Federal Reserve Bank of New York names Williams as next president - The Federal Reserve Bank of New York’s search committee has tapped San Francisco Federal Reserve Bank President John Williams as the next president of the New York Fed, concluding a search process that has drawn criticism for being inadequately considerate of candidates with more diverse backgrounds.In a press release Tuesday, the New York Fed announced that Williams — a career Fed economist who has served as head of the San Francisco Fed since 2011 — would replace current president William Dudley, effective June 18. Sara Horowitz, who co-chaired the search committee and chairs the New York Fed’s board of directors, said that Williams “best fulfilled the criteria” the committee had identified as critical for Dudley’s successor, and the committee voted unanimously April 2 to name Williams as the next president of the New York Fed. “John cares deeply and is committed to the dual mandate and has led extensive work on the U.S. labor markets and employment,” Horowitz said. “He has meaningfully engaged with and supported the diverse communities that make up the San Francisco Fed’s district, and understands the different economic realities of its vast geographies and demographics, which have extensive parallels to the Second District, including Puerto Rico. And, John has always been willing to speak his mind and encourage the Fed to be forward looking and reflective.” Dudley’s term as president expires in January 2019, but he said in an interview with American Banker on March 26 that he opted to retire early in order to give the search committee more time to find a suitable replacement. The president of the New York Fed plays a unique role among regional Fed bank presidents in that it is the only regional Fed bank president with a permanent seat on the Federal Open Market Committee. The presidents of the Chicago and Cleveland Fed banks rotate onto the FOMC every other year, and the remaining regional bank presidents rotate onto the committee every third year.
Fed Chair Powell: The Outlook for the U.S. Economy -- Note: You can Watch Live on YouTube, From Fed Chair Jerome Powell: The Outlook for the U.S. Economy Unemployment has fallen from 10 percent at its peak in October 2009 to 4.1 percent, the lowest level in nearly two decades. Seventeen million jobs have been created in this expansion, and the monthly pace of job growth remains more than sufficient to employ new entrants to the labor force. The labor market has been strong, and my colleagues and I on the Federal Open Market Committee (FOMC) expect it to remain strong. Inflation has continued to run below the FOMC's 2 percent objective but we expect it to move up in coming months and to stabilize around 2 percent over the medium term. Over the next few years, we will continue to aim for 2 percent inflation and for a sustained economic expansion with a strong labor market. As I mentioned, my FOMC colleagues and I believe that, as long as the economy continues broadly on its current path, further gradual increases in the federal funds rate will best promote these goals. It remains the case that raising rates too slowly would make it necessary for monetary policy to tighten abruptly down the road, which could jeopardize the economic expansion. But raising rates too quickly would increase the risk that inflation would remain persistently below our 2 percent objective. Our path of gradual rate increases is intended to balance these two risks. Of course, our views about appropriate monetary policy in the months and years ahead will be informed by incoming economic data and the evolving outlook. If the outlook changes, so too will monetary policy. Our overarching objective will remain the same: fostering a strong economy for all Americans--one that provides plentiful jobs and low and stable inflation.
Enough already with GDP growth… Jared Bernstein - Readers know I’ve long been noodling over measurement issues, whether it’s accurately measuring the economy’s capacity–and admitting we don’t have reliable, policy relevant gauges of potential GDP or a “natural rate” of unemployment–or maybe most importantly, measuring well-being versus growth. See this in today’s WaPo. Like David Pilling, whose book The Growth Delusion I highly recommend in this space, the idea is not to toss GDP growth rates and other aggregate measures. It’s to put them in perspective, and critically: be aware of what they leave out. In that regard, I think one of the most important points in the WaPo piece is the need to net out environmental degradation (which, as I point out, includes adding back in some positive developments, like less use of coal, more use of renewables). The WaPo piece barely scratches the surface of this conversation, of course. The punchline–it takes a village of metrics to begin to characterize the well-being of a populace–invokes the need to evaluate many more metrics, including:
- –Are people meeting their basic needs (housing, food, child and health care, etc.); do their incomes come close to what’s needed given the cost of living where they live? Such data exist.
- –How can we best net out environmental degradation and any progress we’ve made against it?
- –How valid/useful are existing well-being measures, like the Happiness Index in the WaPo piece, the Genuine Progress Indicator, Bhutan’s Gross National Happiness, etc.?
All fodder for future work in this space. Perhaps we can tap this disconnected moment (between growth and well-being) and elevate the need to get away from the usual GDP/stock market etc. and take these measurement challenges much more seriously.
Q1 2018 Was A Disaster For America - In the first quarter of 2018, the financial and investing industry went into overdrive detailing the upside of the 2018 tax cuts and the positive impacts of a "business friendly" executive and congressional branch on business in America. The stock market hit record highs and the Federal Reserve proclaimed such good times as to raise their economic outlook and increase the likelihood for interest rate hikes.From January 1, 2018 through March 28, 2018 (Q1), real GDP likely grew $110 billion (a 2.5% rise on an annualized basis). However, the fly in the ointment...according to the Treasury, from Jan 1, 2018 through March 28, 2018 (Q1), federal debt rose by an astounding $621 billion dollars (a 13.1% increase on an annualized basis). The chart below shows the quarterly change in federal debt versus the quarterly change in real GDP since 2000. Q1 2018 was the second largest quarterly growth in federal debt, only surpassed by the massive free spending of Q4, 2008. Or, if we just subtract the quarterly growth in federal debt from the growth in real GDP...chart below. Unfortunately, Q1 2018 is one of the worst quarters on record with the growth in federal debt doing laps around the "growth" in Gross Domestic Product (which of course counts all the federal debt fueled activity?!?). Incurring over $621 billion in new debt (to be serviced ad infinitum) to produce just over a $100 billion in new economic activity is something only government could achieve. However, it gets downright miserable if you add in the massive $500 to $750 billion quarterly growth of unfunded liabilities alongside the growth in federal debt. Together, the UL's and federal debt are rising $3 to $4 trillion annually while GDP is rising around a half trillion. The tax cuts and fast rising costs of social programs will continue to see deficits rise far faster than economic activity or resultant tax revenue.
Under Trump, a Strong Economy but Murky Policy Outlook - During Barack Obama’s presidency, uncertainty about U.S. economic policy was much higher than it had been during the previous 25 years, according to calculations by a trio of academic economists. You would think uncertainty would be low now, with economic expansion advanced and secure, the global economy on a stable footing, and a president in the White House focused on helping business by cutting regulation. But it isn’t. The researchers find economic policy uncertainty is slightly higher under President Donald Trump than it was during an Obama era marked by deep recession, auto bailouts, unconventional Federal Reserve interventions into the financial system and routine brinkmanship between Democrats and Republicans on fiscal policy. The academics devised an “economic policy uncertainty index” that tracks mentions of the words “uncertain” and “uncertainty” in major newspapers’ articles about economic policy. The dependence on newspapers could make the index prone to shifts in media coverage of issues or people over time. Still it’s instructive. The index averaged 140.2 during Mr. Trump’s first 13 months in office, compared with 126.0 during the comparable period of Mr. Obama’s tenure and 134.7 during his full two terms in office. .In January and February of this year, the index averaged 127, still well above its average of 100 between 1985 and 2010. “Obama was president in a time when you needed extreme policy action,” said Mr. Bloom. “Trump has incredibly benign economic conditions. He should have very low levels of policy uncertainty.” It is hard to say exactly why uncertainty is high now. Mr. Bloom said it is likely partly because of big policy changes happening in Washington—such as an aggressive new stance on trade—and partly because of the decision-making process, which he described as chaotic. Investors got a taste of Trump era economic policy uncertainty in recent weeks: New U.S. tariffs on steel and aluminum imports and a range of goods imported from China; exemptions from those tariffs dribbled out piecemeal; federal government intervention to stop the proposed acquisition of Qualcomm Inc. by a foreign competitor on national security grounds; and the acquisition of Time Warner Inc. by AT&T Inc. landing in federal court.
What Is Mnuchin's Treasury Hoping To Hide? - in the new Orwellian we face today, where freedom is slavery and ignorance is strength, one wonders just what it is that the US Treasury Department is trying to hide by its recent push for discussions about US government debt trading 'transparency' with the nation's biggest banks. The U.S. Treasury Department plans to meet with market-makers and other electronic trading firms to discuss ways to bring more transparency to the $14.5 trillion market for government debt. Bloomberg reports that U.S. officials are seeking industry feedback on how to publicly report prices for Treasury bonds for the first time, according to a person familiar with the matter. Meetings will be held with New York-based firms this week and Chicago traders next week, said the person, who asked not be identified because the information is private. This follows conversations with the 23 primary banks and brokers that buy and sell U.S. debt directly from the government, said a different person familiar with the matter. .. The current environment gives Wall Street dealers total knowledge of prices and trades while investors and market makers are in the dark about deals between banks and their customers, which comprise half of all trading. It also hinders the ability of enforcement agencies to craft coherent policies because they don’t fully understand how Treasuries trade. Some observers have expressed skepticism that any new rules will be implemented. Mnuchin “vowed only to ‘study’ the wider dissemination of trade data, with the first principle of any reform to ‘do no harm,’” said Jim Greco, a co-founder of Direct Match Holdings Inc., a Treasury-trading firm that’s failed to break the banks’ stronghold on the market. So, forgive us a moment of speculation (while we don our tin foil hats) but the timing of Treasury's sudden interest in just how 'transparent' the market for US government bonds is - and the auction process for new debt issuance - is notably coincident with the growing threats and tensions with China (trade wars vs reduced bond auction participation) and Russia (actively reducing Treasury holdings). With a nod and a wink from Treasury and The Fed, are the biggest primes being nudged to soak up the deficit-busting supply in a way that the current 'transparent' rules shade from the average joe's eyes?
The US Arms Machine: Why Wars R Us - It’s one of those stories of the century that somehow never gets treated that way. For an astounding 25 of the past 26 years, the United States has been theleading arms dealer on the planet, at some moments in near monopolistic fashion. Its major weapons-producers, including Boeing, Raytheon, and Lockheed Martin, regularly pour the latest in high-tech arms and munitions into the most explosive areas of the planet with ample assistance from the Pentagon. In recent years, the bulk of those arms have gone to the Greater Middle East. Donald Trump is only the latest American president to preside over a global arms sales bonanza. With remarkable enthusiasm, he’s appointed himself America’s number one weapons salesman and he couldn’t be prouder of the job he’s doing.Earlier this month, for instance, on the very day Congress was debating whether to end U.S. support for Saudi Arabia’s brutal war in Yemen, Trump engaged in one of his favorite presidential activities: braggingabout the economic benefits of the American arms sales he’s been promoting. He was joined in his moment of braggadocio by Saudi Crown Prince Mohammed bin Salman, the chief architect of that war. That grim conflict has killed thousands of civilians through indiscriminate air strikes, while putting millions at risk of death from famine, cholera, and other “natural” disasters caused at least in part by a Saudi-led blockade of that country’s ports. That Washington-enabled humanitarian crisis provided the backdrop for the Senate’s consideration of a bill co-sponsored by Vermont independent Senator Bernie Sanders, Utah Republican Senator Mike Lee, and Connecticut Democratic Senator Chris Murphy. It was aimed at ending U.S. mid-air refueling of Saudi war planes and Washington’s additional assistance for the Saudi war effort (at least until the war is explicitly authorized by Congress). The bill generated a vigorous debate. In the end, on an issue that wouldn’t have even come to the floor two years ago, an unprecedented 44 senators voted to halt this country’s support for the Saudi war effort. The bill nonetheless went down to defeat and the suffering in Yemen continues.
Trump’s Corrupt Crusader Cabinet - Nina Illingworth - Hail, hail the gang’s all here; that floundering fascist fuck has actually done it and woe indeed awaits the poor bastards trapped outside when the now-inevitable shit rain falls. In the blackened Beltway heart of Amerikkka, the other shoe finally dropped last week when globally-loathed US swine emperor Donald Trump officially announced his plan to replace rumored “adult in the room” baby killer H.R. McMaster with a live hand grenade wearing a Yosemite Sam novelty mustache. Barring an unforeseen miracle, bomb-lobbing sociopath John Bolton will become Herr Donald’s new National Security Advisor; an objectively homicidal choice that comes on the jackbooted heels of Trump’s also-objectively homicidal decision to promote “Iron Mikey” Pompeo and “Bloody” Gina Haspel to head up the State Department and CIA respectively. With these additions, our rapist-in-chief is assembling a bloodthirsty crusader war cabinet that will likely rewind US foreign policy to an era of unrestrained imperial aggression unknown since Hank Kissinger used a body count in the millions to lure Hollywood starlets into the Lincoln bedroom. Perhaps more importantly, it’s now clear to even the most moronic American media minions that Trump intends to prop up his festering, leprous presidency by plunging the pig empire into further warfare; the only questions remaining all have mind-fuckingly terrible answers – questions like when, where and how many wars are we talking about here? The stage is set and the die has been cast; there will be no avoiding another atrociously reckless, unarguably moronic war once Trump has surrounded himself with blood soaked corpse-mongers who share his genocidal fantasies of limitless American imperial power. So just who are these architects of death and destruction now propping up the swine emperor’s desperately militant regime? Let’s look at six important members of Herr Donald’s corrupt crusader cabinet and where they stand on relevant foreign policy issues like Amerikkkan relations with North Korea, Iran, Syria, Israel and Russia:
The Ignorant and the Arrogant: How Pompeo and Bolton Bring Us Closer to War in the Middle East - Armed conflict between the US and Iran is becoming more probable by the day as super-hawks replace hawks in the Trump administration. The new National Security Adviser, John Bolton, has called for the US to withdraw from the Iran nuclear deal of 2015 and advocated immediate regime change in Tehran. The new Secretary of State, Mike Pompeo, has said the agreement, which Trump may withdraw from on 12 May, is “a disaster”. Trump has told Israeli Prime Minister Benjamin Netanyahu that he will not accept a deal with “cosmetic changes” as advocated by European states, according to Israeli reporters. If this is so, then the deal is effectively dead. The escalating US-Iran confrontation is causing menacing ripples that could soon become waves across the Middle East. The price of crude oil is up because of fears of disruption of supply from the Gulf. In Iran, the value of the rial is at its lowest ever, having fallen by a quarter in the last six months. In Iraq, Prime Minister Haider al-Abadi admits his greatest fear is a confrontation between the US and Iran fought out in Iraq. A dangerous aspect of the super-hawk approach to Iran is similar to that of the Bush administration in the run up to the invasion of Iraq in 2003. In both cases, those calling for use of armed force had, or have, lethally little knowledge of what they were/are getting into. Pompeo had a simple solution to the Iranian problem when he was still a congressman, telling reporters it would take “under 2,000 sorties to destroy the Iranian nuclear capacity”.
The U.S. Navy Wants to Spend Billions on Aircraft Carriers That Aren’t Ready - The U.S. Navy wants to go all in on the USS Ford-class aircraft carrier program. Less than a year after the first-in-class ship’s commissioning — before it ever launched or recovered an aircraft, a first in history — the sea service is exploring options to buy similar vessels in bulk.The Navy has already repeated several common acquisition mistakes with the Ford program, but this latest scheme would pile on more problems. The Navy committed to this program—which includes several new major ship systems like nuclear reactors, catapults and radar systems—while their designs were still in a conceptual stage, and the inevitable complications in their development have contributed greatly to the program’s $6-billion cost increase.Committing to such a large program with so many unproven systems earned the Ford-class program a spot on Sen. John McCain’s “America’s Most Wasted Report.” Yet, James Geurts, the Navy’s assistant secretary for research, development and acquisition, told the House Armed Services Committee on March 6, 2018 that the Navy is studying a potential two-ship block buy for the third- and fourth-in-class ships. Geurts testified that such a plan could save $2.5 billion over the total cost of the program, although this is only a rough estimate at this point as they are asking for evidence of savings from the contractor rather than seeking an independent cost estimate. The history of this program should make everyone skeptical of such claims.The Government Accountability Office released a report in 2017 that stated cost estimates for the Ford program are unreliable because they do not take into account the risks associated with building the ships before the design has been completed and tested. The ship’s electric advanced arresting gear is supposed to be able to go 16,500 landings between mission failures. It can do 19.
Weapons for Anyone: Donald Trump and the Art of the Arms Deal - It’s one of those stories of the century that somehow never gets treated that way. For an astounding 25 of the past 26 years, the United States has been the leading arms dealer on the planet, at some moments in near monopolistic fashion. Its major weapons-producers, including Boeing, Raytheon, and Lockheed Martin, regularly pour the latest in high-tech arms and munitions into the most explosive areas of the planet with ampl eassistance from the Pentagon. In recent years, the bulk of those arms have gone to the Greater Middle East. Donald Trump is only the latest American president to preside over a global arms sales bonanza. With remarkable enthusiasm, he’s appointed himself America’s number one weapons salesman and he couldn’t be prouder of the job he’s doing. Earlier this month, for instance, on the very day Congress was debating whether to end U.S. support for Saudi Arabia’s brutal war in Yemen, Trump engaged in one of his favorite presidential activities:bragging about the economic benefits of the American arms sales he’s been promoting. He was joined in his moment of braggadocio by Saudi Crown Prince Mohammed bin Salman, the chief architect of that war. That grim conflict has killed thousands of civilians through indiscriminate air strikes, while putting millions at risk of death from famine, cholera, and other “natural” disasters caused at least in part by a Saudi-led blockade of that country’s ports. That Washington-enabled humanitarian crisis provided the backdrop for the Senate’s consideration of a bill co-sponsored by Vermont independent Senator Bernie Sanders, Utah Republican Senator Mike Lee, and Connecticut Democratic Senator Chris Murphy. It was aimed at ending U.S. mid-air refueling of Saudi war planes and Washington’s additional assistance for the Saudi war effort (at least until the war is explicitly authorized by Congress). The bill generated a vigorous debate. In the end, on an issue that wouldn’t have even come to the floor two years ago, an unprecedented 44 senators voted to halt this country’s support for the Saudi war effort. The bill nonetheless went down to defeat and the suffering in Yemen continues.
US and South Korea hold war games ahead of talks - The massive annual US-South Korean war games known as Foal Eagle and Key Resolve began last week. The drills, which were delayed to allow North Korea to participate in last month’s Winter Olympics in South Korea, take place amid continuing high tensions on the Korean Peninsula. The exercises, which usually last two months, will run for just one month and not involve key US strategic assets, such as an aircraft carrier strike group, nuclear submarines and nuclear-capable bombers. The lower-key approach follows the announcement of talks between North Korean leader Kim Jong-un and South Korean President Moon Jae-in this month, and between Kim and US President Donald Trump, possibly in May. While the Pentagon, as it ritually does, said the exercises have a “defensive character,” they are a barely-disguised rehearsal for war with North Korea. Foal Eagle will involve 11,500 American troops and about 300,000 South Korean troops, backed by heavy armour, artillery and war planes. Key Resolve is a two-week, computer-based command-and-control exercise involving 12,000 US and 10,000 South Korean troops. There is nothing defensive about these war games. They are premised on OPLAN 5015, agreed by the US and South Korea in 2015, that involves pre-emptive strikes on North Korea and “decapitation raids” to kill its top leaders.
Why the U.S. Fails to Understand Its Adversaries - Robert Jervis and Mira Rapp-Hooper warn about the dangers that come from misperception on both sides of the standoff with North Korea: If any U.S. strategy toward North Korea is to have a chance of succeeding (or even of just averting catastrophe), it must be guided by an accurate sense of how Kim’s regime thinks, what it values, and how it judges its options. Washington must understand not just North Korean objectives but also how North Korean officials understand U.S. objectives and whether they consider U.S. statements credible. Unfortunately, the U.S. is remarkably bad at understanding these things accurately. This is not just a Trump administration failing. Most American politicians and policymakers routinely misjudge the intentions and goals of our adversaries, and they often invent a fantasy version of the regime in question that leads them astray again and again. One reason for this is that it is simply easier to project our assumptions about what a regime must want than it is to make the effort to see things as they do. Another reason is that many of our politicians and policymakers mistakenly think that if they try to understand an adversary’s views that must somehow mean that they sympathize with the adversary or condone its behavior. Instead of trying to know their enemy, our leaders would prefer not to for fear of being “tainted” by the experience. This lack of knowledge is compounded in some cases by the absence of normal diplomatic relations with the adversary. Our leaders are encouraged to take this self-defeating approach to international problems by a political culture that rewards the people that strike tough-sounding-but-ignorant poses about a problem and marginalizes those that seek to understand it as fully as possible.
Google employees revolt, say company should shut down military drone project -- About a month ago, news surfaced that Google was working with the United States Department of Defense on drone software called "Project Maven." The project applied Google's image-recognition techniques to the millions of hours of drone footage collected by the military with the goal of identifying people and objects of interest. At the time, some Google employees were reportedly outraged at the news, and now The New York Times reports the situation has escalated to a formal letter being addressed to Google CEO Sundar Pichai. The letter, which The Times reports has "garnered more than 3,100 signatures" comes right out in the first paragraph and demands the project be cancelled: Dear Sundar, We believe that Google should not be in the business of war. Therefore we ask that Project Maven be cancelled and that Google draft, publicize, and enforce a clear policy stating that neither Google nor its contractors will ever build warfare technology. The letter goes on to say that "building this technology to assist the US Government in military surveillance—and potentially lethal outcomes—is not acceptable" and that Maven will "irreparably damage Google's brand and its ability to compete for talent." The letter even invokes Google's "Don't Be Evil" motto. A Google spokesperson sent the following response to the letter: Maven is a well-publicized DoD project, and Google is working on one part of it—specifically scoped to be for non-offensive purposes and using open-source object-recognition software available to any Google Cloud customer. The models are based on unclassified data only. The technology is used to flag images for human review and is intended to save lives and save people from having to do highly tedious work. Any military use of machine learning naturally raises valid concerns. We're actively engaged across the company in a comprehensive discussion of this important topic and also with outside experts, as we continue to develop our policies around the development and use of our machine-learning technologies.While the project is "specifically scoped to be for non-offensive purposes," the employee letter takes issue with this assurance, saying that "the technology is being built for the military, and once it's delivered, it could easily be used to assist in [lethal] tasks."
President Trump To Create Space Force: Another Race US May Trigger To Lose - Donald Trump believes that space is becoming a “warfighting domain,” just like the land, air, and sea, and is thus encouraging the creation of a space force on par with the other branches of the armed forces. It was hardly an off-the-cuff comment. The idea enjoys strong support in Congress. Pushing forward such an initiative would strengthen the president’s position at a time when he needs it the most. Some lawmakers say that force could be created as part of the Department of the Air Force in just three to five years. The proposal is not popular among the military brass, but on March 13 the president made his views known. "The president is very focused on outcomes. He has prioritized space, he has recognized the threats that have evolved, and the pace with which they've evolved, and he recognizes that as a warfighting domain," says Kenneth Rapuano, assistant defense secretary for homeland defense and global security. The initiative dovetails with the recently issued National Security Strategy. Some initial steps have already been taken. Deputy Defense Secretary Patrick Shanahan, the chief space adviser, provided lawmakers with an interim report on upcoming space reforms this month. An updated report is due August 1. No doubt Donald Trump’s statement was prompted by President Putin’s March 1 address to lawmakers in which he unveiled some details about Russia’s new weapons. The balance of forces in the air, land, and sea is not tilting in America’s favor, but domination of space could change that picture. The Joint Vision 2020 states that the US should dominate and control the military use of space. What could this mean in practice? It’s logical to assume that all the satellites belonging to the branches of the military and STRATCOM will operate under the new command. No doubt the structure will have teeth, such as the HTV-2 and AHW hypersonic-glide-vehicle weapons, the Boeing X-37 spacecraft, and the Dream Chaser reusable space planes. The X-37 has flown several secret missions into orbit carrying mystery payloads. Anti-satellite weapons have been tested. Now that they have undergone testing on land and at sea, laser technology will move to space.
Senate GOP skeptical of Trump idea to cancel spending - The Hill - Senate Republicans are reacting tepidly to proposals from President Trump and House Majority Leader Kevin McCarthy (R-Calif.) that Congress use an arcane budget maneuver to claw back spending from the $1.3 trillion omnibus package passed just last month with bipartisan support. They say they won’t take the rescission proposal seriously until House Speaker Paul Ryan (R-Wis.) takes a position on it. The spending claw-back has been floated in response to dismay from the GOP base over the size of the omnibus, which passed the House less than 24 hours after it was unveiled to the public. Ryan has yet to speak publicly about the proposal, and some Republican aides say he appears to be skeptical. Trump and McCarthy first discussed the idea during a phone call this week, according to a senior House GOP source. And the Speaker's office and White House also have discussed the concept. The source explained that the White House would need to draft the plan and send it to Congress. "It’s a bit unclear how this would play out since it hasn't happened in a long time. That said, this is an idea congressional leaders are taking seriously," said the GOP source. Ryan spokeswoman AshLee Strong said in a brief statement: "We are engaged in this conversation with the White House." The maneuver is popular with House conservatives because if the claw-back bill passes the House, it could pass the Senate with a simple majority because it is a privileged resolution. The Budget Act of 1974 allows for the process.
Incoming NSA chief has a reputation for winning ‘all the important fights.’ Russia will be his biggest test yet. WaPo - The next head of the National Security Agency and U.S. Cyber Command will be taking charge in the face of what intelligence officials call the greatest strategic threat to the United States: Russia’s efforts to disrupt U.S. elections. Lt. Gen. Paul Nakasone, who is widely expected to be confirmed this month, also will confront Russia’s aggressive targeting of the U.S. electrical grid and other critical infrastructure, and if directed would be responsible for providing the president and the defense secretary options to counter such provocations. With distrust between Washington and Moscow at a new high, Nakasone will face a host of challenges leading two agencies on the front line of this new Cold War. The NSA has been shaken by several major breaches, a steady loss of technical talent and a controversial reorganization. CyberCom, now eight years old, has struggled to gel as a mature organization able to offer effective options for countering cyberthreats. Nakasone, 54, cruised through two confirmation hearings, during which he said that, when it comes to Russia’s campaign against the United States, “the most important thing is we want the behavior to change.” Nakasone, currently the commanding general of Army Cyber Command, said, “We want them to pay a price.”
Trump Invited Putin To White House Summit, Kremlin Says - Two weeks after President Trump congratulated Russian President Vladimir Putin on his latest electoral triumph (defying his national security staff in the process), Agence France Presse and Bloomberg reported Monday that the president has invited Putin to a summit at the White House. The Kremlin made the announcement just days after Russia decided to expel 60 US diplomats and close a US consulate in St. Petersburg in a tit-for-tat retaliation for US expulsions. The White House hasn't said anything about plans for a summit. President Trump left things vague when he first raised the possibility of a formal meeting between the two leaders - a declaration that outraged Trump's critics. Such a meeting will only serve to embarrass and infuriate Special Counsel Robert Mueller, particularly now that the "Russia" branch of his Russia probe has seemingly resulted in a dead end. Kremlin foreign policy aide Yuri Ushakov told reporters at a Moscow briefing that Trump had extended the invitation. However, he clarified that the two leaders haven't had a chance to start "constructive" talks because of the fallout from the Skripal poisoning. The Kremlin said it hopes the US has stopped its aggressive tactics against Russia. Bloomberg pointed out that Putin plans to discuss the Iran deal (to which Russia is a signatory) during a meeting with the Iranian president later this week. The meeting will occur at a summit hosted by Turkey, where Iranian President Hassan Rouhani, Putin and Turkish President Recep Tayyip Erdogan will discuss issues related to the increasingly fraught situation in Syria. In its talks with Iran, Russia said it's seeking to "preserve the effectiveness of the joint comprehensive action plan." The Kremlin also said Putin has no plans to meet with North Korea leader Kim Jong Un - unlike Trump, who is expected to meet with the North Korean leader as soon as May.
Trump says we’re leaving Syria ‘like, very soon.’ Bad idea. -- By Editorial Board WaPo -- THE GAP between the policies pursued by President Trump’s administration and what the president says when he is outside the range of a teleprompter continues to be disconcertingly wide. At a rally in Ohio on Thursday, Mr. Trump suddenly blurted that he might hold up the trade accord his envoys just struck with South Korea “until after a deal is made with North Korea” — an assertion that left a lot of people puzzling over how perpetuating tensions with a critical U.S. ally could improve the prospects for negotiations with a common adversary. That, however, wasn’t the most striking of Mr. Trump’s departures from his own national security strategy. After bragging that “we’re knocking the hell out of ISIS,” he announced that “we’ll be coming out of Syria, like, very soon. Let the other people take care of it now.” A day later it emerged that the president had suspended $200 million in stabilization funds for Syria after reading a news report about them. That must have come as surprise to Defense Secretary Jim Mattis, U.S. commanders in the region and senior State Department officials — all of whom have been pursuing and publicly defending precisely the opposite policy for the last few months. “We’re not just going to walk away [from Syria] right now,” Mr. Mattis said last November. “We’re going to make sure we set the conditions for a diplomatic solution . . . . Not just, you know, fight the military part of it and then say good luck with the rest of it.” Pentagon spokesman Dana White reiterated that position on Thursday, hours before Mr. Trump spoke, saying U.S. forces will work with local allies “to secure and stabilize liberated territory, as our diplomats work to resolve the Syrian conflict.” The State Department agreed. But the president’s words will surely encourage Russian and Iranian hopes of driving the United States out of the country, so they can entrench their military bases and political influence. That would pose a major threat to Israel and severely damage U.S. standing throughout the Middle East. Which is why the Trump administration, as opposed to Mr. Trump, has concluded that letting “other people take care” of Syria is a terrible idea.
Graham: Pulling out of Syria ‘the single worst decision’ Trump could make - Pulling troops out of Syria would be a dangerous mistake that would unravel U.S. gains made against terrorist groups there, Sen. Lindsey Graham warned Sunday.In an interview on “Fox News Sunday,“ the South Carolina Republican argued that leaving Syria would wipe out gains against the Islamic State terrorist group. “It’d be the single worst decision the president could make,” Graham said. “I’ve seen this movie before, when Obama did the same thing in Iraq.”“When it comes to Syria, do not read the Obama playbook, one foot in, one foot out,” Graham advised. “This is a disaster in the making.” Speaking in Ohio last week, President Donald Trump said the U.S. would end its military involvement in the war-torn Middle Eastern country “very soon.” The Trump administration has also frozen more than $200 million in recovery funds meant for Syria.
Interventionistas Outraged Over Trump's Syria Withdrawal: "We Took The Oil. We’ve Got To Keep The Oil" - Regime change advocates, neocon beltway hawks, and all the usual armchair warrior zero-skin-in-the-game think tank interventionistas are in continued meltdown mode after Trump confirmed plans to withdraw American forces - some 2000+ troops and personnel - from Syria. On Friday the president told senior White House aides that US forces will be exiting Syria after public comments made earlier.In statements carried by Reuters, Trump said, “Let the other people take care of it now. Very soon, very soon, we’re coming out. We’re going to get back to our country, where we belong, where we want to be.” As we noted last week, the timing of Trump's dramatic Syria turn corresponded with news of an American soldier killed in Manbij in northern Syria (killed likely by an IED alongside a British coalition soldier overnight last Thursday).Perhaps to be expected, the weekend editorials and cable news pundit shows reacted in disbelief and horror - with charges of "chaos" at the Trump White House over Syria policy, and claims that "ISIS will come back" if America leaves. Nevermind the fact that Trump himself while on the campaign trail in 2016 stated in public speeches and in a tweet (and linking to a declassified intelligence memo) that US support to jihadists in Syria under President Obama is precisely what fueled the rise of ISIS in the first place. CNN, for example, painted a picture of mass revolt among the ranks of military officers and career State Department officials, asserting that, "Any decision by Trump to pull out of Syria would also go against the current military assessment, a fact that left some national security officials concerned about the impact of a withdrawal, another senior administration official told CNN." No, there's no "chaos" when it comes to Syria policy at the White House - Trump is doing exactly what he pledged to do while previously on the campaign trail, and he's further continuing what he started when he nixed the CIA's regime change program last summer.
Trump Defies His Generals on ISIS and Syria - President Trump, a foreign-policy neophyte increasingly emboldened to chart his own course, grew testy with the members of his national-security team when they huddled in the White House Situation Room on Tuesday to debate Syria. The split had been publicly telegraphed just hours earlier. At the U.S. Institute of Peace, I listened to top U.S. officials—one running the military campaign against ISIS and the other coördinating the international coalition—stress the need for American forces to stay in Syria.“We are in Syria to fight ISIS. That is our mission, and our mission isn’t over,” Brett McGurk, the State Department coördinator for the international coalition fighting ISIS, told the audience. Two pockets of ISIS fighters—numbering in the low thousands—remain in the eastern Euphrates Valley and along the border with Iraq. Among them is the ISIS leader, Abu Bakr al-Baghdadi. “We have to work through some very difficult issues as we speak,” he said. “We are going to complete that mission.” About two thousand U.S. troops are still deployed in Syria, largely in the northeast, where they aid and advise local militias that have forced ISIS out of almost a third of Syria, including the Islamic State’s nominal capital, in Raqqa. However, the trickier part of the military campaign—stabilizing liberated areas, so that ISIS does not return—still lies ahead.“The hard part, I think, is in front of us, and that is stabilizing these areas, consolidating our gains, getting people back into their homes,” General Joseph L. Votel, who heads Central Command operations, candidly told the conference. “There is a military role in this, certainly in the stabilization phase.”Even as the panel was still speaking, Trump was holding a press conference, a few blocks away, with the Presidents of the three Baltic states. He was visibly angry when asked about Syria. “I want to get out,” he said, his voice rising. “I want to bring our troops back home. I want to start rebuilding our nation. We will have, as of three months ago, spent seven trillion dollars in the Middle East over the last seventeen years. We get nothing—nothing out of it, nothing.” He called it “a horrible thing.” “So it’s time,” Trump said. “We were very successful against ISIS. We’ll be successful against anybody militarily. But sometimes it’s time to come back home.”
Syriasly! - “Peace with Honor” was President Nixon’s anodyne phrase for futzing around as long as possible in Vietnam to conceal the reality that the US military was getting its ass kicked by what we had initially thought was a 98-pound weakling of a Third World country. And so just the other day, the latest POTUS declared (in his usual way) that “we’ll be coming out of Syria, like, very soon. Let the other people take care of it now.” The utterance sent the neocon partisans in government into a paroxysm. Cries of “Say What?” echoed up and down the Great Mall. Which “other people” was Mr. Trump referring to? The United Auto Workers? Gandalf the Grey? The cast of Glee? I doubt that the average Harvard faculty member can state with any conviction what the fuck is going on in Syria. Vietnam was like a simple game of Animal Lotto compared to the mystifying puzzle of Syria. And then, of course, once you get handle on who the players are, it’s another matter altogether to descry what US interests there might be. One angle of the story is whether it is in America’s interest for Syria to become another failed state in a region of several other failed states. Whatever else you might say about US policy in that part of the world, the general result in places like Iraq, Libya, and Yemen has been anarchy and irresolvable factional conflict. In today’s world of nation-states, a central government is required to avoid that fate, and the embattled one in Syria happens to be the regime of Bashar al-Assad. The US has long militated for the overthrow of Assad, but I would also challenge you (and the Harvard faculty) to name any credible party or person who we have hypothetically proposed to replace him with. One might also propose that the battlefield of Syria, with its array of militant religious maniac armies, is just a proxy action for the tag-teams of the USA/Israel versus Russia/Iran. If so, the US has not been very clear or honest about it. Anyway, it has hardly been demonstrated that Russia is all that comfortable with Iran extending its influence to the Mediterranean Sea. I would take Russia’s presence in Syria as an attempt to block, or at least moderate, Iran’s influence there — which is one of the arguments for a US/Russia partnership in cleaning up the mess there.
Trump agrees to keep U.S. troops in Syria a ‘little longer,’ but wants out (Reuters) - President Donald Trump agreed in a National Security Council meeting this week to keep U.S. troops in Syria a little longer to defeat Islamic State but wants them out relatively soon, a senior administration official said on Wednesday. Trump did not approve a specific withdrawal timetable at Tuesday’s meeting, the official said. He wants to ensure Islamic State militants are defeated but wants other countries in the region and the United Nations to step up and help provide stability in Syria, the official said. “We’re not going to immediately withdraw but neither is the president willing to back a long-term commitment,” the official said. Trump had signalled his desire to get U.S. forces out of Syria in a speech last Thursday in Ohio, and officials said he had privately been pressing for an early withdrawal in talks with his national security aides. Trump told a news conference on Tuesday with Baltic leaders that the United States was very successful against Islamic State but that “sometimes it’s time to come back home.” His advisers have been urging him to maintain at least a small force in Syria to ensure the militants are defeated and to prevent Syrian President Bashar al-Assad’s ally Iran from gaining an important foothold. The United States is conducting air strikes in Syria and has deployed about 2,000 troops on the ground, including special operations forces whose advice has helped Kurdish militia and other U.S.-backed fighters capture territory from Islamic State, also known as ISIS. White House spokeswoman Sarah Sanders rejected concerns that a U.S. withdrawal from Syria might encourage deeper Iranian involvement in the country, saying U.S. allies and partners in the region could help with security.
US Isn’t Leaving Syria—but Media Lost It When Possibility Was Raised -- At a rally in Cleveland last week, President Donald Trump said that the US will get out of Syria “very soon.” It is now clear that the 4,000 US troops currently occupying Syria (Washington Post, 10/31/17) will in fact stay in Syria (Independent, 4/4/18), even though keeping troops in another country in defiance of that country’s government is a violation of international law. Yet the very possibility of US withdrawal from Syria rendered apoplectic journalists who are convinced of the legitimacy of Washington’s domination of the country—international law be damned.Some writers want America to occupy Syria to weaken Russia. In the Washington Post (3/30/18), Josh Rogin claimed that “there are a lot of good arguments for maintaining an American presence in Syria after the fall of the Islamic State,” but stressed that the “larger US mission in Syria” was necessary for “stopping Russia from exerting influence over the region.”Michael Gerson, writing in the same paper (4/2/18), was concerned that a US departure “would leave Russia as the undisputed power broker at the heart of the Middle East,” a dubious claim in a region that includes Saudi Arabia (whose military budget by some counts exceeds Russia’s) as well as nuclear-armed Israel, both close US allies. CNN ran two articles that made the same point about Russia, with Dan Merica and Jim Acosta (3/30/18) writing “Trump Promise to Get Out of Syria ‘Very Soon’ Could Be a Win for Russia,” and Zachary Cohen and Ryan Browne (3/31/18) telling readers “that most foreign policy experts agree that” the void left by US forces in the event of a withdrawal “would likely be filled by Russia.” The Syrian government’s alliance with Russia supposedly justifies Washington’s occupying Syria, in defiance of international law. Partnership with Russia is unacceptable; only submission to the US is permissible.
Time to Get Out of Syria - President Donald Trump is right; it is time for the U.S. military to leave Syria. Even though he appears to have no strategy for what comes next, his intention to put a limit on any long-term U.S. military commitment is the right way to go. Trump’s off-the-cuff withdrawal statement from last week received the standard Washington push-back. Why did we go into Iraq if we don’t intend to see it through, some say? American lives will have been sacrificed for nothing, like in Iraq. We have to see it through and handle the next stage, as Gen. Joseph Votel of U.S. Central Command put it: “stabilizing these areas, consolidating our gains, getting people back into their homes, addressing the long-term issues of reconstruction and other things that have to be done.” Pulling troops from Syria, the critics say, unilaterally gives up leverage for a U.S. role in the next round of Syria diplomacy. This criticism perpetuates a long tradition of American hubris about our ability to make things happen in the Middle East, especially using military force. But those days are long, long gone, if they ever existed. A stake went through the heart of American Middle East hubris the day President George W. Bush ordered the invasion of Iraq to overthrow Saddam Hussein. The invasion also set in motion a regional security landslide that had been waiting to happen and has been rumbling downhill ever since. Unfortunately, the apparent victory over ISIS has revived American hubris. But this outcome was not a coalition victory, and certainly not a U.S. victory. It was largely a Kurdish victory, with some free Syrian participation, aided by U.S. surveillance and air support, and largely unknown but limited U.S. counterterrorism operations. Well done, but that is not a basis for assuming U.S. forces can bring stability, reconstruction, and peace.
The Illegal War in Syria and Trump’s Awful Embrace of the Saudis - Trump said something about keeping U.S. forces in Syria earlier today that needs to be addressed:‘Saudi Arabia is very interested in our decision,’ Trump noted. ‘I said, “Well, if you want us to stay maybe you’ll have to pay.”‘ Trump’s statement is remarkable for a few reasons. He claims to want to pull U.S. forces out of Syria, but this statement suggests that he would be willing to keep them there if the Saudis would pay for it. Protecting the lives of American soldiers and U.S. interests seem to be irrelevant to Trump so long as someone is offering to pay. That implies that he thinks the services of the U.S. military are available to be rented by our despotic clients whenever they are willing to offer enough money. Trump doesn’t care whether staying in Syria makes America more or less secure, but is focused only on whether someone else is willing to foot the bill. It is not news that Trump’s approach to foreign policy is transactional and exploitative, but it is nonetheless striking to have it stated so bluntly in public like this. If staying in Syria is important enough to U.S. security to risk the lives of American soldiers, it shouldn’t matter whether the Saudis will pay for it or not. Since we know that it isn’t that important, it shouldn’t matter whether the Saudis will pay for it or not. Our military should not be serving as the Saudis’ mercenary army. I have no confidence in Trump’s judgment, and his latest remarks tell me that he will make his decision about this for the worst reasons.
China Slaps Tariffs On US Imports Including Pork, Nuts and Wine -- As previewed one week ago, on Sunday China unveiled new retaliatory duties on US food imports including pork, nuts, wine and fruits of between 15% and 25% in response to Trump administration’s Section 232 tariffs (not to be confused with the $60BN in Section 301 tariffs unveiled subsequently) on steel and aluminum imports.In a statement posted on China's Ministry of Finance website, China’s Customs Tariffs Commission confirmed reports from March 23, stating that additional duties on 128 kinds of products of US origin would be introduced from Monday "in order to safeguard China’s interests and balance the losses caused by the United States additional tariffs."As was already known, the highest tariffs of 25% will be imposed on top of existing duties on imports of US scrap aluminium and various kinds of frozen pork. A lower, 15% tariff, will be slapped on dozens of US foods including wine, fresh and dried fruits such as cherries, nuts such as almonds and pistachios, and various kinds of rolled steel barsAs the FT notes, the list was consistent with measures proposed by Beijing last month when it said it was planning tariffs on $3BN of US imports. The response was seen as relatively measured since it left out key US exports to China such as soyabeans, of which the US exported some $14bn last year. Since Beijing has yet to retaliate to the 25% duty on up to $60bn of annual imports from China that Trump promised later last month, it is almost guaranteed that Beijing will make a tougher response in the future.While most analysts say Beijing is reluctant to escalate trade disputes with Washington, as its mercantilist economy would have more to lose in any trade war, some influential commentators in China have called for a more robust response to the US’s next set of tariffs, the details of which are yet to be announced but which are expected to be aimed at strategic sectors such as robotics, which Beijing is promoting as part of its industrial policy. The full list of US imports targeted by China is below
China begins new tariffs on 128 US products - China begins new tariffs on 128 US products China announced to impose new tariffs on 128 imports from the United States starting Monday in response to the new US tariffs on steel and aluminum that took effect a week ago. The Customs Tariff Commission of the State Council decided to impose a tariff of 15 percent on 120 items of products including fruits from the US and a tariff of 25 percent on eight items, including pork, from the US, according to a statement posted on Sunday on the Ministry of Finance website. The commission, headed by former finance minister Xiao Jie, said the tariffs are aimed at safeguarding China's interests and balancing the losses caused to China by the new US tariffs on steel and aluminum imports. In a statement from the Ministry of Commerce to comment on the decision, China urged the United States to revoke protective measures that violated WTO rules to bring the bilateral trade of related products back to normal. The US began imposing a 25 percent tariff on steel imports and 10 percent tariff on aluminum imports on March 23 under the Section 232 of US Trade Expansion Act of 1962 that the foreign imports pose a national security threat. The move, first announced on March 1, triggered strong response from US trade partners which pledged retaliation. The new tariffs have raised concerns that US consumers and businesses that use steel and aluminum as raw materials will bear the costs from rising prices. Farmers for Free Trade, a non-profit campaign chaired by former Montana Democratic Senator Max Baucus and former Indiana Republican Senator Richard Lugar have run ads on major TV networks warning Trump of the adverse effect of the tariffs on US farmers, many of whom voted for Trump in the 2016 election.
White House: China's Overcapacity Is Causing Global Steel Crisis -- The White House has responded to China's decision to impose tariffs on 128 different categories of US imports - primarily foodstuffs and industrial items. The tariffs, which went into effect Sunday but were previewed more than a week ago, are meant to be a response to the Trump administration's Section 232 tariffs on steel and aluminum (not to be confused with the $60 billion in section 301 tariffs unveiled later). In a statement posted on China's Ministry of Finance website, China’s Customs Tariffs Commission confirmed reports from March 23, stating that additional duties on 128 kinds of products of US origin would be introduced from Monday "in order to safeguard China’s interests and balance the losses caused by the United States additional tariffs."In response, a White House Deputy Press Secretary Lindsay Walters said the US tariffs were justified because China is creating a global steel glut with its oversupply."China’s subsidization and continued overcapacity is the root cause of the steel crises. Instead of targeting fairly traded U.S. exports, China needs to stop its unfair trading practices which are harming U.S national security and distorting global markets," Walters said in an emailed statement.Meanwhile, the Chinese are calling for another round of trade talks with the US after the US didn't respond to China's March 26 request for a dialogue on the steel and aluminum tariffs, per Bloomberg. Earlier Monday, White House Press Secretary Sarah Huckabee Sanders said the president is "doing exactly what he said he was going to do" to help reduce the US trade deficit with China. As a reminder, here's the list of US imports upon which China has imposed tariffs of between 15% and 25%.
Washington blasts China over retaliatory tariffs on $3 billion worth of US goods - The United States has lashed out at Beijing after Chinese tariffs on $3 billion (€2.4 billion) worth of US goods entered force on Monday. "Instead of targeting fairly traded US exports, China needs to stop its unfair trading practices which are harming US national security and distorting global markets," White House deputy spokeswoman Lindsay Walters said. China said on Sunday that it would start taxing 128 mostly agricultural US goods at midnight on Monday, including a 25 percent tariff rate on pork products and a new 15 percent tariff on fruits and nuts. The move came after the US placed tariffs on Chinese steel and aluminum and said it would separately impose $50 billion worth of tariffs on other Chinese goods over alleged intellectual property violations.China said the US decisions had "seriously violated" World Trade Organization principles and "caused serious damage" to China's interests. US farmers criticized the new raft of Chinese tariffs, with the Farmers for Free Trade group calling them a "tax on American farmers, brought about by protectionist trade policies." The spat has also spooked investors, who fear the dispute could escalate into a trade war between the world's two largest economies.
Some companies may reduce their reliance on the US after Trump's trade moves -- Companies linked to a newly-inked Pacific trade pact may reduce their reliance on the world's largest economy following President Donald Trump's controversial tariffs.Rising U.S. protectionism reinforces the importance of a multilateral trading order — the kind represented by the Trans-Pacific Partnership deal — strategists have widely argued. It could also see companies based in TPP member nations shy away from doing business stateside. Known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) or TPP-11, the landmark free-trade agreement will cut tariffs between 11 countries, which include Australia,Canada, Chile, Japan, Malaysia and Mexico. It was signed the same day that Trump authorized steel and aluminum duties — controversial taxes that pushed Beijing to enforce tit-for-tat action on Monday. m"In an environment of growing uncertainty and risk, the CPTPP helps by providing stability," said Deborah Elms, executive director at the Singapore-based Asian Trade Centre. "The agreement itself provides considerable new opportunities for member firms to find new markets or to save money — this should push companies to diversify their own portfolio and rely less on the U.S." The Trump administration's trade policy is centered on bilateral negotiations rather than multilateral agreements, but that's troublesome for companies based in TPP member countries. When possible, multinationals or small-and-medium sized enterprises could be motivated to strengthen cooperation with fellow TPP members instead of turning to the U.S.
It’s Not Just China’s Retaliatory Tariffs That Should Worry U.S. Businesses - On Monday, China hit back at the Trump administration’s decision to raise duties on steel and aluminum imports, imposing tariffs of up to 25% on 128 American goods — including pork, wine and fruit — worth an estimated $3 billion.Beijing said the hike was intended to “safeguard China’s interests and balance” losses caused by the new 25% tariff on steel imports and 10% on aluminum that Washington imposed from March 23, citing “national security.” President Trump has stated that trade wars are “good” and “easy to win,” while common consensus among economists is that all parties lose.Beijing’s strident state media has praised the retaliation. A Global Times editorial described the tit-for-tat as “now an unofficial trade war.”“It is time for Washington to bid farewell to the fantasy it has long been living in, a delusional world of make-believe whereby it imagines China as an unresponsive nation and tolerant toward U.S. tariffs,” it added.For now, the dispute doesn’t appear to be spiraling, though that could change if the White House follows through with recent threats of an additional $60 billion of tariffs related to alleged Intellectual Property (IP) theft.“If this is a Jujitsu match, I haven’t seen any major moves yet,” says Jeffrey Towson, a private-equity investor and a professor of investment at Peking University in Beijing. “This looks like grappling to me, but nobody’s choking each other out.” Still, if this turns into a street brawl, China knows how to fight dirty — and frequently does. The Beijing government has a record of slapping tariffs on nations for political or retaliatory purposes. Moreover, China doesn’t even have to take explicit action to hurt other nations in the pocket — its people can do that themselves. One of the biggest weapons Beijing wields is popular nationalism, which often works in cahoots with government coercion. Last year, China targeted South Korea’s economy in response to Seoul’s decision to host the U.S. THAAD missile defense system, which Beijing deems an affront. According to South Korea’s National Assembly’s Budget Office, a tourism boycott alone saw Chinese arrivals drop 67% and cost the South Korean economy $6.8 billion.
US and China remain on brink of trade war, but the big guns have yet to be fired, analysts say - Washington is set to unveil punishing tariffs against Chinese products this week amid an escalating trade skirmish between the world’s two largest economies, which analysts say could prompt Beijing to retaliate strategically against US products such as soybeans and cars. The United States is expected by Friday to release a list of the US$50 billion to US$60 billion worth of Chinese imports that will be affected following a Section 301 trade investigation into Beijing’s intellectual property practices, including its forced technology transfer policies. It comes as trade tensions and rhetoric have ramped up between the two countries, with US President Donald Trump reiterating long-standing complaints against intellectual property theft and China’s record-high trade surplus with the US. China hits back at Trump with retaliatory tariffs on 128 US imports Although US trade representative Robert Lighthizer indicated recently that “there’s hope” in the ongoing talks between Washington and Beijing, China is not expected to back down, observers say. The latest tit-for-tat measures saw China on Sunday imposing tariffs of up to 25 per cent on 128 US imports, including fruit and pork, in retaliation for earlier US duties on steel and aluminium imports. But it was still a “relatively mild” step from Beijing, and more painful measures that target US soybeans, cars and planes, could yet follow, former Chinese finance minister Lou Jiwei said last week. “There’s going to be a few more exchanges … in this sort of nascent trade war. It’s going to go a little further before things cool down,” Gregory Moore, head of international studies at the University of Nottingham said. “China will keep pace with everything that the US does.” China’s reaction was carefully calculated, Moore said, with the tariffs on US pork imports designed to hurt pig farmers in Trump-friendly states, thus exacting a political cost on the US leader.
China will give as good as it gets in trade war with United States, ambassador says - China will respond to any new US tariffs on Chinese products with countermeasures of the “same proportion” and intensity, Beijing’s ambassador to the US said on Tuesday, as the threat of a trade war between the world’s two largest economies continues to loom large. Cui Tiankai said China would “certainly” take retaliatory measures against the US$50 billion to US$60 billion in tariffs expected to be announced by Friday, following the United States’ “Section 301” investigation into Beijing’s intellectual property practices. His remarks came during an interview with state-owned China Central Television and after China’s commerce ministry on Monday imposed US$3 billion worth of tariffs on 128 US products, including fruit, wine and pork. That action was taken in response to the imposition of US tariffs on steel and aluminium resulting from a separate “Section 232” investigation.“If they do [impose new tariffs] we will certainly take countermeasures of the same proportion and of the same scale, same intensity,” Cui said. Former Chinese finance minister Lou Jiwei said last month that such retaliation might target US soybeans – its most valuable export to China, worth US$14 billion annually – as well as its cars and planes. However, such a move could well be costly for Chinese businesses and consumers. Soybeans, for instance, are a vital part of the animal feed produced in China and any shortage in the supply from the US would likely drive up prices of equivalent goods from Brazil and Argentina. Without US soybeans, China could be left with a shortfall of an estimated 10 million metric tonnes, according to Paul Burke, North Asia director for the US Soybean Export Council. “It’s a negative for both US soybean farmers, and also for the Chinese government and Chinese consumers,” he said earlier in Beijing.
Trump administration targets $50 billion in Chinese electronics, aerospace and machinery goods with tariffs - The Trump administration Tuesday unveiled a list of about $50 billion in Chinese electronics, aerospace and machinery products it plans to hit with steep tariffs, the latest move in a deepening U.S.-China trade conflict. The new 25 percent import taxes are designed to penalize China for discriminatory policies that the United States says put its companies at a disadvantage in the Chinese market. President Trump has complained that the Chinese government forces U.S. companies to surrender their proprietary technology in return for access to local customers and steals other trade secrets via cybertheft. Trump’s latest protectionist move threatens to upend global supply chains for corporations such as Apple and Dell, raise prices for American consumers who have grown accustomed to inexpensive electronics and aggravate tensions between the world’s two largest economies. “The pain will be very visible and the potential gains will be very abstract. The administration hasn’t prepared the U.S. for the downsides of a trade war,” said Brad Setser, a former White House economist in the Obama administration. The Chinese Embassy said Tuesday that it “strongly condemns and firmly opposes” the U.S. action. “As the Chinese saying goes, it is only polite to reciprocate. The Chinese side will resort to the WTO dispute settlement mechanism and take corresponding measures of equal scale and strength against U.S. products in accordance with Chinese law,” the embassy said in a statement. With just seven months before congressional elections, a worsening trade war with Chinacould pose a political challenge for the president, who promised his supporters he would overhaul U.S. trade policy to benefit American workers.
Trade War Round 2: US Releases China Tariff List Targeting 1,300 Products - Assuring that a second retaliation by China in the escalating trade war is just a matter of days if not hours, moments ago the US Trade Representative released a list of Chinese product subject to 25% tariffs as part of Trump's Section 301 crackdown on Beijing Intellectual Property abuses, focusing on China's high tech product push. The list covers about 1,300 tariff lines, or 44 pages, the USTR said referring to a system of codes used to categorize products. It added that the value of the list is approximately $50 billion in terms of estimated annual trade value for calendar year 2018, a level which is "appropriate both in light of the estimated harm to the U.S. economy, and to obtain elimination of China’s harmful acts, policies, and practices." Some example of are shown below: Below we list the top US imports from China. Not surprisingly, most are found in the new tariff list: What else is in the list? “Stuff that you put on your body: spared. Stuff you put in your home: targeted,” said Hun Quach, vice president of international trade for the Retail Industry Leaders Association. Some more details from Bloomberg: In some cases the tariffs targeted raw materials and components used to assemble finished goods in the U.S., such as ingredients for insulin, while in others the items were complete products, like Chinese-assembled cars. Many of the affected products were machines used to make other things, vexing factory owners accustomed to being praised by Trump for manufacturing in the U.S. While apparel and footwear won’t get additional tariffs, some equipment used to make them, like textile printers and injection molders for shoes, are getting taxed. “Tariffs on certain machinery will make American-made products more expensive,” said Matthew Shay, president of the National Retail Federation, in a statement. With the list published, the National Association of Manufacturers will be consulting with its members about what specific products on the list it may oppose and try to get removed during the comment period, spokesman Michael Short said. The group urged Trump to pursue a bilateral trade agreement with China rather than act on its own.
All-Out Trade War: China Strikes Back With 25% Tariffs On $50BN Of US Imports - Beijing wasted no time in striking back at Washington’s latest round of tariffs on Chinese imports by announcing a new list of US products that would be subject to punitive action, as the world’s two largest economies edge ever closer towards an all-out trade war. China’s State Council said on Wednesday it planned to impose additional tariffs of 25% on 106 US products imported into the country, including soybeans, airplanes, cars, and chemicals, CCTV reported. The Ministry of Commerce said the import value of the goods on the list in 2017 was $50 billion. The effective date will depend on when the U.S. action takes effect. Beijing’s retaliation came just hours after the United States Trade Representative Office released details of hundreds of Chinese imports worth about $50 billion that it planned to hit with 25% tariffs, with the emphasis on industrial and hi-tech goods. "China’s response was tougher than what the market was expecting - investors didn’t foresee the country levying additional tariffs on sensitive and important products such as soybeans and airplanes," As reported last night, the US list covers 1,300 items, including high-definition colour video monitors, electromagnets used in MRI machines, aerospace products, and machinery used to make processed textiles, printed products and food. Beijing responded immediately to the US announcement saying it would “take corresponding measures of equal scale and strength against US products in accordance with Chinese law”. USTR developed the tariff targets using a computer algorithm designed to choose products that would inflict maximum pain on Chinese exporters, but limit the damage to U.S. consumers. A USTR official said the list got an initial scrub by removing products identified as likely to cause disruptions to the U.S. economy and those that needed to be excluded for legal reasons.
Here Is The Full List Of 106 US Exports That China Is Targeting - When China released its list of 106 product groups that will be subject to tariffs of 25% in retaliation to America's list of tariffed Chinese imports - which includes such items as artificial teeth, flamethrowers, nuclear reactors and air combat flying simulators - the biggest surprises were conveniently put in the top two spots in the list released by the Chinese Commerce Ministry: soya beans, for reasons explained previously. However, a second look at China's list which includes dozens of additional products from cotton to whiskey, reveals that no less than 27 categories of auto and car-related US exports are being targeted, especially electric vehicles, which we can only assume is Beijing's middle finger to Elon Musk. And just as notable is what Bernstein analyst Doug Harned spotted at the very bottom of the list, namely category "Aircraft, 15,000 kg <unladen weight≤45,000 kg"- as he puts it, China's restrictions could affect just 24 aircraft in Boeing's backlog. According to Harned, the upgraded 737 Max family weigh in just above the 15,000 kg to 45,000 kg range. (The empty weight of a 737 MAX-8 for example is 45,070), suggesting that Boeing may have just scraped through, perhaps on purpose. "On the surface, this looks like business as usual,'' Harned wrote in a note to clients, and adds that more critical is what impact a trade war might have on the global economy, and by extension, on airline passenger numbers. The full list of 106 US exports to China slapped with 25% tariffs is below, with key product categories highlighted...
China says it never backs down in the face of threats after trade salvos with U.S. (Reuters) - China has never surrendered to external pressure and it will win any trade war with the United States, the nation’s state media stressed in a series of editorials and columns in the hours after the world’s two top economies targeted each other with steep tariffs. While China’a Ambassador to the United States Cui Tiankai stressed in comments to reporters in Washington that Beijing’s preference was to resolve the trade dispute through negotiations, Beijing’s official mouthpieces were taking a more belligerent line. The ruling Communist Party’s People’s Daily newspaper said Beijing’s quick counter-move had caught the Americans off guard. “Within 24 hours of the U.S. publishing its list, China drew its sword, and with the same strength and to the same scale, counterattacked quickly, fiercely and with determination,” the paper said in a commentary on Thursday. “The confidence to know that [China] will win the trade war comes from the scale of [China’s] consumer market,” the paper said, noting that China’s market potential is incomparable to other economies. Many American consumer product and industrial companies see the Chinese market as a big source for future growth given the continued rise in the number of people joining both the middle class and the wealthier levels of Chinese society. The United States’ proposed list of $50 billion in duties on Chinese goods is aimed at forcing Beijing to address what Washington says is deeply entrenched theft of U.S. intellectual property and forced technology transfer from U.S. companies. China hit back within hours with its own threatened tariffs on U.S. imports including soybeans, planes, cars, whiskey and chemicals.
With trade war, U.S. and China stumble into the Thucydides trap (Reuters) - The United States and China have fired the opening shots in a trade war that may be hard to stop. Washington has published a target list of 1,300 items imported from China worth an estimated $50 billion that would be hit with an extra tariff of 25 percent (“Notice of determination”, USTR, April 3). Beijing has responded with a target list of 106 items imported from the United States worth a similar amount that would be hit by the same ad valorem tariff (“China retaliates for U.S. tariffs”, Reuters, April 4). The United States has appeared eager to impose tariffs to create leverage and force China into concessions on the bilateral trade deficit, intellectual property protection and forced technology transfer. President Donald Trump has insisted trade wars are winnable and pushed his officials to increase the scope of the target list. For its part, China has appeared anxious to avert a trade conflict but threatened a proportionate response to any unilateral U.S. action. Both sides have been careful to leave time for further negotiations in an effort to prevent the tariffs from taking effect. Most investors still seem convinced a last-minute deal can be reached without damaging the world’s two largest economies. The Trump administration has a track record of announcing aggressive and headline-grabbing trade policies and then diluting or abandoning them in the face of stiff opposition and in exchange for comparatively minor concessions. Trade wars, however, are like real wars in that they are easy to start, but, once underway, the course is unpredictable and they can be difficult to halt. As a result, trade war between the United States and China must be seen as one of the biggest risks to the global economy and commodity prices in 2018 and 2019.
U.S. floats talks after China strikes back in trade fight (Reuters) - President Donald Trump’s administration said on Wednesday talks with Beijing could resolve an escalating U.S.-China trade fight after China retaliated against U.S. proposals to slap tariffs on $50 billion in Chinese goods by targeting key American imports with similar duties. Just 11 hours after the Trump administration proposed 25 percent tariffs on some 1,300 Chinese industrial, technology, transport and medical products, China responded with a list of similar duties on key American imports including soybeans, planes, cars, beef and chemicals. Global stock markets, fearful of a trade war between the world’s two economic superpowers, were shaken by the salvos between China and the United States but have since regained some lost ground. Trump, who contends his predecessors served the United States badly in trade matters, rejected the notion that the tit-for-tat moves amounted to a trade war. “We are not in a trade war with China that war was lost many years ago by the foolish, or incompetent, people who represented the U.S.,” he wrote on Twitter. Asked by reporters outside the White House whether the United States could lose a trade war, Trump’s top economic adviser, Larry Kudlow, said, “No. I don’t see it that way. This is a negotiation, using all the tools.” “What you’ve got is the early stages of a process which will include tariffs, comments on the tariffs, then ultimate decisions and negotiations. There’s already back-channel talks going on,” Kudlow separately told Fox Business Network. U.S. Commerce Secretary Wilbur Ross told CNBC, “It wouldn’t be surprising at all if the net outcome of all this is some sort of a negotiation.”
Why China’s Soybean Tariffs Matter - China accounts for the lion's share of global soybean imports at $34 billion, or two-thirds of the total.American exports made up about a third of that , or $12.4 billion, making soybeans the second-most valuable U.S. export to China after varieties of airplanes. The importance of China as a market for soybeans has been driven by an explosion in demand for meat as consumers switch from a diet dominated by rice to one where pork, poultry and beef play an important part. Chinese production of meat from those three animals surged 250 percent from 1986 to 2012 and is projected to increase another 30 percent by the end of the current decade. However, China is unable to produce enough animal feed itself, hence the need to import soybeans from the U.S. and Brazil.That's why the tariffs have tremendous potential to hurt farmers here in Ohio, where soybeans are the number one agricultural export at $1.4 billion. And Ohio is just the sixth-largest exporter of soybeans, after Illinois, Iowa, Minnesota, Indiana and Nebraska, all of which will suffer from the tariffs. Not only do farmers stand to lose out by giving up market share to Brazilian farmers, but soybean prices will probably fall as well, hurting incomes and creating a double whammy for Midwest farms. This is of course why the Chinese chose to place a tariff on U.S. soybeans in the first place. Farmers will hurt a lot, and soybeans are produced in states where many of them voted for Donald Trump . China's hope, presumably, is that farmers will lobby the administration to step back from the brink of a trade war.
China Tariff Threat Prompts U.S. Farmers to Weigh Changes - China's threatened tariffs on U.S. soybeans and other agricultural goods this week are already forcing some American farmers to rethink planting and investment decisions. U.S. growers were already anticipating another year of diminished income from crops and livestock as they face continued low prices and growing supplies. The prospect of China—one of the biggest purchasers of U.S. farm products—scaling back imports is sharpening those fears, potentially changing what crops they plant and whether to spring for a new tractor. Chinese officials didn’t say when the country’s proposed 25% tariffs on soybeans, corn, wheat, beef, and other products would take effect. But in central Illinois, Aaron Wernz is already considering how to react. On Wednesday he said the sharp drop in soybean prices and the possibility of diminished sales to China could prompt him to sow more corn, and less soybeans, on his 2,000 acres when he fires up his planter in a few weeks. He said he would also take a harder look at future seed and fertilizer purchases if crop prices remain depressed. As soybean and corn prices traded lower Wednesday, Mr. Wernz figured the day’s decline alone cut $50,000 off the value of his crops this year. “That’s my first house,” the 39-year-old said, adding that switching 200 acres back to corn could cost him nearly $40,000 more thanks to corn’s higher per-acre cost. The U.S.-China trade dispute has already boosted costs for some farmers. The Trump administration’s tariffs on Chinese-made steel and aluminum last month have already made it more expensive to build structures like feed mills and hog confinements, farmers said.
Why China's Soybean Tariff Changed Everything - While markets are being somewhat drama queen-ish this morning, China's trade war retaliation was telegraphed well in advance, and as we reported nearly two weeks ago, "China About To Launch "Tens Of Billions" More In Tariffs." As such it should not have come as a surprise that China did just that overnight, when it announced 25% tariffs on $50 billion in 106 US imports. What was a surprise, was the unexpected announcement that China would also include US soybean exports in the list of items impacted by tariffs, something which we noted earlier opens up the door to a new, third round of tariffs by the US, which would assure that a "nuclear" trade war has indeed broken out. It is the presence of soybeans in the tariff list that has startled China watchers and analysts, such as Capital Economics' Julian Evans-Pritchard, who writes that "China’s rapid and aggressive response to the proposed US tariffs has raised the stakes for both sides."What makes the inclusion of soybeans so surprising?Perhaps nothing more than the fact that while China is seeking to hurt US exporters, it will also substantially and materially impair its own domestic producers and supply chains, will struggle to replace U.S. soybean supplies "inflicting severe financial pain on domestic companies, analysts and executives at feedmakers said" according to Reuters, and potentially risk sparking runaway food inflation as surging feedstock prices send pork prices through the roof. To be sure, from a trade war perspective the inclusion of soybeans makes perfect sense: for China, the world's top importer of the oilseed in the world, soybeans are considered one of the most powerful weapons in Beijing’s trade arsenal because a drop in exports to China would hurt Iowa and other farm states that backed U.S. President Donald Trump. As the chart below shows, soybeans were the biggest U.S. agricultural export to China last year at a value of $12 billion.
Markets underestimate risk of an accidental trade war: Kemp (Reuters) - In a round of interviews and media briefings on Wednesday, Trump administration officials downplayed the risk of a U.S. trade war with China, insisting tariff threats are just the first round in negotiations. The concerted attempt to calm market nerves came after the two countries each published a list of potential targets for higher tariffs in a dispute over intellectual property and technology transfer. "There's no trade war here," the U.S. president's top economic adviser Larry Kudlow said in an interview with Fox Business Network "What you’ve got is the early stages of a process which will include tariffs, comments on the tariffs, then ultimate decisions and negotiations. There are already back-channel talks going on," Kudlow said. The soothing message appeared to work, with U.S. equity indices reversing earlier losses as investors concluded the risk of threatened tariffs actually being imposed was low. But investors and traders are probably underestimating the difficulty of the negotiations and the risk the United States and China could drift into a damaging confrontation by accident. The threat to impose additional 25 percent tariffs on imports from China worth up to $50 billion fits with the Trump administration’s typical negotiating pattern. In general, the administration starts by making an aggressive and openly controversial announcement to drive an issue up the agenda, control the framing, and create leverage, before settling down to negotiate the details in private. It has already employed this approach by threatening to leave free trade agreements with Canada, Mexico and South Korea, as well as with steel and aluminium tariffs. Outside the trade area, it has used the same strategy to demand changes to the nuclear agreement with Iran, denuclearisation of North Korea, more burden-sharing by NATO allies, a border wall with Mexico, and to deal with the problem of undocumented child migrants. There is no guarantee the negotiations will reach a successful conclusion and avoid imposition of the threatened tariffs. So while negotiations may be able to avert tariffs, there is a non-zero probability that they will fail to achieve a solution. The process itself is likely to be a source of considerable uncertainty for businesses in both countries as well as third parties in their supply chains for months.
Chart: All the Goods Targeted in the Trade Spat – WSJ - The U.S.’s tit-for-tat with China over tariffs has ushered in a high-stakes standoff over the future of trade between the world’s two largest economies. On Tuesday, the U.S. proposed a 25% tariff on some 1,300 Chinese goods, unveiling the most aggressive challenge in decades to Beijing’s trade practices. The items range from high value-added goods such as medicines and medical equipment to intermediate goods like machine tools and chemicals, according to a release by the U.S. Trade Representative. On Wednesday, China retaliated by targeting 106 high-value American exports, from airplanes to soybeans, in a tactic Beijing officials say is meant to secure a truce. Here is the universe of goods included in the proposed tariffs on both sides. (graphic)
U.S. to Consider Additional $100 Billion in China Tariffs —President Donald Trump threatened a major escalation in trade tensions with Beijing on Thursday, saying he was considering imposing tariffs on an additional $100 billion in imports from China.The move would triple the amount of Chinese goods facing levies when entering the U.S., up from the tariffs on $50 billion in imports from China that the president announced last week. Mr. Trump, who justified the tariffs on Chinese imports by citing alleged violations of U.S. intellectual property laws, said Thursday that an escalation would be due to Beijing’s “unfair retaliation,” which could “harm our farmers and manufacturers.” Mr. Trump also said he would instruct the Agriculture Secretary to put together a plan “to protect our farmers and agricultural interests,” but he provided no details.After the U.S. threatened tariffs on Tuesday, China quickly came up with its own $50 billion hit list of U.S. exports to China, including aircraft and soybeans. That retaliation has led to outcries from agricultural interests and lawmakers, which has put pressure on Washington to back off its hard-line stance to China. In response to the possible new U.S. tariffs, China’s Commerce Ministry said Beijing would respond with its own countermeasures should it come to that. “The Chinese side will follow suit to the end, not hesitate to pay any price, resolutely counterattack and take new comprehensive measures in response,” a ministry statement said citing an unnamed spokesman. The spokesman suggested that China is waiting to see if the Trump administration will go ahead and act, saying “We will listen to its words and watch its actions.” The threat of new tariffs and further retaliation was almost certain to cause fears of a full-scale trade war among investors, farmers and businesses with ties to the China trade. Even before Mr. Trump’s announcement Thursday, key lawmakers from the president’s party were criticizing the confrontation with China. Sen. Pat Roberts (R., Kan.) on Thursday called the standoff with Beijing a “minefield” during remarks criticizing the administration’s policies at a commodity futures conference in Kansas. Sen. Pat Toomey (R., Pa.) said Chinese practices, like allegedly stealing intellectual property, were problematic but that the Trump administration had instead trained its attention on trade deficits. “The administration is focused on the wrong problem and it is using the wrong tools to try to address it,” Mr. Toomey said in an interview before the announcement.
Trump Ups the Ante in Trade Brinksmanship -- Yves Smith - Mr. Market is not happy with Trump’s latest move in his trade war of wills with China. US stock futures have fallen overnight by more than 1.5% and Asian markets are volatile. Yesterday, Trump announced that he would have the US Trade Representative identify another $100 billion of goods imported from China on which the US might impose 25% tariffs, with a 60 day comment period. This was in response to China’s reaction to Trump’s threat to impose 25% on $50 billion of Chinese goods. China responded that it would impose tariffs on its own list of $50 billion of US goods, including soybeans and 127 other agricultural goods, cars, chemicals, and aircraft. China also said it would file a case in the WTO contesting the Trump tariffs. Remember that these measures are in addition to the tariffs Trump imposed on steel and aluminum.The Chinese also made a tart announcement overnight. From Bloomberg:“The Chinese side will follow suit to the end and at any cost, and will firmly attack, using new comprehensive countermeasures, to firmly defend the interest of the nation and its people,” the Commerce Ministry said in a statement on its website, without further detailing any planned measures.The Commerce Ministry also made clear it would prefer not to have a trade war. The earliest the US might impose tariffs is the end of May, on the first $50 billion of Chinese goods targeted. The Trump Administration has been deliberately silent about when it might pull the trigger. However, team Trump may have gone out of the gate sooner than was in its best interest. It was naive to think they could wrest a quick win from China. April is a long time before the November midterms. If the Trump administration keeps the tariff threat in play though then, investors won’t like the volatility, and the trade row could be the trigger for an overdue revaluation. A protracted trade game of chicken would probably weaken the dollar, which would increase import prices and thus the inflation rate. That in turn could stiffen the Fed’s resolve to stick to its guns on interest rate increases, which would be another negative for asset prices. The $50 billion tit for tat round was expected to have limited macroeconomic impact. We’ll presumably get an update on the latest threats. The effect on the Chinese economy was estimated to be 0.1-0.2% of GDP. Asia Times has a write-up of a Goldman Sachs analysis which shows both sides so far have been targeting goods with limited knock-on effects. Moreover, as some experts noted even before the details were announced, given how many manufactured goods are part of global supply chains, measures nominally targeting Chinese goods would have some of their costs going to other countries, including the US.
US companies on edge over tariff threat to supply chains - The Trump administration says the ultimate goal of its threatened tariffs on imports from China is to bring back manufacturing jobs in the US. Jason Andringa, who runs an agricultural and construction equipment maker in Iowa, says they could have exactly the opposite effect.His business demonstrates how complex international supply chains mean that new tariffs can have damaging unintended consequences.Vermeer, where Mr Andringa is chief executive, imports cabs assembled in its plant in Tianjin, China, that it uses for its drilling vehicle made in Iowa. Using the lower-cost imported cabs helps Vermeer stay competitive against German and Chinese rivals, in the US market and around the world.But the components were on the commerce department’s list of imports from China threatened with a new 25 per cent tariff. If the administration follows through on that threat, Vermeer’s competitive position will be eroded. “We have 600 jobs at our Iowa factory as a result of being able to import products, and we have American production sold into global markets,” Mr Andringa says. “If the US goes ahead with a unilateral tariff, it is going to create global opportunities for companies in other countries to go after.”
Trump’s Trade War, Stranded Assets, and Wilbur Ross’s Shipping Company -- Paul Krugman relates declines in stock valuations to the insanity of trade policy from Donald Trump and taught me a new expression – stranded asset: An asset that is worth less on the market than it is on a balance sheet due to the fact that it has become obsolete in advance of complete depreciation. Paul notes: Yet there is a reason why stock prices might overshoot the overall economic costs of a trade war. For a trade war that “deglobalized” the U.S. economy would require a big reallocation of resources, including capital. Yet you go to trade war with the capital you have, not the capital you’re eventually going to want – and stocks are claims on the capital we have now, not the capital we’ll need if America goes all in on Trumponomics. Or to put it another way, a trade war would produce a lot of stranded assets … But the costs to the economy as a whole might not be a good indicator of the costs to existing corporate assets. Since about 1990 corporate America has bet heavily on hyperglobalization – on the continuance of an open-market regime that has encouraged complex value chains that sprawl across borders….the factories that do exist were built to serve globalized production – and many of them would be marginalized, maybe even made worthless, by tariffs that broke up those global value chains. That is, they would become stranded assets. Call it the anti-China shock. Of course, it wouldn’t just be factories left stranded by a trade war. A lot of people would be stranded too. Companies in the export sector have already seen their stock valuations take a hit from the upcoming trade war. Now to Wilbur Ross:U.S. Commerce Secretary Wilbur Ross is divesting his interests in shipping firms Diamond S Shipping and Navigator Holdings, an official said Tuesday Navigator Holdings has a lot of stranded assets. The book of its ships is recorded at approximately $1.7 billion but the market value of equity is over $300 million below the book value. What happened was that the shipping companies invested heavily in ships during the commodity boom so much that there is an excess supply of ships. Ross likely sold his shares at a considerable loss but it is good for him that he got out before the trade war he is now promoting as that will further exacerbate this excess supply.
China to fight U.S. protectionism "at any cost" - English.news.cn: (Xinhua) -- China will fight "at any cost" and take "comprehensive countermeasures" if the United States continues its unilateral, protectionist practices, a spokesperson with the Ministry of Commerce said Friday."On Sino-U.S. trade, China has made its position very clear. We don't want a trade war, but we are not afraid of such a war," the spokesperson said.The remarks came after the U.S. President Donald Trump said Thursday that he had asked the U.S. Trade Representative to consider 100 billion U.S. dollars of additional tariffs on Chinese products."Concerning the U.S. statement, we will not only listen to the words but also watch the deeds," the spokesperson said.If the United States continues its protectionism regardless of opposition from China and the international community, China will fight to the end at any cost to "protect the interests of the country and the people," according to the spokesperson."The conflict was initiated by the United States as provocation," the spokesperson said.China will continue reform and opening up, safeguard multilateral trade, and promote trade and investment liberalization, the spokesperson added.Chinese Foreign Ministry spokesman Lu Kang also made similar pledge when asked to comment on President Trump's direction, according to a document at the ministry's website.
Kudlow: US Tariffs Are "Not A Bluff", China's Response Is "Highly Unsatisfactory" - Echoing comments by Treasury Secretary Steven Mnuchin made during an early-afternoon interview on CNBC, National Economic Council head Larry Kudlow told a group of reporters at the White House Friday that China's response to the first round of US tariffs announced was "highly unsatisfactory" and that, while he hopes the trade dispute doesn't result in tariffs, that outcome remains a possibility.That is in sharp contrast to Kudlow's attempt on Wednesday to assuage the fears of nervous investors by promising them that the US will likely get a deal with China to avert the trade barriers threatened by both sides.Still, a solution to the US-China trade spat could come within three months - but the Trump administration's saber-rattling over trade barriers "is not a bluff". And while the US isn't currently in a trade war with China - any foreign policy "could go awry."Kudlow's about-face notably comes as the White House has put its foot down on Friday and warned investors to expect some "some fluctuations" in the stock market as the trade dispute plays out.He also raised the possibility that the US could provide a "list of suggestions" to China, per the Hill: "The U.S. may provide a list of suggestions to China," White House National Economic Council Director Larry Kudlow told a group of reporters at the White House, adding that resolving the trade dispute between Washington and Beijing is "eminently doable." These latest comments come after Kudlow gave a contentious interview with Bloomberg earlier Friday where he said that serious talks to avert a trade crisis "have not really begun yet" while clarifying that Trump had discussed the issue with Chinese President Xi Jinping and that other senior administration officials had discussed trade policy with their Chinese counterparts.
Stock market ends sharply lower on renewed trade war fears - U.S. stocks closed sharply lower on Friday, led by a selloff in industrials and financials, as investors continued to fret over an escalating China-U.S. trade fight. The main indexes sold off in early trade following President Donald Trump’s proposal of fresh tariffs against China. The afternoon selling pressure followed Federal Reserve Chairman Jerome Powell’s speech in which he backed a “patient” approach to raising interest rates. What are main benchmarks doing? The Dow Jones Industrial Average fell 572.46 points, or 2.3%, to end at 23,932.76, bringing its weekly decline to 0.7%. All 30 blue-chip companies finished with losses on Friday. The S&P 500 index dropped 58.37 points, or 2.2%, to finish at 2,604.47, with all 11 main sectors trading in negative territory. More than 95% of S&P 500 stocks closed lower on Friday, according to FactSet. Industrial and financial stocks led the losses, down 2.7% and 2.4%, respectively. The benchmark index lost 1.4% over the week. Meanwhile the Nasdaq Composite Index declined 161.44 points, or 2.3%, to close at 6,915.11, leaving it with a 2.1% weekly fall.
Trump Pushing For Nafta Deal In Next Two Weeks -- Having gone nowhere for the past year of Nafta negotiations, the Trump administration is said to be pushing for the U.S., Canada and Mexico to reach a Nafta deal in principle to be announced at the Summit of the Americas in Peru on April 13-14, Bloomberg reported citing three people familiar.The US will host Nafta negotiators in Washington this week, where it hopes to achieve a breakthrough on significant remaining differences, Bloomberg said, adding that under the White House push, leaders of the three nations would be able to announce at regional summit that they’ve reached agreement on the broad outlines of an updated Nafta deal, while technical talks could continue to hammer out the finer details and legal text. Still, disagreement persists and significant differences remain on issues ranging from automotive content to government procurement, and there is no assurance an agreement, even in principal, can be reached.As part of the last minute blitz negotiations, Mexican Economy Minister Ildefonso Guajardo will travel to Washington for meetings with U.S. Trade Representative Robert Lighthizer on Wednesday, while Trump's adviser and son-in-law Jared Kushner and Mexican Foreign Minister Luis Videgaray - who have been the lead people for managing the relationship between President Donald Trump and his Mexican counterpart Enrique Pena Nieto - will also meet in Washington this week. Separately, Canadian Foreign Minister Chrystia Freeland will travel to Washington to meet with Lighthizer on Friday and may also meet with Mexico’s top Nafta negotiators at the same time. “Canada is committed to concluding a modern, mutually beneficial Nafta as soon as possible,” said Adam Austen, a spokesman for Freeland, while declining to comment on her meeting schedule.
"Huge Caravan" Of Central American Refugees Is Headed For The U.S. Border -- Over 1,500 Central Americans are on a crusade across Mexico in the hopes of being granted asylum at the U.S. border - a move which is set to pose an enormous challenge to the Trump administration's much campaigned about immigration policies, while reminding Trump's base that they still don't have the wall they elected him to build 14 months into his presidency. "We want to become one, supporting us shoulder to shoulder and show that together we can break down borders," say the caravan's organizers.mSetting out six days ago and marching under the slogan "Migrantes en la lucha" ("Migrants in the Fight") during holy week, the caravan comprised mostly of Hondurans was organized roughly a month ago by the mysterious group Pueblo Sin Fronteras (People Without Borders) - which solicited donations via Facebook and encouraged volunteers to contact them. ''Our mission is to provide shelter and safety to migrants and refugees in transit, accompany them in their journey, and together demand respect for our human rights," reads the group's mission statement.The Central American migrants, mostly Hondurans and Guatemalans, flee their countries because of insecurity and because they are threatened by gang members, also because of the economic and political situation in the region. -proceso.hn (translated)“The crime rate is horrible, you can't live there,” a migrant named "Karen" told BuzzFeed News on the side of a highway near the Southern Mexico town of Huixtla. “After the president [was sworn in] it got worse. There were deaths, mobs, robbed homes, adults and kids were beaten up.”"They want to reach the border and ask for asylum, the majority flee from gang violence, extortion and police abuses," says one of the organizers named Garibo.
Trump Threatens To End NAFTA, Foreign Aid Unless "Immigrant Caravan" Is Stopped - For the third time in less than a week, Trump has sounded the alarm about the "huge caravan" of Latin American immigrants traveling through Mexico unobstructed by local authorities, and seeking asylum at the US border. Previously, Trump used the caravan as an example of why his border wall needs to be built and also as an excuse to attack Democrats for their part in watering down border-security measures included in the $1.3 trillion omnibus spending bill. He's also attacked the Mexican government for ignoring the situation, ominously threatening to remember their negligence as NAFTA negotiations continue.Today, he took his threats one step further by not only threatening to kill NAFTA - Mexico's "cash cow" - but also to cut off foreign aid to "Honduras and the countries that allow this to happen" before closing with: "Congress must act now! The migrants, mostly Guatemalans and Hondurans, are hoping to escape brutality and violence that proliferates in both countries: "The crime rate is horrible, you can't live there," a migrant named "Karen" told BuzzFeed News on the side of a highway near the Southern Mexico town of Huixtla. "After the president [was sworn in] it got worse. There were deaths, mobs, robbed homes, adults and kids were beaten up." As we reported, migrants gathered for the march in the southern Mexico border town of Tapachula in advance of the march - where Pueblo Sin Fronteras conducted introductory workshops to help the Central Americans best navigate the United States once they arrive
Trump Warns He'll Dump Nafta If Mexico Doesn't Stop Drug Flows - President Donald Trump threatened to pull out of the North American Free Trade Agreement if Mexico doesn’t stop people and drugs from flowing into the U.S. from Central America.“They must stop the big drug and people flows, or I will stop their cash cow, NAFTA. Need Wall!” Trump said Sunday on Twitter, minutes before arriving at church for an Easter Sunday service with his wife, Melania.In a series of tweets, the president also suggested he was no longer willing to strike a deal to assist immigrants brought to the country illegally as minors, and repeated a call for Senate Republicans to go to a simple 51-vote majority as a way to pass legislation more easily.“Border Patrol Agents are not allowed to properly do their job at the Border because of ridiculous liberal (Democrat) laws like Catch & Release,” Trump wrote. “Getting more dangerous. ‘Caravans’ coming. Republicans must go to Nuclear Option to pass tough laws NOW. NO MORE DACA DEAL!” The president’s tweet was posted shortly after a segment on Fox News Channel’s “Fox and Friends,” in which Brandon Judd, the president of the National Border Patrol Council, a labor union representing border patrol agents, talked about reports that a caravan of hundreds of Central Americans was headed toward the U.S. in a bid to secure asylum. Judd said the immigrants seeking asylum would “create havoc and chaos” while in the U.S. awaiting hearings on their refugee status. Under current immigration policies, asylum seekers that prove a “credible fear” of returning home may be released while they await adjudication if they don’t present a security or flight risk. Those detained after crossing the border are also sometimes released due to bed shortages and a court ruling that limits the detention of women and children in custody to 21 days. Trump went on to say those crossing the border “are all trying to take advantage of DACA.” “They want in on the act!” he wrote.
Trump Rages: "Use Nuclear Option To Stop Massive Inflow Of Drugs And People" - For the second time in two days, Trump took to twitter to warn about the caravan of migrants headed through Mexico to the the US border, and bashed the Mexican government for allowing migrants untrammeled access to its northern border and Democrats for passing laws that "don't do their job." In doing, the president demonstrated that he's not only listening to his right-wing critics - of which Anne Coulter the most prominent example - who chastised him as a "lazy ignoramous" and levied charges that "all he wants is for Goldman to like him" - but is clearly worried about the midterms and a potential impeachment should Dems win the House and Senate. It also seems that the recently emboldened President is at least trying to give the impression of putting his foot down when it comes to his promised border wall (even if he failed to obtain the funding needed to build it) with demands that Congress pass a comprehensive border-security package and lift certain restrictions on ICE agents. ...Congress must immediately pass Border Legislation, use Nuclear Option if necessary, to stop the massive inflow of Drugs and People. Border Patrol Agents (and ICE) are GREAT, but the weak Dem laws don’t allow them to do their job. Act now Congress, our country is being stolen!— Donald J. Trump (@realDonaldTrump) April 2, 2018 Trump then reverted to his charge that DACA is officially dead, and it's the Democrats fault, a claim he first made on Sunday. Still, the president appeared to leave open the possibility of a deal, saying Democrats "must build Wall and secure our borders with proper Border legislation. Democrats want No Borders, hence drugs and crime!" Yesterday, Trump demanded Senate Majority Leader Mitch McConnell to invoke "the nuclear option" - modifying rules to require only a simple majority to end debate and move to a vote, effectively killing the opposition's ability to filibuster. Democrats, who made this change for presidential appointments back in 2013, have said they regret it (it allowed Trump to appoint Neil Gorsuch).
Trump Wants Military to Secure Border with Mexico— President Donald Trump said Tuesday he wants to use the military to secure the U.S.-Mexico border until his promised border wall is built. Speaking at a lunch with Baltic leaders, Trump said he'd already discussed the idea with Defense Secretary Jim Mattis. "We are going to be guarding our border with the military," Trump said, calling the measure a "big step." Trump has been deeply frustrated about the lack of progress building what was the signature promise of his campaign: a "big, beautiful wall" along the Mexican border. He's previously suggested using the Pentagon's budget to pay for building the wall, arguing it is a national security priority, despite strict rules that prohibit spending that's not authorized by Congress. The Department of Homeland Security, Pentagon and White House did not immediately respond to requests for comment on how such a plan might work. Trump's announcement came a day administration officials said they're crafting a new legislative package aimed at closing immigration "loopholes." Trump has called on Republican lawmakers to immediately pass a border bill using the "Nuclear Option if necessary" to muscle it through. The president has been tweeting about immigration and the border for the last few days, declaring protections for so-called Dreamer immigrants "dead," accusing Democrats of allowing "open borders, drugs and crime" and warning Mexico to halt the passage of "caravans" of immigrants or risk U.S. abandonment of the North American Free Trade Agreement. Trump has been seething since realizing the major spending bill he signed last month barely funds the "big, beautiful" border wall he has promised supporters. The $1.3 trillion funding package included $1.6 billion in border wall spending, but much of that money can be used only to repair existing segments, not to build new sections.
Trump Deploys U.S. Military To Southern Border - President Trump said on Tuesday that he will deploy U.S. troops along the southern border to guard against illegal crossings into the country "until we can have a wall." “Until we can have a wall and proper security, we are going to be guarding our border with the military. That's a big step,” Trump told reporters at the White House while sitting nearby Defense Secretary James Mattis.FLASH: Pres. Trump reveals he is plotting with Defense Sec. Mattis to guard the border with Mexico using the U.S. military pic.twitter.com/GPC2L3KQOu— Josh Caplan (@joshdcaplan) April 3, 2018 Trump's comments follow several comments he's made about a "huge caravan" of Central American immigrants traveling through Mexico unobstructed by local authorities until the Mexican government announced late Monday night that the caravan would be broken up. "If it reaches our border, our laws are so weak and so pathetic...it's like we have no border,” Trump said. Trump's comments mark a significant escalation in U.S. border policy, as troops along the frontier with Mexico - not the U.S. border patrol, would be the most aggressive action taken to date by the President who promised voters a giant wall. The President closed the door on a DACA deal over the past several days - an Obama-era program designed to protect young immigrants brought here illegally to the United States as children. In a Sunday tweet, Trump railed against "ridiculous liberal (Democratic) laws" like "catch and release". And with more "dangerous caravans coming" to the US border, "Republicans must go to Nuclear Option to pass tough laws NOW. NO MORE DACA DEAL!"
Trump To Deploy National Guard To Southern Border - Thanks to a caravan of Central American migrants which has more or less stalled out in Mexico while on its way to the United States, President Trump announced plans to "deploy U.S. troops" to the southern border to guard against illegal crossings into the country "until we have a wall." Today we learn from Homeland Security Secretary Kirstjen Nielsen that Trump is signing an executive order on Wednesday directing the National Guard to deploy troops to "assist the border patrol." Homeland Security Sec. Nielsen announces Pres. Trump will sign an executive order to deploy the National Guard to "assist the border patrol." pic.twitter.com/U1Nba3WV5a— Josh Caplan (@joshdcaplan) April 4, 2018Speaking during the Wednesday White House press briefing, Nielsen pitched the deployment as a method of strengthening an immigration system that "rewards bad behavior," such as drug smuggling and border crossings. “Border security is homeland security, which is national security,” Nielsen said, adding “It’s not a partisan issue.”There is no word on how many troops will be deployed, for how long, nor the cost of the operation - however we assume it will be an ongoing guard until Trump's wall is built (or perhaps until January 21, 2021 after Trump loses the next election because he never built it).“It will be strong. It will be as many as needed to fill the gaps we have today,” Nielsen said when asked about logistics “We do hope the deployment will begin immediately.” The troops will initially serve in a support role and will not actually participate in the arrest and detention of migrants who cross the border illegally.
Trump Will Work With Governors to Deploy National Guard to the Border - NYT — President Trump will issue a proclamation on Wednesday directing the Department of Defense and the Department of Homeland Security to work with governors to deploy National Guard troops to the southwest border to assist the Border Patrol in combating illegal immigration. “It’s time to act,” said Kirstjen Nielsen, the secretary of homeland security, as she outlined the policy during a White House briefing. In recent days, and in anticipation of an annual increase in numbers of people who attempt to cross the border, the Trump administration has been ramping up plans to block migrants and asylum seekers, including young unaccompanied children, from entering the United States. The announcement came a day after Mr. Trump said he wanted to send the military to the southwest border to guard against growing threats from unchecked immigration, suggesting he might want to use active-duty armed forces to do what immigration authorities cannot. “We are going to be guarding our border with our military,” Mr. Trump had said on Tuesday during a meeting with Baltic heads of state. “That’s a big step.”
Trump orders indefinite detention of immigrants at border as troop deployment looms - In a memo published late on Friday night, the Trump administration announced it will take concrete measures to indefinitely jail immigrants captured crossing the border. Not since President Franklin Roosevelt ordered the internment of Japanese and Japanese-Americans has the government put in motion mass incarceration of such a scale.The new policy is part of an overall campaign of terror by the Trump administration, with the complicity of the Democrats, targeting immigrant workers. On Thursday, ICE officials raided a meatpacking plant in rural Tennessee, arresting 97 immigrants, in one of the largest workplace raids in recent years.The Trump administration memo will exponentially expand the constellation of immigrant internment camps that dot the American southwest. It calls for the Attorney General and Department of Homeland Security (DHS) to “allocate all legally available resources to construct, operate, control, or modify—or establish contracts to construct, operate, control, or modify—facilities to detain aliens for violations of immigration law at or near the borders of the United States.” As of Friday evening, no Democratic Party leader had indicated opposition to the memo. In March, Democrats joined Republicans in passing a $1.3 trillion spending bill that included a provision that grants Trump the power to expand the immigrant prisons “as necessary to ensure the detention of aliens prioritized for removal.” The memo orders DHS to produce “a detailed list of all existing facilities, including military facilities, that could be used, modified, or repurposed to detain aliens for violations of immigration law at or near the borders of the United States.” In other words, the real purpose of Trump’s decision to deploy 2,000-4,000 National Guard troops to the US-Mexico border will be to guard the makeshift military detention camps or to free-up Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP) to take on the responsibility.
DOJ To Institute Quotas For Immigration Judges - The Department of Justice (DOJ) issued a notice to immigration judges on Friday that their job performance will be evaluated based on how quickly they close cases, in an effort to reduce the significant backlog of nearly 700,000 cases pending before the Executive Office of Immigration Review (EOIR). The backlog was less than 225,000 in 2009 at the beginning of President Obama's first term, according to data from the Transactional Records Access Clearinghouse at Syracuse University. The roughly 200 Judges which are located in 53 immigration courts will be expected to clear at least 700 cases a year, with less than 15% of their decisions sent back on appeal to receive a "satisfactory" rating - a standard their union said was an "unprecedented" step that may undermine judicial independence and potentially open the courts to new legal challenges. The average judge completed 678 cases per year over the last five years said DOJ spokesman Devin O'Malley, however he noted that there is a wide range - with some judges processing as many as 1,500 cases per year. In addition, they will be required to meet other metrics, depending on their particular workload. One standard demands that 85% of removal cases for people who are detained be completed within three days of a hearing on the merits of the case. Another metric demands that 95% of all merits hearings be completed on the initial scheduled hearing date. -Wall St. Journal Among the most prolific immigration judges is Saundra Arrington - one of four judges at the Stewart immigration detention facility in Lumpkin, GA who together decide more than 6,000 immigration cases each year - with a 98.2% deportation rate as of FY2015. Where immigrants end up is a matter of geography and chance. If they’re arrested in the Southeast part of the country, there’s a good possibility they’ll be sent to Stewart. But if those men had been sent to the detention center in Miami, for example, their futures could be far different: They would be over three times more likely to get an attorney, and 10 times more likely to stay in the U.S. -The Marshall Project
Trump gives Liberian immigrants a year to leave or face deportation - President Donald Trump announced in a memo last Tuesday to the Department of Homeland Security that he was formally ending the program known as Deferred Enforced Departure, which allowed Liberian immigrants to stay and work legally in the United States since 1999. The program was established by President Bill Clinton in response to the devastated social and economic situation in Liberia following the brutal civil war of the 1990s. More than 800,000 Liberians fled their country during the civil war, with a small percentage reaching the United States, where an estimated 4,000 reside to this day. These workers now have a year to leave the country or face deportation.The Deferred Enforced Departure program had been renewed by subsequent administrations since 1999, but Trump’s memo declared that improved conditions in Liberia meant that the program was no longer necessary. In fact, Liberia has yet to recover from the devastating Ebola outbreak of 2014-2015 which claimed nearly 5,000 lives in Western Africa. As a result, the health care system is in shambles as well as the overall economy. Unemployment and government corruption have made Liberia rank 177 out of 188 on the United Nation’s Human Development Index, with 80 percent of the population living on $1.25 a day. This will be the third time this year the Trump administration has announced an end for special immigration status for a whole host of countries. The White House announced an end for the Temporary Protected Status (TPS) for Salvadorans, Nicaraguans, Sudanese and Haitians, and is actively seeking an end to the Deferred Action for Childhood Arrivals (DACA) program which covers more than 800,000 brought by their parents to the US as children without proper documentation.
Homeland Security to Compile Database of Journalists, Bloggers - The U.S. Department of Homeland Security wants to monitor hundreds of thousands of news sources around the world and compile a database of journalists, editors, foreign correspondents, and bloggers to identify top “media influencers.” It’s seeking a contractor that can help it monitor traditional news sources as well as social media and identify “any and all” coverage related to the agency or a particular event, according to a request for information released April 3. The data to be collected includes a publication’s “sentiment” as well as geographical spread, top posters, languages, momentum, and circulation. No value for the contract was disclosed. “Services shall provide media comparison tools, design and rebranding tools, communication tools, and the ability to identify top media influencers,” according to the statement. DHS agencies have “a critical need to incorporate these functions into their programs in order to better reach federal, state, local, tribal, and private partners,” it said. The DHS wants to track more than 290,000 global news sources, including online, print, broadcast, cable, and radio, as well as trade and industry publications, local, national and international outlets, and social media, according to the documents. It also wants the ability to track media coverage in more than 100 languages including Arabic, Chinese, and Russian, with instant translation of articles into English.
FEMA has a ‘blunt’ new message: It won’t be there for every future disaster - “FEMA is not a first responder,” Daniel Kaniewski, the agency’s deputy administrator, said in a speech Wednesday at George Washington University’s Center for Cyber and Homeland Security. “We are going to be very blunt with the American public about what FEMA can and can’t do, about what the federal government can and can’t do, and I hope state and local governments take this forward as well.” FEMA, can’t, for example, manage and lead emergency response efforts for every single disaster. “FEMA will continue to fund the recovery for smaller disasters, but increasingly, we will be looking for state and local governments to manage those programs,” Kaniewski said. “I will assert, maybe that’s a high goal. It depends on what state or what community you’re talking about — whether or not they can step up and manage those programs.” To that end, FEMA wants to help states reach a point where they can successfully take on some of this work on their own. It wants to foster a “culture of preparedness” and spread those messages as part of a new national campaign, Kaniewski said. FEMA is hosting disaster planning seminars for its other federal partners, Kaniewski said. The Health and Human Services and Transportation departments lent a hand in Texas, Florida and Puerto Rico.
Massive United States-Saudi Infrastructure Fund Struggles to Get Going - NYT - Last May, the private equity firm Blackstone announced that it was creating a $40 billion fund that would invest in infrastructure projects in the United States. The fund’s largest backer was the government of Saudi Arabia, which agreed to kick in half the cash. Ten months later, the highly anticipated fund has yet to complete an initial round of fund-raising, much less start investing in infrastructure. Although the Saudis promised to contribute up to $20 billion, Blackstone is required to raise a dollar from other investors for every dollar the kingdom’s Public Investment Fund puts in. So far, only two other investors have publicly committed to the fund, with their contributions totaling $575 million, according to data provider Preqin, which tracks such investments. In the short term, Blackstone’s goal now is to raise a total of $15 billion — much less than it trumpeted during President Trump’s visit to Riyadh last spring — according to a document posted on the website of a Pennsylvania pension plan that has agreed to invest in the fund. Facing hesitant investors, Blackstone has twice missed its own deadlines for completing the first round of fund-raising, according to people briefed on the plans and a timetable included in the Pennsylvania pension plan’s documents.
Trump infrastructure policy adviser to leave White House - DJ Gribbin, President Trump's infrastructure policy adviser, is departing the White House as the administration's rebuilding plan appears to have hit a wall in Congress.Gribbin, who led the Trump administration's push for an infrastructure proposal that was released in February, is "moving on to new opportunities," according to a White House official. “Since he joined the team early last year, DJ has played an important part in coordinating the Administration-wide process behind the President’s infrastructure initiative,” national economic adviser Gary Cohn, who is also leaving the administration, said in a statement Tuesday.“I am grateful for his service and fully believe that the plan President Trump delivered to Congress, combined with the work we are doing administratively, will have a transformational impact on our economy.”Gribbin has been Trump's point person on infrastructure policy, fiercely defending the administration's push to overhaul the nation's infrastructure. His exit from the White House comes as the Trump administration's efforts to promote a sweeping infrastructure package appear to have stalled in Congress.
Federal workers spill on life in Trump’s Washington - One Health and Human Services employee swore off online dating after potential suitors repeatedly got upset that he worked for the Trump administration. An Education Department fellow eagerly returned to teaching after listening to Betsy DeVos bash public schools. And one Environmental Protection Agency official said staffers are distraught at having to personally dismantle regulations they spent years crafting.This is Donald Trump’s government 14 months into his presidency. Interviews with nearly three dozen current and recently departed workers across the ideological spectrum and across the federal bureaucracy — from the State Department to the Interior Department — show that Trump’s presidency has fundamentally altered the lives of government workers in ways big and small. Trump’s frequent attacks on the “deep state” have engendered deep distrust between career and political employees, pushing many longtime civil servants toward the exits and raising the possibility of a government wide brain drain. And while some workers, such as Border Patrol agents, are feeling newly empowered under Trump, morale at other agencies is so low that some employees said they were suffering from increased anxiety and depression that has complicated their personal relationships and even led to heavier drinking. Several career employees said they were keeping their heads down and ignoring possible avenues for promotions because they have little interest in being subjected to the political infighting that has taken hold in many agencies. “It’s the worst administration, and I’ve dealt with all of them from Ronald Reagan all the way forward,” said Jeffrey David Cox, national president of the American Federation of Government Employees, the country’s largest federal employee union. “The worst with morale of employees. The worst with constantly wanting to take away rights and benefits. And the worst in trying to starve the agencies of resources.”
In Angry Tweetstorm, Trump Renews Attack On Amazon, Demands "Fake Washington Post" Register As Lobbyist - President Trump's obsession and escalating feud with Jeff Bezos, and bringing Amazon to heel before it destroys what's left of America's crumbling brick-and-mortar retail industry, was on display Saturday morning when he fired off a series of angry tweets claiming the Bezos-owned Washington Post should register as a lobbyist and that the Post Office should jack up its parcel rates to stick it to Amazon."While we are on the subject, it is reported that the U.S. Post Office will lose $1.50 on average for each package it delivers for Amazon," Trump tweeted."That amounts to Billions of Dollars. The Failing N.Y. Times reports that 'the size of the company’s lobbying staff has ballooned,' and that does not include the Fake Washington Post, which is used as a 'lobbyist' and should so REGISTER. If the P.O. 'increased its parcel rates, Amazon’s shipping costs would rise by $2.6 Billion.' This Post Office scam must stop. Amazon must pay real costs (and taxes) now!" “This Post Office scam must stop. Amazon must pay real costs (and taxes) now! — Donald J. Trump (@realDonaldTrump) March 31, 2018 Trump's latest salvo follows several attack tweets earlier this week, where Trump accused Amazon of paying "little or no taxes" while putting "thousands of retailers out of business." His angry tweets have sent the company's shares plunging, extending a drop that began with an Axios report saying Trump is fixated on containing Amazon's inexorable expansion, potentially by invoking anti-trust measures and breaking down the company. In total, Amazon founder Jeff Bezos saw his net worth plunge by $13 billion during the selloff
Why WSJ Insists Trump's Crackdown Against Amazon Would Be "A Long Shot" -- President Donald Trump's decision to launch a PR war against Amazon this past week helped drive the Nasdaq to its worst monthly performance since January 2016 (of course, Trump's involvement was precipitated by an Axios report claiming the president is "obsessed" with finding ways to punish the e-commerce company). But in the interest of stopping the bleeding (as tech shares, and chiefly the FANG stocks grouping of which Amazon is a member, led the market lower in arch), the Wall Street Journal published a story on Saturday - following another round of attacks by Trump - claiming that an anti-trust action against Amazon of the type that Trump has intimated just isn't feasible, based on a cursory reading of US anti-trust law. As WSJ reporter Laura Stevens explains, trying to spit up Amazon on anticompetition grounds "would be difficult, requiring an overturn of the principles that have guided US antitrust enforcement for decades.." The problem, Stevens explains, is that Amazon doesn't have enough of a monopoly in any one of its business lines (even its core e-commerce business) to run afoul of US anti-trust laws - which were written and passed during the first half of the twentieth century. Amazon’s rapid growth over more than two decades from an online bookseller to a $178 billion retailer that also has a cloud-computing business, a Hollywood studio, a device business and a grocery store chain has prompted Mr. Trump and some policy experts to question how big is too big. Current regulations typically only kick into effect when a company is dominant in one market or is hurting consumers—neither of which experts think currently apply to Amazon. While Amazon has about 43% of the U.S. e-commerce market, it is still less than 4% of total U.S. retail, according to eMarketer. Some people in the business community, including those who know Mr. Trump well, have said that antitrust law has failed its historical purpose when it comes to Amazon, focusing too much on pricing and not enough on concerns that integrated businesses can be anticompetitive, people familiar with the matter have said.
Trump is right about Amazon - Liberals find the president so morally repulsive and so transparently dishonest that they now respond to everything he says with instantaneous outrage and disgust, while presuming in each and every case that his statements are made in bad faith, concealing baser motives. The latest example is the response to Trump's Thursday tweet zinging Amazon.I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!— Donald J. Trump (@realDonaldTrump) March 29, 2018 The universal response to this tweet has been to assume that it follows entirely from the president's hostility to The Washington Post. Amazon founder and owner Jeff Bezos also owns the Post, which has relentlessly pursued stories of possible collusion between Russia and the Trump campaign, flagrant corruption in and around the Trump family, and overall White House dysfunction. The president would love to destroy the paper, or at least get it to back off of its politically damaging coverage of his administration, and the broadside against Amazon is a transparent effort to make that happen. Now it's entirely possible that this is what's motivating Trump. But does that mean it makes sense for liberals to rally around Bezos in response? Not at all — at least not if the left in this country wants to stand for more than reflexive opposition to whatever Trump says and does.Amazon is much too big. Its exponential growth has been greatly aided by its avoidance of taxes. And its business model has done enormous damage to retail outlets across the country. It's also harmed, and in some cases decimated, numerous industries by ruthlessly dropping prices below levels of profitability and using other advantages of its enormous size and power to squeeze competitors.
Trump Triples Down In Amazon Feud: "Deal With Post Office Will Be Changed" - With Amazon shares already heading lower thanks to Trump's weekend twitter thrashing, the president has again chimed in Monday morning, tripling down on his recent threatening rhetoric toward the e-commerce giant.According to Trump, "only fools, or worse, are saying that our money losing Post Office makes money with Amazon. THEY LOSE A FORTUNE, and this will be changed." Amazon shares were down more than 3.5% as the price of a single share slipped below the $1,400 level. President Trump's obsession and escalating feud with Jeff Bezos, and bringing Amazon to heel before it destroys what's left of America's crumbling brick-and-mortar retail industry, was on display Saturday morning when he fired off a series of angry tweets claiming the Bezos-owned Washington Post should register as a lobbyist and that the Post Office should jack up its parcel rates to stick it to Amazon."While we are on the subject, it is reported that the U.S. Post Office will lose $1.50 on average for each package it delivers for Amazon," Trump tweeted."That amounts to Billions of Dollars. The Failing N.Y. Times reports that 'the size of the company’s lobbying staff has ballooned,' and that does not include the Fake Washington Post, which is used as a 'lobbyist' and should so REGISTER. If the P.O. 'increased its parcel rates, Amazon’s shipping costs would rise by $2.6 Billion.' This Post Office scam must stop. Amazon must pay real costs (and taxes) now!"
Amid Trump attacks, Amazon competes for lucrative DOD contract | TheHill: The Trump administration is considering whether to award Amazon a multibillion-dollar defense contract even as President Trump takes public shots at the company. Over the past week, Trump has repeatedly derided Amazon on Twitter, with reports suggesting the president is aiming to damage the e-commerce giant and its owner, Jeff Bezos. The company’s stock has tumbled as a result. "I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!" Trump tweeted last week. Even as the president hammers Amazon, federal defense officials are widely seen as likely to award the company a multibillion-dollar cloud computing contract early next month. The Department of Defense (DOD) is finalizing the details of the contract during a public comment period, but has signaled that it will ask a single source to develop a new department-wide cloud computing system. Amazon’s rivals and critics say that the Pentagon is likely to award the Seattle-based company the contract and argue that the process has been biased toward the company. The DOD rejects those allegations, saying that no company has received special treatment.
Mueller told Trump’s attorneys the president remains under investigation but is not currently a criminal target -- Special counsel Robert S. Mueller III informed President Trump’s attorneys last month that he is continuing to investigate the president but does not consider him a criminal target at this point, according to three people familiar with the discussions. In private negotiations in early March about a possible presidential interview, Mueller described Trump as a subject of his investigation into Russia’s interference in the 2016 election. Prosecutors view someone as a subject when that person has engaged in conduct that is under investigation but there is not sufficient evidence to bring charges.The special counsel also told Trump’s lawyers that he is preparing a report about the president’s actions while in office and potential obstruction of justice, according to two people with knowledge of the conversations.Mueller reiterated the need to interview Trump — both to understand whether he had any corrupt intent to thwart the Russia investigation and to complete this portion of his probe, the people said. Mueller’s description of the president’s status has sparked friction within Trump’s inner circle as his advisers have debated his legal standing. The president and some of his allies seized on the special counsel’s words as an assurance that Trump’s risk of criminal jeopardy is low. Other advisers, however, noted that subjects of investigations can easily become indicted targets — and expressed concern that the special prosecutor was baiting Trump into an interview that could put the president in legal peril.John Dowd, Trump’s top attorney dealing with the Mueller probe, resigned last month amid disputes about strategy and frustration that the president ignored his advice to refuse the special counsel’s request for an interview, according to a Trump friend.Trump’s chief counsel, Jay Sekulow, and Dowd declined to comment for this report. White House press secretary Sarah Huckabee Sanders referred questions to White House attorney Ty Cobb.
Dutch Lawyer Sentenced To 30 Days In Prison For Lying To Mueller - Special Counsel Robert Mueller has imprisoned his first target in his wide-ranging probe into whether the Trump campaign colluded with Russia to defeat Hillary Clinton did anything whatsoever that was even remotely illegal. Dutch lawyer Alex Van Der Zwaan, the son in law of a Russian oligarch, has become the first Mueller target to be sentenced on Tuesday, after a judge sentenced him to 30 days in prison and slapped with a $20,000 fine.Zwaan pled guilty in February to misleading the FBI about conversations he had with Manafort lieutenant Rick Gates and a mysterious "Person A" who was not identified. Axios said it's believed this "Person A" was longtime Manafort associate (and, according to Mueller, a suspected Russian intelligence operative) Konstantin Kilimnik. It has been reported that these conversations were related to a report he prepared for the trial of a Ukrainian Prime Minister Yulia Tymoshenko. Mueller didn't recommend a sentence for Zwaan. He faced up to five years and $250,000 in fines. According to his LinkedIn page, Van Der Zwaan was an associate in the London office of Skadden, Arps, Slate Meagher & Flom. He was reportedly questioned regarding the firm’s work in 2012 on behalf of the Ukraine Ministry of Justice."What I did was wrong. I apologize to the court for my conduct," Zwaan said in a Washington DC area court. The judge characterized Van Der Zwaan's crimes as momentary lapses in reason that unfortunately had serious consequences, Sputnik reported.
The scant science behind Cambridge Analytica’s controversial marketing techniques - The practices of Cambridge Analytica, a data-analytics firm involved in US President Donald Trump’s 2016 election campaign, have made headlines around the world this month. It’s alleged that the firm received data from millions of Facebook users, gathered without their explicit consent. Media reports suggest that this data hoard was later used to target voters with messages personalized to their personality traits — a strategy known as psychographic marketing — although the firm has denied that it used the Facebook data in its work. Facebook already offers advertisers and campaigners numerous ways to send particular messages to particular audiences. It segments its users by demographic information such as age, gender, education or interest in specific issues. But psychographic marketing — which many firms around the world now claim to do — targets people on the basis of their personality traits. But could these tactics actually have swayed voters? Here, Nature takes a look at the science behind psychographic targeting.
Facebook: Trump Campaign Was Better At Facebook Than Clinton Team - Despite a record $1.2 billion Hillary Clinton's campaign spent before losing the 2016 election, the former Secretary of State - who has horrible twitter game - was also out-Facebooked by the Trump campaign according to an internal Facebook whitepaper, published days after the election. And that's excluding the alleged "help" of Russia. “Both campaigns spent heavily on Facebook between June and November of 2016,” the whitepaper's author wrote, citing internal revenue figures of $44 million spent by the Trump campaign vs $28 million for Clinton during the same period. “But Trump’s FB campaigns were more complex than Clinton’s and better leveraged Facebook’s ability to optimize for outcomes.” The paper, first obtained by Bloomberg and "describes in granular detail the difference between Trump’s campaign, which was focused on finding new donors, and Clinton’s campaign, which concentrated on ensuring Clinton had broad appeal." The data scientist says 84 percent of Trump’s budget asked people on Facebook to take an action, like donating, compared with 56 percent of Clinton’s. In other words, Clinton's team felt they needed to convince voters to start liking Hillary. According to Bloomberg, the Trump campaign ran 5.9 million different versions of ads during the campaign - immediately testing audience response in order to push the ones with the highest levels of engagement, according to the paper. Clinton ran just 66,000 ads during the same period. A former Facebook employee referred to the internal white paper in a memo to Rep. Adam Schiff (D-CA), who said that Schiff and other congressional investigators could use the document in order to "ask the right questions" about whether the Trump campaign coordinated with Russia. The House Intel Committee closed down their investigation into Russia days later, which Rep. Schiff - who sat on it - says left "questions unanswered, leads unexplored, countless witnesses uncalled, subpoenas unissued."
NYC Pension Fund Demands Zuckerberg Relinquish Chairman Role: "We Need Independent Oversight" - It has been more than three weeks since the New York Times and the Guardian-owned Observer published their stories about data analytics firm Cambridge Analytica's surreptitious use of data from more than 50 million Facebook users during its work for President Trump's campaign.And, as CEO and founder Mark Zuckerberg continues his robotic media appearances and seemingly forced apologies ahead of back-to-back Congressional testimony later this month, some of the company's largest investors are agitating for changes to be made not just to senior management, but to the board of directors that oversees Facebook.Overnight, we pointed out that the European Commission is considering new regulations to stop social media companies from spreading "fake news", something that Facebook has become a pariah for since the election, much to its leadership's chagrin.Then, adding insult to injury, on Monday afternoon New York City Comptroller Scott Stringer added his voice to the chorus of wary investors who are demanding changes be made to stop what one CNBC guest described as "the most profitable company of its size in the history of capitalism" from succumbing to regulatory crackdowns and user flight. Though New York City's pension fund - which has about $1 billion invested in Facebook stock - doesn't have the clout to unilaterally push for change, Stringer said he's pushing for a shakeup on the company's board of directors. Specifically, Stringer wants Facebook CEO Mark Zuckerberg to relinquish his role as chairman, and hand the position over to an "independent" advisor.
Facebook says Cambridge Analytica may have had data on 87 million people: Facebook said Wednesday that Cambridge Analytica, a data firm with ties to President Donald Trump's campaign, may have had information on about 87 million Facebook users without the users' knowledge. Previous reporting had put the number of people whose information may have been shared with Cambridge Analytica at around 50 million. Facebook announced its own estimate in a blog post on Wednesday. The 87 million number is the maximum amount of people that could have impacted, according to Facebook's calculations. CEO Mark Zuckerberg said in a call with reporters on Wednesday that it got to that number by looking at the maximum number of friends its users had at the time. "I'm quite confident given our analysis it is not more than 87 [million]. It very well could be less. But we wanted to put out the maximum we felt that it could be as soon as we had that analysis done," said Zuckerberg. Facebook has said the data was initially collected by a professor for academic purposes in line with its rules. The information was later transferred to third parties, including Cambridge Analytica, in violation of Facebook's policies.
Facebook Says Data on Most of Its 2 Billion Users Is Vulnerable - Facebook Inc. said data on most of its 2 billion users could have been accessed improperly, giving fresh evidence of the ways the social-media giant failed to protect people’s privacy while generating billions of dollars in revenue from the information. The company said it removed a feature that let users enter phone numbers or email addresses into Facebook’s search tool to find other people. That was being used by malicious actors to scrape public profile information, it said. “Given the scale and sophistication of the activity we’ve seen, we believe most people on Facebook could have had their public profile scraped in this way,” the company said. “So we have now disabled this feature.” Facebook also said data on as many as 87 million people, most of them in the U.S., may have been improperly shared with research firm Cambridge Analytica. This is Facebook’s first official confirmation of the possible scope of the data leak, which was previously estimated at roughly 50 million. It has resulted in calls from legislators and policy makers for greater regulation of social media, helping to shave billion of dollars from the company’s market value. “We didn’t take a broad enough view of what our responsibility was and that was a huge mistake. It was my mistake,” Facebook Chief Executive Officer Mark Zuckerberg said on a conference call with reporters. “We’re broadening our view of our responsibility.”
Facebook Admits "Most" Of Its 2.2 Billion Users Exposed To Data Scraping, "Malicious Actors" - Facebook has admitted that "most" of its 2.2 billion users "could have had their public profile scraped" by third parties without their knowledge, and that the personal information of up to 87 million people was improperly shared with Cambridge Analytica, the company disclosed on Wednesday. “In total, we believe the Facebook information of up to 87 million people — mostly in the US — may have been improperly shared with Cambridge Analytica,” said Mike Schroepfer, Facebook's Chief Technology Officer. Initial reports set the number of users affected by the CA data purchase at 50 million. The London-based political data company bought the data from two psychologists (one of whom currently works for Facebook) who developed a data harvesting app disguised as a fitness app. One of the methods used by "malicious actors" to "scrape" user data has been to enter another person's phone number or email address into a Facebook search, allowing information to be harvested or scraped. “We believe most people on Facebook could have had their public profile scraped in this way,” Schroepfer said. The Wednesday admissions were accompanied by the announcement of nine major changes aimed at safeguarding user privacy following the data harvesting scandal that has pummeled Facebook stock and resulted in Congressional inquiries. CEO Mark Zuckerberg will testify before the House Energy and Commerce Committee on April 11, which chairman Greg Walden (R-OR) and Frank Pallone Jr. (D-NJ) said would be "an important opportunity to shed light on critical consumer data privacy issues and help all Americans better understand what happens to their personal information online."
Facebook Sent "Top Secret" Doctor To Hospitals For Patient Data Collection Scheme - Facebook sent a cardiologist to several major U.S. hospitals to pitch a scheme that would combine a patient's medical file with user data collected by the beleaguered social media giant, in order to "figure out which patients might need special care or treatment," reports CNBC. The program, which "never progressed passed the planning phase" according to Facebook, was put on pause after the Cambridge Analytica data harvesting scandal raised concerns over the company's policies governing data collection and use. Facebook's pitch, according to two people who heard it and one who is familiar with the project, was to combine what a health system knows about its patients (such as: person has heart disease, is age 50, takes 2 medications and made 3 trips to the hospital this year) with what Facebook knows (such as: user is age 50, married with 3 kids, English isn't a primary language, actively engages with the community by sending a lot of messages). –CNBC Recently as last month, however, Facebook was discussing the program with several health organizations - including Stanford Medical School and American College of Cardiology.The company says that the shared data would have personally identifiable information obscured - such as a patient's name, and that they were thinking of using a technique known as "hashing" to match an individual's medical data to their social media information. Facebook said on Wednesday that as many as 87 million users were affected by the Cambridge Analytica scandal, and that "most" of their 2.2 billion users were exposed to potential data scraping by "malicious actors."
Facebook Slapped With Four New Lawsuits Over Cambridge Analytica Data Harvesting Scandal - The lawsuits against Facebook are pouring in following the bombshell data harvesting scandal revealed in the wake of the Cambridge Analytica (CA) exposé published by The Guardian last month. Lawsuits began to pile up after it was revealed that CA had purchased user data from two psychologists (one of whom currently works for Facebook) who developed a data harvesting app which collected information on over 50 million users. As we reported last month, a group of Facebook investors filed a lawsuit against the company in a San Francisco federal court, claiming that investors had suffered losses. The suit claims that, “defendants made false or misleading statements and failed to disclose that Facebook violated its own data privacy policies by allowing third parties access to personal data of millions of Facebook users without their consent.” Adding to Facebook's woes, the company was hit with four new lawsuits, according to SFGate. One lawsuit was filed by a Facebook user who claims the Menlo Park company acted with "absolute disregard" for her personal information after allegedly representing that it wouldn't disclose the data without permission or notice. That lawsuit, filed by Lauren Price of Maryland in San Jose on Tuesday, seeks to be a class action on behalf of up to 50 million people whose data was allegedly collected from Facebook by London-based Cambridge Analytica ... Two other lawsuits were filed in San Francisco Tuesday and San Jose on Thursday by individual shareholders Fan Yuan and Robert Casey against Facebook, Chief Executive Mark Zuckerberg and Chief Financial Officer David Wehner....The fourth lawsuit, filed in federal court in San Jose Thursday by San Francisco attorney Jeremiah Hallisey, is a shareholder derivative suit filed on behalf of the company against Zuckerberg, Chief Operating Office Sheryl Sandberg and board members. –SFGate Meanwhile, Facebook stock is languishing at around $150 / share - down approximately 17% since the data harvesting scandal broke.
Sandberg: Facebook Users Would Have To Pay To Opt Out Of Sharing Data - Facebook COO Sheryl Sandberg says that while Facebook doesn't sell or give away its users' information (it just allows third party apps to do that), the company still "depends on your data," and if users wanted to completely opt out of all of the platform's data-driven advertising, they would have to pay for it.
Trump attorney seeks to force porn star's lawsuit into arbitration (Reuters) - President Donald Trump’s personal lawyer asked a federal judge on Monday to force adult film star Stormy Daniels to use arbitration to settle a dispute over an agreement to keep quiet about a sexual encounter she says she had with Trump. Daniels, whose real name is Stephanie Clifford, last month sued Michael Cohen, Trump’s personal attorney, to be released from the non-disclosure agreement she signed in October 2016 in exchange for $130,000. The White House has denied that Trump had sex with Daniels. Cohen has said he paid Daniels out of his own pocket. In Monday’s court filing in Los Angeles, Brent Blakely, Cohen’s attorney, argued the agreement included a provision that any disputes over it be settled through arbitration, as opposed to open court. Federal law “dictates that this motion be granted, and that Clifford be compelled to arbitration, as she knowingly and voluntarily agreed to do,” Blakely wrote. Daniels’ attorney, Michael Avenatti, said the matter should be settled in open court. “We will vigorously oppose the just-filed motion by Mr. Trump and Mr. Cohen to have this case decided in a secret arbitration, in a private conference room, purposely hidden from the American public,” Avenatti said in a statement. Last week, U.S. District Judge S. James Otero ruled that a request by Daniels to depose Trump and Cohen was premature because they had yet to formally request that she arbitrate her claims. Avenatti has argued that the non-disclosure agreement is invalid because Trump never signed it. But in Monday’s filing Blakely responded that the language of the agreement did not specify that Trump, using the pseudonym David Dennison, needed to sign it for the agreement to be binding. Blakely also argued that Daniels accepted the $130,000 and did not dispute the agreement for 16 months even though Trump had not signed it.
Stormy Daniels Accusations Boost Trump Approval Rating Among Men, Poll Shows - While Trump's approval rating is higher than President Obama's at the same point into his presidency, a Harvard CAPS/Harris poll has found that the president's approval shot up 3% among male voters in the wake of the Stormy Daniels controversy. Consequently, much like Stormy's neckline - Trump's approval rating among women plunged at the same time - falling from 41% to 35% in the same poll. Harvard CAPS/Harris Poll co-director Mark Penn has directly attributed the divergent opinions between the sexes to the "Stormy Effect." “While President Trump’s overall ratings are stable, his support increased among men and dropped among women,” Penn told The Hill. “This poll was taken right after the Stormy Daniels interview and so I think this increased gender polarization is the ‘Stormy Effect’.” In her 60 Minutes interview that brought the show its highest ratings in a decade, a seemingly stoned Stormy, whose real name is Stephanie Clifford, went into detail over an affair she claims she had with Trump in 2006. Trump denies the affair, despite his personal attorney Michael Cohen paying Daniels $130,000 right before the 2016 election in exchange for her silence - which some have construed as a possible violation of campaign finance laws. In fact, 58% of those surveyed said the special counsel - appointed to investigate Russia matters, should look into the payment to Daniels. The stripper and former porn star has also filed a lawsuit to break a non-disclosure agreement with Trump, claiming it's invalid because he never signed it. Daniels has also offered to return $130,000 to Cohen.
44 Democrats Exempted Awans From Background Checks Before Granting Access To Classified Intel - As the Russian "hacking" episode continues to mire the Trump administration in nebulous innuendo and daily claims of collusion, Luke Rosiak of the Daily Caller reminds us that House Democrats participated in an actual data breach conducted by Pakistani-nationals who were given access to highly sensitive intelligence as part of their duties providing IT support to members of Congress - and in particular, Reps. Debbie Wasserman Schultz (D-FL) and Gregory Meeks (D-NY). "Every one of the 44 House Democrats who hired Pakistan-born IT aides who later allegedly made “unauthorized access” to congressional data appears to have chosen to exempt them from background checks," writes Rosiak. All of them appear to have waived background checks on Imran Awan and his family members, even though the family of server administrators could collectively read all the emails and files of 1 in 5 House Democrats, and despite background checks being recommended for such positions, according to an inspector general’s report. The House security policy requires offices to fill out a form attesting that they’ve initiated background checks, but it also includes a loophole allowing them to simply say that another member vouched for them. Had any of the 44 House Democrats performed background checks, they would have discovered several red flags in Abid Awan's past - including "a $1.1 million bankruptcy, six lawsuits against him or a company he owned; and at least three misdemeanor convictions including for DUI and driving on a suspended license, according to Virginia court records," notes Rosiak.
Treasury watchdog subpoenas Google to identify whistleblower - — The Treasury Department’s office of the inspector general has gone to court to identify an anonymous employee at the Office of Financial Research who produced several critical online videos. The employee reportedly posted five YouTube videos that raised concerns about discrimination and diversity problems at the research office, which is an independent bureau within Treasury. The inspector general's office subpoenaed Google, which owns YouTube, in February, asking for identifying information about the employee as well as for the content of two of the videos. All of the videos were removed from public view by the employee last fall, according to court filings. They were posted between May 2016 and October 2017. The videos were created to alert Congress to problems at the agency, and they were sent to more than 15 lawmakers along with a request for help, according to a March 27 motion to quash the subpoena filed on behalf of the employee. If the court rules against dismissing the case, however, the employee’s lawyers ask that his or her name be given solely to “specified, responsible persons within OIG.” The matter is playing out in the U.S. District Court for the Northern District of California.
Sinclair Broadcasting Under Fire for Outrageous Trump Propaganda Script - A viral clip highlighting a mandatory promo released by the right-wing Sinclair Broadcasting company, which owns more than 200 local news stations across the country, has drawn widespread concern. A video compilation of dozens of local news anchors repeating the same script was released by Deadspin over the weekend, and now the nation's largest owner of local television stations is facing backlash for its pro-Trump propaganda.How America's largest local TV owner turned its news anchors into soldiers in Trump's war on the media: https://t.co/iLVtKRQycL pic.twitter.com/dMdSGellH3— Deadspin (@Deadspin) March 31, 2018 Deadspin's story followed a report from CNN last month that said the right-leaning Sinclair is mandating its local affiliates read aloud a promotional campaign that condemns other news outlets for pushing “fake stories.” Echoing President Donald Trump’s derision of the mainstream media, the anchors warn millions of unsuspecting viewers that “[T]his is extremely dangerous to our democracy.”The promos, which began airing on the station last week, are part of a Sinclair campaign that forces local anchors to read Sinclair-written scripts warning of the dangers of "one-sided news stories plaguing our country.""The sharing of biased and false news has become all too common on social media," the script reads. "More alarming, national media outlets are publishing these same fake stories without checking facts first.”The script does not identify any particular media outlets, or what kind of biases it is asking viewers to be aware of. According to Deadspin the script has "brought upheaval to newsrooms already dismayed with Sinclair's consistent interference to bring right-wing propaganda to local television broadcasts."
Sinclair is hiring for hundreds of open positions, amid ‘must-run’ script scandal -- Sinclair Broadcast Group has found itself in hot water in recent days after a script for one of its “must-run” segments was published online. But despite the fallout, the controversy has done little to hamper its efforts to recruit young journalists and those desperate for work. On Thursday, the Seattle Post-Intelligencer published a script from content-sharing partner KOMO-TV, which blasted its competition as fake news. The script was one of many “must-run” segments Sinclair distributes to its anchors and reporters regularly, which often feature a mixture of misinformation and pro-Trump talking points.The backlash was swift but has yet to hit the company’s bottom line. Sinclair, America’s largest owner of local news stations, continues to pursue its $3.9 billion dollar purchase of Tribune Media which, if approved, would give Sinclair control of more than 200 stations and the ability to reach more than 70 percent of American households. Another area where Sinclair is flexing it’s financial muscles: the journalism jobs market. On the website JournalismJobs.org, more than 800 open job listings, or 64 percent, are from Sinclair Broadcast. On LinkedIn, Sinclair is mentioned in 116 active journalism postings, 62 of which were posted in the last month alone. By comparison, NBC has 104 “journalism” positions currently listed, CBS Corporation has 42, and Turner Broadcasting System, CNN’s parent company, has 34. Sinclair is only beat by media services company TEGNA, which currently has 138 positions listed nationwide. In an age where newsroom layoffs have become the norm and the journalistic revenue model seems stuck in perpetual turmoil, Sinclair has established itself as one of the few companies that’s actively hiring, making it an appealing option for younger reporters seeking their first full-time job, and those desperate for work.
Bank regulatory actions under Trump fall to historic lows - The issuance of financial regulations has dropped to a 40-year low, new data shows, a sign that the Trump administration is fulfilling its deregulatory agenda. Companies that track financial regulations started to see a slight drop in the volume of regulations last year with a major drop-off in issuances and revisions in the first quarter. Regulators now are issuing or revising two to four items a week, a dramatic drop from the five to seven items a week, on average, that companies have had to comply with for years, according to Continuity. The new range is the lowest that the compliance management provider has found since tracking the issuance of regulations dating back to the 1970s. The company’s “bank compliance index” currently measures an average range of 24 to 48 regulatory actions per quarter, compared with a 30-year average of 60 to 85 per quarter that had held steady through the financial crisis and dates back to the 1980s. "It's clear that at the agencies issuing these rules, whether officially or not, the gears are grinding to a halt, and there is some paralysis," said Pam Perdue, an executive vice president and chief regulatory officer at Continuity and a former senior examiner at the Federal Reserve Bank of Kansas City. The sharp reduction in regulatory activity comes as Congress is also aiming to ease the industry’s load. A bipartisan regulatory relief package that recently passed the Senate, which makes targeted reforms to the Dodd-Frank Act, is now pending before the House.
New York Fed Picks John Williams as President – WSJ - The Federal Reserve Bank of New York said Tuesday that John Williams, who has helmed the San Francisco Fed since 2011, will become its next leader, assuming one of the top leadership positions at the U.S. central bank. Mr. Williams, a 55-year-old economist whose research has helped shape top Federal Reserve officials’ thinking on monetary policy, is set to succeed William Dudley, who will retire June 17. Mr. Williams will start the next day. Mr. Williams “cares deeply” about the Fed’s job and inflation mandates and “has meaningfully engaged” with diverse communities in his work at the San Francisco Fed, Sara Horowitz, who leads the Freelancers Union and serves as chairwoman of the New York Fed’s board of directors, said in a statement. The incoming bank leader “best fulfilled the criteria we’d identified as well as the feedback we’d received through our public outreach efforts.” .Ms. Horowitz also said Mr. Williams “has always been willing to speak his mind and encourage the Fed to be forward looking and reflective.” Federal Reserve Chairman Jerome Powell welcomed Mr. Williams’s selection, saying the veteran central banker is a “distinguished thought-leader in monetary policy-making, and a proven executive and public communicator.” Mr. Williams’s move to New York comes amid significant turnover in the Fed’s leadership ranks. Mr. Powell became its chairman in February. Randal Quarles became vice chairman for supervision in October. The Fed’s seven-member, Washington-based board of governors has four vacancies, including the vice chairman position. As New York Fed chief, Mr. Williams will hold a permanent vote on the interest-rate-setting Federal Open Market Committee. The presidents of the Fed’s other 11 regional reserve banks hold voting seats on a rotating basis. Mr. Williams voted with other officials to lift the Fed’s benchmark interest rate in March, and has said he expects a total of three or four such moves this year.
What banks — and fintechs — can expect from N.Y. Fed's new chief -- The selection of John C. Williams as the next president of the Federal Reserve Bank of New York could have a ripple effect that spreads far beyond lower Manhattan.The New York Fed has always played an outsized role within the Federal Reserve System, owing in part to its association with the nation's financial center and as the home jurisdiction of many of the largest financial firms. It also plays a key functional role conducting the open market operations directed by the Federal Open Market Committee. Unique among regional banks, the New York is a permanent FOMC member.But the ascension of Williams — now the head of the Federal Reserve Bank of San Francisco — to what is often considered one of the most influential leadership positions with the Fed system, along with the Fed board chair and vice chair, could change the direction of the central bank itself. Part of that is the longevity of the term. The Fed chairman and vice chair each serve four-year, renewable terms. The New York Fed president’s term, meanwhile, is effectively a 10-year term. And unlike Federal Reserve Board governors, most New York Fed presidents serve out the majority of their term. There have only been 10 since the passage of the Federal Reserve Act in 1913. Williams is poised to wield a lot of influence in part because the Federal Reserve’s Board of Governors is so historically short-handed. The voting members of the FOMC, for example, are composed of the seven members of the board and a rotating selection of five regional bank presidents. Those include the New York Fed as a permanent voting member, the Chicago and Cleveland Fed bank presidents on a biennial rotation, and the remaining Fed bank chiefs on a triennial rotation, making a total of five regional bank votes. With only three Fed Governors currently serving — and with the president’s only other nominee facing a tough confirmation fight — Williams and the other regional bank presidents will outnumber the Fed board, at least for the time being.
New York Fed to launch U.S. Libor contender, slow takeup seen (Reuters) - The New York Federal Reserve launched a benchmark U.S. rate on Tuesday to potentially replace Libor, and market participants hope it will prove more reliable after a long and complex switchover. The Secured Overnight Financing Rate (SOFR) set at 1.80 percent. SOFR is based on the overnight Treasury repurchase agreement market, which trades around $800 billion in volume daily. Publishing the rate is the first step in a multi-year plan to transition more derivatives away from the London interbank offered rate (Libor), which regulators say poses systemic risks if it ceases publication. Analysts have struggled to explain a recent jump in Libor, which has reached nine-year highs USD3MFSR=X even as bank credit quality is seen as solid. Increased issuance of short-term Treasury securities and declining demand for credit due to tax reforms are deemed the most likely factors. A decline in interbank lending has reduced the robustness of the rate, which is sometimes estimated rather than based on actual transactions. “It’s going to be based on a very, very robust set of transactions. I don’t think a lot of the issues and unknown volatility around Libor is going to exist,” said Blake Gwinn, an interest rate strategist at NatWest Markets in Stamford, Connecticut.
The Hudson Report: The Economic Impact of Bipartisan Bank Deregulation - The Hudson Report is Left Out’s new weekly podcast series with economist Michael Hudson. Transcript of this March 28 interview by Dante Dallaville was provided by Michael Hudson and first published at Naked Capitalism. Senate Republicans and Wall Street friendly Democrats recently voted in favor of rolling back banking industry regulations, including key parts of Dodd-Frank, under the guise of providing relief for struggling community banks. Professor Michael Hudson weighs in on the details of the bill and its potential economic impact.
- Dante Dallavalle: The Senate recently passed the Economic Growth, Regulatory Relief, and Consumer Protection Act or S.2115 with bipartisan support. Essentially the bill rewrites parts of the 2010 Dodd Frank Act. The piece of legislation whose purpose was to create a framework for oversight of the banking system responsible for the 2008 financial crisis and the economic downturn that resulted from basically the behavior of unscrupulous speculators. The bill S.2115 was purportedly passed to exempt smaller banks from oversight and requirements for loans, mortgages, and trading. It would change the size at which banks are subjected to regulatory scrutiny. The bill has been called the Crapo bill, after its main author Senate Banking Committee Chair Mike Crapo. Crapo touts the bill as one that aims to help consumers gain easier access to credit and as a boon to regional banks by freeing them from burdensome regulations. Seen as the most significant portion of the legislation is the increase in the level at which a financial institution is considered a systemically important financial institution or SIFI – which subjects institutions to more oversight than other banks not given this designation. It would drop the number of SIFI designated institutions from 38 to just 12. The problem opponents cite is that many of the institutions that contributed to the downturn were capitalized at significantly less than the SIFI threshold–namely 250 billion dollars. Professor, what are your thoughts on this bill?
- Michael Hudson: They are using a lot of euphemisms as a cover for dismantling the fairly modest regulation that was put in by Dodd Frank. They want to work at the weakest link, which is the local community banks – and after starting with them, then proceeding to the larger banks. The best thing to do is to put it in perspective and ask: “What would an ideal financial regulatory system do? How would it subordinate banks in general to serve the industrial and agricultural economy and to make it grow?” That’s certainly not the kind of regulation we have, because it’s not the business plan of banks. Their aim is not to help the economy grow but to attract customers and clients to the banks’ product, which is debt. Also, banks act increasingly as bookies for customers to place bets on Wall Street’s financial horse race – which way stock prices, bond prices, and foreign currency shifts are going to go.
Behind the Fed's effort to squeeze out payments fraud - Last week the Federal Reserve announced plans for a major new study of payment fraud, the latest step in its push to modernize the fragmented and in some ways antiquated system that enables U.S. commerce.The study, which will be conducted by a consulting firm, is aimed at measuring the extent of fraud across a range of payment methods. The results are expected to provide insight into vulnerabilities and help inform the Fed’s ongoing efforts, in collaboration with banks and other payment firms, to improve security.The fraud study is the latest example of the Fed asserting its centrality in the U.S. payment system. In 2015, the Fed convened a pair of task forces to study how the nation’s payments can be sped up and made more secure. Last July, one of those panels established the goal that by 2020, anyone with a U.S. bank account should be able to receive payments that are both highly secure and delivered in something close to real time.
Wolf Richter: Collapse of Cryptocurrencies in Q1 – Even the Biggest Crashed 67% to 88% - Wolf Richter --I don’t think there has ever been an entire sector that skyrocketed as much and collapsed as quickly as the cryptocurrency space. The skyrocketing phase culminated at the turn of the year. Then the collapse phase set in, with different cryptos choosing different points in time.It doesn’t help that regulators around the world have caught on to these schemes called initial coin offerings (ICOs), where anyone, even the government of Venezuela, can try to sell homemade digital tokens to the gullible and take their “fiat” money from them and run away with it. There are now 1,596 cryptocurrencies and tokens out there, up from a handful a few years ago. And the gullible are getting cleaned out. And it doesn’t help that the ways to promote these schemes are being closed off, one after the other.At the end of January, Facebook announced that, suddenly, “misleading or deceptive ads have no place on Facebook,” and it prohibited ads about ICOs and cryptos.On March 14, Google announced that it will block ads with “cryptocurrencies and related content,” including ICOs, cryptocurrency exchanges, cryptocurrency wallets, and cryptocurrency trading advice. Its crackdown begins in June. On March 26, Twitter announced that it would ban ads of ICOs, cryptocurrency exchanges, and cryptocurrency wallet services, unless they are by public companies traded on major stock markets. The overall cryptocurrency space, in terms of market capitalization, peaked on January 4, when market cap reached $707 billion, according to CoinMarketCap. Less than three months later, market cap has now plunged by 65% to $245 billion. $462 billion went up in smoke. Here’s how the top five cryptos did over the past few months. Together they account for 76% of the total market cap of the space:
"I Just Discovered I Owe The IRS $50,000 I Don't Have, Because I Traded Cryptos" - A Reddit user who was "surprised" to learn he owed the IRS roughly $50,000 from his crypto-trading profits - money that he had not set aside when he cashed out his bitcoins at the height of the boom - complained in a viral post that crypto trading "ruined his life."The alleged trader, who uses the screenname Thoway, explained that he bought eight bitcoins for $7,200 in January 2017 then cashed them out in December for about $120,000. Here's the catch: his altcoin investments quickly sunk, eating away most of his bitcoin profits. But unbeknownst to him, by selling his bitcoin, Thoway had inadvertently triggered a "taxable event".Thoway said his lawyer advised him to cash out his remaining altcoins and give whatever is left to the IRS. Thoway, who has not been identified and has apparently gone "missing" from Reddit since his post went viral, told readers that he earns $47,000 a year as an office assistant.Thoway's lawyer said he should be able to set up a payment plan allowing him to pay down the debt over a long-period of time, likely ten years. Still, Thoway complains that, during that period, his tax payments will likely siphon off most of what would've been his savings, meaning he has essentially been condemned to live paycheck to paycheck for the foreseeable future because he made a profitable trade, but ignored the tax consequences."I feel like I might have accidentally ruined my life because I didn't know about the taxes," he said.
CFPB's Mulvaney looks to rein in ‘tyranny’ of agency he runs --Acting Consumer Financial Protection Bureau Director Mick Mulvaney proposed dramatic curbs to his agency's power Monday, including a recommendation that all CFPB rules must be approved by Congress. In yet another breathtaking move for the agency since Mulvaney took the helm in late November, the CFPB's semiannual report called for the bureau to be funded through congressional appropriations, all major CFPB regulations to be subject to review by lawmakers, the CFPB director to have to answer to the president and the creation of a dedicated inspector general for the bureau. Mulvaney said the CFPB has accumulated too much power and fits "the very definition of tyranny."“The Bureau is far too powerful, with precious little oversight of its activities,” Mulvaney wrote in a letter accompanying the report. “The power wielded by the Director of the Bureau could all too easily be used to harm consumers, destroy businesses, or arbitrarily remake American financial markets."Mulvaney said the four changes to the Dodd-Frank Act that he wants Congress to enact would "establish meaningful accountability for the bureau." He appeared to view the semiannual report as a tool to urge Congress to change the CFPB's structure while Republicans are still in control. But all four recommendations, which would require some Democratic support, are unlikely to pass with Democrats loath to change the agency's structure.
Acting Chief Recommends Reining In Consumer Financial Protection Bureau —The Trump administration wants to limit a federal regulator’s independence in policing the consumer-finance industry, the latest salvo by the White House to roll back Obama-era oversight put in place after the financial crisis. Mick Mulvaney, acting director of the Consumer Financial Protection Bureau, on Monday asked Congress to pursue sweeping changes giving the executive and legislative branches control over the bureau’s regulations, leadership and budget. Major CFPB rules would need congressional approval, for instance, and the CFPB’s director would answer directly to the president, instead of being fully independent. Its funding, which currently comes from the Federal Reserve, would be handled by Congress. The changes would be a substantial departure from the CFPB’s structure, which currently gives it wide latitude to oversee consumer financial products without interference from Congress or the White House, and make it less independent than other banking and markets regulators. “The bureau is far too powerful, and with precious little oversight of its activities,” Mr. Mulvaney said in a report on the CFPB sent to Congress. Monday’s report shows Republicans’ determination to ease what they see as regulatory excess, which they say constrains U.S. economic growth. The Treasury Department last year released a report calling for financial deregulation across a number of industries, part of which are now under consideration in Congress and at federal agencies.It isn’t clear that defanging the CFPB would bolster the economy, yet efforts to scale back its operations stem from a belief that easing the 2010 Dodd-Frank financial overhaul that created the bureau will pave the way for increases in investment, spending and hiring. The proposal faces long odds of clearing Congress, where lawmakers have been unable to agree on whether to alter the CFPB’s structure or regulatory powers.Though the House passed a broad deregulatory blueprint last summer that would eliminate the CFPB’s supervisory and rule-writing functions—reducing it to an enforcement agency—Senate lawmakers haven’t taken up the plan.
It ‘would stab a knife’ into CFPB: Critics react to Mulvaney proposal - Once again, Mick Mulvaney dropped a bomb on the agency he oversees, and once again it drew strong reactions.Critics of the Consumer Financial Protection Bureau have supported the acting director's efforts to restructure the agency, but Mulvaney's latest salvo — proposing in the agency's semiannual report that all CFPB rules be subject to congressional approval, among other recommendations — left many observers stumped if not outraged."The bureau would be a very strange administrative body if its every rule is subject to direct congressional approval," said Jim Hawkins, a law professor at the University of Houston Law Center. In the CFPB's semiannual report to Congress, released Monday, Mulvaney also called for the CFPB to be funded through congressional appropriations, for the CFPB director to answer to the president, and for the creation of a dedicated inspector general for the agency. Some attorneys questioned Mulvaney's call for congressional reviews in light of the fact that Congress already has veto power over bank regulations through the Congressional Review Act. Lawmakers used that law — which only requires a simple majority to block regulations — last year to rescind the CFPB's arbitration rule, and another pending resolution before Congress would eliminate the agency's the payday lending rule. Some suggested that Mulvaney's proposal could require a filibuster-proof majority to roll back rules, which is a higher hurdle. "I wonder if he considered that a requirement for getting legislative approval for all rules would mean that he would not be able to change the payday lending rule without gaining 60 votes in the Senate to do so — a rather Herculean task,".
Mulvaney’s CFPB plan is dangerous - When Mick Mulvaney first took the reins of the Consumer Financial Protection Bureau last year, he attempted to reassure anxious employees and the public that he was not there to destroy the agency, despite his outspoken public contempt for the agency. “Rumors that I will set the place on fire or blow it up or lock the doors are false,” he said at his first press conference. But if Congress were to somehow approve Mulvaney’s most recent proposal to restructure the agency, he might as well blow the place up, because there would be virtually nothing left for the CFPB to do. On Monday, Mulvaney called for four major reforms to CFPB: putting it on congressional appropriations; creating a dedicated inspector general (currently the Federal Reserve’s inspector general oversees it); giving the president more oversight of the bureau; and, most important, subjecting all major new rules to congressional approval. This fourth suggestion, a version of the so-called REINS Act that some conservative Republicans have been pushing for years, is by far the most dangerous and far-reaching. Mulvaney justifies it as a return to the Founding Fathers’ vision of America, quoting James Madison in calling it a necessary check on the “tyranny” of the CFPB’s allegedly unchecked power. Yet if enacted, it would hurt everyone involved: the agency, the consumers it is supposed to protect and even the financial services industry it oversees. Congress simply doesn’t have the ability, much less the time, to preapprove every major rule of a federal agency. The result would be that the CFPB does no rulemaking of any kind. That effectively neuters the agency, preventing it from writing rules targeting abuses in the marketplace. While bankers may be tempted to cheer such an outcome, it also prevents the agency from leveling the playing field with nonbanks, ensuring they face lighter regulation than financial institutions. Moreover, it prevents the agency from making fixes or providing clarity on regulations already in place. Such a scenario could quickly turn into a nightmare for lenders and borrowers, who would have to rely on distracted lawmakers to resolve a complex problem better handled by regulators on the ground.
Mulvaney thwarts Warren inquiry, citing CFPB structure - Consumer Financial Protection Bureau acting Director Mick Mulvaney said Thursday that the agency’s fundamental structure prevents him from fully responding to accusations regarding his stewardship of the bureau, and only structural reforms would compel him to be more accountable. In a written response to a letter from Sen. Elizabeth Warren, D-Mass. — the latest in a running series of public statements between the two officials — Mulvaney declined to answer specific questions Warren and other Democrats in Congress have posed in previous letters, and suggested that those questions might be based on incorrect or unreliable information.“I could go through the almost eleven pages of single-spaced allegations of all that has supposedly gone wrong at the Bureau under my leadership,” Mulvaney said. “As you can imagine, I have a very different take on what is actually happening at the Bureau (and, tellingly, my information is based on being here and does not rely on sources such as leaked — and sometimes provably false — materials).” Mulvaney goes on to say that Warren's frustration is understandable. He writes that he felt similarly frustrated with former CFPB Director Richard Cordray when he was in Congress and urges Warren to consider that the structure of the agency might be to blame. “When I served on the House Committee on Financial Services as a Member of Congress, I was frequently frustrated with what I perceived to be a lack of responsiveness, transparency and accountability at the Bureau,” Mulvaney wrote. “I encourage you to consider the possibility that the frustration you are experiencing now, and that which I had a few years back, are both inevitable consequences of the fact that [the Dodd-Frank Act] insulates the Bureau from virtually any accountability.” The two policymakers have been butting heads for months now. Warren is widely considered the architect of the consumer agency, while Mulvaney has been a vocal critic since its inception. Mulvaney said he is “trying to improve on the Bureau’s record” of transparency and accountability, but that “none of that will change the Bureau’s DNA, which is the Dodd-Frank Act that created it. Only by changing the oversight requirements can the Bureau truly be made permanently accountable and transparent.”
CFPB requests public input on financial education programs - The Consumer Financial Protection Bureau is seeking public comment on its consumer financial education programs and how to gauge their effectiveness.In a request for information issued Wednesday, the CFPB said it is looking for feedback on ways the agency can improve or change its education programs, including what topics to address in such programs and how to utilize government contractors. The CFPB also is looking at whether it should eliminate certain financial education programs or at least minimize duplication with work performed by other federal, state, and local agencies.
Banks struggle to unmask true account owners for looming AML rule — Financial institutions were given a demanding compliance job two years ago when regulators required them to begin tracking the true owners of business clients. But with the rule set to take effect in May, the biggest challenge may be getting customers on board with the plan.The 2016 rule by the Financial Crimes Enforcement Network is meant to allay concerns about money laundering by bad actors hiding behind shell companies. Yet executives say some customers are balking at the new steps that will be required when they open an account. The customer due diligence rule, which takes effect May 11, requires banks, credit unions and other financial institutions to report the “beneficial owners” of a legal entity opening an account or applying for certain credit. The reporting requirement applies to anyone with a controlling interest or at least a 25% ownership stake.Most bankers say they are prepared for the rule, but sometimes the businesses that need to submit the information are not, particularly those that have multiple legal entities with different owners. Fincen has considered the rule since 2012, but the threat of bad actors disguising themselves has grown in light of high-profile incidents, such as Russian trolls’ use of shell companies and fake names in their attempt to influence the 2016 election. Most bankers said they are prepared for complying with the rule but sometimes the businesses that need to submit the information are not, particularly those that have multiple legal entities with different owners. “Some of the more complex property management groups that open up a new LLC for every project . . . we’ve had to provide them with a certain amount of information to understand why we are doing this,” said Erik Vingelen, a senior vice president overseeing Bank Secrecy Act and anti-money-laundering compliance at the $9.5 billion-asset Banner Bank in Walla Walla, Wash. “As far as complaints and objecting, there’s some of that.”
JPMorgan has 'a responsibility' to recruit ex-cons, Dimon says - Jamie Dimon on Thursday published his annual letter to shareholders, setting the industry abuzz with his comments on big economic issues, such as interest rates, immigration and trade policy. Less noticed — but nonetheless important — were his unlikely comments about recidivism in the criminal justice system and the responsibility banks have to hire employees with minor records. The chairman and CEO of JPMorgan Chase called attention to a little-noticed proposal by the Federal Deposit Insurance Corp. that would allow banks to hire employees who have been convicted of small-dollar theft or certain minor drug crimes. The proposal, issued in January, would also give banks the authority to hire employees who were convicted when they were under 21 years old. Currently, banks are prohibited from hiring anyone who has been convicted of minor crimes, such as small-dollar theft, without the approval of the FDIC. In calling attention to the proposal, Dimon said JPMorgan, the nation’s biggest bank by assets, has an obligation to hire those who have spent time in jail.“Our responsibility to recruit, hire, retain and train talented workers extends to this population,” Dimon said, citing research showing a relationship between joblessness and incarceration. “The overwhelming majority of Americans who are incarcerated return to their communities after they are released,” Dimon said. “Reducing recidivism is not only important to returning citizens and their families — it can also have profound implications for public safety. “This is a win-win for workers, employers and the economy as a whole,” Dimon said. The FDIC issued its proposal in January. In addition to JPMorgan, the agency received letters in support of the policy change from Independent Community Bankers of America and several advocacy groups. The comments were part of Dimon’s highly anticipated annual missive to shareholders. In the letter, at 46 pages long this year, Dimon touched on a wide range of subjects, from the importance of international trade agreements to the “giant waste of time” of many corporate meetings.
Wells Fargo execs, directors got the boot. Will its auditor be next? - A year ago, the biggest issue at Wells Fargo’s annual meeting was the makeup of the scandal-plagued bank’s board of directors.Twelve months later, seven out of 15 board members are either gone or on their way out, and the question for shareholders now is whether the San Francisco bank should hire a new auditor.KPMG has been Wells Fargo’s auditor since 1931, or three years prior to the establishment of federal deposit insurance. The accounting giant was also the auditor for Wachovia, which Wells Fargo acquired in 2008. KPMG has not been accused of wrongdoing in connection with the phony-accounts saga at Wells, but critics such as Democratic Sen. Elizabeth Warren of Massachusetts are skeptical of its repeated contention during the run-up to the scandal that the bank was maintaining effective internal control over its financial reporting.
New York pushes JPMorgan, BofA, Visa to reconsider gun-sale risk -- New York state's pension funds are urging credit card companies to consider following Citigroup's lead in cracking down on gun sellers.Comptroller Thomas DiNapoli, the financial watchdog who also oversees the $209.1 billion retirement system for public employees, last week sent letters to nine companies. He asked them to explore whether gun transactions should be classified with restricted high-risk purchases like porn, drugs and cryptocurrencies, a spokesman said Wednesday.The $209.1 billion pension, the third largest in the U.S., contacted the chief executives of nine financial institutions — Mastercard, Visa, American Express, Discover, JPMorgan Chase, Bank of America, Wells Fargo, First Data Corp. and Worldpay Inc. — asking them to assess risks and explore the cost of implementing systems that could reject purchases of firearms, ammunition or accessories. "If gun violence continues unabated in society — public outcry and calls for action may grow and create significant financial risk for the company," DiNapoli said in the letter sent to MasterCard. The New York system, which oversees retirement funds for more than a million people, owns millions of shares of the companies. DiNapoli said he worries that processing gun sales could be reputationally risky.
For ag bankers, fear and loathing over China - China’s threat to impose hefty tariffs on imports of U.S. soybeans and other agricultural products is creating a sense of unease among farmers and ranchers and the banks that lend to them. Farmers, who have been increasing production for years to meet demand from China, are worried that exports to the world’s second-largest economy will slow if the tariffs take hold, leaving them stuck with more product than they can sell. Bankers, meanwhile, are concerned that their agricultural customers could struggle to repay their debts, forcing banks to beef up their loan-loss reserves. Their fears were heightened Wednesday when China announced that it would add soybeans to the roster of farm products on which it has already threatened to impose tariffs, including pork, fruit, wine and nuts. China has proposed a 25% tariff on soybeans and pork and a 15% tariff on other products in retaliation to President Trump’s decision to impose tariffs on $50 billion worth of Chinese imports.
March 2018: Unofficial Problem Bank list declines to 98 Institutions, Q1 2018 Transition Matrix - Note: Surferdude808 compiles an unofficial list of Problem Banks compiled only from public sources. Here is the unofficial problem bank list for March 2018. Here are the monthly changes and a few comments from surferdude808:Update on the Unofficial Problem Bank List for March 2018. During the month, the list fell by three institutions to 98 after four removals and one addition. Assets declined to $19.9 billion from $20.5 billion a month earlier. A year ago, the list held 151 institutions with assets of $41.3 billion. This month, actions were terminated against The National Capital Bank of Washington, Washington, DC, ($430 million); First Bank and Trust Company of Illinois, Palatine, IL ($192 million); Grand Mountain Bank, FSB, Granby, CO ($109 million); and State Bank of Nauvoo, Nauvoo, IL ($31 million). Added this month was The Citizens State Bank, Okemah, OK ($126 million). With it being the end of the first quarter, we bring an updated transition matrix to detail how banks are moving off the Unofficial Problem Bank List. Since the Unofficial Problem Bank List was first published on August 7, 2009 with 389 institutions, a total of 1,727 institutions have appeared on a weekly or monthly list at some point. Only 5.7 percent of the banks that have appeared on a list remain today. In all, there have been 1,629 institutions that have transitioned through the list. Departure methods include 952 action terminations, 406 failures, 254 mergers, and 17 voluntary liquidations. Of the 389 institutions on the first published list, only 9 or 2.3 percent still remain in a designated troubled status more than eight years later. The 406 failures represent 23.5 percent of the 1,727 institutions that have made an appearance on the list. This failure rate is well above the 10-12 percent rate frequently cited in media reports on the failure rate of banks on the FDIC's official list.
A decade on, crisis-era litigation still bedevils banks - Banks and other financial institutions might reasonably have expected that, 10 years after the collapse of Bear Stearns and the demise of Lehman Brothers, they would finally be free and clear of lawsuits spawned by the financial crisis. That has not come to pass. Nor does freedom from legal actions rooted in the events of that era appear imminent. This circumstance should be seen not just as an annoyance for banks, or another indication of how slowly our judicial system and claims resolution processes often operate. Instead, it is an opportunity for proactive, potentially curative action. Banks can take steps now that would minimize, or at least expedite resolution of, certain types of legal claims that tend to proliferate in the aftermath of a crisis. Given that problems in the mortgage market were at the heart of the last crisis, it’s no surprise that mortgage-related lawsuits remain a key area of focus. Whether living (Bank of America or JPMorgan Chase, for example) or dead (Lehman and various failed banks for which the Federal Deposit Insurance Corp. is acting as receiver), financial institutions continue to pursue, and/or be the targets of, residential mortgage-related lawsuits. Many of these cases involve the alleged creation and sale of shoddy mortgage-backed securities. In other instances, they involve claims against trustees for alleged failures to fulfill their obligations to stakeholders in residential mortgage-backed securities trusts. Both of these types of cases are typically preludes to yet another type of lawsuit grounded in the financial crisis: so-called “indemnification” and breach of contract lawsuits brought by trustees, liquidating trusts or banks against the financial institutions (other banks or mortgage companies) that sold loans that ultimately were deposited into the RMBS trusts. The focus of these cases is the contention that loan originators breached representations and warranties when they sold the loans to a loan aggregator, and that they should therefore make the plaintiff "whole" for losses that the plaintiff later sustained as a supposed consequence of the alleged breaches.
Are the Big Banks Putting a Gun to the Head of the U.S. Consumer – Again? -- Pam Martens --According to the 2017 year-end study on “Household Debt and Credit” from the Federal Reserve Bank of New York, household debt has increased for 14 consecutive quarters and now stands at $13.15 trillion, an historic milestone that eclipses the former peak of $12.68 trillion that occurred in the third quarter of 2008, in the midst of the greatest financial crash since the Great Depression. The report notes two troubling trends: credit card balances that are more than 90 days delinquent have “been increasing notably from the last year” and student loans that were 90 or more days delinquent or in default in the fourth quarter of last year reached 11 percent of student loan debt outstanding. The most recent report from the Federal Reserve on consumer debt (excluding debt tied to real estate such as mortgages and home equity loans) raises more alarm bells. That report shows that from the end of 2013 to the end of January 2018, consumer debt went from $3.095 trillion to $3.855 trillion on a seasonally adjusted basis. Approximately one-quarter of that debt is on credit cards and the interest rates on those credit card debts are rising dramatically with no restraints being placed by bank regulators or Congress. At the end of 2013, the average interest rate being assessed on credit card accounts was 12.95 percent according to the Fed report. As of November 2017, according to the latest data released by the Fed, that rate had increased to a whopping 14.99 percent, which is a full percentage point higher than six months earlier. For an already tapped out consumer, this kind of credit shock presents both a direct danger to the U.S. economy and an outrage to the American public that belatedly learned in 2011 that these mega banks had been bailed out by the Fed to the tune of $16 trillion in almost zero interest rate loans during the financial crisis.
Consumer privacy, as we once knew it, is dead - American privacy, in its original formulation, is deader than a doornail — or at minimum is anachronistic. And it is about time that we confront this new reality. At the end of the last century, we were comfortable with the idea that our confidential information was entrusted to sacred guardians, financial institutions, who would zealously protect both our financial privacy and other personal information. Today, despite almost daily reports of data theft and data manipulation by technology purveyors and outright data thieves, adherents of outdated privacy concepts (e.g., governmental entities and politicians) have refused to confront the reality that our understanding of personal privacy needs to be closely reexamined — and a new national policy on privacy rights must be developed and adopted. The protection of privacy was primarily reflected in data security breach laws, which generally require holders of data to notify citizens of data breaches. The result of this approach has been a proliferation of data breaches by non-banks for which liability has been minimal. This is because most courts have held that a data breach without provable damage is not actionable — instead, companies experiencing data security breaches must merely establish monitoring systems at credit reporting agencies. Moreover, since practically every American has experienced several thefts of his/her data, a very effective strategy when defending data security breaches is requiring complaining parties to prove that any identified harm is traceable to the data breach under scrutiny — and not other similar data breaches involving the same affected individuals. Although banking institutions have done a better job of protecting customer information — they don’t want to lose their marketing edge by passing along valuable data to others — even this limited privacy protection is threatened. Data scrappers and similar entities who obtain consumers’ specific permission to obtain privacy information held by a bank can analyze and manipulate that data for the consumer.
Online Ad Fraud Is Off The Charts: "28% Of All Web Traffic Comes From Click Farms" - In one of the most imprudent announcements in years, the ANA (Association of National Advertisers) congratulated itself a while back on having achieved a 10% reduction in ad fraud in 2017."The fraud decline is particularly impressive recognizing that this is occurring when digital advertising spending is expected to increase by 10 percent or more."According to their calculations, global ad fraud dropped from $7.2 billion in 2016 to $6.5 billion in 2017.The ANA announced this despite unmistakable indications that ad fraud is growing ferociously and is completely out of control. Every reputable independent ad fraud expert I know peed their pants laughing at this bullshit. Now there's some serious data indicating how ludicrously delusional the ANA and the marketing industry are. A new report released by Adobe last week indicated that actual losses to ad fraud may be 10 times the ANA's number. The Adobe study, reported in The Wall Street Journal, claims that..."...about 28% of website traffic showed strong “non-human signals,” leading the company to believe that the traffic came from bots or click farms."Using Adobe's 28% number and projecting this out over $237 billion in estimated online ad spending this year (WARNING: COPYWRITER MATH COMING UP) I calculate that online ad fraud may reach $66 billion in 2018. This is astonishing, even to an old hysteric like me.And it may even be higher. The Adobe calculation is based on the signals that Adobe can detect. Since the fraudsters are always one step ahead, it is reasonable to assume that there is some undetected fraud. Praneet Sharma CTO of Method Media Intelligence says, "Avoiding detection will be the major obstacle that fraudsters will present."According to another ad fraud expert, Dr. Augustine Fou, "No matter what you are hearing or reading about digital ad fraud, I can assure you it's actually worse than you think."
Rising Rates Sounding Alarm Bells for Debt-Laden US Consumers - Americans have a history of loading up on debt in good times, then paying dearly when the bills come due. Adding to the pain: A booming economy is often accompanied by rising interest rates, which make mortgages, credit cards and other debt much more expensive. As the U.S. Federal Reserve raises rates, there are signs that consumers could be putting themselves in peril. “When consumers are confident, or over-confident, is when they get into credit-card trouble,” said Todd Christensen, education manager at Debt Reduction Services Inc. in Boise, Idaho. The nonprofit credit counseling service has seen a noticeable uptick in people looking for help with their debt, he said. Spending on U.S. general purpose credit cards surged 9.4 percent last year, to $3.5 trillion, according to industry newsletter Nilson Report. Card delinquencies are also rising. U.S. household debt climbed in the fourth quarter at the fastest pace since 2007, according to the Federal Reserve. “There are warning signs out there,” Especially concerning is a surge in student and auto loans over the past decade, he said. See also: The unloved Libor is back, bringing trouble and opportunity Meanwhile, the Federal Reserve is steadily hiking rates, most recently on March 21 when the federal funds rate rose a quarter point to a target range of 1.5 percent to 1.75 percent. Libor, a benchmark rate the world’s biggest banks charge each other, is also on the rise. The 3-month Libor reached 2.3 percent last week, the highest since November 2008. That could be a problem for companies, especially those with lower credit ratings, looking to refinance debt. Overall, an estimated $350 trillion of contracts are based on Libor, according to its administrator, ICE. To be sure, the typical American might not notice much pain from rising rates –- at least for now. The vast majority of mortgages, auto loans and student debt are taken out at fixed rates, guaranteed for the life of the loan. That leaves rising rates on credit card debt as the biggest financial worry for many U.S. families. Card debt is typically based on a “prime rate” that’s directly linked to the fed funds rate. If the Fed pushes through a quarter-point increase, your card’s rate could go up by the same amount a month or two later.
The Devastating Loophole That Sticks Car Buyers With Interest Rates That Would Be Otherwise Illegal – On June 19, 2015, Bronx resident Carlos Guerrero-Roa went to CarsBuck, an auto dealer in Brooklyn, to purchase a 2005 Lexus RX that was being advertised online for $6,900. Guerrero-Roa left with the car that day, only after it was financed with a loan that, according to a lawsuit he later filed, carried an interest rate “well over” 25 percent—a threshold that New York state law deems a felony. But thanks to a loophole in the statute, Guerrero-Roa and countless others in New York end up with auto loans that have high, and possibly illegal, interest rates. A CarsBuck employee told him the car could only be acquired “by way of a one-year financing plan,”according to the complaint. In need of a vehicle to get around, Guerrero-Roa accepted the stipulation. To complete the transaction, Guerrero-Roa signed an electronic pad, even though he wasn’t able to view a computer monitor “displaying the document to which he was signing his name,” according to the lawsuit. And he claims he wasn’t given a copy of the agreement he signed. (The increased use of electronic contracts among auto dealers has been associated with auto loan fraud across the U.S., as Jalopnik reported in December.) What Guerrero-Roa didn’t realize was the transaction he’d signed off on actually required him to pay $18,998.40 for the car over 48 months—more than $12,000 over the initially advertised price. It wasn’t until the company that financed the purchase, Westlake Financial Services, called him a few days later that Guerrero-Roa learned “he had borrowed over $18,000 to finance the purchase of the Vehicle,” the lawsuit said. In New York, charging interest above 16 percent is a violation of the state’s civil usury law. Charging more than 25 percent is considered a felony. There’s a wrinkle in New York’s usury laws that still make transactions like Guerrero-Roa’s possible, and it boils down to a basic question: What is a “loan”? About 80 percent of all consumers obtain financing for a car through auto dealers, as opposed to their own banks or credit unions. Many likely believe what they’re getting from the dealer is a loan, but legally, that’s not always the case.
Trepp: CMBS loan delinquencies rise for first time since June - Default rates for securitized U.S. commercial real estate loans last month increased for the first time in nearly a year, according to Trepp. The overall March delinquency rate of 4.55% for CRE loans backing commercial mortgage-backed securities was 4 basis points higher than the February mark. The “rare” increase was a “modest” hike, Trepp reported Tuesday, but was the first upward tick in the rate since June 2017.The rate had fallen for eight consecutive months, in a cumulative 120-basis-point drop in the rate since last June. The March rate was 82 basis points lower than the year-ago level of 5.37%, according to Trepp. The percentage of loans that are seriously delinquent — such as 60 days overdue, in foreclosure, or in bank REO portfolios — was down 5 basis points to 4.39%. The vast majority of delinquent loans are pre-crisis loans issued before 2009 (or CMBS 1.0), with a delinquency rate of 47.84%.
Regulators finalize rule expanding exemption for CRE appraisals - — As part of a larger regulatory relief effort, the bank regulators issued a final rule Monday that raises the dollar-amount threshold for commercial real estate transactions that require a formal appraisal by lenders.The rule raises the threshold from $250,000 to $500,000 for commercial real estate transactions. Under the new rule, more transactions are exempt from a long-standing requirement to get an appraisal. Instead, banks can simply get an evaluation of the real property collateral. The change to the threshold was partly in response to a larger effort by regulators to streamline regulation and reduce paperwork, a review process that concluded in March 2017. The threshold was also raised to coincide with higher property values since the last threshold was set 24 years ago.
Will dropping tax lien data from credit reporting lead to bad loans? -- In just over two weeks, the three major credit bureaus will make a significant change, deleting the last remaining scraps of tax lien data that exists in consumer reports, an estimated 5.5 million records. But a question hangs over the April 16 deadline — what will happen to credit scores as a result? While a definitive answer isn't clear, some argue that the existence of a tax lien says a lot about a person's ability to repay debt. They worry that eliminating that information completely from credit reports could blind lenders to serious risk because it will raise credit scores. “We feel the data, when accurately linked to the consumer, is important,” said Ankush Tewari, senior director of credit risk assessment at LexisNexis Risk Solutions, a provider of public record data. “It is important for lenders to know, for example, if a consumer has a $50,000 tax lien that they have an obligation to repay before issuing them new credit. So if you’re an auto lender and you’re considering giving this consumer a loan for a $35,000 automobile, it’s important for the lender to be aware that the consumer also has this other lien obligation that they’re also paying off. The change is part of a series of steps taken by the credit bureaus, which last July eliminated civil judgment records — notes that a consumer owes a debt to a court as a result of a lawsuit — from credit reports, as well as half the tax lien data they had. That change and the next step of purging the remaining tax lien data are a result of settlement agreements between the bureaus and 31 state attorneys general, which said that as of July 1, 2017, public record data given to the credit bureaus had to contain name, address, and Social Security number and/or date of birth, and had to be refreshed at least every 90 days. At issue were concerns that the credit bureaus had trouble linking public record data to credit reports.
Flexible boundaries and exams: How Treasury would modernize CRA — The Treasury Department released long-awaited recommendations Tuesday of reforms for enforcing the nearly 40-year-old Community Reinvestment Act. The CRA, which grades financial institutions on their lending and other activities in low- and moderate-income neighborhoods associated with their market, has not been significantly updated since the Clinton administration.The report calls for updates to how banks are examined for compliance, including the definition of geographic boundaries used for CRA exams. Treasury's recommendations come as federal bank regulators have indicated they will soon release a proposal to reform CRA policy. “Forty years since the passage of CRA, it is time for modernization to fit today’s banking landscape and community needs,” Treasury Secretary Steven Mnuchin said in a press release. “Our recommendations will improve the effectiveness of CRA by enhancing the assessment and examination process, enhancing the ability of banks to deliver services in the communities they serve while considering technological advances in the financial industry.”The Treasury’s main recommendations are:
- • Updating the definitions for how banks are assessed based on geographic areas. The current law, which only looks at lending around a bank’s physical location, does not take into consideration changes in banking like online lending and consumer behaviors. The Treasury recommends the assessments now reflect those advancements and go beyond the surrounding area of branch locations.
- • Greater flexibility on CRA exams and more transparency in how banks are rated.
- • Improve the timeliness in how banks are evaluated to when a rating is published, a process that has sometimes taken regulators years to complete.
- • Implement more performance incentives for banks to encourage more community lending.
“Treasury’s recommendations will incentivize bankers to do more for low- and moderate-income communities, especially in cases where the bank has underperformed in prior assessment periods,” the report said.
5 takeaways from Treasury’s call to action on CRA — Bank regulators are gearing up to modernize their policy on Community Reinvestment Act enforcement, but the CRA reform effort appeared to benefit from a jump-start Tuesday thanks to the Treasury Department. Industry representatives, analysts and consumer advocates all praised the Treasury report recommending a slew of CRA reforms that could serve as a jumping off point for regulators that seemed poised for another attempt at updating their decades-old policy.Despite hope that policymakers are serious about bringing CRA enforcement in line with modern technology, including the growth of mobile banking, regulators have tried to update the law before, to no avail. Still, the Treasury report — which included recommendations to redefine CRA assessment areas and provide flexibility on CRA exams, among others — appeared to spark optimism. The Treasury “released an astonishingly progressive set of recommendations to reform implementation of the Community Reinvestment Act,” Federal Financial Analytics said in a note Tuesday. “If these are taken up by the federal banking agencies — and they will be — banks would do more for their communities and thus rely a lot less on” government-sponsored “lending to show they care even when they really don’t.” Here are the key takeaways from the Treasury report.
- Industry representatives and community reinvestment advocates both lauded Treasury. Few issues in the years since the financial crisis have united bankers and consumer advocates, but all observers reacting to the report praised Treasury's recommendations.
- CRA assessment areas will continue to be a focus of reform deliberations. One of the biggest concerns that both lenders and consumer groups have raised about the CRA is that the evaluations are largely based on the communities surrounding a bank’s physical locations, which has become increasingly outdated as more loans are made online and there are fewer branches nationwide. Treasury said that concern can be addressed with a greater focus on "alternative channels" in evaluating financial institutions' compliance.
- A goal of reform is to expand banks' opportunities to earn CRA credit for their activities. The Treasury also suggested expanding the types of loans that would qualify for CRA credit, and that the regulators should clearly publish criteria for earning such credit prior to evaluating a lender, rather than retroactively.
- Regulators may focus on making CRA evaluation less subjective. The Treasury advocated for major changes to the CRA rating system, which lenders have long argued is too subjective, unclear and inconsistently applied across regulatory agencies. Currently, there are four ratings a bank can receive for CRA compliance: Outstanding, Satisfactory, Needs to Improve or Substantial Noncompliance. But the Treasury said banks are unclear about how many points they can receive for CRA-eligible activities based on a geographic assessment area.
- Subjecting nonbanks to CRA supervision is still an open question. A sticking point for both consumer groups and banks is that nonbanks are not subject to CRA evaluations, even though they continue to account for a larger share of the financial services landscape. For example, the Treasury report cited data from the Urban Institute that the total origination share for nonbanks of loans backed by the government-sponsored enterprises jumped from 30% in 2013 to 60% in 2017.
Time's up: GSE reform ain't happening this year -- It was always going to be an uphill struggle to pass housing finance reform this year. But it now appears to be downright impossible.When draft Senate legislation — based on talks between Sens. Bob Corker, R-Tenn., and Mark Warner, D-Va. — leaked back in January, observers had warned the effort would need to quickly pick up steam in order to have a prayer of enactment ahead of the midterm elections this November. Instead, momentum has been moving in the wrong direction. The sharp debate over the Senate’s banking relief bill this past month has renewed doubts that a bipartisan consensus on housing can be reached anytime soon, according to sources tracking the negotiations. The fight proved tougher — and more personal — than many predicted. That makes the chances of winning moderates over on yet another controversial deal, this time over resolution of the government-sponsored enterprises, remote at best. “The regulatory relief effort has taken more time and left more bruised egos than anyone expected at the outset of this Congress, which has left Democrats uneager to delve into the far more complicated and contentious debate over GSE reform,” said Isaac Boltansky, director of policy research at Compass Point Research & Trading. And the risk of yet another Senate vote on regulatory relief still looms. Rep. Jeb Hensarling, R-Texas, chairman of the Financial Services Committee, has said that he will not pass the Senate version of the legislation without further input from the House, either through formal or informal negotiations. That means the bill could end up back in the Senate before it is signed into law. This latest political dust-up is hardly the only factor working against comprehensive reform of the mortgage market — but it’s another blow to a movement struggling to gain traction nearly a decade after the GSEs were placed into conservatorship. The timing around housing finance reform is worth considering because Corker, who has been a driver behind efforts to overhaul the GSEs for years, is set to retire at the end of 2018. And without legislative action in the near term, the odds go up that the Trump administration could act unilaterally to make changes to the mortgage market through the Federal Housing Finance Agency.
U.S. is said to restrict lenders in veterans' mortgage crackdown -- Two lenders have been punished by a top U.S. mortgage agency amid its concern that they enabled costly rapid refinances of veterans' home loans.NewDay USA and Nations Lending Corp. have been restricted effective this week from issuing Ginnie Mae bonds that are intermingled with loans from other lenders, according to a person familiar with the matter. The move follows an examination by Ginnie Mae, a government-owned corporation that guarantees about $2 trillion in mortgage-backed securities, including loans backed by the Department of Veterans Affairs.Over the past couple years, some lenders have rapidly churned veterans through unneeded refinances, according to Ginnie Mae and other regulators. That process can increase lenders' profits but result in fees or higher loan balances for veterans who may not understand the repercussions while driving up rates for other borrowers, Ginnie Mae says. Under the restrictions, NewDay and Nations Lending can still issue Ginnie Mae-backed securities but only in "custom pools" that aren't mixed with loans from other lenders. Those bespoke securities are likely to get worse prices from bond investors. NewDay said in a statement that it would continue to issue Ginnie securities in custom pools, that many of its borrowers can't get loans elsewhere and that it doesn't churn loans. "Policy changes recommended by Ginnie Mae will do virtually nothing to stop the unprincipled practice of veteran loan churning, but in all likelihood will force the elimination of much-needed benefits and financial services for tens of thousands of veterans — especially those veterans struggling with poor credit," NewDay said in the statement.
Clayton Homes backs HUD's call to ease standards for mobile homes — The dominant player in manufactured housing, Clayton Homes, is supporting the Department of Housing and Urban Development's review of construction and safety standards on manufactured homes. In a sign that it was considering easing standards to boost manufactured housing growth, HUD announced the review in January and invited industry comments. John Weldy, Clayton Homes' director of engineering, said in the company's comment letter that the current constructions standards are overly restrictive. "Our company is concerned that HUD’s Office of Manufactured Housing Program has developed in a manner that has increased the costs of operating in the industry without providing a commensurate benefit to consumers," Weldy wrote. "Some of HUD’s expansion of regulatory programs has stepped into state functions, reinterpret regulations in ways that are at odds with long-standing and accepted building practices, and implemented regulations and guidelines that unnecessarily limit consumer choice and increase costs." Manufactured homes account for 10% of single-family dwellings, with 22 million people living in factory-built homes. "I believe one of the biggest things that we can do for rural housing is to eliminate the huge regulatory burdens that we have on manufactured housing," HUD Secretary Ben Carson said at a Senate Banking Committee hearing last month. "This is an area that has been under-utilized and will provide tremendous advantages for us in the future."Carson told the senators that some of the regulations on manufactured homes are "ridiculous.""So we are inspecting all of those regulations and getting rid of a lot of them," he said. But housing advocates are concerned HUD may go too far and undermine the quality of manufactured housing.
Black Knight Mortgage Monitor for February --Black Knight released their Mortgage Monitor report for February today. According to Black Knight, 4.30% of mortgages were delinquent in February, up from 4.21% in February 2017. The increase was primarily due to the hurricanes. Black Knight also reported that 0.65% of mortgages were in the foreclosure process, down from 0.93% a year ago.This gives a total of 4.95% delinquent or in foreclosure. Press Release: Black Knight’s Mortgage Monitor: Tappable Equity Sees Greatest Calendar-Year Rise on Record, Increasing $735 Billion in 2017; HELOC Market Share Poised to Rise This month, Black Knight revisited the nation’s equity landscape, finding that as home prices continued to increase so has the amount of tappable, or lendable, equity available to Americans with mortgages. Black Knight defines tappable equity as the total amount of equity a homeowner with a mortgage has available to borrow against before reaching a maximum loan-to-value ratio (LTV) of 80 percent. As Black Knight Data & Analytics Executive Vice President Ben Graboske explained, rising home prices have pushed the total amount of such equity to a record high. “As home prices continued their upward trajectory at the national level, the amount of tappable equity available to homeowners with mortgages continued to rise as well,” said Graboske. “Tappable equity rose by $735 billion over the course of 2017, the largest dollar-value calendar year increase on record. At $5.4 trillion, total tappable equity is also the highest on record and 10 percent above the previous, pre-recession peak in 2005. An estimated $262 billion in tappable equity was withdrawn in 2017 via cash-out refinances and home equity lines of credit (HELOCs), also reaching a new post-recession peak. This graph from Black Knight shows the Black Knight's estimate of "tappable equity". There is much more in the mortgage monitor.
Unable To Prove They Own Their Homes, Puerto Ricans Denied FEMA Help - José López doesn't have a deed for the little house at the edge of a dairy farm where he was raised and still lives — only the stories his grandfather told him about how the house came to be. It began with an agreement between gentlemen 39 years ago. His grandfather, a foreman on the farm, needed a house for his recently divorced daughter, López's mother. So he asked the farm's owner if he could have a little corner of the sprawling estate to build her one. "My grandfather worked on the farm for 44 years," López said, "and his boss was a good man. He said yes." In the four decades since, the family kept the modest house up – adjusting the floorplan, rebuilding the balcony. "But Hurricane Maria wiped that away," López said. He knew the storm would be a monster. He didn't expect it to tear off the roof. He covered the gaping hole using wood pallets, tarps, and recycled sheet metal. Then a week after the storm, he climbed the hill behind the house in search of cell reception. Using his phone, he filled out an application for help from the Federal Emergency Management Agency, hoping for a grant to repair the roof quickly. But six months after Hurricane Maria devastated this island commonwealth, he says FEMA has yet to approve his application. "They say I have to justify why I don't have title to the house," he said. "But back then, when people made agreements, all that mattered was their word and a handshake." Puerto Rico still has huge challenges ahead, key among them the task of repairing hundreds of thousands of homes that the hurricane damaged or destroyed. One impediment to that goal is the fact that FEMA has denied many families crucial federal repair grants because, like José López, they've been unable to prove ownership of their homes.
Brutal choice in Houston: sell home at a loss or face new floods — When Hurricane Harvey struck Houston, floodwaters swept through Eileen and Jeff Swanson’s two-story brick home, blanketing the first floor in muck and nearly destroying a domestic existence 12 years in the making. Their china cabinet, in the family for three generations, was reduced to a sodden mess. A couch, once a soft red, had blushed into a watery burgundy; the carpet squished like grass at the bottom of a marsh. A dirty foot-high water line ran wall to wall, marking the local crest of an event that the National Weather Service called “the most significant tropical cyclone rainfall event in United States history.”After the floodwaters receded, the Swansons returned to a house ravaged, endless questions, few answers — and a looming decision.They are not alone. Hundreds of homeowners in Canyon Gate at Cinco Ranch, a quiet subdivision in a west Houston suburb, are mired in a slow, frustrating effort to rebuild. Others have formed an uneasy exodus, their attachment to familiar places and routines irreparably battered by a storm that dumped 50-plus inches and caused widespread flooding. They are now selling their gutted homes at well below pre-storm prices.The fundamental decision — stay or go — is one being faced by h omeowners all around the Houston area. As climate change increases the frequency and intensity of storms like Harvey, no neighborhood is immune from being flooded again. But the Swansons and other homeowners in Canyon Gate face a far more certain prospect: Their neighborhood is on land that was designed to be flooded. It is part of a reservoir that was built by the United States Army Corps of Engineers in the 1940s to prevent catastrophic flooding downtown, a fact that developers did little to publicize when they built Canyon Gate in the 1990s.
Warren Buffett Is Now America's No. 2 Real-Estate Broker -- Warren Buffett's Berkshire Hathaway is swallowing up market share in a business that Buffett said he "hardly noticed" when the company first acquired it in 2000. In light of the paucity of deals Berkshire struck last year, Buffett devoted ample space in this year's annual report to touting the success of Berkshire's HomeServices of America, which Buffett lauded for its rapid, if long overlooked, expansion over the past decade...I have told you several times about HomeServices, our growing real estate brokerage operation. Berkshire backed into this business in 2000 when we acquired a majority interest in MidAmerican Energy (now named BerkshireHathaway Energy). MidAmerican’s activities were then largely in the electric utility field, and I originally paid littleattention to HomeServices.But, year-by-year, the company added brokers and, by the end of 2016, HomeServices was the second-largest brokerage operation in the country – still ranking, though, far behind the leader, Realogy. In 2017, however, HomeServices’ growth exploded.We acquired the industry’s third-largest operator, Long and Foster; number 12, Houlihan Lawrence; and Gloria Nilson. With those purchases we added 12,300 agents, raising our total to 40,950. HomeServices is now close toleading the country in home sales, having participated (including our three acquisitions pro-forma) in $127 billion of “sides” during 2017.To explain that term, there are two “sides” to every transaction; if we represent both buyer and seller, the dollar value of the transaction is counted twice.Despite its recent acquisitions, HomeServices is on track to do only about 3% of the country’s home- brokerage business in 2018. That leaves 97% to go. Given sensible prices, we will keep adding brokers in this mostfundamental of businesses. Unfortunately for Buffett, limited supply and inflated valuations are beginning to weigh on purchases, with pending sales down more than 4% year-over-year.
Less mortgage credit available for a challenged housing market - Mortgage credit availability tightened during March to its lowest level in over a year, adding another headwind to a market challenged by rising interest rates and a shortage of homes for sale.The Mortgage Credit Availability Index fell to 177.9 in March from 180.7 in February and from its post-housing bust high point of 183.4 for March 2016. The last time the MCAI was this low was in February 2016, when the index value was 177.8.It is the second consecutive month of tighter mortgage credit availability.This index is calculated by the M ortgage Bankers Association using loan program data in Ellie Mae's AllRegs Market Clarity database."The government MCAI saw the largest decrease which was driven by investors making adjustments to their interest rate reduction offerings for Federal Housing Administration and Veterans Affairs loans," Joel Kan, the MBA's associate vice president of research and economics, said in a press release.
MBA: Mortgage Applications Decrease in Latest Weekly Survey --From the MBA: Mortgage Applications Decrease in Latest MBA Weekly SurveyMortgage applications decreased 3.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 30, 2018.
.. The Refinance Index decreased 5 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 5 percent higher than the same week one year ago. ... The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) remained unchanged at 4.69 percent, with points remaining unchanged at 0.43 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The first graph shows the refinance index since 1990.
Mortgage apps slow prior to home purchase season start -- Mortgage application activity decreased 3.3% from one week earlier as purchase and refinance volume fell prior to the start of the home buying season, according to the Mortgage Bankers Association.The MBA's Weekly Mortgage Applications Survey for the week ending March 30 found that the refinance index decreased 5% from the previous week."Heading into the holiday weekend, mortgage application volume fell a bit both for purchase and refinance volume," said the MBA's Chief Economist Mike Fratantoni in a press release. "Mortgage rates were little changed for the week, despite the increase in financial market volatility." The refinance share of mortgage activity decreased to its lowest level since September 2008, 38.5% of total applications, from 39.4% the previous week.
Homeowners Tapping Equity In Cash-Out Refis, Highest Level Since '08 - As we detailed on Tuesday, the mortgage refis have cratered to levels not seen since December '08 amid a spike in interest (and mortgage) rates. Simply put, the population of borrowers who both qualify for a refi and want one given the higher rates has collapsed. Consequently, the remaining homeowners seeking to refinance are overwhelmingly "cashing out" also known as taking out a new mortgage that's bigger than the remaining balance on the existing one and using the extra money to do sensible things like home improvements maintain their lifestyle. And why not: just look at all that sweet, sweet equity... "When rates are low, the primary goal of refinancing is to reduce the monthly payment,” wrote researchers for the Urban Institute in a recent report. “But when rates are high, borrowers have no incentive to refinance for rate reasons. Those who still refinance tend to be driven more by their desire to cash out.” To better quantify the drop-off in refis, Black Knight reports the recent spike in interest rates cut the population of borrowers with an interest rate incentive to refinance by nearly 40 percent in 40 days.. Virtually all of the decline in potential refinance candidates was among 2009 and later vintages; Fewer than 100K traditional refinance candidates (720+ credit score, <80 percent loan-to-value (LTV) ratio) remain in 2012 and later vintages “As people stay in their homes longer we see people reinvesting in their homes by using equity to update their homes and do repair work,” said Rick Sharga, executive VP for Carrington Mortgage Holdings and an industry veteran (via MarketWatch). "We’ve seen a huge expansion of the types of retirement options people have. One is aging in place and retrofitting your house." In the last go-around, many homeowners “blew the money,” in Sharga’s words, on splashy purchases like vacations and boats. But lenders were complicit too, offering loans that were as much as 120% of the existing value of the home. While homeowners may not be taking Hummer limos to Vegas with their cashed-out home equity "winnings" like idiots of ten-years past, it should be noted that the U.S. savings rate is at crisis lows, credit card debt has gone "completely vertical," and 61% of Americans don't have enough in savings to cover a $1,000 emergency.
"Mortgage Rates Begin April Near 2-Month Lows" --From Matthew Graham at Mortgage News Daily: Mortgage Rates Begin April Near 2-Month Lows Mortgage rates moved lower today as underlying bond markets generally followed a much bigger move in stocks. ...with rates already fairly close to recent lows and with lenders generally holding back ahead of the extended holiday weekend, all it took was that modest improvement in bond markets for mortgage rates to drop to the lowest levels since early February. [30YR FIXED - 4.5%]
CoreLogic: House Prices up 6.7% Year-over-year in February -- The CoreLogic HPI is a three month weighted average and is not seasonally adjusted (NSA). From CoreLogic: CoreLogic Reports Home Prices Rose 6.7 Percent Year Over Year, Increasing for the Seventh Consecutive Month in February CoreLogic® ... today released the CoreLogic Home Price Index (HPI™) and HPI Forecast™ for February 2018, which shows home prices rose both year over year and month over month. Home prices increased nationally year over year by 6.7 percent — from February 2017 to February 2018 — and on a month-over-month basis, home prices increased by 1 percent in February 2018 — compared with January 2018 — according to the CoreLogic HPI.Looking ahead, the CoreLogic HPI Forecast indicates that the national home-price index is projected to continue to increase by 4.7 percent on a year-over-year basis from February 2018 to February 2019, with California leading the climb at a forecasted 10.3 percent year-over-year change. The CoreLogic HPI Forecast is a projection of home prices that is calculated using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state. “A number of western states have had hot housing markets,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Idaho, Nevada, Utah and Washington all had home prices up more than 11 percent over the last year. With the recent rise in mortgage rates, affordability has fallen sharply in these states. We expect home-price growth to slow over the next 12 months, dropping to 5 to 6 percent in Idaho, Utah and Washington, and slowing to 9.6 percent in Nevada.”
How Much Income You Need To Afford the Average Home In Every State - The housing market has not only recovered its pre-recession levels, but some observers are actually starting to worry about yet another housing bubble. Housing prices are on the rise, thanks in large part to extremelytight inventory, so it’s worth asking: are potential home buyers getting priced out of the market? The answer depends on where they live and how much money they make. HowMuch.net collected average home prices for every state from Zillow which we then plugged into a mortgage calculator to figure out monthly payments. Remember, mortgage payments consist of both the principal and the interest for the loan. The interest rate we used varied from 4 to 5% in each state, depending on the market. The lower the interest rate, the lower the monthly payment. To keep things simple, we assumed buyers could contribute a 10% down payment. Another thing to keep in mind is that financial advisors commonly recommend the total cost of housing take up no more than 30% of gross income (the amount before taxes, retirement savings, etc.). Using this rule as our benchmark, we calculated the minimum salary required to afford the average home in each state.
These are the ways student loans stop people from buying a house - Student loan debt has become a major barrier to home ownership in America. Some 45 million people in the United States carry student debt. The average borrower owes more than $30,000, according to Student Loan Hero, a website for managing education debt. Almost a fifth owe more than $100,000, according to the National Association of Realtors. People's monthly student loan payments can eat up a large slice of their income, threaten to push down their credit scores and make saving nearly impossible — all huge impediments, of course, to landing in a house. For every 10 percent in student loan debt a person holds, their chance of home ownership drops between 1 and 2 percentage points during their first five years after school, according to the Federal Reserve. More than 80 percent of people ages 22 to 35 with student debt who haven't bought a house yet blame their educational loans, according to the National Association of Realtors. "Student loan debt holders do want to own a home, that's part of their American dream," said Jessica Lautz, managing director of survey research at the National Association of Realtors. "It's just really hard to get there right now."
People have stopped paying their mobile home loans, and it’s a warning sign for the economy - The mobile-home market is showing signs of stress. The delinquency rate on mobile-home loans has increased by 200 basis points, or 2 percentage points, over the past year, according to research cited by UBS. The 30-day-plus delinquency level is now about 5%, the highest level since 2005. The increase in the number of struggling mobile-home borrowers suggests that a large chunk of these people haven't benefitted from the economic growth of the past few years, despite the low unemployment level. "We interpret this data to mean that these individuals have not largely benefitted from these macro-dynamics, and may also be disproportionately exposed to industries that have experienced compression — rather than expansion — in the current economic conditions, such as retail or some areas of energy extraction," UBS said. Conventional single-family residential loan delinquencies haven't seen a similar uptick, instead continuing their steady downward path through the post-recession recovery.This data represents a piece of a jigsaw puzzle of the condition of consumer finances in the US. And the picture that's emerging, according to UBS, is of a two-speed economy, with lower-income consumers and younger borrowers with substantial student debt moving at a slower pace than more affluent and established participants.
Construction Spending increased 0.1% in February -- Earlier today, the Census Bureau reported that overall construction spending increased in February: Construction spending during February 2018 was estimated at a seasonally adjusted annual rate of $1,273.1 billion, 0.1 percent above the revised January estimate of $1,272.2 billion. The February figure is 3.0 percent above the February 2017 estimate of $1,235.7 billion. Private spending increased and public spending decreased in February: Spending on private construction was at a seasonally adjusted annual rate of $982.0 billion, 0.7 percent above the revised January estimate of $974.8 billion. ... In February, the estimated seasonally adjusted annual rate of public construction spending was $291.1 billion, 2.1 percent below the revised January estimate of $297.4 billion. This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted. Private residential spending has been increasing, but is still 21% below the bubble peak. Non-residential spending is 8% above the previous peak in January 2008 (nominal dollars). Public construction spending is now 11% below the peak in March 2009, and 11% above the austerity low in February 2014. The second graph shows the year-over-year change in construction spending. On a year-over-year basis, private residential construction spending is up 5%. Non-residential spending is up 1% year-over-year. Public spending is up 2% year-over-year. This was below the consensus forecast of a 0.5% increase for February, however spending for the previous two months was revised up.
Construction activity stalls, with implications for freight markets - Construction activity remained essentially flat for the second consecutive month, as the sector looks to gain some footing heading into the spring home buying season. The Census Bureau reported yesterday that the total value of construction put into place in the economy rose by 0.1% in February to a seasonally adjusted annualized level of $1.27 trillion. This fell well short of consensus expectations of a 0.5% gain as year-over-year growth fell to 3.0%. Much of the disappointment in yesterday’s report stemmed from the public sector, as spending on infrastructure projects fell during the month. In the private sector, construction of both single and multi-family housing actually posted solid gains in February and remain on a general upward trend headed into the 2nd quarter. Construction on building improvements continued to struggle, however, declining for the second consecutive month. The amount of construction spending in the economy affects freight markets in a number of ways. Construction of new houses, office buildings, factories, and other commercial buildings typically involves the use of heavy machinery for grading the land before construction begins. Lumber and other building materials are then transported to the building site to begin construction. Both of these movements typically benefit flatbed carriers. Dry vans and LTL carriers typically benefit from the later stages of construction, as flooring material, appliances, and home or office furniture is transported to the building site.Private residential construction activity is highly seasonal, with construction spending on new homes and improvements typically ramping up in February and March to have homes ready for show during peak buying season in the housing market during the spring and early summer months. In addition, carriers benefit from the amount of spending on public infrastructure projects, particularly on highway and street expansions and improvements. Highway construction spending has generally declined over the past couple of years, with the trend continuing in February.
Fed: Q4 2017 Household Debt Service Ratio Increasing from Very Low Level --The Fed's Household Debt Service ratio through Q4 2017 was released on today: Household Debt Service and Financial Obligations Ratios. I used to track this quarterly back in 2005 and 2006 to point out that households were taking on excessive financial obligations.
These ratios show the percent of disposable personal income (DPI) dedicated to debt service (DSR) and financial obligations (FOR) for households. Note: The Fed changed the release in Q3 2013.The household Debt Service Ratio (DSR) is the ratio of total required household debt payments to total disposable income. The DSR is divided into two parts. The Mortgage DSR is total quarterly required mortgage payments divided by total quarterly disposable personal income. The Consumer DSR is total quarterly scheduled consumer debt payments divided by total quarterly disposable personal income. The Mortgage DSR and the Consumer DSR sum to the DSR. The graph shows the Total Debt Service Ratio (DSR), and the DSR for mortgages (blue) and consumer debt (yellow).The overall Debt Service Ratio increased slightly in Q4, and has been moving up slowly from the recent record low. Note: The financial obligation ratio (FOR) also increased slightly in Q4.The DSR for mortgages (blue) are near the low for the last 38 years. This ratio increased rapidly during the housing bubble, and continued to increase until 2007. With falling interest rates, and less mortgage debt (mostly due to foreclosures), the mortgage ratio has declined significantly. The consumer debt DSR (yellow) has been increasing for the last five years.This data suggests aggregate household cash flow has improved significantly since the great recession, but has started to decline slightly recently.
America's Credit-Card Fueled Spending Spree Hits A Brick Wall - Last month was bad, this month it's the worst it's been in almost five years. Exactly one month ago we showed that after the record debt-fueled spending spree in late 2017, US credit card usage in the first month of 2018 posted a sharp slowdown even as auto and student loan issuance maintained its feverish "drunken sailor" spending pace. Well, fast forward to today, when according to the latest NY Fed consumer credit report, the tapped out US consumer, whose personal savings rate recently hit an all time low, America's credit card-fueled spending binge just hit a brick wall as total consumer credit was one of the lowest in the past three years. Of note, with only $148 million in additional credit card borrowings in the month of February, this was the weakest month in revolving credit growth going back almost five years, to November 2013, the last month in which credit card borrowing declined (with the exception of the December 2015 series revision). Still, even with the nominal increase of just $0.1BN, total revolving credit rose to a new all time high of $1.031 trillion. The silver lining was to be found in the non-revolving credit data set - used to pay for just two things, autos and "college" - which with the exception of one definition change month, has not gone down since 2011, also hit a new all time high of $2.836 trillion, following the latest monthly increase of $10.6 billion, which however was also a slowdown to recent trends, and the lowest since September 2016. What about its components? With everything else going for record highs, if at a far slower rate, we doubt it will be a surprise to anyone that both student debt and auto loans hit a new all time high in the quarter ending December 2017, with $1.491 trillion for the former, and $1.12 trillion for the latter (the next monthly update will take place next month, when the Q1 data is released). Credit and auto loan debt aside, the sharp slowdown, and borderline negative print, in credit card debt is the latest red flag for the US economy, which as a reminder ended 2017 with a record 13-week annualized surge in credit-funded spending.
Consumer delinquencies decline as job market improves -More U.S. consumers are keeping up with their loan payments as they enjoy a boost from the strong economy.During the fourth quarter of last year, late-payment rates at banks declined in nine out of the 11 consumer loan categories tracked by the American Bankers Association, according to seasonally adjusted data released Wednesday.The improved performance, in comparison with the third quarter of 2017, spanned auto loans, personal loans, home equity loans and credit cards. The percentage of credit card borrowers who were at least 30 days late fell to its lowest level in three and a half years. ABA Chief Economist James Chessen attributed the stronger credit performance to improvements in the U.S. labor market.“It’s rare to see delinquencies fall in nearly every category,” he said in a press release. “The steady creation of new jobs has been essential to keeping delinquencies low, and we’ve seen more than 10 million jobs filled in the past four jobs.”“Greater job stability and increased take-home pay have allowed consumers to make more purchases while keeping balances low relative to their income,” Chessen added.The fourth-quarter data looked good in part because it was immediately preceded by a comparatively weak report. In the third quarter of 2017, an index of late-payment rates for eight closed-end loan categories hit its highest level in more than four years, though it remained well below its 15-year average.The ABA uses a quarterly survey of banks to track trends in consumer credit performance. During the fourth quarter, home equity lines of credit were one of two categories in which a larger percentage of borrowers were delinquent.
For The First Time Ever, Younger Americans Are Less Optimistic Than Their Parents -- Superficially, last week's University of Michigan consumer confidence report could not have been better: rising above 101, it was the highest number since 2004 (even if it was driven entirely by rising optimism from poorer households, while those in the top third have started to lose faith in Trumponomics). However, less noted among the various survey questions was one troubling finding: for the first time in history, Americans younger than 35 are less optimistic, - and have less confidence in the economy - than older Americans, those aged 55 and over, which includes their parents. As the Deutsche Bank chart below shows, this has never happened in the 60 years the University of Michigan has been collecting data. This stark reversal in outlooks is hardly a surprise: as MartkWatch notes, Millennials shoulder more student loan debt than any other generation and face house prices that are far higher than their parents did at their age. Student loan debt has reached $1.4 trillion as the cost of college has soared. Meanwhile, spending "only" 30% of their income on rent or a mortgage, a golden rule for decades, is near-impossible for most young Americans. While many are quick to blame "selfish" Boomers for creating the perfect storm for their offspring and future generations, Americans appear - at least on paper- to be concerned about the economic prospects of those who come after them, even if the numbers don't look good. As MarketWatch reminds us, a 2017 Pew study found that just 37% of Americans believe today’s children will grow up to be better off financially than their parents: roughly 49% of 18- to 29-year-olds believe that the next generation will be worse off, while more than half, or 61% of Americans aged 50 and over believe the next generation will be worse off.
Big box stores are dying. What do we do with all the bodies? - On March 15, Toys ‘R’ Us announced that, without a Hail Mary influx of cash, the beloved chain will be closing, leaving its 800-odd American storefronts vacant. For millennials and younger generations, big box stores have always existed as part of the country’s landscape, but at one time they were a radical invention. Instead of keeping most of the inventory sealed off in storage, big box stores put the wares—all of them—on display. It’s difficult to pinpoint the origins of this architectural style, but experts point to 1962 as a watershed year, with the first Walmart, Target, and Kmart stores opening up within a few months of each other. To fully promote their wares, these companies required voluminous and largely undivided retail space, with high ceilings that allowed stock clerks to stack seemingly endless supplies. Outside, they needed big parking lots to fit all their customers, and easy access to highways, to keep car-centric shoppers close. For decades, these big box retailers thrived, gobbling up smaller stores that couldn’t compete with the diversity and abundance of wares. But the rise of online retail has changed all that. Instead of driving to a big box store, our purchases come directly to us. As a result, 2017 saw a record-breaking 6,700 store closures, including big box stores like Kmart and more speciality retail outlets like Teavana. The Toys ‘R’ Us shutdown shows things are only getting worse for big box companies. Now, architects, urban planners, and activists are asking: What becomes of these big, empty storefronts and their sprawling parking lots now that the companies inside have closed down or moved on?
Mall Vacancies Reach Six-Year High as Retail Slump Batters Local Economies” [Wall Empty space in regional shopping malls reached a six-year high in the first quarter, adding further stress to regions being hit by a retail earthquake that is shaking up the job market across the U.S.The vacancy rate in big U.S. malls increased to 8.4% in the first quarter of 2018, up from 8.3% in the fourth quarter and the highest since the fourth quarter of 2012, according to real-estate data firm Reis Inc., which studies 77 metropolitan areas. Meanwhile, neighborhood and community shopping centers in 41 of the 77 areas experienced an increase in vacancy during the 12 months ending on March 31.The numbers show that bricks-and-mortar malls and shopping centers continue to be hurt by shifting consumer spending patterns, particularly the increasing use of online retail. Numerous department stores and other retailers that traditionally have been mainstays of shopping areas have been contracting or have failed. Reis reported that retailers occupied 453,000 more square feet of shopping center space at the end of the first quarter than the fourth quarter of 2017, but that amount of “absorption” was the lowest for any quarter in more than five years. The completion of 712,000 square feet of new shopping center space also was “much lower” than average, Reis said.The weakness in the retail real-estate sector comes at a time of overall growth in the U.S. economy. Store and shopping center closings have been particularly painful to small cities that have been reliant on the sector for jobs and taxes. The trend is attracting increasing scrutiny from elected officials. State governments have been enacting new laws to require Amazon.com Inc. and others to collect sales tax on online purchases so physical stores aren’t disadvantaged.
Brick & Mortar Retail Meltdown, March Update Wolf Richter - March was a busy month for the brick-and-mortar retail meltdown which kicked off in 2015 and has since picked up speed. We’ve followed this progression from the early days. This year, there was a brutal January, an even more brutal February, and here’s March.
- Southeastern Grocers, parent of Winn-Dixie, filed for bankruptcy on March 28. It’s buckling under its debts. Its creditors have agreed to restructure some of this debt in return for equity, which will reduce the debt by $500 million. The company has also secured new financing once it emerges from bankruptcy. In the Chapter 11 filing, it said it plans to continue operating over 580 stores in Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina, and South Carolina. On March 14, when the company initially had announced bankruptcy plans, it also said that it would close 94 of its stores.
- Michaels Companies, largest US crafts retailer with about 1,300 stores in the US and Canada, announced on March 22 that it would shutter all its 94 Aaron Brothers framing and art supplies stores. It will offer custom framing in its Michaels stores. The whole thing should be wrapped up by July 31.
- Claire’s Stores filed for Chapter 11 bankruptcy on March 19, suffocating under $1.9 billion in debt. The youth-oriented jewelry and hair accessories retailer has 7,500 stores that also offer ear piercing, which was supposed to be its strategy to fight off online sales, but it wasn’t enough. Mall traffic had fallen 8% year-over-year, the debt was too high, and interest expenses ate up $183 million a year, chief financial officer Scott Huckins lamented in the court papers.
- Toys “R” Us filed for liquidation, it announced on March 15. The toy retailer, which had filed for Chapter 11 bankruptcy last September, will close all its 735 stores in the US and liquidate their inventory. The prospects of liquidation started becoming clear earlier in March. Shuttering the US operations will destroy about 33,000 jobs over the next few months. And it puts a lot of retail space on the market that may be worth “little or nothing,” and holders of Toys “R” Us commercial mortgage backed securities are bracing for losses.
- Bon Ton stores faces liquidation if it cannot find a buyer, according to its bankruptcy court proceedings on March 12, in which the company set out the rules for an auction of its business as a going concern. The regional department store chain based in Pennsylvania had filed for bankruptcy in February, after discussions with its creditors about restructuring its debts had collapsed. Now the bondholders are clamoring for asset liquidation, hoping to get some of their money back. If there is no bid that satisfies the court and the creditors, Bon Ton will likely be forced into liquidation.
- Guitar Center is buckling under its debts. The company calls itself “the largest musical instrument retailer in the world,” and opened as it says “its 262nd location” with its Times Square flagship store in Manhattan in 2014 while it was still in PE-firm driven expansion mode. In addition, it operates 120 stores specializing in band and orchestral instruments.
Hackers Steal Credit Card Information for More Than 5 Million Saks Fifth Avenue, Lord & Taylor Shoppers - A massive data breach hit the Saks Fifth Avenue and Lord & Taylor retail chains, compromising the credit and debit card information for more than 5 million shoppers. Hackers stole the personal financial information from more than 5 million customers who visited the stores from May 2017 to now, according to Gemini Advisory, a cybersecurity firm. About 125,000 of these records were put up for sale on the dark web, the firm said, adding that it “is amongst the biggest and most damaging ever to hit retail companies.” The data breach also hit Saks Off Fifth stores. All of the U.S. locations of the retail chains have been compromised, the company said, with the majority of stolen credit card information coming from stores in New York and New Jersey. Hudson’s Bay Company, which owns both retail chains, released a statement Sunday about the data breach, noting that it does not impact shoppers who bought items on digital platforms. “We wanted to reach out to our customers quickly to assure them that they will not be liable for fraudulent charges that may result from this matter,” the company said. “We have identified the issue, and have taken steps to contain it.” Hudson’s Bay Company said it will notify customers as it gets more information. It also advised them to review their credit and debit card accounts to monitor for unusual transactions or activity. The company did not say how many stores or customers were compromised.
U.S. Light Vehicle Sales increase to 17.5 million annual rate in March - Based on a preliminary estimate from AutoData, light vehicle sales were at a 17.48 million SAAR in March.That is up 4.5% year-over-year from March 2017, and up 3.0% from last month. This graph shows the historical light vehicle sales from the BEA (blue) and an estimate for March (red, light vehicle sales of 17.48 million SAAR from AutoData).This was above the consensus forecast for March.Note that the increase in sales at the end of 2017 was due to buying following the hurricanes.Sales will probably decline again in 2018 after setting a new sales records in both 2015 and 2016. The second graph shows light vehicle sales since the BEA started keeping data in 1967. Note: dashed line is current estimated sales rate.
Annual Vehicle Sales: On Pace to be Unchanged in 2018 --Through March, light vehicle sales are on pace to be unchanged in 2018 compared to 2017. This would still make 2018 tied with 2017 for the fourth best year on record after 2016, 2015, and 2000. My guess is vehicle sales will finish the year with sales lower than in 2017. A small decline in sales this year isn't a concern - I think sales will move mostly sideways at near record levels (however there is concern about the impact of tariffs). As I noted last year, this means the economic boost from increasing auto sales is over (from the bottom in 2009, auto sales boosted growth every year through 2016).This graph shows annual light vehicle sales since 1976. Source: BEA.
GM Scraps a Standard in Sales Reporting - General Motors Co. is abandoning its decades-old practice of reporting monthly auto sales, saying a 30-day period doesn’t provide an adequate snapshot of the company’s complex business or the broader industry.The move by the nation’s top auto seller will likely disrupt the industry’s collective attempt to give analysts, economists and investors a broad view of one of America’s bedrock businesses and a consistent bellwether for consumer behavior. With the exception of Tesla Inc. and a few other exotic or niche auto makers, every car company discloses detailed monthly sales figures.“Thirty days is not enough time to separate real sales trends from short-term fluctuations in a very dynamic, highly competitive market,” GM sales-operations chief Kurt McNeil said in a statement. GM said it would continue to disclose that data at the end of each quarter, much like Tesla does. The quarterly reports “will make it easier to see how the business is performing,” Mr. McNeil said. Several independent outlets and government agencies are likely to continue estimating monthly sales for the industry, or reporting data later in the month. The move, however, could prompt other large auto makers to eventually follow suit, but the entire industry—including GM—is expected to report March sales Tuesday. Many years ago, auto makers reported sales on a 10-day basis, but also backed away from that practice. Large companies in other big sectors have stopped disclosing monthly sales, including several retailers. Target Corp. discontinued the practice in 2012. Walmart Inc. stopped reporting them a decade ago. GM under Chief Executive Mary Barra has played down the sales scoreboard while posting record profits. Industry watchers rely on monthly sales figures to analyze the sector and individual companies, said IHS Markit analyst Stephanie Brinley. Still, she agrees with GM’s premise that the numbers often lack context.
Automakers hope to avoid market disruption in the latest Trump vs. California fight: A possible clash between the U.S. government and California over future fuel-economy standards raises the knotty question of whether automakers one day might have to build two different sets of the same vehicles for various parts of the nation. Even though automakers pushed the Trump administration to loosen standards, they will work to avoid such a costly and complicated scenario — one that probably would lift vehicle sticker prices as the companies pass some of those costs along to consumers — analysts said Friday. "Automakers do not want to build two sets of cars, for sure," said Jessica Caldwell, director of industry analysis at Edmunds.com. Still, there's a good chance that the Environmental Protection Agency and California could be locked in court for years over the EPA's expected plan to scale back mileage targets that the Obama administration had drafted in tandem with California.The targets aimed to boost average fuel economy for passenger cars and sport utility vehicles to 55 miles per gallon by 2025. But the agency plans to replace those targets with a weaker standard that would be unveiled soon, according to people familiar with the plans.Officials in California, whose standards have been adopted by a dozen other states, vowed to challenge any rollback by EPA chief Scott Pruitt."California has its own authority under the Clean Air Act to fight pollution," Sen. Dianne Feinstein (D-Calif.) said in a statement Friday. "I fully support California, the largest auto market in the country, to use that authority to retain the achievements being made that will likely result in fuel efficiency of more than 50 mpg by 2025."The EPA's plan "will create confusion for the industry because manufacturers will have to meet two separate standards," Feinstein said. "The years of litigation and investment uncertainty will be far harder on the auto industry than simply living up to the fuel-economy standards they once embraced." Assuming California prevailed in court, "if we got to two standards, the consumer is going to suffer,"
U.S. Heavy Truck Sales up Year-over-year in March --- The following graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the March 2018 seasonally adjusted annual sales rate (SAAR). Heavy truck sales really collapsed during the great recession, falling to a low of 181 thousand in April and May 2009, on a seasonally adjusted annual rate basis (SAAR). Then sales increased more than 2 1/2 times, and hit 480 thousand SAAR in June 2015. Heavy truck sales declined again - probably mostly due to the weakness in the oil sector - and bottomed at 364 thousand SAAR in October 2016. With the increase in oil prices over the last year, heavy truck sales increased too. Heavy truck sales were at 455 thousand SAAR in March, down from 475 thousand in February, and up from 391 thousand in March 2017.
Heavy-Duty Truck Orders Hit a Record Pace – WSJ --Trucking companies ordered big rigs at a record pace in the first quarter, racing to meet growing demand in a red-hot U.S. freight market. Fleets ordered 133,900 heavy-duty trucks in the first three months of the year, nearly double the orders from the first quarter of 2017, analyst group FTR said in a report released Tuesday. The report included final numbers for January and February and a preliminary estimate of 46,300 new orders in March. The ordering extends a strong move to build up trucking capacity that began in the middle of last year as the U.S. economy picked up steam. Fleets “are getting calls to move shipments and they can’t do it because they don’t have the capacity,” said Don Ake, FTR’s vice president for commercial vehicles, in an interview Wednesday, adding, “The last three months, they’re ordering trucks and trailers like crazy to try and get the capacity.” ACT Research, another transportation equipment analysis group, said in a separate report Tuesday that it counted 46,900 orders for heavy-duty Class 8 trucks—the big rigs that haul goods mostly between cities—more than double the orders from a year ago. Trucking-industry figures suggest orders for new vehicles are lagging behind growing U.S. freight demand, however. DAT Solutions LLC, which matches available loads to trucks in the spot market, says shipments on its “load board” rose 27% from February to March while the number of trucks available increased only 14%. The gap between demand and capacity has led truckers to charge higher prices, giving fleet owners more cash to replace older vehicles and greater confidence in future demand. DAT says average rates on the spot market were up nearly a third in March from the same month a year ago.
Drivers need to get paid twice as much, says OOIDA president Todd Spencer” -- FreightWaves recently ran a story about ATA senior vice president Bob Costello speaking on the shortage of truck drivers and how the industry would grapple with a reality that looks increasingly grim every year. He had refuted the claim of the Department of Labor that lists the number of trucking-centric drivers to be 864,000 but rather estimated it to be around 500,000. And since the industry ran with an estimated 50,000 drivers short last year, Costello believes the situation is more ominous than it looks. Todd Spencer, the president of OOIDA, mirrored the views of Costello and extended his reasons for the shortage while talking on a Fox Business segment yesterday. “Pay for truck drivers has been falling for three decades, while the demand and the responsibility to the job are going exactly the opposite,” he said. “It will always be difficult to find people to do jobs that are hard, that doesn’t really pay much.”Driver pay has indeed been slumping for three decades. The average trucker wage was $38,618 annually in 1980 and if it is adjusted to the present, would be over $111,000 a year. But as Spencer points out, the average wage today as estimated by the Department of Labor is a paltry $41,000, which is nearly a third of what a trucker needs to draw, considering the inflation over the years.The buck does not stop here. Drivers in the trucking industry are among the hardest toiling working class, with weeks that range between 70 to 80 hours on the road. Spencer believes that “the trend hasn’t really changed,” and for a job that pays less while demanding incredibly long work weeks, it does not come as a surprise that drivers are hard to come by. “Much of the time is spent on the road away from families, gone for weeks at a time, and sometimes even months,” said Spencer. “Those are the kind of jobs that people will look to replace and again, that is what has been going on.”
Transportation Tragedies Shine Light on Pedestrian Infrastructure Needs -- Two transportation-related tragedies in recent weeks -- the collapse of a bridge in Miami and the death of a woman in Arizona who was struck by an autonomous Uber car -- have shined a light on the challenges of deploying new infrastructure technologies. But the two incidents also highlighted something else, according to many safety advocates: the inadequacies of legacy designs when it comes to pedestrians.And they come as pedestrian deaths have been climbing. The Governors Highway Safety Association estimates there were 6,000 pedestrian deaths in 2017. That's essentially unchanged from the year before -- but 2016 saw a higher level of pedestrian deaths than the country had seen in 25 years. In Tempe, Ariz., an autonomous vehicle from Uber struck and killed a pedestrian while going 40 mph on a dark street on March 19. Most of the attention so far has been on Uber’s driverless technology and whether the company was testing that technology responsibly. But some safety advocates have also questioned whether the design of the street itself played a role, because it gave pedestrians no convenient, safe place to cross. The Uber death came just three days after the collapse of a pedestrian bridge in Miami killed six motorists. The Miami tragedy raised a different set of questions about pedestrian infrastructure, but with a similar underlying concern: Was the massive pedestrian bridge being built for the convenience of pedestrians, or for the motorists who traveled under it? Florida International University chose a new technology, called accelerated bridge construction (ABC), to erect its $15 million, 289-foot-long pedestrian bridge. The chief benefit of that approach is that it limits the amount of time the road below needs to be closed to traffic. The pedestrian bridge, though, would not have addressed larger concerns about the safety of Eighth Street, the arterial road that passed beneath it. Seventeen people died on a four-mile stretch of the road between 2007 and 2012, and one FIU student died there just last fall. But local planners were looking for ways to ease congestion -- in other words, speed traffic up even more -- on the major thoroughfare.
China’s Bigger Trade Targets, Trucking’s Recruiting Shortfall and a Divide Over Emissions - Trucking companies and shippers facing tight capacity on the roads shouldn’t expect the problem to end anytime soon. The flow of new truck drivers coming into the business is lagging far behind roaring U.S. freight demand, WSJ Logistics Report’s Jennifer Smith writes, and commercial-driving schools are seeing dimming interest from young recruits despite stepped-up efforts to lure new workers. With unemployment at a nearly two-decade low, the grueling downsides of life behind the wheel make recruitment tough, casting a grim demographic cloud over the business. The average age of a for-hire long-haul trucker rose from 42 years old in 2002 to 49 in 2014, according to the American Trucking Associations. Training schools can end up being costly for recruits, and that may have to change if companies want to build a pipeline of drivers that meets shipping demand. China is firing back at the Trump administration’s latest trade penalties by setting far bigger targets for U.S. goods. Beijing says it will place 25% tariffs on some $50 billion worth of critical American exports, including soybeans, airplanes and autos. The WSJ’s Liyan Qi, Lingling Wei and Kenan Machado write the tariff rate and the sum of goods match an earlier White House proposal that would hit a broader range of goods, including dishwashers, medical equipment and machine tools. The new volleys sharply ramp up the severity of the trans-Pacific trade skirmish and heighten the stakes for both countries. The high-profile targets also raise the pressure on Beijing, leaving China few further options in a trade fight. The U.S. could take months to trigger its tariffs while China didn’t set timing on its retaliatory measures. Maritime’s global shipping regulator is facing a stormy path on the way to new emissions rules. The International Maritime Organization is kicking off high-stakes meetings in London with aims of setting world-wide standards to reduce the industry’s carbon emissions. The WSJ’s Costas Paris reports the IMO faces deep political divisions, with mainly developing countries arguing that strict emission standards will hurt their economies. The politically charged debate may not end at the IMO. Critics say the regulator has moved too slowly since shipping was excluded from the 2015 Paris climate agreement, leaving operators subject to varying rules around the world if different governments take action on their own. Vessel operators will have to comply with whatever final rules there are to stay in business, but the biggest challenge may be figuring out how to pay for the improvements as new standards come into force.
AAR: Rail Carloads Up 3.6% YoY, Best March Ever for Intermodal -- From the Association of American Railroads (AAR) Rail Time Indicators. Intermodal did great in March: container plus trailer volume was up 6.5% (66,151 units) over last year, the 14th straight year-over-year monthly gain. Average weekly intermodal volume in March 2018 was easily the most for any March in history. Total U.S. rail carloads were up 3.6% (36,157 carloads) in March 2018 over March 2017, the best percentage gain in nine months. This graph from the Rail Time Indicators report shows U.S. average weekly rail carloads (NSA). Light blue is 2018. Rail carloads have been weak over the last decade due to the decline in coal shipments. U.S. railroads originated 1,050,653 carloads in March 2018, up 36,157 carloads, or 3.6%, over March 2017. That’s just the second year-over-year monthly gain in the past nine months (December 2017 was the other). Weekly average carloads in March 2018 were 262,663, the most for March since 2014. The second graph is for intermodal traffic (using intermodal or shipping containers): U.S. railroads originated 1,082,239 containers and trailers in March 2018, up 6.5%, or 66,151 units, over March 2017. It was easily the best March in history for U.S. intermodal. For the first three months of 2018, U.S. intermodal volume was up 5.5%, or 181,304 units, over the same period in 2017. At this point, there’s no reason to think this won’t be a record year for intermodal, breaking the record set last year.
February Trade Deficit at $57.59B, An Increase of 1.6% MoM -- The U.S. International Trade in Goods and Services, also known as the FT-900, is published monthly by the Bureau of Economic Analysis with data going back to 1992. The monthly reports include revisions that go back several months. This report details U.S. exports and imports of goods and services. Here is an excerpt from the latest report: The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $57.6 billion in February, up $0.9 billion from $56.7 billion in January, revised. February exports were $204.4 billion, $3.5 billion more than January exports. February imports were $262.0 billion, $4.4 billion more than January imports. Today's headline number of -57.59B was worse than the Investing.com forecast of -56.90B. This series tends to be extremely volatile, so we include a six-month moving average.
Trade Deficit at $57.6 Billion in February -- From the Department of Commerce reported: The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $57.6 billion in February, up $0.9 billion from $56.7 billion in January, revised. ... February exports were $204.4 billion, $3.5 billion more than January exports. February imports were $262.0 billion, $4.4 billion more than January imports. Both exports and imports increased in February. Exports are 24% above the pre-recession peak and up 7% compared to February 2017; imports are 13% above the pre-recession peak, and up 11% compared to February 2017. In general, trade has been picking up. The second graph shows the U.S. trade deficit, with and without petroleum. The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.Oil imports averaged $54.61 in February, down slightly from $54.76 in January, and up from $45.25 in February 2017. The petroleum deficit increased over the last two months, and this is the main reason the overall trade deficit increased in January and February. The trade deficit with China increased to $29.3 billion in February, from $23.0 billion in February 2017. The trade deficit with China was boosted by the timing of the Chinese New Year this year.
US Reports Biggest Trade Deficit Since The Financial Crisis - With so much attention focused on trade data in recent weeks, Trump will hardly be happy to learn that not only did the US trade deficit grow by 1.6% in February from $56.7BN to $57.6BN, missing expectations of a $56.8BN print, but was the highest monthly trade deficit going back ten years, just as the financial crisis was warming up back in 2008. According to the Census Bureau, the deficit increased to $57.6 billion, as imports increased more than exports. Broken down by components, the goods deficit increased $0.3 billion in February to $77.0 billion. The services surplus decreased $0.6 billion in February to $19.4 billion. The good news is that exports of goods and services increased $3.5 billion, or 1.7% , in February to $204.4 billion. Exports of goods increased $3.0 billion and exports of services increased $0.5 billion.
- The increase in exports of goods mostly reflected increases in industrial supplies and materials ($2.0 billion), in automotive vehicles, parts, and engines ($0.9 billion), and in capital goods ($0.7 billion). A decrease in consumer goods ($0.8 billion) partly offset the increases.
- The increase in exports of services mostly reflected increases in transport ($0.2), in travel (for all purposes including education) ($0.1 billion), and in charges for the use of intellectual property ($0.1 billion).
- The bad news is that imports of goods and services increased slightly more in absolute dollar terms, by $4.4 billion, or also 1.7% of total, in February to $262.0 billion. Imports of goods increased $3.3 billion and imports of services increased $1.1 billion.
- The increase in imports of goods mostly reflected increases in capital goods ($1.8 billion), in industrial supplies and materials ($0.8 billion), and in foods, feeds, & beverages ($0.8 billion).
- The increase in imports of services mostly reflected an increase in charges for the use of intellectual property ($1.0 billion), which included payments for the rights to broadcast the 2018 Winter Olympic Games
Broken down by trading partner, the February figures show surpluses, in billions of dollars, with South and Central America ($3.4), Hong Kong ($3.1), Brazil ($0.9), United Kingdom ($0.6), and Singapore ($0.5).Meanwhile, the countries that should be worried they are about to fall in Trump's trade war sights and resulted in a US trade deficit, included China ($34.7), European Union ($15.3), Germany ($6.7), Mexico ($6.6), Japan ($6.0), Italy ($2.8), OPEC ($2.3), India ($1.9), Taiwan ($1.5), France ($1.4), South Korea ($1.1), Saudi Arabia ($0.4), and Canada ($0.4).More importantly, it's not just China: the deficit with Mexico increased $1.0 billion to $6.6 billion in February, while the deficit with Germany increased $0.4 billion to $6.7 billion in February. Meanwhile, the deficit with Canada decreased $1.2 billion to $0.4 billion in February. Finally, if you want to get Trump really mad, tell him that when stripping away petroleum products - which recently saw record US exports thanks to shale - the US trade deficit has never been greater.
U.S. factory orders increase broadly in February (Reuters) - New orders for U.S.-made goods rebounded in February, boosted by strong demand for transportation equipment and a range of other products, pointing to a strengthening manufacturing sector. Factory goods orders increased 1.2 percent, nearly unwinding January’s revised 1.3 percent decline, the Commerce Department said on Tuesday. Economists polled by Reuters had forecast factory orders rising 1.7 percent in February after a previously reported 1.4 percent drop in January. Orders surged 7.9 percent on a year-on-year basis in February. Orders for transportation equipment soared 7.0 percent, lifted by a 26.2 percent jump in the volatile orders for civilian aircraft. There were also increases in orders for machinery, which rose 1.2 percent after slipping 0.2 percent in January. Orders for mining, oil field and gas field machinery climbed 1.8 percent. Orders for motor vehicles shot up 1.5 percent. Orders for electrical equipment, appliances and components surged 3.4 percent while bookings for computers vaulted 3.5 percent. Manufacturing, which accounts for about 12 percent of U.S. economic activity is being supported by strong domestic and global demand, but a shortage of skilled workers and capacity constraints could hurt factory output. A survey on Monday showed a slight ebb in sentiment among manufacturers amid rising concerns over labor shortages and the supply chain. Manufacturers also reported that tariffs on steel and aluminum imports imposed by President Donald Trump in early March were raising prices, “causing panic buying” and “leading to inventory shortages for non-contract customers.” The Commerce Department revised February orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans, to show them rising 1.4 percent instead of the 1.8 percent jump reported last month. Orders for these so-called core capital goods fell 0.3 percent in January. Shipments of core capital goods, which are used to calculate business equipment spending in the gross domestic product report, increased 1.4 percent in February as reported last month.
ISM Manufacturing index decreased to 59.3 in March --The ISM manufacturing index indicated expansion in March. The PMI was at 59.3% in March, down from 60.8% in February. The employment index was at 57.3%, down from 59.7% last month, and the new orders index was at 61.9%, down from 64.2%. From the Institute for Supply Management: March 2018 Manufacturing ISM® Report On Business® “The March PMI® registered 59.3 percent, a decrease of 1.5 percentage points from the February reading of 60.8 percent. The New Orders Index registered 61.9 percent, a decrease of 2.3 percentage points from the February reading of 64.2 percent. The Production Index registered 61 percent, a 1 percentage point decrease compared to the February reading of 62 percent. The Employment Index registered 57.3 percent, a decrease of 2.4 percentage points from the February reading of 59.7 percent. The Supplier Deliveries Index registered 60.6 percent, a 0.5 percentage point decrease from the February reading of 61.1 percent. The Inventories Index registered 55.5 percent, a decrease of 1.2 percentage points from the February reading of 56.7 percent. The Prices Index registered 78.1 percent in March, a 3.9 percentage point increase from the February reading of 74.2 percent, indicating higher raw materials prices for the 25th consecutive month. Comments from the panel reflect continued expanding business strength. Demand remains robust, with the New Orders Index at 60 or above for the 11th straight month, and the Customers’ Inventories Index at its lowest level since July 2011. The Backlog of Orders Index continued a 14-month expansion with its highest reading since May 2004, when it registered 63 percent. Consumption, described as production and employment, continues to expand, with indications that labor and skill shortages are affecting production output. Inputs, expressed as supplier deliveries, inventories and imports, were negatively impacted by weather conditions; Asian holidays; lead time extensions; steel and aluminum disruptions across many industries; supplier labor issues; and transportation difficulties due to driver and equipment shortages. Here is a long term graph of the ISM manufacturing index. This was below expectations of 60.0%, and suggests manufacturing expanded at a slower pace in March than in February.
Markit Manufacturing PMI: "Strongest manufacturing growth for three years" -- The March US Manufacturing Purchasing Managers' Index conducted by Markit came in at 55.6, up from the 55.3 final February figure. Today's headline number was below the Investing.com forecast of 55.7. Markit's Manufacturing PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction. Here is an excerpt from Chris Williamson, Chief Business Economist at IHS Markit in their latest press release: “US factories reported a strong end to the first quarter, with the PMI advancing to a three-year high. The goods producing sector should therefore make a positive contribution to economic growth in the first quarter, as rising demand fueled further improvements in factory production. “Optimism about the year ahead has meanwhile also risen to its highest for three years, generating yet another solid payroll gain and suggesting strong growth momentum will be sustained in the second quarter.” [Press Release]Here is a snapshot of the series since mid-2012.
Manufacturing Input Costs Soar Most In 7 Years, Trump Tariffs Blamed - March's final Manufacturing PMI printed at its highest level since 2015 (though very slightly below its flash print) driven by rises in new orders, output, and surging inflation. However, while the headline data is positive, input costs rose to the greatest extent since November 2012, with companies stating that price rises often stemmed from recently announced tariffs and higher raw material costs. Average prices charged also continued to increase, with the rate of inflation quickening to the fastest since December 2013. ISM Manufacturing confirmed this inflationary surge, with Prices Paid spiking to their highest since April 2011... However, the headline ISM Manufacturing print disappointed, falling (in line with US hard macro data) as PMI rose... In fact only prices paid rose across the ISM subcomponents flashing a stagflationary warning message. Commenting on the final PMI data, Chris Williamson, Chief Business Economist at IHS Markit said: “US factories reported a strong end to the first quarter, with the PMI advancing to a three-year high. The goods producing sector should therefore make a positive contribution to economic growth in the first quarter, as rising demand fueled further improvements in factory production. “Optimism about the year ahead has meanwhile also risen to its highest for three years, generating yet another solid payroll gain and suggesting strong growth momentum will be sustained in the second quarter. “Companies cited rising demand at home and abroad plus recent government policy announcements as helping shore up confidence in terms of their future production levels. “However, recent tariff announcements were already reported to have added to inflationary pressures, and also led to the stockpiling of goods expected to rise further in price in coming months. Input cost inflation consequently hit the highest since 2012.”
ISM Non-Manufacturing Index decreased to 58.8% in March --The March ISM Non-manufacturing index was at 58.8%, down from 59.5% in February. The employment index increased in March to 56.6%, from 55.0%. Note: Above 50 indicates expansion, below 50 contraction. From the Institute for Supply Management: March 2018 Non-Manufacturing ISM Report On Business® "The NMI® registered 58.8 percent, which is 0.7 percentage point lower than the February reading of 59.5 percent. This represents continued growth in the non-manufacturing sector at a slightly slower rate. The Non-Manufacturing Business Activity Index decreased to 60.6 percent, 2.2 percentage points lower than the February reading of 62.8 percent, reflecting growth for the 104th consecutive month, at a slower rate in March. The New Orders Index registered 59.5 percent, 5.3 percentage points lower than the reading of 64.8 percent in February. The Employment Index increased 1.6 percentage points in March to 56.6 percent from the February reading of 55 percent. The Prices Index increased by 0.5 percentage point from the February reading of 61 percent to 61.5 percent, indicating that prices increased in March for the 25th consecutive month. According to the NMI®, 15 non-manufacturing industries reported growth. Despite the slight dip in the NMI® composite index, the non-manufacturing sector enjoyed another month of strong growth in March. The cooling off of the New Orders Index possibly prevented an even stronger reading for the NMI® composite index. The majority of respondents remain positive about business conditions." This graph shows the ISM non-manufacturing index (started in January 2008) and the ISM non-manufacturing employment diffusion index. This suggests slightly slower expansion in March than in February.
Markit Services PMI: Strength Remains in March -- The March US Services Purchasing Managers' Index conducted by Markit came in at 54.0 percent, down 1.9 from the final February estimate of 55.9. The Investing.com consensus was for 54.3 percent. Markit's Services PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.Here is the opening from the latest press release:March survey data indicated a strong expansion in business activity across the U.S. service sector. That said, the growth rate softened from that seen in February and was below the long-run series average. Similarly, the upturn in new business softened from the previous month but was sharp overall. In line with sustained increases in client demand, the rate of job creation accelerated to a seven-month high. Meanwhile, both input price and output charge inflation remained strong and above their respective series averages. [Press Release] Here is a snapshot of the series since mid-2012.
Weekly Initial Unemployment Claims increase to 242,000 --The DOL reported: In the week ending March 31, the advance figure for seasonally adjusted initial claims was 242,000, an increase of 24,000 from the previous week's revised level. The previous week's level was revised up by 3,000 from 215,000 to 218,000. The 4-week moving average was 228,250, an increase of 3,000 from the previous week's revised average. The previous week's average was revised up by 750 from 224,500 to 225,250. Claims taking procedures in Puerto Rico and in the Virgin Islands have still not returned to normal. The previous week was revised up. The following graph shows the 4-week moving average of weekly claims since 1971.
ADP: Private Employment increased 241,000 in March From ADP:Private sector employment increased by 241,000 jobs from February to March according to the March ADP National Employment Report®. ... The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis....“We saw impressive momentum in the first quarter of 2018 with more jobs added per month on average than in 2017,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Midsized businesses added nearly half of all jobs this month, the best growth this segment has seen since the fall of 2014. The manufacturing industry also performed well, with its strongest increase in more than three years.”Mark Zandi, chief economist of Moody’s Analytics, said, “The job market is rip-roaring. Monthly job growth remains firmly over 200,000, double the pace of labor force growth. The tight labor market continues to tighten.”This was above the consensus forecast for 180,000 private sector jobs added in the ADP report. The BLS report for March will be released Friday, and the consensus is for 167,000 non-farm payroll jobs added in March.
First Look at March: ADP Says 241K New Nonfarm Private Jobs -- The economic mover and shaker this week is Friday's employment report from the Bureau of Labor Statistics. This monthly report contains a wealth of data for economists, the most publicized being the month-over-month change in Total Nonfarm Employment (the PAYEMS series in the FRED repository). Today we have the ADP March estimate of 241K new nonfarm private employment jobs, a decrease over February's revised 246K.The 241K estimate came in above the Investing.com consensus of 208K for the ADP number.The Investing.com forecast for the forthcoming BLS report is for 190K nonfarm private new jobs and the unemployment rate to decrease to 4.0%. Their forecast for the March full nonfarm new jobs is (the PAYEMS number) is 195K.Here is an excerpt from today's ADP report press release:“We saw impressive momentum in the first quarter of 2018 with more jobs added per month on average than in 2017,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Midsized businesses added nearly half of all jobs this month, the best growth this segment has seen since the fall of 2014. The manufacturing industry also performed well, with its strongest increase in more than three years.”Mark Zandi, chief economist of Moody’s Analytics, said, “The job market is rip-roaring. Monthly job growth remains firmly over 200,000, double the pace of labor force growth. The tight labor market continues to tighten.” Here is a visualization of the two series over the previous twelve months.
A Closer Look at Today's ADP Employment Report -- In this morning's ADP employment report we got the March estimate of 241K new nonfarm private employment jobs from ADP, a decrease over February's revised 246K. The popular spin on this indicator is as a preview to the monthly jobs report from the Bureau of Labor Statistics. But the ADP report includes a wealth of information that's worth exploring in more detail. Here is a snapshot of the monthly change in the ADP headline number since the company's earliest published data in April 2002. This is quite a volatile series, so we've plotted the monthly data points as dots along with a six-month moving average, which gives us a clearer sense of the trend. As we see in the chart above, the trend peaked 20 months before the last recession and went negative around the time that the NBER subsequently declared as the recession start. At present, the six-month moving average has been hovering in a relatively narrow range around 200K new jobs since around the middle of 2011.ADP also gives us a breakdown of Total Nonfarm Private Employment into two categories: Goods Producing and Services. Here is the same chart style illustrating the two. The US is predominantly a services economy, so it comes as no surprise that Services employment has shown stronger jobs growth. The trend in Goods Producing jobs went negative over a year before the last recession. Interestingly, the Goods Producing jobs have seen an uptick since late 2016.For a sense of the relative size of Services over Goods Producing employment, the next chart shows the percentage of Services Jobs across the entire series. The latest data point is just fractionally below the record high. There are a number of factors behind this trend. In addition to our increasing dependence of Services, Goods Production employment continues to be impacted by automation and offshoring. The percentage in the chart above began decreasing in early 2015 with no clear bounceback since. For a better sense of the components of the two Goods Producing and Service Providing cohorts, here is a snapshot of the five select industries tracked by ADP. The two things to note here are the relative sizes of the industries and the relative trends. Note that Construction and Manufacturing are Production industries whereas the other three are Service Providing.
March Employment Report: 103,000 Jobs Added, 4.1% Unemployment Rate --From the BLS:Total nonfarm payroll employment edged up by 103,000 in March, and the unemployment rate was unchanged at 4.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in manufacturing, health care, and mining.The change in total nonfarm payroll employment for January was revised down from +239,000 to +176,000, and the change for February was revised up from +313,000 to +326,000. With these revisions, employment gains in January and February combined were 50,000 less than previously reported. In March, average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents to $26.82. Over the year, average hourly earnings have increased by 71 cents, or 2.7 percent. The first graph shows the monthly change in payroll jobs, ex-Census (meaning the impact of the decennial Census temporary hires and layoffs is removed - mostly in 2010 - to show the underlying payroll changes). Total payrolls increased by 103 thousand in March (private payrolls increased 102 thousand). Payrolls for January and February were revised down by a combined 50 thousand. This graph shows the year-over-year change in total non-farm employment since 1968. In March the year-over-year change was 2.261 million jobs. The third graph shows the employment population ratio and the participation rate. The Labor Force Participation Rate decreased in March to 62.9%. This is the percentage of the working age population in the labor force. A large portion of the recent decline in the participation rate is due to demographics. The Employment-Population ratio was unchanged at 60.4% (black line). The fourth graph shows the unemployment rate. The unemployment rate was unchanged in March at 4.1%. This was well below the consensus expectations of 175,000 jobs, and the previous two months combined were revised down by 50,000.
U.S. Job Growth Eased in March; Unemployment Steady at 4.1% - March was the 90th consecutive month of job growth, by far the longest streak on record. Employers have added an average of just over 200,000 jobs per month so far in 2018, a pace that has held relatively steady for the past two years. The unemployment rate hasn’t budged since October, but remains at its lowest level since 2000.“The fundamentals still remain solid,” said Dan North, chief economist for Euler Hermes North America.The slowdown in March wasn’t a surprise. February’s job growth was probably inflated by a surge in hiring in construction and the retail sector that reflected unseasonably warm weather in much of the country. Both sectors slumped in March as winter storms blew through the eastern United States.“We’ve had such unsustainably strong results in January and February that it was largely expected that we were due for some payback,” said Ellen Zentner, chief United States economist for Morgan Stanley. “The weak number in headline payrolls does not change the fact that trend job growth is strong.” The one dull spot in February’s report was wage growth, which slowed from January. That figure was revised up slightly on Friday, and earnings rebounded further in March, rising 2.7 percent from a year earlier. Economists caution against reading too much into the month-to-month data on wages, which is volatile and prone to distortions. The bigger picture is that wage growth remains weaker than most economists would expect when unemployment is so low. Economists have proposed a long list of possible explanations, from globalization to weak productivity growth. Most still expect employers to have to raise pay eventually to attract and retain workers. But so far, employers are resisting. The manufacturing sector has posted solid job gains over the past year, and that growth continued in March, when American factories added 22,000 jobs. But mounting trade tensions with China could threaten the sector’s rebound in the months ahead.
March Payroll Miss Huge: Only 103K Jobs Added; Hourly Earnings Rise - Going into today's payroll number, the whisper number was for a substantial miss because as Deutsche Bank noted this morning," consensus estimate has overestimated the initial March nonfarm payrolls print in four of the last five years by an average of 62k." Well, that almost exactly how much the consensus estimate of 185K was missed by, because in March, the BLS reported that only 103K jobs were added, a 3 sigma miss to consensus, and roughly 66% drop from February's upward revised 320K. As shown in the chart below, this was the weakest payrolls month since exactly one year ago: March 2017. The print, as noted, was a 3-sigma miss to consensus. This time the seasonal adjustment was not a factor: There was a reason for the miss however: as Goldman warned yesterday, inclement weather kept many away from their jobs; in fact, according to the BLS 159K Americans were unable to work due to weather.Labor force participation dipped fractionally, from 63.0% to 62.9% as the number of people Employed (per the Household Survey) was barely changed (from 155.215K to 155.178K) as the labor force shrank modestly as well. The number of Americans not in the labor force increased by 323K to 95.335K, just in case there is any confusion why there is no wage growth. And while the headline payroll number may have been a miss following major prior revisions (January was revised down from +239,000 to +176,000, February was revised up from +313,000 to +326,000, for a net 50,000 fewer jobs than previously reported), what markets really cared about was the hourly earnings, which at 0.3% M/M and 2.7% came precisely in line as expected, and above the 0.1% and 2.6% in February, respectively. There was some disappointment in the unemployment rate, which remained unchanged at 4.1%, missing expectations of a drop to 4.0%. Some more details from the report: Total nonfarm payroll employment edged up by 103,000 in March, following a large gain in February (+326,000). In March, employment grew in manufacturing, health care, and mining. The change in total nonfarm payroll employment for January was revised down from +239,000 to +176,000, and the change for February was revised up from +313,000 to +326,000. With these revisions, employment gains in January and February combined were 50,000 less than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.) After revisions, job gains have averaged 202,000 over the last 3 months. The average workweek for all employees on private nonfarm payrolls was unchanged at 34.5 hours in March. In manufacturing, the workweek edged down by 0.1 hour to 40.9 hours; overtime edged down by 0.1 hour to 3.6 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged down by 0.1 hour to 33.7 hours.
March jobs report: surprisingly weak - HEADLINES:
- +103,000 jobs added
- U3 unemployment rate unchanged at 4.1%
- U6 underemployment rate fell -0.2% from 8.2% to 8.0%
- Not in Labor Force, but Want a Job Now: fell -35,000 from 5.131 million to 5.096 million
- Part time for economic reasons: fell -141,000 from 5.160 million to 5.019 million
- Employment/population ratio ages 25-54: fell -0.1% from 79.3% to 79.2%
- Average Weekly Earnings for Production and Nonsupervisory Personnel: rose $.04 from $22.38 to $22.42, up +2.4% YoY.
- Manufacturing jobs rose 22,000 for an average of +19,000/month in the past year vs. the last seven years of Obama's presidency in which an average of 10,300 manufacturing jobs were added each month.
- Coal mining jobs were unchanged for an average of +75/month vs. the last seven years of Obama's presidency in which an average of -300 jobs were lost each month
- January was revised downward by -63,000. February was revised upward by +13,000, for a net change of -50,000.
- the average manufacturing workweek fell -0.1 hours from 41.0 hours to 40.9 hours. This is one of the 10 components of the LEI.
- construction jobs decreased by -15,000. YoY construction jobs are up +228,000.
- temporary jobs decreased by -600.
- the number of people unemployed for 5 weeks or less decreased by -221,000 from 2,508,000 to 2,287,000. The post-recession low was set over two years ago at 2,095,000.
- Overtime fell -0.1 hours to 3.6 hours.
- Professional and business employment (generally higher-paying jobs) rose by +33,000 and is up +502,000 YoY.
- the index of aggregate hours worked in the economy fell by -0.2%.
- the index of aggregate payrolls was unchanged.
This was a surprisingly weak report. While manufacturing employment continued to gain, and measures of underemployment fell (but not to new lows), most of the indicators fell. Some of these, like aggregate hours, the employment population ratio, and the labor force participation ratio, simply gave back last month's improvement. But that three of the four leading indicators, plus revisions, in the report declined is not welcome news (although obviously only one month), and wage growth for ordinary workers remains tepid at 2.4%. If the jobs boost from last autumn's spending by consumers is over, then the slow late-cycle deceleration in jobs growth can be expected to resume.
In Like a Lion… (6 graphs) The BLS announced that nonfarm payroll employment rose by 103,000 in March and revised February employment up 13,000 to 326,000 and January down 63,000 to 176,000. The 50,000 in downward revisions and the weak 103,000 March number paints a fairly different picture of the labor market…one not quite as strong as it was just yesterday. The sharp drop off may well have been weather related as the construction sector lost some 15,000 jobs in March. Looking at the data over a longer period of time with a 12 month moving average suggests that employment growth has been slowing for some time. But this is the ninth year of an expansion and the fact that the economy is continuing to add jobs at a good pace is encouraging, the March hiccup notwithstanding.Average hourly earnings increased 8 cents and is up 2.7% since last year and with low inflation has lead to real wage gains. Average weekly hours remained at 34.5. The household survey reveals a decline of 158,000 in the labor force with the participation rate falling from 63.0 to 62.9. The unemployment rate fell slightly from 4.14% to 4.07%.
US Job Growth Slows In March, But Annual Pace Holds Steady - Companies in the US hired substantially fewer workers in March than economists expected, according to this morning’s monthly update from the Labor Department. But the sharp deceleration in growth looks like monthly noise, based on the steady moderate pace for the year-over-year increase in private employment. US firms added 102,000 employees last month – below Econoday.com’s consensus forecast for 175,000 and far under the upwardly revised 320,000 gain in February. The latest rise marks the slowest advance in six months. But looking through the monthly volatility suggests that moderate growth prevails. On a year-over-year basis, private employment rose 1.8% in March, essentially unchanged from February and thereby marking the strongest set of annual gains since last August. “This is some payback for strong job growth in February,” opines Ryan Sweet, an economist at Moody’s Analytics. He says that weather was a factor and so “there’s no reason to be depressed” about the surprisingly soft monthly change in March, adding that it’s “pretty much steady as she goes” in terms of the broad trend.Paul Ashworth, chief US economist at Capital Economics, agrees, noting that today’s numbers aren’t expected to derail the Federal Reserve’s plans to raise interest rates. “The Fed will be primarily focused on the increase in average hourly earnings. Overall, looking through the volatility, employment growth is trending higher and wage growth is starting to heat up.” Hourly wage growth for private-sector workers increased 2.7% last month vs. the year-earlier level — slightly above February’s 2.6% increase and just below the nine-year high of 2.8% that was briefly reached in recent history. The rear-view mirror for the labor market, in short, still reflects a bias for moderate growth. The question is how or if the Trump administration’s increasingly confrontational trade policy changes the calculus for the outlook. After the White House announced sweeping tariffs on imports from China this week, Beijing responded with its own set of tariffs on US goods.
March jobs: Topline miss but solid trend, plus a deeper dive into the current wage story - Jared Bernstein - Payrolls were up 103,000 last month, well below expectations for about 180,000, but this miss should not be taken to mean that the job market is in trouble. To the contrary, the trend of job growth remains strong and unemployment is at a 17-year low. Remember, these monthly data are noisy and you must average over numerous months to extract a meaningful trend—see “smoother” figure below. Consider, for an example of the monthly swings in these data, February’s gain, revised up now to 326,000 (the larger downward revision to January led to a decline of 50,000 from the combined previous reports of job gains in those months).Wages, before inflation–a closely watched gauge of the extent to which the tightening job market is boosting workers’ bargaining clout–rose 0.3% in March, and 2.7% year-over-year, a slight bump over last month’s 2.6% rise. However, this is far from an inflationary number, and the production/non-supervisor wage was up only 2.4%, and that’s 80% of the workforce. (Yes, that implies outsized gains to higher-paid workers, but again, some of that is monthly noise.) I dive more deeply into the wage story belowOur smoother wrings out some of that noise by looking at average monthly job gains over 3, 6, and 12-month periods. As you see, the underlying trend is around 200,000 a month. This is a very solid trend of job growth, especially considering a job market closing in on full capacity. But the key words there are “closing in.” The employment rate of prime-age workers (25-54) still implies room-to-run (as does the lack of pressure from price measures, including inflation and wages). The peak in the prime-age rate was 80.3% in January 2007; its trough in 2011 was 74.8%, an historically sharp decline as these workers got seriously slammed by the Great Recession. But the persistently tight job market is enabling them to claw back their losses, against many predictions that they were lost forever (a reminder to economists that it’s tough in this space to know what’s cyclical and what’s structural).Their employment rate in March was 79.2%. Thus, prime-agers have recovered 4.4 out of 5.5 percentage points, or 80%, of their decline over the course of the recession. Prime-age men, whose employment rates have suffered a longer-term decline, have made back 76% of their loss; women have done better, clawing back 90%. This month, we (Lexin Cai and I) dig a bit deeper into the wage story. Much wonkiness follows, but the punchline is that slow productivity growth poses a clear constraint on wage growth. However, there’s a lot more room for wage growth through labor clawing back some of its lost share of national income. Importantly, from the Fed’s perspective, that’s source of wage growth is non-inflationary.
Part-Time Jobs Added: 310K; Full-Time Jobs Lost: –311K - One look at recent trends in the payrolls data, especially the important numbers beneath the headlines, and one will be left with the impression that there is an unprecedented amount of (political) data goalseeking, if not outright manipulation, taking place at the Bureau of Labor Services. Case in point, last month we reported that in addition to the strong Establishment Survey payrolls number, which was revised even higher to 326K this month, there was an even more impressive number: a record 1 million full and part-time jobs were added according to the Household Survey. One month later you can scratch all of that, because according to the latest data, the 729K full-time jobs added in February was a fluke, and in March, the number actually declined by 311K; in fact in recent months it has been swinging so hard, a simple regression model suggests that it is more based on noise than any underlying signal. Meanwhile, as full-time jobs tumbled, part-time jobs continued to rise, and as shown in the chart below, they increased just enough to offset the drop in full-time jobs: Part-Time jobs up 310K; Full-Time jobs down 311K.
Where The Jobs Were In March: Who's Hiring And Who Isn't - While March was expected to see a jump in hourly earnings from February - which happened as expected, thanks to a 0.3% increase in hourly take home pay, and 2.7% Y/Y to $26.82 - payrolls were set to slide, if perhaps not as aggressively as the 326K to 103K drop revealed. Still, March marked the 90th straight month of U.S. job growth, the longest such streak on record. So with strong wage growth once again taking place, which sectors were responsible? Not surprisingly, it was all of the high paying jobs while minimum wage industries barely contributed.
- Professional Business Services (ex temp help): +33.6K
- Manufacturing: +22K
- Healthcare: +22K (Ambulatory Care: +16K, Hospitals +10K)
- Wholesale Trade: +11.4
- Transportation and warehousing: +9.8K
Even the traditional laggards, financial services and information, added 2K jobs each. At the same time, the minimum wage retail trade and temp help saw a drop in employment in March. Commenting on the composition and wage growth, Southbay Research had this to say:Hourly Earnings y/y crept up from 2.6% to 2.7%: In a related fashion, Overtime Hours held at cyclically high levels, although down a bit from February (it fell from 3.7 hours to 3.6 hours). The slight dip in overtime is likely snowstorm related: the biggest drop came in the Construction sector. But if you believe, as I do, that Overtime Hours is the strongest indicator of pending wage pressure, then the trend needs to be watched.Employers are absolutely resisting wage increases because it's a slippery slope; once started, it's hard to reverse. For that reason they prefer to offer existing workers overtime rather than hire new workers. (It's been said that employers are resorting to overtime because they can't get qualified workers. That's less true than reported.)Wage pressure will remain softer than expected because of the use of teenage labor (which is minimum wage labor). For this age group, both the participation rate and the employment rate have increased.Finally, the Bloomberg chart below shows how shifts in employment have coincided with changes in average hourly pay from one month to the next.
Comments on March Employment Report - The headline jobs number at 103,000 for March was well below consensus expectations of 175 thousand, and the previously two months were revised down a combined 50 thousand. Looking at just March, this was a disappointing employment report. However some of weakness was due to payback from the nice weather in February (as expected in my jobs preview). Job growth has been solid for the first three months of 2018. In March, the year-over-year employment change was 2.261 million jobs. This has been generally trending down, but is still solid year-over-year growth. Wage growth was about as expected in March, although hourly wages for February were revised down slightly." This graph is based on “Average Hourly Earnings” from the Current Employment Statistics (CES) (aka "Establishment") monthly employment report. The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees. Nominal wage growth was at 2.7% YoY in March. Wage growth had been trending up, although growth has been moving sideways recently. Since the overall participation rate has declined due to cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old. In the earlier period the participation rate for this group was trending up as women joined the labor force. Since the early '90s, the participation rate moved more sideways, with a downward drift starting around '00 - and with ups and downs related to the business cycle. The 25 to 54 participation rate decreased in March at 82.1%, and the 25 to 54 employment population ratio decreased to 79.2%. The participation rate had been trending down for this group since the late '90s, however, with more younger workers (and fewer 50+ age workers), the prime participation rate might move up some more. The number of persons working part time for economic reasons has been generally trending down, and the number decreased in March. The number working part time for economic reasons suggests a little slack still in the labor market. These workers are included in the alternate measure of labor underutilization (U-6) that was decreased to 8.0% in March. This is the lowest level for U-6 since last November. This graph shows the number of workers unemployed for 27 weeks or more. According to the BLS, there are 1.322 million workers who have been unemployed for more than 26 weeks and still want a job. This was down from 1.397 million in February. This is the lowest level since October 2007. This is trending down, but remains a little elevated. The headline jobs number was disappointing, however the weakness was probably related to payback due to the nice weather in February. For the first three months of 2018, job growth has been solid.
Philly Fed: State Coincident Indexes increased in 47 states in January -- From the Philly Fed: The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for January 2018. Over the past three months, the indexes increased in 44 states, decreased in four, and remained stable in two, for a three-month diffusion index of 80. In the past month, the indexes increased in 47 states, decreased in two, and remained stable in one, for a one-month diffusion index of 90. 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.
A Guaranteed Jobs-for-All Program Is Gaining Traction Among 2020 Democratic Hopefuls - The conservative approach to social programs has evolved in sophistication over the decades. With frontal assaults on Social Security and Medicaid having been badly beaten back, the GOP has repackaged its attempt to roll back these programs by putting recipients to work. After all, if a person is physically able to, why shouldn’t they work just like everybody else?But an approach catching fire among activists and even some high-level elected Democrats answers the question by turning it on its head, drawing on an idea with a storied history in American politics. If working is so important, then why shouldn’t the government provide a job directly to somebody who can’t find one?For years considered the province of renegade economists, the idea that everyone should have a job if they want or need one — and it’s the government’s job to make that possible — has begun once again to creep into mainstream conversation.In the last week alone, rumored 2020 hopeful Sen. Kirsten Gillibrand, D-N.Y., told The Nation that “guaranteed jobs programs, creating floors for wages and benefits, and expanding the right to collectively bargain are exactly the type of roles that government must take to shift power back to workers and our communities.” And Sen. Elizabeth Warren, D-Mass., another presumed 2020 aspirant, has begun looking closely at this issue, a source close to her told The Intercept. Senate aides have begun interoffice meetings to grapple with how to draft a workable bill, aides in two separate offices told The Intercept.
The Job Guarantee: Design, Jobs, and Implementation -- The job guarantee (JG) is a public option for jobs. It is a permanent, federally funded, and locally administered program that supplies voluntary employment opportunities on demand for all who are ready and willing to work at a living wage. While it is first and foremost a jobs program, it has the potential to be transformative by advancing the public purpose and improving working conditions, people’s everyday lives, and the economy as a whole. This working paper provides a blueprint for operationalizing the proposal. It addresses frequently asked questions and common concerns. It begins by outlining some of the core propositions in the existing literature that have motivated the JG proposal. These propositions suggest specific design and implementation features. (Some questions are answered in greater detail in appendix III). The paper presents the core objectives and expected benefits of the program, and suggests an institutional structure, funding mechanism, and project design and administration.
The Oligarchs’ ‘Guaranteed Basic Income’ Scam - Chris Hedges - A number of the reigning oligarchs—among them Mark Zuckerberg (net worth $64.1 billion), Elon Musk (net worth $20.8 billion), Richard Branson (net worth $5.1 billion) and Stewart Butterfield (net worth $1.6 billion)—are calling for a guaranteed basic income. It looks progressive. They couch their proposals in the moral language of caring for the destitute and the less fortunate. But behind this is the stark awareness, especially in Silicon Valley, that the world these oligarchs have helped create is so lopsided that future consumers, plagued by job insecurity, substandard wages, automation and crippling debt peonage, will be unable to pay for the products and services offered by the big corporations. The oligarchs do not propose structural change. They do not want businesses and the marketplace regulated. They do not support labor unions. They will not pay a living wage to their bonded labor in the developing world or the American workers in their warehouses and shipping centers or driving their delivery vehicles. They have no intention of establishing free college education, universal government health or adequate pensions. They seek, rather, a mechanism to continue to exploit desperate workers earning subsistence wages and whom they can hire and fire at will. The hellish factories and sweatshops in China and the developing world where workers earn less than a dollar an hour will continue to churn out the oligarchs’ products and swell their obscene wealth. America will continue to be transformed into a deindustrialized wasteland. The architects of our neofeudalism call on the government to pay a guaranteed basic income so they can continue to feed upon us like swarms of longnose lancetfish, which devour others in their own species.
"I Can't Pay My Bills" - McDonald's Employees Furious As Company Renegs On Wage Hikes - When the initiative was first announced, McDonald's decision to raise its employees' wages to $1 above minimum wage (albeit only at corporate-owned stores, a minority of the company's total count) was hailed as a radical example of corporate accountability - a direct repudiation of the far-left notion that "quarterly capitalism" and employers accepting responsibility for their employees were mutually exclusive. As any steely eyed realist might've expected, McDonald's widely lauded "wage hike" was little more than a publicity stunt. In the three years since McDonald's announced the wage hike in 2015, the firm has essentially frozen employee wages, often leaving them just a few cents above minimum wage, as Bloomberg has discovered. But the company doesn't expect to experience any blowback from this decision: After all, McDonald's never said it was pegging employees' wages to $1 above minimum wage. The company, it appears, deliberately equivocated during its initial announced - and what's worse, nobody in the media has called the company out. Until now, that is.In Milpitas, California, north of San Jose, where the local minimum wage rose to $12 an hour on Jan. 1, several workers’ February paychecks show they received $12.35 or $12.45. In Los Angeles, where the minimum wage for large employers has been $12 since July, some checks show hourly pay of $12.69 or less.Employees and members of the "Fight for $15" coalition - which had successfully pressured McDonald's to assent to the wage hike (or so we had thought) - are understandably angry at the company, possibly having planned to receive higher wages in the near future, and based some major financial decisions on that."They need to give us the dollar that they promised us," said one of those employees, Fanny Velazquez, who’s worked for the corporation for a decade. "I can’t pay my rent or my bills."The Service Employees International Union - most likely the initial anonymous source who brought the story to Bloomberg - blasted the company in an on-the-record statement. It's also organizing workers to organize and exert whatever pressure they can.
Disney Withholds Bonuses As Union Workers Protest Poverty Wages - Hundreds of Disney World workers marched more than a mile on March 23 to the entrance to Disney Springs, an entertainment and shopping complex on Disney property.The protesters — including hospitality and housekeeping workers, custodians, ride operators, and cast members— handed out picket signs and balloons with “End Disney Poverty” stamped on them. They chanted, “We work, we sweat, put a raise on our check.”It was the latest sign of a rift between labor and management at the “Happiest Place on Earth,” with unionized workers in Florida and California alleging that Disney pays them poverty wages.In response to the unions rejecting Disney’s initial offer, Disney withheld bonuses up to $1,000 from 41,000 union employees in Florida and California under the condition they accept the company’s wage proposal by August 31 or forfeit the bonuses entirely.The unions jointly filed a federal charge with the Department of Labor against Disney over the withheld bonuses. (These are the bonuses the company publicly announced were tied to the Republican tax cut package that passed last year.) Disney employees were granted anonymity to speak because they fear losing their jobs if management becomes aware of their participation or support for protests. “We need a living wage. We need to get people out of homeless shelters and hotels. People can’t afford to live day to day,” one Disney employee at the protest said. “There are so many people not doing well, who work for Disney. We feel we deserve the raise and the bonus we all are fighting for.”
Fired for Liking a Tweet on Tibet, US Worker Feels China's Reach - In early January, Roy Jones was making $14 an hour, $5 aboveNebraska’s minimum wage as a representative dealing with customers on social media for Marriott International Group, the international hotelier. On what Jones called a hectic shift, there was a tweet from Friends of Tibet, a pro-Tibetan independence organization, congratulating Marriott for recognizing Tibet, Hong Kong and Taiwan as countries. The Friends of Tibet is a pro-Tibetan independence organization. When a Marriott International Group social media account "liked" a Friends of Tibet tweet, Roy Jones lost his job. The company, which has more than 300 hotels in China, had named the three in a survey sent to customers that asked in which country they lived and gave options including Tibet, Taiwan and Hong Kong. A Marriott social media account “liked” the Friends’ tweet, setting off an international incident that exemplifies the challenges Western companies such asApple, Mercedes, Delta and Zara face as they do business with China. Now, more than two months later, Jones told VOA Mandarin he is still not sure how or what he did or even if he was the employee who actually responded to that tweet. He was, however, the employee the hotel company fired almost immediately, and since January, his case has attracted the attention of U.S. Sen. Marco Rubio, the Florida Republican who sits on the Foreign Relations Committee and who, as chairman of the Congressional-Executive Commission on China, spoke out in February on companies bowing to Beijing.
With paper and phones, Atlanta struggles to recover from cyber attack (Reuters) - Atlanta’s top officials holed up in their offices on Saturday as they worked to restore critical systems knocked out by a nine-day-old cyber attack that plunged the Southeastern U.S. metropolis into technological chaos and forced some city workers to revert to paper. Police and other public servants have spent the past week trying to piece together their digital work lives, recreating audit spreadsheets and conducting business on mobile phones in response to one of the most devastating “ransomware” virus attacks to hit an American city. Three city council staffers have been sharing a single clunky personal laptop brought in after cyber extortionists attacked Atlanta’s computer network with a virus that scrambled data and still prevents access to critical systems. “It’s extraordinarily frustrating,” said Councilman Howard Shook, whose office lost 16 years of digital records. One compromised city computer seen by Reuters showed multiple corrupted documents with “weapologize” and “imsorry” added to file names. Ransomware attacks have surged in recent years as cyber extortionists moved from attacking individual computers to large organizations, including businesses, healthcare organizations and government agencies. Previous high-profile attacks have shut down factories, prompted hospitals to turn away patients and forced local emergency dispatch systems to move to manual operations. Ransomware typically corrupts data and does not steal it. The city of Atlanta has said it does not believe private residents’ information is in the hands of hackers, but they do not know for sure.
"The Longer It Goes, The Worse It Gets" - Nearly 2 Weeks Later, Atlanta Still Reeling From Crippling Ransomware Attack -- It has been nearly two weeks since the City of Atlanta's municipal government was hit with a crippling ransomware attack that wiped millions of government files and left the city's police and first responders relying on paper record-keeping.So far, the city has made almost no progress in recovering its files. Police still don't have access to vital databases and investigative files. The town's auditor says the city's books have been destroyed, aside from whatever's left in the paper record. And top city officials are scrambling through a holiday weekend to piece together bits of city projects from personal computers and email addresses that weren't affected by the hack. Almost every government department was affected by the hack - though fortunately 10 of the 18 machines in the city auditor's office somehow avoided the hack."Our data management teams are working diligently to restore normal operations and functionalities to these systems and hope to be back online in the very near future," said Carlos Campos, a spokesman for the Atlanta PD. Campos said that some officers have returned to filing digital reports. City officials (with an assist from the FBI) are trying to work through the hack. But if they don't find a way to recover at least some of the corrupted files soon, officials might be forced to pay the $51,000 ransom that the hackers are demanding (the FBI typically discourages the victims of these attacks from paying the fine).
Court Gives Florida 1 Month to Revamp System for Restoring Felons’ Voting Rights - A judge on Tuesday ordered Gov. Rick Scott and the Cabinet to dismantle Florida’s “fatally flawed” system of arbitrarily restoring voting rights to felons and to replace it by April 26. U.S. District Judge Mark Walker in Tallahassee issued a permanent injunction in support of the Fair Elections Legal Network, which sued the state a year ago. The group successfully challenged the constitutionality of the state’s 150-year-old voting rights restoration process for felons in the nation’s third-largest state. “This is a victory for the principle that the right to vote cannot be subjected to officials’ gut instincts and whims,” said Jon Sherman, senior counsel for the nonprofit voting rights group. “We are also heartened that the court prevented Florida from following through on its threat to be the only state in the nation with an irrevocable lifetime ban on voting for all former felons — what the court called ‘the ultimate arbitrary act.’ ”
Over A Million Illegal Immigrants Issued California Driver's Licenses - California has issued over a million driver's licenses to illegal immigrants over the past three years, according to the Sacramento Bee. Following the passage of Assembly Bill 60 which went into effect January 1, 2015, the California Department of Motor Vehicles has granted 1,001,000 illegal immigrants licenses as of March 31, according to a Wednesday announcement by the DMV. The bill, entitled "The Safe and Responsible Drivers Act" authored by then-Assemblyman Luis Alejo in 2013, was meant to help illegal immigrants "get to work, drive their children to school, and run everyday errands without the fear of being pulled over," according to DriveCA. An applicant who does not have proof of lawful presence can receive an AB 60 license. An AB 60 license will have a visible distinguishing feature and cannot be used for certain federal purposes, such as to enter restricted areas of federal facilities. AB 60 driver’s licenses are available since January 2nd, 2015. -DriveCa"Immigrants are getting tested, licensed and insured and this is making our roads safer for everyone," said Alejo, now a Monterey County supervisor.. "Today, we see the law working the way it was intended to and has dramatically improved the lives of a million immigrants and their families." Of note, the licenses do not grant illegal immigrants the right to vote - however a new law rolling out this month which automatically registers drivers to vote, the California Motor Voter Act, has sparked concern over potential abuse.
Federal Judge Upholds Massachusetts Assault Weapons Ban - A Federal District Court Judge in Massachusetts has upheld that state’s ban on so-called “assault weapons,” handing yet another Court defeat to proponents of gun rights: A federal judge dismissed a lawsuit on Friday challenging Massachusetts’s ban on assault weapons. U.S. District Judge William Young said in his ruling that the firearms and large magazines banned by the state in 1998 are “not within the scope of the personal right to ‘bear Arms’ under the Second Amendment.” The features of a military-style rifle are “designed and intended to be particularly suitable for combat rather than sporting applications,” Young wrote. Massachusetts was within its rights since the ban passed directly through elected representatives, Young decided. “Other states are equally free to leave them unregulated and available to their law-abiding citizens,” Young wrote. “These policy matters are simply not of constitutional moment. Americans are not afraid of bumptious, raucous, and robust debate about these matters. We call it democracy.” The lawsuit was filed last year by the Gun Owners Action League of Massachusetts, who claimed the law infringed on their Second Amendment rights. Attorney General Maura Healey (D), a defendant in the suit, said the ban “vindicates the right of the people of Massachusetts to protect themselves from these weapons of war.” “Strong gun laws save lives, and we will not be intimidated by the gun lobby in our efforts to end the sale of assault weapons and protect our communities and schools,” Healey said in a Facebook statement.
Only Black People Prosecuted Under Mississippi Gang Law Since 2010 — In the lead-up to this year's legislative session in Mississippi, supporters of a tougher gang law in the state talked a lot about the need to arrest white people. But in an ironic twist, the Jackson Free Press has learned that everyone arrested under the existing gang law from 2010 through 2017 were African American. Over the last year, members of the Mississippi Association of Gang Investigators worked to spread the message that not all gang members in Mississippi are African American, Hispanic or another ethnicity. In fact, they warned, many of the state's toughest gang members are now white, between the growing Simon City Royals, white supremacist groups like the Aryan Brotherhood, and biker "clubs" such as the violent Bandidos, started by a white Marine in Texas in 1966 who would later be convicted of murder. #In August 2017, MAGI told The Clarion-Ledger that 53 percent of verified gang members, a number presumably pulled from the dozens of identified criminal groups in the state, are white. It is a potentially surprising statistic in the state with the highest proportion of African Americans in the nation and that experiences a large amount of media coverage of its black and Hispanic gangs. The Mississippi State Gang Assessment, published in December 2017, listed the white Simon City Royals as the third largest criminal street gang in the state behind the Black Gangster Disciples and the Vice Lords, both black gangs. In addition, MAGI members regularly provide examples of heinous crimes by white gang members, such as the murder and dismemberment of a Royals snitch on the Coast in 2016. Welford Lee McCarty is now serving a life sentence for murder charges.
Inside a Private Prison: Blood, Suicide and Poorly Paid Guards - NYT— On the witness stand and under pressure, Frank Shaw, the warden of the East Mississippi Correctional Facility, could not guarantee that the prison was capable of performing its most basic function.Asked if the guards were supposed to keep inmates in their cells, he said, wearily, “They do their best.”According to evidence and testimony at a federal civil rights trial, far worse things were happening at the prison than inmates strolling around during a lockdown: A mentally ill man on suicide watch hanged himself, gang members were allowed to beat other prisoners, and those whose cries for medical attention were ignored resorted to setting fires in their cells.So many shackled men have recounted instances of extraordinary violence and neglect in the prison that the judge has complained of exhaustion. The case, which has received little attention beyond the local news media, provides a rare glimpse into the cloistered world of privately operated prisons, at a time when the number of state inmates in private facilities is increasing and the Trump administration has indicated that it will expand their use. The use of private prisons has long been contentious. A 2016 Justice Department report found that they were more violent than government-run institutions for inmates and guards alike, and the Obama administration sought to phase out their use on the federal level. Early last year, President Trump’s attorney general, Jeff Sessions, reversed the ban. Several states, including Michigan and Utah, have stopped using private prisons in recent years because of security problems.Sheriff’s deputy runs down Sacramento protester and flees scene - A woman taking part in demonstrations against the police murder of Stephon Clark Saturday evening had to be transported to the hospital after a Sacramento County sheriff’s deputy struck her with his SUV and fled the scene. The 61-year-old woman, identified as Wanda Cleveland, sustained minor injuries and was taken by ambulance to a nearby hospital. The deputies involved in the assault have not yet been identified. Stephon Clark, a 22-year-old African-American father of two, was shot at least six times from behind in his grandparents’ backyard by two Sacramento, California police officers responding to a report of someone breaking car windows in the neighborhood on March 18. After pointing their guns at Clark for another six minutes as he lay dying on the ground, the officers, identified as Terrence Mercadel and Jared Robinet, handcuffed his lifeless corpse and made a token effort to resuscitate Clark before pronouncing him dead at the scene. Clark was unarmed and was holding a cell phone in one hand. The Sacramento Police Department’s release of body camera and helicopter video, including the officers’ subsequent attempt to fabricate a pretext for the murder while their microphones were switched off, have prompted almost daily protests demanding an end to police violence and poverty in the California’s capital city. The Saturday incident occurred when the woman, who was carrying a sign that read “Stephon Clark Rest in Power,” walked in front of a deputy’s vehicle and motioned for him to stop. After initially slowing down, the deputy suddenly accelerated into the woman, violently knocking her to the ground. Rather than stopping to determine her condition and apply first aid, the deputy immediately sped away from the scene.
The Supreme Court just gave cops a license to shoot, then think -- “Why’d you shoot me?” Amy Hughes, screaming and bleeding, asked Officer Andrew Kisela after he fired four rounds at her through a chain link fence. Thanks to the Supreme Court, a jury will not get a chance to consider that question. In a case that illustrates how hard it is to hold police officers responsible for using excessive force, the court on Monday ruled that Kisela is protected by “qualified immunity” from civil liability for the injuries he inflicted on Hughes in May 2010. The decision, as Justice Sonia Sotomayor observed in a dissent joined by Justice Ruth Bader Ginsburg, “tells officers that they can shoot first and think later.” Kisela, an officer with the University of Arizona Police Department in Tucson, was responding to a “check welfare” call about a woman who was hacking at a tree with a kitchen knife. Arriving at the home that Hughes shared with Sharon Chadwick, he saw Hughes emerge from the house with a kitchen knife in her hand and approach Chadwick, stopping about 6 feet from her. Hughes, who talked to Chadwick but did not seem angry, was holding the knife at her side, with the blade pointing away from her housemate. Chadwick, who later described Hughes as “composed and content,” said she never felt she was in any danger. Kisela and the two other officers with him nevertheless drew their guns and ordered Hughes to drop the knife. It’s not clear whether she heard the commands. Chadwick said it seemed to her that Hughes did not understand what was happening, an impression shared by Kisela’s colleagues. The cops, although in uniform, never verbally identified themselves as police officers, and the whole encounter was over within a minute. Kisela, who later said he was trying to protect Chadwick, opened fire immediately and without warning, hitting Hughes with all four bullets. She survived but easily could have been killed.
Student shot at Madison Schools in Ohio gets detention for school-shooting protest - In 2016, he was shot in his school’s cafeteria while eating chicken nuggets. He remembers falling on the ground, unsure what happened, watching students run away from him. He hoped someone would come tell him everything was OK. Earlier this month, against the wishes of his school administration, Cooper Caffrey walked out of Madison High School – past the cafeteria – as part of a day of protests around the country in the wake of the deadly school shooting in Florida. The sophomore got a detention. And so did 42 other students who walked outside with him.Some in this small Butler County community are upset with the punishment, saying if anyone has a right to protest it's these students. But Cooper’s dad Marty Caffrey understands school officials were put in a tough position, worried about safety, and will always be grateful for how they helped his son in the aftermath of the shooting. “The whole purpose of a walkout is to protest against an establishment,” he wrote on Facebook. “I do not expect the establishment to support the walkout.” Without punishment, he told The Enquirer, it would have been meaningless. Madison High School's student council met with administrators several times before the walkout. There would be no walkout. Cooper didn’t go to school that day planning to protest. Inside, the high school principal told students they would be punished for any activity that disrupts the school day. Cooper was pissed, he texted his dad, because they were telling him what to do. And pissed because he cared. Later that morning, he and 42 other students walked outside into the school’s courtyard. The students concluded their 17-minute demonstration in prayer.
Black Marjory Stoneman Douglas Students Say Police at School Make Them “Feel Like Prisoners” - The March for Our Lives in Washington, D.C., featured speakers from Chicago and Los Angeles who brought attention to gun violence in communities of color. But at Marjory Stoneman Douglas High, the school whose shooting survivors are leading the #NeverAgain movement that prompted the march, some students were left wondering where their place in the conversation is as survivors of gun violence in the Parkland area. As reported by the Miami Herald and documented in tweets from WLRN reporter Nadege C. Green, students held a press conference Wednesday to show a more diverse image of their high school, where black students make up 11 percent of the student body, according to the Herald. They wanted to address the predominately white image portrayed in the national media coverage following the February 14 mass shooting. Those students, including Mei-Ling Ho-Shing, a 17-year-old junior, spoke up about wanting to be represented in the national conversation around March For Our Lives, especially because gun violence impacts communities of color (and particularly, as per a 2015 Brookings Institute report, young black men). Kai Koerber, a 17-year-old junior, spoke at the conference and told Teen Vogue the students have an action plan, which includes a public safety tax on firearms and metal detectors at schools. He said the heightened police presence at MSD that has come in response to the shootings is an alarming trend. For Kai, adding more police officers is far more concerning than reassuring. Kai told Teen Vogue that he has already been racially profiled at school by an officer. “If we are going to have more police officers at school, that only makes the problem worse,” he said. “We are trying heal from the tragedy we experienced, but we’re being made to feel like prisoners.”
Florida Students Stage Walkout In Support Of Second Amendment - About 75 students at Rockledge High School in central Florida walked out of class in support of the Second Amendment on Friday. The students say they felt "silenced" last week when students walked out in support of gun control.Fox News:“I’m pro-Second Amendment,” Rockledge junior and protest organizer Anna Delaney told the station. "I wouldn’t mind deeper background checks, of course, but the Second Amendment will not be infringed upon.”Many Rockledge students walked out of class March 14 as part of the National School Walkout that was held in support of the Parkland school shooting victims and to protest gun violence and call for new gun control measures. They stood on the football field and formed a huge heart.About 75 students participated in Friday’s walkout at Rockledge, Florida Today reported. The protest lasted 20 minutes.They walked onto the schools track carrying the American flag and signs that said “guns don’t kill people, people kill people” and “I support the right to bear arms,” the paper reported. Some wore Trump “Make America Great Again” hats and camouflage clothing.“We were built on certain rights and that was one of the original rights, that we should have the right to bear arms,” sophomore Chloe Deaton told the group. She helped Delaney organize the walkout. Zachary Schneider, a junior, was quoted by the paper as saying, “It’s all over the news right now that all students hate guns. I wanted to show that not all students feel that way.”
It’s Oklahoma’s Turn to Strike - The historic victory in West Virginia has inspired teachers and staff across the United States. Marches, rallies, and sickouts in defense of public schools have spread to Kentucky, Arizona, Wisconsin, and beyond. Whether this movement becomes a bona fide strike wave will depend to a significant degree on what happens in Oklahoma over the coming days. Demanding major increases in pay and school funding, Oklahoman educators are set to strike on April 2. The similarities with West Virginia are obvious. In a Republican-dominated state with a decimated education system and a ban on public employee collective bargaining, an indignant workforce teetering on the edge of poverty has initiated a powerful rank-and-file upsurge. But history never repeats itself exactly. To strike and win, Oklahoma workers will have to overcome a range of distinct challenges and obstacles. Years of austerity have devastated Oklahoma’s education system, as well as its public services and infrastructure. Since 2008, per-pupil instructional funding has been cut by 28 percent — by far the worst reduction in the whole country. As a result, a fifth of Oklahoma’s school districts have been forced to reduce the school week to four days. Textbooks are scarce and scandalously out of date. Innumerable arts, languages, and sports courses or programs have been eliminated. Class sizes are enormous. A legislative deal to lower class sizes — won by a four-day strike in April 1990 — was subsequently ditched because of a funding shortage. Many of Oklahoma’s 695,000 students are obliged to sit on the floor in class. “The kids aren’t getting what they need. It’s really crazy. Though the media doesn’t talk about this as much as salaries, I feel that funding our schools is the primary issue.”
Oklahoma teachers strike as workers’ upsurge spreads in US -- Tens of thousands of teachers are poised to strike in the state of Oklahoma today, the latest in a series of rank-and-file rebellions by US teachers. More than 30,000 teachers and their supporters are expected to converge on the Oklahoma state Capitol building for the main demonstration.The courageous stand by Oklahoma teachers follows the nine-day teachers strike in West Virginia, where educators’ defiance of the state government and the teachers’ unions galvanized workers throughout the country and internationally. This latest strike action follows a rank-and-file sickout by teachers in Kentucky and coincides with mounting demands by Arizona teachers for a statewide strike. The corporate media, which ignored the strike in West Virginia as long as possible, has been compelled to take note of the strike in Oklahoma. Coverage has included revealing interviews with teachers who are forced to work multiple jobs just to make ends meet. By some measures, Oklahoma teachers are the lowest-paid in the country out of the fifty states plus the District of Columbia. The state has led the country in cuts to public education for four consecutive years, according to the Center on Budget and Policy Priorities. At the same time, the state doles out hundreds of millions of dollars in tax incentives to the oil and gas industry every year. The situation is so dire that 20 percent of the state’s school boards have cut back to a four-day-a-week class schedule.
Oklahoma teacher walkout moves into second day | TheHill: Oklahoma public school teachers on Tuesday continued their strike into a second day, demanding pay raises and more funding for schools.Many schools in the state remained closed, including the state’s three largest districts, as thousands of teachers continued their walkout, according to CBS News.On Monday, an estimated 36,000 people gathered at the Oklahoma state Capitol in support of the walkout. The teachers, many of whom have not seen a pay raise in a decade, are demanding a $10,000 pay increase over three years and $5,000 for support personnel. The state’s GOP-controlled legislature last week passed a revenue package that included a pay raise for educators, but teachers are saying that the increase was not enough. Oklahoma teachers are paid, on average, less than teachers in nearly every other state, at $42,460 according to the U.S. Bureau of Labor Statistics. "We must be responsible not to neglect other areas of need in the state such as corrections and health and human services as we continue to consider additional education funding measures," said GOP Gov. Mary Fallin (R), according to CBS News. Teachers in Kentucky are also leading a statewide rally in opposition to a GOP-backed pension reform bill. The demonstrations come shortly after a nine-day strike in West Virginia, where teachers secured a 5 percent pay raise, and protests in Arizona last week, where teachers wore red and gathered at the state capital to demand a much larger 20 percent pay increase.
Oklahoma teachers are posting their crumbling textbooks online - Alisha Malaska had an important question at this week’s parent-teacher conference: Why were her son’s textbooks falling apart?Her son, a freshman at Bethany High School in Bethany, Oklahoma, is using a 2003 textbook to learn Spanish. His science textbook is 10 years old. While the state’s curriculum standards have changed several times over, the textbooks haven’t kept pace, she told the PBS NewsHour on Twitter.She’s one of many parents and teachers across the state sharing pictures of decrepit or out-of-date textbooks during this week’s teacher strike in Oklahoma, where teacher pay ranked 50th in the nation until last week and where education funding as a whole has dropped drastically in the past decade. Ripped binding, torn pages and outdated information — such as listing the current president as George W. Bush, whose term ended in 2009 — have been a visible rallying cry as teachers demand better pay and more funding. The people who teach Malaska’s son shrugged with understanding, she said. “We have really great teachers who do the best with what they have.” Here are some of the pictures of Oklahoma textbooks that have gone viral as the strike has taken off.
Oklahoma teachers converging on capitol for third day of strike - Thousands of Oklahoma teachers, students and their supporters are expected to converge on the state capitol today, the third day of a walkout by nearly 40,000 educators in the southwestern US state. Teachers are demanding pay raises and the restoration of more than a decade of bipartisan school funding cuts, which have left the state near the bottom in the US for both teacher pay and per-pupil funding. To the chagrin of state legislators and the teacher unions, which first opposed the strike and then hoped to limit it to one day, thousands of teachers showed up at the state capitol in Oklahoma City yesterday. By mid-morning, capitol officials said the building had reached capacity and prevented additional protesters from entering. Outside the building there was an almost festive atmosphere, with teachers coming in on busses from throughout the state. Many carried signs denouncing Republican Governor Mary Fallin and demanding sufficient funding to provide the state’s 700,000 school children with a quality education.By early Tuesday evening, most of the state’s districts, including Oklahoma City and Tulsa, announced that schools would be closed Wednesday, with many saying they would determine on a day-by-day basis if enough teachers showed up to resume school. Tulsa teachers are beginning a 110-mile march to the state capitol today. The strike was initiated by rank-and-file teachers, who used social media to communicate and launch a series of coordinated sickouts and protests to build up support for a statewide strike. For months, the unions—the Oklahoma Education Association (OEA) and the Oklahoma City American Federation of Teachers (AFT)—opposed a walkout and then tried to delay it. This was overruled by rank-and-file teachers inspired by the nine-day strike of West Virginia teachers and the growing militancy of educators in Kentucky, Arizona, Colorado, New Jersey and other states.
Teachers’ rebellion continues in Oklahoma and across the US - their supporters are expected to fill the state capitol in Oklahoma City today, as the strike by nearly 40,000 teachers in the southwestern US state reaches its fifth day.Teachers are demanding a $10,000 pay raise and a sharp increase in school funding in the state. Under both Democrats and Republicans, Oklahoma has slashed 28 percent of its school budget over the last decade and ranks near the bottom nationally in teacher pay and per-pupil spending.Despite efforts by the Oklahoma Education Association (OEA) and Oklahoma City-American Federation of Teachers (OKC-AFT) to prevent the walkout and then sabotage it by boosting illusions in state Democrats, a union official was forced to say the strike would continue next week. Teachers in Tulsa are marching to the state capitol on a 110-mile trek, which is building up support along the route.The walkout, which was initiated by rank-and-file educators in defiance of the unions and the state’s anti-strike laws, is part of a powerful movement of teachers spreading throughout the US and internationally.On Monday, Kentucky teachers, many of whom had carried out sickouts, marched on the state capital of Frankfort to defend their pensions, and protests continued later in the week in the eastern city of Pikeville.More than 1,000 educators and supporters converged on the Arizona State Office Building in downtown Tucson, Arizona Wednesday afternoon, after a series of “walk-in” rallies at local schools. Hundreds of students and teachers walked out Wednesday at Anacostia High School in Washington, D.C. to protest squalid conditions, including no running water, broken toilets and a flooded cafeteria. At one point, according to the Washington Post, “students and teachers linked arms at the front of the school and chanted, ‘Anacostia Matters,’ ‘Our children matter’ and ‘Our teachers matter.’” Teachers, the Post noted, said, “they readily work long hours each day to help their students,” and already face an “evaluation system that ties teachers’ salaries to their performance. Showing up to school with broken plumbing and little warning felt like another injustice.”
Oklahoma teachers strike to continue next week, after state senate passes derisory funding bill --The strike by teachers in Oklahoma will continue into its second week on Monday, following the passage on Friday of a derisory spending bill by the Oklahoma Senate.The Oklahoma Education Association (OEA), working in collaboration with Democratic and Republican lawmakers, is seeking to end the strike by Tuesday. The union praised the senate’s action on Friday and called for two additional measures that will do nothing to meet the demands of the teachers.OEA President Alicia Priest declared Friday, “Today the legislature started to hear us.” Priest was referring to the revenue and tax bill that is expected to raise $20 million from an internet sales tax and $24 million from the legalization of “ball and dice” gambling in the state. Both are regressive taxes that would siphon more money from the working class in Oklahoma—including the parents of many of the students that teachers serve every day.Priest called for the senate to take the additional measure of removing capital gains exemptions, saying that this would add an additional $100 million in revenue, and for Oklahoma Governor Mary Fallin to veto the repeal of a tax on guests at hotels and motels—another regressive measure. lThe OEA has dropped all references to the main demands initially raised by teachers, including an immediate $10,000 pay raise for teachers, $2,500 pay raise for school support staff, and $200 million in additional school funding. These measures would themselves not make up for a decade in which real school funding has been cut by more than 28 percent, or an average of $1,000 per pupil each year.
Some Kentucky schools have already canceled classes Monday ahead of a rally in Frankfort - Some Kentucky school districts not already on spring break are canceling Monday's classes to allow teachers to travel to Frankfort and rally for public education, saying "drastic times call for drastic actions." The closures come after 29 school districts across the state shut their doors Friday when hundreds of teachers called in sick in protest of the hastily passed pension reform bill that cleared both General Assembly chambers Thursday night. A rally at the state Capitol on Monday, advocated for by the statewide teachers organization, is intended to remind lawmakers to keep students' best interest in mind as they vote for the state budget. And some districts, it seems, want to let their teachers join. "Drastic times call for drastic action," a post on the Boone County School district Facebook page said. "Although, closing school is the last thing anyone wants to do, one of the reasons for this decision to close school is because educators feel one of their main responsibilities is to advocate for the children of the Commonwealth," it continued. "We have attempted every other means of communication, action, and advocacy. Now it seems that our Governor and Legislature still have not internalized the importance of putting our students and families first." The Kenton County School District also announced Saturday that it would be closed on Monday "so #TeamKenton can advocate together in Frankfort as one team."
Thousands of Kentucky teachers rally to oppose cuts - On Monday, about 5,000 Kentucky teachers and their supporters rallied at the state capitol to demand adequate funding for public education while 800 miles away, 15,000 of their colleagues were striking and demonstrating in Oklahoma City. Teacher struggles, sparked by the nine-day strike in West Virginia and initiated by independent efforts by rank-and-file educators, are challenging years of bipartisan attacks on public education and social services throughout the US.At the capitol building in Frankfort, Kentucky, the crowds of educators and supporters teemed through the state senate hallways and spilled onto the grounds throughout the day Monday. In a tremendous display of unity, not only teachers and school support staff, but parents, bus drivers, firefighters, emergency responders, and others attended, many with their children and grandchildren in tow. They rallied under a banner strung across the capitol steps reading, “YOU MAKE US SICK!”In a dirty deal, the State Senate passed a budget bill which provides a meager increase in per pupil funding, which will remain well below 2008 levels, through a series of regressive measures including a new 6 percent tax on services that had previously been tax-free, primarily affecting working people.Upon hearing the news, the crowd outside the senate chambers cried, “Shame on you!” and “Show your face!” The demonstrators were angry that secret negotiations had taken place following last Thursday’s ramming through of draconian attacks on education, just prior to the K-12 spring break in many counties. Independent of the Kentucky Education Association (KEA), teachers in 29 school districts retaliated, calling a “sick-out” last Friday and holding a spirited rally at the capitol. KEA President Stephanie Winker described the militant job actions “unfortunate”. On Monday, public schools were closed in all of the state’s 120 counties. While some were on spring break, the rest of the state was shut tight by the walkout, timed to coincide with the final vote in the state senate on the biennial budget.
Amid Kentucky Teacher Protests, Worries About State Pensions and Priorities - Last Thursday night, lawmakers passed a last-minute pension overhaul. It would cap the amount of sick days that teachers could use towards retirement. It would also swap a traditional pension plan — where certain benefits are guaranteed — for cash-balance retirement plans that depend on the stock market but are guaranteed to not lose money. Lawmakers and Gov. Matt Bevin have said some pension reform is necessary: the state has a $41 billion unfunded pension liability. That’s the amount of money needed to pay retirement benefits over the next 30 years.But the recent pension bill was passed without an actuarial analysis, and bill sponsor Rep. Bam Carney said it would only save the state about $300 million over the next 30 years, a fraction of the pension debt.And these are cuts that teachers say will have a big effect on their ability to afford to teach…and to retire.“When we sign our contracts to go into teaching, we have nulled our ability to collect Social Security,” said Courtney Sorrell, a middle school teacher in Covington. She’s referring to the fact that in Kentucky — and 14 other states — public school teachers aren’t eligible for federal Social Security benefits.“I know me personally, I work three jobs. I know I will not be collecting money from Social Security even though I pay into it,” Sorrell said. “Yep, three jobs … this is public education: we’re not in it for the big bucks.” Federal law also limits what Kentucky school teachers get of a deceased spouse’s Social Security benefits.
Arizona teachers demand 20 percent raises, more money for students AZ Central Frustrated and desperate, Arizona educators are demanding 20 percent pay raises to address the state's teacher crisis and have threatened to take escalated action if state leaders don't respond with urgency. About 2,500 teachers and their supporters — clad in a sea of red — cheered organizers of the Arizona Educators United grassroots group as they announced their list of demands of Gov. Doug Ducey and the Legislature at a Wednesday evening rally at the Capitol. The educators said Ducey and state legislators have failed Arizona's students and teachers by not adequately funding public education. The organizers said they will give the governor and state lawmakers through the end of this legislative session to act on their demands, and said they would go on strike if they did not. “Governor Ducey, Legislature, the last thing that any of us want to do is go on strike, but if we have to, we will,” said Dylan Wegela, an organizer and teacher in the Cartwright School District."Arizona Educators United is prepared to do whatever it takes to reach our demands," Wegela said. "However, we will do everything in our power to avoid a strike. As educators, we’re willing to put kids first, even when the state won’t.”
Teachers protest the collapse of public education in Puerto Rico | TheHill: Thousands of teachers are protesting in Oklahoma and Kentucky because state governments hardly fund their schools. Similarly, 15,000 teachers walked out of their classrooms in Puerto Rico in the past month alone. Puerto Rico’s educational system is suffering a demographic collapse. In 1980, 712,880 students attended public schools in Puerto Rico. Now, there are less than half: fewer than 320,000 students. Only 12 percent of the missing enrollments went to local private schools. Instead, countless Puerto Rican parents moved their children to Florida, New York, or elsewhere.Incredibly, 709 public schools have shut down in Puerto Rico since 1980. Now, the government plans to shut down 305 schools in 2018 alone, to save $1 million per school annually. There will be a net loss of 1,014 schools. It’s a shameful point in a long history of mismanagement that wrecked public education. Six months after Hurricane Maria, nearly a third of the schools had no electricity. More than forty schools were so damaged that they could not reopen. And yet, the largest problems predate the hurricane. Growing up in Puerto Rico, I studied at three public schools and graduated from one of them. Those schools were sturdy buildings with desks, students, teachers, and staff. There was no science equipment, no computers, no music instruments, no medical supplies, no after-school programs, and no sporting equipment whatsoever. Today, the schools lack more basic resources. Every semester, parents receive long lists of things to buy, including whiteboard markers, drinking water, heavy-duty cleansers, soap, and toilet paper. This shows that Puerto Rico’s Department of Education (PRDE) invests hardly anything in its broken-down schools, aside from paltry salaries for teachers.
Teachers flex political muscle in red-state strikes | TheHill: Thousands of teachers marched Monday on state capitals in Oklahoma and Kentucky, shuttering schools and demanding that Republican-controlled legislatures vote to increase their pay. The demonstrations come on the heels of a nine-day strike in West Virginia, where teachers secured a 5 percent pay raise, and protests in Arizona last week, where teachers wore red and gathered at the state capital to demand a much larger 20 percent pay increase.Teachers in Oklahoma received a pay raise when Gov. Mary Fallin (R) signed legislation last week hiking their salary as much as $6,100 a year, but they are seeking a bigger across-the-board $10,000 raise. Average teacher salaries in Oklahoma were lower than all but one other state before the recent hike. The protests in Kentucky revolve around a pension reform bill that passed the state legislature last week just hours after it was introduced. That bill would replace the existing defined benefit pension plans with a plan that couples 401(k)-type savings accounts with traditional pension benefits. The walkouts, sickouts and strikes are the first major actions since the end of the recession, when state budgets were squeezed across the country, making raises untenable. A 2016 study by the center-left Economic Policy Institute (EPI) found teachers make 17 percent less than workers in other industries with similar education and skill levels, a gap that has grown in the post-recession years. “Teachers in particular have seen their wages and benefits, their compensation in total, lag behind that of other workers for more than 20 years,” said Larry Mishel, a distinguished fellow at EPI. “In this recovery, teachers have not fared very well. [Legislatures] been cutting back on school budgets and letting teacher pay lag and attacking teacher pensions, all while they manage to give out tax breaks for corporations.”
The teacher strikes could be the future of alt labor - In some states, workers who don't join the union that represents them still have to pay certain union fees. But lots of states have passed right-to-work laws, which undo this requirement. Union champions argue this creates a free-rider problem: Unions still have to bargain for everyone, but no longer get the resources they need to effectively do so. Unsurprisingly, wages are lower in right-to-work states than elsewhere. That brings us to the aforementioned Supreme Court case, Janus v. AFSCME Council 31.To make a long story short, Janus could turn the entire country into a right-to-work zone when it comes to public employees. Since the mid-century, national union membership has dropped from over 30 percent to around 10 percent. But public employees still have a membership rate of 34.4 percent versus the private sector's 6.5 percent. Worker advocates fear the Supreme Court, with its five-conservative majority, could use Janus to deal a crippling blow to the public sector's holdout of organized labor power.This is where the teacher strikes come in.On Monday, hundreds of schools in Oklahoma and Kentucky shut down, canceling classes for hundreds of thousands of students, as teachers rallied to protest low pay and poor public investment. Oklahoma teachers are among the lowest paid in the country, and have sent lawmakers scrambling to meet their demand for a $10,000 pay hike. Kentucky teachers are somewhat better off. But the state government is trying to privatize their retirement plans, sparking the unrest there.Both protests were clearly inspired by West Virginia public school teachers, who walked off the job by the thousands in February, ultimately squeezing a 5 percent pay increase out of the state legislature.Then there's Arizona, where pay is also terrible, and teachers are rallying for a 20 percent increase. Teachers wore buttons to the protest reading, "I don't want to strike, but I will." The significance is that all of these states are right-to-work already. Kentucky became right-to-work last year, and Arizona way back in 1947. West Virginia passed its right-to-work laws in 2016, and Oklahoma did back in 2001. Teachers in these states were able to rally and successfully extract concessions, even when their unions had already suffered whatever damage Janus would inflict on public sector unions nationally.
Amazon is asking cities for their high schoolers' SAT scores — and it's a major hint about its HQ2 priorities -- Amazon is pulling out all the stops to ensure it can recruit and retain top talent at the site of its new headquarters, or HQ2. Amazon is asking for specific statistics from the 20 cities it's visiting as part of its HQ2 search,according to a new report in The Wall Street Journal. Local high schoolers' scores on the SAT and the ACT, as well as other "probing questions regarding how much talent Amazon can attract," have been a topic of conversation during site visits, according to The Journal. The report helps clarify what Amazon has made a very opaque process.When it announced the search for its second headquarters, Amazon listed education as an important factor in choosing the site. Most interpreted that as Amazon's prioritizing cities with well-known higher-education institutions, but the focus on college-entrance-exam scores shows that Amazon could be taking a longer-term view of the employee pipeline. Amazon is also visiting these cities' trendier areas to ensure they are attractive enough to draw younger workers from all over the US, according to The Journal.The company said in its request for proposals that it would invest $5 billion over 10 years in creating its second headquarters in the city it chooses. The project also outlines an influx of 50,000 employees to the area.Amazon is said to be leaning toward selecting a more urban area to build its campus, which it hopes will be in an area that can absorb the high rate of g rowth that HQ2 is likely to bring, according to The Journal.
Admit Everybody - In Jacobin, Freddie deBoer has published a “progressive case for the SAT,” defending the standardized college-admissions test against criticism. Many leftists dislike the SAT, and have said that it is unfair, biased both economically and racially. It rewards people for being good test-takers above all else, and wealthy students are better able to prepare for it than non-wealthy students. DeBoer believes these criticisms are misplaced, and that “if you believe in equality and a more level playing field in college admissions, you should defend the SAT.” While SAT results “reflect inequalities in race and social class,” he says, this is less a problem of the SAT than of society itself. Every potential competitive college admissions system will reflect these inequalities, and deBoer argues that the SAT is the least bad of the available options. If we move, as some SAT critics propose, to a more “holistic” system of student evaluation, this will be no less easily “gamed” by rich parents, who have “far greater ability to provide opportunities for extracurricular (and frequently out-of-school) activities than less affluent parents do.” Contrary to what we might assume at first, “favoring the ‘soft’ aspects of a college application is straightforwardly beneficial to the more privileged at the expense of the less.” The SAT, whatever its deficiencies, is better than using grades or holistic evaluations. Using grades encourages grade inflation, and holistic evaluations will just mean that parents pay for community service trips to developing countries rather than test-prep courses. There are two conclusions here, one of which I agree with and one of which I find objectionable. The conclusion I agree with is that the SAT may be the “least bad” of three options for competitive admissions, when compared with using grades or Mushy Holistic Factors, and that therefore eliminating the SAT alone won’t in and of itself produce greater equality and could backfire. (I even have a certain soft spot for the SAT because it enabled me, a person who didn’t know any of the weird upper-class “holistic” signals that impress colleges, to go to a good college.) But the conclusion I disagree with is that this somehow makes a “progressive case for the SAT,” or that we should “defend the SAT.”
Donald Trump Doesn't Understand Community Colleges - During a speech on Thursday, President Trump revealed a striking ignorance of one of the pillars of his country’s educational system. In the course of promoting his infrastructure plan, he, a bit perplexingly, dismissed the country’s community colleges, suggesting he doesn’t know what purpose they serve. “We do not know what a ‘community college’ means,” he told the crowd in an Ohio training facility for construction apprentices, moments after expressing nostalgia for the vocational schools that flourished when he was growing up—schools that offered hands-on training in fields such as welding and cosmetology.He seemed to have a better grasp on these latter schools, analogizing them to the apprenticeship programs he was promoting in his effort to create 400,000 high-paying infrastructure jobs. The implication, as he brushed aside one form of higher education and lauded another, was that he’d like to resuscitate short-term training opportunities and phase out community colleges in the name of workforce development. One of Trump’s stated goals is to ensure that every American knows “the dignity of work, the pride of a paycheck, and the satisfaction of a job well done”—but he seems to be unaware of the vital role that community colleges play in realizing that vision. As Jeffrey Selingo wrote in The Atlantic earlier this year, the fastest-growing jobs in the United States require candidates to have training and education beyond high school, and community colleges, which typically offer associate’s degrees, will be key to filling those openings. Community colleges are not just a substantial part of the future of American education—they are also a substantial part of its present. More than 40 percent of the country’s undergraduates are currently enrolled in community colleges, according to the College Board, the higher-education research firm and test administrator. Preliminary federal data suggest that roughly 9 million undergraduates were enrolled in community colleges in the 2015-2016 school year. And with their low tuition (typically costing less than what federal Pell grants provide) and practice of letting in all applicants, community colleges serve as a pathway to the middle class for low-income and first-generation students.
No men allowed: UVM hosts women-only debate championship --The first rule of a North American debate tournament to be held in Vermont this weekend: No men allowed. Some 150 debaters from 18 schools across the U.S. and Canada will compete in the special tournament, which is designed to be a safe space for women who complain of bias when they debate against men. Although some men will be allowed to serve as judges, organizers say the tournament at the University of Vermont offers women a chance to hone their speaking and arguing skills and gain confidence and friends without being subject to sexism. "There is also a lot of sexual predation that happens in the debate community," said UVM debate director Helen Morgan-Parmett. "The tournament, I think, provides a safe space where people feel they are debating other women, and their bodies aren't necessarily on display." College debating is one of the few intercollegiate competitive activities in which women and men compete directly against one another. While some women do win, the debaters say they have to be that much better than men to overcome bias on the part of many judges. And they point to statistics that show they are less likely to reach the top echelons of the activity. "Like with a lot of collegiate activities, debate has a tendency to be male-dominated," said UVM sophomore debater Miranda Zigler, of Boston. The UVM event will be run using the British Parliamentary debating style, in which participants learn the topic they will be debating only 15 minutes before the competition begins. More traditional college debate, known as policy debate, uses a set topic for the entire season and the debaters must be ready to argue for or against. Both formats are judged by a panel.
'Condom snorting challenge' is the latest dangerous trend to go viral on the internet - The internet has seen the "Tide Pod challenge" and the "cinnamon challenge," but the most recent online challenge is dangerous, and perhaps, the most disturbing of them all. Videos posted on social media show people unwrapping a condom from the packaging, snorting it up one nostril, and then attempting to pull it through the pharynx and out of the mouth. The challenge has been around for several years, but it is becoming popular again as people, mainly younger adults and teens, search for stupid trends to do during boredom that will go viral on the internet.It's dangerous because the condom could easily get stuck in the nose and throat, blocking breathing and causing the challenger to choke.“The nose is connected to the back of the mouth – it’s also connected to the airwaves. There’s every possibility something you push up your nose will end up in your windpipe, or in your lungs. With potentially fatal results,” Dr. Carol Cooper told United Kingdom news company The Sun. In many of the videos, you can see pain on the faces of those who take part in the "condom snorting challenge."
For First Time, Tuition Is Public College’s Biggest Revenue Source State colleges and universities are relying more on tuition dollars to fund their operations even as state funding rises and colleges come under pressure to keep tuition low. Last fiscal year, for the first time, tuition revenue outpaced government appropriations for higher education in the majority of states, according to the annual higher education finance report from the State Higher Education Executive Officers Association. The association represents chief executives of statewide governing, policy and coordinating boards of postsecondary education. The report looked at net tuition revenue, which it defined as tuition and fees minus medical student tuition, state and institutional financial aid and other waivers and discounts. It found that tuition dollars paid by families — a figure that includes federal grants and loans — made up 46 percent of funding for U.S. public colleges and universities in fiscal 2017, almost double tuition’s share of higher education funding in 1990. In over half of states, the share was higher. In Vermont, New Hampshire, Delaware and Pennsylvania, over 70 percent of higher education funding came from tuition dollars last year. Nationwide, net tuition revenue peaked as a funding source for public higher education in 2013, after the collapsing economy sent a wave of students back to school at the same time as state lawmakers were cutting funding for colleges. Since then, enrollments have fallen and state investments in higher education and financial aid have increased.
AARP accused of hard-sell marketing practices like those it warns seniors about -- In its newsletters and magazines, in congressional testimony and on its website, AARP warns seniors about deceptive direct mail and other dubious marketing come-ons as part of its mission to protect members from financial abuses.But the huge lobbying group’s own aggressive efforts to coax seniors to join or renew their memberships also have drawn a burst of criticism this year.Angry members say AARP’s barrage of solicitation letters and social media posts can mislead or confuse aging consumers, some of whom struggle with memory and managing their financial affairs. Hundreds have complained about getting false warnings that their memberships would soon expire, and at least some people have unwittingly paid for duplicate memberships.The critics include Kathy Portie, senior editor of the Big Bear Grizzly weekly newspaper in Southern California. In January, she received a sponsored post from AARP in her Facebook feed that read: “Your membership is about to expire. … ACT FAST – Time is running out.” Her terse reply, mirroring the grievances of dozens of others who received the same post, was, “No it’s not. It is valid through 2020. So stop it.”Wendi Fein fumes about the experience of her octogenarian parents, Ruth and Richard Schwartz. She said the two, who live in Nevada City, Calif., have cognitive issues but, like many in their generation, pay their bills promptly without asking questions. In January, Fein wrote to the Better Business Bureau about discovering that her parents sent in a check to AARP each time they received a mailing last year — five times in all. “Every time,” she said, “they paid the $16,” which covers a membership for two.
Millions Of Americans Go To Mexico When They Need Healthcare -- You probably already knew that healthcare is way more expensive in the USA than just about anywhere else. But you probably also know we got a big ol' health care overhaul this past decade that was supposed to fix things (among other effects, it reduced the number of uninsured Americans by a significant amount). And yet even today, Americans find it worthwhile to leave the country when they need treatment. Looking only at California, a million medical tourists a year went across the border both before Obamacare and after Obamacare. "If anything, we've gotten more business since Obamacare," says Jerry, who ferries medical tourists south in his shuttle bus. So what's going on here? "American health insurance is really strange," says Dr. Juan, a Mexican dentist whose practice is a mile south of the border. "It can cover so much or so little." Some of the American patients who come to Dr. Juan don't have insurance, but most do, and they tell him it's still cheaper to pay out of pocket in Mexico than to throw it to insurance in the U.S. Plans still generally leave you with a deductible to pay, and deductibles keep growing. Unless you qualify for subsidies, your out-of-pocket costs probably went up under the Affordable Care Act. So cheap care in Mexico can look like one hell of a good alternative. Costs overall are said to be 40-65 percent less than in America -- 70 percent or even more if we're talking about dental work. When you're facing a five-figure bill in the U.S., that means you can buy a plane ticket to Tijuana, book a hotel there, get healed, and then throw in another week of sightseeing and tequila on top of that, and you'll still end up spending less than if you'd gotten the work done at home.
CDC Finds "Nightmare Bacteria" Across United States - The Centers for Disease Control and Prevention (CDC) published a new Vital Signs report that identified an alarming trend of antibiotic-resistant genes in “nightmare bacteria” across the United States, on April 03. The CDC warned that nationwide testing - conducted in 2017, uncovered 221 instances of unique resistance genes in “nightmare bacteria.” According to Fortune, of all the germ samples submitted to the CDC for lab testing, one in four had antibiotic-resistant gene characteristics. For some time, the CDC has warned Americans about the deadly, drug-resistant ‘superbugs,’ otherwise now called “nightmare bacteria,” which seems officials have upgraded the term to a much more dangerous name — reflecting the severity of today’s epidemic.“Nightmare bacteria” kills more than 23,000 Americans each year, and the report states about 11 percent of Americans who were screened had “no symptoms” before the bacteria aggressively spread.“While antibiotic resistance (AR) threats vary nationwide, AR has been found in every state. And unusual resistance germs, which are resistant to all or most antibiotics tested and are uncommon or carry special resistance genes, are constantly developing and spreading,” the CDC said in a report.Antibiotic-resistant bacteria can spread like wildfire (infographic). “Essentially, we found nightmare bacteria in your backyard,” said Dr. Anne Schuchat, Acting Principal Deputy Director of CDC.“These verge on untreatable infections” where the only option may be supportive care — fluids and sometimes machines to maintain life to give the patient a chance to recover, Schuchat said.Schuchat states about 2 million Americans get infections from antibiotic-resistant bacteria each year, and around 23,000 people die from the deadly infections.
A Dangerous Antibiotic-Resistant Gene Has Spread The World. We Now Know Where It Started - The mcr-1 gene, which helps bacteria resist colistin – one of the few remaining antibiotic drugs of last resort that still work – has now reached hospitals all across the world.And thanks to new research, we now have more evidence of where it came from – pig farms in China.While experts had previously thought the gene developed on Chinese pig farms, due to their extensive use of colistin on the animals, the latest study offers more evidence to back this idea up. It pinpoints the start of the spread to sometime in 2005. Although there's nothing good about the rise of mcr-1 and antibiotic resistance in general, the genetic analysis techniques used in this research could help scientists get a better handle on the spread of superbugs in the future. "By deciphering the genetic code of these bacteria we found it was possible to predict not only how and where but also when mcr-1 started to spread," says one of the researchers, Lucy van Dorp from UCL. "This is so important as the presence of mcr-1 across the globe, in many different bacteria species, all within only a decade highlights the ease and speed with which these resistant genes can be disseminated." Now we've been able to track how mcr-1 spreads, we might be able to better prepare ourselves for the next antimicrobial resistance gene (AMG) to emerge. That's going to take a worldwide effort and a lot of cooperation between countries, the researchers say.Because of its potentially severe side effects, colistin is only used as an antibiotic of last resort for infections such as E. coli, but the spread of mcr-1 is rendering it ineffective. The gene can hop between bacteria of different species, making it very difficult to stop.
New Studies Link Cell Phone Radiation with Cancer - The ionizing radiation given off by sources such as x-ray machines and the sun boosts cancer risk by shredding molecules in the body. But the non-ionizing radio-frequency (RF) radiation that cell phones and other wireless devices emit has just one known biological effect: an ability to heat tissue by exciting its molecules. Still, evidence advanced by the studies shows prolonged exposure to even very low levels of RF radiation, perhaps by mechanisms other than heating that remain unknown, makes rats uniquely prone to a rare tumor called a schwannoma, which affects a type of neuron (or nerve cell) called a Schwann cell. The studies are notable for their sizes. Researchers at the National Toxicology Program, a federal interagency group under the National Institutes of Health, tested 3,000 rats and mice of both sexes for two years—the largest investigation of RF radiation and cancer in rodents ever undertaken in the U.S. European investigators at the Ramazzini Institute in Italy were similarly ambitious; in their recent study they investigated RF effects in nearly 2,500 rats from the fetal stage until death. Also noteworthy is that the studies evaluated radiation exposures in different ways. The NTP looked at “near-field” exposures, which approximate how people are dosed while using cell phones. Ramazzini researchers looked at “far-field” exposures, which approximate the wireless RF radiation that bombards us from sources all around us, including wireless devices such as tablet and laptop computers. Yet they generated comparable results: Male rats in both studies (but not mice or female animals) developed schwannomas of the heart at statistically higher rates than control animals that were not exposed. Taken together, the findings “confirm that RF radiation exposure has biological effects” in rats, some of them “relevant to carcinogenesis,” says Jon Samet, a professor of preventive medicine and dean of the Colorado School of Public Health, who did not participate in either study. Samet, however, cautioned the jury is still out as to whether wireless technology is similarly risky to people. Indeed, heart schwannomas are exceedingly rare in humans; only a handful of cases have ever been documented in the medical literature.
Humans Eat More Than 100 Plastic Fibers With Each Meal -- The proliferation of microplastics in the ocean has led to concerns that they might work their way up the food chain to us. But when researchers at Heriot-Watt University set out to investigate that concern, they found that plastics in our own homes pose a much greater threat to humans. The results of the study, published March 29 in Environmental Pollution , found that humans likely consume about 114 plastic microfibers each meal simply from household dust that settles on their plates. That adds up to 13,731 to 68,415 pieces per year. In comparison, researchers calculated that eating mussels would only lead humans to ingest 100 microplastics yearly. Each mussel they studied contained about two plastic particles. "We do not know where these fibres come from, but it is likely to be inside the home and the wider environment," Henry said in the release. . "Plastic microfibers found in the dust in our homes and the air we breathe can come from car tyres, carpets and soft furnishings, as well as clothes such as fleece jackets. These are regularly shedding tiny bits of plastic into the environment as they are worn away," he said in the Heriot-Watt release. According to a study published in Lancet Planetary Health in October, 2017, the proliferation of microplastics in the environment is a concern in part because the impact on human health is still not well-known.
WHO launches health review after microplastics found in 90% of bottled water - The World Health Organisation (WHO) has announced a review into the potential risks of plastic in drinking water after a new analysis of some of the world’s most popular bottled water brands found that more than 90% contained tiny pieces of plastic. A previous study also found high levels of microplastics in tap water. In the new study, analysis of 259 bottles from 19 locations in nine countries across 11 different brands found an average of 325 plastic particles for every litre of water being sold. In one bottle of Nestlé Pure Life, concentrations were as high as 10,000 plastic pieces per litre of water. Of the 259 bottles tested, only 17 were free of plastics, according to the study. Scientists based at the State University of New York in Fredonia were commissioned by journalism project Orb Media to analyse the bottled water. The scientists wrote they had “found roughly twice as many plastic particles within bottled water” compared with their previous study of tap water, reported by the Guardian.
Michigan Lets Nestlé Draw More Groundwater for Bottling - The Michigan Department of Environmental Quality (MDEQ) has granted Nestlé Waters a permit to increase groundwater withdrawal from 250 gallons per minute to 400 gallons per minute from its White Pine Springs well for the purpose of bottling drinking water .The approval comes despite near universal opposition from residents, who cite the Swiss food and beverage giant 's nominal $200-a-year fee to pump water from its wells. The fee will not change with the new permit.Additionally, Nestlé's White Pine Springs well near Evart, Michigan happens to lie approximately 120 miles from the lead-poisoned city of Flint . Bottled water companies have drawn outrage from many communities for privatizing their public water supply in the face of Flint's years-long drinking water crisis, where some residents have been billed hundreds of dollars for water they cannot drink."Michiganders know that no private company should be able to generate profits by undermining our state's precious natural resources, which is why an unprecedented number of people spoke up to oppose this permit," State Sen. Rebekah Warren, D-Ann Arbor, who serves on the Senate's Natural Resources Committee, told Detroit Free Press . "Out of 81,862 comments filed by the people of our state, only 75 of them were in favor of the permit."MDEQ said the application met the requirements under the Michigan Safe Drinking Water Act.
Pruitt Gives Himself Final Say on Water Protections, But for How Long? -- In a March 30 memo obtained by CNN and reported Wednesday, U.S. Environmental Protection Agency ( EPA ) Administrator Scott Pruitt told agency staff to give him the final say on whether transportation, development or industry projects threaten wetlands, ponds or streams. The new policy would shift Clean Water Act deliberations away from regional EPA officials and scientists and towards Pruitt. "With this revised delegation, authority previously delegated to regional administrators to make final determinations of geographic jurisdiction shall be retained by the Administrator," the memo read in part. However, it is possible Pruitt won't have much of a chance to use his self-assigned powers as ethics scandals pile up. Also on Wednesday, press secretary Sarah Huckabee Sanders said that President Donald Trump was "Not [OK]" with Pruitt's arrangement with an energy lobbyist and his wife to rent a D.C. condo at below-market rates, CNN reported . Sanders' statement came a day after The Atlantic dug up fresh dirt on Pruitt: he had apparently used a provision of the Safe Drinking Water Act, which allows the EPA administrator to hire as many as 30 people without presidential or congressional approval, in order to give massive raises to two staffers who had traveled with Pruitt from Oklahoma. According to The Atlantic, Pruitt had first sought Trump's approval for the raises and been refused.
Recycled Wastewater Tasted Better Than Tap Water In One Study, & Here’s What That Means For The Future Of Toilet-To-Tap - I'm a self-proclaimed water snob. If I'm drinking tap water, I'm squeezing half a lemon into my glass to disguise the flavor. It sounds ridiculous to most people, but I've been staunch in my water preferences — which is why I'm intrigued about new research that examines toilet-to-tap water. What is toilet-to-tap water? According to the BBC, water that gets flushed or poured down a drain is recyclable, and it can be filtered and treated until it's safe to drink. I have a visceral reaction at the thought of drinking water that was once in a toilet, but a study from the University of California, Riverside, found that recycled wastewater tastes better than tap water. The study is published in journalAppetite. Researchers already knew that recycled wastewater is safe for drinking — all that's left is getting people like me who are grossed out on board with the concept. They conducted a blind taste test and gave 143 people samples of tap water, bottled water and recycled wastewater (researchers call it indirect potable reuse, or IDR). Participants ranked the water on taste, texture, smell, color and temperature and found that tap water ranked lower, while bottled water and recycled wastewater were equally liked. "The groundwater-based water was not as well liked as IDR or bottled water," study co-author and UC Riverside professor Mary Gauvain said in a press release about the findings. "We think that happened because IDR and bottled water go through remarkably similar treatment processes, so they have low levels of the types of tastes people tend to dislike." The researchers also asked people about their levels of neuroticism and their openness to new experiences. People who considered themselves neurotic preferred both bottled water and IDR water, while adventurous people rated the samples the same. Even though the thought of drinking water that was once in someone's toilet may make you shudder, the implications of this study are huge. The water is just as safe as anything else you drink, and it may even taste better thanks to its rigorous filtering process. In states like California, getting people to use recycled wastewater would be a huge win for the drought-affected environment. The BBC says that a city that recycles all of its wastewater can reduce its water needs by 60 percent.
The Kentucky county where the water smells like diesel - For the past 20 years, Hope Workman has hustled up a dirt path on the side of a mountain in Lovely, Kentucky, just to get drinking water. She doesn't trust what comes out of her tap. Workman is not the only person in Martin County, Kentucky, or America for that matter, who struggles to get clean water. Two well-publicized crises include Flint, Michigan's, lead contamination and Puerto Rico's failing water systems in the wake of Hurricane Maria. As our water infrastructure system ages, experts say, keeping America's water clean becomes increasingly challenging. Just ask the residents of Martin County. Customers of the county's water district post videos and pictures on social media of brown cloudy water spouting out of their taps. Sometimes, it comes out looking like blue Gatorade. Sometimes, it smells like diesel fuel. Locals ask themselves, "Just what's in the water?" Until several months ago, customers received notices on the back of their water bills stating that their water had been tested and found to be above federal limits of trihalomethanes and haloacetic acids. These contaminants are a reaction between the chlorine used to treat the water for bacteria and organic matter that may be found in the water or the pipes. Exposure to these chemicals could mean an increased risk of cancer. Eastern Kentucky has some of the highest levels of cancer in the country due to smoking and obesity, but residents here also wonder whether their water is to blame.
Kentucky Lawmakers Limit Black Lung Claims Reviews Despite Epidemic - A measure signed into law in Kentucky this past week would prevent federally-certified radiologists from judging X-rays in state black lung compensation claims, leaving diagnoses of the disease mostly to physicians who typically work for coal companies. The new law requires that only pulmonologists — doctors who specialize in the lungs and respiratory system — assess diagnostic black lung X-rays when state black lung claims are filed. Up until now, radiologists, who work in evaluating all types of X-rays and other diagnostic images, had been allowed to diagnose the disease as well. Just six pulmonologists in Kentucky have the federal certification to read black lung X-rays and four of them routinely are hired by coal companies or their insurers, according to an NPR review of federal black lung cases. The two remaining pulmonologists have generally assessed X-rays on behalf of coal miners but one is semi-retired and his federal certification expires June 1. Among the radiologists excluded by the law is Dr. Brandon Crum, who helped expose the biggest clusters ever documented of complicated black lung, the advanced stage of the fatal disease that strikes coal miners. "I do believe the coal industry is writing this bill to exclude certain doctors that they don't like," said Phillip Wheeler, an attorney in Pikeville, Ky., who represents coal miners seeking state black lung benefits.
Cape Town ‘Day Zero’ Pushed Back to 2019 as Dams Fill Up in South Africa - South Africa’s drought-stricken Cape Town has pushed back its estimate for “Day Zero,” when taps in the city run dry and people start queuing for water, to 2019 from August of this year, as data show dam levels rising elsewhere in the country.An El Nino-triggered drought two years ago hit agricultural production and economic growth throughout South Africa. Cape Town was particularly hard hit, and lack of good subsequent rains around the city has made its water shortage worse.The city of Cape Town said on its web site that Day Zero had been “pushed out to 2019.” Residents have been living with stringent consumption restrictions, which now stand at 50 litres per person per day. Those restrictions remain in effect.Dam levels for the Western Cape province, which includes Cape Town, were at 18.3% last week compared with 19% the week before, according to South Africa’s Department of Water Affairs. Elsewhere, the water situation has been improving.The Vaal Dam, a major supply source for Gauteng, the province that includes Johannesburg, Pretoria and much of South Africa’s industry, was at 94.7%, up from 83.5% the week before.Levels in the Katse and Mohale dams in neighbouring Lesotho, which are key water storage systems for Gauteng, have a combined capacity now of almost 54%. In late January, they were at 32%, raising concerns that the water crisis would spread beyond Cape Town. Relief for Cape Town, a major tourist draw famed for its mountain backdrop, beaches and nearby wine farms, may also be imminent, with good seasonal rains forecast. Cape Town typically gets rain in the southern hemisphere winter, starting around May. Above-average-rainfall is now forecast over the next three months, according to the latest seasonal outlook from the South African Weather Service.
China’s new rain-making system could increase rainfall by billions of cubic feet - China needs water — and their answer to the issue is a massive weather modification system being developed by the China Aerospace Science and Technology Corporation (CASC). South China Morning Post (SCMP) reported the country is testing technology that could increase rainfall in the Tibetan Plateau by as much as 10 billion cubic meters, or around 353 billion cubic feet, every year. Will a huge rain-making system help China with water issues? SCMP said they plan to build tens of thousands of chambers across the Tibetan mountains to generate rain over an area of around 620,000 square miles, or “three times the size of Spain.” The chambers will burn solid fuel to create silver iodide, which SCMP described as a “cloud-seeding agent with a crystalline structure much like ice.” They said the chambers will be located on steep ridges facing the south Asia monsoon. Wind striking the mountain will produce an upward draft, carrying particles into clouds to bring about rain. Real-time data from 30 weather satellites, each one watching monsoon weather above the Indian Ocean, will guide daily operation of the chambers. The ground-based network will also draw on cloud-seeding methods with drones, planes, and artillery to maximize the impact of the system, according to SCMP. A researcher on the project told SCMP, “[So far,] more than 500 burners have been deployed on alpine slopes in Tibet, Xinjiang, and other areas for experimental use. The data we have collected show very promising results.” The publication said although the idea isn’t a new one, China is the first country to try “such a large-scale application,” and space scientists designed and built the chambers with “cutting edge military rocket engine technology.”
Study: flood control engineering likely has worsened floods — Flood control work in the Mississippi River and its tributaries has likely made floods worse in Mississippi and Louisiana, researchers say.Using 500 years of data from tree rings and from sediment in oxbow lakes — bends that once were part of the Mississippi River but became lakes when the river changed its path slightly — they say the river has flooded more often and poured more water into those states over the past 150 years than any previous period.Climate change may be responsible for about one-quarter of the difference, they estimate. Engineering, such as building levees and creating a straighter, narrow channel for navigation, is likely responsible for the rest, researchers from Massachusetts, Illinois, Alabama, South Carolina, Texas and Liverpool, England, say in Wednesday's journal Nature.Some outside scientists praised the entire paper. Others praised the "paleoflood" work but had doubts about the conclusion that flood engineering is the main reason floods are worse. The researchers said climate variability, particularly the multidecade changes in the North Atlantic's surface temperature, has played a big part in flooding over the centuries. However, they said, changes in such cycles would predict a much smaller increase than has occurred since 1800."The other likely culprit is something we've done to the river or basin," Munoz said. The Mississippi River Basin drains all or part of 31 states and two Canadian provinces."Their palaeoflood record is compelling. ... And if the authors are correct, and collective efforts to subdue the Mississippi have inadvertently pushed it to rise higher than ever, then the time might have come to consider loosening its restraints,"
New Model Shows Towns on the Wrong Side of an Illinois Levee District Are Treading Water – For years, the residents of Pike County, Missouri have blamed their worsening floods on their neighbors across the Mississippi River in Illinois.Ever since the Sny Island Levee Drainage District raised its levees above authorized heights, Pike residents claimed, the agricultural lands behind the Sny were spared while farms in Missouri, protected by lower levees, were inundated.The kind of science needed to prove allegations like this is expensive and time consuming. But thanks to a new government model, the Missouri residents finally have some science to back up their suspicions. The Army Corps of Engineers designed a $500,000 computer model that lets scientists simulate how floods affect the Upper Mississippi River, demonstrating, in part, the difference that larger levees make. The tests show that if the region faces a disaster as grave as the Great Flood of 1993, communities with higher levees — found in a handful of levee districts on both the Illinois and Missouri sides of the river — would be far better protected, and those without them would fare far worse. On the Illinois side, the land behind the Sny’s higher levees would be much drier, with some areas saved from more than 16 feet of flooding. The Missouri side would weather floodwaters up to 1.7 feet higher than it experienced in 1993.
The Great Lakes are filling up with giant green blobs - Every summer, a massive green-algae blob colonizes western Lake Erie. Last year’s bloom ranked among the biggest ever, blanketing 700 square miles—an area 1.5 times bigger than Los Angeles. The shoreline of Toledo, Ohio, “smelled like a sewer,” according to one reporter.These fetid growths appear on lakes throughout the country and world. They’re known as “harmful algal blooms” because they generate toxins called microcystins, which when ingested cause nausea, vomiting, diarrhea, severe headaches, fever, and liver damage. Where do these green blobs come from? In short, we create them. In land upstream from the lake, farmers apply phosphorus as fertilizer for their corn and soybean crops. Every year, a portion of it leeches into the lake, where it fertilizes algae instead—a process called eutrophication. While Erie’s west-side drainage basin has been planted in millions of acres of farmland for decades, the state’s regulators have documented that the amount of biologically active phosphorus entering the lake each year spiked in the 1990s and has remained high ever since. Poisoned water is only one of the consequences of the excess farm fertilizer that ends up in lakes. Another is accelerated climate change. A new paper—by a team that includes researchers from the EPA and the University of Minnesota—finds that algae-riddled lakes are much bigger emitters of the potent gas methane than was previously known. Methane is a greenhouse gas with about 30 times the heat-trapping effect of carbon. All told, they found, methane from the world’s lakes emits methane equivalent in greenhouse effect to about 20 percent of all the carbon dioxide from fossil fuels burned globally—about twice the level of previous assumptions. And they directly tied these emissions to algae blooms. “The greener or more eutrophic these water bodies become, the more methane is emitted, which exacerbates climate warming,” the study’s lead author, University of Geneva researcher Tonya DelSontro, said in a press release. The paper found that even modest increases in eutrophication over the past century could add methane to the atmosphere equivalent in greenhouse gas terms to 13 percent of the world’s current fossil fuel combustion.
Train Hauling 10 Million Pounds Of New York Excrement Stranded In Alabama - A train carrying 200 containers, or 10 million pounds of New York City sewage sludge (i.e. shit) is stuck in an Alabama rail yard, leaving a small town of around 1,000 people choking on the foul stench. The poop train has sat for months in limbo in a Parrish, Ala. trainyard, just two hours north of Montgomery, after a legal dispute arose between waste management facilities in New York and New Jersey, which originally shipped the biowaste to Big Sky Environment landfill in Adamsville, AL.200 containers of New York City sewage sludge have been stranded on a train in northern Alabama because of a legal dispute. Northern Alabama isn’t happy. https://t.co/4nDvHLXcni— Jim Roberts (@nycjim) March 30, 2018 When neighboring West Jefferson filed and won an injunction against Big Sky in January to prevent the "shit train" from evacuating its fecal freight, the load was moved to Parrish, where there are no zoning laws against keeping it there - and where it has sat ever since. "People need to understand that this waste does not need to be in a populated area," said Parrish Mayor Heather Hall. "There are places to put it, industrial places. We're a very small town caught in the middle of this, and I feel like that's part of the issue here. This shouldn't be happening." “It greatly reduces the quality of life,” Hall said. “You can’t sit out on your porch. Kids can’t go outside and play, and God help us if it gets hot and this material is still out here.” On Tuesday, when Hall spoke to CNN, the temperature in Parrish reached 81 degrees. Hall told CNN that as many as 252 tractor-trailer loads of feces was stockpiled in the Parrish rail yard adjacent to a baseball field - permeating the entire two-mile-wide town with the fetid fallout. The mayor said she expected the poo train to be moved within days of its February arrival. She met with Alabama Governor Kay Ivey and other state lawmakers last week in order to try and find a solution to the fecal fiasco.
The Puerto Rican Town Left to Stew in Toxic Waste - Up and down Rodríguez’s street, other residences appear abandoned and rundown. But Rodríguez’s community is dealing with more than the wreckage left by a powerful Category 4 hurricane. Two and a half miles east of her home lies the Battery Recycling Company Superfund Site, a 16-acre former lead-smelting facility that shut down in 2014, after the Environmental Protection Agency confirmed its 20 years of operations had resulted in toxic levels of heavy metals at and around the site. It flooded during Hurricane Maria, too. Locals like Rodríguez, along with some scientists, worry the storm could have spread the facility’s pollutants far and wide. The EPA says everything is fine, but history shows that the agency doesn’t always exhibit the best judgment when it comes to this Superfund. Visiting the site on a recent trip, I left with more questions than answers. What’s clear is that the Battery Recycling Company Superfund—and other industrial sites like it around Arecibo—continue to threaten Rodríguez and her community, in ways that natural disasters will only exacerbate. The fact that folks are getting back to their regular routines in spite of the wreckage is a reminder that things were never really “normal” in Arecibo, a community encircled by pollution and where nearly half of the city residents live below the poverty line. Along with the Battery Recycling Company, Arecibo’s history includes chemical manufacturing of Agent Orange, an allegedly law-breaking landfill, a failed sewage system, hazardous waste left behind by pharmaceutical companies, and an active pesticide storage warehouse that’s also a Superfund site. For several years, the city has been trying to convert a rundown, asbestos-laden paper mill into a waste-to-energy incinerator that could become another source of lead emissions. Many of the region’s industrial sites have emitted particulate matter, methane, or other hazardous air pollutants.
Tourists and exports return to storm-hit island of Dominica — The small Caribbean island of Dominica is making progress toward recovery after a devastating blow from last year’s Hurricane Maria, the country’s prime minister said Tuesday. Prime Minister Roosevelt Skerrit said the country has exported the first crops harvested since Maria roared across Dominica as a fierce Category 5 on Sept. 18 and that tourism is recovering with the return of cruise ships and the re-opening of hotels on the mountainous island in the eastern Caribbean. He also said water has now been fully restored to all communities in Dominica and that many homes are being rebuilt. The country has received about $400 million in assistance from the World Bank, the European Union and other international institutions. Skerrit said the island needs about $1 billion to rebuild and prepare for future storms. “We are much better than yesterday,” the prime minister said in an interview on the sidelines of a disaster-recovery workshop in Miami organized by the Clinton Foundation. “We have a long way to go because we are going to build back better and that takes time.” Hurricane Maria struck Dominica with sustained winds of about 160 mph, killing at least 31 people and damaging 90 percent of homes on the island of about 74,000 people. Skeritt, who had to flee his own home when it was damaged in the storm, said about 5,000 houses need to be rebuilt still and 20,000 require repairs.
Climate Change and Invasive Milkweed Could Make Toxic Cocktail for Monarchs, Study Finds - Monarch butterflies are already in danger . Their numbers have decreased by 80 percent in the past 20 years, and this year's count of the number of the black-and-orange butterflies wintering in Mexico was lower than 2017's. Now, researched reported Tuesday in a Louisiana State University (LSU) press release reveals that two human-caused environmental concerns could combine to pose another deadly threat to monarchs in the future: climate change , and the spread of non-native species. The study, published Tuesday in the journal Ecology, looked at the effect of higher temperatures on a non-native, tropical variety of milkweed or Asclepias curassavica. Tropical milkweed is commonly sold in garden stores in the southern U.S., and monarch butterflies thrive on it under current conditions. As the press release explains, all varieties of milkweed contain cardenolides, chemicals that are toxic to most predators but that monarchs have evolved to tolerate. By laying their eggs on milkweed, monarchs protect their offspring, and the caterpillars that hatch render themselves unappetizing to predators by feasting on the chemicals. Tropical milkweed has more cardenolides than the native Asclepias incarnata, and currently the higher level is good for monarchs. Adult butterflies that feed on A. curassavica weigh more and are more likely to survive than butterflies that feed on less-toxic, native varieties. But this could change with the climate . The study found that warmer temperatures increase the cardenolides in A. curassavica to the point where they poison monarch larvae, delaying larval growth and stunting adult forwings. Native milkweed is not similarly impacted.
Life for Residents Near Hog Farms Just Got Much, Much Worse - In the midst of last week’s, um, stormy news cycle, the meat industry quietly scored a pair of legislative coups, both of which bolster corporate power to impose the downsides of factory-scale animal farming on communities. One victory will affect people who live near these large operations. In North Carolina alone, 160,000 people reside within a half mile of vast open cesspools full of manure from thousands of confined hogs. If you lived in such conditions, you’d probably want to know what pollutants you and your family were breathing from the foul-smelling air wafting from these operations. In North Carolina,160,000 people reside within a half mile of vast open cesspools full of manure from thousands of confined hogs. Folded into the omnibus spending bill signed by President Donald Trump last week is a rider that will prevent such knowledge from reaching public view. It’s based on a bill called the “Fair Agricultural Reporting Method Act”(get it? FARM), which proposed to free most livestock operations from having to report the air-borne toxins emitted from the manure they accumulate. These gases, which include ammonia and hydrogen sulfide, can trigger ill health effects in neighboring communities, including eye irritation, chronic lung disease, and olfactory neuron loss. The pork, beef, andchicken trade groups all hotly supported the measure, which is now the law of the land. The Center for Progressive Reform’s Laurie Ristino has the backstory. The passage of the FARM rider in the omnibus bill preserves the know-nothing status quo. Patty Lovera, assistant director of Food & Water Watch, says the provision amounts to a “missed opportunity to get a handle on what some of these facilities are releasing—which means communities nearby do not even know what they are being exposed to.” And if federal agencies can’t measure the air-borne pollutants wafting off of CAFOS, they also can’t force the industry to cut emissions, Lovera adds. By ending the effort to collect data, the provision lets the big meat companies “argue that the EPA doesn’t have enough data to come up with regulations.”
Invading iguanas tear through Florida′s ecosystem - Florida's warm, sunny weather and extensive wetlands support a paradise of diverse flora and fauna. But when non-native species arrive and take advantage of the Sunshine State's enviable climate and rich biodiversity, they leave destruction in their wake.Voracious predators like the Burmese python and Argentine black-and-white tegu lizard are the most famous culprits. But another, vegetarian, reptile is inflicting similar damage. Native to Central and South America and parts of the Caribbean, green iguanas have been spreading across South Florida after escaping or being released by pet owners."If they escape here in South Florida it's like Club Med – they're out there enjoying this wonderful environment, no pressures on them," zoologist Ron Magill told DW. Without any natural predators, iguanas are thriving in South Florida in particular. They can grow up to 6 feet (1.8 meters) in length, with appetites to match, and reproduce at an alarming rate. "One female can lay 30 to 40 eggs at a time," Magill says. They munch through native plants and crops and crowd out smaller, native lizards. They also feed on flowering plants that butterflies depend on, and are blamed for wiping out the last known colonies of critically endangered Miami blue butterfly, which is found nowhere outside of South Florida. "It is a common misconception, 'oh they look cool' and 'oh they don't really hurt anything,'" Van Leer told DW. "The reality is they are a plague that has been unleashed on our ecosystem. So when people see one, they see this neat-looking lizard, what they don't understand is the damage that they create."
Trump plan could open Giant Sequoia monument to logging - The timber industry and its advocates are using the national monument review to advocate for reduced protections around California’s giant sequoias. These majestic plants have a lineage stretching back to the Jurassic period, but fears over their future have prompted a somewhat counterintuitive plan presented to the Trump administration – in order to save the giant sequoias, some say, their surrounding area must be stripped of protected status. this land is your land ask As part of the Trump administration’s determination to roll back regulation and open public land to private industry, the interior secretary, Ryan Zinke, is currently undertaking a review of more than two dozen national monuments declared since the 1990s. The stated goal of the review is to reboot extractive industries such as mining and logging. Supporters of the Giant Sequoia monument fear a unique ecosystem is at risk from timber industry advocates who would peel back protections. “If this were a different administration and there was a push by the timber industry and its allies to shrink the monument, I wouldn’t take it too seriously,” said Chad Hanson, a rangy tree ecologist who has agitated for greater sequoia protections for the past two decades. “But the Trump administration? Oh, yeah. We are taking this threat very seriously.” At a boisterous public meeting in June, the Tulare County supervisors voted 3-2 in support of a plan to shrink the Giant Sequoia national monument, which contains the majority of the world’s population of the towering trees, to less than a third its current size. The decision sparked bellowing acrimony that required the county sheriff to step in to restore calm.
Trump administration sues California over state law on federal land transfers - The legal war between the Trump administration and the state of California expanded Monday as the Justice Department sued to block a new state law that limits transfers of federal lands.The suit, filed in federal court in Sacramento on Monday, contends that the state law is unconstitutional because it interferes with Congress’ right to control the sale of federal property. California’s Legislature adopted the law last October at the urging of environmentalists concerned that the Trump administration was readying plans to sell off federal land for real estate development, mining or drilling. The new suit was filed by the Justice Department less than a month after the federal government sued California over three other state laws widely viewed as enacting “sanctuary” policies aimed at blocking aggressive immigration enforcement by the Trump administration. That suit grabbed headlines, but lawyers for the state and attorneys for the federal government have been battling in court for months over more than two dozen lawsuits California Attorney General Xavier Becerra has brought on issues ranging from the president’s so-called travel ban to rollbacks of birth control coverage under Obamacare to efforts to ban transgender people from serving in the military. Justice Department officials expressed frustration Monday with the tactics California’s legislators and Gov. Jerry Brown have used to register their disagreement with Trump policies. “California has, once again, passed an extreme statute found in no other state to obstruct the federal government, this time by interfering with the conveyance of federal lands,” acting Associate Attorney General Jesse Panuccio told reporters. “This is another example of California ignoring federal law. No state legislature can, statute by statute, undermine the rule of law and the U.S. Constitution.”
Half of Alberta's boreal forest could disappear due to fires and climate change | CBC News: A study shows half of Alberta's boreal forest could disappear in just over 80 years due to wildfires and climate change. The research, published Monday in the journal Ecosphere, gives a glimpse at how vegetation could change based on the current rate of carbon emissions and climate change. "We found that wildfire could initiate the conversion of approximately 50 per cent of the current boreal forest into grassland or deciduous open forest," said Diana Stralberg, who did the research as part of her PhD in the biological sciences department at the University of Alberta. "If you look at even more extreme assumptions about future wildfire, you would get something closer to 75 per cent conversion." The study simulated wildfire using a model from Natural Resources Canada and data from the Alberta Biodiversity Monitoring Institute to determine what vegetation might grow back under future climates. Marc-Andre Parisien, a fire research scientist at Natural Resources Canada, said the potential for change is strong. "Trees are very stubborn," he said. "Trees tend to want to persist and stay where they are, even though the climate in which they are living is not really suitable any more. "To really change that vegetation type from a certain kind of forest to something else, you have to kill the trees — whether it's a chainsaw or a fire or an insect or a flood."
Proposed Rule Change Would Be 'Death Sentence' for Nearly 300 Species, Activists Warn - In all the media attention gobbled by U.S. Environmental Protection Agency ( EPA ) head Scott Pruitt, it's important to remember that Trump's appointed Department of Interior (DOI) leader Ryan Zinke is also extremely dangerous for the environment. Before being chosen to head the DOI, Zinke was a Montana representative with a three percent environmental voting record who was especially hostile to the Endangered Species Act: He spearheaded efforts to remove protections for wolves, sage grouse and lynx, among other actions, according to Center for Biological Diversity executive director Kierán Suckling. Under his leadership, the DOI is continuing that hostile legacy. On Monday, the department sent a proposal to the White House that would remove essential protections for almost 300 threatened species, The Center for Biological Diversity reported Wednesday. The proposal would reverse a rule made by the U.S. Fish and Wildlife Service (FWS) in 1975 which grants threatened species the same protections under the Endangered Species Act as listed endangered species, unless the FWS determines those protections are unnecessary on a case-by-case basis. "The Trump administration just issued a death sentence to nearly 300 threatened species," Center for Biological Diversity Endangered Species director Noah Greenwald said in a release. The species left vulnerable by the rule change would include southern sea otters, northern spotted owls, piping plovers, red knots, Yosemite toads, delta smelt, Santa Catalina Island foxes, gopher tortoises and manatees, according to the Center for Biological Diversity and CNN .
Another 333 Minke Whales Killed by Japanese Fleet - In defiance of international protests, Japanese whaling vessels returned to port with another 333 minke whales on Saturday after its months-long hunt in the Southern Ocean Whale Sanctuary in Antarctic waters. According to the Japanese Institute of Cetacean Research , among the whales collected, 152 were male and 181 were female. About 60 percent of the males and 70 percent of the females were matured. Japan plans to hunt about 4,000 whales over the next decade despite the International Whaling Commission's (IWC) 1986 moratorium on commercial hunting. The country launched its "scientific whaling" program in 1987 as a loophole to the moratorium. Its government insists that the marine mammals are killed in the name of research. "The purpose of this research is to carry out a detailed calculation of the catch limit of minke whales and study the structure and dynamics of the ecological system in the Antarctic Ocean," the Fisheries Ministry said after last year's hunt. However, Reuters noted that Japan's ultimate goal is the resumption of commercial whaling. Japan insists that most whale species are not endangered and that eating whale is part of its culture, even though most Japanese people no longer eat it. Conservation organization Sea Shepherd has long opposed Japanese whaling in the Southern Ocean Whale Sanctuary and has sent ships since 2005 to intercept the hunts. The group, however, did not send ships this year. Founder Captain Paul Watson told Australian Broadcasting Corp in August that Japan is "using military technology. They have real-time satellite coverage of where we are. We cannot close in on them."
New study shows seafloor erosion now occurring like coastal land loss -- Scientists have discovered that the seafloor from the Mississippi River Delta to the Gulf of Mexico is eroding like the land loss that is occurring on the Louisiana coast. During the 20th century, thousands of dams were built on Mississippi River tributaries stopping the flow of fine silt, clay and other sediment from reaching the delta and seafloor to offset erosion. Without this sediment, land —in the form of wetlands and the seafloor— is lost, which threatens offshore and inland infrastructure in the face of waves, hurricanes and surge, or flooding, from storms. Land loss also affects marine plants and animals as well as how pollution is absorbed and broken down. In this new comprehensive study, scientists have mapped the retreat of the seafloor from the Mississippi River Delta into the Gulf of Mexico for the first time. This research was published recently in the journal Marine Geology. "Imagine this as an underwater extension of land loss that we see at the surface. This is a big deal because it can affect so many processes that occur from the coast to the open ocean including marine organisms' lifecycles and underwater landslides," said lead author San Diego State University Assistant Professor Jillian Maloney, who conducted this research as a post-doctoral researcher at LSU.
Large crack in East African Rift is evidence of continent splitting in two - PBS -- A large crack, stretching several kilometers, made a sudden appearance recently in south-western Kenya. The tear, which continues to grow, caused part of the Nairobi-Narok highway to collapse and was accompanied by seismic activity in the area. The Earth is an ever-changing planet, even though in some respects change might be almost unnoticeable to us. Plate tectonics is a good example of this. But every now and again something dramatic happens and leads to renewed questions about the African continent splitting in two.The Earth’s lithosphere (formed by the crust and the upper part of the mantle) is broken up into a number of tectonic plates. These plates are not static, but move relative to each other at varying speeds, “gliding” over a viscous asthenosphere. Exactly what mechanism or mechanisms are behind their movement is still debated, but are likely to include convection currents within the asthenosphere and the forces generated at the boundaries between plates. These forces do not simply move the plates around, they can also cause plates to rupture, forming a rift and potentially leading to the creation of new plate boundaries. The East African Rift system is an example of where this iscurrently happening. The East African Rift Valley stretches over 3,000km from the Gulf of Aden in the north towards Zimbabwe in the south, splitting the African plate into two unequal parts: the Somali and Nubian plates. Activity along the eastern branch of the rift valley, running along Ethiopia, Kenya and Tanzania, became evident when the large crack suddenly appeared in south-western Kenya.
America's first climate change refugees are preparing to leave an island that will disappear under the sea in the next few years — Connected to the marshes and moss-laced bayous of southern Louisiana by two miles of narrow causeway, waters lapping high on each side, Isle de Jean Charles takes you as far into the Gulf of Mexico as you can go without falling in. But the dolour in the salt air is not just about loneliness and separation. It's about impending demise. Don't call it a death sentence - the intention is the opposite - but state officials in late March made the announcement that had been a long time coming. Some on the island, nearly all members of the Biloxi-Chitimacha-Choctaw Indian tribe, met it with relief; others with hostility. Marking the kick-off of what will be the first climate resettlement of its kind in the entire United States, land had been chosen an hour's drive to the north for a whole new town to be thrown up. No one will force them exactly, but the intention is clear: to evacuate those still living on the island to the new site, where at present nothing but sugar cane stands, before it is too late. When that will be depends on whom you ask. But no one disputes that the island is sinking, thanks to a combination of subsidence and rising sea levels. Where there were 22,000 acres in 1955 there are only 320 acres today. Climate change isn't helping, but the principal problem traces back to the Great Mississippi Flood of 1927 when the corps of engineers responded by building giant levees to constrain the river. The result was stopping the flow of sediment into its delta, which once gave the state's barrier islands the material to rebuild as fast as they eroded.
Melting Permafrost Emits More Methane Than Scientists Thought - Methane is reckoned to be at least 30 times more powerful than CO2 at warming the earth, with some estimates putting its potency much higher still. The good news, research has suggested, is that there is far less methane than CO2 in the atmosphere to worry about. The bad news, announced by an international research team, is that previous calculations may have been seriously wrong, and that thawing permafrost is likely to be producing appreciably more methane than anyone had thought.The researchers were headed by Christian Knoblauch of the Center for Earth System Research and Sustainability (CEN) at the University of Hamburg, Germany. Their findings, published in the journal Nature Climate Change , make it possible to predict better how much of this significant gas may be released by the thawing of the Arctic permafrost.Methane and carbon dioxide are both produced in thawing permafrost as dead animal and plant remains decompose. But methane is formed only in the absence of oxygen. Until now, scientists had also thought that more greenhouse gases were formed when the ground was dry and well aerated—in other words, when oxygen was available. So they did not expect much methane to be produced by the thawing permafrost. What Dr. Knoblauch and his colleagues have now shown is that water-saturated permafrost soils without oxygen can be twice as harmful to the climate as dry soils—which means the role of methane has been greatly underestimated.
PIOMAS April 2018 -- Arctic Sea Ice - Another month has passed and so here is the updated Arctic sea ice volume graph as calculated by the Pan-Arctic Ice Ocean Modeling and Assimilation System (PIOMAS) at the Polar Science Center: March 2018 turned out to be quite cold, relatively speaking (more on that below). And thus, as expected, volume increased by a lot, especially given that it was relatively low at the end of last month. In fact, with 2278 km3, sea ice volume growth during March was the largest in the 2007-2018 period, well above the average of 1832 km3. This means that the gap with 2017 has widened again, whereas the difference with all other years has become smaller. 2011 is now hot on this year's tail, being just 217 km3 behind. I expect this year to end up having the second lowest maximum on record, but you never know. Here's how the differences with previous years have evolved from last month: The 2018 trend line can clearly be seen moving back towards the pack on Wipneus' version of the PIOMAS graph: Naturally, the trend line on the PIOMAS sea ice volume anomaly graph has shot up, moving away from the linear trend line again, meaning volume loss is slightly less than expected, if one were to extrapolate the data average into the future: If volume is going up, but extent is among the lowest on record, and you divide the one by the other to get average thickness, the number will go up, of course. Hence the PIJAMAS trend line going up slightly faster than the rest, but differences are marginal at this stage anyway:
Underwater melting of Antarctic ice far greater than thought, study finds - Hidden underwater melt-off in the Antarctic is doubling every 20 years and could soon overtake Greenland to become the biggest source of sea-level rise, according to the first complete underwater map of the world’s largest body of ice. Warming waters have caused the base of ice near the ocean floor around the south pole to shrink by 1,463 square kilometres – an area the size of Greater London – between 2010 and 2016, according to the new study published in Nature Geoscience. The research by the UK Centre for Polar Observation and Modelling at the University of Leeds suggests climate change is affecting the Antarctic more than previously believed and is likely to prompt global projections of sea-level rise to be revised upward. Until recently, the Antarctic was seen as relatively stable. Viewed from above, the extent of land and sea ice in the far south has not changed as dramatically as in the far north. But the new study found even a small increase in temperature has been enough to cause a loss of five metres every year from the bottom edge of the ice sheet, some of which is more than 2km underwater. “What’s happening is that Antarctica is being melted away at its base. We can’t see it, because it’s happening below the sea surface,” said Professor Andrew Shepherd, one of the authors of the paper. “The changes mean that very soon the sea-level contribution from Antarctica could outstrip that from Greenland.”
An alarming 10 percent of Antarctica’s coastal glaciers are now in retreat, scientists find - Antarctica’s ocean-front glaciers are retreating, according a new satellite survey that raises additional concerns about the massive continent’s potential contribution to rising sea levels.Antarctica, which contains enough ice to raise the oceans by about 200 feet, is a continent of ice that flows outward to the ocean at numerous large glaciers. These mostly submerged glaciers rest deep on the seafloor at a point called the “grounding line,” where ocean, ice and bedrock meet.But at 10.7 percent of these glaciers, the ice masses are moving at a significant speed back toward the center of the continent as they melt from below, often because of the incursion of warm ocean water, which causes the grounding line to retreat. Only about 1.9 percent of glaciers were growing at a significant speed, suggesting a net retreat.And the more glaciers are retreating, the more one worries about sea-level rise. Retreating grounding lines can expose more ice to the ocean, allowing it to flow outward more rapidly. Here’s a brief video of the process provided by the authors of the new study, which was published in Nature Geosciences: http://www.washingtonpost.com/news/energy-environment/wp-content/uploads/sites/43/2018/04/Grounding_line_animation-1.mp4 The research used satellite techniques to infer changes to glacier grounding lines based on changes in the height of the glacier’s surface. Scanning one-third of Antarctica’s marine-based glaciers along a roughly 10,000-mile stretch of coastline, the work presents a more comprehensive look than other studies of Antarctic glaciers, which have tended to focus on grounding lines in just one key region.
California bans climate-warming HFCs in new air-conditioning and refrigeration - The federal government may be walking back regulations on the climate-warming chemicals used in refrigeration and air conditioning, but the state of California isn't.The California Air Resources Board (CARB) adopted a regulation last week that prohibits the use of hydrofluorocarbons (HFCs), chemicals that are between 1,000 and 3,000 times more potent than carbon dioxide. The decision follows a federal court ruling in August 2017 that found the EPA did not have the authority to regulate HFCs. "The Board's action today preserves the federal limits on the use of these powerful chemicals and refrigerants and provides more certainty to industry," said CARB Chair Mary D. Nichols. HFCs, a type of short-lived climate pollutant, linger in the atmosphere for an average of 14 years, which is significantly less time than CO2, but long enough to become mixed throughout the atmosphere. That means that reductions in HFCs in one area can affect the climate globally, including in the Arctic where climate change is wreaking havoc on natural systems. An Obama-era rule would have restricted the manufacturing of products containing HFCs, and had the potential to cut U.S. greenhouse gas emissions by as much as the equivalent of 72 million metric tons of carbon dioxide by 2025, according to an analysis by scientists at Lawrence Berkeley National Laboratory.But a federal appeals court sided with foreign manufacturers of HFCs, ruling that the EPA did not have authority to regulate them under the Clean Air Act. As use of air conditioning and cooling have increased around the world, HFCs have become the fastest-growing form of climate emissions, with the potential to cause up to a half a degree Celsius of warming by 2100. In California, a 2016 law requires the state to reduce HFCs emissions 40 percent below 2013 levels by 2030. The state also has established an approach to reduce other short-lived climate pollutants, like methane and black carbon. The CARB regulation will lead to an estimated 3.4 million metric tons of CO2-equivalent emissions reductions annually by 2030. Though it's not enough to reach the mandate imposed by the 2016 law, the board wrote in a release that "this regulation is a good start."
EPA sued by 14 states over delay in methane emission standards (Reuters) - Fourteen states filed suit on Thursday accusing the U.S. Environmental Protection Agency of failing to issue regulations for curbing emissions of methane, a potent greenhouse pollutant, from existing oil and gas operations as required under the Clean Air Act. The legal challenge, led by New York state, came nine months after a federal appeals court sided with environmental activists who sued to block the EPA from freezing enforcement of its own rules to control methane leaks from new or modified fossil fuel facilities. In both instances, EPA chief Scott Pruitt has been accused of putting the interests of oil and gas companies ahead of the agency’s obligation to protect air quality, including the control of heat-trapping pollutants that scientists blame for global climate change. Pruitt, who was a leading EPA critic as attorney general of the oil-producing state of Oklahoma before beginning his tenure as head of the EPA, has said he does not believe greenhouse gas emissions are the principal driver of climate change. As EPA administrator, Pruitt has moved to carry out U.S. President Donald Trump’s campaign pledge to roll back or reconsider a slew of environmental protections deemed burdensome by the industry, including climate change regulations. In March 2017 Trump signed an order to undo climate rules. And the EPA that month halted efforts to collect data from fossil fuel operations to prepare performance standards that states would have to follow in devising methane-control measures for existing wells, pipelines, storage tanks, pumping stations and other facilities. It was EPA’s “unreasonable delay” in developing those standards that Thursday’s lawsuit, filed in U.S. District Court in Washington, cited as a Clean Air Act violation.
How the Global Warming Information Mode Scrambles Ecological Understanding - Ecological information delivery mode in the media seems most often to consist of what we could call an information dump. At least one factoid — and often a whole plateful — seems to be falling on to our heads. And this falling has an authoritative quality: The delivery mode seems to be saying Don’t question this, or even, You should feel very bad if you question this. In particular, “global warming information mode” seems to be about dumping massive platefuls of facts on to us. Why? This is another way of saying What are the moves we can make in the possibility space of global warming information mode? Which is a rather complex way of saying What is the genre of global warming information mode? Which way is up? How are we supposed to feel? What kind of information delivery would destroy this mode? And so on.Our not having a ready answer for this question, unless we are global warming deniers, should make us pause. Deniers are quite clear: this mode is trying to convince me of something I don’t want to believe. I am having a belief forced down my throat.Why don’t we all feel like that? And if we feel ecologically righteous, we shun people who think they are being dumped on to make them feel something — crude guilt leading to crude belief, maybe. This is not a war of beliefs — this is the truth. Damn it, Mr Denier, why can’t you see that? Despite what factoids would have us believe, no fact just plops out of the sky. There is a whole environment in which the fact can appear — otherwise you can’t see it at all.
Why India’s CO2 emissions grew strongly in 2017 - India’s CO2 emissions grew by an estimated 4.6% in 2017, despite a turbulent year for its economy.Measured per person, India’s emissions are still very low – at only 1.8 tonnes of CO2 per capita – which is much lower than the world average of 4.2 tonnes. But those emissions have been growing steadily, with an average growth rate over the past decade of 6%. With India being the world’s fourth largest emitter of CO2, it is important to understand what the country’s emissions are currently and where they might be headed. Given India’s early stage of economic development, low per-capita emissions and its large population, there is significant scope for its emissions to increase.India’s pledge under the Paris Agreement is to reduce the carbon intensity (see below) of its economy by 33-35% by 2030, compared to 2005 levels. Given projections of very strong economic growth over this period, emissions are expected to grow significantly. Every year, the Global Carbon Project, of which CICERO is a key contributor, prepares a budget of sources and sinks of CO2 emissions. Alongside this budget is a projection of the current year’s global emissions, before the full year’s data is available. To build up this projection, we combine projections for several world regions. This year, India was added into the mix. The figure below shows the world’s top-four emitters, clearly showing the growing importance of India. In a recent guest post for Carbon Brief, my colleagues and I discussed how and why our projected growth rate for China, made in Autumn 2017, was higher than the first official estimates released in February 2018. In this article, the focus turns to India.
Scientists examine threats to food security if we meet the Paris climate targets -- Readers of this column have certainly heard about temperature targets such as 1.5°C or 2°C. These targets refer to allowable temperature increases over pre-industrial temperatures. If humans take action to hit a 1.5°C target, it means we are committed to keeping the human-caused global temperature rise to 1.5°C. Similarly for a 2°C target.The lower the target, the smaller the climate change. The smaller the climate change, the better. But is it worth the effort to set lower targets? I mean, if 2°C is good enough, why take the trouble to keep temperatures within 1.5°C?Fortunately, a new paper just out in the Philosophical Transactions of the Royal Society A asks this question. Specifically, they ask “How much larger are the impacts at 2°C compared to 1.5°C?” A follow-on question asked by the authors relates to what conditions occur at a particular level of warming, such as 2°C. This is a really important question because policymakers need to know what it will take to adapt to a 1.5°C world or a 2°C world.The authors focus on the impact of climate change on food security, and in particular, how changes to extreme weather will impact food production. The weather issues that are central to this study are drought and precipitation. We know that in a warming world, the weather will get wetter. This is because warm air is more able to hold water (air can be more humid). As a consequence, when rains fall, they come in heavier bursts. We are already seeing this in the US, for example, where the most extreme rainfalls are increasing across the country.But, at the same time, evaporation happens quicker and areas can dry out faster. So, when the rains stop, drought can set in quicker and more severely. So, there are competing issues and an obvious question is, which will win out? Will the world become drier or wetter? The answer to this question depends on where you live. It is likely that areas that are currently wet will become wetter. Areas that are currently dry will become drier. This is just a general rule of thumb, there are variations to this rule. But it is a pretty good generalization.
IEA’s Rosy Outlook for Fossil Fuels Is Driving World Towards Climate Disaster -- A new groundbreaking report out Thursday details how one of the most influential organizations in the world when it comes to the global energy system, the International Energy Agency (IEA), is holding back governments from making the necessary transition away from fossil fuels and towards the kind of rapid transition to renewables that scientists say is necessary to ward off the worst-case scenarios of global warming and the climate crisis. Published by Oil Change International and the Institute for Energy Efficiency and Financial Analysis (IEEFA), the report—titled Off Track:How the International Energy Agency Guides Energy Decisions towards Fossil Fuel Dependence and Climate Change (pdf)—concludes that the IEA's ongoing guidance to countries that have agreed to do everything possible to meet the goal of the Paris climate agreement is undermining those commitments by painting a picture of a world that remains much too wedded to the use of oil, gas, and coal. "The IEA promotes a vision of the future where the world remains dependent on fossil fuels," warns Greg Muttitt, research director at Oil Change International and lead author of the report. "As a basis for policy and investment decisions, this is in danger of becoming a self-fulfilling prophecy. All 30 of the IEA’s member countries have signed the Paris Agreement, so the IEA should be helping them achieve climate goals, not holding them back."
Any plan to geoengineer the planet must include the global south - Geoengineering is a radical climate change response that could backfire catastrophically. If it did, developing countries would bear the brunt of the burden, both in terms of any negative consequences of planet-hacking, as well as if we suddenly stopped. So it stands to reason that just maybe, those countries should have a little bit of a say in the matter. That’s the view of a dozen academics articulated in a letter published Tuesday in Nature. Led by Atiq Rahman of the Bangladesh Centre for Advanced Studies, the group includes environmental scientists and policy experts from India, Kenya, Ethiopia, Brazil, and other nations mainly in the developing world. Their message? Scientists from these countries need to “play a central role” in the conversation around solar radiation management (SRM). This oft-discussed geoengineering strategy would entail spraying tiny particles into Earth’s stratosphere to reflect incoming sunlight. Mimicking the effect of a large volcanic eruption, SRM could potentially bring global temperatures down in a matter of years. It’s also a wildly dangerous idea, with possible side-effects ranging from depletion of Earth’s ozone layer toutter devastation of the Amazon. Some folks also worry SRM could distract world leaders from the task of bringing down global carbon emissions (as if they needed more distractions). Because developing nations with less resources to throw around would be especially vulnerable to any unintended environmental catastrophes resulting from SRM, it behooves them to study the matter more deeply. While calling the technology “outlandish and unsettling,” the authors of the letter say they are “neutral” as to whether SRM is a good idea or not. The risks would have to be weighed against the benefit of offsetting rising temperatures. Climate change, remember, is also having a disproportionate impact on developing nations.
Scientists suggest a giant sunshade in the sky could solve global warming - It sounds like the stuff of science fiction: the creation, using balloons or jets, of a manmade atmospheric sunshade to shield the most vulnerable countries in the global south against the worst effects of global warming.But amid mounting interest in “solar geoengineering” – not least among western universities – a group of scientists from developing countries has issued a forceful call to have a greater say in the direction of research into climate change, arguing that their countries are the ones with most at stake. Scientists have long known that manmade events like pollution in the atmosphere, smoke from forest fires and volcanic eruptions can create a cooling effect. That has led scientists at Harvard University to propose their own experiment, which they call “stratospheric controlled perturbation effect”, or SCoPEx for short. It involves using a balloon to test the controversial proposition that aerosols released at a height of 20km in the Earth’s atmosphere can alter the reflective properties of cloud cover. Now a dozen scholars, from countries including Bangladesh, Brazil, China, Ethiopia, India, Jamaica and Thailand, have joined the debate, arguing in the journal Nature that poor countries should take a lead in the field since they have most to gain or lose from the technology. “Solar geoengineering – injecting aerosol particles into the stratosphere to reflect away a little inbound sunlight – is being discussed as a way to cool the planet, fast,” the scientists write in Nature.“Solar geoengineering is outlandish and unsettling. It invokes technologies that are redolent of science fiction – jets lacing the stratosphere with sunlight-blocking particles, and fleets of ships spraying seawater into low-lying clouds to make them whiter and brighter to reflect sunlight. “Yet, if such approaches could be realised technically and politically, they could slow, stop or even reverse the rise in global temperatures within one or two years.
Making Sure YOU Stay Alive When Millions Are Dying - Ian Welsh - Ok my friends, it’s time to talk seriously. We are screwed, blued and tattooed. We are so fucked that we can’t see straight. The vast majority of people are in complete denial about the level of pain coming down the pike. The combination of climate change and ecological collapse is going to hit us like high speed train carrying nitroglycerine derailing in the middle of a oil refinery. The timing on this shit is unclear. I have seen coherently argued cases that ecological collapse could happen soon. Heck, I’ve seen cases that say it, er, should have happened by now. But that doesn’t mean it won’t happen. And combined with climate change and the way we have utterly fucked up our management of fresh water, this is going to lead to, in a reasonable best case scenario, hundreds of millions of deaths, and a billion or so refugees. The aquifers are being depleted in wide areas in China, India, America and elsewhere. The groundwater is also being polluted. No one is prepared and no one is doing sweet fuck all. I get chewed on for being “cynical”, but people who do so are absolute fools and morons: anyone who cheered the Paris accords on the environment was delusional at best. They had no enforcement provisions. Virtually no one was going to meet those goals AND the goals were insufficient to being with. We were told they weren’t going to do enough, and weren’t going to hold themselves to it anyway, and people pretended to believe this BS was going to make the least bit of difference? Grow the fuck up. Now, if you are not old or the sort of sick that means your lifespan is shit and your odds are surviving and major catastrophe are crap, or if you care about your children or some other people, you need to start taking this into account in your personal lives. We are BEYOND STOPPING THIS. It is too late. Too late. So start building in some ability to survive if you care about surviving. And don’t allow yourself to go all delusional thinking it won’t happen. Best you can hope for is you die before it does. Good bet for some of us. But if you’re young and healthy, or care about people who are, no.
Fossil fuel supply: why it’s time to think seriously about cutting it off -There is a bias in climate policy shared by analysts, politicians, and pundits across the political spectrum so common it is rarely remarked upon. To put it bluntly: Nobody, at least nobody in power, wants to restrict the supply of fossil fuels. Policies that choke off fossil fuels at their origin — shutting down mines and wells; banning new ones; opting against new pipelines, refineries, and export terminals — have been embraced by climate activists, picking up steam with the Keystone pipeline protests and the recent direct action of the Valve Turners.But they are looked upon with some disdain by the climate intelligentsia, who are united in their belief that such strategies are economically suboptimal and politically counterproductive.Now a pair of economists has offered a cogent argument that the activists are onto something — that restrictive supply-side (RSS) climate policies have unique economic and political benefits and deserve a place alongside carbon prices and renewable energy supports in the climate policy toolkit. “In our experience,” the authors write, “the climate policy community has for too long been excessively narrow in its preference for certain kinds of policy instruments (carbon taxes, cap-and trade), largely ignoring the characteristics of such instruments that affect their political feasibility and feedback effects.” I have written the same thing many times, so I think a climate policy argument that takes politics seriously deserves a close look. Climate policies can apply to the supply side (production of fossil fuels) or the demand side (consumption of FF), and they can be restrictive or supportive. That creates a grid with four quadrants:
- Restrictive supply side: policies that cut off FF supply, including declining quotas, supply taxes, and subsidy reductions
- Restrictive demand side: policies that restrict demand for FF, including carbon prices and declining emission caps
- Supportive supply side: policies that support the supply of FF alternatives, like renewable energy subsidies and mandates
- Supportive demand side: policies that support demand for FF alternatives, like subsidies for purchase of energy-efficiency appliances or favorable government procurement policies
Congress gives science a record funding boost - Science - The $5 billion spending increase that the U.S. Congress showered on nine leading civilian science agencies last week has sent science advocates "over the moon." But their joy may be short-lived. The hikes, including $3 billion more for the National Institutes of Health (NIH), are part of a $1.3 trillion spending package for 2018 that includes a record $176.8 billion for federal spending on research and development, a 12.8%, or $20.1 billion, increase over 2017. The good news in the spending bill stems largely from a recent government-wide budget deal that allowed lawmakers to lift mandatory spending caps on discretionary accounts by a cumulative $300 billion over 2 years. But there's a string attached: Most of the additional civilian spending occurs in the first year, 2018, meaning that researchers shouldn't expect a repeat of this year's windfall in the 2019 fiscal year, which starts on 1 October. Another concern is the lopsided allocation, with NIH getting more than half of the raise given to the major civilian science agencies. That imbalance could reignite a long-simmering debate over whether federal investments have tipped too far toward the biomedical sciences.
Zinke’s Interior Dept Disproportionately Reassigned Native American Workers - A full third of the senior Interior Department (DOI) career officials reassigned under Secretary Ryan Zinke in a major agency reshuffling are Native American, even though Native Americans make up less than 10 percent of the Department’s workforce, a review by TPM has found.The finding comes days after Democratic lawmakers demanded an investigation into whether Zinke discriminated when he reassigned 33 career officials last summer, and follows on reports that Zinke has repeatedly told DOI officials he doesn’t care about diversity — which prompted one member of Congress to accuse Zinke of working to create a “lily-white department.”Former government officials tell TPM that they see the reassignment of top Native American staffers as part of an effort to remove internal opposition to Zinke’s plan to open up more tribal and public lands to the fossil fuel industry.Thanks to a Freedom of Information Act lawsuit filed by Katherine Atkinson, a lawyer for ousted DOI climate scientist Joel Clement, the agency has begun to release emails and other documents related to the reassignments, including a list of the 33 reassigned officials.Government documents and news reports reviewed by TPM show that at least 11 are members of Native tribes. The list includes workers who have served in government for many years, like Chickasaw Nation member Stanley Speaks, Oglala Sioux member Michael Black, and Miami Nation member Darren Cruzan. Several others on the list are Black and Latino, online records show.
Trump’s nominee to oversee superfund program spent decades fighting EPA cleanups on behalf of polluters -- Though he has openly disparaged much of his agency’s mission, Environmental Protection Agency Administrator Scott Pruitt has remained steadfastly enthusiastic about Superfund, the federal program responsible for cleaning up some of the country’s most contaminated industrial sites. The EPA budget brief released in February said the agency would “accelerate the pace of cleanups” and make an additional 102 Superfund sites and 1,368 brownfield sites “ready for use” by September 30, 2019. That move follows Pruitt’s creation of a “Superfund task force,” which laid out the program’s priorities in July and, in December, issued a list of 21 sites to be fast-tracked for cleanup. Yet even as he’s offered up these promises, some of Pruitt’s budgetary and hiring decisions have threatened the possibility that he’ll be able to fulfill them. The EPA’s proposed 2019 budget would cut the enforcement staff necessary to track down polluters and hold them accountable. Perhaps even more undermining to the program are the people Pruitt has chosen to run it. First there was Albert Kelly, a former banker who had contributed to Pruitt’s campaigns and whose bank had given him loans, appointed to head the Superfund task force last May despite the fact that he had no previous environmental experience. And now comes Trump’s nomination for Kelly’s boss at the office responsible for managing hazardous waste: Peter Wright, a man with an extensive history with Superfund — fighting EPA cleanups on behalf of polluters. While Kelly is new to this professional world, Wright, Trump’s nominee to head the EPA’s Office of Land and Emergency Management, has an extensive track record with hazardous waste: For the last quarter-century, he has defended companies responsible for some of the biggest of these industrial disasters, including Dow Chemical, where he has worked for more than 18 years, and Monsanto, where he worked for seven years before that.
At Pruitt’s E.P.A.: No Studies, No Data, No Rules - - NYT Editorial Board - The other day, Scott Pruitt, the administrator of the Environmental Protection Agency, took yet another step to muzzle the scientific inquiry that for years has informed sound policy at an agency he seems determined to destroy. He told his subordinates that they could no longer make policy on the basis of studies that included data from participants who were guaranteed confidentiality. Over the years, such studies have been crucial to establishing links between mortality and pollution, led to regulations and saved many lives. Limiting policymakers to only those studies with publicly available health data greatly narrows the field of research. This got us to searching again (we’ve been here before with Mr. Pruitt) for the word that best describes the Trump administration’s hostility to scientific inquiry. “Disdain” jumps to mind. Fourteen months into his term, President Trump has yet to name a director of the White House Office of Science and Technology Policy, or any of the four associate directors authorized by Congress — jobs that have provided presidents for decades with unbiased counsel. There’s another word: Fear. From the top down, the people who run this government seem absolutely terrified of scientific inquiry and the ways in which it could threaten Mr. Trump’s promise to ease regulations on fossil fuel companies and increase their profits, no matter the cost to public health and the planet. Think of it from Mr. Trump’s point of view. Why would he want a science adviser telling him that the link between climate change and the burning of fossil fuels is incontrovertible, that he should stick with the Paris agreement on climate change, that it’s a grave mistake to repudiate every one of President Obama’s efforts to slow the dangerous warming of the earth’s atmosphere? Far better to stick his head in the sand, ostrichlike; do that, and the need for policies regulating greenhouse gas emissions or dangerous pollutants like soot and mercury magically disappears. Which is certainly Mr. Pruitt’s modus operandi. As Gina McCarthy, a former E.P.A. administrator, and her deputy for air quality, Janet McCabe, said in a recent Times Op-Ed: “Mr. Pruitt’s goal is simple: No studies, no data, no rules.”
EPA poised to scrap fuel economy targets that are key to curbing global warming — setting up clash with California: The Trump administration is poised to abandon America's pioneering fuel economy targets for cars and SUVs, a move that would undermine one of the world's most aggressive programs to confront climate change and invite another major confrontation with California. The Environmental Protection Agency is expected to announce in the coming days that it will scrap mileage targets the Obama administration drafted in tandem with California that aim to boost average fuel economy for passenger cars and SUVs to 55 miles per gallon by 2025, according to people familiar with the plans.The agency plans to replace those targets with a weaker standard that will be unveiled soon, according to the people, who did not want to be identified discussing the plan before it was announced. EPA spokeswoman Liz Bowman said a draft determination was undergoing interagency review and a final decision would be made by Sunday. EPA chief Scott Pruitt has previously suggested that he thinks the targets are too onerous for manufacturers and inhibit them from selling the vehicles most popular with Americans. A climate skeptic, Pruitt has questioned mainstream science on the warming caused by greenhouse gases such as auto emissions. Whether Pruitt can weaken the rules for the entire country is an open question. California, with its history of smog problems and heightened vulnerability to climate change, has unique authority under the Clean Air Act to impose its own standard. The act also permits other states to adopt the California rules, and a dozen have. Over the last decade, the federal government has worked with California to keep mileage targets uniform nationwide, folding the state's aggressive smog and anti-pollution goals into the national program. A single standard is crucial to who don't want to contend with multiple production lines to comply with conflicting rules in states, particularly one as important to car sales as California.
Honda executive: EPA’s relaxed car efficiency standards plan not ‘sensible’ | TheHill: A top executive at the Honda Motor Company says the expected relaxation of fuel efficiency standards by the Environmental Protection Agency (EPA) is not the "sensible" plan automakers requested. “We didn’t ask for that. The position we outlined was sensible," said Robert Bienenfeld, an assistant vice president at American Honda Motor, when asked by The New York Times about the new standards.The EPA is expected to declare within days that the fuel efficiency regulations on cars in the U.S. are too strict, and offer revisions for standards on greenhouse gas emissions enforced by the Department of Transportation. The EPA sent a draft of the 16-page revised plan to the White House for approval this week, according to The New York Times.Automakers, represented by the Auto Alliance and Global Automakers, have lobbied the Trump administration to loosen the tight fuel efficiency standards put in place by the Obama administration. Under a 2011 agreement within the Obama administration, auto companies are expected to produce cars achieving an average fuel efficiency of over 50 miles per gallon by the year 2025. The outgoing Obama administration concluded from a midterm evaluation in the weeks before President Trump's inauguration that the efficiency goals should stay in place.
EPA Will Ease Vehicle-Emissions Standards —The Environmental Protection Agency moved to ease Obama-era vehicle emissions standards, siding with car makers who say the rules don’t work in an era of cheap gasoline, and setting up a fight with environmentalists and the state of California. The rules, finalized in the waning weeks of the Obama administration, would require auto makers to cut emissions enough so that new vehicles sold average more than 50 miles a gallon by 2025. Monday’s decision would start a process to relax future standards covering vehicle model years 2022-2025. The standards, arrived at through complex government calculations, equal roughly 36 mpg in real-world driving for 2025. The decision is expected to prompt a battle with California and other states that have implemented tougher controls on greenhouse-gas emissions to limit air pollution and slow climate change. California has a waiver from federal authority under the Clean Air Act that allows the state to set its own, higher standards. The EPA said in its news release Monday that it is re-examining that waiver. Redrafting these standards has been one of the Trump administration EPA’s highest priorities, and is part of its effort to undo Obama-era climate rules that it calls overly strict. The administration has already announced intentions to leave the Paris international climate accord and to roll back new controls on power-plant emissions. Auto makers have argued that current standards requiring them to sell vehicles averaging more than 50 miles a gallon by 2025 are unrealistic at a time when consumers continue to demand less-efficient cars and trucks. After oil prices unexpectedly plummeted in recent years, sales of pickup trucks and sport-utility vehicles soared. They now account for more than 60% of the U.S. market, countering a trend towards a more-efficient fleet. In making the move, EPA Administrator Scott Pruitt criticized Obama administration officials, saying they misread the market. He also claimed his predecessors rushed their review of vehicle efficiency for political reasons, noting they set the standards after a review they started and completed in just two months, immediately after Donald Trump won the presidential election in 2016. The deadline for making a final determination wasn’t until April 2018, but the EPA was free to make it earlier and said in November 2016 its process was exhaustive. Gina McCarthy, the EPA administrator at the time, said then that current rules were “affordable and effective,” and were on track to double fuel economy.
EPA To Gut The Only Major Federal Rule To Cut Climate Pollution From Vehicles -- The Environmental Protection Agency has outlined plans to undo a landmark Obama-era rule tightening fuel standards for vehicles, weakening the only major federal policy to reduce planet-warming emissions from the nation’s top source of greenhouse gas pollution. The decision, announced Monday in a press release, hands a victory to automakers who lobbied the Trump administration to declare the previous standard too strict.“The Obama administration’s determination was wrong,” EPA Administrator Scott Pruitt said in a statement, adding that the standards were “too high.” At a press conference Tuesday morning, Pruitt, flanked by signs that read “CERTAINTY,” “JOBS” and “EFFICIENCY,” compared the nation’s economic optimism over his deregulatory efforts to the excitement over a new baseball season. Three executives from auto industry trade associations joined Pruitt at the event. Pruitt, who is facing mounting calls to resign, heaped praise on President Donald Trump, who reportedly called the embattled administrator Tuesday morning to offer his support. The press conference was originally scheduled to be held at a Chevrolet dealership in Chantilly, Virginia, that is owned by Geoffrey Pohanka, an outspoken climate change denier and National Automobile Dealers Association board member. But other Chevy dealers, wary of associating the General Motors brand with the Trump administration’s actions, convinced Pohanka to cancel the event, according to The New York Times. Instead, Pruitt hosted the conference in the EPA’s historic Rachel Carson Green Room. Pruitt did not take any questions.
EPA wants to give automakers a break on emissions. But that might not help… The Environment Protection Agency wants to give automakers a break on emissions rules established under the Obama Administration. But that might not be enough to help manufacturers. The agency said that the Obama rules are inappropriate and will be revised in a statement on Monday. But about a third of the country operates under tougher emission rules that were established by the state of California, and are currently followed by another 12 other states. And so far the EPA is not seeking to upend those tougher rules. Instead it will try to reach an agreement with California on a single national standard. As long as a third of the nation operates under the tougher California rules, automakers will have to make cars that comply with the more stringent requirements. So even if the EPA does ease up emissions standards, they'll still be under pressure to make more fuel efficient vehicles, such as plug-ins. Greenhouse gas emissions are tied directly to how much gasoline a car burns. So any rule requiring lower greenhouse gas emissions requires higher fuel mileage. The automakers are on record saying they're not sure they can meet the Obama administration's aggressive target to raise corporate average fuel economy to 54.5 miles per gallon by the year 2025. They also desperately want is a single national standard so they can sell cars that comply with all rules. The EPA said the waiver granted to California to set a separate, tougher standard is still being reexamined by EPA.
Calif. to fight Trump’s ‘politically motivated’ car standards plan | TheHill: California officials promised Monday to put up a fight against the Trump administration’s newly announced decision to lower standards for car tailpipe emissions. The Environmental Protection Agency (EPA) declared Monday afternoon that the Obama-era greenhouse gas rules for cars made between 2022 and 2025 are too ambitious and should be eased. That sets up a fight with the Golden State, which currently sets its own car emissions rules and has argued for stringent regulations. Twelve other states currently follow those rules, accounting for a third of the nation’s car market.“This is a politically motivated effort to weaken clean vehicle standards with no documentation, evidence or law to back up that decision,” Mary Nichols, chairwoman of the California Air Resources Board (CARB), said in a statement. “This is not a technical assessment, it is a move to demolish the nation’s clean car program. "EPA’s action, if implemented, will worsen people’s health with degraded air quality and undermine regulatory certainty for automakers.” Nichols said her agency would “vigorously defend” the current standards. It will also use a 2009 waiver from the Obama administration to keep enforcing the rules planned through 2025. EPA Administrator Scott Pruitt said Monday that he is still deciding whether to preserve California’s authority to set its own rules or to revoke the waiver. "Cooperative federalism doesn’t mean that one state can dictate standards for the rest of the country,” he said in a statement.
Germany’s Energiewende predicament - It’s widely acknowledged that Germany’s Energiewende is in trouble, but few if any recent articles have addressed the full scope of its problems. Here I provide an overview of Germany’s progress to date, or lack thereof, in meeting its original targets, which were set in 2010. The results show that Germany is on track to meet its targets for expanding renewable energy but is unlikely to stay on track in coming years. The prospects that Germany will meet any of its 2050 energy and emissions targets are remote. The Energiewende’s targets were formalized by the German government in 2010 in this document, which translated into English is entitled “Energy concept for an environmentally friendly, reliable and affordable energy supply.” Specific targets are summarized in this Wikipedia table:
Powering Europe with solar via the global solar interconnector -- Up until now the fact that The Sun does not shine at night (and often not at all in winter) has been an obstacle to the deployment of solar energy in Europe. Recent research, however, has revealed that winter in Europe coincides with summer in the Southern Hemisphere and that midnight at longitude zero coincides with midday at longitude 180, meaning that combining solar generation from different parts of the Earth will smooth out seasonal and diurnal variations and permit baseload solar power delivery. Energy Matters has obtained access to an unpublished European Commission report which identifies the benefits of HVDC interconnectors that combine solar energy from Europe with solar energy from Fiji and points between, and which states that the EC will introduce the concept of “global solar linkage” at the forthcoming Bonn Climate Conference as a means of holding global CO2 emissions below the 2°C danger threshold. In this short post we reveal the details. The Figure below shows Europe’s solar generation on two typical spring days, with maximum output normalized to 1.0 for simplicity. It clearly does not qualify as baseload. Adding antipodal solar generation (green) fills in some of the European nighttime shortfalls but still does not provide baseload:But the remaining deficits can be filled with solar generation from intermediate sites where solar noon is displaced by 6 or 18 hours relative to European solar noon. Adding these sites gives these results (intermediate sites blue and brown, sum of output black):The sum of outputs shows solar power delivery varying between 1 and 1.4 (normalized) units. This variation can be smoothed further by angling solar panels east or west, by installing dual-axis tracking arrays or by other means such as demand management, smart meters, blockchain technology, microgrids and discharging EV batteries into the grid at midday. In short, we now have solar baseload in Europe, and with optimized system balancing in all of the other contributing regions as well. The need to offset winter/summer and night/day variations determines solar generation site locations and therefore the route of the interconnectors that link them together. These are shown below, with submarine cables in blue and landlines in red:
Quebec town halts bitcoin mining projects over energy supply concerns - Another Quebec town is slamming the brakes on future cryptocurrency mining operations as concerns grow about the demands they are placing on Quebec’s supply of low-cost electricity. Elected officials in Magog, about 120 kilometres east of Montreal, voted Tuesday to withhold approval for any future mining ventures. “We have practically reached the maximum power for the energy block that Hydro-Québec supplies us,” said Mayor Vicki-May Hamm. The amount of energy needed to power these operations has given pause to both Hydro-Québec and the Quebec government. Magog joins the 21 municipalities of the Brome-Missisquoi regional council which have already imposed a moratorium on future cryptocurrency mining operations. Cryptocurrency mining requires high-powered computers operating continuously as they seek to solve complex math equations. When a computer solves a problem, it earns bitcoin or other cryptocurrency. The computers need to be kept cool, so mining operations are extremely energy intensive. Quebec's cheap hydroelectricity rates — among the lowest in North America — make the province an attractive place for these companies to do business.
Towns in upstate New York move to regulate cryptocurrency mining - For decades, the people of Plattsburgh have paid some of the cheapest electricity rates in the country. That changed in recent months, when a surge in bitcoin mining sent electric bills skyrocketing hundreds of dollars. An agreement made in the 1950s guarantees the city a set amount of electricity from a massive hydroelectric dam on the St. Lawrence River. Bitcoin mining operations pushed Plattsburgh over its energy allotment in December and January, forcing the city to buy power on the open market, which is more expensive. In response, the council passed an 18-month ban on new cryptocurrency mines on March 15, citing safety concerns due to the large amounts of heat they produce.
In 2017, U.S. electricity sales fell by the greatest amount since the recession - U.S. retail electricity sales fell by 80 billion kilowatthours (kWh) in 2017, the largest drop since the economic recession in 2009. The 2% decrease in 2017 reflects lower retail sales in the residential, commercial, and industrial sectors and is largely attributable to milder weather. Total electricity retail sales in 2017 were 3,682 billion kWh, nearly identical to the levels seen more than a decade before, in 2006. The residential sector buys the most electricity from the grid, accounting for slightly more than 37% of the 2017 total. Commercial sector electricity retail sales made up slightly less than 37% of the total in 2017, and the industrial sector made up about 26%. Although factors such as electricity prices, energy efficiency, and macroeconomic cycles play a role in the use of electricity in each sector, most of the year-over-year changes in sales in 2017 were attributable to changes in weather. With few exceptions, air conditioning and other cooling equipment is powered by electricity, so warmer weather in summer months often results in greater use of air conditioning and higher retail electricity sales. Cooling degree days, an indicator of cooling-related energy demand, were 9% lower in 2017 compared with 2016 levels, indicating a cooler summer in 2017 and less demand for air conditioning. Although fuels other than electricity such as natural gas, heating oil, and propane can be used to generate heat, electricity use also increases in colder weather. Heating degree days, an indicator of heating-related energy demand, were 1% lower in 2017 compared with 2016 levels. In the South census region, where homes and businesses are more likely to heat with electricity, 2017 heating degree days were 8% to 10% lower than in 2016.
US Power Grid Vulnerable To "Devastating" Attack, NERC Finds - Just as tensions between the US and North Korea are finally beginning to cool (while animosity between the US and Russia intensifies), a recent industry report argues the US government isn't doing nearly enough to safeguard the US electric grid from a potentially devastating attack. In its report, the North American Electric Reliability Corporation (NERC) revealed that much of the US electricity grid is vulnerable to attack - and neither the industry or the government are doing anything about it. NERC is the organization responsible for overseeing the US's massive electric grid, which is subdivided into eight regional entities. Though the report didn't include a "comprehensive" assessment of the myriad physical threats to the US's energy infrastructure, worries that North Korean could execute a massive electromagnetic pulse (or EMP) attack have been intensifying as the prospect of a nuclear showdown with the restive communist state looms large (Kim Jong Un's recent actions aside). The research was also inspired by a series of gun attacks on transformers, including a rifle attack on a transformer in Utah that occurred in September 2016, according to the Washington Free Beacon. Many organizations, including recently the National Academy of Sciences, have warned of the catastrophic consequences should a malicious actor - be it a state or a terrorist organization - manage to take down the US energy grid. "There is widespread belief that bulk power critical assets are vulnerable to physical attack, that such an attack potentially could have catastrophic consequences, and that the risks of such attacks are growing," according to the report. "But the exact nature of such potential attacks and the capability of perpetrators to successfully execute them are uncertain." ...
Michigan Activates Emergency Ops Ahead Of Chinese Space Station Crash - With China's Tiangong-1 space station (translated as "Heavenly Palace") full of highly toxic chemicals such as hydrazine, set to crash into the earth at a still unknown location some time today, Michigan isn't taking any chances. As a reminder, several weeks ago Aerospace.org predicted that while the list of possible crash sites includes locations in Northern China, South America, Southern Africa, Northern Spain and the United States, lower Michigan in particular is among the regions with the highest probability of a direct hit. Fast forward to today when in advance of Tiangong's atmospheric reentry, sometime between now and April 2, Michigan Gov. Rick Snyder has activated the state's Emergency Operations Center today to monitor its travels. According to the Detroit Free Press, and as noted previously, pieces of the 8.5 ton space station have the potential to land in the southern Lower Peninsula of Michigan, according to the Aerospace Corporation. Still , while the possibility that space debris could land in Michigan looms, the odds of it actually happening are miniscule. "When considering the worst-case location ... the probability that a specific person (i.e., you) will be struck by Tiangong-1 debris is about 1 million times smaller than the odds of winning the Powerball jackpot," according to Aerospace, a government contractor that provides research, development, and advisory services to national-security space programs. In any event, Michigan's Emergency Operations Center urges anyone who suspects they have encountered debris from the space station to call 911 and stay at least 150 feet away from it.
A new coal war frontier emerges as China and Japan compete for energy projects in Southeast Asia | South China Morning PostA joint report by Greenpeace, the Sierra Club and CoalSwarm indicates that Southeast Asia will be the new epicentre of coal production. Asia accounts for 85 per cent of new coal power development in the world’s top 20 coal producing countries, with China as the leader of the pack. However, while tighter restrictions on domestic coal plants have been imposed by the central government to curb pollution, Beijing has pushed the development of high-efficiency, low-emission coal plants across Southeast Asia as part of the “Belt and Road Initiative”. As China is expanding its influence, Beijing’s foremost strategic competitor in Asia, Japan, is being forced to step up efforts to combat its shrinking influence in the region. The booming energy sector of Southeast Asia, especially coal, is proving to be the new front line in the geopolitical rivalry between Asia’s two industrial giants. China’s coal drive is part of a larger energy-driven investment policy that follows its attempt to reduce carbon emissions by clamping down on the coal industry and pledging to increase investments in renewables. However, Chinese energy planners have realised they cannot relinquish coal as a major power source for the foreseeable future. Instead of abandoning coal, China is developing cleaner and higher-efficiency coal plants – and, as a boon to its plan for greater regional influence, aims to export the technology abroad. To that end, the China Development Bank and C hina Export Import Bank last year lent US$25.6 billion to global energy projects. This figure surpassed even the US$22.6 billion provided by the International Bank for Reconstruction and Development. Coal consumption across Asia is slated to outpace that of China over the next 20 years, coupled with an absolute increase in global coal demand over the next seven years. The more than 1,600 coal plants scheduled to be built by Chinese corporations in over 62 countries will make China the world’s primary provider of high-efficiency, low-emission technology.
Coal-fired power stations caused surge in airborne mercury pollution, study finds - Airborne mercury pollution from coal-fired power stations in Victoria’s Latrobe valley increased 37% in just 12 months, according to an annual national survey of toxic emissions. The mercury output from Loy Yang B power station alone more than doubled to 831kg in 2016-2017, an increase of 123% over five years. The brown coal burning power station produced more than 640 times the airborne mercury pollution of Eraring power station near Newcastle, New South Wales. Eraring, Australia’s largest coal-fired power station, produces three times the energy of Loy Yang B power station but reported just 1.3kg of airborne mercury pollution in 2016-17, a reduction of 97% over the past five years. The pollution gap between the two power stations is an example of the failure of state-based regulators to properly and consistently control air pollution, Environmental Justice Australia researcher Dr James Whelan said. The NPI records the self-reported estimated pollution levels of 93 toxic substances, with the intention of providing communities with more information about local air quality. It is now in its 20th year. Whelan said that the fact that levels of many pollutants had either increased or remained stable in that time showed that the NPI was not working as intended. “The intention of the NPI is that you will actually control air pollution,” he told Guardian Australia. “There’s no excuse not to control it.” Whelan said power stations in Australia should be updated with emission control technology, which could reduce the release of toxins by up to 90%. A report by EJA last August found that the pollution levels of Australian coal-fired power stations would be illegal in the US, Europe and China.
Erdogan, Putin mark start of work on Turkey's first nuclear power plant (Reuters) - The leaders of Turkey and Russia marked the official start of work to build Turkey’s first nuclear power station on Tuesday, launching construction of the $20 billion Akkuyu plant in the southern province of Mersin. The plant will be built by Russian state nuclear energy agency Rosatom and will be made up of four units each with a capacity of 1,200 megawatts. Russian President Vladimir Putin and Turkey’s Tayyip Erdogan marked the start to construction, watching by video link from Ankara. “When all four units go online, the plant will meet 10 percent of Turkey’s energy needs,” Erdogan said, adding that despite delays Turkey still planned to start generating power at the first unit in 2023. Speaking at a later news conference with Putin, Erdogan said the cost of the project may exceed the planned $20 billion for the 4,800 megawatt (MW) plant, part of Erdogan’s “2023 vision” marking 100 years since the founding of modern Turkey and intended to reduce Turkey’s dependence on energy imports. Since Russia was awarded the contract in 2010, the project has been beset by delays. Turkish companies have been put off by the size of the financing required as well as by concerns they will not receive a sufficient share of the lucrative construction side of the deal, two industry sources have said. Erdogan told the news conference Turkey may cooperate with Russia on defense projects besides the S-400 missile defense system which Moscow has agreed to supply to Ankara. He did not give further details.
Cyprus to Protest Turkey’s Planned Nuclear Power Plant -- Cyprus says it will lodge protests over the construction of Turkey’s first nuclear power plant a few dozen kilometers from the east Mediterranean island nation. Cyprus government spokesman Prodromos Prodromou said Thursday that the country’s foreign ministry will spearhead protests over the plant’s future operation on Turkey’s Mediterranean coast. Prodromou said Turkey has ignored concerns expressed by many including the European Parliament. One worry raised is that the Akkuyu area, where the plant is to be built, is earthquake-prone. On Wednesday, Turkish President Recep Tayyip Erdogan and Russian President Vladimir Putin launched the start of construction of the Russian-built plant. The plant is expected to be completed by 2023.
Fukushima Jitters - Fukushima is full of nasty surprises, similar to John Carpenter’s classic film The Thing (1982), but unlike Hollywood films, Fukushima’s consequences are real and dire and deathly. It’s an on-going horror show that just won’t quit. Only recently, a team of international researchers, including a group of scientists from the University of Manchester/UK and Kyushu University/Japan made a startling discovery. Within the nuclear exclusion zone in paddy soils and at an aquaculture center located several miles from the nuclear plant, the research team found cesium-rich micro-particles.Evidently, the radioactive debris was blown into the environment during the initial meltdowns and accompanying hydrogen blasts. Accordingly, the environmental impact of radiation fallout may last much longer than previously expected. (Source: New Evidence of Nuclear Fuel Releases Found at Fukushima, University of Manchester, Phys.org, Feb. 28, 2018)According to Dr. Gareth Law, senior lecturer in Analytical Radiochemistry at the University of Manchester: “Our research strongly suggests there is a need for further detailed investigation on Fukushima fuel debris, inside, and potentially outside the nuclear exclusion zone. Whilst it is extremely difficult to get samples from such an inhospitable environment, further work will enhance our understanding….” Ibid.Their discovery dispels the long-held view that the initial explosion only emitted gaseous radionuclides. Now, it is clear that solid particles with very long-lived radionuclides were emitted. The research team did not discuss the likely impact, as more analysis is necessary before drawing conclusions. Decidedly, they’d best hurry up, as the Olympics are scheduled for 2020.
Nuclear Blast Simulator Shows Whether You Would Survive An Attack - Did you ever think about the places close to you that would be potential targets for a nuclear strike by an enemy? Chances are, the answer is yes. But how would a strike to that nearby target affect you? In the event of a nuclear strike, there are four things to consider. The numbers below are in the event of a 300 kiloton bomb:
- The Fireball: Everything in this range would be disintegrated, It is nearly a one-mile radius and also called Ground Zero.
- Radiation: A wave of deadly radiation would affect everything within 5.5 miles. This will cause lung injuries, severe burns, deafness, blindness, and internal bleeding. Anyone in this range who survives the immediate danger is likely to suffer from radiation poisoning in the upcoming weeks.
- The Shockwave: A shockwave of incredible power would spread throughout a range of about 11.5 miles. Also called the blast wave, this highly compressed air will travel at high velocities (up to 470 mph), destroying nearly every building in its path.
- The Heat: Heat from a nuclear blast would travel almost 50 miles. This heat can ignite fires and cause first degree burns.
You can plug any address into this website and see how far the effects of a nuclear strike would reach.Here’s what a 300 KT strike on the White House would look like, so that you can get an idea of the different danger zones.
FirstEnergy Solutions files for bankruptcy - Norwalk Reflector — With a late-night Chapter 11 bankruptcy filing by FirstEnergy Solutions and FirstEnergy Nuclear Operating Co., FirstEnergy Corp. — the parent company that for years has been one of the nation’s largest utilities — has further distanced itself from major power-generating units such as the Davis-Besse nuclear power plant in Ottawa County, the Perry nuclear power plant east of Cleveland, and the twin-reactor Beaver Valley nuclear complex west of Pittsburgh.Unable to make them profitable in an electricity market upended by record-low natural gas prices, the fate of those plants — plus two coal-fired power plants, one dual fuel gas/oil plant, and a pet-coke fired plant — appears even bleaker now unless a buyer or a bailout emerges.The market has been changed radically by a worldwide surge in fracking brought on a little more than a decade ago by a revolutionary horizontal drilling technique that allows the oil and gas industry to recover fuel from previously inaccessible areas. The Washington-based Nuclear Energy Institute has said it is especially hard for nuclear plants to compete in deregulated electricity markets, which Ohio and Michigan have had since 1996.Davis-Besse, Perry, and the two Beaver Valley units are the latest of several nuclear plants across America that have recently closed or have announced they will close prematurely because of failing economics.The anticipated closure date for Davis-Besse is now listed as May 31, 2020, by PJM Interconnection LLC, the Pennsylvania-based operator of the 13-state regional electric grid that includes Ohio — one of the nation’s largest electric grids. Closure dates for Perry and Beaver Valley Unit 1 are May 31, 2021. For Beaver Valley Unit 2, it is Oct. 31, 2021.
FirstEnergy Solutions, power-generating subsidiary of Akron-based FirstEnergy Corp., files for bankruptcy protection -- The unregulated power generation arm of Akron’s FirstEnergy Corp. said in a 21-page document that it had more than $1 billion in liabilities and that reorganizing under the bankruptcy code was in the best interests of the company and creditors. FirstEnergy Solutions was due to make a significant debt payment on Monday but did not have the funds on hand to make the payment. The filing for bankruptcy protection includes FirstEnergy Solutions, along with all FES subsidiaries and FirstEnergy Nuclear Operating Co., according to a prepared statement released by FirstEnergy late Saturday night. The filing doesn’t involve FirstEnergy or its distribution, transmission, regulated generation and Allegheny Energy Supply subsidiaries. “FirstEnergy and its other subsidiaries are not part of this Chapter 11 filing,” FirstEnergy President and CEO Charles E. Jones said in the prepared statement. “The six million customers of our regulated utilities will continue to receive the same reliable service, while our regulated generation facilities will continue normal operations, with the same longstanding commitment to safety and the environment.” FirstEnergy had warned about the possibility since November 2016, with Jones telling analysts during a conference call that “competitive generation is weighing down the rest of the company” and noting that the odds were already stacking up against FES being able to service its debt on time. FirstEnergy is continuing its previously announced strategy to exit the competitive generation business and become a fully regulated utility company.
FirstEnergy Solutions filed for bankruptcy late Saturday - Toledo Blade — With a late-night Chapter 11 bankruptcy filing by FirstEnergy Solutions and FirstEnergy Nuclear Operating Co., FirstEnergy Corp. — the parent company that for years has been one of the nation’s largest utilities — has further distanced itself from major power-generating units such as the Davis-Besse nuclear power plant in Ottawa County, the Perry nuclear power plant east of Cleveland, and the twin-reactor Beaver Valley nuclear complex west of Pittsburgh. Unable to make them profitable in an electricity market upended by record-low natural gas prices, the fate of those plants — plus two coal-fired power plants, one dual fuel gas/oil plant, and a pet-coke fired plant — appears even bleaker now unless a buyer or a bailout emerges. The market has been changed radically by a worldwide surge in fracking brought on a little more than a decade ago by a revolutionary horizontal drilling technique that allows the oil and gas industry to recover fuel from previously inaccessible areas. The Washington-based Nuclear Energy Institute has said it is especially hard for nuclear plants to compete in deregulated electricity markets, which Ohio and Michigan have had since 1996. Davis-Besse, Perry, and the two Beaver Valley units are the latest of several nuclear plants across America that have recently closed or have announced they will close prematurely because of failing economics. The anticipated closure date for Davis-Besse is now listed as May 31, 2020, by PJM Interconnection LLC, the Pennsylvania-based operator of the 13-state regional electric grid that includes Ohio — one of the nation’s largest electric grids.Closure dates for Perry and Beaver Valley Unit 1 are May 31, 2021. For Beaver Valley Unit 2, it is Oct. 31, 2021. While each of those plants is operating safely, there is no guarantee FirstEnergy Solutions will keep them running until those dates, either. Corporate executives have said FirstEnergy Solutions will not make any major improvements to those plants going forward, and have acknowledged the U.S. Nuclear Regulatory Commission will not allow them to continue operating if there comes a point in which substantial work would need to be done to ensure safety.
Coal power company files for bankruptcy and asks Trump for bailout - The coal and nuclear divisions of Ohio power company FirstEnergy (FE) filed for Chapter 11 restructuring over the weekend, mere days after the company sent a letter to the Energy Department requesting emergency relief. They're seeking a bailout through a rarely-used section of federal law normally reserved for natural disasters or times of war. A spokeswoman from the Energy Department said the FirstEnergy request is "now under review." FirstEnergy Solutions and FirstEnergy Nuclear Operating Company have been teetering on the brink of bankruptcy for months. They said they plan to use about $550 million in cash to continue operating and pay their 3,000 employees. The divisions own and operate two coal-fired power plants, one dual natural gas/coal plant, one petroleum-coke plant and three nuclear power plants. FirstEnergy is a major customer of Murray Energy, the mining giant run by outspoken coal CEO Robert Murray. The Chapter 11 filing does not include the parent company, Akron-based FirstEnergy. The bankruptcy case and bailout request show how the coal industry continues to face enormous pressure, mostly from cheap natural gas, despite Trump's promises to revive the industry by slashing regulations. "It really comes down to economics. Coal continues to be challenged by cheap and plentiful natural gas,"
Bankruptcy of FirstEnergy’s Power-Generation Fleet Will Test Trump’s Promises to Coal Industry -- The Trump administration’s commitment to coal is under its stiffest test yet after an Ohio energy company made a plea to favor that power source over its many rivals, including oil and natural gas, in a clash that could end with higher costs for consumers. FirstEnergy Corp.’s fleet of coal- and nuclear-power plants filed for bankruptcy over the weekend, just days after the company asked the federal government for an emergency declaration that would keep many of them open. That forces President Donald Trump’s Energy Department into a decision on whether to intervene under a lightly used, 83-year-old law and compel the nation’s largest electric-grid operator to dispatch power from FirstEnergy’s coal and nuclear plants effectively before any other. Trump has been one of the coal industry’s biggest boosters, campaigning on reviving a downtrodden industry, and his administration has voiced support for nuclear, too. Both of those fuels are facing tough competition as alternatives—including natural gas, and wind and solar power—have become cheap and more plentiful. Should the Ohio company’s plea succeed, it could protect thousands of jobs at nuclear and coal plants, as well as their suppliers. But it would hurt rival energy businesses and could raise electricity prices for companies and consumers across the Midwest and mid-Atlantic states. That poses significant risk to Trump by antagonizing supporters among electricity users and companies in the oil-and-gas industry that have become primary suppliers to power plants.
Power grid manager PJM to Energy Department: there is no emergency - Plain-Dealer-- Power grid manager PJM Interconnection on Friday urged the U.S. Department of Energy not to take extraordinary action ordering subsidies to keep uncompetitive coal and nuclear power plants operating. FirstEnergy's power plant subsidiary, FirstEnergy Solutions (FES), asked the DOE for the action on Thursday morning, about 18 hours after informing PJM and the Nuclear Regulatory Commission that it would close its three nuclear power plants within three years.The Akron-based company relied on a rarely used clause in the Federal Power Act authorizing the DOE to take extraordinary action to keep power plants running -- and the grid stable -- during extreme emergencies such as an act of war. PJM Interconnection is the federally approved manager of the high-voltage electric grid and wholesale power markets in Ohio, 12 other states and Washington, D.C. "PJM can state without reservation there is no immediate threat to system reliability," wrote Vincent Duane, senior vice president and general counsel. "Indeed, the FES units that announced their expected retirement earlier this week, by their own disclosures, will remain operational in most cases until through May 2021." FirstEnergy Solutions told PJM in writing that it plans to close its Davis-Besse nuclear plant near Toledo in 2020 and both the Perry nuclear plant in Lake County and the two-reactor Beaver Valley plant near Pittsburgh in 2021. The company said it informed the NRC orally, but the agency will not recognize the company's intentions until it files a written notice, said an NRC spokeswoman. In the letter to Energy Secretary Perry, Duane wrote that future power plant closings do not constitute the kind of emergency that the framers of the Federal Power Act had in mind. And he noted that PJM will do a formal analysis of the grid impact of the planned closings of the FirstEnergy reactors in the next 30 days, using an analytical procedure approved by the Federal Energy Regulatory Commission. If the analysis shows the closings would in fact weaken the grid as FirstEnergy Solutions argues, PJM could ultimately join with the company's request, the letter states. "PJM therefore respectfully requests that the Secretary allow PJM's FERC-accepted process to unfold in an orderly manner and refrain from taking unnecessary, extraordinary and precedential immediate action as sought by FES," the letter concludes.
Under proposed bill, cities may see financial benefits for storing fracking waste – WFMJ - Local lawmakers are looking for a way communities can benefit from storing fracking waste.State Representatives Glenn Holmes and Mike O'Brien introduced House Bill 578, that will reallocate 40 percent of fees paid by outside companies to store fracking wastewater in Ohio injection wells. “We think it is only fair that the community sees some type of remediation for the impacts of dumping in our communities. Furthermore, we need to explore the technologies to stop the need for injection wells altogether," said Holmes. Under the proposed bill, 37.5 percent of out-of-district injection well fees would be redirected to the local municipalities and townships housing the wells. House Bill 578 also changes the injection well setback requirement to 300 feet. As of now, the Oil and Gas division of the Ohio Department of Natural Resources monitors injection wells and receives all payments from out-of-district entities.“This legislation will redirect fees to the communities that have been adversely affected by this industry, and a 300-foot setback is a more aesthetically appropriate setback,” said O’Brien. The lawmakers say the impact of injection wells on local areas include ecological contamination, noise, and excessive wear and tear on roads, as well as other costs incurred by communities surrounding the wells.
Bill would send fracking dollars to communities -- Ohio House Bill 578 was announced Thursday by Ohio Reps. Glenn Holmes, D-Girard, and Michael J. O’Brien, D-Warren, and would affect fees paid by outside companies who store fracking wastewater in Ohio injection wells, according to a news release from the representatives. The proposal, awaiting committee assignment in the House, would send 37.5 percent of out-of-district injection well fees to the local communities where the wells are located. The fees now are turned over to the Ohio Department of Natural Resources, which oversees state injection wells. The other portion of the funds would remain with ODNR. Holmes said his office is still waiting on figures to see how much money the bill could generate in local communities or cost the state agency. “All we are asking for is that ODNR and the injection well industry be good community partners in dealing with this very sensitive issue,” said Holmes. “We think it is only fair that the community see some type of remediation for the impacts of dumping in our communities.” The bill also doubles the setback requirement for the surface of the well from 150 feet to 300 feet. O’Brien said the larger setback is more “aesthetically appropriate.” Under the bill, the owners of new wells would have to get written permission from property owners to set up within 300 feet of certain types of occupied buildings and areas with lakes, streams and other bodies of water.
Six Permits Awarded in Ohio’s Utica Shale – The Ohio Department of Natural Resources issued six permits for horizontal wells to energy companies drilling for oil and gas in eastern Ohio’s Utica shale last week, the agency reports.Permits were awarded to XTO Energy Inc., a division of Exxon Mobil, to drill four new wells in Belmont County for the week ended March 31, ODNR said. Chesapeake Exploration LLC secured two new permits for wells in Harrison County.The rig count in the Utica rose last week to 23 from 19 the previous week, according to ODNR. As of March 31, ODNR had issued 2,799 permits for horizontal wells in the Utica, 2,314 of which are drilled and 1,871 of which are in production. No permits were issued in the northern Utica, which encompasses Mahoning, Columbiana and Trumbull counties. Nor were there new permits issued for neighboring Lawrence and Mercer counties in western Pennsylvania, according to the Pennsylvania Department of Environmental Protection.
Utica report card: Ohio's natural gas production at record levels - Ohio has produced more natural gas than it uses since early 2015. Driven by prolific Utica Shale wells, the state produced a record 1.7 trillion cubic feet of natural gas last year.Much of the regional economic development around that production has been in the form of pipelines and processing facilities.Two interstate natural gas pipelines — Energy Transfer’s Rover project and the NEXUS Gas Transmission pipeline — cross Stark and neighboring counties. Marathon Petroleum also has built or acquired assets in the region to supply its Canton refinery with liquids from Utica Shale wells. Ohio’s industry boosters want to turn the state’s natural gas reserves into even more economic development, but are facing headwinds from Wall Street and Washington, D.C.Attendees of the fifth annual Utica Midstream conference on Wednesday heard updates on natural gas production, local pipeline projects and efforts to sell the Ohio River valley as the world’s next petrochemical hub. The Rover project is partially operational and will carry 3.25 billion cubic feet of natural gas a day to customers in Canada and the United States when completed. But the project has run afoul of environmental regulators in Ohio and West Virginia and encountered delays, notably after spilling drilling fluid into a wetland next to the Tuscarawas River in Bethlehem Township last year. But as soon as Rover began partial operation of one of its two 42-inch diameter mainlines last year, producers started shipping gas to reach better markets, which opened space on other pipelines that producers were also eager to use, Construction on NEXUS started in October, and work crews in Michigan have already started welding and burying pipeline, said Erika Young, a business development project director with Enbridge, the Canadian company partnering with DTE Energy to build the pipeline.Locally, workers have been clearing trees and building work areas for NEXUS, which should be in service by the end of the third quarter. When completed, the 36-inch diameter pipeline will carry 1.5 billion cubic feet of natural gas a day to markets in Ohio, Michigan and Canada. Rover and NEXUS shipping natural gas should help to relieve the regional surplus, raise prices and spur more drilling, Breshears said.
Ohio expecting more multi-well pads, increase in oil, natgas production - — Ohio is expecting drilling in 2018 to continue to grow slowly and steadily, with development of numerous multi-well pads in 2018 and beyond a given.Those assessments came from Rick Simmers, chief of the Ohio Department of Natural Resources’ Division of Oil and Gas Resources Management.Oil production in Ohio is likely to increase slightly in 2018, Simmers said on Wednesday at the fifth annual Utica Midstream Conference at Walsh University in North Canton, Ohio. Kallanish Energy attended the one-day program, presented by ShaleDirectories.com and the Canton Regional Chamber of Commerce.Oil production from the Utica Shale in eastern Ohio has declined in the last two years, due to lower commodity prices, he said.Producers have also opted to drill instead in Ohio’s dry gas window to reduce costs. Drilling in the wet gas window can result in producers having to pay more to get the natural gas liquids removed.Ohio oil production in 2017 was 16.3 million barrels (MMBbl), down from a peak of 21.9 MMBbl in 2015.Natural gas production in Ohio is expected to continue growing, Simmers said. Ohio hit 1.7 trillion cubic feet (Tcf) of natural gas production in 2017, and that is likely to grow.Many Ohio producers in 2011 and 2012 built pads and drilled single wells in efforts to delineate holdings and to find the most productive areas, he said. Now those producers are going back and adding new wells to existing pads.There is one pad in southeast Ohio with 28 wells, and more are planned. More typically, Ohio producers are expected to add six to 12 wells per pad in an effort to reduce costs and boost production, Simmers said.
Cabot moving west, deeper in search of crude - Independent producer Cabot Oil & Gas, which has made its mark as the major dry-gas producer in the Marcellus Shale play in Northeast Pennsylvania, is branching out, both geologically and geographically.The Houston-based company is preparing to drill a handful of test wells in Ashland and surrounding counties in north-central Ohio, in 100,000 acres.And the search could be for natural gas, natural gas liquids – or even crude oil. “Our geologists are telling us they see something and we want to take a look,” George Stark, a Cabot spokesman tells Kallanish Energy. But we’re going below the Utica.” The Houston-based company has filed paperwork with the Ohio Department of Natural Resources (ODNR) for two well pads in Ashland County, and plans to drill up to five test wells in an area that also includes parts of Richland, Knox, Wayne and Holmes counties. During the early days of Utica Shale exploration, Devon Energy drilled a few test wells in the area Cabot is targeting, but found nothing to warrant a major drilling program, moved on. Stark told Kallanish Energy Cabot isn't drilling exactly where Devon drilled. Paperwork filed with ODNR indicates the company is targeting the Rome and Knox formations. Cabot plans to drill vertical wells and take samples that will show the ratio of oil to natural gas and the pressure and thickness of the rock, factors that determine whether it makes economic sense to drill more wells, Stark tells Kallanish Energy. According to a March presentation made at the Scotia Howard Weil Energy Conference, Cabot revealed it plans to spend $75 million in 2018 on “exploration areas,” with the Ashland County drilling program consuming a major part of that budget. For the past 10 years, Cabot has been drilling Marcellus Shale horizontal wells in Pennsylvania’s Susquehanna County.Cabot was producing natural gas from 561 horizontal wells at the end of 2017, and has another 3,000 undrilled Marcellus locations among its 172,000 acres in northeast Pennsylvania, according to that same presentation. The company plans to drill roughly 85 Marcellus wells this year.
Oil and gas company eyes drilling in north-central Ohio - Cabot Oil & Gas is getting ready to drill test wells in Ashland and surrounding counties in north-central Ohio.“We’ve got a really neat group of geologists who think they see something in Ohio,” said George Stark, a Cabot spokesman based in Pittsburgh. “They see something, and we want to go touch it.”Cabot is looking for natural gas and oil a hundred miles northwest of the Utica Shale play’s core in eastern Ohio. The Houston-based company has filed paperwork with the Ohio Department of Natural Resources for two well pads in Ashland County, and plans to drill up to five test wells in an area that includes parts of Richland, Knox, Wayne and Holmes counties. Stark will talk about Cabot at the fifth annual Utica Midstream Conference Wednesday at the Barrette Center at Walsh University. The Canton Regional Chamber of Commerce and ShaleDirectories.com are presenting the conference. During the early days of Utica exploration, Devon Energy drilled a few wells in the area Cabot is targeting, but moved on. Cabot is planning to explore below the Utica Shale, Stark said. Paperwork filed with ODNR indicates the company is targeting the Rome and Knox formations, but Stark declined to be specific. The agency has yet to issue the company a drilling permit.The company plans to drill vertical wells and take samples that will show the ratio of oil to natural gas and the pressure and thickness of the rock, factors that determine whether it makes economic sense to drill more wells, Stark said.Cabot has obtained the right to drill vertical wells into rock formations 3,000 to 4,000 feet beneath a natural gas storage field owned by Columbia Gas Transmission, but Cabot still needs to get horizontal-drilling rights from surface landowners. Casings around the wells will isolate the wellbore from the storage field and any other formations that aren’t the target of the well, Stark said.
Property owners seek to limit fracking in Holmes, Ashland, Richland – Cabot Oil & Gas is seeking to explore and develop potential subsurface natural gas resources in Ohio, prompting several area landowners’ groups to team up in opposition to the company’s efforts. The area being targeted for exploration lies beneath underground natural gas storage fields owned by Columbia Gas Transmission, LLC in Holmes, Ashland and Richland counties. On August 30, 2017, Cabot entered into a sublease agreement with Columbia to allow the company to explore and potentially develop natural gas resources beneath the storage fields through horizontal drilling and then extract those resources through hydraulic fracturing, a process commonly known as fracking. “We believe that there is something there, a hydrocarbon, an oil, natural gas, natural gas liquid, something, in the layers below the Utica Shale, but the only way to find that out is to actually drill a well and test and see because we can’t just assume.” She noted that under the current sublease agreement, Cabot already has the right to drill vertical wells in the area, however, the company believes that doing so would not be environmentally sound or economically viable. However, before this can occur, the company needs property owners in the tri-county area to sign an amendment to their existing agreements with Columbia. Bill Baker is the founder of a group called Frack Free Ohio that has been helping local landowner groups organize and mobilize against Cabot’s efforts. “I discovered through contacts in Ashland, Richland and Holmes counties that Cabot Oil was attempting to get folks to sign leases to do horizontal drilling in the area,” he explained. “They were concerned about this, so I worked with landowners in those three counties, and they decided to form individual groups to focus on their direct community to educate their neighbors and address this issue.” Out of the effort was born the Tri-County Landowners Coalition, comprised of several grassroots groups representing area landowners. Currently, the coalition includes the Hayesville Community on Fracked Gas (HCFG), representing landowners in Ashland County; the Clear Fork Landowners Group (CFLG), representing property owners from the Clear Fork Valley area of Richland County; Advocates for Local Land (ALL), comprised of landowners in Ash- land and Western Holmes counties; and the Monroe Township Landowners Coalition (MTLC), representing property owners in Monroe Township in Richland County.
COMMENTARY: In Ohio, it's the lobbies that are beating local rule – Thomas Suddes - Earlier, in 2004, the legislature denied Ohio’s 900-plus cities and villages any authority over the “permitting, location, and spacing of oil and gas wells.” You don’t want someone fracking in your neighborhood? Don’t waste your breath at City Hall: No mayor can do much to help. Instead, the Ohio Department of Natural Resources is supposed to police what the oil and gas industry does, including fracking. That 2004 measure – which had bipartisan support – was House Bill 278. Its sponsor was then-Rep. Thomas Niehaus, a suburban Cincinnati Republican, later a state senator, then Senate president. Today, he’s a Statehouse lobbyist whose 30 clients include the Ohio Oil and Gas Association. Here’s how then-Justice William O’Neill explained HB 278 in a state Supreme Court dissent. O’Neill, a Chagrin Falls Democrat, is among six Democrats running for this year’s Democratic gubernatorial nomination.At issue in the Supreme Court case was a bid by Munroe Falls, the Akron suburb, to prevent Beck Energy Corp. from drilling an oil and gas well in Munroe Falls. In contrast, the Natural Resources Department – big surprise – had issued a permit for the Munroe Falls well. The Ohio Supreme Court sided with Beck Energy. O’Neill opposed the Supreme Court’s ruling. O’Neill’s dissent included this take on the court’s decision: “Under this ruling, a drilling permit could be granted in the exquisite residential neighborhoods of (Franklin County’s) Upper Arlington, (Greater Cleveland’s) Shaker Heights, or the (Hamilton County) village of Indian Hill – local zoning dating back to 1920 be damned.” Litigation over the 2004 law, and over fracking, continues. Meanwhile, though, amnesia is an Ohio politician’s best friend. So here, in alphabetical order, are people who today hold elected state office but in 2004, as Ohio House or Senate members, voted “yes” to pass House Bill 278 and thus strip Ohio cities and villages of power over oil and gas drilling:
Pipeline faulted for unauthorized drilling -- The builders of the Atlantic Sunrise natural gas pipeline have received a notice of violation from the Pennsylvania Department of Environmental Protection for using an unauthorized drilling method when placing the pipe underneath Interstate 81 in Lebanon County. Transcontinental Gas Pipe Line Company contacted DEP on March 24 to report a spill of 30 gallons of drilling fluids in Union Township, prompting a DEP inspection, according to the notice DEP issued Friday and posted on its website. Inspectors found construction crews using a horizontal directional drilling (HDD) method for installing pipes that DEP had not authorized at that location, the notice says. The DEP required the pipeline company to submit several layers of documentation in response, including a "report documenting any other unpermitted changes made to the method for instillation of the Atlantic Sunrise pipeline." Chris Stockton, a spokesman for pipeline owner Williams, noted that Williams was allowed to bore at the location, just not by using the HDD method. "We take this permit violation very seriously and are working closely with the contractor, while in coordination with PADEP, to ensure this does not happen again." It is the second notice of violation DEP has issued in Lebanon County during Atlantic Sunrise pipeline construction. On March 2, DEP faulted Atlantic Sunrise contractors for a failure to install best management practices that led to sediment entering a wetland near the Quittapahilla Creek. Crews also began work on the pipeline's crossing of the creek in late January even though a high stream flow and localized flooding were predicted, the report said. The construction of the Atlantic Sunrise pipeline near the Quittapahilla Creek crossing has been heavily criticized by a relative of a farm owner whose land borders the creek where construction is occurring. Jami Willard said in February that construction crews often weren't following best management practices and "just do what they want as easily and quickly as possible."
Mariner East Remains Offline, Raising Questions on Longer-Term Impacts - Ethane and propane transport on the Energy Transfer Partners LP (ETP) Mariner East (ME) 1 pipeline remains suspended more than a month after Pennsylvania regulators ordered a halt to operations because of sinkholes, with little clarity on exactly when service will resume. Three sinkholes, one of which came within 10 feet of a house’s foundation, formed in West Whiteland Township near the area where horizontal directional drilling for the ME 2X pipeline was underway. That prompted the Pennsylvania Public Utility Commission (PUC) to issue an emergency order in March directing ETP subsidiary Sunoco Pipeline LP to conduct an investigation of the integrity of ME 1 and geophysical testing in the construction area.The investigation was initially estimated by the state to last up to 14 days, but ETP said it could last up to six more weeks.PUC spokesperson Nils Hagen-Frederiksen said the emergency order and the suspension of natural gas liquids (NGL) transport on ME 1 remains in full effect. Under the terms of the order, Sunoco can’t resume operations on the system until regulators are satisfied with the test results and any corrective actions necessary. The order notes that Sunoco must share all of its findings and meet regularly with the PUC.The ongoing suspension indicates that various conditions, all of which are subject to the review and approval of the PUC, have not been met by Sunoco. “We are working with the PUC and appropriate agencies to complete the necessary testing and remediation in order to ensure integrity of the pipeline before putting it back into service,” said ETP spokesperson Lisa Dillinger. “We expect this work to take up to four-to-six weeks depending on what we do, or do not find.”
Sunoco pipeline offers $10,000 reward following equipment vandalism — Sunoco Pipeline is offering a $10,000 reward for information that leads to an arrest for construction equipment that was vandalized. Between April 2 and April 3, Sunoco Pipeline had multiple pieces of construction equipment vandalized, the company says. The incident occurred along the Mariner East 2 Pipeline in West Whiteland Township, Pennsylvania, according to Sunoco’s press release on Thursday. The vandalism was deliberate and caused a significant amount of damage and potentially harmful impacts, according to the release. Sunoco says, “We understand there are varying opinions about critical infrastructure projects like the Mariner East 2 Pipeline, and we respect the rights of all to peacefully protest, however, destruction of equipment is not peaceful.” In spite of the vandalism, construction continues on this infrastructure project. The mainline construction is currently 97 percent complete.
Sunoco will temporarily relocate residents while it conducts pipeline sinkhole study - Sunoco Pipeline LP will temporarily relocate five Chester County families whose backyards were damaged last month after sinkholes developed along the Mariner East 1 pipeline, forcing the company to shut down operations over safety concerns after its bare pipeline was exposed. The company offered last week to temporarily relocate the families on Lisa Drive in Exton for up to the six weeks that it estimates it will take to conduct geotechnical studies in their backyards, where Sunoco’s construction of a second Mariner East pipeline caused sinkholes to develop.The backyards of homes on Lisa Drive in Exton, where sinkholes developed after Sunoco began horizontal directional drilling along its Mariner East pipeline route. The PUC halted pipeline operations on March 7 until Sunoco determines the extent of underground instability. The Pennsylvania Public Utility Commission (PUC) ordered Sunoco to shut down the existing pipeline on March 7 until remedial action was taken. At the time, Sunoco estimated the Mariner East 1 pipeline would be out of service for 10 to 14 days.But the shutdown of the 8-inch-diameter pipeline, which transports as much as 70,000 barrels a day of Marcellus Shale natural gas liquids such as propane to a terminal in Marcus Hook, now appears to be more likely to stretch into May, forcing Sunoco’s customers to seek other outlets for their products. Sunoco Pipeline is owned by Energy Transfer Partners (ETP), a giant Texas pipeline operator. Sunoco began preparatory work Friday for its “geotechnical data-collection activities,” installing plastic mats to protect the ground from equipment rutting. In a letter to residents, the company said the studies would involve making “small excavations” every 35 feet to confirm the location of the pipeline, followed by other work, “including the use of small auger drills to obtain core samples to identify subsurface voids, if any, in the area.”
Frac sand needs growing with laterals – When prices went into the ditch in 2014-2016, the U.S. energy industry hunkered down, concentrated operations to plays’ sweet spots, and discovered supersizing well laterals and frac sand usage were the way to succeed. Now, with crude prices remaining over $60 a barrel, the market for sand is surging once again as U.S. oil production rebounds in a big way, and the rising price of the tiny grains threatens to cut into energy companies’ profits. “Laterals are longer and the pounds of sand used per lateral-foot have increased considerably,“ Ryan Carbrey, Houston-based senior vice president with Rystad Energy, told Kallanish Energy. Sonny Randhawa, director and senior research analyst – Oilfield Service and Equipment at Seaport Global Securities in Houston, expects frac sand demand to increase to 100 million tons in 2018, and 115 million tons in 2019, up from 82 million tons in 2017. Laterals rapidly are approaching two miles in length — and beyond. Carbrey told Kallanish Energy he expects the volume of frac sand forced into each horizontal well drilled in the Marcellus and Utica Shale plays, along with the Permian’s Delaware and Midland sub-basins to jump an average of 26.6% from 2018 to 2021. Expert opinions vary as to whether increase drilling, plus longer laterals and more sand per lateral-foot will lead to a possible shortage. Carbrey, for example, told Kallanish Energy there currently is a frac sand shortage in certain areas, but it’s due to bad weather slowing shipments to the wellsite. “The (frac sand ) companies are saying four to six weeks (of shortages), but we think it might be longer than that; the issue is slowly being mitigated and within two months this should be sorted out,” he said. While going to the beach with a highlift and loading dump trucks with sand doesn’t qualify as a solution to a possible frac sand shortage, once again the industry has discovered there is a viable substitute for the gold (or the white) standard of sand. . “They may need to switch to a lower quality sand for example, but should still be able to satisfy their needs.” The Marcellus/Utica Shale plays would be using primarily Northern White Sand because it’s not only the best sand, it’s also the closest.
Pennsylvania judge distinguishes fracking from traditional mineral rights - A Pennsylvania appellate judge on Monday distinguished [opinion, PDF] the natural gas extraction practice known as hydraulic fracturing, or "fracking," from conventional drilling property rights and held that fracking is not subject to the same "rules of capture."In a suit brought against Marcellus Shale gas producer Southwestern Energy [corporate website] alleging trespass and conversion for producing gas under the plaintiffs' land, Senior Judge John Musmanno of the Superior Court of Pennsylvania [official website] explained that Pennsylvania courts have yet to determine whether the processes unique to fracking prevent its application to the same law of capture as traditional methods of drilling.Traditionally, the rules of capture assume that oil and gas originate in subsurface reservoirs or pools, and can therefore migrate freely within the reservoir and across property lines. However, the court explained, this is not true for the oil extracted via fracking from the Marcellus Shale formation. "Shale gas does not merely 'escape' to adjoining land absent the application of an external force," the court said. The court concluded that the rule of capture does not prevent liability for trespass due to fracking. The court did not rule on whether Southwestern actually trespassed on the property, but rather sent the case back to the Susquehanna County Court of Common Pleas to determine the facts in light of the Superior Court's ruling.
PA: Local fracking suit could have statewide impact - A Susquehanna County family can proceed with a lawsuit against an energy company that extracted natural gas from beneath their land using wells on an adjacent property, the state Superior Court ruled in a potentially precedent-setting decision. The ruling in the suit Adam Briggs and his two siblings filed against Southwestern Energy Production Co. is important because it negates a legal principle in oil and gas law that allows companies to siphon natural resources from beneath land they do not own without compensating the landowner. Briggs filed suit in 2015 against Southwestern relating to an 11-acre property he, his brother, Joshua Briggs, and his sister, Sarah Briggs, own in Harford Twp. The suit alleges Southwestern operated two wells to extract natural gas from a Marcellus Shale formation under the Briggs’ property since 2011. The Briggs were never compensated for the gas, however, because the wells are on a neighbor’s land. Southwestern has a lease with the neighbor but not the Briggs family. A Susquehanna County judge dismissed the lawsuit in August, after finding Southwestern was not required to pay the Briggs family based on a legal principle known as the “rule of capture.” The rule allows companies to drain a natural resource, including oil, gas or water, from beneath property they do not own as long as they do not trespass on the land. In its ruling, the Superior Court noted the rule is based on the idea that ownership of underground pools of gas or oil cannot be determined because the resource naturally migrates between property lines. In his appeal, the Briggs’ attorney, Laurence Kelly, of Montrose, argued the rule should not apply to natural gas extracted through hydraulic fracturing because the gas contained in Marcellus Shale does not freely migrate. It is only freed by the fracking process. The Superior Court agreed.
Nexus pipeline construction slashes its way through Washtenaw County - A year ago, we told the stories of Washtenaw County residents trying to head off the construction of the Nexus pipeline, which was determined to use eminent domain to build a pipeline carrying fracked gas from Ohio to Canada, where pipeline owners hoped to sell it for a profit. Activists were mad as hell that the pipeline, a project of DTE Energy in partnership with an Enbridge subsidiary, was going to use eminent domain, which the Federal Energy Regulatory Commission grants because gas infrastructure is considered a public good — even though the gas would be bound to another country for sale. These eminent domain powers would allow the company to claim land, and the pipeline was routed near schools, private homes, through private recreational land, public parks, and even the centennial farm of resident Kathy Schoen. Schoen had told us, "My fear is ... they're going to have to de-water our property. It sounds like they drive big steel sheets in at angles, and they pump the water out, and it's just going to be even worse. It won't ever be the same." Pictures sent in over the winter show the toll construction has taken on Schoen's farm land. "Meanwhile, up at the Throw Shop, the disc golf shop run by Ben Calhoun, trees have been taken out and the land formerly used as a disc golf course is in upheaval. Calhoun adds that Nexus was granted its odorization waiver. That means that any gas leaking from the pipe will not have the nasty smell the public is taught to associate with natural gas. While Calhoun says the decision poses long-term health and safety risks, it will save the pipeline operators money. Meanwhile, critics of the pipeline remain convinced it is not needed and will not even prove profitable. DTE Energy, in fact, hedged its bets on whether it would make money, bringing a case before the Michigan Public Service Commission and saying that, should the line not be profitable, it would like permission to pass the costs of building Nexus on to DTE ratepayers.
Delinquent $13.8 Billion Pipeline Company Receives Minor Fine For Major Oil Spill – Real News Network, video & transcript - The transportation of oil via pipelines is encountering increasing resistance across North America. In what has been dubbed the Standing Rock of the North, indigenous Canadians, environmentalists, and ordinary citizens are battling the massive expansion of Kinder Morgan's Trans Mountain pipeline in Western Canada. Trans Mountain carries toxic tar sands bitumen from Alberta to British Columbia's Pacific Coast. Meanwhile, south of the border, many battles are raging as well. The Dakota Access Pipeline, the Nebraska arm of the Keystone XL, and the construction in Virginia and West Virginia of two proposed natural gas pipelines are all encountering strong resistance. In Virginia some protesters have spent 30 days positioned up in trees in the construction area of the pipeline. A new pipeline spill in Indiana confirms that the fears of pipeline resisters are well founded. In the Indiana spill approximately 1000 barrels, or 42000 gallons, of diesel fuel entered Big Creek, which feeds into the Wabash River. The company responsible, Marathon Petroleum Corporation, manages one of the largest petroleum pipeline networks in the United States, based on total volume delivered. A few days after the disclosure of the recent spill, the Environmental Protection Agency and Illinois Environmental Protection Agency announced an agreement with Marathon Pipeline to resolve a Clean Water Act violation stemming from its 2016 spill into the Wabash River, with civil penalties amounting to 335000 dollars. With us to discuss the recent spill and Marathon's track record, we are pleased to be joined by Jodi Perras. Jodi manages Sierra Club's Beyond Coal campaign in Indiana, Kentucky, Michigan, and Ohio. Thanks for joining us today, Jodi.
Co-Tenancy is Now Law in West Virginia, More Gas Production - The co-tenancy legislation that passed during this year’s regular session in West Virginia is generally expected to aid natural gas development, but exactly how significant its impact will be remains unclear. A long-awaited compromise aimed at helping shale gas producers develop more of their assets and, in particular, block-up more acreage for longer laterals, the co-tenancy bill was a top priority for West Virginia’s leading oil and gas trade groups. In West Virginia, mineral rights are severed from the surface. After more than 100 years of oil and gas development in the state, it’s not uncommon for producers to encounter mineral interests on a single property divided among dozens of family members, some of whom can be hard to track down or unwilling to allow development to occur. In cases where there are more than seven mineral rights owners on a single tract of land, the new law would require a producer to obtain consent from 75% instead of the 100% as was previously required. Before the bill was signed by the governor in early March, West Virginia was the only oil and gas producing state that allowed a single minority interest owner to prevent others from allowing drilling. The bill takes effect in June. Groups including the West Virginia Oil and Natural Gas Association had long maintained that the outdated mineral laws were putting the state at a competitive disadvantage. With co-tenancy on the books, industry representatives think it may attract additional investment, spur more job growth and provide more opportunities for mineral and surface owners. “Our companies, the big companies that are drilling here, they said to us, ‘get us co-tenancy, get us the ability to amass individual tracts of land with a super majority, not 100%, and we moved forward from there,” said executive director Charlie Burd of the West Virginia Independent Oil and Gas Association. “Co-tenancy absolutely moves the needle. It moves the needle in favor of producers’ need to accumulate more individual tracts to be able to get larger drilling units, not just larger units, but longer drilling units.
WVDEP launches webpage dedicated to helping citizens learn about pipeline projects - The West Virginia Department of Environmental Protection has created a new webpage designed to help the public navigate maps and information about the five major natural gas pipelines in West Virginia that have been proposed or are under construction. In a news release Monday, WV DEP said the site includes, “detailed maps, transcripts, (and) permit information” on a single webpage.The five pipelines that are the focus of the webpage are the Atlantic Coast Pipeline, Mountain Valley Pipeline, the Mountaineer Gas Company Eastern Panhandle Expansion Project, Mountaineer Xpress Pipeline, and the Rover Pipeline. The webpage connects detailed maps of the proposed routes and DEP’s searchable online database with information about inspections and enforcement actions and any permit modifications. The site also links to find public hearing transcripts, responses to comments received at public hearings, and press releases about the pipelines. The DEP says the page will be updated as more information becomes available. The page also has a place to submit reports of possible permit violations.
W.Va. launches new webpage on five natural gas pipelines West Virginia’s Department of Environmental Protection has launched a new webpage to help residents learn about five natural gas pipelines proposed or under construction, Kallanish Energy reports.The pipelines are the Atlantic Coast Pipeline, Mountain Valley Pipeline, the Mountaineer Gas Co. Eastern Panhandle Expansion Project, Mountaineer Xpress and the Rover Pipeline.“We are making sure that anyone who has any questions about these pipelines can find those answers on one, easy-to-use webpage,” said WVDEP Cabinet Secretary Austin Caperton, in a statement.“People who live near these projects deserve to be able to find answers to their questions quickly and WVDEP is providing this new webpage to help them do that,” he said.The webpage includes maps, route descriptions, inspection and enforcement actions, permit modifications, public hearings and press releases.The page will be updated as more information becomes available on each pipeline. Citizens will be able to submit reports on possible violations via the webpage. The page is available at: https://dep.wv.gov/pio/Pages/Major-Pipelines-In-West-Virginia.aspx.
Tree Sitters Stall MVP Pipeline — “Tree sitters" are stalling construction of the Mountain Valley Pipeline. Members of the group Appalachians Against Pipelines are physically occupying two trees and a vertical pole erected in the middle of the only access road on Peter's Mountain, which straddles the Virginia-West Virginia border. The pipeline partnership, led by gas company EQT, has obtained the necessary permits for the Mountain Valley project. But rules protecting a rare bat species forbid cutting trees there between April 1 and November. Protester Alex - who didn't share his last name - spoke by cell phone from the tree he's occupied for more than a month."This is a victory, and the fact that we've been able to last this long and impede the construction is a testimony to the power that people have,” Alex said. “But if we were to get down tonight, I expect that they would try to clear tomorrow or the next day." Until this weekend, the MVP developers maintained they would meet a March 31 deadline to cut down the trees. And Alex acknowledged it may be impossible for tree sitters to permanently prevent the $3.7 billion project. Pipeline opponents say government agencies and the courts have so far failed to meet their responsibilities to protect landowners and the environment. And Alex said the public doesn’t have to accept the MVP. “There are still a million ways to interrupt the inevitability. We can decide that together."
A tree-sit protest of the Mountain Valley Pipeline has spread to Roanoke County - Another pipeline protester has taken to the trees.The latest person to climb up a tree in the path of the Mountain Valley Pipeline — hoping to prevent tree cutting as construction of the project begins — got off the ground Monday on private land in Roanoke County. Speaking from a tree stand about 30 feet high, the 61-year-old woman said she planned to hold her position in the woods along Poor Mountain Road for “as long as it takes.” “I have three children, and this mountain is like my fourth child,” she said, identifying herself only by the nickname of Red. “And take it from me, I would do anything within my power to protect this mountain. “I am very connected to this land. This is family property that has been in my family for seven generations.” The woman said she was inspired by another tree-sit operation three counties away, where two protesters have been holed up in trees along the proposed route of the natural gas pipeline in the Jefferson National Forest since Feb. 26.If the civil disobedience movement spreads, she said, “I’m hoping that people will open their eyes and look at the devastation that this will do.”While opponents have long argued in regulatory proceedings that the project will cause widespread environmental damage, the tree-sits are the first direct action taken in an effort to stop construction. However, a spokeswoman for Mountain Valley said the protests have so far failed to delay the company’s plan to have the 303-mile pipeline transporting natural gas through West Virginia and Southwest Virginia by the end of the year. “With the vast majority of the MVP project ready for the next phase of construction activity, there is more than enough work that can get underway and keep the project on track,”.
Tunnel Drilling Under the Blue Ridge Parkway is Asking for Trouble - Dominion intends to drill 4,639 feet through the Blue Ridge under the George Washington National Forest, Appalachian National Scenic Trail, and Blue Ridge Parkway. Dominion’s plans call for use of horizontal directional drilling (HDD) and contingency use of direct pipe installation (DPI) if the HDD operation fails. Given the topographic and geophysical challenges at the site, the Forest Service initially conditioned any authorization for ACP construction on prior successful completion of the proposed HDD or DPI operations. Should the HDD and DPI prove impracticable after ACP construction is underway, there will be a strong incentive for allowing an open-cut crossing of the Appalachian Trail and the Blue Ridge Parkway.The proposed drilling operations will have an extreme environmental footprint, requiring extensive excavation for entry and exit workspace, pipe pullback, fabrication, and testing workspace, as well as siting of heavy equipment for pipe handling, and a network of access roads – all on steep mountainsides with multiple stream crossings. As with other aspects of the ACP, the public and regulatory review agencies have not had access to detailed construction plans. The areas and amount of excavation required for construction have been imprecisely specified at best. The Dominion Pipeline Monitoring Coalition published a report in early 2017 describing both the risk of failure and the unavoidable environmental damage associated with the plans for drilling through the Blue Ridge. This report described the risk factors confronting both the HDD and contingency DPI operations. Although detailed geophysical investigation of the drill path is standard practice for assessing the feasibility of prospective HDD and DPI operations, the information considered during environmental review was limited in both scope and reliability. No subsurface borings were completed at or near the HDD endpoints and geophysical survey data were obtained for less than 25% of the drill path.
Thousands Call on VA Gov. Northam to Protect Virginia Streams from Fracked-Gas Pipelines — Citizens representing Virginia landowners, the faith community, scientists, people of color, water protectors and clean energy advocates today called on Governor Ralph Northam to protect Virginia’s waters by taking immediate action on the proposed Mountain Valley and Atlantic Coast pipelines. The action comes the morning after Virginia’s Department of Environmental Quality approved a key permit for the Mountain Valley Pipeline, paving the way for its construction. At a press conference at the Bell Tower on Capitol Square, citizens presented the Northam administration with petitions signed by more than 10,000 Virginian residents. The signatories call on the governor to protect the drinking water supplies of countless Virginians from the Mountain Valley and Atlantic Coast pipelines, which would cross streams and other waters more than 1,400 times across the state. The group also presented a petition from Change.org with more than 62,000 signatures from other concerned citizens from around the country calling on Governor Northam to reject the pipelines. In addition to the projects’ tremendous climate impacts that affect all Americans, the projects bisect national treasures including the Blue Ridge Parkway, the Appalachian Trail, and many miles of national forest land. The petition demands that the Northam administration immediately halt the ongoing tree-felling along the routes, allow the public to review and comment on the erosion and stormwater control plans before they are finalized by the Department of Environmental Quality, and take action to ensure the state analyzes individual stream impacts, rather than the Trump administration’s Corps of Engineers.
Russian 'green' trolls are targeting the US energy sector, House report claims - Russian internet trolls from the same outfit blamed for meddling in the 2016 US presidential election also created more than 9,000 social media posts designed to stir up enmity around energy and natural gas projects in the US, such as the Dakota Access Pipeline, according to a report from the Republican majority of the House Science, Space, and Technology Committee. The House Science Committee, chaired by Republican Lamar Smith of Texas, prepared the report. It analyzed how that Russian troll farm — which is also under scrutiny by Special Counsel Robert Mueller — hyped controversies about pipelines, hydraulic fracturing and climate change on Facebook, Twitter and Instagram. Energy reporter Tim Puko of The Wall Street Journal says that while the posts, which were created by Russia's Internet Research Agency (IRA), were meant to create controversial debate in the US, they should also be viewed in terms of how they might have helped Russia's own energy sector. Social media companies turned over to the committee social-media posts from some of the same Russian agents who were caught up in the Mueller investigation, Puko says. Many were “meme-like posts created…to take the side of environmentalists in different controversies surrounding oil and gas development and new pipelines.” “It was pretty clear that these posts were designed to inflame fears in people who have environmental concerns or health concerns about, typically, fossil fuel development,” Puko says.
Protesters block Bayou Bridge Pipeline construction supply site in Calcasieu Parish - Two women from New Orleans on Thursday morning dressed up as crawfish and chained themselves inside barrels parked in front of an industrial yard about 200 miles from their homes. By the end of the day, Renate Heurich, a retired teacher, and her friend, Sue Prevost, an active teacher, said they were facing counts along with two others who joined them in protesting construction of the 163-mile Bayou Bridge Pipeline across south Louisiana. The industrial yard in Iowa, which is outside Lake Charles, is stocked with railroad ties that trucks use to access muddy construction sites along the pipeline route, said Anne Rolfes, founding director of the Louisiana Bucket Brigade, which organized the protest. About 20 protesters blocked access to the industrial yard for more than three hours starting at 6 a.m., Rolfes said. About five trucks were trapped inside, she said, until the Calcasieu Parish Sheriff’s Office arrived about 9 a.m. All but two — Heurich and Prevost, the crawfish-festooned teachers in the barrels — complied with an order to disperse, Rolfes said. The protesters remained at the site but moved a distance away. Sheriff’s deputies eventually pushed aside the barrel containing Heurich, who willingly left the barrel. The five trapped truck drivers managed to leave once deputies removed the first barrel, Rolfes said, but she figured the lack of other trucks attempting to enter signified a wider disruption. “This is a busy yard on a usual day,” Rolfes said. “They are usually in and out of this yard every 10 minutes.”
Louisiana and Minnesota Introduce Anti-Protest Bills Amid Fights Over Bayou Bridge and Enbridge Pipelines - This week, the Louisiana House of Representatives introduced new legislation aimed at criminalizing the activities of groups protesting the extraction, burning, and transport of oil and gas. The bill is similar to a model created by the right-wing American Legislative Exchange Council. Indeed, in the wake of the massive protest movement at Standing Rock, which attempted to prevent completion of the Dakota Access pipeline, at least seven states have introduced or passed “critical infrastructure” legislation. Louisiana’s version comes as opponents of the Bayou Bridge pipeline have ramped up protest activities in the state, staging occupations and blockades aimed at halting construction of the project. The legislation creates new crimes that would punish groups for “conspiring” to trespass on critical infrastructure sites and prescribes particularly harsh penalties for those whose ideas, if carried out, would disrupt the operations of such infrastructure. The definition of the term critical infrastructure would be amended to include pipelines and pipeline construction sites. The language of the bill reaches far beyond cases of property destruction, and stands to net individuals who do not participate in or condone such activities. The Louisiana bill, unlike the ALEC model, does not require that any disruption to a facility’s functioning take place for penalties to apply — an individual could face huge fines or prison time without ever having set foot on the property. The proposed law appears to be designed to intimidate the array of groups working to halt construction of the 163-mile oil pipeline, which cuts through a sensitive wetland where Louisiana crawfish are harvested. The Bayou Bridge pipeline shares the same parent company, Energy Transfer Partners, as the Dakota Access pipeline. Indeed, the two projects represent the northern and southern ends of a larger pipeline system.
Pipeline Backed by Pruitt’s Oil Lobbyist Landlord Approved While EPA Chief Was Receiving Sweetheart Rent -- As U.S. Environmental Protection Agency ( EPA ) chief and reigning number one seed in the " worst Trump cabinet member " bracket Scott Pruitt attempts to beat back accusations that he violated ethics rules by renting a room from the wife of powerful energy lobbyist J. Steven Hart, the New York Times revealed late Monday that Pruitt approved a massive pipeline project supported by Hart's firm at the same time he had access to what critics argue was an unusually low-priced rental ."A giant pipeline that rips up a vast swath of America and wrecks the climate in exchange for a cheap condo," 350.org founder Bill McKibben tweeted in response to the new report. "Seems the perfect emblem of the Trump years."While EPA officials immediately pushed back against the notion that Pruitt approved the project as a favor in exchange for the cheap condo, government ethics experts argued that the pipeline approval at the very least gives off the appearance of a conflict of interest."Entering into this arrangement causes a reasonable person to question the integrity of the EPA decision," Don Fox, who served as general counsel of the Office of Government Ethics during the Obama and George W. Bush administrations, told the Times. During an appearance on MSNBC on Monday, former White House ethics official and vice-chairman at Citizens for Ethics and Responsibility in Washington Richard Painter called Pruitt's room rental "disgusting" and argued it is a clear "violation of the gift rule." Pruitt's decision to sign off on the project—an expansion of Enbridge's Alberta Clipper pipeline, which runs from Alberta, Canada to Wisconsin—came in March of last year, when his lease with the Washington, DC condo was still in effect.
LNG and pipeline reversals turn Louisiana gas market upside down, part 4. -- The Louisiana natural gas market is in a state of major flux. The state’s supply mix has changed drastically, with Offshore Gulf of Mexico production declining over the past few years and the long-dormant Haynesville Shale making somewhat of a comeback in the past year. At the same time, four new liquefaction trains at Cheniere Energy’s Sabine Pass LNG terminal have added more than 3.0 Bcf/d of export demand that didn’t exist before 2016. These trends signal a shift in Louisiana’s supply-demand balance and are a prelude to big changes yet to come as producers and midstreamers look to provide solutions for balancing the market. Today, we continue our deep-dive into recent and upcoming changes in the Louisiana market, this time focusing on flow trends across the state’s North, Offshore Gulf and Central pipeline corridors. In Part 1, we looked at the growing importance of the Louisiana market in balancing the U.S. gas market. It’s at the epicenter of natural gas demand growth in the U.S. For that reason, it’s also the destination market that U.S. gas producers and midstreamers are targeting. We learned from our analysis in Part 2 that gas supply along the Upper East corridor is increasingly moving east from the Perryville Hub (in northeastern Louisiana) over the past year or so, and the aggregated capacity of the seven pipes in that corridor is nearly full. In Part 3, we looked at flows on the western side of the state. Gas flows across the western Louisiana border have traditionally moved east from Texas and Oklahoma into Louisiana, and that continues to be the case. But the same pushback from Marcellus/Utica supply that’s displaced flows in the eastern Louisiana corridors also has affected flows on the west side, with a couple of pipes — TETCO and TGP — reversing direction.
Natural gas storage design capacity increased slightly in 2017 - Over the past four years, relatively little new underground natural gas storage capacity was built in the Lower 48 states. EIA measures natural gas storage capacity in two ways: design capacity and demonstrated maximum working gas volume (or demonstrated peak). In 2017, design capacity grew by about 1%, and demonstrated peak fell by 1%. Design capacity is the sum of the working gas capacity for all active facilities in the Lower 48 states as of November 2017. Design capacity is based on the physical characteristics of the reservoir, installed equipment, and operating procedures particular to the site. Nationally, design capacity rose by 34 billion cubic feet (Bcf), or 0.7%, between November 2016 and November 2017. This increase was driven by expansion in the East storage region, where design capacity grew by 30 Bcf (2.9%) in 2017.Most of the incremental capacity in 2017 came from expansions to existing facilities, and expansions were heavily concentrated in the East region, where natural gas production has grown almost continually since 2009. Several facilities in Ohio and West Virginia likely expanded in 2017 to accommodate increasing levels of natural gas production in the Appalachian Basin. Demonstrated peak is the sum of the highest storage levels reached by each storage facility over the most recent five-year period, with the most recent period covering December 2012 to November 2017 (the beginning of each yearly heating season). Demonstrated peak indicates how storage facilities were actually used, not just how they were designed. The demonstrated peak fell by 46 billion cubic feet (Bcf), or 1.0%, in 2017. EIA began tracking peak capacity metrics in 2011, and 2017 marks the first year that the demonstrated peak declined. The decline was partly because the new five-year range does not include 2012, a year that saw very high inventory levels because of record warm weather.
May NYMEX natural gas futures pull back to $2.688/MMBtu ahead of EIA storage report -- NYMEX May natural gas futures lost footing overnight in the US ahead of Thursday's open, amid anticipation of a slowdown in the pace of inventory erosion approaching the traditional end of the withdrawal season. At 6:41 am ET (1041 GMT) the contract was down 3.0 cents at $2.688/MMBtu. Abating weather-related demand support associated with the arrival of spring is seen to have minimized the rate of weekly storage draws when the US Energy Information Administration releases its storage report later today for the week ended March 30. Estimates gathered by S&P Global Market Intelligence call for a consensus withdrawal of 25 Bcf. That would follow a 63 Bcf draw reported for the previous week which left total working gas stocks at 1,383 Bcf, or 672 Bcf below the year-ago level and 346 Bcf below the five-year average of 1,729 Bcf. Higher low temperatures generated by lingering cold in spring are expected to have contributed to diminished heating demand and the anticipated step down in the pace of storage erosion in the forthcoming report. "Even with the cold temperatures, nat gas heating-related demand (although above normal) is nothing like demand during the height of the winter heating season," Energy Management Institute principal Dominick Chirichella said in a note to clients. "This week's inventory withdrawal level will likely be below normal or the five-year average for the same week."
Natural Gas Futures Slide as EIA Storage Stats Seen Bearish - A bearish government storage report helped fuel a natural gas futures retreat Thursday as lingering cold couldn’t overshadow signs of a well-supplied market. Spot prices were mixed, with a few New England points spiking and California prices eased amid moderate demand in the region; the NGI National Spot Gas Average climbed 14 cents to $2.92/MMBtu. The May contract settled at $2.675, down 4.3 cents on the day, enough to erase gains from the previous two trading sessions. June settled 3.7 cents lower at $2.729.The Energy Information Administration (EIA) reported a weekly storage withdrawal that came in looser versus market expectations, although a reclassification resulted in a slightly larger net decrease to inventories overall. EIA reported a net decrease of 29 Bcf for Lower 48 gas stocks for the week ending March 30, but the figure came with an asterisk. In a footnote, the agency said the implied flow for the week was actually a withdrawal of 20 Bcf, with “nonflow-related adjustments” accounting for a 9 Bcf decrease in inventories in the South Central Nonsalt region for the period. Markets seemed to latch on to the less impressive minus 20 Bcf “implied flow.” As soon as EIA’s 10:30 a.m. ET report crossed trading desks, the May contract slid close to 4 cents to as low as $2.651 before settling into a range of around $2.665-2.675 over the next half hour. By 11 a.m. ET, May was trading around $2.662, down about 5.6 cents from Wednesday’s settle. The 20 Bcf implied withdrawal compares with a 4 Bcf pull in the year-ago period, while the five-year average is a withdrawal of 28 Bcf. Last week, EIA reported a 63 Bcf withdrawal for the week ended March 23. Prior to the report, the market had been looking for a larger withdrawal than the implied flow. The median taken from a Bloomberg survey had showed traders and analysts expecting a 26 Bcf withdrawal for the week, with responses ranging from 22 Bcf to 39 Bcf. A Reuters survey of 23 participants had settled on a median 26 Bcf draw with a range of 19 Bcf to 35 Bcf. IAF Advisors analyst Kyle Cooper had called for a withdrawal of 23 Bcf, in line with Intercontinental Exchange EIA storage futures, which had settled Wednesday at a withdrawal of 23 Bcf. OPIS by IHS Markit expected a withdrawal of 27 Bcf. Including the net 9 Bcf decrease because of reclassification, total working gas in underground storage stood at 1,354 Bcf as of March 30, versus 2,051 Bcf a year ago and five-year average inventories of 1,701 Bcf, according to EIA. The year-on-year deficit increased week/week from 672 Bcf to 697 Bcf, while the year-on-five-year deficit widened slightly from 346 Bcf to 347 Bcf, EIA data show.
EPA grants 25 small refiner exemptions to fuel mandates — The Environmental Protection Agency (EPA) has so far granted 25 small US refiners exemptions from federal fuel blending mandates for 2017, dragging down the market for compliance credits and infuriating biofuels groups. EPA did not comment on the associated number of renewable identification numbers (RINs) associated with small refinery exemptions to the Renewable Fuel Standard (RFS). The number of approved waivers — more than double the previous year and all but four of the applications received for 2017 — surged after Congress and federal courts told the agency last year it had overstepped its authority by limiting the number of waivers. "It appears the agency has initiated a fire sale on RFS demand," Renewable Fuels Association chief executive Bob Dinneen said. RFS requires refiners, importers and other companies to each year ensure minimum volumes of renewables blend into the fuel they add to the US transportation supply. Companies acquire RINs needed to prove compliance by blending approved renewable and conventional fuels. Obligated parties that lack infrastructure for that activity purchase RINs from blenders. Congress created a hardship waiver for refineries with less than 75,000 b/d of capacity. Facilities must convince the Department of Energy and EPA that compliance creates an economic hardship. The waivers apply to individual facilities, rather than an overall company. EPA does not adjust a year's minimum volume after waiving a small facility's obligation. Such waivers instead effectively reduce obligations for all obligated parties and increase the supply of available RINs, cutting costs. The agency has historically granted few waivers, though given little detail on who received the benefits or how decisions were reached. Because the waivers hinge on economic hardships, they are treated as confidential business information. A 2011 list of candidate refineries prepared by the Department of Energy was also redacted.
Oil and Gas Drilling Blamed for Sinkholes Threatening to Swallow Parts of Texas - Oil and gas extraction in west Texas is causing the formation ofmassive sinkholes, according to a new study. As the fossil fuel industry has expanded its operations in the region, an increase in seismic activity and other “alarming” geological hazards have been recorded. Two giant sinkholes near the Texan town of Wink have previously been linked with such operations, but they may just be the tip of the iceberg. The geophysicists who first alerted the world to the threat posed by the expansion of Wink’s sinkholes undertook further research and found unusual land movement throughout the wider west Texas region.“The ground movement we’re seeing is not normal,” said Professor Zhong Lu, an expert in satellite radar imagery analysis at Southern Methodist University.“The ground doesn’t typically do this without some cause.”Having previously used satellite radar images to study the Wink sinkholes, Professor Lu and his collaborator, Dr Jin-Woo Kim, used similar methods to explore the link between such phenomena and human activities.“This region of Texas has been punctured like a pin cushion with oil wells and injection wells since the 1940s and our findings associate that activity with ground movement,” said Dr Kim. In their study, published in the journalScientific Reports, the researchers demonstrated significant ground movement across a 4000-square-mile area of Texas. Combining their imagery with oil well data for the region allowed the scientists to conclude that this unstable ground was associated with decades of fossil fuel extraction.
Fracking activist tries to gauge power plant emissions -- Sharon Wilson stood in a lecture hall at the University of Texas Rio Grande Valley Tuesday with two side-by-side photos of a local power plant on the projector. What followed were gasps from the roughly 70 students in attendance.The well-known environmental activist is a licensed thermographic camera user. The Environmental Protection Agency, Texas Commission of Environmental Quality and the oil and gas industry all use the same equipment to measure hydrocarbon emissions, which are invisible to the naked eye.“They use the same cameras but they try to criticize the videos that I take,” Wilson said. Wilson has alleged that although government entities and the industry use the same equipment, they are prohibited from using memory cards to avoid a paper trail. TCEQ has been using thermographic cameras for about a decade and reported having 20 in 2015. “The cameras detect hydrocarbons, but they don’t identify which specific hydrocarbons are being emitted,” said Andrew Keese, a media relations specialist with TCEQ. “It’s a general tool we use to identify potential things we need to look into. … It may or may not indicate an issue. So, if something was detected, then an investigator would have to go and follow up.” Wilson visited several power plants in the area and compared the images to the audience at UTRGV, presenting Tuesday on the effects of the oil and gas industry in Texas. She said the images taken from power plants in Hidalgo County — Calpine Magic Valley, Merit Compressor Station and STEC Red Gate power plant — were “as bad as (she’s) seen anywhere.”
Trump’s SEC Blocks Shareholder Climate Resolution at Oil Company’s Request - The Securities and Exchange Commission (SEC) has blocked a shareholder resolution to set greenhouse gas-emissions targets, setting a troubling precedent for shareholders who want to use their collective power to fight climate change , Axios reported Monday.The investment firm Trillium Asset Management had intended to propose a resolution at an annual shareholders' meeting this spring calling on EOG Resources, the largest oil-producer in Texas, to set dates for reducing greenhouse gas emissions. But EOG complained to the SEC in December, asking the government agency to bar the resolution from a vote on the grounds that it would " micro-manage " the company.The SEC ruled in EOG's favor in February, and rejected an appeal from Trillium in March, marking the first time that the SEC has ruled to block an emissions-related proposal for non-technical reasons."What the SEC has done here really feels like interfering with the marketplace, substituting their judgment for what shareholders and investors already think and do," Trillium shareholder-advocacy director Jonas Kron told Axios. Trillium is far from the first investment group to use a similar proposal as an attempt to push fossil-fuelcompanies to reduce greenhouse-gas emissions. Axios cited data from the Sustainable Investments Institute saying that 130 such resolutions had been proposed since 2010.
Investors stunned over oil producer’s climate-change exemption - A new twist is unfolding in the fight between activist investors and the oil industry: an unprecedented move by federal regulators allowing a major producer to preemptively kill a shareholder resolution on climate change without a vote. The Securities and Exchange Commission’s support of oil producer EOG Resources is emerging as a flashpoint in what has become America’s central battleground over climate change: what investors do about it. It’s an arcane fight, but a consequential one too, because President Trump is reversing course on climate policy. “What the SEC has done here really feels like interfering with the marketplace, substituting their judgment for what shareholders and investors already think and do.” For the record, spokespeople at the SEC and EOG both declined to comment. Trillium proposed a resolution calling on EOG to set a target to reduce its greenhouse gas emissions. EOG complained to the SEC in late December that the proposal would micromanage the company, calling it a "rigid, time-bound" target, and asked to omit it from consideration. Responding in late February, the SEC agreed and took a veiled shot at shareholders, implying they don’t know enough to set company policy. The SEC sent another letter last month to Kron’s firm rejecting an appeal request. EOG is the largest oil producer in Texas, according to state data. It also has operations throughout the U.S. and a few places overseas. Kron, whose firm manages more than $2 billion in investments with a focus on sustainability, said other oil producers, like Hess Corporation, have committed to greenhouse gas reduction targets. The development comes ahead of this year’s annual shareholder meetings that run through spring. Numerous energy companies are expected to face investor votes on non-binding, but symbolically important, climate resolutions in a process known as “shareholder democracy.” Investors, including large asset managers BlackRock and Vanguard, are putting increasing pressure on fossil-fuel companies to acknowledge the risks climate change pose to their bottom lines.
Permian Differentials Widening On A Wave Of New Crude Supplies -- Price differentials in the Permian Basin are widening at a rapid pace. The discount for Midland crude to West Texas Intermediate (WTI) at Cushing has widened by over $4/bbl since the beginning of March and the discount to Magellan East Houston (MEH) crude was over $7/bbl yesterday. Permian production is increasing at a breakneck pace as new players are entering the scene. Private equity-backed exploration and production companies (E&Ps) are no longer just acquiring and flipping acreage, as they are being forced to prove their assets are profitable and can generate a return on investment. The combination of large drilling plans from the majors and new production from these smaller operators — with no new pipeline takeaway capacity in sight — has sent Permian crude pricing into a tailspin. Today, we begin a new series on the recent slide in Permian prices, how new producer strategies are contributing to it, and what it means for pipeline space, trucking and midstream infrastructure.
Texas oil output surge clogs pipelines, depresses prices (Reuters) - The Permian basin in Texas is leading the way as U.S. oil production has reached an all-time high, but the prolific output is causing bottlenecks as pipelines transporting the crude have filled up more quickly than expected. That has depressed prices there, posing a threat to future production, while providing a boost to pipeline companies as the lines have filled to near-capacity. With few new pipeline projects scheduled for this year, producers may be forced to slow drilling, or even shut in active production. The problem illustrates the snags that can arise in transporting crude to the U.S. Gulf Coast as oil prices have rebounded to more than $60 a barrel and companies have reduced costs to make drilling more profitable in the Permian. Production there is estimated to have hit a record 3.08 million bpd in March, nearly a third of overall U.S. production of 10.4 million bpd, according to the Energy Information Administration (EIA). Permian drillers are branching out into relatively less-profitable areas of the region, said John Zanner, energy analyst for RBN Energy. “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,” he said. Most analysts estimated pipelines out of the Permian would fill completely by mid-2018, but this may already be happening. According to market intelligence firm Genscape, pipeline utilization from the Permian to the Gulf Coast averaged about 89 percent this year and 96 percent in the last four weeks.
Another sign of Permian boom: record electricity demand - In West Texas, an oil and gas drilling rush has overwhelmed local roadways, housing supplies and a limited pipeline network. Now, the shale boom is straining the region’s electric grid, which was designed to handle a fraction of the power needed by the oil and gas producers that dominate the West Texas economy. Driving the booming power demand is a transformation in oil and gas operations as companies forgo expensive diesel and natural gas generators to power compressors and pipelines in favor of the cheaper option of hooking up to the grid. The unprecedented spike in electricity consumption coupled with inadequate transmission have slowed the development of new projects, such as sand mines, that support the energy industry. Excessive demand on a limited system also threatens the grid’s reliability in West Texas, and could lead to blackouts caused by the voltage overload. “To say that this is load growth like we have not experienced before is kind of an understatement,” . “There is not an area in ERCOT that has seen that kind of load growth before. That is unheard of.” Fixing the bottlenecks has implications not only for the oil and gas industry, but also for the Texas economy, the environment and electric customers across the state. Under state regulations, the costs of transmission projects are shared by all users of the power grid, regardless of whether they are served directly by the transmission or the utility building it. Dallas utility Oncor, which serves the Permian Basin, is asking regulators to expedite two transmission projects, costing an estimated $223.6 million, to meet the skyrocketing demand in the oil patch. “Is the rest of the state subsidizing these capital investments to handle peak loads?” It’s too soon to tell how much Oncor’s and other transmission projects in West Texas might add to electricity bills. Three utilities, Oncor, AEP Texas and Texas-New Mexico Power, serve a majority of the region around the Permian Basin that covers 24,000 miles, with an average of just 16 people per square mile. By 2022, the power demand in the area is projected to climb to 1,000 megawatts, up from just 22 megawatts in 2010.
West Texas oil, gas growth means more electricity needed - In West Texas, an oil and gas drilling rush has overwhelmed local roadways, housing supplies and a limited pipeline network. Now, the shale boom is straining the region's electric grid, which was designed to handle a fraction of the power needed by the oil and gas producers that dominate the West Texas economy. The Houston Chronicle reports driving the booming power demand is a transformation in oil and gas operations as companies forgo expensive diesel and natural gas generators to power compressors and pipelines in favor of the cheaper option of hooking up to the grid. The unprecedented spike in electricity consumption coupled with inadequate transmission have slowed the development of new projects, such as sand mines, that support the energy industry. Excessive demand on a limited system also threatens the grid's reliability in West Texas, and could lead to blackouts caused by the voltage overload. "To say that this is load growth like we have not experienced before is kind of an understatement," said Jeff Billo, senior manager of transmission planning with the Electric Reliability Council of Texas, which oversees 90 percent of the state's grid. "There is not an area in ERCOT that has seen that kind of load growth before. That is unheard of." Fixing the bottlenecks has implications not only for the oil and gas industry, but also for the Texas economy, the environment and electric customers across the state. New and expanded transmission would allow energy companies to lower costs, improve profit margins, increase production and continue to hire and expand, not only in West Texas, but in Houston and other parts of the state — including burgeoning Gulf Coast ports where abundant supplies of crude and natural gas are sent, stored and exported.
Cyber attack cripples system that manages Dallas company’s national pipeline network - A system that digitally processes customer transactions for a major pipeline network in the U.S. was shut down Monday after a cyber attack.The electronic data interchange provided by third-party Energy Services Group LLC for Energy Transfer Partners's natural gas pipeline system was attacked Monday and will be hobbled until "further notice," Energy Transfer said in a notice to shippers.The shutdown could affect a network of major pipelines owned by subsidiaries, including Panhandle Eastern Pipe Line Company, which owns lines from Michigan to Texas, Transwestern Pipeline Company and Rover Pipeline. The EDI system, designed to cut costs and boost speed, is used to conduct business through a computer-to-computer exchange of documents. Though it's not clear who was responsible for the attack, it comes after U.S. officials warned in March that Russian hackers are conducting a broad assault on the nation's electric grid and other targets. Last month, Atlanta's municipal government was hobbled for several days by a ransomware attack. "This situation has not impacted our operations. We are handling all scheduling in house during this time," Vicki Granado, a spokeswoman for Energy Transfer, said in an emailed statement. Energy Services Group was not immediately available for comment. Energy Transfer, run by billionaire Kelcy Warren, isn't the only pipeline company using EDI. Other operators with the system include Kinder Morgan Inc. and Tallgrass Energy Partners LP, according to their websites. Kinder Morgan wasn't affected, spokeswoman Melissa Ruiz said in an email. Tallgrass didn't immediately respond to requests for comment.The Panhandle natural gas pipeline network includes four large-diameter pipelines stretching from the Anadarko Basin of Texas and Oklahoma into several other midwestern states. The Trunkline system, which extends from the Gulf Coast into the Southeast and Midwest, and the Sea Robin system in the Gulf of Mexico are also part of the Panhandle network.
Cyberattack Pings Data Systems of At Least Four Gas Networks - On Tuesday, Oneok Inc., which operates natural gas pipelines in the Permian Basin in Texas and the Rocky Mountains region, said it disabled its system as a precaution after determining that a third-party provider was the “target of an apparent cyberattack." A day earlier, Energy Transfer Partners LP, Boardwalk Pipeline Partners LP, and Chesapeake Utilities Corp.’s Eastern Shore Natural Gas reported communications breakdowns, with Eastern Shore saying its outage occurred on March 29. The Department of Homeland Security, which said Monday it was gathering information about the attacks, had no immediate comment Tuesday. “We do not believe any customer data was compromised,” said the Latitude Technologies unit of Energy Services Group, which Energy Transfer and Eastern Shore both identified as their third-party provider. “We are investigating the re-establishment of this data,” Latitude said in a message to customers. The company wasn’t ready to make a statement or discuss the details of the service disruption yet, Carla Roddy, marketing director at Energy Services Group, said in a brief interview at the company’s headquarters in Norwell, Massachusetts. The attacks follow a U.S. government warning in March that Russian hackers are conducting an assault on the U.S. electric grid and other targets. Last month, Atlanta’s government was hobbled by a ransomware attack. At least some of the websites went down on March 29 and didn’t start returning until Monday, according to Dan Spangler, pipeline manager for data provider Genscape Inc. in Boulder, Colorado. “Although all of the sites are back up now, many of them are still missing” data for March 30 and April 1, he said. “Other than Energy Transfer pipes and the pipelines hosted by Latitude, we haven’t seen any issues with gas data.”
Peak Shale? Payback Time: Oilfield Services Raise Prices -- Oilfield service providers are upping their prices, the latest Dallas Fed Energy Survey has found, confirming what producers began to complain about last year when oil prices started recovering. The survey found the index of input costs for oilfield services jumped from 46.8 from 30.9 this quarter from last. The index for oilfield service prices was also higher in Q1 2018, at 27.9 from 22.6.Further strengthening the view of an industry in recovery, the survey also found that the index for utilization of oilfield service equipment was higher this quarter, at 40.4. That’s up 11 points from the reading for the last quarter of 2018, the Dallas Fed noted. Higher oilfield services prices began pressuring producers’ margins soon after the industry officially swung into recovery and growth mode. It was only to be expected because the services sector suffered a harder blow from the oil price collapse, with providers forced to offer huge discounts to drillers in order to stay in business. Once prices began rising again, producers were eager to start pumping more again and not long after there was a shortage of frack crews and equipment on the horizon. This shortage led to a price spike for oilfield services and longer waiting periods. It also led to new optimism about the services industry. This is only fair. After all, it was oilfield service providers that accounted for the bulk of the almost half a million layoffs in the industry during the downturn. It was oilfield service providers that greatly contributed to those notorious efficiency improvements that producers like to brag about so much. In the providers’ case, efficiencies meant cut-throat prices for their services.The recovery is not universal, though, as Forbes’ Dan Eberhart noted in a recent story on the sector. Smaller services providers—and even some big ones—are still in the red and struggling to return to profit. . Producers, in other words, might be in for a blow to their profit margins as service providers recover.
Oil Production Per Rig -- EIA Data May Be Very, Very Wrong -- April 2, 2018 -- I apologize to a reader for the late response / delayed posting of his note. The reader sent me two notes regarding my post regarding "oil production per rig." In the first note, the reader wrote: I read somewhere using Oil Production Per Rig as a metric for the Permian was inaccurate because so many newly drilled wells go into DUC status. He then backed up that statement with a link to this site: https://btuanalytics.com/eia-drilling-productivity-report-misleading-market/: EIA drilling production report misleading the market, dated July 25, 2017. My hunch is that the reader is completely correct. But if this is the way the EIA is calculating rig efficiency, wow -- talk about huge mistake. It certainly misconstrues everything. Very, very bothersome.
U.S. production of crude oil grew 5% in 2017, likely leading to record 2018 production - Annual average U.S. crude oil production reached 9.3 million barrels per day (b/d) in 2017, an increase of 464,000 b/d from 2016 levels after declining by 551,000 b/d in 2016. In November 2017, monthly U.S. crude oil production reached 10.07 million b/d, the highest monthly level of crude oil production in U.S. history. U.S. crude oil production has increased significantly over the past 10 years, driven mainly by production from tight rock formations using horizontal drilling and hydraulic fracturing. EIA projects that U.S. crude oil production will continue to grow in 2018 and 2019, averaging 10.7 million b/d and 11.3 million b/d, respectively. Although much has changed since 1970, Texas continues to produce more crude oil than any other state or region of the United States. Texas has held the top position in nearly every year since 1970, with the exceptions of 1988, when Alaska produced more crude oil than Texas, and from 1999 through 2011, when production from the Federal Gulf of Mexico was higher. Texas crude oil production averaged 3.5 million b/d in 2017 and reached a record high monthly level of 3.95 million b/d in December 2017. Texas’s 2017 annual production increase of nearly 300,000 b/d—driven by significant growth within the Permian region—was more than all other states and the Federal Gulf of Mexico combined. Growth in the Permian region, which spans parts of Texas and New Mexico, also contributed to a 74,000 b/d production increase in New Mexico, the state with the second-largest growth in 2017. New Mexico surpassed California and Alaska to become the third-largest crude oil-producing state in the second half of 2017, although it produced less than those states on an annual average basis.
About 7% of fossil fuels are consumed for non-combustion use in the United States - While most fossil fuels in the United States are burned, or combusted, to produce heat and power, EIA estimates that the equivalent of about 5.5 quadrillion British thermal units of fossil fuels were consumed for non-combustion purposes in the United States in 2017. Over the past decade, non-combustion consumption of fossil fuels has typically accounted for about 7% of total fossil fuel consumption and about 6% of total energy consumption in the United States. Fossil fuels can be consumed, but not combusted, when they are used directly as construction materials, chemical feedstocks, lubricants, solvents, waxes, and other products. Common examples include petroleum products used in plastics, natural gas used in fertilizers, and coal tars used in skin treatment products. In 2017, about 13% of total petroleum products consumed were for non-combustion use. Natural gas non-combustion use accounted for about 3% of total natural gas, while coal was less than 1%.. Estimation of fossil fuels for non-combustion consumption is essential to calculate total U.S. carbon dioxide emissions. In the non-combustion use of these fuels, some (but not all) of the carbon is sequestered and not included in the fuel consumption values for emissions calculations. Petroleum products account for about 86% of non-combustion consumption. Hydrocarbon gas liquids (HGL) such as ethane, ethylene, butane, butylene, isobutane, isobutylene, propylene, and natural gasoline and petrochemical feedstocks such as naphthas are important components for making plastics. HGL are used as intermediate products, while petrochemical feedstocks are used directly at chemical plants. Other petrochemical feedstocks are used to make synthetic fabrics, such as Kevlar, synthetic rubbers, detergents, and other chemical products. Asphalt and road oils are used for roofing and paving construction. Lubricants, which include motor oil and greases, are used in vehicles, machinery, and various industrial processes. Petroleum coke is used as a chemical catalyst, while special naphthas are used in petroleum-based paints. Other petroleum products include distillate and residual fuel oils used as chemical feedstocks as well as polishes and waxes. Natural gas is used as feedstock to make nitrogenous fertilizers and a range of chemical products including ammonia, hydrogen, and methanol.
Western natural gas markets whack Rockies producers - Efforts to increase natural gas production in the Rockies are running into a brick wall — make that several brick walls. To the east, burgeoning gas production in the Marcellus/Utica region is surging into Midwest markets, pushing back on Rockies gas supplies. To the south, Permian gas production is ramping up toward 8 Bcf/d, most of it associated gas from crude-focused wells — volumes that will be produced even if gas prices plummet. To the west, Rockies gas faces an onslaught of renewables in power generation markets, where wind and solar are increasingly replacing gas fired and coal generation, especially during non-peak periods when the sun is shining and the wind is blowing. To the north, Western Canadian producers facing a where-do-we-send-our-gas problem of their own are only days away from having expanded pipeline access to U.S. West Coast markets — access likely to displace some of the Rockies gas which has been flowing west. Today, we discuss highlights from a new report by our friends at Energy GPS that assesses these developments and explores their implications. There was a time, many years ago, when the Rocky Mountain states (Colorado, Utah, Montana and Wyoming) represented the fastest-growing gas-producing region in the country. From 1998 to 2008, Rockies dry gas production more than doubled, increasing by 6 Bcf/d (from 5 Bcf/d to 11 Bcf/d) while the U.S. as a whole increased by only 3 Bcf/d. Thus, Rockies gas production was growing while the rest of the U.S. was in decline. The region was growing so rapidly that severe pipeline takeaway capacity constraints developed, prompting construction of Rockies Express (REX), the largest pipeline built in a decade at that time, which was completed in November 2009 to bring 1.9 Bcf/d of Rockies gas all the way to Clarington, OH. Then shale happened. But not to the Rockies. Gas producers shifted their attention to the big shale producing basins, leaving the Rockies to muddle along. Rockies production flat-lined.
Wyoming judge decides oil and gas firms will not have to comply with controversial emissions rule -- Oil and gas firms will not have to comply with a signature environmental rule from the Obama era, a federal judge in Wyoming decided Wednesday. Most have lost count of the times that the Bureau of Land Management’s methane waste rule has been laid before a judge or gone in and out of effect. A previous decision in early February had essentially ordered industry to comply while the Interior Department revised the standards.The rules would curb venting and flaring from industry infrastructure and require more labor-intensive checks for accidental leaks.Whether the rules were necessary, worth the cost and within the Bureau of Land Management’s authority are points of division among industry, states and environmental groups. After the February decision from a judge in northern California, industry groups said it would be impossible for many firms to comply overnight, and it remained unclear at the time how and if the Bureau of Land Management would enforce the rules. But environmental groups applauded the decision, one of a host in favor of the rules in 2017. They argued that industry had had years to prepare. Industry groups attempted multiple times to halt compliance on aspects of the rule. Congress also went after the rules, attempting to axe them completely via a rarely-used provision to eliminate midnight decisions of an outgoing president. That also failed. The Interior Department tried to rescind the rule, but was chided by the courts for not following the administrative process of undoing a rule. Since that decision the Interior has proposed a revision which would eliminate some of the most contested aspects, like using radar equipment to identify leaks from pipelines. Wyoming federal judge Scott Skavdahl bemoaned the back and forth on the standards in his written decision Wednesday, saying compliance with the rules, given that those requirements will soon disappear, “makes little sense.” “And unfortunately, it is not the first time this dysfunction has frustrated the administrative review process in this Court.” The judge did not rule on the merits of the rule, so addressing methane leaks and flares is still going to have its day in court. But until then, the judge said, the rules should be on hold.
33 accidents happened at oil refineries as EPA delayed updating disaster rule, says environmentalist group - At least 33 fires, explosions and chemical releases at U.S. oil refineries and industrial plants have occurred in the last year as the Environmental Protection Agency delayed updating a Chemical Disaster Rule intended to stop many of those accidents from occurring, a coalition of environmental groups said in a report released Tuesday.Titled “A Disaster in the Making,” the report is intended to illustrate how inadequate safety measures can threaten public health, said the group of 10 environmental organizations across the country that sponsored the report, including California Communities Against Toxics and the Union of Concerned Scientists.“The Chemical Disaster Rule includes much-needed improvements to the EPA’s Clean Air Act Risk Management Program and would prevent and reduce chemical disasters, hazardous releases and resulting chemical exposures, while strengthening emergency preparedness and coordination with local first responders,” the groups said in a news release accompanying the report.“When developing the rule, the EPA determined that prior protections failed to prevent over 2,200 chemical accidents around the country during a 10-year period, including about 150 incidents per year that caused reportable harm.” Three of those 33 accidents cited in the report, including two on the same day last summer, happened in the South Bay:
- A failed temporary pump was believed to have caused a “forceful” fire Oct. 17 at the Chevron El Segundo Refinery that prompted authorities to issue a shelter in place order as 40-foot-high, oil-fueled flames spewed thick back smoke into the air. The fire was extinguished in about an hour, preventing two large tanks nearby from overheating.
- A hazardous release of at least 100 pounds of potentially lethal and flammable hydrogen sulfide and a leak of 42 gallons of a chemical called diethanolamine occurred June 26 at the Tesoro Refinery in Wilmington.
- Three separate unplanned flaring events occurred within 24 hours and a 30-gallon crude oil spill occurred June 26 from a pipeline at the Torrance refinery owned by PBF Energy.
Chinese lender gets in line behind Alaska LNG project - A major Chinese bank is among the financial entities tasked with raising equity to develop a liquefied natural gas project in Alaska, the developer said. Alaska Gasline Development Corp. wants to build pipelines and associated infrastructure to process state gas into liquefied natural gas, a super-cooled form of gas that has more maneuverability than other piped resources. The project includes an 807-mile pipeline across Alaska. The Alaskan company announced late Tuesday that Bank of China Ltd. and Goldman Sachs agreed to serve as the global capital coordinators for the project. Both entities will help AGDC raise equity to fund full-scale development once all the necessary permits are in place. "Bank of China and Goldman Sachs are well positioned to provide AGDC with world-class institutional knowledge and resources required to arrange the equity and debt financing to build Alaska's natural gas infrastructure and LNG export project," Keith Meyer, the president of AGDC, said in a statement. In November, the state government and the AGDC signed an agreement with Chinese lenders and China Petrochemical Corp., or Sinopec, to advance discussions on the LNG potential in Alaska. China could secure LNG from cheaper reserves closer to home, notably from Australia or Qatar, which already have established LNG infrastructure. The United States, meanwhile, is on pace to become the third-largest LNG exporter within the next two years. The first deliveries from Alaska are planned for 2025.
After Targeting U.S. Farms, China Can Strike America's Shale - Beijing on Wednesday took aim at America’s rural heartland by proposing levies on politically sensitive farm commodities such as soybeans, which were among 106 U.S. products targeted. The list also included petrochemicals and liquefied propane, indicating that the world’s biggest oil buyer is willing to use energy as a weapon to retaliate against planned American duties on its high-tech goods.While officials from the world’s two largest economies had sought to calm markets by showing a willingness to negotiate, U.S. President Donald Trump on Thursday ordered his administration to consider tariffs on an additional $100 billion in Chinese imports. The Asian nation is the biggest regional buyer of American oil as well as liquefied natural gas, and the critical commodities may be swept up in the trade war if tensions flare further. “China can ditch American energy at any time because there’s plenty of supplies elsewhere, whereas for the U.S., energy is a sensitive subject,” said Will Yun, a commodities analyst at Hyundai Futures Corp. in Seoul. “The two countries may eventually come to an agreement and China may not use energy so soon into the dispute. It will use the card wisely.”
Arrests to Continue as Kinder Morgan Protests Heat Up - Organizers of the recent wave of protests at the Kinder Morgan site on Burnaby Mountain say we can expect more large protests and arrests as the battle shifts up and down the intended pipeline expansion route this year. Police have arrested 176 people so far at the Burnaby Mountain site since March 10, according to Eugene Kung, a staff lawyer at West Coast Environmental Law.“Folks are getting arrested for violating a court injunction,” Kung said. “They’re being charged with contempt of court for breaching or violating a court order that says you are not allowed to go within five metres of the Kinder Morgan terminal.” These are the technical legal grounds that allow for the arrest of protesters at the Burnaby Mountain protests. The question about why people are choosing to get arrested vary from “standing in solidarity for Indigenous rights, having fears of a spill or tank farm fire, and the contribution of climate impacts of this project,” Kung said. Grand Chief Stewart Phillip, president of the Union of BC Indian Chiefs, said the organization around the ongoing protests is organic and that no central group is spearheading the gatherings.“On April 7, we’re going to be hosting another large gathering [at the Kinder Morgan Burnaby Mountain site],” Phillip said. “I will be present and I’ll likely be arrested on that day.” Phillip, who was arrested Nov. 27, 2014 at a protest at the site, said it’s appropriate to demonstrate solidarity with the people who have already been arrested in the past weeks, and that the location of the protests will change. “There could be a point where the action will shift from Burnaby Mountain to Cold Water,” Phillip said. “Over the next several months, you can expect there to be an ebb and flow with this battle.”
How First Nations are keeping watch over an embattled Canadian pipeline - After its completion on March 10, George, a member of the Tsleil-Waututh First Nation, told Earther he and others would be living at the watch house that sits just off a public walking trail in Burnaby, a suburb of Vancouver. From it, they would be keeping an eye on Kinder Morgan, the company planning to construct a 715-mile pipeline to carry crude oil from Alberta’s tar sands through George’s ancestral territory. “The watch house would be watching for enemies of the territory who would be coming for raids,” . “This was a call to all the thousands of people who marched here yesterday to warrior up.” In many ways, the watch house embodies the existential struggle over Canada’s most controversial pipeline, which pits a coalition of climate activists and suburbanites, led by First Nations, against energy giant Kinder Morgan—or as George calls them, “the enemy.” The escalating discord over the pipeline gives it an air of the North Dakota Standing Rock protests set in the suburbs. If completed, Kinder Morgan’s new Trans Mountain Pipeline would triple the capacity of tar sands flowing from Albertan fields to coastal British Columbia and into the global marketplace. The proposed route largely mirrors the current Trans Mountain Pipeline, which has been in use since 1953, and also cuts across First Nations land.The bitumen the new pipeline carries is extremely hard to clean up because it’s so viscous. Any spill could poison waterways the Tsleil-Waututh and other First Nations rely on for resources and spiritual renewal.“The water is very important to us, it’s our spiritual highway,” George told Earther. After years of degrading First Nations, including by building the first Trans Mountain Pipeline without their consent, Prime Minister Justin Trudeau promised reconciliation to atone for past wrongdoings. First Nations activists opposed to the new pipeline see the government’s green lighting of this project as a huge betrayal of those promises. And the George family, long a fixture of activism and leadership, is once again leading the charge for justice. The fight is also about the future of Canada’s economy and its role in curbing climate change. Building a pipeline that ships some of the dirtiest oil in the world is a huge step backward from Canada’s climate rhetoric.
BC Government Withheld Information on Dangers of Unregulated Fracking Dams - Early last spring, provincial civil servants cut off virtually all communication about what the government knew about a sprawling network of potentially dangerous and unregulated dams in northeast B.C. on the pretext they could not comment because of the impending election. The co-ordinated effort meant there was virtually no comment until months after voting day from frontline agencies on how 92 unlicensed dams were built on the BC Liberal government’s watch. Details about muzzling government communication on the dams — which were built to trap freshwater used in natural gas industry fracking operations — are contained in some of the 8,000 pages of documents released by the BC Oil and Gas Commission in response to Freedom of Information requests by the Canadian Centre for Policy Alternatives, which was the first to report on the dams early last May. The initial CCPA report, published one week before the election and widely covered by media outlets, exposed how fossil fuel companies had built “dozens” of unlicensed fracking dams. “Guidelines on ‘managing records during an election’ cannot trump the law,” said Colin Bennett, a University of Victoria political scientist. “If there is a public interest in disclosure, then the election period is irrelevant.” Bennett added that B.C.’s Freedom of Information and Protection of Privacy Act clearly states that government officials should proactively release information that is in the public interest without delay. That did not happen in this case. Not only did it not happen, but the OGC insisted on formal FOI requests being filed to obtain the information. By doing so, the commission — with the knowledge of the Ministry of Natural Gas Development — ensured that documents on the troubling dams would not be released until long after the election.
How Canadian Drillers Adapt To Extreme Crude Discounts -- Canada’s oil producers had just started to slowly recover from the oil price crash when they began to face increased constraints in marketing and monetizing their heavy crude oil. Transportation bottlenecks widened the discount to which Western Canadian Select (WCS)—the benchmark price of oil from Canada’s oil sands delivered at Hardisty, Alberta—trades relative to West Texas Intermediate (WTI), weighing on Canadian producers’ revenues and profits, increasing their debts, and battering their share prices.Some Canadian producers have started to actively market non-core assets, trying to dispose of heavy oil portfolios that they can’t monetize efficiently with WCS at some $20 or higher discount to WTI. Others have slowed down production in response to increased market access constraints. Some analysts even think that producers would better allocate the cash they make to buying back shares instead of drilling new wells to boost production.Earlier this week, Obsidian Energy said that it was exploring a potential sale of the Alberta Viking assets and that it was in talks with China Investment Corporation (CIC) to sell its share of the jointly owned Peace River assets. Obsidian plans to use any potential proceeds from sales to fund growth at its core Cardium assets, cut debt, and buy back shares. “In addition to exploring the sale of our Alberta Viking and Peace River assets, we are actively reviewing industry consolidation opportunities with significant synergies,” said David French, President and CEO of Obsidian Energy, which has divested around US$1.8 billion (C$2.3 billion) worth of assets over the past three years.Obsidian is not alone in seeking to sell assets to strengthen the balance sheet and cut debt.Crescent Point Energy Corp continues to market non-core asset packages and to increase commodity hedges to protect cash flows, it said in the 2017 results release last month.Crescent Point is looking to sell part of its Western Canadian Sedimentary Basin (WCSB) assets, if it could get the right price for them, COO Neil Smith told S&P Global Platts. Some of the biggest Canadian producers are slowing heavy oil production to mitigate the impact of the wide WCS-WTI differential.
North Sea, Mexico most attractive as oil, natural gas industry costs fall: Wood Mackenzie - The UK, Mexico and shallow-water Norway are now the most competitive locations for new oil and gas projects following cost-cutting by the offshore industry globally, consultancy Wood Mackenzie said Thursday. Related news: Dated Brent crude oil differential drops to almost 2.5-year low ahead of expected May rally In a new report, Wood Mackenzie forecast that breakeven costs for major new investment projects would fall by another 15% this year to $44/barrel of oil equivalent, and said it expected 30 major projects to be approved this year, in line with last year's 32. It gave a cautious view on spending levels, predicting that investment per barrel of reserves would rise slightly this year for deepwater projects, to almost $10/boe, but the average price tag of newly approved major projects would fall for a third year in a row, to $2.2 billion, from $2.7 billion last year, which was the lowest in a decade. It noted that already in the first quarter six of the 30 projects that it forecast would be approved this year had got the go-ahead, in the UK, Norway, Israel, the Netherlands, Malaysia and China. The report chimes with surveys and comments from industry leaders applauding improvements in the North Sea, which was long viewed as exceptionally expensive. . But Wood Mackenzie noted a sharp drop in the average volume of oil and gas reserves associated with each project approved last year, accompanied by an increase in the number of countries where projects were approved, from eight in 2016 to 19 in 2017. The average project size last year was 376 million boe, down from 909 million boe in 2016 and 537 million boe in 2015, the consultancy said. "We cannot rely on smaller projects forever, and when we look at LNG in particular, we see a lot of big projects on the horizon."
Runaway Arctic Ice Menaces Oil Rigs and Shipping as the Planet Warms - As the planet warms, giant icebergs and sea ice that once would have remained trapped in the frozen Arctic are moving southward faster and more frequently, menacing shipping and oil and gas drilling operations.In the North Atlantic, scientists say the number of icebergs spotted south of 48 degrees latitude—where they start to get into more shipping lanes—is up again this year, following a series of extreme iceberg seasons."So far, iceberg numbers crossing south of 48 degrees look to be higher this year than last, and last year saw a relatively high iceberg flux year—about 1,000 icebergs crossing 48 North, compared to the long-term mean of 450," said University of Sheffield geographer Grant Bigg, who studies icebergs and climate.That ice can pose serious risks to ships and offshore oil and gas rigs. Last year, strong storms sent a swarm of icebergs surging into the oil and gas drilling field at the Grand Banks off Newfoundland, marking the fourth extreme iceberg season in a row, according to International Ice PatrolCommander Gabrielle McGrath."There were so many in the area that we couldn't count them all. Our models couldn't keep up with how quickly they were moving to the south," she said. During one week, the number of icebergs in McGrath's watch area in the North Atlantic surged from 37 to 455. At the peak of the iceberg invasion, the trackers also found seven icebergs outside their normal monitoring area, creating what McGrath described as the most dangerous possible situation for North Atlantic mariners.
Fracking firm says first horizontal well at Lancashire is complete - The first large-scale fracking in Britain has moved a step closer after an energy firm said it had completed drilling the UK’s first horizontal well at a site in Lancashire. Cuadrilla said the development was a “major milestone” towards the first shale gas exploration in the UK since 2011, when work was halted after it triggered a minor earthquake. The company said it hoped to begin fracking at its site on Preston New Road, near Blackpool, in the summer, pending government approval. Cuadrilla has reported signs of a “sizeable quantity of shale gas” on the site and said its tests suggested each well could extract enough gas to power 5,000 homes for 30 years.The drilling announcement was met with scorn from environmentalists and protesters, however, about 200 of whom were outside the gates of the fracking site on Tuesday. Doug Parr, the chief scientist for Greenpeace UK, said: “Just as Bloomberg reveal that solar plants have dropped in cost by 20% in the last 12 months, Cuadrilla announces that seven years after the last UK well was fracked, they are almost ready to have another go, notwithstanding local opposition, pending government permission, sometime in the summer, maybe.“And this announcement of yet another delay in getting started is what Cuadrilla are trying to pass off as a success.” The announcement coincided with the start of three months of protests at the site, beginning with a women’s week to mark 100 years since some women won the right to vote. Some protesters wore suffragette sashes and chanted to the beat of a samba band as they prepared to take “non-violent direct action” against trucks attempting to enter the site on Tuesday.
Venezuela's Oil Sector May Soon Have New Owners - Venezuela’s oil production fell by another 100,000 barrels per day (bpd) in March, a devastating blow that will only make the country’s economic crisis worse. Output is expected to continue its downward spiral; the only uncertainty is over the pace of decline. As Venezuela comes apart at the seams, it will hand over more and more control of its natural resources, and even power over its institutions, to China, according to a new report from the Washington-based Center for Strategic & International Studies. The report argues that enormous levels of foreign investment may seem beneficial, but that Venezuela’s economic predicament has actually been made much worse by China. Taking advantage of Venezuela’s desperation, China has managed to convince Caracas to sign “one-sided financial agreements” that perpetuate the economic malaise afflicting the country.Over the past decade, China has sent an estimated $62 billion to Venezuela in one form or another, representing about half of all the money that China has lent to Latin America. For years, Venezuela has been sending oil shipments to China as repayment, and last year it shipped roughly 330,000 bpd to China, sales that earned Caracas little or no revenue.China’s patience with Venezuela seems to have worn thin. Reuters reported last month that China is likely to roll over a current financing arrangement it has with Venezuela, allowing for lenient repayment terms, but that it won’t lend the Venezuelan government any more money than it already has. China remains Venezuela’s largest debt owner with $23 billion in outstanding debt. But CSIS argues that China remains a key piece of the puzzle propping up President Maduro’s repressive “narco-regime.” The think tank says that China’s excessive influence is both bad for Venezuela and it also raises security concerns. China’s hunger for commodities has led to “long-term dependency,” essentially preventing Venezuela – and other commodity-exporting countries in Latin America – from ever developing more sophisticated valued-added sectors of the economy. Venezuela will remain in a colonial-like state, serving as a place for resource extraction for China’s benefit. Indeed, China’s appetite for commodities is only expected to grow.
Brazilian Auction Draws Oil Companies Back to Offshore Drilling — Exxon Mobil and other oil companies opened their wallets at an offshore oil auction in Brazil on Thursday in a sign that the industry was stepping back into the deepwater drilling business. It was the third encouraging Brazilian offshore auction since September, and a vote of confidence for the country’s energy reform program at a time when oil companies have been reluctant to make ambitious offshore investments. As oil prices plunged in recent years, global investment in offshore oil and gas operations collapsed to roughly $160 billion in 2017, from a high of $335 billion in 2014. Rystad Energy, a Norwegian energy consulting firm, projects that offshore investments will level off at $155 billion this year, and gradually pick up over the next five years. But BP, Royal Dutch Shell and Germany’s Wintershall defied the global trend and were among the big winners at the Brazilian auction on Thursday. Chevron had kept a low profile in Brazil since an oil spill in 2011 off the coast of Rio de Janeiro, but it successfully bid for four exploration units. Particularly aggressive was Exxon Mobil, which is eager to replace depleted reserves and increase production. Along with several partners, Exxon Mobil won eight bids for covering 640,000 acres of fields, including one bid valued at $848 million. Combined, the auction brought the Brazilian government more than $2.4 billion in payments for both deepwater and shallow-water prospects. On Wednesday, two choice offshore blocks were withdrawn from the auction by a Brazilian court, which argued that they should be granted only under a production sharing model that would benefit the government. But Brazilian officials and energy analysts argued that the auction was a success anyway.
Indonesia state firm says oil spill due to cracked underwater pipeline (Reuters) - Indonesia’s state oil company Pertamina said on Wednesday a cracked underwater pipeline was the cause of an oil spill off the coast of a port city on Borneo island that has prompted a major clean-up operation in the area. Authorities rushed to contain the spill off Balikpapan, which started on Saturday and sparked a fire that killed four people at the weekend. TV footage has shown officials scooping up buckets of oil from the sea and dumping them in pits on shore. “The pipe was found ... in a broken condition. There were external factors that caused that,” said Togar MP, general manager of Pertamina’s refinery in Balikpapan. “We are still calculating the volume of the leak and losses,” he said at a news conference in Balikpapan, adding the leak was of crude oil. It was not immediately clear if the pipeline had been repaired. A government official in Jakarta said it was unclear what had caused the leak. “It could be that the pipeline is rusty or an anchor hit it,” said Djoko Siswanto, director general of oil and gas at the energy ministry. The state energy firm said on Sunday initial tests showed the oil was marine oil used in boats. Balikpapan city, a major mining and energy hub, declared a state of emergency on Monday, warning residents to stay away from the coast because the area was prone to fires.
Cracked Undersea Pipeline Caused Deadly Oil Spill in Indonesia - A burst undersea pipeline owned by Indonesian state-owned oil and natural gas corporation Pertamina caused a deadly oil spill on Saturday that left Balikpapan Bay in Borneo "like a gas station." The company initially said the disaster had nothing to do with its nearby refinery or undersea pipelines that run across the bay, noting that its own tests on oil spill samples found marine fuel oil used for ships, not crude oil. But on Wednesday, Pertamina admitted that its crude oil pipeline was indeed the cause. A company manager noted the distribution line was closed immediately after divers detected the leakage on Tuesday. A test on a tenth oil spill sample also confirmed that it was crude. The firm is now calculating the amount of oil leaked into the bay. The government, however, insists the incident is not Pertamina's fault. An energy ministry official cast blame on a foreign coal vessel that dropped anchor in the bay and dragged the pipeline 120 meters from its initial location, causing it to crack. Indonesia declared a state of emergency on Monday after the spill ignited and killed at least five people in the port city of Balikpapan over the weekend. Hundreds of locals reported health issues including difficulty breathing, nausea and vomiting from the smell of fuel and black smoke that emanated from the blaze.
Oil Spill Now Larger Than Paris Ravages Indonesian Island, 5 dead - An oil spill in Borneo that began over the past weekend has now spread across an area greater than the city of Paris and is heading out to the open ocean, the Indonesian government said. The spill, first reported on March 31, stems from a pipeline operated by state-owned oil firm Pertamina in the city of Balikpapan, in East Kalimantan province. A report released April 4 by the Ministry of Environment and Forestry said the slick was spreading out from Balikpapan Bay and into the Strait of Makassar, covering some 130 square kilometers (50 square miles). Pertamina, which for days had denied responsibility for the disaster, finally admitted on April 4 that one of its pipes used for transporting crude oil was the source of the slick. "Our preliminary investigation had indicated that the oil was ship fuel, but it was only until [the evening of April 3] that we got confirmation that it was from us," Pertamina general manager Togar M.P. told reporters. "Ever since the incident was discovered, we have shut down the pipes." The incident has been blamed for the deaths of five fishermen in a fire sparked by clean-up workers who were trying to clear the oil by burning it off the water's surface. Some 84 acres of mangrove forests are covered in oil, the environment ministry report said. The slick is also believed to have led to the death of an endangered Irrawaddy dolphin (orcaella brevirostris), a protected species under Indonesian law, which was found washed up on the coast near the site of the spill. Thousands of people in Balikpapan, a city of 700,000, have also complained about health problems from the toxic slick.Authorities declared a state of emergency in the city on April 3, and warned residents not to light cigarettes in the area. They also distributed gas masks to protect against the acrid fumes and smoke.
BP thinks an oil spill in Australia would be ‘welcome boost’ for locals -- BP, the company behind the deadly Deepwater Horizon oil spill disaster, the biggest in history, has claimed an oil spill off the South Australian coast would be a good thing, as the clean up would boost local economies. BP made the outlandish claim as part of its bid to drill for oil in the pristine Great Australian Blight. “In most instances, the increased activity associated with cleanup operations will be a welcome boost to local economies,” it said, in its second rejected environmental safety plan, submitted to the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) in March 2016.The strange argument was uncovered thanks to a two-year-old freedom of information request made by Climate Home News. Government documents reveal Australia’s doubts about the oil giant’s proposal. In a letter to BP, NOPSEMA pointed to a number of statements that BP should remove from its proposal. These included the “welcome boost” claim and the giant firm’s allegation that a spill would not have a social impact, which it said meant, “BP interprets this event to be socially acceptable.”The authority took issue with this statement because of the impact a spill would have on recreation, fishing and tourism. It also told BP it would need to make a “significant modification” to its submission, in order to comply with environmental laws and to address more environmental impacts. In its proposal, BP admitted an oil spill could affect 750 km of coastline beaches within 300 days. NOPSEMA found BP’s plan lacking in relation to mobilizing equipment and the personnel needed for such a clean-up.
China Looks To Double Its LNG Terminals - China’s seemingly endless thirst for natural gas is on a collision course with not only U.S.-based liquefied natural gas (LNG) project developments, but others as well, including Russia and Australia, in a move that is revolutionizing global markets for the super-cooled fuel. Per China’s government mandate to replace coal-based power generation with natural gas, the cleaner burning fuel is set to make up at least 10 percent of the country’s energy mix by 2020, with further earmarks after that.Not only is China’s pivot away from coal to natural gas changing natural gas market dynamics, both piped gas and LNG, it is also causing a knee jerk response among the country’s state-owned oil majors. Yesterday, state-owed Sinopec Group said that it aims to more than double its receiving capacity for LNG over the next six years. The company will add new LNG receiving facilities along China’s east coast for a total of 26 million tonnes annually by 2023, up from the current 9 million tonnes. Currently, China has 17 LNG import receiving terminals.The company also wants to increase its domestic shale gas production by two-thirds by 2020. Sinopec said it will have some 60 billion cubic meters (bcm) of gas capacity, which includes imports and also domestic production by 2023. In 2017, it produced only 27 bcm of gas.Last week, the company said that Fuling, China’s first shale gas field, had built up an annual capacity of 10 bcm. Dai Houliang, Vice Chairman and President of Sinopec Corp. made the announcement at a news conference in Hong Kong when it disclosed its 2017 annual results. In 2016, the field generated over 6 bcm of shale gas. The company has also made new advances in its shale gas business, with a recent discovery in the Weirong block in southwestern Sichuan province, said Sun Huanquan, general manager of the group’s oilfield development division. He didn’t elaborate on the new find but said it should contribute to the group’s shale gas production target.
In Unprecedented Move, China Plans To Pay For Oil Imports With Yuan Instead Of Dollars - Just days after Beijing officially launched Yuan-denominated crude oil futures (with a bang, as shown in the chart below, surpassing Brent trading volume) which are expected to quickly become the third global price benchmark along Brent and WTI, China took the next major step in the challenging the Dollar's supremacy as global reserve currency (and internationalizing the Yuan) when on Thursday Reuters reported that China took the first steps to paying for crude oil imports in its own currency instead of the US Dollars. A pilot program for yuan payment could be launched as soon as the second half of the year and regulators have already asked some financial institutions to "prepare for pricing crude imports in the yuan", Reuters sources reveal.According to the proposed plan, Beijing would start with purchases from Russia and Angola, two nations which, like China, are keen to break the dollar’s global dominance. They are also two of the top suppliers of crude oil to China, along with Saudi Arabia.A change in the default crude oil transactional currency - which for decades has been the "Petrodollar", blessing the US with global reserve currency status - would have monumental consequences for capital allocations and trade flows, not to mention geopolitics: as Reuters notes, a shift in just a small part of global oil trade into the yuan is potentially huge. "Oil is the world’s most traded commodity, with an annual trade value of around $14 trillion, roughly equivalent to China’s gross domestic product last year." Currently, virtually all global crude oil trading is in dollars, barring an estimated 1 per cent in other currencies. This is the basis of US dominance in the world economy. However, as shown in the chart below which follows the first few days of Chinese oil futures trading, this status quo may be changing fast.
Qatar says too early to exit OPEC oil cuts as investment still low (Reuters) - OPEC and its allies should maintain oil supply curbs to guarantee healthy price levels which will allow increased investment in the industry and help avoid a supply and price shock in the long run, OPEC member Qatar said. Qatar’s Energy Minister Mohammed al-Sada told Reuters he also supported the idea of creating a permanent platform for OPEC’s cooperation with Russia even after the current round of joint oil supply cuts ends. “There is a clear recovery in oil prices. But it has not been met with an increase in investments ... Investment has been very low. My concern is that medium- to long-term demand is met comfortably,” Sada said in an interview. “Investors are still cautious and over-conservative”. Sada said that global oil demand was set to rise by at least 1.5 million barrels per day this year or by a healthy 1.5 percent. But the global oil investment purse of around $400 billion was still too small to guarantee the required level of investment to replace production from mature fields and the launch of new projects. “I would see the need to keep the (OPEC cooperation) momentum ... We need to restore investments. It could take months ... OPEC could start being concerned about gross over-tightening.” OPEC and its allies led by Russia have reduced production since the start of 2017 to ease a global oil glut stemming from the U.S. shale oil boom that saw oil prices crashing to below $30 per barrel and investment in the oil sector falling by over $1 trillion in the past three years. OPEC’s production restraints have helped cut global oil stocks in industrialized nations from as high as 350 million barrels above the five-year average to as low as 50 million barrels, Sada said. The tightening of the market propelled oil prices above $70 per barrel this year but also encouraged U.S. shale oil drillers to increase investments and return to record production growth.
Bahrain says new discovery contains an estimated 80 billion barrels of tight oil (Reuters) - A new discovery off the coast of Bahrain is estimated to contain at least 80 billion barrels of tight oil, the kingdom’s biggest ever find, its oil minister said on Wednesday. Bahrain said on Sunday it had discovered extensive tight oil and deep gas resources off the west coast of the kingdom. Independent appraisals by U.S.-based oil consultants DeGolyer and MacNaughton and oilfield services company Halliburton had confirmed Bahrain’s find of “highly significant quantities of oil in place ... with tight oil amounting to at least 80 billion barrels, and deep gas reserves in the region of 10-20 trillion cubic feet,” Oil Minister Sheikh Mohammed bin Khalifa al-Khalifa said. Tight oil is a form of light crude oil held in shale deep below the earth’s surface that is extracted with hydraulic fracturing, or fracking, using deep horizontal wells. “Agreement has been reached with Halliburton to commence drilling on two further appraisal wells in 2018, to further evaluate reservoir potential, optimize completions, and initiate long-term production,” Sheikh Mohammed told a news conference in Manama. He said he was not sure yet how much of the estimated 80 billion barrels was recoverable, but the kingdom aims to attract foreign oil and gas firms to develop the resources. Sadad al-Husseini, a former senior executive at Saudi Aramco and now an energy consultant, said the discovery was positive news for Bahrain, but more data gathering, evaluation and well testing needed to follow to determine whether there are any future commercial opportunities in the resources. “Converting resource estimates to reserves is an intense and costly process and not all the resources may ultimately be upgraded to reserves,” he said.
Bahrain Discovers Largest Oil Field With 80 Billion Barrels - Bahrain officials have revealed that the tiny gulf kingdom has discovered some 80 billion barrels of shale (otherwise known as tight) oil - the kingdom's largest oil and gas find ever. The field also discovered 14 trillion cubic feet of natural gas beneath an existing field. Oil Minister Sheikh Mohammed bin Khalifa Al Khalifa said the kingdom has not yet determined how much of the oil can be easily extracted, according to the Associated Press. The oil fields were discovered in the offshore Khalij al-Bahrain Basin, which covers some 770 square miles in the shallow waters off Bahrain's west coast.The underwater shale would dwarf the country's existing reserves.According to figures from the US Energy Administration, Bahrain currently pumps about 45,000 barrels a day from its Bahrain Field. It also shares income from a deposit with Saudi Arabia that produces about 300,000 barrels a day."Initial analysis demonstrates the find is at substantial levels, capable of supporting the long-term extraction of tight oil and deep gas," the Sheikh said. He added during the news conference, which was held in Manama on Wednesday, that Bahrain's National Oil and Gas Authority hoped to lure foreign oil and gas firms to develop the field where the reserves were found, per the BBC. Bahrain has been pumping oil since 1932 and was among the first Arab Gulf states to extract oil.
How Fracking Is About To Change The Middle East's Oil And Gas Dynamic - Hydraulic fracturing (“fracking”) opened new oil and gas opportunities for the United States when the advanced techniques became common practice beginning in the late 1990s in the Permian Basin (Texas), Eagle Ford (Texas), Bakken (South Dakota) and Marcellus (New York). Though they have received less attention, similar fields were discovered in Russia, China and Argentina. Now, tight oil and gas fields are gaining attention in the Middle East. In 2014, Saudi Aramco held a workshop on fracking at its Houston-based Aramco Research Center. At the time, Saudi Aramco was exploring and studying several areas in Saudi Arabia for their fracking potential. Four years later, in 2018, Aramco announced the discovery of its own shale oil fields. The Jafurah field, at the southeastern end of the Ghawar oil field in the eastern area of Saudi Arabia, rivals the Eagle Ford in size. Eagle Ford is the second largest natural gas producing shale play in the United States. Aramco is specifically looking at using fracking to produce more natural gas. Saudi Arabia hopes to convert all of its oil-burning power plants to natural gas in the near future. It is unlikely at this point that Saudi Arabia would try to produce significant amounts of oil from fracking, because it produces plenty of oil from conventional fields and does so at costs far below what it would face in a fracking enterprise. If Saudi Arabia starts producing significant amounts of natural gas to feed its electrical grid, this would ease domestic Saudi demand for oil. Saudi Arabia could either increase exports or cut production while maintaining the same exports. This would give the impression that global oil supply is decreasing even though the same amount of oil is still entering the global market. Saudi Arabia is not the only Middle-Eastern oil producer with major shale fields. Bahrain recently announced a significant find on the west coast of the tiny island kingdom. The discovery of this oil and gas field is the most significant discovery in Bahrain since 1932.
Is Russia Cheating On The OPEC Deal? -- After three months of steady output, Russia’s crude oil production increased in March to 10.97 million bpd, the highest level since April 2017, as the top two Russian companies boosted their production. According to data by the Russian Energy Ministry, Russian oil production in March was 46.39 million tons, or 10.97 million bpd, up from 41.85 million tons in February, or 10.95 million bpd.The March production level showed the first increase since December 2017, and is slightly above Russia’s quota in the production cut deal. Russia’s pledge in the OPEC/non-OPEC deal is to shave off 300,000 bpd from its October 2016 level, which was the country’s highest monthly production in almost 30 years—11.247 million bpd.Last month, the two largest Russian oil producers, Rosneft and Lukoil, both raised their production by 0.1 percent compared to February, according to energy ministry data, carried by Reuters. On the other hand, production from projects under production sharing agreements (PSAs) dropped by 0.6 percent in March.The Russian compliance with the OPEC/non-OPEC deal last month was at 93.4 percent, Energy Minister Alexander Novak said on Monday, explaining the lower compliance with seasonality on the domestic market. Still, Novak reiterated that his country was committed to achieving the oil market rebalancing.Earlier this month, Novak once again confirmed that Russia would continue to comply with the OPEC/non-OPEC deal until the end of this year and even into 2019 if need be. Novak added, however, that Russia is also on board with an earlier end to the deal, should its partners decide it was the best course of action to follow.
Private equity firms becoming longer-term players in the oil patch, investors say - Private equity investors say they're holding onto footholds in the U.S. oil patch for longer periods than in previous years, attempting to more fully develop their assets amid a lack of available capital at potential public company buyers and an anemic IPO market.Historically, the role of private equity capital in the oil industry hasn't been to fund substantial production gains, but to prove oil and gas can be captured economically. But over the next few years, these investments firms will have to focus more on squeezing cost efficiencies and productivity gains from the oil fields they invest in, said Carl Tricoli, managing partner at private equity firm Denham Capital in Houston. "You'll see more private equity money going into drilling wells," Tricoli said. "The next iteration will be, instead of taking and selling the acreage, you might see us holding onto the acreage longer – and that's where efficiency gains come. How do I change my estimated ultimate returns? How do I affect the cost structure in a more meaningful way? That'll happen over the next three to five years."
Hedge fund oil bulls downplay macro risks: Kemp (Reuters) - Hedge fund managers have turned bullish again towards oil prices, casting aside the caution that prevailed during much of February and March. Hedge funds and other money managers increased their net long position in the six most important futures and options contracts linked to petroleum prices by 85 million barrels in the week to March 27.Portfolio managers have increased their net long position in Brent, NYMEX and ICE West Texas Intermediate crude, U.S. gasoline, U.S. heating oil and European gasoil by a total of 180 million barrels over the two most recent weeks.Net long positions stood at 1.396 billion barrels, not far below the record 1.484 billion barrels set nine weeks ago on Jan. 23 (https://tmsnrt.rs/2Jf5hzq). Fund managers’ long positions outnumber their short ones by a record ratio of 12.5:1, according to an analysis of records published by regulators and exchanges.On most measures, portfolio managers’ positioning in crude and refined products looks increasingly stretched and lopsided.Large concentrations of positions such as this, on either side of the market, have typically preceded a sharp reversal in prices since the start of 2015.With so many long positions already established and few short positions left to cover, there may not be much more buying to support prices if the holders of existing longs try to realise some of their profits.But the same risk factors have been evident for the last three months and so far prices have been steady with little day-to-day volatility.Most hedge fund managers seem convinced the next major move in prices is more likely to be on the upside. OPEC has signalled its willingness to continue supporting prices by indicating it will extend output curbs through the end of 2018.
Trade War Looms Over Oil Markets -- Oil prices, along with equities across the board, were dragged down on Monday over fears of a brewing trade war. China announced $3 billion of tariffs on U.S. goods, including pork and recycled aluminum. The move came as a retaliation to the Trump administration’s 25 percent tariff on steel and aluminum imports. China’s tariff announcement on Monday sent global financial equities careening downwards, and the losses were likely magnified by President Trump’s Twitter attacks on Amazon, which sparked a selloff in tech stocks.Fears of a global trade war are again on the rise. The worrying thing is that China’s tariff measures on Monday were somewhat narrow, and only came as retaliation to the steel/aluminum tariffs, not the $60 billion in tariffs the Trump administration announced more recently, which specifically targeted China.Chinese officials reiterated a desire to avoid a trade war, but China might not hold its fire forever, and the government could be preparing a larger set of trade tariffs in response. In other words, there is a decent chance that the trade dispute continues to escalate. That is bad news for oil prices. The case for oil going higher largely hinges on exceptionally strong demand scenarios for 2018. “Our latest forecast suggests that demand will grow by 1.7 million b/d in 2018, the fifth-highest this century,” WoodMac said in a recent note. A trade war would seriously upend that forecast.
US crude sinks 3%, settling at $63.01, as geopolitical anxiety that fueled a rally fades - Oil prices fell 3 percent in thin trading on Monday, as the geopolitical concerns that underpinned last week's rally faded. Crude futures had risen in overnight trading, lifted by a drop in drilling activity in the United States and concerns that Washington could reintroduce sanctions against Iran, OPEC's third-biggest oil producer. U.S. WTI crude futures ended Monday's session down $1.93, or 3 percent, at $63.01 a barrel, after finishing the first quarter up 7.5 percent. Brent crude futures were down $1.59, or 2.3 percent, at $67.75 per barrel by 1:55 p.m. ET, having nearly touched the contract's 2018 high of $71.28 last week. Trading volume was lower than normal as many countries were still on Easter holiday.Tensions between Saudi Arabia and Iran, two of OPEC's top three crude producers, have somewhat receded, though traders were still covering bets that oil prices would fall heading into the long holiday weekend, analysts said."With nothing happening and no catalyst to keep it up here, you're starting to see this weak length coming out of the market," said John Kilduff, founding partner at energy hedge fund Again Capital."The anxiety just comes racing out of the market if nothing happens."President Donald Trump has threatened to pull out of a 2015 international nuclear deal with Tehran under which Iranian oil exports have risen. He has given the European signatories a May 12 deadline to "fix the terrible flaws" of the deal.Those concerns have been amplified by Trump's nominating Iran hardliner Mike Pompeo to be secretary of State and naming noted hawk John Bolton as national security advisor, said Tom Kloza, global head of energy analysis at Oil Price Information Service. "Those two guys have probably propped up crude by a couple dollars a barrel, pending appointments or confirmation," he told CNBC.
Financial Turmoil Hits Oil Markets Hard - Oil prices sold off along with everything else on Monday, falling despite the surprising decline of the U.S. rig count posted last week. The drop in prices appeared to have been triggered by rising Russian production and the record low levels of shorts in the market. Oil prices rebounded slightly on Tuesday. Tesla raced against the clock last week to produce as many Model 3s as possible, just as the first quarter came to a close. The company’s fortunes took another bad turn last week when a motorist was killed using the driver-assistance system Autopilot. Meanwhile, Moody’s also just downgraded Tesla’s credit rating deep into junk territory. FirstEnergy put a fleet of its power generation units into Chapter 11 bankruptcy, just days after it sent a plea to the U.S. government for a bailout. FirstEnergy’s coal and nuclear power plants are increasingly uncompetitive in a market of cheap natural gas and cheap renewable energy. Earlier this year U.S. FERC rejected a proposal that it intervene to prop up failing coal and nuclear plants. The latest request, which, if granted, would require the PJM grid to use the power from FirstEnergy’s aging fleet. The Energy Department says the request will be reviewed. But a decision won’t come in time to save FirstEnergy’s fleet. A Wall Street Journal survey of 15 investment bank points to higher oil prices. The average forecasted price for Brent and WTI for 2018 from the 15 banks came in at $63 and $59 per barrel, respectively. Both of those figures are up $1 per barrel from last month’s survey, an indication that falling crude oil inventories and rising geopolitical concerns are leading to a more bullish outlook. . China responded to U.S. tariffs on Monday by imposing $3 billion worth of tariffs on U.S. goods, including pork and recycled aluminum. The levies come as retaliation to President Trump’s steel and aluminum tariffs, which means that China could be preparing more retaliatory moves in response to the follow-up China-specific tariffs that the U.S. imposed more recently. The tit-for-tat risks a broader trade war, and that led to a global financial selloff, which dragged down oil prices and energy stocks on Monday.
Oil inches up, but rising Russian output still weighs (Reuters) - Oil prices inched up on Tuesday as rising Russian output and expectations of a reduction in Saudi Arabian crude prices were offset by a potential slowdown in U.S. production. U.S. WTI crude futures were at $63.2 a barrel at 0117 GMT, up 18 cents, or 0.3 percent, from their previous settlement. Brent crude futures rose to $67.84 per barrel, up 20 cents, or 0.3 percent, after it fell more than 2 percent on Monday. Greg McKenna, chief market strategist at futures brokerage AxiTrader, said traders were wary of the fact that the market was still holding large amounts of long positions which will need to be sold off at some stage. "That makes prices vulnerable to bad news," he said, pointing to rising Russian production and a likely drop in Saudi physical crude prices. Brent reached a 2018 high of $71.28 in January but hassince struggled to pass that level. Two rallies last week ran out of steam just above $71. There was also pressure coming from the physical market, where top exporter Saudi Arabia is expected to cut prices for all crude grades it sells to Asia in May. This came amid rising supplies. Top producer Russia pumped 10.97 million barrels per day (bpd) of crude in March, up from 10.95 million bpd in February, official data showed, an 11 month high. One of the key price drivers going forward will be crude output from the United States, which has risen by almost a quarter since mid-2016 to 10.43 million bpd, overtaking Saudi Arabia's and coming in just shy of Russia's. A dip in drilling activity for new production could imply that the relentless rise in U.S. production could be tapering off toward the middle of the year.
Western Canadian heavy crude surges to 2018 high while light grades fall - Western Canadian heavy pipeline crude rose sharply Tuesday to its strongest differential this year on what traders described as firm buying activity and the expectation of further production cutbacks. Light grades fell. Western Canadian Select at Hardisty, Alberta, the heavy benchmark, was assessed at WTI CMA minus $18.25/b, a gain of $3.65/b from where it was last assessed. The assessment marked the first time the grade has risen above minus $20/b this year. It was last assessed higher on December 5, when it reached WTI CMA minus $17.65/b. One trader described the day as marked by "lots of buying" and guessed that participants "might be short from the last trade cycle." Another trader said that a decline in heavy crude production from Cenovus and other small players had contributed to the strength.The day's rise for WCS at Hardisty gives some reprieve for a market that has struggled to alleviate a supply glut in Alberta following the temporary shutdown of the Keystone Pipeline on November 16. Cenovus Energy said last month it would curtail oil sands production to cut losses spurred by a lack of market access and crude price discounts, and Canadian Natural Resources said in its earnings call earlier in March that it was cutting heavy oil drilling in northern Alberta to reduce overall company costs. While heavy crude rose Tuesday, light grades moved in the opposite direction. Syncrude Sweet Premium at Edmonton was assessed at WTI CMA minus $1/b, down $2.80/b from Thursday and the lowest since February 6. Canadian markets were not assessed Friday and Monday because of the Easter holiday.
Oil Prices Fall as China Imposes Tariffs on US Goods- Oil prices fell on Wednesday after China said it would impose tariffs on a number of U.S. goods including agricultural products, raising the prospect of a growing trade war that could impact global growth. China, the world’s largest importer of raw materials, hit back at the Trump administration’s plan to levy tariffs on $50 billion of its goods, retaliating with a list of duties on U.S. imports including soybeans, planes, cars, whiskey and chemicals. Equity and commodity markets dropped sharply, reflecting growing nervousness among traders and investors. Brent crude futures fell $1.23 on the day to $66.89 a barrel by 0918 GMT, bringing losses for the week so far to nearly 5 percent. U.S. WTI crude futures were last down $1.18 at $62.33 a barrel. Oil prices had already been under pressure earlier in the day ahead of a possible rise in U.S. inventories, as reported by the Energy Information Administration (EIA) later on Wednesday. “We’re seeing the reaction across the board … crude oil is keeping an eye on stocks and with S&P (futures) down … we’re seeing renewed weakness ahead of the EIA this afternoon,” Saxo Bank head of commodities strategy Ole Hansen said. Yet fund managers hold more bets on a sustained rise in the price of Brent crude oil than at any time, data from the InterContinental Exchange shows.
WTI/RBOB Rebound After Big Surprise Crude Draw - WTI/RBOB tumbled after China's trade war retaliation, erasing gains on OPEC's lowest output in a year, but rebounded after DOE reported a bigger-than-API-reported and surprising 4.6mm barrel crude draw - the most in 3 months. Prices jumped despite a new record high in US crude production.
- Crude -4.617mm (+2mm exp, -3.28mm API) - biggest draw in 3 months
- Cushing +3.666mm (+4.06mm API) - biggest build since Dec 2016
- Gasoline -1.16mm (-1.5mm exp, +1.12mm API)
- Distillates +537k (+2.2mm API)
API showed an unexpected 3.28mm draw overnight and DOE confirmed it as even larger - the biggest crude draw since early January. Following the prior week's biggest surge in Cushing stocks in over a year (and API's spike), DOE reported a huge-er spike in Cushing stocks this week - the biggest build since Dec 2016.
Should the US government stockpile gasoline and jet fuel? - Capitol Crude podcast - As the US government continues to sell off hundreds of millions of barrels from its crude oil stockpile, a new report argues that the Trump administration should start building reserves of gasoline, jet fuel and other refined products. Phillip Cornell, the author of the study, joins the podcast to talk about where these product reserves should be built, how much they’d cost and whether an emergency fuel reserve needs to be used in order to be effective. Cornell is a nonresident senior fellow at the Atlantic Council’s Global Energy Center and a former adviser to both Saudi Aramco’s chairman and CEO and the executive director of the International Energy Agency.
Oil Climbs with Equities, Saudi Arabia Hikes Crude Prices - (Reuters) - Oil prices rose on Thursday, helped by gains in U.S. equities markets and Saudi Arabia's unexpected hike in crude prices, though crude's advance was curbed by strength in the dollar. Brent crude futures gained 31 cents to settle at $68.33 a barrel, and U.S. West Texas Intermediate crude rose 17 cents to settle at $63.54 a barrel. Oil prices drew support as Wall Street rose. Equities investors shrugged off fears of an escalating trade conflict between the United States and China and looked forward to the quarterly earnings season. U.S. officials said the countries could negotiate. "Oil prices are profiting from the general brightening of sentiment on the markets as signs emerge that the trade dispute is easing between the U.S. and China," analysts at Commerzbank said in a note. Saudi Arabia announced that it would increase its official selling prices of May crude, and the move supported prices, The strength of the U.S. dollar limited oil's gains, analysts said. The U.S. dollar rose to its highest in more than one month against a basket of major currencies. Because oil is dollar-priced, a stronger greenback makes purchases in other currencies more expensive. Market intelligence firm Genscape said inventories at Cushing, Oklahoma, the delivery point for U.S. crude futures, rose 2.5 million barrels for the week to April 3, according to traders who saw the data. Wednesday's weekly inventory figures showed that U.S. crude stocks unexpectedly declined by 4.6 million barrels in the most recent week. U.S. production hit a new high last week. The extent to which it counterbalance output cuts from the Organization of the Petroleum Exporting Countries (OPEC) will be critical, said Gene McGillian, manager of market research at Tradition Energy in Stamford. The energy minister of OPEC member Qatar told Reuters that the organization and its allies should maintain supply cuts, which are set to run until the end of 2018.
Oil Prices Crash Despite Bullish Fundamentals -- The escalating trade war between China and the U.S. is likely drowning out a rather bullish EIA report, which showed a strong inventory decline last week. The oil market is tightening, but trade concerns are dominating headlines. In a rapidly escalating trade war, President Trump called China’s recent tariffs “unfair,” and said he was considering an additional $100 billion in tariffs on China. Trump said that the tariffs on U.S. soy and pork would hurt American farmers, and he instructed the Department of Agriculture to come up with a plant to protect the U.S. agricultural sector. If the administration follows through on the $100 billion in tariffs, China’s Commerce Ministry said it would “follow suit to the end, not hesitate to pay any price, resolutely counterattack and take new comprehensive measures in response.” A wide range of U.S. industries are opposed to the Trump administration’s actions. Dean Garfield, president of the Information Technology Industry Council, a high-tech trade group, called the Trump move “irresponsible and destabilizing,” according to the WSJ. Crude oil prices sank after each round of tariffs, and while there are real concerns about the ripple effects on demand and global economic growth, it is unclear whether or not the oil and gas relationship will be directly targeted in a major way. China needs the energy, and oil and gas exports have succeeded in cutting the U.S. trade deficit, a particularly concerning metric for the Trump administration. Some analysts think U.S. oil and gas exports to China are too important for both countries. But not everyone agrees. “China can ditch American energy at any time because there’s plenty of supplies elsewhere, whereas for the U.S., energy is a sensitive subject,” Will Yun, a commodities analyst at Hyundai Futures Corp. told Blomberg. “If China shows its willingness to impose tariffs on crude, it will send a shock wave through markets,” said Min Byungkyu, a global strategist at Yuanta Securities Co.
Oil Prices Bristle As US Rig Count Climbs -- Baker Hughes reported a 10-rig increase to the number of oil and gas rigs this week. The total number of oil and gas rigs now stands at 1003, which is an addition of 164 rigs year over year.The number of oil rigs in the United States increased by 11 this week, for a total of 808 active oil wells in the US—a figure that is 136 more rigs than this time last year. The number of gas rigs held steady this week, still at 194; 29 rigs above this week last year.The oil and gas rig count in the United States has increased by 80 in 2018. While US drillers seem determined to add rigs, Canada continued its brutal losing streak, with a decrease of 23 oil and gas rigs, after losing 168 rigs last week in the four weeks prior. At just 111 total rigs, Canada now has 21 fewer rigs than it did a year ago. Oil prices were trading down on Friday, with West Texas Intermediate trading down $0.27 (-0.42%) at $63.27 at 9:17am EST. The Brent benchmark was trading down $.011 (-0.16%) at $68.22. Price pressures persisted on Friday as the China and US trade tiff heated up, with President Trump announcing billions in additional tariffs in a tit-for-tat measure after China’s latest round of tariffs. Also weighing on prices this week is the ever-present threat of climbing US crude oil production, which rose again in the week ending March 30, reaching 10.460 million bpd—the sixth build in as many weeks—well on its way to the 11 million bpd mark that analysts see coming in 2018. At 8 minutes after the hour, WTI was trading at $62.41 (-1.78%) and Brent was trading at $67.43 (-1.32%).
U.S. drillers add oil rigs for the third week in four: Baker Hughes - U.S. energy companies added oil rigs for the third time in four weeks as crude prices drifted from a three-year high hit earlier this year amid concerns of a trade war between U.S. and China. Drillers added 11 oil rigs in the week to April 6, bringing the total count up to 808, the highest level since March 2015, General Electric Co’s Baker Hughes energy services firm said in its closely followed report on Friday. This was the biggest weekly addition in about two months. The U.S. rig count, an early indicator of future output, is much higher than a year ago when 672 rigs were active. Energy companies have been steadily increasing spending since mid-2016 when crude prices began recovering from a two-year crash. U.S. crude futures traded around $62.30 a barrel this week, moving away from the three-year high of $66.66 hit in late January, but up from the $50.85 average hit in 2017 and $43.47 in 2016. Looking ahead, futures were trading around $61.60 for the balance of 2018 and $58 for calendar 2019. In anticipation of higher prices, U.S. financial services firm Cowen & Co said 58 of the roughly 65 exploration and production companies they track have already provided guidance indicating an 11 percent increase this year in planned capital spending. Cowen said those 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. . So far this year, the total number of oil and natural gas rigs active in the United States has averaged 969, up sharply from an average of 876 rigs in 2017 and 509 in 2016, and not far from the total of 978 in 2015. Most rigs produce both oil and gas.
Oil futures end 2.3% lower amid trade worries, rising rig count - Oil futures ended sharply lower Friday, weighed down by rising trade tensions between the U.S. and China and data that showed an increase in the number of U.S. rigs drilling for crude. West Texas Intermediate oil for May delivery on the New York Mercantile Exchange dropped $1.48, or 2.3%, to settle at $62.06 a barrel. For the week, the U.S. benchmark declined around 4.6%. Oil prices were under pressure after U.S. President Donald Trump threatened to expand planned tariffs on Chinese imports, prompting Beijing to warn of further retaliation. Meanwhile, oilfield services firm Baker Hughes said the number of U.S oil rigs rose by 11 to 808 this week.
Oil sinks as China-U. S. trade battle escalates - A combination of rising China-U. S. trade tensions and the highest number of U.S. oil rigs in three years saw oil futures end sharply lower Friday, sealing the biggest weekly decline for the U.S. benchmark since early February. On the New York Mercantile Exchange, West Texas Intermediate futures for May delivery, the U.S. benchmark, dropped $1.48, or 2.3%, to end at $62.06 a barrel. June Brent crude the global benchmark, dropped $1.22, or 1.8%, to close at $67.11 on London’s Intercontinental Exchange. Both benchmarks posted their lowest close since March 19. WTI fell 4.4% for the week, its biggest such decline since the week ended Feb. 9. Brent saw a 3.2% weekly fall, its biggest since the week ended March 2.Losses mounted after oil-field services firm Baker Hughes said the number of U.S. oil rigs rose by 11 to 808, the highest number since March 2015. That underscored worries about rising U.S. output. Oil began the day under pressure after the White House said, in a statement after the market close Thursday, that Trump has asked the U.S. Trade Representative to consider an extra $100 billion in Chinese goods to face tariffs and to identify the products that could be targeted, escalating protectionist trade tensions that market participants fear could disrupt global economies and potentially impact crude demand, even if on a short-term basis. “After all, the U.S. and China are the world’s largest oil consumer and oil importer countries. If the trade conflict escalates and slows oil demand in the U.S. and China, this would have an impact on the market balance that could hardly be ignored,” wrote commodity analysts led by Eugen Weinberg at Commerzbank.
OPEC Production Slumps To 12-Month Low - Crude oil production across OPEC slumped by 170,000 bpd last month to 32.04 million bpd, a Bloomberg survey among energy analysts. This is the lowest daily production rate in the cartel since April 2017, when it pumped 31.9 million bpd.Yet once again the drop was not the result of a conscious effort. Venezuela’s production continued to fall, shedding another 100,000 bpd in March, which made the struggling South American economy the main—if unwilling—contributor to the OPEC production decline. Venezuela pumped 1.51 million bpd last month, versus its OPEC quota of 1.97 million bpd. The country’s cumulative cut as of March stood at 557,000 bpd, versus a pledge cut of just 95,000 bpd.Algeria was another contributor to the production decline, with output there falling by 40,000 bpd to 1 million bpd as field maintenance season kicked in. Libya was also an unwilling participant in the overall decline, with production there slipping below 1 million bpd on field outages. Saudi Arabia also continued to pump less than it had pledged to, with the daily average falling by another 10,000 bpd last month to 9.87 million bpd. In comparison, Russia’s production hit the highest in 11 months in March, at 10.97 million bpd, still almost in line with its pledge to OPEC, which was for a cut of 300,000 bpd from its November 2016 average daily of 11.247 million bpd. In the United States, daily crude production averaged 10.398 million bpd in March, data from the Energy Information Administration shows.OPEC has been upbeat about its compliance with the cuts agreed in November and December 2016, but the fact that it w as Venezuela that the cartel had to thank for this compliance in large part has not gone unnoticed by industry observers. In fact, the International Energy Agency recently warned that Venezuela’s falling production could at some point tip the market into a deficit. This prospect, however, is for now remote in the face of growing production from non-OPEC producers led by the United States.
Saudi Officials Worried About Oil’s Future - Saudi government officials like talking to the media about oil. They invariably come across as upbeat, confident that the OPEC deal will achieve its goal of shrinking the global oversupply, and equally confident that U.S. shale will not seriously eat away at their oil revenues, however fast it grows.The general message seems to be: We can handle everything. Behind the scenes, however, things look differently, Time reports, citing former and current U.S. government officials with experience in the Kingdom.Following an interview with Crown Prince Mohammed, in which he anticipated a bright future for crude oil thanks to new strong demand, Time talked to several U.S. officials who shared their concern about how realistic this view of the industry actually is.In fact, these officials believe Saudi Arabia is still overdependent on crude oil, and this could spell trouble for the barely contained powder keg that is the Middle East—a ripple in crude oil would likely set the region all ablaze. What’s more, they say, Saudi Arabia is still unable to make ends meet, even at the current higher oil prices. If prices fall and its deficit deepens further, the Kingdom would be hard pressed for an urgent change in its heavily subsidized economic model. There is even a danger of the economy crashing, one U.S. official said, and should this happen, chaos will ensue. It is possible that Saudi officials are downplaying some very real threats to all the ambitious economic reform plans initiated by Mohammed bin Salman. However, it seems difficult to gauge the importance of these threats when Saudi sources are often at opposing ends of the opinion spectrum. Some, U.S. officials say, are adamant that everything around the reforms is proceeding smoothly. Others are equally adamant that the Kingdom is running on fumes that will soon evaporate.
Saudi Oil Tanker Hit In Houthi Missile Attack Off Yemen - In the latest attempt by Houthi rebels to strike directly at Saudi Arabia, the Kingdom said Tuesday a Saudi oil tanker in the Red Sea was hit in a Houthi attack off Yemen’s main port city of Hodeidah, Al-Arabiya reported on Tuesday, citing a statement from the Saudi-led coalition.The oil tanker was attacked by Houthi rebels at 1:30pm local time on Tuesday, said Colonel Turki al-Maliki, a spokesman for the coalition forces, as quoted by Al Arabiya. He said the attack took place in international waters west of the port of Hodeidah, which is under the control of Houthi armed militias.Al-Maliki said the attack failed after one of the alliance's naval vessels intervened, adding that the oil tanker suffered only minor damage. The vessel continued on its navigational line and sailed north following the incident, while being accompanied by alliance ships. As Reuters adds, the Iran-aligned Houthi group said they had targeted a warship of the coalition in the Red Sea in response to an air strike in Yemen’s Hodeidah province on Monday.
Attack on Saudi tanker could mean higher oil prices - An attack on a Saudi super tanker by Yemen's Houthis this week signals further escalation in the efforts to take the war in Yemen directly to Saudi Arabia and its oil facilities. Saudi Arabia entered the war three years ago, but the proxy battle between it and Iran has so far not added much of a premium to the price of oil. However, that could change if the Iranian aligned Houthis are more successful in their attacks on Saudi Arabia and its oil facilities."This could eventually prove to be the tripwire for a direct confrontation between Saudi Arabia and Iran," said Helima Croft, head of global commodities strategy at RBC. Crown Prince Mohammed Bin Salman led the kingdom into the regional war after the Houthi rebels forced Yemen's president Abd Rabbu Mansour Hadi into exile. "Imagine if that tanker was seriously damaged. Is this going to start a tanker war situation? I worry about this not being a one off and there becomes concerns about the security of the straits. They just had a missile strike on Riyadh a week ago," Croft said. John Kilduff of Again Capital said oil did not jump on news of the attack but it did hold up during a sell off in global risk assets Tuesday. West Texas Intermediate crude futures were trading up about a half percent at $63.67 per barrel in late trading Wednesday afternoon.
Saudi-Iran Proxy War Threatens OPEC Deal - Tensions between Iran and Saudi Arabia triggered doubts about the success of the OPEC+ oil production cut deal two years ago when it was first being hatched. Now, with the deal in its second year, these doubts have been rekindled by the escalation between the two regional rivals. There is no end in sight for the proxy war that Saudi Arabia and Iran are fighting in Yemen, and it could spell the end of the deal.There are already doubters that the deal will survive beyond the June 2018 meeting of the partners. Earlier this year, commodity analysts from leading investment banks warned that for some of the partners in the deal, oil prices are getting too high for comfort. Russia was a notable example in this respect: with its economy mainly export-oriented, it could use lower oil prices to keep the ruble low and maintain demand for its export goods.Iran seems to also be on the side that is fine with sub-$70 Brent. Last month, Energy Minister Bijan Zanganeh told the Wall Street Journal in an interview that Iran was uncomfortable with oil at US$70, as this price level would stimulate more U.S. shale production. Indeed, U.S. production has been growing inexorably, last week hitting 10.43 million bpd. Now the growing hostility between Riyadh and Tehran could become the last straw. ETF Securities commodities strategist Nitesh Shah this week told CNBC that these bilateral relations that have so far had only a fleeting effect on oil markets could now lead to an earlier end to the deal.
A proxy war between Saudi Arabia and Iran could be the nail in OPEC’s coffin -- Tensions between Iran and Saudi Arabia triggered doubts about the success of the OPEC+ oil production cut deal two years ago when it was first being hatched. Now, with the deal in its second year, these doubts have been rekindled by the escalation between the two regional rivals. There is no end in sight for the proxy war that Saudi Arabia and Iran are fighting in Yemen, and it could spell the end of the deal. There are already doubters that the deal will survive beyond the June 2018 meeting of the partners. Earlier this year, commodity analysts from leading investment banks warned that for some of the partners in the deal, oil prices are getting too high for comfort. Russia was a notableexample in this respect: with its economy mainly export-oriented, it could use lower oil prices to keep the ruble low and maintain demand for its export goods. Iran seems to also be on the side that is fine with sub-$70 Brent. Last month, Energy Minister Bijan Zanganeh told the Wall Street Journal in an interview that Iran was uncomfortable with oil at US$70, as this price level would stimulate more U.S. shale production. Indeed, U.S. production has been growing inexorably, last week hitting 10.43 million bpd. Now the growing hostility between Riyadh and Tehran could become the last straw. ETF Securities commodities strategist Nitesh Shah this week told CNBC that these bilateral relations that have so far had only a fleeting effect on oil markets could now lead to an earlier end to the deal.
Saudi Crown Prince: Iran’s Supreme Leader ‘Makes Hitler Look Good’ - This much, at least, can be said for Mohammed bin Salman, the putatively reformist crown prince of Saudi Arabia: He has made all the right enemies. Among those who would celebrate his end are the leaders of ISIS, al-Qaeda, Hezbollah, and Hamas, as well as Yemen’s Houthi rebels, and the entire clerical and military leadership of the Islamic Republic of Iran. As a bonus, there are members of his own family, the sprawling, sclerotic, self-dealing House of Saud, who would like to see him gone—or at the very least, warehoused at the Ritz-Carlton in Riyadh, where the 32-year-old prince recently imprisoned many of his enemies and cousins during an anti-corruption sweep of the kingdom.The well-protected Prince Mohammed does not seem particularly worried about mortal threats, however. He was jovial to the point of ebullience when I met him at his brother’s compound outside Washington (his brother, Prince Khalid bin Salman, is the Saudi ambassador to the U.S.). Prince Mohammed (who is known widely by his initials, MbS) seemed eager to download his heterodoxical, contentious views on a number of subjects—on women’s rights (he appears doubtful about the laws that force Saudi women to travel with male relatives); on Iran’s supreme leader, Ayatollah Khamenei, who is, in the prince’s mind, worse than Hitler; and on Israel. He told me he recognizes the right of the Jewish people to have a nation-state of their own next to a Palestinian state; no Arab leader has ever acknowledged such a right. Prince Mohammed, who is on a seemingly endless pilgrimage to the nodes of American power (he is in Hollywood this week) is an unfamiliar type for Middle East reporters accustomed to a certain style of Saudi leadership, which is to say, the functionally comatose model of authoritarian monarchism. Prince Mohammed’s father, the 82-year-old King Salman, is not overly infirm, but it is clear that his son is already in charge. And if the prince, his many handlers, and his partisans on Wall Street and in the White House (especially his fellow prince, Jared Kushner) are to be believed, he is in a genuine hurry to overturn the traditional Saudi order.
Sunni Saudi Arabia courts an ally in Iraq's Shia - Najaf, the Iraqi holy city for Shia Muslims, might seem an unlikely place for anyone but Shia pilgrims to seek out. Yet the city, 160km south of Baghdad, has an unusual new suitor — the oil-rich power on the other side of Islam’s sectarian divide, Saudi Arabia. The Sunni Gulf kingdom’s courting of Iraq’s Shia clerical elite over the past year could mark a transformational shift in Riyadh’s regional strategy. For decades, Saudi Arabia and its Shia rival Iran have exploited the centuries-old schism between Islam’s Shia and Sunni sects to serve their modern-day power struggles. Now, Saudi officials are discreetly shuttling messages to Najaf’s leading Shia clerics, who, although wary of being drawn into a proxy struggle, want to hear Riyadh out. Last year foreign minister Adel al-Jubeir made the first visit to Iraq by a senior Saudi official since 1990. Iraqi leaders have hinted that Crown Prince Mohammed bin Salman could also visit the country soon, with some saying he would include Najaf on any itinerary. But the Saudi foreign ministry was forced on Saturday to issue a statement saying that no such trip was planned, after a protest in Baghdad at the end of last week against such a visit. The stakes of this tentative rapprochement are high. At its best, Riyadh’s efforts to find Shia allies against Iran could defuse sectarianism that has sewn a bloody trail of conflict across the region. At its worst, the push could turn Iraq into yet another stage for Iranian-Saudi rivalries, played out most recently in Yemen, Syria and Lebanon.
New Study Provides Yet More Proof Of Saudi State Sponsorship Of ISIS - During the same week Saudi Arabia's crown prince Mohammed bin Salman (MbS) admitted to the The Atlantic's Jeffrey Goldberg that Saudi nationals have funded terror groups, a prominent Georgetown University counterterrorism expert and field researcher has published his findings based on extensive interviews with former ISIS members which identifies Saudi Arabia as a key source of the now defunct Islamic State's prior rapid growth. The findings were summarized in the Government and Technology Services Coalition's Homeland Security Today online journal, and authored by Georgetown University professor Ahmet Yayla, who during the past four years has interviewed over 40 ISIS defectors in Turkey while conducting on the ground research along Syria's border.Yayla's findings entitled, To Truly Fight Terror, Counter Salafist Jihadist Ideology First, confirm that: “The majority of the ISIS shaykhs (imams and teachers) who were preaching in ISIS-controlled territories and schools were from Saudi Arabia.” https://t.co/2zSHObVjRa— Max Abrahms (@MaxAbrahms) April 3, 2018 Though documentation on Saudi Arabia's role in financing global jihad has been abundant over the past years of war in Syria and Iraq, Professor Yayla's field research provides yet further empirical confirmation and proof of Saudi Arabia's role in fueling both ISIS and al-Qaeda terrorism.
Capitalism and the artificial intelligence revolution - Last month, over 3,000 Google employees signed a letter taking a stand against Google’s collusion with the United States’ drone assassination program, which has killed and maimed tens of thousands of people throughout the Middle East and North Africa. Google employees demanded that the company end its participation in “Project Maven,” a system of mass drone surveillance integrated with the US drone warfare program, declaring, “We believe that Google should not be in the business of war.” It called for the adoption of a policy stating that “neither Google nor its contractors will ever build warfare technology.”Google’s collusion with the drone assassination program highlights the growing integration of the major technology companies with the US military, which, having declared a new era of “great-power competition” with Russia and China, sees pressing Silicon Valley into its war plans as the only way to regain its military power on the world stage.Just as ominous is Google’s role in mass domestic surveillance and censorship. In April, Google announced changes in its search algorithms—implemented through the use of “deep learning” and artificial intelligence technologies—to promote “authoritative content” over “alternative viewpoints.” These changes led to a sharp fall in search referrals to left-wing web sites by as much as 75 percent—with the World Socialist Web Site a central target. More broadly, Google, Facebook and Twitter have hired tens of thousands of professional censors, many with backgrounds in the military, police and intelligence agencies, to train and augment their artificial intelligence systems to censor and police what people say and read online.
Syria debacle deepens crisis of Trump administration - The last significant enclave held by US-backed groups near the Syrian capital of Damascus collapsed Sunday with the agreement of two groups to evacuate and of another to submit to Russian military police acting on behalf of President Bashar al-Assad.The fall of Eastern Ghouta, with a population estimated at 400,000 people, is the biggest debacle suffered by the US-backed Islamist groups since the Assad regime recaptured the country’s largest city, Aleppo, in December 2016.The largest rebel group in Eastern Ghouta, Jaish al-Islam, which controlled Douma, the biggest population center in the area, reached an agreement Sunday on evacuating the enclave, according to the Syrian government news service SANA. Other reports said Jaish al-Islam was still pressing for Russian military police to be introduced as a buffer force between its own fighters and Syrian army troops.Jaish al-Islam agreed Saturday to evacuate its wounded to Idlib, in northwestern Syria, the last province in the country under the control of Islamist forces opposed to Assad. The group was in negotiations with the Assad government through Russian mediators. Two smaller rebel groups reached a full evacuation deal with the Russian intermediaries, which called for the evacuation of 19,000 people to Idlib, including fighters from the Faylaq al-Rahman and Ahrar al-Sham groups, their families, and residents who wished to join them. It is the comprehensive defeat of the US-backed rebels and the consolidation of the Assad regime’s control over the last area from which attacks could be mounted on the capital that underlies the evident disarray in US policy in Syria. On Thursday, President Trump told a campaign-style rally in Richfield, Ohio that US forces would “be coming out of Syria, like, very soon. Let the other people take care of it now.” While the remark came in the context of Trump boasting about the successes of US military forces against ISIS in eastern Syria and western Iraq, his suggestion that the 2,000 US troops now in Syria could soon be withdrawn contradicted the official policy of his own administration.
France To Send Military Forces To Syria As Trump Prepares To Withdraw; Turkey Furious - On the same day that Trump made his unexpected announcement that US troops would be "coming out of Syria very soon," French President Emmanuel Macron reportedly pledged to send a French military force into northern Syria in support of US-backed Kurdish forces near Afrin - now under Turkish control.News of Macron's promise to Kurdish officials in a closed door meeting was met with a swift and harsh response from Turkey: “If it’s accurate, the statement on mediation between Turkey and SDF amounts to crossing the line,” President Recep Tayyip Erdogan said on Friday. “Those who yesterday hosted terrorists at the highest level once again should know this is only an expression of enmity against Turkey,” Erdogan added, essentially calling France a 'state sponsor' of terror. Though the French Presidency did not immediately confirm the news Thursday, reports circulated widely after Macron met with a delegation of Syrian Kurdish officials on Thursday representing the self-declared autonomous region of Rojava, of which the Syrian Kurdish People's Protection Units (YPG/YPJ) are the prime defense forces on the ground.Turkey's Erdogan has repeatedly denounced the YPG as a terrorist extension of the PKK, and after successfully c apturing the largely Syrian Kurdish Afrin canton following a bloody two-month cross border operation, has vowed to continue pushing deeper into Syrian territory toward Manbij and Tal Rifaat. Early this week Erdogan put the US on notice while addressing a crowd in the Black Sea province of Trabzonin: "the U.S. needs to transfer the control of Manbij to its real owners from the terrorist organization as soon as possible," Erdogan brazenly declared, while adding, "of course we will not point gun to our allies, but we will not forgive terrorists."
Erdogan Calls Israel A "Terrorist State" After "Inhumane Attack" In Gaza - In response to the killing of 16 Palestinians by the Israeli army following clashes during a demonstration on March 30 on the Gaza-Israeli border, Turkey's president Recep Tayyip Erdoğan accused Israel of being a "terrorist state and occupier," and its army of "inhuman cruelty" in its crackdown on Palestinian protesters. “Oppressor Israel and its army are only courageous against the oppressed in Gaza, Jerusalem, they are cowards when it comes to facing others,” Erdogan said at a ruling Justice and Development Party (AKP) congress in the southern province of Adana on April 1, addressing Israeli Prime Minister Benjamin Netanyahu according to Turkey's Hurriyet. “He says our soldiers are oppressing people in Afrin. Netanyahu, you are very weak, very poor. We [Turkey] are dealing with terrorists. But you are not concerned about terrorists because you are a terror state,” Erdoğan said. Calling the Israeli leader “an occupier” in Palestine, Erdogan said Netanyahu has no right to criticize Turkey. “You are not popular. The step you took regarding Jerusalem at the United Nations is out in the open. The answer you received is out in the open. Stop bragging about owning nuclear weapons. The time may come when those weapons don’t work,” Erdoğan added. "You are also a terrorist. History is recording what you have done to all those oppressed Palestinians,” Erdoğan said, adding that he believes Israelis too are disturbed by Netanyahu’s misdeeds. Erdogan's harsh language came after tens of thousands of Palestinians marched to Gaza’s border with Israel on March 30; at least 16 were killed and hundreds injured when Israeli forces opened fire on protesters marking “Land Day.” Land Day is an annual Palestinian commemoration of the deaths of six Arab citizens of Israel killed by Israeli forces in 1976 during demonstrations over government land confiscations in northern Israel.
US media’s silent complicity in Israeli massacre in Gaza -- Major American media outlets, led by the New York Times, are treating the Israeli military’s mass killing and wounding of unarmed, peaceful Palestinian protesters in Gaza as a non-event.On Friday, as tens of thousands of Palestinians gathered near the militarized border with Israel to protest Israeli expropriation of Palestinian land and demand the right of Palestinian refugees to return to their homeland, Israeli troops and sharpshooters opened fire, killing at least 16 people and wounding some 1,400 more.Millions around the world reacted with shock and horror at the scenes of deliberate murder, using live ammunition. One video showed a young man running away from the border fence who was shot in the back and killed by Israeli troops. Another showed that at least two of those killed were unarmed as they walked slowly towards the Israel border.The Israel Defence Forces (IDF) deployed troops and more than 100 snipers to shoot unarmed protestors demonstrating in the towns and cities of the tiny enclave as well as the thousands who gathered at the border with Israel.According to Hamas, the bourgeois Islamist group that controls the Palestinian enclave, only five of those killed on Friday belonged to Hamas’s military wing, the rest being civilians. The US intervened at the United Nations Security Council to block a resolution put forward by Kuwait calling for an independent investigation into the mass shooting, and Israeli spokesmen flatly rejected any such probe, congratulating the Israeli soldiers for “defending Israeli sovereignty.”
NPR Runs IDF Playbook, Spinning Killing of 17 Palestinians - NPR, as FAIR has noted throughout the years (e.g., 8/14/01, 11/01, 2/5/02, 11/15/12, 10/10/14), takes a default pro-Israel line when reporting on the affairs of Israel/Palestine. Its correspondents almost always live in West Jerusalem or in Israel proper, are rarely Palestinian or Arab, and they work consistently to deflect blame for Israeli violence—either shifting blame onto Palestinian victims or dispersing it through false parity. A segment from Friday (All Things Considered, 3/30/18) on Israel’s killing of Gaza protesters provides a case study in this process. NPR host Ari Shapiro set up the segment, an interview with reporter Daniel Estrin, by blaming the 17 dead and hundreds of injured Palestinians on “the militant group Hamas,” framing Israel as totally defensive. From the very first line, blame is deflected from the Israeli military:Today saw some of the most violent clashes in years between Palestinian demonstrators and Israeli troops. We do not have one party’s snipers opening fire on another, unarmed party; we have “violent clashes”—a term, as FAIR (8/12/17) has noted before, that implies symmetry of forces and is often used to launder responsibility. The whitewashing got worse from there: Tens of thousands of people in Gaza answered the militant group Hamas’ call to protest. Palestinians have no organic reasons for wanting to protest the occupation of their homes; the whole thing was a top-down decree from “the militant group” Hamas. They threw rocks and firebombs near the border fence with Israel. On the other side, Israeli troops assembled. This conveys the impression the Israeli military was just sitting around, minding its own business, when it was aggressively attacked by hundreds of Palestinians, then responded to this assault. The “firebombs” claim is repeated later in the piece by Estrin himself: “Israel responded to Palestinians throwing rocks, firebombs, burning tires.” This isn’t qualified with “according to the IDF” or “the Israeli government”—even though as of now, there’s no independent evidence firebombs were used, much less used before any sniper fire from Israel. The issue isn’t trivial: The matter of first blood when it comes to the Palestinian/Israeli “conflict” is a crucial one (FAIR.org, 12/8/17); framing Israel as always responding to threats, rather than inflicting aggressive violence on an occupied people, is a critical difference.
Analysis | For Israel, there's little political cost to killing Palestinians - Washington Post - This weekend in Gaza, Palestinians buried their dead after Israeli soldiers killed at least 18 Palestinian protesters and wounded hundreds more on Friday. About 30,000 Palestinians had gathered near the fenced barrier separating the Gaza Strip from Israel, both protesting the stifling blockade on their territory and mourning the dispossession of their ancestral lands at the hands of the Israeli state. As in many other Palestinian protests that take place in the occupied territories, most protesters were unarmed and nonviolent. Families picnicked in the shadow of the Israeli border and flew Palestinian flags. But like so many other Palestinian protests, this one ended in tears. “I took my grandchildren. We went to a peaceful demonstration,” Fayik Sabbagh told The Washington Post. “We went there to tell them this is our land, but what we found was different.” Israeli authorities claimed they opened fire in response to some protesters who had encroached near the fence, burning tires and hurling stones or molotov cocktails. Footage that emerged from the chaotic scene suggested Israeli soldiers targeted unarmed protesters, including some who were running away and were shot from a distance by snipers. One victim was 20-year-old Badr Sabbagh, Fayik’s son, who was killed just minutes after arriving to watch the protests. “He asked for a cigarette, I gave it to him, he had two puffs, and then he was shot in the head,” his brother Mohammed told The Post.The right-wing government of Israeli Prime Minister Benjamin Netanyahu offered neither sympathy nor remorse. “Israel is acting determinedly and decisively to protect its sovereignty and the security of its citizens,” The Israeli leadership had reason to feel comfortable in its defiance. The most vocal criticism from abroad came from Iran and Turkey; censure from either country is more likely a source of relish for Netanyahu than unease. And at the United Nations, the Trump administration blocked the Security Council from issuing a statement that called for an “independent and transparent investigation” and affirmed the Palestinians’ right to peaceful protest.
Israel Is Prepared to Kill More Unarmed Protesters in Gaza - Israel’s army expects up to 50,000 Palestinians to attend protests in Gaza on Friday, and is prepared to once again use deadly force against unarmed demonstrators, one week after Israeli snipers fired at least 650 bullets at Palestinian civilians, killing 15. With President Donald Trump apparently ignoring last week’s massacre in a phone call to Israeli Prime Minister Benjamin Netanyahu, senior Israeli officials brushed off pleas from human rights groups to rescind orders that permit snipers to open fire on protesters who approach Israel’s perimeter fence.“We have defined the rules of the game clearly and we do not intend to change them,” Israeli Defense Minister Avigdor Liberman said as he toured the frontier on Tuesday. “Anyone trying to approach the fence is putting their lives at risk.” At protest camps near the fence, families of Palestinian refugees originally from towns and cities inside what is now Israel read books and learned first aid as young men stockpiled rubber tires, which they burned to create smokescreens as cover from sniper fire. Even Palestinians skeptical of the tire-burning, which create toxic fumes, rejected claims from the Israel Defense Forces that the fires justified the use of deadly force against the protesters. The Israeli human rights group B’Tselem, which monitors the treatment of Palestinians in the territories Israel’s military has controlled since 1967, published ads on Thursday urging soldiers to “refuse patently unlawful orders, to open fire on unarmed demonstrators in Gaza.” Israel’s military has also reserved the right to spray herbicides along the frontier, destroying crops on the Gazan side of the fence. Keeping the area clear of vegetation provides Israeli snipers with clear lines of sight to fire on Palestinian militants or protesters at will. In 2015, the Israeli military confirmed to the rights group Gisha that it does use crop dusters to spray herbicide inside Gaza — a scene frequently recorded on video by Palestinian farmers whose crops are damaged or destroyed.
Israeli troops kill seven Palestinians on day of heightened Gaza border protests: medics (Reuters) - Israeli troops shot dead seven Palestinian protesters and wounded at least 200 along the Israel-Gaza border on Friday, Gaza medical officials said, raising the death toll to 27 in the week-long disturbances. They said the demonstrators, including two teenage boys aged 16 and 17, were killed at protest sites along the frontier during a round of daily demonstrations that has been dubbed “The Great March of Return”. The day of violence, which saw bigger Palestinian crowds than in recent days but not as large as when the demonstration began last Friday, calmed down as night descended. Gazans, including Palestinian refugees and their descendants seeking to regain ancestral homes in what is now Israel, have set up tent encampments a few hundred meters (yards) inside the 65-km (40-mile) fence that separates Israel from the Gaza Strip. Large groups of youths have ventured much closer to the no-go zone along the barrier, risking live fire from Israeli troops to roll burning tires and throw stones. “Israel took everything from us, the homeland, freedom, our future,” said Samer, a 27-year-old protester who would not give his full name, fearing Israeli reprisals. “I have two kids, a boy and a girl, and if I die, God will take care of them.” The number of protesters on Friday was larger than in recent days, but lower than the outset of the disturbances on March 30, when 17 Palestinians were fatally shot by Israeli forces. The Israeli military estimated Friday’s turnout at around 20,000. Refugees comprise most of the 2 million population of Israeli-blockaded Gaza, an enclave ruled by the Islamist movement Hamas which calls for Israel’s destruction and is designated by Western states as a terrorist organization.
7 killed, scores wounded by Israeli fire in Gaza protest (AP) -- Thousands of Palestinians protested along Gaza's sealed border with Israel on Friday, engulfing the volatile area in black smoke from burning tires to try to block the view of Israeli snipers and cheering a Hamas strongman who pledged that the border fence will eventually fall. Israeli troops opened fire from across the border, killing at least seven Palestinians and wounding 293 others - 25 of them seriously - in the second mass border protest in a week, Gaza health officials said. Hundreds more suffered other injuries, including tear gas inhalation, the officials said. The deaths brought to at least 29 the number of Palestinians killed by Israeli fire since last week. The latest casualties were bound to draw new criticism from rights groups that have branded Israel's open-fire orders on the border as unlawful, after Israel's defense minister warned that those approaching the fence were risking their lives. The U.N. human rights office said Friday that it has indications that Israeli forces used "excessive force" against protesters last week, when 15 Palestinians were killed or later died of wounds sustained near the border. An Israeli military spokesman defended the rules of engagement. "If they are actively attacking the fence, if they are throwing a molotov cocktail that is within striking distance of Israeli troops or similar activities, then those persons, those rioters, become, may become, a target," said Lt. Col. Jonathan Conricus.
Gazans return to border in defiance of Israeli guns | Middle East Eye: Thousands of Palestinians returned to the Gazan border for the second week of protests as Israel continued to threaten protesters attending the demonstration. Eight Palestinians were fatally shot by Israeli forces, while at least 1,060 protesters have been wounded at the border, according to the Ministry of Health in Gaza. Photojournalist Yasser Mortaja succumbed to his wounds late on Friday after being shot in the stomach by Israeli forces in the morning. Among the dead was 15-year-old Hussein Mohammed Madi from Gaza City. Madi was killed east of Gaza City by an expanding dum-dum bullet, the ministry said. No Israeli casualties have been reported. Early figures released by the Israeli military said that "approximately 10,000 Palestinians has been rioting in five locations along the border with the Gaza Strip". It added that "several attempts have been made to damage and cross the security fence under the cover of the smokescreen". The latest fatalities come a week after similar demonstrations led to violence that saw Israeli forces killing 19 Palestinians in the deadliest day since the 2014 Gaza war. Israel's army has faced criticism over its use of live fire against demonstrators, but it warned protesters that open fire rules would remain unchanged during Friday's demonstrations. Tel Aviv also rejected repeated calls by the international community, including the United Nations, to launch an independent investigation into last week's fatalities.
Egyptian website editor arrested for republishing article on election fraud - Egyptian police have raided the office of a news website and arrested its editor-in-chief as part of a wider crack down on media that reported allegations of vote buying during last month’s presidential election. The raid late on Tuesday came two days after the supreme council for media regulation, an official oversight body, told the Masr al-Arabia website to pay 50,000 Egyptian pounds ($2,849) as a fine for republishing a New York Times article on alleged irregularities during the presidential election. The website is one of over 500to have been blocked within Egypt since May 2017. Two journalists at the website quoted the site’s lawyers as saying that police said they had acted because the website did not have a permit to operate. The journalists said the raid was prompted by the republishing of the New York Times article. A statement from the council, which was based on a complaint from the national election authority, on Sunday had accused the website of publishing false news. “The website should have checked the authenticity of the news or commented on it with an opinion,” the council statement said, referring to the New York Times article, which said some voters were offered payments and other inducements to vote. The New York Times defended its reporting. “We stand by the accuracy of our reporting and strongly condemn any arrests meant to intimidate journalists and stifle freedom of the press,”
China March factory growth cools to four-month low: Caixin PMI - (Reuters) - China’s manufacturing activity expanded at its weakest pace in four months in March as export demand faltered, prompting companies to shed staff more quickly as they looked to cut costs, a private survey showed on Monday. The Caixin/Markit Manufacturing Purchasing Managers’ index (PMI) fell to 51.0 in March from February’s 51.6, countering economists’ expectations for a slight uptick to 51.7. While the index remained above the 50-point mark that divides growth from contraction on a monthly basis, it was the weakest reading since November and signaled only a marginal improvement in operating conditions at the end of the first quarter. The findings contrasted with official data on Saturday, which showed manufacturing growth picked up more than expected in March in response to stronger domestic and overseas demand. The two reports often diverge, possibly due to differences in the number and type of businesses surveyed. The Caixin PMI, which tends to focus on smaller firms, suggested output and new orders grew only modestly in March, with growth in export orders slumping to a 10-month low even as fears grow of a possible trade war between the United States and China. The survey cited subdued foreign demand, and did not mention if there had been any impact yet from escalating trade tensions.
Trade War or Not, China Risks a ‘Minsky Moment’ - Marshall Auerback - The transformation of China’s economy, both in terms of GDP growth rate and poverty reduction since it started its transition to the market system in the late 1970s, has arguably been the biggest macroeconomic event of the past half-century. The model that has characterized the country’s high output growth rates has followed in the footsteps of the Asian “tigers“: first, its high growth rates of capital accumulation, driven by high investment-output ratios; second, a marked outward orientation through export-led growth policies; and third, the pursuit of industrialization (in particular the production and export of manufacturing goods), a key ingredient for fast growth and development. By almost every metric, China has advanced from economic backwater to the world’s second-largest GDP (and by some measures, is now the largest economy). But in spite of signs of renewed economic activity in March, the country’s debt build-up has provoked increasing concern amongst Beijing’s policy makers, as it points to an underlying long-term financial fragility, particularly if trade war pressures intensify. Just last October during the Communist Party Plenary, Zhou Xiaochuan, then head of the country’s central bank, warned of a “Minsky moment“: “When there are too many pro-cyclical factors in an economy, cyclical fluctuations will be amplified. If we are too optimistic when things go smoothly, tensions build up, which could lead to a sharp correction, what we call a ‘Minsky Moment’. That’s what we should particularly defend against.” To elaborate on Zhou’s statement, the economist Hyman Minsky described how once the debt “disease” goes metastatic, there will come a “Minsky moment” (a term originally coined by economist Paul McCulley) when euphoria gives way to concern and then to panic liquidation and credit revulsion. When that dynamic is in full flower, policy makers are powerless to avert it, no matter how much they want to bring the punchbowl back. Governor Zhou’s public warning was no doubt in response to recent rapid increase of debt which, according to Professor L. Randall Wray, “increased from 162 percent to 260 percent of GDP between 2008 and 2016,” and remains “a topic of discussion, if not deep concern.”
We came ‘to let US know’ about close military ties with Russia – Chinese defense minister in Moscow - Beijing has sent a delegation to Russia to show Washington the unity of Russian and Chinese military forces and “support” Russia at the 7th Moscow Conference on International Security. Chinese Defense Minister Wei Fenghe voiced strong support for Russia during the talks with his Russian counterpart, Sergey Shoigu. While stressing “the united position” on the international arena, the minister said that one of the main goals of the visit was to send a message to Western powers. “The Chinese side came to let the Americans know about the close ties between the Russian and Chinese armed forces,” Wei said.It is General Wei’s first foreign trip since he was appointed head of the Chinese Defense Ministry. The choice of the destination is not a coincidence, but underlines the “special character” of the bilateral partnership, according to Shoigu.Prior to the visit, the Chinese state-run Global Times newspaper published an article titled “Western pressure brings China and Russia closer.” The report quotes analysts, who believe that the current international environment – including Western anti-Russia hysteria and the looming US-China trade war – will only strengthen the Sino-Russian alliance.Both nations have been engaged in their own disputes with the West. The NATO military buildup on Russia’s doorstep has already “crossed the red line,” according to Russian envoy to NATO Aleksandr Grushko. At the same time, Russia is at loggerheads with the US and EU over the poisoning of ex-double agent Sergei Skripal and his daughter in the UK. The British blame-game over Russia’s alleged involvement in the incident sparked tit-for-tat expulsions of diplomats. Meanwhile, Beijing is engaged in an escalating trade row with Washington, which was triggered by US President Donald Trump’s new steel and aluminum tariffs. China immediately imposed retaliatory measures, announcing increased fares on more than 100 US goods. It also vowed to take further countermeasures in the event of any new round of fare hikes against Chinese goods.
China is opening the world’s longest sea bridge — and it contains enough steel to build 60 Eiffel Towers - China is the midst of several megaprojects that will transform its cities. Over the next decade, China plans to encourage 250 million people (29 times New York City's population) to move into the country's growing megacities. To cope with that huge migration, the country has invested tens of billions of dollars in giant infrastructure projects. This month, China will open its most ambitious megaproject yet, a bridge that connects Hong Kong, Macau, and the mainland's southern city of Zhuhai. Stretching 34 miles, it's the world's longest cross-sea bridge, according to the AFP. Take a look: (see series of captioned photos)
Is China’s Belt and Road working? A progress report from eight countries-- The idea of transforming the ancient fishing village of Gwadar into a bustling port city has been around since at least 1954, but it is now at the heart of a hugely ambitious plan known as the China-Pakistan Economic Corridor, or CPEC. China has pledged to spend $63 billion to bolster Pakistan's power plants, ports, airports, expressways and other infrastructure under the initiative, which Beijing positions as one of the pillars of its $1 trillion global Belt and Road Initiative championed by Chinese President Xi Jinping. The investment is clearly visible at Gwadar. More than 1,000 people, about half of whom are Chinese, work at a recently completed 660-meter container terminal. Nearby is a hospital built using Chinese funds. Pearl Continental Hotel, a luxury hotel owned by a local company, stands on a hill overlooking the port. The pier is dotted with Pakistani naval and coast guard ships. Armed boats and pickup trucks patrol the area, while wooden fishing boats float in the distance. The gains for China in all of this development are perhaps less visible, but potentially far more significant. A major goal for China is to link its landlocked western region to the port at Gwadar. This would allow ships carrying oil and other goods from the Persian Gulf to avoid the "choke point" of the Strait of Malacca, shaving thousands of kilometers off existing routes frequently patrolled by foreign navies. For all this grand ambition, some analysts have doubts. Pakistan's trade deficit with China has been rising, and there are concerns about what happens if it is unable to repay its debt. As with other countries that have benefited recently from Beijing's largesse, some in Pakistan worry that the price of such investment could be a huge debt burden. "Ten years' tax concessions, 90-year leases for Chinese companies and cheap imports will impact the competitiveness of existing domestic industries."
China hopes Kim Jong-un’s meeting with Donald Trump will ‘take fuse’ out of North Korea crisis | South China Morning Post: China’s foreign minister has said he hopes that planned summits between North Korean leader Kim Jong-un and the presidents of South Korea and the United States will “take the fuse” out of the situation on the Korean peninsula. After a meeting with Russian Foreign Minister Sergei Lavrov in Moscow, Wang Yi said he hoped the summits would bring the issue of North Korea’s nuclear programme back into the realm of dialogue and negotiations. South Korean President Moon Jae-in and US President Donald Trump have both agreed to meet Kim. “We all welcome and support the apparent improvement in the situation on the peninsula and appreciate the efforts of all parties,” Wang, who is also a State Councillor, said on Thursday, in comments posted on his ministry’s website.He added that he hoped the three leaders would take the opportunity to completely defuse the situation. Trump has traded barbs with the North Korean leader for much of his time in office as Pyongyang pursued the development of nuclear weapons capable of hitting the United States. Separately Nikki Haley, the US ambassador to the United Nations, said North Korea was “suffocating” under international sanctions, adding, “They need an out.” Speaking at Duke University in North Carolina on Thursday, Haley said, “When the president ends up speaking with Kim, the conversation has to be about denuclearising. Not some of it, all of it. We don’t want an irresponsible actor to have nuclear weapons.”
Tokyo wary of dialogue with North Korea --A potential summit between North Korea and the United States has revealed cracks in the US-Japan alliance. The government of Prime Minister Shinzo Abe in Tokyo is viewing the prospect of dialogue with Pyongyang apprehensively, fearing being sidelined if any deals are actually struck.Washington had seemingly seen eye-to-eye with Tokyo on rejecting talks with Pyongyang, but US President Donald Trump’s sudden about-face reveals differences between the two, as well as further demonstrating Washington’s willingness to prosecute its interests alone, regardless of its alliances.The Trump administration did not coordinate with Tokyo before announcing earlier this month it had agreed to talks with North Korean leader Kim Jong-un. Abe had opposed any talks with the North, even warning South Korean President Moon Jae-in in February: “North Korea continues to develop its nuclear weapons and long-range missiles. [We should] be careful about North Korea's charm offensive.”A senior Japanese government official told the Diplomat that Tokyo fears any potential reduction in US military commitment in the region that could result from an agreement. “In that case, Japan would lose the crucial buffer against not only North Korea but also China, and expose itself directly to the security threat surrounding Japan,” the official said. The Japanese government claims that even if Pyongyang agrees to abandon its intercontinental ballistic missile (ICBM) program, Japan would still be at risk from the North’s shorter-range missiles.A US military pull-back is highly unlikely given Washington’s new National Defense Strategy, unveiled in January, which targets China and Russia as the main US military targets. Tokyo’s concerns reveal the differing imperialist interests of the two allies and expose the claims that they are working to stop the supposed North Korean threat. Another senior Japanese government official told the Diplomat: “I believe that the US-Japan alliance is being tested more than ever since the end of World War II. It is very difficult to anticipate if the [North Korean] crisis will end with dialogue or military options, but I can say that Japanese people will carefully examine the results of the crisis [and ask] whether we should have maintained the alliance with the US for about 70 years or not.”
China, Philippines seek to share South China Sea | Asia Times: China and the Philippines are now considering a series of resource-sharing agreements in the South China Sea, the latest development in a diplomatic warming trend that has reset the disputed maritime area’s strategic calculus. The initiative was made public during the late March visit of Philippine Foreign Secretary Alan Peter Cayetano to Beijing, where he echoed President Rodrigo Duterte in hailing a “golden period” in Philippine-China relations.The chief Filipino diplomat reiterated his country’s interest in ensuring the “South China Sea disputes will no longer block the development of bilateral ties” but rather “will be turned into a source of friendship and cooperation between our two countries.” The two neighbors agreed to pursue “offshore oil and gas exploration” schemes based on a “suitable legal framework”, which will be mutually beneficial and apparently skirt intractable sovereignty issues over contested features. Chinese Foreign Minister Wang Yi reassured both sides that any resource-sharing agreement in the resource-rich area will be explored and conducted in “a prudent and steady way” to ensure its viability and success.
Duterte: UN Human Rights Chief Is An "Empty-Headed Son Of A Whore" - Philippines President Rodrigo Duterte lashed out at one of his favorite targets - the United Nations - earlier this week when he labeled the UN's Human Rights chief a "son of a whore" with an empty skull."Look, you have a big head but it’s empty. There is no gray matter between your ears. It’s hollow. It’s empty. It cannot even sustain a nutrient for your hair to grow because his hair here is gone," Duterte said. RT reports that Duterte made the comments during a Tuesday speech after UN Human Rights Commissioner Zeid Ra'ad Al Hussein said last month that Duterte was in need of a "psychiatric evaluation". He also criticized the Philippines strongman for insulting UN rapporteur Agnes Callamard with what Al Hussein described as "the foulest of language." But the joke may be on Al Hussein, because Duterte said he's already been to a psychiatrist, and the doctor gave him a clean bill of mental health - though he allegedly pointed out Duterte's penchant for cursing."Hey son of a whore, you commissioner, I need to go to a psychiatrist? The psychiatrist told me: "You are okay, mayor. You are just fond of cursing," he said.Before winning the presidency in 2016, Duterte served as mayor of Davao, a city on the southernmost Philippines island of Mindanao. Duterte told his audience that he'd been advised to let the remark go, but had decided that he couldn't resist seeking revenge.
India Bans Bitcoin Wallets, Bank Funding, All Cryptocurrency Services - Don’t expect India’s 1.3 billion residents to be investing in Bitcoin or other virtual currencies any time soon.According to a report from the Economic Times, the Reserve Bank of India has issued a blanket ban on all cryptocurrency trading.You will not be able to buy cryptocurrency via banks or e-wallets etc. in India anymore as Reserve Bank of India (RBI) has banned them with immediate effect from “dealing with or providing services to any individuals or business entities dealing with or settling virtual currencies”.Though the country says it understand the need for supporting blockchain related technologies, the exchange of virtual currencies is now prohibited on every level, including the purchase of digital assets via bank accounts or debit cards, as well as the utilization of wallets to transfer assets.The RBI issued a statement on the matter with guidance to follow:“It has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs. Regulated entities which already provide such services shall exit the relationship within a specified time. A circular in this regard is being issued separately”RBI governor BP Kanungo, at a press conference Thursday, suggested that Bitcoin is dangerous to the stability of India’s monetary system. The attack on cryptocurrencies by centralized financial institutions in the name of “protecting investors from volatility” continues. Last week one of Canada’s largest banks blocked cryptocurrency purchases, a move that followed similar bans in the United States by large banks like JP Morgan. Despite the news, cryptos are roughly unchanged in the past 24 hours, although as discussed earlier this week, only after suffering their worst quarter on record.
Pakistan seeks bailout from China and Saudis, rather than the IMF | Asia Times: Pakistan plans to seek financial assistance from China and Saudi Arabia to get out of the grave financial crisis it faces to bridge the country’s external account deficit ahead of budgetary proposals for the 2018-19 fiscal year. A well-placed source in the Ministry of Finance told Asia Times that instead of approaching the International Monetary Funds (IMF) for a bailout, officials have proposed that the government ask wealthy friends such as China and Saudi Arabia to help Pakistan overcome its dire economic situation. Prime Minister’s Adviser on Finance Miftah Ismail confirmed last week that the government contacted friendly countries for assistance to get the economy back on track at a time when preparations are already underway for budget proposals for the next fiscal year. “If I am not wrong the country had to repay foreign loans worth US$6 billion by the 31st of March this year, which it could not do due to the external account deficit and fast depleting foreign-exchange reserves,” Imran Khan’s chief political advisor and a former Pakistan Tehrik-e-Insaaf (PTI) Punjab president, Ejaz Ahmed Chaudhary told Asia Times. Alluding to former finance minister Ishaq Dar, he said ‘Dar’s doctrine’ had landed the country in a serious debt trap, because “from July 2013 to the end of 2017, they contracted foreign loans worth $40 billion, which is now a huge burden on the economy,” Chaudhary claimed.
Fintech to Promote Financial Inclusion in Pakistan -- About 100 million Pakistani adults lacked access to formal and regulated financial services as of 2016, according to a World Bank report on financial inclusion. Only 2.9% of adults in Pakistan had a debit card, and only 1% of adults used them to make payments. Just 1.4% of adults used an account to receive wages and 1.8% of adults used it to receive government transfers in 2014. Since then, Pakistan has been leading the way in South Asia in digital finance and branchless banking. According to the latest State Bank statistics on branchless banking (BB) sector, mobile wallets reached a high of 33 million as of September 2017, up 21% over the prior quarter. About 22 percent of these accounts – 7.4 million – are owned by women, up 29% in July-September 2017 over previous quarter. A McKinsey and Co analysis shows that adoption of financial technology (fintech) can help dramatically increase financial inclusion in Pakistan. Karandaaz Pakistan , a non-profit organization, set up jointly by UK’s Department for International Development and Bill and Melinda Gates Foundation, is promoting financial technology in the country. Finja and Inov8 are among the better known fintech startups in the country. Chinese e-commerce giant Alibaba's Ant Financial's recent entry in Pakistan is creating a lot of excitement in Pakistan's fintech community.
Taliban vows 'serious revenge' over Afghan airstrike -- The Taliban has vowed to "take serious revenge" after an Afghan airstrike in an area controlled by the militant group in the northeastern province of Kunduz killed or wounded dozens of people, many of them children.The government and military have said the Afghan Air Force (AAF) hit the Taliban base on Monday where senior commanders were meeting to plan attacks.But Afghan security sources and witnesses have told AFP that AAF helicopters struck a madrassa in Dashte Archi district where a graduation ceremony for religious students was under way.At least 59 people were killed, including Taliban commanders, according to security sources. Health officials said at least 57 wounded were taken to hospital in the provincial capital Kunduz.The Taliban issued a statement late Wednesday saying it "condemns in the strongest terms this major crime and vows to take serious revenge against the perpetrators".
Gun Ownership, Self-Defense, and South African Farm Confiscation- Are South African Genocide Fears Just White Racist Paranoia? - “The National Assembly … set in motion a process to amend the Constitution so as to allow for the expropriation of land without compensation,” South Africa’s News 24 reported on a Feb. 27 vote. “The motion, brought by the EFF leader Julius Malema, was adopted with a vote of 241 in support, and 83 against.” “South Africa’s much needed land debate is being turned into an international racist rant,” Quartz Africa reacted in a story presented under a “Dog Whistle” heading. “South Africa’s land—still largely owned by the white minority—is to be redistributed to black owners. “Nowhere did it say that the land was to be taken from white farmers, and yet that has not only become the headline, it has fuelled political jockeying ahead of South Africa’s 2019 election,” Quartz continues, seemingly oblivious to the contradiction. And fears of people reacting to the proposed amendment, it says, “are based on the dangerous myth that a ‘white genocide,’ targeting white farmers in particular has been underway since the ANC came to power in 1994.”Is theirs a fair assessment that puts things in hysteria-free perspective? If so, is Genocide Watch also guilty of “an international racist rant” when it presents articles that justify such fears? Those include a warning from the Cato Institute that Malema’s program will bring famine, and an accusation by South African political leader Mamphela Ramphele describing Malema as “South Africa’s own Hitler.”And what does Malema say?“We are cutting the throat of whiteness,” he told a cheering crowd in a packed Johannesburg arena. He demanded removal of a mayor because he is white and declared, “Angry white people can go to hell.” And while he ultimately turned on ideological mentor Robert Mugabe of Zimbabwe and urged him to step down from power, Malema maintained, “Mugabe is 100% right about land.”Malema is also the one who let slip, “We are not calling for the slaughtering of white people, at least for now (emphasis added).” That leaves, “when we think we can” open. Additionally, Malema wants majority government ownership of mining interests and banks, leading more rational analysts to foresee bankruptcy, famine and civil war.
Brazil's ex-president Lula misses deadline for surrender to police - BBC News: Former Brazilian President Luis Inácio Lula da Silva has passed the night in a union building in his hometown outside Sao Paulo, after missing a deadline to hand himself over to the authorities. He was due to start a 12-year prison term for corruption after a trial he says was politically motivated. Lawyers for Lula, who is 72, argue he should remain free pending appeals. He came out to greet supporters on Saturday before attending a Mass in memory of his late wife. Marisa Leticia died last year. Reports suggest police in the city are preparing to bring him in. A large crowd of supporters are surrounding the building in the suburb of Sao Bernardo do Campo, where Lula built his trade union and political career. The former metalworker and trade union activist is an iconic figure for the left in Latin America. He is the first left-wing leader to make it to the Brazilian presidency in nearly half a century. The authorities stress he is not being regarded as a fugitive, as everyone knows where he is.
Canada’s trade union-backed Liberal government clamps down on steel and aluminum imports - As trade war develops between the United States and China, Justin Trudeau’s Liberal government is taking steps to solidarize Canada with, and line up behind, the Trump administration. Late last month, following a telephone call with Trump in which Trudeau pledged to do more to clamp down on steel “dumping,” Canada’s prime minster unveiled protectionist measures to block cheap steel and aluminum imports from entering Canada.The measures include extra powers for customs and border authorities to identify suspect imports. They were implemented in response to pressure from Washington and a vociferous lobbying campaign by the trade union bureaucracy, led by the United Steelworkers (USW).When Trump slapped tariffs of 10 and 25 percent respectively on aluminum and steel imports, the USW hailed the move, with its only quibble that Canada should be exempted.After Trump deigned to grant Canada a temporary exemption, the USW turned its sights on the Trudeau government, demanding it follow Trump’s lead in cracking down on “unfair trade.” This included a call for the USW to be given a role in enforcing economic nationalist policies aimed at boosting Canadian-based companies and pushing the burden of job losses onto workers in other countries.
Ominous cracks show in the West’s united front against Russia - WaPo - At least 28 countries have now agreed to expel nearly 150 Russian diplomats, in a coordinated response to Russia’s use of a military-grade chemical weapon in an assassination attempt in Salisbury, a provincial English town. Even as the Russian government continues to throw out dozens of counter-explanations for the attack on Sergei Skripal (according to the British foreign office, they are now up to 24 such theories), and even as the Russian government has moved toward a tit-for-tat response, a majority of Western countries say they believe the British version of events and will stick by their decision. Particularly striking was the unified response of France and Germany, two countries that are major targets of Russian political-influence campaigns. Merkel has been wary of Russia’s intentions in Europe since the Russian invasion of Ukraine; without her support, sanctions against Russia would not have been possible. She knows, as does Macron, that there is Russian support for her political opponents and that there have also been Russian attempts to hack German and French politicians. Others have a decidedly different attitude toward Russian political meddling. In Italy, where an indecisive election has yet to produce a new government, the outgoing leadership expelled two diplomats. But Matteo Salvini, leader of the pro-Russian, nativist Northern League and a potential prime minister, angrily criticized this decision, as did the leader of a smaller far-right party, another possible member of a future coalition, who declared it “unacceptable that a caretaker government has expelled two staffers at the Russian embassy.” In Greece, where both the far-left ruling party and its far-right coalition partners (yes, it’s an odd combination) have deep links to Russia, no diplomats have been expelled. The same is true in Austria, where the ruling coalition includes the far-right Freedom Party, which — of course — has Russian links, as well.
Skripal: the West escalates, but where is the proof? - Australia, the US, and several EU nations joined forces with Britain this week to expel Russian diplomats from their nations. The decision is based on the widespread view that the Russian regime of Vladimir Putin is responsible for the poisoning of Sergei Skripal and his daughter in England earlier this month. At this stage, however, there is still no evidence – none – about the identity of the culprit. One can accept that the finger of suspicion reasonably points to a Russian agent and still agree with the scepticism of leading British conservatives Peter Oborne, Peter Hitchens, and Rachel Johnson (Foreign Minister Boris’s sister): that it is better to take our time to get the bottom of this crime so that we can punish the perpetrators, whomever they may be. This is especially true when you realise Putin had no reason to poison the spy and his daughter and good reasons not to do it. Remember, Moscow did not kill Sergei Skripal after he was arrested and jailed in 2004. Nor was he denied a spy swap deal with Britain in 2010. As the distinguished professor of international relations John Mearsheimer has asked, why would Putin exacerbate his already strained relations with the West now by trying to assassinate the former double agent? Even hostile Putin critics concede Putin might be right in protesting his innocence. Moreover, what is so wrong with establishing proof before the West escalates a very dangerous international situation? As the Chilcot Inquiry into Britain’s role in the Iraq war recommends, governments should carefully investigate serious crimes before coming to conclusions. Indeed, governments should always make evidence-based pronouncements rather than relying on assertion and bombast, which is what has happened in the Skripal case.
Russia Claims Skripal Poisoning Was Staged By UK Intelligence - Russia's Ambassador to the UK, Alexander Yakovenko, says that London's reluctance to share information on the March 4 poisoning of former double agent Sergei Skripal has led Moscow to suggest that London authorities actually perpetrated the crime. “We have very serious suspicion that this provocation was done by British intelligence,” Yakovenko told Russia's NTV channel - adding however that Moscow had no direct proof, but that the UK's behavior constitutes strong circumstantial evidence in support of their theory. Yakovenko also suggested that London had gained several benefits from the poisoning - both short and long-term, in that Theresa May's government is capitalizing on the event in order to boost support at home, while burying headlines over its failures to negotiate better Brexit terms. The long-term benefit, according to Yakovenko, is that London is able to elevate itself into a primary position in the ongoing confrontation between the West and Russia. “The Britons are claiming a leading role in the so-called containment of Russia. To win support from the people and the parliament for this containment of Russia, a serious provocation was required. And the Britons may have done a really savage one to get this support" -Alexander Yakovenko Skripal and his daughter were poisoned in Salisbury using what the UK says was a "military grade" nerve agent developed by Russia from the "Novichok" family of toxins - however Russia's representative to the Organization for the Prohibition of Chemical Weapons (OPCW) told state-run television in mid-March that the U.S. and U.K. developed the military-grade nerve agent used in the attack.
Russia relations could descend into ‘a real war, not a "’Cold War’ - Moscow has said that relations with the West are now worse than during the Cold War in the aftermath of the Skripal poisoning. Sergei Lavrov, the Russian foreign minister, claimed that unwritten codes of conduct between the Soviet Union and the western powers during an era of mutually assured nuclear destruction no longer applied, suggesting that the modern relationship was more volatile and unpredictable.Speaking in Moscow, he said that there was “a lot of talk about a ‘cold war’, about the situation being worse than it was during the classic Cold War, because then there were some rules, and some decency was observed”.Mr Lavrov added: “I believe that our western partners, I mean primarily the United Kingdom, the United States and some countries that blindly follow them, have cast away all decency, they are resorting to open lies, blatant misinformation.” Evgeny Buzhinskiy, a retired Russian lieutenant-general and former member of the Soviet general staff, said that the situation could descend into war. “A real war, worse than the Cold War. It will be the last war in the history of mankind,” he told the Today programme on BBC Radio 4. “You are cornering Russia, and cornering Russia is a very dangerous thing.” Theresa May said last month that a Russian-made nerve agent known as novichok was used to attack Sergei Skripal, 66, a former MI6 double agent, and his daughter Yulia, 33, in Salisbury on March 4. The former agent, who was handed to the UK in 2010 in a spy swap, is critically ill in hospital. Ms Skripal is also being treated but has shown some improvement. Britain expelled 23 Russian diplomats in response to the attack. The US ejected 60 and a series of European countries as well as Canada and Australia removed dozens more between them. Moscow responded in kind. Mr Lavrov repeated his government’s assertion that the poisoning was a “provocation” and alleged that the British government itself could have orchestrated the attack.
Putin calls for probe into poisoning of former spy in UK | TheHill: Russian President Vladimir Putin on Tuesday called for a probe into the poisoning of a former Russian spy in the United Kingdom last month. Putin made the remarks after meeting with Turkish President Recep Tayyip Erdoğan in Ankara and demanded that Moscow play a role in the probe, according to The Associated Press.The AP reports that Putin cited the head of the U.K.'s defense laboratory as saying the source of the nerve agent used in the attack had not been identified.He went on to say the "speed at which the anti-Russian campaign has been launched causes bewilderment," according to the news agency. Putin's comments come nearly a month after Sergei Skripal and his daughter, Yulia Skripal, were exposed to a military-grade nerve agent. U.K. health officials announced last week that Yulia was no longer in critical condition. Multiple countries, including the U.S., have laid blame on Moscow for the attack, and have expelled Russian diplomats in response. Russia retaliated last month, announcing that it would expel 60 American diplomats and would shutter the U.S. consulate in St. Petersburg in response to a similar action by Washington. Russian Foreign Minister Sergey Lavrov also said that Moscow would take action against the two dozen other countries that also banished Russian diplomats.
Conclusive Evidence of the Russian State’s Guilt in the Skripal Case Is Lacking — and That’s Important - naked capitalism - Yves here. We’ve not featured any stories on the charges made against Russia in the Skripal case, in part because the subject is a bit wide of our beat and it thus seemed best to relegate it to Links. However, the effort to isolate an major power on what looked like shaky charges, and then get the media in full throated roar behind them has been a spectacle to behold, and not in a good way. And any developments of such geopolitical importance wind up having economic effects. Yesterday, the Guardian drily reported that the absolute confidence with with the UK government had pinned the poisoning on the Russian state was looking ill-founded: British scientists at the Porton Down defence research laboratory have not established that the nerve agent used to poison Sergei and Yulia Skripal was made in Russia, it has emerged. The very fact of the article below, at the UK website openDemocracy says it’s now acceptable to question the official narrative. Before, anyone who had dared voice doubt would have been deemed to be a Russian operative or a stooge. Mind you, that’s a long shot from this development getting the attention it warrants. The story is buried at the Independent. And from the start of the story at the BBC: The precise source of the nerve agent used to poison a Russian ex-spy and his daughter has not been verified, says the head of Porton Down laboratory.The defence research facility, which identified the substance in Salisbury as Novichok, said it was likely to have been deployed by a “state actor”. The UK said further intelligence led to its belief that Russia was responsible.
UK Foreign Office Denies Claiming Russia Responsible For Nerve Agent, Deletes Tweet - Update: It appears that either the British government can't keep its lies and proof-less accusations straight or something far more nefarious is at play. Following headlines (below) that British government scientists admitted they couldn’t tell where the poison - identified by the UK as A-234, also known as Novichok, used in the Salisbury poisoning of the Skripals - came from, undermining a number of claims to come out of Westminster, The UK Foreign Office denies claiming the nerve agent used in the Salisbury poisoning of the Skripals came directly from Russia, despite admitting it sent a tweet saying exactly that, and Boris Johnson making the same claim. The UK Foreign Office has admitted it deleted the tweet which directly stated that the nerve agent came direct from Russia.London has directly accused the Kremlin on at least three occasions of being behind the chemical attack on former double agent Sergei Skripal and his daughter, Yulia. As RT notes, bizarrely, the Foreign Office denies Foreign Secretary Boris Johnson claimed the novichock “categorically” came from Russia, despite a recorded interview clearly showing he did. pic.twitter.com/Uhxes9ptVn The Foreign Office has not yet deleted a tweet in which the UK's ambassador to Russia, Laurie Bristow, reiterates the accusation of Moscow being behind the poisoning.British Ambassador to Russia Dr Laurie Bristow has briefed the international diplomatic community in Moscow on the UK Government response to the Salisbury attack https://t.co/TOknU0j8gb pic.twitter.com/jrB2r9MuEg— Foreign Office (@foreignoffice) March 22, 2018 The row between Russia and Britain is reaching boiling point as officials from the OPCW meet Russian representatives on Wednesday.
Johnson and May Hide as their Lies Dissolve -- The government has attempted to control the narrative by finally admitting, as they have known for three weeks and just ahead of the OPCW experts coming out and saying so, that there is no evidence the substance used in the Salisbury attack was made in Russia. You can see the interview with the Chief Executive Officer of Porton Down only in this tweet from Sky here. #Salisbury attack: Scientists have not been able to prove that Russia made the nerve agent used in the spy poisoning. Porton Down lab's chief exec reveals the details in this interview pic.twitter.com/qFNgPlr6vS — Sky News (@SkyNews) April 3, 2018 In modern Tory Britain, it should be no surprise to anybody that, to be the Chief Executive of Britain’s chemical weapons establishment, they recruited a radio salesman: Aitkenhead’s PR skills were clearly thought sufficient to get across the government’s key propaganda points, and his struggle to do this throughout the Sky interview is telling. Aitkenhead has been in an extremely difficult position for the past three weeks, standing between his scientists who are adamant they will not say the substance was made in Russia, and the government who have been pushing extremely hard for them to do so. At 5 mins 30 sec into this interview Boris Johnson directly lies about what Porton Down had told him: It is very plain that what Aitkenhead is saying to Sky is “the scientists cannot establish it is from Russia. But the government claims to have intelligence sources that show that it is.” His struggle to fit the formulations he has been given to parrot this sense as more effective propaganda, into answers to the pretty good questions he is being asked, is almost comic:
Russia Demolishes UK Poisoning 'Hoax' During Emergency Security Council Meeting - Russia’s UN envoy blasted the UK’s attempt to blame the poisoning Sergei and Yulia Skripal on Moscow, describing the entire hoax as a “theater of absurd.” The extraordinary UN Security Council meeting was requested by Russia, following the announcement made by the secretive British Porton Down chemical laboratory, that it had not established that the Novichok nerve agent used in the poisoning was of Russian origin. According to RT, top British officials explicitly cited the Porton Down laboratory when pinning the blame on Moscow, so following this revelation their theory started to fall apart, said Vasily Nebenzia, noting that the UK’s secret agencies rushed to help the government, producing new claims based on some “intelligence data.”Nebenzia asked a series of questions pointing to inconsistencies of the UK’s narrative.“I don’t even know how to comment on this. It’s some sort of the theater of absurd. You couldn’t have come up with better fake story?” “Why did we have to wait eight years and [then] decided to [attack the Skripals] two weeks before the elections and several weeks before the world cup? Why did we release him from the country in the first place? Why do that in extremely public and dangerous fashion.”The fact that the victims of the nerve agent, which is believed to be among the deadliest, managed to survive the attack has also raised serious questions, Nebenzia said.As RT reports, it could be explained only if an antidote had been administered to them immediately after the exposure. British officials, however, insisted that no antidote was used, since none existed in the first place. The Skripals managed to walk around for four hours after the exposure, according to the version by the British authorities, yet the police officer who found them lost consciousness immediately.There are also different versions of how the poison was delivered, leaked and speculated in the British media.“There are so many versions in wake of the lack of facts and evidence. House of Skripal, the door knob, flowers, buckwheat, or, in fact, the bay leaf?” Nebenzia said.As the cornerstone allegation that the nerve agent originated from Russia turned out to be without merit, the whole narrative fell apart, Nebenzia said. Arguments that the Novichok nerve agent family originates from Russia, and therefore it was Moscow to blame do not hold water either, the diplomat added.“We want to state urbi et orbi, Novichok is not copyrighted by Russia,” he stressed.
Sergei Skripal poisoning: Former Russian spy recovering rapidly, hospital says - The hospital treating former Russian spy Sergei Skripal says he is no longer in a critical condition and his health is improving rapidly, more than a month after he was poisoned with a nerve agent in England. Mr Skripal, 66, who as a colonel in Russian military intelligence betrayed dozens of agents to Britain's foreign spy service, was found slumped unconscious on a bench in the city of Salisbury along with his daughter Yulia on March 4.Britain blamed Russia for the poisoning, the first known offensive use of such a nerve agent on European soil since World War II.Moscow denied any involvement and suggested Britain had carried out the attack to stoke anti-Russian hysteria. After weeks of no reported change in his condition, the hospital confirmed that Mr Skripal, who had been treated under heavy sedation, was now making fast progress. Prime Minister Theresa May said the Skripals were poisoned with Novichok, a deadly group of nerve agents developed by the Soviet military in the 1970s and 1980s.Russia said it did not have such nerve agents and President Vladimir Putin dismissed as nonsense the notion that Moscow would have poisoned Mr Skripal and his 33-year-old daughter.The attack prompted the biggest Western expulsion of Russian diplomats since the Cold War, as allies in Europe and the United States sided with Ms May's view that Moscow was either responsible or had lost control of the nerve agent. Moscow has hit back by expelling Western diplomats, questioning how Britain knows that Russia was responsible and offering its rival interpretations, including that it amounted to a plot by British secret services.
The Empire Strikes Backwards - John Helmer - Empires are just like everything else going down the toilet. Bits always stick on the porcelain which require more flushing. Embarrassing bits. Now in its fifth week since the poisoning of Sergei and Yulia Skripal in Salisbury on March 4, the bits that cannot be flushed away are producing an odour whose obviousness is embarrassing for Salisbury Hospital and the Organization for the Prohibition of Chemical Weapons (OPCW). The hospital is treating the Skripals for their medical welfare and is required by hospital policy and UK law to be accountable to their next of kin. Their rights of access to and from the hospital are also required by European Human Rights Convention. The evidence now accumulating is that the hospital is detaining and isolating the Skripals against their will, preventing contact with their family. Requested to explain this and identify her legal authority, the response of the hospital’s chief executive, Cara Charles-Barks, is to stonewall. Yulia Skripal can hear and speak, according to the British state broadcaster BBC, but she is incommunicado. In Moscow, her cousin Victoria Skripal has told the Russian press she has repeatedly tried to telephone her cousin on the latter’s Russian mobile telephone, but that this device has been disconnected.
France strike: Rail misery as three-month action tests Macron - BBC News: France's rail network has been severely disrupted, as a wave of strikes against President Emmanuel Macron's labour reforms gets under way. The start of the strike has been dubbed "Black Tuesday", but the action will spread over three months, affecting two days in every five. Staff at state railway SNCF are leading the strike, but the energy and waste collection sectors are also affected. The unrest presents Mr Macron's biggest challenge since his election last May. The president plans to overhaul the heavily indebted SNCF but the unions say some of the changes would pave the way for privatisation, which the government denies. With the four main rail unions observing the strike, services have been severely curtailed. Some 77% of SNCF drivers were believed to be on strike. The company said 34% of its staff overall were striking. Only one in eight high-speed TGVs is scheduled to run while only one in five regional trains is operating.Commuter lines into Paris have also been slashed and bus services have been hugely overcrowded. Some stations were crammed for the few trains available, others were deserted. The website that measures car traffic around the capital recorded about 420km (260 miles) of jams at rush hour.
Strikes by railway workers and aircrews paralyze France -The strike by railway workers and Air France personnel paralyzed France on Tuesday, as Parisian garbage workers, power station workers and students also went on strike.According to the state railway company SNCF, over one third of the 150,000 employees took part in the strike. Among train crews, which are indispensable for train traffic, participation was considerably higher, at almost 50 percent.Seventy-seven percent of the train drivers and 69 percent of the inspectors were on strike. As a result, seven out of eight long-distance trains [TGVs], four out of five regional trains and two out of three local trains were canceled.The SNCF expects train cancellations to remain high on Wednesday. In the next three months, the railroad workers want to continue their labor struggle. The strike will alternate between two days of strike action and three days of work.Air France had to cancel around one third of the long distance and medium distance flights because of the strike, and half of the domestic flights were canceled. More strikes are planned for the 10th and 11th of April.While the strike at Air France is focused on higher wages, railroad workers are directly engaged in a power struggle with President Macron's government. Macron is seeking to privatize the railway, shut down railway lines, reduce jobs and abolish the statute that protects the railroad workers from dismissal and guarantees them a pension. “This will make our jobs more and more precarious and we will lose our protections; we will be at the mercy of the bosses. It’s unacceptable!” Youssef, a striking rail worker, told the WSWS in Paris.
Spanish parties unite to demand repression against Catalan nationalists -- Leaders of the ruling Popular Party (PP), the right-wing Citizens and the Socialist Party (PSOE) are using limited street protests as a pretext to demand Prime Minister Mariano Rajoy steps up repression against Catalan nationalists.On Monday, Citizens’ leader Albert Rivera called on Rajoy to use “all necessary means to protect judges, prosecutors, public officials, police and, in general, honest and decent Catalans” from “the violent separatist commandos who are organising in Catalonia.”Rivera added, “Violence cannot condition daily life and sow terror among people,” claiming that Citizens party members “have felt the increase in pressure and harassment” in recent days and requested police protection. He did not reveal who these members were, saying that doing so would mean giving “clues to the enemy.”Rivera failed to note that the most violent act in the past week was an arson attack on Thursday against a community centre in Sarria, Barcelona, popular among Catalan separatist youth, which left the premises practically “unrecoverable.” Nazi and Francoist symbols and slogans were daubed on the walls.Rivera’s comments were followed by a statement by the secretary of organization of the Catalan section of the Socialist Party (PSC), Salvador Illa, demanding the regional police, the Mossos d’Esquadra, “stop” the CDR’s “insurrectional acts.” On the same day, the deputy secretary of Social and Sectorial Policy of the PP, Javier Maroto, said that the Committees for the Defence of the Referendum (CDRs) “remind” him of “Kale Borroka”—the “Street Fighting” undertaken by Basque nationalist youth aligned with the armed separatist group ETA in the 1980s and 1990s.
Carles Puigdemont released on bail by German court --A court in northern Germany decided Thursday to release ousted Catalan regional President Carles Puigdemont from detention on bail of €75,000.The court will still evaluate Spain’s extradition request for Puigdemont, but not based on Spain’s charge of rebellion. The court found this charge to be “inadmissible” because such an offense in Germany would have to include “violence,” which the court said “is not the case here.”Thus, the remaining charge of misuse of public funds will be considered in the extradition decision.Puigdemont was arrested in Germany late last month under a European Arrest Warrant issued by Spain after he crossed the border by car from Denmark on his way to Belgium from Finland. The former Catalan leader faces charges including rebellion and misuse of public funds in Spain over a separatist push last year. He fled to Belgium to avoid charges after the Catalan parliament declared independence following a referendum deemed illegal by Madrid.
A Strong End to A Strong Year (9 graphics) The European Union finished 2017 strong with GDP growing at an annualized rate of 2.4% during Q4 and 2.6% throughout 2017. The Euro Area performed slightly better with a year-on-year growth rate of 2.7%. Both regions outperformed the United States, which grew by 2.5% during 2017. Moreover, 2017Q4 remained largely on par with 2017Q3, though with a substantial increase in gross fixed capital formation. Whereas fixed capital formation decreased at an annualize rate of 0.80% during 2017Q3, it rebounded during 2017Q4, growing by 3.6%. Romania and Slovenia continued their impressive performance for the year, boasting GDP growth of 7.0% and 6.2% since this time last year, respectively. 2017Q4 was the weakest quarter of the year for Romania, however, growing by only 0.6% during the quarter. While lackluster when compared to a high of 2.4% during 2017Q3, it remained on par with the EU28 during the fourth quarter. The big losers for 2017, on the other hand, are the United Kingdom, Denmark, and Norway. Even Italy, with all of its problems detailed in previous posts, edged out these three countries. Also of note, is that the fastest growing economies tended to be those in the East whereas the slower growing economies resided in the West. While the North-South divide has long been recognized, perhaps an East-West divide is also beginning to emerge. All EU member nations increased investment as measured by fixed capital formation except for Ireland and Luxembourg, which decreased investment by 41% and 13.5%, respectively. These countries have been omitted from the above map. Here again, we see that the Eastern EU nations dominated. Greece and Cyprus were the standouts among this group, boasting fixed capital formation growth of 28.9% and 53.9%, respectively. Hungary, Lithuania, Latvia, and Slovenia each increased fixed capital formation by 11%-16%. The large increases in fixed capital formation are a good sign for these Eastern countries given that only Hungary and Cyprus have exceed investment levels seen prior to the Great Recession. In the case of Cyprus, 2017Q4 is the first quarter in which this has been the case– it remains to be seen whether this is a “one-off” or indicative of the start of a longer term trend. Moreover, despite the sharp declines seen in Ireland and Luxembourg, they remain above fixed capital formation levels seen during 2008Q1. Net exports again boasted strong growth during 2017Q4 in Western and Northern Europe, with numbers ranging from 4% in Portugal to 16% in Germany. Moreover, Ireland, Belgium, and Finland continued to lead the pack in this regard, improving their trade balance by 122%, 92%, and 72%, respectively, relative to 2016Q4. Clear exceptions to this pattern are the United Kingdom, Norway, and Sweden, all of which saw their trade balance worsen. Of these countries, Norway faired the worst with negative net export growth of 25.5%. The Eastern EU members continued their long run trend of a worsening trade balance. Overall, however, the EU28 improved their trade balance by roughly 26%.
The master plan to stop Brexit — The leaders of the last-ditch effort to stop Brexit are rallying their troops with an uncomfortable message — they’ve been fighting in the wrong place. With just a year to go until the U.K.’s official exit date from the EU, leading anti-Brexit group Best for Britain is assembling an army of volunteers educated with tactics that couldn’t be further from the typical disgruntled Remainer playbook. They argue that far from winning converts, the “told you so” tweets and the EU flag-waving is a huge turn-off for many citizens they hope to persuade. Apart from the enviable war chest the group has amassed for the final battle to halt the Article 50 process, it stands out among the U.K.’s spread of pro-EU campaigns for its different approach — an ardent focus on breaking the echo chamber of anguished Europhiles. If they can successfully reach out to “soft Leavers” and convert them to their cause, they believe the Brexit juggernaut can be stopped before the point of no return. Alongside a national media campaign launched this week, calling for a referendum on the Brexit withdrawal agreement, the group has conducted dozens of “barnstormer” events around the country since the end of last year, often in heavily Leave-voting areas, where would-be campaigners are tooled with the strategies, techniques and messages they need to persuade Leave voters to change their mind. Most of the mock doorstep conversations descend into disagreements on matters of principle like identity and the rights and wrongs of immigration. In their sights: the crunch parliamentary vote on the Brexit deal that Theresa May’s government hopes to agree with Brussels this fall. Best for Britain wants MPs to vote it down, and then to legislate for a referendum on the deal, with one of the options before voters being “no Brexit.” To do that, they need a groundswell in public support for the idea that the U.K. doesn’t have to leave the EU.
The time for revoking Brexit has passed - Wolfgang Münchau - Events will surely intrude between today and March 29 2019, the scheduled date of Britain’s formal departure from the EU. But even with that caveat in mind, the window for a successful revocation of Brexit is closing, and we may already be past the time where it can be reopened — for four reasons.The first is that there is now very likely going to be an agreement on a withdrawal treaty. All the difficult bits have been signed off. For the EU, the most important was the financial settlement and the rights of EU citizens in the UK. The two sides also reached a deal on the Irish border in December, and recently also on the transition period. The second reason why Brexit revocation has become less likely is the fragmentation of the opposition. The third reason is that the UK economy has failed to collapse, contrary to predictions. The revocateurs’ strongest argument used to be that an economic calamity would cause a nationwide rethink. That did not happen. The forecasters will no doubt double down as they always have done, but their credibility has been irretrievably damaged. Finally, the EU has moved on. This is a point rarely considered in the UK. A good example of the gap in perceptions was the inept attempt by Vince Cable, the leader of the Liberal Democrats, to get EU liberal leaders to sign up a declaration in favour of a second referendum.
Brexit: ships that don’t pass in the night - The picture shows what is left of the road to the eastern-most tip of England – Spurn Point – from which the coastguard station watches the traffic out of the Humber, ships on their way down the North Sea to ports on the continent. This is the place where we will see, in a negative sense, the evidence of Brexit. Standing on Spurn Point, one can normally see a procession of specialist chemical tankers on their way from Goole to Rotterdam, and back. But, as I pointed out in my post on REACH, published on 28 January 2017, after Brexit proper, we will no longer see these ships (for a while, at least) if trade in chemicals with the continent dries up. It really is quite remarkable how difficult it is for the chatterati to take on board this simple point, but the fact is that, once the transition period is over, UK manufactured chemicals, which have been registered by the manufacturers under the REACH regulation, will no longer be accepted in the EEA for free circulation. At great cost, the 6,000 or so chemicals registered in the UK will have to be re-registered by a representative established in the territory of an EU Member States, or the registrations will have to be transferred to an EU entity. Products cannot be traded in the EEA until this is done. Oddly, the EU has been less than forthcoming on the impact of Brexit on chemical industries, with the European Chemical Agency archly observing that: "If your business is in any way part of a supply chain that links you to businesses located within the 27 EU Member States remaining after the UK's withdrawal, you will face some fundamental changes".
Remainer MPs insist that Britain should stay shackled to the EU - Remainer MPs are insisting that Britain should stay permanently shackled to the EU even after Brexit.They are calling for Theresa May to keep open the so-called Norway option, which would see the UK continue to accept free movement and pay into the EU in return for better market access.But the recommendations – from the Commons Brexit select committee – were condemned as an attempt to ‘thwart Brexit by stealth’ and should not even have been published after deep divisions between members emerged.Chairman Hilary Benn last night said the option would allow ‘continuity of access for UK services and could also be negotiated relatively quickly’.Despite the result of the referendum, the committee has a 10-6 majority in favour of Remain. With Mr Benn apparently unable to reach a consensus, this has led to a series of reports that have failed to win unanimous backing.Committee member and prominent Eurosceptic Jacob Rees-Mogg said the decision to publish, despite a lack of consensus, was ‘another effort by Remainers to reverse the result of the referendum’.
Brexit deal should be judged a failure if businesses face ‘additional costs’ for EU trading, MPs warn - Theresa May’s Brexit deal must be judged a failure unless it secures “no additional costs” for businesses trading with the EU, a committee of MPs warns today. Its report sets “a high bar” for the agreement the prime minister must achieve by the autumn – also demanding no new checks at the Irish border, or weakening of the fight against crime or terrorism, among no fewer than 15 tests. Hilary Benn, the chairman of the Brexit committee, said MPs should be ready to use the “meaningful vote” to reject the Brexit deal if it fell short of the promises the Government had made for it. “It is vital that UK businesses are able to continue to trade freely and sell services into our largest market after we leave, without additional costs or burdens or a hard border in Northern Ireland, and that we maintain close cooperation on defence, security, data and information sharing and consumer safety,” he said.The report recommends the UK takes up the “Norway option” of European Economic Area (EEA) membership if the talks fail, arguing that could be “negotiated relatively quickly”.
Frankfurt Is Winning The Battle For London's Bankers - Since the UK voted to leave the EU, its biggest financial institutions have been observing the slow moving Brexit negotiations with a degree of discomfort. Last month, as Statista's Niall McCarthy notes, Theresa May warned that the UK's financial companies could lose full passporting rights and single market access, leading to even higher anxiety, particularly in the City of London. The air of uncertainty had already prompted several companies to take action and prepare for post-Brexit life in new European hubs. In recent months, much has been written about the threat of financial relocations but which companies have actually followed through with the threat and announced they will shift staff abroad? Bloomberg has kept track of banks announcing plans to relocate staff and the following infographic provides an overview of the situation with London's loss Frankfurt's gain. Goldman Sachs recently announced to its investment bankers and traders that their future may well lie in in Germany's financial capital. The firm has already said it intends moving 1,000 of its 6,000 strong staff to Frankfurt. It's just one of many organizations to announce a shift to other EU hubs with UBS planning to shift 1,500 of its workforce in the UK to Frankfurt and Paris. Depending on the outcome of talks on a future trade agreeement, these initial moves could just herald the start of London's financial exodus.
Brits are in denial about their diminishing importance - Britain’s prime minister, Theresa May, visited all four parts of the UK last week – England, Scotland, Wales and Northern Ireland. Her goal was to drum up some excitement about Brexit just one year before March 29, 2019, when the country is due to leave the European Union. On the other side of the English Channel, Ms. May’s upbeat message met with near-total incomprehension. Contrary to fears, no other EU country has shown any sign of following the British lead. Even the right-wing nationalist governments of Poland and Hungary remain firmly committed to the EU.Britain’s impending exit has shifted the balance of power between the UK and the EU, but not at all to London’s advantage. When the Brexit negotiations began in March 2017, some in the EU feared they could be bamboozled by savvy British diplomats, well-schooled in the country’s imperial tradition. A year later, things look very different. Britain’s diplomats are still brilliant, but they have little say in their own country, making little headway against demagogues and populist deniers of reality like Boris Johnson or David Davis.Long after the loss of its colonies, Britain continued to benefit from the Empire’s fading aura. But with Brexit, that magic has finally worn off. Left to its own devices, Britain is just a medium-sized state with limited global influence, its Empire long gone. The Commonwealth does not have a seat at the table with the world’s great powers. So now the prime minister travels the country, trying to hold together the tiny remains of the empire on which the sun never set. Northern Ireland and Scotland voted against Brexit, and there is a still a risk that Scotland may carry out its threat to leave the UK. Within Europe, Britain has marginalized itself. Its hopes of fomenting division among the EU’s other 27 member states have proved illusory. Ms. May has had to endure much humiliation, including from Angela Merkel. Last year, the German chancellor made it known that EU heads of government had better things to do than discuss Brexit. In future, could the British prime minister deal directly with Michel Barnier, the EU’s chief Brexit negotiator, please?
Brexit and the Irish border -- Theresa May promised in December that the UK would avoid “any physical infrastructure or related checks” at the Irish border after Brexit. Yet it is still not clear how the government can square this with its pledge to take the UK out of the single market and the customs union, which the European Union says will inevitably lead to frictions in trade. Plans for an innovative “customs partnership” with the EU, under which goods are electronically tracked to their destination in order to determine which businesses need to pay which duties, have been dismissed by Brussels as “magical thinking”. British officials have said that these proposals would take over five years to implement regardless, meaning that they would not be ready until well after the end of the agreed Brexit transition period. Industry is also sceptical. Peter MacSwiney, who chairs the HMRC-sponsored committee for consultation with business on customs, has called the customs partnership a “ridiculous suggestion”. So what will the Irish border really look like after Brexit? The Times has travelled to investigate how Irish communities along the border live now, how other countries manage their borders with the EU and what a new regime could mean for the peace process. … On the country road that runs from Blacklion Village in the Republic of Ireland to Marble Arch Caves in the North, there is nothing to mark the border between the two countries but a subtle change in the colour of the tarmac. Hugh Maguire, 69, lives a few yards into the Republic but, like many local farmers, he has land and livestock on both sides of the border. “See them sheep yonder?” he says in a broad Ulster accent, gesturing to the fields on his left. “Them sheep is in Northern Ireland. See them sheep there?” He gestures to the fields on his right. “Them sheep is in the Republic.” Mr Maguire says that any new checks between the two countries as a result of Brexit would be impossible to enforce, recalling the ease with which farmers bypassed customs controls before the creation of the European single market in 1992. “There was lots of smuggling of livestock on this border”, he says. “I done it meself - lots of it! And I would do it again. There’s no point in telling lies about it.” The boundary is so easy to traverse that farmers would easily outmanoeuvre the authorities, he explains. “How can the government stop me? The border’s across wide open fields from here, for miles and miles. You can’t police that, lads.”
Brexit: an isolated offshore island? - A reflective article in the Irish Times, written by academic Richard Wynn Jones, points out that the port of Holyhead would be one of the biggest losers from a failure to resolve the Irish question. However, for even those lacking direct knowledge of the port facility can readily see from the photograph (above) how limited it is, and how restricted is the scope for expansion. A hard border, therefore, would require a massive expansion of the facilities at Fishguard and Liverpool, the Rosslare and Dublin routes – and even a resumption of services to the Welsh ports at Mostyn and Swansea. Yet this is somewhat theoretical. Wynn Jones wryly notes that, so far, the UK government has no contingency plans in place to deal with this situation. Indeed, he says, there is no real evidence that planning for the future of any kind has taken place. Instead, there are airy injunctions from the British government's representative in Wales, the secretary of state for the region, Alun Cairns, that all will be well. Doubtless, the Irish have seen the writing on the wall – and that would explain why they are so keen to see additional ferry services sailing directly from Dublin and other Irish ports to the Continent. Longer term, expansion of the deep water port at Cork could make it the destination of choice for US traffic heading for Europe, replacing other UK ports such as Southampton. As a distribution hub, it can service the UK and the entire EEA without goods having to make multiple switches between different customs administrations. There is far more to the story that we looked at yesterday, part of which the Financial Times has caught up with. And, in predictable manner, the Telegraph has lifted that story – as has the Express -demonstrating once again how narrowly-sourced and inward-looking the legacy media are. Anything outside their circle simply doesn't exist. The thing is, though, that the Telegraph's headline, "Irish shipping to bypass British ports after Brexit", really is only a part of the story – a tiny part. More than anything, it illustrates that Brexit is a dynamic situation with multiple players. And if – as we have now seen too many times – if the UK doesn't take the initiative, other countries will.
Child poverty: Pale and hungry pupils 'fill pockets with school food' - BBC News: Malnourished pupils with grey skin are "filling their pockets" with food from school canteens in poor areas due to poverty, head teachers say. The heads, from various parts of England and Wales, described differences in the appearance of some pupils. One head said: "My children have grey skin, poor teeth, poor hair; they are thinner." The government said measures were in place to tackle poverty. Lynn, a head teacher from a former industrial town in Cumbria, who did not want to give her full name, was one of a number of head teachers speaking to reporters at the National Education Union conference in Brighton. They were highlighting the issues faced by an increasing number of children growing up in poverty, and how their experiences affect their education. Lynn said that hunger was particularly apparent after the weekend. She said: "Children are filling their pockets with food. In some establishments that would be called stealing. We call it survival." Another head teacher from Nottinghamshire, Louise Regan, said: "When you take children out to an event, maybe a sporting event, you see children of the same age from schools in an affluent area. "It's the grey skin, the pallor. It's the pallor you really notice." She went on: "Monday morning is the worst. "There are a number of families that we target that we know are going to be coming into school hungry. "By the time it's 9.30am they are tired." She said her school supplied some pupils with clean uniforms, and that they often came back in the same clothes, grubby, after the weekend. The school has a food bank which gives out food parcels and a supply of clothes, shoes and coats for those without.
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