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

Saturday, May 5, 2018

week ending May 5

Fed likely to keep rates steady; investors bet on June hike  (Reuters) - The U.S. Federal Reserve is set to hold interest rates steady this week but will likely further encourage expectations that it will lift borrowing costs in June on the back of rising inflation and low unemployment.   Investors have all but priced out the chance of a rate hike at the end of the Fed’s two-day policy meeting on Wednesday, particularly given its adherence in recent years to only raising rates at meetings that are followed by press conferences. The central bank is due to announce its decision at 2 p.m. EDT (1800 GMT) on Wednesday. Fed Chairman Jerome Powell is not scheduled to hold a press conference. “Fed speakers have done little to push back against this expectation ... we expect no fireworks,” JPMorgan economist Michael Feroli said in a note to clients. The Fed raised its benchmark overnight lending rate at its March 20-21 meeting by a quarter percentage point to a target range of between 1.50 percent and 1.75 percent. It currently forecasts another two rate rises this year, although an increasing number of policymakers see three as possible. The Fed’s next policy meeting after this week is scheduled for June 12-13. Investors overwhelmingly see a rate hike then. The pace of rate increases has picked up since the central bank began its tightening cycle in December 2015. It raised rates once in 2016, but lifted borrowing costs three times last year amid a strengthening economy. 

FOMC Statement: No Change in Policy -- FOMC Statement: Information received since the Federal Open Market Committee met in March indicates that the labor market has continued to strengthen and that economic activity has been rising at a moderate rate. Job gains have been strong, on average, in recent months, and the unemployment rate has stayed low. Recent data suggest that growth of household spending moderated from its strong fourth-quarter pace, while business fixed investment continued to grow strongly. On a 12-month basis, both overall inflation and inflation for items other than food and energy have moved close to 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with further gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace in the medium term and labor market conditions will remain strong. Inflation on a 12-month basis is expected to run near the Committee's symmetric 2 percent objective over the medium term. Risks to the economic outlook appear roughly balanced. In view of realized and expected labor market conditions and inflation, the Committee decided to maintain the target range for the federal funds rate at 1-1/2 to 1-3/4 percent. The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation.

Fed Leaves Rates Unchanged, Says Inflation Close to Target - Federal Reserve officials left interest rates unchanged, acknowledging inflation is close to target without indicating any intention to veer from their gradual tightening of monetary policy. “Inflation on a 12-month basis is expected to run near the committee’s symmetric 2 percent objective over the medium term,” the policy-setting Federal Open Market Committee said in a statement Wednesday in Washington. “The committee expects that economic conditions will evolve in a manner that will warrant further gradual increases in the federal funds rate.” Officials may have signaled their willingness to allow inflation to exceed their 2 percent goal somewhat by adding a reference to the “symmetric” nature of their target. The FOMC also noted the weakness in growth in the first quarter, removing a reference in the in March statement that the economic outlook had “strengthened in recent months.” They balanced that out by noting strong growth in business investment. The yield on 10-year U.S. Treasury notes slipped slightly to 2.96 percent following the release of the statement, while the S&P 500 Index of U.S. stocks climbed to its highest level of the day and the Bloomberg Dollar Spot Index fell. U.S. economic growth cooled in the first quarter to an annualized pace of 2.3 percent after averaging higher than 3 percent in the previous three quarters. The decision to maintain the federal funds target range at 1.5 percent to 1.75 percent was a unanimous 8-0. This FOMC meeting won’t be followed by a press conference. The Fed’s commentary is unlikely to change investor expectations that policy makers will raise interest rates for the second time this year when they re-convene in June. Officials left unchanged their view that near-term risks to the economic outlook appeared “roughly balanced.” That suggests policy makers are not ready to steepen dramatically the path they’ve projected for slowly raising rates. The Fed lifted its benchmark rate three times last year -- while also beginning to slowly trim its balance sheet. Officials indicated in March they expect a total of three or four hikes in 2018. The FOMC’s two-day meeting followed the release of data Monday that showed inflation measured by the central bank’s preferred gauge had hit its 2 percent target after being below that goal for almost every month since April 2012.  

The FOMC's Symmetric 2 Percent Inflation Objective ---A few excerpts from Tim Duy at Fed Watch: Fed Holds Rates Steady The most important news from the FOMC statement was the hint that the Fed would not overreact with substantial policy changes in response to inflation readings modestly above 2 percent. ..... Most notable was the addition of “symmetric” in this line:Inflation on a 12-month basis is expected to run near the Committee’s symmetric 2 percent objective over the medium term. Inflation is now very near the Fed’s target and it is reasonable to expect some overshooting of that target. Central bankers are reminding market participants that the inflation target is symmetric such that they will tolerate reasonable short-run deviations from target in the near term. In other words, don’t freak out if inflation exceeds 2 percent as that alone will not drive the Fed to change policy. And from Merrill Lynch: As was widely expected, the FOMC kept the fed funds target range unchanged at 1.50-1.75%.The most significant change in the statement came in the second paragraph where the Committee included the word "symmetric" in characterizing its inflation target. This is consistent with the March SEP which showed that the median forecast was expecting core inflation to hit 2.1% in 2019-2020, allowing for inflation to rise slightly above its target in the medium run. The inclusion of the word "symmetric" helped offset the more hawkish tone in the prior paragraph which highlighted that core inflation is moving closer to 2%. In our view, the FOMC's balanced tone reemphasizes its expectations to adjust the path of policy gradually throughout the current hiking cycle.

PCE Price Index: March Headline & Core -  The BEA's Personal Income and Outlays report for March was published this morning by the Bureau of Economic Analysis. The latest Headline PCE price index was up 0.03% month-over-month (MoM) and is up 2.01% year-over-year (YoY). The latest Core PCE index (less Food and Energy) came in at 0.15% MoM and 1.88% YoY. Core PCE remains below the Fed's 2% target rate. Revisions were made to figures for January through March.  The adjacent thumbnail gives us a close-up of the trend in YoY Core PCE since January 2012. The first string of red data points highlights the 12 consecutive months when Core PCE hovered in a narrow range around its interim low. The second string highlights the lower range from late 2014 through 2015. Core PCE shifted higher in 2016 with a decline in 2017 only to bounce back later in the year. The first chart below shows the monthly year-over-year change in the personal consumption expenditures (PCE) price index since 2000. Also included is an overlay of the Core PCE (less Food and Energy) price index, which is Fed's preferred indicator for gauging inflation. The two percent benchmark is the Fed's conventional target for core inflation. However, the December 2012 FOMC meeting raised the inflation ceiling to 2.5% for the next year or two while their accommodative measures (low FFR and quantitative easing) are in place. More recent FOMC statements now refer only to the two percent target.

Early Q2 GDP Forecasts - From Merrill Lynch: We revise down our 2Q GDP forecast to 3.2% from 3.7% as consumer spending and capex trends appear less bullish and there is a weak handoff between 1Q and 2Q. [May 4 estimate]. And from the Altanta Fed: GDPNow The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in thesecond quarter of 2018 is 4.0 percent on May 3, down from 4.1 percent on May 1. [May 3 estimate] From the NY Fed Nowcasting Report The New York Fed Staff Nowcast stands at 3.0% for 2018:Q2. [May 4 estimate]CR Note: These early estimates suggest GDP in the 3% to 4% in Q2.

Treasury Increases Auction Sizes To Fund Soaring Deficit; Launches 2-Month Bill - While traditionally a snoozer, this morning's Treasury's refunding announcement was closely watched for details on how the US Treasury's plans to fund its soaring budget deficit in the coming quarters, shortly after it announced it had sold a near record $488BN in debt in the last quarter. Specifically, bond traders were looking at how much upcoming auctions would increase by, and whether the Treasury would also introduce a 2 Month bill auction as some strategists had expected.Well, the Treasury did all that and more, revealing that it would sell $31BN in 3Y notes on May 8, a $5BN increase vs the $26BN sold last quarter; additionally, the 10Y refunding auction on May 9 will also increase by $1BN to $25BN vs $24BN last quarter, and a similar increase for the 30Y auction, which would increase to $17BN on May 10 vs $16BN last quarter.That was just the beginning: among the other debt-busting details revealed today were the following

  • Treasury to introduce two-month bill later this year
  • Keeps TIPs auctions unchanged, evaluates new five- year TIPs sale
  • 2-, 3-year note auctions to rise by $1 bln per month
  • Boosts 5-, 7-, 10-, 30-year debt auctions by $1b
  • Floating-rate note auctions boosted by $1 bln

In total, these adjustments will result in an additional $27 billion of new issuance for the upcoming quarter.  The good news for bond bulls is that the nominal coupon and FRN auction size increases are smaller than the total increases of $42 billion announced in January 2018 for the months of February through April 2018.

US Treasury says Q1 borrowing set record of $488 billion  (AP) — The Treasury Department announced Monday that the government borrowed a record $488 billion in the January-March quarter, but officials expect borrowing needs will decline sharply for the current April-June quarter. Treasury said that actual borrowing in the first quarter exceeded the old record of $483 billion set in the first quarter of 2010, a period when the country was struggling to pull out of a deep recession and prop up the financial system following the 2008 financial crisis. For the current quarter, Treasury said it expects it will only need to borrow $75 billion but that the borrowing needs will rise again in the July-September quarter to $273 billion. Treasury is facing the need to finance government operations at a time when annual deficits are heading to record levels. While the huge deficits will drive up the government's borrowing needs, Treasury Secretary Steven Mnuchin said late Monday that he was not concerned that the increased borrowing could send interest rates surging and threaten overall economic growth. "There is a lot of supply (of new Treasury securities) but I think the market can handle it," Mnuchin said in an interview with Bloomberg TV. Asked if he is worried that stock markets could be rattled with rates climbing after so many years of low rates, Mnuchin said, "I have tremendous confidence in Chairman (Jerome) Powell and his leadership at the Fed." Mnuchin said he did not intend to comment on the specific decisions the Fed is making to push its benchmark rate higher to keep inflation under control, but he did say, "I think a little inflation is a good thing. We want wages to increase." 

The US Just Borrowed $488 Billion In One Quarter, The Most Since The Financial Crisis - For months, analysts have been warning that the US is set to borrow an unprecedented - for a non-recessionary period - amount of money... ... and on Monday afternoon this was confirmed, when the US Treasury announced that in the quarter ended March 31 (the fiscal year's second), the US borrowed $47BN more than its had anticipated three months ago, or $488BN to be precise. This was the single biggest quarterly amount of debt sold by the US Treasury since the record $569BN in debt borrowed in Q4 2008 when the financial system nearly collapsed, and Treasury had no choice but to raise a gargantuan amount of money during the biggest financial crisis in modern US history. What makes the just passed quarter different, however, is that there was no crisis, not even a recession. In fact, in the first quarter US GDP rose by 2.3% according to the BEA amid what, until recently, the "experts" said was a global coordinated recovery. In retrospect, it appears the "recovery" was only around long enough for the US and/or China to raise near record amounts of debt. As a result of the near-record borrowing spree, the US ended the quarter with $290BN in cash, more than the $210BN budgeted. What is scary is how fast the US is raking up the debt: as a reminder, just a few weeks ago we reported that in the first six months of the fiscal year, the US budget deficit rose to $600 billion as spending increased at three times the pace of revenue growth in the October-to-March period. At that run-rate, the US deficit will soar to $1.2 trillion for fiscal 2018, far above the $804BN projected budget gap and resulting in an even greater amount of debt borrowed. Commenting on the debt splurge, the Treasury said tax changes are “poised to underpin near-term consumption and investment” and “the stage is set for a pick-up in growth over the near term." They better, because if all we have to show for nearly a half a trillion in debt in one quarter is 2.3% GDP, then the US is in very serious trouble. Looking ahead, the Treasury forecast a need to issue $75BN in net marketable debt in the current quarter, $101BN below the last forecast, and assumes the cash balance continues to rise by the end of June to $360 billion, the TSY said. The April-June borrowing estimate is $101 billion less than its previous forecast, which was partly driven by the higher cash flows. 

Trump to meet North Korean leader in “three or four weeks” --At a campaign rally in Michigan yesterday, US President Donald Trump indicated that he would meet with North Korean leader Kim Jong-un in the next “three or four weeks,” at a still undisclosed location. His supporters chanted “Nobel,” Nobel,” echoing calls by Republican Party congressmen for Trump to be awarded the peace prize, just as Barack Obama was in 2009 even as his administration continued the occupation of Iraq and escalated the war in Afghanistan.Trump boasted that the talks last Friday between Kim and South Korean President Moon Jae-in were the outcome of his “strength”—meaning his administration’s reckless threats to “totally destroy” North Korea unless it submits to US demands to give up its nuclear programs and dismantle its nuclear weapons.After a diplomatic pantomime in which the South and North Korean leaders held hands and hugged, the erstwhile hostile states signed a “declaration” committing to cultural and economic cooperation; the signing of a formal peace treaty to end the 1950–53 Korean War; and, “through complete denuclearisation, a nuclear-free Korean Peninsula.”Over the weekend, further details of what was and was not agreed was revealed by both the South Korean government and Trump’s new secretary of state, former CIA director Mike Pompeo. The South Korean presidential office stated yesterday that North Korea would allow US and South Korean inspectors to verify the closure of its Punggye-ri nuclear test, which Kim announced earlier this month. Kim also reportedly told Moon Jae-in: “There is no reason for us to possess nuclear weapons ... if mutual trust with the United States is built… and an end to the war and non-aggression are promised.”

The Memo: Korean thaw gives Trump a big boost | TheHill: The historic meeting between the leaders of North Korea and South Korea is forcing critics of President Trump to acknowledge that his much-derided strategy might be bearing fruit. Trump’s approach to North Korea, including his famous derision of its leader Kim Jong Un as “Little Rocket Man” and his talk about the size of his nuclear button, elicited a combination of fear and mockery from foreign policy experts and other elite voices. So too did his threat during a United Nations speech last September to “totally destroy” North Korea. But the positive mood music from the dramatic meeting between Kim and his South Korean counterpart Moon Jae-in, as well as the ongoing plans for a Trump-Kim summit, are winning praise from unexpected quarters.“President Trump’s tightening of sanctions and his belligerent rhetoric genuinely did change the equation,” New York Times columnist Nicholas Kristof — no fan of Trump — wrote on Friday. Kristof did qualify his argument, however, by suggesting that Trump’s escalation had been primarily important not because it had intimidated Kim but because it had startled Moon into making overtures to the North Koreans. Voices from different ideological perspectives made similar points. Dean Cheng, a senior research fellow at the conservative Heritage Foundation, told The Hill that it seemed to him as if both North Korea and South Korea had “become very concerned about the possibility of conflict.” Cheng said that, when it comes to threats of military action, “Trump has more credibility.” With previous American presidents of either party, he suggested, “very clearly the North Koreans did not take that as being a credible threat.” 

John Bolton: U.S. Using ‘Libya Model’ for North Korea Negotiations - John Bolton, President Donald Trump’s national security adviser, said on Sunday that the United States is using the “Libya model” as it seeks to denuclearize the Korean peninsula—a process that eventually led to the destabilization of that country and the death of its dictator, and one that has drawn North Korea’s ire in the past. “We have very much in mind the Libya model from 2003, 2004,” Bolton said on Fox News Sunday, referring to the African country’s decision to get rid of its nuclear weapons after negotiating with American officials. Seven years later, Libya found itself in a civil war that led to the death of its dictator, Muammar Gaddafi, after an intervention by the U.S. and its allies. It’s unclear how Bolton’s message will be received by Kim Jong Un’s regime, which has already taken some steps—though none of them concrete or verifiable—toward denuclearization. Pyongyang has long cited U.S. interventions in countries such as Libya as a reason why it needs nuclear weapons. As the civil war was intensifying there in 2011, North Korea said it was a mistake for Libya to agree to dismantle its nuclear program. A North Korea Foreign Ministry official described it at the time as “an invasion tactic to disarm the country.” But Bolton said the Libya process could be an example for the Trump administration, particularly as it seeks hard evidence that Pyongyang is moving toward denuclearization.

North Korea Releases US Prisoners Ahead Of Historic Trump Summit - North Korea has released three U.S. citizens from years-long detentions in a suspected labor camp, giving them medical treatment and "ideological education" at a hotel near Pyongyang, says human rights advocate Choi Sung-ryong, as reported by the Financial TimesChoi Sung-ryong, a representative of the families of the prisoners, told South Korean news outlet Naver: "We talked with a source in North Korea today. North Korean authorities released Kim Dong-cheol, Kim Sang-deok and Kim Hak-seong, who were in jail at the labor correction center in early April, and they are currently in a ‘course’ where they are treated and educated at a hotel outside Pyongyang.” -IB Times    “We heard it through our sources in North Korea late last month. We believe that Mr Trump can take them back on the day of the US-North Korea summit or he can send an envoy to take them back to the US before the summit,” said Mr Choi.Among the three detainees, Kim Dong-cheol, a South Korean-born American pastor, was arrested by North Korea in 2015 on charges of spying and sentenced in 2016 to 10 years of hard labour. Kim Hak-seong and Kim Sang-deok, both working for Pyongyang University of Science and Technology, were detained last year on suspicion of “hostile acts”. –FT Newly minted National Security Advisor John R. Bolton told Fox News on Sunday "If North Korea releases the detained Americans before the North-US summit, it will be an opportunity to demonstrate their authenticity."  Secretary of State Mike Pompeo is believed to have discussed the release of the three Americans during his clandestine meeting in Pyongyang with the North Korean leader over Easter Weekend - while President Trump confirmed last week that the two countries had been negotiating for their release.

Trump Orders Pentagon to Consider Reducing U.S. Forces in South Korea— — President Trump has ordered the Pentagon to prepare options for drawing down American troops in South Korea, just weeks before he holds a landmark meeting with North Korea’s leader, Kim Jong-un, according to several people briefed on the deliberations. Reduced troop levels are not intended to be a bargaining chip in Mr. Trump’s talks with Mr. Kim about his weapons program, these officials said. But they acknowledged that a peace treaty between the two Koreas could diminish the need for the 28,500 soldiers currently stationed on the peninsula. Mr. Trump has been determined to withdraw troops from South Korea, arguing that the United States is not adequately compensated for the cost of maintaining them, that the troops are mainly protecting Japan and that decades of American military presence had not prevented the North from becoming a nuclear threat. His latest push coincides with tense negotiations with South Korea over how to share the cost of the military force. Under an agreement that expires at the end of 2018, South Korea pays about half the cost of the upkeep of the soldiers — more than $800 million a year. The Trump administration is demanding that it pay for virtually the entire cost of the military presence. The directive has rattled officials at the Pentagon and other agencies, who worry that any reduction could weaken the American alliance with South Korea and raise fears in neighboring Japan at the very moment that the United States is embarking on a risky nuclear negotiation with the North. Officials declined to say whether Mr. Trump was seeking options for a full or partial reduction of troops, though a full withdrawal was unlikely. They emphasized that rethinking the size and configuration of the American force was overdue, regardless of the sudden flowering of diplomacy with North Korea. But Mr. Trump’s meeting with Mr. Kim injects an unpredictable new element. His enthusiasm for the encounter — and the prospect of ending a nearly 70-year-old military conflict between the two Koreas — has raised concerns that he may offer troop cuts in return for concessions by Mr. Kim. Defense Secretary Jim Mattis added to those concerns last Friday when he suggested that the future of the American military presence might be on the table.

Trump Formally Nominated For Nobel Peace Prize -- A group of 18 GOP lawmakers led by Rep. Luke Messer of Indiana, have signed a letter formally nominating President Trump for the 2019 Nobel Peace Prize. The letter is addressed to the Norwegian Nobel Committee, and states that President Trump has worked "tirelessly to apply maximum pressure to North Korea to end its illicit weapons programs and bring peace to the region." “His Administration successfully united the international community, including China, to impose one of the most successful international sanctions regimes in history,” the letter says. “The sanctions have decimated the North Korean economy and have been largely credited for bringing North Korea to the negotiating table.” Other signatories include Reps Mark Meadows, R-N.C., Marsha Blackburn, R-Tenn., Matt Gaetz, R-Fla., Diane Black, R-Tenn., and Steve King, R-Iowa. “Although North Korea has evaded demands from the international community to cease its aggression for decades, President Trump’s peace through strength policies are working and bringing peace to the Korean peninsula,” the letter reads. “We can think of no one more deserving of the Committee’s recognition in 2019 than President Trump for his tireless work to bring peace to our world.” 

 Congress Offers Bipartisan Blank Warmaking Check to Donald Trump - The president of the United States is now a veritable autocrat in the realm of foreign policy. Fear not, two brave “centrist” senators, Republican Bob Corker and Democrat Tim Kaine, are riding to the rescue. Their recently announced bill to repeal and replace the existing AUMF promises to right seven decades of wrong and “establish rigorous congressional oversight,” “improve transparency,” and ensure “regular congressional review and debate.”  In reality, it would do none of those things. Though Senator Kaine gave a resounding speech in which he admitted that “for too long Congress has given presidents a blank check to wage war,” his bill would not stanch that power. Were it ever to pass, it would prove to be just another blank check for the war-making acts of Donald Trump and his successors.Though there have certainly been many critiques of their piece of legislation, most miss the larger point: the Corker-Kaine bill would put a final congressional stamp of approval on the inversion of the war-making process that, over the last three-quarters of a century, has become a de facto constitutional reality. The men who wrote the Constitution meant to make the declaration of war a supremely difficult act, since both houses of Congress needed to agree and, in case of presidential disagreement, to be able to muster a supermajority to override a veto.The Corker-Kaine bill would institutionalize the inverse of that. It would essentially rubber stamp the president’s authority, for instance, to continue the ongoing shooting wars in at least seven countries where the U.S. is currently dropping bombs or firing off other munitions. Worse yet, it provides a mechanism for the president to declare nearly any future group an “associated force” or “successor force” linked to one of America’s current foes and so ensure that Washington’s nearly 17-year-old set of forever wars can go on into eternity without further congressional approval. By transferring the invocation of war powers to the executive branch, Congress would, in fact, make it even more difficult to stop a hawkish president from deploying U.S. soldiers ever more expansively. In other words, the onus for war would then be officially shifted from a president needing to make a case to a skeptical Congress to an unfettered executive sanctioned to wage expansive warfare as he and his advisers or “his” generals please.

Pompeo briefs Saudi, Israel on Trump plans for Iran deal --Secretary of State Mike Pompeo arrived in Saudi Arabia on Saturday on a hastily-arranged visit to the Middle East as the United States aims to muster support for new sanctions against Iran. Washington's new chief diplomat was to meet Saudi and Israeli leaders on Sunday to rally coordinated opposition to Tehran and brief them on President Donald Trump's threat to end the Iran nuclear deal. Secretary of State Mike Pompeo touched down in Riyadh on Saturday shortly after Tehran-backed Huthi rebels in Yemen fired missiles across the kingdom's border.US officials travelling with Pompeo told reporters the Huthi missiles had been supplied by Iran, and cited the attacks as evidence that regional powers should work together. Pompeo had dinner with Saudi Arabia's Crown Prince Mohammed Bin Salman, and on Sunday he was due to meet his father King Salman.Then he was due to fly on to Jerusalem to meet Israeli Prime Minister Benjamin Netanyahu and then on to Amman in Jordan, wrapping up a weekend of talks with some of Iran's most fervent foes in the region.Trump is due to decide on May 12 whether to reimpose nuclear-related sanctions on Tehran, putting in peril the landmark 2015 nuclear accord, which most world powers see as key to preventing Tehran from getting the bomb. But Trump and America's Middle East allies argue the deal, approved by Trump's predecessor Barack Obama, was too weak and needs to be replaced with a more permanent arrangement and supplemented by controls on Iran's missile program.

French Ambassador: "US Withdrawal From Iran Deal May Lead To War"  - The diversionary US missile strikes on Syria this (and last) April may have been just an appetizer to the main course.The French Ambassador to Israel Hélène Le Gal has warned that a potential US walkout from the Iran nuclear deal may bring the region to the brink of a war, as she believes that Tehran would “immediately” revive its alleged nuclear weapons program, prompting a response by Israel.Speaking to Ynetnews on Saturday, Le Gal warned there would be "huge consequences" if President Trump follows through on his pre-election pledge and pulls the US out the Iran Nuclear Deal also known as the JCPOA (or Joint Comprehensive Plan of Action), which he has repeatedly blasted as the "worst deal" ever negotiated.Le Gal argued that as soon as Washington exits the seven-party agreement, it will become defunct, as Iran will follow suit."I don’t think Iran will stay in the deal if the US goes out" and added that "the possibility of war exists." "If the nuclear deal is cancelled, Iran will immediately restart its program. We need to prevent Iran from having nuclear weapons. We don't want Iran to have nuclear weapons—not now or ever."The French diplomat's warning comes shortly after French President Emmanuel Macron reaffirmed his commitment to the deal during his three-day trip to Washington, and suggested a framework for more constraints to put on Iran after 2025, when the deal is set to expire. In addition to Iran's already mothballed nuclear program, Macron hopes to stifle its ballistic missile development and restrict its influence in the region, including in Syria and Yemen, echoing similar demands by Saudi Arabia.

Trump says nixing Iran nuclear deal would not hurt North Korea talks (Reuters) - U.S. President Donald Trump said on Monday that pulling out of the Iran nuclear deal would not have a negative impact on his upcoming nuclear talks with North Korea, and he said he would be open to negotiating a new nuclear accord with Tehran.  “I think it sends the right message,” Trump told a news conference when asked if pulling out of the Iran deal would send the wrong message to Pyongyang. “You know in seven years, that deal will have expired and Iran is free to go ahead and create nuclear weapons.” Trump declined to say whether the United States would pull out of the nuclear deal before a May 12 deadline for a decision, saying: “We’ll see what happens.” But he expressed his dissatisfaction with the pact. “That is just not an acceptable situation. They’re not sitting back idly. They’re setting off missiles, which they say are for television purposes. I don’t think so,” Trump said, adding, “That doesn’t mean we won’t negotiate a real agreement.”

 Washington and Tel Aviv lurching toward a war with Iran - Events of the past few days have made it clear that US imperialism—working in close tandem with its main ally in the Middle East, Israel—is set on a course of direct military confrontation with Iran.Barely a week and a half before the May 12 deadline for President Donald Trump to announce his decision on whether or not his administration will renew a waiver of unilateral US sanctions that were shelved as part of the 2015 Iranian nuclear agreement, Israel’s Prime Minister Benjamin Netanyahu staged a theatrical presentation claiming to have “proof” that “Iran lied” about its nuclear program. He went on to express confidence that Trump would “do the right thing,” i.e., scuttle the nuclear accord—the Joint Comprehensive Plan of Action, or JCPOA—that was reached between Iran and five major powers: the US, Britain, France, Germany, China and Russia.Trump hailed Netanyahu’s theatrical presentation as confirmation that he had been “100 percent right” in his denunciations of the nuclear accord as a “horrible deal.” In reality, international nuclear experts, European representatives and even ex-Israeli intelligence officials all dismissed Netanyahu’s performance as a farce. The Israeli government, which claimed to have stolen hundreds of thousands of files from Iran, produced not a single shred of evidence that Iran has engaged in any form of nuclear weapons program for the past 15 years, much less that it has violated the terms of the JCPOA. Repeated reports by the International Atomic Energy Agency, including one as recent as February, have established that Tehran is abiding by the stringent restrictions on uranium enrichment and intrusive inspections regime imposed under the agreement.

US Secretary of State Pompeo endorses Israeli murder of Gaza protesters - Recently confirmed US Secretary of State Mike Pompeo capped off his four-day trip to the Middle East on Monday by declaring the administration’s total support for the Israeli military’s ongoing murder of unarmed protesters in Gaza. Pompeo made his remarks at a news conference alongside Jordan’s Foreign Minister Aydan Safadi. Asked by a reporter whether he believed Israeli troops had used “excessive force” in response to the “March of Return” protests that have occurred at Gaza border fences each Friday over the past month, Pompeo responded briefly: “We do believe the Israelis have the right to defend themselves, and we’re fully supportive of that.” The supposed acts of self defense endorsed by Pompeo have involved the repeated use of live ammunition, tear gas and rubber-encased steel bullets by Israeli troops against tens of thousands of unarmed civilian protesters. Since March 30, these attacks have killed 45 people, five of them children, and injured close to 7,000, including 3,500 from live ammunition, shrapnel or rubber bullets, according to Gaza health officials. In contrast, no Israeli soldiers have been seriously injured in any of the protests. The last to die was a 14-year-old boy, Azzam Hilal Oueida, who was shot in the head by an Israeli soldier on Friday. He was rushed to a Gaza hospital but died the next day. Another 178 people were injured from gunshot wounds, and many remain in critical condition. (See “Israel again opens fire on Gaza protesters, killing three and wounding hundreds”)

Pompeo vows to reinvigorate diplomacy, restore US ‘swagger’ — He didn’t mention Rex Tillerson by name. But the contrast was clear as new Secretary of State Mike Pompeo arrived at the State Department on Tuesday vowing to reinvigorate American diplomacy and help the United States get “back our swagger.”Pompeo was greeted with cheers and applause as he entered the marbled lobby of the Harry S. Truman Building for the first time as America’s top diplomat and addressed a diplomatic corps left deeply dispirited by a tumultuous year under Tillerson, President Donald Trump’s first secretary of state. Pompeo described his mission as leading diplomats to execute Trump’s foreign policy “with incredible vigor and incredible energy.”“The United States diplomatic corps needs to be in every corner, every stretch of the world, executing missions on behalf of this country,” Pompeo said. “It is my humble, noble undertaking to help you achieve that.”He said he would spend “as little time” as possible cloistered in the secretary’s seventh-floor suite of offices, preferring to “get out” and interact directly with diplomats around the world, including humanitarian workers at the U.S. Agency for International Development.It was a subtle attempt to differentiate himself from Tillerson, who was infamous for surrounding himself with just a few close aides and eschewing the input of career diplomats, rank-and-file staffers and even U.S. lawmakers.And in another sign that Pompeo was pursuing a different approach than his predecessor, on his first day in the office he joined Twitter, a medium that Tillerson did not use. From the handle @SecPompeo, he tweeted his gratitude to Trump for naming him to the job.

Trump has all but decided to withdraw from Iran nuclear deal: sources (Reuters) - U.S. President Donald Trump has all but decided to withdraw from the 2015 Iran nuclear accord by May 12 but exactly how he will do so remains unclear, two White House officials and a source familiar with the administration’s internal debate said on Wednesday. There is a chance Trump might choose to keep the United States in the international pact under which Iran agreed to curb its nuclear program in return for sanctions relief, in part because of “alliance maintenance” with France and to save face for French President Emmanuel Macron, who met Trump last week and urged him to stay in, the source said. A decision by Trump to end U.S. sanctions relief would all but sink the agreement and could trigger a backlash by Iran, which could resume its nuclear arms program or “punish” U.S. allies in Syria, Iraq, Yemen and Lebanon, diplomats said. Technically, Trump must decide by May 12 whether to renew “waivers” suspending some of the U.S. sanctions on Iran. One of the White House officials who spoke on condition of anonymity said it was possible Trump will end up with a decision that “is not a full pullout” but was unable to describe what that might look like. A presentation by Israeli Prime Minister Benjamin Netanyahu on Monday about what he said was documentary evidence of Tehran’s past nuclear arms program could give Trump a fresh argument to withdraw, even though U.N. inspectors say Iran has complied with the terms of the deal. Iran has denied ever seeking nuclear weapons and accuses its arch-foe Israel of stirring up world suspicions against it.

Iran says will not renegotiate nuclear deal, warns against changes (Reuters) - Iran’s foreign minister said on Thursday U.S. demands to change its 2015 nuclear agreement with world powers were unacceptable as a deadline set by President Donald Trump for Europeans to “fix” the deal loomed. Trump has warned that unless European allies rectify the “terrible flaws” in the international accord by May 12, he will refuse to extend U.S. sanctions relief for the oil-producing Islamic Republic. “Iran will not renegotiate what was agreed years ago and has been implemented,” Foreign Minister Mohammad Javad Zarif said in a video message posted on YouTube. Britain, France and Germany remain committed to the accord as is, but now, in efforts to keep Washington in it, want to open talks on Iran’s ballistic missile program, its nuclear activities beyond 2025 - when key provisions of the deal expire - and its role in Middle East crises such as Syria and Yemen.   A senior adviser to Iranian Supreme Leader Ayatollah Ali Khamenei also warned Europeans on Thursday over “revising” the nuclear deal, under which Iran strictly limited its enrichment of uranium to help allay fears this could be put to producing atomic bomb material, and won major sanctions relief in return.  “Even if U.S. allies, especially the Europeans, try to revise the deal..., one of our options will be withdrawing from it,” state television quoted Ali Akbar Velayati as saying.  The European signatories to the deal have been trying to persuade Trump to save the pact, reached under his predecessor Barack Obama. They argue it is crucial to forestalling a destabilizing Middle East arms race and that Iran has been abiding by its terms, a position also taken by U.S. intelligence assessments and the U.N. nuclear watchdog agency.  Zarif said: “Let me make it absolutely clear and once and for all: we will neither outsource our security nor will we renegotiate or add onto a deal we have already implemented in good faith.”

Trump "All But Decided To Withdraw" From Iran Deal As IAEA Refutes Netanyahu Speech - Soon after Israeli Prime Minister Benjamin Netanyahu gave a televised address in which he unveiled a cache of 55,000 pages of documents and 183 CDs that he claimed comprised Iran's alleged "atomic archive" of documents on its nuclear program, supposedly proving the existence of an illegal and ongoing secret program to "test and build nuclear weapons" called Project Amad, the UN's atomic agency weighed in to directly negate the claims. But right on cue, Reuters now reports that "Trump has all but decided to withdraw from the 2015 Iran nuclear accord by May 12 but exactly how he will do so remains unclear, two White House officials and a source familiar with the administration’s internal debate said on Wednesday."On Tuesday, the International Atomic Energy Agency (IAEA) issued an assessment in response to Netanyahu's speech firmly asserting that there are "no credible indications" supporting Netanyahu's claims of a continued Iranian nuclear weapons program after 2009.According to the AP summary of the IAEA assessment:The U.N. nuclear agency says it believes that Iran had a “coordinated” nuclear weapons program in place before 2003, but found “no credible indications” of such work after 2009...The documents focused on Iranian activities before 2003 and did not provide any explicit evidence that Iran has violated its 2015 nuclear deal with the international community.The IAEA statements followed on the heels of a number of international Iran analysts weighing in to say there appeared "nothing new" in terms of "evidence" which Netanyahu confidently presented as if it were an open-and-shut bombshell revelation of Iranian malfeasance.Nothing really new in @netanyahu Iran speech. Confirms that Iran closed down nuclear weapons program in 2003. Continued technology efforts. In principle all of this well known. No allegation that Iran cheats on 2015 nuclear deal. — Carl Bildt (@carlbildt) April 30, 2018 One such specialist in an op-ed for the New York Times called the supposed Israeli Mossad intelligence haul a big "nuclear nothingburger" full of things already well-known to the world, with the further implication that the intelligence operation that netted the files itself appears hokey and untrustworthy.

Iran’s Secret Nukes? Scaremongering Netanyahu Strikes Again - Israel's timely You Tube gambit against Tehran would be frightening--if it were true. On Monday Israeli Prime Minister Benjamin Netanyahu delivered an alarming presentation, allegedly based upon hundreds of thousands of pages of documents and files, detailing an undeclared Iranian nuclear weapons program that Netanyahu claimed to have been recently acquired by Israeli intelligence. If true, the Israeli intelligence coup appears to have exposed a significant element of Iranian non-compliance with the so-called Iran nuclear agreement, formally known as the Joint Comprehensive Program of Action, or JCPOA, at a time when the very future of that agreement hangs in the balance.  On May 12 President Donald Trump is widely expected to announce a decision on whether the United States will remain as a state party of the Iran nuclear agreement. The president ran for office in 2016 on a campaign that derided the JCPOA as a “horrible deal”, and vowed to “rip it up” once he took office. Fulfilling this promise proved to be harder than expected.   Trump ran into resistance from Congress, his own cabinet (former National Security Advisor H. R. McMaster, former Secretary of State Rex Tillerson, and Secretary of Defense James Mattis consistently cautioned against pulling out of the agreement) and the other signatories to the JCPOA, all of whom pointed out that Iran was complying with the terms of the agreement and, as such, the agreement was working in so far as it blocked Iran’s pathway to a nuclear weapon. As a result, Trump was compelled to hold off on withdrawal while his administration struggled to find consensus. Consensus, as it was, was reached not by constructing a policy path that would allow the United States to remain in the JCPOA despite the president’s strong reservations, but rather by removing those in the president’s cabinet who did not support his policy on the Iran deal: McMaster was replaced by the noted Iran hawk, John Bolton, and Tillerson was ejected from the State Department and replaced by former CIA Director Mike Pompeo, who shares Trump’s position regarding the fate of the JCPOA.

UN Secretary General Warns Scrapping Iran Deal Could Lead To "World War III" - UN Secretary General Antonio Guterres offered a chilling message to the world during a recent interview with BBC Radio: The risk of "World War III" breaking out in the Middle East is intensifying at an alarming rate.As we've previously speculated, the combatants in the conflict that Guterres envisions would be the US, Israel and Saudi Arabia on one side, aided by some of their allies in Western Europe, and China, Russia and Iran on the other. What's worse, Guterres warned that the collapse of the Iran deal could be the catalyst for a military conflict that morphs into the next global confrontation. Unless the agreement is preserved, the world will likely descend into chaos, he said."The risks are there. I think we need to do everything to avoid those risks.""I believe the JCPOA was an important diplomatic victory and it is important to preserve it. I also believe there are areas in which it would be very important to have a meaningful dialogue because I see the region in a very dangerous position."  President Trump has the opportunity to avert this horrifying future, Gutteres said - all he would need to do is preserve the JCPOA until a better deal can be worked out. Perhaps the deal's signatories could work out something similar to the "four-part" supplementary agreement outlined by Emmanuel Macron  during a press conference with President Trump.Gutteres added that while he understands concerns about Iranian influence and the country's nuclear program, a reference to Israeli Prime Minister Benjamin Netanyahu's recent presentation about Iran's alleged attempts to conceal a nuclear weapons program, the Iran deal is an "important achievement" that should be preserved. "I understand the concerns of some countries in relation the Iranian influence in other countries of the region. I think we should separate things. I think that this agreement is an important achievement. If one day there is a better agreement to replace, it’s fine, but we should not scrap it unless we have a good alternative."

US Judge Orders Iran To Pay Billions To Families Of 9/11 Victims - Despite judge's ruling, official US report says Iran did not play a direct role in the attacks A US federal judge in New York ordered Iran to pay billions of dollars in damages to families affected by 9/11, ABC news reported on Tuesday. Judge George B Daniels found the country liable to more than 1,000 “parents, spouses, siblings and children” involved in the lawsuit. Daniels said the payment amounts to $12.5m per spouse, $8.5m per parent, $8.5m per child and $4.25m for each sibling, according to the ABC report.The lawsuit claims that Iran provided technical assistance, training and planning to the al-Qaeda operatives that conducted the attacks.However, the official investigation on the attacks, known as the 9/11 Commission Report, said that Iran did not play a direct role.In addition, there is no binding mechanism to force Iran to pay, making the judgment symbolic.The lawsuit is linked to a case filed against Saudi Arabia, which families of 9/11 victims say provided direct support for the attackers.Back in March, judge Daniels rejected Saudi Arabia's request to dismiss lawsuits accusing it of being involved in the attacks.The cases are based on the Justice Against Sponsors of Terrorism Act (Jasta), a 2016 law that provides an exemption to the legal principle of sovereign immunity, allowing families of the victims to take foreign governments to court.The families point to the fact that the majority of the hijackers were Saudi citizens, and claim that Saudi officials and institutions "aided and abetted" the attackers in the years leading up to the 9/11 attacks, according to court documents.The Saudi government has long denied involvement in the attacks in which hijacked planes crashed into New York's World Trade Center, the Pentagon outside Washington, DC, and a Pennsylvania field. Almost 3,000 people died. 

U.S. freezes funding for Syria’s “White Helmets” - Less than two months ago the State Department hosted members of the White Helmets at Foggy Bottom. At the time, the humanitarian group was showered with praise for saving lives in Syria. "Our meetings in March were very positive. There were even remarks from senior officials about long-term commitments even into 2020. There were no suggestions whatsoever about stopping support," Raed Saleh, the group's leader, told CBS News.Now they are not getting any U.S funding as the State Department says the support is "under active review." The U.S had accounted for about a third of the group's overall funding."This is a very worrisome development," said an official from the White Helmets. "Ultimately, this will negatively impact the humanitarian workers ability to save lives."The White Helmets, formally known as the Syrian Civil Defense, are a group of 3,000 volunteer rescuers that have saved thousands of lives since the Syrian civil war began in 2011. A makeshift 911, they have run into the collapsing buildings to pull children, men and women out of danger's way. They say they have saved more than 70,000 lives. Having not received U.S. funding in recent weeks, White Helmets are questioning what this means for the future. They have received no formal declaration from the U.S. government that the monetary assistance has come to a full halt, but the group's people on the ground in Syria report that their funds have been cut off. The group has an "emergency plan" if the funding is halted for one or two months -- but they are worried about the long-term freeze.

Pompeo’s Message to Saudis? Enough Is Enough: Stop Qatar Blockade - NYT - — As Saudi Arabia considers digging a moat along its border with Qatar and dumping nuclear waste nearby, Secretary of State Mike Pompeo arrived in Riyadh on his first overseas trip as the nation’s top diplomat with a simple message: Enough is enough.Patience with what is viewed in Washington as a petulant spat within the Gulf Cooperation Council has worn thin, and Mr. Pompeo told the Saudi Foreign Minister, Adel al-Jubeir, that the dispute needs to end, according to a senior State Department official who briefed reporters on the meetings but who was not authorized to be named. Last June, Saudi Arabia and the United Arab Emirates led an embargo by four Arab nations of Qatar, accusing the tiny, gas-rich nation of funding terrorism, cozying up to Iran and welcoming dissidents. Years of perceived slights on both sides of the conflict added to the bitterness.  Mr. Pompeo’s predecessor, Rex W. Tillerson, spent much of his tenure trying to mediate the dispute, which also involved Egypt and Bahrain, but without success. The Saudis, keen observers of Washington’s power dynamics, knew that Mr. Tillerson had a strained relationship with President Trump and so ignored him, particularly because Mr. Trump sided with the Saudis in the early days of the dispute. But Mr. Pompeo is closer to Mr. Trump and thus a more formidable figure. And in the nearly 11 months since the embargo began, Qatar has spent millions of dollars on a Washington charm offensive that paid off earlier this month when its leader, Emir Tamim bin Hamad al-Thani, had an Oval Office meeting with Mr. Trump during which the president expressed strong support for the tiny country.

Senate Bill To Ban F-35 Sales To Turkey An Unprecedented Attempt To Check Erdogan’s Actions -- A bipartisan bill introduced by Senators Lankford (R-OK), Tillis (R-NC), and Jeanne Shaheen (D-NH) would prevent the transfer of F-35s to Turkey and keep the country from establishing a maintenance depot for the stealth fighters. Turkey has been one of six prime F-35 partner nations since 2002 and one of its biggest customers, with 116 of the stealth fighters on order. Under this legislation, the White House would to certify that Ankara isn’t working to degrade NATO interoperability, exposing NATO assets to hostile actors, degrading the security of NATO member countries, seeking to import weapons from a foreign country under sanction by the U.S., and wrongfully or unlawfully detaining any American citizens.

Mattis: Criminal charges likely amid probe into intelligence contract - Defense Secretary James Mattis told lawmakers Thursday it’s probable that federal officials will file criminal charges as part of an ongoing investigation into a series of contracts the Army issued to help establish security forces in Iraq and Afghanistan.The contracts were supposed to be used to help those nations build their own intelligence gathering capabilities, but audits thus far have pointed to tens of millions of dollars in potential fraud connected to at least one vendor, including for luxury vehicles and six-figure salaries paid to its employees who performed no discernible work.The ongoing criminal investigation involves a series of agreements, beginning in 2007, that wound up costing $458 million.According to an audit the Special Inspector General for Afghanistan Reconstruction published in July, the lion’s share of those funds went to a single subcontractor, New Century Consulting (NCC). But SIGAR concluded that because of poor recordkeeping and a reliance on vendors to grade their own performance, it’s almost impossible to determine whether the contracts’ objectives were ever met. And new details from a separate audit appear to show NCC charged the government for at least $51 million in unsupportable expenses. That audit, performed by the Defense Contract Audit Agency (DCAA), reportedly found the bills DoD paid included high salaries for NCC employees and the purchase of Bentleys, Porsches, Aston Martins and other luxury cars for the company’s executives.

China prepares a hard-line stance on Trump’s trade demands --China will refuse to discuss President Trump's two toughest trade demands when American negotiators arrive in Beijing this week, people involved in Chinese policymaking say, potentially forcing Washington to escalate the dispute or back down. The Chinese government is publicly calling for flexibility on both sides. But senior Beijing officials do not plan to discuss the Trump administration's two biggest demands: a mandatory $100 billion cut in America's $375 billion annual trade deficit with China and curbs on Beijing's $300 billion plan to bankroll the country's industrial upgrade into advanced technologies such as artificial intelligence, semiconductors, electric cars and commercial aircraft. The reason: Beijing feels its economy has become big enough and resilient enough to stand up to the United States.A half-dozen senior Chinese officials and two dozen influential advisers laid out the Chinese government's position in detail during a three-day seminar that ended here late Monday morning. A handful of foreign writers were invited from around the world to make sure China's stance would be known overseas. All of the officials and most of the advisers at the seminar insisted on anonymity because of diplomatic sensitivities. It is not clear what will happen when the two sides sit down this week or whether either will find a reason to waver. Still, the Chinese and American positions are so far apart that China's leaders are skeptical a deal will be possible at the end of this week. They are already raising the possibility that Chinese officials may fly to Washington a month from now for further talks.

White House Pushes Beijing To Roll Back "Made In China 2025" Initiative - Just hours after the White House revealed that it had extended exemptions on aluminum and steel import tariffs from the European Union, Canada, Mexico and several other countries, Nikkei reported Tuesday evening that China has presented the Trump administration with a plan to boost imports of aircraft, semiconductors and natural gas from the US to try and reduce its massive trade surplus.However, Chinese officials are less enthusiastic about Washington's demands that it scrap its "Made in China 2025" initiative to bolster high-tech manufacturing in several key sectors.The report comes as Treasury Secretary Steven Mnuchin, top economic advisor Larry Kudlow, Trade Representative Robert Lighthizer, Commerce Secretary Wilbur Ross and Trump advisor Peter Navarro head to Beijing later this week for the first round of face-to-face talks to try and end the trade war. They will meet with senior Chinese officials including President Xi and Vice Premier Liu He, China's de facto economy czar.Since shortly after announcing his candidacy for office, President Trump has railed against the US-China trade deficit, declaring that it was tantamount to handing billions of dollars to the Chinese every year. The Trump administration's demands regarding "Made in China 2025" could become a potential sticking point, as Chinese officials have expressed reservations about scrapping one of President Xi's signature initiatives. The plan calls for building up 10 key high-tech areas of China's manufacturing sector, including industrial robots and semiconductors. "China increasingly threatens to dominate the industries of the future: artificial intelligence, autonomous vehicles, blockchain systems, robotics, high-tech ship manufacturing and more," White House trade adviser Peter Navarro wrote in the Wall Street Journal last month. "Death by China" author Navarro, who thinks the country's rise in high-tech manufacturing could lead to a military clash, was an influential voice behind the tariffs in response to alleged Chinese intellectual property abuses. Navarro will accompany Mnuchin and the others to China this week. The U.S. wants Beijing to scrap the Made in China 2025 plan, a diplomatic source said.

Chinese state media has a message for the US ahead of trade talk in Beijing --Ahead of a meeting between officials from the world's two largest economies to iron out their trade tensions, state-owned Chinese media has one message for the American delegates: Don't expect China to give into all of your demand."Washington had better not expect that its trade-war stick will force Beijing to take whatever the US delegation offers. The imminent dialogue must be held on an equal footing and the US delegation has to come with sincerity," said a Global Times editorial published on Wednesday. The meeting is s cheduled to take place on Thursday and Friday inBeijing, after tensions between the two economic giants intensified in recent months with both sides threatening to impose additional tariffs on each other's products.The U.S. is sending a high-level delegation to Beijing for the talks, including Treasury Secretary Steve Mnuchin, Commerce Secretary Wilbur Ross, Trade Representative Robert Lighthizer and National Economic Council Director Larry Kudlow, the Global Times said.China has also lined up some of its heavyweight officials to meet the U.S. team, including President Xi Jinping, Vice President Wang Qishan and Xi's top economic adviser Liu He, The Wall Street Journal reported."The composition of the US delegation indicates the importance Washington attaches to China-US trade. We hope this can also be shown in how flexible the delegation will be in negotiations. China won't abandon its principles despite pressure," the Global Times said.The U.S., under President Donald Trump, has repeatedly decried Chinese practices which it has called unfair and blamed for worsening the trade balance between the two countries. Trump has also accused China of stealing intellectual property from American companies.

Mnuchin not worried about China retaliating on trade by dumping US Treasuries- China hasn't ruled out using its status as America's biggest foreign creditor as leverage in the fight over trade. But Steven Mnuchin isn't concerned. "Plenty of people can buy our Treasuries," the US Treasury secretary said in an interview with CNN's Cristina Alesci on Monday at the Milken Institute's annual conference. Treasury securities are "among the most liquid in the world," he said, adding that the market for US bonds is "robust." In March, the Chinese ambassador to the United States kept open the option of scaling back purchases of US debt in the event of a trade war. "We are looking at all options," Cui Tiankai told Bloomberg Television at the time. China is the largest foreign US bond holder with $1.18 trillion in holdings. It's not certain that China would actually dump US debt. Experts say such a move could bring unwanted consequences for the Chinese government, including reducing the value of the bonds it holds on to and even destabilizing its currency against the dollar. However, the issue could come up later this week when Mnuchin heads to Beijing for trade meetings with government officials. Mnuchin said that the US team plans to address the trade deficit, as well as a number of issues related to intellectual property theft. But he avoided showing his hand ahead of the negotiations.

It appears China has stopped buying soybeans from the US altogether because of trade fight CNBC --China is apparently no longer buying U.S. soybeans amid the rise in trade tensions, Bloomberg reported Wednesday. "Whatever they're buying is non-U.S.," Soren Schroder, CEO of New York-based Bunge, the world's largest oilseeds processor, told the news outlet in a phone interview. "They're buying beans in Canada, in Brazil, mostly Brazil, but very deliberately not buying anything from the U.S." A Bunge representative did not immediately respond to a CNBC request for comment. China canceled a net 62,690 metric tons of U.S. soybean purchases in the two weeks ended April 19, the Bloomberg article pointed out, citing USDA data for the current marketing year.  Soybean futures fell 1 percent Wednesday, but are up 8 percent on the year.  In response to the Trump administration's proposed tariffs on $50 billion worth of Chinese imports, China's Ministry of Commerce announced duties in early April on 106 U.S. products, including soybeans. No effective date was announced at the time.  China is the second-largest market for U.S. agricultural exports, and soybeans have historically been one of the top products sold to the Asian country, according to the U.S. Department of Agriculture Foreign Agricultural Service.

Bean Ban Blowback: Bunge CEO "China Deliberately Not Buying US Products" - In its trade dispute with the US, started by Trump, China is deliberately not buying US products.Bunge Ltd. CEO Soren Schroder told Bloomberg on Wednesday China has essentially stopped buying U.S. supplies amid the brewing trade war. Bunge is the world’s biggest oilseed processor.“They’re buying beans in Canada, in Brazil, mostly Brazil, but very deliberately not buying anything from the U.S.” It’s “very clear” that the trade tensions have already stopped China from buying U.S. supplies, Schroder said. “How long that will last, who knows? But so long as there is this big cloud of uncertainty, that’s likely to continue.” Bunge has still been able to meet Chinese demand by filling shipments with supplies from outside the U.S., Schroder said. The White Plains, New York-based company has a large presence in South America. The futures symbol for soybeans is "ZS". A chart shows the price of soybeans peaked in summer of 2012 near $1790. Since bottoming in September of 2014, the price has mostly flatlined between $900 and $1,050.It appears that the lack of Chinese buying US soybeans has neither hurt nor helped US farmers. But the dispute not done a damn thing for the deficit either.At best, China's soybean retaliation has made the US the deficit with China worse while improving it by the same degree elsewhere.President Trump is playing with fire. He has started a trade war on multiple front simultaneously: China, the EU, NAFTA (Canada and Mexico).Nothing good can possibly come from this. For

China Warns Trump "We Will Outlast You" As US "Significantly Escalates" Trade War -  Beijing sent the first messaging salvo ahead of the Steven Mnuchin-led delegation to China (which will engage in trade talks over May 3-4) overnight when the PBOC fixed the yuan sharply lower than many expected. The signal was clear: push us hard enough, and we may just launch another devaluation. Or worse.A little while later, Beijing did its best attempt at managing expectations, when it said that it’s "unrealistic" to expect to solve all issues between the U.S. and China at a single meeting, given the economic sizes of the two countries and their complex economic and trade relationship, foreign ministry spokeswoman Hua Chunying says at daily briefing.While Hua tried his best to pay the diplomatic "good cop", saying it was in the mutual interest of both countries to solve trade issues through consultation, just a few hours later, China's foreign minister Wang Yi was the bad cop, who warned that whereas China would welcome a successful outcome from upcoming trade talks with the United States, it  is "fully prepared for all outcomes and will not negotiate on core interests."Then the "worst cop" emerged in the form of yet another, unnamed official who according to Reuters said that talks must be held as equals and be mutually beneficial, echoing EU president Jean-Claude Juncker, saying that Beijing would not yield to any trade threats from Washington or accept any preconditions for talks. He then uttered the most explicit warning yet: "In the event of a trade war, we have a much greater ability to endure (the consequences) than the U.S.," the official said.As a reminder, the United States has asked China to reduce its bilateral trade surplus by $100 billion and as reported last night, targeted Beijing's "Made in China 2025" initiative, which aims to upgrade the domestic manufacturing base with more advanced products. China - which last year had a record trade surplus of $375 billion with the United States - responded that Beijing would not accept talks with any preconditions.

Concerns grow as Team Trump kicks off trade talks with China | Asia Times: In a blunt warning, the European Union has called on the United States and China to avoid a trade war as high-level talks began in Beijing on Thursday. The executive arm of the EU underlined the importance of a deal in a brief communique. Delivered by Pierre Moscovici, who heads the Economic and Financial Affairs department of the European Commission, it read: “Europe continues to enjoy robust growth, which has helped drive unemployment to a 10-year low. “Investment is rising and public finances are improving, with the deficit in the euro area set to drop to just 0.7% of GDP [gross domestic product] this year. “The biggest risk to this rosy outlook is protectionism, which must not become the new normal: that would only hurt those of our citizens we most need to protect.” With 28-member countries and a combined population of 510 million, the EU has waded into the controversy after hopes of finding a quick fix to the US-China trade row appeared to be fading. At stake are punitive taxes on billions of dollars of American and Chinese goods, which, if ratified, could derail global economic growth. During the past month, the US President Donald Trump has threatened to levy new tariffs on US$150 billion of Chinese imports, while Beijing has so far retaliated with a list of $50 billion in targeted products.  “It is not realistic to resolve all issues through only one round of negotiations, but we believe that, as long as the US is sincere to resolve the relevant issues, the negotiation will be a positive one,” Hua Chunying, a spokeswoman for China’s Foreign Ministry, told a news briefing on the eve of the summit. In Washington, Trump put his cards on the table through his favorite social media site, Twitter.

US Farmers Choke On Trade War With China - In April we told you about how some of the "unintended consequences" of Trump's steel tariffs, such as an Illinois farmer who put the brakes on a $71,000 grain mill, but had to hold off on the purchase because the seller raised the price 5% to account for the rising price of steel, or Iowa grain mill producer Sukup Manufacturing, which had to hike their prices for grain storage bins. The Wall Street Journal now reports that the US-China "trade spat" is now affecting US exporters of soybeans, pork and other commodities. Since early April, when China announced tariffs on some U.S. agricultural goods and threatened to target others, Chinese importers have canceled purchases of corn and cut orders for pork while dramatically reducing new soybean purchases, according to U.S. Department of Agriculture data. Chinese importers’ new orders of sorghum, a grain used in animal feed, have dwindled while cancellations increased.The chill in agricultural trade is sending jitters through the U.S. Farm Belt, which for years has dispatched farmers on trade missions to cultivate the Chinese market. –WSJ “As the summer persists and if nothing’s been resolved, it will start showing up as a pretty big hole in U.S. exports,” warned Soren Schroder, CEO of Bunge Ltd., one of the world’s largest soybean processors and traders.Last Thursday, a ship bound for China carrying over 58,000 tons of American sorghum was diverted to South Korea after Beijing said it would levy a hefty deposit on U.S. shipments of the grain amid an anti-dumping probe.Importers now facing losses of millions of dollars on their cargoes are trying to resell the grain to buyers elsewhere but are being forced to offer steep discounts. Four cargoes have been resold to Saudi Arabia and Japan, and another is heading to Spain. If the ‘Peak Pegasus’ unloads in South Korea, it would be first of the Chinese cargoes to be resold in that country. –Reuters    US officials including Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer are meeting with Chinese officials in Beijing this week for negotiations. That said, even if they reach an agreement, the uncertainty created by the threatened tariffs has already done quite a lot of damage in the commodities sector.

Here's What the U.S., China Demanded of Each Other on Trade  - The U.S. and China issued long lists of demands at talks in Beijing this week to resolve the simmering trade dispute between the world’s two biggest economies. In a document entitled “Balancing the Trade Relationship,” seen by Bloomberg News, the U.S. divided its demands into eight sections, ranging from trade-deficit reduction to tariff barriers to implementation. Here’s a synopsis of the U.S. requests, which were presented to China at the outset of the talks:

U.S. seeks $200 bln cut in China trade imbalance” --  The U.S. handed China a lengthy list of demands on trade, ranging from immediately cutting a trade imbalance by $100 billion a year to halting all Chinese government support for advanced technologies, according to a document sent to Beijing before talks this week. The U.S.-China trade relationship is "significantly imbalanced," said the document, which was reviewed by The Wall Street Journal. It noted that U.S. investment and sales of services into China remain "severely constrained" and added that China's industrial policies "pose significant economic and security concerns" to the U.S. Chinese officials believed the proposal was "unfair," according to people with knowledge of the negotiations Thursday and Friday. U.S. officials declined to comment on the document. The document was given to Chinese officials in advance of the talks, which have taken place at the government's Diaoyutai Guesthouse complex in western Beijing. To address the trade relationship, the U.S. document offered an eight-point plan to Beijing and called for China to change its policies within a year or two. It also said the U.S. was ready to negotiate on the proposals. The first U.S. request was for China to reduce the bilateral trade deficit by at least $200 billion by the end of 2020. The U.S.-China bilateral deficit in goods was $375 billion last year. President Donald Trump has repeatedly said he wants China to slash the figure by $100 billion a year. The U.S. also demanded that China immediately stop providing subsidies and other assistance for advanced technologies outlined in the government's Made in China 2025 plan. The initiative aims for China to dominate future frontiers of manufacturing and industry, from robotics and aviation to new-energy vehicles. The U.S. also asked China to cut tariffs on "all products in non-critical sectors" to levels that are no higher than the levels that the U.S. applies to imports, according to the document. In addition, the U.S. also asked China to guarantee that it won't hit back at the U.S. for any actions taken in the disputes over intellectual property. It also asked that China withdraw its challenges in this area at the World Trade Organization.

US-China Trade Talks End Without A Deal After Trump Hikes Deficit Cut Demand - Moments ago, the US trade delegation led by Treasury Sec. Steven Mnuchin, and which included Commerce Sec. Wilbur Ross, US Trade Rep. Robert Lighthizer, and White House trade adviser Peter Navarro, left China after two days of U.S.-China trade discussions ended on Friday without a concrete deal, only an agreement to keep on talking. On Friday afternoon, China’s official Xinhua News Agency reported that both sides reached a consensus on some trade issues, without providing details. More importantly, they acknowledged major disagreements on some matters and will continue communicating to work toward making more progress. US Treasury secretary Steven Mnuchin (centre) and US Commerce Secretary Wilbur Ross (second from right) walk through a hotel lobby as they head to Diaoyutai state guest house to meet Chinese officials in Beijing  The biggest surprise, according to the FT, is that heading into the talks the US delegation asked China to cut the bilateral trade deficit by $200BN by 2020, reduce tariffs and cut subsidies for emerging industries, according to a document seen by the Financial Times. The surprise is that the revised $200BN target is already double the $100BN amount that President Trump demanded just two months ago be wiped from last year’s $337BN US deficit in goods and services. According to the document, the US aimed to cut the deficit by $100bn in the year beginning June 1, and by a further $100bn between June 2019 and May 2020. Some more details on the list of US demands from the WSJ:

  • The first U.S. request was for China to reduce the bilateral trade deficit by at least $200 billion by the end of 2020. The U.S.-China bilateral deficit in goods was $375 billion last year. President Donald Trump has repeatedly said he wants China to slash the figure by $100 billion a year.
  • The U.S. also demanded that China immediately stop providing subsidies and other assistance for advanced technologies outlined in the government’s Made in China 2025 plan. The initiative aims for China to dominate future frontiers of manufacturing and industry, from robotics and aviation to new-energy vehicles.
  • The U.S. also asked China to cut tariffs on “all products in non-critical sectors” to levels that are no higher than the levels that the U.S. applies to imports, according to the document.
  • In addition, the U.S. also asked China to guarantee that it won’t hit back at the U.S. for any actions taken in the disputes over intellectual property. It also asked that China withdraw its challenges in this area at the World Trade Organization.
  • Chinese officials believed the proposal was “unfair”

By early afternoon Friday neither side had flagged plans to give a briefing on the discussions, and the American team departed shortly after. According to Bloomberg, earlier in the day Mnuchin said that the U.S. and China had been having a “very good conversation,” without elaborating. While China hasn’t indicated any detail on what it may be prepared to agree to, a senior official sounded a defiant tone ahead of the meeting, and the state news agency warned against “unreasonable demands”, a stark difference to the CNN rumor released on Thursday that the deals would be successful, and which sent the market soaring.

    US Trade Delegation Issues Statement On China Talks After Leaking "Aggressive" Position Memo - While the US trade delegation led by Steven Mnuchin that just spent two days in Beijing to achieve nothing, is currently somewhere over the Pacific on its way back to the States, that did not prevent it from issuing an official statement on the event that, until earlier this morning, was the biggest potential upside catalyst for today's market: the status of US-China trade talks.In the statement, the Mnuchin-led group said "U.S. trade officials had candid trade discussions with their Chinese counterparts" and added that President Donald Trump will decide the next steps.This is what it said.  Statement on the United States Trade Delegation's Visit to Beijing   At the invitation of Vice Premier Liu He and at the direction of President Donald J. Trump, the United States trade delegation, led by Secretary of the Treasury Steven Mnuchin and including Secretary of Commerce Wilbur Ross, U.S. Trade Representative Robert Lighthizer, Assistant to the President for Economic Policy Larry Kudlow, and Assistant to the President for Trade and Manufacturing Policy Peter Navarro, traveled to Beijing, and was joined there by Ambassador Terry Branstad.The delegation held frank discussions with Chinese officials on rebalancing the United States-China bilateral economic relationship, improving China's protection of intellectual property, and identifying policies that unfairly enforce technology transfers. The United States delegation affirmed that fair trade will lead to faster growth for the Chinese, United States, and world economies.The size and high level of this delegation illustrates the importance that the Trump Administration places on securing fair trade and investment terms for American businesses and workers. There is consensus within the Administration that immediate attention is needed to bring changes to United States-China trade and investment relationship. The delegation now returns to Washington, D.C., to brief the President and seek his decision on next steps.

    China-US trade: a long-term battle of system versus system | Asia Times - Donald Trump’s economic heavy hitters including US Treasury Secretary Steve Mnuchin, along with US Trade Representative Robert Lighthizer, Commerce Secretary Wilbur Ross, White House trade adviser Peter Navarro, and National Economic Council head Larry Kudlow, have just wrapped up meetings held in Beijing this week. The currently dysfunctional US-China trade and economic relationship was long in the making and is the handiwork of successive administrations – with an assist from many an American CEO. This long-term situation indicates that shuttle diplomacy and a magic formula of sanctions and tariffs on the US side, or “market opening measures” on the Chinese side, won’t fix things – no matter how this week’s talks were spun. “By the very nature and mission of the CPC, there is nothing in their self-view, national view or worldview that will allow an acceptable behavioral change. The very nature of China, plus the addition of a CPC regime, is driving what is becoming a permanent state of contention with the US. America will never have the ‘normal’ relationship with China that it is has with most other nations. ‘It tears at America’s psyche that our relationship with one nation should be different from our relationship with all the rest. The CPC has accepted this reality. The US has not’   So far, the CPC has taken full advantage – to their decisive competitive advantage. “This is not Chinese skulduggery but America’s inability to understand China … or in reverse, our ability to misunderstand China by assigning our own cultural expectations on what they should be, or will be, with our understanding, patience, largesse and engagement. “There is nothing the CPC can do, by its very nature, to materially ‘open up’ China to American business that would be considered an acceptable outcome to the US. China’s learning to live with high import duties for Chinese goods entering the US, and restrictions on Chinese investment in the US would be an acceptable ‘present’ condition. “American understanding of who the CPC is, how they manage China and their objective to eventually displace American capitalism and global influence, is really the precursor to arriving at an acceptable outcome with the CPC.” 

    U.S. says will be consequences for China's South China Sea militarization (Reuters) - The United States has raised concerns with China about its latest militarization of the South China Sea and there will be near-term and long-term consequences, the White House said on Thursday. U.S. news network CNBC reported on Wednesday that China had installed anti-ship cruise missiles and surface-to-air missile systems on three manmade outposts in the South China Sea. It cited sources with direct knowledge of U.S. intelligence. Asked about the report, White House spokeswoman Sarah Sanders told a regular news briefing: “We’re well aware of China’s militarization of the South China Sea. We’ve raised concerns directly with the Chinese about this and there will be near-term and long-term consequences.” Sanders did not say what the consequences might be. A U.S. official, speaking on condition of anonymity, said U.S. intelligence had seen some signs that China had moved some weapons systems to its artificial islands in the Spratly archipelago in the past month or so, but offered no details. CNBC quoted unnamed sources as saying that according to U.S. intelligence assessments, the missiles were moved to the Spratlys within the past 30 days to Fiery Cross Reef, Subi Reef and also Mischief Reef, which is 216 km (135 miles) from the Philippines, well within Manila’s Exclusive Economic Zone. They would be the first Chinese missile deployments in the Spratlys, where Vietnam, the Philippines, Malaysia and Brunei have rival claims. China’s defense ministry did not respond to a request for comment. Its foreign ministry said China has irrefutable sovereignty over the Spratlys and that necessary defensive deployments were for national security needs and not aimed at any country. “Those who do not intend to be aggressive have no need to be worried or scared,” ministry spokeswoman Hua Chunying said.

    Rising Bilateral Deficit with China, Negotiations Over China 2025 - Brad Setser The U.S. trade deficit fell in March, for the first time in several months. That’s not really a surprise—the monthly data bounces around a lot, especially in the first quarter (the lunar new year distortion is now global) and the advance trade data had hinted at a lower deficit in March. It is too early to tell if this really represents a break in the widening of the (non-oil) goods deficit that started in q4 2017, or it is just an interruption in the trend. I would bet, given the size of the increase in the fiscal deficit and the dollar’s recent strengthening, that the improvement doesn’t last. The U.S. savings and investment fundamentals point toward a bigger not a smaller deficit over time. The bilateral deficit with China also narrowed in March, though it’s likely a lagged lunar New Year effect. China’s exports were  down year-over-year in March, so it figures that U.S. imports dipped too.  But the basic trend in the bilateral balance over the past few months has been clear—the bilateral deficit is now rising at a reasonably rapid clip. U.S. consumer goods imports picked up in late 17, and China’s overall import growth has slowed over the last year as China started to tighten policy. That shows up in the year-over-year export and import growth numbers—U.S. imports from China are now clearly growing faster than U.S. exports to China. U.S. imports from China were up 13.5 percent in q1, while exports to China were up 8.5 percent (exports to China and Hong Kong combined were up only 4.5 percent, and I think that is the best measure). With a lot more imports than exports and faster growth in imports than exports, the bilateral (goods) deficit is growing fast. It increased by $25 to $30 billion in 2017 (it depends a bit on whether you use the balance of payments data or the customs data, and on whether or not Hong Kong is included), and is poised to grow by a similar amount, if not more, in 2018. A linear extrapolation based on q1 import and export growth rates would put the bilateral deficit up close to $50 billion.I suspect China’s leaders have done this math too. It isn’t rocket science.* Cutting the bilateral deficit by the $100 billion Trump has demanded is likely a shift tof $125 to $150 billion relative to trend, as the bilateral balance is clearly rising now. So it isn’t a surprise that China has rejected this demand. It wouldn’t even be possible if Apple joined Samsung and started to assemble (or hire contract manufacturers to assemble) the bulk of its smart phones in Vietnam (probably the easiest way to shift the bilateral balance around). China’s leaders have also have indicated that Made in China 2025 is non-negotiable. China has a right to seek to catch-up technologically and all. TheWall Street Journal reports that Yang Weimin, an economic advisor to President Xi, said: “It’s unreasonable to only let China produce T-shirts and the U.S. produce high-tech.” Fair enough, though if Yang Wiemin thinks China only produces t-shirts now he is fifteen years out of date.

     "We Won't Talk With A Gun Pointed To Our Head": Europe Braces For Trade War With The US --With just days left until the May 1 deadline when a temporary trade waiver expires and the US steel and aluminum tariffs kick in, and after last-ditch attempts first by Emmanuel Macron and then Angela Merkel to win exemptions for Europe fell on deaf ears, the European Union is warning about the costs of an imminent trade war with the US while bracing for one to erupt in just three days after the White House signaled it will reject the bloc’s demand for an unconditional waiver from metals-import tariffs."A trade war is a losing game for everybody,” Belgian Finance Minister Johan Van Overtveldt told reporters in Sofia where Europe's finance ministers have gathered. “We should stay cool when we’re thinking about reactions but the basic point is that nobody wins in a trade war so we try to avoid it at all costs."Well, Trump disagrees which is why his administration has given Europe, Canada and other allies an option: accept quotas in exchange for an exemption from the steel and aluminum tariffs that kick on Tuesday, when the temporary waiver expires. "We are asking of everyone: quotas if not tariffs,” Commerce Secretary Wilbur Ross said on Friday. This, as Bloomberg points out, puts the EU in the difficult position of either succumbing to U.S. demands that could breach international commerce rules, or face punitive tariffs.Forcing governments to limit shipments of goods violates World Trade Organization rules, which prohibit so-called voluntary export restraints. The demand is also contrary to the entire trade philosophy of the 28-nation bloc, which is founded on the principle of the free movement of goods. Adding to the confusion, while WTO rules foresee the possibility of countries taking emergency “safeguard” measures involving import quotas for specific goods, such steps are rare, must be temporary and can be legally challenged. The EU is demanding a permanent, unconditional waiver from the U.S. tariffs. Meanwhile, amid the impotent EU bluster, so far only South Korea has been formally spared from the duties, after reaching a deal last month to revise its bilateral free-trade agreement with the U.S.

    EU's Juncker Demands "Unconditional, Permanent" US Tariff Exemptions (And A Pony?) European Commission President Jean-Claude Juncker wants his cake and to eat it too.. .. Addressing the EU Parliament, Reuters reports that Juncker said he will not accept threats in talks with the United States to secure a permanent exemption from U.S. import tariffs on steel and aluminum.“I would like to reiterate the call that this exemption be made unconditional and permanent.We consider that the U.S. measures cannot be justified on the basis of national security...We will continue our negotiations with the United States, but we refuse to negotiate under threat."That's it? So, despite widely divergent tariffs on various products (to the detriment of US consumers), the EU emperor wants Trump to acquiesce to no tariffs, no conditions, forever...

    Trump delays metal tariffs on Canada, EU, Mexico, exempts some others (Reuters) - U.S. President Donald Trump has postponed the imposition of steel and aluminum tariffs on Canada, the European Union and Mexico until June 1, and has reached agreements for permanent exemptions for Argentina, Australia and Brazil, the White House said on Monday. The decisions came just hours before temporary exemptions from the tariffs on these countries were set to expire at 12:01 a.m. (0401 GMT) on Tuesday. In a statement, the White House said the details of the deals with Brazil, Argentina and Australia would be finalized shortly, and it did not disclose terms. “The administration is also extending negotiations with Canada, Mexico, and the European Union for a final 30 days. In all of these negotiations, the administration is focused on quotas that will restrain imports, prevent transshipment, and protect the national security,” the White House added. A source familiar with the decision said there would be no further extensions beyond June 1 to stave off tariffs. Trump on March 23 imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminum, but granted temporary exemptions to Canada, Mexico, Brazil, the EU, Australia and Argentina. Trump has also granted a permanent exemption on steel tariffs to South Korea as part of a revision of a free trade pact that he sharply criticized. Trump has invoked a 1962 trade law to erect protections for U.S. steel and aluminum producers on national security grounds, amid a worldwide glut of both metals that is largely blamed on excess production in China. The tariffs, which have increased frictions with U.S. trading partners worldwide and have prompted several challenges before the World Trade Organization, are aimed at allowing the two U.S. metals industries to increase their capacity utilization rates above 80 percent for the first time in years. 

    Trump Postpones Steel Tariff Decision for EU, Other U.S Allies  —President Donald Trump eased trade pressure on top U.S. allies Monday, giving the European Union and some nations outside the bloc more time to negotiate deals that would exempt them from U.S. steel and aluminum tariffs. The White House said broad tariffs of 25% on steel and 10% on aluminum—already in effect against China, Russia, Japan and others—won’t take effect for the EU Tuesday as previously planned. Instead, Europe will have an additional month to keep talking with the U.S. about a new pact to avoid the tariffs. As expected, Canada and Mexico were given an extension, also until June 1, while talks about rewriting the North American Free Trade Agreement proceed. The White House said it has agreements in principle with Argentina, Brazil and Australia to avoid the tariffs. While the details haven’t been finalized, the countries have agreed to quotas, and their exports won’t face U.S. duties on Tuesday, a senior administration official said. The Trump administration is backing broad restrictions on the trade of metals to limit the direct and indirect effects of Chinese steel and aluminum production on the U.S. market. “In all of these negotiations, the administration is focused on quotas that will restrain imports, prevent transshipment, and protect the national security,” the White House said in a statement. Top Trump administration trade officials met with the president late Monday afternoon to decide on a course of action as a self-imposed midnight deadline approached, with some allies uncertain until the last minute about which direction the U.S. would choose. Uncertainty was especially heightened for the EU. French President Emmanuel Macron and German Chancellor Angela Merkel both made personal visits to the White House last week but left without visible assurances or concessions on trans-Atlantic trade issues. “The decision lies with the president,” Ms. Merkel said in a press conference with Mr. Trump. Following through on threats to impose tariffs would have escalated tensions between the U.S. and its European allies at a moment when other high-stakes discussions were under way on the Iran nuclear deal, U.S. sanctions against Russia, how to confront economic challenges from China and other issues. A spokesman for the EU had no immediate comment Monday evening.

    EU slams Trump for short delay on steel tariffs - The EU today criticized U.S. President Donald Trump for only delaying the imposition of steel and aluminum tariffs until June 1 rather than canceling the duties outright. “The U.S. decision prolongs market uncertainty, which is already affecting business decisions,” the European Commission said in a statement. Brussels also voiced frustration that Trump has continued to target European producers rather than teaming up to form a united front against overcapacity in Chinese steel mills. “Overcapacity in the steel and aluminum sectors does not originate in the EU. On the contrary, the EU has over the past months engaged at all possible levels with the U.S. and other partners to find a solution to this issue,” the statement continued. Trump often complains that EU policies are highly protectionist and unfairly discriminate against U.S. farmers and carmakers. The EU reiterated that it is willing to negotiate over these kind of complaints, but only if Trump scraps his tariffs. “The EU has also consistently indicated its willingness to discuss current market access issues of interest to both sides, but has also made clear that, as a longstanding partner and friend of the U.S., we will not negotiate under threat,” the statement said.

    Canada pushes for permanent tariff exemption; industry worried (Reuters) - Canada will push for a permanent exemption from U.S. steel and aluminum tariffs but the U.S. administration’s decision to postpone them is a “step forward”, Canadian Foreign Minister Chrystia Freeland said on Tuesday. Canada has argued that the tariffs, which had been set to go into effect on Tuesday, would hurt jobs in both countries. The Trump administration said on Monday that the 25 percent tariff on steel imports and 10 percent tariff on aluminum imports from Canada and Mexico would be suspended until June 1. “Last night’s decision is certainly a step forward,” said Freeland to reporters. “Canada will continue to work for a full and permanent exemption.” Freeland said it is “inconceivable” that Canada could threaten U.S. national security. The tariffs are based on a 1962 U.S. law that allows safeguards based on “national security.” Speaking on Monday before the delay announcement, Canadian Prime Minister Justin Trudeau said the tariffs were a “very bad idea” guaranteed to disrupt trade between the two nations. The tariffs, as well as Trump’s insistence that Canada and other nations accept the idea of import quotas, look set to further complicate slow-moving talks to update the North American Free Trade Agreement. The influential auto lobbies in Canada and Mexico are upset by new U.S. proposals for increasing NAFTA’s regional content for vehicles produced in the three member nations of the 1994 trade pact. The Aluminium Association of Canada on Tuesday said the U.S. move to put off a decision would only increase uncertainty affecting the industry worldwide. “Nothing less than a permanent and total exemption is required as soon as possible,” Jean Simard, the association’s president, said in a statement.

    Trump Trade Chief Wants Nafta Deal by Mid-May – WSJ —President Donald Trump’s top trade official wants to finish a renegotiation of the North American Free Trade Agreement by the middle of the month to get a revised pact to a vote in Congress by the end of this year. U.S. Trade Representative Robert Lighthizer told a gathering at the U.S. Chamber of Commerce on Tuesday that he hoped to strike a deal with his Canadian and Mexican counterparts within a week or two after high-level talks resume next week. He said a delay beyond that time frame risked “having a problem” in getting the new Nafta to a vote in Congress this year, he said. The Trump administration is eager to get a revised Nafta to the House and Senate before January. A large number of House Republicans are set to retire at the end of the year. If the Democrats win control of the House in what is expected to be a tough election year for the GOP, they could block efforts to enact Nafta or other parts of Mr. Trump’s agenda. “The new Congress will have its own priorities, and if they’re substantially different, they’re not going to be happy with whatever we do, in my opinion, because it was negotiated with a lot of input from the previous Congress,” Mr. Lighthizer said. To get a new Nafta to a vote, the Trump administration is following the rules of 2015 trade legislation known as fast track, or trade promotion authority, which allows for expedited congressional consideration of trade agreements struck by the executive branch. But under the fast track process, a deal reached after mid-May has a lower chance of reaching Congress this year, according to congressional aides following the talks. Many Democrats have applauded Mr. Lighthizer’s efforts to introduce new Nafta rules to boost domestic production, disadvantage foreign supply chains and weaken dispute-settlement procedures favored by international businesses. Many Republicans have been skeptical of the administration’s approach, preferring a modernization of the pact that focuses on newer technologies and intellectual-property rules.

    U.S. cuts off Brazil tariff talks, adopts steel import quotas (Reuters) - Brazil on Wednesday contradicted a United States announcement that the two countries had reached a deal on a permanent exemption from steel and aluminum import tariffs, saying the Trump administration had unilaterally cut off talks. Representatives for Brazil’s industry decried U.S. negotiation tactics, which the head of the association for aluminum producers, Milton Rego, called “Al Capone-like.” “You get better results by pointing a gun to the head,” he said. Under a new quota-based system, exports of Brazilian steel to the United States fall by around a fifth, dealing a blow to a key sector already grappling with widespread idle capacity and excessive global supply. The White House said on Monday that it had reached agreements for permanent exemptions on steel and aluminum for Brazil, Argentina and Australia, and that the details of the deals would be finalized shortly. It gave no details of the terms. Brazil’s foreign and trade ministries said on Wednesday the U.S. government had called off talks on April 26 after giving Brazil the option of picking between tariffs or quotas. Brazil’s aluminum industry opted for 10 percent import tariffs, while the steel industry opted for an imports quota system, the statement said. 

    Marco Rubio Says Republican Tax Plan Helps Corporations, Not U.S. Workers --  Florida Senator Marco Rubio, a contender for the Republican presidential nomination in 2016, voted with his party for the tax cuts late last year, though he warned that they would not create the dramatic economic growth his party was hoping for. Still, as recently as April 16th, he was happily repeating GOP talking points. "I want to thank you for fighting for the American worker," Rubio said with President Donald Trump and local business leaders at a panel discussion at the time. "And they've been beat up and ignored for far too long. Whether it's taxes, whether it's jobs sent to other countries, this tax reform is about them." Now, less than two weeks later, he’s saying the plan was a handout to large corporations, and did not benefit American taxpayers. In an interview with The Economist published Friday, Rubio said the trickle down economics that the tax plan relied on hadn’t worked. “There is still a lot of thinking on the right that if big corporations are happy, they’re going to take the money they’re saving and reinvest it in American workers,” he said. “In fact they bought back shares, a few gave out bonuses; there’s no evidence whatsoever that the money’s been massively poured back into the American worker.” Rubio said the plan placed value on automation over jobs for American workers. “I have no problem with bringing back American car-manufacturing facilities, but, whether they’re American robots or Mexican robots, they’re going to be highly automated,” he said. “My relatives are firefighters and nurses and teachers and electricians. These are people who are not all that excited about the new economy.”

    Marco Rubio Accidentally Admits Republican Tax Cuts Only Worked for the Rich  --Senator Marco Rubio (R-Florida) just accidentally let it slip that the tax cuts Republicans passed last December were only beneficial for the rich. In a recent interview with The Economist, Sen. Rubio expressed an open dislike of the supply-side economic philosophy adhered to by his party’s leaders, advocating for more government intervention in the market to ensure economic stability.“Government has an essential role to play in buffering this transition,” Marco Rubio said regarding his call for programs to help re-train workers displaced by a rapidly changing economy. “If we basically say everyone is on their own and the market’s going to take care of it, we will rip the country apart, because millions of good hardworking people lack the means to adapt.”However, perhaps the most telling part of the interview was when Sen. Rubio went after the trickle-down philosophy behind the Republican tax cut package of 2017. Even though Rubio ultimately voted for the bill after Senate Republicans included an expansion of the child tax credit, the Florida Republican pointed out that corporations kept a vast majority of the extra money from the tax cut for themselves.“There is still a lot of thinking on the right that if big corporations are happy, they’re going to take the money they’re saving and reinvest it in American workers,” he said. “In fact they bought back shares, a few gave out bonuses; there’s no evidence whatsoever that the money’s been massively poured back into the American worker.”

    Paul Krugman: The tax cut is a nothing burger - Paul Krugman thinks the Republican tax law is failing to stimulate economic growth as promised. "We should be seeing an investment boom or at least some indications of a planned increased investment," the Nobel Prize-winning economist told CNN correspondent Paula Newton on "Quest Means Business" on Wednesday. "We're just not seeing that." In terms of business investment, Krugman said, it "looks like the tax cut is a nothing burger." Republicans promised last year that lowering the corporate tax rate would encourage companies to invest more in new factories and equipment, which would create jobs and boost the economy. But so far, many companies have used the money to reward shareholders.  One recent example is Apple (AAPL), which announced Tuesday that it will spend $100 billion more on stock buybacks. The company spent $22.8 billion buying back its own stock in the first three months of this year.  US companies have plowed more than $246 billion into stock buybacks this year, according to the research firm Birinyi Associates. That's up 31% from the same point last year. Cisco (CSCO) and Wells Fargo (WFC) alone have announced plans to repurchase more than $20 billion of stock each.

    New Bipartisan Bill Could Give Any President the Power to Imprison U.S. Citizens in Military Detention Forever - One of the most outrageous acts of Barack Obama’s presidency was his failure to veto the National Defense Authorization Act for fiscal year 2012.The fiscal year 2012 NDAA included provisions that appeared to both codify and expand a power the executive branch had previously claimed to possess — namely, the power to hold individuals, including U.S. citizens, in military detention indefinitely — based on the Authorization to Use Military Force passed by Congress three days after 9/11.The New York Times warned that the bill could “give future presidents the authority to throw American citizens into prison for life without charges or a trial.” Not surprisingly, Obama’s decision generated enormous outcry across the political spectrum, from Rep. Ron Paul, R-Texas, on the right to Sen. Bernie Sanders, I-Vt., on the left.However, the NDAA did provide some weak restraints on the executive branch’s ability to use this power. In theory, the NDAA’s provisions only apply to someone involved with the 9/11 attacks or who “substantially supported al-Qaeda, the Taliban, or associated forces.” But now, incredibly enough, a bipartisan group of six lawmakers, led by Sens. Bob Corker, R-Tenn., and Tim Kaine, D-Va., is proposing a new AUMF that would greatly expand who the president can place in indefinite military detention, all in the name of restricting presidential power. If the Corker-Kaine bill becomes law as currently written, any president, including Donald Trump, could plausibly claim extraordinarily broad power to order the military to imprison any U.S. citizen, captured in America or not, and hold them without charges essentially forever.

    Trump administration turns away immigrant caravan requesting asylum at US-Mexico border -- On Sunday, US immigration authorities turned away some 200 Central American immigrants seeking to apply for asylum at the US-Mexico border. As the workers and youth fleeing murderous repression in countries long dominated by US imperialism chanted, “Why do they kill us, why do they punish us for seeking a better life?” US Customs and Border Protection (CBP) agents announced they had reached capacity and would not process the applications. They said the refugees’ applications for asylum would be considered in the coming days.The immigrants sought to turn themselves in at the border near San Diego to escape war, violence and poverty in their home countries. A total of 400 immigrants, mostly from Honduras, Guatemala and El Salvador, arrived at the border on Friday after participating in a weeks-long trek through Mexico as part of the “People Without Borders” caravan.The caravan takes place each year to protect those seeking asylum from the widespread sexual assault, kidnapping and violence that immigrants face when traveling alone or in small groups. President Donald Trump has used this year’s caravan to portray the US as overrun by immigrants in order to whip up xenophobic sentiments and escalate his assault on immigrant workers.On April 23, Trump tweeted: “I have instructed the Secretary of Homeland Security not to let these large Caravans of people into our country. It is a disgrace. We are the only Country in the World so naïve! WALL.” The administration responded to the arrival of the asylum seekers with threats of prosecution and indefinite detention. Department of Homeland Security (DHS) Secretary Kirstjen Nielsen issued a statement declaring, “If you enter our country illegally, you have broken the law and will be referred for prosecution.”

    Watch: Chaos Erupts As "Caravan" Of Illegals Scales US Border Fence, Cheering "Gracias Mexico" -  Scores of migrants gathered at the U.S. border began scaling the San Diego "wall" while shouting "Gracias, México!" presumably to thank the Mexican government for allowing them to travel from Central America to the U.S. border in the hopes of obtaining asylum from the Trump administration.  Footage TODAY of Central Americans from the Caravan reaching the San Diego border "wall". The migrants are climbing the fence and cheering "Gracias, México!"The disrespect for our borders, and for our country, is beyond belief. This is an attempt at invasion. #StopTheCaravan RT — Lauren Rose (@LaurenRoseUltra) April 29, 2018   Illegal immigrants are scaling over the dinky border fence on the Southern Border   — Ryan Saavedra (@RealSaavedra) April 29, 2018  People scale border fence in Tijuana as migrant caravan prepares to seek asylum in U.S. — #NBC7 San Diego (@nbcsandiego) April 29, 2018  Some 200 migrants, many traveling with children, attempted to apply for asylum at San Diego's San Ysidro border crossing - approximately six miles inland from where the fence is being scaled - only to be told that they port of entry is at capacity."At this time, we have reached capacity at the San Ysidro port of entry for CBP officers to be able to bring additional persons traveling without appropriate entry documentation into the port of entry for processing," Commissioner Kevin McAleenan said in a statement. "Those individuals may need to wait in Mexico as CBP officers work to process those already within our facilities." CBP officials have issued a statement saying they are at capacity for the day to accept people seeking asylum at the San is Ysidro port of entry just as #caravan arrived. “This is to please Donald Trump,” said one organizer. — Daniel Gonzalez (@azdangonzalez) April 29, 2018  Or they can just go six miles West and hop the fence.

    Trickle of 'caravan' migrants seek asylum on U.S. soil (Reuters) - U.S. border officials processed a trickle of asylum applications on Tuesday from a caravan of Central American migrants camped at the U.S.-Mexico border, despite criticism from U.S. President Donald Trump of their attempt to enter the country. Border agents slowly admitted 17 migrants, mostly women and children, on Tuesday, according to organizers with the Pueblo Sin Fronteras immigrant rights group. Eight from the caravan were allowed in on Monday night. That left about 115 people who made the 2,000-mile (3,220-km) trek from Central America waiting anxiously in a makeshift camp outside the border post in the Mexican city of Tijuana. “I’m scared, I’m so scared. I don’t want to return to my country,” said Reina Isabel Rodriguez, who fled Honduras with two grandsons, as tears streamed down her face. Eleven-year-old Christopher looked up at his grandmother in anguish, while 7-year-old Anderson sat at her feet, his head drooping sadly and a red toy robot in his lap. Rodriquez said she feared being separated from her grandsons, whom she has cared for since her daughter abandoned the eldest, the child of a gang rape perpetrated by members of the MS-13 gang. MS-13, which started in Los Angeles in the 1980s, has since grown into a cross-border criminal organization with leadership in El Salvador. Rodriquez was among the couple dozen more migrants who rushed to gather their belongings and eat what they could on Tuesday afternoon before heading into the border facility’s walkway for what could be another 24-hour wait to be let through. The camp of weary migrants showed no signs of breaking up as a third consecutive cold night in the open approached. The U.S. Department of Justice said on Monday it launched prosecutions against 11 “suspected” caravan members on charges of crossing the border illegally. About half of them are represented by the federal public defender in San Diego, according to the office’s chief trial attorney Shereen Charlick. She said some of the mothers apprehended are no longer with their children, and that lawyers in the office are trying to figure out how they were separated. 

    Trump ends temporary protected status for 86,000 Hondurans - The Trump administration announced yesterday that it is ending temporary protected status (TPS) for 86,000 Hondurans who have lived in the United States for nearly 20 years. To date, the Trump administration has terminated TPS status for 425,000 immigrants, which will lead to a mass deportation roughly equal to the population of Minneapolis, Cleveland or Oakland.Protections for these immigrants will now expire in 2020, at which point those in the US under TPS will be forced to return to their war-torn, impoverished home country.The TPS program is intended to provide temporary respite from deportation to immigrants from countries devastated by natural disaster or war. Yesterday’s decision signals that the government is effectively ending it. Including the Hondurans, 97.4 percent of all TPS beneficiaries will now see their protected status end. In its decision announcing the policy change, Department of Homeland Security Secretary Kirstjen Nielsen said the DHS is “determined that the disruption of living conditions in Honduras from Hurricane Mitch that served as the basis for its TPS designation has decreased to a degree that it should no longer be regarded as substantial.”

    Trump administration removes language on freedom of the press from Justice Department handbook - The Trump administration has removed language about freedom of the press from its guidebook for US attorneys. The US Attorneys' Manual is a guide to Justice Department policies written for US attorneys and other department employees. It was edited late last year, for the first time in two decades, with significant changes to the “Media Relations” section – changes experts say reflect a larger Trump administration hostility towards members of the press. Gone from the handbook is a section specifically reminding attorneys of the public's right to know. Gone is a section on the need for free press and public trial. Added to the manual is a section reminding employees to report any concerns to their superiors, and requiring them to disclose any contacts they have with the media. The purpose of the overhaul – the largest since 1997 – was to “identify redundant sections and language, areas that required greater clarity, and any content that needed to be added to help Department attorneys perform core prosecutorial functions,” Mr Prior said. The new manual removes a section titled “Interests Must Be Balanced,” which reminded attorneys to balance the public's right to information with an individual's right to a fair trial and the government’s ability to enforce justice.

    Air Force Once and other White House typos - BBC News: The White House has blamed a "clerical error" for a typo in a news release stating that Iran "has" an ongoing nuclear weapons programme. It should actually have read "had" - in the past tense - administration officials say. That's a big difference. It's no secret that President Donald Trump himself frequently hits "send" on his tweets before editing them for spelling errors. But ever since winning the election, his White House has been plagued with typos and misspelled words - including on official documents and press releases referring to sensitive diplomatic matters such as US national security. As long as there is human error, every organisation is prone to an embarrassing gaffe in its written communications. But the Trump presidency seems particularly prone to orthographical mishaps. Here are some notable examples, with input from the BBC's White House reporter.

    Trump takes a hard line on tribal health care - This week, the Trump administration made the remarkable step of asserting that tribal citizens should be required to have a job before receiving tribal health care assistance. Several states are seeking to force the requirement on tribal health care systems that have always operated within their sovereign nations. The Trump administration contends that tribal members should be considered a race, not a political class, as courts have always viewed them, and should not be exempted from state regulations, The administration has repeatedly denied requests from tribes — sovereign nations that oversee their own health care systems — that they be exempt from the Medicaid work requirement, which would force potential recipients of government health coverage to work or look for work. (For similar reasons of sovereignty, Native Americans are exempt from paying penalties for not having health coverage.) Kentucky, Indiana and Arkansas have been given federal permission to implement work requirement rules for Medicaid. Ten other states have made similar requests. More than 600,000 Native Americans live in those 13 states. Indigenous communities already face higher than average rates of unemployment and poor health, as well as a severe lack of job opportunities, and adding a work requirement for medical treatment on tribal lands could potentially exacerbate those pressing issues. Nevertheless, Trump’s Health and Human Services administrator, Seema Verma, suggested in an April 4 tweet that making patients work can be one way doctors can help them: “Doctors know that helping individuals rise out of poverty can be the best medicine!” 

    Mike Pence Physician Behind Ronny Jackson Attacks: Report  - Vice President Mike Pence's Army physician, Dr. Jennifer Pena, is behind a series of salacious allegations against Ronny Jackson - President Trump's White House physician and nominee to lead the Veterans Affairs Department, according to four administration officials who told the very connected Sara Carter. According to four administration officials, the main allegations were brought forth by Vice President Mike Pence’s Army physician Dr. Jennifer Pena, who is assigned to Pence by the White House Medical Unit and does not work directly for the office of the Vice President. Those officials contend Pena has held a long-time grudge against Jackson because of his continuing promotions in the White House.She began her career at the White House during the Obama administration. According to the officials, Pena, who is still active military and assigned to the White House Military Office, did not follow proper protocol to report on the allegations. Instead, she went directly to the Senate with the support of some current and former White House medical staff who were her loyalists. None of the allegations she allegedly brought forth have been substantiated. -Sara CarterJackson - who served under three Presidents, withdrew himself from consideration for the VA role on Thursday following bombshell allegations of being intoxicated while on the clock and improperly dispensing medication - reportedly passing out Ambien, Provigil and other prescription drugs "like they were candy." President Trump responded to the allegations, telling reporters that Jackson was "one of the finest people that I have ever met."While Jackson has denied the claims as "completely false and fabricated," he said he was withdrawing his name from consideration because he had  become a distraction for Trump and his agenda. 

    Mike Pence Doctor Resigns After Ronny Jackson Debacle - Dr. Jennifer Pena, Vice President Mike Pence’s physician, has resigned following reports that she was among those who detailed claims of professional misconduct against President Trump's VA Secretary nomination Ronny Jackson to senators considering his nomination. “The Vice President’s office was informed today by the White House Medical Unit of the resignation. Physicians assigned to the Vice President report to the White House Medical Unit and thus any resignation would go entirely through the Medical Unit, not the Vice President’s office,” Pence spokeswoman Alyssa Farah said in a statement.As we noted previously, Sen. Tester even admitted that he reviewed the FBI files and there was no derogatory information in there about Jackson but he still spread malicious rumors,” said a current Administration official. “Certainly we would never nominate anybody who had derogatory information. Pena has had a long-standing feud with doctor Jackson......she’s very jealous that he’s been consistently promoted. This isn’t about being a whistleblower – there are other procedures for that. She went up to the hill and she spoke with approximately twenty-five Democrats......she’s a holdover in the White House and didn’t want Jackson to be nominated.” As a reminder, Jackson - who served under three Presidents, withdrew himself from consideration for the VA role on Thursday following bombshell allegations of being intoxicated while on the clock and improperly dispensing medication - reportedly passing out Ambien, Provigil and other prescription drugs "like they were candy."  While Jackson has denied the claims as "completely false and fabricated," he said he was withdrawing his name from consideration because he had become a distraction for Trump and his agenda.

    In stunning reversal, Trump's personal doctor says Trump dictated a letter declaring he was in 'astonishingly excellent' health during the 2016 election -- President Donald Trump's longtime personal physician, Dr. Harold Bornstein said on Tuesday that a 2015 letter declaring then-candidate Trump to be in "astonishingly excellent" health, was actually dictated by Trump himself, CNN reported."He dictated that whole letter," Bornstein said, referring to Trump. "I didn't write that letter.""That's black humor, that letter," Bornstein continued. "That's my sense of humor. It's like the movie 'Fargo': It takes the truth and moves it in a different direction."The letter raised more than a few eyebrows during the 2016 presidential election campaign, due to its language and prose: "If elected, Mr. Trump, I can state unequivocally, will be the healthiest individual ever elected to the presidency," the letter said."[Trump] dictated the letter and I would tell him what he couldn't put in there," Bornstein said, adding that the Trump camp stopped by his office to pick up the letter. Bornstein's admission on Tuesday was reported shortly after he claimed that Trump's aides conducted a raid on his offices in 2017 and took Trump's medical records. The incident reportedly took place two days after he disclosed to a newspaper that Trump was prescribed hair-growth medicine.

    "Unaccountable" Pentagon Officials Have "Weaponized" Vetting Of Trump Appointees: WSJ - Nothing ends a Washington career like being branded an unacceptable national-security risk. That’s why officials adjudicating personnel-security cases must act in a mature, objective and nonpartisan fashion. But when it comes to vetting Trump appointees, they often aren’t. Instead, security clearances are being weaponized against the White House by hostile career bureaucrats, thwarting the president’s agenda by holding up or blocking appointees. Consider the case of Adam Lovinger. Mr. Lovinger is a highly regarded and politically conservative Defense Department official. In January 2017, the Trump administration made a “by name” request for him to serve as a senior director on the White House National Security Council. Before departing the Pentagon that January, Mr. Lovinger raised documented concerns with his supervisor about the misuse of contractors. One outfit, run by a woman Chelsea Clinton describes as her “best friend,” was being used to perform foreign-relations activities on behalf of the U.S. Mr. Lovinger, an attorney, perceived the arrangement as violating a federal law delineating inherently governmental functions. He also took issue with millions of dollars in public funds being spent on contractor studies of questionable relevance. One taxpayer-funded study sought to determine whether Americans are a “war-like people.” Months after Mr. Lovinger raised these issues, the Pentagon suspended his security clearance and his White House detail was canceled without warning. The reason? Specious, and constantly evolving, claims of misconduct. One of Mr. Lovinger’s alleged transgressions was that Pentagon officials had improperly marked an academic report he took aboard an airplane for reading. The father of three, his family’s primary breadwinner, remains on administrative leave. The same official who suspended Mr. Lovinger’s security clearance is now moving to cut off his pay while the allegations are under review. Amplifying due-process concerns, the panel rendering the final decision reports to the official who suspended him. She refuses to recuse herself or her subordinates despite a conflict of interest.

    Democratic leadership backs right-wing military-intelligence primary candidates --A tape recording made in January and leaked last week to the Intercept captures House Minority Whip Steny Hoyer, the number two Democrat in the House of Representatives, telling a liberal candidate for the Democratic nomination in the Sixth Congressional District of Colorado that he should pull out in favor of the choice of the party leadership, Iraq War veteran and former paratrooper Jason Crow, who is now a well-connected corporate lawyer.The liberal candidate, “green” capitalist Levi Tillemann, had previously denounced Hoyer’s intervention and released notes of their discussion, but the tape recording provides a more detailed picture of the electoral strategy being pursued by the Democratic Party leadership in 2018.With Crow engaged in a primary contest against two more liberal opponents, Tillemann and David Aarestad, a lawyer for the University of Colorado and health care activist, the Democratic Congressional Campaign Committee (DCCC) gave Crow its highest token of support, designating his candidacy as part of the “Red to Blue” campaign. The DCCC has poured money into the district to support him.Aarestad withdrew from the race last month under pressure from Washington, but Tillemann has refused to do so. The recording is from a face-to-face meeting at the Denver Hilton between Hoyer and Tillemann. Hoyer can be heard saying, “Staying out of primaries sounds small-D democratic, very intellectual and very interesting. But it was clear that it was our policy and our hope that we could, early on, try to come to an agreement on a candidate that we thought could win the general, and to give that candidate all the help we could give them.”  Similar interventions have been reported in Democratic primary campaigns in Texas, Florida, New York, Pennsylvania, Nebraska, Minnesota, California and other states. In virtually every case, the party leadership has favored the more right-wing candidate against those who described themselves as “progressives” or hailed from the Bernie Sanders wing of the party.

    FCC commissioner broke the law by advocating for Trump, officials find - Republican FCC commissioner Michael O’Rielly broke a federal law preventing officials from advocating for political candidates when he told a crowd that one way to avoid policy changes was to “make sure that President Trump gets reelected,” according to a newly released letter from government officials. O’Rielly was warned by the officials about making similar comments in the future. The Hatch Act bars many federal employees from using their offices to influence an election. During the conservative CPAC conference in February, which was also attended by FCC chairman Ajit Pai, O’Rielly was asked about how to avoid rapid swings in policy ushered in by a new administration. “I think what we can do is make sure as conservatives that we elect good people to both the House, the Senate, and make sure that President Trump gets reelected,” he responded, adding that there would also be a fight in the US Senate over net neutrality rules.After he made the comments, the watchdog group American Oversight filed a letter with the Office of Special Counsel, which handles Hatch Act complaints. In response to the group’s letter, the Office of Special Counsel said today that O’Rielly did, in fact, violate the Hatch Act. The letter said O’Rielly responded that he was only trying to provide an explanatory answer to how those changes in policy could be stopped, but the office rejected that reasoning. The office said it has sent a warning letter to O’Rielly this time, but will consider other infractions “a willful and knowing violation of the law” that could lead to legal action.

    Comey: House Intel probe into Russia's election meddling is a 'wreck' | TheHill: Former FBI Director James Comey on Sunday slammed the House Intelligence Committee's probe into alleged ties between the Trump campaign and Russia, referring to the panel as a "wreck." "It wrecked the committee," Comey told NBC's Chuck Todd on "Meet the Press," referring to the politicization of the panel."It damaged relationships with the [Foreign Intelligence Surveillance Act] court, the intelligence communities. It's just a wreck," he continued.  The committee on Friday released a Republican-authored report that said it found no evidence of collusion between the Trump campaign and Moscow. The former FBI director pushed back on the report on Sunday, calling it politically motivated. "That is not my understanding of what the facts were before I left the FBI, and I think the most important piece of work is the one the special counsel's doing now. This strikes me as a political document," Comey said.  Comey is currently promoting his memoir, "A Higher Loyalty: Truth, Lies, and Leadership."

    Russian lawyer who met with Trump Jr. says she is an informant -- An organization established by an exiled Russian tycoon says it has obtained emails showing collaboration between Russian government officials and the Russian lawyer who met with Donald Trump Jr. in 2016. The lawyer, Natalia Veselnitskaya, also admitted she's an informant to the Russian attorney general, during an NBC News interview that's slated to air Friday, according to the New York Times.  "I am a lawyer, and I am an informant," she reportedly told NBC. "Since 2013, I have been actively communicating with the office of the Russian prosecutor general." This contradicts her earlier contention that she had no connections with the Russian government. Last year, when asked point blank by NBC if she had any connections to the Russian government or had previously worked for the Kremlin, Veselnitskaya replied, "No."  The emails the Dossier organization have suggest Veselnitskaya worked closely with a top official in Russia's Prosecutor-General's Office to fend off a U.S. fraud case against one of her clients. Veselnitskaya has denied having connections to the Kremlin since her meeting with then-candidate Donald Trump's son, son-in-law and campaign chairman. The encounter took place after Donald Trump Jr. was told she had potentially incriminating information about Trump's election opponent, Hillary Clinton. Veselnitskaya is a well-connected Moscow lawyer, but the extent of her government ties has been unclear. Trump Jr., along with the president's son-in-law, Jared Kushner, and then-campaign chairman Paul Manafort met with Veselnitskaya in June 2016 after Trump Jr. was told in emails that the lawyer could provide damaging information about Hillary Clinton.

    Mueller Has Dozens of Inquiries for Trump in Broad Quest on Russia Ties and Obstruction— Robert S. Mueller III, the special counsel investigating Russia’s election interference, has at least four dozen questions on an exhaustive array of subjects he wants to ask President Trump to learn more about his ties to Russia and determine whether he obstructed the inquiry itself, according to a list of the questions obtained by The New York Times. The open-ended queries appear to be an attempt to penetrate the president’s thinking, to get at the motivation behind some of his most combative Twitter posts and to examine his relationships with his family and his closest advisers. They deal chiefly with the president’s high-profile firings of the F.B.I. director and his first national security adviser, his treatment of Attorney General Jeff Sessions and a 2016 Trump Tower meeting between campaign officials and Russians offering dirt on Hillary Clinton. But they also touch on the president’s businesses; any discussions with his longtime personal lawyer, Michael D. Cohen, about a Moscow real estate deal; whether the president knew of any attempt by Mr. Trump’s son-in-law, Jared Kushner, to set up a back channel to Russia during the transition; any contacts he had with Roger J. Stone Jr., a longtime adviser who claimed to have inside information about Democratic email hackings; and what happened during Mr. Trump’s 2013 trip to Moscow for the Miss Universe pageant. Mr. Trump said on Twitter on Tuesday that it was “disgraceful” that questions the special counsel would like to ask him were publicly disclosed, and he incorrectly noted that there were no questions about collusion.  The questions provide the most detailed look yet inside Mr. Mueller’s investigation, which has been shrouded in secrecy since he was appointed nearly a year ago. The majority relate to possible obstruction of justice, demonstrating how an investigation into Russia’s election meddling grew to include an examination of the president’s conduct in office. Among them are queries on any discussions Mr. Trump had about his attempts to fire Mr. Mueller himself and what the president knew about possible pardon offers to Mr. Flynn. A few questions reveal that Mr. Mueller is still investigating possible coordination between the Trump campaign and Russia.

    ‘So disgraceful’: Trump lashes out at publication of special counsel questions - President Trump lashed out Tuesday at the publication of questions that special counsel Robert S. Mueller III was said to be interested in asking him as part of the Russia probe and possible attempts to obstruct the inquiry. In a morning tweet, Trump said it was “disgraceful” that the 49 questions were provided to the New York Times, which published them Monday night. “So disgraceful that the questions concerning the Russian Witch Hunt were ‘leaked’ to the media,” he wrote on Twitter. So disgraceful that the questions concerning the Russian Witch Hunt were “leaked” to the media. No questions on Collusion. Oh, I have a made up, phony crime, Collusion, that never existed, and an investigation begun with illegally leaked classified information. Nice!— Donald J. Trump (@realDonaldTrump) May 1, 2018   It appears that the leak did not come from Mueller’s office. The Times reported that the questions were relayed to Trump’s attorneys as part of negotiations over the terms of a potential interview with the president. The list was then provided to the Times by a person outside Trump’s legal team, the paper said. In his tweet, Trump also falsely asserts that there are no questions about “Collusion.” 

    Trump to Replace Ty Cobb with Clinton Impeachment Lawyer --President Trump plans to replace White House lawyer Ty Cobb with Emmet Flood, the veteran Washington attorney who gained notoriety for representing Bill Clinton during his impeachment,the New York Times reported Wednesday. Cobb reportedly told Trump weeks ago that he wanted to retire after nearly a year aiding the White House legal team in its dealings with Special Counsel Robert Mueller. “It has been an honor to serve the country in this capacity at the White House,” Cobb, who plans to remain on through the end of May, told theTimes. “I wish everybody well moving forward.” Though Flood’s hiring has not been made official, he is expected to adopt a more aggressive posture in dealing with Mueller’s team, breaking with Cobb’s more conciliatory approach.

    Giuliani: Trump reimbursed Cohen for $130,000 payment to Stormy Daniels | TheHill: Former New York City Mayor Rudy Giuliani (R) said Wednesday that President Trump reimbursed his personal attorney Michael Cohen the $130,000 paid to adult-film star Stormy Daniels to stay quiet about their alleged affair. The comments by Giuliani, who recently joined Trump’s legal team, contradicted a previous statement by the president, who has said he did not know about the payment. Asked about whether he knew about the Cohen payment last month by reporters on Air Force One, Trump replied "no" and "I don't know." Giuliani made his startling statements to Fox News’s Sean Hannity. Expounding on his comments in a series of interviews, he said Trump had repaid Cohen over a series of months, and that the repayments were to ensure there was no campaign finance violation.He told Hannity the payment was “perfectly legal” and said it was “not campaign money,” meaning the arrangement didn’t violate campaign finance law.“It's not campaign money. No campaign finance violation. They funneled through a law firm and the president repaid it,” Giuliani said.Giuliani also cast the payment as a normal aspect of the way Trump interacted with Cohen, suggesting it was typical for the president to repay his lawyer for expenses that he incurred.  He also said that Trump did not know about the specifics of the $130,000 expense.

    Giuliani Hints Trump, While President, Paid Cohen a $420,000 Slush Fund to Handle “Things of a Personal Nature” --Pam Martens - What Rudy Giuliani, the former mayor of New York City and Donald Trump’s latest legal fixer did last night was to effectively tell Trump’s mortal enemy, the Washington Post, that Trump paid his personal lawyer, Michael Cohen, a $420,000 slush fund last year to clean up dirt on the President. Cohen is the target of a criminal investigation by the U.S. Attorney’s office for the Southern District of New York. Cohen’s home, office, hotel room and safety deposit box were raided by the FBI on April 9.  In an interview with Sean Hannity of Fox News last evening, and then later with the Washington Post, Giuliani buried both himself and the President deeper into a web of half truths or outright lies while managing to taint the legal work he does at his law firm, Greenberg Traurig, a corporate law behemoth with 2,000 lawyers in 38 offices on three continents. By the end of the evening one thing was clear – Giuliani had concocted such a shifting, nebulous alibi for Trump that it didn’t even hold up to a few hours of media scrutiny let alone a future interview with a Federal prosecutor.The explosive social media controversy that ensued over the Giuliani interviews centered on the fact that on April 5 the President had stated flatly “no” when asked if he was aware of the $130,000 payment that Michael Cohen had made to porn star Stormy Daniels as hush money over her allegations that she and Trump had had a sexual relationship. A reporter also asked Trump “do you know where he got that money to make that payment.” Trump responded, “No, I don’t know.” Trump’s April 5 statement was made to reporters aboard Air Force One and widely carried on cable news programs. Cohen has admitted to making the payment in the days leading up to the presidential election of 2016. The payment has important legal jeopardy ramifications for both Cohen and Trump. A hush money payment just days before his presidential election can be viewed under campaign finance law as a payment to protect his campaign from political damage. Under federal campaign finance law, any expenditures by a candidate or someone working on behalf of a candidate must be reported to the Federal Election Commission (FEC). No such filing has been made.

    Trump defends payment to Stormy Daniels after Giuliani revelation -- President Trump on Thursday defended hush money paid to adult-film actress Stormy Daniels, saying he reimbursed his personal attorney through a retainer that had “nothing to do with the campaign.” Trump in a series of tweets said his attorney, Michael Cohen, received a monthly retainer “from which he entered into, through reimbursement, a private contract between two parties, known as a non-disclosure agreement, or NDA.” The president said the Daniels agreement “was used to stop the false and extortionist accusations made by her about an affair." Contradicting past claims that he knew nothing about the payment, Trump said such arrangements “are very common among celebrities and people of wealth.” Mr. Cohen, an attorney, received a monthly retainer, not from the campaign and having nothing to do with the campaign, from which he entered into, through reimbursement, a private contract between two parties, known as a non-disclosure agreement, or NDA. These agreements are..... — Donald J. Trump (@realDonaldTrump) May 3, 2018...very common among celebrities and people of wealth. In this case it is in full force and effect and will be used in Arbitration for damages against Ms. Clifford (Daniels). The agreement was used to stop the false and extortionist accusations made by her about an affair,..... — Donald J. Trump (@realDonaldTrump) May 3, 2018...despite already having signed a detailed letter admitting that there was no affair. Prior to its violation by Ms. Clifford and her attorney, this was a private agreement. Money from the campaign, or campaign contributions, played no roll in this transaction. — Donald J. Trump (@realDonaldTrump) May 3, 2018

    Giuliani May Have Exposed Trump to New Legal and Political Perils - President Trump’s new legal team made a chaotic debut as Rudolph W. Giuliani, who was tapped recently to be one of the president’s lawyers, potentially exposed his client to legal and political danger by publicly revealing the existence of secret payments to Michael D. Cohen, the president’s personal lawyer. After he moved into the White House, the president began paying Mr. Cohen $35,000 a month, Mr. Giuliani said, in part as reimbursement for a $130,000 payment that Mr. Cohen made to a pornographic film actress to keep her from going public about an affair she said she had with Mr. Trump. The president confirmed he made payments to Mr. Cohen in a series of Twitter posts on Thursday morning. The explosive revelation, which Mr. Giuliani said was intended to prove that Mr. Trump and Mr. Cohen violated no campaign finance laws, prompted frustration and disbelief among the president’s other legal and political advisers, some of whom said they feared the gambit could backfire. Legally, the failure to disclose the payments could be a violation of the Ethics in Government Act of 1978, which requires that federal officials, including Mr. Trump, report any liabilities of more than $10,000 during the preceding year. Mr. Trump’s last disclosure report, which he signed and filed in June, mentions no debt to Mr. Cohen. Politically, Mr. Giuliani’s remarks — made in television appearances and interviews — raised questions about the president’s truthfulness and created a firestorm at the White House, where aides were caught off guard and furiously sought to deflect questions they could not answer. Sarah Huckabee Sanders, the White House press secretary, said she had been unaware of the payments before the interviews.

    The Memo: Trump's legal moves roil Washington | TheHill: President Trump’s whirlwind moves on the legal front are causing turmoil, creating consternation among some Republicans even as other supporters embrace the newly aggressive approach. Former New York City Mayor Rudy Giuliani (R), who joined the president’s personal legal team about two weeks ago, has been at the center of many of the recent storms. Trump praised Giuliani as a “great guy” to reporters at the White House on Friday and said that the former mayor had correctly concluded that the investigations into him were a “witch hunt.”But he also delivered a rebuke of some of Giuliani’s comments, saying that he was still “learning the subject matter” and would in time “get his facts straight.” Those comments appeared to relate to Giuliani’s statements about the $130,000 payment Trump attorney Michael Cohen made to adult-film actress Stormy Daniels in the run-up to the 2016 presidential election. The payment was apparently intended to buy her silence over an alleged 2006 affair with the president. The administration has denied an affair took place. Giuliani surprised many White House officials, including press secretary Sarah Huckabee Sanders, when he said during a Wednesday evening interview with Sean Hannity of Fox News that Trump had compensated Cohen for that payment. On Air Force One last month, Trump had told reporters that he had been unaware of the Cohen payment and did not know where Cohen had gotten the money. On Friday, Giuliani issued a clarification of those remarks, though it seemed mostly to stick to the central points he had made during the interview. “The right hand doesn’t seem to know what the left hand is doing,” 

    Trump Is Said to Know of Stormy Daniels Payment Months Before He Denied It - President Trump knew about a six-figure payment that Michael D. Cohen, his personal lawyer, made to a pornographic film actress several months before he denied any knowledge of it to reporters aboard Air Force One in April, according to two people familiar with the arrangement. How much Mr. Trump knew about the payment to Stephanie Clifford, the actress, and who else was aware of it have been at the center of a swirling controversy for the past 48 hours touched off by a television interview with Rudolph W. Giuliani, a new addition to the president’s legal team. The interview was the first time a lawyer for the president had acknowledged that Mr. Trump had reimbursed Mr. Cohen for the payments to Ms. Clifford, whose stage name is Stormy Daniels. It was not immediately clear when Mr. Trump learned of the payment, which Mr. Cohen made in October 2016, at a time when news media outlets were poised to pay her for her story about an alleged affair with Mr. Trump in 2006. But three people close to the matter said that Mr. Trump knew that Mr. Cohen had succeeded in keeping the allegations from becoming public at the time the president denied it. Ms. Clifford signed a nondisclosure agreement, and accepted the payment just days before Mr. Trump won the 2016 presidential election. Mr. Trump has denied he had an affair with Ms. Clifford and insisted that the nondisclosure agreement was created to prevent any embarrassment to his family. 

    Rudy Giuliani says Trump son-in-law Jared Kushner is 'disposable,' warns against investigating Ivanka -- Rudy Giuliani called President Donald Trump's son-in-law, Jared Kushner, "disposable" — and warned that special counsel Robert Mueller should stay away from Ivanka Trump. Giuliani's off-the-cuff cut on Kushner, a senior adviser to the president, came Wednesday night as he also revealed that the president had repaid long-time lawyer Michael Cohen for a $130,000 hush-money payment to porn star Stormy Daniels. Giuliani, who is now on Trump's legal team, told Fox News' Sean Hannity that Kushner's wife, Ivanka, should not be subject to Mueller's probe of Russian meddling into the 2016 election.Ivanka Trump is also a senior presidential adviser."Jared is a fine man, you know that," the former New York mayor said. "Men are disposable.""But a fine woman like Ivanka? Come on.""'Ivanka Trump? I think I would get on my charger and go right into ... their offices with a lance if they go after Ivanka," the former federal prosecutor said of Mueller's team.Giuliani also predicted that "the whole country will turn on," Mueller if the special counsel went after the president's daughter.Mueller is investigating Russian interference in the 2016 presidential election, as well as possible collusion by Trump campaign officials.

    The real reason Mueller hasn’t called Ivanka Trump - She was in Bedminster, New Jersey, with President Donald Trump the rainy May 2017 weekend when he decided to fire FBI Director James Comey. She was a passenger on the plane flying home from the G-20 conference in Germany the next month, strategizing about how to manage the fallout of her brother Don Jr.’s 2016 meeting with a Russian lawyer peddling “dirt” about Hillary Clinton. Ivanka Trump, the president’s daughter and West Wing adviser, also spoke briefly at Trump Tower with a Russian lawyer and a lobbyist who was present for that meeting during the campaign. Yet the family member closest to the president — and the woman who as a key campaign figure helped lobby her father to hire Paul Manafort, a man who is now under indictment on money laundering and fraud charges, as campaign manager — has yet to be called in for questioning by special counsel Robert Mueller, according to multiple people familiar with the investigation. That someone so close to the major events under scrutiny would not be interviewed is unusual, former prosecutors and Justice Department lawyers said. But Mueller’s decision to steer clear of the first daughter — at least for now — is a signal of his “don’t poke the bear until you have to” strategy. “Mueller would know that trying to interview Ivanka Trump would be like lighting a match to the highly combustible Donald Trump,” said Elizabeth de la Vega, a former federal prosecutor who reported directly to Mueller when he served in the U.S. attorney’s office in the Northern District of California. “The team would want to wait to the last possible moment, if at all, before taking that step.”  Calling in Ivanka Trump for an interview, former Justice Department officials and legal experts said, would be risky primarily for two reasons: It would give the public the perception that the prolonged investigation has reached the point of harassing the president’s family members, giving Trump more ammunition to decry how unfairly he and his family are being treated in an investigation he has already deemed a “witch hunt.”  And it would carry with it the very real possibility that the reactive president would “go nuclear,” according to a former federal prosecutor, once again raising the possibility of pardons or toying with the idea of firing the special counsel altogether.

    Rosenstein Says He Won’t Be ‘Extorted’ Amid Impeachment Threat - Deputy Attorney General Rod Rosenstein, who’s overseeing the Russia investigation, dismissed those trying to intimidate him after a group of House Republicans drafted articles of impeachment against him.  “There are people who have been making threats, privately and publicly, against me for quite some time,” Rosenstein said at a Law Day event Tuesday at the Newseum in Washington. “I think they should understand by now the Department of Justice is not going to be extorted. We’re going to do what’s required by the rule of law.”"Any kind of threats that anybody makes are not going to affect the way we do our job," he said.House Freedom Caucus Chairman Mark Meadows of North Carolina responded Tuesday that if Rosenstein believes being asked "to do his job is ‘extortion,’" then he "should step aside and allow us to find a new deputy attorney general -- preferably one who is interested in transparency."Rosenstein has been under withering attack by some House Republicans and President Donald Trump for his role in overseeing Special Counsel Robert Mueller’s federal criminal investigation into whether Trump or any of his associates helped Russia interfere in the 2016 election and whether the president sought to obstruct the inquiry. Meadows and some other members of the conservative Freedom Caucus have drafted a version of articles of impeachment. Meadows is one of Trump’s closest allies in Congress and talks to him by phone several times a week.

    FBI monitored phone calls of Trump’s personal lawyer -  Multiple media reports on Thursday revealed that the Federal Bureau of Investigation monitored and logged the phone calls of President Donald Trump’s personal lawyer and confidante, Michael Cohen, in the period leading up to the FBI raid on Cohen’s office and residences in April. According to NBC News, at least one of the calls that were tracked was between Cohen and Trump. The extraordinary fact that the federal government’s chief police agency, an integral part of the country’s intelligence network, is monitoring telephone communications between the president and his self-described “fixer” points to the explosive level of conflict within the American ruling class and its state. The revelation comes a month after the FBI, based on a referral from Robert Mueller, the special counsel who is investigating alleged Russian interference in the 2016 election and possible collusion by the Trump campaign, raided Cohen’s office and residences as part of a criminal probe into his business dealings. FBI agents seized Cohen’s financial records, computer hard drive, cell phones and taped recordings of conversations. Ostensibly, the main concern of federal prosecutors is Cohen’s involvement in hush-money payoffs to two women, a porn star and a former Playboy playmate, who claim to have had sexual relations with Trump. US prosecutors, according to news reports, have also been covertly reading Cohen’s emails. Spying on a lawyer’s phone calls and Internet communications is considered highly unusual, given the principle of lawyer-client privilege. However, the Daily Beast quoted Ken White, a former federal prosecutor, as saying, “That sort of thing happens all the time if you’re dealing with mob wiretaps.”

    Gaius Publius: Setting a Perjury Trap for Trump - A “perjury trap” is a prosecutorial maneuver and a form of entrapment in which “a prosecutor calls a witness to testify with the intent to base a perjury charge on their statements, not to indict them for a previous crime.” If a prosecutor calls a witness for only that purpose, rather than to get information to further an investigation, the law is clear — it’s forbidden.Perjury traps are most easily executed when the prosecutor has prior knowledge of the matter about which the witness is questioned but doesn’t reveal having that knowledge. In practice perjury traps can be executed while furthering an investigation and still be traps. A prosecutor can ask investigatory questions and set a perjury trap at the same time. Thus, since perjury traps are forbidden in law only in restricted circumstances, they are difficult to avoid. If the questions leaked to the New York Times and presented as what Robert Mueller would ask Donald Trump in an official interview, are indeed Mueller’s questions (regardless of who leaked them), Mueller may be setting a perjury trap for Trump.Perhaps you’re fine with this use of prosecutorial power. Perhaps, even though you’d hate it if these tactics were used against you, and hated it when they were used against Bill Clinton, you now love them when used against Trump and his team. But whatever your view of either man, Donald Trump or Bill Clinton, keep this in mind:

    •      1. This is the way prosecutors regularly do business in our “in love with prosecution” state.
    •      2. This is one way Mueller is trying to get rid of Donald Trump — this and the blackmail opportunity his investigation of Trump’s finances will inevitably offer.

    And thanks to Democrats, who opposed these tactics when used against Clinton’s presidency, and now cheer their use against Trump’s, we see that:

    •      3. These techniques have now been “blessed” (legitimized) by both parties and the mainstream press, and
    •      4. They can and will be used freely against any sitting president who falls seriously out of favor with our ruling Establishment.

    The Horsefly Cometh --  Kunstler - You can see where this Mueller thing is going: to the moment when the Golden Golem of Greatness finally swats down the political horsefly that has orbited his glittering brainpan for a whole year, and says, “There! It’s done.” It suggests that Civil War Two will end up looking a whole lot more like the French Revolution than Civil War One. The latter unfurled as a solemn tragedy; the former as a Coen Brothers style opéra bouffe bloodbath. Having executed the presidential swat to said orbiting horsefly, Trump will try to turn his attention to the affairs of the nation, only to find that it is insolvent and teetering on the most destructive workout of bad debt the world has ever seen. And then his enemies will really go to work. In the process, they’ll probably wreck the institutional infrastructure needed to run a Republic in constitutional democracy mode. They got a good start in politicizing the upper ranks of the FBI, a fatal miscalculation based on the certainty of a Hillary win, which would have enabled the various schemers in the J. Edgar Hoover building to just fade back into the procedural woodwork of the agency and get on with life. Instead, their shenanigans were exposed and so far one key player, Deputy Director Andrew McCabe, was hung out to dry by a committee of his fellow agency execs for lying about his official conduct. Long about now, you kind of wonder: is that where it ends for him? Seems like everybody else (and his uncle) is getting indicted for lying to the FBI. How about Mr. McCabe, since that is exactly why his colleagues at the FBI fired him? Perhaps further resolution of this murky situation awaits Inspector General Michael Horowitz’s forthcoming report, which the media seems to have forgotten about lately. An awful lot of the mischief at the FBI and its parent agency, the Department of Justice, is already on the public record, for instance the conflicting statements of Andrew McCabe and his former boss James Comey concerning who illegally leaked what to the press. On the face of it, it looks pretty bad when at least one of these Big Fish at the top of a supposedly incorruptible agency is lying. There are at least a dozen other Big Fish in there who still have some serious ‘splainin’ to do, and why not in the grand jury setting?

     Dems seek to compel Chicago bank to hand over documents -- Democrats on the House Oversight Committee want to issue a subpoena to a Chicago bank that has refused to turn over documents related to its connection to the special counsel probe of the Trump campaign. The Federal Savings Bank has been under a spotlight since it was revealed that it provided $16 million in mortgages to onetime Trump campaign manager Paul Manafort between July 2016 and January 2017.Manafort faces more than two dozen criminal charges as part of special counsel Robert Mueller’s probe into Russian meddling in the 2016 election. He has denied wrongdoing.  Around the time that the $364 million-asset bank made the loans to Manafort, bank CEO Stephen Calk was reportedly seeking to be named Army secretary. A letter that the Department of Defense recently sent to House Democrats revealed that Calk had two contacts with Army officials in November 2016.Mueller’s office has reportedly been investigating whether Calk made the loans to Manafort in exchange for a job in the Trump administration. Calk did not ultimately receive such a job. On Tuesday, Democratic Reps. Elijah Cummings of Maryland and Stephen Lynch of Massachusetts asked the chairman of the House Oversight Committee, Republican Rep. Trey Gowdy of South Carolina, to compel The Federal Savings Bank to hand over various documents. The documents that are being sought include communications between Calk and Manafort, communications between Calk and the Trump campaign, communications between Calk and the Trump transition team, and communications about the bank’s loans to Manafort.

    Twitter Sold Information To Researcher Behind Facebook Data Harvesting Scandal - Twitter has now also become embroiled in the Facebook data harvesting scandal - as the Sunday Telegraph reveals that the social media giant sold user data to Aleksandr Kogan, the Cambridge University researcher and director of Global Science Research (GSR), who created an app which harvested the data of millions of Facebook users' without their consent before selling it to political data firm Cambridge Analytica. Aleksandr Kogan, who created tools for Cambridge Analytica that allowed the political consultancy to psychologically profile and target voters, bought the data from the microblogging website in 2015, before the recent scandal came to light. -Sunday TelegraphKogan says that the data was only used to generate "brand reports" and "survey extender tools" which were not in violation of Twitter's data policies. While most tweets are public information and easy for anyone to access, Twitter charges companies and organizations for access to information in bulk - though Twitter bans companies which use the data for political purposes or to match with personal user information found elsewhere. A Twitter spokesman confirmed the ban and said: “Twitter has also made the policy decision to off-board advertising from all accounts owned and operated by Cambridge Analytica. This decision is based on our determination that Cambridge Analytica operates using a business model that inherently conflicts with acceptable Twitter Ads business practices.The company said it does not allow “inferring or deriving sensitive information like race or political affiliation, or attempts to match a user’s Twitter information with other personal identifiers” and that it had staff in place to police this “rigorously”.-Sunday Telegraph Data licensing made up 13% of Twitter's 2017 revenue at $333 million. In a March blog post, Citron Research said that Twitter’s 2018 data-licensing business will generate $400 million (analysts polled by FactSet say $387 million) and that it represents the fastest-growing segment of the company’s operations (which it is, according to FactSet).

    Cambridge Analytica closing after Facebook data harvesting scandal - Cambridge Analytica, the data firm at the centre of this year’s Facebook privacy row, is closing and starting insolvency proceedings.The company has been plagued by scandal since the Observer reported that the personal data of about 50 million Americans and at least a million Britons had been harvested from Facebook and improperly shared with Cambridge Analytica. Cambridge Analytica denies any wrongdoing, but says that the negative media coverage has left it with no clients and mounting legal fees.  “Despite Cambridge Analytica’s unwavering confidence that its employees have acted ethically and lawfully, the siege of media coverage has driven away virtually all of the Company’s customers and suppliers,” said the company in a statement, which also revealed that SCL Elections Ltd, the UK entity affiliated with Cambridge Analytica, would also close and start insolvency proceedings.“As a result, it has been determined that it is no longer viable to continue operating the business, which left Cambridge Analytica with no realistic alternative to placing the company into administration.”As first reported by the Wall Street Journal, the company has started insolvency proceedings in the US and UK. At Cambridge Analytica’s New York offices on an upmarket block on Manhattan’s Fifth Avenue, it appeared all the staff had already left the premises.  The Guardian rang the doorbell to the company’s seventh-floor office and was met by a woman who would not give her name but said she did not work for the company.

    Nomi Prins’ New Book Is a Far More Important Read than Comey’s --  Pam Martens - While former FBI Director James Comey’s new book, A Higher Loyalty, has been getting lots of attention on cable news, Wall Street historian and author Nomi Prins latest book, Collusion: How Central Bankers Rigged the World is a far more important book. America can recover from a disastrous presidency, the topic of Comey’s book. But America might not be able to fully recover from another epic financial crash brought on by disastrous central bank policy – the subject of Prins’ book. Collusion not only proves that the 1 percent got bailed out while the 99 percent got sold out as a result of policies of the U.S. Central Bank (the Fed) during and after the financial crash of 2008, but it makes the powerful argument that another epic financial crash is inevitable under the current mega bank structure which has turned the Federal Reserve into little more than a money pimp (our term) for the Wall Street casino. Prins writes that “Eight years after the crisis began, the Big Six US banks – JPMorgan Chase, Citigroup, Wells Fargo, Bank of America, Goldman Sachs, and Morgan Stanley – collectively held 43 percent more deposits, 84 percent more assets, and triple the amount of cash they held before. The Fed has allowed the biggest banks on Wall Street to essentially double the risk that devastated the system in 2008.” Prins refers to what the U.S. Fed and other major central banks like the Bank of Japan and European Central Bank are doing as “conjured” money. The money has been conjured or fabricated, writes Prins, because the Fed and its counterparts are allowed to electronically create money out of thin air.  The super cheap money that the Fed was conjuring and funneling to the mega banks had no strings attached. Prins writes that the largest Wall Street banks “that inhaled this cheap money were not required to increase their lending to the Main Street economy as a condition of the availability of that money…Wall Street used its easy access to cheap money to increase speculation in derivatives and other complex securities. They used it to buy back their own shares, thus effectively manipulating their own stock – in broad daylight and with explicit approval from the Fed.” Equally problematic writes Prins, “these banks dialed back their lending to small and midsized businesses, which hampered their growth potential.”

    Goldman Fined $110 Million For "Improperly" Rigging The FX Market First Deutsche, then BNP, and now it's Goldman's turn to pay the Fed a token fee for making billions in manipulating the FX market from 2008 to 2013.The Department of Financial Service announced on Tuesday that Goldman had agreed to pay the Federal Reserve $54.75 million, and an identical fine to the New York financial regulator, to settle claims that the bank allowed its foreign exchange traders to wrongly share customer information with traders from other global banks and engage in questionable conduct.Furthermore, it appears that Goldman was the latest bank to participate in infamous FX rigging "chatoorms" which its traders used to discuss their positions on currency trades away from regulatory scrutiny.The violation announced today stems from an investigation by DFS determining that from 2008 to early 2013, Goldman engaged in unlawful, unsafe and unsound conduct by failing to implement effective controls over its foreign exchange business.Oddly enough, these years roughly coincide with Tom Stolper's reign as Goldman's undisputed "FX Gartman" when it comes to trading recommendations as regular readers will recall. "The firm failed to detect and naddress its traders' use of electronic chatrooms to communicate with competitors about trading positions," the Fed said in a statement. The Fed said it was taking the action with the New York Department of Financial Services (NYDFS). Separately on Tuesday, Bloomberg reported that Goldman agreed to match the Fed's fine to resolve the same allegations.Having been caught manipulating the FX market, Goldman promised to do better and will "enhance internal controls and risk management" under the consent order. Translation: the rigging will continue, only this time no more chat rooms.Full DFS press release below:

     Little-noticed reg relief measure would combat card fraud - The bipartisan financial regulatory bill that passed the Senate in March contains a largely overlooked provision that could go a long way toward helping banks better spot a fast-growing form of borrower fraud. The legislation includes a little-noticed measure that would make it harder for criminals who use real Social Security numbers to create fake personas, which they subsequently employ to apply for credit. In some cases, fraudsters have used these synthetic identities to open hundreds of credit card accounts and steal hundreds of thousands of dollars. The schemes can also cause substantial problems for the individuals whose Social Security numbers get stolen. Analysts say that the incidence of synthetic identity fraud has been increasing by at least 30% per year. “It’s grown exponentially,” said Brian Murphy, a vice president of policy at the American Bankers Association. “It’s become a major area of consumer pain and financial cost for those impacted.” 

    FT: financial regulators scrutinize banks' use of cloud - Financial regulators on both sides of the Atlantic have turned their attention to the cloud, as concerns mount over how to supervise online storage services, which hold information from the world’s biggest banks. Global financial institutions are becoming increasingly reliant on the cloud — using it to store customer-account data and their banking systems, leading supervisors to fret about what might happen if a bank collapses. As well as cyber risk, regulators ‎are worried about concentrating so much information in the hands of Amazon, Google and Microsoft — the three big companies that dominate cloud provision — without the same level of supervisory oversight as banks, according to people familiar with regulatory discussions.  The Bank of England is considering whether to test banks’ resilience this year, analyzing what would happen if access to the cloud were disrupted. The BoE’s Prudential Regulation Authority is also expected to publish more detailed thinking on the subject as a prelude to possible regulation. Meanwhile, the United States Office of the Comptroller of the Currency is reviewing banks’ relationships with third-party vendors, including cloud providers. EU watchdogs have also had discussions with tech companies in recent weeks, according to people familiar with the situation, and have asked to see commercial agreements with banks.

    Fed plan to ease capital rules courting disaster: Bair, Hoenig - — The outgoing No. 2 of the Federal Deposit Insurance Corp. and the agency's former chair are arguing against recent proposals to modify bank capital rules, saying the proposed changes would increase the likelihood of another financial crisis and make future crises more severe. Thomas Hoenig, who also announced Friday his resignation from the FDIC, and former Chair Sheila Bair said in an op-ed published in The Wall Street Journal that recent proposals by the Federal Reserve and Office of the Comptroller of the Currency to change banks’ capital regimes would repeat many of the same mistakes that led to the 2008 financial crisis.  “These proposals have the laudable goals of simplifying bank capital rules and boosting lending to the real economy,” the authors wrote.. “But we fear their unintended impact would be to make the financial system less resilient and to make another financial crisis likelier and more severe.” The "unintended impact" of recent capital proposals by the Fed and OCC "would be to make the financial system less resilient and to make another financial crisis likelier and more severe,” said former FDIC Chair Sheila Bair and Thomas Hoenig, the agency's outgoing vice chair. Bloomberg News (Hoenig) Hoenig and Bair called the idea that lowering capital standards results in greater lending an “urban legend,” and said it actually could reduce lending overall by increasing the likelihood of a recession. Banks reduced lending by 18% in 2008 and 2009 because of capital and liquidity concerns, the authors said, and in any event, there is no reason to believe that credit is constrained.   “Changes in capital rules should, if anything, boost capital buffers during growth periods,” they said. “The proposals the Fed is currently considering would not only weaken them but rely less on the leverage ratio—a simple and understandable metric capping the ratio of debt to equity in bank funding that has proven a strong predictor of banks’ financial health.”

    Why some foreign banks might fail new round of stress tests — A number of foreign banking powers will soon face a day of reckoning under a more advanced version of the Federal Reserve's stress test regime. This June, consolidated U.S. operations of foreign banks, known as intermediate holding companies, or IHCs, will undertake their first full examination under the Comprehensive Capital Analysis and Review and Dodd-Frank Act Stress Tests for the first time. IHCs participated in the stress tests last year, but this year their results will actually be published. Many of those banks will also be subject to the "qualitative" assessments from which other banks with less than $250 billion have recently been exempted. Even though the results for foreign firms in prior, nonpublic stress test iterations are unknown, observers say some foreign banks could stumble out of the gate in the public version. “We don’t know the exact results of last year’s CCAR, but I’m sure there’s a learning curve, and I would assume you will see in [this year’s] results that … the learning curve continues,” said Mike Silva, chair of the financial services practice at DLA Piper and a former official at the Federal Reserve Bank of New York. “At least some firms may not pass.” Banks typically face both technical and financial challenges in complying with CCAR, but Karen Shaw Petrou, managing partner at Federal Financial Analytics, said that part of the reason IHCs face a particularly uphill battle is because of the inherently dichotomous nature of their supervisory structure. “Very simply, their parent company is not a U.S. company, and the parent company is subject to both very different laws and often a totally different cultural expectation of how to run a really big bank,”

    Next stop on the reg relief train: Reforming AML rules — The laser focus on regulatory relief among lawmakers and regulatory appointees in the Trump administration is beginning to address long-held industry complaints about anti-money-laundering regulations. Agreement by many in the government that Bank Secrecy Act rules are too burdensome to banks, and ineffective in stopping crime, has led to a reassessment of AML regimes on numerous fronts. Regulators have met to discuss how to streamline rules, and, according to congressional aides, House Republicans and Democrats will soon introduce a package that partly puts more responsibility on regulators to help banks track suspicious financial transactions. The “goal is to look at this from the standpoint of: No one does not want to catch" money launderers, "but we’ve evolved into something that most major banks today are under some type of action associated with their regulators on” AML rules, said Comptroller of the Currency Joseph Otting at an American Bankers Association conference April 25. “We’ve evolved into where it’s almost impossible to comply with and so we need to . . . take this on.” Otting said he was meeting with leaders at the Federal Reserve and the Federal Deposit Insurance Corp. this week to create a list of recommendations “offering up flexibility to banks” on BSA and AML requirements. That list will be submitted to the Financial Crimes Enforcement Network, or Fincen, which works with regulators and law enforcement to track suspicious financial transactions. Otting said they planned to meet with Fincen this month. “We’ve done a ton of work in these last 60 days on this issue, and now we got a point where I think we’ve got some real solutions that we can put forth,” he said. One major issue that both regulators and lawmakers will likely address is how effective the reports are that banks must submit every time a financial transaction is flagged, called a suspicious activity report, or SAR. “Where banks are monitoring for suspicious activity, it is completely off the rails” in terms of the reports being filed “with close to zero yield,”

    Four former Wilmington Trust executives found guilty of loan fraud - Four former executives of Wilmington Trust were found guilty Thursday of criminal conspiracy and other charges from their involvement in a loan fraud scheme nearly a decade ago, according to media reports.A federal jury in Delaware returned the verdicts on Thursday, after a six-week trial, against Robert Harra, the former president of the bank; David Gibson, the then chief financial officer; William North, former chief credit officer; and ex-controller Kevyn Rakowski, the Wilmington News-Journal reported.Each defendant was found guilty on all charges, according to the jury verdict. The charges included making false certifications in financial reports, making false statements to the Federal Reserve, making false entries in banking records, securities fraud and conspiracy to defraud the federal government. All four defendants had pleaded not guilty.U.S. District Judge Richard Andrews ruled that sentencing would occur no sooner than four months from now. The judge allowed the defendants to remain free on bail. The executives and the company were accused of intentionally understating the value of past-due real estate loans in 2009 and 2010. Harra and the other executives were said to have conspired to deceive federal regulators who were examining Wilmington Trust’s loan book a year before it was sold to M&T Bank in Buffalo, N.Y., in 2011 for $351 million.

    Wells Fargo to pay $480 million to settle suit tied to fake accounts -  Wells Fargo on Friday announced a tentative $480 million settlement to a class-action lawsuit that was brought by shareholders in connection with the bank’s phony sales scandal.The lawsuit alleged that bank executives deliberately failed to disclose material facts to shareholders. It argued that the company’s cross-selling strategy was designed to fulfill sales quotas and otherwise benefit Wells Fargo while burdening consumers with products that they did not authorize, but the bank withheld that information from investors. The case was brought on behalf of anyone who bought shares in the San Francisco bank between Feb. 26, 2014 and Sept. 15, 2016, which was around the time that the scandal spilled into public view. Wells Fargo has disclosed that as many as 3.5 million accounts were opened without the customers’ permission.

    CRE borrowers are repaying early. It's a problem for banks… A growing number of commercial real estate borrowers are apparently paying off their loans early and taking their business elsewhere — and many bankers either can’t or won’t do enough to stop them. Banks do not break out early loan payoffs in their quarterly results, but bank executives have warned of an uptick in payoffs in the past several weeks, especially among CRE credits. Data that shows insurance companies are making significantly more CRE loans than they did earlier in the decade only reinforces the notion that the business is migrating.  The trend takes its toll in two ways. While banks charge fees for prepayments, income is lost because those fees typically total less than the interest they would have collected over the life of the loan. Moreover, early payoffs are contributing to anemic loan growth figures at many banks because bankers are having a hard time replacing the lost loans with new ones without sacrificing too much margin.“It is definitely a factor in the slower loan growth across the banking industry, in the fourth quarter of last year and again in the first quarter,” said FIG Partners analyst Chris Marinac. Many bankers agree that the payoffs have put a squeeze on lending.

    April 2018: Unofficial Problem Bank list declines to 94 Institutions -- Note: Surferdude808 compiles an unofficial list of Problem Banks compiled only from public sources. Here is the unofficial problem bank list for April 2018. Here are the monthly changes and a few comments from surferdude808:  Update on the Unofficial Problem Bank List for April 2018. The list had a decline of four insured institutions to 94 banks. Aggregate assets declined during the month by $956 million to $18.9 billion. A year ago, the list held 148 institutions with assets of $36.1 billion.Actions were terminated against American Bank of the North, Nashwauk, MN ($550 million); Affinity Bank, Atlanta, GA ($260 million); Allied First Bank, SB, Oswego, IL ($94 million); and South Carolina Community Bank, Columbia, SC ($53 million). CR Note: When the unofficial weekly was list was first published on August 7, 2009 it had 389 institutions. The list peaked at just over 1,000 institutions in 2011. Now there are only 94 banks on the unofficial list (the FDIC reported 95 banks on the official problem bank list at the end of 2017). The FDIC's official problem bank list is comprised of banks with a CAMELS rating of 4 or 5, and the list is not made public (just the number of banks and assets every quarter). Note: Bank CAMELS ratings are also not made public. CAMELS is the FDIC rating system, and stands for Capital adequacy, Asset quality, Management, Earnings,Liquidity and Sensitivity to market risk. The scale is from 1 to 5, with 1 being the strongest. As a substitute for the CAMELS ratings, surferdude808 is using publicly announced formal enforcement actions, and also media reports and company announcements that suggest to us an enforcement action is likely, to compile a list of possible problem banks in the public interest.

    Democratic senators urge more banks to crack down on gun sellers - Twelve Democratic senators are calling on banks to follow the lead of Citigroup and Bank of America in limiting their business with firearms dealers in light of recent mass shootings. The senators, led by Dianne Feinstein of California and Brian Schatz of Hawaii, wrote letters to 11 banks — including Wells Fargo, JPMorgan Chase and Morgan Stanley — endorsing corporate policies that raise the minimum age to purchase firearms, require background checks on sales, and prohibit the sale of high-capacity magazines, bump stocks and assault-style weapons. “We applaud this model of corporate responsibility and we hope that this is the path forward for similar financial entities,” the senators said. “There is a growing consensus in the private sector that companies can and should take action to address the problem of gun violence in our country.” 

    Fintech needs more regulatory 'sandboxes' -- Regulatory “a=sandboxes” for financial services are now becoming more widely adopted, but they are not without controversy. Arizona became the first state to enact a fintech sandbox last month and Illinois lawmakers are currently debating a pair of bipartisan bills to establish a similar system. The models follow a 2014 U.K. initiative, Project Innovate, which is the oldest and most active of the regulatory sandboxes for fintechs. The general concept of a sandbox is to create a special relationship between a company and the applicable regulator where innovations can be tested with real customers without the full burden of regulation. If you stop there, it is easy to see why consumer advocacy groups and incumbent regulated entities often cry foul. The Southwest Center for Economic Integrity, Arizona Community Action Association, Children's Action Alliance, and Protecting Arizona's Family Coalition all came out against the Arizona Regulatory Sandbox bill under the belief that it would open up vulnerable populations to predatory lenders. That isn't an unreasonable concern, however, the program is overseen by the attorney general, which makes it unlikely that predatory behaviors would go unnoticed. The emphasis should be on the frequency and depth of oversight, not creating strict definitions and controls upfront that would prevent open dialogue from taking place.

    Blockchain insiders tell us why we don't need blockchain - We've written before about how blockchain is a belief system, complete with prophets, disciples, traitors, rituals and schisms. But recently, faith in the technology appears to be ebbing. Normally, we would have to make our own arguments - or at least turn to other cynics - to explain why this might be happening. This time, we find ourselves able to turn to blockchain insiders themselves to undermine the technology.Yesterday, a panel of blockchain experts gave evidence on the technology to the British Parliament's Treasury Select Committee. The panel included Ryan Zagone, director of regulatory relations (yes, that's apparently really a job title) at Ripple, the company behind the ultimate leap-of-faith-demanding centralised digital currency, XRP. Mr Zagone gave the committee the usual spiel about the need for a bridging currency for cross-border payments (which we've previously debunked). He also told us that 120 financial institutions had signed up to “the Ripple network”. And then he said:The banks we see on the network are not using XRP. Right now we're looking down the road at how they can expand their reach through XRP.   That's right! No bank is using the digital currency designed for banks. That doesn't stop it currently being assigned a market value of $32.5bn (more than Twitter'smarket capitalisation). Also on the panel was Chris Taylor, chief operating officer at Everledger, a company that is trying to use the blockchain to track (and miraculously “protect”) diamonds and other assets. Here's an excerpt from his contribution:  it's the same as any system - it's garbage in, garbage out. So you've got to make sure that the participants that you're allowing to contribute to the network are trustworthy. He said it, not us. A blockchain is the same as any system. If you feed garbage into it, it will feed garbage back out to you. And if you accidentally feed garbage into it, you can't change it, because immutability!

    Billionaire Thiel Unveils Broker-Dealer Venture For Major Crypto Traders - Billionaire Peter Thiel’s venture-capital firm is investing a startup designed to optimize block trading for major cryptocurrency market participants. The Wall Street Journal reports that Founders Fund is among the investors in the early-stage startup, called Tagomi Systems Inc., people familiar with the situation said.Thiel's investment comes after it was revealed that Founders Fund itself has already made a "monster bet" on bitcoin.It also confirms Thiel's bullish view on bitcoin reported in October last year when the billionaire investor argued that critics of bitcoin were "underestimating" the cryptocurrency. “If bitcoin ends up being the cyber equivalent of gold and it has a great potential left and it’s a very different kind of thing from what people in Silicon Valley focus on—companies, not algorithms not protocols, but this might be maybe one exception that is very underestimated,” the Silicon Valley elite said.And, in March, he said there will ultimately be only one digital equivalent to gold, and bitcoin, as the "biggest" cryptocurrency, will triumph. The question with something like bitcoin is whether it can become a store of value. And the thing it would replace is something like gold. The analogy is it's like bars of gold in a vault that never move and you get it and it's a hedge of sorts against the whole world falling apart." "The objections that people have to bitcoin are also objections to gold. It's this weird currency that's not backed by any government. Same thing is true of gold. It's not clear what the intrinsic value of bitcoin is. Same thing is true of gold. It may well be a bubble, but - and most bubbles are unstable and end - one of my friends has this line that 'money is the bubble that never pops', so if it is a bubble, then it is money." "If everybody decided that a $100 bill was worthless then you wouldn't want to have a $100 bill." According to The Wall Street Journal, the problem that the new startup aims to solve stems from a fragmented trading environment across global cryptocurrency exchanges, where, for instance, the price of bitcoin can vary between platforms. As such, the startup - co-founded by Greg Tusar, the former chief of electronic equities trading at Goldman Sachs - is building a platform that finds the best market to execute large numbers of cryptocurrency trading orders at a specific time.

    "This Won't End Well" - Speculators Have Never Been More Short Bonds... Ever - As the yield on the 10Y US Treasury note broke above the 3.00% Maginot Line this week (for the first time since Jan 2014), traders piled on - pushing net speculative positioning for 10Y note futures to their largest short ever. In fact, along with almost $4 trillion notional in Eurodollar shorts (betting on rising short-term interest rates), the aggregate position across the rest of the Treasury futures space has also reached a new record short, which, as the chart below shows, is equivalent to well over 1.1 million 10Y futures contracts. However, just as it became 'obvious' that rates were now set to rocket higher - umm growth and inflation and well stocks are awesome-er, right - yields tumbled...  And the yield curve flattened dramatically...  With both the level of the curve and its shape dropping notably on the week.And while we are yet to see whether this record positioning will prove the crowd is always wrong again, there is one clear set of 'losers' already facing considerable losses - mom-and-pop investors in Wall Street's latest and greatest 'conservative' bond offering - 'Steepener' Securities.As Bloomberg reports, as the yield curve flattened to the lowest in more than a decade, the fallout spread beyond the realms of high finance and central banking. It also caused the value of hundreds of millions of dollars worth of debt -- often held by retail investors -- to evaporate. Holders of ‘‘steepener’’ securities are facing the prospect of minuscule or even zero coupons. The structured products were issued in droves in recent years by Wall Street banks including Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley. Frequently marketed by brokers, they pay a high introductory fixed rate that switches to a floating coupon linked to the gap between short- and long-term U.S. interest rates. The complex math behind the trade has been laid bare by the flattening curve, leaving a slew of retail investors blindsided, say critics, as issuance booms. Globally, around $2.5 billion of notes tied to constant maturity swap rates was sold last quarter -- the most since 2015 -- scores of which use the steepener structure, according to data compiled by Bloomberg.

    Bull Markets Actually Do Die Of "Old Age" - David Ranson recently endeavored in a long research report to simply declare that “bull markets do not die of old age.” “The life expectancy of bull markets can be inferred from history. Fourteen bull markets in U.S. stocks have come and gone since 1927, and their mean lifetime is 55 months. But this calculation can be taken further. From the age of one year to the age of eight years, there’s no overall tendency for life expectancy to decline as a market advance gets older. The present stock market advance, which began 105 months ago, is no more likely to end within the next twelve months than it was when it was only twelve months old. Bull markets do not die of old age.” Think about this for a moment. This is the equivalent of suggesting that since the average male dies at 88-years of age if he lives to be 100, he has no more chance of dying in the next 12-months than he did when he was 40-years old.  While a 100-year old male will likely expire within a relatively short time frame, it will not just “being old” that leads to death. It is the onset of some outside influence such as pneumonia, infection, organ failure, etc. that leads to the eventual death as the body is simply to weak to defend itself. While we attribute the death to “old age,” it was not just “old age” that killed the host. First, averages and medians are great for general analysis but obfuscate the variables of individual cycles. To be sure the last three business cycles (80’s, 90’s and 2000) were extremely long and supported by a massive shift in a financial engineering and credit leveraging cycle. The post-Depression recovery and WWII drove the long economic expansion in the 40’s, and the “space race” supported the 60’s. But each of those economic expansions did indeed come to an end. The table below shows each expansion with the subsequent decline in markets. The problem for investors, and the suggestion that “bull markets don’t die of old-age,” is that economic data is always negatively revised in arrears. The chart below shows the recession pronouncements by the National Bureau Of Economic Research (NBER) and when they actually began. The point here is simple, by the time the economic data is revised to reveal a recession, it will be far too late to do anything about it from an investment perspective.

    Link between payday campaign cash and lawmakers' votes, report claims -- Seventeen lawmakers were paid thousands of dollars in campaign contributions by payday lenders and their political action committees within days of taking actions to benefit the industry, raising fresh questions about the sector's influence in Washington, according to a report released Thursday by Allied Progress.  The group's findings focus on campaign contributions to 16 current lawmakers — 14 Republicans and two Democrats — as well as donations to acting Consumer Financial Protection Bureau Director Mick Mulvaney when he was a Republican member of Congress.  The report comes as Mulvaney continues to face criticism over his industry ties. On Tuesday, he told an American Bankers Association conference that while he met with all constituents as a congressman, regardless of donations, he would only meet with outside lobbyists if they contributed to his campaign. His comments provoked outrage from Democrats, who said it proved Mulvaney was for sale.

    House bill seeks to limit punitive effect of CFPB guidance process -  — Rep. Sean Duffy, R-Wis., has introduced legislation designed to make the Consumer Financial Protection Bureau’s guidance process more transparent.The bill, co-sponsored by Rep. Ed Perlmutter, D-Colo., would require the CFPB director to issue “guidance” that "is necessary or appropriate to enable the bureau to carry out federal consumer financial law, including facilitating compliance with such law." It also prohibits penalizing institutions that rely in good faith on guidance from the bureau. “I’m proud to sponsor bipartisan legislation to bring predictability and transparency to the CFPB’s rule-making process,” Duffy said in a press release last week. “The CFPB should focus on its mission to actually protect consumers rather than play ‘gotcha’ with ambiguous and surprising guidance for mortgage lenders.”

    CFPB drops investigation into Altisource - The Consumer Financial Protection Bureau has dropped an investigation into Altisource, a mortgage servicing technology firm with close ties to Ocwen Financial. The CFPB informed the company that no enforcement action would be taken, Altisource CEO William B. Shepro said in remarks during the Luxembourg-based firm's first-quarter earnings call. "We received notification from the CFPB that it has completed its investigation, is currently not recommending an enforcement action and relieved us of our document retention obligations pursuant to the civil investigative process," Shepro said. 

    CFPB’s Mulvaney misled Congress about land deal, watchdog says -  An ethics watchdog is calling for an investigation into acting Consumer Financial Protection Bureau Director Mick Mulvaney for allegedly misleading Congress about a foreclosure on an investment property he owns in South Carolina. Citizens for Responsibility and Ethics in Washington on Monday asked the Federal Reserve's inspector general to investigate whether Mulvaney misled the Senate Budget Committee by claiming he had paid off his debts on a 17-acre parcel of undeveloped land in Indian Land, S.C. Mulvaney is also the permanent director of the Office of Management and Budget, and faced questioning from the Budget Committee as part of his confirmation process.  The property, which was owned by a limited liability company that had been created to buy the land, went into foreclosure in late 2016.  The watchdog sent a nine-page letter to the Fed's IG, Senate Budget Committee Chairman Mike Enzi, R-Wyo., and Sen. Bernie Sanders, I-Vt., alleging Mulvaney may have made materially false statements about the property's foreclosure, which he said in his confirmation hearings was "uncontested."  Mulvaney failed to inform the Senate that three days before he was confirmed to lead the OMB, a private lender had filed a $2.6 million breach of contract claim in foreclosure proceedings on the investment property, the watchdog group alleges.   The group alleges Mulvaney created "a web of limited liability corporations ... and loan arrangements to acquire and preserve his investment in a single parcel of real estate."It appears Mr. Mulvaney violated his ethical obligations by taking complex, unusual and potentially dishonest steps to avoid paying debts his company owed related to the property at issue in the foreclosure," Noah Bookbinder, CREW's executive director, wrote in the letter.

    PHH declines to appeal CFPB constitutionality case to Supreme Court - PHH Corp. is not appealing to the Supreme Court a case that questioned the constitutionality of the Consumer Financial Protection Bureau, ending a contentious four-year legal battle.The Mount Laurel, N.J., mortgage lender and servicer notched a huge victory in January when the U.S. Court of Appeals for the D.C. Circuit threw out the CFPB's $109 million fine against PHH over an alleged kickback scheme. But the court ruled against the company's claim that the agency's single-director structure is unconstitutional. PHH chose not to file a so-called "petition for cert" by a May 1 deadline to appeal the case to the Supreme Court, said Dico Akseraylian, a PHH spokesman.

    Trump's nominee for FHA loan commissioner deserves a Senate vote --Imagine what would happen if a trillion-dollar private sector entity operated without a CEO because its board of directors squabbled over unrelated matters, rather than approving the appointment of the top executive. Now consider the Federal Housing Administration, a major insurance operation with over $1.2 trillion of insurance in force, which has been without a commissioner for more than year.The FHA is a unique and purposeful entity that fulfills a social purpose by providing credit enhancement to entice lenders to make mortgages to first-time homebuyers and existing homeowners currently burdened with high interest rate mortgages; to developers building rental housing to serve low-income families and the moderate-income workforce; to community-based hospitals and nursing homes; and to older homeowners needing to draw upon their home equity to cover the growing costs of longer lifespans.Without the FHA, all of these types of borrowers would face higher financing costs and more restrictive terms, rendering many of these vital undertakings unfeasible.At the moment, this trillion-dollar-plus enterprise is operating without a "CEO," a role that is essentially fulfilled by the Federal Housing Commissioner. A qualified nominee, Brian Montgomery, was nominated by the Administration on Sept. 13 and approved by the Senate Banking Committee on Nov. 28 with bipartisan support. Yet, five months later, Montgomery's nomination still awaits a vote by the full Senate.

    GSE reform unlikely to happen this year: Mnuchin - — Treasury Secretary Steven Mnuchin cast doubt Monday on Congress' tackling housing finance reform this year, saying reform of the government-sponsored enterprises is more likely to be a focus in 2019."Unfortunately, I just don't think this is going to be a focus in this Congress," Mnuchin said in a television interview with Fox Business. "But we'll come back to this next year and this will be a big focus of mine post the elections." He said he sees a big opportunity for GSE reform when Federal Housing Finance Agency Director Mel Watt’s term ends in 2019. Watt is an Obama administration appointee.

    Mnuchin wants GSE reform in 2019. There's a problem with that - Treasury Secretary Steven Mnuchin confirmed Monday what we already knew: Reform of the government-sponsored enterprises isn’t happening this year. Still, Mnuchin remained bullish about prospects for picking up the debate in 2019. “We'll come back to this next year and this will be a big focus of mine post the elections,” he told Fox Business in an interview. “I’m determined that we have a fix to the GSEs and don’t leave them in conservatorship for the rest of time.” This may prove to be wishful thinking. “What gets done here will need to be done on a bipartisan basis,” said Treasury Secretary Steven Mnuchin. But that's easier said than done. Bloomberg News It’s true that the Trump administration has the opportunity to nominate a new director to the Federal Housing Finance Agency to replace Mel Watt, whose term expires in January. And a new FHFA chief could impose a number of changes on Fannie Mae and Freddie Mac — not the least of which might involve cutting off affordable housing contributions or even more structural changes to the entities. But doing so will still take time, not to mention the ability to confirm a nominee. Under the Housing and Economic Recovery Act, Watt can remain in his position until a successor is appointed. Given the slow pace in assembling a financial regulatory team up to this point — with vacancies still pending at the Federal Reserve, the Consumer Financial Protection Bureau and the Federal Deposit Insurance Corp. — there’s no indication that this will be an immediate priority for the White House or Congress. More crucially, the Trump administration appears, at least for now, to be pushing for a legislative overhaul of the GSEs. Supporters of this approach have argued that it offers the cleanest, most viable way to transform the system and ensure a stable transition. The problem is that Congress hasn’t been able to advance a plan to overhaul the GSEs for nearly a decade. The threat of FHFA action could very well put discussions back on the table, but that doesn’t mitigate the fact that lawmakers have yet to reach even a broad consensus about what a future system might look actually like. 

    Donald Trump’s Companies Destroyed Emails in Defiance of Court Orders -- Over the course of decades, Donald Trump’s companies have systematically destroyed or hidden thousands of emails, digital records and paper documents demanded in official proceedings, often in defiance of court orders. These tactics—exposed by a Newsweek review of thousands of pages of court filings, judicial orders and affidavits from an array of court cases—have enraged judges, prosecutors, opposing lawyers and the many ordinary citizens entangled in litigation with Trump. In each instance, Trump and entities he controlled also erected numerous hurdles that made lawsuits drag on for years, forcing courtroom opponents to spend huge sums of money in legal fees as they struggled—sometimes in vain—to obtain records.  Trump’s use of deception and untruthful affidavits, as well as the hiding or improper destruction of documents, dates back to at least 1973, when the Republican nominee, his father and their real estate company battled the federal government over civil charges that they refused to rent apartments to African-Americans. The Trump strategy was simple: deny, impede and delay, while destroying documents the court had ordered them to hand over.

    GE looking at a bankruptcy filing for subprime mortgage unit WMC -  WMC Mortgage, a leading subprime originator during the boom era, could be placed in bankruptcy by parent company General Electric if it loses a legal proceeding regarding indemnifications on mortgage-backed securities. TMI Trust Co. alleged it had losses of $425 million regarding $800 million of subprime mortgages, GE said in a May 1 Securities and Exchange Commission filing. A bench trial started in the U.S. District Court for the District of Connecticut in January. The evidentiary portion of the trial has been completed and final arguments are scheduled for June 12. There is "the possibility WMC will file for bankruptcy in the event of a finding of liability in the TMI case," the filing said. It was raised in the context of GE settling a Financial Institutions Reform, Recovery and Enforcement Act proceeding brought by the Department of Justice. That investigation started in December 2015 for loans originated between Jan. 1, 2005, and Dec. 31, 2007. 

    Mortgage-backed securities price fraud prosecution rests case -  After less than a week of trial, prosecutors rested their case against a former Cantor Fitzgerald LP trader accused of lying to his customers about bond prices.Lawyers for David Demos haven't yet said if they will call witnesses in his defense when trial resumes April 30. Demos told the court on April 27 that he needs to consult with his attorneys before he decides whether to testify.The government presented testimony from six witnesses, including representatives of Demos' alleged victims, Ellington Capital LLC and Marathon Asset Management, who testified about their negotiations with Demos. Demos is charged with defrauding investors in trades between May 2012 and January 2013 by misrepresenting the prices at which his firm would buy or sell mortgage backed securities. Prosecutors say he did so to boost the firm’s profit and increase his own bonus.Defense attorneys have argued that the alleged victims were sophisticated investors who used complex analytics and disregarded statements made during negotiations.In what may have been an effort to streamline the case for jurors, prosecutors presented fewer witnesses than they did in three prior trials focused on lies by bond traders. Last year's trial against three former Nomura Holdings Inc. traders lasted for almost two months. Jurors cleared the defendants of the vast majority of the 27 charges, fully acquitting one, convicting one of conspiracy and failing to reach a verdict on a few other counts. A retrial in that case is scheduled for next month.

    To reach first time home buyers, Freddie Mac eases 3% down payment limits - In its latest effort to reach first-time homebuyers, Freddie Mac is launching a new 3% down payment program that casts aside a number of restrictions in its existing low down payment offerings. The program, called HomeOne, doesn't have income caps or geographic limits like previous 3% down programs. But one of the borrowers on the loan must be a first-time homebuyer and the property type is limited to a one-unit primary residence. Its current low down payment program, Home Possible, is capped at a 95% loan-to-value ratio, except for the Home Possible Advantage loan that goes to a 97% LTV. However those loans are subject to income limits. Rising home prices continue due to inventory shortages is making it tougher to save up for a down payment, said Danny Gardner, Freddie Mac's senior vice president of single-family affordable lending and access to credit. The Home Path program has been well-received in the market since it launched about three years ago, Gardner said. But lenders found that Home Possible's guidelines "were so specific. [Borrowers] have to meet income thresholds; you have to meet thresholds based on certain geographies. And things change a lot during a loan transaction," he said, like a lender discovering additional income sources that would make a borrower ineligible for Home Possible. By having a more broad-based product where the metric is whether or not you are first-time homebuyer makes those other if/then statements obsolete and lenders can be more confident promoting an option for borrowers,"

    Freddie Mac Launches "3% Down" Mortgage With No Income Restrictions  - Rising oil prices are great for OPEC and oil exporters, for US shale producers and their capex plans (or at least, stock buybacks plans), and for those long energy equities. They are less great for everything else, and carry a long list of adverse consequences chief among which is that rising oil/commodity costs pressure margins and result in weaker consumer spending. In short, they transfer wealth from oil importers to oil exporters, and benefit stocks at the expense of the economy.It is this trade off that is becoming a major concern to Goldman's clients according to the latest Weekly Kickstart from Goldman's David Kostin, who writes that higher oil prices "should have only a minor impact on aggregate S&P 500 EPS" as the boost to Energy EPS is "offset by margin pressures and weaker consumer spending."The Goldman chief equity strategist also reminds us that his bank's energy team is bullish on oil in the near term (largely on geopolitical considerations), turning more neutral over the longer-term:"Brent crude oil has surged to $75/bbl from $45 in 2017. Our Commodities team expects oil prices will rise to $83 during the next three months before falling to $75 later in 2018." Meanwhile, when it comes to the impact of rising oil prices on energy stocks, the answer is also nuanced, because while energy companies have rallied by 11% in the last three weeks, sharply outperfmorming the S&P 500's +1% gain amid improving cash flows and capex discipline, the risk is that "decelerating economic growth poses a risk to the sector, and positioning and valuation are less compelling than many expect." Going back to the chief concerns voiced by Goldman's clients, namely the impact of oil prices on the S&P and the broader economy, Kostin believes that these will be negligible, with the upside summarized as follows: every $10 increase in the average price of oil would add roughly $1 to S&P 500 EPS; this however is offset by higher energy input costs which weigh on the profit margins of firms in other sectors. Furthermore, as Joe Lavorgna recently pointed out, each one cent increase in gasoline prices reduces household purchasing power by $1 billion.

    US housing secretary proposes tripling of rent for the poor --US Department of Housing and Urban Development (HUD) Secretary Ben Carson’s “Making Affordable Housing Work Act of 2018,” unveiled last week, would spell destitution for the poorest households receiving federal rental assistance, virtually all of which have annual incomes of less than $7,000. Roughly 1.7 million people, including 1 million children, would face eviction and homelessness.The typical household affected would be a single mother with two children, with an annual income of $2,400—or just $200 a month. After paying rent, under this proposal, the family would have only $48 left to pay for necessities like clothing, diapers, school supplies and food or medical needs not covered by other assistance.The housing proposal would impose a mandatory tripling of the minimum rent for households with an adult younger than 65, to at least $152; raise rents from the current 30 percent to 35 percent of gross income; and allow local public housing authorities to impose work requirements on those receiving benefits.Carson’s sadistic plan is only the latest in a series of attacks on the most vulnerable and impoverished Americans that are being proposed or carried out at the federal and state level. It follows an executive order by President Trump instructing the secretaries of six federal departments to seek out new ways to gut existing programs and impose work requirements for Medicaid, food stamps, home heating assistance, housing assistance and welfare benefits. In addition to housing assistance cuts, other major programs targeted include:

    • * Medicaid: Trump’s Centers for Medicare & Medicaid Services (CMS) has given wide latitude for states to impose work requirements in Medicaid, the health insurance program for the poor jointly administered by the federal government and the states. About 1.7 million out of the 67 million people currently covered by the program could be affected by work requirements now imposed or being proposed in 10 states.
    • * Food stamps: Republicans have proposed work requirements for the Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps, in the farm bill now going through Congress. If enacted, benefits for about 2 million people will be reduced or eliminated altogether. Those current SNAP recipients most likely to face cutbacks are working households—those with working members whose wages are so low, or hours of work so few, that they qualify for food assistance.

    MBA: Mortgage Applications Decrease in Latest Weekly Survey --From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey: Mortgage applications decreased 2.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 27, 2018... The Refinance Index decreased 4 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 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) increased to its highest level since September 2013, 4.80 percent, from 4.73 percent, with points increasing to 0.53 from 0.49 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.

    CoreLogic: House Prices up 7.0% Year-over-year in March -- Notes: This CoreLogic House Price Index report is for March. The recent Case-Shiller index release was for February. The CoreLogic HPI is a three month weighted average and is not seasonally adjusted (NSA). From CoreLogic: CoreLogic Reports Home Prices Up Again in March, This Time by 7 Percent CoreLogic® ... today released the CoreLogic Home Price Index (HPI™) and HPI Forecast™ for March 2018, which shows home prices rose both year over year and month over month. Home prices increased nationally by 7 percent year over year from March 2017 to March 2018, while on a month-over-month basis, prices increased by 1.4 percent in March 2018 – compared with February 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 5.2 percent on a year-over-year basis from March 2018 to March 2019. On a month-over-month basis, home prices are expected to rise 0.1 percent in April 2018. 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. “Home prices grew briskly in the first quarter of 2018,” said Dr. Frank Nothaft, chief economist for CoreLogic. “High demand and limited supply have pushed home prices above where they were in early 2006. New construction still lags historically normal levels, keeping upward pressure on prices.” CR Note: The CoreLogic YoY increase has been in the 5% to 7% range for the last couple of years.  This is towards the top end of that range.  The year-over-year comparison has been positive for six consecutive years since turning positive year-over-year in February 2012.

    Southern California has only a 'minimal' risk of a housing bubble - There is a minimal risk of another housing bubble developing in Southern California, even as there is just a slim chance area home prices will fall in the next two years. Arch MI gauged the economic foundations of home values in 100 major metropolitan areas to determine local housing markets with "minimal" risk. Locally, Arch MI found solid performance among regional businesses and limited development of new homes as factors that should keep home prices firm. Orange County was the riskiest market in the region -- if having a 4% risk of a price decline in the coming two years is what you consider dicey. That compares with the county's 28-year historical average of 25% chance of falling home values. Arch MI noted Orange County's home prices were up 12% in the two years ended in 2017 -- only the 52nd highest among the 100 large metros studied. Per-capita homebuilding of 18 single-family homes per 10,000 residents -- ranked No. 63 out of 100. Business output rose 5.2% last year, the 40th fastest growth nationally. Los Angeles County had 2% risk of decline as 2018 started vs. a 1980-2018 average of 27% , according to Arch MI. 

    The trillion-dollar coastal property bubble is ready to burst, per new study --The trillion-dollar coastal property bubble is ready to burst as global warming-driven sea level rise and storm surges threaten more and more property with flooding. We are now seeing “a pricing signal from climate change” in the relatively depressed prices for the coastal property most at risk for flooding, as Harvard real-estate professor Jesse Keenan told the Wall Street Journal Friday. Keenan is the lead author of a new study of Miami single-family homes that found the “rates of price appreciation in the lowest elevation” homes “have not kept up with the rates of appreciation of higher elevation” homes since about 2000 (see chart). That is, the homes along Miami’s coast most at risk from climate change are seeing their value drop over time compared to homes less at risk of flooding. A second, broader study, “Disaster on the Horizon: The Price Effect of Sea Level Rise,” found that “Homes exposed to sea level” are being priced 7 percent lower than homes that are the same distance from the beach, but that are less exposed to flooding.The study, which used Zillow data from around the country, concluded that the pricing gap between riskier homes and safer homes was being driven by the “more sophisticated investors.” For that group, the gap is about “11 percent and has increased over time, coinciding with the release of new scientific evidence on the extent and timing of ocean encroachment.” The economic risks from rising seas are enormous — but the Trump administration’s policies all but guarantee a worst-case scenario plays out. A 2014 Reuters analysis of this “slow-motion disaster” calculated there’s almost $1.25 trillion in coastal property whose value is being propped up by the National Flood Insurance Program’s below-market rates.

    Climate Change Is Already Depressing the Price of Flood-Prone Real Estate - New research shows that real estate properties in areas affected by extreme weather and sea level rise are losing value relative to less exposed properties. The effects are already substantial, but they may point to a looming collapse as climate change makes coastal communities untenable.Work by Harvard researchers published last week and highlighted by the Wall Street Journal finds that, after accounting for an array of other factors, home prices have appreciated more slowly in lower-lying areas of Miami-Dade County, particularly Miami Beach. A broader study using data from Zillow, still under peer review, found that properties exposed to rising sea levels sell at a 7% discount to comparable properties not subject to climate-related risk. As many as 13% of Americans are still convinced climate change isn’t happening at all, and 30% are confident that humans play no role in it. But real estate prices now seem to confirm the chestnut attributed to author Philip K. Dick: “Reality is that which, when you stop believing in it, doesn’t go away.” Even those who don’t believe in climate change, or have never been hit by a hurricane, are nonetheless seeing an impact on their property values. That foretells inevitable and large economic impacts in vulnerable areas, but could have the broader positive effect of discouraging risky investment.

    Latest Climate Threat for Coastal Cities: More Rich People - When Hurricane Irma reached Florida’s Big Pine Key in September, it caused the floor of Terry and Sharon Baron’s cream-colored mobile home to collapse. On Marathon Key, twenty miles north, the winds lifted Diane Gaffield’s mobile home off its concrete pad and smashed it against her neighbor’s house. A few blocks over, Kimberly Ruth’s mobile home simply vanished into the storm. Irma was only the start of their troubles. The Florida Keys building code effectively prohibits replacing or substantially repairing damaged mobile homes because of their vulnerability to hurricanes. That leaves people living in one of the nearly 1,000 trailers and RVs damaged or destroyed by the storm with three options: find sturdier but more expensive accommodation, repair or replace the homes and hope code officials don’t notice, or leave the Keys. Around the country, the government’s response to extreme weather is pushing lower-income people like the Barons away from the waterfront, often in the name of safety. Those homes, in turn, are often replaced with more costly houses, such as those built higher off the ground and are better able to withstand storms. Housing experts, economists and activists have coined the term “climate gentrification.” Ever-stricter building requirements make homes more expensive to construct. Rising premiums for federal flood insurance make them costlier to live in. And when local governments issue bonds to pay for sea walls and other protections, as Miami did last year, taxes are often raised, further increasing costs.

    U.S. Population Trends Back Towards Rural, Finally -  k.m. - Comment: It doesn't take a rocket scientist to figure out that real estate costs much less and jobs are generally more available if you oppose the prevailing momentum of where "everyone else" wants to live. Might this trend accelerate? Rural America ends first-ever period of population loss Between July 2016 and July 2017, rural (nonmetro) counties increased in population for the first time this decade, according to the most recent estimates released last month by the U.S. Census Bureau. The shift in rural population change was quite small, from a loss of 15,000 people in 2015-16 to a gain of 33,000 in 2016-17. However, it continues an upward trend in all but one year since 2011-12, when rural counties declined by 61,000 people. Population growth rates for rural areas have been significantly lower than in urban (metro) areas since the mid-1990s, and the gap widened considerably after the housing-market crisis in 2007 and the Great Recession that followed. The gap between rural and urban growth rates has narrowed slightly in recent years, but remains significant. Urban areas grew by 0.82 percent in 2016-17, compared with 0.07 percent growth in rural areas. The recovery in population growth for rural America during this decade has been much more gradual compared with previous rural population downturns.

    Gimme shelter Q1 2018 update: rents and house prices all at or near new extremes --This post is a comprehensive update as to the cost of new and existing homes vs. renting, all measured compared with median household income. As such it is epistolary in length. So here is the TL:DR version:

    • as a multiple of median household income, new home prices are at an extreme beyond even the peak of the housing bubble, while existing home prices are about 5% under theirs
    • but unlike then, when apartment vacancies were high and rents cheap, now rents are *also* at an extreme as compared with median household income
    • even with their recent increase, interest rates are still lower now than during the housing bubble, so the median monthly mortgage payment adjusted for median household income is even still about 10% less than it was at the peak of the housing bubble
    • if the trends of rising prices and interest rates continue, at some point they will overcome the demographic tailwind of the large Millennial generation having reached typical home-buying age. At that point there may be another deflationary bust

    Pending Home Sales Inched Higher in March --This morning the National Association of Realtors released the March data for their Pending Home Sales Index. Here is an excerpt from the latest press release:Lawrence Yun, NAR chief economist, says contract activity is moving sideways and not breaking higher despite the strong job-creating economy. "Healthy economic conditions are creating considerable demand for purchasing a home, but not all buyers are able to sign contracts because of the lack of choices in inventory," he said. "Steady price growth and the swift pace listings are coming off the market are proof that more supply is needed to fully satisfy demand1. What continues to hold back sales is the fact that prospective buyers are increasingly having difficulty finding an affordable home to buy."Added Yun, "As anticipated, the multiple winter storms and unseasonably cold weather contributed to the decrease in contract signings in the Northeast." (more here).  The chart below gives us a snapshot of the index since 2001. The MoM came in at 0.4%, down from a 2.8% increase last month. had a forecast of 0.6%.

    Construction Spending decreased 1.7% in March - Earlier today, the Census Bureau reported that overall construction spending decreased in March:Construction spendingduring March 2018 was estimated at a seasonally adjusted annual rate of $1,284.7 billion, 1.7 percent below the revised February estimate of $1,306.4 billion. The March figure is 3.6 percent above the March 2017 estimate of $1,239.6 billion.Private spending decreased and public spending was essentially unchanged in March:Spending on private construction was at a seasonally adjusted annual rate of $987.5 billion, 2.1 percent below the revised February estimate of $1,009.1 billion. ...In March, the estimated seasonally adjusted annual rate of public construction spending was $297.2 billion, nearly the same as the revised February estimate of $297.3 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 9% above the previous peak in January 2008 (nominal dollars).Public construction spending is now 9% below the peak in March 2009, and 13% above the austerity low in February 201The 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 2% year-over-year. Public spending is up 3% year-over-year.This was below the consensus forecast of a 0.5% increase for March, however spending for the previous two months was revised up.

    Residential construction spending slips in March - March's residential construction spending declined by 3.5% on a seasonally adjusted basis from February, but was virtually flat for new single-family properties, according to the U.S. Census Bureau.There was $536.8 billion spent on a seasonally adjusted basis for residential construction in the private sector during March, down from a revised $556.5 billion in February but up 5.3% from $509.9 billion in March 2017.   The month-to-month decline in seasonally adjusted new single-family construction spending was a mere 0.4%, $283.5 billion in March versus $284.8 billion for February. It rose 9.7% compared with March 2017's $258.4 billion.

    Q1 2018 GDP Details on Residential and Commercial Real Estate --The BEA has released the underlying details for the Q1 advance GDP report.The BEA reported that investment in non-residential structures increased at a 12.3% annual pace in Q1.  Investment in petroleum and natural gas exploration increased substantially recently, from a $55 billion annual rate in Q4 2016 to a $118 billion annual rate in Q1 2018 - but is still down from a recent peak of $165 billion in Q4 2014. Without the increase in petroleum and natural gas exploration, non-residential investment would be essentially unchanged year-over-year. The first graph shows investment in offices, malls and lodging as a percent of GDP. Investment in offices increased in Q1, and is up 1% year-over-year.Investment in multimerchandise shopping structures (malls) peaked in 2007 and was down slightly year-over-year in Q1.   The vacancy rate for malls is still very high, so investment will probably stay low for some time.Lodging investment increased in Q1, and lodging investment is up 14% year-over-year. The second graph is for Residential investment components as a percent of GDP. According to the Bureau of Economic Analysis, RI includes new single family structures, multifamily structures, home improvement, Brokers’ commissions and other ownership transfer costs, and a few minor categories (dormitories, manufactured homes). Home improvement was the top category for five consecutive years following the housing bust ... but now investment in single family structures has been back on top for the last four years and will probably stay there for a long time. However - even though investment in single family structures has increased from the bottom - single family investment is still very low, and still below the bottom for previous recessions as a percent of GDP. I expect further increases over the next few years.Investment in single family structures was $280 billion (SAAR) (about 1.4% of GDP), and was up in Q1 compared to Q4.  Investment in multi-family structures declined in Q1.Investment in home improvement was at a $243 billion Seasonally Adjusted Annual Rate (SAAR) in Q1 (about 1.2% of GDP).  Home improvement spending has been solid.

    Residential construction, ISM new orders, vehicle sales show decelerating growth - Yesterday and today we got a bunch of leading economic data for both March and April. Last month the short term news was good, while the longer term construction spending data portended a slowdown (but not a downturn). Let's take an updated look.Residential construction spending To recap, in terms of their order in leading the economy, the housing data I track runs in this order:

    • new home sales (but these are very volatile and heavily revised, so the signal to noise ratio is low)
    • permits (much less volatile)
    • single family permits (even less volatile - signal to noise ratio is high)
    • housing starts (more volatile than permits, but have the advantage of being "hard" economic activity)
    • residential construction spending (the least volatile of all of the data, even though less leading)
    • residential fixed investment (part of quarterly GDP, so the last reported)

    There is also the weekly mortgage applications report, which has just made new highs for the expansion, and which recently has tracked new home sales better than the other series, but has had compositional issues in the past. Residential spending declined significantly in March, but only taking back outsized gains in the several previous months.You can see the relative advantages of each. Single family permits are more leading, but somewhat more noisy, while residential construction spending is not noisy at all, but follows a few months after permits. That there has been a recent slowdown in growth becomes more apparent when we look at the m/m percent change in nominal construction spending focused on the last several years: As of March, both single family permits and private residential construction spending have increased by about 5% YoY. While we had slowdowns even more than this in 1994, 1996, and 2010 without recessions following, actual downturns in 1999 and 2006-07 did presage the recessions.

    Mall Owners and Retailers Clash Over Avalanche of Online Returns - Mall owners, already squeezed by e-commerce and spending billions on property makeovers to draw shoppers, have a new headache: retailers deducting returns for items bought online from their sales figures. David Simon, chief executive officer of Simon Property Group Inc., says a “significant number” of tenants are underreporting sales and that the company, the largest U.S. mall owner, is negotiating with them to find a solution. For America’s beleaguered retail landlords, sales per square foot is a crucial metric, used by investors to gauge their financial health. In addition to the dollars lost themselves, a low number can damage a mall’s reputation on Wall Street. The issue Simon is flagging arises from rents that are based on how much a retailer sells in its physical store. It’s common for a tenant to pay a base amount and then give the landlord a cut of sales that exceed a set threshold. Occasionally a retailer has no base rent and is obligated to pay only a percentage of sales rung up at the property. “We are getting dinged by internet returns,” Simon said on a conference call with analysts Friday. “Every retailer is different, and there is not a standard response yet. It needs to be addressed in future leases.” He declined to quantify the problem but said it was “material,” telling the analysts that “we have audit rights, and in our normal procedure we saw some anomalies about sales.” The tension adds to a growing list of troubles for retail property owners as the rise of internet shopping erodes brick-and-mortar revenues. Landlords are dropping big sums to reconfigure their shopping centers with attractions customers can’t enjoy online, such as restaurants and gyms. 

    Personal Income increased 0.3% in March, Spending increased 0.4% - The BEA released the Personal Income and Outlays report for March:  Personal income increased $47.8 billion (0.3 percent) in March according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $39.8 billion (0.3 percent) and personal consumption expenditures (PCE) increased $61.7 billion (0.4 percent). Real PCE increased 0.4 percent. The PCE price index increased less than 0.1 percent. Excluding food and energy, the PCE price index increased 0.2 percent. The March PCE price index increased 2.0 percent year-over-year and the March PCE price index, excluding food and energy, increased 1.9 percent year-over-year. The following graph shows real Personal Consumption Expenditures (PCE) through March 2018 (2009 dollars). The dashed red lines are the quarterly levels for real PCE. The increase in personal income was slightly below expectations, and the increase in PCE was at expectations. PCE growth was weak in Q1, however inflation is now near the Fed's target.

    March 2018 personal income and spending --  March 2018 real personal income and spending were both positive. So far, so good. The personal saving rate fell slightly: Again, this is consistent with a late cycle dynamic where consumers are more stretched than they were earlier in the expansion. Real personal spending continues to outstrip real retail sales (quarterly to reduce noise, through Q1 in the graph below): This is also a typical late cycle dynamic (a relationship that holds for 10 of the last 11 expansions.  But since neither shows signs of significant declines, there is no imminent danger of a downturn. As has been the case for the last several years.

     Energy expenditures as a percentage of PCE - Note: Back in early 2016, I noted that energy expenditures as a percentage of PCE had hit an all time low. Here is an update through the March 2018 PCE report released this morning. Below is a graph of expenditures on energy goods and services as a percent of total personal consumption expenditures through March 2018. This is one of the measures that Professor Hamilton at Econbrowser looks at to evaluate any drag on GDP from energy prices.  Data source: BEA Table 2.3.5U.  The huge spikes in energy prices during the oil crisis of 1973 and 1979 are obvious. As is the increase in energy prices during the 2001 through 2008 period.  In March 2018, energy expenditures as a percentage of PCE increased to 4.05% of PCE, up from the all time low two years ago of 3.6%.  Historically this is still a low percentage of PCE for energy expenditures, even though oil prices are up sharply over the last two years (WTI was at $37.55 per barrel in March 2016 and has risen to almost $69 per barrel today).

    Real Disposable Income Per Capita in March - With the release of this week's report on March Personal Incomes and Outlays, we can now take a closer look at "Real" Disposable Personal Income Per Capita.At two decimal places, the nominal 0.22% month-over-month change in disposable income was trimmed to 0.18% when we adjust for inflation. The year-over-year metrics are 3.00% nominal and 0.97% real.  Post-recession, the trend was one of steady growth, but generally flattened out in late 2015.The first chart shows both the nominal per capita disposable income and the real (inflation-adjusted) equivalent since 2000. This indicator was significantly disrupted by the bizarre but predictable oscillation caused by 2012 year-end tax strategies in expectation of tax hikes in 2013. It will be interesting to see how the recent tax legislation affects the trend.The BEA uses the average dollar value in 2009 for inflation adjustment. But the 2009 peg is arbitrary and unintuitive. For a more natural comparison, let's compare the nominal and real growth in per-capita disposable income since 2000. Do you recall what you were doing on New Year's Eve at the turn of the millennium? Nominal disposable income is up 76.8% since then. But the real purchasing power of those dollars is up only 27.1%.

     US Savings Rate Slides As Spending Outpaces Income Growth For 26th Straight Month - For the 26th month in a row, US spending growth outpaced income growth with the latter rising just 3.7% YoY (the lowest since Oct 2017) and former rising 4.6% YoY (slightly faster than in Feb). Which prompted a drop in the savings rate and a notable downward revision to the last two months (of notable conservatism) with Jan revised down from 3.2% to 3.0% and Feb down from 3.4% to 3.3% and now March at just 3.1%. However, while income growth did disappoint (rising just 0.3% MoM vs 0.4% MoM expectations), wage growth was up a notable 4.4% YoY with private wages dominating government worker gains (+4.8% YoY vs +2.5% YoY). Finally we note that Real Personal Spending rose a disappointing 0.4% MoM (versus 0.5% expectations) as The FT notes that the Fed's favored inflation measure picked up to its strongest level in 17 months in March, further boosting the case for US policy makers to increase rates two or three more times this year after a lift last month. The so-called core personal consumption expenditures price index, which excludes the volatile food and energy components, jumped 1.9 per cent on the year last month, according to a report from the Bureau of Economic Analysis. The rise in consumer spending, which accounts for 70% of the economy, gives the economy some momentum at the end of an otherwise weak quarter, and provide some support for forecasts that consumption will accelerate this quarter as tax cuts and a gradual pickup in wages filter into Americans’ bank accounts and sentiment. However, as Bloomberg notes, at the same time, the income figures were slightly below forecasts, reflecting the weakest gain in wages and salaries since October.

    AAR: Rail Carloads Up 3.3% YoY, Best April Ever for Intermodal - From the Association of American Railroads (AAR) Rail Time Indicators. April was a very good month for U.S. rail traffic. Fifteen of the 20 carload commodity categories the AAR tracks saw higher carloads in April 2018 than in April 2017 — 15 is the most since January 2015. Total carloads were up 3.3% (34,020 carloads) in April ...U.S. intermodal volume in April 2018 was up 6.8%, or 69,630 units, over April 2017. April was the 15th straight year-over-year monthly increase for intermodal, dating back to February 2017. Average weekly intermodal volume in April 2018 was 274,750 units, the third highest for any month on record. April is the seventh straight month in which U.S. intermodal volume was the highest ever for that month.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.Originated U.S. rail carloads in April 2018 were up 34,020, or 3.3%, over April 2017 to 1.05 million. Total carloads have risen in three of the past five months. Weekly average carloads in April 2018 were 262,757, the most for April since 2015. The second graph is for intermodal traffic (using intermodal or shipping containers): U.S. railroads originated 1,099,000 containers and trailers in April 2018, up 69,630 units, or 6.8%, over April 2017. It’s the 15th straight year-over-year monthly increase for intermodal, dating back to February 2017. Average weekly intermodal volume in April 2018 was 274,750 units, the third highest for any month on record (behind only February 2018 and October 2017). April is the seventh straight month in which U.S. intermodal volume was the highest ever for that month.

    March Trade Deficit at $48.96B, Slightly Better Than Forecast -- 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 $49.0 billion in March, down $8.8 billion from $57.7 billion in February, revised. March exports were $208.5 billion, $4.2 billion more than February exports. March imports were $257.5 billion, $4.6 billion less than February imports.  Today's headline number of -48.96B was slightly better than the forecast of -50.00B. This series tends to be extremely volatile, so we include a six-month moving average.

    Trade Deficit at $49.0 Billion in March  --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 $49.0 billion in March, down $8.8 billion from $57.7 billion in February, revised. ... March exports were $208.5 billion, $4.2 billion more than February exports. March imports were $257.5 billion, $4.6 billion less than February imports. Exports increased and imports decreased in March.  Exports are 26% above the pre-recession peak and up 9% compared to March 2017; imports are 11% above the pre-recession peak, and up 9% compared to March 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 $54.00 in March, down slightly from $54.61 in February, and up from $46.26 in March 2017. The trade deficit with China increased to $25.8 billion in February, from $24.6 billion in March 2017.  Note: The timing of the Chinese New Year pushed up the trade deficit with China in February, and probably reduced the deficit slightly in March.

    US Trade Deficit Plunges Most Since The Financial Crisis - What a difference a month makes: just 30 days after the US posted the biggest trade deficit since the financial crisis, when the US trade balance was some $57.6BN against the US, moments ago the BEA reported that the US trade deficit plunged by a whopping $8.7 billion, dropping to $49BN, better than then $50BN expected, and the biggest monthly drop (in dollar terms) since the financial crisis.  According to the census bureau, the deficit decreased from a revised $57.7 billion in February to $49.0 billion in March, amid a perfect trade environment as exports rose and imports declined, or as Trump would say, "his policies to boost US trade worked." Broken down by category, the goods deficit decreased $7.5 billion in March to $69.5 billion. The services surplus increased $1.3 billion in March to $20.5 billion.The good news: exports of goods and services increased $4.2 billion, or 2.0%, in March to $208.5 billion. Exports of goods increased $3.7 billion and exports of services increased $0.4 billion.

    • The increase in exports of goods mostly reflected increases in capital goods($1.9 billion), in foods, feeds, and beverages ($1.0 billion), and in industrial supplies and materials ($0.9 billion).
    • The increase in exports of services mostly reflected increases in maintenance and repair services ($0.1 billion), in travel (for all purposes including education) ($0.1 billion), and in transport ($0.1 billion).
    • imports declined, decreasing by  $4.6 billion, or 1.8%, in March to $257.5 billion. Imports of goods decreased $3.7 billion and imports of services decreased $0.9 billion.
    • The decrease in imports of goods mostly reflected decreases in capital goods ($1.5 billion), in consumer goods ($0.9 billion), and in industrial supplies and materials ($0.7 billion).
    • The decrease in imports of services mostly reflected decreases in charges for the use of intellectual property ($0.9 billion) and in transport ($0.1 billion). Charges for the use of intellectual property for February included payments for the rights to broadcast the 2018 Winter Olympic Games.

    Broken down by trading partner, the March figures showed surpluses with Hong Kong ($3.3BN), South and Central America ($3.1), United Kingdom ($1.2), Brazil ($0.8), and Singapore ($0.3).  Meanwhile, the countries that should be worried that they may fall in Trump's trade war sights, and recorded deficit with the US in March, included China, of course, with a $35.4 billion deficit, but also the European Union ($12.4), Mexico ($7.0), Japan ($5.9), Germany ($5.0), Italy ($2.3), France ($1.5), OPEC ($1.4), India ($1.4), Taiwan ($1.3), South Korea ($1.2), Saudi Arabia ($0.3), and Canada ($0.2).

    U.S. Light Vehicle Sales decrease to 17.15 million annual rate in April  -- Based on a preliminary estimate from AutoData, light vehicle sales were at a 17.15 million SAAR in April.
    That is up 1% year-over-year from April 2017, and down 1.4% from last month. This graph shows the historical light vehicle sales from the BEA (blue) and an estimate for April (red, light vehicle sales of 17.15 million SAAR  from AutoData). This was slightly above the consensus forecast for April.Note that the increase in sales at the end of 2017 was due to buying following the hurricanes. Sales will probably move sideways or decline in 2018 after setting 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 - The BEA released their estimate of April vehicle sales this morning. The BEA estimated sales of 17.07 million SAAR in April 2018 (Seasonally Adjusted Annual Rate), down 1.7% from the March sales rate, and up slightly from April 2017.Through April, 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. 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).

    Tesla posts record $710m net loss as it struggles to produce Model 3 cars - Tesla posted a record $709.6m net loss in the first quarter and burned through $745.3m in cash while struggling to crank out large numbers of its Model 3 mass-market electric car. The loss and cash burn announced on Wednesday raised questions about the company’s future and whether it would be able to pay all of its bills by early next year without more borrowing or another round of stock sales. During a sometimes testy conference call with analysts, Tesla’s CEO, Elon Musk, conceded that criticism was valid but said it was “quite likely” the company would make money and have positive cash flow in the third quarter. “It’s high time we became profitable,” said Musk, who also promised restructuring this month to achieve profit goals. “The truth is you’re not a real company until you are, frankly. That’s our focus right now.” But Tesla investors gave a rare rebuke to Musk after he cut off analysts asking about future profit potential, sending shares down 5% despite promises that production of the troubled Model 3 electric car was on track. Tesla stock was little changed after the earnings announcement but fell during a conference call with analysts, when Musk began cutting analysts’ questions short, costing Tesla over $2bn in market capitalization. “These questions are so dry. They’re killing me,” Musk said after an analyst asked what percentage of Tesla 3 reservation holders have started to configure options for their cars, an indicator of how much profit Tesla will be able to wring from the vehicles. Another analyst asked about a capital requirement before being cut off.

    GM Is Hiring More Part-Time Workers To Slow Job Cuts - Last month, we pointed out how last month's abysmal labor-market report was in reality even softer than many analysts initially believed. Case in point: A quick peek beneath the surface revealed sizable revisions in full-time job creation and also the discouraging fact that part-time jobs created only just offset the full time jobs lost during the period. And as if this problem wasn't already acute enough, the plight of the part-time worker could soon be even more widely shared, as a General Motors plant in Lordstown, Ohio is considering a radical plan that would see it become almost entirely reliant on part-time workers to power one of its shifts, the Tribune Chronicle reported. The cuts come as Chevy Cruze sales have dwindled, as Wolf Richter over at Wolf Street shows us in the chart below: Last month, GM announced that the second shift would be eliminated. But this week, the leader of the local United Auto Workers Local 1112 said the union and management might've found a way to save some of the 1,500 jobs cut from the factory's second shift. n a rare move, the General Motors complex in Lordstown may be considering using part-time workers to fulfill the plant’s needs after it was announced last month the second shift was being eliminated, costing approximately 1,500 workers their jobs.

    U.S. factory orders rise, but business equipment spending slowing - New orders for U.S.-made goods rose more than expected in March, boosted by strong demand for transportation equipment and a range of other products, but there are signs that business spending on equipment is slowing. Factory goods orders rose 1.6 percent, the Commerce Department said on Thursday. Data for February was revised up to show orders jumping 1.6 percent instead of the previously reported 1.2 percent increase. Economists polled by Reuters had forecast factory orders increasing 1.4 percent in March. Orders rose 7.7 percent on a year-on-year basis in March. Orders for transportation equipment increased 7.6 percent, lifted by a 44.5 percent jump in the volatile orders for civilian aircraft. Transportation orders rose 8.9 percent in February. Orders for machinery fell 1.9 percent, the largest drop since April 2016, after rising 0.6 percent in February. Orders for mining, oil field and gas field machinery surged 2.6 percent. Orders for motor vehicles fell 1.0 percent, the biggest drop since last July. Orders for electrical equipment, appliances and components rose 0.6 percent while bookings for computers advanced 1.0 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 rising commodity prices after the Trump administration imposed tariffs on steel and aluminum imports are starting to impact production. A survey on Monday showed sentiment among manufacturers falling in April for a second straight month amid growing concerns about the tariffs, which were imposed by President Donald Trump in March. Manufacturers said the import duties had increased prices, made it difficult to source material and brought business planning to a standstill. That could undercut business spending on equipment. The Commerce Department revised March orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans, to show them falling 0.4 percent instead of dipping 0.1 percent as reported last month. Orders for these so-called core capital goods rose 1.0 percent in February. Shipments of core capital goods, which are used to calculate business equipment spending in the gross domestic product report, declined 0.8 percent in March instead of the 0.7 percent drop reported last month. Core capital goods shipments were up 1.2 percent in February.

    Solid pace of US factory orders points to ongoing mfg growth    - Manufacturing growth is likely to remain solid in the 2nd quarter, as orders for new production remained healthy through March.Data from the Census Bureau showed that new factory orders rose an impressive 1.6% in March from January’s levels. This slightly exceeded consensus estimates of a 1.3% increase and follows a 1.6% gain in the previous month that was larger than initially reported.Much of this increase in manufacturing orders was expected after the advance report last week on durable goods orders. A surge in commercial aircraft orders helped boost the durable goods side of the manufacturing sector, which otherwise saw a modest monthly gain. This morning’s report contained additional information on nondurable manufacturing, including goods such as clothing, chemical products, and paper. Orders for nondurable goods rose by 0.5% in March, erasing last month’s decline and pushing year over-year growth to 6.5%. For the quarter, factory orders rose at an impressive 7.0% annualized pace excluding the volatile aircraft component. This is impressive from a historical perspective, but falls well below the 13.2% surge in the previous quarter.   Manufacturer’s new orders serve as a glimpse into what manufacturing activity will be in upcoming months, as factories work to fill the orders that exist. Orders growth typically leads actual growth in production by 1-2 months, which would suggest that manufacturing production will contionue to enjoy healthy growth well into the 2nd quarter. This manufacturing activity helps provide part of the foundation for domestic freight demand in the economy. As such, the data from the first quarter again points to solid freight demand conditions, even if things have eased somewhat in recent months.  

    Dallas Fed Manufacturing Outlook: Overall Activity Rebounded in April - This morning the Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for April. The latest general business activity index came in at 21.8, down from a revised 22.8 in March. All figures are seasonally adjusted. Annual seasonal adjustments were made. Here is an excerpt from the latest report: Texas factory activity rose markedly in April after posting slower growth in March, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, increased 11 points to 25.3.  Perceptions of broader business conditions remained highly positive on net in April. The general business activity index was largely unchanged at 21.8, and the company outlook index edged up four points to 23.6. Both indexes remained far above their average levels. Expectations regarding future business conditions remained largely optimistic in April. The index of future general business activity held steady at 31.9, and the index of future company outlook rose to 37.1. Both readings are significantly above average. Other indexes for future manufacturing activity pushed further into positive territory. Monthly data for this indicator only dates back to 2004, so it is difficult to see the full potential of this indicator without several business cycles of data. Nevertheless, it is an interesting and important regional manufacturing indicator. Texas turns out a large share of the country’s production of petroleum and coal products, reflecting the significance of the region’s refining industry. Texas also produces over 10 percent of the nation’s computer and electronics products and nonmetallic mineral products, such as brick, glass and cement. Here is a snapshot of the complete TMOS.

    April Regional Fed Manufacturing Overview - Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia.  Regional manufacturing surveys are a measure of local economic health and are used as a representative for the larger national manufacturing health. They have been used as a signal for business uncertainty and economic activity as a whole. Manufacturing makes up 12% of the country's GDP.  The other 6 Federal Reserve Districts do not publish manufacturing data. For these, the Federal Reserve’s Beige Book offers a short summary of each districts’ manufacturing health. The Chicago Fed published their Midwest Manufacturing Index from July 1996 through December of 2013. According to their website, "The Chicago Fed Midwest Manufacturing Index (CFMMI) is undergoing a process of data and methodology revision. In December 2013, the monthly release of the CFMMI was suspended pending the release of updated benchmark data from the U.S. Census Bureau and a period of model verification. Significant revisions in the history of the CFMMI are anticipated." Here is a three-month moving average overlay of each of the five indicators since 2001 (for those with data). The latest average of the five for April is 20.3, down from the previous month's 20.9.

    Chicago PMI Rises Slightly in April -- The Chicago Business Barometer, also known as the Chicago Purchasing Manager's Index, is similar to the national ISM Manufacturing indicator but at a regional level and is seen by many as an indicator of the larger US economy. It is a composite diffusion indicator, made up of production, new orders, order backlogs, employment, and supplier deliveries compiled through surveys. Values above 50.0 indicate expanding manufacturing activity.The latest Chicago Purchasing Manager's Index, or the Chicago Business Barometer, rose in April to a value of 57.6 from 57.4 in March. forecast 58.2.Here is an excerpt from the press release: “While the MNI Chicago Business Barometer ended a three month falling streak in April, supply constraints faced by firms intensified and continue to weigh on activity. Longer delivery times are proving attritive, while dearer materials bite further into margins” said Jamie Satchi, Economist at MNI Indicators."“Uncertainty among suppliers appears to be assisting the upward march in prices, but the majority of firms were optimistic any negative impact stemming directly from recently implemented tariffs would be minimal,” he added. [Source] Let's take a look at the Chicago PMI since its inception.

    ISM Manufacturing index decreased to 57.3 in April - The ISM manufacturing index indicated expansion in April. The PMI was at 57.3% in April, down from 59.3% in March. The employment index was at 54.2%, down from 57.3% last month, and the new orders index was at 61.2%, down from 61.9%.From the Institute for Supply Management: April 2018 Manufacturing ISM® Report On Business®  “The April PMI® registered 57.3 percent, a decrease of 2 percentage points from the March reading of 59.3 percent. The New Orders Index registered 61.2 percent, a decrease of 0.7 percentage point from the March reading of 61.9 percent. The Production Index registered 57.2 percent, a 3.8 percentage point decrease compared to the March reading of 61 percent. The Employment Index registered 54.2 percent, a decrease of 3.1 percentage points from the March reading of 57.3 percent. The Supplier Deliveries Index registered 61.1 percent, a 0.5 percentage point increase from the March reading of 60.6 percent. The Inventories Index registered 52.9 percent, a decrease of 2.6 percentage points from the March reading of 55.5 percent. The Prices Index registered 79.3 percent in April, a 1.2 percentage point increase from the March reading of 78.1 percent, indicating higher raw materials prices for the 26th consecutive month. Comments from the panel reflect continued expanding business strength. Demand remains strong, with the New Orders Index at 60 or above for the 12th straight month, and the Customers’ Inventories Index remaining at low levels. The Backlog of Orders Index continued expanding, with its highest reading since May 2004, when it registered 63 percent. Here is a long term graph of the ISM manufacturing index.This was below expectations of 58.7%, and suggests manufacturing expanded at a slower pace in April than in March. Still a solid report.

      Markit Manufacturing PMI: Highest in Over Three Years --The April US Manufacturing Purchasing Managers' Index conducted by Markit came in at 56.5, up from the 55.6 final March figure. 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:“April saw US manufacturers reporting the strongest monthly improvement in business conditions since September 2014. The surveysuggests the economy has started the second quarter on a solid footing and sends an encouraging signal for GDP growth to accelerate after the modest 2.3% rate of expansion seen in the first quarter.“Warning lights are being flashed in relation to inflation, however, with factories reporting the strongest rise in prices for nearly seven years. Suppliers are hiking prices in response to surging demand, while tariffs and higher oil prices are also exerting upward pressure on costs. With the average price of goods leaving factories rising at the fastest rate since 2011, consumer price inflation looks set to accelerate.” [Press Release] Here is a snapshot of the series since mid-2012.

      Inflation "Warning Lights" Are Flashing As Manufacturing Prices Soar Most Since 2011 - Despite a tumble in 'hard' and 'soft' data in April, Markit reports the Manufacturing PMI survey surged to 56.5 (as expected) - its highest since Sept 2014. Output is rising at its fastest pace since Jan 2017 as inflationary pressures intensify dramatically.As is usual recently in our baffle 'em with bullshit world, ISM Manufacturing disappointed, dropping to 57.3 (exp 58.5) to its lowest since July 2017.Looks like ISM is fitting real data better than PMI... ISM saw a big drop in employment, modest drop in new orders, but big jump higher in Prices Paid...But there was a major divergence between adjusted and unadjusted new orders...One ISM respondent summed things up well... "[The] 232 and 301 tariffs are very concerning. Business planning is at a standstill until they are resolved. Significant amount of manpower [on planning and the like] being expended on these issues. Commenting on the final PMI data, Chris Williamson, Chief Business Economist at IHS Markit said: “April saw US manufacturers reporting the strongest monthly improvement in business conditions since September 2014. The survey suggests the economy has started the second quarter on a solid footing and sends an encouraging signal for GDP growth to accelerate after the modest 2.3% rate of expansion seen in the first quarter.  “With inflows of new orders rising at an accelerated pace, greater input buying and business expectations regarding future production levels running at one of the highest levels seen over the past three years, there’s plenty of evidence to suggest strong growth will persist through May. “The upturn is being led by large firms, with smaller companies trailing behind but nonetheless also seeing some of the best business conditions for three years. However, Williamson leaves the best/worst for last as inflationary pressures are intensifying dramatically...“Warning lights are being flashed in relation to inflation, however, with factories reporting the strongest rise in prices for nearly seven years. Suppliers are hiking prices in response to surging demand, while tariffs and higher oil prices are also exerting upward pressure on costs.With the average price of goods leaving factories rising at the fastest rate since 2011, consumer price inflation looks set to accelerate.”

      ISM Non-Manufacturing Index decreased to 56.8% in April --The March ISM Non-manufacturing index was at 56.8%, down from 58.8% in March. The employment index decreased in April to 53.6%, from 56.6%. Note: Above 50 indicates expansion, below 50 contraction. From the Institute for Supply Management: April 2018 Non-Manufacturing ISM Report On Business®  Economic activity in the non-manufacturing sector grew in April for the 99th consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®. The report was issued today by Anthony Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the Institute for Supply Management® (ISM®) Non-Manufacturing Business Survey Committee: "The NMI® registered 56.8 percent, which is 2 percentage points lower than the March reading of 58.8 percent. This represents continued growth in the non-manufacturing sector at a slower rate. The Non-Manufacturing Business Activity Index decreased to 59.1 percent, 1.5 percentage points lower than the March reading of 60.6 percent, reflecting growth for the 105th consecutive month, at a slower rate in April. The New Orders Index registered 60 percent, 0.5 percentage point higher than the reading of 59.5 percent in March. The Employment Index decreased 3 percentage points in April to 53.6 percent from the March reading of 56.6 percent. The Prices Index increased by 0.3 percentage point from the March reading of 61.5 percent to 61.8 percent, indicating that prices increased in April for the 26th consecutive month. According to the NMI®, all 18 non-manufacturing industries reported growth. There was a slowing in the rate of growth that was mostly attributed to the decline in the Employment and Supplier Deliveries indexes. The respondents have expressed concern regarding the uncertainty about tariffs and the effect on the cost of goods. Overall, the respondents remain positive about business conditions and the economy." This graph shows the ISM non-manufacturing index (started in January 2008) and the ISM non-manufacturing employment diffusion index. This suggests slower expansion in April than in March.

      ISM Non-Manufacturing: Continued Growth at Slower Rate in April --The Institute of Supply Management (ISM) has now released the April Non-Manufacturing Purchasing Managers' Index (PMI), also known as the ISM Services PMI. The headline Composite Index is at 56.8 percent, down 2.0 from 58.8 last month. Today's number came in below the forecast of 58.1 percent.Here is the report summary:"The NMI® registered 56.8 percent, which is 2 percentage points lower than the March reading of 58.8 percent. This represents continued growth in the non-manufacturing sector at a slower rate. The Non-Manufacturing Business Activity Index decreased to 59.1 percent, 1.5 percentage points lower than the March reading of 60.6 percent, reflecting growth for the 105th consecutive month, at a slower rate in April. The New Orders Index registered 60 percent, 0.5 percentage point higher than the reading of 59.5 percent in March. The Employment Index decreased 3 percentage points in April to 53.6 percent from the March reading of 56.6 percent. The Prices Index increased by 0.3 percentage point from the March reading of 61.5 percent to 61.8 percent, indicating that prices increased in April for the 26th consecutive month. According to the NMI®, all 18 non-manufacturing industries reported growth. There was a slowing in the rate of growth that was mostly attributed to the decline in the Employment and Supplier Deliveries indexes. The respondents have expressed concern regarding the uncertainty about tariffs and the effect on the cost of goods. Overall, the respondents remain positive about business conditions and the economy." [Source] Unlike its much older kin, the ISM Manufacturing Series, there is relatively little history for ISM's Non-Manufacturing data, especially for the headline Composite Index, which dates from 2008. The chart below shows Non-Manufacturing Composite. We have only a single recession to gauge is behavior as a business cycle indicator.

      Markit Services PMI: April Highest in Three Months -The April US Services Purchasing Managers' Index conducted by Markit came in at 54.6 percent, up 0.6 from the final March estimate of 54.0. The consensus was for 54.4 percent. The Investing.comconsensus 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:  April survey data indicated a strong expansion in business activity across the U.S. service sector. However, although the rate of growth accelerated, it remained below the series’ long-run average. Meanwhile, the upturn in new business quickened to a sharp rate that was the fastest since March 2015. Greater client demand was also reflected in a strong rise in employment and increased backlogs. Operating expenses continued to rise, with input price inflation the second-strongest since June 2015. Business confidence also picked up, reaching the highest in almost three years. [Press Release] Here is a snapshot of the series since mid-2012.

      Weekly Initial Unemployment Claims increase to 211,000, 4-week average lowest since 1973 -- The DOL reported: In the week ending April 28, the advance figure for seasonally adjusted initial claims was 211,000, an increase of 2,000 from the previous week's unrevised level of 209,000. The 4-week moving average was 221,500, a decrease of 7,750 from the previous week's unrevised average of 229,250. This is the lowest level for this average since March 3, 1973 when it was 221,250. Claims taking procedures in Puerto Rico and in the Virgin Islands have still not returned to normal.  The previous week was unrevised. The following graph shows the 4-week moving average of weekly claims since 1971.

      US job cuts fall 40% in April after surging in March: CG&C -- Job cuts announced by U.S.-based employers fell 40.2 percent in April to 36,081, the second lowest monthly total for the year, according to a report released Thursday by global outplacement and executive coaching firm Challenger, Gray & Christmas, Inc. April’s total belies a trend for increased cuts after announcements in March hit a 23-month high of 60,357. March’s total was the highest since April 2016, when 64,141 job cuts were announced. “Most of the cuts in March came from a single announcement, but an increase in large-scale job cut announcements could be on the horizon,” said John Challenger, Chief Executive Officer of Challenger, Gray & Christmas, Inc. “With rising wages, near full employment, and solid job creation, we may be in for a market correction over the upcoming months,” added Challenger. According to the Bureau of Labor Statistics, compensation costs rose 2.7 percent over the last year. Employers added 326,000 jobs in February and 103,000 in March. Job cut announcements in April were down 1.4 percent from the 36,602 announced job cuts during the same month last year. So far this year, employers have announced 176,460 job cuts, 8.38 percent more than the 162,803 announced through the first four months of 2017. Retail leads all sectors in job cuts in 2018, with 64,370, 7,844 of which occurred in April. Retailers have announced 28.4 percent more cuts than through the same period last year, when 50,133 cuts were announced. In 2018, Challenger has tracked 2,460 retail store closures. That is in addition to the 9,241 store closures that were announced in 2017. Health Care/Products companies announced the second highest number of job cuts in April, with 4,949 for a total of 17,450 this year. Companies in the Services sector announced 14,665 cuts, with 4,101 in April. Electronics companies announced 2,793 cuts in April for a four-month total of 4,070. That is 170 percent more than the 1,504 cuts that were announced in that sector through the same period last year.

      First Look at April: ADP Says 204K 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 April estimate of 204K new nonfarm private employment jobs, a decrease over March's revised 228K. The 204K estimate came in above the consensus of 200K for the ADP number.The forecast for the forthcoming BLS report is for 194K nonfarm private new jobs and the unemployment rate to decrease to 4.0%. Their forecast for the April full nonfarm new jobs is (the PAYEMS number) is 192K.Here is an excerpt from today's ADP report press release:“The labor market continues to maintain a steady pace of strong job growth with little sign of a slowdown,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “However, as the labor pool tightens it will become increasingly difficult for employers to find skilled talent. Job gains in the highskilled professional and business services industry accounted for more than half of all jobs added this month. The construction industry, which also relies on skilled labor, continued its six month trend of steady job gains as well.”Mark Zandi, chief economist of Moody’s Analytics, said, “Despite rising trade tensions, more volatile financial markets, and poor weather, businesses are adding a robust more than 200,000 jobs per month. At this pace, unemployment will soon be in the threes, which is rarified and risky territory, as the economy threatens to overheat.” Here is a visualization of the two series over the previous twelve months.

      ADP Prints Weakest Jobs Gain Since November (After March's Biggest 'Miss' In 7 Years) Following March's big disappointment in BLS (and surge in ADP), perhaps today's better than expected print for April of +204k (+198k exp) is less relevant than ever. Service-providing jobs rose 160k, goods-producing rose 44k, and March's hot number was revised lower (from 241k to 228k). Jobs rose in every cohort except "Information"..  “The labor market continues to maintain a steady pace of strong job growth with little sign of a slowdown,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “However, as the labor pool tightens it will become increasingly difficult for employers to find skilled talent. Job gains in the high-skilled professional and business services industry accounted for more than half of all jobs added this month. The construction industry, which also relies on skilled labor, continued its six month trend of steady job gains as well.” Mark Zandi, chief economist of Moody’s Analytics, said,“Despite rising trade tensions, more volatile financial markets, and poor weather, businesses are adding a robust more than 200,000 jobs per month. At this pace, unemployment will soon be in the threes, which is rarified and risky territory, as the economy threatens to overheat.”  While all eyes are focused on ADP employment data today for a hint ahead of Friday's payrolls print, we remind readers that March saw the biggest 'miss' in 7 years as ADP printed 138k higher than BLS' version of reality... In fact, as we have pointed out previously, something odd has happened since President Trump was elected - ADP is constantly over-optimistic relative to BLS data, the exact opposite of its regime during Obama's tenure.

      A Closer Look at Today's ADP Employment Report - In this morning's ADP employment report we got the April estimate of 204K new nonfarm private employment jobs from ADP, a decrease over March's revised 228K. 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 saw an uptick in late 2016 that has continued. 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 complete 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. Another view of the relative trends of the five select industries is an overlay of the year-over-year comparison.

      April Employment Report: 164,000 Jobs Added, 3.9% Unemployment Rate - From the BLS: Total nonfarm payroll employment increased by 164,000 in April, and the unemployment rate edged down to 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, manufacturing, health care, and mining. .. The change in total nonfarm payroll employment for February was revised down from +326,000 to +324,000, and the change for March was revised up from +103,000 to +135,000. With these revisions, employment gains in February and March combined were 30,000 more than previously reported....In April, average hourly earnings for all employees on private nonfarm payrolls rose by 4 cents to $26.84. Over the year, average hourly earnings have increased by 67 cents, or 2.6 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 164 thousand in April (private payrolls increased 168 thousand). Payrolls for February and March were revised up by a combined 30 thousand. This graph shows the year-over-year change in total non-farm employment since 1968. In April the year-over-year change was 2.280 million jobs. The third graph shows the employment population ratio and the participation rate. The Labor Force Participation Rate was decreased in April to 62.8%. 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 decreased to 60.3% (black line). The fourth graph shows the unemployment rate. The unemployment rate declined in April to 3.9%. This was below the consensus expectations of 190,000 jobs, however the previous two months combined were revised up by 30,000.

      Nonfarm payrolls increased by 164,000 in April, vs 192,000 jobs expected -- The unemployment rate fell to 3.9 percent in April, an 18-year low, even as nonfarm payrolls rose by just 164,000, according to a report Friday from the Bureau of Labor Statistics. Economists surveyed by Reuters had expected payroll growth of 192,000 and the jobless rate to drop by one-tenth of a percent to 4.0 percent. The official jobs tally showed an increase from an upwardly revised 135,000 in March. "The expectations were a little bit elevated going into this probably just because last month's report was a little bit weaker,"  "Net-net this was a little bit softer than people were expecting. This goes into a lot of the other data that we've been seeing, ... a little bit of a soft patch." The closely watched average hourly earnings number rose by 4 cents, equating to a 2.6 percent annualized gain, a bit off the pace from the previous month and a shade less than expected. The average workweek was unchanged at 34.1 hours. A more encompassing measure of unemployment that includes discouraged workers and those holding part-time positions for economic reasons fell to 7.8 percent, the lowest since July 2001. Unemployment for blacks fell to a fresh record-low of 6.6 percent, down 0.3 percent. The drop in the unemployment rate came amid another decline in the labor force participation rate to 62.8 percent, the lowest since January. The number of people counted as out of the labor force swelled by 410,000 to 95.74 million. Professional and business services created the most new jobs, with 54,000, while manufacturing and health care added 24,000 apiece. Mining saw 8,000 new jobs, bringing to 86,000 the total unemployment growth since October 2016 for a sector that President Donald Trump promised to target when he campaigned. Services jobs overall led the way, with 119,000 new positions. Leisure and hospitality increased by 18,000. In addition to the upward revision for March, February's number edged lower from 326,000 to 324,000. The lack of wage pressure likely will be the one takeaway for Federal Reserve officials. Central bankers are on a pace to continue raising rates, but the lack of inflation could augur for a more patient pace than some in the market anticipate.

      Unemployment Falls to 3.9 percent, Wage Growth Remains Weak - Dean Baker - The Bureau of Labor Statistics (BLS) reported that the unemployment rate fell to 3.9 percent in April, the lowest rate since 2000. It has only been below this level for one month in the last 45 years. On the establishment side, the economy added 164,000 jobs. With upward revisions for the prior two months totaling 30,000, the average for the last three months stands at 208,000. In spite of the drop in the unemployment rate, other aspects of the household survey were less encouraging. The decline was due to a reported drop in labor force participation, the second consecutive drop, not an increase in employment in the household survey. It is important to note that this follows a big jump in employment of 785,000 reported for February, so this more likely noise in the data rather than an actual weakening of the labor market. The employment rate for prime-age workers, ages 25 to 54, was unchanged at 79.2 percent, 1.1 percentage point below its prerecession peak. There was also a drop of 0.4 percentage points in the share of unemployment attributable to voluntary quits. The 12.7 percent share is still the second highest level for this recovery, but well below the rates of the 13.7 percent average for 2000. This suggests that in spite of the low unemployment rate, workers are still not confident about their labor market prospects. This is consistent with weak wage growth in the establishment survey. The average hourly wage increased by just 4 cents in April, bringing the year-over-year increase to 2.6 percent. The annualized rate of wage growth, comparing the last three months (February, March, and April) with the prior three months (November, December, January), is just 2.5 percent. If anything, wage growth is slowing modestly rather than accelerating. By demographic group, the unemployment rate for blacks dropped to 6.6 percent, a new low. This was also due to a drop in labor force participation, as employment fell by 159,000. The decline in the unemployment rate was driven by a drop of 0.9 percentage points in the unemployment rate for black women aged 20 or above to 5.1 percent, which more than offset a rise of 0.3 percentage points in the unemployment rate for black men and a 1.1 percentage points rise for black teens. The unemployment rate for Hispanics fell to 4.8 percent, while the employment-to-population ratio (EPOP) rose to 63.2 percent, both tying the bests for the recovery. Involuntary part-time employment edged down 34,000 to 4,985,000, which is 324,000 below its year-ago level. Voluntary part-time fell for the month, but is 852,000 above its level of April 2017. The job gains in the establishment survey were broadly based. Professional and technical services added 25,700 jobs in April, followed by 24,400 in health care, and 24,000 in manufacturing. Employment in the sector is now 245,000 above its year-ago level. This job growth is striking since output growth has been modest. BLS reported yesterday that productivity in the manufacturing sector had risen just 0.8 percent over the last year. This is hard to reconcile with the idea of job-killing robots. Construction added 17,000 jobs in April, a bit less than its average rate of 21,400 over the last year. Retail added 1,800 jobs, putting employment in the sector 71,800 above its year-ago level. Restaurants added just 14,800 jobs, compared to an average of 19,000 since April of 2017. This follows an increase of just 3,700 in March. This could indicate restaurants are having trouble attracting workers, although wages in the super sector have risen just 2.9 percent over the last year.

      +164,000 Jobs: Payrolls, Hourly Earnings Miss As Unemployment Rate Hits 18 Year Low 3.9% -  (6 graphs)Coming into today's payrolls number, the sellside community was hoping that last month's unexpectedly poor payrolls number would prove to be a one off. It was not, and moments ago the BLS surprised with yet another poor jobs number, when it reported that in April, the US generated only 164K jobs, missing expectations of a 190K print, if modestly better than last month's upward revised 135K number (from 102K).Total 164,000 April payrolls, compared with an average monthly gain of 191,000 over the prior 12 months, with most job gains occurring in professional and business services, manufacturing, health care, and mining.February payrolls were revised down from +326,000 to +324,000, while March was revised up from +103,000 to +135,000, netting a +30,000 job gains for the past two months. After revisions, job gains have averaged 208,000 over the last 3 months.  There was a silver lining: some of the miss could potentially be explained by harsher April weather, as workers who said they are unable to work due to bad weather was at 133K, nearly double the April historical average of 76k employees.However, it wasn't just the headline payrolls number that was a disappointment: the much more closely watched average hourly earnings print also missed, rising just 0.1% M/M, below the 0.2% expected, and 2.6% Y/Y, also missing the 2.7% expected.Specifically, the average hourly earnings for all employees on private nonfarm payrolls rose by 4 cents to $26.84. Over the year, average hourly earnings have increased by 67 cents, or 2.6%.  Average weekly earnings rose a solid 2.9%, but below the 3.2% last month.Average hourly earnings of private-sector production and nonsupervisory employees increased by 5 cents to $22.51 in April.The average workweek for all employees was unchanged at 34.5 hours in April. In  manufacturing, the workweek increased by 0.2 hour to 41.1 hours, while overtime edged up by 0.1 hour to 3.7 hours. The average workweek for production and nonsupervisory employees increased by 0.1 hour to 33.8 hours. The one piece of solidly good news in today's report is that the unemployment rate dropped to a new 18 year low of 3.9%, below the 4.0% expected, and down sharply from the 4.1% in March, which however was the result of a 240K drop in the labor force as the number of employed Americans (per the Household Survey) remained virtually unchanged at 155.181K Offsetting this, the participation rate declined modestly from 62.9% to 62.8%. Some more details from the report: Employment in manufacturing increased by 24,000 in April. Most of the gain was in the durable goods component, with machinery adding 8,000 jobs and employment in fabricated metal products continuing to trend up (+4,000). Manufacturing employment has risen by 245,000 over the year, with about three-fourths of the growth in durable goods industries.Health care added 24,000 jobs in April and 305,000 jobs over the year. In April, employment rose in ambulatory health care services (+17,000) and hospitals (+8,000). Employment changed little over the month in other major industries, including construction, wholesale trade, retail trade, transportation and warehousing, information, financial activities, leisure and hospitality, and government.

      April Jobs: More moderate than strong, with no wage acceleration. - Jared Bernstein - Today’s employment report revealed labor market gains that were more moderate than strong. The unemployment rate fell to 3.9%, an 18-year low, but this was mostly due to a tick down in the labor force. Employment gains, at 164,000, came in slightly below expectations for 190,000, though the prior two months’ gains were revised up by a cumulative 30,000. Wages grew 2.6% for the third month in a row; this continued lack of acceleration is one indicator that some labor market slack remains.That said, the labor market is still clearly closing in on full employment with sizable, steady month gains. To boost the signal-to-noise ratio in these noisy monthly data, our smoother shows average monthly gains over 3, 6, and 12-month periods. These are all clocking in at around 200,000, which should be enough to continue pushing down the jobless rate.The wage story told by these monthly reports continues to underwhelm. Despite persistently low unemployment, as the figure below reveals, wage growth on a yearly basis, before inflation, has been stuck in the mid-2’s for about two years. In a truly tight labor market, more wage pressure would be visible in this series, the inverse of the sharp decline in wage growth during and after the downturn.  To be clear, recessions typically whack nominal wage growth more sharply than recoveries boost them: nominal wages take the elevator down and the stairs up. But the gradual gains in 2015-16, from about 2% to 2.5% ceased around mid-2016, even as the job market clearly tightened further. Other dynamics are in play here, including people entering and leaving the job market (lower-wage workers coming into the job market can reduce the pace of wage gains); some other series show better wage outcomes than this one. But even given these considerations, this indicator should definitely be taken as a signal that some slack still exists in the job market.It is also worth noting that consumer inflation has been running just slightly below this level (2.4%, year-over-year, in March), meaning paychecks are running just slightly ahead of price growth.Those of us who’ve argued that slack still remains in the US job market tend to focus on the employment rates–share of the population with jobs–of prime-age (PA: 25-54) persons. In my monthly reports, I’ve emphasized that this group has pretty consistently been clawing back their losses since the last recession. Though this rate was unchanged in April, holding at 79.2%, since the downturn, it has climbed significantly. The PA employment rate fell 5.5 percentage points in and after the recession, but as the figure below shows, they’ve clawed back 4.4 percentage points of that loss, or 80%. For men, the comparable percentage point loss was 7.6; they’ve made back 5.9 points, or 78%; prime-age women lost 4.1 points and have made back 3.5 points, or 85%.

      April jobs report: excellent in almost all respects - HEADLINES:

      • +164,000 jobs added
      • U3 unemployment rate fell -0.2% from 4.1% to 3.9%
      • U6 underemployment rate fell -0.2.% from 8.0% to 7.8%
      • Not in Labor Force, but Want a Job Now:  up +19,000 from 5.096 million to 5.115 million   
      • Part time for economic reasons: down -34,000 from 5.019 million to 4.985 million
      • Employment/population ratio ages 25-54:  unchanged at 79.2%
      • Average Weekly Earnings for Production and Nonsupervisory Personnel: rose $.05 from  $22.46 to $22.51, up +2.6% YoY.  (Note: you may be reading different information about wages elsewhere. They are citing average wages for all private workers. I use wages for nonsupervisory personnel, to come closer to the situation for ordinary workers.)     
      • Manufacturing jobs up +24,000 for an average of 12,000/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 up +700 for an average of 100/month vs. the last seven years of Obama's presidency in which an average of -300 jobs were lost each month
      February was revised downward by -2,000. March was revised upward by +32,000, for a net change of +30,000.    The more leading numbers in the report tell us about where the economy is likely to be a few months from now. These were positive.
      • the average manufacturing workweek rose +0.2 hours from 40.9 hours to 41.1 hours.  This is one of the 10 components of the LEI. 
      • construction jobs increased by +17,000. YoY construction jobs are up +257,000. 
      • temporary jobs increased by +10,300.  
      • the number of people unemployed for 5 weeks or less decreased by -172,000 from 2,287,000 to 2,115,000.  The post-recession low was set over two years ago at 2,095,000.
      • Overtime rose +0.1 hours from 3.6 hours to 3.7 hours.
      • Professional and business employment (generally higher-paying jobs) rose by +54,000 and  is up +518,000 YoY.
      • the index of aggregate hours worked in the economy rose by 0.5%.
      • the index of aggregate payrolls rose by 1.1%.    

      Disappointing jobs growth and wages data reported for April - The American economy created fewer jobs than expected in April and wage growth slowed down. The US Bureau of Labour Statistics reported that there were 168,000 new non-farm payrolls added in the month, below Wall Street expectations of 192,000. However, last month’s figure of 103,000 was revised up to 135,000.  The US is estimated to need to create roughly 100,000 jobs a month merely to keep up with the growth of the working age population. Average earnings were up by 2.6 per cent year on year in April, dipping below the 2.7 per cent rate in March. However, the overall unemployment rate ticked down from 4.1 per cent to just 3.9 per cent, the lowest since December 2000. The statistics agency reported that jobs gains in the month were concentrated in business services, manufacturing, health care and mining. “It was a mixed report. The headline numbers are disappointing but there’s nothing scary about inflation,” said Art Hogan of B,Riley FBR, a New York investment bank. “There were fewer jobs created in the last month than consensus but the month before was revised higher. That makes this a benign report.” Erik Norland of CME Group highlighted the combination of an ultra-low unemployment rate and still subdued pay growth. “Makes one wonder why the Fed is in such a rush to 'normalizs' policy given the lack of wage and inflationary pressures” he said. “They always seem to think that inflation is just around the corner and it’s never there.” The Federal Reserve has raised interest rates six times over the past three years in order to head off inflationary pressures, last doing so in March. It is expected to put up the cost of borrowing to 2 per cent in June. The BLS reported an additional 24,000 net new jobs in both manufacturing and health care and an extra 8,000 in mining Sectors such as construction, retail, transport and hospitality saw little change in job numbers.

      Jobs, Sliced and Diced - Wolf Richter - Employers added 164,000 jobs in April, seasonally adjusted, according to the Bureau of Labor Statistics, based on its survey of about 651,000 work sites of 149,000 businesses and government agencies. It was the 91st month in a row of gains, the longest such period in the history of the data. The trend has been solid but not spectacular: For the 12-month period ended in April, employers added 2.27 million jobs (not seasonally adjusted). This is in the middle of the range since 2012. The chart below shows the 12-month change in payrolls going back to 2000: The BLS publishes several unemployment rates, based on differing definitions. The data is obtained from household surveys, rather than employer surveys.  Here are the two most often cited:

      • U-3, the headline unemployment rate with a narrow definition of “unemployment,” edged down to 3.9%, from 4.1% where it had hovered for half a year.
      • U-6, the broadest measure that covers U-3 plus people who are “marginally attached to the labor force” plus those employed part time who want to have full-time employment, edged down to 7.8% in April, from 8.0% in March.

      The crucial aspect of these “unemployment rates” is that they’re not absolute measures of unemployment, and were never designed to be that. They’re indicators of trends in the labor market: Is unemployment rising or falling? A different measure with the same trend, the number of “unemployed” in April fell by 239,000 to 6.35 million. And so the labor market continues to tighten. But it’s tighter in some sectors, and shedding jobs in other sectors. The BLS provides a trove of granular data on these movements. By looking at the totals for the past 12 months through April, we capture the trends and avoid much of the monthly noise – to see which industries and governments created or destroyed jobs. The chart below shows the total jobs by sector in April: Note in the chart above that I have put education jobs at state and local governments into one category to get employment in education. I titled this category, “Education, state & local gov.,” the fifth largest category, with 10.9 million workers. Employment by state and local governments is then shown “excluding education.” The Federal government, with a civilian payroll of 2.7 million people is way down on the list (military is not included). The Postal Service, which has been shedding jobs for years, cut its payroll by 5,500 jobs over the past 12 months. It accounts for 28% of civilian federal employment. And here’s how these industries and payroll categories have either slashed jobs or created jobs over the past 12 months:

      Where The Jobs Were In April: Who's Hiring And Who Isn't - After years of monthly payroll reports padded with excessive minimum wage waiter, bartender, educator or retail worker jobs, the just released April jobs report, disappointing as it may have been on the top-line, showed surprising strength in most components even if some negative surprises were also present. Of note: the biggest jobs growth in April was in the higher paying job categories, such as professional services and manufacturing. The notable sector trends are as follows, via Southbay Research:

      • Continued strength in Goods Production: Oil services (+7K), Construction (+17K) & Manufacturing (+24K).
      • Trade & Transportation Slowed: Wholesale (-10K), Retail (+2K), and Transportation (+0K).

      And while the retail sluggishness was expected, the weakness in Wholesale and Transportation was not, especially since it was contradicted by micro level data sourced directly from major trucking employers, all of whom have been complaining they can't find enough people to hire, which suggests there may be an upward revision next month. Some other highlights:

      • Professional Services were especially strong, with a balanced mix of White collar demand (Technical services +26K) and Admin & Suppport (+28K). The offset: Temp workers came in soft at just +10.3K.
      • Manufacturing also very strong at +24K: machinery added +8K jobs and fabricated metal products was up +4,000.
      • Education weak with just +1.1K: Unexplained significant weakness in this sector.
      • Healthcare was steady: +29.3K: Employment rose in ambulatory health care services (+17,000) and hospitals (+8,000).
      • Leisure & Hospitality mild: +18K
      • Mining +8K solid, most of the gain came from support activities for mining (+7,000).

       Comments on April Employment Report - Mcbride - The headline jobs number at 164,000 for April was below consensus expectations of 190 thousand, however the previously two months were revised up a combined 30 thousand. With the revisions, this was close to expectations. In April, the year-over-year employment change was 2.280 million jobs. This has been generally trending down, but is still solid year-over-year growth. Wage growth was about as expected in April, however hourly wages for March were revised down. From the BLS: "In April, average hourly earnings for all employees on private nonfarm payrolls rose by 4 cents to $26.84. Over the year, average hourly earnings have increased by 67 cents, or 2.6 percent." 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 2.6% YoY in April. 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 April to 82.0%, and the 25 to 54 employment population ratio was unchanged at 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 April. 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 decreased to 7.8% in April. This is the lowest level for U-6 since 2001. This graph shows the number of workers unemployed for 27 weeks or more.  According to the BLS, there are 1.293 million workers who have been unemployed for more than 26 weeks and still want a job. This was down from 1.322 million in March. This is the lowest level since September 2007. This is trending down, but remains a little elevated.

      Employment and GDP - U.S. Economic Snapshot (9 graphs)- The BLS release showed 164,000 new jobs, with 168,000 added in the private sector in April and the government sector declining by 4,000. Service sector jobs increased 119,000 and goods producing jobs increased 49,000. The mining and logging sector has had non-negative growth for the past year and a half after experiencing twenty five consecutive months of decline. Average hours of work remained at 34.5 and hourly earnings ticked up slightly, from $26.80 to $26.84. The household data revealed a 3.93% unemployment rate,  down from 4.07%, and is now the lowest rate the economy has seen in nearly two decades. The number of people in the labor force fell by 236,000 and the participation rate was down 0.1%.  The continued improvement in the labor market, jobs and wages, will bring some added pressure to the FOMC to raise rates, given the “no change” verdict from the May 1-2 meeting:Information received since the Federal Open Market Committee met in March indicates that the labor market has continued to strengthen and that economic activity has been rising at a moderate rate. Job gains have been strong, on average, in recent months, and the unemployment rate has stayed low.Economists often refer to a “tight” labor market as one in which there are relatively few job openings (vacancies) compared to the number of unemployed persons searching. The latest data from JOLTS  show that the number of vacancies was 6,052,000 in February and the number of unemployed job searchers was 6,585,000 in March, that is 1.09 openings per unemployed. The number of job openings is the highest ever recorded since the BLS began the series in December, 2000. The BLS also reports job openings by industry. The most job vacancies are in Education and Health Services with 1,173,000 openings with 1,101,000 in Health Care and Social Services. The next highest was in Trade, Transportation and Utilities, 1,148,000, with 708,000 in retail trade. The four graphs below show the levels of vacancies and the number of unemployed for the four census regions.The Midwest labor market is extremely tight, with roughly 110,000 more vacancies than unemployed searchers. It is the only census region with more vacancies than unemployed; although the other regions appear to have tight labor markets as well. The only other place where that has happened since the JOLTS series began was in the Northeast in 2001, with 10,000 more vacancies than unemployed. The BEA announced that real GDP grew at a 2.3% clip in the advance estimate for 2018Q1 and 2017Q4 was revised up to 2.9%. Consumption grew at a 1.1% pace after growing 4.0% in Q4. This is the slowest growth for real PCE since 2013. In spite of the strong growth and labor market, the consumer is not providing much of the fuel for the expansion.

      US Worker Productivity Disappoints, Unit Labor Costs Revised Lower - While both US Productivity and Unit Labor Costs picked up from Q4's data, both key economic data points disappointed expectations with productivity up 0.7% (+0.9% exp) and labor costs up 2.7% (+3.0% exp). Notably the +2.5% Q4 unit labor cost rise was revised notably lower to +2.1% QoQ. Non-Durable Manufacturing Worker Productivity declined YoY for the 3rd quarter in a row... Headline real compensation dropped 0.1% QoQ - the second QoQ decline in a row. Under the hood we note that real compensation for the manufacturing sector dropped 0.1% YoY and real compensation for non-durables dropped 1.5% YoY.

      Midwestern Towns Offer Young Workers Money To Move There - Many millennials, it seems, are content to pay sky-high rents while working low-level jobs in places like New York City just so they can eat their avocado toast, meet their friends for bottomless mimosas, and enjoy other compelling cultural attractions (like the nearly limitless dating pool).But as young people struggle with an aggregate $1.4 trillion in student debt - not to mention tepid wages, high rents and a range of other factors that are forcing them to put off family formation and home ownership - rural areas are offering to help newcomers pay down their debts and buy a home. In exchange, the recipients need to settle in midwestern towns where jobs are plentiful, but workers are rare.Indeed, the demand for college-educated workers in some parts of the midwest is so acute, many towns and civic organizations have started offering "reverse scholarships" to entice young people to relocate there. In a recent story, the Wall Street Journal profiled several young people - many of them couples - who've used money from these grants to pay the down payment on a house or to finance their relocation back to the towns where they grew up. The "reverse scholarships" vary in size and scope based on location. Some are specifically intended to pay off student loan debt. Others can be used to help buy a home. The sizes range from around $5,000 to as much as $15,000. What's more, these grants are typically being offered in towns where labor shortages have been driving up wages.

      Calif. Supreme Court Transforms Test for Who Is an Employee -- California workers and companies have a new test to determine whether someone should be classified as an employee or independent contractor under state law. The state supreme court said in an April 30 ruling that a three-factor “ABC” classification is the correct test under state law, shifting from a separate standard that looked at nearly a dozen different factors. “It’s a bombshell,” Richard Reibstein, a partner at Locke Lord LLP in New York, told Bloomberg Law. “It will require hundreds of thousands of companies in California that lawfully created independent contractor relationships to reevaluate their classifications.”  “Many companies have built their businesses in a manner that conforms to the laws in the states in which they operate, including California, which has so dramatically changed its test that many of these companies today might be misclassifying workers that were lawfully classified yesterday,” said Reibstein, who represents employers and senior management in labor and employment cases.  The decision affirms a lower court ruling, which upheld a trial judge’s decision to certify a class action filed by drivers for delivery service Dynamex Operations West Inc. Dynamex is a subsidiary of TFI International Inc. Even though the high court’s ruling upheld decisions reached by lower courts, its adoption of the ABC test was a shift in how it interpreted worker classification under state law.  “For employees I think it establishes a bright line test that is going to be beneficial for employees and for employers who want to comply with the law,” Pope said. The new standard puts the responsibility on businesses for proving the three parts of the ABC test, he said. “It’s the employer that has to meet the burden on each of those tests.”

      Report: Walmart Workers Cost Taxpayers $6.2 Billion In Public Assistance - Walmart's low-wage workers cost U.S. taxpayers an estimated $6.2 billion in public assistance including food stamps, Medicaid and subsidized housing, according to a report published to coincide with Tax Day, April 15.Americans for Tax Fairness, a coalition of 400 national and state-level progressive groups, made this estimate using data from a 2013 study by Democratic Staff of the U.S. Committee on Education and the Workforce."The study estimated the cost to Wisconsin’s taxpayers of Walmart’s low wages and benefits, which often force workers to rely on various public assistance programs," reads the report, available in full here."It found that a single Walmart Supercenter cost taxpayers between $904,542 and $1.75 million per year, or between $3,015 and $5,815 on average for each of 300 workers."Americans for Tax Fairness then took the mid-point of that range ($4,415) and multiplied it by Walmart’s approximately 1.4 million workers to come up with an estimate of the overall taxpayers' bill for the Bentonville, Ark.-based big box giant's staffers.The report provides a state-by-state breakdown of these figures, as well as some context on the other side of the coin: Walmart's huge share of the nationwide SNAP, or food stamp, market. "Walmart told analysts last year that the company has captured 18 percent of the SNAP market," it reads. "Using that figure, we estimate that the company accounted for $13.5 billion out of $76 billion in food stamp sales in 2013."

      Want a More Equal Society? Universal Basic Income Might Not Be the Policy You Are Looking For --The case for a Universal Basic Income (UBI) has rapidly become part of mainstream political debate. The Labour Party is actively considering the policy, in the US it was revealed Hillary Clinton almost included it as a manifesto pledge. Trials have recently begun across the world, including close to home in Scotland.The policy is again in the news as the Finnish government chose not to fund an extension to their two-year basic income trial. This led to much speculation as to what this means for the policy, leading many to argue that a basic income had fallen flat. In reality, the government simply chose not to fund an extension to what was always intended as a time limited policy experiment. But this provides a useful chance for reflection on the idea of Universal Basic Income, its aims and the debate that surrounds it. The idea of Universal Basic Income, or Citizens Income, is superficially quite simple. A monthly payment made to every adult and/or child in the population, of equal value and with no conditions attached. No need to search for or be in work, no means testing, just a condition of citizenship.For its proponents, UBI has several benefits. It would remove bureaucracy, and therefore cost, from the system through eliminating means testing, and protects workers in an increasingly insecure labour market. This latter point is particularly important in an age where many are concerned about the impact that automation and AI might have on our working lives, and the resultant power balances between capital and labour. However, the superficial simplicity of a Universal Basic Income belies a multiplicity of versions, and raises several questions. At what level should a UBI be paid? How does it factor in children? How will it support those with disabilities or who are out of work? Will it sit alongside or replace existing social security arrangements? And most importantly, what are the economic arrangements which govern how a UBI would be paid for?

      Report: Amazon and Tesla among most dangerous workplaces in the US -In its annual report, “The Dirty Dozen 2018: Employers Who Put Workers and Communities at Risk,” the National Council for Occupational Health and Safety (COSH) ranked Amazon and Tesla as among the most dangerous work environments in the United States, exposing the grim reality that workers face in the modern tech industries.The report opens with an overview of statistics on workplace injuries and fatalities in the US, noting, “According to the U.S. Bureau of Labor Statistics, 5,190 people died from workplace trauma in 2016, a seven percent increase from 2015 and a 12 percent increase over a five-year period dating back to 2012. [These deaths] include sudden, tragic events—such as falling from a height, being struck by a vehicle or being crushed by a machine.”The report continues, “In addition to more than 5,000 deaths from acute workplace trauma, an estimated 95,000 workers die annually in the U.S. from cancers, respiratory and circulatory diseases and other illnesses associated with long-term exposure in the workplace.”“All these deaths were preventable. […] Thousands of workers would still be alive and with their families today if their employers had followed well-established safety protocols to reduce the risk of injury, illness and death.”The “Dirty Dozen” report highlights the fact that since 2013 alone, seven workers have been killed at Amazon warehouses in the US, including three workers in a five-week span during the high-volume holiday “peak season” last fall.  The report describes each of the deaths of the seven Amazon warehouse workers since 2013:

      Toiling Over a “Puddle of Blood”: Why These Warehouse Workers Are Standing Up to Abuses - Workers at the XPO Logistics warehouse in Memphis announced in early April that they had filed a complaint to the Equal Employment Opportunity Commission (EEOC) alleging rampant abuse, including sexual harassment. On April 3, workers held a rally with the International Brotherhood of Teamsters (IBT) to coincide with the filing of the EEOC complaint.The complaint was triggered by an XPO worker’s death that co-workers attribute to company policies which restrict workers from leaving the job. In October 2017, Linda Neal, 58, died at work after passing out on the job. Workers allege that a supervisor denied Neal being given CPR by a co-worker. Medical reports confirmed that Neal died of a heart attack caused by cardiovascular disease.XPO Logistics, based in Connecticut, has warehouses across the country and a market value of nearly $9 billion. The company provides transportation, delivery and logistics for Verizon, Ikea, Home Depot and other retailers. The Memphis warehouse has more than 300 permanent employees and more than 400 temporary workers.  Lakeisha Nelson, who has worked for XPO since 2014 and was close to Neal, tells In These Times, “[Neal] was a mother figure to a lot of us, and we had to become family in that building. We had to work over the puddle of blood that was left behind the next morning, and that hurt me to my core.”  Nelson believes company policy played a role in Neal’s death, recalling that an XPO supervisor would not allow Neal to leave work when she expressed she was feeling ill.“The only thing that’s important to XPO is them making money, and if it takes our lives to get their money, then our lives are expendable,” says Nelson. “And they tell us all, if you don’t like the way we do things, find another job. It’s very, very easy to get fired there.” Staff workers have filed multiple complaints regarding safety hazards and dangerous working conditions, but little has been done by management to address them, according to Nelson.

      "There's Crack And Heroin Everywhere" - Homeless Set Up Shooting Gallery Inside SF BART Station - America's twin public-health crises of homelessness and drug dependency have been put on grotesque display in a corridor of the Civic Center BART station in San Francisco - one of the busiest stations in the Bay Area.In a shocking report by CBS San Francisco Bay Area, the station documents a group of junkies and drug addicts who congregate in a hallway in the terminal early in the morning, where they openly inject and smoke drugs. In the videos, junkies can be seen injecting drugs into veins near their knuckles or nodding out amid piles of vomit and other bodily fluids.BART police say they're too overwhelmed to put a stop to the daily congregations, and that they might need to enlist the help of San Francisco police to stop drug users from setting up what's essentially a roving shooting gallery in the passageways of the station. Some stations, CBS reports, are often left completely unguarded.The rider who alerted CBS described the situation in an interview, saying there's "crack and heroin" everywhere. Some may find the video shocking. Others may find it routine. "Every day. Every morning. 5:30 to 6 o’clock. You can see there’s dozens of them. Needles everywhere. Crack. Heroin." [...] "One morning I said, 'I got to pull out the camera and show my friends this. They’re not going to believe it,'" he said. When confronted with the footage, a spokesman for BART said the organization is just trying to do the best it can with the resources it has.

      Proposed Harrisburg School District budget could cut kindergarten to half days - The Harrisburg School District is facing difficult cuts and a possible tax hike. A proposal for the changes came out on Monday during a public meeting. The changes are needed as part of the district's $8 million deficit. Emotions spilled over as parents and board members tried to figure out how to serve children on a budget that will be stretched even thinner over the next couple years due to increases in pension and health care costs. One option is to raise taxes. Officials said on average, it would cost each family about $43 the first year, and increase slightly over the two following years. In total, this would give the district another $1.4 million to help offset the budget shortfalls. "If we were to make no changes in the program, then in the next two or three years, we would have no fund balance. With the proposed changes, that stretches that out for another six or seven years," Another part of the proposal involves cutting kindergarten to half days. Superintendent Dr. Sybil Knight-Burney fought for full kindergarten days when she started her position. Board officials said they may use a combination of cutting non-mandatory programs and raising taxes to improve their financial situation. Meanwhile, teachers are wondering how we got to this place "Leadership must hold itself accountable. Citizens must hold their leadership accountable because when you research and look at the condition of this district, it's unacceptable," Board members said this has been excruciating, but if they don't make changes now, the district will face bigger problems in a couple years. "We want [these proposed cuts] to have the least amount of impact on students. It's that simple," Hasan said. Teachers, parents and community members are begging for another way. 

      New Test Results Reveal A "Lost Decade" For Academic Progress In Public Schools - The biannual report card from the National Assessment of Education Progress (NAEP) has been released. The results indicate a lost decade for academic progress in America’s public schools, with little progress measured in eighth-grade reading and zero improvements for reading in fourth-grade or for mathematics in eighth-grade. Despite the hundreds of billions of taxpayer dollars pumped into the education programs at state and federal levels per annum, the return on developing America’s intelligent, future leaders of tomorrow is failing. “This has been education’s lost decade,” Michael Petrilli, president of the reform-oriented Thomas B. Fordham Institute, told The 74 Million. NAEP was administered in 1Q2017 to a nationally representative sample of 149,400 fourth-graders and 144,900 eighth-graders. Fourth-grade scores in 2017 were unchanged in math and declined in reading, though the decline was not determined to be significant. On the other hand, eighth-graders made marginal progress in both subjects, though reading was much stronger than math. The 74 Million said in the modern era of academic standards and school accountability over the last two decades, the flat trajectory in education progress for public school youth have left education reformers baffled. “In some ways, the flat trajectory provides relief for educators after the especially bitter NAEP news in 2015, when scores dropped for three out of four age/subject groupings. The development came as states were still rolling out testing regimes aligned with the Common Core, and the new standards were widely (and controversially) blamed for bringing down student performance. Although scores for American students have gone through periods of sizable and consistent growth — most recently at the dawn of the modern era of academic standards and school accountability in the late 1990s and early 2000s — results over the past 10 years have left education reformers at a loss.” While the national average in test scores stagnated over the past decade, “scores for the highest-performing eighth-graders (those scoring at the 75th and 90th percentiles) nosed higher, while those for the lowest-performing students (those at the 10th and 25th percentiles) declined in fourth-grade math, eighth-grade math, and fourth-grade reading,”

      The $21 Billion Debt That Most Illinoisans Know Nothing About - Illinoisans hear plenty about the state’s ballooning pension debt, its billions in unpaid bills and rising bond debts. In fact, many even know about the local pension crises playing out in cities like Harvey and North Chicago.But most don’t know that the state’s 860 school districts have put Illinoisans on the hook for another $21 billion in debt. In 2002, it was just $12.3 billion. That growing burden is just another reason Illinoisans pay the nation’s highest property taxes.Illinois has far more school district debt, measured on a per student basis, than its neighbors, with the exception of Indiana.Illinois, with $10,400 in debt per student, has 70 percent more school debt than Wisconsin, 44 percent more than Iowa and 33 percent more than Missouri. Indiana’s debt load is just 2 percent more than Illinois’ own.And just like pension debts and unpaid bills, Illinois’ school debt has been on the rise. Total debt across the state is up about 70 percent since 2002. Back then, the debt equaled about $6,100 when measured on a per student basis.That increase could be explained if Illinois was a fast growing state with many new students and a need for more infrastructure. But the opposite is true. Illinois’ student population is flat when compared to 2002.  School districts are limited in how much debt they can accumulate – not that it’s stopped many from going far over what the law allows.The limit is calculated as a percentage of the taxable property in the district (the Equalized Assessed Value) – 6.9 percent in the case of elementary and high school districts and 13.8 percent for full K-12, or Unit, districts.Across the state, 72 districts exceeded their allowed debt limit as of 2016. In sum, their debts are nearly $1 billion over the limit. That’s according to a FOIA from the Illinois State Board of Education. That’s only possible because the debt limit the state imposes is full of exceptions and loopholes.

      NRA Convention Bans Guns To Protect Mike Pence. Parkland Survivors' Jaws Drop. - Guns will be barred during Vice President Mike Pence’s appearance at an upcoming National Rifle Association convention to protect his safety — prompting survivors of the Parkland school shooting in Florida to wonder why the gun group won’t agree to gun restrictions elsewhere to protect children.Those attending the NRA Leadership Conference in Dallas are on notice that no firearms or “weapons of any kind,” or ammunition, will be allowed in the Kay Bailey Hutchinson Convention Center “prior to and during” Pence’s appearance on May 4. The NRA posted the restrictions ― a requirement of the Secret Service ― on a website announcing the conference. “There will be no storage for firearms,” the NRA says in the announcement.   Teens who survived the Feb. 14 mass shooting at Marjory Stoneman Douglas High School in Parkland, where 17 people were killed, are wondering why the NRA fiercely resists extending the same safety considerations to other areas to safeguard children. The NRA wants “guns everywhere” when it comes to kids, tweeted Matt Deitsch, a Parkland student who helped organize the March for Our Lives rally for stricter gun laws in Washington.  The NRA urges more guns in schools and suggests teachers be armed. President Donald Trump, who agrees with the gun group, boasted that an armed teacher could have “shot the hell out of” the Parkland gunman. An armed deputy assigned to the school failed to respond to the shooter and stayed outside the building.Wait wait wait wait wait wait you’re telling me to make the VP safe there aren’t any weapons around but when it comes to children they want guns everywhere? Can someone explain this to me? Because it sounds like the NRA wants to protect people who help them sell guns, not kids.— Matt Deitsch (@MattxRed) April 28, 2018  Cameron Kasky, another Parkland student who has become a gun control activist, lashed the NRA as a ridiculous “parody of itself.”The NRA has evolved into such a hilarious parody of itself. — Cameron Kasky (@cameron_kasky) April 28, 2018

      As Arizona teachers strike enters third day, unions seek to shut down walkout --The strike by tens of thousands of Arizona educators, the largest yet in a series of teacher struggles across the United States over the last two months, is in danger of being shut down by the unions. The Arizona Education Association (AEA) and the American Federation of Teachers (AFT), working in conjunction with the Facebook group Arizona Educators United, are preparing to end the walkout on the basis of a rotten agreement with legislators that resolves nothing. An estimated 57,000 teachers walked out last Thursday to demand a 20 percent raise for teachers, substantial pay hikes for support staff and the restoration of the $1 billion in school cuts in order lower class sizes and fund school supplies. While Phoenix, Tucson and other school districts will remain closed today, the unions are preparing to use the expected passage of another bogus funding proposal and the reopening of schools in Scottsdale and other districts to call the strike off as early as Tuesday.The arrival today of AFT President Randi Weingarten is meant to be the kiss of death to the strike. Weingarten, whose salary is $497,300, is not in Arizona to unify teachers with their counterparts in other states. On the contrary, Weingarten and National Education Secretary Lily Eskelsen Garcia (salary $348,000) have spent the last two months jetting from their Washington, DC offices to West Virginia, Oklahoma and other states to prevent a unified struggle by teachers across state boundaries.Arizona Governor Doug Ducey announced on Friday a deal promising a 20 percent pay increase for educators and a minor increase in school funding, which would supposedly be financed based on unrealistic projections of economic growth. In other words—empty promises. The AEA, for its part, has said it will shut down the strike on Tuesday even if this cynical gesture is not passed by the legislature.

      Arizona strike enters second week as teacher union president opposes calls for nationwide strike --On Monday, nearly 50,000 Arizona educators and supporters continued their walkout against underfunded schools and low pay for a third day. Although the teacher unions have done everything to isolate the teachers and wear them down with fruitless appeals to hostile politicians, educators came out to the state capitol in Phoenix en masse Monday to demonstrate their determination as the strike began its second week. Several of the largest districts announced they would remain closed on Tuesday as the Arizona Education Association and the national teacher unions scramble to come up with some justification to end the strike without meeting teachers’ demands, as the unions did in West Virginia and Oklahoma. Over the weekend, AEA President Joe Thomas had called Monday’s rally the final “remedial opportunity” for the state legislature to listen to teachers’ demands before the union shifted its focus to electing Democrats in the November elections. On Monday, he said, “The real work is getting them to pass a budget and you have to do that today,” adding, “Break bread with your legislators and find common ground.” But teachers have no common ground with legislators who have cut roughly $1 billion from Arizona schools over the past decade. The teacher unions above all want to prevent the strike from spreading across the United States and coalescing into a movement for a nationwide strike. This was made clear by American Federation of Teachers President Randi Weingarten who was questioned by a World Socialist Web Site reporter during a press conference in Phoenix Monday. Asked for her response to the growing demands by teachers for a nationwide strike, Weingarten insisted that “education is a statewide issue.” She added, “We want to make sure that these walkouts become walk-ins to the voting booth in November.”

      Arizona Educators United Facebook group censors teachers, WSWS - In the past two days, the administrators of the Arizona Educators United (AEU) Discussion Hub Facebook group have begun censoring World Socialist Web Site articles, and banning commenters who oppose or warn about the preparations by the Arizona Education Association (AEA) to shut down and sell out the strike.On Saturday, Carey Zegart, an Oklahoma school teacher, was removed from the group after he published statements warning other workers not to trust the AEA. He pointed to the lessons from the 10-day Oklahoma teachers strike, which the unions shut down on April 13 without any of their demands met.David Moore, the Socialist Equality Party’s candidate for the 2018 midterm elections, who is reporting from Arizona for the WSWS, was banned the same day after he shared a link to a WSWS article on the strike.The page administrators also deleted a post published Friday by another writer for the WSWS, which quoted AEA President Joe Thomas’s statements at that day’s rally in Arizona. Thomas had stated that if governor Doug Ducey offered no concessions, the union would end the strike and let the voters decide if they’re going to listen to these people.” The comment warned that this was a clear indication that the AEA was preparing to sell out the strike and channel opposition behind the election of Democrats.The post was deleted after it had been “liked” or commented on by more than 30 teachers, indicating opposition to the union’s efforts to shut down the strike.The AEU’s censorship measures are a violation of a basic principle of workers’ democracy, which upholds the right of all socialist and pro-working-class tendencies to make their views known to workers—and the right of workers to read and hear these views. When the AEU Discussion Hub group was established, the administrators announced its entire purpose was to allow a free and open debate of ideas among teachers. Now, however, this is being prevented.

      How Arizona’s $5 Billion in Corporate Tax Handouts Decimated Public Education - If you want to know why thousands of Arizona teachers shut down schools across the state for Thursday’s massive statewide protest, follow the money.At least 1,000 schools with a combined 840,000+ students were closed on Thursday for the walkout, in which teachers demanded not only a 20 percent pay increase, but a restoration of funding cuts amounting to roughly $1 billion since the austerity measures began during the Great Recession of 2008-2010. Despite Arizona Governor Doug Ducey (R) pledging to increase teacher salaries by 20 percent by 2020 with no tax increases, teachers say they won’t go back to class without a promise of additional education funding from the state legislature.  Images from Thursday’s walkout show what appears to be tens of thousands of teachers all marching on the state capitol in Phoenix despite high temperatures of roughly 95 degrees. The crowd of teachers swelled from sidewalk to sidewalk and stretched on for roughly a dozen city blocks according to photos taken by local media: The reason for the historic walkout and march — which is likely the largest teacher demonstration in history, even outnumbering the crowd at the Oklahoma state capitol earlier this month — is much easier to grasp when looking at hard numbers showing exactly how much teacher pay has been cut over the last several decades and comparing that with the amount given to corporations. Vox tracked the amount of money granted to corporations through state tax incentives in Arizona and found that, according to data from the state’s Joint Legislative Budget Committee and the Seidman Institute at Arizona State University, the state lost out on roughly $5 billion in corporate tax revenue since 1993, when adjusting for inflation. Simultaneously, over the last 15 years, the average teacher salary in Arizona has dropped by almost $10,000. Per-student spending has also suffered, with the state spending roughly $800 less per student today than it did ten years ago. This data signifies a trend of upward wealth redistribution, from teachers’ paychecks and childrens’ education to corporate balance sheets:

      The bizarre right-wing campaign to discredit striking Arizona teachers - The teachers striking in Arizona have been called Democratic operatives. Masterminds of a national socialist revolution. Architects of a plot to legalize marijuana. The backlash is fiercer than in other states where teachers have protested or gone on strike. And the comments aren’t coming from the ideological fringes of the internet. State politicians, lawmakers, and journalists are making these accusations to discredit teachers who are demanding higher pay and more funding for public schools.Thousands of teachers in Arizona walked out of class on Friday for the second day in a row to protest low pay and cuts to public education funding. Like the teachers who went on strike in West Virginia and Oklahoma, teachers in Arizona are among the lowest-paid in the country and have suffered some of the deepest cuts to public school funding — largely a result of steep Republican tax cuts that didn’t bring the promised economic windfall. So far, state lawmakers have not introduced any bills to meet teachers’ demands. Instead, they are trying to paint the organizers of the grassroots group, Arizona Educators United, as outsiders on a secret political mission. “Cursory research (my public school teachers taught me well) reveals that #RedForEd’s music teacher leaders, 23-year-old Noah Karvelis and comrade Derek Harris, are political operatives who moved here within the last two years to use teachers and our children to carry out their socialist movement,” wrote Republican state Rep. Maria Syms in an op-ed published in the Arizona Republic, in which she also accused them of being “Bernie Sanders political operatives.”  Fox10 host Kari Lake said the teachers strike is actually just a cover ploy to legalize recreational marijuana in Arizona. Lake seemed to be suggesting that teachers wanted to force lawmakers to allow recreational marijuana sales in the state as a way to create new tax revenue for education.

      Outrage grows over union effort to shut down Arizona teachers strike --Striking teachers in Arizona are outraged by the effort by the Arizona Education Association (AEA) and the Facebook group Arizona Educators United (AEU) to send them back to work without obtaining teacher and support staff raises and the restoration of school funding to pre-2008 levels.On Thursday evening AEA President Joe Thomas and AEU founder Noah Karvelis announced they would endorse the same budget proposal teachers rejected when nearly 60,000 educators began their strike last Thursday. “What we have right now is the most we could possibly get through this avenue,” declared Karvelis.The ostensibly rank-and-file controlled AEU group, which was set up with the backing of the union, instructed teachers to return to work as soon as the budget gets passed by the state legislature, which is expected by Thursday. This comes just after 93 percent of AEU site liaisons voted to continue the strike over the weekend.Given the greenlight by the union, school districts have indicated they will reopen Thursday. “I got a text to return to work by my school district,” a Phoenix teacher told the World Socialist Web Site. “The districts are threatening to take disciplinary action if teachers don’t report to work. They’re trying to split teachers, threaten them and destroy this movement.”Like the betrayal of the strikes in West Virginia and Oklahoma, the deal accepted by the union does nothing to address the decades-long deterioration of living standards and classroom conditions. Although Governor Doug Ducey said he would give teachers a 20 percent pay hike the Republican governor’s budget proposal does not give direct raises, just extra funding to school districts. At least 58 districts would not receive enough to actually give the 20 percent raise promised by Ducey. The plan would restore only $400 million in funding, less than half of the $1.1 billion that has been cut since 2008. The raises included in the budget do not include support staff who are frequently paid near the minimum wage. Neither does the budget establish a salary schedule with specified yearly raises for experienced teachers. In other words, the deal backed by the AEA and AEU ignores every single one of the demands teachers endorsed when they voted by 78 percent to strike.

      Union betrays Arizona teachers strike, backs Republican state budget -- Early Thursday morning, the Arizona state legislature passed the budget proposal of Republican Governor Doug Ducey, which was promptly signed into law. Arizona Education Association (AEA) and its front group, Arizona Educators United (AEU), endorsed the budget on Tuesday and called for an end to the walkout. Districts across the state sent out notices that classes are to resume Friday. The settlement is a miserable betrayal of teachers who courageously struck for six days, in defiance of anti-strike laws and the deliberate isolation of their walkout by the national teacher unions and state unions in Arizona. The budget is virtually unchanged from the proposal teachers rejected when they began their strike April 26. It includes money to give some teachers raises but not enough for the promised 20 percent over the next three years. Teachers without a homeroom class, like resource teachers or reading coaches, are entirely left out of these raises. Also excluded are tens of thousands of support staff like school bus drivers, instructional aides, custodians and cafeteria workers, many of whom are paid close to minimum wage.  Like the statewide strikes that preceded it in West Virginia and Oklahoma, the walkout in Arizona was initiated by rank-and-file teachers, not the unions, which opposed any strike action from the beginning. The Arizona teacher unions announced the end of the walkout the day after a visit from American Federation of Teachers President Randi Weingarten, who along with her counterpart in the National Education Association, Lily Eskelsen Garcia, have been combing the country to stamp out teachers’ strikes and prevent them from coalescing into a nation-wide movement.  The Arizona budget meets none of the initial demands of teachers and resolves none of the underlying problems in public education that drove teachers to strike. The deal provides only $400 million in additional school funding over the next five years, barely more than a third of the $1.1 billion that has been cut over the last decade. Teacher raises, which are not even guaranteed, will still leave educators near the bottom in the country for salaries.

      Georgia Bus Drivers Joined the School Uprising and Paid a Price -- The red-state school uprising is spreading to educators around the country, with teachers in Colorado and Arizona now planning walkouts to demand better treatment from state and county governments. But the widespread public support that has helped carry the teachers to victories so far has been less present for blue-collar workers following in their footsteps. In Georgia, bus drivers who organized their own work stoppage last week were met with public condemnation and immediate firings. On Thursday, the same day that the votes in favor of a walkout were tallied in Arizona, nearly 400 school bus drivers in DeKalb County, Georgia, stayed home from work, staging a “sickout” to protest their low salaries and meager benefits. Whether the school bus drivers can succeed in winning their demands and maintaining broad popular support remains to be seen, but the protest provides an important test case on whether these teacher movements will lead to a broader working-class uprising or stay limited to organizing among a narrower band of white-collar professionals. The bus drivers’ protests last week did not lead DeKalb County’s school district to shutter its schools. But on Thursday, 42 percent of the district’s bus drivers did not show up to work, causing disruption and delays. DeKalb Public School officials called for transportation help from outside the district, the bus drivers who did show up were asked to take on second routes, and parents had to find last-minute transportation alternatives. While the teachers strikes in West Virginia, Oklahoma, and Arizona have boasted the vocal support of local school boards and superintendents, the school district leadership in DeKalb County has offered no such solidarity to the school bus drivers. In fact, seven bus drivers were fired on Thursday, identified as “sickout ringleaders.”

      Teachers in Pueblo, Colorado to strike Monday - Teachers is Pueblo, Colorado will begin a strike on Monday, the first strike by teachers in the state since 1994.The Colorado Department of Labor issued a memo May 2, to both the Colorado Education Association (CEA) and Pueblo City Schools (District 60), stating that it will not intervene with the planned teacher strike, which was approved by teachers 471-24 in April.Teachers in the city located south of Denver have been staging protests for weeks, including organizing sick-outs that have forced schools to close. On Wednesday, the district threatened consequences for further job action, stating, “[W]e have been notified by the leadership of PEA [Pueblo Educators Association] and PPEA [Pueblo Paraprofessional Educators Association] that they intend to call for a District-wide strike, presumably within the week and potentially in violation of state law.”It declares that “members of the professional staff who use excused leave to participate in either sick-outs or a strike will be subject to a full salary-deduction for each day of absence based on the staff member’s current daily rate of pay. Also, during any period of salary deduction, staff members will be subject to a suspension of benefits.” The salary-deductions will impact the teachers heavily. They are some of the most underpaid teachers in the country and cannot afford to lose any pay in a state where the cost of living is increasing.

      The Teacher Uprising Spreads Far and Wide - An Associated Press poll found that 78 percent of Americans think teachers are paid too little, and a majority support teachers’ strikes to win higher pay. Fifty percent said they favor higher taxes to pay teachers more.

      • After weeks of protesting proposed pension concessions, Kentucky teachers were shocked to learn in March that their Republican-dominated legislature had suddenly amended a bill on sewer system regulations to include 291 pages on pension reform. The new law creates a two-tier pension system. Teachers reacted with sickouts, closing schools in a dozen districts as thousands rallied at the capital. After this backlash, the state legislature did increase funding for schools, but inflation-adjusted per-student funding is still 16 percent lower than in 2008.
      • School bus drivers in DeKalb County, Georgia, pulled a sick-out over pay, retirement, and poor treatment. About half the workforce participated, but most drivers returned to work by the third day, after officials fired the “ringleaders.” The drivers, who are overwhelmingly African American, have no union but had organized a Drivers and Monitors Advisory Committee.
      • Colorado teachers have joined the wave of walkouts, shutting the state’s 10 largest districts April 26-27 as they join protests at the state capital over a lack of funding and their pension plan. The Colorado Education Association says that teacher salaries after inflation have dropped 17 percent in the last 15 years, and that the state has underfunded education by $6.6 billion since 2009 by failing to implement a constitutional amendment that requires education funding to grow on pace with inflation.
      • Thousands of North Carolina teachers are planning to take personal days on May 16 to demonstrate at the capital for school funding and teacher raises. Teacher pay there is $10,000 below the national average.
      • Corporate elites are worried about the public support for teachers. The State Policy Network, a conglomeration of right-wing think tanks, put out a messaging guide. It admits, “A message that focuses on teacher hours or summer vacations will sound tone-deaf when there are dozens of videos and social media posts going viral from teachers about their second jobs, teachers having to rely on food pantries, classroom books that are falling apart, paper rationing, etc.”

      Instead, the guide suggests that politicians should emphasize that “teacher strikes hurt kids and low-income families.” On cue, Kentucky Governor Matt Bevin told the press, “I guarantee you somewhere today, a child was physically harmed or ingested poison because they were left alone” as a result of teacher walkouts. Meanwhile teachers from Arizona to West Virginia have gone out of their way to make sure kids are fed while schools are closed.

      The US Teachers Strike in Historical Perspective - In the US, a teachers’ strike is spreading from one red state to another. It began in West Virginia when 34,000 teachers walked out on February 22 2018. They stayed out until March 7, against the advice of their own union leaders, until they received a deal that they could live with from the state government. They were soon joined by tens of thousands of teachers in Oklahoma, who struck from April 2 to April 12, and then their colleagues in Arizona followed them on April 26.Now there are rumbles of teachers’ strikes in the blue and purple states of Illinois and New Jersey, and in states elsewhere. NBC News reports a “Red-state Teacher Rebellion.” There is no telling whether the rebellion will spread to more states and occupations.The teachers’ strikes come at a difficult time for American unions. Their total membership has fallenfrom 17.7 million people in 1983 to 14.8 million in 2017, and the proportion of union members in the workforce has fallen even more dramatically, from 20.1 percent in 1983 to 10.7 percent in 2017. Unions continue to fund the Democratic Party, but their investment has seen few legislative gains. This is a story of failure, softened only by the occasional victory.Yet the teachers’ strikes may offer American unions a road back to health. Historians have long known that unions seldom grow at a slow, steady pace. They tend instead to push forward in a series of leaps, in a kind of chain reaction where a strike in one industry inspires strikes in others. The growth of unions in one part of the country leads to the growth of unions in other parts, and to use the British historian Eric Hobsbawm’sterm, the labor movement recruits “in lumps” as striking workers join unions en masse. The American labor activist Kim Moody, in his recent book On New Terrain,describes this process as a “labor upsurge.” Could the strike by teachers in West Virginia be the spark for just such an upsurge in 2018? To answer this question it’s useful to look back to previous waves of strikes in the US like the rising of 1934, when striking workers laid the groundwork for the Congress of Industrial Organizations,or the mass strikes in coal, steel, the railroads and other industries during or immediately after the First World War, or the militancy of auto and other workers in the 1970s.

      CIA expands its Signature School program to University of Illinois Chicago - At the end of February, the University of Illinois Chicago (UIC) and the US Central Intelligence Agency (CIA)announced a new partnership in the CIA’s Signature Schools program.The CIA is targeting UIC in the name of “diversity.” Its large student population of more than 30,000, drawn from many national and racial backgrounds, and located in the center of the city of Chicago, has attracted the agency’s attention. In the words of Maja Lehnus, CIA associate director for “talent” recruitment, the “CIA is committed to building a diverse workforce that has a broad range of ethnic and cultural backgrounds, language expertise, and educational and life experiences to ensure diversity of thought and the ability to operate effectively worldwide.”In 2016 under the Obama administration, John Brennan, then head of the CIA, announced its Diversity & Inclusion Strategy, with Lehnus at the helm.In 2016, UIC reported 15 percent of all students enrolled were international students, coming from more than 100 countries. The university reported international students made up more than a third (34.5 percent) of graduate and professional students that year.In that same year, the CIA launched its Signature Schools program. UIC is now fourth to join the program, which includes Baruch College of the City University of New York, the University of New Mexico, and Florida International University. All the institutions have large minority student populations, or majority minority student bodies, as well as large numbers of international students. The program is reported to permit the CIA, the arm of the US intelligence apparatus also known as “Murder, Inc.,” to have a regular recruiting presence in order to “build relationships” and “sustain contact with qualified student applicants” through on-campus interviews, workshops, presentations and seminars on “the business of intelligence,” and other activities with CIA personnel, according to the joint press release.

      Documents show ties between university, conservative donors (AP) — Virginia's largest public university granted the conservative Charles Koch Foundation a say in the hiring and firing of professors in exchange for millions of dollars in donations, according to newly released documents. The release of donor agreements between George Mason University and the foundation follows years of denials by university administrators that Koch foundation donations inhibit academic freedom. University President Angel Cabrera wrote a note to faculty Friday night saying the agreements "fall short of the standards of academic independence I expect any gift to meet." The admission came three days after a judge scrutinized the university's earlier refusal to release any documents. The newly released agreements spell out million-dollar deals in which the Koch Foundation endows a fund to pay the salary of one or more professors at the university's Mercatus Center, a free-market think tank. The agreements require creation of five-member selection committees to choose the professors and grant the donors the right to name two of the committee members. The Koch Foundation enjoyed similar appointment rights to advisory boards that had the right under the agreements to recommend firing a professor who failed to live up to standards. Cabrera emphasized in his note to faculty that the "agreements did not give donors control over academic decisions" — an apparent reference to the fact that the Koch Foundation did not control a majority of seats on the selection committees.

       Millennials explain why they have nothing saved for retirement - Pensions are disappearing. The future of Social Security is uncertain. It's likely we'll live longer lives. But most Millennials still aren't putting away any money for retirement. About 66% of people between the ages of 21 and 32 have absolutely nothing saved for retirement, according to a report from the National Institute on Retirement Security. CNN heard from dozens of Millennials about why they have little or nothing saved. For the most part, they believe they'd be better off putting their money elsewhere. Some want to pay off student debt. Some are trying to build up their own business. Many graduated during the recession, worked low-wage jobs for a few years and then went back to school to improve their job prospects.   For others, there are more immediate costs like child care and rent. They're still building up emergency savings and the idea of putting money in an account they can't touch for 30 years doesn't make a lot of sense to them, despite the advantage of compounding interest.  Here are four of their stories.

      America Has Never Had More Millionaire Retirees - One out of every six American retirees is a millionaire, according to a new report by investment manager United Income, which notes that the average retiree's wealth has risen over 100% since 1989, to $752,000  - while the share of millionaires has doubled. "Retirees are healthier and wealthier than any previous generation," reads the report.  While income inequality has remained about the same since 1989, a rising stock market has resulted in a 42% rise in wealth inequality among American retirees.  “People have held incomes and spending constant over time,” said Matt Fellowes, United Income’s founder and chief executive officer. “The wealthiest retirees are wealthier but are not spending more, relative to previous generations.”  The gap between the wealthy and the ultra-wealthy has also widened. The wealth of the median millionaire rose by about 12 percent from 1989 to 2016, while the median millionaire’s equity position was swelling from 27 percent of financial accounts to 55 percent. The wealth of the top 1 percent of millionaires, meanwhile, more than doubled, from $14.9 million to $31.3 million, in 2016 dollars, as their equity positions jumped from 30 percent to 69 percent, according to the report. –Bloomberg “It’s clear that the dividends from being an investor are paying off for retirees fortunate enough to have savings and investments,” said Fellowes. “What’s discouraging is that those who are not saving or investing are just getting left progressively farther and farther behind as each successive generation enters retirement." In other words, if you want to retire wealthy, you better be rich to begin with. The analysis uses data from various sources including the Federal Reserve Board, the US Bureau of Labor Statistics, the Census Bureau, the Internal Revenue Service, and the Centers for Disease Control, for their in-depth analysis of the changing lives of retirees in the US.

      Why The War On Men Is Hurting Everyone - Daisy Luther These days, it appears that being a man means you’re crazy. You’re a rapist waiting for a woman to rape. You’re a misogynist, just looking for a woman to oppress. You’re a brute, looking for a woman to punch in the face. You are violent, domineering, and angry.At least according to the University of Texas at Austin.They’ve rolled out a program called MasculinUT that treats men as though they are violent rapists just waiting for a woman on whom to force themselves. And, you know, slap around a little, because apparently, that is what men do. The project praises a poster of a black man with a flower crown, but mourns that masculinity “should go further than that.” The program is a project of the Counseling and Mental Health Center, and many media outlets immediately objected to this, stating that they were treating traditional masculinity as though it was a mental health issue. American Thinker and PJ Media both voiced their outrage. In response, UT has rewritten their webpage about the MasculinUT program. The MasculinUT program does not treat masculinity as a “mental health issue,” and any such statements are simply not accurate. It was established to bring more men to the table to address interpersonal violence, sexual assault and other issues.Like other UT programs related to sexual assault and interpersonal violence, MasculinUT is housed administratively in the university’s Counseling and Mental Health Center. Its goals include helping men explore ways to reduce sexual violence, helping students take responsibility for their actions, and fostering healthier relationships on campus and beyond.These are important goals that we strongly stand behind. It has become clear that some of the communication and discussion surrounding MasculinUT did not convey this fully or clearly and was not effective at reaching the broad audiences the program envisioned. As a result, we will be reviewing the website and other content to ensure that it serves the program’s goals and will make any appropriate changes as we receive feedback from stakeholders.Earlier this year, the UT System Board of Regents approved funding for mental health, student safety, and alcohol-related initiatives including efforts to reduce sexual assaults on campus. The new staff position that will oversee this program, and coordinate with other UT System schools, is part of those efforts funded by the Regents. (source)I dunno. I mean, maybe it’s just me, but it still sounds kind of mental health-ish, doesn’t it? And this thing at UT is only the tip of the iceberg in this war on men.

      Patients face expensive ER bills even when they don’t receive treatment -- On October 19, 2016, Jessica Pell fainted and hit her head on a nearby table, cutting her ear. She went to the emergency room at Hoboken University Medical Center, where she was given an ice pack. She received no other treatment. She never received any diagnosis. But a bill arrived in the mail for $5,751.“It’s for the ice pack and the bandage,” Pell said of the fee. “That is the only tangible thing they could bill me for.”Pell’s experience is not unique. Submissions to Vox’s ER database project found multiple examples of ERs charging patients hundreds or even thousands of dollars for walking through the door. Some never got past the waiting room. Some were triaged, but none received treatment from a doctor. Pell left the ER when she discovered the plastic surgeon who would see her was out of network for her insurance. She decided to go to an in-network facility instead. She thought this was a smart way to avoid the costly fees that came with seeing a provider that wasn’t included in her health plan.

      More Than 4 Million Americans Have Lost Health Insurance Since 2016 - Even before the GOP killed Obamacare's individual mandate back in December as part of their tax-reform plan, the number of Americans going without health insurance had been rising. And now, according to a recent study, the number of uninsured US adults between the ages of 19 and 64 climbed to 15.5% in March 2018 compared with 12.7% in 2016. That's tantamount to 4 million people losing insurance, according to CBS.The number of uninsured adults between the ages of 19 and 64 rose to 15.5 percent in March 2018, up from 12.7 percent in 2016. An estimated 4 million people lost individual coverage during that period, while the number of people with employer-sponsored coverage stayed steady.Adults with lower incomes - about $30,000 for an individual and $61,000 for a family of four - saw a much higher increase: 25.7 percent in March 2018 compared to 20.9 percent in 2016. Perhaps the biggest contributor to rising uninsured rates, according to the study, is the coverage gap, which leaves poor Americans in many states unable to afford health insurance. The gap first emerged in 2012, after the Supreme Court ruled that Obamacare's mandate forcing states to expand Medicaid was "unconstitutionally coercive".  The biggest increases in uninsured rates in recent years have occurred in states that did not expand Medicaid, which shouldn't come as a surprise.Another factor may be related to the so-called coverage gap. When the ACA was passed, it mandated that all states expand their Medicaid coverage, including increasing qualifying income limits. At the same time, the ACA ruled that people whose income fell below 100 percent of the poverty level would not qualify for the ACA's government subsidies to help pay health insurance premiums. The assumption was these people would be covered by expanded Medicaid coverage, Collins explained.That plan went haywire when the Supreme Court later ruled that states were not required to expand Medicaid coverage but could do so voluntarily. As a result, people in nonexpansion states with incomes below the ACA subsidy limits often don't qualify for Medicaid. Indeed, the survey found the steepest increases in uninsured rates occurred in states that did not expand Medicaid. 

      A New Algorithm Identifies Candidates for Palliative Care by Predicting When Patients Will Die - End-of-life care can be stressful for patients and their loved ones, but a new algorithm could help provide better care to people during their final months. A paper published in arXiv by researchers from Stanford describes a deep neural network that can look at a patient’s records and estimate the chance of mortality in the next three to 12 months. The team found that this serves as a good way to identify patients who could benefit from palliative care. Importantly, the algorithm also creates reports to explain its predictions to doctors. Palliative care is a growing trend in the U.S. It can make the end of someone’s life much less painful, and it can usually be done at home. Even as such care becomes more widespread, though, the researchers note that although 80 percent of Americans say they would like to die at home, only 20 percent end up getting to do so. The paper points out that a shortage of palliative-care professionals means patients face delays in being examined for services, so using an algorithm could help overstretched doctors focus on patients in the greatest need. The system works by training on several years’ worth of electronic health records and then analyzing a patient’s own records. It generates a prediction about the patient’s mortality, as well as a report for doctors to review about how it came to its conclusion. This includes details on how much certain factors—like the number of days someone has been in the hospital, the medications prescribed, and the severity of the diganosis—played into its prediction. The results have so far been positive, and the algorithm is being used in a pilot program at a university hospital, though the team didn’t say where.

      She modeled in New York and worked for the Navy. At 93, parasites ate her alive at a nursing home.- Pictures of Rebecca Zeni during her younger years showed her with flawless skin, well-defined eyebrows and long, thick lashes. Her hair, parted in the middle, was neatly tied with a bow behind her ear. Her beauty could capture a room, her daughter said, but she was more than just a beautiful face. She was a modern-day woman of the 1940s and 1950s, headstrong, career-oriented and hard-working, said Mike Prieto, a lawyer representing Zeni’s family.  But the once-vibrant woman later found herself living in a nursing home, where she suffered a long, painful death, her family’s attorneys said. Parasitic mites had burrowed under her skin, living and laying eggs all over her body. By the time she died, vesicles and thick crusts had formed on her skin. Her right hand had turned nearly black, and Prieto said her fingers were about to fall off.The scabies that infected Zeni’s body had become so severe that bacteria seeped into her bloodstream. She died in 2015 at age 93. Zeni’s death is now the subject of a lawsuit filed against PruittHealth, a for-profit company that owns dozens of nursing homes, including Shepherd Hills in LaFayette, Ga., where Zeni lived for five years until she died. Shepherd Hills, a nursing home that had multiple scabies outbreaks in recent years and a history of health violations, failed to follow policies and procedures to prevent the occurrence and spread of the highly contagious disease, documents say. Instead of providing the care that Zeni desperately needed, the lawsuit alleges that the nursing home allowed her to die an agonizing death. “The last six months of her life, she was in constant pain,” Prieto said. “She was literally being eaten alive from inside out.”

      Inequality in US Life Expectancy -How much would you be willing to pay, in actual money, for an additional 30 years of life expectancy? The question is hypothetical, but linked in reality. During the 20th century, life expectancy for an American increased by about 30 years. What are those extra 30 years of life worth? Some years back, Kevin Murphy and Robert H. Topel took a swing at t this subject in "The Value of Health and Longevity" (Journal of Political Economy, Vol. 114, pp. 871-904, October 2006). Obviously, you need to make some estimates about how people value of years of life, but their conclusion that the extra 30 yeas are worth $1 million or more per person seems plausible. But if gains in life expectancy have considerable value, it also follows that inequality of life expectancy matters, too. Victor R. Fuchs and Karen Eggleston offer a primer on "Life Expectancy and Inequality in Life Expectancy in the United States" in a "Policy Brief" from the Stanford Institute of Economic Research (April 2018). As background, here's a figure showing the what share of people died at what age in 1950 and in 2015.  The increase in life expectancy means that the average age of death has risen. Fuchs and Eggleston are especially focused on the inequality of life expectancy. So they look at where the age of death falls for the 20th and the 80 percentile of this distribution. Then they calculate how the age of death at these percentiles has evolved over time. It's a little tricky to eyeball this result from the graph (and the authors provide more specific statistical meaures), but the inequality from 80th to 20th percentile diminished somewhat between about 1950 and 2000, but since then the degree of inequality hasn't changed much.They point out that current public health research is heavily focused on heart disease and cancer--which tend to be diseases of the middle-aged and elderly. They suggest some reallocation of resources to "reducing the incidence of low birth weight (e.g., promoting immunization for influenza among women of child-bearing age, especially poor and vulnerable women); assuring access to preventive and curative health services for all children (e.g., through CHIP and Medicaid); and addressing the multiple socioeconomic disadvantages that accumulate over time for poor and minority children, such as poor nutrition, exposure to pollution, and substandard housing." They also note: "Comparison with other high- income democracies indicates great potential in the United States for such an increase.

      New York Times Feature Seriously Ponders Whether We Should Let People Addicted to Drugs Die - Over the weekend, as the journalism world fiercely debated whether it’s OK to make fun of Sarah Huckabee Sanders, the New York Times—without stirring much controversy—asked if doctors should let people die if they’re addicted to drugs.“Injecting Drugs Can Ruin a Heart. How Many Second Chances Should a User Get?” the headline of a large feature piece wonders. The article details the frustrations doctors face dealing with the fallout from the opioid crisis. That includes having patients doing drugs in the hospital, a phenomenon one doctor likens to “trying to do a liver transplant on someone who’s drinking a fifth of vodka on the stretcher.” People who inject drugs are susceptible to blood infections, which can lead to endocarditis, a catastrophic condition that requires a surgeon to patch a heart back together with one or more artificial valves. The procedures are expensive, and doctors or hospitals are not happy to do them on repeat for people who continue to do drugs. So the piece seems to ask, in all earnestness, whether it makes sense to deny people with a deadly condition treatment if they seem likely to relapse.  “I think it’s a horrible idea,” Dr. Burson tells Raw Story. “Same as refusing to prescribe insulin for a diabetic who may not follow her diet. I don’t think we want to start down that road. Could we refuse to treat emphysema in patients who are still smoking? Where would it end?”

       Flint Is Finally Moving to Help Kids Recover from Lead Poisoning’s Toxic Legacy  -Nearly three years after a toxic scandal bubbled to the surface in Flint, Michigan, the city remains in a water crisis. And while the government continues to fail to provide a long-term solution to the still-unfolding public health impacts from the lead-tainted water, the crisis that began with first signs of lead exposure surfaced in 2015 has started to spur legal action to ensure a fair recovery process for local children—and perhaps seed a national model for redressing mass public health harms. A new legal settlement between Flint’s children and local school authorities will establish an unprecedented medical screening program for the entire impacted community. The initial $4.1 million investment mandated by the newly announced agreement represents the beginning of what may be a generations-long process of monitoring and treating the survivors, establishing legal channels for treatment and benefits for affected youth and families, and most importantly, ensuring that future generations are protected.  The partial settlement in the ongoing litigation was negotiated by attorneys representing children in the affected area, and the agreement could potentially encompass tens of thousands of local youth. According to one of the leading organizations behind the litigation, Education Law Center, the program will build on an existing health registry program in Flint that currently monitors the whole resident population. Additional services will be provided by the Genesee Health System and Hurley Children’s Hospital Neurodevelopmental Center of Excellence.  Aiming to lay the groundwork for a longer-term health program, the settlement—which coincides with a new water infrastructure reform bill in Congress—provides children with universally screening, along with referral for deeper medical examinations as needed, including neuropsychological testing to gauge cognitive and mental development. The Michigan Department of Education, Genesee Intermediate School District and Flint Community Schools will conduct public outreach through the schools to evaluate their need for special education services.

      Michelle Wolf’s Flint comment touches a nerve in Michigan’s capital -- As Michelle Wolf was leaving the podium at the end of her courageous and funny takedown of Trump, the Democrats and the press at the White House correspondents’ dinner last Saturday, she added, “…and Flint still doesn’t have clean water.” This is a statement with which a large majority of the city’s 100,000 residents would agree.    From the office of Michigan Governor Rick Snyder, however, it elicited an indignant rejoinder. In an email to MLive/The Flint Journal, Snyder’s chief spokesperson, Anna Heaton, said, “Inaccurate comments from comedians will not help the city move forward.”  Snyder’s use of the phrase “move forward” means closing the book on Flint. A month ago, Snyder announced the termination of the last of the PODS, the state-funded distribution sites for bottled water and filters to Flint residents. Even though the city’s program for replacing lead and galvanized steel (which can also act as a repository of lead) service lines is only one-third finished and isn’t scheduled to be completed until 2020, the minimal assistance of providing bottled water to residents has been wound up. The pipe replacement program does not even include the mains. There are no plans to replace the entire antiquated water infrastructure, which was built decades ago. Moreover, nothing has been done to address the damage done by corrosive Flint River water to the pipes inside residents’ homes. The governor’s justification for cutting off bottled water distribution for Flint was laid out in Heaton’s comments: “All state scientists and independent scientists who have collected their own samples and data agree that Flint’s water system is testing well beneath the federal standards for lead and that the city’s water is in fact of better quality than many other US cities of similar size and age.”For Flint’s populace, the vast majority of whom will not drink Flint water, this merely adds insult to injury. In addition to being poisoned, losing unborn babies, enduring an outbreak of Legionnaires’ disease that killed at least 12 people, and having a generation of children who face lifelong neurological damage, the population as a whole has suffered immense trauma and stress, not to mention the collapse of their home values.

      Michigan Says Flint Water Is Safe to Drink, But Residents’ Trust in Government Has Corroded -  On April 6, with little warning, the state of Michigan closed water point of distribution (POD) centers that have provided residents in Flint for the past three years with bottled water to drink, cook and bathe. This move was based on analysis showing that the city's water quality had tested below action levels defined in federal drinking water regulations for nearly two years.The state's decision to close the PODs signals that with respect to water quality, Flint's water crisis is over. But for thousands of Flint residents, the trauma it inflicted persists.The actions that led up to the Flint water crisis did not occur in a vacuum. As a sociologist based in Michigan, whose research focuses on social inequality, racism and racial health disparities, I was driven to explore the context behind one of the most significant public health crises in modern history. Because film can be a powerful medium for conveying inequalities, I chose to direct and produce a documentary on the crisis.My documentary, " Nor Any Drop to Drink: The Flint Water Crisis ," is scheduled for streaming and video-on-demand release in August 2018. From meeting Flint residents and talking to them about their water problems, I can see that more than pipes have been corroded. State and federal mishandling of the city's water crisis has all but destroyed trust in government agencies among Flint's residents. Flint's water crisis is a story of bad decisions by government officials. In 2014, under a state-appointedemergency manager , Flint's drinking water source was switched from the Detroit water system to the Flint River, even though this move relied on a hastily refurbished and understaffed treatment plant. The state carried out inadequate and improper sampling of the water distribution system, in violation of the Safe Drinking Water Act . Michigan officials disregarded and attempted to cover up compelling evidence of water quality problems and associated health effects. A spokesman for the Department of Environmental Quality stated in 2015 that Flint residents " can relax ," despite their expressed concerns.

      Dark Side of Computers, Smart Phones and Tablets: Blue Light Causes Cancer, Ruins Your Eyes and Makes You Toss and Turn at Night - I use a computer and smart phone for more than 10 hours a day.So I wasn’t happy to learn that recent scientific studies show the blue light emitted by our computers, tablets and smart phones can cause cancer, ruin your eyes, and cause insomnia.Device makers use screens that pump out a lot of blue light.  Not for any evil purpose … but just because it’s cheap to make bright LEDs lights which pump out crazy amounts of blue light frequencies (light with a wavelength of between 450 and 495 nanometers). A new study by Spanish, British and Canadian scientists published Monday in the journal Environmental Health Perspectives found that blue light is linked to prostate and breast cancer. The study found that other bright light – such as red or green LEDs – are not linked with cancer. Numerous studies show that the blue light from our devices can lead to serious eye problems.For example, blue light is linked with macular degeneration … the main cause of blindness among older Americans. It’s well-known that exposure to blue light at night can lead to insomnia. There are numerous blue light filters which you can put on your computer, tablet or phone.  For example, Amazon carries hundreds of them.

      Daily emissions from personal care products comparable to car emissions: study -  When people are out and about, they leave plumes of chemicals behind them—from both car tailpipes and the products they put on their skin and hair. In fact, emissions of siloxane, a common ingredient in shampoos, lotions, and deodorants, are comparable in magnitude to the emissions of major components of vehicle exhaust, such as benzene, from rush-hour traffic in Boulder, Colorado, according to a new CIRES and NOAA study. This work, published in the journal Environmental Science and Technology, is in line with other recent findings that chemical emissions from personal care products can contribute significantly to urban air pollution."We detected a pattern of emissions that coincides with human activity: people apply these products in the morning, leave their homes, and drive to work or school. So emissions spike during commuting hours," said lead author Matthew Coggon, a CIRES scientist at the University of Colorado Boulder working in the NOAA Earth System Research Laboratory.  D5 Siloxane, short for decamethylcyclopentasiloxane, is added to personal care products like shampoos and lotions to give them a smooth, silky feeling. Siloxane belongs to a class of chemicals called volatile organic compounds (VOCs); once applied, they evaporate quickly. In the air, sunlight can trigger those VOCs to react with nitrogen oxides and other compounds to form ozone and particulate matter—two types of pollution that are regulated because of their effects on air quality and human health. Coggon and his colleagues measured VOCs from the roof of NOAA's Earth System Research Laboratory in December, 2015 and January, 2017, and from a mobile laboratory driving around Boulder in February, 2016. Among other measurements, they tracked the concentrations of traffic-related compounds, including benzene, commonly used as a marker of vehicle exhaust, during rush hour.

      Personal Care Products as Dangerous for the Air as Car Exhaust, Study Finds - People's efforts to keep themselves clean are actually making the air dirtier, at least in Boulder, Colorado. A study by the National Oceanic and Atmospheric Administration (NOAA) and the Cooperative Institute for Research In Environmental Sciences (CIRES) found that emissions from personal care products commuters use before leaving in the morning were roughly equivalent in magnitude to emissions from the tailpipes of their cars, a CIRES press release reported Monday. "We detected a pattern of emissions that coincides with human activity: people apply these products in the morning, leave their homes, and drive to work or school. So emissions spike during commuting hours,"  The results are in keeping with an earlier NOAA and CIRES study that found personal care and cleaning products were a major contributor to air pollution in Los Angeles. The results, published April 16 in Environmental Science and Technology , were a bit of a surprise. In December 2015, February 2016 and January 2017, researchers measured volatile organic compounds (VOC) that react with nitrogen oxide in sunlight to form particulate matter and ozone, two types of air pollution dangerous to human health.One VOC they measured was benzene, a common car emission used to monitor traffic pollution. But they also found large quantities of an unknown VOC."We found a big peak in the data but we didn't know what it was," Coggon said in the release.Then NOAA scientist and study co-author Patrick Veres identified it as siloxane. Since the siloxane peaked at the same time as benzene, researchers hypothesized it was also coming from car exhaust, but when they tested car emissions directly, they couldn't find it.But siloxane is also commonly used in personal care products such as shampoo, lotions and deodorants to make them silky and smooth. The researchers realized that siloxane levels peaked with benzene levels in the morning because people were leaving their homes leaving their homes showered and lotioned to drive to work.

      Proposed GMO Food Labeling Could Leave 100 Million Americans in the Dark - The U.S. Department of Agriculture (USDA) on Thursday released the long-awaited proposed regulations for the mandatory disclosure of foods produced using genetic engineering (GE or GMO ), which it calls "bioengineered foods."The regulations come out of a 2016 law signed by President Obama prohibiting existing state GE labeling laws, such as Vermont's, that required on-package GE labeling, and instead created a federal "disclosure" program, which for the first time creates a nationwide standard of required GE disclosure. There now will be a 60 day public comment period. The 2016 law requires that USDA issue the final rules by July 29, 2018.Public comments will be particularly important because the proposal presents a range of alternatives for public comments and makes few decisions, leaving considerable unknowns about its outcome. For example, instead of requiring clear, on-package labeling in the form of text or a symbol, USDA proposes to allow manufacturers to instead choose to use "QR codes," which are encoded images on a package that must be scanned and are intended to substitute for clear, on-package labeling. Real-time access to the information behind the QR code image requires a smartphone and a reliable broadband connection, technologies often lacking in rural areas. As a result, this labeling option would discriminate against more than 100 million Americans who do not have access to this technology. Last fall,CFS forced the public disclosure of USDA's study on the efficacy of this labeling, which showed it would not provide adequate disclosure to millions of Americans.

      Glyphosate Detected in Granola and Crackers, FDA Emails Show - Scientists with the U.S. Food and Drug Administration ( FDA ) have found traces of a ubiquitous and controversial weedkiller in granola, crackers and other everyday foods, according to internal documents obtained by The Guardian through a freedom of information request. The FDA has tested food samples for glyphosate for "two years, but has not yet released any official results," Carey Gilliam reported in The Guardian article. Gilliam is an author, investigative journalist and research director for U.S. Right to Know . "I have brought wheat crackers, granola cereal, and corn meal from home and there's a fair amount in all of them," FDA chemist Richard Thompson emailed to colleagues in January 2017. He noted that broccoli was the only food he tested that "does not have glyphosate in it." In other emails, FDA chemist Narong Chamkasem found "over-the-tolerance" levels of glyphosate in corn, detected at 6.5 parts per million, which is over the legal limit of 5.0 parts per million.  Gilliam observed, "An illegal level would normally be reported to the Environmental Protection Agency ( EPA ), but an FDA supervisor wrote to an EPA official that the corn was not considered an 'official sample.'"

      Pesticide linked to cancer is in nearly every US food: report --A widely used weed killer that’s been linked to cancer has turned up in nearly every common food in the US, according to a new report.Scientists with the Food and Drug Administration found glyphosate, which has been used as an herbicide since the 1970s, in everything from corn to honey, granola, wheat crackers and oatmeal, The Guardian said, citing records it obtained through a Freedom of Information Act request.“There’s a fair amount in all of them,” FDA chemist Richard Thompson wrote to colleagues in a January 2017 email that was among the records.The FDA has been testing how prevalent glyphosate is in foods for two years but hasn’t released official results.Linda Birnbaum, a toxicologist and director of the US National Institute of Environmental Health Services, said even a small exposure to pesticides can be dangerous.“Even with low levels of pesticides, we’re exposed to so many, and we don’t count the fact that we have cumulative exposures,” Birnbaum told the Guardian. Thompson, who works out of an FDA laboratory in Arkansas, wrote that broccoli was the only food that he had “on hand” that didn’t show any traces of the herbicide. Chamkasem also found traces of glyphosate in honey and oatmeal products. The FDA temporarily suspended testing after those findings and reassigned Chamkasem’s lab to “other programs,” the Guardian said.

      Tick and Mosquito Infections Spreading Rapidly, C.D.C. Finds - The number of people getting diseases transmitted by mosquito, tick and flea bites has more than tripled in the United States in recent years, federal health officials reported on Tuesday. Since 2004, at least nine such diseases have been discovered or newly introduced here.The Centers for Disease Control and Prevention did not suggest that Americans drop plans for softball games or hammock snoozes. But officials emphasized that it’s increasingly important for everyone — especially children — to be protected from outdoor pests with bug repellent.New tickborne diseases like Heartland virus are showing up in the continental United States, even as cases of Lyme disease and other established infections are growing. On island territories like Puerto Rico, the threat is mosquitoes carrying viruses like dengue and Zika.Warmer weather is an important cause of the surge, according to the lead author of a study published in the C.D.C.’s Morbidity and Mortality Weekly Report. But the author, Dr. Lyle R. Petersen, the agency’s director of vector-borne diseases, declined to link the increase to the politically fraught issue of climate change, and the report does not mention climate change or global warming. Many other factors are at work, he emphasized, including increased jet travel and a lack of vaccines.   “The numbers on some of these diseases have gone to astronomical levels,” Dr. Petersen added.

      Diseases spread by ticks, mosquitoes and fleas more than tripled in the U.S. since 2004 - The warmer weather of spring and summer means the start of tick and mosquito season and the diseases they transmit, including Lyme disease, Rocky Mountain spotted fever, West Nile and Zika.A new report from the Centers for Disease Control and Prevention has found that illnesses from mosquito, tick and flea bites more than tripled in the United States from 2004 to 2016.The report, released Tuesday, shows that the number of reported cases of these diseases jumped from 27,388 cases in 2004 to more than 96,000 cases in 2016. The data includes illnesses reported in U.S. states and territories. During that period, more than 640,000 cases of these diseases were reported to the CDC.Officials say the actual number of people who have become sick is much higher, in part because many infections are not reported or recognized. Some patients may experience mild symptoms and not seek medical attention, and not all diseases were reported for the full 13-year analysis period or from all states and territories. The data “substantially underestimate disease occurrence,” the report said.For example, recent data from clinical and laboratory diagnoses estimate that Lyme disease infects about 300,000 Americans every year, which is eight to 10 times the number reported in the CDC analysis. In 2016, the number of Lyme disease incidents reported for the United States was 36,429. As a group, these diseases in the United States are notable for their wide geographical distribution and resistance to control. Only one of the diseases, yellow fever, has a vaccine approved by the Food and Drug Administration.

      Warning issued in London after toxic caterpillar outbreak (AP) — Residents in London are being told to beware the white-haired caterpillars that can cause rashes, vomiting and asthma attacks.The British Forestry Commission says caterpillars that become oak processionary moths have been spotted in and around the English capital since mid-April.The caterpillars are covered in thousands of hairs containing the protein thaumetopoein, which can cause skin rashes, sore throats, breathing difficulties and eye problems.People are being warned not to touch the creatures, which are most often found in oak trees — and to keep pets away from them, too. Officials are treating oak trees with pesticide to try and eliminate the moths, which were accidentally introduced to Britain in 2005 on plants imported from continental Europe.

      Hawaii Approves Bill Banning Sunscreen Believed To Kill Coral Reefs - Hawaii lawmakers passed a bill Tuesday that would prohibit the sale of over-the-counter sunscreens containing chemicals they say are contributing to the destruction of the state's coral reefs and other ocean life. If signed by Gov. David Ige, it will make Hawaii the first state in the country to pass such a law and will take effect on Jan. 1, 2021.   "Amazingly, this is a first-in-the-world law," state Sen. Mike Gabbard, who introduced the bill, told the Honolulu Star-Advertiser. "So, Hawaii is definitely on the cutting edge by banning these dangerous chemicals in sunscreens.  The chemicals oxybenzone and octinoxate, which are used in more than 3,500 of the world's most popular sunscreen products, including Hawaiian Tropic, Coppertone and Banana Boat, would be prohibited. Prescription sunscreens containing those chemicals would still be permitted.  As NPR reported, a 2015 study of coral reefs in Hawaii, the U.S. Virgin Islands and Israel determined oxybenzone "leaches the coral of its nutrients and bleaches it white. It can also disrupt the development of fish and other wildlife." Even a small drop is enough to damage delicate corals. At the time, researchers estimated about 14,000 tons of sunscreen lotions end up in coral reefs around the world each year.Opposition to the ban came from sunscreen manufacturers, including Bayer, the maker of Coppertone. And the state's major doctors group said the ban goes too far.

      A Hawaiian island got about 50 inches of rain in 24 hours. Scientists warn it's a sign of the future  -- This week the National Weather Service said nearly 50 inches of rain fell in 24 hours.  "The rain gauge in Hanalei broke at 28 inches within 24 hours," said state Rep. Nadine Nakamura of the North Shore community. "In a neighboring valley, their rain gauge showed 44 inches within 24 hours. It's off the charts." Now, as Kauai continues to recover, scientists warn that this deluge on April 14 and 15 was something new — the first major storm in Hawaii linked to climate change. "The flooding on Kauai is consistent with an extreme rainfall that comes with a warmer atmosphere," said Chip Fletcher, a leading expert on the impact of climate change on Pacific island communities. He noted that the intense rainfall not only triggered landslides, it also caused the Hanalei River to flood and carve a new path through Hanalei. Homes, cars and animals were swept away in raging waters, but no residents or visitors died. Some were airlifted to safety or rescued by boat. Members of a bison herd were displaced or carried off by floodwaters, and some were rescued from the ocean after swimming for their lives.  Kawika Winter, a natural resource manager, put the storm in perspective. "This is the most severe rain event [in Hawaii] that we know about since records started being kept in 1905,"

      Melbourne’s water supply on verge of “disaster” as population balloons -- Ecologists have today warned that Melbourne’s water supply is at risk due to the “collapse” of state forests caused by logging. From The GuardianNew research led by Prof David Lindenmayer of ANU, published in PNAS journal on Tuesday, has found the ecosystem has already begun to undergo a “hidden collapse”…The majority of Melbourne’s water catchments are in mountain ash forests, which are either protected in national parks or in state forests where logging is either allowed or has previously occurred. If those forests have been damaged or are still growing, Lindenmayer said, they draw 12 megalitres more water per hectare per year than forests that are more than 100 years old. More than 98% of the mountain ash forest in Victoria is no more than 80 years old, and most of those in key catchment areas are less than 80.In the Upper Thomson catchment, which feeds Melbourne’s largest water supply dam, the Thomson reservoir, about 61% of the trees have been logged.“That’s a serious issue because two-thirds of all the rainfall in that catchment falls on one-third of the area and that’s the ash forest … that’s called an own goal,” Lindenmayer said…“My hope is that at some stage people will wake up and say, ‘Oh my god, that’s the water supply for 4.5 million Melburnians,’” Lindenmayer said. “Is it appropriate to compromise the water supply of soon-to-be Australia’s largest city?” 4.5 million Melbournians? Try 4.9 million currently, with the city’s population projected to balloon to 8 million people mid-century.  Regardless, warnings over insufficient water supply across Australia’s major cities have accumulated recently.

      The Politics of Water and Peace in the Middle East -- The Middle East, oil-rich but water-poor, with about six percent of the world’s population, has only one percent of the earth’s renewable water resources. Fourteen Middle East and North African (MENA) countries are among the 33 most water-stressed in the world. Climate change, drought and population growth have increased the demand for water in this arid region, fueling conflict and instability. Clashes over water access have aggravated an already volatile Middle East. For many MENA countries water scarcity has become a national security issue. Middle Easterners are dependent on four main sources of water: aquifers, precipitation, rivers and desalinized sea water. The underground aquifers, however, are drying out at alarming rates. Increasingly the oil rich Persian Gulf states are depending on desalination for water security. Only Iran and Turkey have been self-sufficient in water. Once known as the Cradle of Civilization, the fertile soil of the Middle East gave birth to agriculture. Grains thrived in the rich soil of The Fertile Crescent, "the land between the rivers" – Tigris and Euphrates. However, today most countries in the region are net food importers, especially grains. Aridity, drought and climate change have contributed to food insecurity and surging food prices. Water scarcity contributed to the 2011 uprisings in Egypt and Syria, and was embodied in the protestors’ rallying cry, "Food, freedom and dignity." 

      'Mountains and mountains of plastic': life on Cambodia's polluted coast - (photo essay) Photographs from Sihanouk in the country’s south west reveal locals living amid a staggering tide of plastic pollution -- Looking down into the water that lies beneath the ramshackle houses of Sihanouk, Cambodia, it is hard to imagine that the sea is there at all. Instead, there is dense layer upon layer of plastic waste clogging the water, piling up around poles that support the wooden homes, carpeting the beach. New images of from Sihanouk, in the country’s south west, depict in horrifying detail the extent of Cambodia’s growing problem of plastic pollution and how the tide of unbiodegradable rubbish has become part of the fabric of the lives of communities living in poverty. Photographer Niamh Peren said she had been “gobsmacked” at the levels of plastic pollution that littered the waters and wharfs of Sihanouk, but emphasised that these mountains of waste also told another story: one is often neglected in the current global discussion around plastic, where poorer countries are often accused of being the biggest culprits in terms of generating plastic waste. “There seems to be no empathy for the fact that for the people living in Sihanouk, there isn’t a water filtration system,” said Peren. “Their tap water is so dirty and undrinkable, that to stay alive they have to buy bottled water and then live among the rubbish it creates because there’s nowhere to put it.”

      Microplastics Pollute Rivers and Lakes, Too - When you think of microplastic pollution, plastic debris less than five millimeters in size, you likely envision the ocean—probably because ocean gyres gained notoriety for being a microplastic soup .  But what about our lakes, rivers , forests and fields? They can be just as contaminated with microplastic debris as the oceans .  Until recently, these environments were described as conduits—ways for plastics to get to the oceans. But now we're seeing rivers, lakes and soil in a different light, as reservoirs for plastic particles. We now know that agricultural land , surface waters , freshwater lakes and river sediments are also contaminated. In the past five years, researchers have started to study the sources, fates and effects of microplastics in freshwater and terrestrial ecosystems, but only a handful of studies have been done so far.   Here in North America, when we think of freshwater, we often think of the Laurentian Great Lakes . They hold more than one fifth of the world's freshwater , are the basis of billions of dollars in economic activity and are a point of pride for those living on their shorelines. For the Indigenous peoples of Canada, the Great Lakes hold even more importance. There are more than 75 First Nations communities in the Great Lakes watershed, all of whom fish the waters for food or sport. It is no secret, however, that the Great Lakes have had their share of ecological problems. Most have been caused by us, including the ongoing issues of nutrient-loading, invasive species like zebra and quagga mussels, tributary dams and reduced ice cover.  Recent research now shows the Great Lakes also contain microplastic pollution , with the highest concentrations in heavily urbanized areas, like Toronto and Detroit.

      Electronics-recycling innovator is going to prison for trying to extend computers’ lives -- A Southern California man who built a sizable business out of recycling electronic waste is headed to federal prison for 15 months after a federal appeals court in Miami rejected his claim that the "restore discs" he made to extend computers' lives had no financial value, instead ruling that he had infringed on Microsoft Corp. to the tune of $700,000. The appeals court upheld a federal district judge's ruling that the discs Eric Lundgren made to restore Microsoft operating systems had a value of $25 apiece, even though the software they contained could be downloaded free and the discs could only be used on computers that already had a valid Microsoft license. The U.S. 11th Circuit Court of Appeals initially granted Lundgren an emergency stay of his prison sentence, shortly before he was to surrender, but then affirmed his original 15-month sentence and $50,000 fine without hearing oral argument in a ruling issued April 11.  Lundgren, 33, has become a renowned innovator in the field of electronic waste, or e-waste, using discarded parts to do things such as construct an electric car, which in a test far outdistanced a Tesla on a single charge. He built the first "electronic hybrid recycling" facility in the United States, which turns discarded cellphones and other electronics into functional devices, slowing the stream of harmful chemicals and metals contained in those devices into landfills and the environment. His Chatsworth company, IT Asset Partners, processes more than 41 million pounds of e-waste each year and counts IBM, Motorola and Sprint among its clients. "This is a difficult sentencing," U.S. District Judge Daniel T.K. Hurley told him last year, "because I credit everything you are telling me. You are a very remarkable person."

      "The Ocean Is Suffocating": Mysterious "Dead Zone" In Arabian Sea Far Worse Than Expected - Thanks to advances in robotic technology, scientists have been able to study a massive "dead zone" in the Arabian sea - a region with so little oxygen that virtually nothing can live. Scientists began to observe the oxygen-starved zones in the 1970s - which naturally form in the deep sea, but are also found wherever excess nitrogen and phosphorous-based fertilizers run off into coastal waters.By one account nearly 8-12% of the nitrogen fertilizer applied worldwide is lost from fertilized fields and transported to the sea. In some individual fields, the value can be as high as 50%.Still more nitrogen is lost during the disposal of animal wastes from modern industrialized production of pork and chickens. Here nitrogen is lost during inadvertent overflow of waste lagoons, and nitrogen is transported to groundwater, which makes its way to stream channels.   By 2008, 405 dead zones - also known as Oxygen Minimum Zones (OMZ) had been identified by Sweden's Göteborg University. New research from the University of East Anglia (UEA) has confirmed that the Gulf of Oman dead zone - floating in the strait bordered by Iran, Pakistan, Oman and the UAE, is indeed the largest in the world. Two robot submarines called Seagliders, each around the size of a small human diver, were able to collect data for eight months in parts of the Gulf of Oman previously unable to be monitored due to concerns over piracy and geopolitical tensions. What they found was stunning; since the 1990's, the gulf's dead zone has undergone "a dramatic increase" in both size and severity, and is now made up of entirely of low, or no-oxygen waters also known as suboxic or anoxic conditions respectively.   “The region is now anoxic—essentially extending the Arabian Sea OMZ into the marginal regions, much closer to where people live, fish, and depend on the marine environment. Hence the growing concerns.” "Our research shows that the situation is actually worse than feared. The area of dead zone is vast and growing. The ocean is suffocating," Queste said in a statement.

      New Dam Could Be 'Ecological Armageddon' for Rare Orangutan -- Less than a year ago, scientists announced an exciting discovery—a new species of orangutan, called the Tapanuli orangutan, living in Batang Toru in Sumatra, Indonesia, The Conversation reported.But an article published in Current Biology Thursday has some sobering news for the newly discovered ape: The "critically- endangered species " is at serious risk for extinction."This is just the seventh species of Great Ape ever discovered, and it could go extinct right before our eyes," study co-author and University of Indonesia Prof. Jatna Supriatna said in a James Cook University press release about the new study.There are fewer than 800 of the rare apes squeezed into a habitat less than a tenth the size of Sydney, the release noted."In forty years of research, I don't think I've ever seen anything this dramatic," James Cook University professor and research team leader William Laurance said in the press release.The Tapanuli orangutan is under threat for many reasons, including deforestation , poaching and road-building, but researchers said the most immediate threat is a large dam being built by China called the Batang Toru project, which will flood large parts of their habitat and disrupt others with roads and powerlines."  This is a critical test for China and Indonesia. They say they want sustainable development—but words are cheap," Laurance said in the press release. "Without urgent action, this could be ecological Armageddon for one of our closest living relatives," he continued.

      'Tsunami' of hydropower dam building threatens Europe's last wild rivers - campaigners (Reuters)- Plans to build about 3,000 hydropower plants in the Balkans in the next few years endanger Europe’s last wild rivers and some of the most important biodiversity hotspots on the continent, campaigers said on Saturday. Stretching from Slovenia to Albania, critics say the hydropower boom threatens animal life, including endemic species of fish, and people’s access to water used for drinking, fishing and farming. “There is a tsunami of hydropower dam constructions happening here and nobody really knows about it,” said Britton Caillouette, director of “Blue Heart”, a documentary that focuses on efforts to halt the hydropower plans. “Blue Heart”, which had its world premiere on Saturday in a screening at the Idbar dam near Konjik, focuses on local people’s and campaigners’ efforts to halt the plans. Investment in renewable energy projects is growing around the world as countries rush to meet clean energy goals under the Paris Agreement on climate change. The EU aims to source at least 27 percent of the bloc’s energy from renewables by 2030. Western Balkan countries, including Bosnia, Kosovo, Montenegro and Serbia, plan to invest billions of euros in building new coal-fired plants to meet rising demand for electricity as old plants are being phased out. Hydropower is already widely used across the region but environmentalists fear the investment in coal could backfire as governments may be forced to invest hundreds of millions of euros more to upgrade plants to meet European Union environmental standards as the countries progress toward membership of the bloc. The European Bank for Reconstruction and Development (EBRD) is funding some hydropower projects in the Balkans and has agreed to foster a transition towards sustainable, low-carbon economies in the region. 

      Slowing Gulf Stream, Implications for Ireland -  New papers confirming observations of slowdown in North Atlantic current triggering alarm bells on an issue that was thought to be one for the next century, if ever.  Irish Times: Ireland lies relatively far north in the Atlantic so the Gulf Stream’s gift of more temperate waters matters hugely to our climate, as does their interaction with the atmosphere to produce the sea surface temperature. This oceanic movement of waters is known scientifically as the Atlantic Meridional Overturning Circulation (Amoc). It brings warm and salty water from the Caribbean region in a northeasterly current towards the Nordic Seas. As Summer K Praetorius goes on to explain in the April 11th issue of the scientific journal Nature: “In the chill of winter, these waters cool and descend with the heavy load of their salinity. This deep convection is a key part of the Amoc which can be thought of as an ocean conveyor belt that releases heat to the atmosphere above the North Atlantic Ocean before travelling through the abyssal ocean to resurface in other areas of the world.” The process is linked to and replicated throughout the world’s oceans by the deep colder waters that travel past North and South America. Praetorius makes these points in introducing two startling research papers on Amoc and the Gulf Stream which show it has slowed down by about 15 per cent. That is the equivalent to the loss of water produced by 15 Amazons or three times the effect of bringing all the Earth’s rivers and streams to a stop. It is the biggest change we know about for 1,600 years. Previous research has shown such changes can be abrupt and have major effects on climate. On one calculation, there have been 25 shifts from colder to warmer waters over the last 115,000 years. During the last Ice Age, winter temperatures changed by up to 10 degrees within three years in some places.

      Everglades under threat as Florida's mangroves face death by rising sea level - Florida’s mangroves have been forced into a hasty retreat by sea level rise and now face being drowned, imperiling coastal communities and the prized Everglades wetlands, researchers have found. Mangroves in south-east Florida in an area studied by the researchers have been on a “death march” inland as they edge away from the swelling ocean but have now hit a manmade levee and are likely to be submerged by water within 30 years, according to the Florida International University analysis.“There’s nowhere left for them to go,” said Dr Randall Parkinson, a coastal geologist at FIU. “They are done. The sea will continue to rise and the question now is whether they will be replaced by open water. I think they will.“The outlook is pretty grim. What’s mind boggling is that we are facing the inundation of south Florida this century.”Mangroves are made up of coastal vegetation that grows in salty or brackish water. They are considered crucial buffers to storms and salt water intrusion, as well as key habitats for certain marine creatures. Using aerial photographs, satellite imagery and sediment cores, FIU researchers found that mangroves just south of Miami were migrating westwards over marshland at a rate of about 100ft a year until they were halted by the L-31E levee, a flood barrier in Miami-Dade county, where they are now making their last stand.

      Unprecedented U.S.-British project launches to study the world’s most dangerous glacier - The largest U.S.-British Antarctic mission in seven decades officially launched at an event in Cambridge on Monday, as the two countries pooled dollars and scientific resources for missions to West Antarctica’s Thwaites glacier — a Florida-size ice body that, scientists fear, could flood the world’s coastlines in our lifetimes. “For global sea-level change in the next century, this Thwaites glacier is almost the entire story,” said David Holland, a geoscientist at New York University, who will pair with British Antarctic Survey researcher Keith Nicholls to lead one of the six scientific field missions. Thwaites is wide and deep and flows out of the heart of West Antarctica, a marine ice sheet that could contribute about 10 feet of global sea-level rise. Thwaites is losing ice rapidly, with its 50 billion tons per year currently driving 4 percent of global sea-level rise, and sits perched in 2,600-foot-deep waters atop a seafloor “bump” that scientists fear is the last thing holding it in place.Past the bump, the ocean gets deeper still, and if Thwaites retreats down that hill, there could be no stopping it. Its contribution to sea-level rise could increase dramatically, bumping up the current global rate of 3.2 millimeters per year.“The thinking is that if it goes inland, there are no bumps to hold it, and it will go faster and faster and retreat effectively to the South Pole,” Holland said.Thwaites is a key part of the reason that recent computer modeling studies have predicted that the Antarctic could double the previously projected rate of sea-level rise during this century. But it is located in an extremely remote area, and the critical region that will determine how fast the glacier retreats — the “grounding line” where ocean, ice and bedrock meet at 2,600-foot depths — remains little studied

      Activity on Hawaii volcano could indicate new eruption — A series of earthquakes and the collapse of the crater floor at the Puu Oo vent on Hawaii’s Kilauea Volcano could trigger a new eruption of lava, officials said Tuesday. Scientists from the U.S. Geological Survey’s Hawaiian Volcano Observatory said that seismic activity over the past 24 hours could lead to a new breakout on the east side of the Big Island volcano. USGS geologist Janet Babb said similar activity has been recorded prior to previous eruptions in the area. In mid-April the observatory issued a volcano activity alert when scientists noticed the Puu Oo vent was inflating and becoming pressurized. “We knew that change was afoot and we’ve seen this in the past, and so we have been kind of waiting and watching for whatever change that was going to happen to happen,” Babb said. “It happened yesterday afternoon.” When the earthquakes and collapse occurred and the pressure within the Puu Oo vent was released, an “intrusion” of lava was sent into a new area of the volcano and spread throughout the night. “Magma has now migrated into a lower part of the East Rift Zone,” Babb said. “The concern is that the intrusion migrated about 10 miles down rift into the area where Highway 130 is.”

      Fresh earthquakes hit Hawaii near erupting Kilauea volcano --A series of fresh earthquakes on Friday, including a couple capable of causing considerable damage, hit Hawaii's Big Island, where the Kilauea volcano has been spewing fountains of lava into residential areas and forcing hundreds to evacuate.The U.S. Geological Survey said the latest tremor at 12:32 p.m. measured a magnitude of 5.8.The Hawaii County Civil Defense Agency said the quake, which was on land close to the volcano, was not large enough to cause a tsunami. Its epicenter was located 12 miles southwest of Leilani Estates, one of the communities where lava has been burbling up from the ground from newly opened fissures or vents. A new fissure opened up just before the latest tremor on Friday, the Defense Agency said in a text message, making a total of four found so far in residential areas.The volcano, one of five on the island, began erupting on Thursday after a series of earthquakes over the past week, the USGS reported on its website. Starting around 11 a.m. on Friday, the island experienced a flurry of earthquakes, the largest registering magnitude 5.8. Residents in Leilani Estates and Lanipuna Gardens subdivisions, home to about 1,700 people, were ordered to evacuate after public works officials reported steam and lava erupting from fissures in the road, the Civil Defense agency said. No injuries or deaths were reported.

        Dramatic Drone Footage Shows Fountains Of Lava From Mount Kilaeua Eruption - Hawaii's Mount Kilauea volcano has erupted, sending ash miles into the sky and spewing fountains of lava in a residential area which has been captured on stunning drone footage. The eruption of Mount Kilauea caused a mass evacuation in the residential area of Leilani estates, with the the drone showing lava oozing through a local forest.Shortly after the event, Hawaii's Governor David Ige activated the military reservists from the national guard to aid desperate residents to evacuate the area. He tweeted: “I am in contact with Mayor Harry Kim and Hawai‘i County, and the state is actively supporting the county’s emergency response efforts. I have also activated the Hawai‘i National Guard to support county emergency response teams with evacuations and security."  Meanwhile, a fourth eruption from a new fissure in Kilauea's east rift zone opened Friday morning as authorities continued to urge Leilani Estates residents to get out while they still can.  The situation in the Puna subdivision continues to get more dire, and Hawaii County Civil Defense authorities have issued this ominous warning to households that choose not to heed mandatory orders to leave: "First responders may not be able to come to the aid of residents who refuse to evacuate." The new breakout comes after three eruptions earlier in the day, which sent lava cutting through forest and roads in Leilani Estates and significantly damaged at least two homes. Residents described the eruption as sounding like a "freight train."  At least a dozen small earthquakes rattled the region since midnight, according to the U.S. Geological Survey. Resident Ikaika Marzo said he could feel several quakes shake the area in the early morning hours and saw the second eruption around 1:30 a.m.. It lasted for about two hours, he said. The two new eruptions happened less than a day after the volcano's first eruption created a fissure in the community, spewing lava into the air as high as utility poles, covering roads and nearing several homes.

        A city in Pakistan may have just endured the hottest April temperature ever observed on Earth --  On Monday, a city in the southern part of Pakistan soared to 122.4 degrees (50.2 Celsius). This might just be the highest temperature ever reliably measured on the planet during April.The temperature was observed in the city of Nawabshah, which has a population of 1.1 million and is about 120 miles from the Indian Ocean. Etienne Kapikian, a meteorologist at Meteo France, posted the observation on Twitter.Kapikian’s tweet said that it was the warmest April temperature ever recorded in Pakistan and for the entire Asian continent.Christopher Burt, an expert on global weather extremes, went a step further. In an email he said it probably was also the highest temperature “yet reliably observed on Earth in modern records.”The competing hottest April temperature of 123.8 degrees (51.0 Celsius) set in Santa Rosa, Mexico, in April 2001, is “of dubious reliability,” Burt said.We may never be able to say definitively that Nawabshah’s 122.4 degrees is a world April record because the World Meteorological Organization does not conduct official reviews of such monthly temperature extremes. But Randy Cerveny, who serves as rapporteur for the agency’s committee on extreme records, said that he would trust Burt’s take. “He’s pretty thorough about those things,” Cerveny said in an email.

        India dust storms: At least 100 killed in Uttar Pradesh, Rajasthan - BBC News: At least 100 people have been killed and scores more injured in fierce dust storms that hit the northern Indian states of Uttar Pradesh and Rajasthan. The storms on Wednesday disrupted electricity, uprooted trees, destroyed houses and killed livestock. Many of the dead were sleeping when their houses collapsed after being struck by intense bursts of lightning. Dust storms are common in this part of India during summer but loss of life on this scale is unusual. At least 65 people died in Uttar Pradesh, more than half of them of them in Agra district which is home to the Taj Mahal monument. Officials say the death toll could increase.

        U.S. Air Pollution Falling More Slowly Than EPA Data Suggests -- U.S. air pollution isn't declining as fast as the Environmental Protection Agency ( EPA ) has claimed, a study published Monday in Proceedings of the National Academy of Sciences revealed.To track the levels of nitrogen oxides and carbon monoxide, two pollutants that contribute to smog formation, an international research team used satellite pollution measurements backed up by local air quality monitor readings. They compared this to EPA data, which is based on readings from air monitors and pollution estimates from vehicles and industry, and came to a surprising conclusion. While nitrogen oxide levels had fallen by a healthy 7 percent annually from 2005 to 2009, from 2011 to 2015 the decline stalled to a mere 1.7 percent per year. This meant a 76 percent slowdown in pollution decline and contrasted with EPA data, which put the slowdown from 2011 to 2015 at only 16 percent. "We were surprised by the discrepancy between the estimates of emissions and the actual measurements of pollutants in the atmosphere," lead author Zhe Jiang said in a National Center for Atmospheric Research (NCAR) and University Corporation for Atmospheric Research (UCAR) press release . "These results show that meeting future air quality standards for ozone pollution will be more challenging than previously thought." The researchers, who were funded by NASA, the National Oceanic and Atmospheric Administration, the University of Colorado Boulder and the NCAR-sponsoring National Science Foundation, hypothesized that the difference between the satellite data and the EPA measurements of nitrogen oxide were due to three factors.

        1. The decrease in nitrogen oxide released by cars because of the widespread use of catalytic converters
        2. A relative increase in nitrogen oxide released by boilers and off-road vehicles
        3. A slower decrease in emissions from diesel trucks than expected due to the fact that effective catalytic converters for these vehicles are still being perfected.

        Greenhouse gas ‘feedback loop’ discovered in freshwater lakes - A new study of chemical reactions that occur when organic matter decomposes in freshwater lakes has revealed that the debris from trees suppresses production of methane—while debris from plants found in reed beds actually promotes this harmful greenhouse gas. As vegetation in and around bodies of water continues to change, with forest cover being lost while global warming causes wetland plants to thrive, the many lakes of the northern hemisphere—already a major source of methane—could almost double their emissions in the next fifty years.The researchers say that the findings suggest the discovery of yet another "feedback loop" in which environmental disruption and climate change trigger the release of ever more greenhouse gas that further warms the planet, similar to the concerns over the methane released by fast-melting arctic permafrost."Methane is a greenhouse gas at least twenty-five times more potent than carbon dioxide. Freshwater ecosystems already contribute as much as 16% of the Earth's natural methane emissions, compared to just 1% from all the world's oceans," said study senior author Dr. Andrew Tanentzap from the University of Cambridge's Department of Plant Sciences. "We believe we have discovered a new mechanism that has the potential to cause increasingly more greenhouse gases to be produced by freshwater lakes. The warming climates that promote the growth of aquatic plants have the potential to trigger a damaging feedback loop in natural ecosystems."

        We Just Breached the 410 PPM Threshold for CO2 - The world just passed another round-numbered climate milestone. Scientists predicted it would happen this year and lo and behold, it has. On Tuesday, the Mauna Loa Observatory recorded its first-ever carbon dioxide reading in excess of 410 parts per million (it was 410.28 ppm in case you want the full deal). Carbon dioxide hasn’t reached that height in millions of years. It’s a new atmosphere that humanity will have to contend with, one that’s trapping more heat and causing the climate to change at a quickening rate. In what’s become a spring tradition like Passover and Easter, carbon dioxide has set a record high each year since measurements began. It stood at 280 ppm when record keeping began at Mauna Loa in 1958. In 2013, it passed 400 ppm. Just four years later, the 400 ppm mark is no longer a novelty. It’s the norm. “Its pretty depressing that it’s only a couple of years since the 400 ppm milestone was toppled,”  Earlier this year, U.K. Met Office scientists issued their first-ever carbon dioxide forecast. They projected carbon dioxide could reach 410 ppm in March and almost certainly would by April. Their forecast has been borne out with Tuesday’s daily record. They project that the monthly average will peak near 407 ppm in May, setting a monthly record. Carbon dioxide concentrations have skyrocketed over the past two years due to in part to natural factors like El Niño causing more of it to end up in the atmosphere. But it’s mostly driven by the record amounts of carbon dioxide humans are creating by burning fossil fuels. “The rate of increase will go down when emissions decrease,” Pieter Tans, an atmospheric scientist at the National Oceanic and Atmospheric Administration, said. “But carbon dioxide will still be going up, albeit more slowly. Only when emissions are cut in half will atmospheric carbon dioxide level off initially.”

        Will rising carbon dioxide levels really boost plant growth? - Plants have become an unlikely subject of political debate. Many projections suggest that burning fossil fuels and the resulting climate change will make it harder to grow enough food for everyone in the coming decades. But some groups opposed to limiting our emissions claim that higher levels of carbon dioxide (CO₂) will boost plants’ photosynthesis and so increase food production.   New research published in Science suggests that predicting the effects of increasing CO₂ levels on plant growth may actually be more complicated than anyone had expected.  This is the process that uses light energy to power the conversion of CO₂ into the sugars that fuel plant growth and ultimately provide the food we depend on. Molecules of CO₂and oxygen are similar shapes and the key mechanism that harvests CO₂, an enzyme with the catchy name of RuBisCO, sometimes mistakes an oxygen molecule for one of CO₂. This wasn’t a problem when RuBisCO first evolved. But about 30m years ago CO levels in the atmosphere dropped to less than one-third of what they had been. With less CO₂ around, plants began mistakenly trying to harvest oxygen molecules more often. Today this is often a substantial drain upon a plant’s energy and resources. As it gets hotter, RuBisCO becomes even more prone to errors. Water also evaporates faster, forcing plants to take measures to avoid drying out. Unfortunately, stopping water getting out of their leaves also stops CO₂ getting in and, as RuBisCO becomes starved of CO₂, it wastes more and more of the plant’s resources by using oxygen instead. However, some plants developed a way to avoid the problem by pumping CO₂ to the cells where the RuBisCO is located to turbocharge photosynthesis. These are known as C4 plants, as opposed to normal C3 plants which can’t do this. C4 plants can be much more productive, especially under hot and dry conditions. They came to dominate Earth’s tropical grasslands from 5m to 10m years ago, probably because the world became drier at this time and their water use is more efficient. Maize (corn) and sugar cane are C4 plants but most crops are not, although a project initially funded by the Bill and Melinda Gates Foundation has been seeking to improve yields in rice by adding C4 machinery to it.

        Minnesota experiment upends notions about how plants will offset rising CO2 - The basic notion can be stated by many a grade-schooler: Plants take in CO2, water and solar energy. Through photosynthesis, they process these inputs into carbohydrate tissue, returning oxygen and moisture to the air, but locking up the carbon. The more CO2, the more growth; the more growth, the more carbon storage; the more carbon storage, the less warming in our planetary greenhouse. There are actually two photosynthesis pathways, known as C3 and C4 (the difference is a matter of enzymes and chemistry I dare not try explain here). Perhaps 97 percent of the world’s plant species — including nearly all trees and flowering, leafy plants — follow the C3 pathway and do pretty much as our grade-schooler described.Not so much the C4 group, which consists mostly of grasses; thought to have evolved in the tropics, these are tough plants that can cope with heat, drought and flooding, but don’t show a growth surge with rising CO2. Though small in species count, the C4 group has a huge role in global ecology and climate buffering — across all the Earth’s green surface, about 40 percent of the vegetation is grasses, and about half of those grasses are C4s. Reich’s team has been watching 88 test plots of grasses, half  of them C3 and half C4, as part of what’s called the BioCON project, which studies the effects of such variables as nitrogen supply (applied as fertilizer) and CO2 (pumped from tanks to raise the local atmospheric concentration an extra 180 parts per million, or about 44 percent above current global levels).The C3 plants were expected to show considerably enhanced “biomass production,” what you and I would call growth, in the CO2-enhanced atmosphere; the C4s were not. And that’s pretty much what happened for 12 years, with the C3s’ growth accelerating some 20 percent above normal.Then came a sudden, sharp reversal, and over the next eight years the C3s’ biomass production fell to slightly below normal — while the C4s’ soared by 24 percent. “This upends our thinking about one of the few truisms or deeply accepted paradigms we have in ecology,” Reich said, but the implications are not yet clear. “Your average newspaper reader probably will want to know, does this make the situation better or worse? And we don’t know that yet.”

        Scientists struggle to explain a worrying rise in atmospheric methane - EVERY year human endeavours emit 50bn tonnes of “carbon dioxide equivalent”. This way of measuring things reflects the climatic importance of CO2, which traps heat in the atmosphere for centuries before it breaks down, compared with other, shorter-lived greenhouse gases. Of that 50bn-tonne total, 70% is carbon dioxide itself. Half the remaining 15bn tonnes is methane. In the past decade methane levels have shot up (see chart), to the extent that the atmosphere contains two-and-a-half times as much of the gas as it did before the Industrial Revolution. Earlier this month America’s National Oceanic and Atmospheric Administration (NOAA) confirmed another sharp rise in 2017. This is disturbing for two reasons. First, methane is a powerful heat-trapper. Although it is far less abundant than carbon dioxide and stays in the air for only a decade or so, molecule for molecule its warming effect (calculated over 100 years) is 25 times higher. Keeping methane in check is therefore critical if a rise in temperature this century is to remain “well below” 2°C relative to pre-industrial times, a goal set out in the Paris climate agreement of 2015. The second concern is that methane’s latest rise is poorly understood. The explanations put forward by scientists range from the troubling to the truly hair-raising. More research is needed to determine the correct degree of anxiety.  Atmospheric methane is biological in origin—but some of the biology happened a long time ago. The bulk of this ancient methane gets into the atmosphere during the production and transport of natural gas, of which methane is the principal component. A lesser amount leaks straight out of the ground. But this fossil methane is only 20% of the total. The remaining 80% is produced by micro-organisms which break down organic matter. These so-called methanogens inhabit soils, preferably moist ones, as well as the digestive tracts of ruminants (and, to a lesser extent, other animals, humans included).

        Gaius Publius: Our Communities Are Scaled and Built for a Climate That No Longer Exists This is your periodic reminder that:

        • The global warming wolf is already at the door, and
        • The people who rule this world will never drive him away.

        Which means:  People who want to fix this problem will have to use force. That’s just a fact. If you remember nothing else from this piece, remember this. Force them to fix it or remove their control — those are the only choices for strong, effective climate action, and given the state of our government, wholly captured by wealth and its interests, those two options are the same.  We can despair or take control. Those are the choices. It’s going to take force to fix this. The climate organization was founded in 2007, when the goalwas to reduce atmospheric CO2 from 385 ppm to 350 ppm, a target already well above the range of atmospheric CO2 for the last 5 million years. Since the founding of 350org, atmospheric CO2 touched 400 ppm in 2013 and breached it solidly in 2014. Last year, atmospheric CO2 touched 410 ppm and this year will breach it solidly. Note in the animation below, CO2 reaches its peak in May. This year, CO2 reached 410 ppm in March, with May still two months ahead. Some global warming cannot now be prevented; too much is “baked in” already for a return to Holocene days, when a predictable human-friendly climate arrived, after hundreds of thousands of years, to give us agriculture and the iPhone. Much of the gift of that climate is going to be lost forever.

        Is This The Collapse You Ordered...?  - Kunstler - I had a fellow on my latest podcast, released Sunday, who insists that the world population will crash 90-plus percent from the current 7.6 billion to 600 million by the end of this century. Jack Alpert heads an outfit called the Stanford Knowledge Integration Lab (SKIL) which he started at Stanford University in 1978 and now runs as a private research foundation. Alpert is primarily an engineer. At 600 million, the living standard in the USA would be on a level with the post-Roman peasantry of Fifth century Europe, but without the charm, since many of the planet’s linked systems — soils, oceans, climate, mineral resources — will be in much greater disarray than was the case 1,500 years ago. Anyway, that state-of-life may be a way-station so something more dire. Alpert’s optimal case would be a world human population of 50 million, deployed in three “city-states,” in the Pacific Northwest, the Uruguay / Paraguay border region, and China, that could support something close to today’s living standards for a tiny population, along with science and advanced technology, run on hydropower. The rest of world, he says, would just go back to nature, or what’s left of it. Alpert’s project aims to engineer a path to that optimal outcome. I hadn’t encountered quite such an extreme view of the future before, except for some fictional exercises like Cormac McCarthy’s The Road. (Alpert, too, sees cannibalism as one likely byproduct of the journey ahead.) Obviously, my own venture into the fictionalized future of the World Made by Hand books depicted a much kinder and gentler re-set to life at the circa-1800 level of living, at least in the USA. Apparently, I’m a sentimental softie. Both of us are at odds with the more generic techno-optimists who are waiting patiently for miracle rescue remedies like cold fusion while enjoying re-runs of The Big Bang Theory. (Alpert doesn’t completely rule out as-yet-undeveloped energy sources, though he acknowledges that they’re a low-percentage prospect.) We do agree with basic premise that the energy supply is mainly what supports the way we live now, and that it shows every evidence of entering a deep and destabilizing decline that will halt the activities necessary to keep our networks of dynamic systems running.

        The Dangerous Belief That Extreme Technology Will Fix Climate Change - Geoengineering – large-scale efforts to manipulate the climate to counteract global warming – has yet to be undertaken, but experts say it's only a matter of time.  But the problem with the way geoengineering is discussed today, lamented John Ehrenfeld, former director of the MIT Program on Technology, Business, and Environment, is that it doesn’t address the societal issues that got us in this mess in the first place.“It’s a failure to accept complexity of the system, and the system includes people,” Ehrenfeld told me recently over coffee. For decades, Ehrenfeld, who is now retired, researched and promoted the concept of sustainability. But to Ehrenfeld, after all the climate conferences, all the stakeholder roundtables, all the debates on market-driven solutions, the questions and answers being debated never questioned capitalism, civilization, and the notion of progress.Tackling a problem as deeply ingrained as global warming, Ehrenfeld said, will require humanity to face an existential question that geoengineering alone cannot address: Are we willing to sacrifice growth to ensure the survival of our species?  “Absent decoupling growth from progress,” Ehrenfeld said, “we won’t address the core of the problem.”

        EPA staff in ‘despair’ after Pruitt blame game - Scott Pruitt may have survived his testimony on Capitol Hill, but he's coming back to a further enraged and demoralized Environmental Protection Agency staff. Several current and former EPA officials and other people close to the agency said Pruitt did himself no favors with his congressional testimony Thursday, in which he blamed his aides for installing a $43,000 privacy booth in his office and approving more than $100,000 in first-class flights that he took last year. Pruitt also denied knowing key details about raises that his top staff received last year. And he declined to defend his former policy chief against Democrats' accusations that she had failed to show up for work for three months, even though she and Pruitt had been photographed attending the same meeting during the period in question. ..In conversations with 11 people who know the atmosphere inside EPA, including Republican political appointees, a handful said his refusal to grovel may have pleased President Donald Trump. But others said his strategy was appalling to the current and former staffers who found themselves thrown under the bus. "I think his credibility is damaged, and whether or not he gets fired by a tweet isn't going to diminish the fact that his credibility has been seriously damaged by all of this," one person close to the administration told POLITICO. "It shows a real lack of leadership that he did not defend, or blamed, his staff. These are the people that he's asking for loyalty from. These are the people that are defending him. He's not returning the favor. That's not leadership." A current EPA official said Friday that employees are veering between "despair" and "embarrassment," and Pruitt's televised performance did not help. 

        Lobbyist helped arrange Scott Pruitt’s $100,000 trip to Morocco — A controversial trip to Morocco by Environmental Protection Agency chief Scott Pruitt last December was partly arranged by a longtime friend and lobbyist, who accompanied Pruitt and his entourage at multiple stops and served as an informal liaison at both official and social events during the visit. Richard Smotkin, a former Comcast lobbyist who has known the EPA administrator for years, worked for months with Pruitt’s aides to hammer out logistics, according to four individuals familiar with those preparations. In April, Smotkin won a $40,000-a-month contract, retroactive to Jan. 1, with the Moroccan government to promote the kingdom’s cultural and economic interests. He recently registered as a foreign agent representing that government.The four-day journey has drawn scrutiny from lawmakers and the EPA’s inspector general, who is investigating its high costs and whether it adhered to the agency’s mission to “protect human health and the environment.” Information obtained by The Washington Post shows the visit’s cost exceeded $100,000, more than twice what has been previously reported — including $16,217 for Pruitt’s Delta Air Lines fare and $494 for him to spend one night at a luxury hotel in Paris. He was accompanied by eight staffers and his round-the-clock security detail.

        D.C. consultant and former lobbyist helped arrange Scott Pruitt’s canceled trip to Australia, records show - A Washington-based consultant who had served as a lobbyist for foreign governments helped arrange a trip that Environmental Protection Agency Administrator Scott Pruitt planned to take to Australia last year, according to federal records obtained under the Freedom of Information Act.Matthew C. Freedman, chief executive of the firm Global Impact Inc., worked with one of Pruitt’s top aides and another longtime ally of the administrator, lobbyist Richard Smotkin, to set up meetings in Australia. The trip was scheduled to take place in late August and early September, but Pruitt canceled the travel shortly before his departure so he could survey Hurricane Harvey damage in Texas.Freedman has previously worked for controversial foreign leaders such as former Philippine president Ferdinand Marcos and the Nigerian government. He is not currently registered as a lobbyist but serves as treasurer for the American Australian Council that promotes economic ties between the two countries. The Washington Post reported Tuesday Smotkin played a key role in brokering a December trip Pruitt took to Morocco that cost taxpayers about $100,000. Smotkin, who accompanied Pruitt for much of that journey and served as an informal liaison between EPA and Moroccan officials, subsequently signed a $40,000-a-month contract with the Moroccan government that was retroactive to Jan. 1.

        Ex-EPA Superfund chief says resignation won’t slow down efforts -- The sudden resignation of EPA Administrator Scott Pruitt’s chief Superfund adviser won’t slow an EPA task force’s work speeding up waste site cleanups and helping surrounding communities, the ex-adviser told Bloomberg Environment. “The task force is continuing to run as it has run,” Albert “Kell” Kelly, Pruitt’s liaison with companies and community groups near toxic sites, said in a May 2 interview. Kelly said he left the Environmental Protection Agency on May 2. His departure came a week after two Virginia Democratic House members, Reps. Don Beyer and Gerald Connolly, asked the EPA’s inspector general to investigate Kelly. Kelly is the latest top-level Pruitt aide to leave the EPA: former Secret Service agent Pasquale “Nino” Perrotta, who led Pruitt’s security detail, recently announced his retirement and Samantha Dravis, an associate administrator of the EPA Office of Policy, also left the agency. The departures come amid scrutiny over Pruitt’s spending and ethics practices. The Democratic lawmakers said Kelly lacked a background in environmental protection and cited media reports saying the Federal Deposit Insurance Corporation banned Kelly from the banking industry last year. Kelly, a former chairman of Oklahoma-based SpiritBank, was banned from banking and fined $125,000 last year by the FDIC under an agreement in which he neither admitted nor denied wrongdoing. Kelly has said the action stemmed from a single transaction in 2010. Kelly declined to discuss his reasons for leaving EPA with Bloomberg Environment. 

        Scientists shocked as NASA cuts only moon rover - In a move that shocked lunar scientists, NASA has cancelled the only robotic vehicle under development to explore the surface of the Moon, despite President Donald Trump's vow to return people there.  Scientists working on the Resource Prospector (RP) mission, a robotic rover that had been in development for about a decade to explore a polar region of the Moon, expressed astonishment at the decision."We now understand RP was cancelled on 23 April 2018 and the project has been asked to close down by the end of May," said the letter dated April 26 by the Lunar Exploration Analysis Group, addressed to NASA chief Jim Bridenstine and posted on the website"This action is viewed with both incredulity and dismay by our community," particularly because Trump's space policy "directs NASA to go to the lunar surface," the letter said.The robotic rover was being built as the world's only vehicle aimed at exploring the polar region of the Moon, and was expected to undergo a design review next year ahead of launching in 2022. It would have been the first US lunar lander since Apollo 17 in 1972, and the first ever US robotic rover on the surface of the Moon.

        Clean energy sector swings Republican with U.S. campaign donations (Reuters) - U.S. solar and wind energy companies have donated far more money to Republicans than Democrats in congressional races this election cycle, according to a Reuters analysis of campaign finance data, an unprecedented tilt to the right for an industry long associated with the environmental left. While the money is modest compared with that donated by fossil fuel interests, the support provides GOP candidates with added credibility on clean energy, an issue polling shows swing voters care about. Renewable energy has typically depended on government subsidies and policies to help fuel its growth, and the donations come at a time when Republicans control both houses of Congress as well as a majority of state houses across the country. Republicans have so far left subsidies for the industry largely intact. Overall, political action committees representing solar and wind companies have donated nearly $400,000 to candidates and PACs in the 2018 election cycle, including $247,000 to Republicans, $139,300 to Democrats, and $7,500 to independents, according to the Reuters analysis. That marks a record. During the 2016 presidential elections, the first cycle during which the clean energy industry gave more to the GOP than to Democrats, Republicans received just over half of the combined $695,470 in political contributions from major wind and solar PACs. Before that, solar and wind companies mainly donated to Democrats, who were broadly seen as more supportive of policies that could help the nascent sector grow. In 2014, 70 percent of the contributions from seven major wind and solar PACs went to Democrats. The U.S. solar and wind industries have expanded greatly over the last decade and now employ some 300,000 workers nationwide, nearly six times more than coal mining. The hottest growth has been in states that voted heavily for President Donald Trump in 2016.

        New import duties drive biomass-based diesel imports down in 2017 - U.S. imports of biomass-based diesel, which include biodiesel and renewable diesel, totaled 14.1 million barrels in 2017, a 36% decrease from 2016. Although increasing Renewable Fuel Standard (RFS) targets have driven increased biomass-based diesel demand in recent years, imports fell in 2017 largely because of U.S. Department of Commerce (DOC) import duties imposed on foreign biodiesel volumes sourced from Argentina and Indonesia, two of the leading exporters of biodiesel. Biodiesel is a mixture of alkyl esters and is often combined with petroleum diesel in blends of 5% to 20% and branded as B5 to B20. By contrast, renewable diesel is composed of hydrocarbon chains that are indistinguishable from petroleum, meaning that it meets specifications for use in existing infrastructure and diesel engines and that it is not subject to any blending limitations. Both fuels are produced from a variety of fats, oils, and grease, collectively referred to as FOGs. Because biomass-based diesel costs more than petroleum diesel to produce, consumption of biomass-based diesel is largely driven by federal and state policies. At the federal level, biomass-based diesel qualifies as an advanced biofuel under the Environmental Protection Agency’s Renewable Fuel Standards program, which mandates the blending of renewable fuels into the nation’s fuel supply.  Biomass-based diesel also generates credits under California’s Low Carbon Fuel Standard (LCFS), a cap-and-trade system intended to reduce the carbon intensity of transportation fuels. Because biomass-based diesel has relatively high energy content and low carbon intensity relative to other biofuels used to meet RFS and LCFS targets, its use has increased as RFS and LCFS targets have become more stringent. The United States has been a net importer of biomass-based diesel since 2013.

        U.S. exported a record amount of fuel ethanol in 2017 - The United States exported nearly 1.4 billion gallons of fuel ethanol in 2017, surpassing the previous record of 1.2 billion gallons set in 2011. U.S. imports of ethanol in 2017 increased compared with 2016 but remained relatively small at 77 million gallons, resulting in the United States being a net exporter of ethanol for the eighth consecutive year.  The United States has seen continued growth in fuel ethanol exports over the past eight years as increases in both corn production and ethanol production capacity have outpaced domestic fuel ethanol consumption. U.S. fuel ethanol was exported to 35 countries in 2017, but more than half of all exported fuel ethanol went to Brazil and Canada. In the United States, ethanol is primarily used as a blending component in the production of motor gasoline and is mainly blended in volumes up to 10% ethanol, also known as E10. Corn is the primary feedstock of fuel ethanol in the United States, and large corn harvests and stable corn prices have contributed to increased fuel ethanol production in recent years. The U.S. Department of Agriculture estimates that the United States produced 14.6 billion bushels of corn in the 2017–2018 harvest year, 4% less than the record 2016–2017 harvest, but still the second-highest level in history.  Fuel ethanol exports to Brazil increased for the fourth consecutive year, reaching 450 million gallons in 2017 and accounting for nearly one-third of all U.S. fuel ethanol exports. Like the United States, Brazil is one of the world’s largest producers and consumers of fuel ethanol, but the country has had supply issues in recent years.  Fuel ethanol consumption in Brazil is driven largely by an ethanol blending mandate (currently set at 27%) and lower prices relative to gasoline, but Brazil's fuel ethanol prices are not competitive with fuel ethanol from the United States primarily because of higher agricultural feedstock costs, especially along Brazilian coastal areas. U.S. exports to Brazil reached 90 million gallons in the fourth quarter of 2017, despite Brazil’s introduction in September of a 20% tariff levied on U.S. fuel ethanol volumes of more than 150 million liters per quarter (roughly 40 million gallons).

        Trump administration drafts plan to unravel Obama-era fuel-efficiency rules, challenge California - The Trump administration has drafted a proposal that would freeze fuel-efficiency standards for automobiles starting in 2021 and challenge California’s ability to set its own fuel-efficiency rules, changes that would hobble one of the Obama administration’s most significant initiatives to curb climate change. The draft document, while not final, suggests the Trump administration is poised to make significant changes to planned auto standards over the next decade. A federal official who has reviewed the document described it in detail to The Washington Post. Drafted in large part by the Transportation Department’s National Highway Traffic and Safety Administration (NHTSA), the plan outlines a preferred alternative in which the federal government would freeze fuel-efficiency standards for cars and light trucks at levels now set for model year 2021, keeping them there through 2026. The draft offers seven other options that would also weaken the standards, though not to the same extent as the preferred alternative. Under a 2011 agreement reached among the Obama administration, California officials and automakers, manufacturers’ fleet of cars and light trucks in the United States are slated to average more than 50 miles per gallon by 2025 — well above the level of the Trump administration’s proposed freeze. The Obama administration granted California a waiver under the Clean Air Act to set its own tailpipe emissions limits, and the state’s higher standards have led automakers to build more fuel-efficient automobiles to maintain access to California’s massive market. But the Trump administration document asserts that, despite the Clean Air Act waiver, a separate federal law preempts California from drafting its own emissions standards. 

        Trump and California are set to collide head-on over fuel standards: The Trump administration is speeding toward all-out war with California over fuel economy rules for cars and SUVs, proposing to revoke the state's long-standing authority to enforce its own, tough rules on tailpipe emissions. The move forms a key part of a proposal by Trump's environmental and transportation agencies to roll back the nation's fuel economy standards. The agencies plan to submit the proposal to the White House for review within days.The plan would freeze fuel economy targets at the levels required for vehicles sold in 2020, and leave those in place through 2026, according to federal officials who have reviewed it. That would mark a dramatic retreat from existing law, which aimed to get the nation's fleet of cars and light trucks to an average fuel economy of 55 miles per gallon by 2025. Instead of average vehicle fuel economy ratcheting up to that level, it would stall out at 42 miles per gallon. That would constitute the single biggest step the administration has taken to undermine efforts to combat climate change. Cars and trucks recently surpassed electricity plants as America's biggest sources of the greenhouse gases that drive global warming. And unlike the electricity industry, in which market forces have pushed utilities toward cleaner energy, including natural gas and renewable sources, relatively low gasoline prices in recent years have led consumers to pay less attention to fuel economy when they buy new cars. As a result, the steady increase in fuel mileage standards championed by the Obama administration in partnership with California represented the most powerful action the U.S. has taken to reduce greenhouse-gas emissions. The biggest gains have been projected to happen in the years that the Trump administration's plan would target.

        California Sues Trump Administration Over Vehicle Emissions… — California Gov. Jerry Brown said Tuesday his state was suing the Trump administration over its decision to ease national vehicle-emissions standards.Mr. Brown said the lawsuit challenges the Environmental Protection Agency’s decision to revise tailpipe emissions rules that go into effect in 2022 for vehicle models through 2025, saying the move was a violation of the Clean Air Act and the Administrative Procedures Act. California holds a waiver that allows it to set its own emissions guidelines for auto makers, and many states follow California’s lead. The suit was filed in the United States Court of Appeals for the District of Columbia Circuit, a news release from the governor’s office said. A total of 17 states—and the District of Columbia—representing about 140 million people and more than 40% of the car market are suing.The Trump administration has decided to lower—and may even eliminate—increases in vehicle-emissions requirements that car makers say don’t work in an era of cheap gasoline. With pump prices low, drivers are buying more fuel-gobbling trucks and sport-utility vehicles, making it more difficult for auto makers to raise the average fuel economy for the vehicles they sell. The Obama administration had aimed by 2025 to raise that figure to the rough equivalent of 36 miles per gallon in real-world driving. The Trump administration didn’t get California to agree to the changes despite its special legal authority to set rules that are now adopted by about a third of the country’s car market. And California officials are joining other critics who say the Trump administration’s hasn’t provided enough research to prove their decision isn’t arbitrary and is legally justified. “You can’t, just like some tinhorn dictator, say I’m tearing up a rule that was built on two years of building up evidence,” Mr. Brown said at a press conference broadcast from Sacramento. EPA Administrator Scott Pruitt is “running roughshod over the laws of this country and the health of our people.” An EPA spokeswoman declined to comment, citing pending litigation. Mr. Brown’s announcement follows a report last week in The Wall Street Journal that the Trump administration was seeking to go further than its already announced plans to ease the emission standards and may work to eliminate California’s special powers.

        DTE Energy can build $1 billion gas plant — and pass cost on to you --   Environmentalists are registering their disappointment this morning upon word that that the Michigan Public Service Commission (MPSC) has approved a certificate of necessity allowing the utility to build a $1 billion natural gas-fueled power plant in St. Clair County. The Union of Concerned Scientists says the commission has set a “risky precedent” that “leaves customers on the hook” in “a move that will cost ratepayers, hurt public health and continue Michigan’s over-dependence on fossil fuels.” You might not think so. After all, on its face, the plan would appear to have a green sheen, given the fact that the gas plant would replace three aging coal plants. But a group of environmental organizations have asked the MPSC to say no to the plan for several reasons.At a press conference earlier this month in Detroit, Becky Stanfield with Vote Solar had said, “The law requires [DTE Energy] to fairly assess energy options including solar power, wind power, and energy efficiency and to choose the resources that are the most prudent and reasonable for its customers. A massive gas plant is not the most reasonable and prudent way of meeting DTE’s customers’ needs.”Environmental groups also objected to the utility’s request for permission to pass $989 million of the cost of building the gas plant on to its ratepayers. Senior Energy Analyst Sam Gomberg of the Union of Concerned Scientists has pointed out that the gas plant would end up costing DTE’s customers $339 million more than if the utility focused instead on renewable power generation and energy efficiency measures. What’s more, a February study by BW Research Partners showed how a portfolio of clean energy resources would create more jobs and more tax revenues than DTE’s proposed project.

        California Warns of a Second Energy Crisis - California’s chief utility regulator is warning that the state could find itself in the throes of another energy crisis if it doesn’t address the droves of customers defecting from utilities. The state is going to find it increasingly difficult to ensure it has enough electricity to keep the lights on as more Californians leave utilities to buy their power directly from resources like rooftop solar panels and community choice aggregators that contract directly with generators, California Public Utilities Commission President Michael Picker said. As much as a quarter of the state’s energy demand may be sourced outside of utilities by the end of this year, he said. “We have a hodgepodge of different providers,” Picker said in a telephone interview. “If we aren’t careful, we could slide back to the kind of crisis we faced in 2000 and 2001.” Almost two decades ago, California was gripped by an unprecedented energy crisis, brought on by electricity shortages and widespread market manipulation. Hundreds of thousand of homes and businesses were plunged into darkness amid rolling blackouts, wholesale electricity prices skyrocketed to record levels and the state’s largest utility, PG&E Corp.’s Pacific Gas & Electric, went bankrupt. The extensive outages hit just a few years after the state decided to open its electricity market to competition. Picker said he’d like to avoid making the same mistake. On Thursday, his staff published a report detailing how California is once again giving more choice to electricity customers. It offers some possible ways in which policy makers could address the shift, taking from experiences that other states and the U.K. have been through. Among them:

        • Defining and designing a “provider of last resort” if a power supplier fails to deliver
        • Reconsidering incentives for new energy technologies
        • Re-examining how costs are allocated to ratepayers for power generation and distribution

        A critical security flaw in popular industrial software put power plants at risk - A severe vulnerability in a widely used industrial control software could have been used to disrupt and shut down power plants and other critical infrastructure. Researchers at security firm Tenable found the flaw in the popular Schneider Electric software, used across the manufacturing and power industries, which if exploited could have allowed a skilled attacker to attack systems on the network.It's the latest vulnerability that risks an attack to the core of any major plant's operations at a time when these systems have become a greater target in recent years. The report follows a recent warning, issued by the FBI and Homeland Security, from Russian hackers.   The affected Schneider software, InduSoft Web Studio and InTouch Machine Edition, acts as middleware between industrial devices and their human operators. It's used to automate the various moving parts of a power plant or manufacturing unit, by keeping tabs on data collection sensors and control systems. But Tenable found that a bug in that central software could leave an entire plant exposed. An attacker can, without needing a password, send a malicious data packet design to force a stack buffer overflow -- effectively exhausting the memory address -- allowing the attacker to read and write arbitrary code on a vulnerable system.   Tom Parsons, head of Tenable Research, explained that the stack-based buffer overflow attack can be leveraged in several malicious ways. First, an attacker can use the vulnerability to trigger a denial-of-service event by crashing the software, locking out remote administrators from their central operations. The bug can also be used to gain a foothold further into the network -- as well as other industrial devices -- or even send instructions to some physical control systems in the plant or unit. Parsons said the attack method was relatively easy, requiring just a shell and an internet connection.

        Indonesia has far more than enough pumped hydro storage sites to support a 100% renewable electricity grid - With the support of the Australia Indonesia Centre we have identified 657 potential sites across Bali for pumped hydro energy storage (PHES), with a combined potential storage capacity of 2,300 Gigawatt-hours. Pumped hydro energy storage is a technique to store energy produced by electricity generation. Using electricity generated from renewable energy such as solar power and wind, the potential sites for PHES that we identified in Bali would be enough to support a 100% renewable Indonesian electricity grid and more. Solar photovoltaics (PV) and wind are now the leading electricity generation technologies being installed worldwide each year. Gas and coal are in third and fourth spots respectively. PV is accelerating away from other energy generation technologies because it's cheaper, scalable and produces no greenhouse gas emissions, and because there is vast availability of sunshine. Indonesia has large solar potential because of its tropical location. Much less than 1% of Indonesian land would be required to produce all of the nation's electricity using PV. About half of the panels would be on the roofs of buildings. Although Indonesia has only a small amount of PV at present, exponential growth can change this quickly—as happened in Australia, China and many other countries. Because of its equatorial location solar energy does not vary much throughout the year, unlike in higher latitudes. PV (and wind) are now economically competitive with new-build coal and gas in Indonesia.  The Australian and Indonesian electricity systems are of similar size. In Australia, effectively all new generation capacity is PV and wind, and no new coal power stations are ever likely to be built. PV and wind are replacing old coal power stations as these are retired. About 4.5 Gigawatts of new PV and wind will be installed in Australia in 2018, compared with peak demand of 35 Gigawatts.

        High oil prices pressure coal production in Wyoming - As coal producers look down the barrel of the off season, there’s one threat quietly clouding their outlook: high oil prices.One of the few saving graces for Wyoming’s economy in the last year has been the improving price of crude. From new jobs to county revenue, more drilling has been a boon for the state as it climbs out of a recession.But it’s not only crude that comes out of the wellhead. The increase in oil production nationally means a jump in natural gas production that could keep gas prices low enough to trouble coal.“There is just a lot of gas out there, “said Travis Deti, executive director of the Wyoming Mining Association. “I wouldn’t go so far to say it’s a glut, but there is just a lot of gas on the market.” The natural gas price at the Opal Hub in Lincoln County averaged $2.05 per million British thermal units in April compared to $2.76 last year, according to Wyoming Insight data published Monday. The national spot price, Henry Hub, averaged higher, at $2.76, a price point that is still within the range where some Wyoming coal companies can compete, Deti said.“We always say $2.50 is our magic number,” he said. “Anything above three bucks and everyone is good.” Producers are now facing a few months of potential doldrums before summer demand kicks in. As winter temperatures give way to spring, electricity-use declines and less coal is dug out of Wyoming’s Powder River Basin. Consistently low gas prices can exacerbate the pressure of the shoulder season on coal mines.

        The war on coal is making the world’s top mine owners a lot richer - Anglo American Plc, Glencore Plc and BHP Billiton Ltd. are generating the highest profits in years from their coal mines. Income for the 37 coal producers tracked in a Bloomberg Intelligence index was the highest in six years. It all comes down to the simplest equation in business: supply and demand. With governments from Asia to Europe setting stricter pollution limits as the climate change debate intensifies, output of the planet’s dirtiest fuel is dropping. Some of the more significant declines are occurring in China, the top mine operator, and financing for new supplies is drying up. That’s creating a windfall for the producers who remain. “It’s a perverse consequence” of policies intended to combat climate change, said Julian Treger, co-founder of activist investor Audley Capital Advisors LLP. “It’s going to be very difficult for funders to provide capital to bring new coal assets online. We have a very interesting supply and demand picture being set up.” Anglo American, which not long ago wanted to unload its coal assets, has seen income from the business triple since 2015 to become the mining company’s most profitable commodity. Last year, Glencore reported earnings from the fuel more than doubled, while BHP Billiton said it surged sixfold. While global coal use and mine output has been dropping, production failed to keep pace with demand in 2016 for the first time in seven years, data compiled by BP Plc show. As supplies continue to drop, the amount available for export is shrinking. BMO Capital Markets says the 1 billion-metric-ton seaborne market will have a small deficit by 2021 and expand to 15 million tons in 2022. 

        Trump plan to nationalize coal plants could be a surprise gift to climate hawks - The White House is considering plans to invoke an obscure, Cold War-era law to prop up struggling coal-fired power plants, a move that some say could open the door for Democrats to take radical steps to phase out fossil fuels. The Defense Production Act gives the president broad authority to intervene in industries deemed vital amid war or disaster, including nationalizing systemically important companies to avert catastrophe. In 1952, President Harry Truman applied the statute to nationalize the steel industry and forestall a nationwide strike. But President Donald Trump is weighing using the law to fulfill a campaign promise and halt coal plant closures, according to a Bloomberg report published late last month. It’s unclear what the program would look like. The Trump administration could spend taxpayer money to bail out some coal-fired plants and require that utilities keep greater stocks of coal on site, effectively nationalizing and dictating the energy market. The White House did not return a request for comment. Coal advocates, including Murray Energy Corp. CEO Bob Murray and Sen. Joe Manchin (D-W.Va.), have long argued that the natural gas and renewables driving coal-fired plants out of business cannot provide reliable electricity in extreme weather ― a widely-disputed conclusion ― and urged the president to protect the remaining power stations under a federal statute. Federal regulators rejected the Trump administration’s plan to pass a new rule to bail out coal and nuclear plants in January, and Energy Secretary Rick Perry shied away from a legally-dubious proposal last month to invoke an emergency clause of the Federal Power Act to give taxpayer-backed financing to struggling power stations. But the 68-year-old Defense Production Act could do the trick. If so, a plan to nationalize or financially buttress the troubled coal industry in the name of averting a crisis thrusts into mainstream debate an idea that has struggled to gain traction but seems increasingly necessary to stave off the worst effects of climate change: nationalizing fossil fuel corporations to dismantle them. 

        Asia’s hunger for cheap energy will sustain coal - Thermal coal, burned to generate energy, has few friends in high places. Britain, France and others are phasing it out and so too is China, the world’s top consumer. Financing coal is getting tougher too, with large banks under pressure from environmentally conscious investors. But the Asian picture is different. In China, where consumption peaked in 2013, deep cuts are taking time. And from Pakistan to the Philippines, the need for more cheap energy means more coal-fired plants, driving regional demand. Appetite for the fuel in large existing markets – India, Korea and Japan – is holding up too. Supply, meanwhile, is hardly likely to increase, as mines age and little new capacity comes onstream. And miners that are still betting on coal, like Glencore, are buying existing capacity, not digging fresh holes.

        Dozens of ponds storing coal ash waste are located in flood zones - Every year, coal-fired power plants in the United States produce over 100 million tons of ash laced with toxic heavy metals, much of which is mixed with water and stored in unlined pits nearby. These ponds, like the plants that fill them, are often located next to waterbodies like rivers or lakes. Environmentalists and public-health officials have long raised concerns that harmful chemicals could leach into groundwater or overflow into rivers and streams during heavy rains and contaminate drinking water sources. A new report out Monday finds that there's merit to these concerns: At least 36 coal ash ponds are located in flood zones.The report's findings were released on the final day of the comment period for a new Environmental Protection Agency rule rolling back Obama-era regulations of coal ash disposal. In 2015, following several high-profile coal ash leaks, including a 2008 spill in which a dike broke at the Kingston Fossil Plant in Tennessee and 1.1 billion gallons of ash poured into the Emory River, the Obama administration proposed new standards for coal ash ponds that included more monitoring and inspections and stricter lining requirements. The rule never took effect. Utility industry officials, citing the "excessive costs of compliance," blocked the rule from implementation with litigation until the Trump administration, which has been much more sympathetic to industry interests, took office. In March, the EPA announced several changes to its coal ash regulations, giving more power to states to set their own ash-disposal standards and saving the industry up to $100 million a year in compliance costs. The agency is expected to move forward quickly with a final rule now that the public comment period has closed. But the authors of the new report highlighting the dangers of coal ash ponds say that weakening the standards now is just "inviting disaster" along rivers that provide drinking water to millions of Americans.

        Coal ash raising concerns over health risks in Puerto Rico : PBS NewsHour - Full Transcript - Residents of Guayama, home to Puerto Rico’s only coal-burning power plant for 15 years, have been diagnosed with cancer, heart and respiratory diseases that they fear are related to coal ash exposure. Ivette Feliciano reports on the concerns of Puerto Ricans who say the situation grew worse after Hurricane Maria--and the national implications as President Donald Trump’s administration rolls back regulations on the disposal of coal ash. 

        Visualizing The World's Other 'Aging' Problem - While the world is becoming increasingly aware of the west's looming (and current) demographic dystopia  - solved in its globalist way via immigration and government-dependence - there is another 'ageing' problem that is potentially even more catastrophic... A total of 450 nuclear reactors are producing around 11 percent of the total electricity output worldwide.According to the International Atomic Energy Agency (IAEA), the United States is currently running 99 reactors, making it the country with the most units online, followed by France with 58 units.   But, as Statista's Dyfed Loesche shows in the infographic below, a lot of the currently still running reactors were connected to the grid in the 1980s, now 29 to 38 years old.  In Germany, where the government decided to shut down all nuclear plants by the end of 2022, all of the 7 still running reactors were built in the 1980s.The oldest reactors worldwide went online some 49 years ago. One of them is the reactor 1 at Beznau power plant in Switzerland which has been delivering electricity since July 1969.

        Russia Launches "Floating Chernobyl" Bound For The Arctic - On Saturday, the world’s first floating nuclear power unit (FPU) dubbed ‘Academik Lomonosov’ departed from the region of Baltiyskiy Zavod in St. Petersburg, towed by two deep-sea tugboats. The ‘Academik Lomonosov,’ a massive barge containing floating nuclear reactors, leaves St. Petersburg over the weekend. (Source: Anton Vaganov/TASS)  A-News captures video of the departure. A floating nuclear power plant made by Russia headed out for its first sea voyage on Saturday. The floating plant, the academic lomonosov will provide power for a port town and for oil rigs. — ANews (@anewscomtr) April 28, 2018    Russia’s first floating nuclear power plant has two KLT-40S reactor units that collectively generate 70 MW of energy. The tugs are currently underway — towing the vessel through the Baltic Sea to a port in northwestern Russia called Murmansk, where its reactors will be loaded with nuclear fuel.

        Move Over Chernobyl, Fukushima is Now Officially the Worst Nuclear Disaster in History - The radiation dispersed into the environment by the three reactor meltdowns at Fukushima-Daiichi in Japan has exceeded that of the April 26, 1986 Chernobyl catastrophe, so we may stop calling it the “second worst” nuclear power disaster in history. Total atmospheric releases from Fukushima are estimated to be between 5.6 and 8.1 times that of Chernobyl, according to the 2013 World Nuclear Industry Status Report. Professor Komei Hosokawa, who wrote the report’s Fukushima section, told London’s Channel 4 News then, “Almost every day new things happen, and there is no sign that they will control the situation in the next few months or years.” Tokyo Electric Power Co. has estimated that about 900 peta-becquerels have spewed from Fukushima, and the updated 2016 TORCH Report estimates that Chernobyl dispersed 110 peta-becquerels. [1] (A Becquerel is one atomic disintegration per second. The “peta-becquerel” is a quadrillion, or a thousand trillion Becquerels.)Chernobyl’s reactor No. 4 in Ukraine suffered several explosions, blew apart and burned for 40 days, sending clouds of radioactive materials high into the atmosphere, and spreading fallout across the whole of the Northern Hemisphere — depositing cesium-137 in Minnesota’s milk.[2]  The likelihood of similar or worse reactor disasters was estimated by James Asselstine of the Nuclear Regulatory Commission (NRC), who testified to Congress in 1986: “We can expect to see a core meltdown accident within the next 20 years, and it … could result in off-site releases of radiation … as large as or larger than the releases … at Chernobyl. [3] Fukushima-Daiichi came 25 years later. Contamination of soil, vegetation and water is so widespread in Japan that evacuating all the at-risk populations could collapse the economy, much as Chernobyl did to the former Soviet Union. For this reason, the Japanese government standard for decontaminating soil there is far less stringent than the standard used in Ukraine after Chernobyl.

        France, India Moving Forward with Massive Nuclear Project - India’s government-owned National Nuclear Power Corp. (NPCIL) in March signed cooperation agreements for equipment and construction related to the massive 9,900-MW Jaitapur project in Maharashtra, the world’s largest nuclear plant project in terms of generation capacity. Jean-Bernard Levy, EDF’s chairman and CEO, in a statement said, “The industrial agreement just signed with NPCIL marks a decisive step in the development of the Jaitapur nuclear project, meaning we can now envisage with confidence the rest of this essential project for India and for EDF. We are proud to support the Indian government in its objective of achieving an energy mix that is 40 percent carbon-free in 2030.”

        Grid Resiliency Risks Posed by US Nuclear Plant Closures - A new report released today by IHS Markit outlines the severe grid resiliency, environmental and financial consequences for customers served by the PJM Interconnection Energy Market (PJM) that will likely result from uneconomic nuclear plant closures. Five nuclear plants operating in the PJM region are slated to prematurely retire by 2025, including Oyster Creek (NJ), Three Mile Island (PA), Beaver Valley (PA), Davis-Besse (OH) and Perry (OH). The report concludes: “The primary finding is that the 65 million consumers who rely on PJM grid-based power supply are better off if something is done to prevent the uneconomic closures of PJM nuclear resources because the PJM power supply portfolio is more efficient, more resilient, and environmentally responsible with the continued contribution of cost-effective nuclear resources.”

         US Mid-Atlantic Grid says It Doesn’t Need Nuclear Plants for Grid Reliability - Mid-Atlantic grid operator PJM reported Monday that FirstEnergy’s plan to close three nuclear power plants by 2021 won’t threaten grid reliability and stability. FirstEnergy’s plan would certainly deliver a blow to PJM’s carbon balance, dropping nearly twice as many carbon-neutral nuclear megawatts from its generation mix as its total amount of wind and solar megawatts to date. But PJM’s “Generation Deactivation Notification Update,” found that the closures would not threaten reliability across the locational deliverability areas (LDAs) covering parts of Ohio and western Pennsylvania. “Sufficient transmission margin remains to import emergency power into impacted LDAs,” the report noted, meaning that enough transmission capacity exists to power those regions’ needs from outside.

        Closing FirstEnergy's reactors will not destabilize grid, says PJM, but launches probe into future fuel security -- PJM Interconnection today said it has determined that FirstEnergy's power plant subsidiary can shut down its three nuclear power plants within three years without destabilizing the 13-state power grid that PJM manages. At the same time, PJM announced its intention to look at "fuel security" in the face of the utility industry's growing fleet of natural gas turbine power plants. These plants, including 10 planned for Ohio, have made it difficult for some nuclear and old coal plants to compete. Both FirstEnergy and now FirstEnergy Solutions have said that PJM's market rules, which focus on the least expensive power that can reasonably be expected to support the grid, do not value old coal and nuclear plants. Don Moul, president of FES generation companies and chief nuclear officer, said in a statement that the PJM finding "ignores the value that these units offer the grid in terms of fuel diversity and zero-carbon emissions generation." The companies have tried to go around PJM twice and have sought intervention from President Donald Trump's administration. The current effort by FES asking the U.S. Department of Energy to use emergency powers to keep old coal and nuclear open in the PJM region as a national security issue, is pending. The DOE has not said when it will make a decision on the FES request, but has opened a special page on its website asking for email comments from the industry and the public. PJM itself is concerned about a massive switch to any one fuel source and has already begun "to analyze fuel security vulnerabilities and establish a system to use market competition to address the problem,"said Andy Ott, PJM president, in a news conference Monday.

        Power Plant Projects Invest $4.6B in 4 Counties — The investment numbers are unlike any the region has witnessed in decades – more than $4.6 billion scattered across four counties in or around the Mahoning Valley where new, nimble and efficient electrical power plants are either in operation, under construction or under consideration. It’s a signature of where growth in new energy will develop in America and what it will look like. This section of northeastern Ohio and western Pennsylvania – with its abundance of natural gas from the Utica and Marcellus shales – has emerged as the fulcrum for the industry’s future.  As older, less efficient power plants are retired or shut down, they’re being replaced with smaller, more cost-efficient combined-cycle plants that use natural gas and steam – not coal or nuclear power – to generate electricity for homes and businesses.   “What’s happening is companies like FirstEnergy had these plants and failed to modernize them. And now companies like ourselves are finding a market to produce electricity more efficiently and at less cost,”  FirstEnergy Corp. announced March 28 that it would close all three of its nuclear power plants – the Davis-Besse Nuclear Power Plant and the Perry Nuclear Power Plant in Ohio, and the Beaver Valley Power Station in western Pennsylvania – over the next three years, as well as its two remaining coal-fired power plants.“Though the plants have taken aggressive measures to cut costs, the market challenges facing these units are beyond their control,” said Don Moul, president of FES Generation Companies.Then on March 31, two of FirstEnergy’s subsidiaries – FirstEnergy Solutions, which operates its coal-fired plants, and First Energy Nuclear Operating Co. – filed for reorganization under Chapter 11 bankruptcy. On April 23, the parent company announced an agreement with key creditors that could allow for a quick exit from Chapter 11. Part of the agreement provides FirstEnergy Solutions and First Energy Operating Nuclear Co. with help from FirstEnergy on “key business matters” as it undergoes reorganization, the company said.

        Ohio’s top court further muddies fracking issue with new ruling | One consistent thing about the Ohio Supreme Court when it comes to decisions about whether it’s constitutional to put an initiative to ban fracking on the Youngstown ballot is its inconsistency. The Mahoning County Board of Elections has voted three times to not permit the measure to appear on the ballot. In September 2015, the Supreme Court voted 7-0 against the board and overturned that decision. In October 2016, the court voted 4-3 in favor of the board’s decision to not put the initiative on the ballot. And Tuesday, the court voted 5-2 against the board and ordered the charter amendment to be put in front of Youngstown voters.   The court ruled against the board of elections this time because of a minor change in the ballot language. The proposal rejected last October by the court would have authorized “private citizens to enforce their rights through nonviolent direct action or by filing suit as a private attorney general.” The court wrote of the previous decision: “We agreed with the board’s determination that a municipality lacks legislative power to authorize Youngstown residents to file suit as a ‘private attorney general’ because a municipality cannot create a new cause of action.” But in the new initiative, the court wrote that “the offending provision” is “not included in the proposed charter amendment now before us, and the board offers no clear support for its conclusion that relators’ current proposal is beyond the scope of the city’s legislative power.” The court added: “There was no creation of a private right of action – an ‘individual’s right to sue in a personal capacity to enforce a legal claim’” – in this case.

        Anti-frackers hope to fool Y'town voters in primary - Youngstown Vindicator Editorial - Opponents of fracking in Youngstown are hoping the lipstick they’ve put on the pig – the proposed charter amendment in Tuesday’s primary election – will fool the voters.We hope it doesn’t.Youngstown residents have said “no” on six separate occasions to the group of self-appointed paragons of environmental virtue pushing an amendment to the Youngstown Home Rule Charter to ban fracking.We have long characterized the effort as a nonissue because there are no plans by any energy companies to drill for oil and gas in the city by use of hydraulic fracturing.Nonetheless, the anti-frackers, led by Ray and Susie Beiersdorfer, have adopted the attitude that they alone know what’s in the best interest of Youngstown residents.But it is revealing that the defeat of the anti-fracking charter amendment going back to the 2013 primary election has prompted the Beiersdorfers and their cohorts to change their strategy. They’re now using scare tactics.The issue was on the primary and general election ballots in 2013 and 2014, and the general elections of 2015 and 2016.In those years, it was called the “Community Bill of Rights” in support of their argument that the rights of Youngstown residents are being usurped by outside entities.This year, however, the issue carries the ominous title “Drinking Water Protection Bill of Rights” (the lipstick on the pig). The claim underlying the title is clear: Fracking in Youngstown will poison the city’s water.  But before Youngstown residents start having sleepless nights about the drinking water that could burst in flames due to all the chemicals, here’s a reality check: Fracking is not in the city’s future. Thus, the bottom line: The city’s drinking water is not in danger of becoming undrinkable.

        Ryan pushes for increased transparency of hydraulic fracturing - Youngstown Vindicator -- U.S. Rep. Tim Ryan of Howland, D-13th, has cosponsored the Fracturing Responsibility and Awareness of Chemicals Act (FRAC Act), a bipartisan bill that establishes common sense safeguards to protect groundwater from risks associated with the oil and gas drilling technique “hydraulic fracturing,” better known as “fracking.”The FRAC Act would require disclosure of the chemicals used in fracking fluids and would remove the oil and gas industry’s exemption from the Safe Drinking Water Act.“There’s no denying that there are immense climate-related benefits and economic benefits associated with the transition to natural gas, particularly here in Ohio. Even still, we must be vigilant ensuring that such benefits do not come at the expense of the health and wellness of our communities. We as lawmakers must make sure natural gas recovery is done in a way that puts community health front and center,” said Ryan. “I am proud to support this common sense legislation to promote the responsible development of natural gas.” The FRAC Act would:

        • Require disclosure of the chemical constituents used in the fracturing process.
        • Disclosure would be to the state, or to EPA, but only if EPA has primary enforcement responsibility in the state. The disclosures would then be made available to the public online.
        • Proprietary chemical formulas are protected under the bill – much like the way Coca-Cola must reveal the ingredients of Coke, but not their secret formula; oil and gas companies would have to reveal the chemicals but not the specific formula.
        • This bill does include an emergency provision that requires these proprietary chemical formulas to be disclosed to a treating physician, the State, or EPA in emergency situations where the information is needed to provide medical treatment.
        • Repeal a provision added to the Energy Policy Act of 2005 exempting the industry from complying with the Safe Drinking Water Act (SDWA), one of our landmark environmental and public health protection statutes.

        Most states have primacy over these types of wells, and the intent of this Act is to allow states to ensure that our drinking water is safe. EPA would set the standard, but a state would be able to incorporate hydraulic fracturing into the existing permitting process for each well, and so this would not require any new permitting process.

        On Ohio home-rule rights, here are the lawmakers who fell in line with the lobbyists on oil and gas drilling in 2004 - Regulation of assault weapons isn't the only home-rule power that the General Assembly yanked from Ohio's cities and villages. 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 Ohio Department of Natural Resources - 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."  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:

        Motion Challenges Fracked-gas Pipeline Threatening Ohio's Only National Forest - Center for Biological Diversity (press release)— Conservation groups are challenging a fracked-gas pipeline that would slash through Ohio’s Wayne National Forest, threatening forests, waterways, wildlife and thousands of people who visit the area. The project is owned by TransCanada Corp., which was responsible for a massive oil spill when its Keystone pipeline broke last fall.The Ohio Environmental Council, Sierra Club and Center for Biological Diversity on Monday filed a motion to intervene in a federal permitting process for the Buckeye Xpress pipeline in southern Ohio. The proposed 66-mile fracked-gas pipeline would cut through Ohio’s only national forest and cross 336 streams and 134 acres of wetlands. Building this pipeline through the Wayne would also increase pressure for more fracking leases in the national forest. “If approved, the project will only further incentivize the expansion of oil and gas development in the Wayne National Forest,” said Chris Tavenor, an attorney at the Ohio Environmental Council. “Last year the OEC and its partners sued BLM because of the immense environmental damages that will occur if the Wayne is fragmented for oil and gas lease sales. The Wayne is Ohio's only national forest, and federal agencies need to recognize the importance of these ecological treasures beyond their potential for pipelines and well pads.”Columbia Gas Transmission, a subsidiary of TransCanada Corp., is applying for a permit with the Federal Energy Regulatory Commission to build the pipeline from its Leach Xpress pipeline south through the Wayne National Forest and across the Ohio River to West Virginia. It would expand and replace an existing pipeline and dig up 225 acres as it crosses 12 miles of the Wayne National Forest’s Ironton unit. “There’s no such thing as a safe fracked gas pipeline, just like there’s no such thing as a safe fracking operation,” said Cheryl Johncox with the Sierra Club. “The Buckeye Xpress pipeline will threaten communities, Ohioans’ only national forest, and waterways while encouraging even more fracking operations. It must be halted.”

        FERC gives Rover OK to bring market segment, Vector station into service - Rover Pipeline won approval from the US Federal Energy Regulatory Commission Tuesday to bring more portions of the second phase of the 3.25 Bcf/d project into service, including the market segment of the pipeline, its Defiance Compressor Station and its Vector Pipeline delivery meter station. The approval will enable gas to be moved onto the Vector pipeline and then ultimately be delivered to the Dawn storage facilities in eastern Canada. Rover still does not have FERC approval to bring online its entire Mainline B between its upstream supply laterals and Defiance, suggesting that the current upside to flows on Rover may be limited. Rover received the green light for bringing a portion of its Mainline B into service on April 25, although that milestone has had minimal impact on flows along the pipeline, according to S&P Global Platts Analytics. The startup of the pipeline's Vector meter station and market segment will provide Rover with more downstream delivery options.  The approval came a day after Rover told FERC it expects to complete by June 30 restoration activities related to those areas, including addressing locations where ground "subsidence" had occurred. In the letter authorizing the startups, Rich McGuire, FERC director of the division of gas-environment and engineering, expressly referenced Rover's commitment to addressing remaining "punch-list" items and the subsidence by that date. "It is my expectation that these commitments will be honored and that any restoration issues that should arise will be addressed fully and promptly," McGuire said. 

        Enbridge fined for failing to fully inspect pipelines after Kalamazoo oil spill -  The Canadian oil pipeline company responsible for one of the largest inland oil spills on record has agreed to pay a $1.8 million fine for failing to thoroughly inspect its pipelines for weaknesses as required under a 2016 agreement. Federal officials say Enbridge, Inc., did not carry out timely and thorough inspections on one of its pipeline systems, as it had agreed to do as part of a consent decree reached with the U.S. Environmental Protection Agency and U.S. Department of Justice.The 2016 settlement stemmed from a massive 2010 oil spill into Michigan's Kalamazoo River. The spill required years and more than a billion dollars to clean up, and it highlighted the hazards of pumping heavy tar sands oil through pipelines. More than 1 million gallons of tar sands oil spilled into the Kalamazoo River near the town of Marshall when a 6-foot rupture opened in Enbridge pipeline 6B. Despite warnings of trouble, oil flowed for 17 hours before Enbridge shut down the pipeline. Ultimately, the oil pushed nearly 40 miles downriver, fouling 4,435 acres of land near the river's banks. It triggered a massive cleanup effort that cost the company $1.2 billion and kept the river closed for nearly two years.As part of a sweeping, $177 million settlement, Enbridge promised to look for cracks and corrosion on its Lakehead pipeline system, a nearly 2,000-mile grid of pipelines that brings oil from Canada into the United States.In a document filed in a Michigan federal court on Tuesday, the government alleges that Enbridge failed to properly conduct six inspections. Although the company agreed to pay the fine, it nevertheless denied that it violated the terms of the consent decree and said it had properly inspected the pipelines.

        Line 5 Oil Spill Potential Damages and Economic Impacts to Michigan Could Top $6 Billion, FLOW Study Finds --A Line 5 oil spill at Michigan’s Straits of Mackinac could deliver a blow of $6 billion in economic impacts and natural resource damages to Michigan’s economy, according to a study commissioned by FLOW, a science, law and policy center in Traverse City, Michigan.Conducted by nationally respected ecological economist Robert Richardson of Michigan State University, the study adds up potential costs of a Line 5 spill into the Straits of Mackinac and adjoining waters under a realistic – but not worst-case – scenario.“This study puts credible numbers behind what common sense tells us, that a Line 5 spill could cause catastrophic economic impacts in addition to environmental destruction. It’s another compelling reason for the state to take swift action to shut down Line 5,” said Liz Kirkwood, Executive Director of FLOW.Enbridge Energy owns and operates the twin 65-year-old pipelines that span the Straits between Michigan’s Upper and Lower Peninsula. Faulty maintenance, unpredictable currents and an early April anchor strike that dented the lines have underscored the risk they pose to the Great Lakes. Enbridge is the same firm responsible for the largest (by surface area affected) and most costly inland oil spill in American history. An Enbridge pipeline ruptured near Marshall, Michigan in July 2010, and according to the company, it released more than 840,000 gallons of oil into the Kalamazoo River system.The report’s estimates are likely conservative. The study does not depict a worst-case spill. It estimates $697.5 million in natural resource damage costs and restoration and more than $5.6 billion in total economic impacts, including:  $4.8 billion in economic impacts to the tourism economy;$61 million in economic impacts to commercial fishing; $233 million in economic impacts to municipal water systems;Over $485 million in economic impacts to coastal property values.

        Natural Gas Is Leading West Virginia Down the Same Dark Path As Coal - It was a warm Monday afternoon in late February. Schools in all 55 counties were closed again. Teachers, cooks and janitors were in the third day of a strike. They wanted pay raises and a fix to the skyrocketing cost of their health insurance. On the other end of the state, at a town hall meeting with teachers in Wheeling, Gov. Jim Justice tossed out a possible solution: Fund the pay raises with an increase in taxes on the state’s booming natural gas industry. But what seemed like a stunning change of direction proved to be little more than a feint. Gas industry lobbyists strongly criticized the proposal and the governor’s tax hike idea quickly faded. West Virginia has been here before. Sixty-five years ago, then-Gov. William Marland, the son of a mine superintendent, shocked state lawmakers by proposing a new tax on coal to upgrade schools and roads. “Let’s use this equitable source of revenue, because whether we like it or not, West Virginia’s hills will be stripped, the bowels of the earth will be mined and the refuse strewn across our valleys and our mountains in the form of burning slate dumps,” Marland told a joint session of the Legislature in February 1953. Marland’s proposal was soundly defeated following an onslaught of criticism. One biographer called it “political suicide.” Today, West Virginia’s headlong race into the gas rush is taking the state down the same path that it’s been on for generations with coal. Elected officials have sided with natural gas companies on tax proposals and property rights legislation. Industry lobbyists have convinced regulators to soften new rules aimed at protecting residents and their communities from drilling damage.

        Fayette County learned how hard it is to fight the natural gas industry - Amid a natural gas boom, communities across the country have pushed to put limits on drilling and waste disposal. But Wender, his fellow commissioners and the residents of Fayette County soon found out that taking on natural gas isn’t any easier than it’s been for decades for other West Virginia communities to take on coal. The state’s laws create an almost insurmountable bar.The day after Fayette County leaders enacted their ban, EQT Corp., a Pittsburgh-based company that is West Virginia’s second-largest gas producer with $1.5 billion in income in 2017, filed suit. Company lawyers said the ordinance was so broad that it would halt any gas production in Fayette.On the morning of an evidentiary hearing, in June 2016, Wender and a few dozen Fayette County residents drove more than an hour over winding roads to Charleston, so they could fill the courtroom. Wender planned to tell the county’s story. The county’s lawyers lined up a Duke University scientist to describe the pollution found downstream from Danny Webb’s site.Just before the hearing, U.S. District Judge John T. Copenhaver Jr. issued a 45-page rulingthat threw out Fayette’s waste disposal ban. No hearing was needed to gather facts, the judge said. It was strictly a legal issue, and the law, at least in this case, was clear: Federal and state statutes govern such matters; county officials can’t ban drilling in their own community.The state of West Virginia “has concluded that oil and natural gas extraction is a highly valuable activity subject to centralized environmental regulation by” the state Department of Environmental Protection, the judge wrote. The County Commission “cannot interfere with, impede, or oppose the state’s goals.”  The state of West Virginia “has concluded that oil and natural gas extraction is a highly valuable activity subject to centralized environmental regulation by” the state Department of Environmental Protection, the judge wrote. The County Commission “cannot interfere with, impede, or oppose the state’s goals.” There was no testimony. Wender didn’t take the stand. The Duke scientist headed back to North Carolina.

        Charlottesville doctors turned away from pipeline protesters in tree -- Two Charlottesville doctors seeking to help a 61-year-old woman who has spent four weeks perched in a tree to halt construction of the Mountain View Pipeline say Roanoke County authorities did not permit them to provide her with medical supplies on Saturday.With a hearing in federal court scheduled for Tuesday afternoon, the family of Theresa “Red” Terry and her daughter, Theresa Minor Terry, 30, are anxiously waiting for a resolution to the ongoing standoff on property that has been owned by their family for seven generations. In an interview Monday, Dr. Greg Gelburd, of Downtown Family Health Care, said he and Dr. Paige Perriello, with Pediatric Associates of Charlottesville, visited Bent Mountain in Roanoke County over the weekend to assess the mother and daughter’s medical condition. Gelburd said being overly sedentary poses a health risk, as blood clots can form in the legs. He also said prolonged exposure to damp conditions can increase the risk of skin infections. After the mother-and-daughter pair recently said they had run out of food and other supplies, Roanoke County officials announced last week that authorities are conducting daily wellness checks and providing them what they need to ensure their physical needs are met.While family members and other supporters have sought to donate food and other supplies, police have placed those items at the base of the tree for Red to retrieve. “She reiterated that she would be arrested if she came down,”

        ATV traffic on the Appalachian Trail is the latest Mountain Valley Pipeline controversy -- Tire tracks and muddy ruts along the Appalachian Trail mark the spot where the Mountain Valley Pipeline will meet the scenic footpath.Although motorized traffic is generally prohibited, Mountain Valley security crews and U.S. Forest Service officials have been driving all-terrain vehicles on the trail to reach an area where pipeline protesters are stationed at the top of Peters Mountain in the Jefferson National Forest.“Motorized use is antithetical to the wilderness experience of the Appalachian Trial,” said Andrew Downs, regional director of the Appalachian Trail Conservancy. After receiving a complaint Sunday about ATV traffic on an approximately quarter-mile section of the trail that runs along the edge of Giles County, Downs contacted the Federal Energy Regulatory Commission, which is overseeing construction of the natural gas pipeline.A FERC official looked into the matter and was told that the Forest Service authorized the use of ATVs, according to FERC spokeswoman Tamara Young-Allen. Forest Service officials have also been four-wheeling on the trail, she said.

        Judge hears arguments for and against two pipeline protesters sitting in trees - Two pipeline protesters stuck to their positions in trees atop Bent Mountain on Tuesday while, in the valley below them, lawyers went to a federal courthouse to argue their fate. Attorneys for the Mountain Valley Pipeline said that 61-year-old Theresa “Red” Terry and her daughter, Theresa Minor Terry, are blocking tree cutting for the natural gas pipeline and should be found in contempt of court. They cited an order from U.S. District Court Judge Elizabeth Dillon that gave Mountain Valley the power, through the laws of eminent domain, to run its pipeline through private land owned by the Terry family. Roanoke attorney Tom Bondurant, who represents the Terrys, flipped that argument around — asserting it was Mountain Valley that should be held in contempt for misrepresenting to the court key facts during an earlier hearing in the condemnation proceedings. After hearing several hours of testimony and arguments, Dillon said she will issue a written opinion “as quickly as I can.” Some facts were not in dispute: The Terrys freely admit that they are attempting to stop construction of a natural gas pipeline that has been approved by regulatory agencies. Both sides agreed that the tree stands sit squarely in the pipeline’s path. But the Terrys question the way Mountain Valley obtained an easement through their land using eminent domain,

        Mother and daughter can stay in trees to protest pipeline – for now –  — A mother and daughter who have been perched on platforms in trees in Virginia for 28 days to protest a natural gas pipeline can stay there for now. Judge Elizabeth Dillon of the U.S. District Court for the Western District of Virginia said she would review testimony presented Tuesday before ruling in the case. That represents at least a short-term victory for Theresa Ellen Terry, 61, and her 30-year-old daughter, Theresa Minor Terry, says their lawyer, Justin Lugar. After all, Mountain Valley Pipeline, which plans a pipeline extending 300 miles from northwestern West Virginia to southern Virginia, had asked Dillon to declare the mother and daughter in civil contempt, fine them and order federal marshals to remove them from the tree. “They’re not in jail, so that’s very good news,” Lugar told TMN. He noted the Terry family has owned the land on Bent Mountain, about 20 miles southwest of Roanoke, Va., since the king of England granted it to Theresa’s husband’s family in colonial days. The Terrys had rejected Mountain Valley’s offer to seize the land under eminent domain and compensate the family. “This case comes down to whether the Terrys have a right to do what they’re doing on they’re own land, and we say they do,” Lugar said. “Just like you and me can go into our back yard or our kids can go in a tree house on their property, so, too, can the Terrys. They’re not doing anything to interfere with Mountain Valley’s rights at all.” Officials from Mountain Valley, which has begun cutting down trees in the area to make way for the pipeline, could not be reached for immediate comment Tuesday evening. 

        From Tree-Sitters to Water Protectors: Meet the Women On the Front Lines of Eco-Activism -- “Well, I’m currently based in a tree.”   That’s how one anonymous 22-year-old eco-activist with the group Appalachians Against Pipelines answered when we asked where she’s working. The activist is a member of a pipeline resistance group called Appalachians Against Pipelines, and she’s camped out high up in a tree in the Peters Mountain area of Jefferson National Forest in West Virginia. She’s one of a handful of activists who have been camping out in located within the National Forest since February, part of an effort to stop a pipeline from being constructed there.  There are many other activists on the front lines of direct action eco-activism projects, and a great number of them happen to be women. These activists are dedicated to not only protecting the environment but also empowering themselves to keep environmentally destructive pipelines out of their communities.  To protest the construction of the MVP, local farmers in Virginia have set up tree-sits to protect their farms, trees, water sources, and soil from destruction. A mother-daughter team of tree-sitters including Theresa “Red” Terry (pictured above) resisting the pipeline are currently facing criminal charges for refusing to abandon their trees.  Another group, called the Three Sisters Resistance Camp, made a camp in Virginia along the planned construction site for the Atlantic Coast Pipeline, another natural gas pipeline set to be built in West Virginia, Virginia, and North Carolina.  The 22-year-old activist protesting the MVP tells us that she feels direct action against pipelines is vital for what she calls “Earth liberation.” “I think the word ‘revolutionary’ can scare people away,” she tells us, “but it is revolutionary to resist the forces that seek to steal from us.”

        Road closure violates the free-speech rights of pipeline protesters, lawsuit claims - Closing a U.S. Forest Service road that leads to where protesters are challenging a natural gas pipeline violates their First Amendment rights, a lawsuit filed Wednesday claims. The lawsuit against the Forest Service takes issue with the closure of Pocahontas Road, which for the past five weeks has been the scene of protests against the Mountain Valley Pipeline and the route it will take through the Jefferson National Forest. A protester known as “Nutty” is camped out on a small platform suspended from a 50-foot pole in the middle of road, effectively blocking Mountain Valley crews from reaching a pipeline construction area on Peters Mountain. At first, a ground team of supporters that was supplying Nutty with food and water — along with others who came to cheer her on — drove about two miles on the gravel road in Giles County to reach the protest area. On April 7, the Forest Service closed the road to everyone except law enforcement and pipeline officials, citing the “hazards associated with constructing the Mountain Valley Pipeline.” The true reason for the closure, according to the lawsuit filed in U.S. District Court in Roanoke, was to prevent protesters from exercising their free-speech rights on public land. “This is a public land, it’s a public space, it’s a public venue,” said Chap Petersen, a Fairfax attorney who filed the lawsuit on behalf of three pipeline opponents.   Forest Service officials stationed at the head of Pocahontas Road have been telling members of the public that the only way to get to the protest site is to hike cross-country through the woods while maintaining a distance of at least 100 feet from the road, the suit says. The route traverses steep slopes, fallen trees and difficult steam crossings that can pose a danger to “all but the fittest and most experienced hikers,” the lawsuit states. 

        Va. state senator files suit against Forest Service in support of pipeline protests - A Virginia state senator filed suit against the U.S. Forest Service on Wednesday, claiming that federal officials are illegally blocking access to a road in the Jefferson National Forest where several people are protesting construction of a natural gas pipeline.State Sen. Chap Petersen (D-Fairfax), who is a lawyer, filed the suit at the federal courthouse in Roanoke after being prohibited from using the road to reach the protesters last week.His action opens another legal front in the fight over the right to protest the Mountain Valley Pipeline, a 303-mile project that starts in West Virginia and crosses through Virginia’s southwest mountains. A separate set of tree sitters was in federal court in Roanoke on Tuesday, as EQT Midstream and other companies behind the pipeline argued that Theresa “Red” Terry, her daughter Theresa Minor Terry and other members of the family are illegally blocking a stretch of the planned pipeline through their land. The builders of the pipeline want a judge to hold the Terry family and their allies in contempt.  Petersen’s suit is aimed at a site on Peters Mountain in Giles County along the West Virginia line. There, a protester identified only as “Nutty” has been living suspended from a pole, or monopod, since March 27, blocking efforts to clear trees.

        Dominion's Long Term Plans Include Eight New Natural Gas Plants in Virginia - Regulation of power station carbon dioxide (CO2) emissions at the federal or state level is a virtual fait accompli, according to Dominion Energy Virginia, whose plans to meet that challenge include more renewable-fueled generation and construction of eight natural gas power plants by 2033."Although federal executive and judicial actions have halted implementation of the U.S. Environmental Protection Agency's Clean Power Plan, the Commonwealth of Virginia has attempted to address carbon emissions through regulatory action," Dominion said in a 231-page Integrated Resource Plan (IRP) filed Tuesday with the Virginia State Corporation Commission."Specifically, the Virginia Department of Environmental Quality has released a draft proposal capping CO2 emissions from the state's electric generating units. The draft proposes linking a cap-and-trade program in Virginia with the existing Regional Greenhouse Gas Initiative now being implemented in the northeastern United States. Regardless of the precise mechanism of carbon control, the company is committed to reducing greenhouse gas emissions."Such reductions would be achieved by shifting the state's power generation fuel mix away from coal and toward natural gas and renewables, according to the IRP.In addition to the 1,585 MW gas-fired Greensville County Power Station, a quintet of alternative plans in the IRP all call for the addition of eight gas-fired facilities using combustion turbine technology with a combined 3,664 MW capacity by 2033. Other common elements of the five plans include development of 4,720 MW of solar photovoltaic (PV) generation and another 760 MW of non-utility generator solar PV generation, 20-year operating license extensions for four nuclear units at Dominion's Surry and North Anna power stations, and demand-side management capable of reducing overall customer energy usage by 805 GWh, all by 2033.

        Virginia Democrats release statement against Mountain Valley Pipeline, Atlantic Coast Pipeline - The group says that these pipelines pose a clear threat to our Commonwealth’s drinking water, and is an abuse of eminent domain.  “We, the undersigned Virginia Democratic Committees and Chairs, do hereby call for Governor Ralph Northam, Attorney General Mark Herring, and the Virginia Department of Environmental Quality to do all they can to stop the Mountain Valley and Atlantic Coast Pipelines. These two pipelines are a clear abuse of eminent domain laws, as they do not benefit the people whose property is being irreparably damaged, and as they will potentially deprive surrounding areas of life-sustaining drinking water, as well as recreation and tourism dollars. The two pipelines will serve to move finites resources through unstable terrain to benefit the natural gas pipeline and utility companies involved in the project. The fact is, the Mountain Valley and Atlantic Coast Pipeline represent the death rattle of an obsolete industry, one being rapidly overtaken by clean energy sources like wind and solar, and pose a clear threat to Virginia’s groundwater and waterways. Throughout his political career, Governor Northam has shown great concern regarding environmental abuses in the Chesapeake Bay and has strongly supported efforts aimed at removing phosphorus, nitrates and other pollutants from the Bay. As a result, today the Bay is doing much better, with vegetation now growing in areas that were once barren. We are grateful for Governor Northam’s foresight and efforts in this area, and implore him to also protect the rest of the state’s waters from environmental damage. We have seen the destruction that fossil fuel pipelines can cause to fragile ecosystems and to drinking water sources in other states. Our citizens should not be forced to hand over Virginia’s pristine landscape and safe drinking water to corporate profiteers who care little, if at all, for the well-being of our communities.

        State senator files complaint asking PUC to halt Mariner East pipeline construction - State Senator Andy Dinniman is trying to halt construction on two natural gas liquids pipelines, in West Whiteland Township, Chester County, alleging they pose a serious threat to public health and safety.Dinniman filed a formal complaint and petition for emergency relief Thursday with the state Public Utility Commission. At issue is Sunoco Logistics’ Mariner East pipeline project, which has been plagued with technical, legal, and environmental problems. It includes three parallel natural gas liquids lines — the Mariner East 1, the Mariner East 2, and the Mariner East 2X.The PUC suspended service on the Mariner East 1 line earlier this spring, citing safety concerns related to sinkholes, and saying that a pipeline leak could have a “catastrophic” effect on public safety.   Dinniman’s complaint and petition relate to the second two lines — the Mariner East 2 and 2X.  “I have a moral, ethical, and constitutional duty to stand for the safety of the people of Chester County and the protection of their children and families, as well our environment, drinking water, natural resources, and public infrastructure,” said Dinniman, a Chester County Democrat. “I am asking the PUC to consider all of that – the numerous drilling problems, the risks to safety, the proximity to homes and schools, and the unique and problematic geology of the region – in concluding that these pipelines should not be built here period.” Dinniman is calling on the PUC to prohibit “the construction of ME2 and ME2X in areas of West Whiteland Township where ME1 is located within 50 feet of a private dwelling, industrial building or place of public assembly, and grant such other relief as the Commission finds to be just and appropriate.” Sunoco has 20 days to respond to the complaint. The Office of Administrative Law Judge will also schedule a hearing on Dinniman’s petition for emergency relief and decide to grant or deny it. Both the complaint the petition will then go to the full Commission.

         New sinkholes appear near Mariner East 1 pipeline in Thornbury -- Residents are concerned after what appears to be two new sinkholes recently developed directly above the Sunoco Mariner East 1 pipeline. Much larger sinkholes had developed in East Whiteland Township and led to last month’s shutdown of the Mariner East 1 pipeline. Similar holes recently developed in Edgmont, about a mile south of the Thornbury holes. The new holes are located at the Andover subdivision, at the intersection of routes 352 and 926. Sunoco spokeswoman Lisa Dillinger had said those Edgmont holes were created by rodents. Dillinger denied the Thornbury depressions are sinkholes. “The holes and fencing observed within our ROW in Thornbury Township are actually a routine part of safe pipeline construction called ‘potholing’ where holes are dug to identify the exact location and depth of our existing pipeline and other utility facilities. The orange fencing is for safety,” she said in a written statement. Jennifer Berlinger’s home is about 100 feet away from the pipeline right-of-way. Construction has started there on the Sunoco Mariner East 2 pipeline in the same right-of-way as the 1930s-era Mariner East 1 pipeline. Berlinger pointed to where Sunoco had axed 180-year-old trees. Two big pines, a walnut tree and a gingko were all cut down on Andover subdivision homeowner’s association property. “It’s scary,” Berlinger said. “I’m angry. They wanted something that wasn’t theirs and they just took it.” Berlinger said she is “stuck” at her home. “No one is going to buy my home — I’m stuck with the danger. Do I look a buyer in the eye and not tell them? This is not political. They can’t just take what they want. It’s hard to believe this can happen in America.” 

        Mariner East pipeline fined $355K for spills in Lancaster, 8 other counties - The state has fined the builders of the Mariner East 2 pipeline $355,000 for pollution of streams in Lancaster County and eight other counties.The penalty is on top of a $12.6 million fine the state Department of Environmental Protection levied against pipeline builder Sunoco Pipeline LP in February on separate violations. The fine was announced Thursday, the same day that the Pennsylvania Public Utility Commission voted unanimously to allow the pipeline to be restarted. The pipeline has been shut down since March after sinkholes opened in Chester County adjacent to the pipeline construction. The PUC’s Bureau of Investigation recommended restarting the pipeline, noting that it is “of the opinion that the integrity of the (existing) ME1 pipeline has not been compromised by the soil subsidence events that triggered this investigation.”The most recent fine is for spillage of drilling fluids into wild trout streams, wetlands and streams rated as high quality.Included were seven spills in West Cocalico Township. Drilling fluids were discharged into streams, a wetland adjacent to endangered bog turtle habitat and on the Middle Creek Wildlife Management Area. The $3 billion, 350-mile-long Mariner East 2 pipeline is to carry natural gas liquids from the Marcellus Shale and Utica Shale regions of western Pennsylvania and Ohio to a refinery in Marcus Hook, near Philadelphia.

        Sunoco pipeline fined for 1 gas pipeline, restarts another   (AP) — Sunoco Pipeline can resume operations on a natural gas liquids pipeline crossing southern Pennsylvania while it agreed to pay $355,000 for polluting waterways in 14 counties while building a sister pipeline. The Pennsylvania Public Utility Commission on Thursday lifted a stop-work order it imposed March 7 on the Mariner East 1 pipeline. It says owner Sunoco Pipeline adequately addressed concerns over sinkholes developing along its path in residential areas in southeastern Pennsylvania. The sinkholes appeared to be related to construction on the adjacent Mariner East 2 pipeline. Meanwhile, Sunoco Pipeline is paying fines to settle 69 citations from the Department of Environmental Protection for spilling drilling fluids into waterways during Mariner East 2's construction. Sunoco Pipeline already drew $12.6 million in fines for violations on the 350-mile Mariner East 2. 

        US Top Court Rejects Constitution Pipeline Over New York Permit - (Reuters) - The U.S. Supreme Court on Monday dealt another setback to a proposed natural gas pipeline running from Pennsylvania to New York, rejecting Constitution Pipeline Co's bid to challenge New York state's refusal to issue a needed water permit for the project. The high court left in place an August 2017 ruling by the New York-based 2nd U.S. Circuit Court of Appeals in favor of the state. Partners in the 125-mile (201-km) pipeline project include Williams Cos Inc, Duke Energy Corp, WGL Holdings Inc and Cabot Oil & Gas Corp. The U.S. Federal Energy Regulatory Commission (FERC), which regulates pipelines, first approved construction of the project in 2014 and then again in 2016, conditional upon other approvals. Constitution, which filed with FERC to build the pipeline in 2013, separately sought water quality certification with the New York Department of Environmental Conservation in August 2013. But the state denied the application in April 2016, saying the company failed to provide sufficient information to determine whether the project would comply with the state's water quality standards. Constitution appealed that decision to the 2nd Circuit, but lost. The Supreme Court's refusal to hear the company's appeal of the 2nd Circuit's ruling does not necessarily kill the project. The company has separately petitioned FERC to overturn the state agency's decision. In March, the federal regulator gave itself more time to consider the issue. If built, the pipeline would transport 0.65 billion cubic feet per day of shale gas. New York uses on average about 3.6 bcfd of gas. 

        New York prevails on natural gas pipeline denial - The nation's highest court dealt another setback this week to a proposed $750 million natural gas pipeline that would connect the gas fields of Pennsylvania to New York. The U.S. Supreme Court declined to consider an appeal from developers of the proposed Constitution pipeline, who last summer lost a lower federal court challenge to a state ruling that blocked the pipeline. The highest court let stand a ruling from the U.S. Court of Appeals Second Circuit rejecting Constitution's claims that the state Department of Environmental Conservation unfairly denied critical water quality permits in April 2016. Passing through Broome, Chenango, Delaware and Schoharie counties, the 121-mile pipeline would connect Pennsylvania fracked gas fields to the Iroquois pipeline in Schoharie County. There, owners have been considering whether to direct the flow of gas north toward Canada. From there, gas could move in other pipes, flowing toward potential export facilities planned on the Atlantic coast. DEC refused to issue water quality permits under that act after the company ignored repeated state requests to provide plans showing how the pipeline could cross 251 streams by going under the streams, rather than digging trenches through them.

        Study: Fracking Chemicals Alter Immune System in Mice - Researchers from the University of Rochester have found the first evidence that early life exposure to groundwater contaminated by fracking chemicals "alters" the immune system in mice.The paper, published Tuesday in Toxicological Sciences , could imply potential health dangers for the roughly17.6 million Americans living within a mile of least one active oil or gas well.For the study, researchers exposed pregnant mice to a mixture of 23 chemicals found in fracking groundwater that are known endocrine disruptors.The researchers then observed that the mouse pups, particularly females, exposed to the 23 chemicals in the womb had "abnormal immune responses" in fighting off several types of diseases, including an allergic disease, a type of flu and a disease similar to multiple sclerosis, according to a press release of the analysis."The mice whose moms drank water containing the mixture had faster disease onset and more severe disease," lead author Paige Lawrence, the chair of Environmental Medicine at the University of Rochester Medical Center, explained to Environmental Health News . Human and mice immune systems are "more similar than they are different," Lawrence added to the news site. "This provides information as to what to look for in people."

        Study links fracking chemicals to immune imbalance - Among predictions of a second fracking boom in the US, the first evidence that chemicals found in ground water near fracking sites can impair the immune system will be published in Toxicological Sciences on May 1. The study, performed in mice, suggests that exposure to fracking chemicals during pregnancy may diminish female offspring's ability to fend off diseases, like multiple sclerosis.  Fracking, also called hydraulic fracturing or unconventional oil and gas extraction, involves pumping millions of gallons of chemical-laden water deep underground to fracture rock and release oil and gas. About 200 chemicals have been measured in waste water and surface or ground water in fracking-dense regions and several studies have reported higher rates of diseases, like acute lymphocytic leukemia and asthma attacks, among residents in these areas."Our study reveals that there are links between early life exposure to fracking-associated chemicals and damage to the immune system in mice," said Paige Lawrence, Ph.D., chair of Environmental Medicine at the University of Rochester Medical Center, who led the study. "This discovery opens up new avenues of research to identify, and someday prevent, possible adverse health effects in people living near fracking sites."Of the 200 fracking chemicals found in ground water, 23 were recently linked to reproductive and developmental defects in mice. Susan Nagel, Ph.D., associate professor of Reproductive and Perinatal Research at the University of Missouri School of Medicine and a co-author of this study, classified the chemicals as endocrine disrupters, meaning they can interfere with hormones and derail hormone-controlled systems. Because the immune system is greatly influenced by hormones, Lawrence tested the immune impact of those 23 fracking chemicals on mice. Lawrence's team added the chemicals to the drinking water of pregnant mice at levels similar to those found in ground water near fracking sites.

        Gov. Larry Hogan's support of a Maryland fracking ban camouflages a pro-fracking policy - Gov. Larry Hogan’s policies on fracking — natural gas extraction through the technology known as hydraulic fracturing — are disingenuous. Hogan did sign 2017 legislation banning fracking in the state with laudable words about protecting our “clean water supply and natural resources.” But this is just astute political maneuvering. The truth is that the governor doesn’t support clean-energy policies and has been busy bolstering a robust and statewide infrastructure for fracked gas. After allaying concerns by signing the fracking ban into law, Hogan — along with his allies on the Public Service Commission and in the state Department of Energy — has been kick-starting a natural gas boom by aggressively promoting a dangerous web of fracked gas pipeline infrastructure and gas combustion projects throughout the state. Take, for example, the Potomac Pipeline, recently green-lighted by Hogan despite fierce opposition from activists, health professionals and residents concerned about the safety of the drinking water that millions of people get from the Potomac River. This pipeline is a project of TransCanada Corp., responsible for the infamous Keystone XL line that experienced leaks in 2016 and 2017. It will carry fracked gas from Pennsylvania across Maryland to West Virginia. With no oversight by the state, TransCanada will be allowed to excavate for and drill a 3.4-mile pipeline under the Potomac. Another project, the proposed Delmarva Pipeline, would travel 190 miles from Rising Sun down the Eastern Shore, passing through eight of the Shore’s nine counties and substantial amounts of farmland. While the gas industry will surely profit, Maryland will suffer scarred landscapes, air and waterways pollution and risks to local livelihoods. Any financial gain for the Eastern Shore will come at a steep price. The most telling indicator of Hogan’s support of for the fracked gas industry is his attitude toward the people of Lusby in Southern Maryland. They live alongside Cove Point, the newly expanded liquefied natural gas export terminal on the Chesapeake Bay. The terminal is owned by Virginia-based Dominion Energy Co.

        NYMEX Jun natural gas futures rebound from lows, up 0.1 cents at $2.772/MMBtu -- NYMEX June natural gas futures fell only to rebound in overnight US trading as traders mull the onset of the injection season. At 6:45 am EDT (1045 GMT) the contract was 0.1 cents higher at $2.772/MMBtu after trading a range of $2.756/MMBtu to $2.778/MMBtu. Storage erosion continued three weeks beyond the usual start of the injection season, with data from the Energy Information Administration showing an 18-Bcf draw for the week ended April 20 compared with a 71-Bcf injection a year earlier and the 60-Bcf five-year average build. However, changing weather indicates a possible switch to injections. The National Weather Service sees below-average temperatures restricted to the lower tier of the Northeast, much of the mid-Atlantic, most of the Midwest and a few patches of the south-central US in the six-to 10-day period and to most of the eastern US in the eight-to 14-day period. 

        NYMEX June natural gas futures up 3.4 cents at $2.797/MMBtu on low stocksNYMEX June natural gas futures rose in overnight US trading on low inventories but were capped by the expected start of the injection season.At 6:50 am EDT the contract was 3.4 -  cents higher at $2.797/MMBtu."The industry has a significant volume of Nat Gas to make up for total inventories to get back to a comfortable level...," Energy Management Institute Principal Dominick Chirichella said in a note.  US inventories have continued to draw three weeks into what is usually the injection season, reaching 1.281 Tcf, or 897 Bcf below a year earlier and 527 Bcf below the five-year average, after the Energy Information Administration reported an 18-Bcf withdrawal for the week ended April 20. Market participants are already looking to a changeover to storage builds, however, when the next storage report covering the week ended April 27 is released on Thursday.

        The US gas market braces for a storage surge --The U.S. gas market in April — the first month of the official storage injection season — was anything but typical. Production was at record highs, nearly 8.0 Bcf/d higher than last year. At the same time, weather in April was exceptionally cold, which meant storage activity remained in withdrawal mode on a net U.S. basis through the first three weeks of the month — a first for the April gas market going back at least eight years. That anomaly, in turn, led to an expanding deficit in storage compared to previous years, deferring the inevitable — shoulder season weather and supply surpluses — for another month. But now, in May, with the cold-weather effects on gas demand fading and record production levels here to stay, the market is bracing for a storage tsunami. The question is, will it be enough to erase the massive inventory deficit compared to recent years? Today, we update our analysis of the gas market balance and implications for the 2018 injection season. This is the latest of our regular updates of the gas market fundamentals. When we last checked in on the gas supply and demand balance last month in Ghost On the (Trading) Floor, the market was exiting a withdrawal season with a massive 700-Bcf deficit in storage compared with the prior winter (2016-17), despite record production levels and lackluster winter weather and demand. But as we noted then, that year-on-year storage differential was due more to an incredibly mild winter last year than to this winter being particularly cold. In fact, putting it into historical context, winter 2017-18 ranked the ninth-warmest in nearly five decades. In other words, had winter 2016-17 been a more normal one, this past winter would have come out much less bullish by comparison, particularly given the supply surplus — the implication being that as soon as the cold weather and related heating demand dissipated, soaring production volumes would inundate the market and rapidly shrink the year-on-year storage deficit. But that didn’t happen, at least not in April.

        Weekly Gas Storage: Spring Build Begins -- The EIA released its weekly Natural Gas Storage Report today, outlining how national natural gas stocks have changed in the last week. In total, the EIA reports natural gas stocks rose by 62 Bcf last week, increasing from 1,343 Bcf to 1,299 Bcf. This is 40.2% below the 2,246 Bcf that was in storage at this point last year, and is 28.4% below the five-year average of 1,877 Bcf. This week’s storage draw was in line with expectations, as analysts predicted a draw of 52 Bcf.

        NYMEX June gas mixed on EIA stocks data, edges fractionally higher at $2.727/MMBtu - NYMEX June natural gas futures inched fractionally higher in overnight US trading supported by lingering storage deficits but struggled to hold onto the gains due to the onset of the injection season. At 6:45 am EDT (1045 GMT) the contract was just 0.1 cent higher at $2.727/MMBtu, after trading in a $2.724-$2.742/MMBtu range. US inventories finally began rebuilding well after the traditional April 1 start of the injection season, with a 62 Bcf addition to stocks reported by the Energy Information Administration in its storage data for the week ended April 27. Although the reported storage build exceeded market expectations, it was below both 68 Bcf a year earlier and the 69 Bcf five-year average. Total working gas stocks climbed to 1.343 Tcf, but deficits widened to 903 Bcf against a year earlier and 534 Bcf against the five-year average.

        Fracking's methane leaks may cook the planet -- Jim Warren, the executive director of the Durham-based consumer advocacy group NC Warn, seems these days like a frantic lead character from a 1950s science fiction movie. He has seen an invisible gas being released by powerful corporations that is endangering the planet — but no one will listen to him. He's not surprised that the corporations – especially Duke Energy – don't want to believe him. But he's mystified that news outlets that usually would pounce on such news are oddly indifferent. Warren is desperately trying to break through with the message that natural gas is not — as utilities claim and the media often repeat — a cleaner fossil fuel than coal whose increased use will slow the buildup of greenhouse gases. Burning natural gas does indeed produce less carbon than burning coal, but the process of collecting natural gas using hydraulic fracturing, or fracking, is releasing high levels of methane — a gas than can be 80 times more potent than carbon dioxide in causing atmospheric warming. "We are up against the wall as far as halting peak emissions soon," Warren said. "If they don’t start heading down, we will have baked in so much that it will move ahead at it own momentum, at a pace no one can predict. Its happening a lot more quickly than anyone believed. Within a decade, we could have abrupt, cascading changes happening."To heighten awareness of the methane threat, the Environmental Defense Fund said in April that it will spend millions of dollars to launch a satellite by 2021 that will spot methane leaking from oil and gas facilities worldwide. It hopes the detection will create pressure to cap the leaks. “Cutting methane emissions from the global oil and gas industry is the single fastest thing we can do to help put the brakes on climate change right now,” said Fred Krupp, EDF president. But that message is being drowned out by utilities promoting clean-burning natural gas.

         Federal judge skeptical about pipeline's impact on wetlands -  One of the federal judges considering whether to allow construction of a crude oil pipeline to continue in an environmentally fragile Louisiana swamp seemed to downplay concerns Monday about the project's impact on forested wetlands. A three-judge panel of the 5th U.S. Circuit Court of Appeals heard arguments over whether to permanently throw out a lower court's preliminary injunction that initially stopped construction in the Atchafayala Basin. A different panel of the appeals court last month suspended the injunction by Baton Rouge-based U.S. District Judge Shelly Dick, who is presiding over the lawsuit filed by Sierra Club and other environmental groups against the U.S. Army Corps of Engineers and Bayou Bridge Pipeline LLC. The lawsuit alleges the Corps violated the Clean Water Act and other environmental laws when it approved a permit for the project. In issuing the February injunction, Dick concluded the project's irreversible environmental damage outweighed the economic harm that a delay brought to the company. Earthjustice attorney Jan Hasselman said "the record is replete with evidence of significant impact" that the pipeline will have on the environment, including the destruction of some trees that are thousands of years old and a reduction in the crawfish population. But Judge Edith Jones appeared skeptical of some of Hasselman's claims on the environmental dangers from the pipeline. "They are not destroying wetlands. That's a little inaccurate," Jones said,

        US proposes to ease some requirements of an offshore drilling safety rule - The US is proposing to ease some of the requirements included in a key offshore drilling safety rule in order to save operators millions of dollars and "reduce unnecessary burdens." The proposed changes to the well control rule, enacted in 2016 in response to the 2010 Deepwater Horizon disaster, affect only a small portion of that rule's requirements and will not reduce safety, the Interior Department's Bureau of Safety and Environmental Enforcement said Friday. The changes will "reduce regulatory burdens" and save offshore operators approximately $946 million over the next 10 years, BSEE said. Friday's announcement did not contain many specifics. But Interior officials emphasized that the changes, to be detailed in the next few days, only applied to about 18% of the provisions of the original well control rule. The "engineers on our team have gone in with a scalpel and been very precise" about which provisions of the rule they chose to revise, Principal Deputy Assistant Secretary for Land and Minerals Management Katharine MacGregor said on a call with reporters. "Our process has been tailored and measured," focusing on safety "without lessening safeguards," BSEE Director Scott Angelle said. 

        U.S. crude output jumps to record 10.26 million barrels per day in February - (Reuters) - U.S. crude oil production jumped 260,000 barrels per day (bpd) to 10.26 million bpd in February, the highest on record, the Energy Information Administration said in a monthly report on Monday. Production in Texas rose by 106,000 bpd to above 4 million bpd, also a record high based on the data going back to 2005. The Permian basin, which stretches across West Texas and eastern New Mexico, is the largest U.S. oilfield. Output from North Dakota declined marginally to 1.15 million bpd, while output in the federal Gulf of Mexico rose by 89,000 bpd to 1.72 million bpd. The agency also revised January U.S. oil production up by 40,000 bpd to about 10.004 million bpd. U.S. natural gas production in the lower 48 states rose to an all-time high of 87.6 billion cubic feet per day (bcfd) in February, up from the prior record of 87.3 bcfd in December, according to EIA’s 914 production report. Output in Texas, the nation’s largest gas producer, increased 1.5 percent in February to 22.4 bcfd, the most since December. In Pennsylvania, the second biggest gas producer, production increased 2.1 percent to a record high 16.4 bcfd in February. That compares with 15.0 bcfd in the same month a year ago. Total oil demand in February was up 2.4 percent, or 460,000 bpd, to 19.62 million bpd versus last year, EIA data showed, as strong demand for distillates helped soften weakness in gasoline demand. Distillate demand in February was up 1.5 percent, or 57,000 bpd, to 3.96 million bpd versus last year, EIA data showed. Gasoline demand in February was down 1.9 percent, or 169,000 bpd, to 8.81 million bpd, EIA data showed. Gasoline demand was up 2.8 percent year-over-year in January.

        U.S. crude oil production efficiency continues to improve - U.S. tight oil production increased in 2017, accounting for 54% of total U.S. crude oil production, in part because of the increasing productivity of new wells. Since 2007, the average first full month of oil production from new wells in regions tracked by EIA’s Drilling Productivity Report (DPR) has generally increased. These growing initial production rates have helped tight oil production to increase despite slowdowns in drilling activity when oil prices fell. The average new well in each DPR region in 2017 produced more oil than wells drilled in previous years in those same regions, a trend that has persisted for nearly ten consecutive years. More effective drilling techniques, including the increasing prevalence of hydraulic fracturing and horizontal drilling, have helped to increase these initial production rates. In particular, the injection of more proppant during the hydraulic fracturing process and the ability to drill longer horizontal components (also known as laterals) have improved well productivity.  This increasing well productivity has supported tight oil production even in years such as 2015, when crude oil prices fell and rig counts dropped. In 2016, rig counts continued to decline sharply and total tight oil production decreased for the first time in 10 years. Fewer wells were drilled; however, those that were drilled were drilled more quickly and located in more productive areas, which led to increased per-well production and profitability.  As rig counts continue to recover from decreases that occurred during 2015 and 2016, producers have increasingly targeted the Permian region, which spans parts of western Texas and eastern New Mexico. The geological structure in the Permian region is more complicated than in other regions, and it took producers more time to advance the drilling and completion technology in the region. However, the Permian region is larger and has more potential for oil production than other regions. Total production and production per new well have increased in the Permian for 11 consecutive years.

        E&P profits appears ready to take off this year after turning a corner in 2017 - The plunge in crude oil prices that started in mid-2014 had a major and lasting impact on the 44 exploration and production companies (E&Ps) we’ve been tracking, triggering a $188 billion swing in net results — from $57 billion in pre-tax operating profits in 2014 to $131 billion in losses in 2015. Defying predictions of widespread bankruptcies, the industry undertook a dramatic strategic and operational transformation that enabled it to emerge from the abyss and return to profitability — albeit just barely — in 2017. Key factors in the industry’s impressive turnaround include the high-grading of portfolios, intense capital discipline and a laser-like focus on operational efficiencies. Today, we dive into the 2017 financial reporting of these companies to identify how these changes have affected income statements and set up the industry for future profitability growth.

        Crude Prices Up, Crude And Gas Production At Record Highs, More Midstream Infrastructure Needed --  Seems like just about everything to do with energy markets is up these days.  Crude oil prices are back to the levels of late 2014.  Crude production hit a 10.6 MMb/d record volume last week, while lower-48 natural gas has been bouncing around an 80 Bcf/d record level. Exports of crude, gas and NGLs are at all-time highs.  But all those hydrocarbon molecules must find their way from the wellhead to market, and in several high-growth regions, that is becoming increasingly problematic, as midstream infrastructure struggles to keep up. In our recent School of Energy, we examined these developments, considering their impact on production trends, domestic demand and the outlook for growth in export volumes. Did you miss it?  Not a problem. We taped the whole conference, andSchool of Energy Online is now available in 12 hours of streaming video, along with all the Excel models, slides, and graphics that we use to tie energy markets together. Today, in this unabashed advertorial, we review some of the highlights of the conference. If you are a trend-follower, you should like Figure 1, which shows U.S. crude oil price, production and exports since 2016. From the depths of despair two years ago, crude oil prices have almost tripled, from $26/bbl in February 2016 to $68/bbl on Friday (April 27). U.S. crude oil production has ramped up 25%, from 8.5 MMb/d in mid-2016 to 10.6 MMb/d in the Energy Information Administration’s (EIA) most recent numbers.  And crude oil exports have skyrocketed from about 0.5 MMb/d in 2016 to 2.3 MMb/d last week. It’s a similar story for production and exports of natural gas and natural gas liquids, although the prices of those commodities have not shot up like oil.

        Citi: US To Become World's Top Oil Exporter | --As global oil markets shift their attention from U.S. shale oil production back to a resurgent Saudi Arabia and Russia and geopolitical concerns bearing down on oil prices, Citigroup said last Wednesday that the U.S. is poised to surpass Saudi Arabia next year as the world's largest exporter of crude and oil products. The U.S. exported a record 8.3 million barrels per day (bpd) last week of crude oil and petroleum products, the government also said Wednesday. Top crude oil exporter Saudi Arabia's, for its part, exported 9.3 million bpd in January, while Russia exported 7.4 million bpd, the bank added. However, it should also be noted that the Citi projection is for both crude and finished (refined) petroleum products, not only crude oil. Saudi Arabia remains the world's largest exporter of crude, though since January amid the OPEC/non-OPEC production cut agreement that figure has fallen. On April 10, the Saudi oil minister said that the kingdom planned to keep its crude oil shipments in May below 7 million bpd for the 12th consecutive month. Saudi Arabia has also trimmed its oil production more than 100 percent of the output cuts it agreed to under the January 2017 production deal. In March, Saudi crude production was at 9.91 million bpd, below the deal's output target of 10.058 million bpd. Russia, however, also part of the global oil protection cut agreement, increased its crude oil production by 0.2 percent to 10.97 million bpd in March, compared to the previous month and an 11-month high. Though Citi has projected that the U.S. could bypass Saudi Arabia in the export of crude and petroleum products, U.S. crude oil exports have been relatively low compared to other major oil producers since the Obama Administration lifted the ban of American crude oil exports in 2015.

         Oil Production Vital Statistics April 2018 -  On the World stage, momentous events are unfolding. The USA, UK and France have bombed Syria risking confrontation with Russia. The Israelis are more than a little concerned about Iranian involvement in Syria. And on the Korean peninsula, peace between N and S is on the cards spreading prosperity and more energy consumption for all. On the second tier, oil production in Venezuela and Mexico continue to tank. No one should be surprised, therefore, that Brent has breached $74/bbl. The only thing standing in the way of another severe oil price spike is the N American frackers going back more seriously to work. They may one day be joined by frackers in Saudi Arabia, China and Russia. The chart below from the February OMR is one of the more important produced by the IEA showing the balance between supply and demand leading to either stock draw or additions. So important in fact that I have decided to leave it there from the last report 2 months ago so that it can be compared with the equivalent chart from the April OMR that is reproduced just below it.The difference between the two charts are quite subtle but with dramatic impact. Data revisions result in crude oil stock draws for 7 quarters backdated from 4Q 18. This has meant that the IEA now sees OECD crude oil stocks at the 5 year mean at the present day. The momentum of the trend will see OECD crude oil stocks shooting to the low side. Even higher oil prices may be on their way. Oil price data updated to 30 April 2018 using data from the EIA.

        • Figure 1 Oil prices are heading higher since the double bottom of January 2016. The WTI – Brent spread, a symptom of the high oil price era has re-opened.
        • Figure 2 Longer term view of daily oil price. Note how the Brent-WTI spread was a feature of the high oil price era.
        • Figure 3 WTI minus Brent. At its peak, the spread reached $30 per barrel. Is this a significant indicator of things to come?
        • Figure 4 Stacked area chart showing North America total rig count. Not much to comment on here.
        • Figure 5 Stacked area chart of US Total rig count showing the oil – gas split. Signs that the US rig count is picking up pace with a renewed marginal shift towards gassy plays.
        • Figure 6 Same data as above but plotted as an unstacked line chart. The response of US frackers returning to work is so far very muted. But the efficiency of what they are doing must be factored in.
        • Figure 7 US rig count broken out by sedimentary basin / petroleum systems play. The Permian play in Texas remains by far the most important.
        • Figure 8 Drilling has slumped in the North Sea to a record low since 1995. Precious little sign yet of a drilling revival in the North Sea.
        • Figure 9 Drilling within OPEC remains close to a cyclical high. Signs of an uptick in OPEC drilling.

        Boom in West Texas oil patch lifts wages, prices (Reuters) - In West Texas, rising oil prices are fueling a sharp economic upswing, lifting employment and pay to records, driving up spending at hotels, restaurants, and car dealerships, and raising the cost of housing and other essentials. This parched patch of land, under which lies the largest oil-producing rock formations in the United States, is the epicenter of a growth binge that shows just how tight the link remains between low unemployment, rising wages, and upward pricing pressure. After a two-year crash, the price of crude CLc1 began to recover in 2016 and pierced $60 a barrel early this year. But oil is still far cheaper than at the peak of the previous eight-year boom that began in 2006 North Dakota’s Bakken oil patch and supercharged the city of Williston. In the Permian basin, which stretches across West Texas and eastern New Mexico, the latest boom is being helped by advances in technology that allow drillers to extract much more from each acre. “$60 is like the new $100,” said Dallas Fed economist Michael Plante in a mid-April interview. Breakeven costs are now as little as $25 per barrel, according to the Dallas Fed’s most recent survey, so energy companies here no longer need $100 oil to make lots of money. And Midland and its neighbor Odessa, the biggest towns for miles and the regional base for major oil producers in the Permian Basin,

         Despite Disappointing Returns, Oil Driller Pushes Ahead With Fracking Near Rare Texas Wildlands - Sharon Kelly, DeSmogBlog - If you ask the CEO of Apache Corp., his company made in 2016 the kind of once-in-a-lifetime find that every oil driller dreams of: a massive oil and gas field that no other company noticed, where thousands of wells could be drilled and fracked to produce massive amounts of fossil fuels -- and, in theory, profits.Indeed, Apache expects a staggering amount of oil and gas can be found in this stretch of West Texas desert: 3 billion barrels of oil; 75 trillion cubic feet of natural gas; and even more natural gas liquids like ethane and propane, which feed plastics production. And it all sits on the outer margins of the famously prolific Permian Basin, where in 2017, one out of every three barrels of shale oil in America was pumped.Alpine High, as the company named its  discovery, was in a little-drilled area near Pecos, Texas, right on the outskirts of the Permian, on land ignored by other drillers who assumed there would be little potential for big oil finds letting Apache buy up leases for a fraction of the price of nearby land. But Apache's big oilfield dreams risk doing irreversible harm to an irreplaceable place -- and, some financial analysts warn, with no clear promise of big profits. Already, there are signs the wells may not live up to Apache's early hopes and pressure has been growing from Wall Street to stop pouring money into huge infrastructure projects based on risky assumptions. Nonetheless, Apache seems to still be dreaming big, pressing forward with plans to drill up to 5,000 wells, each with its own toxic wastewater, gas flares, and air pollution, all in the middle of one of the most ecologically sensitive places in West Texas.

        Drilling rig count jumps in Permian, but not in Texas  - The number rigs actively drilling for oil spiked yet again in the booming Permian Basin, but not in Texas.Instead, the growth came in the relatively smaller portion of the Permian that extends northwestward into neighboring New Mexico, according to weekly data from Baker Hughes, a GE company.The overall drilling rig count jumped by 11 this week, including nine rigs seeking crude oil. Six of those came in New Mexico, while Texas only gained two active rigs. Other states with tiny gains included Oklahoma, Louisiana and North Dakota.There are now 834 rigs drilling for oil with more than half of them - 458 - situated in the Permian. There are 196 gas-seeking rigs and two miscellaneous rigs, creating a total rig count of 1,032, the highest count since March 2015. The total count is up from an all-time low of 404 rigs in May 2016.

        EPA Gives Biofuel Waiver To Billionaire Icahn’s Oil Refinery - The U.S. Environmental Protection Agency (EPA) has granted an oil refinery owned by billionaire Carl Icahn a waiver from the biofuel blending regulations—a waiver typically given to companies in financial hardship.Under the Renewable Fuel Standard (RFS), oil refiners are required to blend growing amounts of renewable fuels into gasoline and diesel. Refiners that don’t have the infrastructure to blend biofuels must purchase tradeable blending credits known as Renewable Identification Numbers, or RINs.The EPA has the authority to grant waivers from the renewable fuel standard to refineries whose oil processing capacity is below 75,000 bpd if the companies owning the refinery can prove that the credits they must buy are causing them financial hardship.The EPA waiver for the 74,500-bpd Wynnewood, Oklahoma, refinery owned by Icahn’s CVR Energy has been granted in recent months, Reuters sources said, without specifying exactly when the waiver was given. “This one’s going to be hard for [Scott] Pruitt to explain,” Brooke Coleman, head of the Advanced Biofuels Business Council industry group, said in an email to Reuters on Friday, referring to the EPA administrator.

        Investigators search for cause of Wisconsin oil refinery explosion (Reuters) - Tens of thousands of residents of a northern Wisconsin city were cleared to return to their homes on Friday, the day after a blast at a Husky Energy Inc refinery injured at least 15 people, a local official said. Investigators searched for the cause of the massive Thursday morning explosion at the refinery, capable of processing up to 38,000 barrels of oil a day, which shook the city of Superior, Wisconsin, home to about 27,000 people. “All indications are that the refinery site is safe and stable and the air quality is clean and normal,” Superior Mayor Jim Paine said in a Facebook posting, noting that the evacuation order was lifted as of 6 a.m. local time (1100 GMT). At least 15 people were injured, local media reported, and at least 10 people - one seriously injured - were taken to area hospitals, said a spokeswoman for Essentia Health-St. Mary’s Medical Center, which operates hospitals in Superior and nearby Duluth, Minnesota. What ignited the blast was not clear. After an initial blaze was extinguished, a storage tank was punctured, and a second fire erupted, Husky Energy spokesman Mel Duvall said. Another tank caught fire at 3:15 p.m., a local ABC affiliate reported, citing Douglas County authorities.Thick black smoke billowed from the facility and hung over Superior throughout the day on Thursday, forcing tens of thousands to flee homes and businesses. Friday classes were canceled in Superior and nearby Maple school districts. There were no reports of fatalities, and all of the refinery’s workers have been accounted for, Husky Energy’s Duvall said.

        Colorado Fracking Company Wants to 'Silence' Opposition to Massive Drilling Project, Lawyer Says - A college student, a legal observer, and a videographer attended a protest at an oil and gas construction site in Greeley, Colorado in early March and all three are now getting sued by the company behind the massive project.The student, Cullen Lobe, already was facing criminal charges in Weld County, Colorado for lockinghimself to a bulldozer as part of an act of civil disobedience at the oil and gas construction site. But for Extraction Oil and Gas, the government’s criminal charges against Lobe weren’t enough. The Denver-based company decided to take legal action of its own.The company’s civil lawsuit names Lobe and four others — John Lamb (the legal observer), Brian Hedden (the videographer), Jeremy Mack, and Mary Delffs — as defendants. While Lobe was arrested and now faces criminal charges, the four other individuals were not arrested but instead were given criminal citations by the Weld County Sheriff’s Department for trespassing at the Extraction Oil and Gas drilling site.The legal action against Lamb, a legal observer with the National Lawyers Guild who was acting as a legal observer at the March 8 protest, and Hedden, an independent journalist who videotaped the protest, comes at a time of increasing concern surrounding the arrest and prosecution of reporters and protesters critical of U.S. government and powerful corporations.  During protests of Donald Trump’s inauguration in Washington D.C., at least six journalists and filmmakers were charged with felony rioting offenses. Legal observers also were rounded up as part of the D.C. police’s strategy to trap and then arrest everyone who was on the street. The charges were eventually dropped against the legal observers and most, but not all, the journalists. A reporter who went to trial as part of the first group of inauguration defendants was found not guilty. Another journalist is among the defendants still facing prosecution.

        Colorado Dem Who Compared Fracking To Rat Poison Accuses Lawmakers Of Being Irrational : A Democratic lawmaker in Colorado compared fracking to manufacturing rat poison Monday after chastising Republican counterparts for not acting rationally on oil and gas development in the state. Colorado citizens have a right to be terrified at the possibility that energy producers might put a natural gas well near their homes, Rep. Matt Gray of Broomfield, Colo., said on the floor of the Colorado House. He then suggested enacting more natural gas wells might be too risky for the public. “They would be incredibly upset about that. If they were going to put a rat poison manufacturing facility in your district, you’d be incredibly alarmed about that,” said Gray, who was commenting on a bill that would force existing wells to be moved further away from schools and other buildings. “If all you hear about what’s going on is what happens at this well, what you see in the newspaper, you don’t understand what that means to the residents who are affected by that,” he said. “You would understand it if somebody said, ‘I want to put a fireworks factory in your district.’ People would be like, ‘What is going on, you’re going to put that next to a neighborhood?’” Broomfield passed a measure in 2017 to enable the city require additional protections before permitting drilling. Weld County is the state’s largest oil and gas producer, with 91 percent of Colorado’s oil production. Much of the animus against hydraulic fracturing has emanated from Colorado, despite the state’s reliance on the oil and gas industry. Colorado officials have nevertheless taken a hard tact against the state’s anti-frackers.

        Trump Fracking Leases Threaten Already Smog-choked Communities - — New federal fracking leases threaten to worsen ozone pollution in communities across the country ― within and near places the Environmental Protection Agency today designated as exceeding federal limits for deadly ozone pollution. The Trump administration declared new “nonattainment” areas today in some of the same places where it has approved massive fracking leases ― including urban centers and rural communities in Utah, Colorado and Texas. However the EPA today failed to declare part of Colorado’s Weld County as a nonattainment area despite pollution from thousands of oil and gas wells that contribute to some of the highest smog levels in the state. People who live in places with unhealthy levels of air pollution are at risk for premature death, lung cancer, asthma attacks and cardiovascular problems. Living in these areas also increases the risk of stillbirths and developmental delays in children. “It’s despicable for the Trump administration to gamble with the lives of children to appease fossil fuel interests,” said Diana Dascalu-Joffe, a senior attorney at the Center for Biological Diversity. “Allowing oil and gas development in areas already choking on pollution is making a bad situation much worse. They’re creating toxic environments for communities and wildlife and destroying public lands in the process.” Ozone, commonly known as smog, stems from tailpipes, smokestacks and industrial activities like oil and gas development. The EPA strengthened its ozone standard following an exhaustive scientific review in 2015. According to the agency’s own estimates, meeting the standard will prevent hundreds of deaths, as well as 230,000 asthma attacks in children, each year.  Pollution exceeds new federal limits in several metropolitan areas along Colorado’s Front Range, including in Denver, Boulder and Fort Collins. Since 2017 the Bureau of Land Management has issued multiple leases to oil and gas companies in or near these nonattainment areas. Public health problems from fracking along the Front Range have been well documented. Still EPA failed to designate heavily polluted northern Weld County as exceeding federal ozone limits.

        Large Oil Spill Reported on Montana Reservation, Contaminating Pond - A well operated by Anadarko Minerals Inc. spilled a " substantial " amount of oil in the central region of the Fort Peck Reservation in northeast Montana, according to local media.An estimated 600 barrels of oil and 90,000 barrels of brine (production water) leaked from the well, theGlasgow Courier reported, citing officials with the reservation's Office of Environmental Protection and the Bureau of Land Management.The spill was first discovered by a farmer doing a flyover in the area. The farmer immediately notified Valley County authorities about the incident.According to a press release received by MTN News , the spill was reported to the reservation's Office of Environmental Protection on April 27. The exact date that the leak occurred is not yet clear. The well was shut in late December.Fort Peck Reservation, which lies north of the Missouri River, is home to members of the Sioux and Assiniboine nations. Members adamantly oppose the proposed Keystone XL (KXL) pipeline and its potential to endanger their water supply. The press release states that the spill further reinforces tribal officials' opposition to the KXL and pipeline development on or near the reservation. Oil and brine from the leak has now traveled roughly 200 yards downhill to a stock pond used by tribal entities to water livestock. The extent of the pond's contamination is not yet determined, the press release continued. According to initial assessments, about three to six inches of oil currently sit on top of the water.

        Coalition to Protect SLO County gathers 14000 signatures supporting prevention of fracking - After two months and thousands of clocked volunteer hours, Coalition to Protect San Luis Obispo County has all but guaranteed the “Protect Our Water, Air, and Land: Ban Fracking and Oil Expansion in SLO County Initiative” a place on the ballot for the November election. An estimated 14,000 signatures from county residents now support this citizens’ initiative to prevent new oil and gas extraction in all unincorporated lands of San Luis Obispo County. This would remove rural areas such as Nipomo, Oceano, Los Osos, Templeton and Santa Margarita from potential new oil and gas well drilling or ban fracking, permanently. The initiative was founded in August 2017 after the owner of the Arroyo Grande Oil Fields requested an aquifer exemption from the California’s Division of Oil, Gas and Geothermal Resources. The exemption would allow increased wastewater injections into the Arroyo Grande aquifer. If made law, the coalition’s initiative would prohibit this expansion but would not hinder the fields’ existing operations. “Our campaign is really going to be about education,” the coalition’s co-founder Charles Varni said. “We have our folks that are going to support us no matter what. We have folks that are going to be against us no matter what. And then we have this group in the middle saying, ‘Give me more information.’” Volunteers with the coalition had until April 30 to collect and substantiate petition signatures. Records were turned in to the Office of the County Clerk-Recorder May 1. The city then has 30 days to verify that the coalition met the minimum 8,580 valid signatures to secure a spot on the ballot. The City of San Luis Obispo has announced plans to pursue new sources of renewable energy. Varni said this initiative falls in line with that prioritization. 

        Pipeline shortage could choke North America’s oil supply with ‘serious implications for global markets’, IEA warns –- Canada will continue to pump out more barrels from the oilsands over the next few years, but delays to pipeline approvals and uncertainty over the provision of more export capacity is undermining the next wave of development, according to the International Energy Agency.In its annual five-year oil forecast published Monday, the IEA warned that Canadian oil pipeline constraints are part of a wider capacity crisis brewing across North America.“Colossal growth in North American supply from 2018 to 2023 raises the crucial question of whether there is enough pipeline capacity to transport and sell all of that oil,” the Paris-based agency said in a report. “If sufficient capacity is not built, the increase in production we foresee could be at risk, with serious implications for global markets.”Despite the pipeline shortages, Canada will be among the countries leading growth in oil output over the next few years, taking its overall production to 5.6 million barrels per day by 2023, compared to 4.8 million bpd this year.But the surge would come at a time of limited export options. “During 2018-19, West Texas and West Canada are likely to face shortages in midstream capacity brought about by a rapid production increase,” the IEA said. “The situation will be much more severe in Canada than West Texas as legal delays mean capacity is unlikely to increase before the end of 2019.”  Choked pipelines means Canadian heavy oil benchmark Western Canada Select is currently trading at a $31 per barrel discount against the West Texas Intermediate U.S. crude oil benchmark, compared to $12 at the same time last year, according to Petroleum Services Association of Canada data. Over the next few years, Canadian takeaway capacity will likely come from Enbridge Inc.’s Line 3 replacement between Hardisty, Alberta, and Superior, Wisconsin.. Another 125,000-bpd of takeaway capacity may come from Enbridge optimising its Mainline conduit. Kinder Morgan Canada Inc.’s Trans Mountain pipeline also faces significant opposition, as does TransCanada Corp.’s Alberta-to-Nebraska Keystone XL pipeline. The IEA does not expect either of the pipelines to be ready before 2021.

        U.S. imports of Canadian crude oil by rail increase - Growth in Canadian crude oil production has outpaced expansions in pipeline takeaway capacity and, along with past pipeline outages, has driven Canadian crude oil prices lower and increased Canadian crude oil exports by rail to the United States. However, the outlook for increased volumes of Canadian crude oil shipped by rail to the United States is highly uncertain despite significant U.S. demand for Canadian crude oil, specifically on the U.S. Gulf Coast. Crude oil production in Canada increased to 3.9 million barrels per day (b/d) in 2017, up approximately 300,000 b/d from 2016. However, crude oil pipeline capacity out of Canada has failed to keep pace with growing production. Consequently, volumes of Canadian crude oil exported to the United States by rail increased in 2017. In December 2017, U.S. imports of Canadian crude oil by rail set a monthly record of 205,000 b/d, nearly matching the amount of crude oil shipped by rail within the United States that month (246,000 b/d). Changes in the relative prices of two crude oils—Western Canada Select (WCS) in Hardisty, Alberta, and West Texas Intermediate (WTI) in Cushing, Oklahoma—demonstrate the effects of transportation constraints. Until late 2017, WCS prices averaged $10 to $15 per barrel (b) lower than WTI, largely reflecting differences in the quality of the two crudes. In late 2017 and early 2018, as crude oil production began to exceed pipeline capacity and demand to transport crude oil by rail increased, WCS priced about $25/b lower than WTI. The price spread between WCS and WTI has since narrowed to an average of $16/b in early April, suggesting some demand for transporting Canadian crude oil by rail has lessened. Low WCS prices may have led some Canadian crude oil producers to reduce output and advance schedules for planned maintenance, likely reducing the need to move crude oil by rail.

        Calfrac revenue doubles as oil price rebound puts fracking crews back on job | Calgary Herald: Higher oil prices are helping energy producers to pull the Canadian well completion business out of the deep funk it entered after the crude price crunch of 2014. On Tuesday, Calgary-based Calfrac Well Services Ltd. reported it more than doubled its first-quarter revenue compared with the same period last year and is reactivating equipment it parked over the past three years. Meanwhile, both Calfrac and its crosstown rival, Trican Well Service Ltd., have been rehiring. According to disclosure documents, Calfrac added 1,000 employees in 2017 to take its total to 3,800 at year-end and Trican hired almost 900 people to jump to 2,067 staff. By comparison, Calfrac had 4,900 employees and Trican had 6,741 at the end of 2014.

        Oilsands thirst for natural gas hits record, environmentalists decry it as 'waste' – Nearly one-third of the natural gas burned in Canada last year was used to produce crude from the oilsands, the country’s energy regulator said Wednesday, something environmentalists called a “waste” of a cleaner-burning resource. According to a National Energy Board report, nearly 2.38 billion cubic feet per day or a record 29 per cent of purchased natural gas was used for oilsands production in Alberta in 2016. That’s up from the 730 million cf/d or 12 per cent of total demand in 2005.Natural gas is used in the oilsands to generate steam to inject into underground formations to thin the heavy, sticky bitumen crude and allow it to be pumped to the surface.The growth in so-called “thermal” projects is the main driver behind increased oilsands demand for natural gas, the NEB said.Environmentalists said that natural gas could be better used to heat houses, generate electricity or make plastics.“Rather than wasting this relatively low-carbon fuel to extract high-carbon oil from tarsands, let’s use it to heat homes as we speed the transition to the 100 per cent renewable future that science demands,” said Greenpeace campaigner Mike Hudema in an email.Andrew Read, a senior analyst with the Pembina Institute, said the report highlights the need for a national energy plan that aligns use of energy with Canada’s climate targets. “This is basically using our cleaner fossil fuel resources to produce dirtier transportation fuels,”

        Feature: Western Canadian heavy crude discount seen widening to 'high teens' on rail - Western Canada's benchmark heavy crude differential has tightened since early April, but observers say this could widen back out to reflect the cost of moving crude by rail and as heavy crude production increases. WCS has been assessed at a $15-$18/b discount to the NYMEX light sweet crude futures calendar-month average (WTI CMA) since April 3, S&P Global Platts data shows. That is in from a discount of $30.55/b in early February, when WCS was depressed by a lack of pipeline takeaway capacity following an unplanned Keystone Pipeline outage in November. Price swings going forward are likely to hinge on whether producers and rail companies are able to sign contracts for dedicated crude unit trains, traders and analysts say. "We expect volatility between unit train and pipeline economics," said Kevin Birn, a senior analyst with IHS Markit. "It's going to be very hard to predict pricing until it makes a definite switch." Birn said it was likely a WCS differential based on the cost of shipping by unit train will likely take hold over the course of this quarter, which would imply a discount to the WTI CMA of around $17-$19/b. Cenovus Energy CEO Alex Pourbaix made a similar prediction on an earnings call late last month, saying that once rail volumes ramp up he expects the WCS differential to "persist in the high teens to get rail down to the Gulf Coast." While price discounts tend to narrow as producers start moving more crude by rail to reduce a backlog, shipping by dedicated crude trains is still more expensive than using pipelines. The all-in cost of moving barrels by unit train from Alberta to the US Gulf Coast -- including loading, unloading, tariffs, fuel and car rental -- is currently estimated at $12.50/b by S&P Global Platts Analytics, with a higher rate for unexpected spot cargoes. The cost of shipping crude from Hardisty, Alberta, to Houston via Cushing, Oklahoma, is around $11/b, according to current pipeline tariffs.

        Europe's biggest bank retreats from the oilsands - Europe's largest bank has joined the list of global investors retreating from new financial commitments in the fossil fuel industry, including investments in oil-rich Alberta. HSBC, whose global assets total more than $2 trillion, announced Friday that as the climate change crisis deepens, it will no longer finance new coal-fired power plants (with a few targeted exceptions), Arctic drilling or new oilsands projects, including pipelines. The announcement comes as part of strengthened "energy policy" that aims to help customers transition to a low-carbon economy in a sustainable way, while "closing relationships with those who do not meet minimum standards."  "We recognize the need to reduce emissions rapidly to achieve the target set in the 2015 Paris Agreement to limit global temperature rises to well below 2 degrees Celsius, and our responsibility to support the communities in which we operate," said Daniel Klier, HSBC's global head of sustainable finance, in a Friday morning press statement.

        Andrew Scheer warns against using public money for Trans Mountain | Calgary Herald: Conservative Leader Andrew Scheer raised a red flag Friday over the potential use of taxpayers’ dollars by the federal and Alberta governments to backstop the expansion of the Trans Mountain pipeline. With British Columbia’s NDP government trying to kill the $7.4-billion pipeline project, and proponent Kinder Morgan setting a May 31 deadline for the uncertainty around the project to be resolved, one option raised by the Notley and Trudeau governments to move the pipeline forward is public investment. Possibilities that have been floated range from insurance guarantees to reimburse Kinder Morgan for losses caused by delays, to equity investments, to Alberta’s outright purchase of the pipeline. Scheer, speaking at a Calgary Chamber of Commerce luncheon at the Westin Hotel, said it’s absurd the situation has devolved to a potential government subsidy for a private company willing to spend its own money as long as it is confident it can proceed. “I think everyone can agree, regardless of their political stripes, that the federal government investing tax dollars in an energy project is not the optimal solution,” said the Regina Qu’Appelle MP, who was elected Conservative leader in an extremely close race last year. However, Scheer did not categorically rule out backing government investment in the pipeline, given that Kinder Morgan could walk away from the project at the end of the month.

        Catastrophic Cyberattacks Threaten Big Oil -  There are over a million oil and gas wells in the United States. There are also several hundred thousand miles of pipelines. Digitization is on the rise in the notoriously conservative oil and gas industry as companies wake up to the cost and operational efficiency boost that sensors and algorithms can offer them. Meanwhile, cybercriminals are keeping ahead of the learning curve, but oil and gas is largely pretending not to notice them. Energy companies - including E&Ps, pipeline operators, and utilities - spend less than 0.2 percent of their revenues on cybersecurity, two security consulting firms have calculated. This compares with three times this portion of revenues spent on cybersecurity by financial services providers and banks.  Oil and gas producers don’t seem to see themselves a likely target of a cyberattack even though such attacks against the industry have been growing in frequency. Symantec, according to Bloomberg, is tracking as many as 140 cybercriminal groups that target the energy industry. That’s up from 87 in 2015. Last year, Deloitte reported that the energy industry was the second most popular target for cyberattacks in 2016. Almost three-quarters of U.S. oil and gas companies, the consultancy said, had a cyber incident in that year, yet only a tiny majority cited cyber risk as a major concern in their annual reports. This is what makes the cybersecurity situation in oil and gas very worrying. A month ago this worry materialized in the hack attack against the communications system supplier to five pipeline operators. While the consequences of the hacking were not particularly serious, the attack should serve as an urgent warning to the industry: the more reliant it becomes on tech, the more vulnerable it becomes.  It’s only a matter of time before someone makes a blockbuster movie about hackers taking over oil producing infrastructure to remotely wreak havoc on the industry. Unfortunately, it may only be a matter of time before something like this happens in real life as well. Deloitte said as much in its 2017 report: “If a cyber attacker were to manipulate the cement slurry data coming out of an offshore development well, black out monitors’ live views of offshore drilling, or delay the well-flow data required for blowout preventers to stop the eruption of fluids, the impact could be devastating.”

        Environmental charity intervenes in fracking legal challenge -An environmental charity has intervened in the legal challenge to the Scottish Government’s fracking ban.Petrochemical giant Ineos, alongside Aberdeen firm ReachCSG, is taking Scottish ministers to court over their decision to convert a moratorium on the controversial gas extraction technique into an indefinite ban.Friends of the Earth Scotland (FoE Scotland) has submitted a public interest intervention in the case, due to be heard in May at the Court of Session. Announcing plans to seek a judicial review in January, Ineos said there were “very serious errors” in the decision-making process. The firm, which owns two fracking licences in Scotland, is challenging the legality of the ban and seeking compensation.However, FoE Scotland will argue the ban is lawful, and arguably required in order to meet Scotland’s legally binding climate change commitments.The organisation’s lawyers say it is the first public interest intervention granted in the Court of Session on environmental grounds. The charity’s head of campaigns Mary Church said: “We are getting involved in Ineos’s judicial review of the fracking ban in order to put forward crucial climate change arguments in support of the ban that otherwise would not have been heard.

        BP profits leap by 71% as oil prices rebound - BP’s profits jumped 71% during the first three months of the year, in the latest sign that the British oil company is back on the path to growth. The continued increase in crude and gas prices combined with a 6% rise in production to push profit up to $2.6bn (£1.9bn), the firm’s highest since 2014. While the growth in earnings was greater than its European peers, BP’s profit was still lower than the Anglo-Dutch company Shell’s $5.32bn and the French group Total’s $2.9bn. Cash flow was nearly $1bn below what analysts had expected, at $5.4bn. BP also had a $1.6bn compensation bill for the Deepwater Horizon disaster, on top of the $65bn it has already paid out since the 2010 oil spill.

        Fracking may have caused rare S. Korea quake: study | Daily Mail Online: Fracking may have induced a rare strong earthquake last year in South Korea, a study said Friday, a potential "game changer" for the contentious practice of pumping water into the ground to extract energy.The 5.5 magnitude quake on November 15 injured scores in the South Korea port city of Pohang and caused major damage.It was one of the largest on record to rattle the Korean peninsula, where significant natural seismic activity is unusual.The quake struck at a shallow depth and in close proximity to a geothermal energy site.Workers at the site had been injecting high pressure water underground in the months before the quake, prompting scientists to speculate human intervention may have caused the tremors.Using seismic data, the study from experts from across Europe concluded that the shallow depth of the quake pointed to the activity at the site as the potential cause."According to our analysis it seems plausible that the occurrence of this earthquake was influenced by these industrial activities," said the study, which was published by respected industry journal "Science".

        Nord Stream 2, other disputes fail to dent Russian natural gas flows to EU - Russia’s Gazprom continues to supply high volumes of natural gas to the EU despite long-running disputes over pipelines, competition and Ukraine, the latest S&P Global Platts guide to EU-Russian natural gas relations shows.Flows via its 55 Bcm/year Nord Stream 1 pipeline to Germany hit a record high of 51 Bcm in 2017, helped by increased access to the onshore OPAL gas pipeline, at first just in January and then continuously from August.The European Commission’s decision in October 2016 to allow Gazprom to access up to 12.8 Bcm/year of extra OPAL capacity through public auctions was intended to settle that particular dispute, running since 2013.But state-owned Polish gas company PGNiG gained an interim court order to suspend the decision, causing the interruption in capacity sales from February to July. It has also asked the EU General Court in Luxembourg to annul the decision completely. The court has said it will rule on this in 2019, and that capacity booked for after this ruling may not be guaranteed. That leaves an element of doubt over Gazprom’s future access to OPAL until the ruling is given.

        Exxon pushes ahead with Rosneft LNG project despite sanctions: sources -  Exxon Mobil is pushing ahead with efforts to develop its $15 billion Far East Liquefied Natural Gas (LNG) project with Russia’s Rosneft despite being forced to exit some joint ventures due to Western sanctions. Two months ago Exxon invited companies including China National Petroleum Corporation’s [CNPET.UL] engineering arm to bid for construction contracts by October, sources with knowledge of the matter said. A final investment decision is due in 2019, they said. The project is being jointly developed with Rosneft using gas from the Sakhalin-1 venture which will be chilled into liquid to underpin the LNG plant’s initial annual output target of 6 million tonnes. Western sanctions forced Exxon to exit some joint ventures with Rosneft in late February, but LNG is not part of the sanctions. The Russian company said the move would not affect the Sakhalin-1 oil and gas production-sharing JV struck in the mid-1990s. “The Sakhalin-1 consortium continues to explore every opportunity to monetize Sakhalin-1 gas resources,” Exxon spokeswoman Julie King said. “A liquefied natural gas plant is an option to maximize benefits to the consortium and the Russian state and its citizens,” she added. Exxon-Rosneft have also held discussions about feeding gas from Sakhalin-1 fields into a planned third production unit at an existing LNG plant run by Gazprom (GAZP.MM) on Sakhalin Island, industry sources said. Rosneft was not available for immediate comment. Exxon’s LNG footprint is expanding rapidly with major new projects planned in Qatar, Mozambique, Papua New Guinea and the United States as demand in China and Southeast Asia booms. Gas accounted for 43 percent of Exxon output last year, according to BMO Capital Markets, a share set to rise as new LNG projects start up. 

        Deepwater section of first TurkStream natural gas pipeline complete: Gazprom - Work to lay the first string of the TurkStream natural gas pipeline in the deep water of the Black Sea is now complete, Russian gas giant Gazprom said Monday, as the project designed to eliminate Ukraine as a transit route for Russian gas to Turkey continues on schedule. The 31.5 Bcm/year, two-string pipeline is set to begin flowing Russian gas in 2019, with the first line set to flow gas directly to Turkey to complement supplies through the other Russia-Turkey Black Sea pipeline, Blue Stream. Russian gas deliveries to Turkey via the TransBalkan pipeline via Ukraine are expected to cease once TurkStream begins operations. Turkey is a key market for Gazprom -- its second biggest export market after Germany -- with supplies in 2017 reaching a record high of 29 Bcm. That was 4.3 Bcm -- or 17.3% -- more than in 2016. "The deepwater pipelay for Line 1 of TurkStream has been completed today," Gazprom said Monday. "Upon completion of the landfall sections the works on the first line will be completed," it said. According to the works schedule, the Allseas-owned vessel Pioneering Spirit will continue the deepwater pipelay of Line 2 in the third quarter of 2018. Some of the second line has already been laid, with Gazprom CEO Alexei Miller saying the project progress was moving "at a high rate." Since May 2017, when the pipelaying campaign began, a total of 1,161 km of pipes has been laid, or 62% of the overall gas pipeline length. 

        ExxonMobil restarts second PNG LNG train; resumes export -- ExxonMobil PNG Ltd has restarted the second liquefied natural gas train at the Papua New Guinea LNG project nearly three weeks after the first train was restarted, as the project recovers from the impact of the earthquake in February. "The plant is now operating at normal production rates, and exports of LNG have resumed," ExxonMobil, which is the main operator of PNG LNG, said in a statement Monday. The restart of PNG LNG's second train was expected to be bearish on prices, especially after Platts JKM LNG prices rose from $7.625/MMBtu last Monday to close the week at $8.125/MMBtu Friday, on demand for short-covering. Market participants were watching for exports from PNG LNG to return to normal levels of around two to three cargoes a week. Two LNG carriers--the Bahamas-flagged Gigira Laitebo and Spirit of Hela -- were currently offshore PNG LNG, S&P Global Platts' vessel tracking system, cFlow, showed. PNG LNG has a nameplate capacity of 6.9 million mt/year but had consistently operated above that level. It expected rates to remain above 8.5 million mt/year, which equated to around two to three cargoes a week. "The company expects to reach full capacity in May," ExxonMobil said, adding that production at PNG LNG had been gradually increasing since the Hides gas conditioning plant, and one train at the PNG LNG plant, restarted earlier in the month. PNG LNG restarted its first processing train on April 12, more than two weeks ahead of schedule, following a shutdown after the 7.5-magnitude earthquake hit the PNG Highlands on February 26, causing widespread destruction. 

        ExxonMobil gas project a disaster for Papua New Guinea’s people - The massive $US19 billion ExxonMobil-led liquid natural gas (LNG) project in the Hela region of Papua New Guinea (PNG) has failed to deliver a promised economic boom for the country, a non-government organisation report has found.The Jubilee Australia report, titled “Double or Nothing; the Broken Economic Promises of PNG LNG,” says the project “has contributed to PNG going backwards on most economic indicators.” According to the author Paul Flanagan, a former Australian treasury official, the country’s impoverished population would have been better off “on almost every measure of economic welfare” without the project.ExxonMobil, the lead operator, is supported by the Australian-PNG company OilSearch. Both have stakes of just under one third in PNG LNG. The PNG government also has a large stake, as does Australian gas company Santos. The project, expected to run for 30 years, ships liquefied gas to Japan, South Korea and China.The operation was substantially financed by the US Export-Import Bank, backed by a $A500 million loan from the Australian government’s Export Finance and Insurance Corporation. ExxonMobil invested primarily in order to profit from low labour and start-up costs. The company began exporting LNG in 2014, amounting to 7.9 million tonnes per year, delivering an initial boost to the country’s output. In 2016, however, the global economic crisis saw a precipitous drop in LNG prices to $US6.45 per million British thermal units (Btu), from a peak of $19.70. The facility remains vital to Washington’s geo-strategic interests in the Asia-Pacific.

        India's first floating regasification terminal to start operations in Q4 2018 - India's first floating storage and regasification terminal or FSRU could begin importing LNG as early as the fourth quarter of this year on the country's west coast, the project's developer H-Energy Gateway Private Ltd and France's Engie, said in separate statements this week. The Norway-flagged FSRU, named GDF Suez Cape Ann, which is under long-term timecharter with Engie, arrived Tuesday at Jaigarh Port in the western state of Maharashtra for its inauguration. The 80,780 dwt vessel marks the first deployment of floating gas infrastructure in India, which has lagged neighboring Pakistan and Bangladesh in installing floating gas systems, as it already has a network of onshore LNG terminals. India is Asia's and the world's fourth-largest liquefied natural gas importer, but its onshore LNG terminals have remained underutilized due to relatively high gas prices and a lack of pipeline interconnectivity. 

        Venezuela Offers India 30% Discount On Oil...If It Pays In Cryptocurrency  - Venezuela has offered India a 30-percent discount on crude oil purchases, but only if India agrees to pay in El Petro, the cryptocurrency that Venezuela is touting as the first national digital currency backed by crude oil reserves, the Indian outlet Business Standard reports. Venezuelan blockchain department experts visited India in March and struck an agreement with Delhi-based Bitcoin trading firm Coinsecure to sell the Venezuelan cryptocurrency Petro in India, Business Standard reported, quoting multiple sources.Maduro’s propaganda machine is touting the digital coin as a ‘ground-breaking’ first-ever national crypto currency, El Petro—backed by 5 billion barrels of oil reserves in Venezuela’s Orinoco Belt. But most observers see this crypto issuance as a desperate attempt to skirt U.S. financial sanctions.In March 2018, U.S. President Donald Trump banned U.S. purchases, transactions, and dealings of any digital coin or token issued for or by the government of Venezuela. Now Venezuela wants to add the Petro as a cryptocurrency on Coinsecure to trade Petro against Bitcoin and the Indian rupee, according to Coinsecure CEO Mohit Kalra quoted by Business Standard. “They are going to different countries and making offers. The offer that they have given to the Indian government is: you buy Petro and we will give you a 30 per cent discount on oil purchases,” Kalra told Business Standard.Earlier this month, Coinsecure said that US$3.5 million worth of Bitcoins had been stolen from the exchange and blamed for this its Chief Security Officer (CSO) Amitabh Saxena. Investigation is still under way, Coinsecure said on Sunday. Meanwhile, India’s crude imports from Venezuela - whose oil industry is collapsing rapidly - dropped to around 300,000 bpd between November 2017 and February 2018, down by 20 percent on the year, to the lowest level since 2012, Reuters reported in March, citing data from shipping and industry sources.

        Russian Oil Turns Its Back On Its Biggest Customer - Since the start of 2018, Russia’s pipeline crude oil exports to China have been growing, while its seaborne shipments to Europe have been falling.At the beginning of this year, Russia doubled the capacity of pipeline exports to China, where it has been the top oil supplier for more than a year after overtaking OPEC’s top exporter and de facto leader Saudi Arabia last year.While Russia is trying to get a bigger chunk of the fast-growing Chinese oil market, it is doing so at the expense of its number-one oil customer, Europe. Decreased seaborne crude oil shipments to Europe may prompt European refiners to buy more Middle Eastern barrels and crude oil from the U.S., analysts say. In addition, lower Russian seaborne shipments could add to the woes of the tanker freight sector, which is also feeling the decline of OPEC’s exports due to the oil cuts pact and an oversupply of tankers.According to loading programs obtained by Bloomberg, Russia’s crude oil exports from its western ports on the Black and Baltic Seas—most of which go to Europe—will have dropped by 19 percent to 1.86 million bpd between January and May 2018. At the same time, Russia’s exports via pipeline to China soared 43 percent to around 750,000 bpd in Q1 2018, data by pipeline operator Transneft shows.In March, Russia kept its top oil supplier spot to China for a 13th month running, with exports up 23.6 percent on the year to 1.36 million bpd, ahead of Saudi Arabia’s 1.09 million bpd exports. Russian oil exports to China jumped 22 percent annually in the first quarter of 2018.

        China is replacing Europe as Russia’s No. 1 oil customer -- Since the start of 2018, Russia's pipeline crude oil exports to China have been growing, while its seaborne shipments to Europe have been falling.At the beginning of this year, Russia doubled the capacity of pipeline exports to China, where it has been the top oil supplier for more than a year after overtaking OPEC's top exporter and de facto leader Saudi Arabia last year.While Russia is trying to get a bigger chunk of the fast-growing Chinese oil market, it is doing so at the expense of its number-one oil customer, Europe. Decreased seaborne crude oil shipments to Europe may prompt European refiners to buy more Middle Eastern barrels and crude oil from the U.S., analysts say. In addition, lower Russian seaborne shipments could add to the woes of the tanker freight sector, which is also feeling the decline of OPEC's exports due to the oil cuts pact and an oversupply of tankers.According to loading programs obtained by Bloomberg, Russia's crude oil exports from its western ports on the Black and Baltic Seas—most of which go to Europe—will have dropped by 19 percent to 1.86 million bpd between January and May 2018. At the same time, Russia's exports via pipeline to China soared 43 percent to around 750,000 bpd in Q1 2018, data by pipeline operator Transneft shows.In March, Russia kept its top oil supplier spot to China for a 13 th month running, with exports up 23.6 percent on the year to 1.36 million bpd, ahead of Saudi Arabia's 1.09 million bpd exports. Russian oil exports to China jumped 22 percent annually in the first quarter of 2018. As Russia is boosting crude oil supply to China at Europe's expense, European refiners may look to replace some of the Russian barrels with Middle Eastern and U.S. crude oil, according to Alan Gelder, Vice President Refining, Chemicals and Oil markets, at Wood Mackenzie.

        Shifting Energy Import Patterns Enhance China's Clout In The Middle East - Subtle shifts in Chinese energy imports suggest that China may be able to exert influence in the Middle East in alternative and subtle ways that do not involve military or overt economic pressure.The shifts involve greater dependency of the Gulf states on oil and gas exports to China, the world’s largest importer, at a time that the People’s Republic has been diversifying imports at the expense of Gulf producers. The shifts first emerged in 2015 when Chinese oil imports from Saudi Arabia rose a mere two percent while purchase of Russian oil jumped almost 30 percent. Russia rather than Saudi Arabia has been for much of the period since China’s biggest crude oil supplier. The shifts were reinforced by the US shale boom, a resulting drop in US imports from the Gulf, and President Donald J. Trump’s tougher trade policies. At the same time, China became in 2016 the largest investor in the Arab world with investments worth $29.5 billion, much of which targeted infrastructure, including the construction of industrial parks, pipelines, ports, and roads.Compounding the impact of shifts in Chinese energy imports is the fact that despite support for Russian policy in the Middle East, Beijing increasingly fears that Moscow’s approach risks escalating conflicts and has complicated China’s ability to safeguard its mushrooming interests in the region. Viewed from Beijing, the Middle East has deteriorated into a part of the world in which regional cohesion has been shattered, countries are fragmenting, domestic institutions are losing their grip, and political violence threatens to effect security and stability in northwest China.China’s concern is likely to increase if and when the guns fall silent in Syria and the country begins to focus on reconstruction. Already China worries that Uyghur foreign fighters in Syria and Iraq are heading to areas closer to Xinjiang in Pakistan and Afghanistan.

        Iraq data: April crude exports fall sharply on bad weather, port maintenance - Iraq's federal crude oil exports in April fell 3.3% from March to 3.34 million b/d due to weather-related disruptions and maintenance issues, according to oil ministry data and sources. The northern Persian Gulf, from where Iraq ships all of its crude saw three days of inclement weather in the month, sources said Wednesday. The bad weather was compounded by the suspension of loadings from the Khor al-Amaya terminal, due to leaks at an old pipeline, and one of the single-point moorings (SPM-1), which was under maintenance. Khor al-Amaya can load up to 300,000 b/d of crude. A new pipeline to the terminal has been laid, but sources said it had not yet been connected. Iraq has four SPMs, each with a loading capacity of 900,000 b/d, but only two are usually operated at any time. Sources said SPM-1 is currently unusable due to a broken hose. A replacement is expected to take weeks to arrive and be installed. Originally planned for April, the installation was pushed back to May as Iraq awaits delivery of the hose. Despite the 113,000 b/d drop in exports from March, the April exports are still above Iraq's 2017 average of 3.309 million b/d. Federal exports averaged 3.427 million b/d in the first four months of the year, up nearly 5% from 3.276 million b/d in the same period of 2017. The oil ministry did not provide any estimate of exports from the semi-autonomous Kurdistan Regional Government. S&P Global Platts estimates total country-wide exports at 3.640 million b/d in April, with the addition of around 300,000 b/d shipped by the KRG from Turkey's Ceyhan port on the Mediterranean. These shipments are opposed by Baghdad as unconstitutional and the KRG has not published its own data on exports for months. The oil ministry did not give a breakdown of its shipments for its two export grades, Basrah Light and Basrah Heavy. The lighter grade typically accounts for 75% of shipments. 

        OPEC Cuts May Go Deeper as Another Member Sees Output Slump  (Bloomberg) -- While plunging output in Venezuela captures the oil world’s attention, problems are quietly festering in another OPEC nation. Angola, once Africa’s biggest crude producer, is suffering sharp declines at under-invested offshore fields, with output dropping almost three times as much as the nation pledged in an accord with fellow OPEC members. With the losses set to accelerate -- a shipping program seen by Bloomberg News shows crude exports will fall in June to the lowest since at least 2008 -- the cartel risks tightening supply too much. “Angola has a serious problem, with its decline rates becoming increasingly visible,” said Richard Mallinson, an analyst at consultants Energy Aspects Ltd. in London. “The low figure in June doesn’t look like a pattern of maintenance but points to steeper, structural declines.” The Organization of Petroleum Exporting Countries and its allies have succeeded in wiping out an oil glut through production cuts launched in early 2017, boosting prices to a three-year high above $75 a barrel. Their efforts have been aided by accidental losses in member nation Venezuela, which is cutting six times the amount it promised as a spiraling economic crisis batters its oil industry. The risk OPEC faces now is tightening world markets too sharply, and sending prices to levels that either crimp oil demand or provoke a new tide of rival supply from the U.S. As Angola’s creeping decline adds to the ongoing slump in Venezuela, that danger only grows. Output interruptions among the organization’s members could send Brent crude prices above $80 a barrel, Bank of America Merrill Lynch analysts including Francisco Blanch, head of commodities research, said in a note to clients. Unintended supply disruptions are rife in the cartel. Nigeria and Libya were exempt from the deal to cut output because their production had already been diminished by local instability, while Iraq’s implementation of the accord only improved after a political dispute halted exports. Some traders are already shunning Iranian crude in fear that President Donald Trump will re-impose sanctions.

        OPEC Ditches Its Rear-View Mirror for Something Worse - OPEC's multi-year attempt to steer the oil market by focusing on inventory levels was always like trying to drive a car while looking only in the rear view mirror. The inventory data is historical and reflects what the market was like a month or more ago. By the time OPEC gets the data, the world has already moved on. If you thought that was a bad idea, wait until you hear this. The most important metric for OPEC and its friends, according to Saudi oil minister Khalid Al-Falih, is the level of investment in future oil production capacity. Speaking after the group’s gathering in Jeddah on April 20, he said they all need to promote confidence in the long-term market in order to attract capital, not to target price. The world needs to add 4 million to 5 million barrels a day of new production capacity each year to meet rising demand and offset declines, he said. The industry is far from reaching that goal. OPEC may be starting to shift its goalposts away from returning inventories to a 5-year average level, however it chooses to measure that target. Now the group seems to want to keep cutting output until investment in new upstream projects picks up.But this is a much worse guide to the state of the market even than inventory levels. Stocks are at least 2 months out of date, but investment plans reflect price levels of 12 to 24 months ago and a whole host of other considerations, too. The group is abandoning the rear-view mirror in favor of a telescope. Light travels so fast that what you see in the former is mere nanoseconds out of date compared to what the latter reveals. 

        Not Everyone Gets Why OPEC Is Determined to Stick With Cuts - OPEC and Russia seem determined to keep on cutting production even after their campaign to rebalance world oil markets achieved its main target. The primary justification for doing so looks shaky.Sixteen months of output curbs have all but eliminated surplus oil inventories and prices are near a three-year high. But Saudi Arabia says the “mission is not accomplished yet” and is urging fellow producers to keep output restrained to fulfill a new priority: encouraging companies around the world to invest more in future supply.The Organization of Petroleum Exporting Countries isn’t the only voice warning about a lack of spending on new projects. Influential figures from the International Energy Agency to the boss of oil major Total SA have warned a supply shortage could emerge early next decade after a period of deep cuts in spending. Under-investment could push prices as high as $300 a barrel within a few years, prominent hedge-fund manager Pierre Andurand said this week.  Yet there’s also no shortage of people who see OPEC’s concern about investment as a pretext for prolonging a strategy that keeps oil prices as high as possible. First-quarter earnings showed major companies including Royal Dutch Shell Plc, Eni SpA and Chevron Corp. are spending less but still expanding production thanks to cost cuts. U.S. oil drillers are deploying more rigs and maxing out pipelines. At current prices the industry is already on track to deliver the extra output the world needs, according to Rystad A/S.

        OPEC Production Cuts: Is Russia Complying? - Russia’s oil production held onto an 11-month high in April, flat compared to March and above its quota under the OPEC/non-OPEC deal for a second consecutive month, according to data by Russia’s Energy Ministry. Russia pumped a total of 10.97 million bpd of oil in April, unchanged from March, and slightly above its quota under the production cut deal, according to energy ministry data, as carried by Reuters.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, production at the larger Russian companies increased, while a decline at the smaller firms offset that growth. Production at Rosneft, the largest Russian oil company, inched up by 0.1 percent in April over March, while Gazprom Neft—which has an ambitious production growth plan—saw its oil production increase by 0.9 percent month on month. The combined production of the smaller oil companies decreased by 0.9 percent last month, offsetting the production gains at the bigger producers.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 - Rosneft and Lukoil - boosted their production. Russia is leading the non-OPEC group of oil producers part of the pact with OPEC to cut production in order to draw down inventories and boost oil prices. Analysts and official figures are already estimating that global oil stocks in developed economies are very close to or already within the five-year average—OPEC’s metric for the deal’s success. Nevertheless, OPEC’s leader Saudi Arabia insists that there is more work to be done and the cuts should continue by the end of this year, as planned. Russia is more careful in comments, although it has repeatedly said that it is committed to the deal. Last month, Russia’s Energy Minister Alexander Novak said that at the June meeting, OPEC and allies could discuss ‘easing the cuts’ until the end of the year.

        Russia stands by OPEC deal even after two months of overproducing -- Russia reaffirmed its pledge to an alliance with OPEC, despite two months of breaching its target under a global oil-output deal. The country remains “fully committed” to bringing balance to the crude market, Russia’s Energy Minister Alexander Novak said in a statement Thursday. Russia’s compliance with the deal was 95.2% in April, after a rate of 93.4% in March. While this over-production is more than offset by slumping output from some members of the Organization of Petroleum Exporting Countries, missed Russian goals could become a feature of the pact, according to Massachusetts-based ESAI Energy LLC. “Six months from now, Russia may follow Kazakhstan’s example, restraining output at some fields to demonstrate ‘good intentions’ even as overall production climbs,” ESAI Energy Principal Andrew Reed said by email. Growing spare capacity at oil projects run by state-controlled Rosneft PJSC and Gazprom Neft PJSC “will soon lead to weakening Russian compliance.” OPEC and its allies led by Russia have nearly succeeded in wiping out an oil glut through production cuts initiated in early 2017, boosting prices to a three-year high. While the deal formally expires at the end of this year, Saudi Arabia has signaled the curbs could be extended into 2019. Novak said earlier this month that the partners will discuss further cooperation in June, with all options on the table, including easing the caps, depending on the market situation. The compliance rate of the OPEC members was 168% in April, up from a revised 165% in March, according to a Bloomberg survey. 

         Russian energy minister Novak says April conformity to OPEC/non-OPEC oil output deal 95.2% - Russian energy minister Alexander Novak said Thursday Russian conformity to the OPEC/non-OPEC crude oil production cut deal was 95.2% in April. This indicates that the ministry estimates April output was 285,600 b/d below October 2016 which is the baseline to assess Russian compliance with the deal. "Fluctuations in liquids output in April were due to increased activity at projects covered by production sharing agreements," Novak said. On Wednesday the Central Dispatching Unit said Russia produced 44.878 million mt of liquids in April. This is equivalent to around 10.965 million b/d, using Platts conversion rate of 7.33 barrels per metric ton. This indicates Russia's compliance was 94%, at 282,000 b/d below the October 2016 level of 11.247 million b/d. Russia committed to cut production by 300,000 b/d under the deal. Energy ministry figures traditionally show higher compliance as they are based on individual coefficients for each field when evaluating the output in barrels, while the CDU data is provided in metric tons, leading to a discrepancy in calculations. In March, the energy ministry reported compliance with the output cut agreement below 100% for the first time since Russia reached its target at the end of April 2017. At the time, energy minister Alexander Novak said there had been a seasonal rise in gas demand that resulted in higher gas output and corresponding increase in associated gas liquids that are included in total liquids output. Novak Thursday also reiterated that Russia is fully committed to balancing the oil market and evening out production volatility.

        Hedge funds trim positions in crude but boost fuels: Kemp (Reuters) - For all the bullish chatter, hedge fund managers have become cautious about increasing their exposure to crude oil, though they are becoming increasingly optimistic about the outlook for refined fuels again. Hedge funds and other money managers cut their combined net long position in the six most important futures and options contracts linked to petroleum by six million barrels in the week to April 24. Net length was reduced in NYMEX and ICE WTI (-17 million barrels), Brent (-7 million) and European gasoil (-2 million) but increased in U.S. heating oil (+7 million) and especially U.S. gasoline (+13 million). Portfolio managers have not really increased their net long position in WTI and Brent since the start of April and arguably not since the start of February, which is perhaps a sign they are now fully invested. In contrast, fund managers have been adding net long positions in gasoline and heating oil, after cutting them in February and March, according to position records published by regulators and exchanges. By April 24, funds held a record net long position in U.S. gasoline equivalent to 111 million barrels as well as a net position in heating oil equivalent to 69 million barrels ( ). Hedge fund managers have amassed a near-record position of 1.405 billion barrels in petroleum and show no signs of rushing to take profits despite the rise in prices to their highest level since 2014. But if there has been no liquidation, there has also been no further buying, except for refined fuels, and overall there has been no upward buying momentum in the petroleum complex for over two months. For the time being, most funds have already put on their positions, and are now waiting to see if the fundamentals will validate their bullish expectations. 

         Rising oil prices put demand destruction back on the agenda: Kemp (Reuters) - Rising oil prices over the last two years have put the issue of demand destruction back on the agenda, as producers, traders and analysts try to estimate how consumers will respond. Demand destruction always becomes a topic of discussion during this stage of the price cycle, and the current discussion resembles previous episodes of high and rising prices in 2005-2008 and 2011-2014. Brent prices have surged by $47 per barrel (170 percent) from their low point in early 2016 and are now trading close to $75 per barrel. Over the same period, weighted-average U.S. gasoline pump prices have risen by almost $1.13 per gallon (61 percent) and now stand just a few cents below $3 per gallon. Crude and gasoline prices are still well below the levels of $115 per barrel and $3.80 per gallon where they stood just before oil prices started slumping at the end of June 2014. But crude and fuels are no longer particularly cheap and most traders and oil exporting nations expect prices to increase further over the next year. In real terms, oil prices are close to the average level for the whole of the last cycle from late 1998 through early 2016. As the price-cycle matures and prices move towards their next peak, the focus on consumer responses is set to intensify. In an early sign of political sensitivity in consuming countries, U.S. President Donald Trump blamed OPEC for rising oil prices via a message on his Twitter account on April 20. “Oil prices are artificially Very High! No good and will not be accepted”, the president wrote with his customary directness. In contrast, OPEC officials have indicated they see no adverse impact on oil consumption as a result of price increases so far. “I have not seen any impact on demand with current prices. We have seen prices significantly higher in the past – twice as much as where we are today,” Saudi Arabia’s oil minister told reporters in Jeddah. “Reduced energy intensity and higher productivity globally of energy input levels leads me to think that there is capacity to absorb higher prices,” the minister said on April 20.

         Lack of fuel subsidies could hasten Asian crude demand destruction: Russell (Reuters) - The term “demand destruction” is again entering the lexicon of the current crude oil market as the sharp rise in prices raises concerns about when do consumers start cutting back on their fuel consumption.  While it’s probably impossible to pick the exact point at which this happens, the risk in the current cycle of rising prices is that it happens earlier than in the past in Asia, the main region driving rising crude demand. The reason for this is that many countries in Asia used the prior period of falling crude prices to end, or dramatically scale back, their fuel subsidies. This means that this time consumers in countries such as India, Indonesia and Malaysia are fully exposed to rising crude prices, something that hasn’t been in the case in previous bull cycles. The combined oil consumption of those three countries is about 6.5 million barrels per day (bpd), with India alone accounting for about 4.3 million bpd. Even a 5 percent drop in demand for fuel in those countries would knock about 325,000 bpd from global crude oil consumption. So far, it appears that consumers in those countries haven’t been exposed to the full extent of the crude oil increase. Global benchmark Brent crude closed at $74.64 a barrel on April 27, up 11.6 percent since the end of last year and 66.5 percent from last year’s low in June. The price of a liter of diesel in New Delhi was 65.93 rupees on Sunday, according to data on the website of Indian Oil. This is equivalent to about $1 a liter. At the end of last year, the price of a liter of diesel was 59.64 rupees, meaning it has risen by 10.5 percent so far this year, not quite keeping pace with the rise in Brent crude oil. When crude was at its 2017 low in June, diesel was 53.46 rupees a liter in New Delhi, meaning it has risen about 23.3 percent since then, while Brent has jumped by 66.5 percent. What appears to have happened is that the state-controlled oil majors such as Indian Oil have largely absorbed the cost of rising crude prices, partly because of government pressure to do so. But there has to be a question mark as to how long this can continue to be the case.

        Goldman's Clients Are Getting Concerned About Rising Oil Prices - It's been a while since the US made a wholesale push to get more cash and income-strapped households into the ever more unaffordable American dream of owning a house, three years to be exact, which is when nationalized housing agency Freddie Mac last rolled out a conventional mortgage that only required a 3% down payment for certain borrowers.The problem is that what modest requirement the mortgage program had back in 2015, meant that most Americans who needed access would be excluded. The program, which as we described at the time was designed for qualified (that being the key word) low-and moderate-income borrowers - i.e., Millennials - saw limited progress over the last few years, with FHFA Director Mel Watt telling Congress last year that Freddie’s 3% down program (along with a similar one from Fannie Mae) was continuing to grow.It just wasn't growing fast enough, because while putting 3% down may not have been especially challenging for most Americans, having even the modest income required to go along with it, was.So fast forward to last week, when Freddie Mac announced on Thursday it was about to supercharge its 3% down program and launch a widespread expansion of the offering, when it announced that it is rolling out a new conventional 3% down payment option for qualified first-time homebuyers, - effectively the same as the 2015 program... with one small difference: there would be no geographic restrictions; more importantly there no longer will be any income restrictions. To wit:   In other words, whereas many Americans could not qualify for the original 3% down program because, well, they lacked virtually any income, that will no longer be a hindrance and the government will effectively backstop the lack of income as a new wave of 'income-challenged' Americans rushes in to buy houses.

        Oil Hedge Fund Manager Andurand Says $300 Oil 'Not Impossible’  -  Pierre Andurand, one of oil’s most prominent hedge fund managers, said the current reluctance of energy companies to invest in new production meant $300 a barrel was "not impossible" within a few years. Andurand, who’s often espoused bullish views, said in a series of tweets on Sunday that concern about the impact of electric vehicles on future demand was limiting investment in projects with long lead times. "So paradoxically these peak demand fears might bring the largest supply shock ever," he wrote. "If oil prices do not rise fast enough, $300 oil in a few years is not impossible." The hedge fund manager, who runs oil-focused Andurand Capital Management LLP, also went against the conventional view that triple-digit oil prices will dampen demand growth. "So no, $100 oil will not kill the economy," he wrote. "And we need +$100 oil to encourage enough investments outside of the U.S." A spokesman for Andurand declined to comment on the tweets, which were later removed from Andurand’s Twitter account. His comments on demand echo those of Saudi Oil Minister Khalid Al-Falih, who earlier this month suggested that prices could rise further from their current level close to $75 a barrel without doing economic damage. “We have seen prices significantly higher in the past, twice as much as where we are today”, and the global economy has the ability to absorb costlier crude, Al-Falih said. In 2008 Brent crude rose to nearly $150 a barrel, before crashing. Andurand was among top commodity hedge fund managers who met with Al-Falih in July in London to discuss the state of the oil market. The Organization of Petroleum Exporting Countries and its partners plan to maintain their production cuts this year, which have helped to boost oil prices. Andurand posted a near 10 percent drop in the first two months of the year as his fund stumbled against a background of zig-zagging energy prices, according to people familiar with the matter. The fund made money in March, one of the people said, asking not to be named discussing private data. He launched his hedge fund in 2013 and it has been positive every year since.  

        Crude Oil Prices Spike on Israeli Comments on Iran - Crude oil prices rebounded from session lows rising above 68-per barrel mid-day after testing below that handle early in the North American trading session. As oil exports are on the rise, higher prices are increasing demand for WTI which is much lower than Brent given its land locked nature.  Comments from the Israeli PM about Iran’s Nuclear program has generated upward momentum in crude oil prices.  Prime Minister Benjamin Netanyahu made a statement on a significant development regarding the nuclear agreement with Iran, Israeli media reports indicate Netanyahu will address the Iran nuclear deal and how he believes Iran is cheating which sent oil prices higher. U.S. oil exports just hit a record high, a sign that the shale boom will continue to lead to higher shipments abroad, despite some infrastructure bottlenecks. Last week, the U.S. averaged 2.3 million barrels per day in crude oil exports, the highest average for any week on record. Another reason for the upward trend in exports is the renewed price differential between Brent and WTI. While the oil market is global, the two benchmarks reflect some unique geographical circumstances. WTI is dragged down by the surging U.S. shale supply, while Brent is seeing tighter conditions, in part because of the OPEC production cuts, but also because of strong demand in much of the world.  Gasoline stocks are below the top end of the 5-year historical range, but the decline in last weeks production could be a sign that refiners have enough stocks.  The Energy Information Administration currently forecasts that drivers in the United States will pay an average of $2.74 per gallon this summer for regular gasoline, the highest average summer gasoline price in four years. EIA’s forecast gasoline price for summer 2018 will be $0.26 per gallon higher than the average price last summer, largely reflecting changes in crude oil prices.

        Oil Rises as 'Alarm Bells' Sound Over Unraveling Iran Nuke Deal (Bloomberg) -- Crude rose after Israeli intelligence about Iranian nuclear ambitions heightened concern an international accord may unravel. Futures in New York rose 0.7 percent on Monday to settle just pennies shy of a three-year high. Israeli Prime Minister Benjamin Netanyahu said Iran had a secret plan to build nuclear weapons. The announcement comes less than two weeks before U.S. President Donald Trump decides whether to scrap the Iranian nuclear deal and reimpose sanctions against OPEC’s third-biggest oil producer. Brent crude, the international benchmark traded in London, closed at a level not see since late 2014. “The geopolitical risk temperature is about to move a little higher here,” said Bart Melek, head of global commodity strategy at TD Securities in Toronto. “This is, at least in my mind, raising some alarm bells.” Israel shared with the U.S. documents on a secret Iranian nuclear-weapons program and the U.S. has verified their authenticity, according to a person familiar with the matter. Meanwhile, Iranian Foreign Minister Mohammad Javad Zarif said Netanyahu allegations were lies, according to state-run FARS. Trump declined to say what he’ll do on the Iran deal. Crude rallied 5.6 percent this month amid heightened geopolitical tensions and Trump’s indications he may scrap the 2015 nuclear deal that eased sanctions against Iran in exchange for a halt to nuclear weapons research. At the same time, OPEC-led production cuts have continued to tighten global markets, despite record-setting U.S. crude output. In Texas, oil production climbed to an all-time high in February, the federal government said. West Texas Intermediate crude for June delivery climbed 47 cents to settle at $68.57 a barrel on the New York Mercantile Exchange. Total volume traded was about 15 percent above the 100-day average. A measure of oil market volatility climbed to the highest level in two weeks. Brent crude for June settlement, which expires Monday, advanced 53 cents to end the session at $75.17 on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a $6.60 premium to June WTI. The more-active July contract closed rose 90 cents to close at $74.69. 

        Oil Prices Fall Despite Looming Iran Deal - OilPrice Intelligence Report - Oil prices fell on Tuesday morning following a big spike on Monday. A U.S. withdrawal from the Iran deal appears to have been all but factored in to oil markets, allowing a soaring dollar to send oil prices tumbling back down.   Israeli Prime Minister Benjamin Netanyahu said new intelligence proved that Iran was deceiving the world on its nuclear program. However, the details he offered were already known to the International Atomic Energy Agency and experts said he disclosed nothing new. Moreover, experts noted that doubts about Iranian intentions are exactly why the 2015 nuclear deal is important. But, the political objective for Netanyahu was clear – he was likely trying to convince the Trump administration to move forward with a hostile approach towards Iran. Judging by Trump’s reaction, the political theater has been largely successful. With the odds of U.S. sanctions on Iran rising as the May 12 deadline approaches, Saudi Arabia is positioned to benefit from the confrontation if Iranian oil is forced off of the market. Saudi Arabia has around 2.5 million barrels per day of spare capacity and could easily ramp up output to replace lost Iranian supply. "Saudi Arabia is not likely to sit on the sidelines and let things play out," Ellen Wald, president of Transversal Consulting and a non-resident scholar at the Arabia Foundation, told S&P Global Platts. "Saudi Arabia likes to present itself as the stable, reliable producer, always there to satisfy customer demands, and this is the perfect opportunity to step in." The EIA said that U.S. output surged by a massive 260,000 bpd in February, taking output up to 10.264 mb/d. The gains are consistent with the weekly estimates that have shown strong gains through April. The monthly estimates, published on a several-month lag, are more accurate but offer only a retrospective look at output. The latest figures show that shale drillers continued to post strong gains through February.

        WTI/RBOB Shrug At Bigger Than Expected Crude Build - Dollar strength sparked WTI/RBOB weakness on the day but a bigger than expected crude build reported by API did nothing for futures which, after an initial drop, popped back to practically unchanged.API

        • Crude +3.427mm (+1.23mm exp)
        • Cushing +725k
        • Gasoline +1.062mm
        • Distillates -4.083mm

        The crude build would be largest since early March (and biggest distillates draw since early March) if EIA data confirms it... WTI/RBOB price action was minimal around the data (RBOB maybe slightly lower)...

        Crude Oil Prices Settle Nearly 2% Lower as Traders Fret US Output Expansion - WTI crude oil prices settled sharply lower as signs of rising US oil production renewed focus on the rapid pace of US output ahead of supply data expected to show U.S. crude stockpiles rose for a second-straight week. On the New York Mercantile Exchange crude futures for June delivery fell 1.93% to settle at $67.25 a barrel, while on London's Intercontinental Exchange, Brent fell 1.90% to trade at $73.27 a barrel. The Energy Information Administration on Wednesday is expected to report crude supplies rose by 0.739 million barrels last week. Expectations for a second-straight weekly build in crude supplies did little to ease fears of ongoing US oil output after the EIA reported Monday U.S. oil production rose to a record 10.264 million barrels a day in February. The weakness in crude prices comes despite the growing prospect of new U.S. sanctions against Iran. Israeli Prime Minister Benjamin Netanyahu presented data on Monday, claiming it was evidence of a secret Iranian nuclear weapon. The data, however, did not contained new information that was unknown to diplomats who had negotiated the landmark Iran nuclear deal in 2015. U.S. President Donald Trump must decide on May 12 whether to restore U.S. sanctions on Iran. If Trump does scrap the deal, it could lead to the re-imposition of secondary sanctions on Iran, pressuring countries to cut their purchases of Iranian crude, denting global supplies, pushing oil prices higher. Goldman Sachs, said, however, that geopolitical risks have had an “only modest role” in the oil price rally, citing “strong” fundamentals and ongoing OPEC cuts as far more important catalysts to curb excess supplies and extend the rally in oil prices. "The oil market deficit is driven by the combination of strong demand growth and remarkably strong OPEC compliance to the cuts, two dynamics that we expect will continue in coming quarters,"Goldman Sachs said in a note to clients. 

        RBOB Extend Losses After Big Surprise Crude, Gasoline Build - WTI/RBOB flatlined after last night's bigger-than-expected crude build from API, but both has slipped lower since Europe opened ahead of the DOE data. Prices extended their losses after DOE confirmed a much bigger-than-expected crude build (+6.22mm vs +1.23mm exp) and surprise gasoline build. DOE:

        • Crude +6.218mm (+1.23mm exp)
        • Cushing +416k
        • Gasoline +1.171mm (-500k exp)
        • Distillates -3.9mm (-1.5mm exp)

        Biggest build in crude since January and a surprise build in gasoline confirmed API's data... Bloomberg Intelligence's Energy Analyst Fernando Valle noted that wide crude price differentials are likely to be pushing refinery utilization higher in the Mid-Continent and Gulf Coast regions, slowing the pace of product-inventory draws. As usual production is a key focus. Bloomberg Intelligence's Senior Energy Analyst Vince Piazza explains that growing strength in Brent prices combined with elevated U.S. crude output is widening the discount for WTI vs. seaborne blends and encouraging domestic production. And sure enough US crude production rose 33k b/d to a new record high...

        Crude Oil Price Wobbles After Huge Addition to Stockpiles - The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Wednesday morning showing that U.S. commercial crude inventories increased by 6.2 million barrels last week, maintaining a total U.S. commercial crude inventory of 436 million barrels. The commercial crude inventory remains in the lower half of the average range for this time of year.Tuesday evening the American Petroleum Institute (API) reported that crude inventories rose by about 3.4 million barrels in the week ending April 27. Gasoline inventories rose by about 1.6 million barrels, and distillate stockpiles decreased by 4.1 million barrels. For the same period, analysts expected crude inventories to increase by about 840,000 barrels and gasoline inventories to drop by 587,000 barrels. Diesel inventories are seen down about 1.3 million barrels.Total gasoline inventories increased by 1.2 million barrels last week, according to the EIA, and remain in the upper half of the five-year average range. U.S. refineries produced over 10  million barrels of gasoline a day last week, up by more than 100,000 barrels compared to the prior week. Total motor gasoline supplied (the agency’s proxy for demand) averaged over 9.3 million barrels a day for the past four weeks, up about 1.2% compared with the same period a year ago.  Before the EIA report, benchmark West Texas Intermediate (WTI) crude for June delivery traded up about 0.1% at around $67.32 a barrel and dipped to around $67.05 (down about 0.3%) shortly after the report’s release. WTI settled at $67.25 on Tuesday and opened at $67.44 Wednesday morning. The 52-week range on June futures is $44.54 to $69.55.

        Oil prices finish higher as IMF move threatens Venezuelan output --After trading on a mixed note for much of Wednesday’s session, oil prices settled decidedly higher, as the International Monetary Fund’s threat to expel Venezuela reignited market concerns over the struggling nation’s crude production.The IMF news broke not long before futures prices settled. Prices had been pressured by a weekly rise in U.S. crude supplies that was more than three times higher than expected, but they had also found support from global inventoFy risks tied to the possibility of the U.S. pulling out of the Iran nuclear agreement.June West Texas Intermediate crude oil climbed by 68 cents, or 1%, to settle at $67.93 a barrel on the New York Mercantile Exchange. Its close at $67.25 Tuesday marked the lowest finish since April 17.International benchmark July Brent tacked on 23 cents, or 0.3%, to $73.36 a barrel on ICE Futures Europe. Tuesday’s settlement at $73.13 was also the lowest in about two weeks. The IMF said it has issued a “declaration of censure” against Venezuela for its failure to implement certain remedial measures and failure to comply with specific obligations. The IMF said it called on Venezuela “to adopt specific remedial measures and will meet again within 6 months to consider Venezuela’s progress in implementation.” “It is another nail in the coffin for the Venezuelan oil industry,”

         Oil up on OPEC output cuts, worries about Iran sanctions (Reuters) - Oil prices rose on Thursday, boosted by OPEC production cuts and the potential for new U.S. sanctions against Iran, but gains were limited by growing U.S. crude inventories.Brent crude futures rose 26 cents to settle at $73.62 a barrel, a 0.35 percent gain. U.S. West Texas Intermediate (WTI) crude rose 50 cents to settle at $68.43 a barrel, a 0.74 percent increase."The price move today is probably based off Iran and the tight oil supply market that we already have," said Rob Thummel, portfolio manager at energy investment manager Tortoise Capital in Leawood, Kansas. "The margin for error right now is just so low in the oil market that you can't just take supply off the market."Iran's foreign minister said U.S. demands to change its 2015 nuclear agreement with world powers were unacceptable as a deadline set by President Donald Trump for Europeans to "fix" the deal loomed.Trump has all but decided to withdraw from the accord by May 12, sources said on Wednesday, though exactly how he will do so remained unclear.Iran re-emerged as a major oil exporter in January 2016 when international sanctions against Tehran were suspended in return for curbs on Iran's nuclear program.Also supporting prices, North Sea oilfields connected to the Brent oil pipeline have stopped production due to a shutdown at the UK's Sullom Voe oil terminal, the Brent pipeline operator said, reducing output of the crude.

        Continental Resources' Harold Hamm credits OPEC for boosting oil prices (Reuters) - U.S. shale oil billionaire Harold Hamm, who once called the Organization of the Petroleum Exporting Countries, a "toothless tiger," here is now crediting the 14-nation group for its steps to boost crude prices. Hamm, founder and chief executive of North Dakota oil producer Continental Resources Inc, acknowledged in a Thursday conference call with investors that OPEC’s actions have drained a global crude glut, leading to prices near $68.50 a barrel, roughly 26 percent higher than when the cuts began. “It has taken since November 2016, when OPEC entered into production cuts along with Russia, to reduce the crude oil overhang in the world to the current level,” Hamm told investors. A joint OPEC and non-OPEC technical panel concluded last month that the 17-month-old plan to cut output by about 1.6 million barrels per day had succeeded in its mission to lower oil inventories in developed nations to a five-year average. Hamm’s change of heart comes ahead of his planned speech to an OPEC meeting next month in Vienna. He appeared to praise OPEC’s strategy on Thursday. “Global crude inventories are slowly being systematically drawn down, which should bode well for stabilized oil prices for some time in the future,” said Hamm, who chairs the Domestic Energy Producers Alliance (DEPA), a U.S. lobbying group. Hamm, who has in the past used OPEC as a foil for the U.S. shale industry and was a vocal supporter of ending the U.S. crude export ban in 2016 here, is benefiting from OPEC's restraint. He has repeatedly urged his U.S. shale peers not to use the crude price rebound to overproduce. Yet last quarter his company’s production jumped 35 percent, the second consecutive quarter of year-over-year production increases.  

        Crude rises on geopolitical jitters; July ICE Brent at $73.82/b, June NYMEX WTI $68.56/b - Crude futures strengthened on Friday morning in Europe on the back of the looming risk of a US withdrawal from the Iranian sanctions deal and other geopolitical risks, while waiting for further signals of growing US production later in the day. At 1040 GMT, July ICE Brent crude futures were up 2 cents at $73.82/b, after rising from negative territory earlier in the morning, while the June NYMEX light sweet crude contract was up 16 cents at $68.56/b. The US dollar was down 0.18% on Wednesday morning, which is typically bullish for oil prices, making the product more affordable for investors who hold other currencies. However, overall the dollar has been in the midst of a sustained rally, reaching its highest level in 2018 to date earlier in the week. Friday marks the end of another unsteady week on crude markets, as fundamental signals battled with geopolitical jitters. "A slew of risk events lie on the horizon," said Stephen Brennock, an analyst at PVM Oil Associates, including the Iranian sanctions deadline in one week's time, and the May 20 elections in Venezuela, which has seen its oil output crash amid political and economic crisis. "The geopolitical landscape will therefore remain tense and price conditions volatile." On Friday, the market was looking ahead to news from the US, including the latest set of the Non Farm Monthly Payrolls data, an indicator of overall economic growth, and its impact on the greenback. Later on Friday, the Baker Hughes rig count data will also be released, which is used as a proxy to track the pace of US crude production. US production, driven by the explosion of shale output, is forecast to surpass 11 million b/d before the end of this year, which would make the US the world's largest crude producer, surpassing both Saudi Arabia and Russia at current rates. However, fundamental signals this week have frequently taken a backseat to speculation over the fate of the 2015 Iranian nuclear deal, which eased economic sanctions in return for curbs on Iran's nuclear program. US President Donald Trump is facing a May 12 deadline to decide whether to withdraw from the deal and reimpose sanctions, imperiling the deal as a whole and restricting the flow of Iranian oil. If the US does decide to withdraw from the deal, as many analysts expect, that would be bullish for oil prices in the long-term, although some expect that if a withdrawal has been baked into current levels for crude, an immediate sell-off could follow. On Thursday, Iranian foreign minister Mohammad Javad Zarif said in a public statement that the deal was not renegotiable.

        All Eyes On Iran As Oil Prices Soar - Oil prices saw a strong rally on Friday as the fate of the Iran nuclear deal, and its possible impact on global oil supply, overshadowed a rising U.S. oil rig count.  The IEA said in a new report that while overall offshore oil production will likely remain flat through 2040, output will shift from shallow water to deepwater. Brazil will stand out as the most attractive place for deepwater development. In a separate scenario that incorporates more sustainability goals, offshore wind thrives while offshore oil production withers.   Pemex is gearing up to develop its first offshore discovery since Mexico’s energy reform more than four years ago. "That is going to be a very big milestone in the energy sector in Mexico," said Carlos Treviño, Pemex’s CEO. He said Pemex was evolving to run more like an international oil company rather than a state-run company. Russia lacks the expertise to develop complicated new projects, which could result in output peaking in 2020 and declining thereafter. "Technological sanctions will have an impact over time," Tatiana Mitrova, a fellow at Columbia University's Center on Global Energy Policy, said at a conference in Washington. "There is no expertise in Russia. Rosneft tried to do it in-house. They're realizing you cannot replace the global oil service industry." That conclusion was echoed by Rystad Energy late last month, which predicted that there was a dearth of new discoveries in Russia and even the discoveries that have been made over the past decade have not been given the greenlight because of cost and complexity. Rystad also predicted Russia’s oil production would erode beyond 2020. Total SA purchased a stake in the Waha oil field from Marathon Oil, a $450 million deal that was closed in March, but Libya’s National Oil Corp. is not handing over Total’s share of crude cargoes from the project, according to Reuters. Libyan officials have some objections about the deal and it appears that the NOC is intervening and withholding cargoes as the dispute lingers.

        Oil Prices Rise Despite Rig Count Gains - US drillers added 11-rigs to the number of oil and gas rigs this week, according to Baker Hughes, adding 9 active oil rigs and 1 active gas rig, with an addition of 1 miscellaneous rig.Meanwhile, neighboring Canada lost 7 rigs for the week, after shedding hundreds rigs (seasonal effects) in the last couple of months. Both the Brent and WTI benchmark were trading up on the day earlier on Friday, supported by the Iran nuclear sanctions issue that is set to come to a head on May 12, and falling production in Venezuela that is expected to continue as the country slips further into disarray.U.S. President Donald Trump has one more to decide the fate of the sanctions against Iran, although it is largely expected that he will refuse to waive the sanctions—a theory that has in itself supported the price of oil this last month, with Brent briefly breaching beyond $75 to its highest price level since November 2014. Prices are expected to be volatile as we move closer to the deadline for the decision.For Venezuela’s part, while production is not expected to reclaim its previous levels, the presidential election in Venezuela scheduled for May 20 is yet another May decision that will impact already volatile prices. West Texas Intermediate was trading up $0.35 (+0.51%) at $68.78 at 11:01pm EST. The Brent benchmark was trading up $0.29 (+0.39%) at $73.91.  US oil production rose again in the week ending April 27, reaching 10.619 million bpd—the increase in as many weeks—less than a 400,000 bpd off the 11.0 million bpd forecast that many predict for 2018. At 8 minutes after the hour, WTI was trading up 2.05% at $69.83, with Brent trading up 1.87% at $74.93.

        Oil hits highest since Nov. 2014 as Iran tensions mount (Reuters) - Oil prices rose about 2 percent on Friday, with U.S. crude hitting its highest in more than three years, as global supplies remained tight and the market awaited news from Washington on possible new U.S. sanctions against Iran. Bob Yawger, director at Mizuho, noted the looming May 12 deadline that U.S. President Donald Trump had set for Europeans to “fix” the deal with Iran over its nuclear programme or he would refuse to extend U.S. sanctions relief for the oil-producing Islamic Republic. “You have the May 12 Iran and Trump headlines that support the market,” he said. U.S. light crude settled up $1.29 at $69.72 a barrel. It touched a session peak of $69.97 for the first time since November 2014. It was on track to gain just over 2.3 percent on the week. Brent crude oil settled up $1.25 at $74.87 a barrel. The global benchmark was set to end the week up 0.3 percent. Iran’s foreign minister said on Thursday that U.S. demands to change its 2015 agreement with world powers were unacceptable. Trump has said European allies must rectify “terrible flaws” in the international accord by May 12. European powers want to hand Trump a plan to save the Iran nuclear deal next week. But they have also started work on protecting EU-Iranian business ties if Trump makes good on his threat to withdraw. Iran resumed its role as a major oil exporter in January 2016 when international sanctions were lifted in return for curbs on Tehran’s nuclear program. Surging production in the Permian shale basin is outpacing pipeline capacity, while local refining issues have exacerbated oversupply. The United States now produces more crude oil than top exporter Saudi Arabia, and two weeks of U.S. inventory builds have limited the oil market’s upside. U.S. energy companies added oil rigs for a fifth straight week, with higher crude prices boosting profits and pushing nationwide production to record highs 

        Saudi Arabia wants higher prices to kick oil addiction: Kemp (Reuters) - Saudi Arabia’s financial position has stabilised as a result of the increase in oil prices as well as efforts to raise non-oil revenues and trim government spending. But the country probably needs even higher prices and revenues in the next few years to pay for its ambitious transformation programme while maintaining internal stability.The government wants to shift the focus of the economy towards the non-oil private sector, but the transition will require enormous investment, even assuming it is eventually possible. Economic transformation will need hundreds of billions of dollars, and financing can come only from the kingdom’s internal resources, or in the form of foreign loans, equity sales or direct investment. The crown prince’s recent extended tour of the United States and Europe was intended partly as a roadshow to encourage foreign investment and partly to cement government-to-government alliances. But foreign investment on its own is unlikely to be enough, given the scale of the task and lingering concerns about the kingdom’s political direction and business environment. So the country will need to find hundreds of billions of dollars from its own resources to complete the transformation programme and smooth the difficult transition. Official foreign assets amount to almost $500 billion and there are more held in various other government funds. But the kingdom needs to maintain a large cushion of liquid assets to ensure confidence in its fixed exchange rate against the dollar. Asset confiscations from wealthy Saudis and the nationalisation of domestic companies could raise extra funding but risk damaging investor confidence, so the potential for such measures is limited. As a result, the kingdom badly needs to maximise oil revenues now to pay for the transition to a less oil-dependent economy in future.

        Slumping economy overhangs Saudi reforms as officials, businessmen meet (Reuters) - A slump in Saudi Arabia’s economy cast a shadow over ambitious plans for reform this week as top officials met businessmen to discuss freeing the kingdom from its dependence on oil exports. At a conference with hundreds of foreign and local bankers and potential investors, ministers said privatizations and partnerships between the government and private companies to build infrastructure projects would begin within months. They pointed to major successes since Crown Prince Mohammed bin Salman launched the reform program in April 2016. A huge state budget deficit, which threatened the stability of the currency, is shrinking. Foreign portfolio funds are pouring into the country after a revamp of the stock market. But data released during the conference showed the private sector, which the reform program assumes will create hundreds of thousands of jobs and play a much bigger role in the economy in the next decade, is struggling. A monthly survey of companies’ purchasing managers, published on Thursday, found growth in private business activity slowed in April to its lowest since the survey started in August 2009. New orders shrank for the first time in the survey’s history, suggesting there is little new business on the way. Bank lending to the private sector shrank from a year earlier in March for the 13th straight month, according to central bank data released on Monday; banks are awash in funds, but private firms see little point in borrowing to invest. Car sales shrank an estimated 24 percent in 2017. The main problem, businessmen say, is part of the reform program itself: austerity measures designed to cut the budget deficit, including 5 percent value-added tax imposed in January, higher domestic fuel prices, and rising fees which companies must pay to hire foreign workers. 

        Saudi Arabia Needs Much Higher Oil Prices -- Saudi Arabia needs oil to trade at US$85 a barrel to fill its budget gap, IMF’s head for the Middle East and Asia said today.“The improvement in the overall economic conditions with growth recovering this year - it is expected to be at 1.8 percent - will help them to maintain the pace of fiscal adjustment and at the same time will allow the economy to grow again,” Jihad Azour said, as quoted by Reuters.The Kingdom presently plans to have a balanced budget by 2023, but this will only happen if oil prices are high enough, it seems. For this year, Saudi Arabia has stipulated a budget deficit of around US$52 billion, which represents 7.3 percent of GDP.The bad news is that the oil price that the Kingdom needs to make ends meet is rising. Last year, Azour said, it was US$83 a barrel. This year, it will be between US$85 and US$87 a barrel. The silver lining, according to some analysts, is that the discrepancy between breakeven and actual oil price will stimulate the government to persist with its reform efforts.“I think the fact that we are currently witnessing a recovery globally and in the region, and the fact that the oil price is going up, shouldn’t at any point in time be considered as a way for them to relax efforts and to be complacent,” the IMF official said. Meanwhile, Saudi Arabia’s Finance Minister told CNBC that oil prices will not have any impact on the pace of reforms the Kingdom has undertaken, even though he acknowledged the price improvement over the last two years has helped the Kingdom reduce its deficit by as much as 40 percent.

        Saudi Arabia Needs $88 Oil - Higher oil prices have provided a boost to the economies of oil-exporting nations such as Saudi Arabia. But the economic risks going forward are “skewed to the downside,” the International Monetary Fund said in a new report, in which it urged Saudi Arabia and other oil exporters to press on with reforms.  Oil price volatility, trade tensions, geopolitical risk and a “sharp tightening of global financial conditions” are just a few of the potential pitfalls that lie ahead.  But the IMF paid extra attention to the debt levels of some oil producers. “The tightening of global financial conditions, if interest rates will continue to go up and liquidity will be less available, this will affect countries with a high level of debt — mainly oil importing countries where the average debt exceeds 80 percent (of gross domestic product)," Jihad Azour, director of the Middle East and Central Asia Department at the International Monetary Fund, told CNBC on Monday. The IMF said that Saudi Arabia needs to continue “structural reforms,” largely referring to the Vision 2030 plan spearheaded by crown prince Mohammed bin Salman. New taxes, deficit reduction, labor market reforms and investments in non-oil sectors of the economy are crucial. While the economies of oil exporters have improved as oil prices have jumped to a three-year high, economic growth “is projected to remain well below its pre-2014 oil shock levels,” the IMF said. High levels of debt will act as a drag on the economy, limiting the extent to which governments can spend to improve short-term demand. And for Saudi Arabia, oil prices are still too low to fully balance the books. The IMF claims that the Kingdom needs about $88 per barrel to balance its budget, up sharply from $70 per barrel last year. The sudden jump in the fiscal breakeven price is the result of an increase in spending expectations.

        Audit Puts Aramco's Oil Reserves At 270 Billion Barrels - An international independent audit of the oil reserves of Saudi Aramco has more than confirmed the official figures released by Riyadh for three decades, putting the number at 270 billion barrels, two unnamed sources close to the company told Reuters. The audit was conducted by companies including DeGolyer and MacNaughton, and Baker Hughes’ Gaffney, Cline, and Associates. It is being watched closely because the reserve base of the company will have a direct bearing on its valuation ahead of the much-hyped initial public offering.The figure may come as something of a surprise because for thirty years, Aramco has been reporting unchanged reserves of about 261 billion barrels despite active production. Yet barrels are not the only factor considered in an oil company’s valuation as Bloomberg Gadfly’s Liam Denning noted in an analysis earlier this year, even though they are an important indicator of the company’s long-term viability and profitability.Also Bloomberg this month took a look at Aramco’s accounts, reporting that the company booked a net profit of US$34 billion for the first half of 2017. The significance of the figures was naturally questioned by skeptic analysts aware that balance sheets can be adjusted to present the information about a company’s performance in the most favorable way.Bloomberg itself made a note of pointing out that despite Aramco’s negligible debt levels and super-low production costs, the company is Saudi Arabia’s cash cow: cash flow is not great because such a large part of the Saudi economy and society literally depend on Aramco.  Interestingly enough, Aramco said the numbers were inaccurate, adding that they were mere speculation. The company is also understandably sensitive to oil prices, which is why Saudi officials have been pushing so vehemently for higher oil prices ahead of the IPO.

        Green Berets Are Now On The Ground Assisting The Saudi War On Yemen In "A Marked Escalation" - Once again a creeping, years' long shadow war is expanding from indirect proxy intervention to direct engagement, complete with US "boots on the ground" where no American ground forces were previously thought to exist. And it's not Syria, or Libya, or central Africa where the now familiar pattern played out before, but in the Arabian peninsula where the Pentagon has long claimed to merely coordinate intelligence, refuel jets, and provide logistical support to the Saudis which have been bombing Yemen since March of 2015. On Thursday The New York Times revealed for the first time that US special forces have been on the ground supporting Saudi coalition forces since late last year:But late last year, a team of about a dozen Green Berets arrived on Saudi Arabia’s border with Yemen, in a continuing escalation of America’s secret wars.With virtually no public discussion or debate, the Army commandos are helping locate and destroy caches of ballistic missiles and launch sites that Houthi rebels in Yemen are using to attack Riyadh and other Saudi cities.Details of the Green Beret operation, which has not been previously disclosed, were provided to The New York Times by United States officials and European diplomats.According to the report, the elite Army operators were sent to assist the Saudis starting in December, weeks after ballistic missiles fired by Yemeni Houthi rebels came close to directly hitting Riyadh's international airport, though the Saudis claimed to have intercepted it - a claim which was subsequently cast into doubt by weapons experts.At that point, a worried Crown Prince Mohammed bin Salman reportedly renewed calls for the the United States to send ground troops in order to bolster Saudi-led operations aimed at rooting out the source of the sophisticated Yemeni missile attacks, which have occurred on multiple occasions over the past year of fighting.

        Iran's Oil Exporters Have Record Month Before Possible Sanctions-- Iran’s crude exporters had a banner April, with shipments soaring to a record right before the possible re-imposition of U.S. sanctions on their oil sales. Crude exports by OPEC’s third-biggest producer totaled 2.61 million barrels a day, according to the Iranian Oil Ministry’s Shana news service. That beat the previous high of 2.44 million barrels a day in October 2016, it said. U.S. President Donald Trump will decide by May 12 whether to keep America in an international agreement that restricts Iran’s nuclear activities in exchange for relief from sanctions and a restriction on oil sales. Since sanctions were eased as of January 2016, Iran’s crude production has almost doubled. China and India together took 1.4 million barrels a day from Iran in April, according to Shana. Some oil traders are already unwilling to sign contracts for Iranian crude and refined products that would be valid after May 12, according to recent interviews with six companies that buy and sell oil in the Middle East. Iran’s crude and condensate exports in April were 2.87 million barrels a day, Shana reported. Observed shipments of both rose to 2.83 million barrels a day from 2.48 million barrels in March, according to ship-tracking data compiled by Bloomberg. Crude volume alone rose to 2.48 million barrels from 2.06 million, the data show.

        Iran Works to Keep Europe On Board Amid Uncertainty Over Nuclear Deal -- Iran is trying to keep Europe on its side as questions mount about the future of its nuclear deal with Western powers and suspected Israeli airstrikes on its bases in Syria. Short of military options and economically distressed at home, Iran appears to be calibrating its response to escalating diplomatic and military pressure from the U.S. and its allies Israel and Saudi Arabia. Tehran’s goal is to blunt the Trump administration’s ability to reimpose sanctions, retain its influence in Syria and avoid a wider regional war, some analysts said. President Donald Trump has set a May 12 deadline to decide whether to scrap the deal, which lifted most sanctions on Iran in exchange for curbs on its nuclear program. Mr. Trump, Israel and, increasingly, European leaders have expressed alarm about Iran’s ballistic-missile program and its influence in conflicts in Syria and Yemen, which aren’t covered by the deal. In the event the U.S. moves to reimpose financial restrictions on Iran, Tehran is working “to divide the EU and U.S. in order to ensure the U.S. sanctions are ineffective,” said Stratfor, the U.S. geopolitical security firm. Iranian President Hassan Rouhani spent an hour on the phone with French President Emmanuel Macron on Sunday, calling the nuclear deal nonnegotiable, Iranian state media reported. He added that Iran was “ready for dialogue” on regional stability. 

        Netanyahu Accuses Iran Of Developing Secret Project To "Test And Build Nuclear Weapons" - Oil is soaring to $69.34/bbl, the highest price since 2014, after Israeli Prime Minister Benjamin Netanyahu accused Iran of secretly developing and building nuclear weapons. In a global televised address, Netanyahu unveiled a cache of 55,000 pages of documents and 183 CDs, comprising Iran's alleged "atomic archive" of documents on its nuclear program; the files allegedly prove Tehran ran a secret program, called Project Amad, to "test and build nuclear weapons." While Iranian leaders have long said their nuclear program is only for peaceful purposes, Netanyahu claimed this was not the case according to tens of thousands of pages of documents, which he said were copied from a "highly secret location" in Iran. Those files detail Project Amad, which Netanyahu described as "a comprehensive program to design, build and test nuclear weapons." “These files conclusively prove that Iran is brazenly lying when it says it never had a nuclear weapons program,” Netanyahu said. “The files prove that.” He says the US has vouched for the authenticity of the secret archive obtained by Israel, and that it would make the documents available to the UN atomic agency and other countries. According to Netanyahu, the files provided "new and conclusive proof of the secret nuclear weapons program that Iran has been hiding for years from the international community in its secret atomic archive." Netanyahu concluded by saying "Iran lied about never having a secret nuclear program. Secondly, even after the deal, it continued to expand its nuclear program for future use. Thirdly, Iran lied by not coming clean to the IAEA," he said, adding that, "the nuclear deal is based on lies based on Iranian deception." Watch a recording to Netanyahu's speech below:

         Iran Blasts "Child Killer" Netanyahu After Nuclear Program Accusations - In a predictably furious response to a presentation delivered Monday by Israeli Prime Minister Benjamin Netanyahu, Iran's Foreign Ministry denounced allegations that the Islamic Republic had been carrying on its nuclear program in secret, calling Netanyahu "an infamous liar" and accusing him of being the head of a "child-killing Zionist regime," according to a statement published in English on Iran's Ministry of Foreign Affairs website.  The statement was attributed to Foreign Ministry Spokesman Bahram Qassemi.Iran’s Foreign Ministry Spokesman Bahram Qassemi has lashed out at Israeli Prime Minister’s Monday speech against Iran, calling Netanyahu’s move a propagandistic one and one of his most recent theatrical presentations on Iran’s "secret" nuclear program.In a Tuesday statement, Qassemi described Netanyahu’s claims as worn-out, useless and shameful. He added that such remarks are futile efforts by a "broke and infamous liar who has had nothing to offer except lies and deceits."He further noted that Zionist leaders see the survival of their "illegal regime", which is established based on lies, in viewing others as a threat using battered charlatanism of the ignorance age and unawareness of the world’s public opinion.Qassemi also stressed that the futility and uselessness of such claims is now obvious more than ever."Netanyahu and the notorious, child-killing Zionist regime must have reached the basic understanding that the people of the world have enough awareness and cognisance," he added.

        Mossad's stunning op in Iran overshadows the actual intelligence it stole -  While revealing a truly impressive intelligence coup by the Mossad, Prime Minister Benjamin Netanyahu on Monday night did not present evidence that Iran had violated the 2015 nuclear deal, nor did the material shed dramatically new light on the Islamic Republic’s pre-agreement atomic program.  Indeed, as Netanyahu noted, Iranian officials lie when they say their country never planned to manufacture nuclear weapons and put them on ballistic missiles. They did, and probably still do.  But the information proving their deception, while perhaps not widely known, was well-documented and made publicly available in its entirety — not by Israel, but by the International Atomic Energy Agency watchdog — back in 2011. The details about Iran’s AMAD nuclear weapons program, the identity of project leader Mohsen Fakhrizadeh, Tehran’s plans to put a nuclear warhead on a Shahab-3 ballistic missile, the suspicion that efforts to create an atomic bomb continued after AMAD was formally shuttered in 2003 — all “revealed” by Netanyahu on Monday night — can be found in the heavily footnoted IAEA report from nearly seven years ago. The main difference, perhaps, is that the IAEA’s 25-page, abbreviation-filled document lacks the panache of Netanyahu’s exhibition.

        Israeli forces kill four Palestinians, wound 955 at Gaza protest -- Israeli soldiers shot dead three Palestinian demonstrators and wounded more than 950 at the Gaza border, despite the UN human rights chief urging Israel to stop using excessive force against Palestinian protesters. A fourth victim, a 15-year old boy named Azzam Hillal, died of his wounds on Saturday. He was shot in the head by Israeli military during Friday's protest.   Among the wounded, 178 were shot with live ammunition on Friday while others sustained injuries from rubber-coated steel rounds, or required treatment for tear gas exposure.  Thousands gathered in the besieged Gaza Strip for the fifth-straight Friday as part of a mass sit-in known as the Great March of Return movement. Palestinians have been demanding the right to return to their homes seized by Israel in 1948.  The protests raised the total death toll to at least 45 Palestinian demonstrators, with more than 6,000 wounded since the mass movement began on March 30. There have been no Israeli casualties.

        Blasted Limbs, Broken Dreams - WaPo - Mohammad al-Ajouri is a lanky teenager who loves to run, a medal-winning track star with ambitions to compete abroad. But last month, while participating in a protest along Gaza’s border, he was struck by a bullet fired by an Israeli soldier. It penetrated his calf, shattering his leg before exiting the shin. Doctors tried to save the limb, but an infection soon spread. The leg had to be amputated. Palestinian cyclist Alaa al-Daly, 21, rests at his home in Rafah in the southern Gaza Strip on April 19. Daly’s dream of competing in the Asian Games was shattered after he lost his leg, struck by a bullet fired by an Israeli soldier during a protest along the Gaza border. During the past month of demonstrations along the border between Gaza and Israel, at least 17 Palestinians have suffered gunshot wounds that ultimately cost them their legs, according to the Palestinian Health Ministry in Gaza. In at least three of the cases, Israeli authorities rejected the transfer of wounded Gazans to the West Bank, where they could receive medical care that might have saved their limbs, according to lawyers and one of the patients’ families. Since the protests began, Israeli troops have killed 43 Palestinians and wounded more than 3,500 with live ammunition, rubber bullets or shrapnel, the Health Ministry said. Of those, about 2,200 have suffered injuries to the legs. Israeli officials say the protests along the border fence are violent and provide cover for militant attacks. Israeli media report that troops have been ordered to initially fire warning shots at demonstrators, after which they should target protesters’ legs. 

        Christians in Jerusalem’s Old City ‘under threat’ from settlers - Christians in Jerusalem’s Old City say their presence at the geographical heart of their faith is under threat from intimidation and aggressive property acquisition by hardline Jewish settlers. According to church leaders, priests are being verbally abused and spat at, and property vandalised. Tensions have risen this year in the Christian and Armenian quarters of the 1 sq km ancient walled city, which includes the Church of the Holy Sepulchre, the holiest place in Christianity where Jesus was believed to be crucified and resurrected. The Old City is also home to places of critical religious importance to Jews and Muslims. The churches say they are facing onslaught on three fronts: a war of attrition waged by hardline settlers; unprecedented tax demands by Jerusalem city council; and a proposal to allow the expropriation of church land sold to private developers. Theophilos III, the Greek Orthodox patriarch of Jerusalem and the most senior Christian leader in the Holy Land, told the Guardian: “Today the church faces a most severe threat at the hands of certain settler groups. The settlers are persistent in their attempts to erode the presence of the Christian community in Jerusalem. “These radical settler groups are highly organised. Over the last years we have witnessed the desecration and vandalism of an unprecedented number of churches and holy sites and receive growing numbers of reports from priests and local worshippers who have been assaulted and attacked. “Where the authorities are concerned, this behaviour goes largely unchecked and unpunished.” 

        PM authorized to declare war in ‘extreme’ situations without consulting cabinet - In a surprise and potentially far-reaching victory for Benjamin Netanyahu, the Knesset on Monday evening gave the prime minister the authority to declare war or order a major military operation by consulting only the defense minister, and not via a full cabinet vote as the law had previously required.   Sixty-two Knesset members voted the dramatic proposal into law, beating out the 41 opposition MKs who opposed it claiming that the language of the law effectively gives free reign to the prime minister by removing all oversight. According to the new law, in “extreme circumstances,” military operations can be authorized by the prime minister and defense minister alone and will not need a vote by cabinet ministers. The law does not specify exactly what those circumstances may be, or who will determine them, saying only that the case will apply, “if the issue is necessary due to urgency.”

        War Propaganda Firm Bellingcat Continues Lying About Syria -In December of 2016, the war propaganda firm Bellingcat ran an article assuring its readers that Twitter star Bana Alabed is a perfectly legitimate little Syrian girl and not at all a psyop designed to manufacture support for military interventionism against Bashar al-Assad. In April of 2017, CNN's "New Day" staged a fake, scripted interview featuring the child condemning Assad and pleading for the world to intervene in Syria. CNN passed it off to its unsuspecting audience as a real interview, and later used the footage against congressman Thomas Massie for his opposition to Syrian interventionism. Bellingcat churns out such tripe constantly, and there's a new article published yesterday that has all the usual warmongers salivating with particular enthusiasm."Another painstakingly detailed report by @bellingcat, documenting the similarities between the Douma chemical attack and previous chemical attacks executed by the Syrian regime," raved Shareblue's Caroline Orr about Bellingcat founder Eliot Higgins' latest masterpiece titled "All the Pieces Matter – Syria’s Chlorine Bombs and the Douma Chemical Attack".  Want to know why Assad apologists hate @bellingcat? This is why," Orr added.

         Palestinians should ‘shut up’ or make peace, Saudi crown prince told Jewish leaders - The crown prince of Saudi Arabia reportedly harshly criticized Palestinian leadership during a meeting with American Jewish organizations in New York last month, slamming Palestinian Authority President Mahmoud Abbas for rejecting peace offers. “In the last several decades the Palestinian leadership has missed one opportunity after the other and rejected all the peace proposals it was given,” Crown Prince Mohammed Bin Salman told the Jewish organizations, Barak Ravid of Israel’s Channel 10 reported Sunday for Axios. “It is about time the Palestinians take the proposals and agree to come to the negotiations table or shut up and stop complaining.”   “People literally fell off their chairs,” said a source who was briefed on the meeting. The prince, known as MBS, also reportedly said that the Palestinian issue was not a priority for the Saudi government, which “has much more urgent and important issues to deal with” like Iran.   But MBS also reportedly said that Israel and the Palestinians would have to make progress in peace negotiations before Saudi Arabia and other Gulf countries could normalize relations with the Jewish state.   Among the groups present at the March 27th meeting were AIPAC, the American Jewish Committee, the Anti-Defamation League, the Jewish Federations of North America, B’nai B’rith, and the Conference of Presidents of Major American Jewish Organizations, The Jerusalem Post reported.

        US Bombers Fly Over South China Sea Amid Escalating Tensions Between Taiwan And Beijing - Trade tensions between the US and China appear to have abated - at least for now - as Treasury Secretary Steven Mnuchin and top Trump economic advisor Larry Kudlow prepare to head to Beijing to kickstar long-awaited "trade talks" with senior Chinese officials.But while fears of a global trade war led by the world's two largest economies have faded into the background, the military tensions in the South China Sea - which have been ignored by the markets for years - continue to escalate, per CNN. Case in point: The US military has revealed that two US Air Force B-52 Stratofortress bombers flew a training mission over the South China Sea on Tuesday, eliciting a defiant response in the Global Times, one of the Communist Party's most widely read mouthpieces, per the South China Morning Post and Reuters. The widely-read Chinese state-run tabloid the Global Times said in an editorial on Friday that if the US bombers were meant to send a message to Beijing about Taiwan it would not work."The US cannot prevent the mainland exerting military pressure on Taiwan," it said. The bombers took off from Andersen Air Force Base on the island of Guam, according to a statement from US Pacific Air Forces. The exercises also involved US F-15 Strike Eagle jets traveling near Okinawa. The mission was part of the US' "continuous bomber presence" in the region.

        Taiwan Livid After China Secretly Installs Cruise Missiles On Contested Spratly Islands - Tensions continue to flare up in the South China Sea, as Beijing has reportedly installed anti-ship cruise missiles and surface-to-air missile systems on three outposts in the region, as reported by CNBC on Wednesday, which cited sources with direct knowledge of U.S. intelligence reports. The missiles have reportedly been installed on Fiery Cross Reef, Subi Reef and Mischief Reef.The land-based anti-ship cruise missiles, designated as YJ-12B, allow China to strike surface vessels within 295 nautical miles of the reefs. Meanwhile, the long-range surface-to-air missiles designated as HQ-9B, have an expected range of targeting aircraft, drones and cruise missiles within 160 nautical miles. –CNBC As we've documented again and again (and again and again), China's military buildup in the Pacific, particularly surrounding the Spratly Islands, a collection of small islands, cays and atolls in the South China Sea, is one of the greatest long-term risks to peace and stability in the US and many of China's neighbors, who have territorial claims in the region that may conflict with China's. If confirmed, the installations would mark the first Chinese missile deployments in the Spratly Islands - a territory with claims by several Asian countries, including Taiwan and Vietnam. Chinese foreign ministry spokeswoman Hya Chunying says that the missiles are required to protect China's sovereignty.

        Taiwan "Won't Bow Down To China Pressure"; Plans To Purchase 108 US Abrams Tanks - Taiwan "will not bow down to pressure from Beijing" Foreign Minister Joseph Wu says, but "will work with friendly nations to uphold regional peace and stability and ensure our rightful place in the international community." His exclamation came after news that the Dominican Republic had broken ties with Taipei and established formal relations with Beijing, expressing "deep regret" that the Dominican Republic had "set aside 77 years of partnership" in order "to accept deceptive promises of investment and aid from China."Taiwan's presidential office also issued a statement criticizing the Chinese government for "exacerbating tension in the Taiwan Strait" just as international society was w orking to promote reconciliation and dialogue, "including in the Korean Peninsula." Which prompted questioning by a panel of legislators on Monday, with Tsai Shih-Ying of the ruling Democratic Progressive Party, asking the National Defence Minister Yen Teh-fa for details surrounding Taiwan’s military program to procure a new modern main battle tank.Yen told Tsai that Taiwan’s military would soon make a bid to purchase M1A2 tanks, an American third-generation main battle tank — the most modern armored tank in the world, from the Pentagon in the second half of 2018.Yen also stated that the American tanks could help transfer technology to the island’s defense industry, Taiwan’s Central News Agency reported, as quoted by South China Morning Post.

        China 'deploys missiles' in South China Sea, US, Australia warn of consequences - ABC News - Foreign Minister Julie Bishop has warned Beijing against militarising the South China Sea following reports that China has installed missile systems in the Spratly Islands for the first time. US news network CNBC reported on Thursday that China had installed anti-ship cruise missiles and surface-to-air missile systems on three outposts in the South China Sea, citing sources with direct knowledge of US intelligence. Ms Bishop would not say if the Australian Government had intelligence confirming that — but said if the reports were accurate, then the Government would be worried. "If the media reports are accurate then the Australian Government would be concerned because this would be contrary to China's stated aspiration that it would not militarise these features," Ms Bishop said. "China of course has a unique responsibility as a permanent member of the Security Council to uphold peace and security around the world. "And any action to militarise features in the South China Sea would go against that responsibility and that role." The United States has also warned China that militarising the sea will have consequences. 

        China Accused Of Using High-Powered Lasers To Harass US Fighter Jets Over Djibouti - Less than a year after China deployed troops to its first overseas base in Djibouti, near the Horn of Africa, located next to the key oil transit chokepoint, the Bab el-Mandeb strait, the US military has warned fighter jet pilots to beware of laser attacks near China’s military base amid what the SCMP said were "increasing signs of friction between the two armed forces in the Horn of Africa."According to the WSJ, the Pentagon issued a Notice to Airmen, later reproduced on the US Federal Aviation Administration’s website, that there had been multiple events “involving a high-power laser” just 750 metres (2,400ft) from China’s base in Djibouti. “Use extreme caution when transiting near this area,” the notice cautioned.Quoted by the WSJ, Maj. Sheryll Klinkel, a Pentagon spokeswoman, said "the U.S. has notified airmen to exercise caution when flying in certain areas in Djibouti" adding "this notice was issued due to lasers being directed at U.S. aircraft on a small number of separate occasions over the last few weeks."“Lasers pointed at aircraft have the potential to cause serious harm to the aircrew and the surrounding area,” she said.According to a report in Jane’s Defence Weekly last month, multiple intelligence sources reported the Chinese garrison in Djibouti is suspected of operating a high-power laser weapon to temporarily blind pilots at the base or on a ship offshore. However, according to SCMP, Chinese military observers said the lasers might have been used to scare off birds near the airfield or disrupt possible spy drones, rather than targeting foreign US pilots.  They also pointed out that China is a signatory to the Protocol on Blinding Laser Weapons, which bans the use of lasers that cause permanent blindness. Which, of course, would never stop China from attempting precisely that.

        French president calls for new Indo-Pacific “axis” against China -- Increasingly besieged at home by working class struggles against his draconian labour laws, French President Emmanuel Macron travelled to the other side of the world this week for a six-day visit to Australia and the nearby French outpost of New Caledonia.While Macron is undoubtedly seeking to use the trip to shore up his position domestically, it has taken to a new level moves by France and other European imperialist powers to assert their interests in the Indo-Pacific region under conditions of rising Chinese influence and waning US hegemony.For now, Macron and other European leaders are maneouvring in the context of a continuing drive by Washington to confront China and, if necessary, go to war against Beijing, to maintain the post-World War II dominance of the US. However, Macron’s trip underscored the efforts being made to bolster European geo-strategic interests independently of the US, and potentially against it.Paris regards Australia as a useful platform for this push, as well as the five tiny territories where France has about 1.5 million citizens and 8,000 military personnel spread across the region—the Indian Ocean islands of Mayotte and Reunion, and the Pacific Ocean islands of New Caledonia, Wallis and Futuna and French Polynesia.In a speech at an Australian naval base in Sydney on Wednesday, on the first leg of his trip, Macron called for a strategic alliance of France, India and Australia to respond to “challenges” across the region.“This new Paris-Delhi-Canberra axis is absolutely key for the region and our joint objectives,” Macron said. “We’re not naive: if we want to be seen and respected by China as an equal partner, we must organise ourselves.”

        Australia’s Largest Bank Lost The Personal Financial Histories Of 12 Million Customers  --The Commonwealth Bank lost the personal financial histories of 12 million customers, and chose not to reveal the breach to consumers, in one of the largest financial services privacy breaches ever to occur in Australia.  BuzzFeed News can reveal that the nation’s largest bank lost the banking statements for customers from 2004 to 2014 after a subcontractor lost several tape drives containing the financial information in 2016.While the bank initially notified the Office of the Australian Information Commissioner (OAIC) of the breach shortly after it became aware of it in 2016, a spokesperson for the OAIC told BuzzFeed News it was now making further inquiries into the privacy breach, following a damning report into the bank's culture released on Tuesday.Angus Sullivan, Commonwealth Bank’s acting group executive of retail banking services told BuzzFeed News in a statement: “We take the protection of customer data very seriously and incidents like this are not acceptable. We want to assure our customers that no action is required and we apologise for any concern the incident may cause."“We undertook a thorough forensic investigation, providing further updates to our regulators after its completion. We also put in place heightened monitoring of customer accounts to ensure no data compromise had occurred."Personal banking statements contain potentially sensitive personal information, and can paint a detailed portrait of the financial and personal affairs of a person. They could potentially be misused by organised crime groups if they fell into the wrong hands, or exploited by commercial companies that could use the data for illegitimate or unethical purposes. Sullivan told BuzzFeed News in his statement the information disclosed in the breach did not contain anything that could directly compromise accounts, such as passwords or PIN numbers. BuzzFeed News has learned the breach occurred in 2016 when the bank’s subcontractor Fuji Xerox was decommissioning a data storage centre where some Commonwealth Bank customer data was stored. Backup magnetic tape drives of financial statements were believed to have been sent to be destroyed.

        Made in China 2025: Beijing’s manufacturing blueprint and why the world is concerned - As the trade tensions between the US and China roll on, one particular Chinese policy is appearing in news reports more frequently. Made in China 2025 is a 10-year industrial development plan, but businesses and governments around the world are concerned it will have a dramatic effect on global trade.Chinese state media has even accused the United States of trying to provoke a trade war in order to undermine the policy.Ambitious, long-term policy documents don't always attract this much attention, so let's have a look at why this one is different.Announced in October 2015, the Made in China 2025 plan is a roadmap for the future of the country's manufacturing sector. It intends to turn China into a manufacturing super power, and Beijing is keen to pour somewhere in the order of $US300 billion into that lofty goal.The plan looks to target emerging industries like robotics, the manufacturing of autonomous and electric cars, artificial intelligence, biotech and aviation.Those industries will be subsidised, handed low-interest loans, rent-free land and tax breaks in order to beat global competitors in the field.   China hoped to turn itself into a high-end manufacturer with global trade links. "The focus is to help China move from being dependent on international companies and providing low-cost labour to actually becoming an independent and technology-driven economy." According to the Council on Foreign Relations (CFR), this would be a nightmare for countries like South Korea and Germany, since hi-tech exports are so central to their economies. There's also the question of how China plans to gain the know-how required to make those hi-tech components.

        Michael Hudson: “Creating Wealth” Through Debt: The West’s Finance-Capitalist Road -- Marx’s Capital describes how debt grows exponentially, burdening the economy with carrying charges. This overhead is subjecting today’s Western finance-capitalist economies to austerity, shrinking living standards and capital investment while increasing their cost of living and doing business. That is the main reason why they are losing their export markets and becoming de-industrialized. What policies are best suited for China to avoid this neo-rentierdisease while raising living standards in a fair and efficient low-cost economy? The most pressing policy challenge is to keep down the cost of housing. Rising housing prices mean larger and larger debts extracting interest out of the economy. The strongest way to prevent this is to tax away the rise in land prices, collecting the rental value for the government instead of letting it be pledged to the banks as mortgage interest. The same logic applies to public collection of natural resource and monopoly rents. Failure to tax them away will enable banks to create debt against these rents, building financial and other rentier charges into the pricing of basic needs. U.S. and European business schools are part of the problem, not part of the solution. They teach the tactics of asset stripping and how to replace industrial engineering with financial engineering, as if financialization creates wealth faster than the debt burden. Having rapidly pulled ahead over the past three decades, China must remain free of rentier ideology that imagines wealth to be created by debt-leveraged inflation of real-estate and financial asset prices.

        ‘Forget the Facebook leak’: China is mining data directly from workers’ brains on an industrial scale | South China Morning Post: On the surface, the production lines at Hangzhou Zhongheng Electric look like any other. Workers outfitted in uniforms staff lines producing sophisticated equipment for telecommunication and other industrial sectors. But there’s one big difference – the workers wear caps to monitor their brainwaves, data that management then uses to adjust the pace of production and redesign workflows, according to the company. The company said it could increase the overall efficiency of the workers by manipulating the frequency and length of break times to reduce mental stress. Hangzhou Zhongheng Electric is just one example of the large-scale application of brain surveillance devices to monitor people’s emotions and other mental activities in the workplace, according to scientists and companies involved in the government-backed projects. Concealed in regular safety helmets or uniform hats, these lightweight, wireless sensors constantly monitor the wearer’s brainwaves and stream the data to computers that use artificial intelligence algorithms to detect emotional spikes such as depression, anxiety or rage.The technology is in widespread use around the world but China has applied it on an unprecedented scale in factories, public transport, state-owned companies and the military to increase the competitiveness of its manufacturing industry and to maintain social stability. 

        Seven Chinese students stabbed to death in attack after school (Reuters) - A 28-year-old man who harboured a hatred of children having been bullied at school stabbed to death seven Chinese middle school students who were on their way home from classes on Friday, state television reported. The attack happened in Mizhi county in the northwestern province of Shaanxi, the brief report said, adding 12 students were injured. The suspect is also from Mizhi and wanted to exact payback for the bullying he had suffered at school, using a dagger in his attack, state television said, adding he had been taken into custody. The Shaanxi City Express newspaper showed pictures on its microblog of children on the ground covered in blood, and the suspect being lead away by police. Violent crime is rare in China compared with many other countries, especially in major cities where security is tight, but there has been a series of knife and axe attacks in recent years, many targeting children. In February, a woman was killed and 12 people injured when a man carried out a knife attack in a mall in a busy shopping district in the capital, Beijing. Such attacks are often blamed on people with mental illness or who have personal grievances. Knives are most commonly used because gun controls are extremely strict in China. 

        China Sends Foreign Minister to Pyongyang - WSJ —China’s sending its foreign minister to North Korea as Beijing seeks to avoid being sidelined by its neighbor’s top-level negotiations with Seoul and Washington. Chinese Foreign Minister Wang Yi is scheduled to visit North Korea on Wednesday and Thursday at the invitation of his North Korean counterpart, Ri Yong Ho, the Chinese Foreign Ministry said Monday in brief statement. Though no agenda was released, Mr. Wang’s visit comes on the heels of Friday’s summit between the leaders of North and South Korea, where the two sides agreed to seek a peace treaty to end the Korean War. On Sunday, the South Korean presidential office said that the North’s Kim Jong Un had committed to closing its nuclear test site next month. With planning under way for a summit between Mr. Kim and U.S. President Donald Trump in coming weeks, analysts said Beijing is anxious to gain insight into those negotiations and secure a Chinese role in any multilateral talks that might follow. “One very important thing for China is to know what happens, as it happens, before it happens. China needs to feel it knows what is going on,” said James Reilly, an associate professor of international relations at the University of Sydney. He pointed to China’s and North Korea’s strained relations of recent years, saying “trust has been damaged and this is the process of rebuilding it and opening communication.” China is North Korea’s only ally and biggest trade partner. Relations soured over North Korea’s nuclear and missile programs and more recently over Beijing’s tighter enforcement of trade sanctions. 

        Here's The Full Text Of Joint Declaration Issued At North, South Korean Summit - As previously reported, North Korean leader Kim Jong Un and South Korean President Moon Jae-in agreed Friday to finally end a seven-decade war this year, and signed a declaration to pursue the “complete denuclearization” of the Korean Peninsula, although they did not announce any concrete steps to dismantle the North’s nuclear programs.The two leaders embraced after signing the deal during a historic meeting on their shared border, the first time a North Korean leader has set foot on the southern side. They announced plans to formally declare a resolution to the war and replace 1953 armistice that ended open hostilities into a peace treaty by year’s end.But the question now is whether the commitment will lead to lasting change. Previous agreements have collapsed over inspections, weapons tests and disputes over economic aid. Much of the agreement mirrors previous deals between North Korea and Moon’s liberal predecessors. It appeared aimed at restoring cooperation that had deteriorated over the past decade. Below is an unofficial translation of the full text of the joint declaration provided by South Korea's Yonhap News Agency. The deal was signed and issued by both leaders at the end of their bilateral summit held Friday at the Joint Security Area of Panmunjom inside the heavily-fortified Demilitarized Zone that divides the two Koreas.

          North Korea Vows To Shut Reportedly Destroyed Nuclear Test Site - Denying reports that the nuclear testing facility at Punggye-ri has become unusable after one of its main access tunnels experienced a deadly collapse, North Korean Leader Kim Jong Un promised to shutter the facility - a continuation of his promise to halt nuclear and missile tests - as a gesture of sincerity to South Korea and the US. Kim reportedly informed South Korean President Moon Jae-in of his decision during a brief private conversation between the two leaders during their historic meeting at a village along the demilitarized zone. During the talks, Kim stepped over the ankle-high barrier separating the two countries, becoming the first North Korean leader to cross into the South since the Korean War armistice that ended combat on the peninsula in 1953. According to the Wall Street Journal, Kim told his South Korean counterpart that he saw no reason to "live under difficult conditions" because of his nuclear arsenal - presumably referring to the punishing economic sanctions that have been levied against the country since the beginning of the Trump era - if he could instead "build trust" with the US and the South."Why would we need to live under such difficult conditions with nuclear weapons if we’re able to build trust with the U.S. at future meetings, and the U.S. promises nonaggression and an end to the Korean War?" Mr. Kim was quoted as telling Mr. Moon by Yoon Young-chan, a spokesman for South Korea’s presidential office. Pushing back against claims that his recent bid for peace has been nothing more than an opportunistic diplomatic distraction while the country rebuilds its nuclear testing capabilities, Kim claimed that two tunnels at Punggye-ri are still usable, and insisted that the country could carry on with tests if it wanted to, according to Bloomberg. Furthermore, according to Reuters, Kim plans to invite experts and journalists from the United States and South Korea when the country shuts its nuclear test site in May. Kim added that the North has "no intention" of ever using nuclear weapons against the South. And in what was another first for a North Korean leader, Kim also stopped to take questions from reporters during the summit.

          North Korea will invite US experts to witness nuclear site shutdown in May, and scrap its unique timezone (Reuters) - North Korean leader Kim Jong Un plans to invite experts and journalists from the United States and South Korea when the country closes its nuclear test site in May, Seoul officials said on Sunday, as U.S. President Trump pressed for total denuclearization ahead of his own unprecedented meeting with Kim. On Friday, Kim and South Korean President Moon Jae-in vowed "complete denuclearization" of the Korean peninsula in the first inter-Korean summit in more than a decade, but the declaration did not include concrete steps to reach that goal. North Korea's state media had said before the summit that Pyongyang would immediately suspend nuclear and missile tests, scrap its nuclear test site and instead pursue economic growth and peace. Kim told Moon that he would soon invite the experts and journalists to "open to the international community" the dismantling of the facilities, the Blue House said. "The United States, though inherently hostile to North Korea, will get to know once our talk begins that I am not the kind of person who will use nuclear weapons against the South or the United States across the Pacific," Moon's press secretary Yoon Young-chan quoted Kim as saying. "There is no reason for us to possess nuclear weapons while suffering difficulties if mutual trust with the United States is built through frequent meetings from now on, and an end to the war and non-aggression are promised." Kim said there were two additional, larger tunnels that remain "in a very good condition" at the Punggye-ri test site beyond the existing one, which experts have said had collapsed after repeated explosions, rendering much of the site useless. Kim's promise shows his willingness to "preemptively and actively" respond to inspection efforts to be made as part of the denuclearization process, Yoon said.

          The Inter-Korean Summit - International relations is supposed to be a high-minded discipline. It is politics at the highest level, as the world knows no higher power than a national sovereign. The politicians in the international relations are often elevated beyond the banalities of governance, having transcended the pedestrian worries about keeping the road free of potholes. They are considered “statesmen,” the titans of humanity that set the rules for the world we live in. All kinds of abstract theories proliferate about how states, through their statesmen, think and behave. Then we come to a moment like this, that suddenly breaks us out of the spell of those theories, and makes us realize this is all human endeavor, whose foundation ultimately is one man speaking to another. Moon Jae-in and Kim Jong Un's tea time, broadcast live to the world. (source) Plenty of history was made in the inter-Korean summit on April 27. It was the first time that a North Korean leader stepped foot on the South Korean territory. It was the first inter-Korean summit that was televised live. It was the first inter-Korean summit in which North Korea put denuclearization as a topic for negotiations. It was the first inter-Korean summit in which wives of Moon Jae-in and Kim Jong Un—Kim Jeong-suk and Ri Sol Ju, respectively—met each other to dine together. So it may be a bit of a letdown that the substance of the Panmunjeom Declaration—the first joint statement between the leaders of the two Koreas—seems a bit thin. It’s not nothing, to be sure: the two Koreas agreed to cease all hostile acts, engage in a mutual reduction of forces along the demilitarized zone, and set up a “peace zone” in the Yellow Sea so that civilian fishing there could resume. The two Koreas would establish a liaison office in Kaesong, North Korea, and link together rails and roads. Separated family meeting is set for August, followed by Moon Jae-in’s visit to Pyongyang. Most importantly, the two Koreas will work toward denuclearization of the Korean Peninsula, and a peace treaty that formally ends the Korean War that technically is ongoing.

           Nearly 80 Percent of South Koreans Say They Trust Kim Jong Un -- One summit has changed the perceptions of a nation. Friday’s meeting between South Korean President Moon Jae-in and Kim Jong Un prompted 78 percent of respondents to a Korea Research Center poll published this week to say they trusted the North Korean leader. That’s a far cry from the 10 percent of South Koreans who said they approved of Kim in a Gallup Korea poll conducted just a month-and-a-half ago. The summit was filled with unprecedented scenes: Kim’s step over the ankle-high concrete slab dividing the Korean Peninsula -- and then his walk back across the border hand-in-hand with Moon; a 30-minute private chat in the woods in front of television cameras; the first ever live remarks to reporters by a North Korean leader; Kim’s sense of humor and his deferential manner toward Moon, who is more than 30 years his senior. And that’s just the optics. More significantly, the two leaders signed a declaration to finally end a seven-decade war this year, and pursue the “complete denuclearization” of the Korean Peninsula. Kim also called for frequent meetings between the leaders -- a major shift given only three summits have taken place since the war. More than 35 percent of respondents to the poll conducted earlier this week on behalf of national broadcaster MBC said the biggest accomplishment was the pledge to rid the peninsula of nuclear weapons. Nearly 30 percent said Moon’s hop over the border at Kim’s impromptu suggestion was the most impressive moment of the summit. Support for Kim is now nearly as high as it is for Moon, who scored an 86 percent rating. The South Korean president has been enjoying the highest popularity among all South Korean presidents in history since his inauguration a year ago . The question now is whether this positive perception of Kim will continue through and beyond a planned summit between the North Korean leader and U.S. President Donald Trump, possibly later this month. 

          Afghan farmers stick to growing opium in the face of less lucrative options (Reuters) - Afghan farmers are busy in their poppy fields as the annual opium harvest begins, underscoring the government’s failure to stamp out a crop that yields much of the world’s supply of heroin. Aided by corrupt bureaucrats, smugglers and Taliban fighters, the farmers help maintain an annual supply of about 9,000 metric tons to international markets, producing bumper crops despite government efforts to deter cultivation. “We don’t get enough money if we grow wheat or other crops,” said Mohammad Nadir, 35, as he gathered the crop he planted last year on two acres of land in the southern province of Kandahar. It is Afghanistan’s second major center of cultivation of the opium poppy after the neighboring province of Helmand, and a hotbed of activity by Taliban militants. Nadir scraped the gum from poppy bulbs into plastic containers to be used in making opium, heroin and other drugs. His annual yield will generate more than $3,000 in income. That compares with a take of less than $1,000 if he switches to growing wheat on the same land, as authorities hope. But Nadir will have to share his profit with the Taliban, in exchange for which they protect poppy fields and find domestic and international smugglers to sell the illegal produce. The insurgents extract a large share of their revenues from narcotics, a trade the United Nations values at roughly $3 billion a year in Afghanistan. Despite years of effort to replace it, the banned crop is a vital part of the south Asian nation’s economy. Opium production hit a record in 2017, up 87 percent over 2016, the U.N. says. Last year, the government distributed more than 10,000 tonnes of seeds to farmers to persuade them to grow wheat along with 20,000 tonnes of urea, widely used as fertilizer for foodgrains. Many farmers collected seeds to grow wheat but did not plant them, said Akbar Rustami, a spokesman for the agriculture ministry in Kabul, the capital.

          "If We Vote, We'll Be Killed" - Taliban Threaten To Burn Down Houses In Afghan Villages -- Villagers in Afghanistan say the Taliban have been telling them not to vote in elections planned later this year, threatening to burn down the house of anyone who does, in a bid to derail a vote seen as a major test of government credibility. Parliament and district council elections scheduled for October represent an enormous challenge for a government which is under heavy pressure from its international backers to ensure a fair and credible vote. But the Taliban, who launched their annual spring offensive this week, have already made it clear that they will not allow the process, seen as a dry run for next year's presidential election, to go ahead unhindered. "They gathered us in the mosque and warned us that if we went to the registration centres and voted, they would burn down the village," said Kamal Uddin, a resident of Rahmat Abad village in the northern province of Balkh, after a visit to his area by Taliban fighters last week. The complex process of registering voters at more than 7,000 centres around Afghanistan began this month in 34 provincial capitals, with district centres and villages due to begin next month. With no room for hitches if some 14 million voters are to be registered by October, officials acknowledge that the process began slowly, with some 568,000 people signed up by Thursday, although they are hopeful it will gather pace.    There was a bloody reminder of the threats facing the process when a suicide attack claimed by the ISIS group killed 60 people at a voter centre in Kabul this week. However, it is in the provinces that the difficulties may be greatest.

          How cough syrup in Nigeria is creating a generation of addicts - BBC News: When the younger brother of the BBC's Ruona Meyer became addicted to cough syrup, she began to investigate the men who make and sell opioid-based medicine on the streets of Lagos. Her investigation took her deep into Nigeria's criminal underworld, uncovering an epidemic that is destroying young lives across West Africa. "Where there are lots of school kids, as soon as they get a taste for it, they'll keep pestering you for more," says Junaid Hassan. When I heard him say these words I felt sick to my stomach. I had already witnessed what he described - young Nigerians hooked on cough syrup made with codeine, an opioid which can be addictive. A 14-year-old girl from my home city of Lagos, her parents distressed and unsure how to help her. A young man in Kano, chained to the floor of a rehab centre, swarming with flies, driven mad by months of drinking syrup with his friends. My own brother has suffered from codeine cough syrup addiction. The strawberry tasting opioid hooked him after our father was killed. Grief, depression, a desire to be cool are just some of the reasons Nigerians are falling for this drug. Musicians sing about the high it gives you. Dealers peddle it in nightclubs and on the streets. Teenagers mix it with soft drinks, or swig it straight from the bottle at "syrup parties".

          These Are Sanctions Directly Aimed at the Civilian Population - Perhaps believing he doesn’t have enough of a megaphone as senator, CNN gave Marco Rubio an online columnthis week in which to level claims that Venezuela has become “a danger to its neighbors and our own national security.” “The regime of Venezuelan dictator Nicolás Maduro threatens US interests,” Rubio states; the country is a state sponsor of drug-trafficking, it harbors terrorists and it has “attacked the regional democratic order,” including by allying itself with “enemies” of the US, such as Cuba and Russia.As you scroll through this nuance-free fulmination, a video starts playing: CNN‘s got an exclusive look at one of Venezuela’s public hospitals and the “catastrophic conditions stalking patients from the moment they step inside.” If CNN offers audiences any affecting images of suffering Venezuelans alongside any other possible responses besides Rubio’s brazen call to “hasten Maduro’s exit from power,” well, they defied detection. Joe Emersberger writes often about Venezuela and other places for, among others, Telesur English, Counterpunch, ZNet and His most recent piece for FAIR is called “Western Media Shorthand on Venezuela Conveys and Conceals So Much.” He joins us now by phone from Windsor, Ontario. Welcome to CounterSpin, Joe Emersberger.

          Brazil Faces Default Risk After Missing Venezuela Loan Alert - Brazil’s government needs swift congressional action to avoid defaulting on loan guarantees it has made to Venezuela and Mozambique. Legislators must approve the use of up to 1.5 billion reais ($424 million) to honor loans that banks made as part of a policy to finance exports. Brasilia itself is on the hook because Caracas is poised to miss a May 8 deadline for a $275 million debt installment. Wary that legislators may not return to work after Tuesday’s Labor Day holiday, President Michel Temer canceled a trip to Asia this week to supervise the episode his office said could cause "immense damage to Brazil’s economy." The imbroglio is the result of a series of missteps by Brazilian policy makers, from a cumbersome arrangement for export loan guarantees to a gross underestimation of the credit risk. Only days before Venezuela missed a previous loan payment to Brazil last August, top budget ministry officials in Brasilia flatly dismissed the chance that their Caribbean neighbor could default, thereby failing to account for the risk in this year’s budget. Now Brazil faces an unlikely but possible default, which in turn would have a series of domino effects, including problems with multilateral institutions such as the Paris Club. "We expect Brazil to service the guaranteed debt owed by Venezuela and Mozambique. However, in an unlikely event, where Brazil were unable to service guaranteed debt, this would constitute a sovereign default. In this remote possibility, we would consider the impact of this credit event on Brazil’s sovereign risk,” said Samar Maziad, a senior analyst at Moody’s Investors Service responsible for Brazil’s sovereign credit. 

          Argentine Peso Plunges To Record Low - Breaks Central Bank Line In The Sand - As the US Dollar continues to charge higher so EM currencies have been pounded and after a long weekend, it appears to be Argentina that is suffering the most as the central bank of Argentina reportedly intervened in the local FX market today to mitigate peso’s depreciation... and failed... Bloomberg reports that the central bank offered $100 million when the peso fell to 20.90/USD, according to the person. The concerted sales is said to be up to $20 million so far.. but the peso keeps falling to 21 per USD - a new record low. Note that the central bank declines to comment while the market is open; the central bank only reports its participation in the currency markets in a statement sent every night. Bear in mind that this plunge in the peso follows a 300bps rate-hike last week! Morgan Stanley analysts led by Fernando Sedano wrote in note: "Both domestic and external factors are likely to test Argentine assets again, keeping volatility and risk premia high," Last week’s 300bp rate hike seen as "a strong commitment to macro normalization" "Because Argentina has used almost two-thirds of the FX reserves acquired this year, we think any eventual FX volatility may have to dealt with via further hikes" Bloomberg reports that Nomura said in a note today that "traders will need further signs from the Macri administration and from the central bank that there's commitment to lowering inflation and narrowing the deficit... it's important officials aren't tempted with pro-growth policies like in December/January. " 

          How Google, Facebook and Twitter are manipulating the Mexican presidential elections—Part 2 -- This is the second article in a two-part series. The first article was published on April 28. Then-US national security adviser, Gen. H.R. McMaster signaled the start of this campaign in December of 2017 when he warned that there were “initial signs” of Russian interference in Mexico’s elections, allegedly through “subversion, misinformation and propaganda.”In February, a group of US senators, including Republican Marco Rubio and Democrat Tim Kaine, issued what amounted to a demand for direct US intervention in Mexico’s elections, claiming that Russian “meddling” was “simply the latest chapter of Russia’s malign influence throughout Latin America that threatens to destabilize the region.”For its part, the corporate media parroted the unproven claims of the military-intelligence apparatus to add fuel to this campaign. The Washington Post led the pack by claiming that Moscow was aiding López Obrador by “amplifying the message on social media” that Mexico’s “democracy is flawed and their politicians are prone to corruption,” as if these facts of life were a Russian invention. Urging social media companies to protect their platforms from “foreign meddling,” Bloomberg wrote: “Facebook, Twitter and Google are important sources of information for many Mexicans … Mexico needs to learn from the US experience and safeguard its electoral process from outside tampering.” The Mexican ruling class is confident that US imperialism will be successful in installing its hand-picked candidate. As recently as February, Bloomberg reported that a stock market boom and favorable credit ratings seemed to indicate that “the business and finance elites are discounting [López Obrador’s] possible win.” In a survey of senior Mexican executives (CEOs, CFOs, COOs and CIOs) surveyed by Santander Bank, 85 percent predicted that López Obrador would be defeated in the election.

          The World Bank should be defunded - Bill Mitchell - Australia is currently being shocked on a daily basis with the revelations in our Royal Commission on Banking, which show that our financial services sector (banks, insurance companies, financial planning, etc) is deeply corrupt, with criminal behaviour clearly rife. Hopefully, many of the top executives and board members of these firms will be prosecuted and do time. Another ‘bank’ that has totally lost any sense of moral compass, not to mention effectiveness, is the World Bank. Its behaviour over the years has been scandalous. Earlier this year we learned that its so-called ‘Doing Business’ strategy deliberately manipulated its reporting to undermine a democratically elected government (Chile). And, last week (April 26, 2018), the World Bank released the Working Draft of its upcoming – World Development Report 2019: The Changing Nature of Work – where it attempted to pressure governments into widespread labour market deregulation, which if carried through would further disadvantage workers and further redistribute national income towards profits. The World Bank has outlived its purpose. It is now a seriously dangerous international institution and progressive governments should set about defunding it.The World Bank has long been criticised for its role in undermining democracy in the less developed world.For my previous analysis of the World Bank, please see this blog post – World Bankspeak – how to hide the failure of a mission! (May 29, 2017).In essence, the World Bank does much more harm than it does good and should be disbanded.It has a long list of ‘funded projects’ that allow large infrastructure projects that will benefit ‘first-world’ capital (Wall Street) at the expense of the local populations.For example, large dams have been built by displacing sustainable, indigenous communities and degrading the local natural ecosystems.In recent years, its role in the climate change debate has demonstrated clearly that it puts the interests of  corporations by continuing to fund carbon-intensive and polluting projects.

          Yra Harris: "There Are Increasing Concerns Around The Globe That Central Bankers Do Not Have An Exit Strategy" -- Back in November, we brought to the attention of our readers a stunning admission from one of Citi's head credit strategists, Hans Lorezen, who said matter-of -factly that during his conversations with central bankers, there was a growing fear that they've lost control: In the context of a self-reinforcing, herding market, the pivot point where the marginal investor is indifferent between putting more money back into risk assets and holding cash instead is fluid. But when the herd suddenly changes direction, the result is a sharp non-linear shift in asset prices. That is a problem not only for us  trying to call the market, but also for central bankers trying to remove policy accommodation at the right pace without setting off a chain reaction – especially because the longer current market dynamics run, the more energy will eventually be released. That seems to be a growing fear among a number of central bankers that we have spoken to recently. In our experience, they too are somewhat baffled by the lack of volatility and concerned about the lack of response to negative headlines.... Our guess is that sooner or later in the process of retrenchment they will end up going too far – though that will only be obvious with hindsight. Fast forward to today when as Yra Harris writes in his latest Notes from the Underground, the realization that central bankers are on the verge of panic is that much closer, because as the veteran trader and strategist notes, "the continued efforts by the ECB, BOJ and Swiss National Bank to keep their overnight rates at crisis-era levels is increasing concerns around the globe that central bankers in general do not have an exit strategy." Yra also had some choice words for the SNB, saying that the Swiss franc "is indeed the true crypto currency as it doesn’t have to be mined but printed."It has a much greater green footprint as it uses far less energy. What’s a small forest of trees in relation to the vast amount of energy consumed in the search for ICOS. As the markets begin to FEEL the weight of mountains of debt coupled with higher borrowing rates, we stand in awe of the “accomplishment” of the SNB."

          Russia Kills Jihadists With Weaponized Robot Ahead Of World Cup - Dramatic footage has surfaced showing Russian counter-terrorism forces slaying jihadist “sleeper cells” and “underground units” ahead of the 2018 FIFA World Cup in Russia. In the past few months, Russian troops have launched numerous counter-terrorism operations in the volatile Islamic region of Dagestan. According to the Daily Mail, local police in Derbent, a city in the Republic of Dagestan, Russia, located on the Caspian Sea, alerted government officials about dangerous jihadist “sleeper cells” that were planning to attack the civilian population on May 01, known as a traditional holiday in Russia. The violent video shows Russian counter-terrorism forces using heavily armored personnel carriers with tremendous firepower, pounding the building with copper and lead bullets, in the town of Derbent, where the jihadist “sleeper cells” were active. Once the terrorist compound caught fire, all of the armored personnel carriers retreated to a safe distance, as a small armed robot was seen approaching the compound to finish off the job. The video shows a Russian soldier remotely guiding the killer robot through the compound. Video and audio recordings relayed wirelessly back to the command notebook of the robot reveals the terrorist shouting ‘Allahu Akbar,’ followed by an explosion. The Daily Mail reported that the heavily armed robot, mounted with a machine gun, was responsible for killing all eleven jihadis. “Guns, bullets, knives, and grenades were discovered at the scene,” according to a statement from the Russian Investigative Committee which investigates terrorism cases. Homemade bombs and other deadly weapons were discovered in the compound before it went up in flames. Government officials later released graphic images showing the bullet-ridden bodies of the terrorist killed in the raid –which is too gruesome to show. 

          Greece Sends Additional Forces To Turkish Border As Refugee Influx Spikes - Greece has rushed to reinforce its land border with Turkey as fears mount over a sharp rise in the number of refugees and migrants crossing the frontier. As The Guardian reports, police patrols were augmented as local authorities said the increase in arrivals had become reminiscent of the influx of migrants on the Aegean islands close to the Turkish coast. About 2,900 people crossed the land border in April, by far surpassing the number who arrived by sea, the UN refugee agency (UNHCR) said. The figure represents half of the total number of crossings during the whole of 2017.Speaking from the frontier town of Orestiada, the local mayor, Dimitris Mavrides, told the Guardian:“Our reception facilities are overwhelmed and things are on the verge of spinning out of control. Far more are coming than are actually being registered.“The government has just sent 120 extra police, but they are temporary and simply not enough. Frontex also has to intervene,” he added, referring to Europe’s border and coastguard agency. This coincidental spike in refugees from Turkey into Greece comes  as tensions between two NATO member states have escalated dramatically in the last two months - Turkey has threatened to invade Greek islands, Greece has responded, and Greeks now see Turkey as the greatest threat to their existence. However, The Guardian notes that the abrupt rise reflects a switch in tactics by people smugglers circumventing the controversial agreement the EU struck with Turkey in a bid to stem migration flows at the height of the crisis when more than a million people entered the bloc through Greece. Under the deal, signed in March 2016, migrants and refugees reaching eastern Aegean islands must remain in situ until asylum requests are processed through a system that is notoriously slow, or face deportation.

            Vatican treasurer Cardinal Pell to face trial on historical abuse charges --  Vatican treasurer Cardinal George Pell will stand trial on multiple counts of historical sexual abuse, the most senior figure in the Catholic Church to face criminal charges for alleged assault. Melbourne Magistrate Belinda Wallington delivered her decision Tuesday morning after a month-long committal hearing in March that heard evidence from a large number of witnesses. Wallington dropped half the charges but found there was enough evidence to commit Pell, one of the country’s most senior Catholic figures, to trial on multiple counts. Pell, who has long protested his innocence, didn’t show any emotion as the decision was announced. When asked to enter a plea, the cardinal said in a loud, clear voice, “not guilty.”

          French Unions & Students Mobilize Against Reforms: Another May ’68? - Real News Network video & transcript - International Labor Day, also known as May Day, took place almost everywhere in the world on May 1, except in the United States. One country where May 1 has special significance this year was France. The reason is that French unions and student organizations are mobilizing against the neoliberal reforms of President Emmanuel Macron. Also, this May marks the 50th anniversary of May 1968, when students and workers in France almost toppled the government of then-president Charles de Gaulle.  Joining me from Paris to take a closer look at the resistance to President Macron's neoliberal reforms is Renaud Lambert. Renaud is an editor with the monthly newspaper Le Monde diplomatic. Thanks for joining us today, Renaud.

          Germany, France Agree to Build New Fighter Jet Together - WSJ - The French and German governments Thursday pledged to jointly build a new combat jet in the face of rising military tensions with Russia. But the commitment to build the fighter aircraft, which would cost billions of dollars to develop and buy, also has another target: Washington. Germany and France hope the new plane that would not enter service for years also will wean European allies off buying U.S. planes. The Pentagon’s newest combat aircraft, the radar-evading F-35 Joint Strike Fighter made by Lockheed Martin Corp., has been a hot seller in Europe. The U.K., Norway, Italy, the Netherlands and Denmark are among the countries that have committed to buying the plane. Finland and Belgium are among others considering purchases of the plane that cost around $100 million each. That has irked European suppliers, such as Airbus and French combat jet maker Dassault Aviation SA, AM -0.30% which have sought to sell their planes to neighbors. Germany is also considering buying U.S. planes. The country needs to replace some of its aging Tornado combat jets before the futuristic plane being pursued with France is ready. Germany has said it would evaluate the F-35 and Boeing Co. made planes for the near-term role. Airbus SE , EADSY -0.38% which is partly owned by the French and German governments, is offering the Eurofighter Typhoon combat plane that it makes in partnership with BAE Systems PLC and Italy’s Leonardo SpA. A German defense ministry spokesman said no decision has been taken on which plane to buy.

          Germans don’t really worry about Brexit and want EU to be uncompromising - Handelblatt - On the morning of June 24, 2016, we Germans woke up to the results of the Brexit referendum with utter disbelief and great regret. Most of us had trusted in the legendary pragmatism of the British that would push them to vote for an unenthusiastic, but rational “remain”. Two years later, what do Germans think about Brexit and its consequences? The British Chamber of Commerce in Germany, KPMG, Open Europe Berlin and the Official Monetary and Financial Institutions Forum (OMFIF) asked Forsa to conduct a representative survey of the German population. Germans keep regretting Brexit … Some 62 percent of respondents “regret the UK leaving the EU.” That is almost unchanged from the results immediately after the referendum. This “Bregret” is more pronounced in western Germany (65 percent) than in the eastern parts (50 percent). Supporters of the Green Party show the most regret (83 percent). Only the supporters of the eurosceptic AfD (46 percent) do not regret Brexit all that much. … but don’t see it as a major foreign-policy concern. At the same time, Germans show quite some Brexit-fatigue. We deem other foreign-policy challenges more urgent. Only a minority of 39 percent are actually very concerned about Brexit. Germans have much more Angst about the US-presidency of Donald Trump (82 percent), the crises in the Middle East (75 percent), the nuclear situation in North Korea (71 percent), and tensions between Europe and Russia (66 percent). Only 38 percent expect a “hard Brexit” of total separation. Germans remain strongly in favour of EU-membership … If a remain-or-leave EU-referendum were held in Germany, 82 percent would vote Remain and only 14 percent Leave, exactly as in June 2016. Again, supporters of the Green party (91 percent Remain) are the most pro-EU. Only AfD supporters would favour “Dexit” (73 percent). Germans expect (only) some damage to their own economy …Germans mostly expect “no influence” (41 percent) on their own economy from Brexit. A “rather damaging” effect is expected by 33 percent and “rather beneficial” consequences by 15 percent.… mainly because they still expect the EU and UK to agree on a “soft Brexit” … About 53 percent said a “soft Brexit” is more likely. This would include the UK remaining close to the customs union and the single market. Only 38 percent expect a “hard Brexit” of total separation.

          Northern Ireland pushes Brexit talks toward fresh crisis— The divide at the heart of the Brexit talks is no closer to being bridged — and now there’s a new clash over when it needs to be solved.With the two sides preparing to resume negotiations next week, the mismatch over the substance and timing of a solution to the Northern Irish border problem threatens to drag the talks back toward a fresh crisis. Add to that a closely watched House of Commons vote Thursday that, while not binding on the government, will indicate the scale of support among MPs for tearing up Theresa May’s red line on leaving the EU customs union. EU chief negotiator Michel Barnier has repeatedly indicated that such a shift would open up new possibilities in the talks — telling an audience in Hannover earlier this week that Brussels would be “open for business.”But if the customs red line remains, he and his officials have warned a breakthrough on Ireland must be found before June’s European Council summit if there is to be any chance of completing a final divorce deal by October. That’s the deadline agreed by both sides to give the European and U.K. parliaments time to ratify the exit treaty.In private, EU officials say May has little over a month to choose whether to leave Northern Ireland permanently aligned with the EU or keep the whole of the U.K. in a customs union.  U.K. Brexit Secretary David Davis on Wednesday told MPs neither would happen — and dismissed June’s deadline as an “artificial” negotiating ploy. The stalemate threatens to precipitate a major impasse in the negotiations as both sides dig in, leaving the clock ticking down to Britain’s scheduled departure from the bloc on March 29 next year.EU diplomats and officials said a “significant British offer,” in the words of one, on customs is needed within weeks to break the impasse. Britain’s proposals to date — an unprecedented “hybrid” customs partnership or a “maximum facilitation” system bringing together a whole range of global best practice border arrangements — have been all but rejected by Brussels.

          Amber Rudd resigns hours after Guardian publishes deportation targets letter - Guardian -- Amber Rudd has dramatically resigned as home secretary, after repeatedly struggling to account for her role in the unjust treatment of Windrush generation migrants.  The home secretary was forced to step down after a series of revelations in the Guardian over Windrush culminated in a leak on Friday that appeared to show she was aware of targets for removing illegal migrants from Britain.  The pressure increased late on Sunday afternoon as the Guardian revealed that in a leaked 2017 letter to Theresa May, Rudd had told the prime minister of her intention to increase deportations by 10% – seemingly at odds with her recent denials that she was aware of deportation targets.  Rudd was facing a bruising appearance in the House of Commons on Monday. Downing Street sources said that in preparing for her statement, new information had become available which convinced Rudd she had inadvertently misled parliament – and she had therefore phoned the prime minister on Sunday to tender her resignation.  In her resignation letter to the prime minister, published hours after the latest leak, Rudd said she had “become aware of information provided to my office which makes mention of targets. I should have been aware of this, and I take full responsibility that I was not.” The prime minister replied that she believed Rudd had given her evidence “in good faith”; but that she could “understand why, now you have had chance to review the advice that you have received on this issue, you have made the decision you have made, and taken responsibility for inadvertently misleading the home affairs select committee”.

          Support grows for cross-party plans to prevent ‘no deal’ Brexit  - Theresa May is facing another major rebellion over Brexit amid a cross-party move to kill off any attempt to crash out of the EU without a deal. A group of MPs and peers has been carefully crafting new laws that will hand parliament guaranteed powers to soften any deal and send the government back to the negotiating table. Tory sources already think there is enough support in the Commons for the plan, which they believe would end the threat of a “no deal” outcome. The move is being described by senior figures as one of the most significant amendments of the Brexit process. Ministers have previously warned that should the deal negotiated with the EU be voted down by parliament, Britain could simply leave the bloc with no agreement. However, the cross-party group’s proposal ensures that if the agreement were voted down, parliament could alter it and ask the government to reopen EU talks. The measure is expected to win a three-figure majority in the Lords on Monday and Tory Remainers are confident it will not be overturned in the Commons next month. The government is already being urged simply to accept the measure. It could open the way for parliament to back staying in the EU’s customs union and single market –something currently ruled out by the prime minister. It comes with rebel Tory MPs beginning to believe that there could now be a Commons majority for staying in the customs union and its single market, through membership of the European Free Trade Association. One well-placed Tory said there were “a few in cabinet who now see it as a possible solution”. However, the cabinet’s Brexiters are preparing a big push this week against any suggestion Britain should remain inside the customs union, which would make it impossible for the UK to negotiate its own trade deals.

          Brexit: Government defeat in Lords over terms of meaningful vote - BBC News: Peers have defeated the government in voting to give Parliament a potentially decisive say over Brexit. An amendment to the EU Withdrawal Bill giving MPs the power to stop the UK from leaving without a deal, or to make Theresa May return to negotiations, was approved by 335 votes to 244. Its supporters said Parliament, not ministers, must "determine the future of the country". The government will now try to persuade MPs to strike out the change. Ministers said giving Parliament a decisive say on the Brexit deal risked "weakening" the UK's hand in negotiations. But Labour said the vote marked a "hugely significant moment" in the fight to ensure Parliament has a "proper role" in the Brexit negotiations and a no-deal situation was avoided. It was one of three government defeats on the Brexit bill on Monday evening. So far, the government has framed Parliament's vote on a final Brexit deal as a stark choice; take it or leave it. The implication - if MPs reject whatever terms are negotiated - the UK would leave the EU without a deal on future relations. But this amendment agreed by the House of Lords could prevent that, by giving Parliament the power to decide what happens if MPs turn down the final agreement.

          Can May’s Brexit stance survive its latest Lords defeat? --Another day, another Brexit defeat in the House of Lords for the Government. This time around, peers have voted to back an amendment to the Brexit bill which would hand Parliament, rather than ministers, the power to decide what to do if MPs reject the final deal agreed with Brussels. The margin in today’s vote was considerable: 335 to 224. But more worrying for the Government is the number of times it has been now been defeated in the Lords on Brexit, with this afternoon’s vote marking the seventh time peers have gone against the Government on the issue. Among those who backed the amendment were 19 Tory lords, including 11 former ministers. The names of those who rebelled are no surprise. But make no mistake: this vote will worry ministers. It also adds to the picture of a Government embattled on a number of fronts, not least on Brexit.  Labour, already riding high in the wake of Amber Rudd’s resignation yesterday, is determined to use this defeat to add to Theresa May’s problems. Keir Starmer has called the vote a “hugely significant moment”, and has told the Prime Minister to bow down and accept that there is no appetite for a no deal Brexit.  So will Theresa May’s ‘No deal is better than a bad deal’ stance hold? It seems likely for now, with the Government determined to fight this one out. Indeed, when this amendment does return to the Commons, they will likely succeed in overcoming it. In a sense, this means that, in practical terms, today’s vote counts for little. But symbolically it is of great importance. The number of amendments being pinged back to the Commons makes it harder and harder for Theresa May to stick to her guns on Brexit. What’s more, this latest defeat could embolden Tory rebels in the Commons, whose support the Government badly needs in upcoming Brexit legislative battles. Even a strong Government with a healthy majority might well be feeling the heat. For one without a majority, it is clear that these are testing times indeed.’

          May’s tactics recall Hitler, says peer as Brexit bill suffers ninth defeat  - Theresa May’s treatment of parliament was compared to Hitler’s assault on German democracy yesterday as the government suffered another defeat on its flagship Brexit legislation.  Peers voted by a majority of 91 in the House of Lords to give parliament a decisive say on the outcome of the final Brexit negotiations, including in the event of a “no deal”. It was one of nine defeats now inflicted on the government during the report stage of the bill that ministers will now have to seek to overturn when it returns to the House of Commons this month.The vote was overshadowed by an acrimonious exchange between Remain and Brexiteer supporters and a Liberal Democrat peer equated Mrs May’s actions over Brexit to Hitler’s seizure of sweeping powers in 1930s Berlin.“Sometimes it is very valuable to look at what happened in other countries when similar steps have been taken,” Lord Roberts of Llandudno said.“We remember the reluctance of Mrs May to allow parliament itself to be involved [in Brexit]. She wanted the government to be in charge. My mind went back to Berlin in 1933 when the enabling bill was passed in the Reichstag and that bill transferred the democratic right from the parliament into the hands of Adolf Hitler.” He added: “Let’s just take a warning. What we are doing here must involve parliament. We cannot let an enabling act in the UK lead to the catastrophe that happened in Berlin.”  Liam Fox, the international trade secretary, accused the Lords of trying to stop Brexit. “We have the unelected house actually trying to block the democratic will of the British people,” he told Sky News. “This is a question about whether the will of the British people will be respected or not, and it must be.”

          Brexiteers tell Theresa May to drop customs partnership plan - BBC News: Theresa May is facing a demand from Conservative Brexiteers to drop one of the government's preferred post-Brexit customs options. A 30-page document passed to the BBC says a "customs partnership" would make meaningful trade deals "impossible" to forge and render the UK's International Trade Department "obsolete". It comes ahead of a key meeting of senior ministers on Wednesday. They will discuss the different options to replace customs union membership. The issue threatens to split the meeting of the Brexit sub-committee and could have long-term implications for the government. All EU members are part of the customs union, within which there are no internal tariffs (taxes) on goods transported between them. There is also a common tariff agreed on goods entering from outside. The UK government has said it is leaving the EU customs union so will have to agree a new arrangement for what happens at the UK/EU border post-Brexit and whether businesses will be hit with tariffs or not. The complicating factor is that the UK wants to strike its own post-Brexit trade deals with other countries rather than have to stick with deals struck for the EU customs union.

          Tory Brexit revolt could sink Theresa May's government | Daily Mail Online: Theresa May's allies warned Brexiteers to wake up to 'reality' today as she battles to save a key plank of her plans for future trade with the EU.Amid a massive revolt by Tory Eurosceptics, Cabinet Office minister David Lidington said they had to recognise the 'challenges' of forging a 'deep and special relationship' with the bloc.The rebuke came as Brexit-backing MPs mounted a huge effort to kill off proposals for a 'customs partnership'. Senior Cabinet members including Boris Johnson, David Davis, Liam Fox and Michael Gove are urging the premier to abandon the idea at a meeting of her 'War Cabinet' this afternoon. Housing minister Dominic Raab appeared to pre-judge the outcome of the crucial clashes - saying Brexiteers were 'winning the argument' against a customs partnership.The standoff deepened today after sixty Conservative backbenchers sent a 30-page report to Downing Street savaging the proposal.The damning report - compiled by the powerful European Research Group headed by Jacob Rees-Mogg - claimed the idea would 'festoon the entire economy with burdensome controls, while crippling the ability of the UK' to negotiate trade deals.Mr Rees-Mogg insisted this morning that he was not 'threatening' Mrs May. But he warned that the proposal would 'not deliver on the Conservative Party manifesto or the Prime Minister's other commitments'.'It would leave us de facto in the customs union and the single market,' he told BBC Radio 4's Today programme.

          Brexit: wrong end of the stick - If there was a good time, I suppose, to bring up the affairs of the Chandler brothers in the House of Commons – and in particular the role of Richard Chandler in supporting the Legatum Institute - it would be in a debate on sanctions and money laundering.And this is precisely what Bob Seely, Conservative MP for the Isle of Wight, has done, invoking parliamentary privilege to rake over the coals of past disputes – much to the delight of The Times, which has given front page prominence to a footnote in what would otherwise have been an obscure debate about a dull but worthy subject. In what suggests a deliberate stratagem to milk the issue for publicity, we see Sky News and the Guardian also pick up the story, the latter headlining: "Founder of pro-Brexit thinktank has link with Russian intelligence, says MP".Aided by Liam Byrne, Labour MP for Birmingham, Hodge Hill, Seely did indeed seek to show that the Chandlers have some relations with Russian figures who in turn have Russian intelligence links and/or have been engaged in sundry nefarious activities. But the stuff is incredibly thin, based largely on material already aired, the author of which has been convicted under different jurisdictions for criminal libel. Almost all of this has already been aired in The Mail on Sunday (which even used the same photograph that The Times now uses - see above), and which, when the Sunday Times also had a pop, provoked a spirited response from the Legatum Group.Intervention by the group also got it an easy hit in Conservative Home and an apology from the Guardian. It also brought the retraction of a clumsy, error-strewn piece by Left Foot Forward, which complained it did not "have the resources to mount a legal defence" to Legatum's threat of "legal proceedings".

          May goes back to drawing board to find customs compromise - Theresa May will go back to the drawing board to find a post-Brexit customs compromise to unify her cabinet, after ministers could not agree what approach to take. The prime minister is said to have asked for her two existing options to be revised in a bid to find a consensus following a meeting of her Brexit “war cabinet”. It means that with five months to go until a Brexit deal is supposed to be set, the UK still has no clear position on exactly what kind of customs arrangements it wants with the EU after withdrawal. In a bid to preempt the deadlock, Downing Street had hinted ahead of Wednesday’s meeting that the prime minister’s thinking on customs options was “evolving” from the two options she had already set out. Up to now Ms May has proposed two options – a “customs partnership”, which favours closer customs ties with the EU to avoid a hard border in Ireland, or a “streamlined arrangement” with looser customs ties, but a harder border. The prime minister is yet to name her preferred option, though she and Philip Hammond, the chancellor, are thought to favour the partnership plan – which is hated by Brexiteers who see it as too close to the UK’s current customs position. The Independent was told that at the meeting on Wednesday, the defence secretary, Gavin Williamson, raised “grave concerns” over the partnership plan, while the new home secretary, Sajid Javid, is also said to have spoken against it.

          Sajid Javid joins hard-Brexiters to derail PM on customs plan - Sajid Javid has joined hard-Brexiters to voice strong doubts about the prime minister’s favoured customs plan as her Brexit inner cabinet broke up without agreement on the government’s negotiating stance. Just days after replacing Amber Rudd as home secretary in the wake of the Windrush crisis, Javid staked out his independence from Theresa May by suggesting her favoured model of a “customs partnership” was unworkable and throwing his weight behind the alternative preferred by the hard-Brexit faction. Downing Street sources insisted the customs partnership, which would see the UK levy tariffs on behalf of Brussels, had not been formally rejected. But Rudd’s departure appears to have left the key cabinet subcommittee deadlocked over how to negotiate Britain’s departure from the EU. During the two-and-a-half-hour meeting, Javid added his voice to those of Liam Fox, David Davis, Boris Johnson and Michael Gove, all of whom expressed concerns about May’s preferred approach. “They’ve lost and they know it, and they’re trying to find a way out,” said one senior Brexiter. “It’s a dead parrot.” Allies of Javid suggested that while he had concerns about the customs partnership, he was not signalling that he would automatically support the hard-Brexiters in future. 

          The strong economy: how Brexit dishonesty began - The first quarter growth figures for the UK are terrible, with GDP per head falling slightly, and they are consistent with an underlying economy which is very weak. As you can see from the chart below, quarter on previous year’s quarter growth in GDP per head was reasonable in 2014, but has been falling since. The economy has been suffering from Brexit uncertainty and the Brexit induced falls in real wages, and as I guessed immediately after the referendum the temporary boost to competitiveness has not been enough to offset this. (More discussion here.) [1] As Will Hutton says, in any other world there would be national soul searching. But the reaction of the Chancellor to the latest data is that it "reflects some impact from the exceptional weather that we experienced last month, but our economy is strong and we have made significant progress". The Chancellor says the economy is strong when GDP per head, the best measure of average prosperity we have, is falling. And the ONS said the weather had a relatively small impact. This kind of Orwellian description of the economy (weak is strong) is something that I first noticed in the run up to the 2015 election. The first three years of the Coalition government were terrible in economic terms, and the government did not try to pretend otherwise. Everyone was expecting a recovery and it didn’t come. But that opened the way for dishonesty to emerge from 2013, as the economy began growing again.

          Half of TSB online banking customers still locked out of accounts - Half of TSB's online banking customers were unable to access their accounts last night after a week of chaos, the bank said. Today the fiasco enters its seventh day after the firm’s attempt to shift five million customers onto a new banking platform last weekend proved disastrous, leaving customers unable to access their own money. As the technical problems have persisted, Paul Pester, the bank's chief executive, has repeatedly tried to reassure people that the TSB’s new IT system is working. His comments have sparked fury, as customers continue to report a myriad of problems including getting access to strangers’ accounts, card failures, incorrect balances and mysterious overdrafts appearing. Last night a spokesman said: “Internet banking is currently operating at around 50 percent of capacity,” a bank spokeswomen said: "For every ten customers who try to access our internet banking, five will be able to access this service.”  "As this fiasco drags on, TSB customers will be really concerned about the impact on their lives. Anxious customers could be incurring fines, penalties and even suffering the effects of a bad credit rating as a result of TSB's shambles." "If the bank is to restore the trust of its customers, it must be swift in responding to those affected and in providing compensation. C" An effort by the bank to upgrade systems for its 1.9 million active online and mobile customers failed a week ago, leaving hundreds of thousands unable to access their accounts. TSB tried to switch five million customers and 1.3 billion records to software run by its Spain-based parent Banco De Sabadell from a system operated by Lloyds Banking Group, which sold TSB three years ago.

          TSB: How it all went so wrong for the bank - BBC News: All surfers know the feeling of being hit hard by a wave, being left bruised and disorientated, and then having to get up and do it all again. TSB chief executive Paul Pester, a fanatical surfer, must have felt much the same each day for the last week. His bank, which has five million customers, has been crippled by an IT crisis. Customers have been told time and again that normal service has resumed, an assertion they have furiously disproven. Mr Pester now faces wave upon wave of questions and demands from customers, MPs, and regulators among others. So how did it all go so wrong? After years of planning, TSB shuts down various services for two days in a planned migration of customer data to a new IT system designed, it says, "for the digital age". The process involves moving 1.3 billion customer records from the old system run by its former parent bank, Lloyds, to one managed by its new Spanish owner, Sabadell, saving £100m a year as a result.It quickly emerges that after the Sunday evening switch-on everything is not working as it should. Customers' stories are far from the normal tales of online banking glitches which many people have told in the past. Matthew Neal, from Hertfordshire, checks his TSB app on Sunday evening to find out his balance and see how much he had spent at the pub the night before. "I could see all my accounts, but on top of that also three accounts belonging to someone else: a £35,000 savings account, an £11,000 Isa and a business account," he tells the BBC. "I could see their account numbers, sort codes and transaction histories and I had access to transfer money too, if I was that way inclined. The thing that was worrying me most was: what if someone can see mine too?" 

          TSB boss Paul Pester got it all wrong as MPs drew blood over bank’s IT snafu - If ever you needed an example of the gulf that has opened up between corporate executives and the wider public, TSB’s appearance before the Treasury Committee to discuss its recent – and apparently ongoing – IT foul up provided it. Chief executive Paul Pester set out his stall from the outset: Terribly sorry that some people have had troubles, but migrating all our data onto a new system was a massive exercise and it went ok for most of our customers. The bank is now working and I have the information here to prove it!  Oh no it’s not, said MPs, who read out a succession of horror stories in the course of questioning him that had been emailed or tweeted to them by constituents. One involved a customer that had died before their issue was resolved. Another was from a woman whose wedding was being wrecked by the stress of it all. Someone else had lost a car, and their deposit through being unable to make a payment.  People emailed and tweeted MPs with stories contradicting Mr Pester’s assertions as the hearing was in progress.  TSB apparently thinks that it is a digital business with a bank attached. Its top executive and directors (chairman Richard Meddings was there as was Miguel Montes who is chief operating officer for owner Sabadell) rather found them hoist with a digital petard on this occasion.

          #TSBFail: MPs Barely Lay a Glove on CEO Pester, Who Discredits Himself All on His Own -- Yves Smith - Based on reading the Guardian’s live blog on the Parliamentary hearings on the TSB IT meltdown, plus some additional coverage, no one appears to have comported themselves all that well, but CEO Paul Pester put in such a spectacularly arrogant and disconnected-from-reality performance so as to have somewhat diverted attention from the poor job MPs did of questioning him and other TSB and Sabadell execs.  Even though the personal styles were as far apart as one could possibly envision, there was an eerie similarity between Pester’s fabulous disconnect from reality and that of former Wells Fargo CEO John Stumpf. Recall that Stumpf ran an operationally sound and highly profitable bank that was being discovered to have a sales culture that could only be characterized as criminal. Yet Stumpf blandly kept insisting that this was just a few bad apples in the face of red hot rejection by Senators and Congressmen from both sides of the aisle. As much as the Parliamentary hearings made clear that Pester is utterly clueless about what is going on with TSB’s systems and a PR liability for the bank, he’s likely to hang on for an even more unseemly amount of time. First, his bosses at Sabadell seem just as out to lunch, so they are unlikely to see him as a problem, since that means admitting they screwed up disastrously too. Second, who could possibly want to step into this role? Any insider is presumably part of the problem. Who would be willing to take on a bank that could have fundamentally unfixable IT problems, which means having to resolve it in a novel manner? Normally banks go tits up in familiar ways, like stupid loans and embezzlement, as opposed to an institution of scale making such a mess of its records that it dies under the liabilities. A few points from the hearings:

          The Silence Of The Skripals – Government Blocks Press Reports – Media Change The Record - There has been no recent reporting on the Skripal case in which a British-Russian double agent and his daughter were poisoned in Salisbury, England. There even seem to be attempts to change the public record of the case. The British government alleged that the Skripals were poisoned by Novichok, a deadly nerve agent, and blamed Russia for it. There are stiill many open questions to ask but the British media, otherwise not afraid of 'door stepping',  are curiously uninterested. We already noted in early April that the British press was throwing Novi-Fog™ onto the public. It was repeating outrageous and illogical claims from "security services" but did no genuine reporting on the Skripal case. Now the former British ambassador Craig Murray quotes Clive Ponting, another former senior civil servant, who suspects that the British government issued a D-Notice. Such a notice forbids British media to report on an issue. Murray also points to a tweet by Channel 4 correspondent Alex Thomson from March 12 in which Thomsen mentions a D-Notice specifically related to Mr. Skripal's MI6 handler: The D-Notice attempt Thomsen mentioned was too late as some media had already reported the name of the Skripal's MI6 handler. We spelled it out on March 8.

          UK media told to conceal connections between Sergei Skripal and MI6 --Craig Murray, the former UK ambassador to Uzbekistan, has published evidence suggesting that a D-notice has been issued to the press to protect MI6, hiding its connections to the Russian double-agent, Sergei Skripal. According to the Conservative government and a pliant media, Skripal and his daughter, Yulia, were poisoned by Russia with a “novichok” nerve agent.A D-notice (Defence and Security Media Advisory Notice) is used by the British state to veto the publication of potentially damaging news stories. Formally a request to withhold publication, the slavishness of the mainstream media ensures these notices function for the most part as gag orders. Murray initially reported the claims of famous whistleblower Clive Ponting that a D-notice had likely been issued in relation to some aspect of the Skripal affair. He then noted Channel 4 journalist Charles Thomson’s confirmation that a D-notice had, in fact, been issued and that it related specifically to censoring the identity of Skripal’s MI6 handler.

          "Forgotten In Statistics" - UK Homeless Population 10x Larger Than Government Says -- A recent study found that the number of homeless people living in the UK is almost 10 times as high as the official statistics reflect. The reason? The government hopelessly undercounts the number of families living in temporary accommodations like bed & breakfasts, according to the Independent. Many of these people - at least 50,000 of them - have been "forgotten in statistics" that fail to reflect anything close to the true scale of the homelessness crisis in the UK.The true scale of homelessness in the UK is almost 10 times worse than official figures suggest, according to a new report.Homeless charity Justlife warns thousands of people are being "forgotten in statistics" after it estimated that at least 51,500 people were living in B&Bs in the year to April 2016 – compared with 5,870 official B&B placements recorded by the government.It comes after a separate investigation found that 78 homeless people died last winter – an average of at least two a week. The report by the Bureau of Investigative Journalism revealed the fatalities included rough sleepers, people recognised as "statutory homeless" and people staying in temporary accommodation. The organization that conducted the study, Justlife, used data gathered from Freedom of Information requests to various government agencies.

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