week ending Jun 16

Update on the Fed’s QE Unwind – Wolf Richter - Just as the Fed created money to buy Treasuries and MBS during QE, it now destroys money as these securities “roll off” the balance sheet.It took the Fed five-and-a-half years to amass $3.4 trillion in Treasury securities and mortgage-backed securities (MBS) during QE, including the year 2014 when it was “tapering” QE to zero. The Fed is now reversing that process, including the opposite of “tapering,” as it is ramping up its QE unwind.The Fed’s balance sheet for the week ending June 6, released Thursday afternoon, shows a total drop of $141 billion since October, the beginning of the era officially called “balance sheet normalization.” At $4,319 billion, total assets have dropped to the lowest level since May 7, 2014, during the middle of the “taper.”If the Fed continues to follow its plan, it will shed up to $420 billion in securities this year, and up to $600 billion a year in 2019 and each year in the future, until it considers its balance sheet to be “normalized” — or until something big breaks. For May, the plan calls for the Fed to shed up to $18 billion in Treasuries and up to $12 billion in MBS. So how did it go?The balance of Treasury securities fell by $17.7 billion in May to $2,378 billion, the lowest since May 28, 2014. Since the beginning of the QE-Unwind, $88 billion in Treasuries “rolled off.” The blue arrow indicates the amount that rolled off in May:On May 15, $26.4 billion in Treasuries on the Fed’s balance sheet matured. The Fed replaced $17.9 billion of them with new Treasury securities directly via its arrangement with the Treasury Department that cuts out primary dealers that the Fed normally does business with. In other words, that $17.9 billion was “rolled over.” But it did not replace $8.5 billion of maturing Treasuries. They “rolled off.”On  May 31, $28.6 billion matured. The Fed replaced $19.4 billion with new Treasuries. The remaining $9.2 billion of maturing Treasuries “rolled off” without replacement.

FOMC Statement: 25bps Rate Hike -- FOMC Statement: Information received since the Federal Open Market Committee met in May indicates that the labor market has continued to strengthen and that economic activity has been rising at a solid rate. Job gains have been strong, on average, in recent months, and the unemployment rate has declined. Recent data suggest that growth of household spending has picked up, while business fixed investment has 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. Indicators 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 further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation 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 raise the target range for the federal funds rate to 1-3/4 to 2 percent. The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation. In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.

Fed hikes rates, signals two more for 2018 -- The Federal Reserve raised interest rates on Wednesday for the seventh time since the financial crisis. In its monetary policy statement released Wednesday, the central bank increased the target range for its benchmark interest rate by 0.25% to a range of 1.75%-2%, the highest since September 2008. All eight voting members of the FOMC voted in favor of Wednesday’s decision.  In raising its benchmark interest rate, the Fed cited an economy that is growing at a “solid” rate, an upgrade from its characterization in May of an economy growing at a “moderate” rate. The Fed added that job gains that have been “strong” in recent months and that, “Recent data suggest that growth of household spending has picked up, while business fixed investment has continued to grow strongly.” In May, the Fed noted that household spending had “moderated” from its strong pace in the final quarter of 2017. The most notable change to the Fed’s statement is the elimination of language suggesting that its policy would “for some time” remain accommodative.In May, the Fed said, “the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.” This language had been a feature of Fed statements for years. The clause was eliminated from the June statement. The Fed’s latest release also included an updated summary of economic projections, which are aggregated economic, labor market, and interest rate forecasts from Fed officials. In this release, the Fed raised its outlook for growth and inflation this year while lowering its expectations for the unemployment rate.  These projections also include the Fed’s “dot plot,” which illustrates expected future interest rates, and now shows most Fed officials see two additional rate hikes coming in 2018, bringing the year’s total to four. On the labor market side, Fed officials lowered their median expectation for the unemployment rate this year to 3.6% from 3.8% in March,. The Fed also lowered its expectations for the unemployment rate in 2019 and 2020 to 3.5% from 3.6%. Over the longer run, Fed officials still expect the unemployment rate to be 4.5%.Since the Fed raised interest rates at its March meeting, the unemployment rate has dropped a further 0.3% to a 48-year low of 3.755% while the economy has added 537,000 jobs over that period. After increasing their forecasts for GDP growth notably in March, Fed officials on Wednesday again increased expectations for economic growth this year, now forecasting the economy will grow 2.8% in 2018. In March, the Fed had forecasted growth of 2.7% in 2018; a year ago, the Fed expected the economy would grow 2.1% this year.  The Fed also reiterated its median expectation that the U.S. economy will grow 2.4% in 2019, 2% in 2020, and 1.8% over the long run.

FOMC Hikes Rates As Expected, Signals Two More Rate Hikes In 2018 -  Having signaled a rate-hike 'no matter what', The Fed delivered 25bps (as the market 100% expected), cut its reference to "rate below long-run levels for some time," and signaled its expectations for two more rate-hikes in 2018. Key takeaways from FOMC decision:

• Fed raises rates as expected, 8-0 vote
• In the latest dots, the rate hike path steepens a little this year, still aiming at 3.4% end-2020; longer-run neutral rate still seen at 2.9%
• FOMC statement says economy growing at "solid rate,'' job gains have been "strong,'' consumer spending has picked up and investment continued to grow "strongly''
• The Fed removed the low inflation line: "Market-based measures of inflation compensation remain low"
• Language about the economy upgraded, line about rates remaining below long-run levels "for some time'' was removed
• The sentence got tweaked: "The Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective over the medium term.''
• IOER rate raised 20bps to 1.95% as of June 14; discount rate goes up to 2.5%

The median 'dot' for the end of 2018 has been 2.125% since Dec 2016 and today's dot plot shifted higher to 2.375% confirming The Fed's expectation for two more rate hikes this year, while the 2019 dot rose from 2.9% to 3.1%, suggesting the hiking carries through.Here is the full breakdown of the median dots:

• 2018 is 2.375% vs 2.125% in March;
• 2019 is 3.125% vs 2.875% in March.
• 2020 and longer-run medians are unchanged at 3.375% and 2.875% respectively

FOMC Recap - Tim Duy’s Fed Watch - The Federal Open Market Committee (FOMC) completed their June meeting with a 25 basis point rate hike, bringing the target range for the federal funds rate to 1.75-2.0 percent. The accompanying Summary of Economic Projections (SEP) revealed a modestly more optimistic outlook, as expected. The improving outlook prompted an upward revision to rate hike expectations with the median policymaker anticipating four rate hikes this year, up from three in March. The Fed dropped the explicit forward guidance language in the statement as they work to encourage market participants to undertake a more nuanced, data-driven approach to assessing the future path of rate hikes.With the economy chugging along at a respectable clip that could exceed 4 percent in the second quarter, the Federal Reserve upgraded its assessment of growth from “moderate” to “solid.” Expected growth for 2018 as a whole rose from 2.7 to 2.8 percent while the unemployment forecast fell from 3.8 percent to 3.6 percent. If history is any guide, that forecast remains too pessimistic given the expected pace of growth this year.… Bottom Line: Pay attention to the interplay of the rate and economic forecasts and the flow of data. The pace of data will almost certainly not slow sufficiently to prevent the Fed from hiking in September and probably December. I would say September is essentially a lock at this point. I also think you need to pencil in rate hikes in March and June of 2019. Recognize though that by mid-2019 the data might reflect the lagged impact of past tightening and the yield curve is likely to be fairly flat; both factors would slow the pace of rate hikes. The Fed will face a more difficult choice if the data holds strong while the yield curve inverts.

Fed hikes rates despite no inflationary signs in data - As expected, the Federal Open Market Committee (FOMC) announced a 0.25 percentage point increase in short-term interest rates today. This hike further solidifies the view that the Fed is now essentially on auto-pilot in its campaign to raise rates, and is not responding to economic data. The data show that inflation is still below the Fed’s 2 percent target, as it has been for most of the past 9 years. They show a labor market that is continuing to improve steadily—as it has every year since 2010—but which has yet to generate wage increases fast enough to push inflation over the Fed’s target. This delinking of Fed decisions from the movement of economic data and the resulting auto-pilot path of interest rate increases is a clear threat to continued economic expansion. Given that inflation-adjusted wages for the vast majority of American workers have just started gaining serious ground in recent years, and given that the economy needs a long period of running at full capacity to restore the damage done to its productive capacity by the Great Recession and slow recovery, prematurely ending the economic expansion would be a grave policy mistake.

 Key Measures Show Inflation increased YoY in May -- The Cleveland Fed released the median CPI and the trimmed-mean CPI this morning:  According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.2% (2.8% annualized rate) in May. The 16% trimmed-mean Consumer Price Index also rose 0.2% (2.1% annualized rate) during the month. The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics' (BLS) monthly CPI report. Earlier today, the BLS reported that the seasonally adjusted CPI for all urban consumers rose 0.2% (2.5% annualized rate) in May. The CPI less food and energy rose 0.2% (2.1% annualized rate) on a seasonally adjusted basis. Note: The Cleveland Fed released the median CPI details for May here.  Motor fuel was up 23% annualized in May.

Q2 GDP Forecasts From Merrill Lynch: The data weighed on GDP tracking, with 1Q edging down to 2.4% qoq saar. 2Q held at 3.7%. [June 15 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 4.8 percent on June 14, up from 4.6 percent on June 8. [June 14 estimate]From the NY Fed Nowcasting Report The New York Fed Staff Nowcast stands at 3.0% for 2018:Q2 and 2.8% for 2018:Q3. [June 15 estimate] CR Note: This is quite a range.   These estimates suggest real annualized GDP in the 3% to 4.8% range in Q2.

How Good Is the Trump Economy, Really? - NYT --The Trump administration has become downright boastful about the state of the economy.“In many ways this is the greatest economy in the HISTORY of America,” the president tweeted recently. After I analyzed the May employment data by consulting a thesaurus and writing a cheeky article using a lot of near-synonyms for “good,” the Trump administration blasted it out approvingly to the White House press list and through a presidential tweet.But I also received some blowback from liberals. There were some similarly good months for job growth in the Obama administration, they noted. And my analysis was not nearly so effusive then.So which is it? Is the economy doing exceptionally well, or performing only about as well as it did in the late years of the Obama administration?The answer depends on precisely how you phrase the question, which in turn hinges on a crucial distinction that people often fail to make when talking about the economy. There’s a big difference between the level of economic performance; the direction of change in the economy; and the pace of change.The economy looks strongest if you look only at the level of economic activity, not the rate of change. For example, per-person gross domestic product adjusted for inflation is at its highest level on record, as are other similar measures of output.Other measures of the level of economic performance are also quite good, though not historically so. The 3.8 percent unemployment level is the lowest in 18 years, but it was lower in 1969. The lowest on record was 2.5 percent in 1953. And the very low jobless rate masks some weakness in the labor market. Among adults in their prime working years, 79.2 percent were working in May, which is still below that statistic’s 80.3 percent recent high in early 2007 and its record high of 81.9 percent in 2000. Still, if you look only at the level at which the economy is performing, the Trump administration does have plenty to be excited about.Then there’s the growth rate. This is the measure by which the Trump economy looks very much like a simple, straightforward continuation of President Obama’s second term.

 US Budget Deficit Hits $530 Billion In 8 Months, As Spending On Interest Explodes - The US is starting to admit that it has a spending problem.According to the latest Monthly Treasury Statement, in May, the US collected $217BN in receipts - consisting of $93BN in individual income tax, $103BN in social security and payroll tax, $3BN in corporate tax and $18BN in other taxes and duties- a drop of 9.7% from the $240.4BN collected last March and a clear reversal from the recent increasing trend...... even as Federal spending surged, rising 10.7% from $328.8BN last March to $363.9BN last month.... where the money was spent on social security ($83BN), defense ($56BN), Medicare ($53BN), Interest on Debt ($32BN), and Other ($141BN). The surge in spending led to a May budget deficit of $146.8 billion, above the consensus estimate of $144BN, a swing from a surplus of $214.3 billion in April and far larger than the deficit of $88.4 billion recorded in May of 2017. This was the biggest March budget deficit since the financial crisis.The May deficit brought the cumulative 2018F budget deficit to over $531bn during the first eight month of the fiscal year; as a reminder the deficit is expect to increase further amid the tax and spending measures, and rise above $1 trillion. The red ink for May deficit brought the deficit for the year to-date to $532.2 billion. Most Wall Street firms forecast a deficit for fiscal 2018 of about $850 billion, at which point things get... worse. As we showed In a recent report, CBO has also significantly raised its deficit projection over the 2018-2028 period.But while out of control government spending is clearly a concern, an even bigger problem is what happens to not only the US debt, which recently surpassed $21 trillion, but to the interest on that debt, in a time of rising interest rates. As the following chart shows, US government Interest Payments are already rising rapidly, and just hit an all time high in Q1 2018.  Interest costs are increasing due to three factors: an increase in the amount of outstanding debt, higher interest rates and higher inflation. A rise in the inflation rate boosts the upward adjustment to the principal of TIPS, increasing the amount of debt on which the Treasury pays interest. For fiscal 2018 to-date, TIPS’ principal has been increased by boosted by $25.8 billion, an increase of 54.9% over the comparable period in 2017.The bigger question is with short-term rates still in the mid-1% range, what happens when they reach 3% as the Fed's dot plot suggests it will?

Democrats Should Reject Bernanke’s ‘Wily E. Coyote’ Criticism of Trump’s Deficits  -- William Black - Ben Bernanke recently gave a speech predicting that President Trump’s deficits will cause the economy to “go off a cliff in 2010.”  Many Democratic Party politicians, of course, will rush to embrace the criticism and prove that they are the true party of fiscal responsibility.  They can then get back to pushing for increased taxation and cuts to the safety net “to save it” from collapse – and feeling virtuous.   They know this is bad politics, but that adds to their faith that the more bitter the medicine the greater the curative properties.  Faith-based federal deficit phobia, however, is terrible economics and terrible politics. Bernanke is one of the worst of the anti-regulators most culpable for creating the criminogenic environment that created the three great epidemics of “control fraud” that drove the financial crisis and the Great Recession.  The Democrats’ cast their eagerness to join in the Bernanke chorus as realpolitik – the enemy of my enemy is my ally.   Bernanke is peddling multiple, harmful financial myths about federal budget deficits that were falsified decades ago – and then falsified again five years ago.  The first myth is the base myth – that running a federal deficit when the Nation is not in or recovering from a recession is harmful and irresponsible.  Bernanke does not discuss the implications of the fact that the United States has a freely-floating sovereign currency and borrows in that currency.  Bernanke is apoplectic that Trump is using fiscal stimulus “at the very worst moment” – “full employment.” The overwhelming majority of economists, including Paul Krugman, share Bernanke’s core myth.  It is important to understand that while it is a myth, it is paradoxically sometimes nearly true.  It is a myth because it is the wrong concept.  Modern monetary theory (MMT) does not predict that a Nation with a sovereign currency’s fiscal deficits are economically irrelevant or inherently desirable.  MMT focuses on real constraints, such as shortages in important resources needed for innovation and growth.  MMT cautions that such resource shortages can produce inflation and that substantial inflation is harmful to the overall economy and individuals.  Even small levels of negative inflation (deflation) can cause serious harm by discouraging consumption, which prolongs and deepens a recession.

 This Is Bigger Than a Meeting With Kim Jong Un - “Remind me of Secretary Kerry’s visit to Tehran, or the time that Obama met with” Iranian President Hassan Rouhani, John Delury, a Korea expert at Yonsei University, challenged me when we got together in Seoul in May. I couldn’t, because those things never happened. And that was precisely Delury’s point. What Donald Trump is doing with North Korea is in fact “bolder” than what Barack Obama did with Iran, he argued. Delury disagreed with Trump’s decision to withdraw the U.S. from the nuclear agreement with Iran, and acknowledged that America’s relations with Iran are even more toxic than its relations with North Korea because Washington and Tehran are on opposing sides of conflicts across the Middle East. Still, he maintained that Obama’s “complicated, technical” deal may have been “too focused” on constraining Iran’s nuclear capabilities. “It wasn’t a deep political settlement,” he explained, whereas “what I see Trump working on with Kim Jong Un is … a fundamental transformation of the relationship.” And what Trump is facing is nothing less than a new nuclear age, when the strategies that kept the world safe during the Cold War may no longer apply. In the words of James Holmes of the U.S. Naval War College, “there are more nuclear-weapon states” now than during the Cold War, “they’re of different shapes and sizes, and they’re on different trajectories.” If the fundamental question now is the same as it was during the Cold War—how do you keep the world’s deadliest weapons from destroying the world?—the context is entirely different, and maybe that means the approach must be as well. “I think Trump gets it,” Delury told me. Fundamental transformation is “the way to get progress with North Korea. … We have so trained ourselves to … treat North Korea as a question of missile and nuclear capabilities. We’re almost Pavlovian at this point: They launch a missile and we salivate. That’s all we understand the problem to be.” But the problem is decades of hostility deeper than that.

Why Do Democrats Want to Sabotage North Korea Talks? - Amazing how partisan politics shape this country’s foreign policy. Seven Democratic senators have written the president urging that any agreement signed with North Korea must be permanent; must be subject to “anywhere, anytime” inspections of all nuclear-related sites and facilities; and must include the dismantling and elimination of all of the regime’s ballistic missiles and programs. (One thinks of Mike Pompeo’s demands on Iran to renegotiate the Iran Deal by making infinite concessions.) It is a tit-for-tat for the solid Republican opposition to the JCPOA in 2015. Five of the seven senators (Durbin, Warner, Feinstein, Leahy, and Brown) had voted for the Iran agreement while two (Schumer and Menendez) had been among a mere four Democrats to (expressing devotion to Netanyahu) vote against. So this is a display of Democratic unity towards the end, not of bringing permanent peace to the Korean peninsula, but to make it as difficult as possible for an unpopular beleaguered president to score a diplomatic triumph (which could shift momentum to the Republicans in the interim election). There are Democrats (and some Republicans alike) praying for failure in Singapore, worried, they imply, about an ill-prepared impetuous commander-in-chief giving up the family jewels over bulgogi and kimchee. At the same time due to calculation (Bolton) or dumbness (Pence) top Trump administration officials (plus his personal lawyer Giuliani) have worked to sabotage the summit by deliberately insulting Kim Jung-un and the DPRK in the weeks leading up to it. The big picture is that the United States under Trump abruptly entered a period of aggressive exceptionalism involving unilateral withdrawal from treaties; provocation of trade wars; broadcast of insults against close allies; harsh measures against undocumented immigrants and the imposition of discriminatory rules on Muslim entry into the U.S.; and a general tendency to reflect the sentiments of a benighted political base. This has alienated Europe in general, as well as Mexico and Canada, the U.S.’s top two trading partners.

Trump Calls Four-Hour Summit ‘Fantastic’ – WSJ - President Donald Trump declared a summit meeting with Kim Jong Un had gone better than expected as he emerged after nearly four hours of talks with the North Korean leader aimed at bringing about Pyongyang’s nuclear disarmament.  The two men walked side-by-side outside the hotel on Sentosa Island where they met as Mr. Trump said they were “going right now for a signing,” without providing more details.  “We had a really fantastic meeting, a lot of progress, really very positive. I think better than anybody could have expected—top of the line,” Mr. Trump said.  They started the day by greeting each other before a row of alternating U.S. and North Korean flags. After a lengthy handshake, the two leaders exchanged a few words. “Nice to meet you, Mr. President,” Mr. Kim told Mr. Trump. The men posed side by side for news cameras before settling in for a 38-minute, one-on-one meeting. They then brought in top advisers for another two hours of talks, before sharing a lunch that included prawn cocktail, beef short rib and vanilla ice cream.“We’re going to have a great discussion,” Mr. Trump said. “It’s my honor and we will have a terrific relationship, I have no doubt.” Mr. Kim said that “old prejudices and practices worked as obstacles in our way forward, but we overcame all of them and we are here today.”The unprecedented meeting between the two leaders is enough for each side to claim an achievement. Mr. Trump became the only sitting U.S. president ever to meet with a North Korean leader and Mr. Kim cemented his place on the world stage. The 13-second handshake, which was televised live around the world, marked the high point of an at-times surreal couple of days, extending the rapprochement of two men who only months ago were trading insults and threatening each other with nuclear attack.

Trump applauds North Korea's 'great beaches,' says they would be a perfect location for condos and hotels = In a press conference following his summit with North Korean leader Kim Jong Un in Singapore, President Donald Trump applauded North Korea's "great beaches" and said they would be a great location for condos and hotels.As a former developer, Trump appeared to hint at that real estate could be the key to North Korea's economic development as a country"As an example, they have great beaches," Trump said to reporters. "You see that whenever they're exploding their cannons into the ocean. I said, 'Boy, look at that view. Wouldn't that make a great condo?'"Trump added that North Korea could be a great location for hotels, too."You could have the best hotels in the world right there," Trump said. "Think of it from a real estate perspective. You have South Korea, you have China, and they own the land in the middle. How bad is that, right? It's great." Trump's news conference on Tuesday came after his historic meeting with Kim Jong Un on Sentosa Island, where the two world leaders discussed North Korea's path to denuclearization and signed a statement that the two nations would open relations.

Trump, Kim sign denuclearization deal in 'new chapter' | TheHill: President TrumpDonald John TrumpSanford at risk in primary shadowed by Trump McConnell cements his standing in GOP history Ready for somebody? Dems lack heir apparent this time MORE and North Korean leader Kim Jong Un signed an agreement Tuesday committing the United States to unspecified “security guarantees” in exchange for a denuclearized Korean Peninsula, as Trump said the two were ready "to write a new chapter" between the nations. The agreement, and a surprise decision by Trump to call off joint military exercises with South Korea, capped a historic summit that represented the first ever meeting between a sitting U.S. president and a North Korean leader.“I think our whole relationship with North Korea and the Korean Peninsula is going to be a very different situation than it has in the past,” Trump said at a signing ceremony on the agreement. “We’ve developed a very special bond,” he said of his relationship with Kim. Trump added that he would “absolutely” invite Kim to the White House to continue their talks. Kim called the document “historic” and said it would lead to a new era in the U.S.-North Korea relationship. “We had a historic meeting and decided to leave the past behind, and we are about to sign a historic document,” he said through a translator. “The world will see a major change.” Kim also thanked Trump for making “this meeting happen.” 

Trump-Kim summit: Two leaders promise to forge a new partnership WaPo— President Trump said he “developed a very special bond” with North Korean leader Kim Jong Un during their historic summit here Tuesday and proclaimed the start of a new era that could break a cycle of nuclear brinkmanship and stave off a military confrontation. “Yesterday’s conflict does not have to be tomorrow’s war,” Trump said at a news conference in Singapore following more than four hours of talks with Kim. Trump said Kim “reaffirmed” his commitment to denuclearization of the Korean Peninsula and also agreed to destroy a missile site in the country. “We’re ready to write a new chapter between our nations,” the president said. Trump sounded triumphant following his meeting with Kim, expressing confidence that the North Korean leader was serious about abandoning his nuclear program and transforming his country from an isolated rogue regime into a respected member of the world community. But Trump provided few specifics about what steps Kim would take to back up his promise to denuclearize his country and how the United States would verify that North Korea was keeping its pledge to get rid of its nuclear weapons, saying that would be worked out in future talks. 

Commentary: Make DPRK-U.S. summit starting point for nuclear-free, peaceful peninsula - (Xinhua) -- A landmark summit between leaders of the Democratic People's Republic of Korea (DPRK) and the United States took place here Tuesday, igniting hopes for a political solution to the Korean Peninsula nuclear issue and lasting peace in the region.No one, however, would expect the half-day summit to be able to iron out all differences and remove deep-seated mistrust between the two long-time foes.To ensure that the positive momentum begets desirable outcomes, it is imperative for all stakeholders to continue working toward a common objective.The road toward the goal of a nuclear-free peninsula and realizing regional peace and prosperity is bound to be a bumpy one that requires patience and wisdom. The first step is always the hardest to take.As Pyongyang and Washington, the two parties at the crux of the peninsula issue, have made bold decisions to hold a summit, it is important that talks keep going and that relevant parties contribute to the negotiating process.The Singapore summit marks the first time in history that a sitting U.S. president meet with the top leader of the DPRK. In that respect, the summit itself carries historical significance, and is expected to chart a course of denuclearization and herald a new chapter toward peace and prosperity on the peninsula.The DPRK has recently made several goodwill gestures that evinced its strong desire to achieve a denuclearized peninsula and to focus on economic development.Disagreements will not disappear all at once but are by no means unbridgeable. The two countries should address each other's reasonable concerns, manage and reduce their differences, and take more actions to enhance dialogue and foster mutual trust.

Trump Touts Success Of Singapore Summit After Securing $10 Billion Trade Deal To Sell Nuclear Warheads To North Korea  —Saying the agreement represents a major high point in American international relations, President Trump concluded his summit with Kim Jong-un Monday by securing a $10 billion trade deal to sell both strategic and tactical nuclear warheads directly to North Korea. “There was some negotiating involved in getting [Jong-un] to buy as many nukes as we wanted to sell, but by cutting the price, we came out with a deal that’s profitable for America and therefore good for the world,” said Trump of the pact, which requires the United States to provide the East Asian authoritarian state with 50 thermonuclear fusion weapons over the next five years. “We’re taking this $10 billion and investing it right back into our economy, our arms industry, and especially our great military, because now more than ever we’re going to need them to help train, supply, and reinforce North Korean troops.” At press time, Trump had threatened to pull out of the deal in a series of invective-laced tweets accusing Kim Jong-un of attempting to acquire $10 billion worth of nuclear weapons.

Trump’s unlikely allies on North Korea talks — progressive Democrats - President Donald Trump has found an unlikely source of support as he meets with North Korea leader Kim Jong-un: Democrats. Some of the same far-left Democrats who complain that he stole the election and want to impeach him praise him for trying to engage in diplomacy. "We are encouraged by your efforts to pursue direct diplomacy with North Korea with the dual goals of resolving the nearly seven-decade-long conflict and achieving the denuclearization of the Korean peninsula," 15 House members wrote in a letter to Trump on Monday. "Diplomacy is the only path to resolve the tensions between our countries." Yet the Democrats may just be helping Trump. SIGN UP The White House has repeatedly boasted that Trump, the businessman-turned-politician, is perhaps the only person who could strike a deal with Kim, the reclusive dictator. Trump has already started campaigning on the issues as he hits the road for the midterm elections and relishes talk of a possible Nobel Peace Prize if the talks yield a significant lasting deal. "These members are willing to put what's best for the country, and in this case the world, ahead of the day-to-day politics of it," said Eddie Vale, a veteran of Democratic and progressive political and legislative campaigns. "But just because someone is giving Trump a chance on diplomacy doesn't mean they won't criticize him if he fails on one of the myriad other issues like immigration, health care, or taxes that he's hurting their constituents on and that's what the elections will be decided on." The letter was signed by the two co-chairs of the House's Progressive Caucus — Reps. Raul Grijalva, D-Ariz., and Mark Pocan, D-Wisc., — and include members from California, Washington, Hawaii and Guam. 

Tearful Rodman claims vindication for Kim ties (AFP) - Basketball star and improbable North Korean envoy Dennis Rodman broke down in tears live on television Tuesday as he recounted the hostility he faced for meeting dictator Kim Jong Un. Amid a landmark summit between President Donald Trump and the young North Korean strongman, Rodman appeared on CNN to voice hope, and vindication. "I got death threats," Rodman said breaking down in tears. "I couldn't even go home ... I had to hide out for 30 days." Saying the controversial talks between him and Kim and between Trump and Kim were the right thing to do, Rodman said: "We need the doors to be open and start fresh and make this world a better place, baby, that's it". Rodman has struck up an unlikely friendship with the basketball loving North Korean leader and made five trips to Pyongyang since Kim took power. He flew into Singapore late Monday to be present for the historic first summit between the two leaders. He appeared on television wearing a Trump supporters' "Make America Great Again" hat and a tee-shirt from his cryptocurrency sponsor. 

Trump "War Games" Announcement Shocks South Korea, US Military Forces --In what was perhaps the most surprising announcement to emerge from today's Trump-Kim summit, president Trump agreed to suspend military exercises with South Korea in return for a commitment to denuclearisation from North Korea.As we reported earlier, Trump said the war games were expensive and “very provocative”, and yet stopping them has been called a "major concession", something the US has previously rejected as non-negotiable on the grounds that the exercises are a key element of its military alliance with Seoul, and maintaining a deterrent against North Korea. In return, Trump said Kim had agreed in a joint statement to reassert “his firm and unwavering commitment to complete denuclearisation of the Korean peninsula”.In other words, Trump made it appear that he is negotiating from a position of weakness to achieve a diplomatic goal which would have remained unachievable had Trump not taken the initiative. In doing so, however, he infuriated the neocons in his immediate circle. Immediately after the announcement, the WaPo's Josh Rogin noted that "Everything Trump is saying and doing goes directly against everything Bolton has ever said or believed about North Korea."Everything Trump is saying and doing goes directly against everything Bolton has ever said or believed about North Korea.— Josh Rogin (@joshrogin) June 12, 2018On the surface, anything that neocon warmonger Bolton hates can only be good.But it wasn't just Trump's closest advisors that were shocked: both the South Korean government and US forces in the region appear to have been taken by surprise by Trump’s declared suspension of joint military exercises.According to Reuters, US forces in Korea said they had not received updated guidance on military exercises. “In coordination with our ROK [Republic of Korea] partners, we will continue with our current military posture until we receive updated guidance,” a spokesperson told Reuters.

Reporters thought this video was North Korea propaganda. It came from the White House. - Reporters crowded into a Singapore auditorium Tuesday, expecting President Trump to walk out and announce the results of his historic meeting with North Korean leader Kim Jong Un. Suddenly, two huge screens on either side of the empty podium came to life. Soaring music boomed over the speakers, and the reporters were bombarded with a montage portraying North Korea as some sort of paradise.Golden sunrises, gleaming skylines and high-speed trains. Children skipping through Kim Il Sung square in Pyongyang. North Korean flags fluttering between images of Egyptian pyramids, the Taj Mahal and the Lincoln Memorial.In a split-screen shot, Kim Jong Un waved to an adoring crowd while President Trump stood beside him with his thumb in the air. The pair appeared over and over again, like running mates in a campaign video.The film went on like this for more than four minutes, with brief interludes of missiles, soldiers and warships interrupting the pageantry. Some journalists, unable to understand the Korean-language narration, assumed they were watching one of Pyongyang’s infamous propaganda films. “What country are we in?” asked a reporter from the filing center.But then the video looped, playing this time in English. And then Trump walked onto the stage and confirmed what some had already realized.The film was not North Korean propaganda. It had been made in America, by or on the orders of his White House, for the benefit of Kim.“I hope you liked it,” Trump told the reporters. “I thought it was good. I thought it was interesting enough to show. ... And I think he loved it.”The crowd sounded skeptical. Some wondered if Trump had not, in fact, just provided U.S.-sanctioned propaganda to one of the country’s oldest adversaries.

Here Is The Full Text Of The Letter Signed By Trump And Kim -  There was some confusion in the immediate aftermath of the signing of a letter by President Trump and North Korean Leader Kim Jong Un to commemorate the conclusion of the historic Singapore summit, for the simple reason that nobody knew what was in the letter, and analysts were forced to extract its contents from photos... of the the agreement held up by Trump.  Moments ago Bloomberg released the full text. Here's what it says (highlights ours).  President Trump and Chairman Kim Jong Un conducted a comprehensive, in-depth, and sincere exchange of opinions on the issues related to the establishment of new U.S.-DPRK relations and the building of a lasting and robust peace regime on the Korean Peninsula. President Trump committed to provide security guarantees to the DPRK, and Chairman Kim Jong Un reaffirmed his firm and unwavering commitment to complete denuclearization of the Korean Peninsula. Convinced that the establishment of new U.S.-DPRK relations will contribute to the peace and prosperity of the Korean Peninsula and of the world, and recognizing that mutual confidence building can promote the denuclearization of the Korean Peninsula, President Trump and Chairman Kim Jong Un state the following:

1. The United States and the DPRK commit to establish new U.S.-DPRK relations in accordance with the desire of the peoples of the two countries for peace and prosperity.
2. The United States and the DPRK will join their efforts to build a lasting and stable peace regime on the Korean Peninsula.
3. Reaffirming the April 27, 2018 Panmunjom Declaration, the DPRK commits to work toward complete denuclearization of the Korean Peninsula.
4. The United States and the DPRK commit to recovering POW/MIA remains, including the immediate repatriation of those already identified.

Having acknowledged that the U.S.-DPRK summit — the first in history — was an epochal event of great significance in overcoming decades of tensions and hostilities between the two countries and for the opening up of a new future, President Trump and Chairman Kim Jong Un commit to implement the stipulations in this joint statement fully and expeditiously. The United States and the DPRK commit to hold follow-on negotiations, led by the U.S. Secretary of State, Mike Pompeo, and a relevant high-level DPRK official, at the earliest possible date, to implement the outcomes of the U.S.-DPRK summit.

Trump just struck a shockingly weak deal with North Korea -- The historic meeting between President Donald Trump and North Korean leader Kim Jong Un is over — and Trump thinks it went really well.  During a lengthy press conference, Trump hailed the historic summit on Tuesday as “very successful,” and praised Kim as having a “great personality.” He also called the agreementthat they signed the start of a new era in North Korea’s relationship with the world. “We’re prepared to start a new history, and we’re ready to write a new chapter between our nations,” the US president added. The agreement, in which both countries commit to working toward peace and “complete denuclearization” of the Korean Peninsula, reduces tensions between the US and North Korea to the lowest they’ve been since Trump assumed office. It’s a remarkable development for two countries that were threatening to launch a nuclear war against each other just months ago — a nightmare scenario that military analysts said was a real possibility.  But despite the pomp and circumstance, experts say that Trump’s agreement with Kim is more of a symbolic achievement than a substantive one. They’re also concerned that Trump has conceded far too much to Pyongyang without receiving enough — if anything — in return. The agreement’s language is apparently more vague and less demanding of North Korea’s denuclearization program than previous agreements the US has had with the country. Some see Trump’s decision to halt joint US-South Korean military exercises as a huge and unreciprocated giveaway to Kim.

Pompeo: North Korea Lied About Trump Making Concessions On Sanctions -  After briefing a group of reporters in Seoul, Secretary of State Mike Pompeo spoke in South Korea accompanied by his Japanese and South Korean counterparts, where he insisted that Kim Jong Un was lying about President Trump making concessions on the lifting of economic sanctions. Pompeo insisted that the North wouldn't benefit from complete sanctions relief until after the country had completely given up its nuclear arsenal.During the meeting, Pompeo was pressed about President Trump's purported commitment to a "step-by-step" process, as well as whether the president "expressed his intention" to lift sanctions - assertions that contradicted Trump's pledge to keep sanctions in place until Kim's weapons had been destroyed."Chairman Kim Jong Un understands the urgency of the timing of completing this denuclearization, and understands we must do this quickly," Pompeo told reporters. "And the sanctions relief cannot take place until such time as we have demonstrated that North Korea has been completely denuclearized." Pompeo is briefing North Asian leaders on Trump's historic summit with Kim, traveling to Seoul to brief Moon Jae-in, the South Korean leader, before he visits Beijing next to brief Chinese leaders. Both China and South Korea support "a phased approach to negotiations" with North Korea while Japan wants the US to lead a "maximum pressure" campaign against Kim. The Secretary of State's main job appeared to be pushing back against criticisms of the one-and-a-half-page paper signed by Trump and Kim that set out some broad principals for North Korea's "complete denuclearization." President Trump famously declared after returning home that there was "no longer a nuclear threat" from North Korea, according to Bloomberg.

Pompeo admits implementing North Korean deal will not be easy | Asia Times: US Secretary of State Mike Pompeo said in Seoul on Thursday that “complete, verifiable and irreversible” disarmament of North Korea remains Washington’s goal and that sanctions will remain in place, but admitted that implementing the deal reached in Singapore on Tuesday will be difficult. Pompeo was speaking at a press conference in Seoul with Japanese Foreign Minister Taro Kono and South Korean Foreign Minister Kang Kyung-wha.The former CIA director had flown to Seoul from Singapore, to give a “read-back” of the summit to his counterparts and to South Korean President Moon Jae-in, a key enabler of the meeting between US President Donald Trump and North Korean leader Kim Jong-un two days prior. Pompeo, who made two trips to Pyongyang, pre-summit and who was a key architect of the North Korea-US summit, appeared keen to defend the declaration signed by the two parties. “We believe that Chairman Kim Jong-un understands the urgency of the timing of completing this denuclearization and understands we must do this quickly,” Pompeo said, according to South Korea’s Yonhap newswire. “And the sanctions relief cannot take place until such time as we have demonstrated that North Korea has been completely denuclearized.” There has been harsh criticism from analysts across the region and across the world of the declaration, which, while wide ranging, is entirely devoid of concrete commitments, timelines or even details about North Korean denuclearization. Some have even called the summit a win for Kim, who was offered what are seen as two key concessions: the end of joint South Korea-US military drills and the use of the preferred North Korean, rather than US term, for the denuclearization process. 

The Real Results Of The Trump-Kim Summit – Freeze For Freeze - The aftermath of the Trump-Kim summit in Singapore confirms my early take on the talks. What both sides committed to is the "freeze for freeze" agreement North Korea had offered since at least 2015. The U.S. stops its threatening maneuvers while North Korea stops missile and nuke testing. Both sides further committed to future talks about a peace treaty in exchange for some nuclear disarmament. Under pressure from hawks the Trump administration tries to spin additional Korean concessions into the summit declaration. It claims that North Korea committed to "verifiable and irreversible" steps. It is a bad move as that is not the case. Only the written words count. "[T]he DPRK commits to work towards the complete denuclearisation of the Korean peninsula" is the binding wording.In 1970 the U.S. committed itself to its own complete nuclear disarmament in the Treaty on the Non-Proliferation of Nuclear Weapons (NPT): Article VI - Each of the Parties to the Treaty undertakes to pursue negotiations in good faith on effective measures relating to cessation of the nuclear arms race at an early date and to nuclear disarmament, and on a treaty on general and complete disarmament under strict and effective international control.Both statements are aspirational. "To work towards" and to "undertake to pursue negotiations" are both intentionally vague and of equal determination. The real point of the Singapore summit was the "freeze for freeze" the U.S. and North Korea both committed to it.

The Hard Part for Trump: Making North Korea Keep Its Summit Promises - WSJ - President Donald Trump’s top priority when he meets Kim Jong Un in Singapore will be wresting a ironclad commitment that the North Korean leader is prepared to give up his nuclear weapons program in exchange for an agreement bringing seven decades of hostilities to a close. But he acknowledged on Thursday that would only be the beginning. “Sounds a little bit strange, but that’s probably the easy part,” Mr. Trump said at the White House alongside Japanese Prime Minister Shinzo Abe. “The hard part remains after that.” Even with such an assurance, the summit will be just the start of an intricate process. U.S. officials need to obtain a list of all of North Korea’s nuclear assets, nail down verification arrangements in a country that has resisted intrusive monitoring and settle on a speedy schedule for dismantling Pyongyang’s arsenal. All this must take place as Washington and Pyongyang try to build trust after more than 60 years of often acrimonious confrontation. Former negotiators say the lower-level talks and future summits that are expected to follow will be full of potential pitfalls. But U.S. officials also have the lessons of several rounds of failed talks to draw on. Among their recommendations: address verification early, be explicit, be firm, get it in writing and keep the momentum. “A key lesson is the need to be specific and explicit about the constraints we want the North Koreans to be bound by,” said Robert Einhorn, a former U.S. negotiator on North Korea’s missile programs. “The North Koreans will exploit any ambiguities.” North Korea has committed itself to denuclearization before: In a September 2005 statement it issued jointly with the U.S. and four other nations, North Korea said it was committed to “abandoning all nuclear weapons and existing nuclear programs.” Those “six–party talks” faltered after Pyongyang resisted the Americans’ demand for wide-ranging verification. 

 North Korea’s Kim Jong-un rewrites the book on the art of the deal with shrewd handling of Donald Trump in Singapore | South China Morning Post: For a 34-year-old who made his first state visit in just the last few months, North Korean leader Kim Jong-un seemed to hold his own in Tuesday’s high-profile summit setting with US President Donald Trump. Kim had already surprised many observers with shrewd strategic manoeuvring before the talks and the Singapore summit only burnished that reputation. In the face of Trump’s well-honed, reality-TV style and reputation as an unpredictable diplomatic opponent, the North Korean leader avoided the inclusion of CVID – or complete, verifiable, irreversible denuclearisation – in the summit’s joint statement – all without appearing confrontational. Instead, he and the US president signed a relatively vague statement agreeing to “work towards complete denuclearisation”. “It must have been at Kim’s insistence to not [include] CVID,” a senior South Korean official said, saying any reference to the term would have subjected Pyongyang to much tighter scrutiny.CVID was among the biggest points of contention in pre-summit negotiations between Sung Kim, the US ambassador to the Philippines and former envoy to South Korea, and North Korea’s Vice-Foreign Minister Choe Son-hui. Their marathon meetings on Monday ended only when Washington yielded to Pyongyang and agreed to leave the term out. Kim has always insisted on a “phased and synchronous” – or “action-for-action” – approach to giving up his nuclear weapons. This would involve the international community compensating Pyongyang for every step it takes on the road to abandoning the programme, rather than waiting until after complete denuclearisation to give North Korea economic rewards. 

 Paul Jay on Trump’s Iran War Agenda and Liberals’ Korea Peace Panic - Yves here. The Real News Network is making a departure from its usual segment format to showcase Paul Jay giving his views on Trump’s latest foreign policy moves and pundits’ reactions. Jay argues that Trump and his team remain focused on Iran. Notice, however, that the White House acts as if it can proceed in the Middle East as it see fit and not worry about the need to deal with a rising China.

TV Poll: 71% Of Liberals Don't Want Peace With North Korea Because Trump Would Take Credit - A live TV poll taken on Michelle Wolf’s Netflix show found that 71% of the comedian’s liberal audience would rather peace with North Korea fail than see Donald Trump take credit for it.The audience was asked, “Are you sort of hoping we don’t get peace with North Korea so you wouldn’t have to give Trump credit?”Only 29% said they wanted peace with North Korea given the option.Video: 71% of audience for @MichelleIsaWolf’s @Netflix show @TheBreakNetflix says yes to “hoping we don’t get peace with North Korea so you wouldn’t have to give Trump credit.” #TTT pic.twitter.com/z4S7Y4WgQq— Brent Baker (@BrentHBaker) June 4, 2018  Wolf’s guest on the show subsequently remarked, “That’s how liberal they are that they would rather the world explode, they’re like ‘I told you guys he was an asshole’.  In other words, a significant majority of leftists would happily risk nuclear war, so long as it meant Trump would look bad. Let that sink in.

Pundits Worry Threat Of Nuclear War Is Being Reduced - Media outlets don’t want America to negotiate with North Korea; they want the US to hold  North Korea for ransom. On MSNBC’s Rachel Maddow Show, the host was aghast (6/12/18) that the US says it will halt the annual war games it conducts with South Korea on North Korea’s doorstep, because doing so is “an absolute jackpot for the North Korean dictator,” “one of the things he wants most on earth,” and now Washington “has just given them that for free, for nothing.”Maddow implied that Trump has taken this step out of fealty to Russia, and complained that pausing war games that threaten North Korea benefits Russia and China. She twice called the Kim/Trump summit a “wedding,” said that the two leaders “love” each other two times, and referred to Kim as Trump’s “best friend.”In other words, de-escalation is for wimps, and what’s needed is toughness, even if it risks nuclear war. Not once did Maddow demonstrate the slightest concern with avoiding war. The message of her segment is that the US should subject all 25 million people in North Korea to the threat of nuclear annihilation until its leaders do what the US says, a threat that necessarily extends to the rest of East Asia, since it would be decimated in any nuclear exchange, to say nothing of the likely devastating effects on the rest of the world.

Senators move to prevent Trump from removing US troops from Korea - A pair of Senate Democrats introduced a bill Wednesday that would prevent President Donald Trump from unilaterally drawing down the American troop presence on the Korean peninsula – not necessarily because he’s said he will, but because they don’t want to rely on his word that he won’t. Other measures that also tie the president’s hands, but don’t go as far, are already closer to being passed as part of an essential military policy bill. The new legislation, from Sens. Chris Murphy, D-Conn., and Tammy Duckworth, D-Ill., would prevent Trump from withdrawing troops from South Korea unless the secretary of defense says it’s in the interest of national security and that it would not undermine the security of allies in the region. “U.S. troops are not bargaining chips to be offered up in an off-handed manner,” Duckworth said in a statement. During his summit with North Korean dictator Kim Jong Un, Trump announced the U.S. would be ending large-scale annual military exercises conducted with South Korea but insisted that the status of the 28,500 American soldiers on the peninsula is not up for negotiation. “They are going to stay. We didn’t even discuss that, that wasn’t discussed,” Trump said in an interview with Voice of America. But he also said, during a press conference, that he still wants to draw down troops in Korea at some point – just not as part of negotiations over the North’s nuclear capability. “At some point, I have to be honest. I used to say this during my campaign… I want to bring our soldiers back home. We have 32,000 soldiers in South Korea. I would like to be able to bring them back home. That’s not part of the equation. At some point, I hope it would be,” he said. 

Iran Warns North Korea About The United States - Now that the much-anticipated meeting between President Donald Trump and North Korean leader Kim Jong Un in Singapore fades from the news cycle, giving way to a myriad of analysis from seemingly all corners, Iran is giving its take on the historic meeting of the two leaders.Iranian Foreign Ministry Spokesman Bahram Qassemi said in press conference that “Iran wants peace and stability on the Korean peninsula. Iran welcomes any steps toward peace in the welfare of the people.”“But given the past record of the U.S. and President Donald Trump who has violated international treaties, especially the 2015 nuclear deal, Iran remains deeply pessimistic about Trump’s intentions. North Korea should act with caution. The nature of the U.S. government is not such that one can be optimistic about it.”Iran’s comments over the summit between Trump and Kim come as the commencement of renewed U.S. sanctions against the Islamic Republic nears, which could remove as much as 500,000 barrels of Iranian oil per day, perhaps more, from world markets. Moreover, there is a ticking clock involved that Tehran has to worry about. On May 8, Trump’s executive order over Iran’s nuclear development started a 180-day countdown timer for the White House to re-impose all of the sanctions on Iran that were relaxed under the Obama-era deal reached in 2015.

Mattis: Withdrawing US Troops From Syria Would Be A "Strategic Blunder" - Speaking at NATO headquarters of Friday, Secretary of Defense James Mattis reiterated his opposition to the idea of withdrawing US troops from Syria. He said any withdrawal before progress was made would be a “strategic blunder.” "In Syria, leaving the field before the special envoy Staffan de Mistura achieves success in advancing the Geneva political process we all signed for under the UN security council resolution would be a strategic blunder, undercutting our diplomats and giving the terrorists the opportunity to recover..." Mattis’ position reflects those of a lot of top US cabinet officials, who have resisted President Trump’s talk of a quick withdrawal. He argues that the UN peace plan necessitates an ongoing US military presence. On the one hand, Mattis suggests leaving too soon could give “the terrorists the opportunity to recover.” On the other hand, he also says that leaving would be exploited by the Assad government and its supporters. This again sets out the US position that the UN plan necessitates regime change in Syria, something other supporters say is not the caase. It also suggests a more or less permanent US presence in Syria, since there is virtually no chance the US will impose a favorable outcome. Instead, Syria looks to be going the way of other major US wars, an open-ended situation short of success in which officials simultaneously are unable to come up with a plan to “win,” but will resist any pullout so they never completely lose.

Uncovering the new administration’s drone war policy --Over three administrations and 16 years, there has been nothing as iconic in the United States’ forever war on terror as the matchstick-with-wings silhouette of the modern drone. Understanding the drone program has never been easy; the covert nature of some of the program, as well as a strong executive emphasis on the needs of national security, meant that even at its most transparent, the drone war was largely opaque. In its third report on drone policy, the Stimson Center finds that after a gradual movement towards more transparency by the end of President Obama’s second term, the Trump administration has fully reversed course.  “We have now seen in the last 18 months a Trump administration take the U.S. drone program and employ less transparency and less restraint at the same time that we’ve seen an increase in the frequency of strikes as well as geographic scope of those strikes,” says Rachel Stohl, managing director of the Stimson Study Group on U.S. Drone Policy. “We have more happening with less information and we’re seeing is an environment where we have not only far less transparency but less accountability and responsibility for the strikes that we are undertaking. My fear is that we have inadvertently set an international precedent which does not do the United States any service in both the short and the long term.” President Trump is reported to have already authored at least 80 drone strikes in Pakistan, Yemen, and Somalia, which nearly twice as many as President Bush authored in his entire administration, and at a pace that would in seven years total more strikes than the Obama administration authored in eight years. And these are just the strikes happening in places outside of formal combat operations; as the report notes an agreement signed by the Trump administration to base drones in Niger could lead to drone strikes across the Sahel as well.

Centrists Are Very Concerned That Donald Fucking Trump Isn’t Hawkish Enough - Caitlin Johnstone  - Today American centrists (who only get to call themselves that because plutocratic media control has made Orwellian neoliberal neoconservatism the dominant ideology in the US) are deeply, profoundly concerned that Donald fucking Trump is insufficiently hawkish.This would be the same Donald Trump whose administration just facilitated the bombing of Yemen’s new cholera treatment center. The same Donald Trump who has increased US troops in Afghanistan, Somalia and Syria. The same Donald Trump who is openly pursuing regime change in Iran. The same Donald Trump whose administration committed war crimes in Raqqa. The same Donald Trump who has made many dangerous cold war escalations against Russia. The same Donald Trump whose administration has voiced a goal of regime change in Damascus and the intention of remaining in Syria indefinitely. The same Donald Trump whose air strikes are killing far more civilians than the drone king Obama’s did. Centrist pundits and politicians on both sides of the aisle are saying that this very man is being too soft and cuddly toward North Korea. These would be the same centrist pundits and politicians who loudly cheered both of the times this administration bombed the Syrian government, effectively sending the message that the only way this narcissistic president can win praise by the manufacturers of the mainstream narrative is by rejecting peace and embracing war. Thanks guys.

China Hacked US Navy Contractor, Stole 614GB Of Submarine Missile Secrets - The U.S. Navy and the FBI are investigating a massive cyber breach that compromised the network of an unidentified Navy contractor, as Chinese hackers allegedly stole large amounts of data related to undersea warfare, including top-secret programs to develop supersonic anti-ship missiles for submarines by 2020, according to American officials, The Washington Post reported. The data breach occurred earlier this year as the investigation is still ongoing. The officials said that the contractor was working at the Naval Undersea Warfare Center, a full-spectrum research, development, and testing arm of the Navy. The warfare center focuses on submarines, autonomous underwater systems, and offensive and defensive weapons systems associated with undersea warfare.According to the WaPo, Chinese hackers stole a total of 614 gigabytes of plans for cutting-edge weapons relating to various undersea programs, as well as sensor data, submarine information about cryptographic systems, and an entire library of submarine electronic warfare data.Since the cyber attack, this has been a nightmare for the Pentagon, as the Navy warned The Washington Post not to release further details about the secret submarine missile program, in their report. Meanwhile, Defense Secretary James Mattis ordered the Pentagon inspector general’s office Friday to investigate the massive data breach. Bill Speaks, Director of Media Operations for the Navy said, “There are measures in place that require companies to notify the government when a ‘cyber incident’ has occurred that has actual or potential adverse effects on their networks that contain controlled unclassified information.”

Inside the State Department's hunt for leakers -- Mike Pompeo’s senior aides are hunting for leakers inside the State Department after the new secretary of state became infuriated about several recent news stories.   State spokesperson Heather Nauert held a public affairs meeting to discuss the leaks several weeks ago in the aftermath of an Associated Press article that confirmed Brett McGurk — a Special Presidential Envoy appointed under former President Obama — was staying on an additional six months. This meeting has been leaked to Axios. "There were a couple of articles that pissed off Pompeo," said a source familiar with the meeting. "One was an article about McGurk. Another about slow-rolling Palestinian funding."  A source familiar also said State Department employees' phones were checked as part of the leak investigation. A department spokesman declined to comment.  Pompeo, coming to State straight from the CIA, was caught off guard by some of the stories revealing internal deliberations.  A number of State Department officials feel that the crackdown is unwarranted and has been handled in a heavy-handed manner, according to sources familiar with the situation:"It's not leaks; it's not classified info. It's reporters confirming what they got from overseas sources," a source familiar with the situation told Axios. "If you're going to do it, don't do it in a meeting about leaks that promptly leaks. They didn't learn their lesson when the White House did this?" "They've gotten diplomatic security involved in the leak investigation — the internal security of the State Department — which is bananas," the source added. "These are the people who stand outside diplomats' doors when they sleep overseas."“The unauthorized release of information, whether it's classified or not, is always a concern of the State Department," Nauert told Axios. "It can jeopardize ongoing operations and negotiations in which the State Department is involved.”  "Also, Diplomatic Security doesn’t 'stand outside diplomats' doors,'" Nauert added. "DS is the security and law enforcement bureau for the entire agency. Their mission is to provide a secure environment for the conduct of U.S. foreign policy

 Canadian PM open to compromise on disputed NAFTA sunset clause  (Reuters) - Canadian Prime Minister Justin Trudeau on Saturday rejected a U.S. demand for a sunset clause in NAFTA but said he was prepared to compromise on the issue, which is holding up talks to update the 1990s-era pact. U.S. President Donald Trump - who regularly threatens to pull out of the North American Free Trade Agreement - insists that Canada and Mexico agree to a sunset clause that would allow a member nation to withdraw after five years. Although Canada and Mexico say the idea is unworkable, Trump told reporters earlier on Saturday that the new deal would contain such a provision. Trudeau rejected the idea. “There will not be a sunset clause ... we will not, cannot sign a trade deal that expires automatically every five years,” he told a news conference at the end of a Group of Seven summit in Quebec. “I think there are various discussions about alternatives that would not be that, and that would not be entirely destabilizing for a trade deal, and I think we are open to creativity,” he said. This, he suggested, could involve “a check in and a renewal.” Officials say Canada and Mexico have proposed member nations gather every five years to review the treaty. Talks to modernize NAFTA, which started last August, have effectively stalled as Canada and Mexico resist U.S. demands for major changes such as the sunset clause and boosting the North American content of autos made in the three nations. Trudeau said he had told Trump that the talks had been made more complicated by a U.S. decision to impose tariffs on Canadian steel and aluminum, ostensibly for national security reasons. Canada has promised retaliatory measures on July 1.   “Canadians, we’re polite, we’re reasonable, but we will also not be pushed around,” said Trudeau.

Trump At G-7 Closing Remarks: "We're The Piggy Bank That Everybody's Robbing" - President Trump's 24 hours in Quebec while attending the annual G-7 Summit was every bit as confrontational as we imagined they would be. The president has enraged his fellow world leaders, insulted Justin Trudeau, who's hosting the summit in Quebec and whom Trump repeated referenced as just "Justin", and skipped a meeting with French President Emmanuel Macron. German Chancellor Angela Merkel has attacked him and vowed to challenge his "America First" trade agenda while also confronting him about his climate stance - something that might be difficult to do, since Trump left this morning after he said he would skip  discussions about climate change Saturday night. Trump also showed up late to a gender-focused breakfast meeting, billed by the event's Canadian organizers as a chance for leaders to "draft concrete actions for the G-7 to advance gender equality," according to CBC. Isabelle Hudon, Canada's ambassador to France, was making opening remarks when Trump and a flood of press pool members arrived and interrupted her.As Trump quietly took his place between Christine Lagarde, head of the International Monetary Fund, and Lt.-Gen. Christine Whitecross, the Canadian head of the NATO college in Rome, Trudeau restated his welcome and Hudon repeated her remarks.Then there were his controversial remarks. Early on, Trump suggested that the G-7 should consider readmitting Russia, which was kicked out in 2014 for its activities in Crimea. Trump instead blamed those on Obama. Also on Friday, Trump floated the idea of ending all tariffs and trade barriers between the US and its allies - a pitch that wasn't exactly expected, according to Politico. Trump offered the proposal at the end of a "contentious" meeting on trade disputes. Most G-7 members remain furious with Trump over his decision to impose tariffs on aluminum and steel imports, and his threats to impose more trade restrictions. Merkel responded positively to Trump's suggestion, saying she would consider it. Before leaving for his meeting with Kim Jong Un, Trump provided an update during a live press conference with Larry Kudlow and John Bolton. First he thanked Trudeau and praised Canada as a "beautiful country" before launching into a summary of issues starting with trade. Though he walked away without signing the US on to the traditional post-summit agreement (providing more fodder for critics who sneered about the G-6 + 1), Trump insisted that the G-7 was "tremendously successful" and despite trade tensions "relationships are outstanding." He adds that the tariff situation is "going to change, 100 percent" as the US is "like the piggy bank that everyone robs".

The G7 summit collapses- In an unprecedented event, the G7 talks at Charlevoix in Quebec broke down Saturday, amid bitter recriminations and threats of trade war measures between countries at the heart of the world economy. Insoluble conflicts erupted over Washington’s threats to impose tariff barriers on billions of dollars of imports from the European Union (EU), Canada and Mexico. The lead-up to the conference had been marked by acrimony, with French President Emmanuel Macron rhetorically proposing to sign a “6 country agreement,” excluding the United States. Photos emerged from the summit of German Chancellor Angela Merkel leaning over a table, glaring at Trump, who left the summit early, skipping talks on climate change.The summit issued a final communiqué papering over the conflicts, as is usual in G7 summits, condemning protectionism but making a few criticisms of the World Trade Organization in line with US complaints. The US was expected to sign, but Trump, after listening to Canadian Prime Minister Justin Trudeau’s post summit press conference while en route to Singapore for a summit with North Korean President Kim Jong-un, fired off a volley of tweets that signaled a comprehensive breakdown of the G7 talks.After Trudeau said that the communiqué criticized protectionism and that Canada would maintain its $16 billion retaliatory tariffs on US goods, the biggest Canadian tariffs since World War II, Trump hurled invective at Trudeau, warning that he “will not allow other countries” to impose tariffs. He accused what are nominally the closest US allies of having targeted the US for “Trade Abuse for many decades—and that is long enough.”In another tweet, the US president threatened a major escalation of trade war measures with tariffs on auto imports and announced the breakdown of talks: “Based on Justin’s false statements at his news conference and the fact that Canada is charging massive Tariffs to our US farmers, workers and companies, I have instructed our US Reps not to endorse the Communiqué as we look at Tariffs on automobiles flooding the US market!”This is the first time since G7 summits began in 1975—originally as the G5 with the United States, Japan, Germany, Britain and France—that all the heads of state could not agree on a communiqué.

That Viral G-7 Photo As Seen From 'The Other Side' -  While this morning's tirades by Trump's top advisors against Justin Trudeau have done nothing to dispel the G6+1 image that yesterday's viral photo from Quebec suggested... Chancellor Angela Merkel’s office released the now-iconic picture that showed her leaning over a table to confront a pouting Trump, with President Emmanuel Macron and Prime Minister Theresa May beside her. ...as with everything else in our new polarized normal, the photo did not tell the truth, the whole truth, and nothing but the truth. In fact, as Bloomberg reports, when viewed from 'alternative' angles, 'alternative' facts become possible - each released by various nations:The White House released this photo showing Trump holding court in a more relaxed setting, arms crossed, with Trudeau, Bolton, and Abe laughing... France's official release, unsurprisingly focused on Macron, with Trump barely visible... And finally, Canadian Prime Minister Justin Trudeau’s take was released with a wider frame, making sure the host, absent from most other images, was also visible -- standing next to Trump, no less.  Something he probably regrets now. As Bloomberg so poetically concluded, the G-7’s true power it seems, lies in the angle of the beholder.

Trump yanks support for G7 statement, tweets Trudeau is dishonest — The G7 summit of world leaders ended in chaos Saturday when U.S. President Donald Trump rescinded his support for a closing communique he had endorsed only hours earlier.Somewhere in the air on Air Force One headed for his North Korean summit with Kim Jong Un, Trump clearly took offence to comments made by Prime Minister Justin Trudeau, who let the president have it at his own news conference closing the event.Trudeau repeated his remarks he found the U.S. decision to impose tariffs on Canadian aluminum and steel by invoking reasons of national security “insulting” to all Canadians.Reacting to Trump’s comments earlier in the day when he said it would be a mistake for countries like Canada to impose counter tariffs, Trudeau revved the throttle.“The president will continue to say what he says,” an unfrazzled Trudeau said. “I have made it clear to the president that it (imposing counter tariffs) is not something we relish doing, but it’s something that we absolutely will do.“Canadians are polite, we’re reasonable, but we also will not be pushed around.”Trump’s reply, using his favourite mouthpiece that is Twitter, was blistering, saying he has instructed U.S. representatives at the summit to remove their support for the communique that had only just been released by summit officials.  Based on Justin’s false statements at his news conference, and the fact that Canada is charging massive Tariffs to our U.S. farmers, workers and companies, I have instructed our U.S. Reps not to endorse the Communique as we look at Tariffs on automobiles flooding the U.S. Market!— Donald J. Trump (@realDonaldTrump) June 9, 2018

IMF Warns Of Doom And Gloom After G7 Circus -- Following a ‘doctrine’ best defined by a White House official as “We’re America, Bitch”, Trump has engaged in egotistical trade battle that has even drawn in the International Monetary Fund (IMF), whose chief is warning of a doom-and-gloom global economic scenario.  IMF chief Christine Lagarde on Monday said that challenging the global trade equation was damaging business confidence the world over and the global economy would suffer for it.  While the IMF global growth forecast of 3.9 percent for 2018 and 2019 has not been changed, what happens next is likely to be dark. “[…] the clouds on the horizon that we have signaled about six months ago are getting darker by the day, and I was going to say by the weekend,” Lagarde said, referring to the circus-style antics of Trump at the G7.  In the meantime, Washington has become increasingly trite, with Twitter being the primary foreign policy platform for simultaneously announcing major, unilateral decisions and airing dirty laundry without the aid of diplomacy or forethought. Against this backdrop, then, it came as no surprise when the Atlantic quoted a senior White House official as defining Trump ‘Doctrine’ precisely as “We’re America, Bitch”.In fact, it’s apparently an entire ideology. (T-shirts coming soon, guaranteed). But post-G7, America might find itself suddenly short on allies, and this whimsical ‘doctrine’ could end up being a playground philosophy that destroys business confidence. “The biggest and darkest cloud that we see is the deterioration in confidence that is prompted by (an) attempt to challenge the way in which trade has been conducted, in which relationships have been handled and in which multilateral organizations have been operating,” Lagarde said, following a Berlin meeting with German Chancellor Angela Merkel and the heads of major international organizations, including the WTO and the World Bank. 

Trump was right. The rest of the G7 were wrong - George Monbiot -- He gets almost everything wrong. But last weekend Donald Trump got something right. To the horror of the other leaders of the rich world, he defended democracy against its detractors. Perhaps predictably, he has been universally condemned for it. His crime was to insist that the North American Free Trade Agreement (Nafta) should have a sunset clause. In other words, it should not remain valid indefinitely, but expire after five years, allowing its members either to renegotiate it or to walk away. To howls of execration from the world’s media, his insistence has torpedoed efforts to update the treaty.In Rights of Man, published in 1791, Thomas Paine argued that: “Every age and generation must be as free to act for itself, in all cases, as the ages and generations which preceded it. The vanity and presumption of governing beyond the grave is the most ridiculous and insolent of all tyrannies.” This is widely accepted – in theory if not in practice – as a basic democratic principle. Even if the people of the US, Canada and Mexico had explicitly consented to Nafta in 1994, the idea that a decision made then should bind everyone in North America for all time is repulsive. So is the notion, championed by the Canadian and Mexican governments, that any slightly modified version of the deal agreed now should bind all future governments.

Trump and Co. go ballistic on Trudeau -- A mild breeze and brilliant blue skies greeted President Donald Trump as he happily shook hands with Canadian Prime Minister Justin Trudeau on Friday at the start of the G-7 summit in Charlevoix. By Saturday, though, Trump had accused the Canadian leader of being two-faced, threatened to impose automobile tariffs on Canada and reversed on a decision to sign a joint statement with the six other leaders. The message was that Trump felt Trudeau had double-crossed him, and a pair of Trump’s advisers amped it up on the Sunday talk shows. Trudeau “really kind of stabbed us in the back,” National Economic Council director Larry Kudlow said Sunday. White House adviser Peter Navarro went a step further by saying “there’s a special place in hell for any foreign leader that engages in bad-faith diplomacy with President Donald J. Trump.” So what happened? The fury from Trump and his advisers seemed to be linked to Trudeau’s closing press conference on Saturday where he reiterated his commitment to retaliate against U.S. steel and aluminum tariffs. He also repeated his position that Canada would never accept a sunset provision in NAFTA. After Trump took umbrage at that, a spokeswoman for Trudeau said the prime minister “said nothing he hasn’t said before — both in public, and in private conversations with the president.” It was unclear whether Trump really expected Canada to unilaterally back off its move to retaliate over Trump’s steel and aluminum tariffs, but he did indicate there was some back and forth on NAFTA, particularly the U.S. proposal for a sunset provision — which has emerged as a key Trump demand. Trump, at his own press conference on Saturday, said the U.S. and Canada were “pretty close” to resolving the issue. He even floated the possibility of agreeing to a “longer” period than the five-year juncture the U.S. has proposed before the trade pact would automatically terminate unless the three parties agreed to extend it. Trudeau made clear on Saturday that Canada would in no way agree to a sunset clause in NAFTA 2.0, which it believes is a back-door way for the U.S. to encourage business investment in America instead of in Canada, but he said Canada is “open to creativity” on the issue and cited discussions on “various alternatives.” Trudeau’s position in Charlevoix was consistent with what he said on May 31 when he revealed that he had rescinded the offer of a one-on-one meeting with Trump in Washington to bring NAFTA talks to a close after Trump, by way of Vice President Mike Pence, attached the precondition that Canada agree to a sunset.

Trump Tries to Destroy the West - If a president of the United States were to sketch out a secret, detailed plan to break up the Atlantic alliance, that plan would bear a striking resemblance to Trump’s behavior.It would involve outward hostility to the leaders of Canada, Britain, France, Germany and Japan. Specifically, it would involve picking fights over artificial issues — not to win big concessions for the United States, but to create conflict for the sake of it.A secret plan to break up the West would also have the United States looking for new allies to replace the discarded ones. The most obvious would be Russia, the biggest rival within Europe to Germany, France and Britain. And just as Russia does, a United States intent on wrecking the Atlantic alliance would meddle in the domestic politics of other countries to install new governments that also rejected the old alliance.Check. Check. Check. Check. Trump is doing every one of these things. He chose not to attend the full G-7 meeting, in Quebec, this past weekend. While he was there, he picked fights. By now, you’ve probably seen the photograph released by the German government — of Trump sitting down, with eyebrows raised and crossed arms, while Germany’s Angela Merkel and other leaders stand around him, imploring. Shinzo Abe, Japan’s prime minister, wears a look of defeat.  The meeting’s central disagreements were over tariffs that Trump has imposed for false reasons. He claims that he’s merely responding to other countries. But the average current tariff of the United States, Britain, Germany and France is identical, according to the World Bank: 1.6 percent. Japan’s is 1.4 percent, and Canada’s is 0.8 percent.  . The tariffs aren’t a case of his identifying a real problem but describing it poorly. He is threatening the Atlantic alliance over a lie. If you need more evidence, look at his tweets after leaving the summit. Close readers of Trump’s Twitter feed (and I don’t envy that title) have learned that he often accuses others of committing his own sins. On Saturday, he called Justin Trudeau, Canada’s prime minister, “very dishonest.”

World Wrassling Diplomacy -  Kunstler - Why not war with Canada? That pissant “nation” is cluttering up the northern half of OUR Continent, which we struggled mightily to free from wicked Old Europe. What doesn’t Justin Trudeau get about that? And when we’re done with him, how about a few rounds with Frau Merkel and the wee frog, Monsieur Macron? I’d like to see the Golden Golem of Greatness in a leotard and one of those Mexican wrestling masks, tossing these peevish international dwarves out of the ring like so many sacks of potting soil.  And now it’s off to Singapore for a championship bout with the opponent known as “Little Rocket Man.” There’s an odd expectation that these two avatars of unreality will settle the hash that has been simmering for sixty years between the divided Korea and the USA. Mr. Trump will make a deal to turn North Korea into a golfer’s paradise and Mr. Kim will promise to beat his nuclear arsenal into nine irons and putters. And then they’ll celebrate on Air Force One with bags of Big Macs and Buckets o’Chicken. (Let the aides and advisors fight over the Singapore Noodles and squid beaks in garlic sauce.)The New York Times lost its shit Monday morning with a lead editorial that hauled onstage the stock villain from The Times’ repertory of international bogeymen: Russia. If a president of the United States were to sketch out a secret, detailed plan to break up the Atlantic alliance, that plan would bear a striking resemblance to Trump’s behavior. […] Ah, so…. To The Times, Canada, Britain, France, Germany and Japan are little more than a pain-in-the-ass-ex-wives-club, and North Korea is the irresistible porn star with a huge rack, proffered by that evil old pimp, Russia, in the never-ending game of Rope-a-Dope they’ve been running on Mr. Trump since even before he glided down that fateful escalator in his gilded Fifth Avenue tower. Surely, the wicked Putin has rigged up the Singapore hotel with the latest spy-ware and loaded the president’s closets with whores and real estate developers to tempt Mr. Trump into every sort of unnatural act dreamed up in the Kompromat labs of Yasenevo.

GOP scolds Trump team for feud with Canada -- Republicans can’t believe it has come to this: The United States is now clashing with Canada. Already rattled by President Donald Trump’s steel and aluminum tariffs on key U.S. allies, GOP lawmakers were increasingly alarmed Monday by the administration’s condemnation of the United States’ neighbor to the north. Canada is one of the nation’s closest trading and military partners, but on Sunday, senators were stunned when top Trump adviser Peter Navarro said that there’s a “special place in hell” for Prime Minister Justin Trudeau. ..Asked whether he’s concerned about the U.S. relationship with Canada, Senate Finance Chairman Orrin Hatch (R-Utah) replied: “Of course.” Navarro “should have kept his big mouth shut because I don’t think that helps us in foreign policy. And frankly, I think that’s out of line,” Hatch said, adding that Trump’s visit to Quebec for the G-7 meeting “could have been handled a lot better.” “What was it that [Trudeau] did that was so offensive that it required that type of a comment?” asked Sen. Mike Rounds (R-S.D.). “This was very disconcerting. And I do not like to see that type of language being used without having a real strong basis for it.” Rounds added that he’d like “to know the rest of the story,” insisting there must be some other justification for the administration’s reaction because he’d heard similar rhetoric from Trudeau in the past. After Trump left the summit early, Trudeau told reporters that Canada “will not be pushed around” and said it was “kind of insulting” that Trump was applying tariffs on Canada using national security as a justification. 

Canadian establishment rallies behind Trudeau in trade war with US --The collapse of last weekend’s G7 summit into acrimony and recrimination has thrown the three-quarter-century-old Canada-US alliance into unprecedented crisis.In response to US President Donald Trump’s imposition of tariffs on Canadian steel and aluminum and his threats to impose tariffs on Canadian auto imports—a move that would decimate the country’s heavily US-integrated auto sector—the entire political establishment, from the New Democratic Party, its trade union allies, and the Greens to the most right-wing Conservatives, has rallied behind Prime Minister Justin Trudeau.Trump denounced Trudeau as “weak” and “dishonest” shortly after leaving the summit, citing Trudeau’s reaffirmation of his plan to impose retaliatory tariffs as reason to repudiate the summit communique. The following day, Trump’s leading advisers attacked Canada in an extremely aggressive manner. Trump economic adviser Peter Navarro said Trudeau would have a “special place in hell” for daring to challenge the president.The apparent trigger for Trump’s outburst was Trudeau’s closing press conference at the G7, during which the Canadian prime minister characterized the US imposition of tariffs on so-called national security grounds as “insulting,” and vowed Ottawa would go ahead with the implementation of C$16 billion worth of its own tariffs against US products starting July 1.Yet, even as Trudeau and others made comments highly critical of Trump, they sought to stress the Canadian bourgeoisie’s long-standing and intimate military-security partnership with US imperialism, thereby demonstrating that despite the current spat, Canada’s ruling elite is eager to cut a deal with Washington, so as to preserve Canadian imperialism’s privileged access to the US market and close strategic alliance with the world’s premier imperialist power. The Canadian bourgeoisie is “insulted” because Trump’s tariffs cut across Ottawa’s desire to continue to serve as US imperialism’s junior partner in upholding North American global hegemony. The Trudeau government, which has pledged to modernize the North American Aerospace Defence (NORAD) security partnership with the US and has further integrated Canada into US military-strategic offensives around the world, would be more than willing to assist Trump in imposing his tariffs if only they were restricted to China, Russia, and other common geopolitical rivals.

Could Ottawa slap the Trump Organization with trade sanctions? - Amid an escalating trade war between the U.S. and Canada—this after Donald Trump imposed tariffs on imports of aluminum and steel, and Canadian officials quickly threatened retaliation with their own set of trade restrictions—politicians of all stripes north of the border are having their say on what Ottawa’s next bold move should be.This time, it was Regina-Lewvan MP Erin Weir, a former NDPer who identifies as a member of the Co-operative Commonwealth Federation—his old party’s precursor and one that Weir resurrected earlier this year after being expelled from the NDP caucus over sexual harassment allegations.During Tuesday’s Question Period, Weir took the floor, saying everyone in the House “supports the Prime Minister standing up to President Trump” and that “unlike previous American presidents, Trump has made himself vulnerable by not divesting his personal business interests.” Then, to nodding heads, including that of Green Party leader Elizabeth May, he asked: “To apply further pressure, has the government considered retaliatory sanctions targeting the Trump organization rather than the American people?” At the other end of the room, Foreign Affairs minister Chrystia Freeland didn’t exactly reject the prospect of sanctioning Trump’s collection of companies, of which past disclosures suggest there are 144 in 25 different countries. As she’s done before, Freeland stressed that the tariffs enacted by the U.S. are “illegal” and “unjustified,” and that the national security justification offered up by the Trump administration is an insult to Canadians. Then she added, to the approving nods of cabinet members around her: “We are now in a consultation period. We welcome ideas from all Canadians on what should and what should not be in our retaliation list.”

Defiant Trump Ignites Trade War with Canada and G-7 Allies – video - Citing national security issues to get around WTO rules, Trump ordered tariffs of 25 percent on steel and 10 percent on aluminum imports from Canada and EU countries. NEP’s William Black and Gerald Epstein discusses the implications of these tariffs on the different economies. You can view transcript here.

Why Trump’s combative trade stance toward allies poses risks (AP) — Insulting the host, alienating allies and threatening to suspend business with other countries: President Donald Trump was in full trade-warrior form for the weekend summit of the Group of Seven wealthy democracies in Canada.The president's acrimony raised the risk of a trade war that could spook financial markets, inflate prices of goods hit by tariffs, slow commerce, disrupt corporations that rely on global supply chains and jeopardize the healthiest expansion the world economy has enjoyed in a decade.Leaving the conclave in Quebec on Saturday, Trump threatened to "stop trading" with America's allies if they defied his demands to lower trade barriers. And he shrugged off the risk that his combative stance would ignite escalating tariffs and counter-tariffs between the United States and its friends — the European Union, Canada, Japan and Mexico."We win that war a thousand times out of a thousand," the president declared before jetting off to negotiate the denuclearization of the Korean peninsula.Later, he picked a Twitter fight with the host of the G-7 conclave. Calling Prime Minister Justin Trudeau of Canada "very dishonest and weak," Trump said the U.S. was withdrawing its endorsement of the G-7's communique, in part over what he called Trudeau's "false statements" about U.S. tariffs at a news conference.  The summit at Quebec's Charlevoix resort failed to produce any truce in an intensifying trade conflict. Trump has imposed tariffs on steel and aluminum imported to the United States from the EU, Canada and Mexico. Outraged, the allies have responded by targeting American products, including cheese, bourbon and pork. On Saturday, Trump warned that "if they retaliate, they're making a big mistake."Trudeau's assessment was glum. "If the expectation was that a weekend in beautiful Charlevoix with all sorts of lovely people was going to transform the president's outlook in the world," the Canadian prime minister said, "then we didn't quite reach that bar."

Of Carrots, Sticks, And How The Empire Fails - It’s important for bullies to always win.  Because once their weakness is exposed they can no longer be bullies. Empires have to resort to bullying near the end because they are fundamentally weak.  They all over-extend themselves through currency debasement which, in turn, degrades the cultural advantage the society had over the previous Empire. Donald Trump knows how to bully with the best of them.  I go back and forth about his status as a bully, however.  He is a mercurial figure whose unpredictability is predictable. I see him more as Loki than the typical bully.  In other words, it’s probably fair to say that to Trump bullying is just another tactic. So, as the head of the U.S., an Empire in the early stages of collapse, fundamentally weakened by two generations of empire building after the failure of Bretton Woods, Trump will bully his opposition because he knows that an Empire that is not feared is one that will soon be laughed at. And when that happens, it’s game over. Trump understands that the U.S. can no longer afford to pay for the post-WWII institutional order.  Europe’s been rebuilt but the EU is in the process of tearing it down for the sake of globalism. And Germany is the one benefiting on our dime. So, if you are opposed to the Empire, regardless of your politics, seeing Trump take it to the G-7 and, in particular, Germany should be welcomed. Where you should be worried however, is how that same bullying is being turned on Russia and Iran.  In my latest article for Strategic Culture Foundation I remind everyone that none other than Mr. Realpolitik, Henry Kissinger, was advising Trump on Ukraine and Crimea in early 2017. And after looking at the way Trump is prosecuting our relationship with Russia it’s clear to me now Kissinger had a stronger influence on Trump than anyone thought.

EU will act against U.S. tariffs on steel, aluminum: Merkel (Reuters) - Europe will implement counter-measures against U.S. tariffs on steel and aluminum just like Canada, German Chancellor Angela Merkel said on Sunday, voicing regret about President Donald Trump’s abrupt decision to withdraw support for a G7 communique. Trump’s announcement on Twitter, after leaving the Group of Seven summit in Canada early, that he was backing out of the joint communique torpedoed what appeared to be a fragile consensus on a trade dispute between Washington and its top allies. “The withdrawal, so to speak, via tweet is of course ... sobering and a bit depressing,” Merkel said in an ARD television interview following the G7 summit. The summit did not mark the end of the transatlantic partnership between Europe and the U.S., Merkel said. But she repeated that Europe could no longer rely on its ally and should take its fate into its own hands. Like Canada, the European Union is preparing counter-measures against U.S. tariffs on steel and aluminum imports, in line with World Trade Organisation rules, Merkel said. “So we won’t let ourselves be ripped off again and again. Instead, we act then too,” Merkel said in an unusually combative tone. Asked if she was concerned that Trump could retaliate against EU counter-measures by imposing tariffs on cars, Merkel said: “First of all, we’ll try and see if we can prevent this... And then hope that the EU will respond again in the same unity.” Merkel said the G7 leaders had agreed to review their trade ties and assess the scope of existing tariffs in order to avoid further trade barriers. The center-right leader said a tariff-free area among G7 allies would be an ideal outcome, but she made clear that any talks about such a trade bloc would have to include non-tariff barriers to trade as well as free access to public tenders. 

Merkel Spokesman: EU Retaliatory Tariffs Will Be Ready For July 1 -- Following promises (threats?) by EU bloc executive Jean-Claude Juncker and German Chancellor Angela Merkel that the European Union would soon impose retaliatory tariffs on the US while moving ahead with a settlement dispute at the WTO, Merkel's chief spokesman Steffen Seibert reiterated Monday morning that the EU is "ready to take action" and that its planned trade countermeasures would be ready to take effect on July 1.  Earlier this month, EU members voiced their support for a plan that would slap 25% tariffs on up to $3.3 billion in US goods. The EU plan would also impose duties of between 10% and 50% on $4.2 billion in additional goods in March 2021, or sooner, if the WTO rules that the Trump tariffs are, in fact, illegal (as many of the US's rivals have alleged). Meanwhile, Trump's aluminum and steel tariffs would impact more than $7.5 billion in European goods. However, Seibert added that Germany is still ready to resolve the trade standoff through the WTO. But with the US reluctant to do so, it's likely that the "tit-for-tat" tariffs will continue until both sides decide to meet at the negotiating table.

• Germany ready to resolve the trade standoff through international forums
• Merkel wants Europe to take on more tasks, tighten unity in Trump era: “This must be speeded up and intensified in many areas”
• U.K. could take part in EU rapid- reaction force also after Brexit: Seibert in Berlin

It's long been expected that the EU would respond to the US tariffs by slapping levies on iconic American goods like motorcycles, orange juice and whiskey (call them the "bourbon and blue jeans" tariffs). In addition to the symbolic weight, many of these goods are produced in states that voted for Trump. Meanwhile, with Harley Davidson's base in Wisconsin, some have suggested that it could be an attempt to target swing states.

EU Lawmakers Confirm Trade Tariff Retaliation; Hit Harleys, Bourbon, & Levis - As has been expected and threatened for the past few weeks, European Union governments have signed off on the first phase of retaliation against US President Trump's metal-import-tariffs, opening the door for a special levy on a range of American goods as soon as next week. After Trump's initial moves in March, the European Union began weighing potential tariffs on U.S. goods ranging from Levi's jeans to Harley-Davidson motorcycles. "We would like a reasonable relationship to the United States, but we cannot simply put our head in the sand," Juncker said.And now, as expected, Bloomberg reports that representatives of the bloc’s governments meeting in Brussels agree to impose a 25% duty on 2.83 billion euros ($3.29 billion) of EU imports of U.S. products including Harley-Davidson motorcycles, Levi jeans and bourbon whiskey.  The tit-for-tat levy still needs to be triggered by the European Commission, the 28-nation EU’s executive arm, which intends to do so within days and has said the measure could take effect as soon as June 20On a side note, Harley-Davidson is based in Wisconsin, the home state of Speaker Paul Ryan (R); Levi Strauss & Co. is headquartered in House Minority Leader Nancy Pelosi's (D) hometown of San Francisco; and bourbon is made in Kentucky, the home state of Senate Majority Leader Mitch McConnell (R).Additionally, Bloomberg notes that the EU is reserving the right to target more American products with further duties no later than March 23, 2021.

Why Canadian milk infuriates Donald Trump   -- In the midst of what appears to be a full-blown trade war between Canada and the US over steel and aluminum, and with Donald Trump taking his first steps on Canadian soil for the G7 summit, a familiar bugbear reappeared to haunt the negotiations. Donald J. Trump (@realDonaldTrump): Canada charges the U.S. a 270% tariff on Dairy Products! They didn’t tell you that, did they? Not fair to our farmers!  June 8, 2018 Whatever understanding Canada and the US may (or may not) have come to on their high-value trade in lumber or auto parts, they remain implacably opposed on the comparatively minor matter of milk. Trump has attacked Canada’s protected dairy industry before, calling it a “disgrace” and blaming it for widespread hardship among US farmers. Although the entire trade in dairy products between the two countries is worth less than US$600m, ideological division has sharpened the ongoing dispute. His negotiators have demanded the dismantlement of Canada’s openly dirigiste system of supply management in agriculture – a complicated nexus of production quotas and import tariffs designed to ensure Canadian dairy, egg and poultry farmers receive fair prices for their products.   But the Canadians are no less determined to retain one of the last vestiges of their otherwise-abandoned collectivist traditions. Canadian cows are sacred, and the farmers who care for them enjoy outsized influence in national politics. Expert observers have said that Justin Trudeau’s government would abandon the treaty altogether before sacrificing supply management.“It’s just too sensitive for the Canadians,”

Backstabbing Over Cows - What is it with cows?  I mean their flatulence does add to global warming, but they seem so benign, chewing their cud while producing milk and meat.  Why is it that national leaders get into fits of backstabbing over them, or especially over all that milk they produce? Well, of course, that is it; they produce a lot of it, and a variety of products come from the milk, which sometimes markets do  not want as much of as some of the other products. This is probably the main reason that in international trade agreements, where highly protected and subsidized agriculture is always a difficult topic, dairy products are often at the top of the list.  For years, the predecessor of the EU, the EEC had “butter mountains” from all the excess butter governments bought to stabilize the market and keep the Danes and the  French from stabbing each other in the back too viciously.  The US also  had a butter mountain problem for a long time, much of it stored in Madison, Wisconsin where it caught fire back in 1991 and burned for 8 days.  Yes, we must protect those Wisconsin Dairy State cows as Trump is struggling to drop!  As it has been in Europe, so between the US and Canada since NAFTA a handful of commodities have off and on been the center of trade disputes, with restrictions holding on both sides.  Lumber and dairy have probably been at the top of the list, althought technically dairy is outside of the NAFTA.  As it is, both sides have heavily subsidized and protected dairy in various ways.  Nevertheless, based on rising exports of ultrafiltered milk that can be used to make yogurt and cheese from the US to  Canada, the US has managed to build up a $400 million annual surplus in dairy products trade (which has decreased slightly).  Last year the Canadians reacted to that and engaged in a reclassification of that type of milk and made changes in their internal pricing, which has led to a decline of exports of this product from both New York, home of Senate Dem leader Schumer, and from Wisconsin, home of House Speaker Ryan.  Ah ha, even thought the US dairy trade surplus remains substantial, this is clearly a stab in the back!

Trade-War Drums: Is Mexico Ready to Fire at the US Corn Belt?-- Mexico, the birthplace of maize, is dangerously hooked on U.S. imports of largely transgenic strains of the crop. In 2017 it was the third biggest importer of corn in the world, behind the EU and Japan, purchasing 15.2 million tonnes of the foodstuff, most of it from U.S. farmers and agribusinesses. But that could soon change.Following the U.S. government’s decision to impose steep duties of imports on steel and aluminum from Mexico, Canada and the EU, Mexico, a net importer of US steel, has hit back with tariffs on US products including whisky, cheese, steel, bourbon, and pork. The move has upset U.S. businesses, including pork producers, who now face a 20% tariff on exporting leg and shoulder to Mexico. Mexico is the largest market for US pork exporters. It’s also the third largest market in the world for U.S. agricultural exports as a whole, pipped to the post by China and Canada.For the moment the Mexican government has ruled out imposing duties on U.S. imports of staple foods such as corn, beans and soy, largely out of fear that it could further fuel food inflation, especially with the Mexican peso once again slumping against the dollar. But calls for such action are rising.If Trump doubles down on his tariffs while continuing to insist on separate bilateral talks with Canada and Mexico, the Mexican government could end up taking the nuclear option of restricting U.S. imports of corn. Given that the biggest corn-producing states in the U.S. were also among the supporters of Trump in the last election, Mexico’s government has a clear strategic motive for doing so. “If we want to stop this [trade war] and hit the U.S. government where it really hurts, we should target America’s corn belt by imposing a tariff on imports of U.S. transgenic corn,”

Farmers already at higher risk of suicide face pressure from tariffs - Southwest Minnesota soybean Farmer Bob Worth has lost three friends and fellow farmers to suicide in the last year. He believes financial stress had a lot to do with it.  "I mean this is like the fourth year of depressed commodity prices so it is really starting to eat on people," he said.  After several tough years of prices near or below break even, the economics of the farm sector may soon get worse because of international tariffs. China, the largest buyer of U.S. soybeans, and Mexico, the largest importer of U.S. pork, are threatening tariffs that would likely choke off demand for those farm products and drop prices further. Worth said it's another unknown farmers face, and another stressor. "We got people who are fifth- or sixth-generation farmers who may lose the farm. They are thinking they let their ancestors down," he said.  Research shows that people in rural areas are much more likely to take their own lives. And a study of suicide in 17 states found people whose occupation involved farming, fishing or forestry were over five times more likely to take their own lives than people in all occupations combined.   Worth urged farmers not to ignore their own distress.   "Please don't think that it is just the times. There's help out there," he said.  But Minnesota's farmers could use a lot more help when it comes to mental health resources, according to the state's Rural Mental Health Counselor Ted Matthews.The 71-year-old said he is the only counselor at the Minnesota Department of Agriculture dedicated to farmers' emotional wellbeing.  He works with farmers across the entire state free of cost. His service is available thanks to funds from the Minnesota Legislature.  Matthews said he had hoped he'd get some help this year to create another position like his. But Gov. Mark Dayton vetoed the legislation with that funding last month. "There's so much that could be done if we had more staff but just can't get it done and frankly, I'm old so I can only do this so long," he said.

As Trump Tariffs Bite, Firms Dangle Cash Prizes in Lobbying Push - Industry Week -- Some U.S. companies anxious for exclusions from Donald Trump’s tariffs are turning to creative ways to get the president’s attention. One Texas steel pipe maker is promising that it will invest millions and hire new workers in return for a temporary break on tariffs. It’s also offering its employees cash prizes for writing the best postcards to Trump advocating for their case. Other companies are encouraging workers and customers to join letter-writing campaigns and are teaming up with lawmakers to lobby on their behalf. “I didn’t know that this would do anything, and I still don’t know, but I’ve got a good feeling about it,” said Joel Johnson, chief executive officer of Borusan Mannesmann Pipe U.S. Inc., which is pitching the investment deal to Trump for its pipe mill and finishing facilities in Baytown, Texas. “I can’t stand by and just not do anything.”’ The Commerce Department has been flooded with almost 19,000 requests so far to have products excluded from Trump’s steel and aluminum tariffs. Borusan Mannesmann and other companies are resorting to unconventional means to persuade the administration that the duties, which are intended to help manufacturing, will actually hurt U.S. production and jobs. ‘Pretty Painful’ “It’s already pretty painful to begin with, and if we don’t get the exclusion, it’s going to be worse for us,” said Ty Taylor, president of South Carolina-based Greenfield Industries Inc., who said that the tariffs are cutting into the company’s profits. Greenfield has asked employees and sales people to write letters seeking support for more than 1,100 exclusion requests. “We almost feel like the government’s telling us we need to stop manufacturing here and move our manufacturing offshore,” Taylor said.

Sending an olive branch to Canada - White House trade adviser Peter Navarro might think there’s a “special place in hell” for Canadian Prime Minister Justin Trudeau, but other top officials in the Trump administration are taking steps to move past a raucous weekend and show the United States’ closest ally that business as usual is continuing between the two nations. Agriculture Secretary Sonny Perdue on Friday heads to Canada, where he will meet with his counterpart, Lawrence MacAulay, and sit for a meeting and photo-op designed to showcase the strength of ongoing cooperation between the two countries on agriculture. The trip, which was announced Monday, has been in the planning stages for weeks, a USDA spokesperson noted. But the warm overtures between the two ag leaders stand in stark contrast to the rhetoric from the White House over the weekend. On trade, U.S. Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland on Sunday discussed the ongoing NAFTA renegotiation in a phone call that her office characterized as “productive and cordial.” Freeland's outreach will also continue later this week, when she travels to Washington on Wednesday to meet with members of the Senate Foreign Relations Committee at the request of Chairman Bob Corker. Both agencies are moving forward just a day after President Donald Trump and a pair of his top advisers unleashed unprecedented criticism on Trudeau personally and his country’s trade policies. But despite initial shock over some of the comments — particularly because a bilateral meeting between the two leaders had been both constructive and positive — Canadian officials, too, are trying to put the weekend behind them. "It will be important to see what happens with dialogue between the U.S. and its closest allies and trading partners when the president returns from Singapore," said Scotty Greenwood, the CEO of the Canadian American Business Council. "There is too much at stake in the economy to get this wrong or to allow a war of words to get in the way of our mutual prosperity." Megan Cassella has more.

NAFTA la vista, baby - With Trump and Trudeau at trade loggerheads following the acerbic G7 meetinglast week, it is easy to forget the North American Free Trade Agreement has another member in the midst of political upheaval: Mexico.A general election is scheduled for 1 July, and front runner Andrés Manuel López Obrador is a “self-styled stubborn radical who is feared by some in the private sector as a dangerous leftist”, according to a profile in Thursday's FT.What many are yet to realise is that the timetable to make changes to Nafta starts to get very complicated if negotiations, initiated by the Trump administration back in August, are not finished before Mexicans go to the polls.Some markets have been paying attention, of course. Given his 20 percentage point lead in surveys of voting intentions, Mr Obrador's victory is arguably priced into the peso, with the currency steadily falling against the dollar as his polling has improved over the past three months:Despite Mr Obrador's seemingly imminent victory, currency traders are gearing up for the election to be a volatile period for the Mexican currency. Just look at this chart from ETM Analytics. It shows a spike in the implied volatility for the dollar-peso exchange rate as each of the six, three and two month futures contracts begin to cover the election date:

China Bought Enough American Cotton Futures to Make 400 Million T-Shirts - China is re-emerging as a major consumer of U.S. cotton after years of stockpiling the fiber, a shift that together with poor growing conditions in Texas has sent prices surging to a six-year high.The world’s most populous nation has purchased futures contracts covering more than 361,000 bales of U.S. cotton for 2019-20, according to U.S. Department of Agriculture data. That is enough to make 400 million T-shirts. China has never booked that much cotton that far in advance at this time of year, in data going back to 1998.“It’s very unusual to have that many bales in the books,” said Peter Egli, risk manager at Plexus Cotton Ltd. “China is the biggest taker of forward sales.” China’s return to global cotton markets is likely to mean a period of higher prices for a fiber used in most apparel, textiles and upholstery. It is also a boon to U.S. producers who have long labored under a market whose prices investors perceived to be capped by China’s cotton stores, which for years have accounted for more than half of all global stocks. China announced this month that it intends to raise cotton import volumes, a move that could increase Chinese purchases of American fiber at a time when the Trump administration is calling for more imports from the U.S.  The shift has revived interest in markets that were until recently seen as being overshadowed by Chinese policy. Open interest has reached all-time highs for this time of year, according to data from the U.S. Commodity Futures Trading Commission. July cotton futures on the ICE Futures U.S. exchange closed at 94.94 cents a pound on Friday, the highest level for a front-month contract since February 2012.

China Trade War Is Back: Trump To Slap Beijing With Tariffs On Friday As Negotiations Collapse - The ceasefire in the US-China trade war is over.As Fox News reported late on Tuesday, Trump rejected Beijing's trade negotiation olive branch, saying that the proposed $80BN in agriculture purchase commitment from China was insufficient, and resetting bilateral trade talks back to square one.In related news, Politico reports that Trump is expected to impose tariffs on Chinese goods as soon as Friday or next week, "a move that is sure to further inflame tensions and spark almost immediate retaliation from Beijing." As discussed previously, on Friday the administration is planning to publish a final list of Chinese goods that will take the hit.Trump's China trade advisor, Peter Navarro, said on Tuesday that the president is planning to impose tariffs on a “subset” of Chinese imports that the administration included in an original list of roughly $50 billion in targeted products in April. Navarro’s comments suggest the Trump administration will move forward with tariffs but that it could impose penalties on a smaller group of products than those included on the original list of about 1,300.After the public had a chance to weigh in, the original list is expected to remain largely intact but will be slightly reduced from what was first proposed, according to two sources briefed on the plans.According to the report, Trump's aggressive stance calls into question the future of talks between the two trade powers, which took a friendly turn in the weeks leading up to the North Korea summit as the U.S. sought China’s help, but have since deteriorated again.To an extent that is understandable: China was seen as playing a key role in getting North Korean leader Kim Jong Un to the table with Trump, who has consistently linked his trade demands to Beijing’s willingness to help on North Korea; now that the summit is over and the wheels are turning, Trump no longer needs China's aid. And, sure enough, after the summit, while Trump defended his personal friendship with Chinese President Xi Jinping and said he would call the Chinese leader, he also said Beijing has not done an adequate job closing its border to trade with North Korea in recent months, which Trump seemed to blame for rising U.S.-China trade tensions. “Which is a shame. But I have to do it. I have no choice. For our country, I have to do it,” Trump said at a press conference in Singapore, possibly referring to tariffs.

U.S. Prepares to Proceed With Tariffs on Chinese Goods -- The Trump administration, deepening its global trade offensive, is preparing to levy tariffs on tens of billions of dollars of Chinese goods in the coming week, perhaps as early as Friday—a move that is likely to spark heavy retaliation from Beijing. Senior trade officials in the White House, the Commerce and Treasury departments and the U.S. Trade Representative’s office met on the issue before President Donald Trump went to a summit of the Group of Seven industrialized nations in Canada on Friday—and agreed that the U.S. should proceed, said U.S. officials and others briefed on the talks. Mr. Trump hasn’t given his final approval and could have second thoughts about applying heavy pressure on China, the officials said, particularly because the U.S. wants Beijing’s cooperation in its efforts to get North Korea to give up its nuclear weapons. Mr. Trump returned to Washington on Wednesday morning after meeting with North Korean leader Kim Jong Un in Singapore. An administration official said Mr. Trump and his circle of advisers are scheduled to finalize plans on Thursday on imposing the China tariffs. Since Mr. Trump’s initial warnings of tariffs, China has done nothing to do address the president’s concerns about its trading practices, the official said, bringing the White House to this point.   The administration in April initially planned tariffs on $50 billion in goods, but the total could change as the list is refined, with some products taken off and others added following a public comment period. The White House had set Friday as a deadline for a list of products that would be covered under a new tariff regime. Mr. Trump has shied away from confronting China at various times in the hope that it would encourage Beijing to help out on North Korea—including by agreeing to a deal that would remove a ban on U.S. companies selling components to Chinese telecom giant ZTE Corp. Lawmakers have added language to a defense bill being considered by the Senate to undo the deal. But a senior White House official on Wednesday said the administration would try to remove the language and seek to block any similar measure later in the legislative process.  The agreement to support tariffs by the heads of the agencies represents an unusual moment of consensus on trade in an administration often at odds with itself over how to proceed. Trade hawks in the administration have sought to crack down hard on China, while globalists seek compromise. The Trump administration considers tariffs as necessary to press China to halt violations of U.S. intellectual property rules, including Beijing’s forcing U.S. companies operating in China to transfer technology to their Chinese partners.

Trump To Slap Tariffs On Up To 900 Chinese Products, Sending Dollar To 2018 Highs -- While it was extensively reported previously that Trump is set to slap China with new tariffs as soon as Friday (here and here), there were few actual details what this latest escalation in the trade wars would entail. Moments ago, CNBC provided some much needed clarity, when it reported that list of products subject to new tariffs is expected to include between 800 and 900 products, slightly less than the original list of about 1,300 products published by the U.S. Trade Representative in April; still, the dollar value of goods subject to protectionism remained unclear.Trump would make a final decision whether to impose the tariffs on Thursday afternoon when the president meets with his advisors, however, a CNBC source said the move was "fait accompli."The person notes that the administration has circulated talking points for the tariff actions among 10 government agencies. In addition, a list of products has already been uploaded to a government database for implementation.The White House, U.S. Trade Representative and Treasury Department did not immediately respond to requests to comment.One factor that could influence Trump's thinking is China's response to the possible tariffs. Earlier on Thursday, China's state news agency Xinhua reported that President Xi Jinping told Secretary of State Mike Pompeo that he wishes the U.S. carefully and appropriately handle sensitive issues including Taiwan and trade conflicts to avoid major disturbance to bilateral ties, citing his comments during meeting with Pompeo in Beijing. In other words, Xi urges Trump to "tread lightly"

Donald Trump Approves Tariffs on About $50 Billion of Chinese goods -- President Donald Trump approved tariffs on about $50 billion of Chinese goods, people familiar with the decision said, as the U.S. ratchets up its trade fight with Beijing over China’s alleged pressure on U.S. firms to transfer technology to Chinese partners. The approval followed a 90-minute meeting on Thursday of senior White House officials, national-security officials and senior representatives of the Treasury, Commerce Department, U.S. Trade Representative’s Office. It wasn’t clear when the tariffs would go into effect. Beijing has said that it intends to assess tariffs on a corresponding amount of U.S. goods. USTR expects to announce the goods subject to tariffs on Friday and publish them in the Federal Register next week, the people familiar with the matter said. The affected imports would face 25% tariffs; the products are expected to be similar to those on a preliminary list that USTR released in early April. The office has held public hearings on the list of 1,300 categories of products to see whether duties on any of the goods it selected would unduly harm U.S. consumers and businesses. USTR is expected to cut some of the products from the list and add others, especially high-tech items, the people familiar with the matter said.The U.S. decision could become the start of a tit-for-tat series of retaliatory moves. If the U.S. hits China with tariffs, China will immediately retaliate with tariffs, said a Chinese official. “We hate unilateral actions,” the official said.Beijing has already said it had prepared its own $50 billion list of U.S. goods that it would subject to tariffs, especially aircraft and soybeans.After Beijing made that threat, President Trump upped the ante and said the U.S. would add another $100 billion of goods to the U.S.’s tariff list. The U.S. hasn’t followed up on that threat by enumerating what goods would be included in that batch. On Thursday, Chinese Foreign Minister Wang Yi said China and the U.S. faced a choice between cooperation and mutual benefit on the one side and confrontation and mutual loss on the other.  “China chooses the first,” Mr. Wang told a joint news conference, after talks with U.S. Secretary of State Mike Pompeo in Beijing.

Chinese Warn Of "Immediate" Retaliation As Trump Readies $50 Billion Tariff Package - Just hours after President Trump reportedly signed off on tariffs targeting some $50 billion in Chinese goods (a decision that was finalized after a 90-minute meeting with officials from the West Wing, as well as senior national-security officials, the Treasury Department, the Commerce Department and the office of the US Trade Representative), Chinese Foreign Minister Wang Yi said during a press conference in Beijing that China is prepared to retaliate as it takes a more confrontational approach against the US on trade, according to the Wall Street Journal. Wang's comments reportedly followed face-to-face talks with Secretary of State Mike Pompeo, where Wang urged Pompeo to choose a path of "cooperation and mutual benefit." Pompeo was in Beijing to brief Chinese officials on the North Korea summit. On Thursday, Chinese Foreign Minister Wang Yi said China and the U.S. faced a choice between cooperation and mutual benefit on the one side and confrontation and mutual loss on the other. "China chooses the first," Mr. Wang told a joint news conference, after talks with U.S. Secretary of State Mike Pompeo in Beijing. "We hope the U.S. side can also make the same wise choice," Mr. Wang said. "Of course, we have also made preparations to respond to the second kind of choice." Meanwhile, Bloomberg reports that Mei Xinyu, a researcher at Chinese Academy of International Trade and Economic Cooperation, part of China's Ministry of Commerce, expects China to adopt retaliatory tariffs on U.S. goods "immediately." While the official breakdown of Trump's tariffs won't be released until tomorrow, a CNBC source noted that Trump has already signed off on the tariffs, and that a list of talking points has been distributed to 10 government agencies, while a list of products has been uploaded to a government database.

Tariffs: US announces 25% import tax on $50 billion of Chinese products -- The United States will impose a 25% tariff on $50 billion of Chinese exports, the president said early Friday. China vowed to retaliate immediately and said the United States had "launched a trade war." The US penalty is designed to punish China for stealing American technology and trade secrets. It will apply to roughly 1,100 exports and will target the Chinese aerospace, robotics, manufacturing and auto industries. Trade between the two countries "has been very unfair, for a very long time," Trump said in a statement. "This situation is no longer sustainable." US customs agents will begin collecting the duties on July 6, the administration said.  The move represents a serious elevation of trade tensions between the world's two largest economies — just as Trump has also picked fights with allies Canada, Mexico and the European Union over steel and aluminum. Beijing said Friday it will fight back with tariffs of its own. China previously outlined plans to respond with retaliatory tariffs on $50 billion of US products such as cars, planes and soybeans. China also said it would scrap promises to purchase more US goods. Those pledges came during negotiations with US trade officials last month. "In this day and age, launching a trade war is not in the interest of the world," China's Commerce Ministry said in a statement. "We call on all countries to act together to firmly stop such an outdated and backward move, and to firmly safeguard the common interest of all mankind." Trump raised the prospect of even further escalation. He said that if China retaliated, the United States would authorize another round of tariffs on Chinese goods. He has previously suggested those tariffs could apply to as much as $100 billion of products.

China vows fast response to US tariffs - BBC - China will respond quickly to protect itself if the US hurts its interests with fresh trade tariffs, a foreign ministry spokesman has said. The warning from Beijing comes as the US prepares to levy new tariffs on $50bn worth of Chinese imports. On Thursday, US officials met at the White House to trim the original list of 1,300 categories to about 800. Duties on foreign steel and aluminium, announced in March, have already gone into effect. Those tariffs have already prompted Europe, Mexico, Canada and China to introduce or announce plans for counter-measures in retaliation. The move threw the G7 meeting last weekend into disarray, with US President Donald Trump retracting his endorsement of the joint statement and lashing out at host Canada.The US says its tariffs on Chinese goods come in response to what it categorises as theft of intellectual property. The US wants China to stop practices that allegedly encourage transfer of intellectual property - design and product ideas - to Chinese companies, such as requirements that foreign firms share ownership with local partners to access the Chinese market. In Beijing on Friday, Chinese foreign ministry spokesman Geng Shuang repeated earlier warnings that all trade talks between China and the US would be void if Washington imposed trade sanctions. "Our position is still the same," he said. "If the US takes unilateral and protectionist measures that harm Chinese interests, we will respond immediately by taking the necessary decisions to safeguard our legitimate rights and interests." 

Trade War's Battle Lines Drawn as U.S., China Set Tariff Limits -  The U.S. and China moved to the brink of a trade war on Friday after the Trump administration announced tariffs on Chinese imports would take effect in three weeks and pledged additional investment restrictions, prompting an immediate vow of retaliation from Beijing.The world’s No. 2 economy will impose tariffs with the “same scale and intensity” on imports from the U.S., and all of China’s earlier trade commitments are now off the table, according to government statements. U.S. goods slated for levies include farm products such as soybeans, a potential blow to rural states that backed President Donald Trump’s election in 2016.Trump on Friday pledged more tariffs if China follows through on the retaliation threats, without specifying an amount. In April, he asked officials to consider an additional $100 billion in levies. Meanwhile, U.S. Trade Representative Robert Lighthizer said an announcement on U.S. investment restrictions on China will follow in the next two weeks. “Our hope is that it doesn’t lead to a rash reaction from China,” Lighthizer said in an interview on Fox Business Network on Friday. “We hope that this leads to further negotiations and we hope it leads to China changing its policies, at least with respect to us, and opening up their market.” The first wave of 25 percent tariffs will hit $34 billion in goods and take effect July 6, with another $16 billion still to be reviewed, the U.S. Trade Representative said in a separate statement.The USTR’s final list includes 1,102 product lines, down from about 1,300 initially, mainly focused on China’s Made In 2025 plan to become dominant in high-technology industries such as robotics, aerospace, industrial machinery and automobiles. Consumer goods including mobile phones and televisions aren’t being hit with the tariffs. Hours later -- early Saturday in China -- the nation’s Finance Ministry issued a list of 545 product categories, also covering about $34 billion in exports from the U.S., to be subject to an additional 25 percent tariff starting July 6. They included a variety of agricultural products, including soybeans, corn and wheat along with beef, pork and poultry, plus automobiles. A second set of tariffs to begin at a later date spanned other goods including coal, crude oil, gasoline and medical equipment.

 Senators See No Trump Pushback on Their Move to Kill ZTE Deal -- ZTE Corp. once again appeared to teeter on the brink of demise Tuesday as senior Republican senators signaled that President Donald Trump was unlikely to block a congressional effort to derail a deal he brokered to resuscitate the Chinese telecommunications giant. The president hasn’t issued tweets urging Republicans to stand down, and lawmakers detect no backlash building within Congress against the move to unravel the White House agreement. “I don’t think the president cares about ZTE,” Sen. Bob Corker (R., Tenn.) told reporters. “Someone told me that he gave [GOP lawmakers] a wink and a nod and told them he didn’t care. I don’t know if that’s true or not, but I think he did what he did for the Chinese leader but he doesn’t really care what Congress does.” Representatives for the White House, the Commerce Department and ZTE didn’t immediately comment. Meanwhile, ZTE shares resumed trading in Hong Kong on Wednesday morning after a halt of almost two months, plunging about 40% in the opening minutes—wiping out nearly $8 billion in market value—as investors remain uneasy about the future of the company. Mr. Trump had spent the previous week in closed-door meetings trying to sell Senate Republicans on the deal, which coincided with his effort to build goodwill with Chinese President Xi Jinping ahead of this week’s talks with North Korea about denuclearization. And in a briefing late on Monday with GOP senators, Commerce Secretary Wilbur Ross again tried to get lawmakers to drop their resistance to the ZTE agreement. 

Trade war could wipe out gains of GOP tax law, former top Trump economic adviser says - An escalating trade war could wipe out the benefits of the Republican tax law passed last fall, President Trump's former top economic adviser said Thursday.Gary Cohn, who served as Trump's director of the National Economic Council but left amid a rift over the president's trade policies, said that retaliatory tariffs between countries could drive up inflation and prompt American consumers to take on more debt, possibly pushing the country into another economic downturn.“If you end up with a tariff battle, you will end up with price inflation, and you could end up with consumer debt,” Cohn, a former Goldman Sachs executive, said at a Washington Post event. “Those are all historic ingredients for an economic slowdown.”Asked if the trade battle could erase the gains to the American economy from the tax law, Cohn said: “Yes, it could.” Cohn announced his resignation from the White House in March during disagreements with Trump on trade, as the president planned to pivot toward protectionist trade policy. The administration has since imposed steel and aluminum tariffs on some of America's top trading partners, including close allies Mexico, the European Union and Canada. These countries have vowed to retaliate with tariffs on U.S. imports, sparking fears of a broader trade war and leading to a dramatic confrontation between world leaders at the Group of 7 summit earlier this month.Economists are divided over the danger the tariffs pose to the broader economy, with some arguing that Trump would have to dramatically increase the number of tariffs to risk dragging down U.S. growth. “If it really were to get out of control, then you could imagine it offsetting some of the tail winds currently affecting the economy,” said Satyam Panday, an senior economist at S&P Global. “But if we are talking about trade skirmishes, which is all we've seen so far, it's really not going to do much of anything meaningful.”

Trump is betting American families are willing to pay for his trade war - President Trump's decision Friday to put hefty tariffs on $50 billion worth of Chinese products means costs are going up for a lot of goods. A tariff is another word for a tax, and Trump just announced significant new taxes on 1,102 items.This is no longer a war of words between Trump and China. There are actual economic consequences now. The result is that Americans will almost certainly face higher costs as companies pay more for parts they need to build cars, dishwashers and tractors, and then firms turn around and pass those higher prices onto consumers.All of Trumps tariffs so far — on China, on steel and aluminum, on washing machines and on solar panels — will end up costing the average U.S. family $80 a year, Moody's Analytics estimates in a report to be released next week. If Trump continues to pile tariffs on China (he has threatened to do another $100 billion) and China retaliates, then the cost to the average family would rise to $210, according to Mark Zandi, chief economist at Moody's Analytics. Wall Street bank Goldman Sachs has also forecast rising prices from the tariffs.  The Tax Foundation, a think tank that supported Trump's tax law, predicts that more than 45,000 jobs will be lost because of the tariffs Trump has issued so far. They also forecast a small hit to the economy and wages. Analysts Kyle Pomerleau and Erica York argue that the tariffs will hurt the economy because prices will rise, reducing profits for companies and costing consumers more. Alternatively, tariffs could cause the U.S. dollar to rise, which usually makes it more difficult for American companies to sell their products abroad, another potential hit to jobs and the economy. The effects of a trade war are difficult to fully predict, in part because how much pain they'll cause the United States depends on how other countries respond. And, of course, the worst case may not come to pass if Trump and China's President Xi Jinping strike a deal soon. But the bottom line is that a lot of different organizations, including ones that typically lean to the right, are all saying costs are probably going up from these tariffs. Even Trump agrees with that.

A senior White House aide is reportedly sharing fake stories with staffers to identify who's leaking to the press - A senior White House aide is deliberately feeding inaccurate stories to White House staffers in an effort to weed out those who are speaking to reporters, according to a New York Times report on Sunday.Amid an ongoing battle with leaks of internal meetings and memos, President Donald Trump has reportedly remained fixated on determining who is passing information on to the press, the report said.Trump's obsession with identifying leakers has grown so much that when he's speaking with outside advisers on the phone and a staffer's name comes up, Trump will ask, "Is he the leaker? Is she the leaker?" according to The Times.Trump has publicly condemned the leaks that have come out of his administration and has reportedly made staffers sign nondisclosure agreements that extend beyond his presidency. "Leakers are traitors and cowards, and we will find out who they are!" Trump said in a tweet last month.

Meet the guys who tape Trump’s papers back together - Solomon Lartey, who earned an annual salary of $65,969 as a records management analyst, was a career government official with close to 30 years under his belt. But he had never seen anything like this in any previous administration he had worked for. He had never had to tape the president’s papers back together again.  Armed with rolls of clear Scotch tape, Lartey and his colleagues would sift through large piles of shredded paper and put them back together, he said, “like a jigsaw puzzle.” Sometimes the papers would just be split down the middle, but other times they would be torn into pieces so small they looked like confetti. It was a painstaking process that was the result of a clash between legal requirements to preserve White House records and President Donald Trump’s odd and enduring habit of ripping up papers when he’s done with them — what some people described as his unofficial “filing system.” Under the Presidential Records Act, the White House must preserve all memos, letters, emails and papers that the president touches, sending them to the National Archives for safekeeping as historical records. But White House aides realized early on that they were unable to stop Trump from ripping up paper after he was done with it and throwing it in the trash or on the floor, according to people familiar with the practice. Instead, they chose to clean it up for him, in order to make sure that the president wasn’t violating the law. Staffers had the fragments of paper collected from the Oval Office as well as the private residence and send it over to records management across the street from the White House for Lartey and his colleagues to reassemble.  “We got Scotch tape, the clear kind,” Lartey recalled in an interview. “You found pieces and taped them back together and then you gave it back to the supervisor.” The restored papers would then be sent to the National Archives to be properly filed away. “I had a letter from Chuck Schumer — he tore it up,” he said. “It was the craziest thing ever. He ripped papers into tiny pieces.” Lartey did not work alone. He said his entire department was dedicated to the task of taping paper back together in the opening months of the Trump administration.   . “I’m looking at my director, and saying, ‘Are you guys serious?’ We’re making more than $60,000 a year, we need to be doing far more important things than this. It felt like the lowest form of work you can take on without having to empty the trash cans.”

 Trump regularly talks to Pruitt about his distaste for Jeff Sessions  - President Trump likes to chat with embattled EPA boss Scott Pruitt about his distaste for Attorney General Jeff Sessions, according to a report. The commander-in-chief regularly dishes with the Environmental Protection Agency leader in spite of aides’ pleas that he ax the scandal-tarnished Pruitt, The New York Times reported Sunday. Trump’s made little secret of his contempt for Sessions, an early campaign supporter who later recused himself from the probe into Russian election meddling when he became attorney general. The President’s blamed Robert Mueller’s hiring as special counsel for the Russia probe on the Alabama Republican’s decision to stay out of the investigation. “The Russian Witch Hunt Hoax continues, all because Jeff Sessions didn’t tell me he was going to recuse himself...I would have quickly picked someone else,” Trump lamented in a tweet last week. “So much time and money wasted, so many lives ruined...and Sessions knew better than most that there was No Collusion!” It wasn’t particularly clear what Trump was discussing with Pruitt. He defended Pruitt last week for “doing a great job within the walls of the EPA,” even though he’s been criticized for meetings with lobbyists and reports he’s abused the privileges of his office. The revelation was part of a report of low White House morale, which has left Chief of Staff John Kelly eyeing the door after less than a year on the job. White House staffers have been left in chaos — something allies told The Times the President thrives on — and Kelly said to a group of senators last week it’s “a miserable place to work.” One of the retired Marine general’s deputies, Joe Hagin, is also gunning for a CIA job to get out of the West Wing, The Times reported.

US expected to withdraw from UN Human Rights Council: report | TheHill: The U.S. is reportedly planning to pull out of the United Nations Human Rights Council after clashes over key issues such as Israel. A source told Reuters that the move could be “imminent.” The council will begin a three-week session in Geneva on Monday. Other diplomatic sources told Reuters that the withdrawal was “not a question of if but of when.” U.S. Ambassador to the U.N. Nikki Haley has clashed with the council over its treatment of Israel and has repeatedly voted against U.N. measures that were critical of that country. Most recently, the U.S. and Australia were the only two members to vote against a proposal to investigate Israel’s alleged use of excessive force in Gaza. Haley has criticized the council over what she called a “chronic anti-Israel bias” and threatened last year to leave. “When the council passes more than 70 resolutions against Israel, a country with a strong human rights record, and just seven resolutions against Iran, a country with an abysmal human rights record, you know something is seriously wrong,” she wrote in an op-ed for The Washington Post last June. The U.S. rejoined the council under former President Obama after boycotting for three years under former President George W. Bush. Haley has also called for other reforms to the body, including making it easier to expel member states with poor human rights records, specifically Venezuela, China and Saudi Arabia. 

Trump administration rescinds right to asylum for victims of gangs and domestic violence -- US Attorney General Jefferson Sessions delivered a devastating blow to asylum seekers yesterday by announcing that the government will no longer grant asylum to most victims of domestic violence or gang violence. The policy change was announced in the form of a decision in the case Matter of A-B-, in which a woman from El Salvador, denoted in this case by the initials A-B-, fled her home country for the United States to escape her ex-husband who repeatedly raped and beat her during their marriage. Although they legally divorced, A-B- was still unable to escape her ex-husband. The regular beatings and rapes continued. As is often the case in domestic violence cases involving workers and peasants in Central America, the police did nothing or were unable to prevent these vicious attacks. The asylum seeker fled for the United States, crossing the US-Mexico border in 2014. When she appeared in immigration court, the judge said she was lying and rejected her asylum application, slating her for deportation. The Board of Immigration Appeals reversed, finding the judge’s ruling erroneous. The Attorney General ultimately intervened to render a final decision. The decision is a legal travesty and will result in the rejection of thousands of asylum applications. Because of this decision, countless people will be deported and then killed or tortured by their persecutors. Under international and US law, an immigrant qualifies as a “refugee” and merits asylum status if they can prove they have a well-founded fear of persecution based on membership in a protected group. Under the legal principle of “non-refoulement,” no country can deport an asylum seeker to a country where they are likely to face persecution based on “race, religion, nationality, membership in a particular social group or political opinion.” Session’s decision rejected this particular social group, closing the doors to countless women desperately fleeing brutal domestic violence. His ruling states that “private violence” does not merit asylum status.

She Was Kidnapped by Guerrillas and Forced to Work. That Qualifies as Material Support for Terrorism, According to Immigration Ruling - The highest U.S. immigration administration authority ruled this week that cooking and cleaning for terrorists, even when done under threat of death, qualifies as providing material support and justification for deporting someone. The immigration court’s catch-all interpretation of material support aligns with how it has been used in federal criminal cases, where the law has allowed prosecutors to charge people for vague, often nonviolent offenses related to terrorism.The case at issue before the immigration court involved an unnamed Salvadoran woman who was kidnapped by guerrillas in 1990 and forced to undergo weapons training and cook and clean. The woman also watched her husband, a sergeant in the Salvadoran army, dig his own grave before being executed by the guerrillas. The U.S. Department of Homeland Security had argued for the woman’s removal from the United States in 2004, based on the duties she was forced to perform while held captive 14 years earlier. Under the material support provisions of the USA Patriot Act, the sweeping security legislation passed in the months after the 9/11 attacks, immigrants may be denied entry or removed from the country if they provided support to terrorists, which are broadly defined in immigration law as nonstate actors involved in armed force. The woman’s lawyer had argued that cooking and cleaning were not significant enough to be considered material support. And even if these activities were to be considered material support, she should be entitled to a so-called duress exception, since her life was threatened, the lawyer said. An immigration judge agreed to cancel her removal order, finding that the work she provided was so minimal it did not amount to material support. But DHS appealed the ruling, and this week, in a 2-1 ruling, the Board of Immigration Appeals upheld the government’s reasoning. The majority of board members found that the woman’s cooking and cleaning for the group still qualified as material support, stating that nothing in the law allows for a “quantitative requirement” that would make one activity, such as raising money, more significant than another activity, such as washing dishes. They also ruled, citing a previous case from 2016, that there is no duress exemption to the material support statute.

US Citizenship and Immigration Services unveils new initiative targeting naturalized citizens -- L. Francis Cissna, the Director of the US Citizenship and Immigration Services (USCIS), announced this week the creation of a new office that will be focused on identifying American citizens who “cheated” in their naturalization application.The ultimate goal of the office is to seek to remove the citizenship rights of such immigrants in civil court proceedings, while also prosecuting them on the charge of criminal fraud. Presented as a straightforward and innocuous initiative, the move marks yet another step in ongoing and relentless attack against immigrants, and more broadly on citizenship rights in the United States. Details about the powers, the budget and the general scope of the new office are as yet sketchy. In an interview to the Associated Press earlier this week, Cissna stated that the Los Angeles-based office will soon start hiring lawyers and immigration officers. The new hires will initially be tasked with looking closely at the files of citizens suspected to have assumed a new identity in order to avoid deportation, and who eventually succeeded in acquiring permanent residency and naturalization. There were no specifics given about the numbers of immigrants who fell within the purview of this new initiative, or for that matter, costs associated with such an effort.

 GOP will vote on immigration next week, sinking discharge petition | TheHill: House Republican leaders will bring a pair of immigration bills to the floor next week, sinking a push from reform-minded centrists to force votes on bipartisan bills opposed by GOP leadership. The House will vote on a conservative immigration bill authored by Judiciary Committee Chairman Bob Goodlatte (R-Va.) and a more moderate compromise measure that is still being put together after weeks of closed-door negotiations facilitated by Republican leaders.“Members across the Republican Conference have negotiated directly and in good faith with each other for several weeks, and as a result, the House will consider two bills next week that will avert the discharge petition and resolve the border security and immigration issues,” AshLee Strong, spokeswoman for Speaker Paul Ryan (R-Wis.), said in a brief email. “The full Conference will discuss tomorrow morning and we'll have more to share at that point." While leadership’s announcement throws a wrench into moderates’ plans, Rep. Carlos Curbelo (R-Fla.), sponsor of the discharge petition, said they will continue to pursue their discharge efforts. “While the legislation to be revealed in the coming days is based on the productive negotiations hosted by House Leaders over the last several weeks, it is vital our colleagues remain committed to the discharge petition,” he said in a statement. “While we believe all parties have negotiated in good faith, until and unless we confirm the proposed legislation fully addresses the interests and concerns that unite us we must and will keep up the pressure.” 

Surge in children separated at border floods facility for undocumented immigrants — Life inside the biggest licensed child care facility in the nation for children brought into the U.S. illegally looks more like incarceration than temporary shelter. The children, a mix of those who crossed into the U.S. unaccompanied and those who were separated from their parents under Attorney General Jeff Sessions’ new zero-tolerance policy, spend 22 hours per day during the week (21 hours on weekends) locked inside a converted former Walmart, packing five into rooms built for four.  It currently houses nearly 1,500 boys ranging from 10 to 17 years old. NBC News was among the first news organizations granted access to the overcrowded Casa Padre facility.  The average stay at the center in Brownsville is 52 days. After that, minors are placed with a sponsor.Shelter leaders said they were not notified in advance of the Department of Justice’s recently stated goal to prosecute 100 percent of immigrants crossing into the U.S. illegally. Children are automatically separated from parents referred for criminal prosecution. The policy has led to a surge in children filling the center above its legal capacity, and has sent officials in Washington scrambling to open temporary tent cities around the country.  Dr. Juan Sanchez, the president of the nonprofit that operates the facility, South West Key, warned that the temporary locations might not have to be licensed or staffed by trained child welfare professionals if they are established on federal land, which the Trump administration has been considering.The Department of Health and Human Services currently houses about 11,200 immigrant children and is investigating locations including U.S. Air Force bases to house the overflow. A shelter employee asked a small group of reporters allowed inside the facility to smile at the hundreds of detained migrant kids in line for a meal because “they feel like animals in a cage being looked at.”

Outcry mounts against Trump policy of forced separation of refugee children and parents - There is growing public outrage over the impact of the Trump administration’s new “zero tolerance” policy, announced last month. Under this policy, all undocumented adults encountered by the Border Patrol or Immigration and Customs Enforcement (ICE) are being arrested and jailed, while their children are turned over to the Office of Refugee Resettlement (ORR), an agency of the federal Department of Health and Human Services (HHS).  This policy is in flagrant violation of international law, which requires that governments accept asylum petitions as legitimate and impose no penalties on asylum seekers while their requests are reviewed and adjudicated. Instead, under the Trump policy announced May 7, all asylum seekers are treated as criminals, with the adults jailed and the children turned over to ORR. The administration does not have the facilities to keep up with its brutal rates of detention, and a report by McClatchy News this week revealed the administration plans to deal with the overflow by warehousing children in tent camps on military bases. The HHS plans to tour four bases in Texas and Arkansas in the coming weeks to determine where a tent city will be established to hold between 1,000 and 5,000 children, with many immigration advocates protesting planned facilities akin to the Japanese internment camps in the American West from 1942 to 1945. Major newspapers and the main US television networks have suddenly begun reporting on the appalling conditions facing thousands of immigrant and refugee children detained along the US-Mexico border. Driving the media coverage Thursday was a tour given the previous day to a small group of journalists through the largest single detention facility for children, the 1,500-bed Casa Padre in McAllen, Texas, near Brownsville, where boys between 10 and 17 are held. The facility is a former Wal-Mart superstore, now run by Southwest Key, a “non-profit” which has raked in more than $1 billion in federal contracts to run detention centers in the region.

How We Got Here: The Disturbing Path that Leads to Child Prison Camps -- One of the fresh horrors this week: The Trump administration is considering housing immigrant children in tents at three Texas military bases. On one level, these tent cities, as they’ve been branded on social media, have a practical purpose. They are provisional solutions to an artificial overcrowding problem. Jeff Beauregard Sessions — who looks more and more these days like a po-faced gremlin that’s been given the keys to the plantation — has decided to criminally prosecute anyone who crosses the border without authorization, including parents traveling with children. Since kids can’t (yet) go to prison with mom and dad, the federal government must — by its cruel logic — seize the children and turn them over to the temporary custody of the U.S. Department of Health and Human Services. But HHS facilities are at 95 percent capacity. There’s no more room at the inn for Sessions’ growing collection of traumatized youngsters. The attorney general, however, is not a man easily deterred by human rights, laws protecting asylum-seekers, or the “optics” of stacking kids like cordwood near the 1st Armored Division. Thus, the brain trust has landed on tents.   Like many Trump border/immigration proposals, this is both new and not new. What’s new is the extreme cruelty of prosecuting parents, many of them asylum-seekers fleeing unbearable violence in their home countries, for the misdemeanor offense of illegal entry. The law has been on the books for a long time, but previous administrations have exercised discretion in a way that excluded families. What’s new is the zealousness with which the administration has treated children, some reportedly as young as 18 months, as collateral damage from its increasingly draconian immigration policies. Let’s be clear: Sessions et. al have chosen to split apart families in the name of tamping down lawlessness. What’s not entirely new is locking up families in penal-like facilities, or even “tent cities” for immigrants, including kids. Under George W. Bush, the immigrant-incarceration complex boomed, fueled by policies that put more and more immigrants into detention and prison.   The administration leaned on the private prison industry, which was more than happy to put up shoddy facilities debt-financed by local governments and get paid for warehousing the tired and huddled masses.

U.S. Looking to Build Tent Cities to House Immigrant Children Separated From Their Parents - The Trump administration has adopted a vicious policy of separating undocumented families who are intercepted trying to cross the border, meaning thousands of terrified small children are now, in effect, wards of the U.S. government. In March, the Trump administration was reportedly exploring the possibility of housing the children at military bases. Now, McClatchy reported Tuesday, the Trump White House is progressing with that plan and is looking to build tent cities at military bases to alleviate the strain on Department of Health and Human Services shelters which are now at 95 percent of capacity, home to 10,0000 children. From McClatchy: The Department of Health and Human Services will visit Fort Bliss, a sprawling Army base near El Paso in the coming weeks to look at a parcel of land where the administration is considering building a tent city to hold between 1,000 and 5,000 children, according to U.S. officials and other sources familiar with the plans. HHS officials confirmed that they’re looking at the Fort Bliss site along with Dyess Air Force Base in Abilene and Goodfellow AFB in San Angelo for potential use as temporary shelters. The number of migrant children that have been separated from their parents and held in government custody has increased 20 percent under the leadership of Attorney General Jeff Sessions and Homeland Security Secretary Kirstjen Nielsen.

Thousands across US rally against Trump administration’s attacks on immigrant families -  Thousands took part in protest rallies across the US on Thursday and Friday as revelations continue to emerge of the Trump administration’s deliberate and cruel efforts to break up families in order to deter future immigration to the United States. During the six weeks beginning April 19 and ending May 31, 1,995 children were forcibly separated from 1,940 parents and guardian adults by immigration officials, according to a report released Friday by the Department of Homeland Security. The forced separation is part of the Trump’s “zero tolerance” policy against incoming immigrants. Previously, immigrants with no criminal record caught at the US-Mexico border were either sent back or, if detained, housed with family members while being processed in immigration court. Under the Trump administration’s policy, however, criminal, rather than misdemeanor, charges are being brought against every adult immigrant apprehended. This has led to the forcible separation of parents from their children while detained. The United Nations has asked US authorities to immediately halt such separation. The UN request is being ignored, however, and the Trump administration has signaled its willingness to press ahead with a deliberate violation of international law. The mood at the protests was typically one of anger and hostility to the government and its assault against immigrants. Protesters chanted at a rally in Washington, DC, “Until they arrest us, we will stay here, however long it takes.”

See? Now You Did It! -  Raul Ilargi Meijer - This is something I’ve commented on many times. Like two months ago, when I wrote:“As for Donald Trump, as much as we would like to engage in constructive criticism of the man and his government, we find we no longer can. The anti-Trump echo-chamber has turned so deafening that any intelligent debate about his policies is being drowned out amid the never ending flow of fake news and half truths and innuendo and empty smears that US media continue to spout. With a brief lull when the bombs fell on Syria.Thank you, New York Times, WaPo, CNN, MSNBC. Thank you for killing the entire discussion, thank you for killing off journalism. There is a lot to say about Trump, much of it critical, but we can no longer open our mouths. Because we don’t want to be in the same camp as you. Life in the echo chamber has given us vertigo. We had to get out.” Jim Kunstler thanked me for saying that. He very much feels the same way. Nothing has changed. They’re still at it, and we still can’t get a word in edgewise. I was thinking earlier today that the best the MSM can do to promote its own case is to praise Trump from time to time. Because that is the only way they could attract some ears and eyes from outside their echo chamber. They won’t do it. Being negative about the US president makes them too much money. It leaves us with a situation in which the one half of America that reads and hears New York Times, WaPo, CNN, MSNBC has become fully isolated from the other half. Yes, this is risky. But this, too, will be blamed on Trump.Meanwhile, border policies where children are forcefully separated form their parents need criticism and condemnation from all of the nation. But there is nobody left who can reach the entire nation. A year and a half of 24/7 unproven allegations about collusion with Russia has seen to that.Therefore, when the Intercept wrote about a Human Rights Watch report last month in Obama’s Deportation Policy Was Even Worse Than We Thought , the MSM don’t cover it, because it doesn’t fit the narrative. But when Trump uses the same ICE machinery to scare potential immigrants away, it’s suddenly considered newsworthy.

Trump administration supports lawsuit challenging Obamacare’s pre-existing conditions protections - The Trump administration is supporting a lawsuit that challenges parts of the Affordable Care Act (ACA), arguing that federal courts should find the health law’s protection for people with pre-existing conditions unconstitutional.On February 26, 20 Republican state attorneys general filed suit in federal court charging that Congress’s changes to the law in last year’s tax bill rendered the entire law unconstitutional. In that bill, the tax penalty for people who fail to obtain insurance was repealed, effective in 2019.Under the “individual mandate” of Obamacare, as the ACA is commonly known, those people without insurance from their employer or a government program were required to obtain health care coverage or pay a tax penalty. The tax bill removed that penalty but did not repeal any of the ACA’s other provisions. The effect, however, was to make the ACA’s mandate to obtain coverage unenforceable.A US Supreme Court decision in 2012 found the ACA constitutional. While the high court said that the government does not have the authority to require people to purchase insurance coverage, it said the ACA should be upheld under Congress’s constitutional power to levy taxes. The current 20-state lawsuit seeks to turn that argument around, saying that without the tax penalty to enforce the individual mandate, “the Court should hold that the ACA is unlawful and enjoin its operation.” The Trump administration filed a brief in federal district court in Fort Worth, Texas, on June 7 in support of the states’ lawsuit. It argued that without the tax to encourage healthy people to buy insurance, the provisions guaranteeing coverage to people with pre-existing conditions and charging them the same rates as others should be struck down and declared “invalid beginning on January 1, 2019,” when the tax penalty is effectively repealed.

Trump administration threatens health care for 130 million people with pre-existing conditions; cable news barely noticed -- Last week, in a move that could further gut the Affordable Care Act and threaten the health insurance of 130 million people, the Department of Justice (DOJ) announced it would not defend the provisions of the law that protect consumers with pre-existing conditions. Cable news barely took notice. On June 7, Attorney General Jeff Sessions announced that the DOJ would stop defending in court a key provision of Obamacare that protects consumers with pre-existing conditions. This could be a life-or-death decision for such individuals, as it could allow insurers to once again deny them coverage because of their medical condition or history. A recent poll found that health care was a top issue for voters, and the pre-existing condition provision is the most popular provision of the law. Despite these facts, as well as the severity of the potential consequences, the unprecedented nature of the DOJ’s decision not to defend a federal law, and the fact that this is a reversal from past Trump statements, cable news spent hardly any time discussing the decision and the implications it could have for nearly 130 million Americans with pre-existing conditions. From the time of Sessions’ June 7 announcement through June 11, CNN spent just 10 minutes discussing the decision. MSNBC fared slightly better, spending 19 minutes on the decision, and Fox News discussed it the most, devoting 25 minutes to the news that the Department of Justice wouldn’t defend coverage of pre-existing conditions protections. Additionally, not a single Sunday political news show mentioned the DOJ's decision or the consequences that would result from it.

Net neutrality is really, officially dead on Monday. Now what? - The Obama-era net neutrality rules, passed in 2015, are defunct. This time it's for real.  Though some minor elements of the proposal by the Republican-led FCC to roll back those net neutrality rules went into effect last month, most aspects still required approval from the Office of Management and Budget. That's now been taken care of, with the Federal Communications Commission declaring June 11 as the date the proposal takes effect.  FCC Chairman Ajit Pai has called the Obama-era rules "heavy-handed" and "a mistake," and he's argued that they deterred innovation and depressed investment in building and expanding broadband networks. (Read his op-ed on CNET here.) To set things right, he says, he's taking the FCC back to a "light touch" approach to regulation, a move that Republicans and internet service providers have applauded.But supporters of net neutrality -- such as big tech companies like Google and Facebook, as well as consumer groups and pioneers of the internet like World Wide Web creator Tim Berners-Lee -- say the internet as we know it may not exist without these protections."We need a referee on the field who can throw a flag," former FCC Chairman and Obama appointee Tom Wheeler said at MIT during a panel discussion in support of rules like those he championed. Wheeler was chairman when the rules passed three years ago. If you still don't feel like you understand what all the hubbub is about, have no fear.  We've assembled this FAQ to put everything in plain English.

Today Is Day 1 of a Worse Internet. Net Neutrality Is Officially dead. Here’s how you’ll notice it’s gone. -- Monday, June 11, is the first day of the post–net neutrality internet. In December, the Federal Communications Commission voted to repeal the Obama-era rules that prohibit internet companies from slowing down or speeding up access to certain websites, but it took about six months for the repeal to get a signoff from the Office of Management and Budget and for the new rules to be published in the federal register. Beginning, well, now, your internet access could—emphasis on could—feel dramatically different than it did yesterday.  Under the new network neutrality rules, internet service providers like Comcast, Verizon, and AT&T are allowed to throttle traffic that travels over their network or even block access to entire websites as long as the companies alert subscribers in their terms of service that they reserve the right to do so. But since most people in the United States don’t have more than one or two internet providers to choose from for broadband service, if users don’t wish to accept those terms, many won’t have anywhere else to go for their internet. Without net neutrality rules stopping them, internet providers will also be able to charge websites a fee to reach users faster.  Those internet providers stand to win the most from the net neutrality repeal, since they’ll be able to operate what is essentially a two-way toll, collecting money from both subscribers and websites that want priority access to users. Already-powerful, deep-pocketed companies that can afford to pay for the fast-lane service like Facebook or Yelp could wind up in a position to set the price, relegating smaller companies, nonprofits, or struggling news organizations to what is, in effect, a slower internet.

After net neutrality's end and AT&T's deal for Time Warner, the internet enters a new phase - The FCC's dissolution of net neutrality regulations took effect Monday. And a landmark court decision on Tuesdayapproved AT&T's merger with Time Warner, over the arguments of the Department of Justice. Together, these events of the last 48 hours could shape the internet for years to come. They open a path to a network that could be quite different from the freewheeling one you grew up with or first got to know in the 1990s or 2000s. In this scenario, the giant companies that supply your internet access (AT&T, Verizon, Comcast, et al.) try to outflank the giant companies that provide most of your online content and services (Google, Facebook, Apple et al.) — and consumers lose out.

• Service providers could leverage their access to user data to target ads more efficiently, favor content and services they own over competitors, and then raise prices on customers who don’t have alternative options.
• Startups have a harder time breaking in, users have a harder time switching services, and everyone ends up spending more money.
• With the FCC's net neutrality rules gone, the FTC can intervene to address some anticompetitive behavior. But progressives and net neutrality activists worry it isn't equipped to effectively police the new internet dynamics.
• AT&T will own its own cellular, home broadband and telecommunications services, along with Time Warner and DirecTV.
• Comcast owns its own cable TV, broadband and fledgling cell service along with NBC Universal.
• Verizon owns its own wired and wireless broadband, Fios TV service as well as AOL, Yahoo, HuffPo and other online brands.

The service providers all say they don't want to limit choice, and that they have no intention of blocking or prioritizing content. But the concern is that, once companies have vertical control over home internet and cable TV service, mobile data service, and multiple content sources, the temptation to pursue such strategies — once upon a time they were dubbed “synergies” — could be irresistible.

 Comcast Offers $65 Billion for Fox in Bidding War With Disney - Comcast Corp. made a long-awaited offer to acquire much of 21st Century Fox Inc., topping a previous proposal by Walt Disney Co. and setting up a bidding war for Rupert Murdoch’s media empire.Comcast, the largest U.S. cable-TV provider, said its cash offer reflects a $65 billion value for Fox’s entertainment assets. At $35 a share, the bid represents a 19 percent premium over the Disney offer, the company said on Wednesday. The move follows AT&T Inc.’s victory over the Justice Department in its antitrust battle to take over Time Warner Inc. That outcome is expected to spur a wave of media consolidation, emboldening companies to make offers they might otherwise have skipped.

Supreme Court strikes down ban on political apparel at polling places | TheHill: The Supreme Court on Thursday struck down a Minnesota law that bans all political apparel at polling places. In a 7-2 ruling, the court said the state law violates the First Amendment’s protection of free speech. In delivering the opinion of the court, Chief Justice John Roberts said the law does not define what apparel is “political,” a word he that said can be expansive.“It can encompass anything ‘of or relating to government, a government, or the conduct of governmental affairs,’” he said, quoting Webster’s dictionary definition, “or anything ‘of relating to, or dealing with the structure or affairs of government, politics, or the state,’” he added, quoting the American Heritage Dictionary. “Under a literal reading of those definitions a button or T-shirt merely imploring others to ‘Vote!’ could qualify.” Roberts, however, said that Minnesota polling places are nonpublic forums that, under the court’s precedent, can be subject to content-based restrictions, "so long as the regulation on speech is reasonable and not an effort to suppress expression merely because public officials oppose the speaker’s view,’” he said, quoting court precedent. He said states must be able to articulate some sensible basis for distinguishing what can be worn and what can’t. As Roberts noted, all 50 states and the District of Columbia have laws curbing various forms of speech in and around polling places on Election Day. 

The giant timeline of everything Russia, Trump and the investigations – PBS - The investigation into Russian attempts to influence the 2016 election has grown dramatically in both size and scope. A complex probe from the start, it is now a nearly indiscernible blur of characters, charges and counter-charges. This timeline is a tool aimed at understanding the growing number of dots and where they connect. Think of it as a map. We spent months checking and cross-checking sources of information for each item. Dig in. There is a lot here.  Click on the image above to zoom in on dates and characters. For a more in-depth look at individual cells, check out this spreadsheet. There are hundreds of entries in the timeline, covering decades of activity. To help get you started, we’ve identified a few moments when major events overlapped in time.

Web of elite Russians met with NRA execs during 2016 campaign | The Fresno Bee: Several prominent Russians, some in President Vladimir Putin’s inner circle or high in the Russian Orthodox Church, now have been identified as having contact with National Rifle Association officials during the 2016 U.S. election campaign, according to photographs and an NRA source. The contacts have emerged amid a deepening Justice Department investigation into whether Russian banker and lifetime NRA member Alexander Torshin illegally channeled money through the gun rights group to add financial firepower to Donald Trump’s 2016 presidential bid. Other influential Russians who met with NRA representatives during the campaign include Dmitry Rogozin, who until last month served as a deputy prime minister overseeing Russia’s defense industry, and Sergei Rudov, head of one of Russia’s largest philanthropies, the St. Basil the Great Charitable Foundation. The foundation was launched by an ultra-nationalist ally of Russian President Putin. The Russians talked and dined with NRA representatives, mainly in Moscow, as U.S. presidential candidates vied for the White House. Now U.S. investigators want to know if relationships between the Russian leaders and the nation’s largest gun rights group went beyond vodka toasts and gun factory tours, evolving into another facet of the Kremlin’s broad election-interference operation. In March, Democratic Rep. Ted Lieu of California noted in a letter to NRA CEO Wayne LaPierre that an NRA delegation met with Rogozin and Rudov during a trip to Russia in December 2015.Even as the contacts took place, Kremlin cyber operatives were secretly hacking top Democrats’ emails and barraging Americans’ social media accounts with fake news stories aimed at damaging the image of Democratic presidential frontrunner Hillary Clinton and boosting the prospects of Republican Donald Trump. It is a crime, potentially punishable with prison time, to donate or use foreign money in U.S. election campaigns. 

There’s actually lots of evidence of Trump-Russia collusion -  Yglesias - “In all of this, in any of this, there’s been no evidence that there’s been any collusion between the Trump campaign and President Trump and Russia,” House Speaker Paul Ryan said Thursday at his weekly press conference. “Let’s just make that really clear. There’s no evidence of collusion. This is about Russia and what they did and making sure they don’t do it again.” From Ryan’s perspective, it would be convenient if it were true that Robert Mueller’s investigation had turned up no evidence of collusion, but it simply isn’t. Republicans from Donald Trump on down have made “no collusion” a mantra. The term itself is ill-defined in this context; you won’t find it in the US code. But roughly speaking, the question is whether the campaign got involved with Russian agents who committed computer crimes to help Trump win the 2016 presidential election. The verdict on this is unclear. But there is certainly plenty of evidence pointing toward collusion; what you would call “probable cause” in a legal context, or what a journalist might simply consider reason to continue investigating the story. And the investigating thus far, both by special counsel Mueller and by journalists working on the story, has been fruitful. The efforts have continued to turn up contacts between Trumpworld and Putinland, cover-ups, and dishonesty.Even as recently as Friday afternoon, we got new indictments charging Trump’s former campaign chair and his former GRU operative business partner with witness tampering and obstruction of justice. It’s important, obviously, not to prejudge a case. It turns out that Saddam Hussein was acting like a man who was covering up a secret nuclear weapons arsenal because he didn’t want the world to know how weak his defenses really were. By the same token, it’s certainly possible that the various Trump-Russia contacts never amounted to anything and that they’ve been consistently covered up for some reason other than an effort to hide collusion. But both the contacts that have been revealed so far and the deception used to deny their existence are certainly evidence of collusion — evidence that should be (and is being) pursued by the special counsel’s office and that should not be dismissed by the press or by elected officials.

More Than Just Russia — There’s a Strong Case for the Trump Team Colluding With Saudi Arabia, Israel, and the UAE -- There has been much discussion of the secret meetings during the 2016 campaign held at Trump Tower with various members of Trump’s inner circle and family members. Recently we learned of yet another — this one reportedly took place on August 3, 2016, and was arranged by Blackwater founder Erik Prince, the brother of Education Secretary Betsy DeVos. He has served as a shadow adviser, not only to the Trump campaign, but also to the Trump administration. He was the guy that pitched Trump on this idea of a privatizedorce for Afghanistan and was also involved with pitching the idea of a private intelligence force that could circumvent the deep state. Prince and his mother were also major financiers of the Trump election campaign.This meeting, first revealed by the New York Times, has raised serious questions from many news outlets and some members of Congress about whether Erik Prince committed perjury before the House Intelligence Committee when he denied any role in the Trump campaign and downplayed his meeting with a powerful Russian businessman in the Seychelles in January 2017. At this meeting was George Nader, an American citizen who has a long history of being a quiet emissary for the United States in the Middle East. He also worked for Blackwater and Prince. Nader is also a convicted pedophile in the Czech Republic and he has faced similar allegations in the United States. Nader works as an adviser for the Emirati royals, and because he has close ties to Mohammed bin Salman, the Saudi crown prince. There was also an Israeli at that meeting, Joel Zamel. He was there supposedly pitching a multimillion dollar social media-manipulation campaign to the Trump team. Zamel’s company, PSY Group, boasts of employing former Israeli intelligence operatives.

Nunes Slams DOJ For "Obstruction" On FBI Spy Documents Related To Stefan Halper - House Intelligence Committee Chairman Devin Nunes has accused the Department of Justice of "obstruction" and using "an array of tactics" to withhold key documents related to the FBI's use of a spy against the Trump campaign. The spy in question is Stefan Halper, a 73-year-old Cambridge professor, former U.S. government official and longtime spook for the CIA and FBI - whose ex father-in-law was Ray Cline, former Deputy Director of the CIA.  Halper was outed as the FBI informant who infiltrated the Trump campaign to conduct espionage after the Washington Post and the New York Times ran reports that corroborated a March report by the Daily Caller. The Caller detailed Halper's outreach to several low-level aides to the Trump campaign, including Carter Page, George Papadopoulos, and a cup of coffee he had with campaign co-chair Sam Clovis. In a Friday letter to Deputy Attorney General Rod Rosenstein, Nunes accused the DOJ of refusing to turn over key documents concerning the agency's use of Halper. "DOJ continues to obfuscate and delay its production using an array of tactics, such as incorrectly categorizing the requested documents as Gang-of-Eight-level material in order to limit access," wrote Nunes, in reference to an April 30 subpoena for the documents. "Such conduct by DOJ is unacceptable because the Gang-of-Eight is a legal fiction that has no basis outside of the confines of Presidential approval and reporting of covert actions."Nunes added "Your continued refusal to permit Members of Congress and designated staff to review the requested documents is obstruction of a lawful Congressional investigation."Rosenstein appears nonplussed at the letter - with a DOJ official commenting to Fox News that the Deputy AG is busy with other matters, and will plan to respond during a previously scheduled briefing on Thursday.  “He, along with the FBI Director and DNI Coats, look forward to further briefing and again presenting responsive documents to Chairman Nunes and the rest of his colleagues in the Gang of 8 meeting scheduled for Thursday of this week,” the official said.

Rosenstein threatened to ‘subpoena’ GOP-led committee in ‘chilling’ clash over records, emails show -- Deputy Attorney General Rod Rosenstein threatened to “subpoena” emails, phone records and other documents from lawmakers and staff on a Republican-led House committee during a tense meeting earlier this year, according to emails reviewed by Fox News documenting the encounter and reflecting what aides described as a "personal attack."The emails memorialized a January 2018 closed-door meeting involving senior FBI and Justice Department officials as well as members of the House Intelligence Committee. The account claimed Rosenstein threatened to turn the tables on the committee's inquiries regarding the Russia probe. “The DAG [Deputy Attorney General Rosenstein] criticized the Committee for sending our requests in writing and was further critical of the Committee’s request to have DOJ/FBI do the same when responding,” the committee's then-senior counsel for counterterrorism Kash Patel wrote to the House Office of General Counsel. “Going so far as to say that if the Committee likes being litigators, then ‘we [DOJ] too [are] litigators, and we will subpoena your records and your emails,’ referring to HPSCI [House Permanent Select Committee on Intelligence] and Congress overall.”A second House committee staffer at the meeting backed up Patel’s account, writing: “Let me just add that watching the Deputy Attorney General launch a sustained personal attack against a congressional staffer in retaliation for vigorous oversight was astonishing and disheartening. ... Also, having the nation’s #1 (for these matters) law enforcement officer threaten to 'subpoena your calls and emails' was downright chilling.” The committee staffer noted that Rosenstein’s comment could be interpreted as meaning the department would “vigorously defend a contempt action" -- which might be expected. But the staffer continued, "I also read it as a not-so-veiled threat to unleash the full prosecutorial power of the state against us.”

Cohen Reportedly Set To Cooperate With Prosecutors, Drops Legal Representation - After two months of legal wrangling following an April 9 FBI raid on his home, hotel room and office, sources close to Trump personal attorney Michael Cohen say that he's preparing to cooperate with prosecutors from the Southern District of New York who have been overseeing the criminal probe against him, ABC News reported Wednesday morning. In the latest sign that he could be preparing to cooperate, ABC said the law firm that has represented Cohen so far will not be representing him going forward. So far, Cohen has been represented by Stephen Ryan and Todd Harrison of the Washington and New York firm McDermott, Will & Emery LLP. No replacement counsel has been identified at this time.  The report comes as Cohen's attorneys are rushing to review 3.7 million documents seized in the raid for signs they could be protected by attorney-client privilege by the Friday deadline. Of 300,000 documents reviewed so far, the "special master" supervising the dissemination of documents seized in the raid said that only 162 of them were protected.The possibility of Cohen turning states witness could create problems for the White House, Cohen's family members and lawyers that have been working on the multifaceted investigation into Russian interference in the 2016 election. Needless to say, the Democrats are ecstatic.  BREAKING: Michael Cohen no longer has legal representation, and a source tells ABC he is going to cooperate with federal prosecutors in New York. This would mean Cohen flipped on Trump. Which would be the most devastating blow to him yet. It could end his presidency. Tick-tock.— Scott Dworkin (@funder) June 13, 2018  Today's news comes after Vanity Fair reported late Tuesday that Cohen has been telling friends that he expects to be arrested soon. When contacted by the Vanity Fair reporter via text, Cohen reportedly replied "your source is wrong!"While Trump has repeatedly played down his connections to Cohen (he said last month during an interview with Fox & Friends that Cohen handled only "a tiny fraction" of his legal work) sources close to the White House have told media that Trump is worried about the prospect of his former "fixer" cooperating with prosecutors. Trump has also lashed out at the prosecutors who targeted Cohen, famously declaring that "attorney-client privilege is dead!" on twitter while saying during a press conference that the raid on Cohen was "an attack on our country."

Judge in Emoluments Case Questions Defense of Trump’s Hotel Profits - NYT — A federal judge on Monday sharply criticized the Justice Department’s argument that President Trump’s financial interest in his company’s hotel in downtown Washington is constitutional, a fresh sign that the judge may soon rule against the president in a historic case that could head to the Supreme Court.The plaintiffs in the lawsuit, the District of Columbia and the state of Maryland, charge that Mr. Trump’s profits from the hotel violate anti-corruption clauses of the Constitution that restrict government-bestowed financial benefits, or emoluments, to presidents beyond their official salary. They say the hotel is siphoning business from local convention centers and hotels.The judge, Peter J. Messitte of the United States District Court in Maryland, promised to decide by the end of July whether to allow the plaintiffs to proceed to the next stage, in which they could demand financial records from the hotel or other evidence from the president. The case takes aim at whether Mr. Trump violated the Constitution’s emoluments clauses, which prevent a president from accepting government-bestowed benefits either at home or abroad. Until now, the issue of what constitutes an illegal emolument has never been litigated. Attorneys general for the District of Columbia and Maryland say that by allowing foreign officials to patronize the five-star Trump International Hotel blocks from the White House, Mr. Trump is violating the Constitution’s ban on payments from foreign governments to federal officeholders. They also claim the president is violating a related clause that restricts compensation, other than his salary, from the federal government or from state governments.

New York AG sues Trump, alleging ‘illegal conduct’ at his charity - New York Attorney General Barbara Underwood filed a lawsuit Thursday against President Donald Trump and three of his adult children alleging a pattern of illegal conduct over a decade related to his personal charity. The allegations — which quickly drew scorn from the president — include unlawful political coordination with his 2016 presidential campaign and self-dealing transactions to benefit Trump’s personal and business interests.  The suit before the New York Supreme Court grew out of an investigation launched by the Democratic attorney general’s office in June 2016. It also seeks special proceedings from the court to dissolve Trump’s charity, the Donald J. Trump Foundation, and obtain $2.8 million in restitution and other penalties.Underwood, who succeeded Eric Schneiderman in May, also sent referral letters Thursday to the Internal Revenue Service and Federal Election Commission raising possible federal law violations. “As our investigation reveals, the Trump Foundation was little more than a checkbook for payments from Mr. Trump or his businesses to nonprofits, regardless of their purpose or legality,” Underwood said in a statement. “This is not how private foundations should function and my office intends to hold the Foundation and its directors accountable for its misuse of charitable assets.”

Comey "Deviated" From FBI Norms In Clinton Probe, But "No Political Bias", OIG Finds - In what is likely to disappoint many on the right, Bloomberg reports that the Justice Department's watchdog has reportedly found that while former FBI Director James Comey "chose to deviate from" the agency's norms in his investigation into Hillary Clinton's emails, he wasn't motivated by political bias.“While we did not find that these decisions were the result of political bias on Comey’s part, we nevertheless concluded that by departing so clearly and dramatically from FBI and department norms, the decisions negatively impacted the perception of the FBI and the department as fair administrators of justice,” Inspector General Michael Horowitz said in the report’s conclusions, which were obtained Thursday by Bloomberg News. Eight days ago, ABC reported that Comey "defied authority" several times while he was director of the FBI, citing sources familiar with the draft of a highly anticipated OIG report on the FBI's conduct during the Clinton email investigation. The draft of Horowitz's wide-ranging report specifically called out Comey for ignoring objections from the Justice Department when he disclosed in a letter to Congress just days before the 2016 presidential election that FBI agents had reopened the Clinton probe, according to sources. Clinton has said that letter doomed her campaign.Before Comey sent the letter to Congress, at least one senior Justice Department official told the FBI that publicizing the bombshell move so close to an election would violate longstanding department policy, and it would ignore federal guidelines prohibiting the disclosure of information related to an ongoing investigation, ABC News was told. –ABC One source told ABC News that the draft report explicitly used the word "insubordinate" to describe Comey's behavior. Another source agreed with that characterization but could not confirm the use of the term.  Former Attorney General Loretta Lynch was rebuked by Horowitz over the investigation, noted in the ABC:  That said, today's leaked conclusion says that the IG found a "troubling lack of any direct, substantive communication” between Comey and AG Lynch ahead of July press conference and Comey’s October letter to Congress. “Extraordinary that, in advance of two such consequential decisions” Comey didn’t speak directly with Lynch.

Comey Responds To OIG Report: "My Team Faced An Extraordinary Situation" - Former FBI Director James Comey has responded to the DOJ Inspector General's report which concluded that he was "insubordinate," used personal email for official business, and "deviated" from FBI norms. Highlights:

• "the inspector general’s team went through the F.B.I.’s work with a microscope and found no evidence that bias or improper motivation affected the investigation"
• "But even in hindsight I think we chose the course most consistent with institutional values."
• "The report also resoundingly demonstrates that there was no prosecutable case against Mrs. Clinton"
• "We knew that reasonable people might choose to do things differently and that a future independent reviewer might not see things the way we did."
• "I never imagined the F.B.I. would face a choice in late October 2016 either to tell Congress we had restarted the email investigation in a significant way or to conceal that fact."

Comey's carefully crafted response to the report can be read below via the New York Times: James Comey: This Report Says I Was Wrong. But That’s Good for the F.B.I. The Department of Justice’s independent watchdog, the inspector general, has released a report that is critical of my decisions as F.B.I. director during the investigation of Hillary Clinton’s email account. The report concludes that I was wrong to announce the F.B.I.’s completion of the investigation without coordinating with the attorney general and that I was wrong to inform Congress in late October that we had reopened the investigation.In both situations, the inspector general’s team concludes, I should have adhered to established norms, which they see as mandating both deference to the attorney general on the public announcement and silence about an investigation so close to an election.I do not agree with all of the inspector general’s conclusions, but I respect the work of his office and salute its professionalism. All of our leaders need to understand that accountability and transparency are essential to the functioning of our democracy, even when it involves criticism. This is how the process is supposed to work.This report is important for two reasons.First, the inspector general’s team went through the F.B.I.’s work with a microscope and found no evidence that bias or improper motivation affected the investigation, which I know was done competently, honestly and independently.Second, this report is vital in shedding light for future leaders on the nature and quality of our investigation and the decisions we made.

IG Report Confirms Obama Lied About Hillary Email Server - Thursday's DOJ Inspector General report covering the Obama DOJ/FBI conduct during the Hillary Clinton email investigation confirms a bombshell that had previously been hinted at through WikiLeaks disclosures: Obama lied when he said in 2015 that he learned of Hillary Clinton's private email server through a New York Times report.  Specifically, Obama told CBS News the following a March 7, 2015 report: President Obama only learned of Hillary Clinton's private email address use for official State Department business after a New York Times report, he told CBS News in an interviewCBS News senior White House correspondent Bill Plante asked Mr. Obama when he learned about her private email system after his Saturday appearance in Selma, Alabama.‘The same time everybody else learned it through news reports,’ the president told Plante. –CBS   The OIG report reveals this was a lie. A footnote on page 89 reads "President Barack Obama was one of the 13 individuals with whom Clinton had direct contact using her clintonemail.com account" What's more, FBI counterintelligence agent Peter Strzok told the Inspector General that the top brass of the agency wrestled over whether or not to include Obama's involvement in Clinton's exoneration statement - and that former FBI Director James Comey knew Obama had lied: 

 Ex-Trump campaign chairman Paul Manafort jailed after witness tampering charge - A federal judge ordered Paul Manafort to jail Friday over charges he tampered with witnesses while out on bail — a major blow for President Trump’s former campaign chairman as he awaits trial on federal conspiracy and money-laundering charges next month.“You have abused the trust placed in you six months ago,” U.S. District Judge Amy Berman Jackson told Manafort. “The government motion will be granted, and the defendant will be detained.” The judge said sending Manafort to a cell was “an extraordinarily difficult decision” but said his conduct — allegedly contacting witnesses in the case in an effort to get them to lie to investigators — left her little choice. “This is not middle school. I can’t take away his cellphone,” she said. “If I tell him not to call 56 witnesses, will he call the 57th?” She said she should not have to draft a court order spelling out the entire criminal code for him to avoid violations. “This hearing is not about politics. It is not about the conduct of the office of special counsel. It is about the defendant’s conduct,” Jackson said. “I’m concerned you seem to treat these proceedings as another marketing exercise.” Manafort was led out of the courtroom by security officers. He turned and gave a last look and wave to his wife, seated in the well of the court. She nodded back to him.

Jailing of ex-Trump campaign manager signals new stage in Washington's political wars -- US District Judge Amy Berman Jackson in Washington revoked former Trump campaign manager Paul Manafort’s bail on Friday, sending him to jail while he awaits a September 17 trial on charges of money laundering, making false statements and failing to register as a lobbyist for ousted pro-Russian Ukrainian President Viktor Yanukovych. He also faces a separate July 25 trial in Alexandria, Virginia on bank and tax fraud charges. The charges in both cases were brought by Special Counsel Robert Mueller, who is heading up the Justice Department investigation into alleged Russian “meddling” in the 2016 presidential election and possible collusion by the Trump election campaign. Mueller is also considering charges of obstruction of justice in connection with Trump’s May, 2017 firing of then-FBI Director James Comey and other actions by the White House directed against the Russia investigation. Mueller escalated the campaign against Trump by having his prosecutors file new charges last week against Manafort and a Russian associate, Konstantin Kilimnik, claiming they sought to obstruct justice by tampering with likely witnesses in the upcoming Washington trial. The prosecutors urged the judge to revoke or revise Manafort’s bail, which has allowed him to remain at home with electronic monitoring on a $10 million bond since his indictment in October of 2017. The jailing of Manafort expresses the ferocious character of the struggle that is raging between rival factions in the US capitalist class and its state apparatus. Both factions are reactionary, the differences centering on questions of imperialist foreign policy and how best to confront and repress social opposition within the United States. The Democrats are opposing the fascistic real estate billionaire primarily on the grounds that he is insufficiently aggressive in pursuing US war aims in Syria and confronting Russia.

'There's a lot of work to do' on bank regulation: Fed's Powell -— Federal Reserve Chairman Jerome Powell said Wednesday that the agency has a “pretty full docket” on regulatory issues, including implementing the recently passed regulatory relief bill and finishing up liquidity and capital regulations. “It’s actually a pretty full docket right now,” Powell said. “There’s a lot of work to do, I think.” Powell specifically cited rules related to the passage of a law raising the statutory threshold for systemically important financial institutions to $250 billion from $50 billion. The law immediately frees firms with assets of up to $100 billion from the additional requirements of a SIFI, but gives the Fed discretion to set new rules for banks between $100 billion and $250 billion. “After … Sen. Crapo’s bill passed, we’ve got quite a lot of work to do under that, to figure out how we’re going to reach below that $250 billion threshold to assess, supervise, regulate the financial stability risk below that level," he said, referring to the Idaho Republican Mike Crapo.  Powell, who has been a member of the Fed board since 2012, took over the agency’s Supervisory Committee in April 2017 after the departure of former Gov. Daniel Tarullo. Soon afterward, he set out his regulatory priorities: revising some of the rules governing bank boards of directors, increasing transparency around the Fed’s stress testing scenarios and models and adjusting the enhanced supplemental leverage ratio to make it less of a binding constraint. The Fed issued a proposal last summer that would give banks’ boards of directors more discretion in whether they personally sign off on supervisory Matters Requiring Attention. Powell defended the action last August, saying it would not lighten the load of bank boards, but rather frees them to attend to more pressing matters facing their banks. In December, the agency proposed a rule that would give banks a better idea of how the Fed’s internal stress testing models work, and more recently in April the central bank issued a proposal that would institute a “stress capital buffer” as a central capital requirement in the stress testing process and capital supervision. Also in April, the Fed issued a proposal to revise the enhanced supplementary leverage ratio for the eight global systemically important banks, replacing a static ratio with half of a bank’s applicable global supplementary leverage ratio.

Fed finalizes rule limiting banks' exposure to single trading partner -- The Federal Reserve Board on Thursday released its final rule limiting the amount of exposure large banks can maintain with a single trading counterparty, raising applicability thresholds but otherwise hewing close to the 2016 proposal. The rule, which the board approved unanimously at an open meeting, will prohibit all U.S. banks above $250 billion in assets from having more than a quarter of Tier 1 capital in credit exposures to a single counterparty — either a bank or nonbank. The rule also prevents global systemically important banks, or G-SIBs, from having credit exposures of more than 15% of Tier 1 capital tied to another systemically important institution. Federal Reserve Board Chair Jerome Powell praised the final rule, saying it shows the agency’s commitment to strong but sensible regulation. “The financial crisis showed that financial interconnections between our largest and most complex institutions … can threaten the stability of the financial system,” Powell said. “This final rule is another step in sustaining an effective and efficient regulatory regime that keeps our financial system strong and protects our economy while imposing no more burden than is necessary to get the job done.” Foreign banking organizations with more than $250 billion in assets would also be barred from having more than 25% of Tier 1 capital exposed to a single counterparty, unless they are already subject to a similar rule in their home jurisdiction. In that case, the banking organization can obtain a waiver from the Fed.

After reg relief, are Dems a party of Warren or a party of compromise? — The book is closed on Senate legislation reforming parts of the Dodd-Frank Act.  But months after a group of Democrats helped propel the bill forward, the opposition party’s identity crisis on banking policy is still on full display. In her speech this week backing new regulation and signaling a possible White House run, Sen. Elizabeth Warren, D-Mass., echoed the zero tolerance of many in her party toward unwinding post-crisis rules. But her sharp words were in stark contrast to pro-regulatory relief stances by moderate Democrats on the campaign trail. “What’s important to keep in mind is that the Democratic views on regulation are not monolithic, and in fact, they are quite heterogeneous,” said Brandon Barford, a partner at Beacon Policy Advisors. In her speech Tuesday backing new regulation, Sen. Elizabeth Warren, D-Mass., echoed the zero tolerance of many in her party toward unwinding post-crisis rules. Bloomberg News Warren used her speech to call for new legislation ending a cozy relationship between private companies and regulators, and said the “war on regulations is waged on behalf of giant companies that don’t want to follow any rules.” Consumer advocates say it is crucial for the party to hold firm on preserving the Obama-era regulatory regime. “What’s critical for Senator Warren and others is to make sure consumers and voters know that the Democratic Party is not going to be involved in this massive new attempt at rolling back the Dodd-Frank regulations,” said Amit Narang, a regulatory policy advocate at Public Citizen. And yet, in contrast to Warren’s words, Senate Democrats running for reelection in red states have not been shy about their recent support for the law rolling back certain Dodd-Frank provisions, which President Trump signed last month. \

Volcker 'fix' may cause new headaches for Wall Street  (Reuters) - A proposal to simplify a rule banning banks from proprietary trading, rather than making life easier for Wall Street, could ensnare billions of dollars’ worth of assets not currently caught by the regulation. This little-noticed wrinkle, if it were to make it into the final rule, could prompt Wall Street firms to overhaul their treasury, trading and merchant banking operations and change their accounting practices, lawyers and executives told Reuters. “It’s going to capture trades that wouldn’t be captured by the current regulation and that’s the bogeyman people would want to avoid in this proposal,”  . One of the most-hated aspects of the Volcker Rule presumes purchases and sales of instruments within 60 days count as proprietary unless the bank can prove they qualify for an exemption, such as market making or hedging. This part of the rule aims to identify short-term trades that are intended to be speculative in nature, but banks say it is too subjective because it would require second-guessing traders’ intentions. Regulators have proposed replacing it with a more objective test, based on the accounting treatment of the instruments traded. Under the new test, trading activity by desks that daily book net realized or unrealized gains and losses exceeding $25 million is only allowed if the bank shows that trading qualifies for the rule’s exemptions. Since the crisis, however, banks have applied this mark-to-market or “fair value” accounting treatment to a range of longer-term investments to better manage their risk. As a result, the proposal would bring under the rule the vast majority of equity investments, derivatives and a range of fixed income securities that banks hold for many years but not to maturity. 

The ‘Fiduciary Rule’ May Sound Boring, But Its Collapse Threatens Your Retirement - Among all the financial reforms launched during the Obama administration, the fiduciary rule may have been the most important to ordinary investors. Issued by the Department of Labor in 2016, the rule required brokers working with retirement accounts to put clients’ interests ahead of their own—for example, by recommending an annuity that was better for the client rather than one from a company that paid the broker a bigger commission. The regulation was hailed as an historic win by consumer advocates, and the financial-services industry began remaking many of its products and pay structures to comply.  Now the regulation is all but dead. In March a federal appeals court struck it down, and the Trump administration has not appealed the ruling. Where does that leave retirement investors? The outlook is anything but clear. In April the Securities and Exchange Commission released its own plan for investor protection. In a proposed rule that runs hundreds of pages, the agency says it wants brokers “to act in the best interest of the retail customer” but adds, “We are not proposing to define ‘ best interest’ at this time.” Instead, the agency lists “obligations” of brokers to ensure they don’t place their own interests before those of their clients and says financial companies must “establish, maintain and enforce policies” that are designed to spot and mitigate conflicts. “We don’t know what they mean by ‘best interest,’ ” says Barbara Roper, director of investor protection at the Consumer Federation of America. “And if it’s vague, it’s going to be difficult to enforce.”

Even after Madoff, Ponzi Schemes Touting Promissory Notes Proliferate -- Pam Martens - Most of these promissory note Ponzi scheme operators are content to swindle millions or tens of millions of dollars from investors. But on December 21 of last year the SEC announced that it had uncovered a $1.2 billion Ponzi scheme using promissory notes that had defrauded more than 8,400 investors, mostly senior citizens. The scheme was operated by Robert H. Shapiro and the Woodbridge Group of Companies LLC, formerly headquartered in Boca Raton, Florida. Preying on senior citizens in Florida is considered a target-rich environment for Ponzi schemers. In May 2012 the SEC charged that George Levin and Frank Preve, who lived in the Fort Lauderdale area of Florida, had raised more than $157 million from 173 investors by issuing promissory notes from Levin’s company and interests in a private investment fund they operated. The SEC charged that the two had used the investors’ money “to purchase discounted legal settlements from former Florida attorney Scott Rothstein through his prominent law firm Rothstein Rosenfeldt and Adler PA.” Unfortunately for investors, Rothstein’s representations were just a scam with Rothstein using the funds to “support his lavish lifestyle.”The promissory note/Ponzi scheme has become such a problem that in April of this year the SEC issued an “Investor Alert” detailing the following “classic warning signs”:

• “Promises of High Returns with Little or No Risk. Guaranteed high investment returns are the hallmark of a Ponzi scheme. Every investment has risk, and the potential for high returns usually comes with high risk. If it sounds too good to be true, it probably is.
• “Unlicensed and Unregistered Sellers. Most Ponzi schemes involve individuals or firms that are not licensed or registered. Even if an investment professional comes across as likeable or trustworthy, use the free search tool on Investor.gov to check whether the person is licensed and registered.
• “Overly Consistent Returns. Investment values tend to fluctuate over time. Be skeptical of an investment that generates steady positive returns regardless of market conditions.

New bank lobbying group excludes Goldman and Morgan Stanley - An effort by the nation’s largest banks to boost their lobbying clout in Washington is leaving three industry titans on the sidelines: Goldman Sachs Group, Morgan Stanley and Credit Suisse Group. Though the three firms were initially slated to be included in a newly merged trade association, they were blocked after some executives argued that adding more megabanks would highlight the stigma that Wall Street still carries from the 2008 financial crisis. Others said that members should be limited to consumer-oriented lenders. The decision is part of a sometimes fractious debate playing out as high-profile CEOs, including Bank of America’s Brian Moynihan and JPMorgan Chase’s Jamie Dimon, work to combine the Financial Services Roundtable and the Clearing House Association. The tie-up, which comes at a time when banks are eager to capitalize on the Trump administration’s business-friendly agenda, has dredged up long-standing fissures over how to improve the industry’s image and rebuild its political standing. While the deal is still expected to go forward, disagreements have bogged down the launch of the new entity, according to people with direct knowledge of the negotiations. The tensions have even prompted some regional banks to discuss dropping out, the people added. 

Even with Trump's support, pot banking bill may still fail -- Support from members of the ruling congressional party, a Democrat as prominent as Sen. Elizabeth Warren, and a Republican president might normally seem like enough to spur legislative progress. But despite backing from all three camps, plenty of pessimism still clouds the latest effort to enable the legal marijuana industry's access to the banking system. Perhaps the biggest factor helping along the bill authored by Warren and Sen. Cory Gardner, R-Colo., exempting businesses from a federal pot ban in states where the substance is legal, was President Trump's casual comment Friday that he "probably will end up supporting" the legislation.

SEC Commissioner Blasts Insiders For Quietly Selling Into Stock Buybacks, Demands Rule Review - In a surprising development, one regulator has had the nerve to point out something we have been criticizing all along, namely that corporate buybacks are simply a scheme to make shareholders and management exorbitantly rich on the back of creditors who buy corporate bonds to fund stock repurchases. And, in an added twist, corporate insiders are taking advantage of a peculiar quirk in price action to dump the bulk of their stock just as algos and humans (and, in the case of Apple and various other stocks, central banks) are buying. Specifically, according to an analysis by SEC Commissioner Robert J. Jackson, Jr., company executives have been grossly busing the timing of buyback announcements and selling significantly more of their stock immediately after the news than they do beforehand. taking advantage of price bumps that often accompany share-repurchase announcements. But what is most infuriating, is that this is perfectly legal, and as the WSJ reports in a speech on Monday, a pissed off Jackson — appointed by President Trump and sworn in this year to fill a Democratic seat at the SEC — may emerge as the most credible SEC employee in years when he urges fellow regulators to review securities laws that provide protection to insiders who capitalize on the timing of buyback announcements.This is where it gets bizarre: while companies engaging in buybacks have certain constraints, such as following a blackout period, or only selling on a NBBO uptick, insiders who sell stock into buyout bounces aren’t trading illegally and Jackson isn’t accusing them of that. But these price surges can be especially beneficial to corporate executives holding large chunks of corporate stock looking for an uptick to unload shares. And since it is the executives that decide when to buy back stock and when to announce it, it seems that this is yet another way for corporate insiders (literally) to skew the market in their favor.

Finally: SEC Frets about Share Buybacks, “Torrent of Corporate Trading Dominating the Market” and “Short-Term Financial Engineering” -- naked capitalism Yves here. A Republican SEC commissioner criticizes share buybacks…and where have the Democrats been on this issue? Too busy giving speeches to Goldman to take notice, it seems. Mind you, one robin does not make a spring. But it is a disgrace that share buybacks have been given a free pass for so long. But it might haves helped if these newfound buyback critics had understood that the tax break for the repatriation of offshore earnings was certain to go mainly to buybacks and executive bonuses, which is what happened the last time companies that used these gimmicks got a tax holiday, in 2004. By Wolf Richter:  A study by the SEC of 385 recent share-buyback announcements — this is when companies announcehow much money they will spend in the futureon buying back their own shares, but before they actually begin buying them — found:

• Share-buyback announcements led to “abnormal returns” in the share price over the next 30 days.
• Executives used this share price surge to cash out.

“In fact, twice as many companies have insiders selling in the eight days after a buyback announcement as sell on an ordinary day. So right after the company tells the market that the stock is cheap, executives overwhelmingly decide to sell,” explained SEC Commissioner Robert Jackson Jr. – appointed by President Trump and sworn in earlier this year – in a speech today. He went on:And, in the process, executives take a lot of cash off the table. On average, in the days before a buyback announcement, executives trade in relatively small amounts—less than $100,000 worth. But during the eight days following a buyback announcement, executives on average sell more than $500,000 worth of stock each day—a fivefold increase. Thus, executives personally capture the benefit of the short-term stock-price pop created by the buyback announcement: “This trading is not necessarily illegal,” he added. “But it is troubling, because it is yet another piece of evidence that executives are spending more time on short-term stock trading than long-term value creation.”The surge in buybacks is largely due to the new corporate tax law. In the first quarter, companies actually repurchasedan all-time-record $178 billion of their own shares. In terms of announcements of future share buybacks, May set an all-time record of $174 billion – in just one month! So this business is heating up.

WaPo and SEC Commissioner Wake Up to Looming Crisis from Stock Buybacks -  Pam Martens - Last Friday, Steven Pearlstein, a Pulitzer Prize-winning business and economics columnist at the Washington Post, penned an in-depth article on the hubris of stock buybacks and the role they are playing in retarding future growth of the U.S. economy as well as fueling the next debt implosion. That dire warning was followed yesterday by equally ominous remarks delivered at the progressive think tank, the Center for American Progress, by newly appointed SEC Commissioner Robert J. Jackson, Jr. (Jackson was appointed by President Trump to fill a Democratic seat on the SEC.)Pearlstein outlined the looming problem as follows:“Last year, public companies spent more than $800 billion buying back their own shares and, thanks to all the cash freed up by the recent tax bill, Goldman Sachs estimates that share buybacks will surge to $1.2 trillion this year. That comes at a time when share prices are at an all-time high — so companies are buying at the top — and when a growing global economy offers the best opportunity to expand into new products and new markets. This is nothing short of corporate malpractice…“The most significant and troubling aspect of this buyback boom, however, is that despite record corporate profits and cash flow, at least a third of the shares are being repurchased with borrowed money, bringing the corporate debt to an all-time high, not only in an absolute sense but also in relation to profits, assets and the overall size of the economy…“A decade ago, in 2008, there was $2.8 trillion in outstanding bonds from U.S. corporations. Today, it’s $5.3 trillion, after the record $1.7 trillion of new bonds issued last year, according to Dealogic, and $500 billion more issued this year.”

Citibank fined $100 million for interest rate manipulation: The bank settled with attorneys general in 42 states for $100 million. Following an investigation, the states said Citibank manipulated Libor, a benchmark interest rate that helps set lending rates across the world. Citibank made millions of dollars of gains from its "fraudulent conduct," the attorneys general said. "Our office has zero tolerance for fraudulent or manipulative conduct that undermines our financial markets," New York Attorney General Barbara Underwood said in a press statement. "Financial institutions have a basic responsibility to play by the rules -- and we will continue to hold those accountable who don't." This is the third bank that settled with state attorneys general for illegally influencing the Libor. Barclays, Deutsche Bank and now Citibank have been fined $420 million collectively. Citibank agreed to comply with ongoing investigations into other banks' Libor cases.

Riskiest Junk Bonds Completely Blow Off the Fed, Face “Sudden” Reckoning - Wolf Richter: High-grade corporate bonds are “gradually” – the key word in everything the Fed says – and reluctantly coming to grips with the new era: Yields are rising and bond prices are falling. The Fed has been laboring to accomplish that. With high-grade debt, the Fed’s plan is working “gradually.” But investors in the riskiest corporate junk debt are totally blowing off the Fed. They’re floating around in their own dream world, facing a very rude awakening.In terms of high-grade corporate bonds, the sell-off has been significant, even if it’s just the beginning. The S&P index for AA-rated bonds is down 2.7% so far this year. As prices have declined, yields have surged, with the average AA yield now at 3.51%, up from around 2.2% in mid to late-2016 (data via ICE BofAML US AA Effective Yield Index):  These are the types of bonds that Apple and other large companies hold in their “cash or cash equivalent” accounts that are registered overseas, and that are now being “repatriated” and sold, and the proceeds from the sales are now being plowed into mega-share buyback programs. These corporations, once avid buyers of this high-grade corporate debt, have turned into sellers. But at the riskiest end of the corporate bond spectrum, with bonds rated CCC or below (deep junk), the party that started at the end of the oil bust in February 2016 simply continued. The S&P bond index for CCC-rated bondshas risen 4.5% so far this year (compared to a 2.7% decline for AA-rated index). Since February 2016, when Wall Street decided to plow new money into junk-rated energy companies, the CCC-rated index has skyrocketed 82%.The average yield of bonds rated CCC or lower is now at 9.56%, down from 12.5% in December 2016, when the Fed got serious, and down from 22% during the peak of the oil bust. This is the lowest yield since the bygone era of “QE Infinity” in June 2014: A yield of 9.56% sounds juicy on the surface. But these riskiest junk bonds turn illiquid when the selling starts. It gets brutal because buyers simply evaporate at current prices.

Ether is not a security, top SEC official says -- Ether investors got a reprieve on Thursday when a top U.S. regulator said transactions involving the token aren’t subject to federal securities rules, ending months of speculation that had weighed on the second-most traded digital currency. Ether and other coins surged on the news. "Putting aside the fundraising that accompanied the creation of Ether, based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions," William Hinman, who heads the SEC’s division of corporation finance, said in remarks prepared for a conference in San Francisco. "And, as with Bitcoin, applying the disclosure regime of the federal securities laws to current transactions in Ether would seem to add little value." Crypto enthusiasts have long worried that the SEC would crack down on Ether, which was originally offered in 2014 by the Ethereum Foundation, a Swiss nonprofit. It’s now widely used in new crypto projects across the globe and some worried that if the regulator subjected it to securities rules that those efforts would have been disrupted.

How Treasury could come down on fintech regulation — The Treasury Department is expected to strike a middle path in upcoming recommendations on regulating the fintech sector, laying out how fintech oversight could be incorporated in existing rules without creation of an entirely new regulatory framework, according to sources familiar with the matter. Treasury is planning to release its report on regulating nonbanks, including fintech firms, as early as this month, these sources said. The last in a series of reports on financial regulation, Treasury's recommendations are expected to cover multiple fintech types, including online lending, as well as partnerships between banks and payments companies. “There’s a lot in this space and there’s a lot of material that the Treasury can touch on so the challenge will be for them to narrow their list of recommendations,” said Margaret Liu, senior vice president and deputy general counsel at the Conference of State Bank Supervisors. The report may also touch on the Office of the Comptroller of the Currency's development of a special-purpose fintech charter, the regulation of installment lenders and interagency coordination. Some observers expect the Treasury to take an even-keeled approach to allowing innovation within the banking system rather than suggesting a completely new regulatory regime, pointing to the past reports in the series in which the Treasury evenly weighed aspects of the regulatory framework that were working with those that unnecessarily add to the industry's burden.  “The Treasury report is likely to count on both the promise and peril of fintech as the industry continues to evolve.” But others said the report could include recommendations strongly supported by the industry, including suggestions on rules pertaining to the sale of online loans and IRS data modernization, among other things. The Treasury report is also likely to touch on the controversy that erupted between state regulators and the OCC over the latter's work on creating a federal charter for fintechs. The charter framework was developed under former Comptroller of the Currency Thomas Curry, but state regulators tried to halt the plan through litigation. Current Comptroller Joseph Otting has not yet taken a position on chartering fintechs.

Blockchain insiders tell us why we don't need blockchain, redux -- Take Dogecoin, for example, the jokecoin whose founder has repeatedly said its price -- and those of other cryptos -- is unhinged from reality. Dogecoin's current total value is estimated at a third of a billion dollars. And then came a story yesterday by Anna Irrera at Reuters:Banks are unlikely to use distributed ledgers to process cross-border payments for now because of scalability and privacy issues, according to Ripple, one of the most prominent startups developing the technology. “I will concede, we haven’t gotten there yet,” Ripple’s chief cryptographer David Schwartz said in an interview.Ripple, the company behind centralised digital token XRP, exists to create a system for payments for banks. At pixel time, XRP was up 3.6 per cent on the day.

Bitcoin Tumbles After Major Crypto Exchanges Subpoenaed For Manipulation, Coinrail Hacked - Bitcoin and other cryptocurrencies flash-crashed Saturday night, one day after the US Commodity Future Trading Commission (CFTC) sent subpoenas four cryptocurrency exchanges in an ongoing probe into bitcoin manipulation that began in late July - following the launch of bitcoin futures on the CME, according to the Wall Street Journal.  CME’s bitcoin futures derive their final value from prices at four bitcoin exchanges: Bitstamp, Coinbase, itBit and Kraken. Manipulative trading in those markets could skew the price of bitcoin futures that the government directly regulates. In delay reaction, Bitcoin fell as much as $433 or 5.6% in Saturday night trading, with some noting that the flash crash happened shortly after a 90th ranked crypto exchange, Coinrail, had suffered a "cyber intrusion", and was likely the more relevant catalyst for the crypto price drop. The CTFC subpoenas were issued after several of the exchanges refused to voluntarily share trading data with the CME after being asked last December. Of note, the CFTC regulates the CTC. According to the WSJ, the CME, which launched bitcoin futures in December, asked the four exchanges to share reams of trading data after its first contract settled in January, people familiar with the matter said. But several of the exchanges declined to comply, arguing the request was intrusive. The exchanges ultimately provided some data, but only after CME limited its request to a few hours of activity, instead of a full day, and restricted to a few market participants, the people added.  What is curious, is that if there was indeed manipulation since the launch of bitcoin futures, it was to the downside, as the price of cryptos peaked around the time the crypto futures were launched, and are down well over 50% in the 6 months since. Coinbase in particular has been under the watch government regulators. On February 23, Coinbase sent an official notice to around 13,000 customers to notify them they were legally required to turn over their information to the IRS.

Bitcoin latest: 'Whales' with $37.5bn holdings scoop up THIRD of crypto market - Data from blockchain research company Chainalysis showed in April there were 1,600 bitcoin wallets held by investors, all of which contained 1,000 of the alt-coin each. The unidentified ‘whales’ scooped an eye-watering 5million bitcoins between them, which amassed to a third of the market, according to the FT. Just under 100 wallets contained between 10,000 and 100,000 bitcoin which would be valued at between $75million and $750million at today’s prices. Chainalysis chief economist Phillip Gladwell said: “This concentration of wealth means that bitcoin is at risk of volatility as the moves of a small number of people will have a large price effect.” Bitcoin is the most popular cryptocurrency and enjoyed a dramatic rise to the top last year when its price rose by 1,000 percent and its value peaked at $20,000 in the run-up to Christmas. But since then, its trade price has fallen back down to $7,500 as regulators circle the sector and competitors Litecoin, Ripple and Ethereum flood the market. Chainalysis data estimated long-term bitcoin holders sold off $30billion of the digital currency between December 2017 and April 2018, with half of trading taking place last December alone. Mr Gladwell said: “This was an exceptional transfer of wealth, and conditions for it to occur again are unlikely to form again soon.”

 Bitcoin’s Collapse Accelerates, Falls to Lowest Since February - Bitcoin tumbled to its lowest level since February as the meltdown in the world’s largest digital currency accelerated, renewing concern about the long-term viability of the much hyped alternative to traditional currencies. The price of the digital coin fell as much as 4.6 percent Tuesday to $6,450.01, bringing the slide for the year to more than 50 percent. It’s down from a record high of $19,511 reached in December, the culmination of the more than 1,400 percent surge seen in 2017 as Bitcoin burst on to the mainstream. “I don’t think this is driven on any particular news, just the general downtrend after the 2017 run,” Kyle Samani, managing partner at Austin, Texas-based crypto hedge fund Multicoin Capital, said in an email. “A lot of people who bought at $9,000 in April are realizing that they’re not going to break even anytime soon, and are instead trying to get out.” Cryptocurrencies have been beset by a string of bad news. Most recently was the “cyber intrusion” on the South Korean cryptocurrency exchange Coinrail this past weekend that appeared to result in a loss of an unknown quantity of digital currency. Bitcoin slumped 12 percent on Monday. Exchanges have come under growing scrutiny around the world in recent months amid a range of issues including thefts, market manipulation and money laundering. Back in May, the sector found itself under increasing government scrutiny when the Justice Department opened up a criminal probe into illegal trading practices that can manipulate the price of Bitcoin and other cryptocurrencies. 

Bitcoin's astronomical rise last year was buoyed by market manipulation, researchers say -- Researchers at the University of Texas at Austin found that at least half of bitcoin's astronomical returns last year may have been a result of manipulation.What may be at the center is another digital token called tether.Tether, whose price is equivalent to the dollar, was designed to make cryptocurrency trading more seamless, by converting cash into digital currency. The company behind the token, also called Tether, claims that each tether “is always backed 1-to-1, by traditional currency held in our reserves.” Tether is sold by the cryptocurrency exchange Bitfinex and is also used on other cryptocurrency marketplaces including Poloniex and Bittrex.The researchers examined transactions where people bought bitcoin using tether. On many exchanges, purchases can be made using only cryptocurrencies, not dollars, which makes tether a useful trading tool. They found that purchases were timed following downturns in the cryptocurrency market, leading to “sizable increases in bitcoin prices” according to the paper, which was reported on first by the New York Times. The findings suggest that the issuers of tether were pumping out the token to purchase bitcoin, creating an artificial demand for the cryptocurrency, and driving up its price. The timing and magnitude of the purchases can't be explained by organic investor demand, the researchers said, which suggests that tether may have been issued without being fully backed by dollars. “Bitfinex seemed to be sending out tether to purchase bitcoin around these large price drops, and also doing so around round number thresholds,” said John Griffin, a co-author of the study and a finance professor at the University of Texas, in an interview with The Washington Post. Griffin found that the tether transactions coincided with bitcoin prices that were multiples of 500, indicating that manipulators may have been attempting to demonstrate a price floor, a benchmark of support, stabilizing the price of bitcoin. This may have encouraged other investors to jump in and buy.

Bitcoin Price Manipulation Versus What’s Going on in Dark Pools  - Pam Martens - ~ Finance Professor John Griffin and fellow researcher Amin Shams, both at the University of Texas, released a study yesterday that is causing alarm bells to ring for investors in Bitcoin and other digital currencies. Titled “Is Bitcoin Really Un-Tethered?” the researchers found strong evidence that Tether, another digital currency, is being used to artificially support the price of Bitcoin when it comes under selling pressure. Griffin and Shams found further that “Tether seems to be used both to stabilize and manipulate Bitcoin prices.”Bitcoin soared over 1400 percent last year but has been selling off this year. It’s lost about 70 percent from the peak it set last year.The researchers write: “To illustrate the potential magnitude and predictive effect of Tether issuances on Bitcoin prices, we focus on the hours with the largest lagged combined Bitcoin and Tether ?ows on the two blockchains. These 87 hours have large negative returns before the ?ows but are followed by large return reversals. These 87 events account for less than 1% of our time series (over the period from the beginning of March 2017 to the end of March 2018), yet are associated with 50% of Bitcoin’s compounded return, and 64% of the returns on six other large cryptocurrencies (Dash, Ethereum Classic, Ethereum, Litecoin, Monero, and Zcash). A bootstrap analysis with 10,000 simulations demonstrates that this behavior never occurs randomly. Consistent with Tether being used to buy Bitcoin when prices drop, we ?nd a statistically and economically strong reversal in Bitcoin prices, but only following negative returns. The Bitcoin reversal did not exist before Tether was prevalent in the market and disappears during the period when Tether stops being printed.” According to media reports, the U.S. Department of Justice has an ongoing criminal investigation into the potential manipulation of Bitcoin and other digital currencies. Griffin and Shams set the stage for their findings with an historic assessment of market bubbles with fraudulent underpinnings.  Given that background, consider what is going on right under the nose of the Securities and Exchange Commission (SEC) and the U.S. Justice Department in terms of the Dark Pools that are currently being operated by the same mega Wall Street banks that collapsed the financial system and U.S. economy in 2008 under the weight of their own greed and corruption.

 How Did JPMorgan Reverse an Arrest Warrant for its Mexico Bank Chief? – Pam Martens - On Monday Reuters reported that “a judge in Mexico has issued an arrest warrant for the country head of U.S. investment bank JPMorgan for alleged fraud….” Details about the arrest warrant were provided the same day in a lawsuit filed in the Federal District Court for the Southern District of New York. The lawsuit explained that “…a prosecutor has conducted a criminal investigation into fraud by J.P. Morgan. Based on the preliminary evidence collected, the prosecutor recently (in June 2018) requested that a judge detain Eduardo Cepeda, the chairman of the board and chief executive officer of Defendant’s Mexican unit, and former J.P. Morgan managing director Miguel Barbosa. Upon review of the evidence presented by the prosecutor, a criminal court judge has found the elements of felony fraud in the amount of $100 million, and issued a detention order for Eduardo Cepeda and Miguel Barbosa.”That was this past Monday. By Wednesday, Reuters was reporting the following: “A judge in Mexico canceled an arrest warrant for the country head of U.S. investment bank JPMorgan Chase & Co and another employee, the bank said on Wednesday, just days after it was issued.” Exactly how does one get a judge to rescind an arrest warrant after an alleged finding of “felony fraud in the amount of $100 million”? We’ll get to the details of the alleged fraud in a moment, but first a bit of historical perspective on JPMorgan Chase’s decade-long crime spree.

I was fired from the CFPB’s Consumer Advisory Board last week, along with all its other members -- I was fired from the CFPB’s Consumer Advisory Board last week, along with all its other members. Why? Because the interim Director, Mick Mulvaney, claiming a lack of “global perspective” and wanting a “fresh start,” appears intent on running the consumer protection bureau into the ground. Never mind that this board is the most diverse it has ever been, split about evenly between consumer advocates and business people (with some academics thrown in for good measurement). If Mr. Mulvaney was concerned the board was all wild-eyed consumer protection activists, he didn’t appear to notice executives from industry giants Citi, Discover, FICO, MasterCard, and PNC. Or if he really cared about about private sector innovation, as he claims, he missed the presence of fintech legend Max Levchin, TrueAccord’s Ohad Samet, NerdWallet’s Tim Chen, Oportun’s Raul Vazquez (both of the latter being Core portfolio companies, for disclosure) and myself.This mass firing is the last in a string of actions meant to kill a regulatory body that was formed in response to the most devastating consumer financial abuse in nearly a century. Mr. Mulvaney, famous for having called the Bureau a “sick, sad joke” before taking its helm, was installed as a cynical gesture by a president who knew the Bureau was too popular to dismantle. Mr. Mulvaney has all but kicked the life out of the Bureau through a series of navel gazing exercises and a moratorium on all (but Wells’) enforcement of legal consumer protections. “Good riddance,” you say? I’d ask you to think again.  But consider the alternative: every rule in place today is a response to incredible harm done to hardworking Americans by greedy, unscrupulous, short-sighted and sometimes outright criminal actors in finance. The CFPB, in several short years, has collected over $12 billion in penalties for 29 million Americans who were sold misleading products or services.

Judge rejects Mick Mulvaney's effort to halt CFPB's payday lending rule -  A federal court dealt a blow to efforts by the Consumer Financial Protection Bureau to slow down the agency's payday lending rule. U.S. District Judge Lee Yeakel on Tuesday denied the request by acting CFPB Director Mick Mulvaney that the court delay the payday rule's effective date, which is set for next year. Mulvaney had sided with two industry trade groups — the Community Financial Services Association of America and Consumer Service Alliance of Texas — that sued the CFPB in April to invalidate the tough restrictions on small-dollar loan providers. The rule was written under former CFPB Director Richard Cordray. The CFPB in January said it plans to reopen the payday lending rule, which goes into effect Aug. 19, 2019. The CFPB's request was another illustration of the sea change at the agency since Cordray stepped down in November. Mulvaney also has dropped several investigations into installment lenders including World Acceptance Corp., based in Greenville, S.C., which had a political action committee that made campaign contributions to Mulvaney when he was a lawmaker. The small-dollar rule, which was finalized in October under Cordray, requires lenders to determine a borrower's ability to repay a short-term loan of 45 days or less. "This is not a good development for the industry," Alan Kaplinsky, co-practice leader of Ballard Spahr's Consumer Financial Services Group, said of the ruling. Consumer advocates hailed the ruling, noting that the CFPB had conducted more than five years of research, analysis and public outreach in developing a rule to keep payday lenders from trapping consumers in a cycle of debt.   "Mick Mulvaney and the payday lenders tried an end-run around the law and it was rightly rejected," said Will Corbett, litigation counsel at the Center for Responsible lending. "Today’s ruling is a win for consumers." Several consumer and civil rights organizations called on the agency to implement the rule as planned to protect consumers from predatory lenders. 

Issa emerges as new name for CFPB chief - Rep. Darrell Issa, the Republican lawmaker from California, is among the candidates who have been discussed as President Donald Trump gets closer to naming someone to run the Consumer Financial Protection Bureau, according to people familiar with the matter.J. Mark McWatters, a credit union regulator and former congressional staffer, is another top candidate, the people said, asking not to be identified because the talks are private. The White House will likely make an announcement next week, according to Mick Mulvaney, the agency’s interim leader. Mulvaney, speaking with reporters Tuesday, said he was recently told by White House Counsel Don McGahn that the Trump administration will adhere to a June 22 deadline for selecting a permanent CFPB director. Trump met with one of the finalists for the job last week, according to Mulvaney, who said he didn’t know who the candidate was.

Trump said to favor little-known OMB official as next CFPB chief - A little-known Office of Management and Budget official is President Donald Trump’s leading candidate to become permanent director of the Consumer Financial Protection Bureau, according to four people with knowledge of the matter. If approved by the Senate, Kathy Kraninger would succeed her boss, White House Budget Director Mick Mulvaney, who has been leading the bureau part time since November. The confirmation process could take months and Mulvaney has said he expects to be at the bureau until the end of the year. Kraninger, an associate director at OMB, previously worked for the Department of Homeland Security and the Senate Appropriations Committee. She would inherit an agency that has been roiled by a shift to Republican leadership under Mulvaney from its roots as a scourge of financial firms under Obama administration appointee Richard Cordray, a Democrat who is running for governor of Ohio. The potential selection of Kraninger, which could be announced next week, is likely to raise concerns among Democrats, especially because of the lack of financial policy expertise in her background.

Senior Democrats to Mulvaney: Stop 'starving' CFPB of consumer data - Two top Democratic senators accused the acting head of the Consumer Financial Protection Bureau, Mick Mulvaney, of “starving” the agency of data used to help write new rules. Sens. Elizabeth Warren of Massachusetts and Mark Warner of Virginia submitted a letter to the agency Monday as part of a comment period for public input on whether to change the CFPB’s rulemaking process. The lawmakers emphasized that the agency should maintain data collection as part of its rulemaking process, while also warning that Mulvaney has been pulling back on gathering data “without any justification.”“The CFPB has used this authority to responsibly collect data while protecting individual privacy, to produce ground-breaking reports, and ultimately to write new rules that protect consumers and crack down on consumer scams,” the two senators wrote. “Starving the CFPB of data, as Mr. Mulvaney has been doing, undermines the CFPB.” The senators pointed in the letter to several actions Mulvaney took after being appointed as acting director of the CFPB in late 2017, including directing staff not to collect personally identifiable data due to privacy concerns.  He also withdrew a plan to conduct a web survey related to a proposed rulemaking on debt collection.

 Mulvaney may cut off public access to CFPB complaints. Ex-AG says not so fast -- Acting Consumer Financial Protection Bureau Director Mick Mulvaney hasn't said yet whether he will keep public consumer complaints about banks, credit unions and other financial firms, but a former Ohio attorney general is gearing up just in case.  Marc Dann, now a lawyer in private practice who represents mortgage borrowers in foreclosure, said he plans to file monthly Freedom of Information Act requests seeking access to consumer complaints filed with the agency, and post all of the information he receives on his law firm's website. Moreover, if Mulvaney revokes the public database or refuses to give him the underlying data, Dann said he will sue. "If Mulvaney doesn’t give us the information voluntarily, we’re prepared to go to court and force him to hand it over," Dann said Wednesday in an interview with American Banker. "We’re going to do everything in our power to blow up his plan to keep consumers and regulators in the dark."

CFPB's Mick Mulvaney drops PHH case, as expected --  Acting Consumer Financial Protection Bureau Director Mick Mulvaney on Thursday dismissed the bureau's case against PHH Corp., ending a contentious legal battle that resulted in no fines against the company and no change to the independent agency's structure. Mulvaney wrote in a two-paragraph legal filing that the Mount Laurel, N.J., company did not violate the Real Estate Settlement Procedures Act, which bans kickbacks in exchange for referrals. "PHH did not violate RESPA if it charged no more than the reasonable market value for the reinsurance it required the mortgage insurers to purchase, even if the reinsurance was a quid pro quo for referrals," Mulvaney wrote. Lawyers had expected Mulvaney would dismiss the case after Kristen Donoghue, the CFPB's director of enforcement, filed a joint statement with PHH's lawyers on Tuesday recommending that Mulvaney drop the case outright. The PHH case was initially decided in 2014 when an administrative law judge who worked for the Securities and Exchange Commission ordered the company to pay $6 million for allegations that it took illegal kickbacks from mortgage reinsurers. In 2015, then-CFPB Director Richard Cordray overruled that decision and ordered PHH to pay a $109 million fine, prompting the company to sue. PHH claimed, among other things, that the CFPB's single-director structure was unconstitutional. In January, an en banc panel of the U.S. Court of Appeals for the D.C. Circuit ruled that the CFPB's structure was constitutional, but that the agency's novel interpretation of RESPA was not. The court said Cordray had violated PHH's due process rights in redefining RESPA without giving the company notice.

Otting’s ‘discrimination’ comment is blow to CRA effort… — The reverberations from Comptroller of the Currency Joseph Otting's comments about discrimination in banking reached the Senate Thursday, with Democrats suggesting the remarks put a dent in Otting's ability to reform Community Reinvestment Act procedures.A day earlier, Otting told the House Financial Services Committee that he has "never personally observed" discrimination in banking "but many of my friends from the inner city across America will tell me that it is evident today." The comments prompted confusion and criticism that dominated his appearance before the Senate Banking Committee Thursday. Democrats on the panel zeroed in on whether Otting will uphold the fair-lending requirements in the CRA — a 1970s law that Otting is seeking support from other regulators to expand and modernize. “Why should the public trust you to overhaul the Community Reinvestment Act, a product of the civil rights movement, meant to address generations of segregation and exclusion if you ... just don’t even seem certain that discrimination exists,” said Sen. Sherrod Brown, D-Ohio, the committee's ranking member. “These are unbelievable statements for any adult in America, especially one that took an oath in the office like you did.” Otting appeared to try to walk back his assertions somewhat. He said he had “personally never experienced” discrimination in banking, rather than using the word "observed." When responding to questions from Sen. Robert Menendez, D-N.J., Otting said he did believe discrimination existed, and indicated he believed in the concept of "disparate impact," a legal theory about unintentional discrimination.

Feds arrest 74 people, alleging real estate and wire fraud - Federal law enforcement authorities have arrested 74 people in this country and abroad, accusing them of participating in a wire fraud scam whose victims included real estate attorneys and settlement service providers.The government was able to seize $2.4 million of alleged ill-gotten gains as well as disrupt and recover $14 million in fraudulent wire transfers as part of Operation Wire Wire, an operation undertaken by the Department of Justice, the Department of Homeland Security, the Department of the Treasury and the U.S. Postal Inspection Service.  But that is just a drop in the bucket in the dollars lost to what the federal government classifies as business email compromise schemes and its variant, email account compromise. Victims have reported over $3.7 billion stolen since the Internet Crime Complaint Center started keeping track of these frauds in late 2013.Of the 74 people arrested, 42 were in the U.S., 29 were in Nigeria and one each in Canada, Mauritius and Poland."I want to thank the FBI, nearly a dozen U.S. Attorneys' Offices, the Secret Service, Postal Inspection Services, Homeland Security Investigations, the Treasury Department, our partners in Nigeria, Poland, Canada, Mauritius, Indonesia and Malaysia, and our state and local law enforcement partners for all of their hard work," said U.S. Attorney General Jeff Sessions in a press release. "We will continue to go on offense against fraudsters so that the American people can have safety and peace of mind." There were 23 individuals charged in the Southern District of Florida, including eight people in an indictment unsealed June 4 for laundering $5 million from a Seattle corporation, various title companies and a law firm, the Department of Justice press release said. The indictment does not contain the victims' names. Sun Title Agency was one of the victims in the Florida indictments, said Tom Cronkright, the owner of the Grand Rapids, Mich.-based company. In total, the fraud spanned eight different countries and included the use of "mules" — people paid to move the stolen funds, as well as money laundering to hide this money.

One in ten dollars of US housing were anonymous -- Until 2016, the US property market was one of the last places to move large amounts of money into the country anonymously, with no questions asked. A shell corporation would be listed as the buyer, and if there was no mortgage involved, cash could simply arrive in the seller's bank account via money order or wire transfer with no troublesome “know your customer” questions asked. In fact, researchers at the New York Fed and the University of Miami found that about a tenth of the dollar volume of housing-market transactions in their sample were such all-cash corporate deals. Until, that is, the Department of the Treasury started to demand title insurance companies identify beneficial owners in certain counties. The effect was dramatic: The dotted line is all buyers, while the solid line shows the cash corporate buyers. The vertical grey lines mark dates when the Treasury's Financial Crimes Enforcement Network (know as FinCEN) started to demand names. It first targeted Miami-Dade County and New York in January 2016, monitoring purchases above $1m and $3m, respectively, then added 12 counties in California, Florida and Texas. Researchers Sean Hundtofte in New York and Ville Rantala in Miami studied the effects of the sudden transparency in the real-estate market, and discovered that they were substantial. Or, to put a number on it (with our emphasis): A regression discontinuity design estimates an annualized drop in volume of approximately $45 billion. Given that this analysis is performed on less than a nationwide sample this presents a lower bound on nationwide US volume of purchasers who desire to remain anonymous from authorities.

 FHFA seeks to bring more transparency to GSE balance sheets   — The Federal Housing Finance Agency on Tuesday proposed new minimum capital requirements for Fannie Mae and Freddie Mac that would only go into effect if the government ends its conservatorships of the two mortgage giants  The plan, which FHFA Director Mel Watt previewed in congressional testimony last month, would assess credit risk for different mortgage categories and include components for market risk and operational risk. The proposal also asked for comment on two different minimum leverage ratio requirements for the government-sponsored enterprises. Under one option, the GSEs would have to hold capital equal to 2.5% of assets and off-balance-sheet guarantees. The second method would require Fannie and Freddie’s capital to be equal to 1.5% of trust assets and 4% of nontrust assets.

NPL sales fall at Fannie Mae and Freddie Mac as portfolios shrink - Sales of nonperforming loans by Fannie Mae and Freddie Mac fell during the past year as the number of delinquent loans on their books continued to drop.The government-sponsored enterprises sold 18,419 NPLs last year, down from 44,169 the previous year and from 25,612 in 2015, according to the Federal Housing Finance Agency. That left the GSEs with 90,456 loans that had been delinquent for a year or more at the end of 2017. The GSEs had had 123,653 NPLs on their books at the same time in 2016 and 199,619 at year-end in 2015. The GSEs sold 15% of their NPLs last year, as compared to 22% in 2016.

Carson backs off plan to triple rents for poorest households - HUD Secretary Ben Carson is backing off plans to triple the minimum rent paid by some of the country's poorest households, citing Congress' move to defy the administration and boost his agency's budget. The proposal to increase the minimum rent paid by rental assistance beneficiaries is no longer “urgent,” due to the additional resources in the HUD budget, Carson said Friday morning.  HUD in April released a rental assistance overhaul plan that would have hiked the rate paid by some recipients from $50 to $150.“The reason we had to consider raising rents at all … [was] in order to not displace people who are already being taken care of,” Carson said in remarks at the Bipartisan Policy Center. “Now that the budget has been changed, the necessity for doing that is not urgent.”Congress has ignored the Trump administration’s requests to dramatically cut the department’s budget. The fiscal 2018 omnibus boosted funding by about 10 percent, and appropriations bills under consideration now would give HUD about $12 billion more than the White House requested for fiscal 2019.When he released the proposal — which would reshape the way 4.5 million people meet their rent by requiring recipients to contribute a greater share of their gross income or pay the higher minimum — Carson defended the decision. He said the current system creates “perverse incentives, including discouraging these families from earning more income and becoming self-sufficient.”  The proposal would also let public housing authorities impose work requirements — part of a broader effort by the Trump administration to curb anti-poverty programs and link government benefits to work stipulations.

Foreclosure rate at 11-year low as home equity, employment grow - Unemployment lows and increased home equity paved the way for the lowest mortgage delinquency rates seen in 11 years, according to CoreLogic.The foreclosure inventory rate fell 0.2% to 0.6% year-over-year in March, which was the lowest reading for the month in 11 years. The foreclosure inventory rate has held steady at 0.6% since August.The early-stage delinquency rate, which serves as an indicator of mortgage market health, held steady at 1.7% in March from a year ago. For mortgages that were 60-89 days past due, the share also remained unchanged at 0.6%.The serious delinquency rate, regarding mortgages 90 or more days past due, including those in foreclosure, fell from 2.1% to 1.9%; this is the lowest reading for the month of March since 2007 when it was 1.5%. "Unemployment and lack of home equity are two factors that can lead to borrowers defaulting on their mortgages," Frank Nothaft, chief economist for CoreLogic, said in a press release."Unemployment is at the lowest level in 18 years, and for the first quarter, the CoreLogic Equity Report revealed record levels of home equity growth with equity per owner up $16,300 on average for the year ending March 2018," he said.The share of mortgages that transitioned from current to 30 days past due ticked up from 0.6% to 0.7% annually. For context, this transition rate was 1.2% in January 2007, just before the start of the financial crisis, and peaked at 2% in November 2008.The share of mortgages in some stage of delinquency in March declined to 4.3% from 4.4% a year ago and from 4.8% from February.

 Delayed maintenance on aging housing stock adds to inventory concerns - Maintenance and renovations aren't keeping up with the nation's aging housing stock, creating an influx of obsolete properties that's adding further strain to an already tight inventory of homes for sale.The houses themselves aren't aging quicker per se, but as the overall housing stock gets older, a larger number of homes are falling into disrepair to the point where they're unlivable. What's more, the frequencies of upkeep and renovations have plummeted. Now, fewer maturing homes get the care they need to remain in usable condition and getting cycled out of the housing stock sooner than in the past.As homes continue to age, their repair needs become greater and the gap between renovation costs and expected increase in home value widens. Housing experts are concerned the home equity lost during the Great Recession made homeowners reluctant to take on renovations if repair projects cost more than the expected gain in home value. Basically, the juice wasn't worth the squeeze. As a result, properties are being doomed to a vicious cycle of decay, explained David Dworkin, a former Treasury Department housing policy advisor

MBA: Mortgage Applications Decrease in Latest Weekly Survey - From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey Mortgage applications decreased 1.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 8, 2018. Last week’s results included an adjustment for the Memorial Day holiday.... The Refinance Index decreased 2 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index increased 9 percent compared with the previous week and was 0.2 percent lower than the same week one year ago. ...  The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to 4.83 percent from 4.75 percent, with points increasing to 0.53 from 0.46 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.

"Mortgage Rates Higher Following Fed Forecasts" -- From Matthew Graham at Mortgage News Daily: Mortgage Rates Higher Following Fed Forecasts Mortgage rates moved higher today, following the Fed's much-anticipated policy announcement. Although the Fed changed quite a few words from the announcement's previous iteration (far more than normal), it wasn't the announcement itself that did the damage. Rather, it was the Fed members' economic projections, which include an assessment of where the Fed Funds Rate will likely be at the end of the next few years. Specifically, a few of the Fed members who'd been holding out for slightly lower rates in 2018 moved their forecasts up enough to increase the odds of a 4th rate hike by December. … The net effect was a slight increase in rates that leaves us a little bit closer to the 7-year highs seen in mid-May. [30YR FIXED - 4.625%-4.75%]

Average mortgage rates rise to their second highest level this year - After declining for two straight weeks, mortgage rates reversed direction this week and rose to their second highest level this year, according to Freddie Mac. Strong economic news, plus actions by the Federal Reserve and the European Central Bank along with the resolution of several geopolitical situations during the past week led to increases in the underlying benchmark Treasury note yields. The 30-year fixed-rate mortgage averaged 4.62% for the week ending June 14, up from last week when it averaged 4.54%. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.91%."The 30-year fixed-rate mortgage climbed eight basis points and the Federal Reserve Board on Wednesday raised the federal funds rate by 25 basis points," Freddie Mac Chief Economist Sam Khater said in a press release. "The good news is that the impact on consumer budgets will be smaller than past rate hike cycles. That is because a much smaller segment of mortgage loans in today's market are pegged to short-term rate movements."The 15-year fixed-rate mortgage this week averaged 4.07%, up from last week when it averaged 4.01%. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.18%.

Price Gains For Lower-Priced Homes Outpace Those Of Higher-Priced Homes: National home prices increased 6.9 percent year over year in April 2018, and are forecast to increase 5.3 percent from April 2018 to April 2019. Further, an analysis of the market by price tiers indicates that lower-priced homes experienced significantly higher gains, according to the latest CoreLogic Home Price Index (HPI®) Report. CoreLogic analyzes four individual home-price tiers that are calculated relative to the median national home sale price [1]. The lowest price tier increased 9.3 percent year over year, compared with 8.5 percent for the low- to middle-price tier, 7.1 percent for the middle- to moderate-price tier, and 5.7 percent for the high-price tier. Figure 1 shows the historical levels of the four price tiers indexed to January 2006, shortly before each of the tiers hit its peak index value. Appreciation in the low-price tier began pulling ahead of the other price tiers in 2013, and appreciation in the low-price tier has been steady since then. The five-year appreciation rate (from April 2013 to April 2018) for the low-price tier was 53 percent, compared with five-year appreciation of 43 percent for the low- to middle-price tier, 37 percent for the middle- to moderate-price tier, and 29 percent for the high-price tier. The overall HPI (all price tiers combined) has increased on a year-over-year basis every month since February 2012 and has gained 55.4 percent since hitting bottom in March 2011. As of April 2018 the overall HPI was 3.9 percent higher than its pre-crisis peak in April 2006. Adjusting for inflation, U.S. home prices increased 4.9 percent year over year in April 2018, and were 14.2 percent below their peak [2]. Figure 2 shows the cumulative price movement since the inception of price declines for both the nominal HPI and the inflation-adjusted HPI, as well as the time in years since the first decrease in the indices. 

 Mortgage Equity Withdrawal slightly negative in Q1 -- The following data is calculated from the Fed's Flow of Funds data (released yesterday) and the BEA supplement data on single family structure investment. This is an aggregate number, and is a combination of homeowners extracting equity - hence the name "MEW" - and normal principal payments and debt cancellation (modifications, short sales, and foreclosures).  For Q1 2018, the Net Equity Extraction was a negative $22 billion, or a minus 0.6% of Disposable Personal Income (DPI) .  This graph shows the net equity extraction, or mortgage equity withdrawal (MEW), results, using the Flow of Funds (and BEA data) compared to the Kennedy-Greenspan method.  Note: This data is impacted by debt cancellation and foreclosures, but much less than a few years ago.  MEW has been positive for 9 of the last 11 quarters (seasonally Q1 is usually weak).  With a slower rate of debt cancellation, MEW will likely be mostly positive going forward.  The Fed's Flow of Funds report showed that the amount of mortgage debt outstanding increased by $34 billion in Q1.   The Flow of Funds report also showed that Mortgage debt has declined by $0.6 trillion since the peak. This decline is mostly because of debt cancellation per foreclosures and short sales, and some from modifications. There has also been some reduction in mortgage debt as homeowners paid down their mortgages so they could refinance.

Retail Sales increased 0.8% in May --On a monthly basis, retail sales increased 0.8 percent from April to May (seasonally adjusted), and sales were up 5.9 percent from May 2017.  From the Census Bureau report: Advance estimates of U.S. retail and food services sales for May 2018, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $502.0 billion, an increase of 0.8 percent from the previous month, and 5.9 percent above May 2017. ... The March 2018 to April 2018 percent change was revised from up 0.2 percent to up 0.4 percent.This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline). Retail sales ex-gasoline were up 0.7% in May. The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993. Year-over-year change in Retail Sales Retail and Food service sales, ex-gasoline, increased by 4.9% on a YoY basis. The increase in May was above expectations, and sales in March and April, combined, were revised up.

May Retail Sales: Up 0.8% MoM, Better Than Forecast -- The Census Bureau's Advance Retail Sales Report for May was released this morning. Headline sales came in at 0.8% month-over-month to one decimal and was above the Investing.com consensus of 0.4%. Core sales (ex Autos) came in at 0.80% MoM (to two decimals). Revisions were made to reflect new seasonal factors, samples, and the results of a 2016 annual survey. Here is the introduction from today's report:Advance estimates of U.S. retail and food services sales for May 2018, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $502.0 billion, an increase of 0.8 percent (±0.5 percent) from the previous month, and 5.9 percent (±0.5 percent) above May 2017. Total sales for the March 2018 through May 2018 period were up 5.2 percent (±0.5 percent) from the same period a year ago. The March 2018 to April 2018 percent change was revised from up 0.2 percent (±0.7 percent)* to up 0.4 percent (±0.2 percent).Retail trade sales were up 0.8 percent (±0.5 percent) from April 2018, and 6.0 percent (±0.5 percent) above last year. Gasoline Stations were up 17.7 percent (±1.6 percent) from May 2017, while Nonstore Retailers were up 9.1 percent (±1.4 percent) from last year. [view full report] The chart below is a log-scale snapshot of retail sales since the early 1990s. The two exponential regressions through the data help us to evaluate the long-term trend of this key economic indicator.

May retail sales come in strong -- Real retail sales for May came in strong, up +0.6% just in the month: As the graph shows, this is on trend for the entirety of this expansion, and is also a new high, surpassing that of last winter. Per capita real retail sales also made a new high, an indicator that the expansion is likely to continue at least one more year: Finally, the YoY% growth in real retail sales has also been increasing:  Since this is a short leading indicator (3 to 6 months) of the trend in YoY% growth in employment, it suggests that the recent run of strong monthly jobs numbers should continue, averaging in about the 175,000 to 200,000 range over the next few months.  Earlier this week I wrote that real retail sales would show how well the average household is doing holding up, considering the stagnation of real wages over the last several years.  Needless to say, the answer is "fine, so far." I hope to say much more on this at some point in the next week or two.

BLS: CPI increased 0.2% in May, Core CPI increased 0.2% -- From the BLS:The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in May on a seasonally adjusted basis after rising 0.2 percent in April, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.8 percent before seasonal adjustment.The indexes for gasoline and shelter were the largest factors in the seasonally adjusted increase in the all items index, as they were in April. The gasoline index increased 1.7 percent, more than offsetting declines in some of the other energy component indexes and led to a 0.9-percent rise in the energy index. The medical care index rose 0.2 percent. The food index was unchanged over the month. The index for all items less food and energy rose 0.2 percent in May. … The all items index rose 2.8 percent for the 12 months ending May, continuing its upward trend since the beginning of the year. The index for all items less food and energy rose 2.2 percent for the 12 months ending May. I'll post a graph later today after the Cleveland Fed releases the median and trimmed-mean CPI. This was at the consensus forecast.

Consumer Price Index: May Headline at 2..80% -- The Bureau of Labor Statistics released the May Consumer Price Index data this morning. The year-over-year non-seasonally adjusted Headline CPI came in at 2.80%, up from 2.46% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 2.24%, up from the previous month's 2.14% and above the Fed's 2% PCE target. Here is the introduction from the BLS summary, which leads with the seasonally adjusted monthly data:The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in May on a seasonally adjusted basis after rising 0.2 percent in April, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.8 percent before seasonal adjustment.The indexes for gasoline and shelter were the largest factors in the seasonally adjusted increase in the all items index, as they were in April. The gasoline index increased 1.7 percent, more than offsetting declines in some of the other energy component indexes and led to a 0.9-percent rise in the energy index. The medical care index rose 0.2 percent. The food index was unchanged over the month.The index for all items less food and energy rose 0.2 percent in May. The shelter index rose 0.3 percent in May. The indexes for new vehicles, education and communication, and tobacco increased in May, while the indexes for household furnishing and operations, and used cars and trucks fell. The indexes for apparel, recreation, and personal care were unchanged.The all items index rose 2.8 percent for the 12 months ending May, continuing its upward trend since the beginning of the year. The index for all items less food and energy rose 2.2 percent for the 12 months ending May. The food index increased 1.2 percent, and the energy index rose 11.7 percent. [More…] The first chart is an overlay of Headline CPI and Core CPI (the latter excludes Food and Energy) since the turn of the century. The highlighted two percent level is the Federal Reserve's Core inflation target for the CPI's cousin index, the BEA's Personal Consumption Expenditures (PCE) price index.

May 2018 CPI - More of the same this month.  I think this month might accelerate the slow motion train wreck, because it is being widely reported as accelerating inflation.  But, non-shelter core prices really haven't risen at all since February.  The only reasons year-over-year core CPI inflation has risen to 2.2% are (1) shelter inflation is at 3.5% and (2) the three months that just fell off the back end of the year-over-year range had cumulative deflation of non-shelter core CPI of 0.34%.  So, three months which had cumulative inflation of 0.02% caused the non-shelter core inflation rate to rise from 0.9% to 1.3%.  And shelter inflation adds the other 0.9%.This will add confidence for maintaining an aggressive schedule of rate hikes.  Households are already into the territory where rent expense is taking a larger portion of personal budgets than is normal.  That suggests that consumption of shelter is already into inelastic territory, so that there won't be a cyclical reduction in shelter consumption.  That suggests to me that shelter inflation will remain high if the Fed overtightens, which will continue to push them to tighten more.In today's context, I'm not sure that non-shelter inflation at 0.5% or even 0% leads to any sort of acute crisis.  But, it seems like that is where the risk lies.  One problem is that the obsessions and biases that developed during the housing bubble led to a canonized belief that the net effect of rising mortgage levels, home prices, and housing starts is consumer inflation.  But, that is wrong.  To the extent that consumption was fueled by mortgage credit, the source was rising rents in Closed Access cities where housing starts are persistently low, and Closed Access homeowners were spending some of their capitalized future rental income.  Except for the foreclosure crisis in 2008-2011, 2005 was the only time in the last 20 years when rent inflation finally reverted back to general inflation.  The housing boom was moderating inflation.  Closed Access homeowners were spending from their ill-gotten rentier profits, but the Fed is perfectly capable of countering that - and they were throughout the boom, with unusually low currency growth.  The Fed could do that today too, and obviously would, given the general hawkish atmosphere.  But, in the meantime, ironically, the first order effect of opening the floodgates on housing credit markets would be significant disinflation because of falling rent.

May 2018 CPI: Year-over-Year Inflation Rate Now 2.8%: According to the BLS, the Consumer Price Index (CPI-U) year-over-year inflation rate was 2.8 % - rate of year-over-year growth up 0.3 % from last month. The year-over-year core inflation (excludes energy and food) rate increased from 2.1 % to 2.2 %, and continues to be above the target set by the Federal Reserve. Energy prices and medical care commodities were the main driver for year-over-year inflation. Core inflation is now above 2.0 % year-over-year.As a generalization - inflation accelerates as the economy heats up, while inflation rate falling could be an indicator that the economy is cooling. However, inflation does not correlate well to the economy - and cannot be used as a economic indicator. The major influence on the CPI was energy and shelter. The indexes for gasoline and shelter were the largest factors in the seasonally adjusted increase in the all items index, as they were in April. The gasoline index increased 1.7 percent, more than offsetting declines in some of the other energy component indexes and led to a 0.9-percent rise in the energy index. The medical care index rose 0.2 percent. The food index was unchanged over the month. Historically, the CPI-U general index tends to correlate over time with the CPI-U's food index. The current situation is putting an upward pressure on the CPI. Notice the gap in the above graphic between the CPI and Food - historically this gap has always closed when the knock-on effect from higher food prices into other CPI components moderates. Recently, medical care too has been accelerating faster than costs in general. The graphs below compare health care to the CPI-U.  The Federal Reserve has argued that energy inflation automatically slows the economy without having to intervene with its monetary policy tools. This is the primary reason the Fed wants to exclude energy from analysis of consumer price increases (the inflation rate).

 May Producer Price Index: Final Demand Up 0.5% MoM -- Today's release of the May Producer Price Index (PPI) for Final Demand came in at 0.5% month-over-month seasonally adjusted, up from last month's 0.1%. It is at 3.1% year-over-year, up from 2.6% last month, on a non-seasonally adjusted basis. Core Final Demand (less food and energy) came in at 0.3% MoM, up from the previous month and is up 2.4% YoY NSA. Investing.com MoM consensus forecasts were for 0.3% headline and 0.2% core.  Here is the summary of the news release on Final Demand:The Producer Price Index for final demand rose 0.5 percent in May, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.1 percent in April and 0.3 percent in March. (See table A.) On an unadjusted basis, the final demand index moved up 3.1 percent for the 12 months ended in May, the largest 12-month increase since climbing 3.1 percent in January 2012.In May, 60 percent of the rise in the index for final demand is attributable to a 1.0-percent advance in prices for final demand goods. The index for final demand services moved up 0.3 percent.Prices for final demand less foods, energy, and trade services edged up 0.1 percent in May, the same as in April. For the 12 months ended in May, the index for final demand less foods, energy, and trade services climbed 2.6 percent. More… The BLS shifted its focus to its new "Final Demand" series in 2014, a shift we support. However, the data for these series are only constructed back to November 2009 for Headline and April 2010 for Core. Since our focus is on longer-term trends, we continue to track the legacy Producer Price Index for Finished Goods, which the BLS also includes in their monthly updates. As this (older) overlay illustrates, the Final Demand and Finished Goods indexes are highly correlated. As the next chart shows, the Core Producer Price Index is far more volatile than the Core Consumer Price Index. For example, during the last recession producers were unable to pass cost increases to the consumer.

 LA area Port Traffic Increases YoY in May -- Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic. The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container). To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average.On a rolling 12 month basis, inbound traffic was up 0.2% compared to the rolling 12 months ending in April.   Outbound traffic was up 0.7% compared to the rolling 12 months ending in April.The 2nd graph is the monthly data (with a strong seasonal pattern for imports). Usually imports peak in the July to October period as retailers import goods for the Christmas holiday, and then decline sharply and bottom in February or March depending on the timing of the Chinese New Year. In general imports have been increasing, and exports have picked up recently.

Industrial Production Decreased 0.1% in May -- From the Fed: Industrial Production and Capacity Utilization Industrial production edged down 0.1 percent in May after rising 0.9 percent in April. Manufacturing production fell 0.7 percent in May, largely because truck assemblies were disrupted by a major fire at a parts supplier. Excluding motor vehicles and parts, factory output moved down 0.2 percent. The index for mining rose 1.8 percent, its fourth consecutive month of growth; the output of utilities moved up 1.1 percent. At 107.3 percent of its 2012 average, total industrial production was 3.5 percent higher in May than it was a year earlier. Capacity utilization for the industrial sector decreased 0.2 percentage point in May to 77.9 percent, a rate that is 1.9 percentage points below its long-run (1972–2017) average. This graph shows Capacity Utilization. This series is up 11.3 percentage points from the record low set in June 2009 (the series starts in 1967). Capacity utilization at 77.9% is 1.9% below the average from 1972 to 2017 and below the pre-recession level of 80.8% in December 2007.  The second graph shows industrial production since 1967. Industrial production decreased in May to 107.3. This is 23% above the recession low, and 2% above the pre-recession peak.

NY Fed: Manufacturing "Business activity continued to grow strongly in New York State" --From the NY Fed: Empire State Manufacturing Survey: Manufacturing firms in New York State reported that business activity expanded at a faster pace than in May. The general business conditions index rose five points to 25.0, its highest level in several months. … The index for number of employees climbed ten points to 19.0, its highest level thus far in 2018, pointing to a pickup in employment levels. This was above the consensus forecast and a strong reading.

Small Business Optimism Index increased in May --From the National Federation of Independent Business (NFIB): May 2018 Report: Small Business Optimism Index: The Small Business Optimism Index increased in May to the second highest level in the NFIB survey's 45-year history. The index rose to 107.8, a three-point gain, with small businesses reporting high numbers in several key areas including compensation, profits, and sales trends. As reported in NFIB’s May jobs report, 23 percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem, followed by taxes at 17 percent and regulations at 13 percent. Fifty-eight percent reported hiring or trying to hire, up one point from last month but 83 percent of those reported few or no qualified workers. This graph shows the small business optimism index since 1986.

Small Business Euphoric About Trump As Optimism Soars To 34 Year High - The May Small Business Optimism Index increased to the second highest level in the NFIB survey's 45-year history, rising to 107.8 from 104.8, the highest level in 34 years, with small businesses reporting high numbers in several key areas including compensation, profits, and sales trends amid euphoria over Trump's economic, fiscal and tax policies . “Main Street optimism is on a stratospheric trajectory thanks to recent tax cuts and regulatory changes. For years, owners have continuously signaled that when taxes and regulations ease, earnings and employee compensation increase,” said NFIB President and CEO Juanita Duggan The May report hit several records:

• Compensation increases hit a 45-year high at a record net 35 percent.
• Positive earnings trends reached a survey high at a net three percent.
• Positive sales trends are at the highest level since 1995.
• Expansion plans are the most robust in survey history.

Reports of higher worker compensation pushed 2 points higher to a record net 35 percent of all firms. The frequency of reports of positive profit trends improved 4 percentage points to a net 3 percent reporting quarter on quarter profit improvements, the best reading in the survey’s 45 year history as "the new tax law and the strong economy are very supportive of profit improvements." In another interesting marker, a net 19 percent of small business owners are planning price increases, the highest since 2008 and a signal of a strong economy. A net three percent reported positive profit trends, up four points and the best reading in the survey’s history. In addition, a net 15 percent reported higher nominal sales in the past three months, up an astonishing seven points and the sixth consecutive strong month for sales. “Small business owners are continuing an 18-month streak of unprecedented optimism which is leading to more hiring and raising wages,” said NFIB Chief Economist Bill Dunkelberg. “While they continue to face challenges in hiring qualified workers, they now have more resources to commit to attracting candidates.” Small business owners continue to hire with a seasonally-adjusted net 18 percent planning to create new jobs. Twenty-nine percent of owners have job openings for skilled workers, the third highest reading since 2000. Twelve percent have job openings for unskilled workers, with the strongest demand in the transportation, travel, communications, utilities sector.

 Gas- and housing-powered inflation mean real wages are going nowhere -- This morning consumer price inflation for May was reported at +0.2%. YoY inflation was 2.8%. This is tied for the highest in six years (blue): The cause of the increase was primarily twofold -- and neither one reflective of wage inflation. First, gas prices have increased by over 20% in the past year (red, right scale above). Second, the costs for shelter (housing) are picking up steam again, up 3.5% YoY(red): Note that, courtesy of gas prices, inflation for everything else except for shelter has also been rising (blue). Most everyone assumes the Fed will raise rates again later this week. Let me point out, as others have as well (e.g., Dean Baker) that this will only make housing costs *more* rather than less expensive, and so will not serve to bring inflation down, short of causing a recession. Meanwhile, while *nominal* wage growth for ordinary workers has finally been rising in the last few months, up 2.8% YoY: today's 2.8% YoY consumer inflation means that *real* wages haven't grown at all, up less than 0.1% YoY: Further, since gas prices bottomed in winter 2016, *real* hourly wages have barely risen at all, as shown in the below graph normed to 100 as of February 2016: Since that time, real wages have increased only 0.3%. We'll get our best clue as to whether the ordinary American household is simply holding its own, or is in actually undergoing increased stress, when retail sales are reported later this week.

Weekly Initial Unemployment Claims decrease to 218,000 --The DOL reported: In the week ending June 9, the advance figure for seasonally adjusted initial claims was 218,000, a decrease of 4,000 from the previous week's unrevised level of 222,000. The 4-week moving average was 224,250, a decrease of 1,250 from the previous week's unrevised average of 225,500. The previous week was unrevised. The following graph shows the 4-week moving average of weekly claims since 1971.

BLS: Unemployment Rates Lower in 14 states in May -- From the BLS: Regional and State Employment and Unemployment Summary Unemployment rates were lower in May in 14 states and stable in 36 states and the District of Columbia, the U.S. Bureau of Labor Statistics reported today. Eleven states had jobless rate decreases from a year earlier and 39 states and the District had little or no change. The national unemployment rate edged down from April to 3.8 percent and was 0.5 percentage point lower than in May 2017.... Hawaii had the lowest unemployment rate in May, 2.0 percent. Alaska had the highest jobless rate, 7.2 percent. This graph shows the number of states (and D.C.) with unemployment rates at or above certain levels since January 2006. At the worst of the employment recession, there were 11 states with an unemployment rate at or above 11% (red). Currently only one state, Alaska, has an unemployment rate at or above 7% (light blue); And only Alaska is above 6% (dark blue).

Striking UPS Workers Will Disrupt Business Nationwide With Largest US Walkout In Decades - UPS is facing its largest labor strike in decades - as over 90% of the shipping company's union members have voted to stop working if a deal can't be reached on the Teamsters' current labor contract which expires on August 1, according to CBS News.  The tally released by the International Brotherhood of Teamsters Tuesday night had 93 percent of UPS members endorsing the authorization and 91 percent of UPS freight employees backing the measure. A national pact with the union covers about 260,000 UPS workers, and the current contract expires July 31. –CBS At issue is how employees will be compensated under a rumored plan to deliver packages seven days a week. UPS began delivering on Saturdays last year to keep up with demand. The company is now proposing a two-tier wage structure that would shift part-time workers making $15/hour to full-time at the same wage. Drivers currently make an average of $36 an hour, or around $75,000 per year.  With UPS's roughly 19 million shipments per day accounting for roughly 6% of the nation's GDP, a labor dispute could disrupt the US economy. The company transports around 36% of deliveries between the top three logistics providers, while the U.S. Postal Service stands at 35% and FedEx comes in third at 17%.  The vote "gives the negotiating committees bargaining leverage this week and during subsequent negotiations for the national contract and the supplements," said Teamsters director and co-chairman of the bargaining committee, Denis Taylor. That said, the Teamsters are deeply divided on the proposal, making a deal more difficult to reach and a strike more likely.

For the biggest group of American workers, wages aren’t just flat. They’re falling - The average hourly wage paid to a key group of American workers has fallen from last year when accounting for inflation, as an economy that appears strong by several measures continues to fail to create bigger paychecks, the federal government said Tuesday.For workers in “production and nonsupervisory” positions, the value of the average paycheck has declined in the past year. For those workers, average “real wages” — a measure of pay that takes inflation into account — fell from $22.62 in May 2017 to $22.59 in May 2018, the Bureau of Labor Statistics said.This pool of workers includes those in manufacturing and construction jobs, as well as all “nonsupervisory” workers in service industries such health care or fast food. The group accounts for about four-fifths of the privately employed workers in America, according to BLS.Without adjusting for inflation, these “nonsupervisory” workers saw their average hourly earnings jump 2.8 percent from last year. But that was not enough to keep pace with the 2.9 percent increase in inflation, which economists attributed to rising gas prices.“This is very likely because of the spike in oil prices eating into inflation-adjusted earnings,” said Allen Sinai, chief global economist and strategist at Decision Economics. “We pay for energy-related costs out of our wages, out of our compensation. And it's making a real impact.”The fall in those wages has alarmed some e conomists, who say paychecks should be getting fatter at a time when unemployment is low and businesses are hiring.

Amazon Blasted Over China Echo Factory Conditions - A watchdog group is calling on Amazon.com Inc. to improve conditions for factory workers in China who make Echo speakers and Kindle e-readers, renewing criticisms that CEO Jeff Bezos became the world’s wealthiest man on the backs of low-paid laborers.The New York-based China Labor Watch released a report at the weekend following a nine-month investigation of working conditions at a factory in the city of Hengyang owned by Hon Hai Precision Industry Co., the company known as Foxconn, which manufactures products for Amazon. It offers the first behind-the-scenes glimpse of how Amazon produces voice-activated speakers that cost as little as $40. The report, which paints a picture of low pay and intense working conditions, includes the following findings:

• Workers were required to work more than 100 hours of monthly overtime in violation of Chinese labor law that limits overtime to 36 hours a month
• The factory uses more “dispatch workers,” similar to temporary staff in the U.S., than are allowed by Chinese law
• Employees did not receive adequate safety training
• Workers are required to arrive at work stations 10 minutes before their shift begins and they are not compensated for this time
• Staff dormitories lack adequate fire-safety precautions such as fire extinguishers

“All workers are subject to long hours and low wages,” the report stated. “As wages are low, workers must rely on overtime hours to earn enough to maintain a decent standard of living.” Amazon completed an audit of the factory in March and found violations regarding overtime and the use of dispatch workers, which it has asked Foxconn to remedy, it said in an emailed statement. On Monday, Foxconn said in an exchange filing it’s begun its own internal investigation and will rectify any illegality it discovers.

Foxconn says investigating labor conditions at China factory used for Amazon (Reuters) - Contract manufacturer Foxconn said on Sunday it is investigating a plant in China that makes devices for Amazon.com Inc (AMZN.O), after a U.S. watchdog group criticized what it described as harsh working conditions at the factory.  A 94-page report by New York-based China Labor Watch that followed a nine-month investigation cited excessive hours, low wages, inadequate training and an overreliance on “dispatch” or temporary workers in violation of Chinese law at the Hengyang Foxconn plant in Hunan province, which makes Echo Dot smart speakers and Kindle e-readers.  “We are carrying out a full investigation of the areas raised by that report, and if found to be true, immediate actions will be taken to bring the operations into compliance with our Code of Conduct,” Foxconn Technology Group said in a statement emailed to Reuters.  Taiwan-based Foxconn, known formally as Hon Hai Precision Industry Co Ltd, is the world’s largest contract electronics manufacturer and employs more than a million people.  Foxconn, which also makes Apple Inc  iPhones, came under fire in 2010 for a spate of suicides at plants in China. Foxconn pledged to improve working conditions.  China Labor Watch said its investigation found that about 40 percent of workers at the plant were dispatch workers, far exceeding the 10 percent limit under Chinese law. Dispatch workers were paid at the same rate for regular and overtime hours, rather than time and a half as required, said China Labor Watch Program Officer Elaine Lu.   “They were underpaid,” Lu said. “That’s illegal.”  Dispatch workers earned 14.5 yuan ($2.26) per hour, the report said. Workers also put in more than 100 overtime hours per month during peak season, far more than the 36 hours allowed by law, and some worked for 14 consecutive days.

 Poor Peoples Campaign Protests All Over US Ignored by Media --Yves Smith - The Poor Peoples Campaign, a young movement, has already gotten an audience in Congress and has been holding protests around the US. The anti-poverty, anti-racism effort takes its name from the initiative launched 50 years ago by Martin Luther King and cut short by his assassination, and is now led by Reverends William Barber and Liz Theoharis> However, it is currently in the “first they ignore you” phase of protest as far as major press outlets concerned.We’ll do what we can to remedy that. The Poor Peoples Campaign website describes how it has enlisted tens of thousands in over 30 states, documenting their suffering and using that information to develop a broad-based critique and a program,which they call a “Declaration of Fundamental Rights and Poor People’s Moral Agenda.” Their issues include racism, such as the erosion of voting rights, poverty and inequality, and ecological devastation, such as lack of access to affordable water. For instance, in Jefferson County, where sewer charges for a family easily run to a few hundred dollars a month, low income families often have to choose between having water or electricity. The last issue is “National Morality,” where they take on fundamentalists and libertarians. For instance: In the history of this country, moral justifications have been offered for the genocide and forced removal of indigenous people from their lands, slavery, resisting the Brown v. Board of Education school segregation case and opposing the Roe v. Wade abortion case. Today, religious extremists focus on issues like prayer in school, abortion, and gun rights that distort the national moral narrative. This distorted narrative became integral to the well-funded libertarian movement to redefine “liberty” as freedom from government. Huffington Post did cover the Congressional hearing earlier this week:

The New York City Subway Is Beyond Repair - The New York City subway is a miracle, especially at 3 a.m. on a Friday night. But the system is also falling apart, and it’s going to cost billions to keep the old trains running: $19 billion, at least according to one estimate from city planners. The time has come to give up on the 19th-century idea of public transportation, and leap for the autonomous future. Right now, fully autonomous cars are rolling around Pittsburgh, the San Francisco Bay area, and parts of Michigan, shuttling people from here to there with minimal manual intervention. Instead of fixing the old trains, let’s rip out the tracks and fill the tunnels with fleets of autonomous vehicles running on pavement. The result would be radical improvements in throughput while saving money and increasing the ability of the system to survive a fire, flood, or terrorist attack.These subterranean highways would be dramatically simpler than public roadways for an autonomous artificially intelligent system because the tunnels could be limited to authorized vehicles only. No jaywalkers on cellphones. No babies in runaway carriages. Just a collection of competing fleets, centrally orchestrated and offering different levels of service to different groups at different prices. Savings in time and energy would come from replacing extremely heavy trains that stop at every station with lightweight vehicles that depart immediately and go directly from A to B, stopping only at one’s destination. No more waiting or stopping every few blocks.

New York Gang Database Expanded by 70 Percent Under Mayor Bill de Blasio - The New York Police Department has quietly expanded its gang database under Mayor Bill de Blasio, targeting tens of thousands of young people of color for increased surveillance even in the absence of criminal conduct.New Yorkers have been added to the NYPD gang database under de Blasio at a rate of 342 people per month, nearly three times the rate of the prior decade. That’s despite both historically low crime levels and the fact that gang-motivated crime makes up less than 1 percent of all reported crime in New York City. New details about who the NYPD includes in the vast database were revealed in response to a public records request by CUNY School of Law professor Babe Howell, who shared the information with The Intercept. The data reveals that as of February 2018, there were 42,334 people in the database — a 70 percent increase since de Blasio took office in January 2014. Ninety-nine percent of those added over that four-year period were not white. The NYPD also maintains a database of “inactive” gang members that includes 2,706 people. The NYPD differentiates between crime committed to advance the interests of a gang — about 0.1 percent of all reported crime in the city between 2013 and 2017, according to Howell’s analysis — and crime committed by alleged gang members but not on behalf of gangs. According to the NYPD statistics, the latter category of crime doubled between 2013 and mid-2017, but still accounts for only 1.7 percent of all reported crime. But the results of a separate Freedom of Information Law request suggest that the NYPD’s definition of what constitutes a gang is broad, vague, and disconnected from evidence of criminal activity.

Why Are There So Many Unsheltered Homeless People in California? -- One-quarter of homeless people in the U.S. live in California, despite Californians making up only 12 percent of the population. Not only is homelessness more common on the West Coast but it is also more visible, because a higher proportion of homeless people are unsheltered. In the U.S., 24 percent of homeless people sleep outside, in vehicles or somewhere else not meant for human habitation. But that varies greatly from place to place: In California, 68 percent of homeless people are unsheltered, compared to just 5 percent in New York. Visitors to the West Coast may be shocked to find the tents that line cities from San Diego to Seattle. Like a modern-day “Grapes of Wrath,” the tents are a stark reminder of the suffering of the thousands living outside, homeless.What’s to blame for such high numbers of unsheltered homeless on the West Coast? The reason isn’t drug use, mental health problems or weather. Rather, it is due to the extreme shortage of affordable housing. As a physician and researcher who provides medical care for people experiencing homelessness, I have seen firsthand how devastating homelessness is to health.Being unsheltered is terrifying, humiliating and isolating. People living without shelterlack access to toileting facilities, sinks and showers. They have no way to store or prepare food and no protection from the elements. Hunger is common.Sleeping in makeshift beds or on the ground, they get little sleep. They must contend with having their possessions stolen. They face frequent forced moves, which disrupt relationships and make it difficult for family, friends or service providers to find them. People who are unsheltered are at high risk of physical and sexual abuse. If they struggle with substance use disorders, their use of drugs and alcohol occurs in public, leaving them open to arrest. There are no places to refrigerate or store medicines, no place to receive mailed appointment reminders or a visit from a visiting nurse, no place to dress a wound or plug in medical equipment like oxygen. Without access to hygiene facilities, they are at high risk for communicable diseases like hepatitis A.

Police framed a teen for four burglaries so chief could tout perfect clearance rate, prosecutors say -- Raimundo Atesiano had a statistic to tout at a town council meeting in Biscayne Park, a village of 3,000 in the middle of Florida’s Miami-Dade County.The Biscayne Park Police Department, where Atesiano was chief at the time, had a clearance rate of 100 percent for burglaries, he said at the July 2013 meeting, according to federal court documents.But the statistics were a fictitious stunt to gain favor with elected officials, according to an indictment filed by Benjamin G. Greenberg, the U.S. attorney in South Florida.Atesiano, with the help of two officers from his department, conspired to falsely arrest and charge a 16-year-old with four unsolved burglary cases that year, prosecutors said Monday.  Atesiano and the two former officers, Charlie Dayoub and Raul Fernandez, were charged by federal prosecutors with conspiracy to violate civil rights under color of law and deprivation of the 16-year-old’s civil rights. If convicted, the three could face 11-year prison sentences.

 Florida Failed To Run FBI Background Checks On Gun Owners Due To Forgotten Password - For over a year, the state of Florida did not run FBI background checks on tens of thousands of residents applying for concealed weapons permits starting in February 2016 - because an employee forgot the password to the National Instant Criminal Background Check System (NICS), reports the Tampa Bay Times.  The screwup by the Florida Department of Agriculture and Consumer Services was discovered by the Office of Inspector General, and meant that anyone from felons to people with mental illness may have been granted the right to carry a firearm in public. The employee in charge of the background checks could not log into the system, the investigator learned. The problem went unresolved until discovered by another worker in March 2017 — meaning that for more than a year applications got approved without the required background check. -Tampa Bay TimesThe report found that there were 134,000 requests for permits in the fiscal year ending in June 2015, and 245,000 applicants over the next 12 months. 2017 applications topped both, at 275,000 applications. After the screwup was discovered, officials scrambled to run background checks - flagging 365 applications which required further review, and 291 revocations. The employee who forgot the password, Lisa Wiolde, has been fired for negligence.  "Upon discovery of this former employee's negligence in not conducting the further review required on 365 applications, we immediately completed full background checks on those 365 applications, which resulted in 291 revocations," Putnam said in the statement. "The former employee was both deceitful and negligent, and we immediately launched an investigation and implemented safeguards to ensure this never happens again." -Tampa Bay Times

 Criticism from parents affects how children's brains respond to emotional information -- Children of highly critical parents show less attention to emotional facial expressions, according to new research from Binghamton University, State University at New York. "These findings suggest that children with a critical parent might avoid paying attention to faces expressing any type of emotion," said Kiera James, graduate student of psychology at Binghamton University, and lead author of the paper. "This behavior might affect their relationships with others and could be one reason why children exposed to high levels of criticism are at risk for things like depression and anxiety."   The researchers wanted to examine how exposure to parental criticism impacts the way that children process and pay attention to facial expressions of emotion. One way to look at attention is through a neural marker called the Late Positive Potential (LPP), which provides a measure of how much someone is paying attention to emotional information, such as a face that is happy or sad.   "We know from previous research that people have a tendency to avoid things that make them uncomfortable, anxious, or sad because such feelings are aversive. We also know that children with a critical parent are more likely to use avoidant coping strategies when they are in distress than children without a critical parent," said James. "Given this research, and our findings that children with a critical parent pay less attention to all emotional facial expressions than children without a critical parent, one possible explanation is that the children with a critical parent avoid looking at any facial expressions of emotion. This may help them avoid exposure to critical expressions, and, by extension, the aversive feelings they might associate with parental criticism. That said, it may also prevent them from seeing positive expressions from others."

 Researchers find IQ scores dropping since the 1970s - A pair of researchers with the Ragnar Frisch Centre for Economic Research in Norway has found that IQ test scores have been slowly dropping over the past several decades. In their paper published in Proceedings of the National Academy of Sciences, Bernt Bratsberg and Ole Rogeberg describe their study and the results they found. They also offer some possible explanations for their findings.  Prior studies have shown that people grew smarter over the first part of last century, as measured by the intelligence quotient—a trend that was dubbed the Flynn effect. Various theories have been proposed to explain this apparent brightening of the human mind, such as better nutrition, health care, education, etc, all factors that might help people grow into smarter adults than they would have otherwise. But, now, according to the researchers in Norway, that trend has ended. Instead of getting smarter, humans have started getting dumber.The study by the team consisted of analyzing IQ test results from young men entering Norway's national service (compulsory military duty) during the years 1970 to 2009. In all, 730,000 test results were accounted for. In studying the data, the researchers found that scores declined by an average of seven points per generation, a clear reversal of test results going back approximately 70 years.  The researchers also found some differences between family groups, suggesting that some of the decline might be due to environmental factors. But they also suggest that lifestyle changes could account for some of the decline, as well, such as changes in the education system and children reading less and playing video games more. Sadly, other researchers have found similar results…

Omaha Public Schools board cuts $29 million from budget -- Last week the Omaha Public Schools (OPS) board voted to implement $29.53 million in budget cuts resulting in the elimination of 180 jobs, the freezing of current employee’s pay and halting the planned purchase of new text books for the upcoming 2018-2019 school year. The cuts are being made on the recommendation of the district’s budget advisory committee, which consists of union leaders, teachers, administrators and community members.The slashing of the budget for the largest school district in Nebraska will result in the elimination of positions in the central office, bus drivers, student support liaisons, accountants and IT professionals. Additionally, the district will implement a salary freeze on current staff, excluding teachers.Students will be affected by the cancellation of a planned $7 million textbook adoption and cuts to the budget for class field trips and classroom supplies in elementary and secondary schools. According to the findings of a survey by the National Center for Education Statistics, 94 percent of teachers across the US are already forced to spend hundreds of dollars of their own money on school supplies to cover budget shortfalls.OPS is using a required $18.7 million payment to the pension fund as political cover for the cuts. In January the budget advisory committee held its first meeting to begin prioritizing cuts in anticipation of decreased state aid and the required pension payment. Nevertheless, in early March the teachers union, the Omaha Education Association (OEA), pushed through a concessions contract that did not make any effort to protect teachers and staff from the expected budgetary shortfall. One month after the contract was ratified, OPS issued notice to 75 teachers and professionals that their jobs were being considered for elimination.

"It's Wrong, And It's Scary" – Baltimore County Teachers "Frightened" By Spike In Violence - According to Project Baltimore, two Baltimore County Public School teachers have stepped forward and sounded the alarm regarding how the school system’s administrators have enacted policies that made schools appear safer on paper — however, this epic fail has led to a massive increase in violence among students and teachers. “I have been kicked. I have been punched. I have been thrown up against lockers,” stated one of the teachers.  “I’ve been spit on. A lot of chair throwing, turning over desks, screaming, running around the classroom,” added the other. These two Baltimore County Public School teachers contacted Project Baltimore with a terrifying message:“What I’m seeing in the schools, it’s wrong and it’s scary. It’s frightening,” collectively stated the pair in a statement to Project Baltimore.Both educators spoke on condition of anonymity because of the fear of losing their jobs. However, as Project Baltimore stated: “they [teachers] can no longer remain silent – especially after watching recent Fox45 reports detailing escalating violence in public schools.”Chris Papst, who is the lead reporter for Project Baltimore’s ongoing investigation into Baltimore area public schools, said,”County teachers say it’s not just students anymore who are victims of violence and bullying.”#ProjectBaltimore - County teachers say it's not just students anymore who are victims of violence and bullying. @FOXBaltimore investigateshttps://t.co/O1iBuG0OJn— Chris Papst (@chrispapst) June 12, 2018 One of the educators told Papst in an interview, “If we don’t do anything about it and we don’t speak out now and try and solve the problem, then we are ultimately becoming part of the problem.”

Another Reason Young Americans Don’t Revolt Against Being Screwed -- “8 Reasons Young Americans Don’t Fight Back: How the US Crushed Youth Resistance” was originally published in 2011, then republished on several Internet sites, and has become one of my most viewed articles. The eight reasons include: student-loan debt; various pacifying effects of standard schooling; the psychopathologizing and medicating of noncompliance; surveillance; television; and fundamentalist religion and fundamentalist consumerism. Over the last seven years, many young people have told me that they appreciate that article, but they have urged me to detail a hugely important pacifying source which I had not included. First, to be clear, not all young people are completely broken. The general state of acquiescence by young people was recently interrupted by their short-lived burst of dissent in the form of large rallies for gun control, in reaction to fears of being murdered in their classrooms. But that was an exception to the general rule of resignation to eating shit. Since my 2011 article was published, many millennials have informed me that they are being broken by something that I hadn’t originally included: the Internet, which many of them tell me is the most important aspect of their lives. From these young people, I have learned how the Internet creates fears, lowers self-esteem, and divides them—all of which weakens their capacity to resist injustices. Fear is a great way to break people, and the Internet—similar to other areas that I had previously detailed—creates fear. Facebook, Twitter, Instagram, Tumblr, Snapchat, and other so-called “social media” create the fear of permanent shame and shunning. Millennials repeatedly see how a single error in judgment on social media will not be forgotten and can haunt forever—and destroy lives. While many young students voice concern about a shooting in their school, my experience is that they are more viscerally terrified of something being posted on social media by them or about them that can damage their attractiveness to their peers or to future employers. For young people, denial over their life being ruined on social media is impossible—most never unplug from it.

Women have $890 billion in student loan debt, the country’s biggest share - Women are carrying nearly two-thirds of the country's outstanding student loan debt.That alarming math comes out of a new report by the American Association of University Women, an education advocacy group, titled, "Deeper in Debt: Women and Student Loans."To be sure, 56 percent of today's college students are women, and so it makes sense that more women than men hold education debt.And student loans are increasingly a burden for anyone in pursuit of an education. Since 1976, the cost of college attendance has ballooned 150 percent, while the median household income went up 20 percent, according to the American Association of University Women.Now, 7 in 10 students take out loans to get their degree. The average person leaves school $30,000 in arrears, while nearly 20 percent owe more than $100,000. Americans are now more burdened by education loans than they are by credit card or auto debt.Conversations on student loans need to start with the recognition that certain demographics are hit harder than others, said Kim Churches, CEO of the American Association of University Women."Even when you compare apples to apples, women are taking on more debt individually," she said.In 2016, the average woman left her undergraduate education owing $21,619, compared with $18,880 for men. That's a difference of more than $2,700. Black women, in particular, are taking on a disproportionate amount of debt, racking up around $25,000 in student loans to receive their bachelor's degree, the study found.

Why the AARP is worried about student loans As student loan debt has ballooned over the past two decades, the issue has moved from the sidelines of wonky policy debates into a full-fledged campaign issue, with even presidential candidates playing to the economic anxieties of parents and recent college grads. In the latest sign of just how far-reaching student loan debt has become, the issue is now on the radar of another, perhaps more surprising group: AARP. Over the past several years, the nation’s leading senior lobby has become increasingly involved in student-loan issues, pressuring the federal government to stop garnishing the Social Security benefits of older borrowers who defaulted on their loans. And in some state capitals the group is taking on the student loan industry, pushing for more regulations to police abusive loan-collection practices. A retirement organization may seem like an unlikely force for reform of student debt. But AARP’s involvement underscores just how long a shadow student loans are increasingly casting over Americans’ economic lives—a shadow that stretches all the way into their retirement. Remarkably, Americans over 60 years old are the fastest-growing category of student loan borrowers, having roughly quadrupled in number between 2005 and 2015, according to the Consumer Financial Protection Bureau. Although older borrowers still account for just a sliver of the more than $1.5 trillion in total outstanding student loan debt, they’re more likely than younger borrowers to be behind on payments. Most are repaying debt they took out to help finance the education of their children or grandchildren, though some are still paying off their own tuition. “We consider it a looming threat,” said Lori Trawinski, director of banking and finance at the AARP Public Policy Institute. A central concern, she said, is how student debt—for themselves and their children—can delay key financial milestones like home ownership and chip away at retirement savings.

America Goes Full Imbecile -  Credit has a wicked way...of magnifying a person’s defects.  Even the most cautious man, with unlimited credit, can make mistakes that in retrospect seem absurd.  But an average man, with unlimited credit, is preeminently disposed to going full imbecile. Several weeks ago we came across a woeful tale of Mike Meru.  Somehow, this special fellow, while of apparent sound mind and worthy intent, racked up over $1 million dollars in student loan debt – all to become an orthodontist.Surely, with several good text books, and a disciplined self-study program, Meru could have learned everything there was to possibly know about adjusting malpositioned teeth for roughly $200 bucks.  Instead, with the full backing of Uncle Sam’s loan program, he went full imbecile.  Yet Meru isn’t alone.  According to the Department of Education, there are 101 people in the U.S. who are a million dollars or more in federal student loan debt.  What’s more, there are 2.5 million people who owe at least $100,000.  What could they have possibly learned that could be so doggone valuable?  Did they discover how to turn nickels into dimes?  Did they solve the geometry of a four-sided triangle?  Did they learn the secrets of the universe?  Did they get an insider’s peek at something more than what happens under the sun?  Only at rare moments are people capable of understanding the full implications of the catastrophes of their making.  These rare moments, often just before dawn, are the precise instants when they gain full clarity to the hopeless fact that they have gone full imbecile.  That every decision they have ever made has led them to this exact place – where they find themselves to be completely and utterly screwed.

People with massive student debt hope Trump will let them declare bankruptcy -- Denise Sparks graduated from college in 1995 with $30,000 in debt. Then her life turned challenging. First, there was the divorce from her husband, which left her to raise two children on her own. Then she fell ill and had multiple operations. Along the way, a psychiatrist diagnosed her with depression, bipolar and post-traumatic stress disorder.She often missed work and didn't have enough money to send in her student loan payments. Today her debt, with interest, penalties and fees, is more than $230,000. Sparks reached out to a number of lawyers where she lives in Phoenix about filing for bankruptcy, but to no avail. That's likely in part because federal laws don't allow student loans to be discharged in bankruptcy unless the borrower can prove that the debt poses an "undue hardship." That term may sound relatively benign, but legally it's a high bar to meet: Borrowers often must exhibit a "certainty of hopelessness."  She discovered that the Education Department was requesting public feedback on whether it's too difficult for Americans to erase their student debt in bankruptcy, signaling it may consider making the process easier. Indeed, the Trump administration has taken moves that advocates describe as favoring the student loan industry over its borrowers.Yet a change in bankruptcy rules could be in the interest of the student loan industry as well, said Ed Boltz, vice president of the National Association of Consumer Bankruptcy Attorneys.That's because the Education Department often requires that servicers of federal student loans like Navient oppose petitions for bankruptcy by student loan borrowers — even if the prospects of recovering that debt are dim, Boltz said.

Some Bankruptcy Judges Finding Ways to Give Desperate Student Borrowers Relief - Yves Smith - Earlier this week, we linked to a CNBC story that described how the Department of Education is seeking input on whether it was too hard for borrowers to discharge student loans in bankruptcy. We pointed out that if the DoE went forward, it would be a twofer for the Republicans: they’d probably win votes from at least some borrowers who benefitted, and the recognition of losses on Federally guaranteed loans would lead to call to make the program more stringent, perhaps including penalties on higher educational institutions who mislead borrowers about loan risks and their earnings potential. Since employees of higher educational institutions skew Democratic, effectively cutting their funding would not hurt and probably would help Team R. It turns out some bankruptcy judges have already concluded that the bankruptcy requirements for student loans have been excessive, and they’ve been allowing some borrowers to reduce or discharge their debts, something that was heretofore virtually impossible.  Mind you, this is not happening very often, in part because bankruptcy judges historically have been so unreceptive to plaintiffs weighed down by student debts seeking relief that lawyers would refuse to take these cases. As a result, last year, only 473 borrowers made the attempt. But as the Wall Street Journal describes, some judges are of the view that the past application of the standard for whether the borrower was a candidate for relief has been too stringent. The Journal buries the legal rationale and in so doing, winds up feeding the right-wing narrative that do-gooder judges try to rewrite the law and therefore represent a menace to upstanding citizens who’ve had the good fortune not to need to borrow to get a degree, or if they did, never suffered a big setback, like a serious illness, job loss, or divorce. The legal question is that in 1998, Congress restricted the discharge of federal student loans to cases where the borrower could demonstrate “undue hardship”. Congress not define what that threshold was, and Journal’s account gives the impression that the standard that came to be applied was more punitive than what “undue hardship” meant to judges when the law was revise.. Indeed, it is hard not to conclude that most judges have been overzealous. From the Journal:

Millennials and retirement: How bad is it? --A comparison of millennials (adults currently ages 25 to 35) with earlier cohorts (Gen-Xers and late baby boomers) when they were the same age shows that even though a higher percentage of both millennial men and women have college degrees, they are behind in almost every economic dimension.  One reason is that millennials entered the labor market during tough times. Most turned 21 between 2002 and 2012, which meant that they were graduating from college during a period that included both the bursting of the dot.com bubble and the Great Recession. This experience appears to have been particularly hard on millennial men, who have labor-force participation rates below earlier cohorts.  In addition, both men and women have had more difficulty finding quality jobs—career-track positions with good compensation. As a result, they are not only behind Gen Xers and late Baby Boomers on their earnings trajectory, they’re also less likely than previ­ous cohorts to receive important employer-sponsored benefits such as retirement savings plans and health insurance.  In terms of preparing for retirement, millennials have three strikes against them. First, because of limited access to retirement plans at work, millennials will struggle to build retirement savings, since experience shows that people have a great deal of trouble saving on their own. Second, they are less likely to have bought a home, and home equity is a valuable retirement asset. And third, they are more likely to be burdened by student loans, and young workers with student loans have less to stash in retirement plans and are more likely to end up at risk in retirement.

 As rich children slim down, poor ones are getting fatter - The Economist - IT IS mid-afternoon in Camberwell Green and the fast-food joints are filling up with schoolchildren. Some are in groups of friends, others are picking up dinner with their family. It is hard to escape unhealthy food in this south London neighbourhood. Posters in supermarkets and on bus-stops display deals for fizzy drinks and burgers. Newsagents’ doorways glitter with packets of sweets and crisps. Even a church, converted from a bingo hall, has a snack-dispensing vending machine in its lobby. The children of Camberwell Green are among the fattest in England. Half of ten- and 11-year-olds there are overweight or obese (meaning that a boy of average height would weigh over 40kg, as opposed to a healthy 35kg or so). By contrast, in Dulwich Village, a few miles south, where household incomes are twice as high, only a fifth of children are in that category, one of the lowest levels in the country.Poor children have been fatter than rich ones since around the 1980s. But over the past decade the rich have started to slim down, as the poor have got bigger. This is true in poor Camberwell and posh Dulwich, where rates of childhood obesity have respectively risen by ten percentage points and fallen by two in the past six years. And it is true of the country at large (see chart).  Since the 1990s the public has become more aware of the risks of obesity. The rich and well educated are best placed to act on this knowledge, says Ronny Cheung, a paediatrician in London. They have more time to cook healthy meals at home and are more likely than poor folk to live near green spaces or join sports clubs. At the same time there has been an uneven growth of fast-food joints

 Psychedelic drugs promote neural plasticity in rats and flies - Psychedelic drugs may have mind-altering powers in the physical sense, too. A new study, published June 12 in the journal Cell Reports, found psychedelics, specifically DOI, DMT, and LSD, can change brain cells in rats and flies, making neurons more likely to branch out and connect with one another. The work supports the theory that psychedelics could help to fight depression, anxiety, addiction, and post-traumatic stress disorder. "These are some of the most powerful compounds known to affect brain function, it's very obvious to me that we should understand how they work," says senior author David E. Olson, assistant professor in the Department of Chemistry and the Department of Biochemistry & Molecular Medicine at the University of California, Davis. The idea that depression stems from imbalanced brain chemistry remains popular, but recent studies have revealed evidence that depression manifests as structural changes in brain circuits or atrophy in parts of the brain. This doesn't mean neurons die off during depression, but that neurites retract. Neurites are the sections—either axons or dendrites—of a neuron that project out to bridge the gap between two neurons at the synapse to facilitate communication. "One of the hallmarks of depression is that the neurites in the prefrontal cortex—a key brain region that regulates emotion, mood, and anxiety—those neurites tend to shrivel up," says Olson. These brain changes also appear in cases of anxiety, addiction, and post-traumatic stress disorder. In their paper, Olson and colleagues tested psychedelics from the amphetamine, tryptamine, and ergoline drug classes. In both test tube and animal experiments, the psychedelics showed functional and structural changes like those promoted by ketamine in cortical neurons. Psychedelics increased both the density of dendritic spines and the density of synapses. Some psychedelics tested, including LSD, proved to be more potent and efficacious than ketamine in promoting neurite growth.

One-Third of US Adults May Unknowingly Use Medications that Can Cause Depression --  A new study from University of Illinois at Chicago researchers suggests that more than one-third of U.S. adults may be using prescription medications that have the potential to cause depression or increase the risk of suicide, and that because these medications are common and often have nothing to do with depression, patients and health care providers may be unaware of the risk.The researchers retrospectively analyzed medication use patterns of more than 26,000 adults from 2005 to 2014, which were collected as part of the National Health and Nutrition Examination Survey. They found that more than 200 commonly used prescription drugs — including hormonal birth control medications, blood pressure and heart medications, proton pump inhibitors, antacids and painkillers — have depression or suicide listed as potential side effects.Published in the Journal of the American Medical Association, the study is the first to demonstrate that these drugs were often used concurrently and that concurrent use, called polypharmacy, was associated with a greater likelihood of experiencing depression. Approximately 15 percent of adults who simultaneously used three or more of these medications experienced depression while taking the drugs, compared with just 5 percent for those not using any of the drugs, 7 percent for those using one medication and 9 percent for those taking two drugs simultaneously. The researchers observed similar results for drugs that listed suicide as a potential side effect. These findings persisted when the researchers excluded anyone using psychotropic medications, considered an indicator of underlying depression unrelated to medication use.

How Purdue Pharma Hooked America on a Deadly Drug -- Purdue Pharma left almost nothing to chance in its whirlwind marketing of its new painkiller OxyContin.From 1996 to 2002, Purdue pursued nearly every avenue in the drug supply and prescription sales chain — a strategy now cast as reckless and illegal in more than 1,500 federal civil lawsuits from communities in Florida to Wisconsin to California that allege the drug has fueled a national epidemic of addiction.Kaiser Health News is releasing years of Purdue’s internal budget documents and other records to offer readers a chance to evaluate how the privately held Connecticut company spent hundreds of millions of dollars to launch and promote the drug, a trove of information made publicly available here for the first time.All of these internal Purdue records were obtained from a Florida attorney general’s office investigation of Purdue’s sales efforts that ended late in 2002.I have had copies of those records in my basement for years. I was a reporter at the South Florida Sun-Sentinel, which, along with the Orlando Sentinel, won a court battle to force the attorney general to release the company files in 2003. At the time, the Sun-Sentinel was writing extensively about a growing tide of deaths from prescription drugs such as OxyContin. We drew on the marketing files to write two articles, including one that exposed possible deceptive marketing of the drug. Now, given the disastrous arc of prescription drug abuse over the past decade and the stream of suits being filed — more than a dozen on some days — it seemed time for me to share these seminal documents that reveal the breadth and detail of Purdue’s efforts.

Malady mongers: How drug companies sell treatments by inventing diseases - The pharmaceutical industry’s image has been significantly damaged in recent years as the public discovered the role its aggressive marketing played in fueling the opioid epidemic. But the American people are still largely in the dark about what may be pharma’s most effective tactic for pushing drugs — marketing diseases. There’s a substantial body of medical literature dating back to the early ’90s about the practice known as “disease mongering.” Pharmaceutical companies regularly pathologize everyday experiences, convince doctors that they are serious problems, tell a hypochondriacal public it needs help and offers the cure: a new drug. Against the onslaught of billions of dollars in marketing campaigns each year, however, researchers’ warnings about these tactics have gone largely unheeded.  The United States was still the largest single pharmaceutical market in 2017, generating more than $450 billion of revenue. In contrast, all of Europe accounted for roughly $214 billion. U.S. pharmaceutical spending alone is double the Organisation for Economic Co-operation and Development average. According to the Mayo Clinic, nearly 70 percent of Americans take at least one prescription drug. Adriane Fugh-Berman, a professor of pharmacology at Georgetown University Medical Center, said the pharmaceutical industry medicalizes normal life by positing that a vague, highly relatable, everyday condition is symptomatic of a newly invented disease. In other cases, pharma exaggerates the prevalence or severity of an existing condition to entice more customers.“Marketing for a drug can start seven to 10 years before they go on the market. Because it’s illegal to promote a drug before it goes on the market, what they’re promoting is the disease. That’s not illegal to do because there’s no regulation on creating diseases,” Fugh-Berman told Yahoo News.

'DISEASE X': New Strain Of Bird Flu Kills 40% Of Those Who Contract, 100s Dead In China - A "new" strain of deadly bird flu dubbed "Disease X" by the World Health Organization (WHO) has killed hundreds of people in China, and is just three mutations away from becoming transmissible between humans, according to experts. The strain, H7N9, circulates in poultry and has killed 623 people out of 1,625 infected in China - a mortality rate of 38.3%. While first identified in China in 2013, H7N9 has recently emerged as a serious threat seemingly overnight.  Professor Jonathan Van-Tam, deputy chief medical officer for the UK, told The Telegraph that H7N9 could cause a global outbreak. “[H7N9] is an example of another virus which has proven its ability to transmit from birds to humans," said Van-Tam, who added "It’s possible that it could be the cause of the next pandemic." The WHO says N7N9 is "an unusually dangerous virus for humans," and "one of the most lethal influenza viruses that we've seen so far"  “H7N9 viruses have several features typically associated with human influenza viruses and therefore possess pandemic potential and need to be monitored closely,” said Dr. Yoshihiro Kawaoka of the University of Wisconsin-Madison. Researchers led by James Paulson of the Scripps Research Institute in California have been studying the mutations which could potentially occur in H7N9's genome to allow for human-to-human infection.The team’s findings, published in the journal PLoS Pathogens on Thursday, showed that in laboratory tests, mutations in three amino acids made the virus more able to bind to human cells — suggesting these changes are key to making the virus more dangerous to people. -Japan TimesThat said, the mutations would need to occur relatively close to each other to become more virulent, which has a low probability of happening according to Fiona Culley, an expert in respiratory immunology at Imperial College London."Some of the individual mutations have been seen naturally … these combinations of mutations have not,” and added: "The chances of all three occurring together is relatively low." Wenday Barclay, a virologist and flu specialist also at Imperial College says the study's findings reinforce the need to keep the H7N9 bird flu under close surveillance. “These studies keep H7N9 virus high on the list of viruses we should be concerned about,” she said. “The more people infected, the higher the chance that the lethal combination of mutations could occur.”

Plague Strikes Idaho: Officials Confirm First First Human Case Since 1992 -- A child in Elmore County, Idaho has contracted the plague according to the state health officials. While the plague has been diagnosed in squirrels as recently as 2016, this marks the first human transmission in Idaho in over a quarter-century according to the Central District Health Department. The child, whose age and sex are unknown, is currently recovering while receiving antibiotic treatment. Officials are unsure whether the child contracted the plague at home in Idaho or during a recent trip to Oregon - where there have been eight human cases of plague since 1990 vs. two in Idaho. Plague epidemics have occurred in Africa, Asia, and South America but most human cases since the 1990s have occurred in Africa. Almost all of the cases reported in the last 20 years have occurred among people living in small towns and villages or agricultural areas rather than in larger towns and cities. –CDC “Plague is spread to humans through a bite from an infected flea. People can decrease their risk by treating their pets for fleas and avoiding contact with wildlife,” Sarah Correll, a Central District Health Department epidemiologist, said in a statement. “Wear insect repellant, long pants and socks when visiting plague affected areas.”The symptoms of plague typically appear within two to six days of exposure, and include sudden fever, chills, headache and weakness. There is typically a painful swelling of the lymph nodes in the armpit, groin or neck.  Plague symptoms in animals include fever, loss of appetite and lethargy - along with swollen lymph nodes under the jaw. Prompt diagnosis and immediate antibiotic treatment can greatly reduce the risk of death in both people and pets.

Polio makes comeback in Venezuela after decades  -- Polio has been reported in Venezuela, a crisis-wracked country where the disease had been eradicated decades ago, the Pan-American Health Organization reports. The organization said the child had no history of vaccination and lives in an under-immunized extremely impoverished Delta Amacuro state. Polio, or poliomyelitis, is a crippling childhood disease caused by the poliovirus, and preventable through immunization. Doctor Jose Felix Oletta, a former Minister of Health, told AFP that the last case of acute poliomyelitis in Venezuela was reported in 1989. "The virus especially affects people in conditions of malnutrition and unvaccinated, as this case," Oletta added. Oletta slammed health authorities in President Nicolas Maduro's government for taking more than a month to notify the PAHO that it had identified the virus. International health regulations require it to do so within 24 hours. Venezuela, devastated by economic and political crises, also accounted for 85 percent of cases of measles reported across Latin America and the Caribbean over the past year, the PAHO said. Of the 11 countries that reported cases, Venezuela had the overwhelming majority of cases, but also 35 deaths since mid-2017, the international organization said. More specifically, "there were eleven countries that reported 1,685 confirmed measles cases across the region," of which 1,427 were in Venezuela, a PAHO report released Saturday found. 

In the Battle against Lyme Disease, the Ticks Are Winning - In the space of two generations, the natural landscape in many American states has been slowly transformed from a place of refuge and peace to one of peril and menace. Blacklegged ticks that transmit Lyme disease and other illnesses inhabit half of US counties, where they infect some 300,000 people yearly in grassy meadows, urban parks, backyards and many other places. Although children are the most frequently diagnosed group and thousands of infected patients develop long-term infirmity every year, little has been done to curb the spread of ticks or to control the harm inflicted by the Lyme bacterium. Instead, the list of new and threatening tick species and illnesses grows.This lack of progress is not a random development. It is, rather, the product of a false image of Lyme disease, embraced by health officials and repeated in reviews of the medical literature, as an illness that is easy to diagnose and readily treatable. That picture should long ago have given way to a more nuanced view that acknowledges flaws in diagnostic tests and the limits of short-course antibiotics to cure the disease.  I began in 2012 to research Lyme disease.. But I had little idea of the controversy that had stymied research and left many late-stage patients clamoring for care. While many patients are indeed diagnosed by a telltale rash or an antibody test, as the guidelines proffer, and many do respond to 10 to 28 days of antibiotics, thousands of others remain sick every year in a treatment paradigm riddled with loopholes. Although 36,429 Americans officially contracted Lyme disease in 2016, the U.S. Centers for Disease Control and Prevention acknowledges that reported cases are perhaps one-tenth of the actual toll annually. Hence, some 3 million Americans have likely been infected in the last decade. Of crucial importance, however, are studies showing that 10 to 20 percent of treated patients still suffer symptoms a year after treatment, or 30,000 to 60,000 patients annually. One long-term study found 5 percent afflicted an average of 15 years later.

The ‘bleeding’ veggie burger is under fire - Stanford biochemist Pat Brown’s “bleeding” vegan patty started winning over carnivores four years ago — Chang was the first high-profile convert, and since then, the burger has surfaced on almost 2,000 menus, including Food Factory’s last month. The food start-up’s success is undeniable — and a noticeable affront to Big Meat — but Impossible Foods’ hasty rise has also made the $400 million Silicon Valley darling an unexpected set of enemies: consumer groups and environmentalists who exposed FDA letters questioning the safety of the burger’s “magic ingredient,” then started demanding more proof that Impossible’s alt-meat is the harmless, vegan product it claims. Almost everyone agrees that the vegan patty is a game changer that looks, smells, and even sizzles like real beef. And some of America’s smartest food writers have declared it “very impressive” and “remarkably like beef,” despite the fact that it’s a combination of wheat, potato protein, coconut oil, and a protein called soy leghemoglobin, or SLH, that delivers the so-called “magic” blood — heme, a ferrous molecule abundant in animal muscle. Brown, the biochemist, has given an entire TED Talk on the substance, detailing how it gives meat its strangely alluring metallic taste, and to create a plant burger packed with this much heme, Impossible must manufacture the SLH in a lab using yeast. Therefore, what the Impossible Burger isn’t is organic. It’s also a creation that’s never been found before in the human food supply.

A serious new hurdle for CRISPR: Edited cells might cause cancer, find two studies -  Editing cells’ genomes with CRISPR-Cas9 might increase the risk that the altered cells, intended to treat disease, will trigger cancer, two studies published on Monday warn — a potential game-changer for the companies developing CRISPR-based therapies.In the studies, published in Nature Medicine, scientists found that cells whose genomes are successfully edited by CRISPR-Cas9 have the potential to seed tumors inside a patient. That could make some CRISPR’d cells ticking time bombs, according to researchers from Sweden’s Karolinska Institute and, separately, Novartis.CRISPR has already dodged two potentially fatal bullets — a 2017 claim that it causes sky-high numbers of off-target effects was retracted in March, and areport of human immunity to Cas9 was largely shrugged off as solvable. But experts are taking the cancer-risk finding seriously. The CEO of CRISPR Therapeutics, Sam Kulkarni, told STAT the results are “plausible.” Although they likely apply to only one of the ways that CRISPR edits genomes (replacing disease-causing DNA with healthy versions) and not the other (just excising DNA), he said, “it’s something we need to pay attention to, especially as CRISPR expands to more diseases. We need to do the work and make sure edited cells returned to patients don’t become cancerous.” Another leading CRISPR scientist, who asked not to be named because of involvement with genome-editing companies, called the new data “pretty striking,” and raised concerns that a potential fatal flaw in some uses of CRISPR had “been missed.”

Monsanto Relied on These ‘Partners’ to Attack Top Cancer Scientists -- This fact sheet describes the contents of Monsanto’s confidential public relations plan to discredit the World Health Organization’s cancer research unit, the International Agency for Research on Cancer (IARC), in order to protect the reputation of Roundup weedkiller. In March 2015, the international group of experts on the IARC panel judged glyphosate, the key ingredient in Roundup, to be probably carcinogenic to humans. The Monsanto plan names more than a dozen “industry partner” groups that company executives planned to “inform / inoculate / engage” in their efforts to protect the reputation of Roundup, prevent the “unfounded” cancer claims from becoming popular opinion, and “provide cover for regulatory agencies.” Partners included academics as well as chemical and food industry front groups, trade groups and lobby groups — follow the links below to fact sheets that provide more information about the partner groups. Together these fact sheets provide a sense of the depth and breadth of the corporate attack on the IARC cancer experts in defense of Monsanto’s top-selling herbicide.

Beekeepers File Legal Complaint Against Bayer Over Glyphosate in Honey -- Bayer, which recently wrapped up its takeover of Monsanto, now owns glyphosate and the liabilities surrounding it.Last Thursday, the same day the $63 billion acquisition closed, a beekeeping cooperative in northern France filed a legal complaint against the German chemical giant after the controversial weedkiller was detected inhoney produced by one of its members, AFP reported.Famille Michaud, one of France's largest honey marketers, found the chemical in three batches supplied by one of its members, according to Jean-Marie Camus, the head of the 200-member beekeeping union, L'Abeille de l'Aisne."They systematically analyze the honey shipments they receive, and they found glyphosate," Camus told AFP.Vincent Michaud, president of Famille Michaud, confirmed to AFP that "we regularly detect foreign substances, including glyphosate." He noted that if glyphosate is found, the supplier's entire shipment is rejected.The supplier of the tainted honey lives near an area of field crops, including rapeseed, beets and sunflowers, Emmanuel Ludot, a lawyer for the cooperative, explained to AFP. "But you also can't forget the weekend gardeners who often tend to use Roundup," he added, referring to Monsanto's widely used glyphosate-based herbicide brand.

Bayer-Monsanto and Nuremburg - The Nuremburg tribunal provides the precedent according to which all of today’s elite criminals – government and corporate leaders – should be judged and sentenced.  It also provides a precedent for the death penalty for a corporation: In this case the chemical conglomerate IG Farben and three of its six constituent companies were dissolved, allegedly because of their participation in Nazi crimes against humanity. And yet even the unfathomable crimes of the slave labor program and death camps weren’t enough to warrant the death penalty for three of the IG Farben companies, including Bayer and BASF. These, unlike the cartel itself and the three lesser companies, were considered by the US to be too structurally important to the corporate-technocratic project. So they and their executives were given just a slap on the wrist. In fact, no corporations or corporate executives were judged according to the moral pretensions of the Tribunal, but only according to what place US elites saw for these German corporations in the post-war globalizing system. This proves:

• 1. If a corporation is big and powerful enough, there is no level of crime up to and including literal mass murder which it will not be allowed to commit with impunity.
• 2. In fact, a core purpose of the corporate form is to organize the commission of crimes against humanity and the Earth, and to provide legal impunity for the leaders of these criminal projects.
• 3. We the people can never look to government, which creates and exonerates these corporations in the first place, for justice or relief. If we want to be free of the corporate tyranny, as indeed we must become if humanity is to have a future at all, we must organize and carry out the anti-corporate abolition movement from the soil up. That’s the only way.

Gene-Edited Supercrops To Be Grown in UK for First Time -- Gene-edited super-crops are to be sown in Britain in a European-first after scientists exploited a legal loophole.The Government has quietly approved the farming of gene-edited (GE) Camelina oilseed crops as part of a trial to super-charge the plants to produce Omega 3 fish oils, one of the most popular food supplements.The pilot was approved because, unlike genetically modified (GM) plants, the Camelina oilseed crops contain no foreign DNA. Instead, they had their genetic code altered in a way that could have happened naturally.  Scientists say gene-editing can cut the time it takes to engineer new plants from decades to months. They argue embracing the new technology is vital if Britain is to benefit from GE crops and help maintain a sustainable source of fish oils in face of depleted ocean stocks.  The trial starts as the European Court of Justice prepares to decide whether GE plants can be legally treated as if they were conventional crops across the EU.Critics, however, accused Defra (Department of Environment, Food and Rural Affairs) of pre-empting a decision by the court which could end up requiring GM-style regulation of GE crops.  The UK trial of the GE Camelina oilseed plants is being done in collaboration with a French team because the French government has barred release of genetically-altered plants in the environment for research.  Professor Johnathan (correct sp) Napier, who is leading the trial at Rothamsted research centre in Hertfordshire, said that unlike traditional methods, GE was important because it could cut the time it took to develop new breeds of plants from decades to months.

Tiny bug inflicts massive damage year after hail storm - A major hailstorm can inflict $1 billion or more in car and roof damage, as was the case in the Denver area on May 8, 2017, and in the Dallas–Fort Worth area several times over the past decade. Likewise, when hail pounds a wheat field, the immediate damage can be widespread and costly. But there’s an accessory to the hail that’s little known outside agricultural circles—one that can sock farmers with major trouble long after the storm has passed.  This partner is a minuscule creature, a mere 0.008 inches (0.2 millimeters) long, called the wheat curl mite. It’s an unassuming critter that takes advantage of the conditions in a hail-ravaged wheat field to bide its time until the next year’s crop is planted. Then the mite goes to work by distributing the destructive wheat streak mosaic virus, which stunts and discolors the plants. Identified more than a century ago, wheat streak mosaic virus is a worldwide problem. In Kansas alone, the virus cost farmers at least $76 million in 2017.   On average, the virus knocks 2% off the annual economic value of wheat across the central Great Plains, according to the Kansas Department of Agriculture. In some years, U.S. wheat streak mosaic damage may exceed the direct damage wreaked by hail on all U.S. crops, which averaged $124 million per year for the period 2012–2016 according to the Insurance Information Institute. When a wheat field is decimated by hail, especially within about three weeks of harvest, the seeds on the ruined stalks often give rise shoots of “volunteer” wheat that spring up in the summer. Although volunteer wheat has no major economic value, it does provide what’s known as a “green bridge”—a botanic foothold on which the wheat curl mite can feed and position itself during the heat of summer (when the field would otherwise be harvested and barren). From there, it spreads the virus into the next winter’s crop during autumn. Once established, wheat curl mites tend to disperse in the direction of prevailing winds, sometimes traveling a few miles away from a hail swath during their life cycle and thus extending the range of potential crop damage. This damage typically doesn’t become evident till the next spring, almost a year after direct hail damage.

Pine-killing southern beetle may be more deadly in north  — A beetle that has killed millions of acres of pines in southern forests is munching its way north, and new research suggests its tree-killing prowess could be magnified in cooler climes. Once unheard-of north of Delaware, southern pine beetles have been steadily expanding their range as the climate warms. Efforts are underway to quell a large outbreak in Long Island's pine barrens and monitoring traps have caught beetles as far north as New England. The insect could reach Nova Scotia by 2020 and cover forests from the upper Midwest to Maine by 2080, according to a Columbia University study published in the journal Nature Climate Change in August.Now there's more bad news in a new study from Dartmouth College: Cooler fall and winter temperatures in this new range increase the beetle's destructive potential. That's because larvae developing in the fall are put on hold as pupae when the temperature drops below 50 degrees Fahrenheit (10 degrees Celsius), to emerge as adults for a mass killing spree in springtime. The researchers found that in warmer regions, beetles mature at various times rather than all at once. "The way they kill trees is by attacking in large numbers, like a pack of wolves killing a moose," said Matthew Ayres, co-author of the study published last month in the journal Oecologia. "When they all attack at once, they draw down the tree's defenses — bleed it out — and the tree is toast."

Africa's baobab trees can live for more than 1,000 years, but many of the oldest and largest are dying -- The oldest and biggest angiosperm trees in the world, the African baobabs, are dying or already dead, an international team of scientists has found. The scientists added that the spate of deaths, described in the journal Nature Plants, might be the result of a changing climate – though they say that research needs to be done to confirm or deny that idea. The baobab known as Adansonia digitata L. is an icon of the African savannah. With wide, cylindrical trunks and gnarled branches, the trees appear to have been yanked out of the ground, flipped over and shoved back in, roots in the air. These giant plants are the largest and longest-living angiosperm (or flowering) trees today, with some individuals surviving for close to 2,000 years. Baobab trees have been nicknamed the “tree of life,” but they could just as well be called the giving tree: The leaves and fruit of many species also provide nutritious food, their bark can be made into rope and cloth, their wood can be harvested for hunting and fishing tools, the seeds hold an oil that’s used in cosmetics, and their broad, occasionally hollowed-out trunks can be used for shelter. “Baobabs are particular trees, with unique architectures, remarkable regeneration properties and high cultural and historic value,” lead author Adrian Patrut, a chemist at Babes-Bolyai University in Romania, said in an email. In addition, “they play an important role in carbon sequestration and create a distinct microenvironment. Baobabs are the oldest and largest angiosperms and the impact of their loss would have profound consequences.” 

Africa’s Iconic Baobabs Are Dying, Including World's Oldest Flowering Tree --When researchers set out to investigate the structure, growth and age of Africa's iconic baobab trees—the largest and longest-living flowering trees in the world—they received a devastating surprise. Many of the oldest, largest baobabs were dead or dying. The final study, published in Nature Plants Monday, reported that nine of the 13 oldest and five of the six largest African baobabs had entirely or partly died during the research period from 2005 to 2017. The oldest was 2,500 years old."It is definitely shocking and dramatic to experience during our lifetime the demise of so many trees with millennial ages," study co-author Adrian Patrut of the Babes-Bolyai University in Romania told AFP. The researchers studied every known large African baobab in Africa, on islands off its coast or outside Africa for a total of more than 60 trees. All of the dying trees were found in the southern African countries of Zimbabwe, Botswana, South Africa, Zambia and Namibia.Baobabs survive the dry Savannah by storing water in their large trunks, but researchers thought conditions were now getting too dry even for them.The cause of the trees' deaths was unknown, but was not attributed to disease, and the deaths of the oldest trees coincided with an uptick in mortality in other mature baobabs. The researchers therefore hypothesized that the impact of climate change on Southern Africa was to blame. "We suspect this is associated with increased temperature and drought," Patrut told BBC News.The report also memorialized the oldest, largest and most famous trees to die.The oldest, Panke, was a sacred tree in Matabeleland North, Zimbabwe. At around 2,500 years old, it was not only the oldest baobab, but the oldest angiosperm, or flowering tree, in the world.

'Australia doesn’t realise’: worsening drought pushes farmers to the brink - In the south-west corner of NSW’s Liverpool plains, in an area called Bundella, farmer Megan Kuhn runs beef cattle and merino sheep with her husband, Martin.They have 400 breeding cows that will calve in six weeks. Shortly, 89 of those cows will leave the property, sold to an abattoir because the cost of feeding the animals during drought has become too great. “There is nowhere to send them to pasture so they are going to be slaughtered,” Kuhn says.“We’re killing a cow and a calf at this late stage of pregnancy. The drought is so widespread there’s just no options left for stock producers to put them anywhere.  Further north, about 20 km from Mullaley, Margaret Fleck is seeing conditions on her property she has not encountered in the 20 years she has been there.She and her partner Paul run beef cattle, producing grass-fed beef for the domestic and export markets. December was the end of their seventh calendar year of below-average rainfall. In the 12 months to May this year, they have had just over 50% of their annual average rainfall.“It’s terrible on the back of seven below-average rainfall years in a row,” Fleck says.“We can’t get over a string of really hot summers. With the sheer consistency of extreme temperatures, the rate of evaporating is so high. We don’t have any surface water left on our property.”  “We spoke to the owners who had this property from 1954 to 1989. We asked what the creek was like in their 34 years. They said it had never dried up,” Fleck says. During the past 14 months, the Bureau of Meteorology has recorded below-average rainfall across New South Wales, central Queensland, the north-west of Victoria and into South Australia.NSW has been the hardest hit in 2018. With the exception of the north and south coasts, most of the state has recorded the lowest rainfall in a five-month period since 1900.Soil moisture levels are below average across much of Australia and in its latest winter outlook, the bureau is forecasting warmer and drier than average conditions across large parts of the country. Communities in NSW say people are struggling and the rest of the country is not aware of the extent of the troubles in parts of that state.

 Dust Rising -- Asthma in Imperial County is rampant. More children are admitted to the emergency room here for asthma-related cases than anywhere else in the state; almost 1 in 5 children suffer from the condition. There’s a long list of reasons why the county is home to such staggering rates of asthma: the fine layer of dust that coats nearly every surface; the gentle mist of pesticide sprayed across acres of produce; the black towers of soot emanating from crop burns; emissions from cars stalled at the border; and fumes from the Mexican maquiladoras wafting over the border. Kicked up by the strong desert winds, microscopic particles from each of these sources fill the air. There’s another source of pollution in the valley that poses a major risk, though it’s only starting to make itself felt: the Salton Sea. An enormous blue void at the north end of the Imperial Valley, the Salton Sea once attracted more visitors than Yosemite. But California’s largest lake is now mostly forgotten, and those who know of it don’t have flattering things to say: they’ll tell you about vast beaches where the sand is made of fish bones; about eerie, half-abandoned Mad Max-esque communities; and most of all, its noxious emissions. In 2012, the Salton Sea burped up a cloud of sulfurous odor so thick that residents in Los Angeles 150 miles away were hit by the nauseating smell of rotten eggs.  Terminal lakes like the Salton Sea, bodies of water that have no natural drain, are particularly vulnerable. Iran’s Lake Urmia — once the largest body of water in the Middle East — has shrunk by almost 90 percent over the last 30 years; Africa’s Lake Chad is also 90 percent smaller than it was in the 1960s; and Kazakhstan’s Aral Sea, once the fourth largest salt lake in the world, has practically been wiped off the map. When these lakes evaporate, they can upend industries and erase surrounding communities. For residents near the Salton Sea, the most pressing problem is the threat of toxic dust: up to 100 tons of dust could blow off the playa daily. If it isn’t captured, that dust will push the area’s asthma crisis from bad to dire. The Salton Sea is a dust bomb that has already begun going off.

Delhi’s air pollution is now so bad it is literally off the chart - Smog more toxic than can be measured by monitoring devices has blanketed the Indian capital this week, months before the start of Delhi’s traditional “pollution season”. A thick haze was visible across the city from Tuesday and some government pollution monitors have recorded concentrations of 999 – the highest they can measure – as dust storms kicked up in nearby Rajasthan state blanketed the region. Though the billowing clouds of dust and sand were blamed for the immediate spike in pollution levels, the sight of dense smog engulfing Delhi months before winter has underscored a growing awareness that harmful air is a year-round problem for the city. Air quality in Delhi usually begins to plummet in October when slower winds and cooler temperatures trap pollutants closer to the ground. But data published by the government’s Central Pollution Control Board shows that air quality has been classed “very unhealthy” – with index scores as high as 270 – every April and May for the past three years, or since authorities began collecting and publishing the statistics. Just a single day in April or May of the past three years had air classified as “good” – 12 April this year, when levels fell to 99.  Authorities have ordered a halt to all construction in the capital and its satellite cities until the weekend to reduce pollution levels, and doctors have advised people to stay indoors as much as possible. Meteorologists said the presence of a layer of dust across the city is also trapping heat, sending temperatures soaring in excess of 40C. Concern about north India’s air quality crisis is usually most acute after the Hindu festival of Diwali in autumn, when hundreds of thousands of Indians release firecrackers that combine with existing pollutants to form a poisonous haze over the region that persists for months until temperatures cool. Public health experts said pollution levels on some days in November last year were the equivalent of smoking 50 cigarettes per day. 

Large Wildfires Scorch Forests in Drought-Stricken Southwest - A number of wildfires are currently ablaze in the Western U.S. as severe drought envelops much of the region.The 416 Fire in Colorado, which has scorched 27,420 acres since it broke out on June 1, has forced the evacuation of more than 2,000 homes and the closure of all 1.8 million acres of the San Juan National Forest.The fire is currently 15 percent contained and no structures have been destroyed, the Rocky Mountain Incident Management Team said.The National Wildfire Coordinating Group noted that the blaze has been fueled by abnormally dry conditions and prolonged drought.Large fires in the West are also burning the Apache-Sitgreaves National Forest in Arizona, the Gila National Forest in New Mexico, Manti-Lasal National Forest in Utah and Medicone Bow-Routt National Forest in Wyoming, the National Interagency Fire Center reported Tuesday.New Mexico's Santa Fe National Forest, one of the state's most popular recreation sites, has been closed since June 1 due to fire danger."Under current conditions, one abandoned campfire could cause a catastrophic wildfire, and we are not willing to take that chance with the natural and cultural resources under our protection and care," Santa Fe National Forest Supervisor James Melonas said in a statement.The Buffalo Fire, a new fire in Colorado that erupted Tuesday, is edging dangerously close to a ski resort town and has already prompted the evacuation of more than 1,300 homes, the Associated Press reported. Western states experienced a winter with very little precipitation and a hot spring, which poses a threat come fire season. National Interagency Fire Center forecasters predicted an "above normal" fire potential this June especially in the drought-ridden Four Corners region, where Colorado, New Mexico, Arizona and Utah meet—and an area experiencing "extreme" to "exceptional" drought.

How Fuel Breaks Actually Fuel Wildfires (and Spread Invasive Weeds) -- This past winter, the Bureau of Land Management (BLM) began preparing two Environmental Impact Statements to review the environmental consequences of creating a region-wide series of “fuel breaks” that will add thousands of miles of new linear pathways across the Great Basin portion of Nevada, Idaho, Oregon and Utah.The goal of fuel breaks is to reduce large wildfires in sagebrush habitat.Unfortunately, the creation of a massive network of linear pathways in the sagebrush steppe likely will not preclude large fires and will have serious impacts on sagebrush ecosystems.Indeed, the BLM has admitted as much in a recent report where it concluded; “Despite the extensive use of fuel breaks in sagebrush landscapes, “no specific research within the sagebrush ecosystem has been conducted to evaluate their effectiveness”  The causes of large wildfires have to do with two factors that are off-limits for the BLM to consider.One is climate change which the Trump administration denies is real. Yet there is abundant evidence that large wildfires are a direct consequence of warm, dry conditions. The second factor leading to greater wildfire occurrence is expansion of cheatgrass as a result of livestock grazing. Livestock destroy the biocrusts that cover undisturbed soils aiding cheatgrass germination.  The elimination of native vegetation and the disturbance created by fuel breaks tend to enhance the spread of exotic weeds. One study in California found a 40% increase in exotic annuals along fuel breaks.

12 Northern California wildfires sparked by PG&E power lines, investigators say –- At least a dozen wildfires that ripped through Northern California last October, including the deadly Atlas and Nuns fires in the North Bay, were caused by Pacific Gas and Electric Co. power lines, state officials said Friday.The findings by the California Department of Forestry and Fire Protection are the first to lay out an official source of ignition for any of the Wine Country blazes, which killed 41 people and destroyed nearly 9,000 homes in a wind-driven inferno. The most destructive of the burns, the Tubbs Firethat hit Santa Rosa, remains under investigation.The completed investigations show that downed electric lines or trees and branches coming into contact with power equipment sparked eight fires in Sonoma and Napa counties, which resulted in eight fatalities, as well as Mendocino County’s Redwood Fire, which left nine dead. Three smaller blazes, in Lake, Humboldt and Butte counties, were also ignited by PG&E equipment, according to Cal Fire. The finding of responsibility “is great news,” said Clifford Rainey, a glass sculptor who lost his life’s work in Napa County’s Atlas Fire and is among many victims suing PG&E for damages. “It’s definitely worth a glass of wine tonight.” In eight of the 12 fires, Cal Fire officials said PG&E violated state law, though investigators did not specify which laws were broken.

Pacific Gas & Electric May Face Criminal Charges After Probe of Deadly Wildfires - Late Friday, California confirmed what many across the state’s devastated wine country had suspected for months: Equipment owned by utility giant PG&E Corp. ignited some of the deadliest and most destructive wildfires that tore through their homes in October.The most unexpected and crucial part of the findings, though, was at the very bottom of California’s end-of-day statement: The state had found evidence of alleged violations of law by PG&E in connection with eight of the blazes. The California Department of Forestry and Fire Protection said in its Friday statement that PG&E equipment caused at least 12 of the wine country blazes, including the Redwood fire that killed nine; Atlas fire that burned 51,624 acres and claimed the lives of six; and Nuns fire that killed at least two. The agency is still investigating the cause of the Tubbs fire, which became the most destructive in state history and led to 22 casualties. Many of the 12 blazes were caused by tree limbs hitting PG&E’s power lines. In one instance, a fire was ignited by a downed power line after PG&E attempted to re-energize it, the fire department said. For its part, PG&E said in a statement that years of drought, extreme heat and millions of dead trees had created “a new normal” in California, contributing to more intense wildfires. In a Friday interview, California state Senator Jerry Hill challenged the idea that global warming was to blame for the fires, saying “climate change and the new normal don’t ignite fires.”

Crisis on the High Plains: The Loss of America’s Largest Aquifer – the Ogallala - The grain-growing region in the High Plains of America—known as America’s breadbasket—relies entirely on the Ogallala Aquifer. But long term unsustainable use of the aquifer is forcing states in the region to face the prospect of a regional economic disaster. As the High Plains states reach the verge of a major crisis, the states have taken different approaches to conservation with varying results. The Ogallala Aquifer supports an astounding one-sixth of the world’s grain produce, and it has long been an essential component of American agriculture. The High Plains region—where the aquifer lies—relies on the aquifer for residential and industrial uses, but the aquifer’s water is used primarily for agricultural irrigation. The agricultural demands for Ogallala water in the region are immense, with the aquifer ultimately being responsible for thirty percent of all irrigation in the United States. The Ogallala Aquifer has long been unable to keep up with these agricultural demands, as the aquifer recharges far slower than water is withdrawn.  Aside from the obvious agricultural ramifications from the Ogallala’s depletion, recent studies have shown that groundwater depletion also has a severe effect on freshwater ecosystems in the region. Each state has had to confront the issue in their own way, but the depletion of the aquifer has become severe enough to warrant the attention of the federal government as well.  The federal government has set up financial and technical assistance for farmers who commit to conservation and is funding large-scale pipeline projects to bring in water to the more desperate areas of the High Plains.

Turkey Uses Ilisu Dam to Play Politics with Iraq’s Water Supply -- Turkey’s decision to start filling the Ilisu dam earlier than promised, took Iraq by surprise. Iraq is currently suffering from a water crisis, as drought and the dams built by Turkey slow the flow of the Tigris to a trickle.  Iraq’s reliance on the Tigris-Euphrates Basin is due to the low volume of rainfall, with the country averaging 216mm per year, combined with the absence of alternative water sources. Turkey’s decision to hold back water to fill up the Ilisu dam has aroused fears of severe water shortages, which would have wide ranging implications, especially for food production. Iraqi officials claim that water reserves are large enough to supply drinking water, but have admitted that they can only supply half of the water needed for irrigation over the summer. With reduced water flow in the Tigris, Iraqi farmers may have little option but to draw water from already strained aquifers.Demand for water continues to increase as Iraq’s population grows. The Iraqi population is expected to increase from 37 million in 2016 to 44 million by 2030, putting further strain on already scarce water resources. Water has become an increasingly contentious issue between Iraq, Turkey and the Kurds. In the past, the filling of Turkish dams has reduced water flow in Iraq by 80 per cent. Increased tensions over water resources have led to military confrontations on two separate occasions. The first was in 1975, when the construction of the Keban dam in Turkey and the Tahba dam in Syria, combined with a drought, resulted in severe water shortages in Iraq. The second, in 1990, occurred when Turkey filled the Ataturk dam reservoir by holding back water from the Euphrates, reducing the water flow entering Iraq and Syria by 75 per cent. In retaliation, Iraq threatened to bomb the dam and Turkey responded by threatening to stop the water flow to Iraq and Syria completely.

Trump’s move to redefine water rule threatens wetlands banks - A private firm is making big money selling promises about some gator-infested Florida swampland. The Panther Island Mitigation Bank isn’t another land boondoggle, but part of a federal system designed to restore wetlands across the United States. Panther Island’s owners preserved one of the nation’s last stands of virgin bald cypress, 4 square miles (10 square kilometers) on the western edge of the Everglades where they cleared away invasive plants and welcomed back wood storks, otters and other native flora and fauna. Banks like this sell “wetlands mitigation credits” to developers for up to $300,000 apiece, offsetting the destruction of marshes by construction projects elsewhere. It’s a billion-dollar industry that has slowed the loss of U.S. wetlands, half of which are already gone. This uniquely American mix of conservation and capitalism has been supported by every president since George H.W. Bush pledged a goal of “no net loss” of wetlands, growing a market for mitigation credits from about 40 banks in the early 1990s to nearly 1,500 today. Investors include Chevron and Wall Street firms, working alongside the Audubon Society and other environmental groups. Now the market is at risk. Administrator Scott Pruitt’s Environmental Protection Agency has completed a proposal for implementing President Donald Trump’s executive order to replace the Waters of the United States rule, or WOTUS, with a much more limited definition of what constitutes a protected federal waterway. The EPA said the proposal now faces months of reviews before being released for public comment, but experts in mitigation are already alarmed. “It would destroy wetland mitigation banking at the federal level,” said Royal Gardner, a professor at Florida’s Stetson University College of Law. 

USC researchers find some shades of LED lamps threaten wildlife --A new generation of outdoor lights spreading across landscapes require greater scrutiny to reduce harm to wildlife, says a USC-led research group that developed a new tool to help fix the problem. The team of biologists surveyed select species around the world to determine how the hues of modern light-emitting diode (LED) lamps affect wildlife. They found that blues and whites are worst while yellow, amber and green are more benign. Some creatures, including sea turtles and insects, are especially vulnerable.  The findings, which include the first publicly available database to help developers, designers, and policymakers choose wildlife-friendly lighting colors, appear today in the Journal of Experimental Zoology Part A: Ecological and Integrative Physiology. Big cities and industrial sites so illuminate night sky now that much of Earth resembles a big, glowing ball. Scientists have spent years studying how light brightness and direction affects wildlife, including migration and attraction, predator-prey relationships and circadian rhythms. The USC team availed that existing ecological data and broke new ground by examining how a range of commercially available LED lights impact species.  LED lights are expected to comprise 69 percent of the global market by 2020, compared to just 9 percent in 2011. They are popular because they have many uses, conserve energy and last longer than other lamps.

Toxic Leftovers From Giant Mine Found in Snowshoe Hares - Even though it was closed decades ago, the Giant Mine on the outskirts of Yellowknife has left a long environmental legacy.The gold extraction process, which required roasting ores at extremely high temperatures, created a toxic byproduct called arsenic trioxide. For about 55 years (1948-2004), arsenic and other toxic elements were released into the environment, causing widespread contamination of the terrestrial and aquatic ecosystems around Yellowknife.  About 237,000 tonnes of arsenic trioxide dust is buried underground, and several nearby lakes show arsenic contamination.  Elevated arsenic levels have also been reported in soil, vegetation and fish around Yellowknife, but we knew little about how it has affected the health of the small mammals that live in the area.  Many of these fur-bearing animals are still being trapped for their pelts and for food, so knowing their arsenic levels is also important for human health. Small mammals can serve as sentinels for environmental contamination. Snowshoe hares (Lepus americanus) live in a relatively small area and eat soil, so they are likely to accumulate higher levels of arsenic and other trace metals from the environment.  Exposure to elevated levels of arsenic can cause damage to the liver and other organs. And cadmium, a toxic metal and another byproduct of the gold extraction process, can replace calcium in the bones, leading to bone deformities and weakness. In humans, chronic arsenic exposure (usually from water) can lead to changes in skin colour, skin growths and cancers of the skin, lung and internal organs.

One-Fifth of Britain’s Mammals Could Be Extinct in 10 Years -- One-fifth of UK mammals could go extinct within a decade, according to the most comprehensive report in 20 years released Wednesday by The Mammal Society and Natural England. The report found that the Scottish wildcat, black rat and greater mouse-eared bat were the most endangered species left, The Guardian reported. Next came the red squirrel, water vole, beaver and grey long-eared bat, according to BBC News. The hedgehog, hazel dormouse, Orkney vole, barbastelle bat and serotine bat were all listed as vulnerable, BBC News further reported."We have almost been sleepwalking," The Mammal Society Chair and University of Sussex Environmental Biology Professor Fiona Mathews told The Guardian. "This is happening on our own doorstep, so it falls upon all of us to try and do what we can to ensure that our threatened species do not go the way of the lynx, wolf and elk and disappear from our shores forever," she said.The largest threats faced by mammal species were habitat destruction due to development and agriculture, as well as diseases and invasive species, Mathews told The Guardian. According to Mathews, the UK is one of the most densely populated countries in Europe and one of the most wildlife poor countries in the world. The report assessed the more than 1.5 million individual records for animals belonging to the UK's 58 terrestrial mammal species and considered their range, population size, trends and future prospects. Not all mammals were suffering. Populations of otter, pine marten, polecat, badger, beaver, wild boar, greater and lesser horseshoe bat and red and roe deer had all increased since the last survey in 1995, BBC News reported.

Does the US have a pet tiger problem? - BBC - Taj was a four-month-old tiger cub when purchased at a Texas truck stop by the driver of an 18-wheeler lorry. But after Taj began tearing up the truck's cab, the driver contacted Austin Zoo to get the animal off his hands. The zoo now looks after the fully grown 17-year-old Bengal tiger male. Taj is one of as many as 7,000 tigers living in the US either in zoos or privately owned, according to some estimates. That's nearly double the estimated 3,890 tigers still prowling in the wild around the world. Many of America's tigers could be in people's backyards as pets, and often aren't registered, especially in states like Texas. No-one really knows just how many tigers there are out there. At the heart of this surprising tiger turnout is the very American notion of a God-given right to do one's own thing, including owning a pet - no matter how exotic - being an individual liberty that the state should not mess with. "A man came up to me and called me a communist," said Ben Callison, a former animal sanctuary director and animal welfare activist, describing the reaction after he addressed a US Department of Agriculture conference on the problems with exotic pets. "People say you are trying to take away their rights to own what they want, and do what they want."

ORSANCO Moves to Eliminate Its Water Quality Standards for The Ohio River - A multi-state commission charged with protecting the Ohio River voted Thursday to move forward with an industry-backed proposal to eliminate its water pollution control standards for industrial and municipal wastewater discharges into the river.  The Ohio River Valley Water Sanitation Commission, known as ORSANCO, is supposed to ensure that the river is safe for drinking, fishing and recreation. Its commissioners from the federal government and eight states along the Ohio voted 14-to-6 at a board meeting in Louisville, KY to advance a proposal that would eliminate some pollution control standards. ORSANCO Director Richard Harrison said many of those protections are already addressed by the states, the U.S. Environmental Protection Agency, and the Clean Water Act. “That has been the focus of the commission, to make sure our program in not redundant, that it’s the best use of our resources,” he said. But according to one ORSANCO report, there are 188 instances where state and federal rules are not redundant to ORSANCO’s. Gail Hesse from the National Wildlife Federation said the commission should continue to do its job and enforce its standards.“The vote is a shameful retreat for the officials charged with the environmental stewardship of the Ohio River,” she said.In addition to providing drinking water to 5 million people, the Ohio River is known as a “working river” because of the hundreds of industrial and wastewater treatment plants along its 981 mile route. Board members from Ohio and West Virginia voted for moving forward with eliminating the standards known as “Option 2.” But the Pennsylvania Department of Environmental Protection representative voted “no.”

Flooding from high tides has doubled in the US in just 30 years -- The frequency of coastal flooding from high tides has doubled in the US in just 30 years, with communities near shorelines warned that the next two years are set to be punctuated by particularly severe inundations, as ocean levels continue to rise amid serious global climate change concerns. Last year there was an average of six flooding days per area across 98 coastal areas monitored by the National Oceanic and Atmospheric Administration (Noaa) – an all-time record. More than a quarter of these locations tied or broke their records for high tide flood days, the federal agency states in a new report.  Known as “sunny day flooding”, these events swamp streets and homes with water simply from the incoming tide, without the aid of a storm. Noaa said that in 2017 areas across the US north-east and Gulf of Mexico were worst hit, with Boston, Massachusetts, and Atlantic City, New Jersey, both experiencing 22 days of flooding, while Galveston, in Texas, was soaked on 18 different days. Noaa warned that cyclical climatic conditions during 2018 and 2019 “may result in higher than expected flood frequencies” in around half of the coastal sites it measures.  The longer-term trend is even more certain, Noaa said, with melting glaciers, thermal expansion of sea water and altered ocean currents pushing the sea level steadily higher and causing further floods.  “Breaking of annual flood records is to be expected next year and for decades to come as sea levels rise, and likely at an accelerated rate,” the report states. “Though year-to-year and regional variability exists, the underlying trend is quite clear: due to sea level rise, the national average frequency of high tide flooding is double what it was 30 years ago.”

Why chronic floods are coming to New Jersey - Sea level rise will have a profound impact on coastal infrastructure because it’s often built on cheaper, low-elevation land. As sea level rises, the systems that support the densely populated, urban areas — power generation facilities, wastewater treatment plants, and miles of transportation networks — will be at greater risk of flooding.Significant portions of the US’s eastern coast are also sinking, due to an ancient, melting glacial ice sheet and the subsidence of its bedrock.The video above details the impacts an accelerated rising sea level will have on the greater New York City metropolitan region.  Rutgers University climate scientist Robert Kopp said that “with a higher sea level, it requires less of a storm to produce the same amount of flooding. And the same storm will produce more flooding.” The impact of increased floods will fall on residents who rely on low-lying infrastructure on a day-to-day basis. “Imagine if you were on a train and you had to wait for high tide to go out for the train to go through,” said Robert Freudenberg of the Regional Plan Association. “We’re facing an impending crisis of shutdown because of this connective tissue in our region in our infrastructure.”

Florida Lifeguards Treat More Than 600 People For Jellyfish Stings in Two Days - More than 600 people were treated over the weekend for jellyfish stings received at beaches along Florida's central Atlantic coast. On Saturday, Volusia County lifeguards treated 107 people with jellyfish stings, according to the Associated Press. That number doubled on Sunday to 523, bringing the total to 630.  Purple flags flew along county beaches on Sunday, indicating the presence of dangerous marine life, Volusia County Beach Safety spokeswoman Liz Driskell told reporters.  If you are stung by a jellyfish, the University of Florida Health recommends getting immediate medical attention.

The Eastern Pacific Just Saw Its Second Major Hurricane in Less Than a Week -- After a sluggish start to eastern Pacific hurricane season, the basin is making up for lost time. Hurricane Bud is the second of back-to-back major hurricanes to form in less than a week. The Category 3 storm is currently churning toward Baja California, though it’s thankfully forecast to weaken before likely landfall this weekend.As of 3 a.m. local time this morning, Bud was still picking up steam roughly 235 miles south of Manzanillo, Mexico. The National Hurricane Center (NHC) put Bud’s winds at 115 mph, making it a Category 3 storm. That’s the threshold for classifying storms as major hurricanes. Meteorologist Ryan Maue tweeted a more recent satellite image with data indicating Bud had reached Category 4 strength with winds around 132 mph.Either way, it’s quite a difference from how the storm looked yesterday. At 4 a.m. local time on Sunday, Bud had winds of just 50 mph, making it a moderate tropical storm . But just as Aletta before it, Bud underwent rapid intensification thanks to warm waters and low wind shear. Rapid intensification is a term used when a storm’s winds increase 65 mph in less than 24 hours. The outer bands of Bud’s winds could reach Mexico, prompting the NHC to issue tropical storm watches from Manzanillo north to the Puerto Vallarta area. The agency also forecast that up to 10 inches of rain could fall in isolated locations on Tuesday and “cause life-threatening flash floods and mud slides.” Bud follows Hurricane Aletta last week. That storm whipped up into a Category 4 hurricane on Friday, thankfully posing no threat to land. Aletta has since been downgraded to a tropical storm and is meandering westward into the Pacific as it weakens.

Old, Fat Fish Have the Most Offspring, Sustainability Study Finds - It might seem smart to eat the big fish and throw the little ones back. But a recent study in the journal Science says just the opposite. Big fish are the ones to throw back, especially if they're female. That's because bigger females have disproportionately more babies than their smaller counterparts.Biologists from Monash University in Australia and the Smithsonian Tropical Research Institute in Panama came to this conclusion after comparing size and fecundity across 342 fish species. In 95 percent of the species, larger mothers produced far more offspring, pound for pound, than smaller mothers. The authors point to Atlantic cod, for instance, where one 30-kilogram (approximately 66-pound) female can lay more eggs per spawning event than 28 smaller, 2-kilogram females. Scientists already knew this for some species, "but we didn't know it was so widespread," said ecologist Diego Barneche of the University of Sydney, who co-authored the study. Until recently, it was widely believed that for most fish, fecundity scaled linearly with size, meaning that 15 2-kilogram cod could lay the same number of eggs as one 30-kilogram cod. But this assumption is not only false, it may also severely underestimate the contributions of larger moms.

Plastic Shreds, Rubber Bands and Balloon Pieces Found in Thai Turtle -- Plastic waste is being blamed for the death of a green turtle found on the eastern province of Chanthaburi in Thailand.The turtle washed up on the beach on June 4, Weerapong Laovechprasit, a veterinarian at the Eastern Marine and Coastal Resource Research and Development Centre told AFP.X-rays on the reptile revealed a blockage in its stomach. A team of vets tried to save the turtle and feed it intravenously, but it died two days later, AFP reported.A necropsy on the turtle uncovered plastic shreds from fishing gear, rubber bands and other marine debris clogged in its stomach.ReReef on Instagram: “Another victim of marine plastic. A juvenile Green Turtle found sick near Laem Chabang, Chonburi on June 4th. A team of Vet tried their…”"It was feeling weak and couldn't swim," Weerapong told AFP. "The main cause of death is the sea trash." The discovery comes not long after a pilot whale died in southern Thailand after swallowing 17 pounds of plastic waste, including 80 plastic bags.

What’s Happening to the North Atlantic Right Whale Is Just Plain Wrong - Imagine if safari-goers in Africa came upon an elephant trudging through the brush covered in a tangle of ropes and netting. What if, on closer inspection, they found that the animal's mouth was blocked, preventing it from eating, or that lengths of rope had coiled around and cut into its legs, making every stride a battle? Imagine if the last thing those tourists saw was the elephant disappearing into the forest, dragging a veritable ball and chain of man-made debris behind it.Unfortunately, this hypothetical scenario comes pretty close to the actual, real-life nightmare suffered on a daily basis by a different creature, the North Atlantic right whale, in its primary habitat off the east coast of the U.S. and Canada."It's a horrific animal welfare issue, but because it's out there in the ocean, we generally can't see it," saidFrancine Kershaw, a scientist with NRDC's Marine Mammal Protection Project.Fewer than 450 North Atlantic right whales remain on Earth, and of that tiny population, 83 percent bear scars from entanglements in fishing gear. Around half of those have been entangled more than once. All in all, entanglement is now the number one cause of death for this species, responsible for 85 percent of all deaths since 2010, which both the U.S. Fish and Wildlife Service and the International Union for Conservation of Nature classify as endangered. Over the past few decades, the North Atlantic right whale had been seeing slow but steady gains, thanks to international efforts to protect critical habitats, move shipping lanes away from the whales, and develop methods to monitor the whales' health. But the population peaked around 2010 and is now in decline. At least 17 of the animals died as a result of entanglements and boat strikes in 2017—nearly twice as many as had died in the previous five years combined.

These Scientists Say It's Too Late to Rid the World's Oceans of Plastic -- They traveled the globe for nine months, sailed across three oceans, and combed the beaches of some of the world's most idyllic islands — including Hawaii, Bermuda, and the Azores — looking for plastic.Their voyage complete, the experts and volunteers of the Swiss foundation Race for Water have delivered a damning verdict."We cannot rid the oceans of the plastics they contain," said foundation director Anne-Cécile Turner. Turner said that such an ocean cleanup would be "scientifically and financially unrealistic." "There are too many sources of pollution, and we don't possess the technology to rid the seas of all this plastic," she added."You often hear people talking about a so-called 'plastic continent,' but there's no such thing," said Kim Van Arkel, a young oceanographer who served as a scientific advisor on the expedition."It's more like a plastic soup, which is very difficult to detect because the particles are floating ten or so centimeters under the surface of the water," she explained.Race for Water's experts made over a dozen stops on land during their nine-month voyage, studying the environmental damage to various coastlines. In some major cities, including Valparaiso, Shanghai, or Rio de Janeiro, scientists spoke with locals about ocean conservation. On the small islands and archipelagos they visited, experts collected samples of plastics for analysis. "With the action of sun and salt, plastic disintegrates and becomes very hard to collect — even with tweezers," noted Van Arkel.

Why China has Canada spooked about the world's plastic waste crisis - Canada is trying to point the way out of a global plastic waste crunch partially of its own making. Whales are choking to death on plastic bags in garbage-filled foreign waterways. Giant patches of plastic garbage are growing even larger in the world’s oceans, while minuscule bits of it are starting to show up in Canadian waterways.And now, six months after China shut its doors to accepting roughly half of the world’s plastic waste, bales of Canadian recyclables are being diverted to landfills or shipped to other plastic-choked regions of Asia for disposal.“It’s piling up,” environmental scientist Tony Walker said.Walker, who teaches resource and environmental studies at Dalhousie University, is among a number of scientists, activists, industry leaders and politicians who are sounding the alarm about plastic waste in the world’s oceans. They estimate more than 8 million tonnes of plastic waste are being dumped into the world’s oceans each year, or one dump-truck load of the stuff every minute.At this rate, it’s expected that plastic will outweigh fish in the world’s oceans by 2050.The federal government estimates 8,000 tonnes of plastic entered Canadian waterways in 2010 alone, despite the country boasting better than 80 per cent coverage with its recycling programs. The problem has prompted Canada to seek public advice on how to deal with the problem at home, and to use its G7 presidency as an opportunity to call for bigger-picture solutions from its allies.

The rate of Antarctic melting has nearly tripled in the past five years -- The Antarctic ice sheet has lost more than 2,500 billion tonnes of ice in the past 25 years and nearly half of that has happened since 2012. An international team of polar scientists found that melting in Antarctica has jumped sharply from an average of 76 billion tonnes per year prior to 2012, to around 219 billion tonnes each year between 2012 and 2017.  That's adding 0.6 of a millimetre to sea levels each year. Antarctica stores enough water to raise global sea levels by 58 metres, and has contributed 7.6 millimetres since 1992, according to the research published in Nature today. The latest data is a continuation of previous assessments known as the Ice sheet Mass Balance Inter-comparison Exercise (IMBIE), which began in 2011 and tracks ice-sheet loss from 1992 onwards. IMBIE was established with the support of NASA and the European Space Agency, to monitor the changes in ice-sheet cover around the world. It uses combined satellite data to measure the Antarctic ice sheet's changing flow and volume. The increase in melting should act as a wake-up call, according to project leader Professor Andrew Shepherd from the University of Leeds. "The rapid increase in Antarctic ice loss is due to ocean melting of glaciers in the Amundsen Sea, and ice shelf collapse on the Antarctic Peninsula," he said in a statement. "These events and the sea-level rise they've triggered are an indicator of climate change and should be of concern for the governments we trust to protect our coastal cities and communities." 

Antarctic Ice Melt Has Tripled in Five Years - Ice melt in Antarctica has tripled in the last five years, according to the most comprehensive assessment of the state of South Pole ice to date, published in Nature Wednesday.The Ice Sheet Mass Balance Inter-comparison Exercise (IMBIE), as the assessment is called, involved 84 scientists, 44 international organizations and 24 satellite surveys and found that Antarctica had lost 219 billion tonnes of ice a year (approximately 241.41 billion U.S. tons) between 2012 and 2017, contributing 0.6 millimeters (approximately 0.02 inches) to global sea level rise, a Centre for Polar Observation and Modelling(CPOM) press release reported. Before 2012, ice loss held steady at 76 billion tonnes (approximately 83.78 billion U.S. tons) per year, for 0.2 millimeters (approximately 0.008 inches) of sea level rise."A three-fold increase now puts Antarctica in the frame as one of the largest contributors to sea-level rise," study co-leader and CPOM Director Professor Andrew Shepherd of Leeds University told BBC News."The last time we looked at the polar ice sheets, Greenland was the dominant contributor. That's no longer the case," he said. The largest amount of ice loss came from West Antarctica, especially its Pine Island and Thwaites Glaciers. Ice sheet collapse on the Antarctic Peninsula and slow growth of the East Antarctic ice sheet also contributed. The IMBIE assessment wasn't the only study published Wednesday with alarming news about the impacts ofclimate change on Antarctica.A University of Waterloo study published in Science Advances discovered a mechanism that could further accelerate Antarctic ice loss. The two year study found that rising ocean and air temperatures are both destabilizing ice shelves from below and also causing them to crack on top, which ups the chance they might break off, according to a University of Waterloo press release published by Phys.org.

 Antarctic ice loss has tripled in a decade. If that continues, we are in serious trouble. - Antarctica’s ice sheet is melting at a rapidly increasing rate, now pouring more than 200 billion tons of ice into the ocean annually and raising sea levels a half-millimeter every year, a team of 80 scientists reported Wednesday.The melt rate has tripled in the past decade, the study concluded. If the acceleration continues, some of scientists’ worst fears about rising oceans could be realized, leaving low-lying cities and communities with less time to prepare than they had hoped.The result also reinforces that nations have a short window — perhaps no more than a decade — to cut greenhouse-gas emissions if they hope to avert some of the worst consequences of climate change. Antarctica, the planet’s largest ice sheet, lost 219 billion tons of ice annually from 2012 through 2017 — approximately triple the 73 billion-ton melt rate of a decade ago, the scientists concluded. From 1992 through 1997, Antarctica lost 49 billion tons of ice annually. The study is the product of a large group of Antarctic experts who collectively reviewed 24 recent measurements of Antarctic ice loss, reconciling their differences to produce the most definitive figures yet on changes in Antarctica. Their results — known formally as the “Ice Sheet Mass Balance Inter-Comparison Exercise” (IMBIE) — were published Wednesday in the journal Nature. “We took all the estimates across all the different techniques, and we got this consensus,” said Isabella Velicogna, an Antarctic expert at the University of California at Irvine and one of the many authors from institutions in 14 countries. The lead authors was Andrew Shepherd of the University of Leeds in England and Erik Ivins of NASA’s Jet Propulsion Laboratory.

 The U.S. just observed its warmest 3-, 4-, and 5-year spans on record - The nation just witnessed its warmest May on record, but, it turns out, that month was only one small piece of a much longer and historically unprecedented stretch of warmth.Data from the National Oceanic and Atmospheric Administration indicate that the past 36-, 48-, and 60-month periods rank warmest on record for the Lower 48, in records that date to 1895.Because weather patterns vary somewhat at random, not every month during this unrivaled warm era set a record for warmth. April even ranked as the 12th-coldest on record as the jet stream plunged south for much of the month. But that brief, cool excursion was more than offset by the record-warm May.More often than not, months have been warmer than normal if not record-challenging. Averaging them, the warmth of the recent 3-, 4-, and 5-year periods has no match.Average temperature ranking for the Lower 48 states over the past 48 months. Dark red indicates warmest on record. Orange indicates much warmer than normal. (NOAA)This collection of months is a reflection of long-term climate warming, set in motion by rising concentrations of greenhouse gases in the atmosphere.The four warmest years on record (2015, 2017, 2016 and 2012) have occurred since 2012, and eight of the 10 warmest years have happened since 1998. Our nation has warmed at a rate of between 0.3 to 0.4 degrees per decade since the 1980s.  The average temperature for the period 2021 to 2050 is predicted to be between 2.5 and 2.9 degrees warmer than the period from 1976 to 2005. “Notably, a 2.5°F (1.4°C) increase makes the near-term average comparable to the hottest year in the historical record (2012),” the report said. “In other words, recent record-breaking years may be ‘common’ in the next few decades.”

El Nino may be back by winter - The U.S. Climate Prediction Center issued an El Nino watch across the equatorial Pacific Thursday, with the odds jumping to 64 percent chance that it will come from December to February. That’s up from a 49 percent chance in the agency’s monthly report in May.“Conditions are now favorable for the emergence of El Nino sometime in the next six months,” said Michelle L’Heureux, a forecaster with the Climate Prediction Center in College Park, Maryland. “The watch hinges on that word, ‘favorable.’ We’re just above the threshold that we want to see to issue a watch.”El Ninos, which occur when the ocean warms and the atmosphere reacts, can have profound impacts on the planet, and on financial markets. A big one in 2015 cut cocoa, tea and coffee harvests throughout Asia and Africa, helped choke Singapore with smoke from wildfires and ushered in the warmest winter on record in the contiguous U.S., stifling natural gas demand.El Nino winters are typically cooler and stormier across the U.S. South, rainy in California and warmer in the Pacific Northwest and northern Rocky Mountains. In South America, Brazil can get drought, while Argentina may get more rain. Some past El Ninos have brought massive mayhem, including fires, floods and droughts that killed at least 30,000 people globally and caused $100 billion in economic damage in 1997 and 1998. And in 1918 and 1919, the phenomenon may have contributed to a global flu pandemic, according to the Climate Program Office.Forecasters have seen signs the ocean’s surface is starting to warm, L’Heureux said, including a “slosh” of warm water across the basin -- technically called a down-welling Kelvin wave. “That’s a hint that things are warming up.”It’s not certain that El Nino will arrive. It requires the atmosphere above the Pacific to react to the warmer surface, which still hasn’t happened. “We say there’s about a 65 percent chance an El Nino will come for winter, but that’s a way to say there’s a 35 percent chance nothing will happen,” L’Heureux said. “It’s always good to reinforce that.”

CO2 Levels Break Another Record, Exceeding 411 Parts Per Million - Levels of carbon dioxide in the atmosphere exceeded 411 parts per million (ppm) in May, the highest monthly average ever recorded at the Mauna Loa Observatory in Hawaii, home to the world’s longest continuous CO2 record. In addition, scientists found that the rate of CO2 increase is accelerating, from an average 1.6 ppm per year in the 1980s and 1.5 ppm per year in the 1990s to 2.2 ppm per year during the last decade.“Many of us had hoped to see the rise of CO2 slowing by now, but sadly that isn’t the case,” said Ralph Keeling, director of the University of California San Diego’s Scripps CO2 Program, which maintains the Mauna Loa record with the National Oceanic and Atmospheric Administration. “It could still happen in the next decade or so if renewables replace enough fossil fuels.”Annual CO2 concentrations ebb and flow depending on the season. The lowest levels are generally recorded in late August or early September, when vegetation growth in the Northern Hemisphere is at its peak. The highest concentrations are generally measured in May, following winter months with little or no plant growth and just before the springtime boost in productivity.From 2016 to 2017, the global CO2 average increased by 2.3 ppm — the sixth consecutive year-over-year increase greater than 2 ppm, according to Scripps researchers. Prior to 2012, back-to-back increases of 2 ppm or greater had occurred only twice. “CO2 levels are continuing to grow at an all-time record rate because emissions from coal, oil, and natural gas are also at record high levels,” Pieter Tans, lead scientist of NOAA’s Global Greenhouse Gas Reference Network, said in a statement. “Today’s emissions will still be trapping heat in the atmosphere thousands of years from now.”

 Global Carbon Emissions on the Rise Again Due to Coal Comeback - Global carbon dioxide emissions from energy use increased 1.6 percent in 2017 following three years of stagnation, according to a new report from British oil giant BP.  The analysis, published Wednesday, further emphasizes worldwide failure to meet the goals struck by theParis agreement to avoid the worst impacts of climate change. Spencer Dale, the BP's chief economist, told the Guardian that the globe's emissions rise was "slightly worrying" and a "pretty big backward step.""It suggests to me we are not on a path to the Paris climate goals," he added.The report, called the BP Statistical Review of World Energy, also pointed out that the world's fuel mix has "strikingly" not changed in the last 20 years. "I am more worried by the lack of progress in the power sector over the past 20 years, than by the pickup in carbon emissions last year," Dale noted to the Guardian.

Judge Orders EPA to Comply With Clean Air Act in Ozone Lawsuit - A federal judge ordered the U.S. Environmental Protection Agency (EPA) to take action to fight air pollution entering New York and Connecticut from five other states, Reuters reported.The EPA had until August 2017 to complete plans for states that failed to adapt to new ozone air-quality standards set by the agency in 2008, but the plans never materialized, a Bloomberg News article published byThe Boston Globe reported.New York and Connecticut therefore sued the EPA in January to try and force it to create ozone plans for Michigan, Pennsylvania, Illinois, Virginia and West Virginia, since their emissions impact New York and Connecticut's air."The court's decision is a major win for New Yorkers and our public health, forcing the Trump EPA to follow the law and act to address smog pollution blowing into New York from upwind states," New York Attorney General Barbara Underwood told Bloomberg News.U.S. District Judge John Koeltl of Manhattan, who decided the case, said that New York and Connecticut had successfully proved they would be harmed by ozone coming from the five states in question. The two states, he said, were trying to "protect their citizens from the harmful effects of the high level of dangerous pollutants in their states caused by the pollutants coming from the defaulting states."Up to two-thirds of New Yorkers breathe unhealthy levels of smog, Underwood said in a statement reported by Reuters.The judge gave the EPA until December 6 to complete the smog-reduction plans."Given the prior violations of the statutory deadline by the EPA, it is a reasonable exercise of the court's equitable powers to require the EPA to do the minimal tasks it has agreed it can do to remedy its past violation of the statute," Koeltl wrote, according to Reuters.

GOP senators push Trump to submit pollution treaty amendment for Senate approval | TheHill - A group of Republicans senators is pushing President Trump to let them approve a treaty amendment meant to cut emissions of certain greenhouse gases. The Obama administration helped negotiate the Kigali amendment in 2016, meant to phase out hydrofluorocarbons (HFCs) around the world. HFCs are used mainly in refrigeration and air conditioning and are thousands of times more potent than carbon dioxide in warming the atmosphere. But Trump still hasn’t decided whether he supports it, in which case he would have to send it to the Senate for ratification.The 13 GOP senators, led by John Kennedy (La.) and Susan Collins (Maine), said the amendment would help domestic companies by leveling the playing field worldwide and giving them long-term certainty on what chemicals to use going forward. “By sending this amendment to the Senate, you will help secure America’s place as the global leader in several manufacturing industries, and in turn give American workers and advantage against their competitors in the international marketplace,” the senators wrote. They said the Kigali amendment would increase manufacturing jobs by 33,000 and boost exports by $4.8 billion. 

Last Exit to the Road Less Traveled -  J. D. Alt - “We now stand where two roads diverge. But unlike the roads in Robert Frost’s familiar poem, they are not equally fair. The road we have long been traveling is deceptively easy, a smooth superhighway on which we progress with great speed, but at its end lies disaster. The other fork of the road—the one less traveled by—offers our last, our only chance to reach a destination that assures the preservation of the earth. –Rachael Carson, Silent Spring What’s important to keep in mind in this quote from Rachael Carson’s 56-year-old warning shot over the bow of corporate civilization is that there are two roads being traveled now. We are no longer at a fork. The fork is half-a-century behind us. The goal is not to get the superhighway to somehow re-route itself and follow the path less traveled. It can’t. The superhighway will, and must, continue accelerating in its inevitable direction, simply because the greed and power of the people driving that highway will not allow them to alter course. But if there is any truth to Rachael Carson’s warning (and there seems to be growing evidence of it) the other path—the Road Less Traveled—will become the surviving branch of our evolutionary diagram. The present goal, therefore, should be to create as many exits from the superhighway as possible—and to encourage and enable as many people as possible to take those exits to explore and follow the other path. Visualizing how we all got on this superhighway in the first place will be helpful to seeing the exit ramps. To make this visualization, it isn’t necessary to speculate about an ancient, human pre-history. The process can be clearly seen and understood in a modern anecdote describing how one particular community of people joined the highway. I quote now from the book Fishing Lessons by Kevin M. Bailey*, where he retells author Robert Johannes’ story of fishermen in Palau, an island country in Micronesia. “Seafood was once abundant there. The Palauan fisherman never had trouble finding enough fish to satisfy their own and their village’s needs. The fisherman gave away the fish they didn’t eat to other villagers…. They lived in a state of ‘subsistence affluence.’  “The fishermen bought even bigger boats to catch the vanishing fish, but to do that they had to borrow money. They had to sell all their fish to pay off their loans. They stopped giving them away in the villages; instead they sold them to the outsiders and to other villagers. Now the people in the village had to work for the money to buy their food….“Pretty soon, there were not enough fish over the reefs for the fishermen to make payments on their loans, so the village sold their customary access rights to the fishing grounds. The people in the village began to eat imported fish in cans.” In a nutshell, that is the superhighway.

 Coral Reefs Lost to Kīlauea Eruption - When searing black lava from fissure 8 slid into the Pacific Ocean at Kapoho Bay on June 3, it had been five weeks since the collapse of the Pu'u 'Ō'ō crater, along the eastern rift zone of the Kīlauea volcano on Hawaii's Big Island. Toxic, acid-laden steam billowed high above boiling waves. Within 36 hours, the bay became paved over by lava, creating a new coastline almost a mile out and destroying shallow-water coral reefs and tidepools."It's been an absolute loss," said marine biologist Misaki Takabayashi of the University of Hawaii at Hilo. The area was popular with snorkelers for its easy access and intense beauty. Takabayashi described the view as floating above a colorful coral reef set against stark black basalt. "When people would go, they were in awe," she told me. The name Kapoho derives from the Hawaiian word poho, meaning a depression or hollow. Those dips in the seafloor created the Wai'ōpae Tidepools, part of which were protected by the state as a Marine Life Conservation District. Takabayashi's team had been studying those for 12 years. They are now gone as well.

Guatemala volcano: woman searches for 50 buried relatives -- Eufemia Garcia watched in horror as Guatemala’s Fuego volcano sent scalding ash and gas surging over her home a week ago, burying her children and grandson among 50 of her extended family. She has been searching for their remains ever since. At least 110 people died after Fuego erupted last Sunday, pushing fast-moving currents of dust, lava and gas down the volcano’s slopes in its greatest eruption in four decades, and close to 200 more are believed buried beneath the waste. Among them, Garcia believes, her nine siblings and their families as well as her mother, her own grown-up children and a grandson, making her family one of the hardest hit in a disaster that officials admit was made worse by delays in official warnings. The hamlet of San Miguel Los Lotes on the lush southern flank of the volcano was almost completely swallowed by several metres of ash, and formal search efforts have been suspended until the still-erupting volcano stabilises. Defying the suspension order, Garcia, 48, leaves the shelter she now sleeps in each morning, grabs a pickaxe or a shovel and heads into the danger zone, where groups of volunteers and other families dig down through ash hardened by rain and sun to try and reach their homes below.  “I’m not going to give up until I have a part of my family and am able to give them a Christian burial,” Garcia said. A fruit seller who lived for more than three decades with her extended family in Los Lotes, Garcia said she was out purchasing eggs when she saw the volcanic flow racing toward her village. She sprinted back to her family’s homes, where uncles and a brother, children and cousins were preparing for a lunch to celebrate a sister visiting from a nearby town. She shouted at them to flee but few heeded the warnings. Her 75-year-old mother decided she could not outrun the danger. “Let God’s will be done,” she said. Garcia ran to safety and looked back to see the burning flow rise to the roof of her house, submerging it completely with her son Jaime, 21, inside. She watched as the ash rushed toward her daughter Vilma Liliana, 23, who sprinted for safety barefoot but was unable to outpace its terrible path. Her other daughter Sheiny Rosmery, 28, stayed at home, her son in her arms. The visiting sister and her husband have not been found. With almost no family left, she does not know where she will live next, or what she will do to survive. But for now, she says, all that matters is the search. 

 Senate panel rejects Trump’s proposed Interior, EPA cuts | TheHill: A Senate subcommittee moved Tuesday to advance a $35.85 billion funding bill for the Interior Department and the Environmental Protection Agency (EPA), rejecting many of the proposed cuts that the Trump administration sought for both agencies. The total proposed funding level for fiscal 2019 is 26.7 percent higher than what President Trump asked for in his budget proposal earlier this year, which was $28.3 billion. It’s about $600 million higher than the funding Congress gave to the agencies for fiscal 2018.The proposal gained recent bipartisan support in the Senate Appropriations Committee’s subpanel with responsibility for Interior and EPA. Sen. Lisa Murkowski (R-Alaska), the subpanel’s chairwoman, said the bill rejects “unwarranted decreases proposed in the budget and [makes] investments in our highest priorities, especially infrastructure investment for the land management agencies, Indian country and wastewater and drinking water improvements.” Sen. Tom Udall (N.M.), the panel's top Democrat, said he was able to support the bill that he and Murkowski wrote because of the major budget agreement that Congress and Trump reached earlier this year. “That allowed us to provide targeted but important increases to programs funded by this bill and to reject the administration’s unjustifiable cuts to Indian education and healthcare and EPA’s bedrock environmental enforcement functions, as well as its proposal to eliminate the Land and Water Conservation Fund and hemorrhage many of our national cultural institutions.” The EPA’s funding would be $8.82 billion, the same as fiscal 2018. Trump had sought a cut to $6.1 billion. The National Park Service would get $3.2 billion, $513 million higher than what Trump wanted. Importantly, the bill has no policy provisions, except ones that were in previous legislation that made it through Congress. 

Pruitt Ordered Staff to Delay FOIA Requests, Top House Dem Says -- U.S. Environmental Protection Agency (EPA) administrator Scott Pruitt directed staff to delay or withhold the release of requested public records relating to his scandal-ridden tenure at the agency, according to the top Democrat on the House Committee on Oversight and Government Reform."Your actions are particularly troubling in light of multiple reports that you have retaliated against EPA staff who disclose waste, fraud and abuse," Rep. Elijah E. Cummings of Maryland wrote in letter to Pruitt Monday.In the letter, Pruitt's former aides told Cummings' staff that the EPA boss appeared to be intentionally slowing down Freedom of Information Act (FOIA) responses for records related to the administrator, and directed staff not to respond until requests from the Obama administration had been completed.Cummings also alleged that Pruitt instituted a new review process requiring political appointees to review FOIA responses before they are released."Under your tenure, EPA's front office is now responding more slowly, withholding more information, and rejecting more requests, according to EPA's own data and independent sources," Cummings wrote. "Combined with your refusal to produce documents requested by Congress, your actions in delaying records under FOIA raise concerns about a fundamental lack of transparency at EPA."The congressman said Pruitt's actions violate EPA and Department of Justice rules, in which simple requests should be processed more quickly than complex requests.

Senate Republicans call for hearing on Pruitt scandal  (Reuters) - Republican senators on Wednesday said embattled Environmental Protection Agency chief Scott Pruitt should testify before the U.S. Congress to address the list of ethics scandals he faces, but stopped short of calling for his resignation.  Pruitt came under fire earlier on Wednesday after a report by the Washington Post alleged that the EPA administrator tasked one of his aides and sought help from Republican political donors to find his wife a job. The report prompted Fox News television and radio host Laura Ingraham to call on Pruitt to resign. She is one of the most prominent Conservative voices to call for his resignation. The EPA chief has been under scrutiny the last few months amid reports involving questionable spending on travel and use of security detail, connections with lobbyists and industry groups and use of his office for favors. Pruitt currently faces a dozen investigations by the Office of the Inspector General, Congress and the White House. An EPA spokesperson was not immediately available for comment. President Donald Trump has so far defended Pruitt and praised him for carrying out his policies despite the barrage of negative media reports. On Ingraham’s radio show on Wednesday, fellow Oklahoman and Pruitt ally Republican Senator James Inhofe stopped short of calling for his resignation but said if the stream of scandals does not stop, he would be forced to ask him to step down. “I think something needs to happen to change that,” he told Ingraham. “One of those alternatives would be for him to leave that job.” A spokeswoman for Inhofe later told Reuters that  while the senator is not ready to call for resignation, “he has concerns about the reports coming out and wants to hear directly from Pruitt” in a hearing.

After Years of Green Promises, Automakers Renege on Emissions Standards - When General Motors CEO Mary Barra recently affirmed a commitment to “a world with zero crashes, zero emissions, and zero congestion,” she echoed similar statements from the company’s executives over the years. Back in 1972, GM Vice President Elliott Estes had declared that “the automobile will be essentially removed from the air pollution problem in the United States” within another decade or so. That didn’t happen, yet two decades later President Bill Clinton played along with this fantasy. Bowing to the power of GM and its then-Big Three partners, Ford and Chrysler, Clinton broke a campaign pledge to raise Corporate Average Fuel Economy (CAFE) standards and instead underwrote industry research on super-clean future cars. Meanwhile, fuel economy fell while CO2 emissions continued to rise.U.S. automakers have always been reluctant partners in the nation’s efforts to reduce air pollution and improve fuel efficiency. Today, Detroit is seeking to undo the carbon-cutting fuel efficiency targets agreed to during the Obama administration, again offering the false promise of green breakthroughs tomorrow. This time, however, it’s happening with the help of an administration and a ruling party openly hostile to the environment. Like some other industries, automakers have been cultivating such a political moment for years. They seized it in 2016 when Donald Trump was elected, writing his transition team two days after the election to request a new review of the vehicle fuel efficiency standards that had been painstakingly developed just a few years earlier. After Trump took office, his new head of the Environmental Protection Agency, Scott Pruitt, agreed to the automakers’ request, officially negating the Obama administration’s 11th-hour determination that the existing strong standards should stand.

Global Investment in Wind and Solar Energy Is Outshining Fossil Fuels -In 2016, the latest year for which data is available, about $297 billion was spent on renewables—more than twice the $143 billion spent on new nuclear, coal, gas and fuel oil power plants, according to the IEA. The Paris-based organization projects renewables will make up 56% of net generating capacity added through 2025.Once supported overwhelmingly by cash-back incentives, tax credits and other government incentives, wind- and solar-generation costs have fallen consistently for a decade, making renewable-power investment more competitive.Renewable costs have fallen so far in the past few years that “wind and solar now represent the lowest-cost option for generating electricity,” said Francis O’Sullivan, research director of the Massachusetts Institute of Technology’s Energy Initiative.This is beginning to disrupt the business of making electricity and manufacturing generating equipment. Both General Electric Co. and Siemens AG are grappling with diminished demand for large gas-burning turbines and have announced layoffs. Meanwhile, mostly Asian-based manufacturers of solar panels are flourishing.In many places, opting for renewables “is a purely economic choice,” said Danielle Merfeld, the chief technology officer of GE’s renewable energy unit. “In most places, it is cheaper and other technologies have become more expensive.”Sustained government support in Europe and other developed economies spurred the development of renewable energy. But costs have fallen for other reasons. China invested heavily in a domestic solar-manufacturing industry, creating a glut of inexpensive solar panels. Innovation helped manufacturers build longer wind-turbine blades, creating machines able to generate substantially more power at a lower cost.Renewable-e nergy plants also face fewer challenges than traditional power plants. Nuclear-power plants have been troubled by mostly technical delays, while plants burning fossil fuels face regulatory uncertainties due to concerns about climate change. And pension funds, seeking long-term stable returns, have invested heavily in wind farms and solar parks, allowing developers to get cheaper financing.

How much of the world’s energy is supplied by renewables? - BP and the International Energy Agency (IEA) measure the contribution of renewables to the global energy mix in terms of primary energy consumed while the World Bank estimates it in terms of final energy consumed. All three give different results, with BP estimating a total renewables contribution of 9.5% in 2015 compared to IEA’s 13.7% and the World Bank’s 18.1%. The BP/IEA differences become larger when contributions are segregated by source (BP estimates almost three times as much energy from hydro as as IEA and IEA estimates four times as much energy from “other renewables” as BP). This post documents these discrepancies while making no attempt to say who is right and who is wrong – that would have to be the subject of another post. But it does raise the question of whether we really know how large a contribution renewables are making to the world’s energy mix. It’s important to establish exactly what primary energy is before proceeding. Fortunately there is general agreement on how to define it:

• OECD: Primary energy consumption refers to the direct use at the source, or supply to users without transformation, of crude energy, that is, energy that has not been subjected to any conversion or transformation process.
• United Nations: Primary energy should be used to designate energy from sources that involve only extraction or capture
• Global CCS Institute: A primary energy source is defined as one that is captured directly from natural resources. A secondary energy source is one obtained from a primary energy source through a transformation process, typically with the aim to make it suitable for a particular energy use.

According to my interpretation of these definitions energy counts as primary only if it hasn’t been run through a power plant, a refinery, a furnace or some other type of processing facility. We will continue on this basis.

Billions in U.S. solar projects shelved after Trump panel tariff (Reuters) - President Donald Trump’s tariff on imported solar panels has led U.S. renewable energy companies to cancel or freeze investments of more than $2.5 billion in large installation projects, along with thousands of jobs, the developers told Reuters. That’s more than double the about $1 billion in new spending plans announced by firms building or expanding U.S. solar panel factories to take advantage of the tax on imports. The tariff’s bifurcated impact on the solar industry underscores how protectionist trade measures almost invariably hurt one or more domestic industries for every one they shield from foreign competition. Trump’s steel and aluminum tariffs, for instance, have hurt manufacturers of U.S. farm equipment made with steel, such as tractors and grain bins, along with the farmers buying them at higher prices. Trump announced the tariff in January over protests from most of the solar industry that the move would chill one of America’s fastest-growing sectors. Solar developers completed utility-scale installations costing a total of $6.8 billion last year, according to the Solar Energy Industries Association. Those investments were driven by U.S. tax incentives and the falling costs of imported panels, mostly from China, which together made solar power competitive with natural gas and coal. The U.S. solar industry employs more than 250,000 people - about three times more than the coal industry - with about 40 percent of those people in installation and 20 percent in manufacturing, according to the U.S. Energy Information Administration. “Solar was really on the cusp of being able to completely take off,” said Zoe Hanes, chief executive of Charlotte, North Carolina solar developer Pine Gate Renewables. GTM Research, a clean energy research firm, recently lowered its 2019 and 2020 utility-scale solar installation forecasts in the United States by 20 percent and 17 percent, respectively, citing the levies. Officials at Suniva - a Chinese-owned, U.S.-based solar panel manufacturer whose bankruptcy prompted the Trump administration to consider a tariff - did not respond to requests for comment. Companies with domestic panel factories are divided on the policy. Solar giant SunPower Corp opposes the tariff that will help its U.S. panel factories because it will also hurt its domestic installation and development business, along with its overseas manufacturing operations. 

The Aberdeen Bay Offshore Wind Farm - After about 15 years in planning, the long awaited and largely hated Aberdeen Bay wind farm has taken shape in recent weeks. I seem to recall early reports saying that the turbines, located on the horizon, would be barely visible from shore. Well that was a lie. The huge towers completely dominate the once unspoiled and beautiful scenery of Balmedie Beach. Those who see this as environmental protection have sick minds. And President Trump, who owns a golf course not far away, and who fought this project in the courts, is going to be mighty angry.  The wind farm comprises 11 * 8.4 MW Vestas 164 turbines giving a total installed capacity of 93.2 MW. Here is how Vattenfall, the operator, describe the scheme using the all too familiar venacular of renewables ideology:

• Annually produce 312 GWh.
• Have an installed capacity of 93.2MW
• Annually displace 134,128 tonnes of CO2
• Remove the equivalent of 736,817 cars from UK roads throughout its lifetime
• Produce enough electricity every year to meet the equivalent annual demand of 79,209 homes
• Generate more than the equivalent of 70% of Aberdeen’s domestic electricity demand and 23% of Aberdeen’s total demand
• Annually invest £150,000 to a Community Benefit Scheme

312 GWh per annum translates to a capacity factor of ~38%. Even although England, Denmark and Germany have vastly bigger offshore wind industries, owing to their favourably shallower water, this facility offshore Aberdeen has been christened the European Offshore Wind Deployment Centre (EOWDC). €3 million has been allocated to fund research into the environmental impact. There seems to be hope among local politicians and the press that this windfarm is somehow going to transform Aberdeen’s ailing economy that is still reeling from the 2014 oil price crash. Allow me to pour some cold water on this hope.

Microsoft Sinks Data Center Off Orkney - Microsoft has sunk a data centre in the sea off Orkney to investigate whether it can boost energy efficiency. The data centre, a white cylinder containing computers, could sit on the sea floor for up to five years.An undersea cable brings the data centre power and takes its data to the shore and the wider internet - but if the computers onboard break, they cannot be repaired.Orkney was chosen because it is a major centre for renewable energy research.The theory is that the cost of cooling the computers will be cut by placing them underwater. "We think we actually get much better cooling underwater than on land," says Ben Cutler, who is in charge of what Microsoft has dubbed Project Natick.  "Additionally because there are no people, we can take all the oxygen and most of the water vapour out of the atmosphere which reduces corrosion, which is a significant problem in data centres."

Quebec State-Owned Energy Provider Halts Crypto Mining Projects - Quebec has seen a massive surge in demand for its super-cheap hydro electricity. The demand has caused Hydro-Quebec, the state-owned power supplier, to temporarily stop providing power for new blockchain-based projects. They will also be submitting a strategy to Regie de l’energie, the state’s energy regulator. This is to try to determine which companies will receive power in future. The Canadian energy minister, Pierre Moreau, said: “The measures announced today represent a responsible, prudent and practical approach to welcome top businesses from the blockchain tech sector …” He went on to state that the move was taken to allow the company to supply power for other industries as well as making sure that no citizens were left without electricity. Apparently, there have been hundreds of applications from blockchain businesses to Hydro-Quebec. The publication stated that if all these companies received the power they sought, a massive 24 percent of the company’s entire capacity would be used up by cryptocurrency mining operations.

Tomago Aluminium warns of 'energy crisis' as power supply falters - Tomago Aluminium, Australia's biggest smelter of the metal, warned on Friday that it faced curtailing operations for a third time this week because of power shortages across the national electricity market. As of Friday afternoon, NSW plants reporting outages or reduced output included the gas-fired Tullawarra power station, Mt Piper coal-fired power plant - both owned by EnergyAustralia. Also reporting coal-fired power units offline were Sunset Power's Vales Point and AGL's two Hunter Valley stations, Bayswater and Liddell.The Australian Energy Market Operator (AEMO) issued an actual lack of reserve alert at 5.44 pm only to cancel it 23 minutes later after the market responded with extra supply - and demand eased back ahead of the long weekend. Tomago said it had been forced to halt each of three potlines this week - one on Tuesday and two on Thursday - because of a lack of reserve across the grid serving eastern states. Matt Howell, Tomago's chief executive, told Fairfax Media on Friday lunchtime, the company was concerned it may face another curtailment of operations later in the day. Tomago accounts for about a tenth of the state's electricity use. Just before 6.30 pm, he said the company had probably "dodged a bullet", with the demand peak over. Earlier, Mr Howell said Australia is "at a crisis point with our energy system". AEMO on Friday issued a level 2 alert, forecasting a lack of reserve power for later in the day. The alert system has been installed to signal to energy operators that additional supplies may have to be activated from gas or other power sources to avert blackouts. Level 3 is the highest alert level in the system.

China’s Global Electricity Takeover - There has been no shortage of stories recently about looming trade wars and foreign investments with questionable implications for national security. But the business press recently took notice of one particularly large investment number: $452 billion. This is the amount China’s state controlled power companies have invested abroad over the past five years.  The list of actual and potential Chinese utility investment locations includes Pakistan, Russia, Nigeria, Brazil, Chile, Portugal, Philippines, Germany, and the UK.  Roughly one third of this almost half a trillion dollars of investment relates to power transmission projects. The Chinese are exporting their ultra-high voltage transmission technology. This, supposedly, is the secret of China’s technology-export success. Generally speaking, moving bulk electricity at higher voltages reduces line losses, which in turn reduces the cost of transmission.Transmission expenses, however,  account for slightly less than 10% of end-use electricity costs, a relatively small piece of cost of the final product.  A typical high voltage transmission line experiences losses of about 4% on average. An ultra-high voltage line brings losses down to about 1%. But reducing losses in this fashion requires more capital. Obtaining meaningful savings elsewhere in the power production process should count for far more.In the semi-deregulated power markets common nowadays, transmission operators run the power grid – somewhat like policemen at a busy intersection directing traffic. Although only minor government functionaries, those directing traffic have a considerable amount power. They decide who proceeds and who shall have extra time to respond to text messages. In the context of the power transmission grid, grid operators as traffic cops have a considerable amount of power and responsibility. For this reason, some local authorities have been reticent about ceding this vital function to Chinese investment and control. The business press with its penchant for the bright shiny object is focused at present on Chinese technology. We suggest financial considerations matter more. And that goes beyond mere trade subsidies.

Rocks Under I-95 Present Odd, and Scary, Threat to Power Grid = Here’s something you probably didn’t know you needed to worry about: There’s a layer of 300 million-year-old rock under Interstate 95 that’s capable of killing the lights from Washington to Boston and beyond the next time the sun erupts in all its fury.  Sound far-fetched? Perhaps. But not to scientists. A solar storm is now viewed as enough of a risk in fact that grid operators across North America are working on plans to respond to just such a disturbance. And a draft of a soon-to-be-published U.S. Geological Survey report pinpoints the Eastern Seaboard as one of the areas most in danger. That’s because this Paleozoic-era rock doesn’t let the energy from a major geomagnetic storm -- a once-in-a-100-years kind of event -- pass through it but instead acts as a backstop that sends the surge back up above the ground for a second shot at causing mayhem. “It’s an active problem that a lot of people are trying to solve and understand,” said Christopher Balch, space scientist at the Space Weather Prediction Center in Boulder, Colorado. Through a stroke of bad luck, the worst of these rocks basically traces the path of I-95 from Richmond, Virginia, to Portland, Maine, passing through Washington, New York and Boston along the way.

Power marketers are increasing their share of U.S. retail electricity sales - Competitive power marketers supplied about 21% of the retail electricity sold in the United States in 2016, up from 11% in 2005. The share of retail electricity sales of regulated investor-owned utilities fell from 62% in 2005 to 52% in 2016. This shift was driven by the Energy Policy Act of 2005, which repealed the Public Utility Holding Company Act of 1935 and closed the original federal regulatory structure established by New Deal-era legislation, which was a combination of public financial reforms and regulations in the 1930s.  U.S. retail electricity sales are provided by entities with different ownership structures such as power marketers, cooperatives, government utilities, and investor-owned utilities. Investor-owned utilities (IOUs) have historically been the primary producers and distributors of electricity to retail customers in the United States. Some IOUs are still vertically integrated, meaning they offer generation, transmission, and distribution service. Other IOUs may partner with independent power producers to purchase generation service. IOUs are regulated by state and local agencies and also by federal agencies if they own transmission facilities. Retail consumption of electricity has remained relatively flat in the United States over the past decade, especially in the residential sector, where sales per capita have declined. Total retail sales of electricity provided by IOUs have declined over this period, falling from 2,264 terawatthours (TWh) in 2005 to 1,919 TWh in 2016.

U.S. Interior Department axed health study on coal without clear reason: watchdog (Reuters) - The U.S. Interior Department has been unable to adequately explain why it canceled a $1 million study on the public health impacts of mountaintop removal coal mining, the agency’s inspector general office said in a report released on Tuesday. Interior Secretary Ryan Zinke canceled the government-funded study on the health impacts of the controversial mining technique used in Appalachia last August as part of what officials said was an agency-wide review of grants in excess of $100,000. The study was by the National Academies of Sciences, Engineering, and Medicine. Mountaintop removal is a form of surface mining in which explosives are used to extract coal from mountaintops and ridgelines. It has raised concern about impacts on rivers and streams, and on human health in surrounding communities. When the Interior Department was asked by the inspector general to detail the reasons for its decision to cancel the study, it could not produce any evidence of a formal review, the watchdog said in its report. “Departmental officials were unable to provide specific criteria used for their determination whether to allow or cease certain grants and cooperative agreements,” the report said. It added the cancellation “wasted” some $455,110 that had already been spent on research and that the remaining $548,443 would be returned to the Treasury in 2021. Interior Department spokeswoman Heather Swift defended the decision, saying the coal study was “duplicative” and was drawing money away from more important efforts “like rebuilding public lands infrastructure and securing public lands along the U.S.-Mexico border.” “It may not sound like a lot of money to House Democrats who continually look for ways to spend us into obliteration,” she told Reuters in an email. The inspector general probe was triggered by a request from U.S. Representative Raul Grijalva, the top Democrat on the House Natural Resources Committee, who has accused the Interior Department of lying and mishandling taxpayer money. 

Watchdog: Interior thought mountaintop mining study wouldn't 'produce any new information’ | TheHill: Interior Department officials canceled a major mountaintop removal mining study because they didn’t think it would yield new findings, the agency’s internal watchdog said. Mary Kendall, Interior’s deputy inspector general, explained the finding in a letter to Rep. Raul Grijalva (D-Ariz.), which Grijalva released Tuesday. Interior officials had never publicly given that reasoning previously, saying only that the funding for the study that was being conducted by the National Academies of Science, Engineering and Medicine (NAS) was undergoing financial review..But Kendall’s staff also found that Interior did not have documentation to justify their conclusion that the study wouldn’t yield new information. “Other than a general document entitled ‘Secretary of the Interior’s Priorities,’ departmental officials were unable to provide specific criteria, used for their determination whether to allow or cease certain grants and cooperative agreements,” Kendall wrote to Grijalva.“Departmental officials decided to halt the study because they did not believe it would produce any new information and felt the costs would exceed the benefits,” she said. Interior had already paid out $455,110 of the $1,003,553 cost of the study, money that Kendall concluded “was wasted because no final product was produced.” The rest of the money is expired and cannot be spent, she said.

U.S. electricity commission sees no emergency in power market (Reuters) - All five members of the panel that regulates the U.S. power grid indicated at a Senate hearing on Tuesday there was no emergency in the country’s electricity markets, potentially undermining efforts by President Donald Trump’s administration to save ailing coal and nuclear plants through subsidies. Trump this month directed U.S. Energy Secretary Rick Perry to take emergency measures to keep coal and nuclear plants running in order to protect national security. Kevin McIntyre, the chairman of the Federal Energy Regulatory Commission (FERC) and one of three Republicans on the five member panel, said there was “no immediate calamity or threat” to power plants operating or serving the needs of consumers. Senator Martin Heinrich, a Democrat, later asked all members of the FERC at the Senate energy committee hearing whether any of them saw a national security emergency in power markets. Cheryl LaFleur, a Democrat, said she did not, and the other four members responded to the question with silence. Neil Chatterjee, another FERC Republican, cautioned that even though the power grid is reliable, regulators need to be vigilant that the turn away from coal and nuclear to natural gas does not make the grid less able to bounce back from weather disasters and physical and cyber attacks on the infrastructure. But Robert Powelson, a Republican member of the commission said a directive to the Energy Department to subsidize coal and nuclear could result in “significant rate increases without any corresponding reliability, resilience or cyber security benefits.” He said intervention threatens “to collapse the wholesale competitive markets that have long been a cornerstone of FERC policy.” Richard Glick, a Democrat on the FERC, said Trump’s push to save aging coal and nuclear plants would “clearly” raise power bills for residents and businesses. “The question is how much,” he said. Glick said estimates he had seen showed the country’s utility rates could rise tens of billions of dollars. Chatterjee, from coal-producing Kentucky, suggested that lawmakers may have to legislate changes to help save those jobs. “That is not something we factor into our record,” Chatterjee said about the deliberations of FERC, which ensures that power markets run efficiently.

FERC Throws Wrench Into Trump’s Pro-Coal Plan - The Federal Energy Regulatory Commission does not see any emergency in the U.S. electricity market, the panel regulating the national grid said at a Senate hearing. The opinion is likely to undermine efforts by the Trump administration to save non-competitive coal and nuclear power plants on the grounds that they guarantee the grid’s resilience in case of emergency.Reuters reported the chairman of the five-member panel and one member stated they saw “no immediate calamity or threat” to the national grid, and one other member responded to a question about whether she saw any risks to the grid’s resilience with “no.” The rest of the panel’s members refrained from expressing an opinion during the hearing.One Republican member of the panel noted, however, that although the grid is currently reliable, FERC must watch it closely to make sure the switch from coal and nuclear to natural gas and renewables does not affect negatively its capacity of coping with extreme weather effects, and physical and cyber attacks.Other members of the panel, Republicans and Democrats alike, noted that subsidies for coal and nuclear power plants would inevitably swell consumer’s electricity bills. “The question is how much,” said Democrat panelist Richard Glick.  Last year, Energy Secretary Rick Perry proposed a plan for subsidizing coal and nuclear plants for providing base load generation—that is, round-the-clock power, but the plan was rejected by the utility regulators who said they will study the national grid’s resilience to supply interruptions. Many grid operators said they are already factoring in everything that has to do with their grid’s resilience to disruptions. Meanwhile, coal and nuclear plants are shutting down as they can no longer compete with cheap natural gas and can barely compete with subsidized renewables. Two months ago, utility FirstEnergy approached the Department of Energy directly with a request for what would have been a bailout package for its coal and nuclear subsidiaries, but just days after this, the parent announced the bankruptcy of the two units. More plant closures are expected this year in the absence of government intervention.

AEP CEO on money-losing coal units: 'We'll shut 'em down' - Any federal plan to forestall the closure of struggling coal and nuclear power plants to stabilize the electric grid should be reviewed by utilities so customers are protected from rising costs, said Nick Akins, CEO of American Electric Power Co. Akins was referring to a controversial proposal under development by the Trump administration to protect and pay electric generating units that play a role in national security, such as supplying a military base. "Everyone wants resiliency and reliability of the grid," Akins, 57, said in an interview last week in San Diego during the annual meeting of the Edison Electric Institute. "The question becomes how do you do it? How do you do it within the market framework or outside the market framework? And who does it apply to?" he said of the draft plan sketched out with the help of the Department of Energy ahead of a National Security Council meeting on June 1. Increasing cyberthreats against U.S. energy infrastructure is the central justification laid out in the broad policy proposal. It cites authority under the Federal Power Act and the Defense Production Act, a Korean War-era law designed to enable swift emergency action in response to national security crises. The plan to guarantee business for money-losing coal and nuclear power plants both challenges the authority of the independent Federal Energy Regulatory Commission, responsible for safeguarding the nation's power supply, and does an end-run around privately run regional grid operators. Akins noted that under the previous White House administration, the EPA's Clean Power Plan designed to ratchet down carbon emissions was attacked by Republicans for favoring carbon-free generation over fossil fuels. The major talking point: The federal government shouldn't be picking winners and losers. 

Turkey to build third nuclear plant - The Turkish government will likely build the country’s third nuclear energy plant in Thrace, Energy and Natural Resources Minister Berat Albayrak has said. “The first phase of the Akkuyu [nuclear plant] will be put into operation in 2023. The location of the third one is almost determined. It will most probably be the Thrace region because this region has a high rate of energy consumption but the production is not so much in this region,” he said during a live interview with private broadcaster CNN Türk on June 13. The construction of the Akkuyu Nuclear Plant, in the Mediterranean province of Mersin, was kicked off by President Recep Tayyip Erdoğan and his Russian counterpart Vladimir Putin on April 3. Turkey had also signed a protocol with the Japanese government for the construction of a nuclear power plant in the province of Sinop on the Black Sea coast.

Bulgaria moves to revive suspended Russian-built nuclear plant - The parliament last week approved by 172 to 14 Prime Minister Boyko Borisov’s proposal to develop a plan to resume construction of the plant on the Danube River by the end of October. Bulgaria had already spent around $1.8 billion on the plant when the government in 2012 put a moratorium on further work, under pressure from the United States and European Union to limit its energy dependence on Russia. Bulgaria had also suspended the joint project with Russian company Atomstroieksport because it failed to find any foreign investors prepared to shoulder its spiraling costs, estimated at about $11.8 billion in total. Russia’s Rosatom has said it will make another bid to complete the project. Also in the running are Chinese state nuclear company CNNC and France’s Framatome, which is majority-controlled by EDF.

Jordan scraps $10bn Russian nuclear scheme - The Jordan Atomic Energy Commission (JAEC) said Monday, 11 June that it cancelled the plan with Rosatom because the Russian side wanted to secure the finance through commercial loans, which it deemed too costly. In a statement, JAEC told The Jordan Times that commercial loans “would have increased the cost of the project and the prices of generated electricity”. Using Russian technology, the 2,000MW plant was to have two pressurised water reactors of the VVER variety, first developed in the former Soviet Union, according to a cooperation agreement signed between Jordan and Rosatom in 2015. Jordan, which depends on foreign oil and gas for 96% of its energy, has not given up on nuclear. The JAEC will now explore the use of small modular reactors (SMRs), a concept under development in a number of countries that would see smaller, portable reactors mass produced from standardised components.

Another Fukushima Plant to be Scrapped -- Tokyo Electric Power Company has officially announced that it will scrap the Fukushima Daini nuclear plant. The plant is one of two in the prefecture. The other is the Daiichi plant that was crippled in the March 2011 earthquake and tsunami. The plant is located about 12 kilometers south of Fukushima Daiichi. The governor says it’s the residents’ strong wish to have all nuclear reactors in the prefecture scrapped. All 4 reactors at the Fukushima Daini halted operation automatically following the major earthquake in 2011 and reached a state of cold shutdown by March 15th, with temperatures inside reactors kept below 100 degrees Celsius. All fuel rods in the reactors were then moved to storage pools. The Daini plant has been managed and maintained in this state since.

The Global Consequences of a Regional Nuclear War -- While there is growing concern about a nuclear war as shown here:  Doomsday Clock Animation from www.thebulletin.org on Vimeo....and with the United States military spending on nuclear weapons growing, an article by Alan Robock at Rutgers University and Owen Brian Toon at the University of Colorado at Boulder looks at the impact of a regional nuclear war between two of the world's lesser nuclear powers; India and Pakistan.As most of us recall, in the early 1980s, science showed that a nuclear war between the Soviet Union and the United States would drastically change the global ecosystem.  This concept was first proposed by renowned scientist, Carl Sagan, who published a paper in Parade magazine on October 30, 1983 entitled "The Nuclear Winter: The World After Nuclear War" which you can find here.  In this model, the smoke from fires resulting from the detonation of nuclear weapons would envelop the earth and absorb sunlight, resulting in a cold, dry and dark world.  This world would be incapable of sustaining plant life and would lead to the elimination of food for the human race.The research by Robock and Toon looks at the ecological impact of a smaller scale conflict between India and Pakistan, two nations which have the following nuclear inventory according to a study by :

• 1.) Pakistan (paper authored by David Albright in 2015):
• 2.) India (paper authored by David Albright et al in 2015): between 77 and 123 nuclear weapons with the most likely number being around 97.

Here is a table showing India's stockpile of highly enriched uranium and plutonium:

What Trump’s “unprecedented” power plant bailout would mean for the Ohio valley - President Donald Trump told the Department of Energy to “prepare immediate steps” to stop the closures of coal and nuclear power plants in the Ohio Valley region that are no longer economical to operate. But a number of energy analysts say the administration’s unprecedented effort to prop up struggling utilities will do little to solve their underlying problems and will likely end up costing consumers more.   The president’s announcement came the same day that a leaked draft memo was published by Bloomberg News. That memo outlines a plan by the federal government to bail out coal and nuclear plants by forcing grid operators to buy power from those struggling plants for two years. At least five coal and nuclear plants across the Ohio Valley have been slated to close in the coming years by Ohio-based utility FirstEnergy Solutions. In March the company asked the federal government to immediately intervene to stop plant closures. Days later it filed for bankruptcy. FirstEnergy has since spent hundreds of thousands of dollars lobbying state and federal lawmakers. In a statement, Don Moul, president of FirstEnergy Solutions, said while the company welcomed Trump’s renewed support and looked forward to reviewing DOE’s final recommendations, the actions being discussed would likely be insufficient to stop scheduled plant closures. “While this marks an important first step, until timing and details of the order are clear, additional support at the state level will be necessary to protect the jobs in Ohio and Pennsylvania,” Moul said. Sonia Aggarwal, vice president of the energy policy think tank Energy Innovation, said any action the administration takes will likely be immediately challenged in court, which will significantly slow down how fast, if ever, the proposed payouts would reach plant operators. “Given this state that FirstEnergy's plants are in, in particular, it may be a long process and I'm just not sure how quickly it would really affect operations,” Aggarwal said.

Rig Count Holds Steady as Ohio Permitting Slows – The number of oil and gas rigs operating in eastern Ohio’s Utica shale stood at 19 for the week ended June 9, as permit activity trickled to a near stop, according to the latest update from the Ohio Department of Natural Resources.ODNR reported that it awarded just two new permits for horizontal wells in the Utica last week, both to Ascent Resources Utica LLC for wells in Guernsey County.The agency released just one permit the previous week, indicating a slowdown in terms of permit interest over the last several weeks.As of June 9, ODNR has issued 2,837 permits for horizontal wells in the Utica. Of that number, 2,358 wells are drilled and 1,899 are producing.  No new permits were issued for the northern tier of the Utica, which includes Mahoning, Trumbull and Columbiana counties, according to ODNR. There were no new permits issued in nearby Lawrence and Mercer counties in western Pennsylvania, according to the Pennsylvania Department of Environmental Protection.

Community leaders cast wary eye on injection wells - Toledo Blade — Fears about the oil and gas industry’s disposal of briny waste fluids in injection wells drilled deep into the ground keep growing, even in areas that historically haven’t had much to worry about because of their karst-prone bedrock.The mere presence of karst — an extremely porous, environmentally sensitive, and relatively soft rock formation near many land surfaces around the world, including southeast Michigan and northwest Ohio — doesn’t necessarily rule out drilling. But it sends warning signals to take extra caution and, thus, often deters such activity.  But now, with a global fracking frenzy that began a decade ago in full swing, people who live in places once assumed to be off-limits to drilling and fracking are experiencing new levels of anxiety — especially when it comes to whether more karst-prone areas will soon host deep underground injection wells used to bury waste fluids.New regulatory rules approved this month in Michigan aim to give state officials more control over drilling operations.   State Sen. Dale Zorn (R., Ida), who in 2015 tried unsuccessfully to convince the Michigan legislature to pass a statewide ban on injection wells for karst-prone areas, called the Michigan Department of Environmental Quality’s past policies toward karst “very, very weak” and said he believes the new rules will help, but not end threats.“It’s never been an economic issue to me. It’s always been a safety issue,” Mr. Zorn said.Neal Thurber, a LaSalle Township resident who spent years drilling wells in the oil and gas industry, said karst-prone areas that allow injection wells into them are “taking on a very high level of risk for contamination for virtually no benefit.”

Coshocton County group opposes company's effort to accept more injection-well fluids -  Columbus Dispatch — A company operating injection wells in Coshocton County has asked regulators to allow a change in its permitting to accept industrial and other nonhazardous waste fluids instead of just oilfield brine.If Buckeye Brine is successful, it would mark the first time an Ohio Class II injection well was switched to a Class I.Operators say they’ve been pumping oilfield fluids into rock formations deep underground for several years without incident, that the facility was built to exceed injection-well standards and that the permitting change would provide an environmentally friendly alternative for disposing of nonhazardous waste fluids."We’ve operated flawlessly for five years," said Steve Mobley, company president. "We’re experienced at this business and we’re doing a good thing for the surface waters of the state and making industrial businesses better able to operate affordably."But a local environmental group opposes the move, citing continued concerns about toxic fluids being pumped into the ground. Coshocton Environmental and Community Awareness, or CECA (http://www.cecaware.org), and its supporters are posting "No Class I Injection Wells" signs along some roads in the vicinity and urging regulators to reject the application. A billboard with the message is planned along Route 16."You can’t take this rotten apple and make it good," said Tim Kettler, a member of the nonprofit advocacy group’s board. "Our position on this is this whole method of wastewater disposal is improper. It’s going to be our legacy, this 7 billion gallons of unknown wastewater ... beneath our community for our children and grandchildren."The signs have prompted debate in Coshocton, about an hour and a half northeast of Columbus. Community groups and some residents have visited the injection well site in recent weeks and been given tours of the operations and explanations of the company's proposal.

Penn State study: Spraying brine from drilling, fracking on roadways is hazardous - Pittsburgh Post-Gazette - Spreading wastewater from non-shale oil and gas drilling and fracking on unpaved roads is a cheap way for municipalities to suppress dust and melt snow, but a Penn State University study says the practice has potentially high costs for human health and the environment.The study, published in the journal “Environmental Science & Technology” last month, said the wastewater contains salts, radioactivity and organic contaminants “often many times higher than drinking water standards.”The toxicity of the wastewater is a concern because rain can wash heavy metals, oils and radium, a carcinogen, from roads into nearby water sources, the study said. “It’s true that breathing road dust is a health risk,” said William Burgos, a professor in PSU’s Department of Civil & Environmental Engineering and the study’s lead author. “But trading one environmental risk-driver for radium and hydrocarbons, well, I don’t know if that’s the best trade-off.” Mr. Burgos said the study’s analysis of wastewater used on roads in 14 townships found median radium levels between 1,200 and 1,500 picocuries per liter. The federal Safe Drinking Water Act limits radium levels in drinking water to 5 picocuries per liter, and radium in industrial waste discharges must be less than 60 picocuries per liter. “Road spreading of conventional oil and gas wastewater is the single largest source of radium being introduced into the environment in Pennsylvania,” Mr. Burgos said.

​Will Pennsylvania Regulators' Ties to Fracking Industry Influence Their Decision on the Mariner East pipeline? -  Opponents of a controversial Pennsylvania pipeline project are hoping that state regulators will uphold a judge’s decision to suspend the project. But the regulators’ extensive ties to the oil and gas industry raise serious concerns about conflicts of interest that may tilt the regulators toward favoring Sunoco, the pipeline company. As our new report shows, the PPUC’s decision may be tainted by conflicts of interest among commissioners, a majority of whom have ties to Pennsylvania’s oil and gas industry, including to Sunoco. The report, released last Friday, highlights the numerous relationships that 4 of 5 commissioners have to the fracking industry in Pennsylvania and, specifically, to the company behind the Mariner East project. This raises the serious question of how impartial a majority of commissioners – who built careers tied to the interests of the oil and gas industry – can be in regulating that same industry. Among other findings in the report are that Commissioner Norman J . Kennard is the former law partner of one of the attorneys representing Sunoco in the Mariner East case before the PPUC. Kennard was a partner at the firm Hawke, McKeon, Sniscak & Kennard (now called Hawke, McKeon & Sniscak) until around a decade ago. Kennard’s former partner, Thomas Sniscak, is currently representing Sunoco in its Mariner East proceedings. This means that Commissioner Kennard will be ruling on a case brought by his former law partner representing Sunono and the pipeline project.The report also finds that Commissioner David W. Sweet was a registered lobbyist for numerous fossil fuel companies – including EQT, Kinder Morgan, Koch Companies, NRG, and Philadelphia Energy Solutions – until 2015. Sweet is a former senior advisor on economic and energy policy to Governor Wolf, and he was part of the legal team that worked on behalf of the private equity firm Carlyle Group to arrange it acquisition – with Sunoco – of Philadelphia Energy Solutions, the largest oil refining complex on the eastern seaboard. After becoming 2/3 owner of the company with Sweet’s help, Carlyle Group raided PES, throwing it into hundreds of millions of dollars in debt while channelling at least $151 million in payments to itself – all while refusing to pay tens of millions in state taxes.

Pennsylvania allows ETP Mariner East 1 pipeline to resume service  (Reuters) - Pennsylvania's Public Utility Commission (PUC) voted on Thursday to allow Energy Transfer Partners LP's Sunoco Mariner East 1 natural gas liquids pipeline to return to service, reversing a suspension tied to safety concerns.The PUC stopped flows on Mariner East 1 through West Whiteland Township after sinkholes were discovered near the pipeline, prompting State Senator Andrew Dinniman to ask for an emergency order to suspend service.All five PUC commissioners voted to allow Mariner East 1 to resume service. Three of the five commissioners, however, also voted to prevent ETP from working on the Mariner East 2 and 2X pipelines in West Whiteland Township.The decision overturned the emergency order, which was granted last month by a PUC administrative law judge and stopped ETP from moving liquids through Mariner East 1 and working on Mariner East 2 and 2X in the Chester County town, located about 30 miles (48 kilometers) west of Philadelphia. Dinniman's district includes West Whiteland Township.It was not the first time Mariner East 1 was shut due to those sinkholes. The state stopped flows of liquids on Mariner East 1 for over eight weeks from March to May after the sinkholes were found, forcing producers like Range Resources Corp to find other ways to get their liquids to market.

Keep standards for gas wells - Pennsylvania has the oldest gas and oil industry in the United States, dating to the nation’s first commercial oil well, drilled in Venango County in 1859.That well, only about 70 feet deep, was the first of more than 300,000 that have been drilled since. They are distinct from the wells that characterize the relatively new gas industry that taps into the Marcellus and Utica shale formations thousands of feet deep. The Marcellus/Utica wells use modern deep-drilling technology and high-pressure “fracturing” to liberate gas trapped in the deep underground rock.Development of the new gas industry over the past 12 years prompted the state, belatedly, to update its laws and regulations covering the economics and environmental impact of large-scale drilling. Updated regulations covered the traditional industry and the new industry because the environmental concerns created by drilling are common even though the scope and techniques of the operations differ.Tuesday, the state House passed a bill, 111-84, that eliminates fundamental environmental regulations for the traditional gas industry.Sponsors complained that many smaller conventional well drillers can’t afford the same level of environmental compliance as the larger companies that dominate the shale industry.But the issue is environmental protection, and the House bill pretty much dispenses with it in several ways. It would allow drillers to spill 210 gallons of crude oil or 630 gallons of wastewater brine without reporting it to the Department of Environmental Protection. It also eliminates a requirement for drillers who damage a water supply to restore it to levels exceeding those of the Clean Water Act. The bill would take the commonwealth backwards by decades, in effect re-establishing standards for conventional wells as they were in 1984 — the last time the state revised drilling law prior to Act 13, the 2012 law that now governs drilling.

Shale Crescent USA Wants To Rebrand Region - Wheeling Intelligencer  — The area has been known by many names — the Upper Ohio Valley, Appalachia, the Rust Belt and Coal Country — in the past, but one organization hopes to rebrand the region in a way that will help it capitalize on its natural gas and other petrochemical reserves. Greg Kozera wants residents, community leaders and businesses to start using the term “Shale Crescent” when they refer to our area, which is situated atop some of the largest natural gas fields in the world. He presented his ideas Tuesday during a Wheeling Area Chamber of Commerce event at Wheeling Jesuit University. Development and hydraulic fracturing, or “fracking,” of those fields began about a decade ago, and those involved in mineral exploration have since determined that the Marcellus, Utica, Devonian and Rogersville shales lie layered beneath our feet. Those shales all contain rich petrochemical deposits that Kozera said could attract a broad variety of industrial interests to the region. Kozera is the marketing director for Shale Crescent USA, a nonprofit based in Marietta, Ohio. The group’s primary goal is to attract new, high-paying manufacturing jobs to the area atop those layers of shale, including parts of Ohio, West Virginia and Pennsylvania. With those jobs, organization members believe, will come an array of development and a higher standard of living for all. They also believe it is important to define and promote the geographic region, so it can better compete with areas such as the Gulf Coast, which have been the traditional locations for petrochemical production and related industries.

EXCLUSIVE: WV explosion of TransCanada Leach XPress occurred feet from adjacent NGL pipeline - I've been studying the Marshall County, WV explosion of Columbia Pipeline / TransCanada "Leach XPress" pipeline (LXP), on Nixon Ridge, just south of Moundsville WV for the last 4 days.  NO NEWS OUTLET is reporting the following facts:

• 1: In addition to the LXP, which was permitted Jan 2017, and went into service Jan 2018, there is another new pipeline was was recently permitted, the Mountaineer XPress (MXP), with a terminus at Nixon Ridge to the LXP.  I believe it is now under construction.
• 2: The failure of the LXP occurred mere feet from the Blue Racer Midstream NGL pipeline, in the same ROW.
• 3: Also, from the published drone shots, it looks like there may have been construction activity in the area?

What has frustrated me, is that there is no one single data source to examine. These pipelines are so new (LXP, MXP), they are not yet in NPMS. So I had to assemble these maps painstakingly from a) NPMS, b) Google Earth, c) the EIS or EA of the LXP/MXP pipelines, and d) published photographs.  I am beginning to measure the impact radius, but the failure occurred in a valley, so the blast was constrained on two sides by mountains. So while this may not set any records, it was a BIG fire.

US regulators urge better oversight for pipeline cybersecurity -  The federal agency now charged with overseeing cybersecurity for U.S. pipelines is ill equipped to do the job, say two top regulators who want the role given to the Energy Department.The Federal Energy Regulatory Commission’s Neil Chatterjee, a Republican, and Richard Glick, a Democrat, wrote in an online article that the Transportation Security Administration can’t keep the pipeline network secure. The two FERC commissioners noted that the TSA has only six full-time workers overseeing more than 2.7 million miles of pipeline, and depends on voluntary cybersecurity standards, rather than mandatory ones.  Instead, Congress should give the job to “an agency that fully comprehends the energy sector and has sufficient resources to address this growing threat," the commissioners wrote.The plea, in an op-ed on the website Axios, follows a cyberattack in late March and early April in which several U.S. pipeline companies said their third-party electronic communications systems were shut down, with five confirming the disruptions were caused by hacking. While the cyberattack didn’t disrupt the supply of gas to homes and businesses, it underscored how energy companies are increasingly vulnerable to cyber threats and how even a minor attack can have ripple effects. "As abundant and affordable natural gas has become a major part of the fuel mix, the cybersecurity threats to that supply have taken on new urgency,"

TransCanada: No natgas flows through Leach Xpress in West Virginia -  TransCanada said last Friday it cannot move natural gas until further notice through the section of its Leach Xpress pipeline in West Virginia that ruptured last week, making customers seek other pipelines to ship their gas.The blast that shut the 160-mile pipe did not cause any injuries and was contained on the morning of June 7, TransCanada said.The 1.5 billion cubic feet per day (Bcf/d) capacity Leach Xpress in West Virginia and Ohio, which entered full service at the start of 2018, transports gas from the Marcellus and Utica Shale plays in Pennsylvania, Ohio and West Virginia, to consumers in the U.S. Midwest and Gulf Coast.Leach Xpress is part of the 12,000-mile Columbia Pipeline System, which TransCanada acquired in 2016, serves customers from New York to the Gulf of Mexico.Columbia, which operates the line, declared a force majeure on June 7 and said the damaged section of pipe could affect movement of roughly 1.3 Bcf/d, Kallanish Energy reports. One Bcf/d is enough gas for about 5 million U.S. homes. Alternative pipelines to route production around the outage include Energy Transfer Partners' Rover, Tallgrass Energy Partners’ Rockies Express, EQT Midstream Partners’ Equitrans and Enbridge's Texas Eastern Transmission, Reuters reported.

Appalachian producers finding alternate markets for natural gas liquids – Given the continued closure of the Energy Transfer Partners Mariner East 1 natural gas liquids pipeline by Pennsylvania officials, Appalachian gas producers who hold capacity on the line are finding alternatives to get their ethane and other NGLs to market. But exploration-and-production companies and market observers have expressed concern that continued closure of Mariner East 1 -- part of a system of pipelines to carry NGLs from plants in western Pennsylvania, Ohio and West Virginia to the export terminal at Marcus Hook, Pennsylvania -- could slow the growth of gas production in the region. In a notice to investors, Range Resources said it has "already executed agreements for some of the Mariner East ethane volume to be sold in alternate markets." The producer added that another option would be for the company to simply leave the ethane in the gas stream.In addition to Range's Mariner East 1 ethane capacity, the company said it has transportation or sales arrangements covering about 41,000 b/d of the NGL. For its propane production, Range said it has access to another NGL pipeline as well as to railcars, which will allow it to move the product to various domestic markets as well as to international export markets through the Marcus Hook terminal. Another Appalachian producer, EQT, also downplayed the impact of the shutdown of Mariner East 1 on its operations. In an email statement, an EQT spokeswoman said in regard to the Mariner East 1 shutdown, "our gas continues to move as planned without complication." Mariner East 1, a project of ETP's Sunoco Pipeline, remains offline following a decision last month by Pennsylvania Public Utilities Commission Administrative Law Judge Elizabeth Barnes, which prohibited the reopening of the line pending a final PUC order. The wide-ranging order also called for the stoppage of all operation, drilling and construction activities on Mariner East 2 and 2X pipelines. ETP is hoping that the ALJ's order will be overturned at the PUC's regular meeting Thursday, spokeswoman Lisa Dillinger said in an email Monday. "Many letters of support to overturn have been submitted to the PUC in advance of the meeting -- including from legislators, labor unions, and local townships," Dillinger said.

TransCanada working on Leach Xpress pipeline after West Virginia blast -- TransCanada Corp’s Columbia Gas Transmission (TCO) unit said it was working on a section of the Leach Xpress natural gas pipeline downstream of a pipe blast in West Virginia last week. That work will enable the Stagecoach-Leach Xpress meter in southeast Ohio to return to service, according to a notice to customers late Tuesday. The Stagecoach meter in Monroe County on the Ohio-West Virginia border connects to EQT Midstream Partners LP’s Strike Force South gathering fields in Monroe and Belmont counties in Ohio. Strike Force can also deliver to Energy Transfer Partners LP’s Rover and Enbridge Inc’s Texas Eastern Transmission (Tetco) pipelines. Columbia Gas said all other meters affected by the blast will remain at zero until the pipeline returns to service. The company said did not say when the full pipe would return to service, noting the site of the incident is in the restoration process. Columbia Gas told customers it will provide an update on the status of the pipe on June 18. The shutdown of Leach Xpress forced producers using the line to find other pipes to ship their gas out of the Marcellus and Utica shale regions of Pennsylvania, West Virginia and Ohio. Alternative pipelines include ETP’s Rover, Tallgrass Energy Partners LP’s Rockies Express (REX), EQT Midstream Partners LP’s Equitrans and Enbridge’s Tetco, according to analysts at S&P Global Platts. Columbia Gas, which declared a force majeure after the blast, said the damaged section of pipe could affect movement of about 1.3 billion cubic feet per day (bcfd). One billion cubic feet of gas is enough to fuel about 5 million U.S. homes for a day. Energy analysts said overall output in the Appalachian region was little changed by the blast as producers, like Range Resources Corp and Southwestern Energy Co, found other pipes.

Natural gas pipeline agrees to pay $430,000 penalty for water pollution violations - Rover Pipeline LLC has agreed to pay the West Virginia Department of Environmental Protection $430,000 for water pollution violations in the state, according to a consent order made public Tuesday. The natural gas pipeline project and the DEP made the deal May 15, documents show, but the public comment period for the consent order ends July 13. The agreement is in response to notices of violation and cease-and-desist orders issued to Rover Pipeline dating back to April 2017, said Jake Glance, spokesman for the DEP. In all, the pipeline has received 18 notices of violation and two cease-and-desist orders, the most recent of which was issued on March 5, when the regulators said crews left trash and construction partially buried on site and failed to clean the roads around the construction site.The DEP also issued a cease-and-desist order in July 2017 for similar violations.The consent order references violations dating back to April 2017, including failing to control erosion and keeping sediment water from leaving construction sites.“The good news that I see is that [the] DEP was on top of it, that they did a good job documenting multiple violations and it shows the importance of oversight of these projects because this company did not appear to be acting in good faith,” said Angie Rosser, executive director of the West Virginia Rivers Coalition.Energy Transfer Partners, Rover Pipeline’s owner, also owns the Dakota Access Pipeline — the subject of protests and heightened attention over its being built in North Dakota. The 713-mile-long Rover Pipeline will move natural gas from processing plants in West Virginia, Ohio and Pennsylvania. Crews are building the pipeline in Doddridge, Tyler and Wetzel counties in West Virginia

Panel won't reconsider Mountain Valley Pipeline approval (AP) - A divided panel of federal regulators has denied requests from individuals and public interest groups to reconsider its approval of the Mountain Valley Pipeline. The Federal Energy Regulatory Commission on Friday issued an order turning down the requests. Two of the five commissioners dissented. Construction is currently underway on the approximately $3.5 billion, 300-mile natural gas pipeline, which will run through West Virginia and Virginia. The pipeline is scheduled to be in service by the end of the year. A number of legal challenges against it are pending. A pipeline spokeswoman said Friday that the commission's decision reaffirms its previous findings that there is a public need for the project. Whether there is true demand for the gas is something environmental groups and other opponents dispute. The dissenting commissioners raised questions about need and the impacts of climate change, among other things.  

Dominion Energy's Atlantic Coast Pipeline Suffers Setback - Dominion Energy, Inc.’s  Atlantic Coast Pipeline recently hit a regulatory roadblock, as a few environmental groups filed a petition with the Federal Energy Regulatory Commission (FERC) to halt the natural gas pipeline’s construction. Three environmental groups namely Sierra Club, the Defenders of Wildlife and the Virginia Wilderness Committee are the ones to oppose. They want construction work of the pipeline in West Virginia — which was authorized by FERC last month — to be stalled due to violation of the Endangered Species Act. The opponents claim that the federal appeals court refuted a required permit from the U.S. Fish and Wildlife Service and allowed construction to proceed anyway. The environmental groups allege that the pipeline’s developer did not have a valid Incidental Take Statement, as the federal agency did not set specific limits on damage that can be done to endangered species during construction and operation of the pipeline. While the owners of the pipeline project deny that the court rulings debunk the Fish and Wildlife Service's approval, the environmentalists demand the construction to be suspended until a revised Incidental Take Statement is issued. Making good on his campaign promises to rev up infrastructure spending, President Trump signed an executive order in January 2017 to accelerate the environment review process and approvals for the Atlantic Coast Pipeline. While the FERC greenlighted the pipeline project last November, it has been facing opposition on environmental, health and safety concerns.

Are the feds cherry-picking data to force pipelines through vulnerable communities? -  The government's energy regulator is facing allegations of cherry-picking data to approve pipeline projects that would disproportionately harm communities of color.According to academics, attorneys, and non-governmental organizations, the Federal Energy Regulatory Commission used unreliable statistical methods in its analysis of the proposed Atlantic Coast Pipeline, masking its high cost to African-American and Native-American communities.While the Commission concluded that the pipeline poses no environmental justice concerns, these minority groups say that their environment, health, and culture will be disproportionately imperiled if the development goes ahead as planned. FERC faced similar accusations over the Sabal Trail pipeline in 2016, indicating a pattern in how the federal government manages to force unwelcome energy infrastructure through vulnerable communities.The ACP is a 600-mile underground infrastructure project that will transport gas from hydraulic fracturing facilities in West Virginia down to Robeson County in North Carolina. The project includes three compressor stations. Dominion Energy is the lead developer on the pipeline, and President Donald Trump has labeled it a "priority" project. FERC conditionally approved the ACP in October of 2017, after its Environment Impact Statement concluded that there would be "no disproportionately high and adverse impacts on environmental justice populations." Duke Energy has claimed that the pipeline will benefit economically distressed communities by attracting jobs and development.Many people living in the area disagree. "It's going to be a lot of pollution in our community," says Robie Goins, a Lumbee Native American who lives in the evacuation zone of the pipeline's proposed route. "The people who are in low-income, poverty-stricken areas are targets for these types of projects. It's like we're being targeted by the big corporations. It's like they want to kill us all."

MEI projects Marcellus, Utica and Permian to supply 55% of US gas by 2030 -- McKinsey Energy Insights (MEI), the data and analytics specialist that provides distinctive insight to the global energy industry, forecasts that the Marcellus, Utica, and Permian shale plays will supply 55% of the North American gas market by 2030. The findings are reported in MEI’s latest North America Gas Outlook to 2030, which explores gas supply and demand projections to 2030.Yasmine Zhu, senior analyst at MEI, comments: “Continued improvements in technology have sustained North American gas production. Improved drilling and completions technology have led to enhanced recovery rates and efficiency, while innovations in water procurement and disposal are allowing operators to realize where additional savings can be made. We anticipate that further technical breakthroughs will continue to boost shale gas production and drive down costs, particularly over the next two to five years in marginal plays like the Haynesville.”Operators are also expected to target secondary plays from existing wells. These developments have substantially lowered breakeven costs, and MEI estimates that approximately 650 Tcf of gas—enough to meet over 25 years of North American demand—has a breakeven point below $2.8/MMBtu. Should recovering oil prices drive a boom in drilling, increasing oilfield services costs could influence the break-even price. By 2030, MEI expects that the Marcellus, Utica, and Permian shale plays will supply ~55% of the North American market. The Marcellus and Utica currently account for 27% of total US and Canadian supply, and MEI projects that percentage will grow to 40% by 2030. Of the anticipated associated gas growth, approximately 60% will come from the Permian, adding 14 Bcfd in 2030. However, additional infrastructure will be needed to keep pace with the rapid production growth and enable operators to capitalize on a higher wellhead price for export markets.

Marcellus, Permian Rig Counts Down as BHI's US Tally Falls by Three - A drop in natural gas-directed drilling, included a net declines in the Marcellus and Utica shales, drove the U.S. rig count lower for the week ended Friday, according to data from Baker Hughes Inc. (BHI). The domestic tally fell by three week/week (w/w) to 1,059 from 933 active units a year ago. Four natural gas rigs exited the patch to offset a net gain of one oil-directed unit. Directional units finished flat w/w, while two horizontal units and one vertical unit packed up, according to BHI. All of the week’s U.S. net declines occurred on land, as Gulf of Mexico activity held steady at 19 rigs and one rig returned to inland waters. In Canada, 27 rigs returned for the week, including 18 oil-directed rigs and nine gas-directed, leaving the Canadian tally at 139, down from 159 a year ago. The North American rig count climbed by 24 w/w to end at 1,198 units from 1,092 rigs at this time last year. Among plays, the Permian Basin saw the largest net change for the week, dropping four units to finish at 476 (368 a year ago). A more detailed breakdown of BHI data by NGI’s Shale Daily shows the declines focused in the “Other” portion of the Permian, with the Midland sub-basin dropping one unit w/w as the Delaware sub-basin added one. Meanwhile, the Marcellus Shale saw two rigs dropped for the week to finish at 54, putting it even with its gas-focused competitor in the Gulf Coast region, the Haynesville Shale. Other declines were in the Arkoma Woodford, the Cana Woodford and the Utica Shale, which each dropped one rig. Gainers among plays included the Williston Basin and the Eagle Ford Shale, which each added two units, while one rig returned in the Granite Wash, according to BHI. Among states, North Dakota and New Mexico each added three rigs for the week, while Louisiana picked up a rig to end at 60 active units. Texas posted the largest weekly net decline among states, dropping four units to finish at 534. Alaska dropped two rigs overall, while Colorado, Ohio, Pennsylvania and West Virginia dropped a rig a piece. 

Gap seen widening between US Northeast gas pipeline capacity, production - Natural gas pipeline takeaway capacity additions in the US Northeast production area have yet to spur the level of further output the market was expecting, making it difficult to fill the infrastructure during certain periods, according to S&P Global Platts Analytics.The perspective, offered during the first day of the LDC Gas Forum Northeast conference in Boston, comes as industry leaders analyze Appalachian Basin supply, demand and pricing fundamentals heading into the next decade.At issue is whether easing pipeline constraints are only temporary and the extent to which LNG export growth will encourage Marcellus and Utica shale producers to drill more. "New production is not there to fill these projects, and this is only going to get worse," Luke Jackson, a Platts Analytics senior energy analyst, told attendees at the conference. "On the surface, you'd say the Northeast is evolving. I would argue, 'Not so fast.'"   Total Northeast production reached 27.3 Bcf/d on several days towards the end of December. Since then, TransCanada's Leach XPress brought online its 1.5 Bcf/d of capacity while Energy Transfer Partners' Rover Pipeline has added about 1.5 Bcf/d of capacity as well. Despite those increases, total Northeast gas production averaged 27.2 Bcf/d in May and is averaging 27.3 Bcf/d thus far in June, data compiled by Platts Analytics show.Rather than spurring regional production growth, additional pipeline capacity has reshuffled production volumes among existing Northeast takeaway pipelines. Jackson said the gap between Northeast capacity and production could be as wide as 10 Bcf/d by late 2019.

Republicans propose penalties for states that oppose offshore drilling | TheHill: House Republicans unveiled a draft proposal this week that would place fines on states that block offshore gas and oil drilling. The Republican draft proposal, first reported by The Washington Post, will be discussed at the Natural Resources Committee on Thursday. It would allow states to disapprove of offshore drilling for gas and oil in half of its lease blocks without facing any penalties. However, states with proposed lease sales that disapprove of drilling in more than 50 percent of the blocks would have to pay a fee equal to at least one-tenth the estimated revenue the government would have made if it had leased the blocks. The proposal also sets up a revenue-sharing scheme for states that allow drilling. The move would help pressure local politicians to fall in line with President Trump Donald John TrumpTrump suggested that North Korean TV anchor should get a job in US: report AT&T announces it has completed acquisition of Time Warner Classified Israeli report raises questions about Trump-Kim summit: report MORE ’s plan to increase offshore leasing. Earlier this year, Trump called for offshore drilling in nearly all U.S. coastal waters, negating a drilling ban former-President Obama imposed near the end of his term. Many Democrats and some Republicans in coastal areas have resisted Trump’s plan, and some have pledged to keep the federal government from allowing offshore leasing in their states. The pushback led Trump’s interior secretary, Ryan Zinke to tell Congress he would scale back Trump’s plan. Democrats are opposed to the proposal, arguing it could cost states millions or billions in fees if they choose to oppose drilling. 

GOP offshore drilling proposal triggers debate --Republicans used a Natural Resources hearing Thursday to tout newly proposed legislation that would give states a larger share of royalties to incentivize them to back expanded offshore drilling. States that do not agree to allow offshore drilling, or that propose moratoriums on it, would see their share of revenue from federal drilling drop. Rep. Paul Gosar (R-Ariz.) touted the bill as a way to give states more authority, while saying they should not be able to veto lease sales. “While states are highly involved in the offshore lease planning process they do not have a veto over lease sales,” Gosar said at a Thursday House Natural Resources subcommittee on energy and mineral resources hearing. “It’s an acknowledgment that such an attempt to strand federal assets comes at the expense of the American taxpayer,” said Gosar, the subcommittee’s chairman. Rep. Rob Bishop (R-Utah), chairman of the House Natural Resources Committee, said the bill would be an example of federalism at its best. The bill, which was proposed this week, would take away management of offshore drilling from the Interior Department's Bureau of Land Management and place it in the hands of states. If a coastal state chooses to expand drilling and increase production of fossil fuels, they’d get a larger portion — 60 percent — of the royalties from the lease sale. 

Supporters of new Enbridge pipeline deliver petitions to Gov. Mark Dayton's office -   Supporters of a proposed new pipeline across northern Minnesota dropped off postcards and petitions containing 1,200 signatures at Gov. Mark Dayton’s office on Friday, the latest move in a drawn-out battle that is weeks away from a regulatory denouement.The Minnesota Public Utilities Commission is set to decide the fate of the controversial Line 3 project by Enbridge Inc. later this month after three years and several legal fights.Enbridge Inc. is seeking approval from state regulators to drain and seal up its aging crude oil Line 3 and construct a larger pipeline across a new, more southerly route.Petitions were signed by “a broad coalition” of supporters that include chambers of commerce, representatives of corn and soybean growers and construction trade unions, said a spokesman for Minnesotans for Line 3, which collected signatures during a five-month statewide canvassing effort.The group is led by United Piping Inc. CEO Bob Schoneberger, a former Enbridge employee whose company specializes in pipe construction for the oil and gas industry.Schoneberger did not respond to a request for comment.Mark Salmon, a retired member of Roofer’s Local 96 in Sturgeon Lake, Minn., said the project will add jobs and update aging infrastructure. He signed a card to show his support for what he called “a no-brainer.”“You’ve got old pipes and new technology that’s safer,” said Salmon, whose property is not affected by the proposed new route. “If you’re worried about the environment, why wouldn’t you want something that’s safer than something that’s been there for however many years and could bust?”The original Line 3 pipeline was laid in the 1960s. Enbridge says it is aging, corroding and operating at just over half capacity because of safety concerns. The new pipeline — which would begin in northern Alberta and end in Superior, Wis. — would restore the full flow of oil from Canada.

Staff members recommend state regulators approve controversial Enbridge pipeline project -- Allowing Enbridge to build a controversial new oil pipeline across northern Minnesota would be better for the environment than to continue relying on the aging, corroding pipeline that it would replace, according to staff for the Minnesota Public Utilities Commission.The PUC staff comments are a recommendation for a new Line 3, but they are not the final decision in regard to the project.After conducting four public meetings this month, the PUC is expected to determine whether the proposed $2.6 billion Line 3 project should get a "certificate of need" and, if so, what route the pipeline should take.As is common before PUC meetings, the commission's staff files briefing papers that sum up the issues. They often include PUC staff analysis and recommendations.In briefing papers filed Friday, PUC staff wrote: "A fair reading of the record would support the conclusion that, with respect to effects of the [Line 3] project on the natural environment, the consequences of granting a certificate of need for the project are more beneficial than denying it because of the risk of catastrophic failure of the existing line, despite it being operated at reduced pressure." The 1960s-vintage Line 3, one of six Enbridge pipelines that ferry Canadian oil across Minnesota, runs at only 51 percent capacity due to safety concerns. Enbridge said a new pipeline would be safer and would restore the full flow of oil. If a new Line 3 is denied, Enbridge plans to keep operating — and regularly repairing — the old one.

US EIA lowers 2018 Henry Hub spot gas price forecast by 2 cents to $2.99/MMBtu - The US Energy Information Administration Tuesday raised by 1.17 Bcf/d to 87.35 Bcf/d its second-quarter natural gas marketed production estimate for the US. EIA, in its June Short-Term Energy Outlook, also raised its Q3 marketed production forecast by 1.09 Bcf/d to 88.22 Bcf/d. The agency raised its natural gas consumption estimates by 0.83 Bcf/d to 69.95 Bcf/d for Q2, and by 0.36 Bcf/d to 69.54 Bcf/d for Q3. EIA lowered its forecast for Q2 Henry Hub natural gas spot prices 1 cent to $2.84/MMBtu. The Q3 forecast also dropped 1 cent from the previous month to $3.01/MMBtu. The agency projected Henry Hub natural gas prices would average $2.99/MMBtu for the full year and $3.08/MMBtu in 2019.

Soaring NGL Supplies May Soon Overwhelm Mont Belvieu Fractionation Capacity - The NGL sector is firing on all cylinders. Natural gas liquids production in the Permian, the SCOOP/STACK and other key basins is up, up, up. A number of new, ethane-consuming steam crackers are coming online along the Texas and Louisiana coast, most conveniently close to the NGL storage and fractionation hub in Mont Belvieu, TX. The export market for liquefied petroleum gases — propane and normal butane — is through the roof, averaging more than 1 MMb/d in the first five months of 2018 (almost all of it being shipped out of Gulf Coast ports), and ethane exports are strong too. What’s not to like? Well, NGLs don’t do anyone much good until they are fractionated into “purity products” like ethane, propane, normal butane etc., and the rapid run-up in U.S. NGL production — combined with the reluctance of producers to commit to new fractionation capacity — has the existing fractionation plants in Mont Belvieu running flat-out to keep up. Today, we begin a review of the NGL Capital of the Western World and considers why Mont Belvieu — as big as it is — is getting bigger.

US feedstocks imports climb above 300,000 b/d on ExxonMobil cargo: Census data - Feedstocks imports to the US from Europe, Africa and other sources rose back above 300,000 b/d in the first 10 days of June with support from a 410,000-barrel cargo shipped by BP and signed for by ExxonMobil, according to US Census Bureau data made public Monday. The Eagle Turin docked at Baton Rouge, Louisiana, June 6 with BP-sourced straight-run fuel oil that had been in storage in the Gulf of Mexico, according to data compiled by S&P Global Platts Analytics. Since late April, the Eagle Turin has been offloading oil from Gulf Coast floating storage for delivery across the region, according to S&P Global Platts' cFlow trade flow software. In the June 1-10 period, the US brought in 312,000 b/d of vacuum gasoil and straight run fuel oil, compared with imports of 198,000 b/d in the previous 10-day period -- May 22-31, the data show. US refiners typically are short 300,000-400,000 b/d of feedstocks and fill that need from sources in Northwest Europe, the Baltics, Russia, the Black Sea and Algeria. Companies signing for feedstocks imports June 1-10 included Marathon, Lukoil, Trafigura, Chevron, Statoil, Vitol, Repsol and Valero, the data show.

Permian oil will outpace all OPEC nations except Saudi Arabia -- The Permian Basin in West Texas is on track to produce more oil within five years than any OPEC nation except Saudi Arabia, positioning the Texas Gulf Coast to rival the Persian Gulf when it comes to oil and gas activity.  Crude volumes from the Permian will more than double by 2023, making the region the world’s third-largest producer after Russia and Saudi Arabia, according to the research and consulting firm IHS Markit. Most of that oil is headed to refineries and ports near Houston and Corpus Christi, as U.S. crude exports are expected to surge to nearly 5 million barrels a day by 2023, up from more than 2 million today.“In the past 24 months, production from just this one region — the Permian — has grown far more than any other entire country in world,” said Daniel Yergin, IHS Markit vice chairman.The comeback of the Permian, which today accounts for more than half the nation’s active oil drilling rigs, is among the the most remarkable stories in the industry’s history. At the beginning of the decade, the aging oil field was struggling with declining production. But advances in hydraulic fracturing, or fracking, and horizontal drilling pioneered by Houston companies such as EOG Resources, have tapped massive reserves of previously inaccessible oil and gas.By 2023, the shortage of pipelines to move oil, gas and natural gas liquids to Gulf Coast markets and beyond is expected to be alleviated by multibillion-dollar projects now underway or planned. Oil, petrochemical and liquefied natural gas companies are investing billions of dollars to process and export petroleum from the Permian and other shale plays, which, according to the International Energy Agency, has made the Gulf Coast a global trading center as vital to world’s energy needs as the Straits of Hormuz, through which tankers filled with Middle Eastern crude travel to the world’s markets.Near Corpus Christi, for example, the Houston exploration and production company Occidental Petroleum, is continuing to expand its crude export terminal at Ingleside. In 2017, Texas accounted for three-fourths of U.S. crude exports, which recently hit a weekly record in May of 2.6 million barrels a day. IHS Markit estimates that $308 billion in new spending is required to drill more than 40,000 new wells in the Permian needed to meet its projections. That’s more than double the $150 billion invested there from 2012 to 2017. The report also assumes that oil prices will continue to average at least $60 a barrel.

Permian Boom Jeopardized By Pipeline Troubles - The Permania, as someone called the oil industry and private equity rush to West Texas and New Mexico, has begun to take its toll on all those investors that saw it as the next huge thing. With production booming, pipeline capacity has become tight, and producers are forced to sell their crude at a painful discount to benchmarks. They are also losing billions in market capitalization. A recent story from Bloomberg estimated that over the last two weeks, eight of the biggest oil producers with a presence in the Permian have shed a collective US$15.6 billion in market value, or over US$1 billion per day, with some of the shares booking double-digit drops. It is an impressive turning of the tables. Just a year ago, everyone who had acreage in the Permian was a magnet for investors. The U.S. Geological Survey had upgraded the reserve estimates for the basin, especially thanks to a major upward revision of the Wolfcamp area. Producers boasted of being able to produce crude at ridiculously low production cost levels. And produce it they did, at a fast-increasing pace, which eventually clogged the pipes. The current pipeline capacity in the Permian is 3.1 million barrels daily. Railway capacity, according to S&P Platts, is around 315,000 bpd. However, the railway is mostly used to supply frac sand for the ever-hungrier wells. Production, as estimated by the Energy Information Administration, should this month reach 3.277 million bpd. And it will continue to rise. No wonder investors are worried. Some are so worried, in fact, that they are dropping their holdings in Permian players, even big names such as Concho Resources and Pioneer Resources. They are moving to producers with more diverse asset portfolios, Bloomberg reports, citing analysts. Pure-play Permian is no longer a stamp of guaranteed success. There is, of course, a solution to this problem, which has seen Midland crude trade at a discount of US$19 a barrel to international Brent. The solution is more pipeline capacity, and although it has been slow in coming, it is coming.

Exxon Mobil, Plains partner on Permian pipeline project - Exxon Mobil is joining the race to build out pipeline networks that stretch hundreds of miles across Texas to deliver crude oil from the booming Permian Basin to refining and port hubs near Houston.Exxon Mobil said Tuesday it plans to create a joint venture with Houston's Plains All American Pipeline to construct a multibillion-dollar pipeline stretching from west of Midland to the Houston and Beaumont areas that would carry oil and condensate. Plains and Oklahoma-based Magellan Midstream Partners recently expanded their BridgeTex oil pipeline, which has served as the major artery from West Texas to the Houston region. Permian oil production, however, is at a record high and rapidly rising and the lack of pipelines are creating bottlenecks that hamper the pace of growth and create discounts to Permian-produced oil.

Permian Basin Pipeline Will Carry Out 1 M Barrels of Crude Oil Per Day -  ExxonMobil and Plains All American Pipeline announced Tuesday a joint pursuit to construct a multi-billion dollar pipeline that will transport more than 1 million barrels of crude oil and condensate per day from the oil-rich Permian Basin to the Texas Gulf Coast, the Houston Chronicle reported. The proposed pipeline will stretch hundreds of miles from both Wink and Midland, Texas to delivery points in Webster, Baytown and Beaumont, Texas, a news release from the companies stated.Despite governments around the world enacting measures to reduce carbon emissions to help fight climate change, the latest oil market forecast from the International Energy Agency (IEA) makes it clear that the world is yet to turn its back on fossil fuels.Production in the Permian shale field in western Texas has been booming. According IEA's Oil 2018 forecast, global oil production capacity is expected to grow by 6.4 million barrels a day (mb/d) to reach 107 mb/d by 2023. Much of that growth is led by the U.S. due to oil produced from fracking the Permian, where output is expected to double by 2023.However, there is currently not enough pipeline capacity to retrieve Permian oil, causing regional oil prices to deflate.But that bottleneck has opened up opportunities for pipeline developers in the region. Exxon said in January it plans triple Permian production to 600,000 oil-equivalent barrels by 2025, and spend more than $2 billion on transportation infrastructure to support its Permian operations. Houston-based Plains All American Pipeline is investing $1.6 billion in Permian expansions, but other pipelines are also in the works, according to Motley Fool. Epic Midstream has proposed a 440,000 barrel-per-day (bpd) crude oil pipeline in the region, so has Magellan Midstream Partners, which has proposed a 600,000 bpd pipeline.

The El Encino-To-Topolobampo Pipeline Nears Completion, And What It Means For Waha --Mexico has been slowly increasing import volumes of natural gas from the U.S., utilizing spare capacity in the newest pipelines south of the border that access supply from the Permian Basin’s Waha Hub. The recent increases have been muted somewhat by delays in completing other infrastructure inside of Mexico, but one of those big delays is about to be resolved. TransCanada’s long-awaited El Encino-Topolobampo Pipeline is finally nearing completion, and once it’s online there may be a surprisingly big gain in gas export volumes to Mexico. As most of this gas will be supplied directly from Waha, Mexico’s impact on Permian gas balances is likely to jump materially in the weeks ahead. Today, we examine the latest development in Mexico’s natural gas pipeline buildout and its effects north of the border. We last looked at the buildout of Mexico’s natural gas pipeline infrastructure in our Closer blog, where we took a deep dive into the most recent developments in Northwest Mexico, focusing on the Fermaca-built pipeline network. Prior to that, we wrote Welcome to the Future, in which we evaluated the evolving structure of Mexico’s pipeline transportation capacity market and its implications for flows and pricing of gas within the U.S.’s southern neighbor. That blog also discussed the role of Comisión Federal de Electricidad’s (CFE) marketing affiliate, CFEnergía, in marketing and trading gas and other fuels within Mexico. In today’s blog, we shift focus to the El Encino-Topolobampo Pipeline, which will link demand along the west coast of Mexico to the Permian, and the plan by CFEnergía to provide Permian-sourced gas to power plants along the new pipe.

Side Effect of Rising Oil Drilling: Indigestion for Gas Frackers - Higher oil prices are helping many American shale drillers. But they are hurting companies that frack for natural gas. As companies respond to rising oil prices by drilling more for it, they often unearth gas as a byproduct. That has further weighed on already low gas prices, pressuring shale frackers in regions that primarily produce gas. The average share price for the five top companies focused on the oil-rich Permian Basin in Texas and New Mexico are up more than 16% over the past year. Share prices for the top five producers focused on the Marcellus Shale in Appalachia, the country’s largest deposit of natural gas, are down more than 9%. “It’s going to be tough for the Marcellus for a while,” said Brian Lidsky, managing director at oil-and-gas research firm PLS Inc. “There is just a tidal wave of gas coming out of the Permian.” Like most shale drillers, those focused on natural gas in the Marcellus—a group that includes Cabot Oil & Gas, EQT Corp, Range Resources, Antero Resources, and Southwestern Energy have been under investor pressure to live within their means, curtail excessive spending and improve returns. And they have come closer to doing that. As a group, those companies spent about $106 million more than they made in the first quarter of 2018, according to a Wall Street Journal analysis of S&P Global Market Intelligence data. That is down from outspending cash flow by more than $274 million in the previous quarter and more than $735 million in first quarter of 2017. .Still, investors have been reluctant to put more money into gas drillers, and the reason is simple: Gas has been cheap for years and doesn’t look primed to go up soon. Demand for natural gas is predicted to rise globally over the next decade as many countries switch from coal-fired power plants to gas-powered ones. However, that isn’t expected to solve gas drillers’ problems in the short term.

Another fracking boom to beget another fracking bust; or will it? | TheHill: - Employers and community leaders in Midland, Texas are in a scramble to keep essential services operating as restaurant workers and school bus drivers are leaving their jobs for much more lucrative work in the oil patch.It’s another fracking boom reminiscent of the 2013 boom in South Texas’ Eagle Ford Shale. Such is life in the oil industry, characterized by boom-bust cycles ever since Edwin Drake discovered oil in western Pennsylvania in 1859. So why this latest oil and gas boom? Most people know that hydraulic fracturing (fracking) has stimulated steady growth in domestic oil and gas production (and exports). But fossil fuel consumption has been growing as well. Indeed, natural gas and coal still dominate the electric generation mix nationally and retain large market shares in places like New England (49 percent) and New York (29 percent) that seem to want to decarbonize.  Economic factors drive energy consumption decisions. While coal is losing market share because it can’t compete on price, oil and gas still can. Oil and gas frequently beat their competitors on price in the transportation and electric generation sectors, respectively, notwithstanding growing demand for electric cars and newly inexpensive wind and solar power. This boom has all the earmarks of past oil and gas booms: rapid and drastic increases in salaries and prices in host communities and concerns about the ability of local communities to manage the consequent social and economic disruptions, truck traffic, environmental impacts, etc. For every boom, there comes a bust. But some hypothesize that this boom might be different — longer lasting, because of the enormous size of the resource and international geopolitical factors that could keep the price of oil higher for longer.

Natural gas pipeline explosion rocks rural Kansas - A Southern Star Central Natural Gas pipeline exploded outside Hesston, Kansas, early Friday morning, sending flames shooting 75 to 100 feet into the sky, CBS Wichita affiliate KWCH reports.Southern Star spokesman Rob Southard said that the pipeline was shut off, with the fire burning up what was left. He said finding a cause could take weeks.Capt. Andy Wray, with Hesston Fire & EMS, told KWCH that the fire had spread from the pipeline to the surrounding wheat stubble field and grass, though fire crews were eventually able to contain it. He said support was requested from the American Red Cross and the Harvey County Emergency Response Team due to the heat and the high demand on firefighters.  No injuries were reported. Residents were asked to steer clear of the affected area.

In possible roadblock for Keystone XL, pipeline opponents gift land to Ponca  — For five years, opponents of the Keystone XL pipeline and members of the Ponca Indian Tribe have sown native tribal corn in the path of the controversial project as a form of resistance. Now they’ve planted another potential roadblock. Last weekend, Art and Helen Tanderup, who farm north of Neligh, Nebraska, deeded the 1.6-acre plot of native corn to the native inhabitants of the land, the Ponca. Selling the land to the Ponca means that TransCanada will have to negotiate with a new landowner, one that has special legal status as a tribe — a tribe that is opposed to the pipeline. The plot becomes the only tribally owned plot of land on the XL pipeline route in the U.S. “We want to protect this land. We don’t want to see a pipeline go through,” said Larry Wright Jr., the chairman of the Ponca Tribe of Nebraska. “If this adds another layer (of opposition) to that issue, we’re happy to be part of that.” TransCanada officials did not respond to requests for comment on Wednesday. The company has recently been holding meetings with landowners along the pipeline route across Nebraska that was recently approved by the State Public Service Commission.

Industry study claims Initiative 97 would cost Colorado billions; measure's proponents push back -- The Colorado Alliance of Mineral and Royalty Owners released a new study showing that if Initiative 97 is passed by voters, it would cost Coloradans roughly $26 billion in lawsuits, and its president says its passage would put an end to oil and gas development in Colorado. But the measure’s proponents say that’s not the case. “It basically shuts down the oil and gas development in the area,” said CAMRO President Neil Ray. Initiative 97 is a proposed ballot initiative that would prohibit oil and gas developments that aren’t on federal land from operating near occupied buildings less than 2,500 feet away.  Ray is a mineral and royalty owner himself who says owners will be probably fight back the initiative if it becomes a law.“Mineral and royalty owners would be denied their private property and wouldn't be able to develop their private property, which would lead to regulatory takings law suits and that would bankrupt the state,” he said.Grassroots organization Colorado Rising, which drafted the initiative, released a lengthy statement disputing the study and its president’s claims:

South Dakota High Court Blocks Bid to Halt Keystone XL -- The South Dakota Supreme Court disappointed an attempt by Native American tribes and state activists to block the Keystone XL pipeline on Wednesday, ruling that the lower court lacked jurisdiction to hear their appeal, The Associated Press reported.The Cheyenne River Sioux Tribe, Yankton Sioux Tribe and conservation and family agriculture group Dakota Rural Action had appealed a decision by a judge last year to uphold the Public Utilities Commission's decision to let the controversial pipeline cross the state.Dakota Rural Action attorney Robin Martinez called the decision "disappointing" on Thursday but affirmed that "fight is not over," The Associated Press reported further.Terry Cunha, the spokesperson for TransCanada Corp., the company behind the pipeline, told The Associated Press in an email that the company was pleased with the court's decision. TransCanada was in the news just last week when one of its natural gas pipelines exploded in West Virginia.

Bakken oil field barrel differential reaches all-time high - The Bakken shale crude differential in Williston, North Dakota, climbed to its highest recorded level Thursday despite a narrowed Brent-WTI spread, with Clearbrook barrels climbing to an eight-month high. Close to the Bakken oil fields, Williston barrels climbed 15 cents day on day to be assessed at NYMEX light sweet crude calendar-month average (WTI CMA) plus $1.75/b, on the back of a Dakota Access Pipeline trade heard and talked rebid 5 cents lower. This was the highest field barrel differential since S&P Global Platts began assessing Bakken in Williston in April 2014. Williston-origin Bakken for FOB transport on BNSF trains was heard traded at NYMEX WTI CMA plus $1.95/b. In the Midwest, Bakken crude in the Clearbrook, Minnesota, hub jumped 45 cents to be assessed at NYMEX WTI CMA plus $3.30 on a trade heard at that level. That was the highest Clearbrook differential since October 2017, when Midwest refiners had increased crude runs to cover production losses from Gulf Coast refineries damaged in the aftermath of Hurricane Harvey. "It is getting out of hand," a Bakken source said about the crude's continued rise. Bakken differentials have been rising amid Brent-WTI spreads remaining wide, making crude grades priced off of WTI more attractive to both domestic and international buyers than their Brent-linked counterparts. Despite a narrowed Brent-WTI spread during the day, Bakken maintained its rally. Platts assessed the front-month spread at $9.07/b, down 38 cents day on day. The spread peaked at $11.15/b last week, the widest in more than three years.

Canada acquires key pipeline link to Washington refineries - The Canadian government is purchasing  a vital link in Washington’s oil network — a nearly 70-mile pipeline spur running through Whatcom and Skagit counties that feeds crude oil to four refineries, according to financial-disclosure documents.This is a piece of the much larger acquisition of the Trans Mountain Pipeline — announced May 29 — that runs more than 700 miles from Edmonton, Alberta, to tidewater at Burnaby, British Columbia.The sale by Houston-based Kinder Morgan to the Canadian government is expected to improve the prospects for a $5.4 billion pipeline expansion strongly supported in Alberta but fiercely opposed in British Columbia and Washington state due to the risks of oil spills and the broader climate impacts of boosting production of crude extracted from oil sands. The sale is expected to close in August. The expansion would nearly triple the flow capacity through the Canadian mainline pipeline so that oil could be exported from Burnaby to California and Asia. But there also is an option — noted earlier this year in a Kinder Morgan financial-disclosure document — to more than double the capacity of the small Washington spur line. That would create the potential for exports from Washington, where tankers have a more direct path to the open ocean than those departing from Burnaby. But any move to export oil from an expanded pipeline through Washington would face huge pushback from tribes, environmentalists and their political allies.

Kinder Morgan Pipeline Leak Two Days Before Trudeau Buyout Was 48 Times Larger Than First Reported - Just two days before Canadian Prime Minister Justin Trudeau announced that his government would purchase Kinder Morgan's faltering and widely opposed Trans Mountain pipeline, British Columbia's Ministry of Environment said 100 liters of crude oil had leaked at a Kinder Morgan pipeline pump station north of Kamloops—but the company initially refused to confirm the severity of the spill.On Saturday, with its bailout from the Canadian taxpayer confirmed by Trudeau, Kinder Morgan declared after an investigation that, actually, 4,800 liters of crude oil had leaked during the May 27 spill—48 times more crude than first reported.While the Ministry of Environment said no waterways were affected by the leak, environmentalists and Canadian members of parliament highlighted the leak as a telling example of the dangers pipelines pose to people and the environment and continued denouncing Trudeau's buyout. .As Common Dreams reported, Trudeau announced late last month that his government would buy the Trans Mountain pipeline for $4.5 billion, a move environmentalists and Indigenous leaders denounced as an act of "immense moral cowardice" that betrayed the prime minister's rhetorical commitments to bold climate action. Trudeau's decision has since sparked opposition rallies nationwide, with green groups arguing that the billions of taxpayer money being used to rescue a leak-prone, "climate-destroying" pipeline should be spent on healthcare, education, and a just transition to a sustainable energy system.

First Nations offer to buy equity in pipeline to have say project's future -  After Justin Trudeau’s surprise announcement that the Canadian government would nationalize a contentious pipeline, indigenous protesters have been among the most vocal in their opposition to the Trans Mountain pipeline expansion project, arguing that the project trespasses on their territory and poses a risk to the environment.  Protests led by First Nations have amplified public unease of over the mega project – which will triple the flow of bitumen from Alberta to the coastal waters of British Columbia – as the country attempts to balance its fight against climate change with an economy driven largely by the energy industry. But the project may soon find an unlikely group of investors: both the Athabasca Tribal Council and the Athabasca River Métis Council – a consortium of 10 communities – have offered to buy equity in the pipeline.“This is not the indigenous community coming out and saying: ‘We’re pro pipeline.’ We’re pro Trans Mountain. We see the value in it,” said Ron Quintal, president of the Athabasca River Métis. “The only way we’re able to mitigate the environmental impacts is through ownership and having a say in these projects.”  The two councils recently met with federal officials, including the infrastructure minister, Amarjeet Sohi, to discuss their proposal.  This will not be the first time Canada’s First Nations have invested in the fossil fuel industries that have encroached on their land and disrupted traditional ways of life.  Last year, the Fort McKay First Nation and Mikisew Cree First Nation in Alberta purchased 49% of an oil storage facility – a deal worth more than half a billion dollars. Frog Lake Energy Resources Corp, an indigenous-run company, produces 3,000 barrels of oil a day. A large source of tension around Trans Mountain project centres on the idea of unceded lands: few formal treaties were ever signed between British Columbia’s colonial settlers and the indigenous population – whose descendants argue that they retain the right to control any development.

The legal fight to leave the dirtiest fossil fuels in the ground -- Tar sands are the dirtiest fossil fuels. These are low-quality heavy tar-like oils that are mined from sand or rock. Much of the mining occurs in Alberta Canada, but it is also mined elsewhere, in lesser quantities. Tar sands are the worst. Not only are they really hard to get out of the ground, requiring enormous amounts of energy; not only are they difficult to transport and to refine; not only are they more polluting than regular oils; they even have a by-product called ”petcoke” that’s used in power plants, but is dirtier than regular coal.This stuff is worse than regular oil, worse than coal, worse than anything. Anyone who is serious about climate change cannot agree to mine and burn tar sands. To maintain climate change below critical thresholds, tar sands need to be left in the ground.This fact is what motivated me to testify to the Minnesota Public Utilities Commission last November, to inform my state’s ruling commission about the impact of tar sands on the climate. Canadian energy company Enbridge has petitioned to put a pipeline through my state to carry this dirty tar to refining sites on the coast. The proposed pipeline is called “Line 3.” The pipeline would carry approximately 760,000 barrels per day – the new pipeline would make it easier and cheaper for the oil companies to transport tar sands and consequently, would boost their bottom line. We already move over two million barrels per day through Minnesota in Enbridge pipelines. This new pipeline would encourage them to extract and sell more tar sands. So, how much pollution would this pipeline carry? 170bn kilograms of carbon dioxide each year. The emissions are equal to approximately 50 coal power plants. These are huge numbers, but more importantly, approval of pipelines like this make it more likely that all of the tar sands in Alberta will be extracted. If that happens, global temperatures will increase by approximately 0.65°F (0.36°C). An astonishing number – approximately 3 decades worth of global warming.

Will Petronas's Stake Finally Make The LNG Canada Export Project A Reality? - Natural gas producers in Western Canada, with their share of U.S. and Eastern Canadian markets threatened by competition from producers in the Marcellus/Utica and other shale plays south of the international border, for years have seen prospective LNG exports to Asian markets as a panacea. But efforts to develop liquefaction “trains” and export terminals in British Columbia failed to advance earlier this decade — for starters, their economics weren’t nearly as favorable as those for U.S. projects like Sabine Pass LNG. Then, by 2016-17, global markets were awash in LNG as new Australian and U.S. liquefaction trains came online, and the BC LNG projects still alive were either delayed further or scrapped. Now, with LNG demand on the upswing and the need for additional LNG capacity in the early-to-mid 2020s apparent, the co-developers of LNG Canada — Shell, PetroChina, Korea Gas and Mitsubishi — have attracted a new and significant investor: Petronas, Malaysia’s state-owned oil and gas company and owner of Progress Energy Canada, which has vast gas reserves in Western Canada. Today, we continue our review of efforts to send natural gas and crude oil to Asian markets with a fresh look at the LNG project and TransCanada’s planned Coastal GasLink pipeline, which will deliver gas to it.

Oil Companies in Alaska Refreeze Melting Permafrost to Keep Drilling - A new industry is taking off in Alaska, as innovators help oil companies compensate for the irony that climate change is making oil exploration harder on the increasingly less frozen permafrost, NPR reported Monday.Ed Yarmak, for example, heads a company called Arctic Foundations that makes metal tubes filled with a refrigerant called thermosyphons. These are then partly buried in permafrost, where they pull heat from the ground."To be honest, climate change is pretty good business for our company," Yarmak told NPR. "We're in the business of making things colder."Yarmak said he had been selling the tubes to oil companies since the 1970s, but that business has only picked up with global warming, which is moving at double the speed in Alaska as it is in the rest of the country, according to NPR.Josh Kindred, who worked representing oil companies for the Alaska Oil and Gas Association, acknowledged the contradictions of the oil companies' predicament, victims of a problem their actions helped to cause."It is ironic, and it's challenging for a state that is so dependent on resource extraction but is also really feeling the impacts of climate change," Kindred said. Kindred said Alaska was too reliant on oil revenue to consider stopping operations.But many oil companies are hesitant to admit that climate change is posing problems. Companies NPR reached out to for comment chose not to be interviewed.

 Rise in U.S. exports of jet fuel driven by Latin American and Caribbean countries --The United States exported 186,000 barrels per day (b/d) of jet fuel in 2017, the eleventh consecutive year of increasing gross jet fuel exports. Almost two-thirds (62%) of U.S. jet fuel exports went to countries in Latin America and the Caribbean, especially Mexico. Relatively high domestic production and a growing international aviation industry have established the United States as a net exporter of jet fuel for the seventh straight year. The United States exported jet fuel to 54 destinations in 2017, with 22% of these exports going to Mexico. U.S. exports of jet fuel to Mexico increased from 4,000 b/d in 2010 to 40,000 b/d in 2017 because of factors such as the liberalization of Mexico’s energy markets, increased air traffic, and low utilization at Mexico’s refineries. Many Caribbean and Central America countries have increased their imports of U.S. jet fuel because of a lack of sufficient refining capacity to meet domestic jet fuel demand.  U.S. refineries operated at record levels during 2017, working to produce enough jet fuel to support the growing export market. Petroleum products are typically exported from U.S. Gulf Coast ports, primarily Houston and New Orleans. About 80% of all U.S. jet fuel exports were shipped from the Gulf Coast in 2017.   The East Coast and West Coast regions of the United States remain net importers of jet fuel because of demand in metropolitan areas that host some of the busiest airports in the world. In particular, the West Coast has become increasingly reliant on jet fuel imports from Asian countries because regional consumption has outpaced production.

Venezuela crude oil output careens toward 1 million b/d - Venezuelan crude oil production is on the verge of sinking to 1 million b/d, and factors playing out this month will determine whether that level is reached early next year or within a few months. The Energy Information Administration projects Venezuela will hit 1 million b/d in second-quarter 2019, said analyst Lejla Villar, who develops projections for the monthly Short-Term Energy Outlook. "However, I am eagerly awaiting to see what the actual June production number falls to, which may very well accelerate the decline in production through 2019, pushing up this time line," she said. "If the worst-case scenario for June production comes true, then we could see Venezuela's production fall to 1 million b/d sooner." EIA's latest STEO report estimated Venezuelan output at 1.43 million b/d for May, down from 1.46 million b/d a month earlier and from 1.98 million b/d in May 2017. The International Energy Agency put May production at 1.36 million b/d and said it could fall to 800,000 b/d or even lower next year. S&P Global Platts estimated the country's May output at 1.36 million b/d, down from 1.41 million b/d in April, according to a survey of industry officials, analysts and shipping data.

Venezuela Won't Have Enough Oil To Export By 2019 - On May 21st President Donald Trump signed a new executive order prohibiting certain oil-related transactions with Venezuela. GlobalData, a leading data and analytics company, argues that the new sanctions are symbolic in comparison to the more targeted sanctions previously considered that would limit exports of Venezuelan crude oil to the U.S. Adrian Lara, Oil & Gas Analyst at GlobalData stated: “Crude oil production in Venezuela is practically falling at an average of 10% every quarter and has been since mid-2017. A scenario with oil production in the country losing at least another 500,000 barrels per day by the end of the year is not unrealistic. Having full additional sanctions imposed would certainly send a strong geopolitical message from the U.S. at the risk of generating more instability in the world supply markets.”GlobalData also forecast that Venezuelan crude oil production would fall to around one million barrels per day by the end of 2018. This is a steep decline from the three million barrels per day that Venezuela produced in 2011.  Platts reported this week that Venezuela has already warned eight international customers that it wouldn’t be able to meet its crude oil commitments to them in June. Venezuela’s state oil company PDVSA is contractually obligated to supply 1.495 million barrels per day to those customers in June, but only has 694,000 barrels per day available for export. Impacted U.S. oil companies reportedly include Chevron, “Conoco” and Valero. I suspect “Conoco” is really Phillips 66, the refining arm spun out of ConocoPhillips in 2012.Venezuela also reportedly has a severe backlog of crude deliveries at its main terminals, and this could temporarily halt PDVSA’s supply contracts if they are not cleared soon. The company has told some customers it may declare force majeure if they do not accept new delivery terms, including higher-cost and riskier seaborne transfers. Brent crude prices moved higher on the news. But if the GlobalData forecast is correct, then the temporary interruption of Venezuela’s exports may be permanent, as they will be plunging toward zero by the end of the year.

New study examines impacts of fracking on water supplies worldwide -- Using hydraulic fracturing to extract oil and natural gas from shale is a common technique used worldwide. Because the technique requires large amounts of water, however, it raises the question of whether it could lead to water shortages or competition with other water uses, especially agriculture. In a new paper in the AGU journal Earth's Future, Lorenzo Rosa and his colleagues evaluated the impacts of hydraulic fracturing on local availability for food production and other human and environmental needs globally.They found that 30 percent of shale deposits are located in arid regions where aquifers are already being heavily tapped for irrigating crops and 31 percent to 40 percent of shale deposits are in areas where water-stress would emerge or be exacerbated by fracking.The researchers conclude that in such places water management plans would be needed to ensure that fracking would not affect other human and environmental water needs.  The map below shows water stress within shale deposits. In water stressed areas, water is consumed at greater rates than the local water supply is replenished. Green, yellow, orange or red pixels represent areas where there are shale deposits and where freshwater is already being used at unsustainable rates. Areas with water stress indexes greater than one are where water consumption for human activities is unsustainable.

Pope Urges Oil Companies to Lead Clean Energy Transition in Unprecedented Vatican Conference - Pope Francis urged the leaders of big oil companies to see the light on climate change at a first-of-its kind conference held at the Vatican with oil executives, investors and Vatican experts, The Guardian reported Saturday."Civilisation requires energy, but energy use must not destroy civilisation," the pope said during remarks at the end of the conference, according to The Guardian.The current pope, who has emerged as a leader in the fight against climate change following his groundbreaking 2015 encyclical, urged the companies to lead the transition towards renewable energy and away from fossil fuels.He said they should strive "to be the core of a group of leaders who envision the global energy transition in a way that will take into account all the peoples of the earth, as well as future generations and all species and ecosystems," The New York Times reported.The pope also spoke with a great sense of urgency about the coming crisis. "There is no time to lose," he said, according to The New York Times."Will we turn the corner in time? No one can answer that with certainty," the pope said. "But with each month that passes, the challenge of energy transition becomes more pressing." The meeting, held Saturday behind closed doors at the Pontifical Academy of Sciences, included big names in the oil industry like the chairman of Exxon Mobil, the chief executive of BP, the chief executive of the Italian energy company Eni and representatives of Royal Dutch Shell, Norway's Equinor and Mexico's Pemex, according to The New York Times and the BBC.

Europe Is Awash With Oil Stored On Ships - While many analysts and agencies have already called the end of the global oil glut, oil held in floating storage in Europe is at an at least 18-month-high, also due to the booming U.S. oil exports that have displaced some of the traditional crude oil routes in the world. Oil in ships around European shores was 12.9 million barrels on average in May, accounting for 26 percent of all global floating storage, and more than Asia-Pacific’s 9.7 million barrels of oil stored, according to estimates by oil analytics company Vortexa, as carried by Reuters. In the two preceding months, March and April, the share of oil in floating storage in Europe accounted for 10 percent of the global storage, compared to 40 percent stored in the Asia-Pacific region. But in May, the volumes of oil held in Europe—including in the Mediterranean—exceeded the oil held off the Asia Pacific coasts for the first time since at least early 2015, according to Vortexa. Consultant Kpler has estimated that there are some 17 million barrels of oil stored on ships in northwest Europe—the highest since at least the beginning of 2016.Soaring U.S. exports have upended some traditional buying patterns, as China, India, and Indonesia have purchased more U.S. crude at the expense of African crude grades from OPEC members Nigeria and Angola, and of some Middle Eastern crudes.On the other hand, U.S. crude oil exports to Europe have also been rising lately, as U.S. oil is increasing in popularity with European refiners, often at the expense of oil cargoes from OPEC nations and Russia.The surge in U.S. production to record levels and the bottlenecks in parts of its biggest producing region, the Permian, have widened the WTI discount to Brent to more than $10 a barrel, up from $5 just two months ago. U.S. exports have also started to eat into OPEC’s market share on the prized Asian market.This has left Nigerian and Angolan crudes sitting in storage off European coasts. According to Kpler, Nigerian crude oil floating in the North Sea is a particularly unusual occurrence.

Dutch minister proposes faster Groningen output cuts – The Netherland’s Groningen gas field, once the largest onshore gas field in Europe, will produce less than 12 billion cubic meters per year (Bcm/y) by October 2020, the country’s economic affairs minister said Thursday.Eric Wiebes said in a letter to parliament the purchase of nitrogen to mixed with imported gas could lead to a reduction in gas extraction of between 1-1.5 Bcm beginning in October 2020. Construction of a new nitrogen plant in Zuiderbroek is underway. Once this plant is operational, around early 2022, gas production in Groningen could drop by another 7 Bcm, Wiebes said.  A reduction of gas exports from Groningen would further enable lower production, bringing forward the target of 12 Bcm/y by two years, Kallanish Energy reports.Following a series of earthquakes and seismic activity in the region due to gas extraction, the government has placed a cap on production of 21.6 Bcm this current gas year. From October, when the next gas year starts, a new cap will be effective. The previous plan was to shut the field by 2030.Wiebes said a draft plan for the next gas year will be published by the end of August. Groningen is operated by NAM – a 50-50 joint venture between Shell and ExxonMobil. The companies are said to be considering compensation claims for an early shutdown of operations.

European Natural Gas War Heats Up As Prices Rise -- Europe’s liquefied natural gas imports have surged sixteen percent (from 40.9 bcm in 2016 to 47.4 bcm in 2017) to become the third largest source of gas supply after Russia and Norway. The re-emergence of Europe as a major LNG market came after years of coal and nuclear power plant retirements as well as steep declines in Europe. In global gas markets, Europe looks like a bright star in terms of commercial opportunities over the next few years, as growing demand coincides with rising prices and strong imports. The United States, with four new LNG projects under construction, is in excellent position to seize the opportunity as a supplier in this dynamic market and assert the strategic role as it challenges Russia’s dominance as the region’s top gas supplier.  Europe’s energy market is undergoing structural changes that allowed natural gas to gain a larger share in the total energy mix over the last two years. After almost a decade of lackluster demand, market expectations for gas were tempered. Yet, contrary to this bearish outlook, gas consumption across the EU grew by 52 bcm (11%) between 2014 and 2016 and was called “one of the biggest surprises” by Venture Global LNG, Inc. The driving factor behind the recovery was the coal- to- gas move in the power sector that reduced Europe’s coal fired capacity to 156.6 GW in 2017 compared to 190 GW in 2010. National public policies and market forced the retirement of most remaining coal plants by 2030. As Europe’s need for gas increased, production from the North Sea and Groningen field in the Netherlands has been steadily declining. Groningen’s output, in particular, was slashed from 45 bcm in 2015 to 12 bcm in 2017. Dutch regulators expect to completely shut down Groningen production by 2030. This in turn will create a significant supply gap within the European gas market. As Europe’s gas demand grew in 2017 it turned first and foremost to Russia. Despite concerns over Russian dominance over supply, its export of “blue fuel” to Europe has grown to reach a record high 193.9 Bcf in 2017 - eight percent higher than its previous record set in 2016.

European natural gas injections show strength after record drawdown- Platts video - Despite European natural gas stocks being drawn down to record low levels at the end of the past winter and concern over storage economics this summer, injections have been strong, with stocks almost back to the same level as in 2017. Stuart Elliott, senior writer for European gas at S&P Global Platts, looks at the drivers of the European storage recovery and what to expect ahead of the coming winter.

Chinese Gas Pipeline Explosion Injures 24 People -- A natural gas pipeline operated by the state-owned China National Petroleum Corp. exploded in the southwestern Guizhou province on Sunday night. At least 24 people were "seriously injured," Xinhua reported Monday, citing local government authorities. Eight people are reportedly in critical condition and 16 in serious condition. No deaths were reported.The explosion occurred around 11:20 p.m. local time in the Shazi district of Qianxinan County.The pipeline was shut down and the fire was put out by 2:30 a.m. on Monday. An investigation into the gas leak is underway and authorities are still searching for any more casualties.The pipeline transports natural gas from Myanmar's Kyaukpyu port to southwest China, Reuters reported.A similar explosion happened on a nearby section of the pipeline in Shazi district in July 2017. That blast, which was caused by heavy rains and a landslide, took eight lives and injured 35, Xinhua reported then.The latest blast comes amid the Chinese government's efforts to boost natural gas to combat the country's notorious air pollution. Natural gas is considered "clean" because it emits 50 percent less carbon dioxide than burning coal. But the primary ingredient of natural gas is methane, a greenhouse gas about four times more powerful at trapping heat than CO2.

There's a gas pipeline deal to be done with Kim Jong Un. Any takers? - The idea of building a conduit to carry natural gas from the Russian Far East to South Korea has been around since the 1990s. From 2008 to 2011, as Russia’s gas giant, Gazprom PJSC, was building a pipeline as far as Vladivostok, the company signed a memorandum of understanding with North Korea and a framework agreement with Seoul’s Korea Gas Corp. to extend it south.It went nowhere, primarily because of the politics surrounding Kim’s bid to build up his nuclear and missile programs. With North Korea’s relations with the U.S., Seoul, and China now on the mend, and South Korea trying to reduce its dependence on coal and nuclear power, the pipeline would seem an obvious piece of economic diplomacy.The government in Seoul, at least, seems interested in bringing the proposal back to life. “Should the security situation on the Korean Peninsula improve, we will be able to review the LNG project involving the two Koreas and Russia,” South Korean Foreign Minister Kang Kyung-wha told a regional energy conference at the end of March, according to the state-owned Yonhap News Agency. Getting the North involved in such a project could “serve as a catalyst that helps ease geopolitical tensions in the region,” she said. Perhaps, but many obstacles stand in the way. Impoverished, unpredictable, and with a history of flouting international law, the government in Pyongyang would make a high-risk partner for something as capital-intensive as an energy pipeline. Even at the height of optimism about the project in 2012, when Gazprom was announcing it was ready to start work, a report by a Russian energy academic warned that “Russia cannot provide its South Korean counterparts with reliable guarantees of safe delivery,” because it lacked “real influence” over Pyongyang.

Global LNG trade continues to grow, especially from Australia and the United States - Global trade in liquefied natural gas (LNG) reached 38.2 billion cubic feet per day (Bcf/d) in 2017, a 10% (3.5 Bcf/d) increase from 2016 and the largest annual volume increase on record, according to the Annual Report on LNG trade by the International Association of Liquefied Natural Gas Importers (GIIGNL). In 2017, there were 19 LNG exporting countries and 40 LNG importing countries. Australia and the United States were among the countries with the largest increases (2.7 Bcf/d combined) in 2017 LNG exports. Besides Australia and the United States, several other countries also increased LNG exports in 2017. The return to service of Angola LNG and increases from several countries including Nigeria, Malaysia, Algeria, Russia, and Brunei added another 1.4 Bcf/d of LNG exports, more than offsetting a combined decline of 0.6 Bcf/d in exports from Qatar, Indonesia, Norway, Peru, the United Arab Emirates, and Trinidad.  Asian countries led the growth in global LNG imports, accounting for 74% (2.6 Bcf/d) of the increase in 2017. Japan remains the largest LNG importer, importing 11.0 Bcf/d in 2017. China had the largest growth in LNG imports globally (1.5 Bcf/d) and became the world’s second-largest LNG importer in 2017, surpassing South Korea. LNG imports also increased in South Korea, Pakistan, Taiwan, and Thailand, which collectively added 1.0 Bcf/d.  Europe increased its LNG imports by 1.4 Bcf/d, primarily in Spain, Italy, Portugal, France, and Turkey. LNG imports in the United Kingdom declined by 0.34 Bcf/d (35%), one of only two countries in Europe to experience declines in LNG imports, as lower winter heating demand from the residential sector and increased electricity generation from wind reduced the demand for natural gas. Growth in LNG trade was driven in part by new liquefaction capacity commissioned in Australia, the United States, and Russia, collectively adding 3.4 Bcf/d of liquefaction capacity. The world’s first floating liquefaction plant, Malaysia’s PFLNG Satu (0.2 Bcf/d capacity), was also commissioned in 2017. Since 2013, the United States and Australia have added a combined 9.67 Bcf/d of new liquefaction capacity, with another 8.3 Bcf/d expected to be completed by 2020. Including additions in the United States and Australia, liquefaction projects currently under construction are projected to increase global liquefaction capacity by 13.5 Bcf/d by 2022.

Global LNG trade jumped 10.3% to 393 Bcm in 2017: BP  -- Global LNG trade grew 10.3% in 2017 to 393.4 Bcm of gas equivalent, the fastest growth since 2010, BP said in its latest annual statistical review published Wednesday.  LNG supply growth leading to more price convergence Strong production growth -- aided by startup of new LNG trains in Australia and the US -- was met by equally strong demand growth from China, which accounted for almost half of the global expansion. Chinese LNG imports totaled 52.6 Bcm of gas equivalent last year, up 47% on the 35.9 Bcm it bought in 2016. Qatar remained the main global LNG supplier, with exports totaling 103.4 Bcm of gas equivalent, while the US saw its exports soar to 17.4 Bcm last year from just 4.3 Bcm in 2016 -- which was the first year of LNG supplies from the lower 48. Australia also saw its exports rise strongly by 28% to 75.9 Bcm last year, making it the world's second biggest LNG supplier by some distance. BP chief economist Spencer Dale said that while market observers had predicted an LNG supply "glut" given the wave of new supply projects that came online in the past few years, the result instead has been periods of unsustainably low prices rather than a build-up of idle capacity.

Natural Gas Flirts With Upside And Downside - Since its introduction in 1990, the NYMEX natural gas futures contract has traded in a range from $1.02 to $15.65 per MMBtu. Over recent years, the band has narrowed near the bottom end of the trading band. As the monthly chart illustrates, over the past three years, we have seen a narrowing trading range. In 2016, natural gas traded from $1.611 to $3.994, a $2.383 per MMBtu range. Last year, the range narrowed to under one dollar at 90.9 cents on the continuous futures contract. So far in 2018, the range has been from $2.53 to $3.661 or $1.131 per MMBtu. Even the range in 2016 is a far cry from past years. In the wild years of 2005 and 2008, the trading band for natural gas was $9.92 and $8.484 respectively. Interestingly, interest in the market is far greater these days than during the heyday of volatile conditions when speculators flocked to the natural gas futures arena. The natural gas market has matured and evolved in the United States over the past decade. The fact is that both the supply and demand side of the fundamental equation for the energy commodity has undergone dramatic changes. The discovery of massive reserves in the Marcellus and Utica shale regions of the United States and technological advances in hydraulic fracking has increased the supplies of natural gas at an exponential rate since the last time the price traded above the $10 per MMBtu level. At the same time, the cost of production has dropped because of both technology and, more recently, an energy-friendly administration in Washington DC that has cut regulations and decreased corporate tax rates. The lower price over recent years is the result of considerable increases in supplies at a lower cost.

Analysts call for 88 Bcf injection to US gas storage for seventh build of season - US gas in storage is expected to have increased by 88 Bcf last week as dipping production and rising temperatures foreshadow a string of slightly below-average builds in the weeks ahead, creating a bullish case for end-of-season levels. The US Energy Information Administration on Thursday is expected to report an 88 Bcf injection for the week ended June 8, according to a survey of analysts by S&P Global Platts. Responses to the survey were tight and ranged for a build of 81 Bcf to 95 Bcf. The EIA plans to release its weekly storage report at 10:30 am EST. An 88 Bcf injection would be more than the 82 Bcf build in the corresponding week last year but less than the five-year average build of 91 Bcf. This would only be the seventh injection of the year compared to the 10 net injections normally seen by this time. Over the past five years storage has added an average amount of 719 Bcf by now. This year, stocks have risen by 536 Bcf since the end of the heating season. In 2014, when in the injection season started at a low of 824 Bcf, storage fields had added 783 by early June. An injection within analysts' expectations of 88 Bcf would increase stocks to 1.905 Tcf. The deficit versus the five-year average would expand to 515 Bcf and the deficit versus last year in the corresponding week would shrink to 793 Bcf. The EIA reported a 92 Bcf injection for the week ended June 1. It increased inventories to 1.817 Tcf, which was 30.5% less than the year-ago inventory of 2.616 Tcf, and 22% less than the five-year average of 2.329 Tcf. 

EIA Shocks with 96 Bcf Storage Build; July Natural Gas Falls - The Energy Information Administration (EIA) reported a 96 Bcf build into storage inventories for the week ending June 8, considerably higher than even the most bearish of expectations. Nymex July natural gas futures initially appeared to take the surprise build in stride as the prompt month barely budged after the storage report’s 10:30 a.m. release.“Prices didn’t fall that much. We were at $2.97 when the number came out, then we dropped a penny,” INTL FC Stone’s Tom Saal said. By 11 a.m., the Nymex July contract had dropped to around $2.93, down 3.2 cents from Wednesday’s settle.The EIA’s reported 96 Bcf injection lifted storage inventories to 1,913 Bcf, 785 Bcf less than last year at this time and 507 Bcf below the five-year average of 2,420 Bcf.Before the EIA released the report, market consensus built around a build in the upper 80s Bcf range. EBW Analytics favored a slightly smaller build, while Bespoke Weather Services projected a 90 Bcf injection. Kyle Cooper of ION Energy Services expected a 93 Bcf build, and a Bloomberg survey had a range of 82-95 Bcf, with a median expectation of 90 Bcf. A Reuters poll also had a range of 82-95 Bcf, with a median expectation of 90 Bcf.Last year, the EIA reported an injection of 82 Bcf, while the five-year average build stands at 91 Bcf. The East region injected 26 Bcf into storage, while the Midwest injected 31 Bcf. Inventories in the South Central region rose by 27 Bcf.Saal said Thursday’s late-morning trading action was likely due to high-frequency traders that don’t necessarily care about such a large discrepancy in storage estimates versus the actual reported build. “The market is groping along now. There’s only so many things it can react to,” he said. Still, with weather forecasts showing cooler weather beginning next week, there could be some downside risk in play.

NYMEX July contract breaches $3/MMBtu on hot weather forecasts - The NYMEX July natural gas futures contract jumped 5.7 cents Friday to $3.022/MMBtu, the first time the prompt-month contract has reached above $3/MMBtu since late January, as hot weather in the coming days are likely to suppress storage-building efforts. Prices were last seen above the $3/MMBtu level in January. That came when a demand surge put storage levels at a 17.5% deficit to the five-year average for the week ended January 26, according to Energy Information Administration data.The price movement "is even more surprising after yesterday's bearish storage report," Myers said.The EIA reported a 96-Bcf injection to gas storage stocks Thursday for the week that ended June 8, a build well above market expectations. The current stock level of 1.913 Tcf is a 21% deficit from the five-year average of 2.42 Tcf, according to EIA. "The market believes that warm weather in the coming days is going to suppress the next storage injections," Myers said.Prices are likely to get further support from the National Weather Service forecast of above-average temperatures for much of the country while the Southwest region is likely to experience cooler weather than usual. US dry gas production slid a mere 100 MMcf day on day to 77.6 Bcf/d Friday, down 1% since the start of the week. Production is likely to rise to 78.3 Bcf/d over the next seven days, S&P Global Platts Analytics data showed.

July Natural Gas Surpasses $3 as Weather Models Point to Increased Heat - July natural gas was uncharacteristically active Friday as traders eyed increasingly hotter trends in the latest weather forecasts and the potential hotter temperatures may have on already below-normal storage inventories. The Nymex July gas futures contract settled 5.7 cents higher at $3.022.Spot gas prices were mixed as warmer weather was expected to lift demand in key eastern regions, but maintenance events and mild conditions in other areas sent prices tumbling. The NGI National Spot Gas Average climbed 1 cent to $2.62.Nymex July futures were strong from the start of trading, rising above $3 just before the open and climbing as high as $3.032 before easing a bit into the settle. At the forefront of Friday’s trading action were weather forecasts calling for more a very warm to hot pattern through the end of the month, with most days having greater than normal cooling degree days (CDD).  National demand was expected to increase over the weekend as hot high pressure shifted over the Great Lakes, Mid-Atlantic and East, where high temperatures of 90s were to be widespread, including in major cities from Chicago to New York City, NatGasWeather said.“This high pressure system is where hotter trends have held all week to add numerous CDDs/Bcf in demand,” the forecaster said. Demand is expected to soften late into the coming week week as weather conditions still looked quite comfortable across the central and northern United States with highs of 70s and 80s. Weather data also showed a weaker ridge over Texas and the South for less intense heat, NatGasWeather said. It will still be quite warm over the Southeast with upper 80s and 90s for regionally stronger demand, and likely hot over California into the Southwest as well with upper 80s to near 100. The hot upper ridge is expected to gain strength June 25-30 across the southern and central United States, including the Southeast and up the Mid-Atlantic Coast. “Where the data could be a little hotter is across the Great Lakes and Northeast. Although, it wouldn't take much of a shift with the hot dome of high pressure further north or east for the pattern to look much more bullish,”

Hong Kong’s CK infrastructure bids over $9 billion for Australian pipeline company -  Victor Li, the new chairman of Hong Kong’s CK Infrastructure Holdings Ltd., moved to expand the empire built by his billionaire father, Li Ka-shing, by offering more than $9 billion for Australian pipeline operator APA Group. The elder Mr. Li was known to be a fan of buying assets that offered stable returns and the APA bid shows the younger Mr. Li is continuing that strategy. It also demonstrates that Victor Li is committed to expanding an empire that includes ports and property businesses in China, electric utilities in Australia and mobile phone networks in the U.K. Li Ka-shing retired last month. APA operates more than 9,000 miles of gas pipelines in Australia. It also owns or has interests in gas-storage facilities, gas-fired power stations and wind farms. Its portfolio of assets is valued at more than $15 billion. On Wednesday, APA said it would open its books to a CKI-led consortium after receiving a conditional offer worth 11 Australian dollars (US$8.33) a share in cash. APA left the door open to other bidders. A formal offer would need approval from Australia’s antitrust regulator and the Foreign Investment Review Board. The CKI offer came at a 33% premium to APA’s Tuesday closing price. It values APA at more than $9.3 billion. The APA bid comes at a challenging time for the Li family’s CK Hutchison Holdings Ltd. conglomerate, which owns a majority stake in CKI. Chinese competitors are eating away at its port and property businesses in Hong Kong and mainland China, while regulators have blocked bids worth more than $10 billion for a mobile phone operator in the U.K. Political uncertainty in the U.K. also poses a risk to CK Hutchison as more than a third of its operating profit comes from there. CKI is one of the largest foreign investors in Australian infrastructure. It owns SA Power Networks, an electricity distributor in South Australia state, Melbourne electricity supplier CitiPower, gas distributor Australian Gas Networks Ltd. and an electricity distributor and a renewable-energy transmission business in Victoria state.

Unsold Nigerian July crude oil pegged at 20 million-34 million barrels - Nigerian oil has been slow to sell this month as bidders for the country's July-loading heavy and light sweet crudes have been absent from the market. Market participants pegged the amount of unsold Nigerian barrels loading in July at 20 million-34 million barrels, amounting to roughly 40%-75% of what is produced in a month. "For the time being, it is extremely quiet. No one has tried to jump on these barrels," one trader said, adding refiners were trying to reshuffle their needs. "Some refiners could be opportunistic about buying distressed cargoes," another trader said. Equity holders, who will take June-loading cargoes they could not sell into their own systems, have struggled to deliver additional stems into their systems in July. Akpo and Agbami, Nigeria's best grades in terms of sulfur and gravity, have fallen to a seventh-month low as large quantities of oil from the June and July program remained unsold as traditional buyers sought alternatives. Akpo and Agbami were both last assessed at a 65 cents/b discount to Dated Brent, their lowest since November 13 when they hit the same level, S&P Global Platts data showed. Marketing barrels has been more difficult due to wide Brent-WTI spreads giving oil coming from west of the Atlantic Ocean a price advantage over Brent-related ones.

BP Sees No Sign Of Oil Supply Shortfall Due To Underinvestment - UK supermajor BP doesn’t expect global oil supply shortages in the coming years because of reduced investment, Brian Gilvary, BP’s Group Chief Financial Officer, said on Thursday.“We’re not seeing under-investment coming through yet,” Gilvary said at the FT Energy Transition Strategies summit in London, as quoted by Reuters.“If we start seeing a drop off in production in the Lower 48 [U.S. shale] that might be a cause of concern,” Gilvary said at the summit.  Earlier this year, Saudi Aramco’s president and chief executive Amin Nasser said that the industry would need to invest more in exploration, after record-low discoveries last year. Oil firms will have to meet not only growing energy demand but will have to offset with new discoveries a large natural decline in mature oil fields, Aramco’s top executive said in Houston in March.According to Nasser, the industry—which has already lost US$1 trillion in investments during the downturn—needs more than US$20 trillion over the next 25 years to meet rising demand for oil and gas. More recently, higher oil prices and lowered development and project costs have led to cautious optimism and measured risk-taking within the industry that is set to see an uptick in global oil investment this year, energy consultants Wood Mackenzie say. While much of the investment increase is happening in U.S. onshore—with shale companies lifting 2018 budgets by 15-20 percent in response to higher prices—conventional oil project investments around the world are also coming back, especially in top offshore areas where project economics are competitive with U.S. tight oil, says Simon Flowers, Wood Mackenzie’s Chairman and Chief Analyst.

Russia led the world for oil and gas discoveries in Q3 2017 - -- A total of 30 oil and gas discoveries were made in the third quarter of 2017. Of these, 18 are conventional oil, one is heavy oil, one is unconventional gas, and the remaining 10 are conventional gas, according to GlobalData, a data and analytics company. Among countries, Russia leads with eight discoveries, followed by Norway and Australia with five and three discoveries respectively. Pakistan and Senegal had two discoveries in third-quarter 2017.In Russia, all eight discoveries yielded conventional oil, with two located in the West Siberian basin and the rest in the Volga-Ural basin.  In Norway, among five discoveries, four finds yielded conventional gas from the Barents Sea basin and Norwegian Sea basin, while the remaining one yielded conventional oil from the Barents Sea basin.In Australia, among three discoveries, two discoveries yielded conventional oil, one from offshore terrain and the other from shallow water terrain, and the remaining one yielded conventional gas from onshore terrain.Among operators, Rosneft Oil Company leads among operators with seven discoveries, followed by Statoil ASA with five discoveries, and Oil and Natural Gas Corporation Limited (ONGC) and Cairn Energy Plc with two discoveries each. The remaining operators had one discovery each in third-quarter 2017.

Interview: Would Qatar like to see an OPEC exit strategy? -  Ahead of OPEC's most important meeting in years on June 22, Qatar's energy minister Mohammed Al-Sada answers questions from the S&P Global Platts team on what to expect in Vienna and the state of the world LNG market.Al-Sada: "The 'Declaration of Cooperation' Agreement between OPEC and allied non-OPEC countries effective from January 1, 2017, has been very successful in balancing the market by reducing the overhang of a staggering 340 million barrels above the OECD five-year average commercial stock levels of 2.81 billion barrels. With a committed production adjustment over the 500 days till mid-May this year, the stock overhang has been brought down to almost zero. Currently both the 'fundamentals' and 'geopolitics' are very robust and are having a strong influence on the market. These factors have dramatically changed the market. Whether production cuts should be prolonged, or re-negotiated, in the context of market fundamental and changing geopolitics would be reviewed by OPEC and allied non-OPEC countries during the forthcoming meetings on 22-23 June in Vienna. They will surely arrive at an appropriate decision to the benefit of both suppliers and consumers." : "The production adjustment has been a thoughtful and agreed step to rebalance the market. It has worked well and there is certainly a good opportunity to extend and enhance the cooperation with the countries who have contributed to the stabilization of the market in the best interest of all and the world economy at large. Global spending peaked at $900 billion in 2014 but the crash in oil prices thereafter reduced the investment by half in 2017. It is estimated that the industry would only be spending $510 billion in 2018. It would be safe to say that except for shale plays in the US, there is still a general hesitation in committing resources for oil exploration and development.There is a need to stimulate investments to ensure adequate oil supplies are available to meet the growing demand and offset declines in some parts of the world."

Geopolitical Tensions Reach Boiling Point Ahead Of OPEC Meeting -- The upcoming OPEC meeting on June 22 is shaping up to be a contentious one, after news broke that the U.S. government asked Saudi Arabia to increase oil production before Washington pulled out of the Iran nuclear deal. Earlier last week, news surfaced that the U.S. government asked Saudi Arabia to boost output to relieve pressure on prices. But Reuters followed up with a report on June 7, adding more context to that story. According to Reuters, a high level Trump administration official called Saudi Arabia a day before Trump was set to announce the U.S. withdrawal from the Iran nuclear deal, asking for more oil supply to cover for disruptions from Iran. The last time the U.S. government pressured OPEC into adding supply, it was also over Iran. The Obama administration wanted the cartel to offset disrupted Iranian production, after an international coalition put stringent sanctions on Iran in 2012. Roughly 1 million barrels per day were knocked offline. While the Trump administration’s request might irk OPEC members, with Iran obviously the most aggrieved, the apparent willingness of Saudi Arabia to comply with Washington’s request has ignited furor from within the group.“It’s crazy and astonishing to see instruction coming from Washington to Saudi to act and replace a shortfall of Iran’s export due to their Illegal sanction on Iran and Venezuela,” Iran’s OPEC governor, Hossein Kazempour Ardebili, said in comments to Reuters. He said that OPEC would not simply comply with Washington’s requests.“No one in OPEC will act against two of its founder members,” he said, referring to Iran and Venezuela. “The U.S. tried it last time against Iran, but oil prices got to $140 a barrel.”“OPEC will not accept such a humiliation. How arrogant and ignorant one could be (to) underestimate the history of 60 years’ cooperation among competitors,” he said. Venezuela wrote to OPEC members, asking them to denounce U.S. sanctions, a request similar to the one Iran made recently. “I kindly request solidarity and support from our fellow members,” Venezuelan oil minister Manuel Quevedo wrote. The group should discuss “the constraining effects of unilateral sanctions imposed by the United States of America, which represent an extraordinary aggression, financially and economically, for our national oil industry’s operations and the stability of the market.”The comments suggest that a good portion of the cartel is lining up against any move to increase production. It could set the stage for a heated meeting in Vienna in two weeks’ time. “It might be one of the worst OPEC meetings since 2011," Eugen Weinberg of Commerzbank told CNBC.

Is Russia Bailing On The OPEC Deal? For the first week of June, Russia, the world's largest oil producer, exceeded the amount it agreed to produce as part of the January 2017, OPEC/non-OPEC supply cut deal.  Russia produced some 11.1 million barrels per day (bpd), far exceeding production limits outlined in the deal, Interfax news agency said on Saturday, citing a source familiar with the matter.  As part of the oil production cut, Russia agreed to trim its production by 300,000 bpd from 11.247 million bpd. The output cut deal called for its members to remove some 1.8 million bpd of oil from global markets.That deal was orchestrated to stop the bloodletting in global oil markets at the time due to a ramp up in U.S. shale production and Saudi Arabia's late 2014 strategy of trying to drive U.S. shale producers out of business by opening the production flood gates and sending prices to multi-year lows.However, the Saudi’s plan backfired. Global oil prices tumbled from more than $100 per barrel in mid-2014 to under $30 per barrel by the start of January 2016, throwing global markets into a historic supply overhang, and causing financial chaos for the Saudis who had to start issuing international bonds to offset record budget deficits - a development that is still ongoing as the Kingdom shores up its finances from that low oil price period. Now that OECD oil inventory levels have reached the OPEC/non-OPEC members’ goal of five-year averages, there is talk and speculation among not only media but oil producing countries asking if it’s time to ramp up production. Also, geopolitical factors are coming into play as renewed U.S. sanctions against Iran will remove as many as 500,000 bpd from global markets, perhaps more according to other forecasts. In addition, OPEC member Venezuela's oil production is coming apart at the seams, also removing more barrels from the market.

Feature: North Korea peace deal could reshape Russian gas export priorities - With US President Donald Trump and North Korean leader Kim Jong-un set to meet at a historic summit in Singapore Tuesday, global power brokers such as Russia are eyeing the prospect of an end to the nuclear stand-off on the Korean peninsula and a "new era" in relations with North Korea. Russia believes a potential North Korea peace deal could help to strengthen multilateral energy cooperation in North Asia, with the possible revival of a project to build a gas pipeline through the Korean peninsula underpinning new partnerships in the region. Russian President Vladimir Putin last week said that he continues to support peace talks and the development of new economic projects with North Korea. Putin said the focus lies on infrastructure projects, primarily a gas pipeline, adding that other energy infrastructure are possible with regional players. "There are many opportunities for joint, trilateral and quadrilateral cooperation, we just need to move in this direction," Putin said in an interview with China Media Group. In a sign that Russia is preparing for greater cooperation, Putin has for the first time invited Kim Jong-Un to the Eastern Economic Forum in September. Russia's flagship economic showcase for Asian investors, it has become something of a launch pad for new cooperation between Russia and Asian investors. Analysts see significant potential in integrating North Korea into the regional energy network for Russia, though it could lead to changes in Russia's energy project prioritizes. 

Global crude oil demand growth is now hostage to China, India: Russell (Reuters) - Discussion in the crude oil market is degenerating into a single “will they or won’t they” focus on whether the Organization of the Petroleum Exporting Countries (OPEC) will ease their output restrictions next week. While the meeting in Vienna on June 22 will undoubtedly heavily influence the direction of short-term crude prices, the market’s focus solely on supply could be viewed as somewhat myopic. Demand is probably the more important driver of the oil price over the longer term, and the simple truth is that the global market is effectively now hostage to just two countries. China and India have so far this year accounted for about 69 percent of the expected growth in crude oil demand, meaning that what happens in those two behemoths is likely of far more importance to the crude market than what may or may not happen in Vienna. The International Energy Agency forecast last month that global crude oil demand would rise by 1.4 million barrels per day (bpd) in 2018, down from an earlier estimate of 1.5 million bpd. For the first five months of the year China’s crude oil imports were 9.21 million bpd, according to customs data, a rise of 690,000 bpd on the same period in 2017. India’s crude imports were 4.57 million bpd in the January-May period, up 272,000 bpd from the same period last year, according to vessel and port data and industry sources. Together these two countries, the world’s biggest and third-largest crude importers, have brought in 962,000 bpd more in the first five months of 2018 than in same period last year. If this pace of growth was maintained for the whole year, it would mean that China and India would account for the lion’s share of the IEA’s forecast for the increase in global demand. 

Oil prices stall as hedge funds take profits: Kemp (Reuters) - Investors continue to reduce their bullish position in crude oil futures and options, after a blistering rally over the last year, but now the profit-taking has spread to refined fuels such as gasoline and heating oil. Hedge funds and other money managers cut their net long position in the six most important futures and options contracts linked to petroleum prices by 72 million barrels in the week to June 5, according to data from regulators and exchanges. Funds cut their net long positions in Brent (-14 million barrels), NYMEX and ICE WTI (-19 million barrels), U.S. gasoline (-17 million), U.S. heating oil (-12 million) and European gasoil (-10 million). Portfolio managers have trimmed their combined net long in petroleum to 1.113 billion barrels, down from a recent high of 1.411 billion on April 17 and a record 1.484 billion on Jan. 23. Heavy liquidation has seen the combined position cut by 298 million barrels over the last seven weeks, with most of the reduction coming from crude, where net length has been reduced by 302 million barrels. But in the two most recent weeks the liquidation has spread to gasoline, heating oil and gasoil, reflecting broader doubts about the sustainability of the rally (https://tmsnrt.rs/2JD9EEe ). Oil consumption growth has been strong and the combination of OPEC output restraint and involuntary production losses from Venezuela and other countries has pushed the market into deficit this year. However, with benchmark crude prices up by almost 70 percent over the last 12 months, and now apparently stalling, many fund managers appear to have decided now is a good time to realise some profits. Most of the reduction in net length has come from the liquidation of long positions (-232 million barrels) rather than the creation of fresh short positions (+66 million barrels) confirming profit-taking is the main motive.

Crude Oil Prices Settle Higher as Iraq Warns Against Lifting Output Curbs – WTI crude oil prices settled higher Monday as Iraq's oil minister warned producers against easing limits on production curbs offsetting reports of an uptick in Russian and Saudi output. On the New York Mercantile Exchange crude futures for July delivery rose 36 cents to settle at $66.10 a barrel, while on London's Intercontinental Exchange, Brent added 2 cents to trade at $76.48 barrel. Iraq's oil minister, Jabar al-Luaibi, warned producers Monday against pumping more oil, claiming oil prices still needed support. That helped oil prices bounce from weakness earlier in the session following reports Russia and Saudi Arabia had increased output. Russian oil production reportedly rose by 150,000 barrels per day in the first week of June to 11.1 million barrels by day. That was above the country’s quota agreed in OPEC-led production agreement. The 1.8 million barrel a day production-cut agreement, first agreed in November 2016, between OPEC and non-OPEC members has rid the market of excess crude supplies, underpinning a move higher in oil prices. At OPEC's next meeting due June 22, the OPEC-led deal is expected to come under review. Saudi Arabia, meanwhile, increased production by more than 100,000 barrels a day in recent weeks, the WSJ reported Friday. That saw Saudi output inched higher to about 10 million barrels a day. Reports of rising Russian and Saudi output emerges amid signs of an ongoing ramp up in U.S. output, raising fears of a slowdown in the rebalancing of oil markets. The number of oil rigs operating in the US increased by 1 to 862, its highest level since March 13, 2015, according to data from energy services firm Baker Hughes. The positive start to week for crude prices comes just days after data showed traders continued to slash their bets on further upside in oil prices.

Oil Markets Unmoved By North Korea Summit | OilPrice.com - The markets shrugged at the historic meeting between President Trump and North Korean dictator Kim Jong Un. Both sides hailed the summit as a breakthrough, with a pledge towards denuclearization, but as expected, there was a lack of even the most basic details on how they might get there. Oil was flat at the start of Tuesday.  Opposition to an increase in the OPEC/non-OPEC production limits continues to grow, with Iraq coming out against such a move. OPEC’s second largest producer said that the production cuts have not yet achieved the intended objective of balancing the oil market. “Producers from within and outside OPEC have not yet reached the goals set,” Iraq’s oil minister Jabbar al-Luaibi said in a statement. Iraq “rejects unilateral decisions made by some producers which do not consult with the rest.” He went on to add: “We shouldn’t exaggerate the need of the oil market for more oil at the present time, and which could cause great damage to global markets.” The statement of opposition comes after Iran and Venezuela also called upon the group to keep the limits in place. The open resistance from a growing number of OPEC members to what seems to be a likely outcome (a softening of the production curbs) is setting the stage for a contentious meeting.  Despite opposition from some OPEC members, the two most important producers, Saudi Arabia and Russia, are already signaling their intent to raise output. Saudi Arabia also added production last month, which, marking a significant change in strategy. OPEC’s secondary sources said Saudi Arabia increased production by 85,000 bpd in May while the Saudis themselves said production rose by 161,000 bpd. Russia also increased output at the beginning of June from 10.95 million barrels per day to 11.09 mb/d. The data suggests the two producers are laying the groundwork for higher output.  Venezuela told OPEC that it increased production in May by 28,000 bpd, but those communications tend to lack credibility. OPEC’s secondary sources say that Venezuelan output actually fell by 42,000 bpd, putting overall output at a new low of 1.392 mb/d, or roughly 750,000 bpd below 2016 levels.

WTI/RBOB Slide On Russia Oil-Cut Rollbacks, Surprise Inventory Builds -- After last week's biggest inventory build since 2008, headlines confirming Russia is seeking a roll-back of oil-cuts saw selling pressure ahead of the API data which confirmed last week's surprise builds in crude, gasoline, and distillates.Bloomberg reports that Russia plans to propose that OPEC and its allies be allowed to return production to October 2016 levels, rolling back most but not all of their output cuts within three months, according to a person familiar with Russian thinking.  The nations would proportionally share out a 1.8 million barrel-a-day increase to their output limit starting as soon as July, the person said, asking not to be identified because the information isn’t public. The actual boost in supply to the market would be less than that because some states, notably Venezuela, Angola and Mexico, aren’t able to increase, the person said.Additionally, next year, the U.S. government doesn’t see worldwide or U.S. crude production as high as it once did. The Energy Information Administration decreased its 2019 forecast for global production to 102.21 million barrels a day, with most of the downward revision from OPEC.“Overall, where we’re at, is continuing to call into question just what the ultimate outcome will be of the OPEC meeting,” said John Kilduff, a partner at Again Capita LLC.“The opposition that you’re seeing from several OPEC members has given the market some pause about continuing to sell off here.”API

• Crude +833k (-1.25mm exp)
• Cushing -730k (-900k exp)
• Gasoline +2.33mm
• Distillates +2.1mm

EIA-reported builds in Crude, gasoline, and distillates last week shocked markets, and this week confirmed that surprise in API data...OPEC decisions remain on everyone's mind but inventory data is spoiling the short-term fun and games.“Our best guess is currently that there will be no formal decision to change the production target, but a rather a type of agreement or understanding that compliance will be relaxed,” said Johannes Benigni, chairman of JBC Energy Group in Singapore.The surprise build combined with Russia sent prices modestly lower...

Oil mixed as OPEC cites uncertain market outlook for 2018 (Reuters) - Oil prices were mixed on Tuesday, with U.S. crude settling higher before falling in post-settlement trading, and Brent slipping as investors prepared for a key meeting of the OPEC producer group next week. Brent crude futures LCOc1 fell 58 cents to settle at $75.88 a barrel, while U.S. West Texas Intermediate crude futures CLc1 climbed 26 cents to $66.36. In post-settlement trading, however, WTI turned negative while Brent extended losses after data from the American Petroleum Institute showed a surprise build of 833,000 barrels in U.S. crude stockpiles. Analysts had expected a decline of 2.7 million barrels. [API/S] A stronger dollar .DXY and euro weakness EUR= was putting some pressure on Brent prices, said Phillip Streible, senior market strategist at RJO Futures. A strong dollar makes greenback-denominated oil more expensive for holders of other currencies. “I was looking for an up day (for WTI) - in just a few weeks it had fallen from around $73 (a barrel) to $65, ... and even for the window of seasonal decline, that’s a big move to go uncorrected,” said Walter Zimmerman, chief technical analyst at ICAP-TA. The Organization of the Petroleum Exporting Countries released its monthly report on Tuesday, saying a high degree of uncertainty was hanging over the global oil market. [nL8N1TE33E] OPEC and other producing countries including Russia have cut oil output by 1.8 million barrels per day (bpd) since January 2017 in an effort to boost the market. OPEC holds its next meeting on June 22-23, and is expected to decide on future supply policy. With U.S. sanctions threatening to cut Iranian exports and the potential for more declines in Venezuelan production, Saudi Arabia and Russia have indicated they would be willing to make up for any supply shortfall. U.S. production, meanwhile, is expected to rise by less than previously expected, to 11.76 million barrels per day next year, the U.S. Energy Information Administration said. 

Saudi Oil Production Jumps In June Despite Drop In Oil Demand: OPEC - It will probably not come as a surprise that at a time when both Trump, and Saudi Arabia, are pressing OPEC to reverse the 1.5 year long OPEC agreement and pump more oil so US gasoline prices dont soar in the summer months, that according to the just released monthly report from the cartel, total OPEC production rose by 35.4kb/d to 31.869mmb/d mostly thanks to Saudi output rising by 85.5kb/d (according to secondary) sources to 9.987mmb/d and up a whopping 161.4kb/d as per direct communication, and back over 10 million barrels. Joining Saudi Arabia in producing more oil in June were Algeria & Iraq, while production again declined in Venezuela, with Libya and Nigeria also seeing a decline in output.Commenting on the state of the market, OPEC noted that 2018 global oil demand growth forecast unchanged; and is forecast to increase by around 1.65mln bpd to average 98.85mln bpd, with total oil consumption projected to surpass 100mln bpd during Q4 2018.However, OPEC did warn that its outlook for H2 2018 warrants close monitoring of the factors impacting both world oil demand and non-OPEC supply that will shape the outlook of the oil market going forward; the tacit warning here is that oil prices may be so high to pressure oil demand."Looking at various sources, considerable uncertainty as to world oil demand and non-OPEC supply prevails,” said report read. "This outlook for the second half of 2018 warrants close monitoring."Indeed, according to the report, Saudi April oil demand saw its biggest drop on record, falling across all product categories, with most of the weakness in the heavy part of the barrel, OPEC reported. Demand was down more than 5% y/y in 1st 4 months of 2018, with April falling y/y by 420k b/d, or 17%. “April was extremely sluggish, with the highest drop ever recorded” the monthly report cautioned:

Trump Slams OPEC Again, Demands Lower Prices: "Oil Prices Are Too High, OPEC Is At It Again" - Nearly two months after Trump drew a line in the sand on oil prices, when on April 20 he lashed out at OPEC, tweeting that "Oil prices are artificially Very High! No good and will not be accepted!"which promptly set a ceiling on crude and prompted Saudi Arabia to scramble to boost production...Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!— Donald J. Trump (@realDonaldTrump) April 20, 2018... moments ago Trump doubled down on his oil- price targeting, and in a lengthy tweetstorm that touched on everything from Marc Sanford's loss, to the strength of the economy, to the just concluded North Korean summit, his relationship with Kim Jong Un and the cancellation of war games with South Korea, even the announcement of the world cup host nation  (US, Mexico and Canada), Trump once again lashed out at OPEC, tweeting that "Oil prices are too high, OPEC is at it again. Not good!"Oil prices are too high, OPEC is at it again. Not good!— Donald J. Trump (@realDonaldTrump) June 13, 2018Translation: Trump realizes that the middle-class is spending increasingly more on gasoline, taking away from disposable income, and hopes that Saudi Arabia will pump more to offset the loss of Venezuela and Iran oil (which would not be impaired if Trump hadn't killed the Iran deal), in line with what we described in "Rising Gas Prices Threaten To Wipe Out Trump's Tax Cut Benefits". This time, the market reaction to Trump's angry tweet was far muted, with oil barely moving - so far - after it slumped following yesterday's API report, even if it recovered most of the losses.

WTI/RBOB Soar After Huge Surprise Crude Draw (Despite Production Surge) -- Despite Russia production-cut roll-back headlines, WTI/RBOB prices are unchanged from the huge, bearish surprise API-reported inventory surge. However, for the 2nd week in a row, DOE data was entirely opposite and showed a big crude and gasoline draw. Markets ignored the 100k b/d surge in production...Bloomberg Intelligence Senior Energy Analyst Vince Piazza notes that a potential agreement by OPEC to increase oil output when it meets later in June is curtailing the crude rally from earlier this year, while prices in earshot of $80 a barrel weigh on demand and threaten economic growth.Bloomberg reports that OPEC and its partners will meet next week and debate whether to restore output halted last year. Saudi Arabia and Russia have said it’s time to reverse the cuts and appear to have begun reviving supplies, but face opposition from Iran, Iraq and Venezuela.“There is no need for a change in the level of production,” said Iran’s OPEC governor, Hossein Kazempour Ardebili, who serves as one of the country’s representatives to the group. “Any increase should be limited to the production allocation in the agreement, which is valid to the end of 2018.”Oil’s recent rally to a three-year peak above $80 a barrel in London has prompted warnings that prices could hurt economic growth. Yet Kazempour insisted that OPEC will resist pressure to raise production. “The Trump administration is trying to intervene in the affairs of a sovereign organization,” he said. Such attempts have failed in the past and “they will also fail” this time. DOE:

• Crude -4.143mm (-1.25mm exp) - biggest draw since March
• Cushing -687k (-900k exp)
• Gasoline -2.271mm (+1mm exp)
• Distillates -2.101mm

After a very bearish API report, and an extremely bearish DOE report last week, DOE data surprised across the board with the biggest crude draw in 3 months and a surprise gasoline draw. This is the 4th weekly decline in Cushing stocks in a row...

EIA says US weekly gasoline demand finds new all-time high -- US gasoline demand -- measured as product supplied -- hit a new all-time weekly high in the week ended June 8, Energy Information Administration data showed Wednesday. Product supplied of gasoline was reported at 9.879 million b/d in the first full week of June, the highest that figure has ever been in data going as far back as 1991. The previous all-time high occurred earlier this year, when product supplied was reported at 9.857 million b/d for the week ended April 13. Amid robust demand, US gasoline stocks for the week were reported 2.27 million barrels down on the week at 236.763 million barrels, which is about 2.3% below their level in the year-ago week. Those stocks fell despite uptick in US gasoline imports, which the EIA says rose from 777,000 b/d in the week ended June 1 to 824,000 b/d in the week ended June 8. Aside from strong demand, higher US gasoline imports likely did not lead to an increase in fuel stocks because gasoline exports rose 69,000 b/d to reach 607,000 b/d. The EIA data show this is the highest volume of exports seen in the first full week of June going as far back as 2010. Interestingly, US demand reached an all-time high despite prices being above historic norms. On Tuesday, S&P Global Platts assessed CBOB in Houston, which is perhaps the most liquid gasoline cash market in the US, at July NYMEX RBOB futures minus 14.60 cents/gal, or $1.9439/gal. This is more than 40% above the assessment value from the year-ago date. This data lines up with a blog post from AAA, an auto-club, posted on Wednesday which said that motorists are now spending more on fuel at the pump relative to last summer.

Crude Oil Prices Settle Higher on Massive Draw in U.S. Crude Supplies – WTI crude oil prices settled higher on Wednesday as data showed a massive draw in U.S. crude supplies despite an ongoing expansion in output. On the New York Mercantile Exchange crude futures for July delivery rose 28 cents to settle at $66.64 a barrel, while on London's Intercontinental Exchange, Brent gained 75 cents to trade at $76.62 a barrel. Inventories of U.S. crude fell by 4.143 million barrels for the week ended June 8, well above expectations for a draw of 1.440 million barrels, according to data from the Energy Information Administration (EIA). The unexpected rise in crude supplies emerged as imports fell, while the widening spread between Brent and WTI crude prices encouraged U.S. exporters to ramp up exports. Crude imports fell 247,000 barrels per day (bpd) last week to 8.1 million barrels per day (bpd), while exports rose 300,000 bpd. A 3% uptick in refinery activity, saw product inventories such as gasoline and distillate fall sharply, underpinning the size of the draw in crude supplies. Gasoline inventories – one of the products that crude is refined into – fell by 2.271 million barrels, confounding expectations for an increase of 0.443 million barrels, while supplies of distillate – the class of fuels that includes diesel and heating oil – unexpectedly fell by 2.101 million barrels, topping expectations for a build of 0.200 million barrels. The unexpected draw in gasoline inventories was supported by rise in U.S. gasoline demand to an estimated 9.88 million bpd –a record high. U.S. oil output, meanwhile, continued its expansion rising 0.1m bpd to a record 10.9 million bpd, according to preliminary EIA data, strengthening the United States' position as the second largest oil producer behind Russia. The uptick in US output arrives at a time when the world's other two largest producers – Russia and Saudi Arabia – raised output, stoking investor fears major oil producers would continue to expand output to plug falling supplies from Venezuela and Iran.

Higher oil prices set to moderate consumption growth: Kemp (Reuters) - Growth in global oil consumption has accelerated significantly since prices slumped in 2014 – highlighting the critical role demand plays in balancing the market. Lower oil prices stimulated OECD consumption between 2015 and 2017 and played a big role in eliminating the global oil market surplus during the rebalancing phase of the cycle. With oil prices up 70 percent over the last 12 months, however, higher prices are set to moderate OECD consumption and thereby global demand growth in 2018/19. Economists often observe that the price-elasticity of oil demand is low, meaning a small change in prices does not have much impact on the amount consumed in the short term. But low impact does not mean no impact. In the case of a large and sustained change, such as occurred in 2014/15, consumption has proved significantly flexible and plays a key role in rebalancing the market. According to the latest estimates from BP, global consumption increased by almost 1.7 million barrels per day (bpd) in 2017 (“Statistical Review of World Energy”, BP, 2018). Consumption has risen by an average of 1.7 million bpd in the last three years since oil prices slumped (2015-2017) compared with an average of just 1.1 million bpd in the three previous years (2012-2014). Real crude oil prices averaged $51 per barrel between 2015 and 2017, down from $112 between 2012 and 2014, according to BP.

Oil shortage or surplus? Floating storage swamps Europe (Reuters) - OPEC is considering whether or not to raise its oil production to prevent the global market from becoming too squeezed, but there is one part of the world that is telling a very different story about the balance between supply and demand. The boom in U.S. shale shipments has outstripped OPEC’s production cuts and pushed millions of barrels into European waters, where more crude is being stored on ships than at any time in the last 18 months. And it’s not just the volume of oil aboard ships. At a monthly average in May of 12.9 million barrels, or 26 percent of total global floating storage, Europe had more oil in floating storage than the Asia-Pacific region at 9.7 million, according to data from oil analytics firm Vortexa. In March-April, Europe’s share was 10 percent versus 40 percent in Asia-Pacific. Vortexa estimates the monthly average share of oil in floating storage located in European – including the Mediterranean – in May outstripped volumes floating in Asia-Pacific for the first time since at least the beginning of 2015. Buyers in China, India and Indonesia have taken growing amounts of U.S. crude rather than their usual cargoes of Nigerian, Angolan or Middle East fare, some of which have unusually ended up in Europe. Consultants Kpler estimate there are some 17 million barrels of oil on ships in northwest Europe, the most since at least early 2016 and Nigerian in particular is extremely unusual. “It’s quite rare to have Nigerian crude floating in the North Sea. It’s only happened in a total of two weeks in 2018 and 4 weeks in 2017,” Kpler economic analyst Reid I’Anson said. U.S. exports are running at around 2.5 million barrels a day, having more than doubled since January, despite a lack of pipeline and port capacity to get crude to the international markets that has forced down differentials for domestic grades. This has inflated the premium that Brent-linked crudes command over their U.S. rivals, which has yawned out to nearly $11 a barrel this month, from closer to $5 a month ago, as well as boosting the cost versus Middle East grades. The North Sea tends to see builds in floating storage between April and June most years, as refineries gradually exit maintenance mode. 

Russia And Saudi Arabia Will Save The Day If OPEC Deal Falls Apart - Even if the current OPEC/NOPEC oil production cut deal goes to pieces, Saudi Arabia and Russia will be willing to go it alone, the two largest oil producers in the agreement said on Thursday ahead of the much-talked-about OPEC meeting later this month, suggesting that some kind of market-managing efforts may remain in place, even if Iran and Iraq begin to sour on the collaboration. The comments came after Khalid al-Falih and Alexander Novak met in Moscow, and were rubber stamped by Saudi Crown Prince Mohammed bin Salman and Russian President Vladimir Putin, who also met on Thursday. The agreement between the two countries was lacking in specifics, saying that they would develop a “comprehensive bilateral agreement” on energy cooperation, according to S&P Global Platts. Both countries increased their May oil production in a show of force that served to calm the oil market somewhat as fears grow over potential supply gaps stemming from looming US sanctions on Iran and realized supply gaps from Venezuela. In a similar market-calming statement made earlier on Thursday, Khalid al-Falih said that it was “inevitable” that OPEC and its partners would agree next week to gradually roll back the oil production cuts that were forged in November 2016 and implemented—at least partially—in January 2017.

OPEC will squeeze oil buffer to historic lows with an output hike (Reuters) - The oil industry will face the biggest squeeze on its spare production capacity in more than three decades if OPEC and its allies agree next week to hike crude output, leaving the world more at risk of a price spike from any supply disruption. Spare capacity is the extra production oil producing states can bring onstream and sustain at short notice, providing global markets with a cushion in the event of natural disaster, conflict or any other cause of an unplanned supply outage. That buffer could shrink from more than 3 percent of global demand now to about 2 percent, its lowest since at least 1984, if the Organization of the Petroleum Exporting Countries, Russia and other producers decide to increase output when they meet on June 22-23, U.S. bank Jefferies said. “You would essentially be taking 3.2 million barrels per day (bpd) of spare capacity down to approximately 2 million bpd,” Jefferies analyst Jason Gammel said, adding global demand was 100 million bpd. Some analysts say spare capacity could even fall below 2 percent, after years of low oil prices drove down investment in new production across the industry. Saudi Arabia, OPEC’s de facto leader which has indicated its support for hiking output at next week’s meeting in Vienna, has said it is alert to the potential squeeze on the market. “We are concerned about tight spare capacity nowadays,” Saudi Energy Minister Khalid al-Falih told Reuters last month, although he also said the industry was in “better shape” than in 2016 when oil prices plunged below $30 a barrel. OPEC and its allies have been curbing supply since January 2017 to boost oil prices and cut bloated global inventories. The price of crude has since surged, climbing above $80 a barrel last month, while inventories have also fallen. But falling inventories, which have now dropped back to around their five-year average in industrialized nations, adds to the conundrum facing OPEC. “Today we no longer have an inventory cushion or a large spare capacity,” Claudio Descalzi, chief executive of Italy’s Eni (ENI.MI), said in January. “In this context, any geopolitical event can create a price spike.” 

  Oil market's shock absorbers becoming dangerously depleted (Reuters) - Sanctions on Iran and the continued decline in output from Venezuela will leave the oil market very vulnerable to any further production or consumption surprises next year.Output and demand in the global market are each currently running at almost 100 million barrels per day (bpd).To ensure a steady flow of oil from the wellhead to consumers, the industry relies on a series of shock absorbers to handle any interruption in supplies or unexpected strength in demand.Both commercial inventories and OPEC spare capacity have become dangerously eroded over the last 12 months, leaving the oil market much more vulnerable in 2019.If all the other shock absorbers become exhausted, oil prices will have to rise to the point where consumption growth begins to slow.The oil market's first line of defence comes from changes in the volume of commercial inventories held by producers, traders and refiners.OECD commercial stocks currently stand at 2.8 billion barrels, composed of crude (1.1 billion barrels), other liquids (300 million barrels) and refined products (1.4 billion barrels).Additional stocks are held in non-OECD countries, as well as on tankers and in pipelines, either in transit from oilfields to refineries and on to final customers, or as floating storage.The vast majority of stocks are held for operational reasons to ensure the uninterrupted flow of oil from wellhead to final customers.Only a small percentage, generally less than 15 percent, can be considered discretionary and available to act as a shock absorber.OECD crude and product stocks are already 27 million barrels below the five-year average, according to the International Energy Agency (“Oil Market Report”, IEA, June 2018).The five-year average was inflated by the glut of oil between 2015 and 2017, so it m ay not be representative of the normal level of inventories.

 Global Oil Supplies Down To 58 Days, Four Hours, And Forty-Eight Minutes -- IEA -- June 14, 2018 --If folks are confused by all the statements coming out of Saudi Arabia, this may be the reason. Reuters wonders if OPEC is moving the goalpost for its oil market scoreline.I have never really believed whatever OPEC says but lately the flip-flops have seemed even more outrageous. First, there's too much oil; then, there's not enough oil; then, there's enough oil now but there won't be enough oil next year; and now, not only is there not enough oil now, there won't be enough oil next year, and US shale oil won't be able to make up the difference.Four months ago, there was this article from Reuters: surge in global oil supply may overtake demand in 2018 (IEA).Today, crude oil demand in 2019 will grow another 1.4 million bopd after growing a similar 1.4 million bopd this year (2018). So, we go back to the data. First, it's nearly impossible to find OECD crude oil inventories. I think it's around 2 billion bbls. This was fromoilprice.com, March, 2018: At 2.865 billion barrels, OECD stocks were 206 million barrels lower than in January 2017, but 50 million barrels above the latest five-year average, OPEC said. But ycharts says the number is 4.4 billion bbls. Regardless, what it is, no one knows how much is really needed. In the US, we have better data, but folks interpret it differently. At 435 million bbls in reserves, analysts suggest that's below the average median/mean/average for the past five years. And yet, it certainly appears that historically, the US has done just fine with 350 million bbls in reserves. [My benchmark remains: 350 million bbls in reserves.] So, let's look at what I think is the best metric: the number of days of crude oil supply. For the US, my benchmark is 21 days. Anything more than 21 days is a "glut." We haven't seen 21 days or less since 2014.

Crude futures mixed on split among OPEC members, US stocks draw; ICE Brent down to $76.43/b, NYMEX WTI up at $66.80/b - Crude oil prices were mixed in European trading Thursday morning as the market searched for signals on how OPEC will resolve rising divisions over the future of the production cut agreement, and digested a surprise drop in US crude stocks. At 1030 GMT, the August ICE Brent crude futures contract was down 31 cents/b from Wednesday's settle, at $76.43/b, while the NYMEX July sweet light crude contract was up 16 cents at $66.80/b. The US dollar index was down 0.27%. On Thursday morning, mixed comments from OPEC members cast further uncertainty over whether OPEC would maintain current production cuts or increase output over the course of the year, ahead of the June 22 OPEC meeting in Vienna. On Thursday, Saudi energy minister Khalid al-Falih told reporters in Moscow that an agreement between OPEC and non-OPEC partners to increase output and loosen quotas was "inevitable." "I think it will be a reasonable, moderate agreement. It's not going to be anything outlandish. We will be easing our ceilings back," the minister said. That sentiment is backed by Russia, which has also communicated that it hopes to increase output following next week's meeting. But Iranian minister Hossein Kazempour Ardebili said Thursday that Iran, Iraq and Venezuela are aligned in maintaining the current OPEC deal, and said that current prices are acceptable to consumers and producers.

Crude Oil Prices Settle Higher as Saudi Says Output Hike Will Be Reasonable – WTI crude oil prices settled higher as traders mulled comments from Saudi's oil minister ahead of the Organization of the Petroleum Exporting Countries meeting next week. On the New York Mercantile Exchange crude futures for July delivery gained 25 cents to settle at $66.89 a barrel, while on London's Intercontinental Exchange, Brent fell 1.08% to trade at $75.92 a barrel. Ahead of the Organization of the Petroleum Exporting Countries (OPEC) meeting next week, Saudi Arabian Oil Minister Al Falih reportedly said "it's inevitable" that OPEC and its allies will agree to boost oil production next week, according to a report from Bloomberg. Al Falih insisted, however, that the uptick in output would be reasonable and won't be anything "outlandish." Traders remained concerned rising output would slow the rebalancing in oil markets as the production-cut agreement has helped rid the market of excess crude supplies. In November 2016, OPEC and other producers, including Russia agreed to cut output by 1.8 million barrels per day (bpd) to slash global inventories to the five year-average. The OPEC-led deal was renewed last year through 2018 and is expected to come under review at the oil-cartel's next meeting on June 22. The uptick in oil prices comes a day after the Energy Information Administration revealed U.S. supplies fell more than expected but output rose to a record. Inventories of U.S. crude fell by 4.143 million barrels for the week ended June 8, well above expectations for a draw of 1.440 million barrels, according to data from the Energy Information Administration. U.S. oil output, meanwhile, continued its expansion rising 0.1m bpd to a record 10.9 million bpd, according to preliminary EIA data, strengthening the United States' positions as the second largest oil producer behind Russia. 

OPEC May crude oil output slides to 13-month low of 31.90 mil b/d: Platts survey - As OPEC prepares to meet in Vienna to decide whether to loosen the taps, its crude production in May slid for the fourth straight month to 31.90 million b/d, the lowest in over a year, according to the latest S&P Global Platts survey of industry officials, analysts and shipping data. The 14-country bloc produced 32.00 million b/d in April, a 140,000 b/d drop from March, according to the survey. The April figure is about 730,000 b/d below OPEC's notional ceiling of about 32.73 million b/d, when every country's quota under its production cut agreement is added up. Outages due to the troubles in Nigeria and Venezuela's oil industries more than offset higher output from Saudi Arabia, Iraq and Algeria, the survey found, as May production fell 100,000 b/d from the previous month. OPEC output was last lower in April 2017 at 31.85 million b/d, the last month before West African producer Equatorial Guinea became its newest member. The 14-country bloc's next meeting is June 22, when ministers will gather in the Austrian capital amid speculation that Saudi Arabia may push for more flexibility on production quotas in anticipation of sustained declines in Venezuela and the impact of US sanctions on Iran. Recent price rises have also drawn the ire of the US, a key Saudi ally. OPEC is committed, along with 10 non-OPEC producers including Russia, to a 1.8 million b/d cut agreement that is scheduled to run through the end of 2018. The May figure is about 830,000 b/d below OPEC's notional ceiling of about 32.73 million b/d, when every member's quota under the deal is added up.

Oil Prices Crash On Supply Fears - Oil prices bounced around over the past few days as the markets await OPEC’s decision in a week’s time. While the meeting is shaping up to be a contentious one, the hype also demonstrates OPEC’s clout years after the group’s obituary was written. “With unplanned outages escalating, geopolitical risks rising, and U.S. shale production facing infrastructure bottlenecks, Saudi Arabia is once again back in the driver's seat exerting significant influence over the oil market in 2018,” Helima Croft, the global head of commodity strategy at RBC Capital Markets, said Thursday. “All eyes are on what course of action it will call for at the June 22 OPEC meeting in Vienna.” The IEA said in its latest Oil Market Report that robust U.S. shale growth will underpin 2.0 million barrels per day (mb/d) of non-OPEC supply growth this year, plus 1.7 mb/d of non-OPEC output gains in 2019. That should more than meet demand growth…in theory, at least. The agency warned that significant losses in Venezuela and Iran could leave a supply gap. “Even if the Iran-Venezuela supply gap is plugged, the market will be finely balanced next year, and vulnerable to prices rising higher in the event of further disruption,” the IEA said. “It is possible that the very small number of countries with spare capacity beyond what can be activated quickly will have to go the extra mile.”  Libya’s two largest oil export terminals suffered disruptions this week due to clashes between rival groups. The outages at the Es Sider and Ras Lanuf terminals disrupted some 240,000 bpd of supply, Libya’s National Oil Corp. said on Thursday. The two facilities account for 40 percent of Libya’s oil exports. If the losses are sustained for any lengthy period of time, it will put more pressure on the OPEC+ group to increase output at its meeting on June 22. Any increase in the volume of output from OPEC and Russia will necessarily cut into spare capacity levels, which analysts say could drop to the lowest level in decades. “You would essentially be taking 3.2 million barrels per day (bpd) of spare capacity down to approximately 2 million bpd,” Jefferies analyst Jason Gammel told Reuters, assuming around 1 mb/d increase in output. Periods of low spare capacity have historically been associated with times of high and volatile prices.

Rig Count Falters Amid Oil Price Correction - Baker Hughes reported a dip in the number of active oil and gas rigs in the United States today. Oil and gas rigs decreased by 3 rigs, according to the report, with the number of oil rigs increasing by 1, and the number of gas rigs decreasing by 4.The oil and gas rig count now stands at 1,059—up 126 from this time last year. Canada, for its part, gained 27 oil rigs for the week—after last week’s gain of 13 oil and gas rigs. Despite weeks of significant gains, Canada’s oil and gas rig count is still down by 20 year over year.  Oil benchmarks experienced a huge slide on Friday as Russia and Saudi Arabia proclaimed their willingness to increase output ahead of the June 22 OPEC/NOPEC meeting in Vienna, even if the oil production cut deal were to fall apart. The loose commitment by two of the largest signees to the production cut deal was enough to drag down prices that were earlier being pulled upwards by Venezuela’s freefalling oil production that some think will fall below 1 million barrels per day, and continuing reports that Iran may face multiple obstacles on the road to exporting its oil in the wake of renewed sanctions levied by the United States.  At 12:07pm EDT, the WTI benchmark was trading down a massive 3.36% (-$2.25) to $64.64, with Brent down 3.48% (-$2.64) to $73.30. Both benchmarks are down week on week as well as on the day. US oil production continues putting downward pressure on oil prices, and for the week ending June 08, production reached 10.900 million bpd—just a hair shy of the 11 million bpd production that many had forecast for the year.

Crude Oil Prices Settle 2.7% Lower on Growing Fears of OPEC Output Hike – WTI crude oil prices settled lower as data pointing to an ongoing expansion in U.S. output and fears that Saudi Arabia and Russia were set to hike production weighed on sentiment. On the New York Mercantile Exchange crude futures for July delivery fell 2.74% to settle at $65.06 a barrel, while on London's Intercontinental Exchange, Brent fell 3.41% to trade at $73.35 a barrel. The number of oil rigs operating in the US increased for a fourth-straight week, rising by 1 to 863, according to data from energy services firm Baker Hughes, pointing to signs of an expansion in U.S. output. The continued uptick in drilling activity comes as the Energy Information Administration said Wednesday U.S. oil output rose to a record 10.9 million barrels. Crude oil prices had started the session on the back foot after Russia Energy Minister Alexander Novak said Thursday after talks with Saudi Energy Minister Khalid al-Falih that both nations agreed to gradually increase production. Saudi Arabian Oil Minister Al Falih had previously attempted to temper investor fears of a sharp rise in production, insisting earlier this week the uptick in output would be reasonable and won't be anything "outlandish." Traders fear that an uptick in global output would slow the rebalancing in oil markets as the production-cut agreement has proved effective in slashing the glut in global crude supplies. In November 2016, OPEC and other producers, including Russia agreed to cut output by 1.8 million barrels per day (bpd) to slash global inventories to the five year-average. The OPEC-led deal was renewed last year through 2018 and is expected to come under review at the oil-cartel's next meeting on June 22. 

 Global oil benchmark ends at 6-week low on expectations for OPEC output hike -  Oil futures dropped sharply Friday, ending the week lower, with global benchmark Brent crude settling at a more-than-six-week low on expectations OPEC and its allies will agree next week to boost output. August Brent crude, the global benchmark, declined by $2.50, or 3.3%, to $73.44 a barrel on ICE Futures Europe. That’s the lowest settlement since May 2, and they suffered a loss of roughly 4% for the week, according to FactSet data. July West Texas Intermediate crude, the U.S. benchmark, traded on the New York Mercantile Exchange, lost $1.83, or 2.7%, to settle at $65.06 a barrel, pulling back after a four-session climb. It saw its lowest finish since June 6 and lost about 1% for the week. Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, is considering an output boost of 500,000 to 1 million barrels a day, while Russia is weighing a rise of as much as 1.5 million barrels a day, said commodity analysts led by Eugen Weinberg at Commerzbank, in a note. Major oil producers meet June 22 in Vienna. The problem, however, is that several OPEC members, including Iran and Venezuela, are resisting output boosts that are intended to offset their own production falls, he said. News reports said the U.S. requested a 1-million-barrel-a-day output increase and tweets by President Donald Trump slamming OPEC for high oil prices could prove to be “additional stumbling blocks” and could lead to a production increase on the smaller side, he added. Indeed, the “vast majority” of OPEC producers are arguing against relaxing the production curbs agreed by OPEC and major non-OPEC producers, said Helima Croft, head of commodity strategy at RBC Capital Markets, in a note. Most OPEC producers “are effectively tapped out,” she said, noting that while Saudi Arabia is in a much better position than most other sovereign producers, its own ambitious Vision 2030 economic plan could be put in danger by a sharp drop in prices.

 United States, Saudi Arabia and Russia Find Agreement on Oil Policy - — It is unusual for the United States, Saudi Arabia and Russia to see eye-to-eye, much less try to achieve common energy policy goals, even indirectly.But that is what seems to be happening, and it is taking the edge off the yearlong rise in oil and gasoline prices. Even if those countries have their own reasons for welcoming the surge in production, it is also reducing the influence of the Organization of the Petroleum Exporting Countries, which will meet in Vienna next week to discuss production cuts put in place in early 2017.The cheerleader, if not the ringmaster, in this effort is President Trump, who took to Twitter on Wednesday to criticize OPEC for high crude prices. “Oil prices are too high, OPEC is at it again,” he wrote in his second such statement since April. “Not good.” Whatever happens at the OPEC meeting, two of the biggest players in the global oil market — Saudi Arabia and Russia — appear to have already calculated that it is in their immediate interest to crank up production, effectively sidelining the Saudis’ fellow cartel members.Between them, the two countries have already each added more than 100,000 barrels a day to global oil supplies. Mr. Trump wants even more crude sloshing around the market to tamp down energy prices ahead of the congressional elections in November, and it looks like he may well get it. It is perfectly normal for Republican and Democratic administrations to try to nudge oil prices down, but rarely — if ever — has the effort been so blunt and public. For decades, whenever presidents faced rising gasoline prices, American officials privately called Saudi Arabia seeking help in getting OPEC to boost production — something that the Trump administration has done, as well. But Mr. Trump appears unsatisfied with limiting his overtures to private diplomacy. He is publicly targeting OPEC even though oil prices have stabilized since his criticism in April, and regular gasoline prices have slid by roughly a nickel a gallon since Memorial Day. A barrel of oil in the United States now costs about $67 a barrel, down nearly $4 over the past month, although that is still about 45 percent higher than at this time last year.

Gloves back on, OPEC and U.S. shale producers to deepen ties in Vienna (Reuters) - Only a few years ago, shale CEOs and the Organization of the Petroleum Exporting Countries were in open conflict. Now, they realize they’re in the same boat and need to row in tandem to keep global crude supply and demand in balance, according to interviews with analysts, executives and investors. The recent rise in crude prices - up more than 40 percent in the past year - has lifted profits for producers across the globe, but also threatens to erode demand for fossil fuels at a time when electrification is becoming commonplace. “We’re getting to a point where a continued rise in the oil price is going to cause major problems for the global economy,” said Amy Meyers Jaffe, director of the program on energy security and climate change at the Council on Foreign Relations. “There are bigger issues at hand besides output that OPEC and shale producers care about.” OPEC and U.S. representatives have met at least twice this year, with a third high-profile meeting set for Vienna next week. Finding the optimal balance of crude supply and demand will be the hot topic. Harold Hamm, the billionaire founder of U.S. shale pioneer Continental Resources, is due to address OPEC ministers, along with fellow shale executives Hess Corp CEO John Hess and Pioneer Natural Resource Co Executive Chairman Scott Sheffield. Hamm and Hess did not respond to requests for comment ahead of the meeting. Sheffield declined to comment. “I wouldn’t take dialogue and discussion as any kind of collaboration. We’re all talking about what does world demand look like for oil,” said U.S. Senator Heidi Heitkamp, a North Dakota Democrat who successfully pushed to lift the U.S. oil export ban in 2015. Lifting that ban ushered in a sea change in global energy, sending nearly 2 million barrels of U.S. crude to India, China and other markets historically dominated by OPEC and forcing the group and its American rivals to be more conciliatory. Hamm, who called OPEC a “toothless tiger” in 2014, has begun encouraging fellow shale companies to focus more on profitability and less on profligate production. Last month, Hamm addressed a Saudi Aramco board meeting in Houston. 

OPEC producers, Russia can quickly boost crude output by 1.5 million b/d: IEA - Middle East OPEC producers and Russia can quickly boost crude production by around 1.5 million b/d to make up for Venezuela's increasing output loss as well as the potential decline in Iranian oil output when US sanctions are implemented, a senior International Energy Agency official said Thursday. Keisuke Sadamori, IEA director for energy markets and security, said at an event in Tokyo: "A quick output boost could be expected mainly from OPEC member countries in the Middle East." "These countries, which have intentionally cut production, have a capacity to boost around 1.2 million b/d in a relatively short time," he said, adding Russia could boost output by around 300,000 b/d. OPEC will meet June 22 in Vienna to decide on the future of its production agreement with 10 non-OPEC countries, led by Russia. Asked about his outlook for the OPEC meeting, Sadamori said: "Under the current market conditions, a certain action is objectively needed to be taken to stabilize the [oil] market." The IEA now expects Venezuela's oil output could fall to 800,000 b/d or even lower next year, from 1.36 million b/d in May and following a 1 million b/d fall over the past two years. Sadamori said the agency also expected to see a "negative impact" on Iranian oil production from the US decision in May to reinstate sanctions. "[The US sanctions] will basically be based on the same clauses in the National Defense Authorization Act for the 2012-15 sanctions," Sadamori said, adding it remained unclear about how exactly the US sanctions will be implemented. International buyers of Iranian oil have until November 4 to wind down contracts before the US re-imposes sanctions on the oil, energy, shipping and insurance sectors. The US has said it will also consider allowing countries to continue importing Iranian crude oil, as long as they demonstrate they are significantly reducing those volumes every 180 days. 

 Ritz-Carlton Crackdown Still Haunts the New Saudi Arabia -- The Ritz-Carlton Hotel in Riyadh, where hundreds of rich and once-powerful Saudis were detained in what the government called an anti-corruption campaign, has been a hotel again for four months. Its legacy as a jail, though, runs deep in the new Saudi Arabia. Billionaires, royals and bureaucrats remain locked up, including Prince Turki bin Abdullah and former Economy Minister Adel Fakeih, a key architect of the kingdom’s transformation plan, according to associates. Some are now in the Al-Ha’er prison, a maximum-security facility south of the capital where many Islamic militants are incarcerated. Those released had to promise to pay huge settlements, while some were banned from travel or required to wear ankle bracelets to monitor their whereabouts, according to their associates. The fate of those still being held is unknown, including the former head of the Saudi Arabian General Investment Authority, Amr Al-Dabbagh, and Ethiopian-born Saudi billionaire Mohammed Al Amoudi. The arrests have created a climate of fear, obscuring the daily reports of change that Crown Prince Mohammed bin Salman is ushering in as a young reformer for a new era. Cinemas are open, genders mix more freely and women will be allowed to drive starting this month, but there’s an increasingly authoritarian side to his leadership. The enthusiasm that existed when he unveiled his sweeping changes to Saudi society two years ago in “Vision 2030” has been slowly replaced with wariness about staying on-message, according to conversations with more than a dozen businessmen, government officials, activists and diplomats, all of whom asked not to be named for fear of retribution.Some Saudis put phones in separate rooms or in plastic containers, worried their microphones are being remotely accessed. Most are reluctant to talk politics in public. A Saudi businessman recently asked a guest in his own sitting room to lower his voice as he discussed the kingdom’s anti-corruption campaign with friends.

Three killed in Saudi Arabia following Houthi missile attack - Three people have been killed in southern Saudi Arabia, after a suspected Houthi missile fired from Yemen hit the town of Jizan late Saturday, Riyadh has said. Saudi-led anti-Houthi coalition Spokesperson Colonel Turki al-Maliki said a "projectile" was "launched deliberately to target civilians" on Saturday, according to Saudi Press Agency, which initially reported two casualties.  He warned that the Saudi-led coalition - which is waging an air war in Yemen - will retaliate in time. "The Joint Forces Command of the coalition will strike with an iron fist all those who threaten the safety and security of Saudi nationals, residents and critical capabilities" he said. Houthi rebels in Yemen have ramped up missile attacks on Saudi Arabia in recent weeks and months. On Tuesday, Riyadh's air defence systems intercepted a Houthi missile fired from Yemen at the Saudi city of Yanbu, north of Mecca and Jeddah. Other missiles have been intercepted by air defences this month.  The Houthis launched their most audacious ballistic attack yet when the Yemeni rebels fired a series of missiles at the Saudi capital in March. Other attacks on Riyadh have taken place since, the most recent being in May. Saudi and UAE-backed Yemeni government forces have surrounded the key port of Hodieda in recent weeks, putting pressure on the Houthi defenders.The UN and aid agencies have pleaded with the Saudi-led force against an attack on Hodeida, warning that it could lead to mass civilian casualties and starvation. Saudi Arabia, the UAE and other Arab joined the Yemen war in March 2015, to help support the Yemeni government which had fled the capital Sanaa in 2014. At least 10,000 people have been killed, the vast majority civilians from Saudi-led coalition air raids.

Anglo-American Media’s Complicity in Yemen’s Genocide -- We’re living through a massive artificial famine, right now. In NW Yemen, home of the Yemeni Shia who’ve fought off a Saudi-financed invasion, the “coalition” of invaders has settled on a slower, more effective strategy: artificial famine and blockade. This is how you kill off a troublesome population, not with bombs and guns alone. Hunger and disease are much better mass killers than firearms and bombs.NW Yemen has been blockaded for years now. And the Saudi strategy is working well. Yemen has had up to a  million cases of cholera, an illness unheard of in countries with modern antibiotics. Untreated cholera is fatal in about half of all cases (versus 1% when normal treatment is available). Since medical supplies are being blockaded (with the help of the US Navy), and few journalists have made much effort to find out what has been going on in the blockaded areas, we may be dealing with an unreported death toll of half a million people, most of them children.Yemen is a perfect target for artificial famine and blockade, because it never had enough farmland to feed its people. Before the Saudi invasion, Yemen imported almost 90% of its food supplies. When the Saudis imposed their blockade, cutting off all food imports to Hodeidah, the one Red-Sea port serving NW Yemen, those imports stopped. There has never been any alternative route for food supplies to Yemen. Even before the war, road traffic between Saudi and Yemenwas all but shut down. (Which is why, in a year spent a few miles from the Yemen border, I went up to the border many times, looked over it, but never gave a thought to crossing it. It would never have been allowed.)So NW Yemen is closed off very nicely, from the Saudi view. Which is also the view of the US, UK, UAE, Israel, Kuwait, and the oil companies — basically, anyone who matters in this world. Shia Yemenis are dying at a very satisfactory rate, children first (because children are always the first to die in long sieges like this). The next step for the Saudi-led “coalition” will be taking Hodeidah, the Shia provinces’ one source of food and medical aid. That operation is well underway as I write.

UN, Red Cross Evacuate Staff From Yemen Port City Ahead Of "Imminent" US-Saudi Coalition Assault - The New York Times reports that the United Nations is pulling its staff from the besieged Yemeni port city of Al Hudaydah as a massive assault on the country's only major humanitarian lifeline appears imminent. UN staff have played a key role in delivering foreign aid through what is now one of the besieged country's only humanitarian access points to the outside world, through which 80% of all humanitarian aid flows. The NYT details that the UN evacuation comes after "member countries were told that an attack by forces led by the United Arab Emirates was imminent, according to two diplomats briefed on the matter." Houthi and other allied Yemeni tribal forces have held the port city of 600,000 for the last two years after ousting the Saudi backed government in Sanaa three years ago. The Saudi-US military coalition currently besieging the country through airstrikes and sea blockade claims Al Hudaydah is a key arms smuggling point through which Iran supplies the Shia Houthis, including sophisticated ballistic missiles which have hit locations inside Saudi Arabia within the past year. Iran has denied that it is a party to the war which has claimed many tens of thousands of casualties — both through direct fighting and through starvation and disease. While acknowledging the US to be a major part of the coalition preparing for the attack on Al Hudaydah, the NYT has still managed to paint the US-Saudi-Emirati forces as benevolent-minded saviors bent on rescuing Yemeni civilians. While first noting that "Yemen is already classified as the world’s worst humanitarian disaster" with "more than 75 percent of the population... dependent on food aid" and as "millions are on the brink of starvation" the NYT report absurdly emphasizes that only the Americans can stave off disaster: "Diplomats in the region say they believe that only more pressure from Washington will stop the planned assault." Thus while the Pentagon has long been at the forefront of the war on Yemen which has caused the deaths of thousands of children, according to one leaked UN report from last summer, the NYT presents the US role as, in our words, 'reluctant humanitarian aggressors' of some sort.

Arab states launch biggest assault of Yemen war with attack on main port (Reuters) - A Saudi-led alliance of Arab states launched an attack on Yemen’s main port city on Wednesday, the largest battle of the war, aiming to bring the ruling Houthi movement to its knees at the risk of worsening the world’s biggest humanitarian crisis. Arab warplanes and warships pounded Houthi fortifications to support ground operations by foreign and Yemeni troops massed south of the port of Hodeidah in operation “Golden Victory”. Ground battles raged near Hodeidah airport and al-Durayhmi, a rural area 10 km (6 miles) south of the city, media controlled by the Arab states and their Yemeni allies reported. The assault marks the first time the Arab states have tried to capture such a heavily-defended major city since joining the war three years ago against the Iran-aligned Houthis, who control the capital Sanaa and most of the populated areas. The port is the main route for food to reach most Yemenis, 8.4 million of whom are already on the verge of famine. The Houthis deployed military vehicles and troops in the city center and near the port, as warplanes struck the coast to the south, a resident speaking on condition of anonymity told Reuters. People fled by routes to the north and west. CARE International, one of the few aid agencies still there, said 30 air strikes hit the city within half an hour. “Some civilians are entrapped, others forced from their homes. We thought it could not get any worse, but unfortunately we were wrong,” said CARE’s acting country director, Jolien Veldwijk. Saudi-owned Al Arabiya TV quoted witnesses describing “concentrated and intense” bombing near the port itself. “Under international humanitarian law, parties to the conflict have to do everything possible to protect civilians and ensure they have access to the assistance they need to survive,” said Lise Grande, U.N. humanitarian coordinator for Yemen. 

Saudi-led ground troops launch assault on Yemen port city of Hodeida, a key moment in three-year war | South China Morning Post: A Saudi-led coalition backing Yemen’s exiled government began an assault Wednesday morning on Yemen’s port city of Hodeida, a crucial battle in the three-year-old conflict that aid agencies warned could push the Arab world’s poorest country into further chaos. Iranian-aligned Shiite rebels known as Houthis and their allies for years have held the Red Sea port, crucial to food supplies in a nation on the brink of famine after years of war. The battle for Hodeida, if the Houthis don’t withdraw, also may mark the first major street-to-street urban fighting for the Saudi-led coalition, which can be deadly for both combatants and civilians alike. Before dawn Wednesday, convoys of vehicles appeared to be heading toward the rebel-held city, according to videos posted on social media. The sound of heavy, sustained gunfire clearly could be heard in the background. Saudi-owned satellite news channels and later state media announced the battle had begun, citing military sources. Houthi media did not immediately report the attack. Yemen’s exiled government “has exhausted all peaceful and political means to remove the Houthi militia from the port of Hodeida,” it said in a statement. “Liberation of the port of Hodeida is a milestone in our struggle to regain Yemen from the militias.” Forces loyal to Yemen’s exiled government and irregular fighters led by Emirati troops had neared Hodeida in recent days. The port is some 150km southwest of Sanaa, Yemen’s capital held by the Houthis since they swept into the city in September 2014. The Saudi-led coalition entered the war in March 2015 and has received logistical support from the US. 

Yemen – The Starvation Siege Has Begun -Last night the Saudi coalition launched its attack on the city of Hodeidah in Yemen. Hodeidah is the only Yemeni harbor on the Red Sea coast that can take large vessels. It is ruled by the Houthi who in 2014 took over the capital Sanaa and disposed of the Saudi installed Hadi government. 90% of the food for the 18 million people living in Houthi controlled areas comes through Hodeidah.  Saudi-owned satellite news channels and later state media announced the battle had begun, citing military sources. They also reported coalition airstrikes and shelling by naval ships. The initial battle plan appeared to involve a pincer movement. Some 2,000 troops who crossed the Red Sea from an Emirati naval base in the African nation of Eritrea landed west of the city with plans to seize Hodeida’s port, Yemeni security officials said.Emirati forces with Yemeni troops moved in from the south near Hodeida’s airport, while others sought to cut off Houthi supply lines to the east, the officials said. The port is now classified as a zone of active military conflict. Prolonged fighting may well destroy the port infrastructure. Even if the Saudi coalition forces take and reopen it they will continue to block food supplies for the central highlands of Yemen. They want to starve the Houthis into submission.

"Civilians Trapped": Major Assault On Yemen Port Begins; Saudi Ship Attacked -- The biggest and potentially most catastrophic battle in terms of civilian casualties has begun in the three-year war between the Saudi coalition and Iranian-aligned Houthi rebels. The assault began early Wednesday after days of the United Nations warning against the operation which also involves the UAE and United States as leading the campaign on the Houthi held port city of Al Hudaydah.  Reuters reports the following breaking updates:

• "concentrated and intense" bombing near the port itself.
• 30 air strikes hit the city within half an hour.
• Houthis say they hit a coalition barge
• Port is main route to feed 8.4 million on verge of famine
• "Some civilians are entrapped, others forced from their homes."
• Arab warplanes and warships pounded Houthi fortifications to support ground operations by foreign and Yemeni troops massed south of the port of Hodeidah in operation "Golden Victory".
• Ground battles raged near Hodeidah airport and al-Durayhmi, a rural area 10 km (6 miles) south of the city

Though Saudi and coalition authorities have long imposed a media blackout on Yemen which has resulted in little on the ground footage of the war, some early footage of the ground assault has emerged on pro-Saudi social media:عاجل | فيديو مباشر: بإسناد القوات المسلحة الإماراتية القوات المشتركة تقترب من مطار الحديدة #الحديدة_تتحرر pic.twitter.com/pPBWBkM2dP— الحديدة مباشر (@HdeidahMubasher) June 13, 2018  Early footage of Saudi-UAE coalition troops mustering outside of the contested port city:

Yemen war: Fighting rages over vital port of Hudaydah - BBC -- Fierce fighting has been reported after pro-government forces in Yemen, backed by a Saudi-led coalition, launched an offensive on the rebel-held city of Hudaydah, a key port for aid supplies.Thirty Houthi rebels and nine members of pro-government forces are said to have been killed.Coalition forces are now within two kilometres of the city's airport, the Emirati envoy to the UN says.The UN Security Council restated its fears about the fate of civilians.The emergency meeting on Thursday, called by the UK, saw members agree the port must be kept open to prevent a further worsening of Yemen's humanitarian crisis. About eight million people are at risk of starvation in the war-torn country and the coastal city is where most aid arrives for people in rebel-held areas.  However, there was not enough support on the council for Sweden's motion to demand an immediate halt to the offensive on Hudaydah. Vassily Nebenzia, Russia's UN ambassador and president of the council in June, said the body urged "all sides to uphold their obligations under international humanitarian law".

The siege of Hodeidah, Washington’s war crime in Yemen -- The siege of Yemen’s Red Sea port of Hodeidah launched by Saudi and United Arab Emirates-led forces at dawn on Wednesday could cost the lives of some quarter of a million people in the crowded city itself, according to a UN estimate, while threatening to kill millions more across the country through hunger and disease. Inflicting mass suffering upon civilians is the main purpose of the attack on Hodeidah, which is the principal lifeline for food, fuel and medicine for at least 70 percent of the population in a country that depends on imports for up to 90 percent of its food. The aim is to starve the impoverished Yemeni people into submission.   Last year alone, some 50,000 Yemeni children starved to death—roughly 1,000 every week—according to the aid group, Save the Children. One million Yemenis are infected with cholera, an epidemic that has claimed the lives of nearly 2,500 people. As part of its preparations for the Hodeidah offensive, Saudi warplanes bombed a cholera clinic run by Doctors without Borders.This total war against an entire population, of the likes carried out by Hitler’s Third Reich three-quarters of a century ago, would be impossible without the uninterrupted support—military and political—of US imperialism since its outset.The US, together with its main NATO allies the UK and France, has supplied the planes, warships, bombs, missiles and shells used to devastate Yemen and slaughter its people. In his eight years in office, President Barack Obama presided over some $115 billion in arms sales to the monarchical dictatorship in Riyadh. The Trump administration, which has sought to forge an anti-Iran axis with Saudi Arabia, the other reactionary Gulf oil sheikhdoms and Israel, has touted arms deals with Riyadh that potentially would amount to $110 billion. The Pentagon has given direct and indispensable aid to the Saudi-led onslaught, providing midair refueling for the planes that bomb Yemeni civilians, staffing a joint command center in Riyadh with US intelligence and logistics officers and reinforcing the Saudi-UAE blockade of the country with American warships. Recently, US Green Berets have been deployed with Saudi ground forces to assist in their anti-Yemen operations. Under the banner of the “war on terror”, the Pentagon is waging its own air war in Yemen, conducting at least 130 air and drone strikes in 2017, quadruple the number in 2016. The Trump administration gave the go-ahead for the current siege of Hodeidah in the form of a statement from US Secretary of State Mike Pompeo announcing that he had spoken with the rulers of the UAE and “made clear our desire to address their security concerns.” Pentagon officials have reported that US officers are helping to select targets in the port city.

Libya "Before And After" Photos Go Viral -A Libyan man who took photos of himself posing at various spots across Beghazi in 2000 has revisited the same locations 18 years later to photograph life under the new "NATO liberated" Libya. The "before and after" pics showing the utter devastation of post-Gaddafi Libya have gone viral, garnering 50,000 retweets after they were posted to an account that features historical images of Libya under Gaddafi’s rule between 1969 and 2011. It appears people do still care about Libya even if the political elites in Paris, London, and Washington who destroyed the country have moved on. Though we should recall that British foreign secretary Boris Johnson was caught on tape in a private meeting last year saying Libya was ripe for UK investment, but only after Libyans "clear the dead bodies away."   We previously detailed in Libya's Slave Auctions And African Genocide: What Hillary Knew how Libya went from being a stable, modernizing secular state to a hellhole of roving jihadist militias, warring rival governments, and open-air slave auctions of captured migrants. Yet what the viral photos confirm is that Libya was once a place of sprawling hotels, wide and clean city streets, functioning infrastructure, and lively neighborhoods. But these very places are now bullet-ridden ruins rotting amidst the political backdrop of the 'Mad Max' style chaos unleashed immediately after US-NATO's bombing the country into regime change. 

Iraqi ballot box storage site catches fire, drawing calls for an election re-run -- A fire ripped through Iraq's biggest ballot warehouse on Sunday ahead of a vote recount prompted by allegations of fraud during legislative elections that saw a surprise victory for a populist cleric. A senior security official, speaking to AFP on condition of anonymity, said the fire broke out in a warehouse located in Al-Russafa, one of the largest voting districts in eastern Baghdad. Firefighters brought the blaze under control several hours after it started, and the extent of the damage caused to ballot boxes was still unclear. Around 60 percent of Baghdad's two million eligible voters had cast their ballots in the May election in Al-Russafa district. A column of black smoke billowed from the warehouse, normally used to store foodstuff, and could be seen across the capital. Warehouse staff ran out of the building carrying blue and white plastic ballot boxes to safety as firefighters backed by around a dozen trucks struggled to put out the fire, an AFP reporter said. Late on Sunday, Iraqi Prime Minister Haider al-Abadi said that the burning of a storage was part of a plot to harm Iraq's democratic process, the first government indication the incident was deliberate. "Burning election warehouses ... is a plot to harm the nation and its democracy. We will take all necessary measures and strike with an iron fist all who undermine the security of the nation and its citizens," Abadi said in a statement.

US-Backed Kurds Agree To "Unconditional Talks" With Syrian Government After Pentagon-Turkey Deal - We've long predicted that the US-backed Syrian Kurdish forces currently holding a vast chunk of land in Syria's northeast with the help of American coalition air power will naturally drift toward striking a deal with Assad, as the two sides have throughout the war exercised some degree of quiet cooperation against ISIS, foreign jihadists, and Turkish expansionism. In a huge weekend development which has gone largely unnoticed by mainstream media, the political wing of the US-trained and supported Syrian Democratic Forces (SDF) announced it is open to entering into unprecedented direct negotiations with the Assad government over the future of the country. The Syrian Democratic Council, or SDC, is the political arm of the powerful alliance of mostly Kurdish and Arab fighters that make up the SDF, and on Sunday declared willingness to enter into "unconditional talks" with the Syrian government. The London based international Arabic newspaper Asharq Al-Awsat reports the following: In a statement on Sunday, the SDC said it was committed to resolving Syria's deadly conflict through dialogue, and would not "hesitate to agree to unconditional talks". "It is positive to see comments about a summit for Syrians, to pave the way to start a new page," it said.Leading SDC member Hekmat Habib told AFP that both the council and the SDF "are serious about opening the door to dialogue" with the regime."With the SDF's control of 30 percent of Syria, and the regime's control of swathes of the country, these are the only two forces who can sit at the negotiating table and formulate a solution to the Syrian crisis," he said.

Israel is about to destroy this Palestinian village. Will Britain step in? - Israel is intent on destroying the homes of the 173 Palestinians who live in the small shepherding community of Khan al-Ahmar, along with the school that serves 150 children from the area. Last month, Israel’s high court of justice removed the last obstacle to this barbaric act of demolishing an entire community in order to forcibly transfer its residents and take over their land. Israel has announced that the land from which these Palestinians will be evicted will serve to expand the nearby settlement of Kfar Adumim. The story of Khan al-Ahmar exemplifies Israel’s policy of expelling dozens of Palestinian communities from areas it plans to formally annex. To keep international criticism to a minimum, Israel usually tries to evict residents slowly by creating unbearable living conditions that force them to leave their homes, allegedly of their own free will. To that end, the authorities refuse to connect these communities to running water and power grids, do not authorise construction of homes or other structures and restrict their pastureland. Now, emboldened by Donald Trump’s overt disdain for human rights – or basic human decency for that matter – and bolstered by the Israeli idea that the European Union is too weak to act decisively, the authorities have stepped up their efforts and issued demolition orders for all the structures in Khan al-Ahmar. Justice Noam Sohlberg, who wrote the ruling that rejected the petition against the execution of these orders, noted the “undisputed” premise that “construction in the Khan al-Ahmar compound, both the school and the dwellings, is unlawful”. He went on to argue that the court should not interfere in the state’s “law enforcement” actions.

Iran, spurned by US, angrily watches Trump-North Korea talks  — For Iran, the so-called "Axis of Evil" has boiled down to a party of one, as President Donald Trump prepares for direct talks with North Korea. For those in Tehran, whether hard-liners, reformists or people simply trying to get by in Iran's worsening economy, it's head-spinning, especially after seeing Trump pull America out of the nuclear deal with world powers.  It wasn't supposed to be like this. Excited crowds flooded the streets after the 2015 nuclear deal that Iran struck with world powers, including the U.S. under President Barack Obama. The deal saw Iran agree to limit uranium enrichment in its nuclear program, which the West feared could be used to build a nuclear weapon. For Iran, which long has maintained its atomic program was for peaceful purposes, the deal took the shackles of sanctions off its economy and opened up its oil sales abroad.  Then came Trump, who campaigned pledging to tear up the nuclear deal. Once elected, he included Iran in his travel bans, blocking Iranians from traveling to the U.S., home to a large Iranian community.  Then on May 8, Trump followed through on his threat and pulled America out of the nuclear agreement, dooming billions of dollars of business deals, including Boeing sales. But at the same time, Trump had traded his criticism of Kim Jong Un, a leader he once derided as "Little Rocket Man" on Twitter, for hopes of a one-on-one meeting.

Iranians Rage At Nike After World Cup Team Forced To Switch Shoes -- It's not merely that the Iranian national team for the 2018 World Cup will no longer have access to Nike shoes or equipment, it's that their current shoes are actually being taken away from them. The announcement set Iranian social media ablaze with anger over the weekend, with many Iranians declaring they would never again buy Nike products: “The sanctions mean that, as a U.S. company, we cannot provide shoes to players in the Iran national team at this time,” Nike told NBC News in a statement.  Soon after initial breaking reports of the decision last week, Iranian-American Middle East analyst Holly Dagres noted, "In the wake of Nike's decision to not provide cleats to Iran's national football team, Iranians are pushing a boycott of the US brand using #BoycottNike."Nike will provide 60% of World Cup players with their shoes as official sponsors when they take the field on June 14 in St. Petersburg, Russia, but says it will confirm to US law citing new U.S. Treasury-enforced sanctions on Iran, and impending White House plans for more. Violators can face punishment of up to $1 million and 20 years in prison, and American banks assisting in business transactions can also be "subject to civil penalties of up to the greater of $250,000 or twice the transaction value," according to the US Department of the Treasury Iran sanctions page.Now, no Iranian players are allowed to wear Nike shoes or gear after the last minute decision — items which the company had previously provided; however, less than a week away from Iran's first game with Morocco on Friday players are being forced to switch.

Is Putin really ready to “ditch” Iran? - The topic of Russian actions in Syria still continues to fascinate and create a great deal of polemics.  This makes senses – the issue is exceedingly important on many levels, including pragmatic and moral ones, and today I want to stick strictly to the pragmatic level and set aside, just for a while, moral/ethical/spiritual considerations.  Furthermore, I will also pretend, for argument’s sake, that the Kremlin is acting in unison, that there are no Atlantic Integrationists in the Russian government, no 5th column in the Kremlin and that there is no Zionist lobby exerting a great deal of influence in Russia.  I will deal with these issues in the future as there is no doubt in my mind that time and events will prove how unfounded and politically-motivated these denials are in reality. But for the purpose of this analysis, we can pretend that all is well in the Kremlin and assume that Russia is fully sovereign and freely protecting her national interests. So what do we know about what is going on in Syria? I submit that it is obvious that Russia and Israel have made some kind of deal.  That there is an understanding of some kind is admitted by both sides, but there is also clearly more happening here which is not spelled out in full.  The Israelis, as always, are bragging about their total victory and posting articles like this one: “In Syria, Putin and Netanyahu Were on the Same Side All Along” with the subheading reading “Putin is ready to ditch Iran to keep Israel happy and save Assad’s victory“.  Really?

China, Iran agree to strengthen strategic cooperation despite US pressure - China and Iran have agreed to strengthen strategic cooperation during Iranian President Hassan Rouhani's visit to China, possibly paving the way for steady crude flows between the two countries. The meeting with China's president Xi Jinping took place on Sunday on the sidelines of the Shanghai Cooperation Organization summit in the eastern coastal city of Qingdao, and comes at a time when Iran faces reimposition of sanctions by the US, which could impact its crude oil exports. China is the largest buyer of Iranian crude and did not reduce crude imports from Iran even at the height of the previous sanctions against Tehran in 2012. In the first quarter of 2018, China's imports of Iranian crude rose 17.3% year on year to 658,000 b/d, making Iran its sixth-biggest supplier. Xi and Rouhani agreed on Sunday to enhance bilateral pragmatic cooperation and pursue comprehensive strategic partnership, according to China's state-owned Xinhua news agency. Xi also called on the two countries to deepen political relations to enhance strategic mutual trust, increase exchanges at all levels, and continue to support each other on issues of major concern involving their respective core interests, according to Xinhua news agency. The latest agreement is expected to further advance bilateral comprehensive strategic partnership established during Xi's state visit to Iran in 2016. Xinhua quoted Xi as saying that the Iran nuclear deal should continue to be implemented earnestly as it acts to stabilize the peace and stability in the Middle East as well as for the international non-proliferation regime.  '

While G7 ends in disarray, China and Russia spearhead enlarged Central Asian bloc – Chinese President Xi Jinping hailed the entry of India and Pakistan into a Chinese-led bloc at a closely orchestrated gathering Sunday that stood in stark contrast to the G-7 summit that ended in disarray. Xi welcomed Indian Prime Minister Narendra Modi and Pakistani President Mamnoon Hussain, calling their presence “of great historic significance” in opening remarks at this weekend’s summit of the Shanghai Cooperation Organization in the northern Chinese port of Qingdao. The two South Asian nations joined the bloc as full members last year. “More member states means greater strength of the organization as well as greater attention and expectations of people of regional countries and the international community,” Xi said Sunday. “We also share greater responsibilities in maintaining regional security and stability and promoting development and prosperity,” he said. The Beijing-led bloc, which experts see as seeking to challenge the Western-led order, is dominated by China and Russia and also includes Kazakhstan, Uzbekistan, Kyrgyzstan, and Tajikistan. Founded in 2001, it was originally conceived as a vehicle for resolving border issues, fighting terrorism, and – more implicitly – to counter American influence in Central Asia following its invasion of Afghanistan. In recent years, its economic component has grown more prominent, embodied in Xi’s signature, trillion-dollar foreign policy and infrastructure drive known as the Belt and Road Initiative. Beijing’s infrastructure projects in Central Asia make some in the bloc uncomfortable – particularly India, which alone among members has refused to endorse the program. Russia, too, is wary of China’s expanding influence, and though it has somewhat reluctantly embraced the Belt and Road, it is also seeking to expand its own economic and political leverage in the region through a customs union it dominates known as the Eurasian Economic Union. 

China Unexpectedly Fails To Follow Fed Rate Hike After "Shockingly Weak" Economic Data - It was just yesterday when we noted the sharp collapse in the Chinese credit impulse, when in May, the PBOC reported that Total Social Financing grew at the slowest pace since July 2016, as a result of a full-blown crackdown on China's shadow credit system. Barely 24 hours later, China served not one but two major surprises that were the direct result of the sharp slowdown in China's credit dynamo. On Thursday China reported activity data including industrial production, fixed asset investment and retail sales, which missed across the board - in the case of fixed investment the weakest on record - and were the most definite confirmation yet that China’s economy is finally starting to get hurt under the weight of a multi-year crackdown on risky lending that has pushed up borrowing costs for companies and consumers, and has led to a surge in corporate defaults.   The number suggested further weakness ahead if Beijing continues with its crackdowns on pollution, questionable local government spending and off-balance sheet “shadow” financing, which as we reported yesterday tumbled at the fastest monthly pace on record. As Reuters notes, China has been walking a fine line between rolling out measures to curb financial risks and pollution and tapping the brakes so hard that business activity slows sharply. Much of their effort so far has focused on the banking sector rather than corporate debt reduction or deleveraging - possibly explaining why China’s headline growth has been so surprisingly solid, prompting some such as Morgan Stanley to wonder if Chinese credit impulse has decoupled from the Chinese economy. Now we can confirm it has not as official and unofficial gauges are now showing the regulatory crackdown is starting to filter through to the broader economy, with companies complaining it is harder to get financing and a growing number of firms defaulting on bonds.

A Chip in the Windshield: China’s Surveillance State Will Soon Track Cars —China is establishing an electronic identification system to track cars nationwide, according to records and people briefed on the matter, adding to a growing array of surveillance tools the government uses to monitor its citizens. Under the plan being rolled out July 1, a radio-frequency identification chip for vehicle tracking will be installed on cars when they are registered. Compliance will be voluntary this year but will be made mandatory for new vehicles at the start of 2019, the people said. Authorities have described the plan as a means to improve public security and to help ease worsening traffic congestion, documents show, a major concern in many Chinese cities partly because clogged roads contribute to air pollution. But such a system, implemented in the world’s biggest automotive market, with sales of nearly 30 million vehicles a year, will also vastly expand China’s surveillance network, experts say. That network already includes widespread use of security cameras, facial recognition technology and internet monitoring. 

China’s Undocumented Filipino Housekeepers Eke Out Risky Living - The 35-year-old domestic worker from the Philippines had never had a legal work permit for China, which meant she was constantly at risk of getting caught by the authorities, who could detain and deport her. “I was so scared I would be put in jail; I didn’t want to be a criminal,” she tells Sixth Tone. Castillo, whose name has been changed to protect her safety, worked as an ayi — a Chinese word for “aunt” that is colloquially used for cooks, cleaners, nannies, and other domestic workers. Most immigrants working in such roles do not qualify for work visas under Chinese law, which means they can’t access health care or other services, and are constantly at risk of prosecution.Nonetheless, China is becoming a popular destination for Filipinos. Attractive salaries are the main draw, as Chinese employers often pay more than those in other countries. “It is common knowledge among us Filipinas,” says Leah Antonio, who has been working legally in Shanghai for nearly four years. The 31-year-old single mother tells Sixth Tone that she now earns 6,000 yuan ($940) a month as an ayi, a salary three times what she earned as a sales promoter back home, and more than double Shanghai’s minimum wage, which at 2,420 yuan is the highest in the country.

Despite US Threats, China Redeploys Missiles On Contested South China Sea Island - China has taken credit for pushing North Korean leader Kim Jong Un to agree to this week's historic peace summit with the US, where the two sides will discuss terms for the possible removal of all nuclear weapons from the Korean peninsula. But as the world's second-largest economy touts its efforts to ensure peace with the US, the simmering tensions in the Pacific, where the US military has repeatedly clashed with China's navy and air force over China's continued development of islands in the South China Sea - something China claims is essential for its national security. And in the latest provocation, the South China Morning Post reported Monday that China has redeployed a series of missiles that it had removed last week from the disputed Woody Island, part of the Yongxing islands in the Paracels. An Israeli intelligence firm called ImageSat International captured satellite images purportedly showing the removal, and then redeployment, of the surface-to-air missiles sattioned on the Island by the Chinese military, according to the South China Morning Post. The missiles were returned to "exactly the same positions they were," an indication that China didn't even bother to hide its latest provocative act. The first batch of photos, taken June 3, showed what appeared to be HQ-9 missiles being removed. The removal came as tensions flared between China and the US, with the US flying two nuclear-capable B-52 bombers over the Spratly Islands.The Pentagon is also reportedly considering whether it should send more warships to the Taiwan Strait to step up security of island, which, according to the US one-China policy, is viewed as part of China. The US is also reportedly trying to rally its allies to increase their own military presence in the area - these allies include Britain and France.

China may take bigger role as ‘guarantor and mediator’ after Trump-Kim nuclear talks | South China Morning Post: Beijing is expected to take a bigger role in Korean peninsula negotiations after US President Donald Trump and North Korean leader Kim Jong-un meet on Tuesday – helping the two sides to push forward any deals they make. The role would be as a “guarantor”, Chinese analysts say, not just of progress on the denuclearisation Washington is seeking, but also to ensure what Kim wants most: the safety of his regime. Reflecting the stakes in play in the negotiations, a leading US politician has called for lawmakers there to endorse the use of military force against North Korea as a precautionary measure in case the Singapore summit fails to reach a diplomatic agreement of some kind. Lindsey Graham, a Republican senator from South Carolina who is a member of the Senate Armed Services Committee, told ABC News on Sunday, that “Donald Trump is not going to capitulate, so there’s really only two options – peace or war.” The latest indication of Beijing’s influence over Pyongyang came on Sunday, when Kim arrived in Singapore for the summit not aboard the North Korea Air Force Un, as it is known – a Soviet-made Ilyushin Il-62M jet – but on an Air China Boeing 747 sometimes used to transport Chinese leaders. Kim’s flight path meanwhile appeared to maximise time spent in Chinese airspace during the journey, including veering off to pass over the southernmost province Hainan Island. A source told the South China Morning Post earlier that China could send fighter jets to escort Kim on the journey through its airspace. 

Russia inserts itself into North Korea game | Asia Times: When it comes to North Korea, Japan and Russia may seem like two “lost souls” in Northeast Asia, standing on the fringes anxiously looking on as China, South Korea and the United States dominate the headlines. The tremors set in motion by the meeting between US President Donald Trump and North Korean leader Kim Jong-un in Singapore last Tuesday add to the angst. In reality, Russia is way ahead of Japan. The meeting in the Kremlin on Wednesday between Russian President Vladimir Putin and the visiting Chairman of the Presidium of the Supreme People’s Assembly of North Korea Kim Yong-nam, the number two man in the hierarchy in Pyongyang, underscores this. Clearly, the two countries are keeping up the momentum in high-level exchanges.Japan, on the other hand, is groping for a way to somehow make an entry. Notionally, it is aligned with the US at the leadership level. But then, Trump is a lone ranger. Japan has no diplomatic relations with North Korea and setting up high-level contacts needs protracted efforts. Besides, Prime Minister Shinzo Abe has been the most forceful proponent of the “maximum pressure” policy toward North Korea. He probably overreached, overlooking Trump’s propensity to make abrupt shifts. Indeed, the shift in the tectonic plates this week caught Tokyo flat-footed. Quick backtracking is necessary. Kim must first decide when, how urgently or even whether to meet Abe. It’s a fraught situation for Tokyo, because Japan is a stakeholder and is most vulnerable to North Korea’s missiles. But with Kim having twice met both Chinese President Xi Jinping and South Korean President Moon Jae-in, Abe is the only major regional leader yet to establish eye contact with the top man in Pyongyang. Clearly, Kim is prioritizing Beijing and Moscow before Tokyo. The plane carrying Kim from Singapore to Pyongyang on the return journey reportedly landed in Beijing airport and someone “disembarked.” And, at the Kremlin meeting, Kim Young-nam handed over to Putin a letter from his supreme leader. 

Will US-North Korea deal leave Japan, South Korea vulnerable? - South Korea and Japan were left confused and concerned about their long-term security after US President Donald Trump said America would no longer take part in “war games” with its East Asian allies and wanted to reduce troop numbers in the region, analysts said. At a briefing immediately after his landmark summit with North Korean leader Kim Jong-un in Singapore on Tuesday, Trump described the joint military drills with South Korea as costly and “provocative”, and said he would like to bring home the 32,000 soldiers based there. “This is bad news for both South Korea and Japan, as joint exercises form an important part of the US’ deterrence strategy,” Benoit Hardy-Chartrand, an adjunct professor at Temple University in Tokyo, said.While Seoul and Tokyo welcomed the Singapore summit and the release of the joint statement, the two allies, which live with the direct threat of Pyongyang’s nuclear and conventional weapons, appeared surprised by Trump’s announcement. South Korea’s defence ministry sought to play it down, saying in a statement that it “need[s] to find out the exact meaning or intention behind [Trump’s] comments”. Japan also expressed concerns. Defence Minister Itsunori Onodera said on Wednesday: “The drills and the US military stationed in South Korea play a vital role in East Asia’s security.” 

 South Koreans Reject Pro-War Old Guard as Moon’s Peace Party Wins Big in Local Elections -- When South Koreans went to the polls yesterday they registered their unambiguous backing for President Moon’s Democratic Party and the peace process that is a signature policy of his administration. In doing so, they also dealt a devastating blow to the country’s main faction hostile to North Korean diplomacy.  Here’s how one South Korean outlet summed up the results: "In what was considered an opportunity to measure the public support of the Moon Jae-in administration one year into its term, the Democratic Party achieved an enormous victory in the local elections of June 13^th, providing even more political flexibility for Moon’s government…. At the same time, the Liberty Korea Party suffered a historically crushing rout that has seen its power wither, leaving it solely with its [traditional strongholds]…as the party appears on the verge of being swept away in a maelstrom of internal discord with members looking for someone to blame for this defeat." (Translation of original Korean by author.)  The Democrats took 14 of the 17 metropolitan districts voted on today, including the city of Busan and Southeast Gyeongsang Province – both former mainstays of the Liberty Party. They also captured 11 of the 12 seats in the National Assembly bi-elections held the same day. The assembly now houses 130 Democratic representatives to 113 from Liberty with the full election coming in 2020. While these results were largely expected, they represent a stunning fall from grace for the once-dominant political force in South Korea. Harsh as the outcome was for the Liberty Party as a whole, it may be the final death knell for its leader Hong Jun-pyo, who had declared his intention to retire from politics if Liberty failed to take at least six of the major jurisdictions voted on today.

Malaysia’s Mahathir calls for review of Trans-Pacific trade pact -– Malaysian Prime Minister Mahathir Mohamad called for a review of the Trans-Pacific Partnership trade agreement, saying smaller economies like Malaysia were at a disadvantage under the current terms. In an interview with Japan’s Nikkei published Saturday, Mahathir said the trade pact — which includes Japan and Canada- should take into consideration the level of development of various countries. “Small, weaker economies must be given a chance to protect their products,” Mahathir told the Japanese financial daily. “We have to review” the TPP. Mahathir’s call to review the TPP agreement would be a blow for the 11-member trade pact, which was finalize after tough negotiations earlier this year following the withdrawal of one of the original signatories, the United States. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), as it is now called following the U.S. withdrawal, will reduce tariffs in countries that together amount to more than 13 percent of the global economy — a total of $10 trillion in gross domestic product. With the United States, it would have represented 40 percent. Mahathir did not reject the significance of agreements such as the TPP and he did not say whether he would consider leaving the trade pact altogether, Nikkei reported. 

More than half Australian workers in part-time insecure employment - The Liberal-National Coalition government claims that its policies have produced an employment upswing, with the creation of half a million additional jobs since it took office in 2013. In reality, it has intensified the pushing of workers into casual, part-time or contract work, a process that begun under the Labor governments of the 1980s and 1990s.Last month, in response to official figures showing the unemployment rate remained at 5.6 percent in May, Prime Minister Malcolm Turnbull boasted: “Every lever of policy put in place by the government is pulling in the direction of more economic growth, more jobs and better jobs.” However, a recent report shows the deepening of the levels of unemployment and under-employment that became entrenched under the last Labor government from 2007 to 2013. Hundreds of thousands workers remain jobless or have been forced into precarious employment with little hope of ever securing better-paying full-time positions.A report released by the Australia Institute’s Centre for Future Work at the end of last month revealed that, for the first time in recent recorded statistics, less than half of all workers are in a permanent full-time paid job with holiday, sick and other leave entitlements.Based on Australian Bureau of Statistics (ABS) and other government data, the research found full-time paid jobs with normal leave entitlements fell to 49.97 percent of all employment in 2017, from 51.35 percent in 2012.Over the same period, the share of part-time jobs rose two percentage points to 31.7 percent, a new high. The number of workers in casual jobs without paid leave entitlements rose 1.6 percentage points to 25.1 percent. Underemployment, the proportion of people working but who want more hours, jumped from 7.6 percent to 9.1 percent, while average hours worked each month fell from 141 to 139.

The Hitler Of South Africa Tells White People, He Won't Kill Them...Yet! -- Earlier this week while most of the world was transfixed on the World Cup, the Trump/Kim handshake, or a multitude of other sundry events, Julius Malema, aka the Hitler of South Africa, was busy telling white people in his country that he’s not going wage genocide against them. Yet. In an interview with TRT World News published this week, Malema said, “We have not called for the killing of white people. At least for now. I can’t guarantee the future.” When the reporter mentioned that some people might view these remarks as a call to genocide, Malema responded, “Crybabies. Crybabies,” but later warned white South Africans that “the masses are on board” for “an un-led revolution and anarchy”. Malema is a prominent politician in South Africa and at the forefront of his country’s movement to confiscate land from white property owners and redistribute it to the country’s black population. No actual specifics about the plan have been revealed, of course. So even if someone thinks this land grab is social justice, it’s at least reasonable to acknowledge the massive corruption that plagues South Africa’s government. And presuming that a multi-billion dollar expropriation wouldn’t be fraught with graft is just plain naive. There has also been zero acknowledgement that forced exprorpriation of private property would cause a wave of defaults on real estate mortgages, triggering a massive banking crisis and unforgiving recession. South Africa already has a prime example about the economic consequences: Zimbabwe’s own land expropriation plunged that country into an economic cataclysm spanning two decades. Yet these all seem to be irrelevant details.

Rand Slides To 6-Mo Lows As South Africa Unveils 'Affirmative Action' Mining Charter - Seemingly not satisfied with 'enabling' the  violent deaths of hundreds of white farmers with their policy of redistribution (confiscation) of white-owned farm-land to poorer black farmers, South Africa's still-newly-minted government has decided to apply the same cleansing of the "original sin," to the nation's resource mining operations. As Ramaphosa previously noted, he wants to see “the return of the land to the people from whom it was taken… to heal the divisions of the past," and published a draft of its new Mining Charter on Friday for public comment before finalizing the set of rules aimed at distributing the industry’s wealth more widely.As Bloomberg reports, Mineral Resources Minister Gwede Mantashe has held months of talks with companies, unions and mining communities on an update to the regulations after a version published last year by his predecessor prompted legal challenges from the industry.South Africa has the world’s biggest reserves of platinum, and its mineral deposits also include gold, manganese, iron-ore, coal, chrome and zinc. Anglo American Plc, Glencore Plc and South32 Ltd. are among companies operating in the country, and the new Mining Charter is aimed at distributing South Africa’s mineral wealth more widely.For new mining rights, the minimum 30 percent black ownership requirement includes a 5 percent free-carried interest and 3 percent financed interest each for workers and mining communities, according to the draft, which was published for public comment before being finalized. The remaining 14 percent is for black investors.New mining right holders also must pay 1 percent of earnings before interest, taxes, depreciation and amortization to employees and communities. That’s a change from last year’s version, which required companies to pay at least 1 percent of annual revenue to black shareholders.Additionally, 70% of total mining spending must be local and 80% of mining services spending must be local.Mining company boards must be 50% black people with 20% black women.

Amid setbacks by the Temer administration, thousands of indigenous peoples march into Brazil's capital -- A defiant energy pulsed through the crowd. We could hear chants, ritual mantras, and ceremonial crying. The place resounded with the voices of the more than 3,000 indigenous people from more than 100 different groups from all over Brazil, who gathered for the five-day 2018 National Indigenous Mobilization, held from April 23 to 27 in Brasilia, the Brazilian capital city.Also known as the ‘Free Land Camp’ (‘Acampamento Terra Livre’, in Portuguese), the sit-in is a yearly event organized by the Articulation of the Indigenous Peoples of Brazil (APIB, in the Portuguese acronym). This year's was its 15th edition. According to the last Brazilian demographic census, there are 305 indigenous populations in Brazil, speaking 274 different languages. Together, they number almost 897,000 — approximately 0.47% of the country's 200-million-strong population. Most of them are scattered over thousands of villages, from north to south of the national territory, located in the 715 Indigenous Lands already regularized and formally recognized by the federal government. There are more than 800 cases of indigenous lands awaiting regularization. The Brazilian National Congress, whose majority is currently dominated by supporters of the agribusiness sector, are trying to approve a bill package that would undermine the rights of indigenous peoples guaranteed by Brazil's 1988 Constitution and other international laws, such as Convention 169 of the International Labor Organization.In the current complex political situation in Brazil, under the controversial administration of president Michel Temer, representatives of the agribusiness sector have gained even greater foothold and managed to also occupy other levels of government.

Putin’s 2018 marathon call-in show, boiled down to two paragraphs -- On June 7, Putin held his latest marathon call-in show on live television. For the first time in a decade, he ditched the studio audience and returned to the model he used from 2001 to 2008. Meduza breaks down Thursday's 4.5-hour event into two short paragraphs.

• Domestic politics. Wages are rising, but admittedly not for everybody. Russia won’t introduce a progressive income tax or a sales tax, but the tax system will be adjusted (as a necessary anti-poverty measure). Mismanagement is to blame for rising gasoline prices, and the government is taking action. Russia won’t ban Facebook or Instagram. Extremism cases need to be investigated, but within reason. Mortgages should be available to everyone, and we should aim for a seven-percent interest rate. It doesn’t make good financial sense to subsidize electric cars, and Russians should use more gas-power cars. The Russian people will choose Putin’s eventual successor.
• Foreign policy. The West’s allegations against Russia are a form of containment. The West mistakenly sees Russia as a threat. There’s been no Third World War thanks to strategic parity; the U.S. is trying to break that peace, but Moscow won’t let it. For some time, many European countries have wanted to lift sanctions against Russia, but these nations aren’t fully sovereign. Now the EU faces trade sanctions from the United States. Russian troops will remain in Syria for as long as it benefits Russia. The European Union should be ashamed of the fact that there are stateless persons in the Baltic states. Ukraine is unable to its resolve problems in the separatist-held east. The government doesn’t currently plan to free Oleg Sentsov or trade him for any Russian citizens now jailed in Ukraine.

Austria Set To Deport 60 Imams, Close 7 Mosques In Crackdown On "Political Islam" - Austria announced on Friday that it will likely expel up to 60 Turkish-funded Imams and their families, and may shutter seven mosques as part of a crackdown on what they have termed "political Islam," reports AFP. Chancellor Sebastian Kurz said that Austrian officials will shut a Turkish nationalist mosque in Vienna, while dissolving a group called the Arab Religious Community that runs six mosques. "The circle of people possibly affected by these measures -- the pool that we're talking about -- comprises around 60 imams," said Interior Minister Herbert Kickl of the far-right Freedom Party (FPOe), the junior partner in Austria's coalition government.Kickl was referring to imams with alleged links to the Turkish-Islamic Cultural Associations (ATIB) organisation, a branch of Turkey's religious affairs agency Diyanet.Kickl added the government suspects them of contravening a ban on foreign funding of religious office holders. –AFP 40 of the Imams have active applications pending to extend their residency, however a number of them had already been referred to immigration authorities for expulsion. When family members are included, a total of 150 people stand to lose their residency, Kickl told a Vienna press conference.  The government actions are based on a 2015 Austrian law that prevents religious communities from receiving foreign funding.   Turkey immediately denounced the move, while populist politicians in Europe praised it.  "Austria’s decision to close seven mosques and expel imams is a reflection of the Islamophobic, racist and discriminatory wave in this country. It is an attempt to target Muslim communities for the sake of scoring cheap political points," presidential spokesman Ibrahim Kalin said on Twitter. Former French Presidential candidate Marine Pe Pen lauded the move, tweeting "Austria is taking things in hand and showing that 'when you want to, you can!'" Italy's new interior minister Matteo Salvini also voiced his support of Austria's actions, tweeting: "Those who exploit their faith to endanger a country's security should be expelled!"

"We're Going To Have To Do Something": Erdogan Warns Austrian Mosque Closures Could Lead To Religious War - Turkish President Recep Tayyip Erdogan blasted Austria's decision to close mosques and expel Turkish-backed Imams as anti-Islamic and promised a response, saying the measures announced by Austrian Chancellor Sebastian Kurz could lead to a "war between the cross and the crescent." Erdogan's comments came a day after the Austrian government said it would expel up to 60 Turkish-funded imams and shut down seven mosques as part of a crackdown on "political Islam", leading to widespread fury in Ankara."These measures taken by the Austrian prime minister are, I fear, leading the world towards a war between the cross and the crescent," Erdogan said in a speech in Istanbul, suggesting that a return of the Ottoman Empire is among the many ambitious "to do" items in Erdogan's calendar: after all that was the last time the "crescent" decided to take on the "cross", and coincidentally, the Turkish ambitions reached as far as Vienna before the Hapsburgs crushed the Ottoman ascent. Austrian Interior Minister Herbert Kickl of the far-right Freedom Party (FPOe), the junior partner in Austria's coalition government, said the move concerned imams with alleged links to the Turkish-Islamic Cultural Association - or ATIB - a branch of Turkey's religious affairs agency, Diyanet. Kickl said he suspects the organization of violating a ban on the foreign funding of religious organizations. A spokesman for Turkey's president said on Friday that the decision was "a reflection of the anti-Islam, racist and discriminatory populist wave in this country." At the time, Kurz claimed the decision was meant to fight radicalization and "parallel societies".

Swiss Voters Strongly Reject Money Reform Proposal WSJ - Swiss voters on Sunday overwhelmingly rejected a proposal to bar commercial banks from creating money, a victory for the central bank which had vehemently opposed the initiative.The Vollgeld Initiative, also known as Sovereign Money, attracted international attention because it would have upended the banking system in a country known for its banks. Financial institutions in Switzerland and around the world create electronic money every day when they lend money to households and businesses.  But Vollgeld supporters wanted the Swiss National Bank to create all the money in the economy, putting it in direct control of the money supply. Swiss voters opted to maintain the status quo, as expected. Only 24% of voters supported the initiative, according to provisional figures released by the government, with 76% against.  “With conditions now remaining unchanged, the SNB will be able to maintain its monetary policy focus on ensuring price stability, which makes an important contribution to our country’s prosperity,” the SNB said in a statement Sunday after the vote. Opinion polls ahead of the vote had support at closer to one-third, suggesting support waned in the campaign’s final days.  Under the current system in Switzerland and elsewhere, when a borrower is approved for a loan, the bank creates an electronic deposit for the borrower, which the borrower transfers to the seller’s bank account. Much of the money in the economy is created through these bank-created deposits. Regulatory limits, such as capital ratios, keep banks from endlessly making loans. Of the 645 billion Swiss francs (about $652 billion) in circulation, only about 85 billion francs are notes and coins.

Italy Hit By Biggest Depositor Run Since 2012 - In the aftermath of the recent political and market turmoil in Italy, last weekend we were surprised to report that none other than JPMorgan came to the unexpected conclusion that what Italy's Euroskeptics are hinting at, if not explicitly pushing for, namely Exitaly, may be the best option for the country, however one which would not take place without major market turbulence.At the heart of JPM's argument is that with Italy effectively owing the Eurosystem €426BN via Target2 imbalances, it has the leverage to if not start with a clean slate, then certainly threaten to do so... ... leverage which is further compounded by Italy's surprisingly favorable current account balance and Net International Investment Position (more details here). So fast forward just a few days, when later last week the Bank of Italy released data on its aggregated balance sheet for May 2018 including its net Target 2 balance, showing a dramatic increase in its negative net balance. Indeed, the net balance deteriorated by nearly €40bn, its largest monthly deterioration since March 2012, to a new record of -€465bn.As JPM further details, on the Bank of Italy’s balance sheet, the increase in the Target 2 liability was largely matched by a decrease in deposits from MFIs even as the aggregate size of the balance sheet was little changed, which as JPM's Nick Panigirtzoglou writes, suggests the worst possible scenario: that some deposits were moved abroad.This is in sharp contrast with the period of rapid deterioration of the Target 2 balance during the escalation of the Euro area crisis from mid-2011 to mid-2012. At the time, the counterpart to increasing Target 2 liabilities came from an expansion in the Bank of Italy’s assets, primarily from an increase in liquidity provision to the banking system.  Indeed, the levels of excess liquidity in the Eurosystem given QE and the large balance of outstanding TLTROs reduce the need for such liquidity provision.But, as JPM adds, this tentative sign of deposit outflows highlights another risk posed by a hardening of rhetoric regarding the euro, given that aggregate deposits at Italian banks amounted to nearly €1.7tr as of March 2018. In short: with the risk of both Italeave and redenomination rising, the Italian savers are starting to pull a "Greece", something we observed on Friday in the dramatic spike in Italian bill yields above those of Greece.

Italy Bars Landing of Ship With 629 Migrants as Finance Minister Takes Euro Exit, Parallel Currency Off Table - Yves Smith -  The shape of the new Italian government is becoming more visible, and so far, it’s not pretty. The head of the right wing Lega party, and now interior minister Matteo Salvini, is attempting to live up to anti-immigrant campaign promises by denying ship carrying over 600 refugees access to Italian ports. As we’ll discuss, he actually lacks the power to do that so the ship will presumably dock, but with the passengers and crew suffering more than they need to, which is presumably part of the point. This situation is symptomatic of a bigger issue that Lega faces: it is also pretty much impossible for them to deliver on their promise of deporting up to 500,000 refugees.In terms of the pro-spending agenda of both members of the ruling coalition, 5 Star and Lega, those at least for the moment have been walked back substantially by the new finance minister, Giovanni Tria, in an interview over the weekend with Corriere della Sera.We’ll deal first with the migrant ship controversy. The lead story in many non-US papers is the effort by interior minister Salvini to keep a vessel with 629 migrants on it from docking in Italy, since under EU rules now in effect, the country where an immigrant lands is responsible for them. Salvini wants Malta to take them and Malta has said no. Italy’s case for not accepting the passengers would seem to be weakened by the fact that the Italian navy assisted in some of the rescue operations that got the migrants on the ship in the first place.  It is pretty much certain that the ship will wind up landing in Italy. Despite his bluster, Salvini does not have authority over ports. The mayor of Naples has said he’ll receive the migrants: “Naples is ready, without funds, to save lives,” he said. That does not mean that migrants are not an issue. Estimates vary, with the total estimated at over 600,000 However, no matter how you cut and slice it that is less than the 800,000 that smaller and more broke Greece took in during 2015, the peak of the refugee crisis, per the United Nations Human Rights Commission: Salvini contends that these humanitarian efforts are enabling human trafficking and that Europe is standing pat instead of Doing Something.

Salvini: "Italy Will No Longer Accept Refugees" As Spain Volunteers - Over the weekend, Italy once again roiled Europe, only this time not with its plunging bonds but with its drastic shift in immigration politics, when the country's new populist leader, Matteo Salvini, now operating as Minister of the Interior, made good on his warning last weekend that "the good times for illegals are over", writing an urgent letter ordering Malta to accept a ship carrying 629 shipwrecked North African migrants currently sitting off the Italian coast - calling Malta the "safest port" for the passengers, and advising that Rome will no longer offer refuge.The Italian message to Europe was simple: having been the port of landing for tens of thousands of migrants in the past two years, Rome would no longer accept boat after boat of North African (or middle eastern) refugees.Italy's vocal resistance to accepting further migrants even prompted prominent globalist George Soros, the person many have accused of being behind Europe's forced migration patterns, to urge the EU to compensate Italy for the 100,000+ migrants landing there, noting that the strong showing of far-right parties partly is due to Europe’s ‘flawed’ migration policies.As for Italy's "suggestion" that the Mediterranean island of Malta accept the migrants, not surprisingly it fell on deaf ears.But if Italy (and Malta) would no longer accept migrants, and with Merkel's "open door" policies in Germany now a taboo, the question remained: who would accept the countless boats of migrants still headed for Europe?  Moments ago we got the answer when that "other" PIIG, Spain, offered on Monday to take in the rescue ship MV Aquarius, that has been drifting in the Mediterranean sea with 629 migrants stranded on board after Italy and Malta refused to let it dock. Spain’s Prime Minister Pedro Sanchez, who took office just over a week ago, has given instructions for the boat to be admitted to the eastern port of Valencia, his office said in a statement.

Italy threatens to drop France summit over migration criticism - Politico -- Italy on Tuesday threatened to cancel a summit with France after Paris strongly criticized an Italian decision to close its ports to a vessel carrying more than 600 migrants, according to Italian media.France has not pulled its punches over Sunday’s decision by the new Italian interior minister, Matteo Salvini, who is also leader of the far-right League, to prevent a rescue ship operated by a French NGO from docking in Italy. On board are 629 migrants, including 123 unaccompanied minors and seven pregnant women.  After Malta also refused to take in the boat, Spain said the rescue ship could dock in Valencia.French President Emmanuel Macron, who had been criticized for not offering to take in the boat at a French port, broke his silence on the topic during a Cabinet meeting Tuesday, denouncing the “cynicism and irresponsibility of the Italian government,” government spokesperson Benjamin Griveaux said at a press conference. Earlier, a spokesperson for Macron’s party, Gabriel Attal, said on a TV show that “the line of the Italian government is nauseating.”  The Italian government responded with a statement saying “Italy cannot accept hypocritical lessons from countries that in the migration field have always preferred to turn their head to the other side,” Italian media reported, adding that Rome is considering canceling a summit between Macron and Italian Prime Minister Giuseppe Conte on Friday.Italy did, however, get the backing of Hungary. Speaking Tuesday after a meeting with his Slovak counterpart, Peter Pellegrini, Hungarian PM Victor Orbán was quoted as saying that Italy’s decision was a “great moment which may truly bring changes in Europe’s migration policies.” Salvini tried to defuse tensions and in a tweet said that “Spain wants to denounce us, France says that I’m ‘nauseating.’ I want to work calmly with everybody but with a principle: #firsttheitalians.”

Italy Summons French Ambassador in Row Over Migrant Ship  - Italy’s foreign minister summoned the French ambassador to Rome in an escalating row over the Italian government’s decision to block access for a migrant rescue ship. Foreign Minister Enzo Moavero Milanesi summoned the ambassador to a morning meeting “following the statements made yesterday in Paris on the Aquarius affair,” his ministry said in an emailed statement on Wednesday. French President Emmanuel Macron said on Tuesday that Italy was “cynical and irresponsible” over the migrant vessel which had been left stranded in the Mediterranean after Italy and Malta refused to grant it permission to dock. International law says the country with the nearest coastline is responsible for welcoming ships in distress, Macron told a cabinet meeting, according to government spokesman Benjamin Griveaux. Italian Interior Minister Matteo Salvini, of the anti-immigrant League, has spearheaded a hardline stand on curbing arrivals from across the Mediterranean as a priority for the new populist coalition with the anti-establishment Five Star Movement. The Aquarius, with some 600 people saved from the sea over the last few weeks, is sailing to Spain after the country agreed to welcome the ship.

Macedonia and Greece fail to resolve bitter naming dispute -- Governments in Skopje and Athens have faced a furious backlash as the challenge of solving one of the world’s most bitter diplomatic feuds hit home just a day after Macedonia announced it was willing to change its name. Hours after the two neighbours declaring they had reached a landmark accord that would see the tiny Balkan state rename itself the Republic of North Macedonia, the nation’s president refused point-blank to sign the deal. “My position is final and I will not yield to any pressure, blackmail or threats,” president Gjorge Ivanov, who is backed by the nationalist opposition, told a news conference in Skopje. The agreement had conceded far too much to Greece – even if its ultimate aim was the country’s future membership of Nato and the EU, he said. The backlash came despite officials in Brussels, London and Washington reacting with unbridled enthusiasm to the breakthrough. Greece has long argued that the state’s name – adopted when it broke away from Yugoslavia in 1991 – conveys thinly disguised irredentist claims on its own northern province of Macedonia. The appropriation of figures associated with ancient Greek history – not least Alexander the Great – had reinforced fears in a region prone to shifting borders. But opposition to the deal was also pronounced in Greece. As in Skopje – where prime minister Zoran Zaev’s leftist coalition was accused of leading the country to national humiliation – prime minister Alexis Tsipras and his leftist Syriza party was also charged with surrendering cherished national rights. One newspaper ran a front-page graphic showing Tsipras, the Greek foreign minister and president being shot by firing squad for treason. 

ECB Unveils End Of QE: Will Halt Bond Purchases By End Of 2019; Keep Rates Unchanged Until Summer 2019 - The beginning of the end of Europe's QE is here.As extensively previewed, jawboned and leaked, the ECB - which kept all of its rates unchanged as expected and as the ECB detailed, remain unchanged until the summer of 2019 - ended the drama over the end of its QE, and moments ago announced that while "the Governing Council will continue to make net purchases under the asset purchase programme (APP) at the current monthly pace of €30 billion until the end of September 2018, after September 2018 the monthly pace of the net asset purchases will be reduced to €15 billion until the end of December 2018 and that net purchases will then end, all of which of course is "subject to incoming data confirming the Governing Council’s medium-term inflation outlook."Second, the Governing Council announced it intends to maintain its policy of reinvesting the principal payments from maturing securities purchased under the APP for an extended period of time after the end of the net asset purchases, "and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation." This was known from before so it is not news.Finally, the Governing Council surprised with a little bit of forward guidance, and announced that while its kept rates unchanged (i.e., the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively, as expected), the surprise in the statement was that the ECB will keep rates at their present levels at least through the summer of 2019 "and in any case for as long as necessary to ensure that the evolution of inflation remains aligned with the current expectations of a sustained adjustment path." It was this delay in the first hike that is being interpreted as especially dovish by most trading desks, and is the reason for the plunge in the Euro. And given that the changes to forward guidance and tapering were already expected by the market, there was no upside in the report for the hawks So the bottom line: a hawkish QE announcement with an even more dovish rate hike delay. Finally, here is a redline comparison of the April vs June ECB statements:

After G7 summit, Merkel calls for European rearmament --Following the collapse of the G7 summit in Charlevoix, Canada, the German government has intensified its campaign for trade war and military rearmament.  Only a few hours after US President Donald Trump announced via Twitter his refusal to agree to the G7 communique, Chancellor Angela Merkel (Christian Democrats, CDU) was a guest on the Anne Will talk show on Sunday evening. She described Trump's decision as “sobering and depressing,” and appealed openly for a more independent German-European militarist great power policy. “We, as Europeans, have to take our fate more into our hands,” Merkel said. We can “no longer hope as we did somewhat carelessly for decades that the US is already taking care of it.” For Germany and Europe, this means “that we must promote our principles and values in Europe, potentially in alliance with Canada or Japan.”   Merkel left no doubt that Berlin and Brussels will respond to the US' aggressive measures with essentially the same nationalist and militarist offensive as Trump. The German-European response to Trump's paradigm of “America first” is “Germany and Europe first.”The Transatlantic partnership could no longer be relied upon, stated Merkel. Instead, the question has to be posed, “Where must we be able to intervene alone?”, and this would “of course mean new tasks for Europe.” The “first loyalty” always belongs “to one's own country,” but “the second, including in issues of foreign policy, should belong to the European Union.”  Merkel proclaimed that the government has already “prepared our own counter-measures” to the “unlawful” tariffs on steel and aluminium adopted by the US President. The American measures would be reported to the World Trade Organization on July 1. If Trump responds with further tariffs, for example on German cars, “we will think again about what to do.” Germany and Europe “will not be pushed around, but we will also act” added Merkel.

Germany’s Left Party embraces policies of far-right AfD - The Left Party’s congress, which took place in Leipzig over the weekend, was dominated by a bitter conflict over refugee policy. The dispute erupted after Left Party parliamentary group leader Sahra Wagenknecht addressed the congress on Sunday. By a slim majority of 250 to 249 delegates, the congress voted for a one-hour debate on Wagenknecht’s anti-refugee line. After around 100 delegates registered to speak, lots were drawn to determine who would be allowed to speak.Wagenknecht, her husband Oskar Lafontaine and their supporters have long advocated a restrictive refugee policy barely distinguishable from that of the far-right Alternative for Germany (AfD). They have repeatedly blamed refugees for the social crisis and sought to play them off against low-wage workers and Hartz IV welfare recipients.For example, Wagenknecht defended the decision of the Tafel charity in Essen to accept only Germans as new members for its food distribution programme. She justified this by claiming that she did not want to expose people to such harsh competition when they had been living in Germany for so long.A conflict has been raging in the party press for some time over Wagenknecht’s AfD line on refugee policy. A number of pieces for and against Wagenknecht’s position have appeared in the Left Party organ Neues Deutschland. In May, a group associated with the Socialist Left, the trade union-aligned faction of the party, published a paper in support of Wagenknecht that called for a “regulated left refugee policy.” The paper, which was signed by parliamentary deputies Fabio de Masi, Jutta Krellmann, Michael Leutert, and Sabine Zimmermann, as well as the chairman of the Cuba Network, Harri Grünberg, rejected “unrestricted immigration, which also includes those who merely want to earn more money and enjoy a better standard of living.” The right to move and reside around the globe “is for a realistic left-wing refugee policy neither a guiding principle nor explicable to the broad sections of the population,” according to the statement.

 Merkel’s Government Wobbles Over Immigrant Row as Italy Threatens Canada Trade Deal -  Yves Smith -  Merkel was blindsided by the ferocity of a revolt by her coalition partner, the CSU, over her immigration policy. The German chancellor wants to keep open borders with the Schengren area. One of the implications is that migrants would also be able to move freely. This is at odds with the policy the CSU wants. The short version of the fight, per Politico’s daily Europe newsletter:Merkel refused to endorse a plan put forward by the CSU’s Interior Minister Horst Seehofer to turn back at the German border refugees who have already applied for asylum in other EU countries. The CSU decided that Seehofer ought to be allowed to do whatever is necessary to help the party win regional elections in the south this fall. In essence, the CSU is fighting Merkel to give Seehofer the autonomy to make his own decisions on Germany’s, and hence Europe’s, migration policiesMore detail from a Politico story:Merkel’s refusal to endorse a plan by her Bavarian interior minister to turn back some refugees at the German border set the stage for a showdown that, barring a last-minute compromise, could bring down her government….The dispute ostensibly revolves around the question of whether Germany should turn back refugees who have applied for asylum in other EU countries. Merkel opposes the policy on the grounds it could hasten the collapse of Europe’s system of open frontiers by forcing Germany’s neighbors to re-impose border controls.The root of the dispute has less to do with that narrow question, however, than with Merkel’s broader refugee policy, which the CSU has resisted from the beginning… Bavaria, Germany’s southernmost state, has been the point of entry for most of the refugees who arrived in the country in recent years. As the influx intensified, CSU leaders prodded Merkel to enforce stricter border controls, going as far as threatening to petition Germany’s constitutional court to force her hand… [Horst] Seehofer, who is now interior minister, demanded an “upper limit” on the number of refugees coming into Germany, a step Merkel long opposed. Though refugee arrivals to Germany have fallen sharply ­— only 64,000 came through April — the CSU is once again asking for further concessions. That’s because the party, which has ruled Bavaria almost without interruption since the war, faces a difficult state election in October, with polls predicting the CSU will lose its absolute majority.Bear in mind that this row hasn’t been resolved. DW reports that Wolfgang Schäuble is going to mediate.

German Officials Admit "Still No Evidence" From UK That Russia Poisoned Skripals - German media reports that the German government has zero evidence from the British authorities that could back London’s claims that Moscow was behind the poisoning of the Skripals More than three months since the start of the probe into the poisoning of former Russian double agent Sergei Skripal and his daughter Yulia, RT reports that the UK is still conspicuously tight-lipped when it comes to any real evidence that could prove its accusations against Russia.This week, the German government informed a parliamentary oversight committee during a closed hearing that it still has not received any evidence suggesting that Russia might well be behind the incident that took place in early March, German TV station RBB reports.“It is [still] only known that the poison used in the attack was a nerve agent called Novichok, which was once produced in the Soviet Union,” Michael Goetschenberg, a correspondent of German ARD and an expert on security services, told RBB, commenting on the results of the hearing, which he is familiar with.Apart from this information, which was released by the British authorities soon after the incident, no new data on Russia’s alleged implication in this case was provided to Germany so far, he added.German intelligence has also found no Russian trace in this case so far, Goetschenberg said. “The BND, Germany’s foreign intelligence… has also contacted its own sources and tried to verify the information [about Russia’s potential involvement] in some way,” he told RBB, adding that it eventually failed to find any evidence pointing to Moscow as well. Russia has categorically denied any involvement, and has complained that the victims were not allowed visits by Russian lawyers and diplomats, and the results of the investigation were kept secret. The Russian envoy to the UK has on several occasions alleged that London was even trying to “destroy” evidence in the probe.

Brexit trade proposals will not be published until after EU summit - Detailed plans on the UK's post-Brexit future will not be published until after this month's EU summit. Theresa May will summon senior ministers to an away day at Chequers in July to settle details of the white paper and find a common way forward. With ministers aiming to complete the negotiations by October, many expected the plans to be released earlier. Labour leader Jeremy Corbyn accused the Tories of "botching Brexit and risking jobs". The announcement comes after Boris Johnson said the UK's Brexit strategy lacks "guts". The white paper has been called the government's "most significant publication on the EU since the referendum". Speaking at the G7 summit in Canada, the prime minister said: "There's going to be a lot of activity in the negotiations over the coming weeks.

‘Extraordinary secrecy’ in Whitehall is crippling Brexit plans - A damaging culture of “extraordinary secrecy” inside government is blighting its ability to plan for Brexit, according to a comprehensive study of Whitehall. Officials are being forced to look at key documents in special reading rooms, while some papers are confined to the offices of the most senior civil servants. The installation of a network of secured computers that can only be accessed by officials with very high security clearance is also being accelerated, to keep the documents under wraps. Meanwhile, the number of documents being restricted is going “well beyond” those containing sensitive details of the government’s EU negotiations. Even basic planning and guidance documents are kept locked away, largely inaccessible to civil service teams that need to see them. A security clearance backlog has also meant that some officials have waited up to nine months to gain access to the material they need. The stark revelations are in a new study by the respected Institute for Government (IfG), which gained access to senior officials across Whitehall and public bodies as part of the project. It rejects the government’s claim that the secrecy is needed to protect its negotiating position with the EU. Instead, it concludes that secrecy is being fuelled by cabinet splits over the direction of Brexit and the need to avoid “domestic political embarrassment”. It concludes that the drive to restrict information has made effective co-ordination of Brexit work across government “impossible”. The assessment comes with the cabinet deeply split over Brexit, with Boris Johnson, the foreign secretary, believing the process is being botched and David Davis, Brexit secretary, demanding concessions from the prime minister over tactics. The report, Preparing Brexit: How ready is Whitehall?, identifies several main challenges affecting the preparation process. It says there are decision delays and an “inability to make trade-offs”, inordinate secrecy, inconsistent assumptions across Whitehall, an inability to properly engage external organisations such as the business community and difficulties in finding and retaining top staff. .

Brexit: An 11th Hour Referendum Headfake to (Again) Blame the EU for the Government's Failings? -- Yves Smith -  As regular readers may know, we’ve discounted the idea of a second Brexit referendum. Until very recently, it was close to a third-rail idea among the political classes. The People Had Spoken. A second referendum had the air of the sort of dirty trick that those anti-democratic EU members did when they got referendum results they didn’t like.The second referendum notion is now safe for mention, no doubt in part because there is no way, given the time involved for all steps in conducting a referendum (including the not-trivial process of agreeing on the wording of the question) for the entire process to take less than a year, when we now have less than ten months to B-Day.However, as Richard North has taken to pointing out on almost a daily basis, a crash-out Brexit is virtually assured. The UK has no realistic solution to the Irish border problem. Perhaps May will capitulate and accept a sea border (and the de-facto partial integration of Northern Ireland into the EU) but the odds don’t appear to favor that.To make matters worse, UK businesses have stayed mum about the consequences of a hard Brexit (as in one with a transition period) and a crash out, since they bizarrely regard a Labour government as an even worse threat to their bottom lines and social standing. That has resulted in the Government getting no pressure, not even any meaningful feedback, regarding their failure to do any Brexit preparation whatsoever. And the level of infighting has made this insanely bad situation worse. As the Guardian reported over the weekend: A damaging culture of “extraordinary secrecy” inside government is blighting its ability to plan for Brexit, according to a comprehensive study of Whitehall. Officials are being forced to look at key documents in special reading rooms, while some papers are confined to the offices of the most senior civil servants. The installation of a network of secured computers that can only be accessed by officials with very high security clearance is also being accelerated, to keep the documents under wraps.Meanwhile, the number of documents being restricted is going “well beyond” those containing sensitive details of the government’s EU negotiations. Even basic planning and guidance documents are kept locked away, largely inaccessible to civil service teams that need to see them. A security clearance backlog has also meant that some officials have waited up to nine months to gain access to the material they need….

Brexit: who cares wins? -- If chaos and confusion attending the end of the debate on the Lords' Brexit amendments, with the word "shambolic" freely being used, one has to observe that this probably signifies nothing more than a House of Commons that has disappeared up its own fundamental and is now destined for the irrelevance that it has so assiduously earned. In all the torrent of verbiage that been devoted to this extraordinary day that was yesterday, not a single commenter seems to have observed that the government is being asked to concede something that it is not within its gift to offer – namely a role for Parliament in the talks with Brussels, should Mrs May's designated team find it impossible to get agreement on the UK proposals. That the prime minister, in the event of the UK failing to reach an agreement – which looks ever-more likely – should then be required to consult with (or take instructions from) Westminster as to what line she should then take, is a counsel of absurdity so manifestly improbable that even the scriptwriters of a political satire might have difficulty raising a laugh with it.  The underlying point here, of course, is that come the October European Council, the UK and EU negotiators will be expected to have agreed the text of a formal Withdrawal Agreement (including a protocol on the much-debated Irish border question), which will then formally be presented to the European Council signifying the end of the negotiations. Theoretically, at this point, the text must then be approved by the European Council, by the European Parliament and then by the UK Government – the latter requiring the assent of both Houses of Parliament.  However, it is not only the Withdrawal Agreement that must be finalised. The parties must also conclude discussions on the framework for a future relationship, taking in trade, security and much else – with the production of a political declaration, the text of which has to be submitted for agreement by all parties.

May seeks compromise on Brexit Bill -- Pro-Europeans in British Prime Minister Theresa May's Conservative Party warned yesterday she must keep promises to give Parliament a greater say over the final Brexit deal or risk a truce she needs to avoid a damaging defeat. Mrs May narrowly avoided losing a major vote on the EU (Withdrawal) Bill in the House of Commons on Tuesday by offering last-minute concessions to Tory MPs who fear the government could decide on its own to leave the bloc with no deal. But there is a dispute over what exactly she promised, with euro-sceptics warning that there must be no question of allowing lawmakers the opportunity to undo Brexit. Mrs May has until tomorrow to draft a legally watertight amendment to the EU Withdrawal Bill that will be acceptable to both sides. There is no time to get the wording of the compromise text wrong because it will probably be debated and voted on in the House of Lords on Monday, according to one senior government official. Mrs May, who leads a minority government propped up by the small Northern Irish Democratic Unionist Party, conceded yesterday that "we need parliamentary support" to implement Brexit. But while ministers must be accountable to lawmakers, she told MPs that "the government's hand in negotiations cannot be tied by Parliament".

 How Theresa May claimed her Brexit majority in the Lords amendments - The Government has faced down a series of crucial Parliamentary challenges to its Brexit position over the last two days, as 15 amendments from the House of Lords were debated. The amendments, which could have undermined Theresa May's negotiating position, included granting Parliament a "meaningful vote" on Brexit; a proposal designed to force the Government to remain in the Customs Union; and an amendment to prevent the proposed exit day of the 29 March 2019 from being written into law.The Government had refused to back down on the Lords amendments, and was confident of talking round a handful of Tory Remainers who previously threatened to rebel. Even though this was thrown into question when Theresa May suffered her first ministerial resignation over Brexit yesterday, Theresa May managed to get Tory rebels to back her in fighting off all Lords amendments. A key vote on Tuesday was the "meaningful vote" amendment, which was seen as the main threat to the Government’s negotiating position.It proposed allowing Parliament the power to decide whether or not to ratify the Withdrawal Agreement reached with the EU. This would essentially allow MPs to reject the agreement and prevent the Government from pursuing a no-deal Brexit if negotiations with the EU head south. 324 MPs sided with the Government on this Amendment, providing relief for Theresa May, against 298 who voted against her. Ministers believed such a scenario would fatally undermine the Government’s negotiating hand, as Mrs May could no longer threaten to walk away from Brussels if it failed to compromise or offer better terms. Despite Government fears of a rebellion, only two Conservative MPs didn't back the Government in the end: Anna Soubry and Ken Clarke.An amendment by the Duke of Wellington proposed the removal of the fixed date when Britain is due to formally leave the European Union - currently standing at 29 March 2019.  The Lords backed the amendment by 311 votes to 233, but after only Ken Clarke rebelled in this amendment, 326 MPs backed the Government against the Amendment. 301 MPs supported it, giving the Government a majority of 25.

Six Labour MPs quit frontbench roles over key Brexit vote  - Jeremy Corbyn has suffered a 90-strong rebellion over a Brexit vote on remaining in the European Economic Area, with six of his MPs resigning from their frontbench roles.  Junior Labour frontbenchers Laura Smith, Ged Killen, Ellie Reeves, Tonia Antoniazzi and Anna McMorrin were the first to step down from their roles on Wednesday night.  Their resignations were revealed moments before the result of a vote on a Lords Brexit bill amendment which called for the government to make remaining in the EEA a negotiating objective.The government said before the vote it disagreed with the amendment and the Labour frontbench had been ordered to abstain.The House of Commons voted 327 to 126 to reject the proposed amendment, with 74 Labour MPs rebelling against their party's whip to vote in favour of EEA membership.A further 15 Labour MPs rebelled in breach of the abstain order to vote against EEA membership, while one Labour MP, Susan Elan Jones, also defied the party's official position to act as a teller for the vote. Rosie Duffield then became the sixth Labour MP to quit her frontbench role.Today I voted for Lords Amendment 51 which would have kept the UK in the EEA. As the frontbench position was to abstain, I have resigned from my role as a PPS. Please see my resignation letter for my reasons. pic.twitter.com/hMFg8dbljY— Ellie Reeves (@elliereeves) June 13, 2018This evening, I have resigned as Shadow Defence PPS to vote in favour of the Lords EEA amendment. I have always said as an MP I will put the interests of my constituents first and I believe that means voting to maintain the closest possible relationship with the EU after Brexit. pic.twitter.com/biMsQbSkPT— Ged Killen (@Gedk) June 13, 2018.

Tory rebellion back on after MPs reject May’s Brexit amendment - Theresa May is heading for a fresh showdown with Conservative rebels next week after they rejected a government-drafted amendment to the EU withdrawal bill. The former minister Anna Soubry said she and her colleagues felt “badly let down” after they believed they had reached an agreement with the government – only to find the text had been redrafted at the last minute. The former attorney general Dominic Grieve held negotiations with the government over the precise wording of the amendment, which was aimed at making it more difficult for Britain to crash out of the EU without MPs being given a meaningful vote.But he said the final version, which was tabled by the government at the last moment on Thursday evening, was “unacceptable”.Rebel peers now plan to table Grieve’s original text when the bill goes back to the House of Lords on Monday – giving MPs a second chance to debate it when it is bounced back to the Commons on Wednesday, in the arcane parliamentary process known as “ping pong”.More than a dozen Tory rebels believed they had been given a personal assurance by the prime minister, in a face-to-face meeting on Tuesday, that their concerns about the risk of a no-deal Brexit would be addressed.But instead of Grieve’s clause 5C, which would have allowed MPs to “direct” the government in the event of no deal, the new amendment just promised a debate on a motion “in neutral terms”. Grieve, who tabled the original amendment, said this new draft was “unacceptable”, because this phrase meant it would be impossible for MPs to amend the government’s proposals – and force ministers to change their minds. Brexiters denied that they had demanded the last-minute change to the bill, insisting it was the government that was determined not to allow MPs to tie ministers’ hands at a crucial phase in the process of extricating Britain from the EU. Some leavers are keen for Grieve and his colleagues to be confronted – and, they believe, defeated – to prevent the government using the tricky parliamentary arithmetic as an excuse for sliding towards an ever-softer Brexit.The row is the latest challenge for May as she seeks to balance the conflicting demands of the two wings of her warring party, in a hung parliament that makes winning every vote a challenge.Grieve’s amendment represented the only defeat for the government as the bill went through the House of Commons in December. A cross-party group of peers, led by the former Tory cabinet minister Lord Hailsham, then sought to strengthen it as the legislation went through the House of Lords.

Brexit rebel Dominic Grieve says May’s compromise ‘a slap in face’ - Brexit rebel Dominic Grieve says May's compromise 'a slap in face' Parliament is being reduced to a “school debating chamber" over Brexit says Conservative MP Antoinette Sandbach. The government's bid to avoid a Commons defeat on the Brexit bill has been rejected as "slap in the face" by leading rebel Dominic Grieve. Theresa May assured Mr Grieve ahead of a vote on Tuesday that his call for MPs to be given a greater say on a Brexit deal would be taken on board. But he said ministers had changed the wording of an amendment drawn up after talks with him, at the last minute. Further talks are expected ahead of the bill returning to Parliament next week. Solicitor General Robert Buckland said the government had to "strike a balance" between rebels' concerns and protecting the government's negotiating position in Brexit talks with the EU. BBC political editor Laura Kuenssberg said Remain-leaning Tory MPs were furious and it set the scene for another big showdown when the bill returns to Parliament. Mr Grieve, a former attorney general, told BBC One's Question Time he could not understand why the government amendment to the EU Withdrawal Bill had been changed "at the last minute" after two days of talks. "I'd actually got on a train. I thought it was all over," he said. He said the problem was that if the UK reached "the really apocalyptic moment" where no Brexit deal had been done by early February 2019, Parliament was not being offered the chance to say what should happen next - only to "note" the position.