrounding the Spratly Islands, a collection of small islands, cays and atolls in the South China Sea, is one of the greatest long-term risks to peace and stability in the US and many of China's neighbors, who have territorial claims in the region that may conflict with China's.  Roughly two weeks ago, satellite images showed China had deployed its only aircraft carrier, the Liaoning, for a series of live-fire drills in the South China Sea (the ship was flanked by 40 other warships and submarines) - an unprecedented exercise of naval force that immediately prompted a US response (not to be outdone, the Navy sent three aircraft carrier battle groups to the region to try and check Beijing's influence).Those drills took place between March 24 and April 5, and were aimed at improving the Navy's conflict-readiness - though Beijing insisted they weren't intentionally targeted at any one country. They followed a series of aerial exercises earlier this year involving Su-35s and H-6s over the South C hina Sea - another unprecedented escalation. Taken together, these are China's largest military exercises to date. Improving the People's Liberation Army's capacity for US-style joint combat operations - involving all the armed services - is one of the main goals of a four-year military-restructuring plan authorized by Xi Jinping.Amid all of this, the US has engaged in at least one military escalation of its own: The US has already carried out two "freedom of navigation" - or "freeop" - missions in the area. These exercises entail sending a US destroyer or some other warship to sail within 12 miles of the Spratly Islands. That's compared with four freeops for all of last year. They're meant to assert the US's right to travel freely in the South China Sea, but they've reportedly angered Beijing.Now, in the latest galling assertion of its dominance over the region, the Wall Street Journal has reported that China installed equipment on two Spratley outposts capable of scrambling military communications and radar systems used by US ships - a clear rebuke to the US and China's neighbors.

      China Eyes Permanent Military Base In Vanuatu As Beijing Expands Reach - China has reportedly approached the government of Vanuatu with plans to build a permanent military base on the South Pacific island nation - a move which would add to Beijing's expanding list of foreign military bases, and position the Chinese a mere 1,200 miles from Australia. Fairfax Media reports that preliminary discussions regarding a military build-up have taken place, however no formal proposals have been put forth. A base less than 2000 kilometres from the Australian coast would allow China to project military power into the Pacific Ocean and upend the long-standing strategic balance in the region, potentially increasing the risk of confrontation between China and the United States. It would be the first overseas base China has established in the Pacific, and only its second in the world.Australian intelligence and security figures, along with their partners in the United States and New Zealand, have been watching with concern as Beijing deepens its influence with Pacific island governments through infrastructure building and loans. -Sydney Morning Herald Beijing has been flooding Vanuatu with hundreds of millions of dollars in development capital, and committed last week to building several new state-owned buildings, including a new official residence for Prime Minister Charlot Salwai, a new Finance Ministry building and an extension of the Foreign Ministry building at a reported total cost of around $36 million. Vanuatu has a population of around 270,000 people.

      Exposing China’s Actions in the South China Sea - China is advancing toward its goal of establishing administrative control over much of the South China Sea. This trend is heightening regional concerns about the reliability of the United States, and enhancing China’s coercive leverage over the commercial and military activities of surrounding countries. If left unabated, the cumulative effect of China’s expanding influence in the South China Sea will make it increasingly difficult for the United States to defend its interests in Southeast Asia: U.S. security partnerships will weaken, the U.S. military will be left with fewer access and presence agreements, and neither regional institutions nor international law will substantially constrain China’s behavior. To prevent these outcomes, it is vital for the United States to implement a comprehensive set of policies that include military, economic, and diplomatic elements. As part of a broader strategy for the South China Sea, the U.S. government should initiate information operations that hinder China’s ability to expand and consolidate its control of the waterway and the airspace above it. Specifically, the U.S. Congress should require the U.S. State Department to provide regular public reports on China’s military and coercive activities in the South China Sea. Greater transparency would help to counter China’s deceptive propaganda about its own behavior, elevate the issue in regional and international forums, and compel regional governments to respond more vigorously to China’s actions. The resultant collective international pressure and evident diplomatic and security costs for China could lead Beijing, as it has at times in the past, to recalibrate and adjust its actions in the South China Sea.

      In just 24 hours, the bad news about India’s banks has gotten worse --Is India’s banking sector imploding?  In the last 24 hours alone, the country learnt that the industry has written off bad loans worth nearly four times the latest annual budget of the Nepal government. What’s worse, the number may as much as double if a forecast from a global investment bank comes true. Adding to the gravity of the situation, India’s second-largest private lender, ICICI Bank, and its CEO Chanda Kochhar, face a potential class action lawsuit in the US over the recent allegations of corruption and nepotism.  The Narendra Modi government revealed in parliament that Rs2.41 lakh crore ($37 billion) were written off by India’s public sector banks (PSBs) in the last four financial years. “Banks write off bad loans or non-performing assets (NPAs) at regular intervals as it helps them clear their balance sheets and achieve tax-efficiency,” minister of state for finance Shiv Pratap Shukla said in a written reply to the Rajya Sabha. Shukla, however, did not reveal the names of the defaulters, citing confidentiality.While the government has insisted that write-offs do not mean the banks will give up on the recovery of loans, an analysis has revealed that the total recoveries by banks in the last four years has been less than 10% of the write-offs.Most write-offs come from the corporate sector which accounts for over 80% of the total PSB loans, according to the Reserve Bank of India (RBI). On the other hand, many government banks have stayed afloat only because of the government’s financial support, including the most recent $32 billion recapitalisation plan.

      ‘Big Brother’ in India Requires Fingerprint Scans for Food, Phones and Finances - NYT  — Seeking to build an identification system of unprecedented scope, India is scanning the fingerprints, eyes and faces of its 1.3 billion residents and connecting the data to everything from welfare benefits to mobile phones. Civil libertarians are horrified, viewing the program, called Aadhaar, as Orwell’s Big Brother brought to life. To the government, it’s more like “big brother,” a term of endearment used by many Indians to address a stranger when asking for help. For other countries, the technology could provide a model for how to track their residents. And for India’s top court, the ID system presents unique legal issues that will define what the constitutional right to privacy means in the digital age. To Adita Jha, Aadhaar was simply a hassle. The 30-year-old environmental consultant in Delhi waited in line three times to sit in front of a computer that photographed her face, captured her fingerprints and snapped images of her irises. Three times, the data failed to upload. The fourth attempt finally worked, and she has now been added to the 1.1 billion Indians already included in the program. Ms. Jha had little choice but to keep at it. The government has made registration mandatory for hundreds of public services and many private ones, from taking school exams to opening bank accounts. 

        India: Modi government accelerates anti-worker privatization drive --As part of a renewed push for “investor-friendly reform,” India’s big business, Hindu supremacist Bharatiya Janata Party (BJP) government is sharply accelerating its disinvestment drive—the partial or complete privatization of central government-owned enterprises.According to the Ministry of Heavy Industries and Public Enterprises, these enterprises, known as CPSEs or CPSUs (Central Public-Sector Enterprises or Undertakings), numbered 331 in 2017. They span most sectors of the economy, including railways, shipping, telecommunications, arms manufacturing, mining, banking, petrochemicals, airlines, and electricity generation and transmission.In India, where working conditions as a rule are brutal and wages extremely low, CPSE jobs have traditionally been coveted as a source of relatively secure employment and better than average wages and working conditions. In a jobs competition that ended last month, more than 25 million people applied for 90,000 jobs, ranging from engine driver and carpenter to track inspector, on India’s state-run railways.India’s ruling elite has been pursuing disinvestment for over a quarter-century, as part of its push to make India a cheap-labor haven for international capital. But the Narendra Modi-led BJP government has gone much further than its predecessors, including by targeting for privatization highly-profitable companies in what have previously been considered strategic sectors of the economy. In this it has two long-term goals. One is to entirely eliminate CPSEs, so as to enable rapacious private investors and companies to gorge on enterprises that, although never run by or in the interests of the working class, are the product of the collective labour of generations of workers. The second is to progressively dismantle whatever social protections the CPSE provide against low-wages, mass-sackings and deleterious working conditions so as to further undermine the social position of the working class as a whole and thereby make India even more attractive to investors.

        US giants in tug-of-war for online retailer Flipkart | Asia Times: In a bid to capture the US$38.5 billion Indian e-commerce market, three major online retailers – Amazon, Flipkart and Walmart – are trying to outdo one another by buying out the competition. Even as Walmart is in talks to buy a majority stake in Flipkart, India’s largest online retailer, Amazon has reportedly jumped in and made a rival bid for it. Amazon did not deny the claim, but said it did not comment on rumors and speculation. Meanwhile, Flipkart did not respond to an e-mail sent by Asia Times. The value of the Indian e-commerce market is expected to grow to $200 billion by 2026 from the current $38.5 billion, according to the Indian Brand Equity Foundation. After 11 years in the game, Flipkart holds an estimated half of the Indian online-retail market, while Amazon, which is just four-years-old in India, already has a 33% market share.

        India Seeks $15 Billion Fighter Jets in World’s Largest Deal -- India asked global companies to submit proposals for 110 fighter jets, the world’s biggest such order currently. The Indian Air Force sought requests for information for the supply of single- and twin-seat jets to be mostly manufactured locally, it said in a statement on its website. The Asian nation had earlier scrapped a deal to buy 126 fighter jets from Dassault Aviation SA, and instead opted to import 36 Rafale aircraft. The order announced on Friday could be worth at least $15 billion, and will be the world’s largest fighter aircraft deal, said Rahul Bedi, a New Delhi-based analyst at Jane’s Information Services. At least 85 percent of the jets -- three-quarters of which are single-seat aircraft and the rest twin-seat -- have to be made in India and manufacturers interested in bidding need to send their proposals by July 6, according to the government. Getting new aircraft is crucial for Prime Minister Narendra Modi as the South Asian nation faces increased risks from neighboring Pakistan and China at a time when the Russian MiG fighters -- India’s mainstay -- are being phased out. The country’s air force and navy require as many as 400 single- and double-engine combat aircraft, according to the government. The first aircraft must be delivered within three years of signing the contract. The South Asian country started looking for new warplanes in 2007, a contest that ended with the government selecting Dassault Aviation for 126 Rafale jets for $11 billion. With talks stalling over price and quality guarantees, the government scrapped the purchase in 2015 and bought 36 jets separately to speed up the process.

        India Builds Over 14,000 Bunkers In Preparation For War With Pakistan - The Government of India is planning to construct 14,460 bunkers for civilians in five border districts in Jammu & Kashmir – Samba, Poonch, Jammu, Kathua, and Rajouri – which reside along Line of Control (LoC) and the international Indo-Pakistani border, reports The Times of India.The state-owned National Buildings Construction Corporation (NBCC) will build these bunkers in populated regions that rest within 3 kilometers (1.86 miles) from the de facto border between the two countries, which have experienced an increasing amount of incursions by the Pakistani Army. In February, Jammu and Kashmir Chief Minister Mehbooba Mufti announced during a State Assembly that 41 civilians had been killed in ceasefire violations along the LoC by Pakistan between 2015 and 2017. To safeguard civilians from Pakistani shelling across the border, NBCC will build 13,029 small bunkers and 1,431 more massive community bunkers. The Times of India said the construction program would cost around 4.157 billion rupees (US$63.8 million). One india News: India builds bunkers along the LoC with Pakistan for villagers  The chairman and managing director of NBCC, A K Mittal, told The Times of India that “pre-cast construction methodology” would be used for the bunkers. “Strategically located casting yards will be used to fabricate RCC components, which shall be transported by trailer/ tractors and the bunkers will be erected by cranes and labourers. We will plan in such a way that each bunker is completed in maximum 2-3 days,” he added.

        As Banks Embrace Biometric Tracking of Customers, Cybertheft Explodes in Mexico - Don Quijones - Criminal organizations in Mexico have branched out into a lucrative new market and revenue stream: big data. They have developed innovative practices to obtain sensitive user information by lifting data from the databases of government agencies such as Condusef, Consar and Buró de Crédito. They call bank customers and spoof on the caller ID screen the phone number of the bank they claim to represent. To gain the target’s trust, they give the credit card security code to the target and ask if it matches what they see on the back of their card. And it goes from there. Now, they’re about to be gifted an invaluable cache of data: the biometric identifiers of Mexican bank customers. In recent years, Mexico has become a haven for the black market of stolen personal data of all kinds — enough to earn it ninth place in PriceWaterhousecooper’s latest list of “economic crime” hot spots. According to Symantec, in 2015 Mexico lost 101.4 billion pesos ($6.7 billion at the prevailing exchange rate) in breaches, identity theft, and other unlawful cyber activity per year, about 12 times more than the total annual losses from fraud committed against banks. A large part of the problem is the widespread impunity cyber criminals enjoy in the country, owing to the absence of adequate legal tools and the lack of enforcement of the existing laws. Cyber theft in Mexico is not just the preserve of isolated hackers but is dominated by highly professional criminal organizations.  This year, banks in Mexico are required to begin collecting biometric data (finger prints and iris scans) on all of their customers. Whenever a customer asks for a new home or car loan, cashes a paycheck, applies for a credit card, or opens a new savings account, the bank will have to request the customer’s digital fingerprints and then match those fingerprints with data against information in the database of the National Electoral Institute.  "But if a biometric is compromised, you’re done. You can’t get another ear.” In other words, if the newly harvested data is hacked by one of Mexico’s burgeoning ranks of cyber criminals, which it almost certainly will be, there is no way of undoing the damage done.

        Mexico's disaster bonds were meant to provide quick cash after hurricanes and earthquakes. But it often hasn’t worked out that way: Officials across southern Baja braced for impact, ­shuttering schools, grounding flights and opening emergency shelters. In the resort city of Cabo San Lucas, where the storm would make landfall late that night, police officers raced through drenched and blustery streets with megaphones, warning everyone remaining to leave.More than a thousand miles away in Mexico City, federal government officials watched nervously, hoping their recent investments in an unusual financial scheme would help cover the damage.With the help of Wall Street and the World Bank, Mexico had issued a series of complex insurance securities called catastrophe bonds, which promise quick payouts when powerful storms or earthquakes strike.Known as “cat bonds,” they were designed for events just like Odile — a storm U.S. officials would describe as the "strongest hurricane to make landfall in the satellite era in the state of Baja California Sur." Indeed, from all reports the government had seen, including from the U.S. National Hurricane Center, they were going to collect $50 million. And they might have, had it not been for a storm chaser from Los Angeles, whose atmospheric pressure readings from a beachfront hotel would upend the entire system, denying the battered government any payout, while keeping the funds secure for investors through a shell company in the Cayman Islands. A year later, the same thrill-seeker’s data would help lower another projected payout, when Hurricane Patricia, the most powerful storm ever recorded in the Western Hemisphere, hit the western state of Jalisco. Combined, the incidents prevented Mexico from collecting tens of millions in recovery funds and exposed fissures in this arcane yet booming financial market — today worth $90 billion.

        ACE Submarine Cable Cut Impacts Ten Countries -- The ACE (African Coast to Europe) submarine cable runs along the west coast of Africa between France and South Africa, connecting 22 countries. It extends over 17,000 km, and has a potential capacity of 5.12 Tbps. The cable system is managed by a consortium of 19 telecommunications operators & administrations, and the first phase entered service in December 2012. While it may not have been completely problem-free over the last 5+ years, online searches do not return any published reports of significant outages caused by damage to the cable.  However, on March 30, damage to the cable disrupted Internet connectivity to a number of connected countries, with reported problems posted to social media over the next several days. These posts indicated that the ACE submarine cable was cut near Noukachott, Mauritania, but did not provide any specific information about what severed the cable.

        Global Debt Jumped to Record $237 Trillion Last Year - Global debt rose to a record $237 trillion in the fourth quarter of 2017, more than $70 trillion higher from a decade earlier, according to an analysis by the Institute of International Finance. Among mature markets, household debt as a percentage of GDP hit all-time highs in Belgium, Canada, France, Luxembourg, Norway, Sweden and Switzerland. That’s a worrying signal, with interest rates beginning to rise globally. Ireland and Italy are the only major countries where household debt as a percentage of GDP is below 50 percent.Still, the ratio of global debt-to-gross domestic product fell for the fifth consecutive quarter as the world’s economic growth accelerated. The ratio is now around 317.8 percent of GDP, or 4 percentage points below the high in the third quarter of 2016, according to the IIF. Among emerging markets, household debt to GDP is approaching parity in South Korea at 94.6 percent.

        Richest 1% on target to own two-thirds of all wealth by 2030 - The world’s richest 1% are on course to control as much as two-thirds of the world’s wealth by 2030, according to a shocking analysis that has lead to a cross-party call for action. World leaders are being warned that the continued accumulation of wealth at the top will fuel growing distrust and anger over the coming decade unless action is taken to restore the balance. An alarming projection produced by the House of Commons library suggests that if trends seen since the 2008 financial crash were to continue, then the top 1% will hold 64% of the world’s wealth by 2030. Even taking the financial crash into account, and measuring their assets over a longer period, they would still hold more than half of all wealth. Since 2008, the wealth of the richest 1% has been growing at an average of 6% a year – much faster than the 3% growth in wealth of the remaining 99% of the world’s population. Should that continue, the top 1% would hold wealth equating to $305tn (£216.5tn) – up from $140tn today. Analysts suggest wealth has become concentrated at the top because of recent income inequality, higher rates of saving among the wealthy, and the accumulation of assets. The wealthy also invested a large amount of equity in businesses, stocks and other financial assets, which have handed them disproportionate benefits. New polling by Opinium suggests that voters perceive a major problem with the influence exerted by the very wealthy. Asked to select a group that would have the most power in 2030, most (34%) said the super-rich, while 28% opted for national governments. In a sign of falling levels of trust, those surveyed said they feared the consequences of wealth inequality would be rising levels of corruption (41%) or the “super-rich enjoying unfair influence on government policy” (43%). 

        Global PMI Plunges To 16-Month Low As 'Synchronous Recovery' Meme Collapses - After rising confidently for 5 straight months, Global PMI collapsed in March - plunging to 16-month lows, dropping by the most since Q1 2016's global growth scare. As Markit notes, global economic growth slowed sharply to the weakest in over a year in March, according to the latest PMI surveys. Although some of the slowdown may prove temporary, the broad-based nature of the weakening suggests growth has peaked. Price pressures meanwhile remained elevated, in part due to supply constraints giving pricing power to sellers. To put the decline in context, while the February PMI reading was consistent with global GDP rising at an annual rate of 3.0% (at market exchange rates), the March reading is indicative of 2.5% growth. Global input costs rose sharply again during March... Machinery and equipment makers - bellwethers of business investment spending – have recorded the strongest global output growth of all sectors covered by the PMI surveys so far in 2018. Tech equipment makers have likewise seen strong growth this year, also reflecting rising capex, although the rate of increase slowed sharply in March. However, only three of the 24 detailed sectors (media, healthcare and real estate) recorded faster output growth in March, further highlighting the broad-based nature of March’s slowdown. And the globally synchronous recovery narrative has collapsed as major developed markets are all now rolling over and dropping in a 'synchronized manner'... Weaker rates of expansion were seen in all four of the largest developed economies. 

        U.S. sanctions on Rusal threaten aluminum turmoil: Andy Home (Reuters) - U.S. tariffs on imports have already roiled the aluminum market. U.S. sanctions on Oleg Deripaska and his companies are going to cause even more turmoil, given they encompass Rusal, which produces around 6 percent of the world’s aluminum. Deripaska was on the U.S. Treasury Department’s sanctions list, covering seven Russian oligarchs, 12 of their companies, 17 Russian government officials, a weapons trading company and a bank. The aluminum market has already reacted. The London Metal Exchange price has jumped from a Friday low of $1,987 per tonne to a high on Monday morning of $2,144. U.S. physical premiums are surging again, with the CME May contract spiking to 18.0 cents/lb on Friday, exceeding the previous tariff-fuelled peak. This may just be the start as the market collectively tries to figure out what happens next to one of the biggest sources of trading liquidity in the global aluminum market. The first casualties of Deripaska’s inclusion on the U.S. Treasury’s sanction list announced on Friday have been the share prices of EN+ and Rusal. EN+ Group, Deripaska’s London-listed holding vehicle, has dropped 48 percent since its Friday opening. It holds a 48.13 percent stake in United Company Rusal, which has experienced a similar-sized collapse in its Hong Kong-listed share price. Both companies have warned of the sanctions that “it is highly likely that the impact may be materially adverse to the business and prospects of the Group”. Rusal has added the U.S. action “may result in technical defaults in relation to certain credit obligations of the group”. 

        Russia lawmakers draft list of U.S. imports that could be banned (Reuters) - Russia’s lower house of parliament is to consider draft legislation that would give the Kremlin powers to ban or restrict a list of U.S. imports, reacting to new U.S. sanctions on a group of Russian tycoons and officials.  Senior lawmakers in the State Duma, which is dominated by Kremlin loyalists, said they had prepared the list ranging from food and alcohol to medicine and consulting services in response to Washington’s move last week. It was not immediately clear if the draft legislation - which would allow the government to impose the measures should the need arise - would become law in its current form, or if it had the backing of the Kremlin. A Kremlin spokesman, Dmitry Peskov, said it was understandable that Russian lawmakers wanted to retaliate against the U.S. measures. He said, though, that the Kremlin had yet to familiarise itself with the draft law. The Russian parliament is often used to send assertive messages to foreign states, but these do not always translate into concrete measures. Large-scale restrictions on U.S. goods and services would hurt American firms but could also cause significant disruption in Russia, where consumers flock to McDonald’s restaurants, fly on vacation in Boeing jets, and use Apple phones. The draft law, according to a text seen by Reuters, is aimed at protecting Russia’s interests and security in the face of “unfriendly and unlawful acts by the United States of America and other foreign states”.

        IMF chief Lagarde warns trade system is at risk of being ‘torn apart' – Christine Lagarde, the head of the International Monetary Fund, has warned that the return of protectionism risks tearing up the current rulebook for global trade.Her remarks in Hong Kong Wednesday come after a tit-for-tat outbreak of trade hostilities between the U.S. and China, raising fears of what a trade war between the world’s two biggest economies would mean for industries.“The multilateral trade system has transformed our world over the past generation. But that system of rules and shared responsibility is now in danger of being torn apart. This would be an inexcusable, collective policy failure,” Lagarde said, according to media reports. The IMF’s managing director also warned of “darker clouds looming” for the global economy, saying while her organization is still optimistic about prospects through the end of 2019, growth momentum would eventually slow.A raising of trade barriers could weigh on the global economy, as they “hurt everyone, especially poorer consumers,” Lagarde argued. Higher tariffs lead to more expensive products and more limited choices, she said, and at the same time they prevent trade from spurring productivity and disseminating new technologies. Because of those risks, governments should ”steer clear of protectionism,” Largarde urged.

        In Latest Humiliation For Brussels, Viktor Orban Wins Hungary Elections In Landslide Victory - In the latest embarrassment for Europe's establishment, the ostracized - by Brussels - Hungarian leader Viktor Orbán, who has waged a relentless vendetta against George Soros in the past year, just won a landslide victory in Hunary's parliamentary elections.Earlier on Sunday, 8 million Hungarians went to the polls to elect a 199-seat parliament in the 2018 general elections, which many expected would see the incumbent Prime Minister Viktor Orbán- and his right-wing Fidesz party - win his third consecutive term. And, as covered here on numerous prior occasions, Orban's campaign had been centered around anti-immigration policies, an especially sensitive topic not only in Hungary and Central Europe, but across the old continent. His main competitors are Gergely Karacsony, a candidate for the Socialist and Dialogue parties; and Gabor Vona of the far-right nationalist Jobbik party, or rather were because according to the Hungarian election office website, Prime Minister Orban’s ruling Fidesz party has won a sweeping, landslide victory according to preliminary results with 69% of the votes counted.

        • Fidesz with 49.5% of party-list votes, matching most pre-election opinion polls
        • Formerly far-right Jobbik second with 20% of list votes, Socialists at 11.9%
        • LMP and DK parties also poised to clear parliamentary threshold based on partial count

        In other words, Orbán's Fidesz party has secured an absolute majority, and may even reach as much as a two-thirds majority of 133 seats, enough to pursue a constitutional amendment. Not surprisingly, virtually all of the Hungarian countryside voted for Orban, while in Europe's continuing polarization of cities and towns versus the countryside, the opposition won the country's urban centers.

        Viktor Orbán: re-election of Hungary’s anti-immigrant leader is major challenge for EU - It’s a safe bet that few in Brussels are celebrating Viktor Orbán’s resounding win. Elected for a fourth term, Hungary’s anti-immigrant nationalist leader poses a profound challenge for the European Union. Since returning as prime minister in 2010, Orbán and his Fidesz party have chipped away at Hungary’s democratic checks and balances, curbed judicial independence and clamped down on the independent media. Hungary’s democratic backsliding has been accompanied by a drumbeat of xenophobic rhetoric, directed against refugees, Brussels and George Soros. The EU, used to grappling with Brexit, is now confronting a country at the heart of the continent making an exit from the club’s liberal values, but continuing to pick up the cheques. The European commission, however, does not see a systemic problem. The current commission’s mandate ends in 2019 and many EU insiders think its president, Jean-Claude Juncker, is reluctant to pick a fight with Orbán.Both politicians are members of the the European People’s Party, Europe’s dominant centre-right bloc, which has shielded Orbán from criticism. Before Sunday’s resounding win, some EPP members were hopeful Orbán would change. “He has been very outspoken, because he has been radicalised by the elections,” one EPP politician told the Guardian. “I think he will moderate and become more reasonable.” People who have followed Orbán’s career are not convinced. “He is getting more and more ambitious,” said Laurent Pech, professor of European law at Middlesex University. “He feels that the political constellation is favouring him.” The Hungarian leader’s approach to migration has been endorsed by allies in Bavaria and Austria. Allegations of misuse of EU funds have met a muted response from net payers to the EU budget. The previous commission froze EU funds for the Czech Republic, after corruption concerns emerged. While the EU’s anti-fraud office is investigating fishy cases in Hungary, money has continued to flow.

        Thousands protest against Czech PM as government talks stall (Reuters) - Thousands of Czechs rallied on Monday to call for the resignation of Prime Minister Andrej Babis, battling police charges and without parliamentary backing for his government. Nearly six months after an election that Babis’s ANO party won by a large margin, the billionaire businessman is still seeking partners to govern and heads a caretaker minority cabinet after losing a confidence vote in January. Coalition talks with the Social Democrats broke down last week in a spat over the allocation of ministries and Babis has not said what he will do next before meeting President Milos Zeman on Tuesday. Most other parties have shunned Babis due to an alleged fraud of European Union subsidies worth 2 million euros ($2.5 million) a decade ago. He denies wrongdoing. Several thousand protested on Prague’s Wenceslas Square on Monday, according to news agency CTK’s estimates, while more than 2,000 rallied in Brno, the country’s second largest city. Police did not provide official estimates. Protests took place in other cities and towns. Protest organizers say someone facing criminal charges should not lead the government. Besides the subsidy case, Slovak-born Babis has also fought to be cleared of a charge of cooperating with the communist-era secret police, a demand rejected by a court in Slovakia earlier this year. Thousands protested in March against a Communist lawmaker being named head of a police oversight commission despite his past in a communist-era special unit.

        French rail workers, students resume strike action against Macron -- Social opposition to President Emmanuel Macron’s government is growing as rail workers begin a fourth day of strike action against the privatisation of the French National Railways (SNCF) and students continue strikes and occupations against new entrance rules at French universities. After two strike days last week, rail transport has again been disrupted since Sunday by strike action. Approximately 35 percent of SNCF workers were on strike Sunday. Only one of every five high-speed trains and one of every three regional express and Paris-area trains were running, and the Express Regional Network (RER) in Paris was also disrupted. SNCF management has predicted a 43 percent strike participation rate for Monday, including 63 percent of controllers and 74 percent of train drivers. The student movement is continuing at universities across France. On Sunday, the National Student Coordination (CNE) called for a new day of action on campuses on Tuesday. It also called for protests on April 14 “in conjunction with the strike of the rail workers” and for students to “join the national strike day on April 19.” This movement is bringing workers and youth into a direct political confrontation with the French government, which is backed by the European Union. In this battle, the only way forward is a struggle to bring down the Macron government. The government, which is looking for money to finance its tax cuts for the rich and its plans for 300 billion euros in military spending by 2024, is determined to proceed with its cuts.In an interview with Le Parisien Sunday, Prime Minister Edouard Philippe insisted that he would not retreat but would impose the privatisation of the SNCF at all costs. He said, “I said there were issues that weren’t negotiable: opening the railways to competition, restructuring the company and ending recruitment based on the rail workers’ statute. We will not go back on this, which does not mean I am not open for discussion on how to implement it.”In short, the government is refusing to negotiate anything but the terms of the unions’ surrender. It is determined to privatize the SNCF and smash existing protections for rail workers, including a guarantee of lifetime employment and relatively advantageous pension benefits. The government intends to raise rail workers’ legal retirement age to align it with the private sector, which is currently 62. The reform package will be debated in the National Assembly starting today, with the formal vote set for April 17.

        Strikes mount as National Assembly opens debate on French rail privatization --Air France workers are taking strike action today over wage demands, after rail workers mounted a fourth day of rotating strikes yesterday against President Emmanuel Macron’s austerity measures. Trade union officials and students occupying universities to protest Macron’s moves to impose harsher selection procedures also mounted a protest outside the National Assembly, as it launched two weeks of debate on the planned privatization of the French National Railways (SNCF). The rail strike continued, with one quarter of rail workers listed as striking, including 75 percent of train drivers and 71 percent of controllers. Only one in every five high-speed trains (TGV), one in every three express regional trains, and one in six inter-city trains were running. SNCF management reported that the strike has already cost the company €100 million in lost revenues.The number of rail workers formally listed as striking went down yesterday, but there were many signs of growing militancy among workers and suspicion of the unions’ strategy of holding rotating strikes two days a week until June, when the Assembly is slated to approve the rail bill. Union officials and workers at the North and Saint Lazare Stations in Paris voted to authorize indefinite renewable strikes, effectively repudiating the union leadership’s strategy of limited, rotating strikes while continuing to negotiate the cuts with Macron. It was in particular a rebuke to Philippe Martinez, the leader of the Stalinist General Confederation of Labor (CGT) union, who went on Europe1 radio yesterday morning to say that he does “not want a lasting labor conflict.”

        Is May 1968 About to Happen Again, or Be Surpassed? Mass Strikes, Occupations and the Fight for the Future Perfect in France - In anticipation of the 50th anniversary of May 1968, the Macron government had been making plans to commemorate this historic uprising by celebrating how it had purportedly contributed to the liberal “modernization of French society.” Allied with the mass media and the ownership class, what better way for the relatively young neoliberal government to lay claim to the future than by taking over the past, using the ritualized burial rites of state-honored commemoration to spin a teleological tale according to which the legacy of ’68 was alive and well in contemporary ‘liberalization’? According to a spokesperson for the French President, this was of course to be done “without dogmas or prejudice,” in order to show that “68 was the time of utopias and disillusions, and we no longer truly have utopias.” Apparently, many French students and workers disagree with this peremptory judgment. Massive uprisings have pre-empted Macron’s plans, and they continue to build momentum by directly challenging a government that projected to rule over the past as well as the future. Halting in its well-trodden tracks the politics of commemoration—which would sever ‘68 from the deep history of anti-capitalist struggles and the broad internationalism of anti-imperialism in order to put it in the service of the current world order—a radical politics of rejuvenation has risen up to challenge Macron’s ‘non-dogmatic’ anti-utopianism. Although the international press is still largely ignoring these developments (as it did with the Nuit Debout movement in 2016), and the French mass media regularly mischaracterize them, a vast uprising is underway that is consistently growing, and there are already clear signs of a convergence of struggles.

        Spain responds to German court decision on Puigdemont with threats of stepped-up repression -- Spain’s Popular Party (PP) government has made clear it will seek to overturn the decision by a German court rejecting the extradition of Catalonia’s deposed regional premier Carles Puigdemont on charges of rebellion. Backed by the media, it is insisting that there will be no let-up in the repression meted out to those involved in organising the Catalan independence referendum last year.On Thursday, the Schleswig Higher Regional Court in Germany ruled against the extradition of Puigdemont back to Spain on charges of rebellion, declaring that the levels of violence Spain claimed had taken place in Catalonia did not satisfy the only possible comparable crime, high treason, in Germany. The court also released Puigdemont on bail.The court upheld a second allegation, misuse of public funds, which could yet lead to his extradition. However, the ruling means that if Puigdemont were to be extradited on the lesser charge, a ludicrous situation would arise whereby the leader of the region’s secessionist drive would be tried for misuse of public funds, while 13 of his Catalan associates would remain charged with rebellion.The court’s decision is a setback for Madrid, which was confident Puigdemont would be on his way back to Spain and a possible sentence of 30 years in jail based on the tacit agreement of the German government on the need to suppress the separatist movement. This sentiment was evident in the Frankfurter Allgemeine Zeitung, which insisted that Puigdemont remained “a criminal” who “cannot escape justice.” Deutsche Welle warned that the decision would “destroy” cross-border cooperation and encourage other separatist movements in Europe, including in Germany.

        Italian Coalition Talks Stall Over Ego - It looked so easy on paper. The two opposition parties in Italy surged to electoral success on the back of voter frustration with, well, everything.  But, a funny thing happened on the way to political revolt in Italy, egos became more important than reform. That’s the only way I can describe the actions of League Leader Matteo Salvini in the initial round of talks with fellow populist traveler Five Star Movement (M5S).  Salvini refuses to break his coalition with Forza Italia and its leader Silvio Berlusconi. And, of course, Berlusconi being the stalking horse for the European Union that he is, refuses to enter into a coalition with Five Star virtue signaling his painted hair off saying, “We are not open to government solutions in which envy and social hate, poverty politics and judicial witch hunts are the cornerstone.” It is fairly obvious that Salvini is a little drunk on the power of his newfound status of coalition leader. He’s trying to milk it for whatever he can get from it. And that’s the real danger.Salvini believes a re-vote is in The League’s favor.  But, I wouldn’t be so sure of that.In response to talks breaking down, M5S Leader Luigi Di Maio made coalition overtures to the Democrats who promptly rejected him.  And that’s expected.  The establishment parties are beholden to Brussels in the end.  It is their job to deliver a result that aligns with further EU integration.  Dragging out coalition talks is part of the strategy of proving that ‘the new guys’ are unfit to rule.  So, Di Maio is getting a little lesson early on here of just whose loyalties lie where and how serious the establishment is at protecting its position.This is why Salvini is pressing his advantage here.  He knows he can’t enter a coalition with M5S and be the senior partner and that’s what he wants.  The only path to that is another vote.

        Italian Politics One Month Later -- A month after the election, how are things developing in Italy? Let’s take a look at the blocs angling for power.The parties and coalitions on the field  Partito Democratico (PD): Comparable to the US Democratic Party. Before this last election, it was in power; in its governments, the prime minister was first the party secretary Matteo Renzi and later Paolo Gentiloni.  The PD lost the March 2018 elections. It didn’t just lose them, it really lost them, as can be seen from the electoral map, where it is actually difficult to spot the red dots (red being the color representing the PD, perhaps given that many of its voters historically supported the Italian Communist Party). Center right: Made up of three parties, and therefore sometimes referred to as a “three-legged alliance.” The three legs are: Forza Italia: Obtained about 13% of the vote. Its leader is Silvio Berlusconi, who is famous for many reasons: he is the founder of the Mediaset media empire and the former owner of Milan, the soccer club, as well as a great fan of women – as it happens, he is a big supporter of quotas for women (quote rosa) in politics in general and in his own party in particular. Lega Nord: Obtained about 17% of the vote. Originally it was called the “Lombard League” and it promoted the idea of secession: splitting off the rich North from the poorer Center and South of Italy. It is now led by a new leader, Matteo Salvini, who focused his campaign, following an approach not entirely dissimilar to Trump’s, around a concept of “Italy first.”  Fratelli d’Italia: The remains of the MSI, itself the not particularly impressive continuation of the fascist party of Mussolini. It is led by the blonde Giorgia Meloni, who, while making no secret of her boyfriend and their out-of-wedlock child, stresses her belief in the traditional family and the values it represents. Cinque Stelle (Five Stars): The party of the moment, as it were, winning more votes (about 32%) than any other.  The party sprang from an initiative of Beppe Grillo, a famous comedian, and Gian Roberto Casaleggio, the head of a PR agency with ideas about the future that are rather eccentric, even apocalyptic. The party criticizes the powers that be of global finance, and its delegates have also warned the world about the Bilderbergs, chemtrails, implanted chips, Masonic plots, aliens, and assorted other threats. Curiously, it has picked as its potential Minister for Economic Affairs an individual with close links to the aforementioned powers that be, Lorenzo Fioramonti.

        Recovering daughter of poisoned Russian spy may be given new identity and granted political asylum to live in Britain as it’s claimed her secret boyfriend has ‘links to Putin’s secret service -- A new life in Britain would see Yulia and her father given new identities and secretly resettled. The 66-year-old spy’s condition is also improving following last month’s nerve agent attack.Salisbury MP and Treasury Minister John Glen said: ‘Given her appalling treatment at the hands of the Russian state, I would warmly welcome the offer of asylum to Yulia Skripal.’Sources have also revealed Mr Skripal’s £400,000 house in Salisbury may be demolished to completely expunge traces of the Russian-made Novichok nerve agent.Sergei Skripal, a Soviet-era military intelligence officer, was branded a traitor in Russia and jailed in 2006 for selling state secrets to MI6. He came to Britain in 2010 after a deal was struck to release him in a spy swap which also saw Western powers send Russian spies to Moscow. Britain has blamed the assassination attempt on Russia – which denies involvement – opening a diplomatic war of words that has seen tit-for-tat consular expulsions and volatile exchanges. Yulia has not responded to requests from Russia to send consular staff to visit her in hospital.She also told her cousin last week that she did not want her to travel from Russia to see her.If she remains in the UK, Yulia would leave behind her mysterious fiance – named for the first time yesterday as Stepan Vikeev, 30 – who has ‘gone into hiding’ and had no contact with her or her family after the attack on March 4.

        Britain piles on lies to shore up Skripal poisoning accusations against Russia - The British government is doubling down on its campaign of dissembling and lies in response to the unravelling of its efforts to blame Russia for the poisoning of Sergei and Yulia Skripal.With Yulia getting “stronger by the day” and her father also recovering well, a United Nations Security Council meeting Thursday saw Russian Ambassador Vassily Nebenzia tear apart the claims by Prime Minister Theresa May and Foreign Secretary Boris Johnson that the Skripals were victims of a novichok nerve agent produced in Russia.He noted how on Tuesday Gary Aitkenhead, chief executive of the UK Porton Down chemical and military research laboratory, admitted that it had not in fact identified the origins of the nerve agent used against the Skripals. His admission proved the government and Johnson in particular, to be serial liars.Nebenzia recalled that prior to the UN meeting called by Britain on March 14, May issued a letter containing “heinous and totally unsubstantiated accusations against Russia of using chemical weapons on the UK soil.”“UK representatives promised at that meeting to regularly brief the Council on the course of the investigation,” he said. “However, no briefings came from their side.” Britain had ridden roughshod over basic standards of international law, refusing all requests for information or to answer more than 40 questions asked of them by Russia. Nebenzia added that Sergei and Yulia Skripal were Russian citizens, yet Russia had been denied consular access even though they “may have become victims of a possible terrorist attack carried out on British soil.” In response Britain ratcheted up the anti-Russian rhetoric still further, with Karen Pierce, the UK’s Permanent Representative, stating after Nebenzia spoke, “We gave 24 hours,” for Russian to respond to the UK’s allegations of culpability, “because this is a weapon of mass destruction.” In another part of the speech, Pierce again stated that a weapon of mass destruction had been used in an “attempt to kill civilians on British soil.” Pierce’s comments assumed the level of farce, given that the “weapon of mass destruction” referred to—one supposedly ten times more powerful than any other nerve agent—has killed no one. Instead, all its alleged victims—including Detective Sergeant Nick Bailey, who was the first to attend the scene and the only other person affected—have now substantially recovered. Yulia Skripal even told her cousin Viktoria by telephone that she will be discharged shortly!

        Don Quijones: After a String of Corporate Scandals and Collapses, “Big Four” Accounting Giants Face Breakup in the UK  - UK regulators may be on the verge of doing something right, but doubts remain over how genuine their stated intentions are.Following a string of corporate scandals and collapses, the UK’s top accounting regulator, the Financial Reporting Council (FRC), has called for an inquiry to explore the possibility of breaking the audit arms of the Big Four accounting firms — KPMG, Deloitte, Ernst & Young, and Price WaterhouseCoopers — into separate pieces. The Competition and Markets Authority (CMA) should look into the possibility of “audit only” firms in a bid to enhance competition in the sector, saidFRC chief executive Stephen Haddrill. There’s a strong case to be made for taking such drastic action. Having extended their tentacles into just about every facet of business administration, from accountancy and auditing to legal and tax consultancy, while wiping out or gobbling up many of their smaller rivals, the Big Four firms have grown horrendously large and conflicted.  Time and again they have signed off on accounts that were demonstrably faulty and allowed the management of large companies all over the world, such as the UK’s Carillion, Spain’s Abengoa, Japan’s Olympus, and the UK’s two biggest banking failures, HBOS and RBS, to mask the true state of their financial health. In the case of Spain’s Abengoa, its auditor, Deloitte, was seemingly unable to detect blatant flaws in the company’s accounting that were flagged up a year earlier by a 17-year old student with only “basic secondary school knowledge of economics.”   Despite such embarrassing failures, the Big Four firms continue to cement their domination of the global auditing industry. In the UK, they audit 99 of the FTSE 100 companies and 97% of the FTSE 350, up from 95% five years ago, despite EU and UK reforms ostensibly aimed at tackling a lack of competition in the sector.

         Ditch trade deal with Trump rather than accept chlorinated chicken, Britons say - The British public are overwhelmingly willing to ditch plans for a post-Brexit trade deal with the United States in order to protect the UK’s high food safety standards, new polling seen by The Independent shows.The finding amounts to a public vote of no confidence in Theresa May’s Brexit trade strategy, which aims to paper-over a potential hit to EU commerce by having “global Britain” sign deals with other countries around the world – the richest of which is the US.American trade negotiators are expected to demand Britain opens its markets to US foodstuffs that are currently illegal under EUrules as the price of a free trade agreement. Practices banned in the EU but currently widespread in the US including chlorine-washed chickens, hormone-treated beef, meat from animals fed on chicken faeces and crops washed with controversial herbicide chemicals.  A recent US trade department appraisal of EU safety regulations complained of “costly and burdensome” stipulations in European regulations on meat and described aspects of the EU’s regulations on the use of chemicals as “simply unnecessary”. When asked whether ditching current standards would be a price worth paying for a deal, a full 82 per cent of the public said keeping current regulations in place should take priority – even if they killed a deal – compared to just 8 per cent who said a free trade agreement with the US should go ahead. Theresa May’s trade chief, Liam Fox, has defended the possible legalisation of banned US agricultural practices, telling MPs that he was “a great believer in giving the public a choice over what they are eating” and that “there are no health reasons why you couldn’t eat chickens that have been washed in chlorinated water”.

        British Banks Will Have to Cut Ties to Sanctioned Oligarchs, U.S. Says - NYT — The United States on Tuesday ratcheted up its efforts to block Kremlin-linked industrialists from doing business in the West, warning that British banks will have to sever their relationships with the tycoons if they want continued access to American financial institutions.Sigal P. Mandelker, a top American Treasury official in London to meet with her counterparts, said British banks could face “consequences” if they continued to carry out significant transactions on behalf of the 24 influential Russians sanctioned by Washington on Friday. The list includes the industrialists Oleg Deripaska and Viktor Vekselberg, along with Kirill Shamalov, who American officials have identified as President Vladimir V. Putin’s son-in-law.“These are blocking sanctions,” Ms. Mandelker, under secretary of the Treasury for terrorism and financial intelligence, said at a briefing with reporters. “There of course would be consequences for U.K. financial institutions” that continued to do business with the Russians. The warning has resonated in London, which for decades has served as a haven for Russia’s wealthiest families. Russian investors own iconic British assets like the Chelsea Football Club and swaths of high-end London real estate, and they support thriving networks of lawyers, financial advisers and estate agents.

        Brexit: short sea shipping - Recalling the recent story about Irish shipping bypassing the UK, it was quite significant that the three UK papers which lifted the story from the Financial Times all took a similar line.The most strident version was the Express, which headed its story "Brexit Punishment", while the latecomer of the trio, The Sun accused European shipping companies of "plotting to bypass Britain when trading with Ireland after Brexit". The thrust of the story was that ferry company CLdN SA was preparing to deploy its newly-built, giant ro-ro ferries, the Celine and the Delphine on the Rotterdam-Zeebrugge-Dublin route, by-passing the UK route to the continent via Holyhead.The tone of the media reports is sadly all too typical of the way Brexit is being treated, a tone that is generally inappropriate and, in this case, more than usually so. Virtually aspect of the reports is either wrong or misleading. In the latest of my own reports, I remark that this development marks an opportunity to route trade from Ireland directly to the Continent, bypassing the UK, but I also note that transferring traffic from the roads to shipping is part of a long-term European Union programme. The generic title of this programme is Motorways of the Sea, initiated by the Transport White Paper of 2001 – long before Brexit was even close to being a realistic proposition. The ultimate objective of the "Motorways of the Sea" (MoS) project is to integrate so-called short-sea shipping into the Trans European Transport Network (TEN-T) so that it encompasses all modes of transport. The intention being to reduce road traffic and replace it, where possible, with more efficient sea transport. To date, just short of €2 billion in EU funds has been spent on MoS projects.

        Britain sees the Commonwealth as its trading empire. It is sadly deluded - In one way or another, the Commonwealth is responsible for all these things: for the Commonwealth Games, which demand the presence of the heir to the throne in Australia; for the Commonwealth heads of government meeting (Chogm), the 25th such conclave since 1971, which occurs in London (and Windsor Castle) on 16-20 April; and, simply by its dogged and unlikely persistence as an international grouping, for permitting the British delusion that old imperial patterns of trade can replace the present arrangements with the EU. (Enter the hormone-treated beef.)  Not that the Commonwealth itself encouraged this idea: nearly every Commonwealth republic and “realm” wanted the UK to remain inside the EU. And not that Europhobes have always prized the Commonwealth. As our present foreign secretary wrote in 2002, “It is said that the Queen has come to love the Commonwealth, partly because it supplies her with regular cheering crowds of flag-waving piccaninnies.” The Commonwealth that some Brexit campaigners had in mind was perhaps a little whiter – taking the definition of Commonwealth all the way back to the time when it meant the British empire’s settler dominions: Australia, New Zealand, Canada, Newfoundland and South Africa, which were sovereign states, not colonies, and bound only by their loyalty to the crown.Indian independence forced Britain to be more flexible about who could be included. . But Britain was keen to maintain some form of the old connection “in the mistaken belief”, according to the Commonwealth historian Philip Murphy, “that India’s huge standing army would continue to underwrite British great-power status”.  Any thought that the Commonwealth could successfully perpetuate the empire vanished with the Suez humiliation in 1956, when Nehru and India sided with Gamal Abdel Nasser and Egypt over the Anglo-French assault. The ties to London began to weaken. Names changed to reflect different realities. Founded in 1930, the British Empire Games became the British Empire and Commonwealth Games in 1954, the British Commonwealth Games in 1970, and finally the Commonwealth Games in 1978.

        The complete failure of the Brexit project -- The Brexit project is already a complete failure. That statement may seem odd, as we are less than one year away from leaving the EU. But what happens in March 2019 if all goes to plan? We leave the EU, but remain in the Single Market (SM) and Customs Union (CU). It is not Brexit means Brexit, but Brexit in name only (BINO). All the UK ‘gains’ is the inability to influence the rules and laws we have to follow as part of the SM & CU. If the Brexiters were being honest, the transition is worse than not leaving. Not only do we lose the sovereignty they perceive as a result of being in the SM & CU, but we also lose our current say in how the SM & CU are run, and we still pay into the EU budget. In sovereignty terms that is going backwards. Free movement continues, although again if Brexiters were being honest they were never too worried about immigration: that was just a hook to catch voters with. But all the things that Brexiters do go on about like freedom to make trade agreements with other countries are impossible during transition. Brexiters may well convince themselves that transition is just an embarrassing phase before their new dawn. They can only do that because they have never concerned themselves with details, whether those are details about how trade works or details about negotiations. The reality is very different. There is no solution to the Irish border problem except staying in the Customs Union and Single Market for goods.  Will the EU be prepared to accept the ‘Jersey option’, which means splitting the Single Market (UK in for goods and out for services) and allowing an end of free movement? That may appear to others as if the UK might be better off after Brexit, which breaks one of the key EU requirements of any deal. As we have learnt from the last year, if the EU does not want something it does not happen. Leaving with No Deal is no longer a threat, so it may be quite possible that the EU may simply say the only feasible solution, if the UK does not want a border in the Irish Sea, is to stay in the complete Single Market and Customs Union. With a hard deadline for the end of transition leaving little room for negotiation, the UK may have little choice but to agree to BINO, or something very close to it.

        City unlikely to get more than “token, minimalist” Brexit deal - A senior City figure has warned that the UK risks being stuck with a “token, minimalist” deal on financial services as part of the post-Brexit agreement with the EU in October.The source, who is privy to conversations with key players on both sides, told City A.M. that while services are likely to be referenced within the final deal, it will be “just a slightly uninspiring, lowest-common-denominator” inclusion that will result in “dramatically less” access than is currently enjoyed.“They will say it’s the most comprehensive deal the EU has ever done on services with any third country and that will be true, but it will not only be less than we have through the Single Market, it will be dramatically less,” he said.  Government figures including Brexit secretary David Davis, chancellor Philip Hammond and even Prime Minister Theresa May have pressed the case for the City to get a deal, the red lines laid down by either side make it difficult to reach a compromise.The EU is pushing for equivalence, which would leave the UK as a rule-taker. An “enhanced” approach - which could lean towards mutual regulatory alignment favoured in the City and Westminster - would still give the EU ultimate control to unilaterally withdraw access, which would leave the UK vulnerable. Although there are individual member states who would back the UK - most notably Luxembourg, whose economy is heavily dependent on a financial services in which the UK plays a critical part - there is still a sense that the Commission is, and will continue to, set the tone in negotiations. France, who has repeatedly described as “hostile” to the UK, remains a major antagonist in the negotiations, and one that is growing in strength in light of a weakened Angela Merkel. The nature of a financial services agreement remains subject to considerable debate. Earlier this year Jonathan Hill, the EU's Commissioner for financial services for two years until the referendum, told the House of Lords it made no sense to "subcontract all our rule-making to someone else" in the hope of maintaining current levels of access.

        UK can change mind on EU single market until 2021, says Michel Barnier - The EU's chief Brexit negotiator has told Theresa May she can change her mind on leaving the bloc's single market up until 2021. Michel Barnier revealed Brussels would consider a reversal of the Government's commitment to quitting the single market even after Brexit. The European Commission official suggested the UK could yet abandon its "red lines" within the planned Brexit transition period, which is due to last until 31 December 2020. Speaking to a group of European newspapers, as reported by Suddeutsche Zeitung, Mr Barnier said: "If Britain decides to change its red lines, we too will change our positions, we remain open, there are no dogmas." The UK will formally leave the EU on 29 March next year, but will remain in the bloc's single market and customs union for the 21-month transition period. After that point, the Prime Minister has insisted the UK will be outside the single market and the customs union, in order for Britain to establish its own immigration and trade policies. Last month, EU leaders left open the option for the UK to change its Brexit policy when agreeing their guidelines for the next stage of negotiations, on the future EU-UK relationship. The conclusions of the European Council summit in March said the 27 remaining EU member states had adopted an approach "compatible with the positions stated by the UK". But it added: "If these positions were to evolve, the Union will be prepared to reconsider its offer." The Times reported this clause was part of the EU's "plan B" for Brexit negotiations. 

        U.K. banks start cracking down on consumer borrowing -- Banks are putting the brakes on Britain’s consumer credit boom, according to the Bank of England. The availability of unsecured credit to households was reported to have decreased “significantly” in the first quarter as lenders tightened criteria for granting both credit card and other unsecured loans, the BOE said in a report published Thursday. Default rates increased and the tougher lending criteria was partly put down to a changing risk appetite among lenders, which have been increasing unsecured credit by about 10% a year. The shift could be due to the outlook for monetary policy, with the BOE expected to increase interest rates in May and possibly again later in the year. The Financial Conduct Authority warned this week that even a gradual increase in rates could have a “detrimental impact” on consumers carrying a lot of debt. “Lenders are getting more cautious,” Liz Martins, an economist at HSBC, said in a note titled ‘Cracking down on credit cards.’ It’s “perhaps as a consequence of the weaker consumer environment and slower economy, but perhaps also in response to the FCA’s concerns.” Demand for unsecured lending also fell at the start of the year, with a large drop in applications for credit cards, although lenders said they expect this to reverse in the next three months. “There have been tentative signs of weakening demand for consumer credit although it remains robust,” the BOE said in the Credit Conditions Survey. The report showed that the contribution of dealership car finance has slowed since mid-2016, having played a large part in the consumer-credit boom of recent years. BOE officials have expressed concern about the surge in borrowing, led by motor finance, which could pose risks to banks and the economy. The BOE’s findings were based on a survey of lenders between Feb. 19 and March 9. 

        Theresa May Calls Syria ‘War Cabinet’ As Donald Trump Tells Russia: ‘Get Ready’ - Theresa May has called an emergency ‘War Cabinet’ to discuss the crisis over Syria as Donald Trump signalled the United States was ready to launch air strikes against the regime of Bashar Assad.The Prime Minister called senior ministers to gather in Downing Street on Thursday after declaring “all the indications” were that the regime was responsible for a chemical strike on its own people last weekend.The Ministry of Defence refused to comment on reports that Royal Navy submarines had been ordered into range to launch Tomahawk cruise missile  strikes as early as Thursday night.“We don’t comment on submarine movements,” a spokesman said.Russia and the United States appear to be on a collision course after Trump warned that missiles “will be coming” to Syria, while Moscow said it will deploy troops to the town at the centre of Saturday’s purported chemical attack.Trump wrote in an incendiary early morning tweet on Wednesday that the missiles would be “nice and new and smart!”, after a Russian official said any strike in retaliation to the attack on the rebel-held town of Douma would be shot down.“Get ready Russia,” the president said. “You shouldn’t be partners with a Gas Killing Animal who kills his people and enjoys it!”Moscow responded immediately, saying “smart missiles should fly towards terrorists, not legal governments”, before the Russian military revealed it would deploy troops to Douma. In a day of fast-paced international diplomacy, Theresa May also said the “continued use of chemical weapons cannot go unchallenged” and that Britain will work with its “closest allies” to see how those responsible for the latest attack in Syria can be held to account.

        Will Big Data kill the Census? -- The UK is trying to scrap its Census;

      • It wants to replace it by linking up lots of existing datasets;
      • Legislation enacted last year gives official statisticians access to data held by public bodies and businesses;
      • It matters because the Census is the foundation of public spending and administration;
      • Did the public notice they agreed to this?

         Iceland elects 41-year-old environmentalist as prime minister -- Katrin Jakobsdottir, the 41-year-old chairwoman of the Left-Green Movement, has been elected Prime Minister of Iceland. One of the most well-liked politicians in Iceland, Katrín, a former education minister and avowed environmentalist, has pledged to set Iceland on the path to carbon neutrality by 2040. As Iceland’s fourth prime minister in only two years, Katrín will take office at a time when national politics have been tainted by public distrust and scandal. A democratic socialist, Katrín is viewed as a bridge-building leader that may lead the country towards positive, incremental change. “She is the party leader who can best unite voters from the left and right,” said Eva H. Onnudottir, a political scientist at the University of Iceland, according to the New York Times. “Because this coalition includes parties from the left to the right, their work will be more about managing the system instead of making ‘revolutionary’ changes.”  Since forming its governing coalition, Katrín’s Left-Green party has already taken bold steps to assert its environmentalism. Rather than appointing a party member of parliament, the Left-Greens have picked Guðmundur Ingi Guðbrandsson, environmental activist and CEO of Landvernd, the largest nature conservation and environmental NGO in Iceland, to serve as Minister of the Environment. The government’s new coalition is expected to continue the work to address climate change began under previous administrations.

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