week ending Jun 23

 The Fed Is "Chasing The Wind" - Today's Tightening Will Trigger The Next Crisis Response - Plebeians generally ignore the tact of their economic central planners.  They care more that their meatloaf is hot and their suds are cold, than about any plans being hatched in the capital city.  Nonetheless, the central planners know an angry mob, with torches and pitchforks, are only a few empty bellies away.  Hence, they must always stay on point. One of the central aims of central planners is to achieve effective public exhortation.  Statistics, with per annum projections, particularly those that show increasing exports and decreasing imports, are critical to maintaining the proper narrative.  The USA’s embarrassing deficit in the balance of international payments will certainly diminish if it is sketched accordingly in an “official” report… right?   Yet the planners always disregard the simple observation that an economy is composed of countless, and variable, inputs. How are the actions of 7 billion individuals to be modeled and displayed on a tidy diagram? This week Federal Reserve Chairman Jay Powell delivered the latest installment of the Fed’s public exhortation.  The occasion was the Federal Open Market Committee (FOMC) meeting statement and press conference.  Before we get to Powell’s remarks, however, some context is in order… Nearly a decade ago, when Lehman Brothers vanished from the face of the earth, and black swans relentlessly descended upon credit markets like common ravens upon fresh Southern California road kill, something utterly ridiculous happened.  Money market shares of the Reserve Primary Fund did the impossible.  They broke the buck – falling to $0.97 cents a share.  Amid the madness, Ben Bernanke, the Fed Chair at the time, in what he later characterized as a courageous act, soiled his pantaloons… and then he soiled them again. He cut the federal funds rate to practically zero and began ravenously consuming toxic mortgage backed securities and Treasury notes, ultimately taking the Fed’s balance sheet from roughly $900 billion to over $4.5 trillion by early 2015.

Why would the Fed want to raise the unemployment rate a full percentage point? - Jared Bernstein -  Last week, after the Federal Reserve committee that sets interest rates raised the benchmark rate it controls, Fed Chairman Jay Powell held a news conference to explain his team’s rationale. It was all going fine until someone asked him a particularly hard question: “How are you going to get unemployment from 3.5 percent up to that 4.5 percent rate?” To which I would have added: “And why would you want to?”    Here’s the background: The Fed forecasts that by late 2019, the unemployment rate will be 3.5 percent. Now, the last time unemployment was 3.5 percent was late 1969, so we’re talking low unemployment. And yet, the current rate — 3.8 percent — is already pretty close, and given all that deficit-financed government tax cutting and spending over the next couple of years, the Fed’s forecast is defensible. No question, there’s a lot that could happen between now and then — recession, trade war — but assume for the moment that it’s right. So, where does that 4.5 number come from?   That’s the Fed’s estimate of the “natural rate” of unemployment: the lowest jobless rate it thinks is consistent with stable inflation. As Powell usefully underscores every time this comes up, it’s a rough estimate, surrounded by a wide margin of error. That said, what the Fed is telling us is that the current economy is overheated because the unemployment rate is a full point below its “equilibrium” rate, i.e., where it would “naturally” settle at full employment. But an extra point of unemployment is far from costless. A point less means 1.6 million more people with jobs; add to that the fact that, because their bargaining clout is so low, the benefits of tight labor markets do not accrue to the least advantaged until a very low unemployment rate lasts a long time. Moreover, if the jobless rate is truly running a full point below its steady-state rate, why aren’t price or wage growth shooting up? How will the Fed orchestrate a significant increase in the unemployment rate over the next few years? Why would it want to? Powell’s key response was, “We can’t be too attached to these unobservable variables,” meaning that although the Fed puts itself in the awkward position of having to report a “natural” rate of unemployment, it doesn’t want us to take it too seriously.

Nomi Prins: The Central Banking Heist That Put The World At Risk - “The 2008 financial crisis was the consequence of a loosely regulated banking system in which power was concentrated in the hands of too limited a cast of speculators,” Nomi Prins tell me. “And after the crisis, the way the US government and the Federal Reserve dealt with this corrupt and criminal banking system was to give them a subsidy.”  Such strong, withering analysis is, perhaps, unexpected from someone who has held senior roles at Wall Street finance houses such as Bear Stearns and Goldman Sachs. But Prins is no ordinary former banker. The US author and journalist left the financial services industry in 2001. She did so, in her own words, “partly because life was too short”, and “partly out of disgust at how citizens everywhere had become collateral damage, and later hostages, to the banking system”. Since then, Prins has chronicled the closed and often confusing world of high finance through the 2008 crisis and beyond. Her writing combines deep insider knowledge with on-the-ground reporting with sharp, searing prose. Alongside countless articles for New York Times, Forbes and Fortune, she has produced six books – including Collusion: how central bankers rigged the world, which has just been published. Her main target in the new work is “quantitative easing” – described by Prins as “a conjuring trick” in which “a central bank manufactures electronic money, then injects it into private banks and financial markets”. Over the last decade, she tells me when we meet in London, “under the guise of QE, central bankers have massively overstepped their traditional mandates, directing the flow of epic sums of fabricated money, without any checks or balances, towards the private banking sector”. Since QE began, in the aftermath of the financial crisis, “the US Federal Reserve has produced a massive $4.5 trillion of conjured money, out of a worldwide QE total of around $21 trillion”, says Prins. The combination of ultra-low interest rates and vast monetary expansion, she explains, has caused “speculation to rage... much as a global casino would be abuzz if everyone gambled using everyone else’s money”. Much of this new spending power, though, has remained “inside the system”, with banks shoring up their balance sheets. “So lending to ordinary firms and households has barely grown as a result of QE,”

"The Probability Of A Recession Is Rising": According To Goldman, This Is As Good As It Gets --On Thursday, in the aftermath of some of the strongest retail sales numbers in the past year, the Atlanta Fed raised its Q2 GDP Nowcast to 4.8%, one of the highest estimates for current GDP in series history.  Various sellside research analysts followed suit, hiking their GDP estimates to the mid-3% range, and in some case, such as Goldman, 4% or more. The buoyant economy has prompted recent confidence prints to hit near all time highs... ... while Trump tweeted that the US economy is now the "greatest ever" with "the BEST jobs numbers in 44 years."And while there is little doubt the US economy is firing on all fours, the main driver behind this is the recent fiscal stimulus, which as extensively discussed, produces a sugar high in the early innings - funded by hundreds of billions in additional debt - only to lead to a painful hangover in time. It's no surprise then, that according to David Kostin, the main topic dominating the Goldman chief equity strategist's recent meetings with equity investors is "The duration of the current US economic expansion."And here, unfortunately, Goldman believes that "this is as good as it gets" with Q2 GDP set to print a local high, and slowly but surely fade from here as the boost from the Trump fiscal stimulus fades.As Kostin writes, "the current state of the US economy is strong" and details: Most economic data released this month have exceeded consensus expectations. Payrolls, unemployment rate, ISM manufacturing and non-manufacturing indexes, JOLTS job openings, NFIB small business optimism, and retail sales all posted positive surprises. Our US MAP index of economic data surprises stands at its highest level since January.   The question is what happens next? Here, Kostin answers that Goldman's economics team expects annual average economic growth to modestly decelerate but remain above-trend through 2019. At that point the US economy will gradually slowdown to trend, growing by 2.9% in 2018 and 2.2% in 2019 compared with an estimated trend pace of 1.8%. Worse, while the US economy is enjoying its sugar higher for now, the build up of imbalances means that strength now is at the expense of recession risks - with even more debt - rising in 2019 and 2020, just before the next presidential election. According to Goldman, the probability of a recession rises from just 4% during the next 12 months to 18% during the next two years and 32% during the next three years (corresponding to 2020).

Duy: "No, A Recession Is Not Likely In The Next Twelve Months" --A few excerpts from Professor Tim Duy at Fed Watch: No, A Recession Is Not Likely In The Next Twelve Months. Why Do You Ask? Headlines blared the latest recession warning today, this time from David Rosenberg of Gluskin Sheff & Associates. The culprit will be the Fed: “Cycles die, and you know how they die?” Rosenberg told the Inside ETFs Canada conference in Montreal on Thursday. “Because the Fed puts a bullet in its forehead.”  I get this. I buy the story that the Fed is likely to have a large role in causing the next recession. Either via overtightening or failing to loosen quickly enough in response to a negative shock.And I truly get the frustration of being a business cycle economist in the midst of what will almost certainly be a record-breaking expansion. Imagine a business cycle economist going year after year without a recession to ride. It’s like Tinkerbell without her wings. But the timeline here is wrong. And timing is everything when it comes to the recession call. Recessions don’t happen out of thin air. Data starts shifting ahead of a recession. Manufacturing activity sags. Housing starts tumble. Jobless claims start rising. You know the drill, and we are seeing any of it yet. For a recession to start in the next twelve months, the data has to make a hard turn now. Maybe yesterday. And you would have to believe that turn would be happening in the midst of a substantial fiscal stimulus adding a tailwind to the economy through 2019. I just don’t see it happening....Bottom Line: The business cycle is not dead. The future holds another recession. But many, many things have to start going wrong in fairly short order to bring about a recession in the next twelve months. It would probably have to be an extraordinary set of events outside of the typical business cycle dynamics. A much better bet is to expect this expansion will be a record breaker.

May 2018 Leading Economic Index Continues to Point To Moderate Growth: The Conference Board Leading Economic Index (LEI) for the U.S improved this month - and the authors say "The U.S. LEI still points to solid growth but the current trend, which is moderating, indicates that economic activity is not likely to accelerate". Because of the significant backward revisions, I do not trust this index. This index is designed to forecast the economy six months in advance. The market (from Nasdaq / Econoday) expected this index's month-over-month change at 0.2 % to 0.5 % (consensus 0.4 %) versus the +0.2 % reported. ECRI's Weekly Leading Index (WLI) is forecasting more moderate growth over the next six months. Additional comments from the economists at The Conference Board add context to the index's behavior. The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.2 percent in May to 109.5 (2016 = 100), following a 0.4 percent increase in April, and a 0.4 percent increase in March. "While May's increase in the U.S. LEI was slower than in recent months, the improvements in a majority of its components offset the declines in leading indicators of labor markets and residential construction," said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. "The U.S. LEI still points to solid growth but the current trend, which is moderating, indicates that economic activity is not likely to accelerate." The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.2 percent in May to 103.7 (2016 = 100), following a 0.2 percent increase in April, and a 0.3 percent increase in March.

Q2 GDP Forecasts -- From Merrill Lynch: We continue to track 3.7% for 2Q GDP growth [June 22 estimate].   And from the Altanta Fed: GDPNow  The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2018 is 4.7 percent on June 19, down from 4.8 percent on June 14. [June 19 estimate] From the NY Fed Nowcasting Report The New York Fed Staff Nowcast stands at 2.9% for 2018:Q2 and 2.6% for 2018:Q3. [June 22 estimate]CR Note: This is still quite a range.   These estimates suggest real annualized GDP in the 2.9% to 4.7% range in Q2.

America's Greatest Crisis Upon Us...Debt-to-GDP Makes It Clear - America in the midst of the greatest crisis in its 242 years of existence.  I say this based upon the US federal debt to GDP (gross domestic product) ratio.  In the history of the US, at the onset of every war or crisis, a period of federal deficit spending ensued (red bars in graph below) to overcome the challenge but at the "challenges" end, a period of federal austerity ensued.  Until now.  No doubt the current financial crisis ended by 2013 (based on employment, asset values, etc.) but federal spending continues to significantly outpace tax revenues...resulting in a continually rising debt to GDP ratio.  We are well past the point where we have typically began repairing the nation's balance sheet and maintaining the credibility of the currency.  However, all indications from the CBO and current administration make it clear that debt to GDP will continue to rise.  If the American economy were as strong as claimed, this is the time that federal deficit spending would cease alongside the Fed's interest rate hikes.  Instead, surging deficit spending is taking place alongside interest rate hikes, another first for America. The chart below takes America from 1790 to present. From 1776 to 2001, every period of deficit spending was followed by a period of "austerity" where-upon federal spending was constrained and economic activity flourished, repairing the damage done to the debt to GDP ratio and the credibility of the US currency.  But since 2001, according to debt to GDP, the US has been in the longest ongoing crisis in the nation's history.  But what is this crisis?  The chart points out the debt to GDP surges in order to resolve the Revolutionary war, the Civil War, WWI, and WWII. But the debt to GDP surges since 1980 seem less clear cut.  But simply put, America (and the world) grew up and matured, but the central banks and federal government could not accept this change.  Instead, the CB's and Federal government wanted perpetual youth...growth without end.  The chart below shows the debt to GDP ratio but this time against the decelerating growth of the total US population as a percentage (black line) but also against the faster decelerating growth of the 0-65yr/old population (yellow line).

U.S. government posts $147 billion deficit in May (Reuters) – The U.S. government had a $147 billion (£110 million) budget deficit in May, an increase of 66 percent from the same month last year as the ledger took a hit from declining revenue and higher spending, according to Treasury Department data released on Tuesday. Treasury reported a budget deficit of $88 billion in the same month last year, the department’s monthly budget statement showed. Economists polled by Reuters had forecast the Treasury recording a $144 billion deficit in May. When accounting for calendar adjustments, the government’s deficit was $131 billion compared to an adjusted deficit of $88 billion in the same month in the previous year. Economists caution that the Trump administration’s corporate and individual tax cuts along with an increase in government spending will drive up the country’s deficit despite a robust economy in which the unemployment rate has fallen to an 18-year low. The deficit for the fiscal year, which began last October, was $532 billion, compared to a deficit of $433 billion in the same period of fiscal 2017. On an adjusted basis, the gap was $584 billion compared with $473 billion in the prior period. Unadjusted receipts last month totalled $217 billion, down 10 percent from May 2017, while unadjusted outlays were $364 billion, a rise of 11 percent from the same month a year earlier.

House GOP plan would cut Medicare, Medicaid to balance budget - House Republicans released a proposal Tuesday that would balance the budget in nine years — but only by making large cuts to entitlement programs, including Medicare, that President Trump vowed not to touch.The House Budget Committee is aiming to pass the blueprint this week, but that may be as far as it goes this midterm election year. It is not clear that GOP leaders will put the document on the House floor for a vote, and even if it were to pass the House, the budget would have little impact on actual spending levels.  Nonetheless the budget serves as an expression of Republicans’ priorities at a time of rapidly rising deficits and debt. Although the nation’s growing indebtedness has been exacerbated by the GOP’s own policy decisions — including the new tax law, which most analyses say will add at least $1 trillion to the debt — Republicans on the Budget Committee said they felt a responsibility to put the nation on a sounder fiscal trajectory. . Lawmakers of both parties agree that spending that is not subject to Congress’s annual appropriations process is becoming unsustainable. But Trump has largely taken it off the table by refusing to touch Medicare or Social Security, and Democrats have little interest in addressing it except as part of a larger deal including tax increases — the sort of “Grand Bargain” that eluded President Barack Obama.The House Republican budget, titled “A Brighter American Future,” would remake Medicare by giving seniors the option of enrolling in private plans that compete with traditional Medicare, a system of competition designed to keep costs down but dismissed by critics as an effort to privatize the program. Along with other changes, the budget proposes to squeeze $537 billion out of Medicare over the next decade.The budget would transform Medicaid, the federal-state health-care program for the poor, by limiting per capita payments or allowing states to turn it into a block-grant program — the same approach House Republicans took in their legislation that passed last year to repeal the Affordable Care Act (the repeal effort died in the Senate, but the GOP budget assumes that the repeal takes place).  It also proposes adding work requirements for certain adults enrolled in Medicaid.

Why Do Air Force Planes Need $10,000 Toilet Seat Covers? -- It seems the Pentagon is (still) overspending on toilet seats. Then again, the federal government’s largest agency overspends on just about everything else, too.  According to a recent news report, a Department of Defense contractor told the Air Force that each new toilet seat cover for the C-17 cargo plane will cost $10,000. Will Roper, the Air Force’s chief acquisition official, rather than pooh-poohing the cost, defended it by claiming the company would have to switch production from other products to make a limited number of toilet covers, thus driving up the expense. Roper added that the Air Force could 3D-print the toilet seat covers for $300 a piece, but would likely have to pay “some kind of profit margin or royalty” to the company.  The Department of Defense and Congress have totally abdicated their responsibilities when it comes to making sure taxpayers pay a fair price. Failing to secure upfront government ownership of intellectual property rights for systems it paid to research and develop is one of the main drivers of costs and a major source of contractor profits when it comes to operations and maintenance. It works well for the contractors. By owning the intellectual property rights, the prime contractor makes itself the only outfit capable of providing the necessary items. Moreover, that monopoly prevents other companies from providing maintenance support to the patented item. In many cases, contractors argue that the costs of these products shouldn’t be questioned because they are “commercial items,” supposedly available for sale and with prices set by the market. In cases like this, though, it’s clear the government is the only customer and pays accordingly high prices.

Trump announces plans for “Space Force” as new military branch - During a meeting with the National Space Council yesterday, President Trump announced his intention to create a “Space Force” as the sixth branch of the US military.The move would elevate US military operations in space within the overall command structure of the military, placing it on an equal footing with the Navy, Air Force, Marines, Army and Coast Guard. US military operations in space are currently overseen by the Air Force’s Space Command.Trump made clear that the move was part of preparations for war with Russia and China. “Our destiny beyond the Earth is not only a matter of national identity but a matter of national security,” Trump said yesterday, adding that the United States should not have “China and Russia and other countries leading us.”In his typically ignorant fashion, Trump declared that the new branch would be “separate but equal” from the Air Force, a phrase infamous in American history as the legal pretext for segregation in the public schools.The announcement came unexpectedly, during a signing ceremony for an apparently unrelated policy directive aimed at streamlining the tracking of space traffic and debris. However, it follows months in which Trump has repeatedly floated the idea in public appearances and lengthier discussions within the military and political establishments. An early draft of last year’s military spending bill included provisions for the creation of a “Space Corps” as a new branch of the military. Whether Trump’s plan will come to fruition remains to be seen. Last year’s proposal in Congress was opposed by Secretary of Defense James Mattis and by the Air Force on the ground that it created needless organizational complexity, indicating that Trump’s announcement could face opposition within the Pentagon and his own cabinet. Senator Bill Nelson (D-FL), a senior member of the Senate Armed Services Committee, also tweeted his opposition, adding that Trump could not carry out such action without congressional approval. All of Trump’s opponents, however, share the basic strategic aim of maintaining and bolstering American military supremacy in space. Since the Strategic Defense Initiative (SDI) under Reagan, commonly known as “Star Wars,” the establishment of space superiority has been a significant and growing element in American military planning.

Trump’s Military Drops a Bomb Every 12 Minutes - We live in a state of perpetual war, and we never feel it. While you get your gelato at the hip place where they put those cute little mint leaves on the side, someone is being bombed in your name. While you argue with the 17-year-old at the movie theater who gave you a small popcorn when you paid for a large, someone is being obliterated in your name. While we sleep and eat and make love and shield our eyes on a sunny day, someone’s home, family, life and body are being blown into a thousand pieces in our names.Once every 12 minutes.The United States military drops an explosive with a strength you can hardly comprehend once every 12 minutes. And that’s odd, because we’re technically at war with—let me think—zero countries. So that should mean zero bombs are being dropped, right? Hell no! You’ve made the common mistake of confusing our world with some sort of rational, cogent world in which our military-industrial complex is under control, the music industry is based on merit and talent, Legos have gently rounded edges (so when you step on them barefoot, it doesn’t feel like an armor-piercing bullet just shot straight up your sphincter), and humans are dealing with climate change like adults rather than burying our heads in the sand while trying to convince ourselves that the sand around our heads isn’t getting really, really hot. You’re thinking of a rational world. We do not live there. Instead, we live in a world where the Pentagon is completely and utterly out of control.  President George W. Bush’s military dropped 70,000 bombs on five countries. “[Obama] dropped 100,000 bombs in seven countries. He out-bombed Bush by 30,000 bombs and 2 countries.” And even when the media did mention it, the underlying sentiment was, “Yeah, but look at how suave Obama is while he’s OK’ing endless destruction. He’s like the Steve McQueen of aerial death.”  However, we now know that Donald Trump’s administration puts all previous presidents to shame. The Pentagon’s numbers show that during George W. Bush’s eight years he averaged 24 bombs dropped per day, which is 8,750 per year. Over the course of Obama’s time in office, his military dropped 34 bombs per day, 12,500 per year. And in Trump’s first year in office, he averaged 121 bombs dropped per day, for an annual total of 44,096.

The Persistent Myth of U.S. Precision Bombing - Opinion polls in the United States and the United Kingdom have found that a majority of the public in both countries has a remarkably consistent belief that only about 10,000 Iraqis were killed as a result of the U.S.-British invasion of Iraq in 2003.   Estimates of deaths in Iraq actually range from 150,000 to 1.2 million. Part of the reason for the seriously misguided public perception may come from a serious belief in guided weapons, according to what the government tells people about “precision” bombing.  But one must ask how so many people can be killed if these weapons are so “precise,” for instance in one of “the most precise air campaigns in military history,” as a Pentagon spokesman characterized the total destruction last year of Raqqa in Syria. The dreadful paradox of “precision weapons” is that the more the media and the public are wrongly persuaded of the near-magical qualities of these weapons, the easier it is for U.S. military and civilian leaders to justify using them to destroy entire villages, towns and cities in country after country: Fallujah, Ramadi and Mosul in Iraq; Sangin and Musa Qala in Afghanistan; Sirte in Libya; Kobane and Raqqa in Syria.  As the U.S. and U.K. launched their “Shock and Awe” attack on Iraq in 2003, Rob Hewson, the editor of Jane’s Air-Launched Weapons, estimated about 20-25 percent of the U.S. and U.K.’s “precision” weapons were missing their targets in Iraq, noting that this was a significant improvement over the 1999 bombing of Yugoslavia, when 30-40 percent were off-target. “There’s a significant gap between 100 percent and reality,” Hewson said. “And the more you drop, the greater your chances of a catastrophic failure.”  So the impression that these weapons can be used to surgically “zap” a single house or small building in an urban area without inflicting casualties and deaths throughout the surrounding area is certainly contrived. “Precision” weapons comprised about two thirds of the 29,200 weapons aimed at the armed forces, people and infrastructure of Iraq in 2003.  But the combination of 10,000 “dumb” bombs and 4,000 to 5,000 “smart” bombs and missiles missing their targets meant that about half of “Shock and Awe’s” weapons were as indiscriminate as the carpet bombing of previous wars.  Saudi Arabia and Turkey asked the U.S. to stop firing cruise missiles through their territory after some went so far off-target that they struck their territory. Three also hit Iran.

Despite 'New, Tough Sanctions', US Takes Delivery Of Russian Rocket Engines - The Trump administration and the U.S. Department of the Treasury last week slapped sanctions on several Russian companies and billionaires for allegedly supporting Russia’s military and intelligence agencies in fueling more cyber attacks and other malicious activities.  Despite the newest round of tough U.S. sanctions, Russia will supply two batches of rocket engines to the U.S. Air Force in 2018, Chief Developer of Energomash Scientific and Production Association [the engines’ developer] Pyotr Lyovochkin told TASS on Friday.“Currently, the production of commercial engines at Energomash is proceeding in compliance with the contracts signed. The dispatch of the first batch of RD-180 and RD-181 engines to the United States is planned for the second quarter of 2018,” the chief developer said.“And the next batch of these engines will be supplied to the customer at the end of the year,” he added, without specifying the number of engines. The Atlas III and Atlas V rockets, manufactured by the Convair Division of General Dynamics, along with Antares rockets are the cheapest and most viable solution for the U.S. Air Force in launching heavy payloads into high orbits. Unbeknownst too many, the Atlas family of rockets and Antares rely on Russian rocket engines for the first stage. This has become a dangerous national security threat, as the Air Force has become Russian dependent on RD-180 and RD-181 rocket engines. The Air Force’s contract with Energomash extends into the second half of 2019.

US Senate Blocks Sale Of F-35 Jets To Turkey Due To Russian Missile Deal - One month ago, in the latest sign that Turkey is seriously considering leaving NATO as its relationship with the security bloc (and the US in particular) continues to deteriorate, Turkish Prime Minister Mevlut Cavusoglu warned in early May  that the country would retaliate if a bill being pushed by House Republicans to block the sale of 116 F-35 fighter jets to Turkey becomes law. Emerging in response to Turkey's potential purchase of Russian S-400 missile defense systems, the measure was criticized by Cavusoglu  who said it was wrong to impose such a restriction on a military ally, alluding to the fact that Turkey has graciously allowed the US to use its Encirlik air base to launch its air strikes against ISIS (as well as against Turkey's enemy the Syrian regime of Bashar al-Assad). In retrospect, Turkey's veiled threats fell on deaf ears and late on Monday the US Senate voted to block the transfer of the F-35 fighter jet to Turkey, reflecting not only US unwillingness to cooperate with any counterparty that does concurrent deals with Russia, but also increasing tension with a NATO ally, in a move that could ultimately hold up the sale of 100 warplanes worth close to $10bn. As the FT reports, a bipartisan clause added to the National Defense Authorization Act, and passed by the Senate late on Monday by a vote of 85 to 10, will prohibit the transfer of F-35s to Turkey until a plan is submitted to cut Turkey from participation in the program. As we previewed last month, senators predictably made the intervention given concerns over Turkey’s intent to install the Russian-built S400 air defense system, which Pentagon officials fear would put the secrets of the F-35 and the data it collects at risk.  “Turkey is buying a missile system that will collect data on Nato’s frontline jet and, for various reasons, the US is trying to prevent that,” said Aaron Stein, a senior fellow at the Washington-based Atlantic Council. “Kicking Turkey out of the consortium won’t make anyone in Ankara happy and underscores how the two sides may not yet be at rock bottom in terms of the relationship.”

Turkey to receive F-35 jets despite opposition from Senate -- Turkey will receive its first two F-35 fighter jets on Thursday, despite earlier attempts by the United States Senate to block the sales of the military equipment, the country's Deputy Prime Minister Bekir Bozdag has said. "Necessary contacts have been made with the US, and delivery of the F-35 jets will be on Thursday," Bozdag said, according to Anadolu news agency. Earlier this week, the sale of the two jets became uncertain when bipartisan efforts by the Senate and the House of Representatives were taken to potentially stop the transfer to Turkey. US Congress called for the halt of the sales following the demand of a report by the Department of Defense on worsening US-Turkey relations. After the bill was introduced by US Senators, Turkish Prime Minister Binali Yildirim criticised the US decision, calling it "an unfortunate development". Turkey will receive the fighter jets during a ceremony taking place in Fort Texas. There, pilots will receive the necessary training to operate the planes, after which the F-35s will be moved to Turkey. In 2014, Ankara placed a buy order of about 100 of the stealth jets, eventually looking to replace its current F-4 and F-16 fleet. However, various legislators have cited a number of concerns with Turkey, including its plans to buy advanced Russian air defence systems, warming ties to Moscow and the arrest of US citizens and consulate staff. 

Trump 'looking at' Putin meeting as Bolton plans Moscow trip - President Donald Trump confirmed on Thursday his interest in a July meeting with Russian President Vladimir Putin, reigniting alarm over Trump’s desire to befriend a Russian leader widely considered a menace to the U.S. and Europe. “We’re looking at the possibility,” Trump told reporters when asked whether he’s planning to meet with Putin next month. ..In a sign of the seriousness of the planning, however, a White House spokesman also said Thursday that national security adviser John Bolton will visit Moscow next week to prepare for a meeting with Putin. A source familiar with the discussions said Trump will likely sit down with Putin just before or after an annual NATO summit in Brussels on July 11 and 12, and that Bolton would discuss possible meeting sites with Russian officials. A summer summit with Putin would again bring the U.S. president face-to-face with the man intelligence officials blame for meddling in the 2016 election. The Russian also stands accused of approving the attempted murder with nerve agent of a former Russian spy in Great Britain earlier this year, and backs Syrian leader Bashar Assad, whose forces Trump has twice struck as punishment for their use of chemical weapons. Russia experts say that Putin would see a meeting with Trump as a chance to shed western sanctions imposed over his aggression in Ukraine and U.S. election interference.   "Russia and the United States will be seen as equals at the summit and that is exactly what President Putin desires.” 

Donald Trump, the Insecure Pledge in the Dictatorship Fraternity - After the last week, Trump is clearly a man who puts the dick in dictator. He’s a fanboy of Putin, Kim, Duterte, and a dog’s breakfast of the worst examples of oppression, thuggery, and anti-Western values the globe has to offer.   Because this week, Trump’s love of authoritarians, dictatorships and his actions and words came together. Donald Trump first went to the G-7 to wreck the proceedings with a combination of insult-comic schtick, diplomatic demolition derby, Putin cheerleading, and giant-toddler petulance.He followed that with the Singapore Shitshow. It was a monstrous reality TV event, as was intended. But it left our putative allies wondering at the new Axis of Assholes Trump has joined—the CRANK: China, Russia, America and North Korea. By the end, it didn’t feel like he was after denuclearization but management tips from the portly little thug Kim.For the American president to normalize, excuse, and ally himself with the worst of the world's bad actors while insulting, degrading, and destroying our allies and alliances would be appalling in any circumstance. The fact that Trump acts like a bumbling, eager fraternity pledge, desperate to join Phi Sigma Dictator makes it all the worse. Donald Trump’s authoritarian impulses have never exactly been a state secret. The entire Trump leadership oeuvre is a grotesque, bubbling slurry of reality TV star egomania and crap-tier nationalist nostrums that sound like Pat Buchanan and Lyndon LaRouche had a love child. Barely contained racial animus and a will to power is what resembles the real heroes of Trump's blisteringly awful mental and moral landscape.

The key word in the Trump-Kim show -  Pepe Escobar -- Throughout the pre-summit negotiations, the Democratic People’s Republic of Korea (DPRK) had always stressed an “action-for-action” strategy leading to denuclearization, as in Pyongyang being compensated every step of the way instead of waiting until after complete denuclearization – a process that could last over a decade – to be eligible for economic benefits. The Singapore joint statement enshrines exactly what the Russia-China strategic partnership – formalized in the recent Shanghai Cooperation Organization (SCO) summit – was suggesting from the beginning: a double freeze.The DPRK holds off on any new nuclear and missile tests while the US and South Korea stop the “war games” (Trump’s terminology).This logical sequence of the Sino-Russian roadmap is based on what South Korean President Moon Jae-in agreed with Kim Jong-un at the inter-Korean summit last April. And that ties in with what North Korea, South Korea and Russia had already discussed at the Far East summit in Vladivostok last September, as Asia Times reported; economic integration between Russia and the two Koreas, including the crucial connectivity of a future Trans-Korean railway with the Trans-Siberian.Once again, this is all about Eurasia integration; increased trade between North Korea and Northeast China, concerning mostly Liaoning, Jilin and Heilongjiang provinces; and total, physical connectivity of both Koreas to the Eurasian heartland.That’s yet another instance of the New Silk Roads, or Belt and Road Initiative (BRI) meeting the Eurasia Economic Union (EAEU). And not by accident South Korea wants to connect deeper with both BRI and the EAEU. When in doubt, re-read Panmunjom.The Singapore joint statement is not a deal; it’s a statement.The absolutely key item is number 3: “Reaffirming the April 27, 2018, Panmunjom Declaration, the DPRK commits to work toward the complete denuclearization of the Korean Peninsula.”This means that the US and North Korea will work towards denuclearization not only in what concerns the DPRK but the whole Korean Peninsula. Much more than “…the DPRK commits to work toward the complete denuclearization of the Korean Peninsula”, the keywords are in fact    “reaffirming the April 27, 2018, Panmunjom Declaration…”  

Why North Korea Can Never Trust the U.S. - The Democratic People’s Republic of Korea (i.e. North Korea) cannot trust the United States of America.  The US does not keep its promises, honor its treaties and obey international laws. This is not opinion; it is the history of the US, beginning with the many broken promises and treaties with the Native Americans.The US has broken promises and treaties in every corner of the globe.  The US ignores the UN Charter, which is a treaty. It flouts international law, which is based on treaties.  The US habitually starts asymmetrical wars, which is aggression and the worst of all war crimes.  It destroys nations, leaving millions of people dead, dying, and in misery. Libya was once a prosperous nation. Muammar Gaddafi was an eccentric dictator, but he had a love for Libya and its people.  Under Gaddafi the people enjoyed a high standard of living, economic freedom, and gender equality.  Education and medical care were free.  Having a home and food was considered a human right.  Libya’s oil wealth benefited the people.Gaddafi was attacked and vilified by the US for decades. After the attacks on the US of September 11, 2001 Gaddafi cooperated with the US in the War on Terror.  That is not to say that the War on Terror was a good thing, but Gaddafi was being US friendly.  In further efforts to establish friendly relations with the US, Gaddafi denuclearized in 2003.  President George W. Bush praised Libya for denuclearizing and suggested Libya as amodel for North Korea.  In 2011 President Obama wantonly destroyed Libya and conspired in Gaddafi’s assassination. Obama’s Secretary of State gloated afterwards “we came, we saw, he died…ha,ha,ha”. Even if North Korea completely and forever denuclearizes Kim Jong-un can never be assured that one day the US won’t try to do the same thing to North Korea that it did to Libya.  North Korea can never put its trust in the US, because the US has proved itself untrustworthy over and over again. The US continues to accuse Iran of having a nuclear weapons program even though the IAEA certifies that it doesn’t, and all 16 US intelligence agencies have said that Iran has not had an active nuclear weapons program since 2003.  Facts do not matter to the US.  It creates its own reality.  Based on its own unreality, the US can invent any reason it wants to impose sanctions and invade asymmetrical countries.

Kim Jong Un visits China to meet Xi Jinping, complicating things for Trump - North Korean leader Kim Jong Un is in China. Again.   Kim arrived on Tuesday for his third visit to China in the span of three months, meeting with President Xi Jinping at the Great Hall of the People, in the heart of Beijing.The visit comes a week after President Trump met with Kim in Singapore and a day after the United States confirmed it will cancel “war games” with South Korea scheduled for August. News of his trip came just hours after Trump threatened China with tariffs on $200 billion worth of goods. On Tuesday evening, Kim and his wife, Ri Sol Ju, were welcomed by Xi and his wife, Peng Liyuan. Pictures from the event show Kim and Xi shaking hands in front of a row of Chinese and North Korean flags — a visual echo of Kim and Trump’s much-photographed handshake in Singapore.Xi reportedly praised the outcome of the Singapore summit, calling it an “important step toward the political solution of the Korean Peninsula nuclear issue,” according to the party-controlled press. Though details are still scarce, the timing and staging of his trip sends a clear message about Beijing’s place at the center of East Asian diplomacy — and its power over Pyongyang.  With U.S.-China trade ties on the rocks, Kim is well positioned to play both powers, talking sweet to Trump while pursuing a closer relationship with Chinese President Xi Jinping. “Although it seems there is a booming romance between Kim Jong Un and Trump, Kim understands the hierarchy. He knows that Xi is the Asian Godfather,” said Yanmei Xie, a China policy analyst at Gavekal Dragonomics, an economic research firm in Beijing. “He is making a pragmatic calculation that China can provide economic assistance to integrate North Korea diplomatically and economically into Northeast Asia.”

US, South Korea suspend upcoming military exercises -- The US and South Korea on Monday agreed to suspend upcoming joint military exercises on the back of President Donald Trump's historic summit with North Korea's Kim Jong Un."South Korea and the United States have agreed to suspend all planning activities regarding the Freedom Guardian military drill scheduled for August," South Korea's defense ministry said in a statement.The move was later confirmed by the Pentagon. Spokeswoman Dana White said the two countries' senior defense officials were set to meet later this week, including the US' Defense Secretary Jim Mattis, Secretary of State Mike Pompeo and National Security Adviser John Bolton.However, White went on to say that department had made no decision on future military exercises beyond August. "We are still coordinating additional actions. No decisions on subsequent war games have been made," she said, adding that there would be "no impact on Pacific exercises outside of the Korean Peninsula."Monday's announcement follows Trump's announcement last week after his summit with Kim that the US would suspend joint military exercises with the South "unless and until we see the future negotiation is not going along like it should."Cancelling the drills, Trump added, would save the US "a tremendous amount of money. Plus, I think it's very provocative."The remarks reportedly threw Pentagon officials and ran counter to long-held US arguments that military drills are crucial to maintaining military partnerships with allies. Trump's rejection of the military drills also appeared to reflect North Korea's assertion that they are "provocative" — assertions the US has for decades denied.

North Korea expected to begin transferring remains of U.S. troops soon: officials (Reuters) - North Korea could start the process of handing over the remains of troops, including Americans, missing from the Korean War within the next few days, two U.S. officials told Reuters on Tuesday.  The officials, speaking on condition of anonymity, said North Korea would hand over the remains to United Nations Command in South Korea, and they would then be transferred to Hickam Air Force Base in Hawaii. One official said “a sizable number” of remains were expected to be handed over, but declined to give a specific number given the unpredictability of North Korean leader Kim Jong Un.  It could take months or even years before the remains are positively identified, the officials added.

Pompeo cancels Senate briefing on North Korea deal — Secretary of State Mike Pompeo on Tuesday abruptly canceled a briefing for senators scheduled for Wednesday about the deal with North Korea that President Donald Trump hashailed as a breakthrough — even while the details of the agreement remain vague.  Senate leaders informed colleagues that the briefing may be rescheduled for next week, though no date had been set, according to aides involved in the scheduling. Pompeo has also not yet committed to a briefing before the Senate Foreign Relations Committee, the committee with jurisdiction over any deal. “We’ve been going back and forth about the date and subject matter and so forth. Hopefully he’ll be here soon," Sen. Bob Corker, R-Tenn., the committee's chairman, told NBC. “It’s always difficult to schedule a secretary of state."  A State Department spokesperson said they did not cancel the meeting, maintaining that a "mutually agreeable time" was not found for the briefing. "We are seeking to schedule a briefing," the spokesperson said. "In the meantime, the secretary is in regular contact with Congress. He looks forward to continuing these engagements and keeping members informed."

US cancels military drills, but maintains sanctions on North Korea  - The US and South Korea formally announced on Tuesday that large-scale joint military exercises in August would be cancelled in order to maintain the momentum of talks with North Korea over denuclearisation.Following his summit meeting in Singapore with North Korean leader Kim Jong-un last week, US President Donald Trump indicated that joint US-South Korean drills—barely disguised rehearsals for war with North Korea—would be suspended as long as negotiations with Pyongyang continued.Last year’s Ulchi Freedom Guardian war games ran for 11 days in August, involving 17,500 US troops and 50,000 South Korean troops, along with military personnel from Australia, Britain and Canada. The drills are part of a broader program of exercises to ensure that South Korean and US forces are prepared to “fight tonight” to implement battle plans that include pre-emptive strikes against North Korea.Trump tweeted on Sunday that the war games were both “very expensive” and “quite provocative.” He also said the military exercises would be quickly restarted if North Korea failed to meet US demands, tweeting: “[They] can start up immediately if talks break down, which I hope will not happen.”Trump’s announcement caught US allies, South Korea and Japan, off guard. While calling off the exercises was presented as a joint decision, South Korean Foreign Minister Kang Kyung-wha acknowledged during a press conference yesterday that Seoul was not informed in advance. Kang told the media that US Secretary of State Mike Pompeo had informed her of US plans for North Korea’s denuclearisation, but she provided no details. Beyond a vague joint statement at the Singapore summit, nothing has been made public about what was decided between Trump and Kim.

No sign of North Korea dismantling nuclear weapons programme, Mattis admits - Immediately after the meeting Trump claimed that North Korea had begun the destruction of a missile engine testing site or would begin as soon as Kim returned from the summit. In return Trump ordered the suspension of military exercises with South Korea, a longstanding demand of the Pyongyang regime. This week the Pentagon confirmed that planning for the next scheduled exercises in August had halted. However, asked on Wednesday if he could “put his finger on” any steps North Korea had taken to dismantle its nuclear weapons programme, Mattis told reporters at the Pentagon: “No, I’m not aware of that.” He added: “The detailed negotiations have not begun. I wouldn’t expect that at this point.” After the Singapore meeting Trump said that his secretary of state, Mike Pompeo, and national security adviser, John Bolton, would take part in follow-up meetings with North Korean officials this week to “go into the details” of the denuclearisation agreement the president believed he had struck with Kim. Both Trump and Pompeo predicted that follow-on talks with North Korean officials would take place in the week after the 12 June summit. “We’re getting together next week to go into the details,” Trump told a post-summit press conference in Singapore. “Next week, with John Bolton and our entire team, to go over the details and to get this stuff done.” The next day Pompeo confirmed: “I will be the person who takes the role of driving this process forward. 

Wilkerson: Don’t Trust Trump, Bolton to Deliver US-North Korea Peace - naked capitalism - - Real News video - Yves here. This Real News Network interview of Lawrence Wilkerson by Aaron Mate was intriguing by virtue of the frequency with which Mate pushed back against Wilkerson’s arguments. On the one hand, it’s not hard to agree with the notion that Trump didn’t have much of a plan regarding North Korea, and as a result Kim Jong Un came out of the talks better than Trump did. But most commentators had and continue to have low expectations that discussions with North Korea would yield much. And even though Kim Jong Un allegedly gained “legitimacy,” I’m not sure that that is worth much, considering how much good that did for Gaddafi. Regardless of the latest stage of international theater, North Korea depends on China. Kim Jong Un was summoned to Beijing before and after the talks. It is conceivable that China thought that by stage managing Kim Jong Un, it might get Trump to moderate his trade demands. On the other, Wilkerson seems unwilling to factor in that 2018 is not 2006. As we pointed out, North Korea has greatly improved its ballistic missiles. It may be capable of delivering a nuclear payload to the US mainland. That puts North Korea in a better bargaining position than in the past. Perhaps the biggest source of the divergence between Wilkerson and Mate came at the end, when Wilkerson depicted Korea as a success because it has been at peace for over 50 years. I don’t see how you reconcile that with the fact the two sides have never agreed to officially end the war, and the US has (until the Trump forbearance) staged provocative war games aimed at North Korea (as well as China). I was only in Seoul once, over 20 years ago, and I can’t imagine things have changed much. I went to Tel Aviv on the same set of trips, and the airport security levels were night and day. In Seoul, passengers and their bags had to go through screening (metal detectors were the bare minimum) to enter the country, and the airport and airport approaches and entry points were heavily manned by soldiers carrying machine guns. Mind you, I’m not disagreeing with Wilkerson’s bottom line, that from Trump’s perspective, the Singapore summit was a PR event. But I was surprised at many of his other comments, and welcome reader input.

Trump flips on North Korea, declaring country still an ‘extraordinary threat’ - Donald Trump has declared that North Korea still poses an “extraordinary threat” to the United States, just days after saying that the country’s nuclear program no longer constituted a danger. In an executive order on Friday, the president extended for one year the so-called “national emergency” with respect to the nuclear-armed nation, re-authorizing economic restrictions against it.  While expected, the declaration comes just nine days after Trump tweeted: “There is no longer a Nuclear Threat from North Korea,” following his summit with North Korean leader Kim Jong-un in Singapore.   The order appears to undermine the president’s claim. It states that “the existence and risk of proliferation of weapons-usable fissile material” and the actions and policies of the North Korean government “continue to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States”. The national emergency has been in place since 2008 and is a sign of the enduring tensions between the US and North Korea that spiked last year as the North moved closed to perfecting a nuclear-tipped missile that could reach American soil, but ebbed with the 12 June summit where Kim agreed to “complete denuclearization” of the Korean peninsula.

North Korea Agreed to Denuclearize, But US Refuses Despite Treaty Obligation A powerful economic incentive continues to drive the nuclear arms race. After the Singapore Summit, the stock values of all major defense contractors — including Raytheon, Lockheed Martin, Northrop Grumman, Boeing and General Dynamics — declined.Given his allegiance to boosting corporate profits, it’s no surprise that Donald Trump is counterbalancing the effects of the Singapore Summit’s steps toward denuclearization with a Nuclear Posture Review that steers the US toward developing leaner and meaner nukes and lowers the threshold for using them.The United States has allocated $1.7 trillion to streamline our nuclear arsenal, despite having agreed in the Nuclear Non-Proliferation Treaty in 1968 to work toward nuclear disarmament.Meanwhile, the US maintains a stockpile of 7,000 nuclear weapons, some 900 of them on “hair trigger alert,” according to the Union of Concerned Scientists. “If weapons are used they need to be replaced,” Brand McMillan, chief investment officer for Commonwealth Financial Network has argued. “That makes war a growth story for these stocks, and one of the big potential growth stories recently has been North Korea. What the agreement does, at least for a while, is take military conflict off the table.”

Poll: Trump approval rating ties highest point of his presidency - A Gallup poll released Monday showed President Trump earning his highest approval rating since shortly after he took office, even as his administration faces growing criticism over its immigration policies.The Gallup poll found 45 percent of Americans approve of Trump’s job performance as of Sunday, while 50 percent disapprove. The approval number matches Trump’s highest to date from Gallup. He previously received the same rating for the week ending on Jan. 29, 2017.Trump’s current approval rating rose 3 percentage points since June 10. In the week in between, Trump met with North Korean leader Kim Jong Un, marking the first summit between sitting leaders of the two countries. After hours of discussions, Trump and Kim signed an agreement committing the United States to unspecified “security guarantees” in exchange for a denuclearized Korean Peninsula. The document also lacked details on the timeline or nature of denuclearization.  Trump has touted the deal as a sweeping success, and claimed North Korea no longer poses a nuclear threat to the world.

Attacking Hodeidah is a deliberate act of cruelty by the Trump administration - The Trump administration is guilty of many acts of deliberate cruelty, such as taking away the children of immigrant parents at the US border. But just as the world was watching the lead up to the Trump-Kim Jong-un meeting in Singapore last Monday, the US may have done something even worse by quietly announcing a decision that threatens to kill millions by starvation or disease.  The potential death sentence came in a short press statement by the US secretary of state, Mike Pompeo, effectively giving a green light for the United Arab Emirates (UAE) to launch an offensive in Yemen aimed at capturing Hodeidah on the Red Sea. The port city is the point of entry for 70 per cent of food and medical supplies for the eight million Yemenis whom the UN says are on the brink of starvation out of the 22 million in need of humanitarian aid. The eagerness of US officials to avoid accusations of complicity in the Hodeidah attack is a sign that they suspect the outcome may be calamitous. Pompeo was deliberately low-key in his three sentence statement about Hodeidah: “I have spoken with Emirati leaders and made clear our desire to address their security concerns while preserving the free flow of humanitarian aid and life-saving commercial imports.”    Absent from this message for the first time was any call for Saudi Arabia and the UAE not to attack Hodeidah, a city with a population of 600,000 who are already hearing explosions in the distance. The US and UAE have been working hard on a smokescreen of misinformation about who is responsible for what is happening and why they are launching the offensive now.     The 25,000 Yemeni fighters advancing on Hodeidah are not an independent force but are paid for and under the control of the UAE. “We take our orders from the Emiratis, of course,” a Yemeni field commander in the front line told Iona Craig of The Intercept earlier this month as he called in airstrikes. This air support is provided by the Saudis and the UAE with the US providing essential services such as mid-air refuelling and target intelligence. The US is denying that it has a direct role in the assault on Hodeidh, but it would not be happening without its assent. 

The West Will Die So That Trump Can Win -“Just another #G7 where other countries expect America will always be their bank,” tweeted U.S. National Security Advisor John Bolton on June 9, following the unprecedented failure of the rich-nation summit to produce a joint communique. “The President made it clear today. No more.”The degree of personal vitriol directed by U.S. President Donald Trump and his team toward their host, the Canadian prime minister, was even more remarkable. Trump called Justin Trudeau “dishonest & weak” on Twitter. There is, White House trade advisor Peter Navarro told Fox News, “a special place in hell” reserved for him.That such language should be directed at an ally is difficult to explain by reference to economic policy or facts. Yes, as Trump has said repeatedly, Canada imposes large import tariffs on milk (as the United States does on sugar). Yet dairy is a trivial portion of U.S. exports to Canada, less than 0.2 percent, and the United States exports northward more than twice as much dairy as it imports. Moreover, the average U.S. tariff rate, at 1.6 percent, is twice Canada’s, and the United States runs a trade surplus with it. Examining Trump’s latest tariffs on steel, aluminum, washing machines, and solar panels, however, I find that Canada is by far the hardest-hit nation. Over $12 billion in Canadian exports have been targeted. And the European Union is No. 2, at just under $8 billion. What about China, a vastly more serious transgressor of trade rules and norms?   To French President Emmanuel Macron’s suggestion that the G-7 collaborate on the “China problem” of steel subsidies, intellectual property expropriation, and the like, Trump reportedly replied that the EU was “worse than China” on trade. Two generalizations may reasonably be drawn. One is that the Trump administration is not making trade policy based on economic facts. It could be doing so haphazardly, but it would appear more likely that it is sending a message to long-standing allies that business as usual is over.   The second generalization is that Trump is targeting allies for punishment and abuse because he is trying to rupture their mindset — the mindset that the United States values this order more than it does the opportunity to boost net exports.

 EU to impose countertariffs on US products as of Friday | DW - A raft of retaliatory tariffs from the European Union on US products will come into effect on June 22. The EU's list of targets reads like a summary of emblematic American exports, including motorbikes and jeans.EU countertariffs on a list of US products would come into force on Friday, the European Commission said Wednesday.The retaliatory measure comes in response to US tariff hikes on steel and aluminum that were imposed on EU member countries on June 1, with the White House citing grounds of national security."We did not want to be in this position," EU Trade Commissioner Cecilia Malmstrom said in a statement. "However, the unilateral and unjustified decision of the United States to impose steel and aluminum tariffs on the EU means that we are left with no other choice." The agreed EU countermeasures will initially target a list of US goods worth $3.2 billion (€2.8 billion), most of which will be hit with import duties of 25 percent.The products affected by the move range from agricultural produce such as rice and orange juice to jeans, bourbon, motorbikes and various steel products. The higher tariffs had previously been registered with the World Trade Organization (WTO)."The rules of international trade that we have developed over the years with our American partners cannot be violated without a reaction from our side," Malmstrom said. She called the EU's response "measured, proportionate and fully in line with WTO rules." Canada and Mexico have also announced their own similar countermeasures just as an even greater trade spat pits the US against China. Together, the current battles have raised the specter of a global trade war, spooking financial markets that fear major consequences for the world economy.

Commentary: China forced to fight back with reciprocal tariffs - (Xinhua) -- Hours after the U.S. administration fired the first shot on Friday, China announced additional tariffs on U.S. goods that are of the same scale and intensity and due to take effect on the same date.China's countermeasure is responsive, passive and reciprocal.The U.S. announcement of imposing additional tariffs on 50 billion U.S. dollars worth of Chinese goods follows months of shuttle diplomacy between Washington and Beijing.China has shown utmost sincerity in rounds of negotiations with plans to meaningfully increase purchases of U.S. goods and services, to meet demands of Chinese people for higher living standards and help the United States to boost employment.The U.S. side also admitted meaningful progress and important consensus were made in the past rounds of talks, as the two sides vowed not to launch a trade war.But consensus has soon proved to be short-lived after the U.S. side demonstrated flip-flops with an obvious intention to escalate the trade spat.China does not want the trade war, but facing a capricious Washington, China has no choice but to fight back vigorously in defense of its national interests, the trend of globalization and the world's multilateral trading system.In fact, China has prepared for volatile Washington. In the wake of the latest round of talks in Beijing earlier this month, China issued a statement, stressing that the outcome of the talks should be based on the prerequisite that the two parties meet each other halfway and will not engage in a trade war.All economic and trade outcomes of the talks will not take effect if the U.S. side imposes any trade sanctions including raising tariffs. Washington obviously has turned a deft ear to this serious message of China.

China Warns US Corporations: You Are About To Become Victims Of A Trade War -- Now that China has released details on its planned retaliation to President Trump's Section 301 tariffs - a list that contains, predictably, agricultural goods like soybeans, orange juice and beef as well as energy products like crude oil (though surprisingly not yet aircraft, though sanctions could be imposed in the next round) - we get to watch as US corporations who will be negatively impacted by the tariffs ratchet up their lobbying of the Trump administration (that is, if they haven't already given up) practically beginning the president not to let tensions escalate much further. Of course, the Chinese aren't stupid. They know that one way to pressure Trump into backing off would be aggressively lobby US businesses with threats - both veiled and obvious - that their businesses could come to harm, or perhaps ruin, if the conflict escalates. Already, the Wall Street Journal has published a story about China's efforts to browbeat American businesses, recounting a meeting between a group of executives and Chinese Vice President Wang Qishan that reportedly took place in late March.When a group of American executives and other global corporate chieftains met with Chinese Vice President Wang Qishan in late March, they received a stern message about the simmering U.S.-China trade conflict: If tensions escalate, buckle up."The message was pretty clear," said a person who attended. "A lot of companies would become victims in a U.S.-China trade war." And some companies say they're already experiencing problems with the customs process as US goods pile up at Chinese ports.Already, some U.S. companies are facing increased regulatory scrutiny in China, according to Jacob Parker, vice president of China operations at the U.S.-China Business Council. For instance, he said, it takes longer for their products to clear Chinese customs; in other instances, Chinese regulators are putting advertisement slogans by U.S. firms under review. Some automobiles and farm products such as pork from the U.S. have piled up at ports."Maintaining a low profile in the China market and ensuring that you’re completely compliant are more important now than in the past," Mr. Parker said. Others, including Foxconn, a Taiwanese technology company that is best known for assembling Apple's iPhones, have begun reviewing their supply chains.

301 tariffs locked and loaded - Expect more fallout this week from President Donald Trump’s announcement Friday that $50 billion in goods from China will face new 25 percent tariffs. Beijing has already threatened retaliation of the same size and on the same schedule, which could spur further threats from the president to slap tariffs on additional Chinese products. It remains to be seen how quickly the two sides will resume negotiations; China declared on Friday that the progress made so far was no longer valid. A senior administration official told reporters that the tariffs were aimed at pressuring China to make structural changes to its policies that facilitate theft of U.S. technology and undermine U.S. access to the Chinese market, “regardless of how you feel about the trade balance.” That implies that a deal satisfying the United States wouldn’t necessarily entail a direct and immediate reduction in the trade deficit. But given Trump’s laser-like focus on the trade balance, all bets are off. Also note that the first tranche of tariffs, on $34 billion in goods, is scheduled to take effect July 6, which isn’t nearly enough time for China to make bureaucracy-shaking changes to prevent the tariffs from happening. Read the full rundown from POLITICO’s Megan Cassella here, and POLITICO’s Victoria Guida answers your questions about the tariffs here. Retaliation is also on the horizon from countries angry at U.S. tariffs on steel and aluminum. As soon as Wednesday, the EU could impose tariffs on the U.S. designed to yield the most political pain -- directed at Kentucky bourbon and Wisconsin cranberries, for example. India this past week also updated its list of proposed retaliatory tariffs, equaling roughly $240 million and covering 30 products, including almonds and apples.

Trump threatens additional $200bn in tariffs on China - US President Donald Trump has threatened to impose tariffs on an additional $200bn (£151bn) of Chinese goods in a growing trade row. Mr Trump said the 10% tariffs would come into effect if China "refuses to change its practices". The move would be a major escalation of the dispute, which threatens to take the US and China into a trade war. China responded by accusing the US of "blackmail" and saying it would match any further tariffs. Mr Trump insists that China has been unfairly benefitting from a trade imbalance with the US for years. Last week, he announced the US would impose 25% tariffs on $50bn worth of Chinese goods. Beijing responded by saying it would hit 659 US products worth $50bn - including agricultural products, cars and marine products - with a similar tax. Mr Trump said in a statement on Monday night that by retaliating, China was "threatening United States companies, workers, and farmers who have done nothing wrong". Asian markets sunk on Tuesday in response to the latest news. Stock markets had already fallen on Monday amid fears of a further deterioration in US-China trade relations 

Donald Trump Threatens New Tariffs on $200 Billion in China Imports —President Donald Trump escalated a trade conflict with China Monday, asking his administration to identify a new list of $200 billion in Chinese goods that would be penalized with tariffs.  The move followed tariffs applied last week on $50 billion in Chinese imports to the U.S., designed to punish China for unfair trade practices. Beijing immediately threatened to retaliate with its own equivalent tariffs on U.S. goods. In a statement late Monday, Mr. Trump said that he now wants U.S. Trade Representative Robert Lighthizer to identify a second tranche of goods imported from China for tariffs of 10%.  Should China retaliate to those additional tariffs, Mr. Trump promised to escalate even further by placing tariffs on another $200 billion in Chinese goods.  The announcement came hours after the Senate delivered an unusual rebuff to his trade policies, passing a measure reinstating a ban on purchases of U.S. components by Chinese telecommunications company ZTE Corp. that Mr. Trump had sought to overturn.  “Further action must be taken to encourage China to change its unfair practices, open its market to United States goods, and accept a more balanced trade relationship,” Mr. Trump said in the statement.   The president boasted Monday of his “excellent relationship” with Chinese President Xi Jinping, and said the two would continue working together on many issues.  “But the United States will no longer be taken advantage of on trade by China and other countries in the world,” he said.  Some of the first tranche of tariffs, aimed at $50 billion in imports from China and designed to punish Beijing for alleged intellectual-property violations and technology theft, will be implemented July 6 and will add 25% to the price of goods at the border. Beijing said Friday it would retaliate in kind by targeting high-value American exports—including farm products, cars and crude oil. The quick response from Beijing appeared to provoke Mr. Trump, who says U.S. tariffs are meant to right the wrongs he says the U.S. has suffered in the global trading system under previous administrations. “This latest action by China clearly indicates its determination to keep the United States at a permanent and unfair disadvantage,” he said, calling Beijing’s response “unacceptable.” A third round of tariffs would bring the total imports from China subject to U.S. tariffs to $450 billion, almost as much as the $505 billion in goods that the U.S. imported from China last year. By comparison, China only imported $130 billion in American goods last year, giving Beijing less room to target trade volumes coming from the U.S. than Mr. Trump does in shipments from China.

Trump's approach on China: Go big or go home -- President Donald Trump upped the ante against China on Monday evening by threatening to slap tariffs on an additional $200 billion worth of Chinese goods.   Trump asked U.S. Trade Representative Robert Lighthizer to draw up a list of products that would be hit with a 10 percent tariff — a response that comes after Beijing retaliated in kind to Trump’s initial decision last week to hit $50 billion worth of Chinese goods with a 25 percent tariff.  "This latest action by China clearly indicates its determination to keep the United States at a permanent and unfair disadvantage, which is reflected in our massive $376 billion trade imbalance in goods," Trump said in a statement. "This is unacceptable. Further action must be taken to encourage China to change its unfair practices, open its market to United States goods, and accept a more balanced trade relationship with the United States." Lighthizer offered support for Trump’s ask on Monday night, calling the initial tariffs “proportionate and very responsive to forced technology transfer and intellectual property theft by the Chinese.”  Trump also promised that if China slaps more retaliatory tariffs, he’ll pursue additional tariffs on another $200 billion worth of goods. That would mean tariffs on a total of $450 billion in goods, or roughly 90 percent of the $505 billion worth of Chinese goods sold to the U.S. last year.  And Beijing looks to retaliate again. China's Commerce Ministry said Monday night that "if the U.S. side becomes irrational and issues a list, China will have to adopt comprehensive measures combining quantity and quality to make a strong countermeasure." It’s not the first time Trump has had a negative response to retaliatory tariffs from China. In April, Trump threatened to impose tariffs on an additional $100 billion in Chinese imports because “rather than remedy its misconduct, China has chosen to harm our farmers and manufacturers,” he said then. China, at the time, had first announced its proposal to retaliate against the U.S. action, a move Trump called “unfair.”   The Trump administration will continue to press on for a “better and fairer trading system for all Americans,” Trump said. “But the United States will no longer be taken advantage of on trade by China and other countries in the world.” Doug Palmer has more.

China pledges it will fight back firmly if Trump goes ahead and publishes list of additional tariffs - China's Commerce Ministry said on Tuesday morning that it will take counter measures if the U.S. publishes an additional tariffs list. In a statement posted on its website, the ministry said China will protect its interests, taking both quantitative and qualitative measures against the move. The fresh threats of additional tariffs violate prior negotiations and consensus reached between the two countries, the Chinese Commerce Ministry said. A trade war hurt companies and people in both countries, it added in the Chinese statement. "This practice of extreme pressure and blackmail deviates from the consensus reached by both parties on many occasions and is disappointing for the international community," the Commerce Ministry said. "The United States has initiated a trade war that violates market laws and is not in accordance with current global development trends," it said. Beijing will respond by safeguarding the interests of China and its people — and defending free trade, the statement added. No matter how the external environment changes globally, China will push firmly ahead with reform and opening up, the Chinese ministry said. Beijing was responding to news that U.S. President Donald Trump's administration is looking to impose fresh tariffs on products from China. Trump has requested the United States Trade Representative to identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10 percent.

Here Are The Six Ways China Could Retaliate In Trade War With The U.S. -- It's all about the trade war between the US and China this morning, and more specifically, how will Xi retaliate to Trump. For those who missed the overnight fireworks, late on Monday, President Trump asked the US Trade Representative to identify USD 200BN in Chinese goods for further tariffs of 10% which will be imposed if China refuses to change its practices and goes ahead with its retaliation threat, while he also stated that China raising tariffs is unacceptable and that the US will pursue tariffs on another USD 200bln of Chinese goods if China increases tariffs yet again. Predictably, China - which last week reacted instantly to Trump's first round of $50BN in tariffs - again responded immediately, wasting no time in accusing Trump of "blackmail." China’s commerce ministry said on its website that if the US “irrationally” moves forward with the tariffs then China has no choice but to “forcefully fight back” with "qualitative" and "quantitative" measures.  But now that the chips are on the table, and Trump is locked into a tit-for-tat strategy with China from which neither he nor Xi can "defect" without losing face, the question is how exactly will China retaliate to punish the US while minimizing the damage to China's economy as much as possible. There are 6 possible things that China can do at this time, in order of escalating severity:

1. China could de-escalate tensions by presenting a list of actions it will follow to reduce its significant trade deficits in services with the US. This could affect education service institutions, the local tourist industry, and entertainment. However, as the CFR's Brad Setser writes, it increasingly looks like the Administration is putting China in a position where China cannot make concessions without appearing to cave - which most think China won't do. Setser, not alone, has trouble seeing a de-escalation option if Trump goes through with the $200b
2. China will likely launch an economic subsidy for its economy in the form of further easing in financial conditions to offset any potential trade-drag. Some, such as Deutsche Bank have proposed that in order to offset the negative hit to its consumers, China will loosen policy such as tolerating the property and land market boom in tier 3 cities and cutting the RRR twice over the rest of this year to partly offset the potential drags. This would also involve a modest devaluation of the Yuan.
3. China could unleash differential treatment of local enterprises: as some have suggested, Beijing could simply opt not apply its "market access liberalization" policy recently announced. This could greatly disadvantage US firms greatly. Beijing could also engage in an aggressive crackdown on US firms operating in China (Apple), hinder border passage of US products (automotive), or pursue antitrust and monopoly allegations against US tech names (Micron).
4. China could also choose a diplomatic retaliation, and order Kim Jong Un to scuttle the recent agreement North Korea signed with the US, humiliating Trump by showing that it was Beijing all along who made the US-N. Korea summit possible and successful.
5. China could pick an aggressive route, and instead of a mild depreciation, it could aggressively pursue a weaker Yuan to boost trade competitiveness: which, ironically, is the catalyst behind much of the Trump administration's animosity toward China. To achieve this, China would relaxing some of the capital control measures that have helped strengthen the renminbi in the past 2 years. That said, such a move would unleash sizable outflow demand, while boosting precious metals and cryptos. The US would also brand China a currency manipulator.
6. China, finally, could pick the nuclear option, and gradually or suddenly liquidate its Treasury holdings. This is a long-running worry by markets given China’s $1.2 trillion in Treasury holdings. In January, Bloomberg reported this was a possibility which was at the time denied by China State Administration of Foreign Exchange; however the recent liquidation of half of Russia's Treasurys was seen by some as a rehearsal for what would happen if Beijing decides to pursue this approach.

White House Is Confident It Has an Edge Over China in Trade Dispute - President Donald Trump’s escalation of trade threats against China reflects his belief that Washington increasingly has the upper hand in the dispute, administration officials said, adding he is prepared to withstand pressure from U.S. businesses that might suffer from the conflict. Mr. Trump caught Chinese officials off guard with his announcement Monday evening about potential new tariffs. Should China retaliate against U.S. trade policies, the White House said, the U.S. would apply tariffs of 10% on as much as $400 billion in Chinese imports. China had earlier threatened to retaliate against the U.S.’s initial round of 25% tariffs on $50 billion on imports announced last week. The bulk of those tariffs go into effect July 6. News of the new tariffs and the prospect of a trade war roiled global markets Tuesday. The Dow Jones Industrial Average fell 1.1% and the Shanghai Composite Index dropped 3.8% to its lowest level since mid-2016. Indexes in major exporters Germany and France slid more than 1%. Commodities prices also took a hit, with soybean prices dropping 2.2% to their lowest level in more than two years. The White House’s tough stance represents the ascendancy, for now, of trade hawks in the administration, particularly White House senior trade adviser Peter Navarro and U.S. trade representative Robert Lighthizer. Both officials argue China represents a fundamental threat to the U.S. that needs to be countered, even at the cost of pain to the U.S. economy. “It’s clear that China has much more to lose” than the U.S. from a trade fight, said Mr. Navarro. Mr. Lighthizer said additional tariffs wouldn’t be imposed until the U.S. picked the products, and received industry comment, a process that will take months and leaves open the possibility of additional negotiations. But so far there is no indication that such talks are on the horizon, and the Trump administration is signaling that it is increasingly confident of achieving goals through a dramatically more confrontational approach to China. Although Chinese government officials pledged to fight back forcefully, they didn’t give any details of what they might do, as they have in the past. Beijing has threatened to match the initial U.S. tariffs dollar-for-dollar and impose them on the same day as the U.S. acts. Next up from the administration is a plan to halt Chinese investment in U.S. technology, due to be released by the Treasury Department by June 30. Under the plan, which is still being developed, the U.S. would use a law designed to address national emergencies to block Beijing from acquiring what the White House calls “industrially significant technology.” Export controls on such technologies would also be tightened, say administration officials. 

Blankfein: Trump's Trade Threats Are A Savvy "Negotiating Strategy" - With roughly six months left before he leaves the Goldman Sachs C-Suite, CEO Lloyd Blankfein has been sounding more uninhibited in interviews lately. In one recent conversation, the CEO admitted that "it's only with great trepidation that I'd say anything positive about the president".But he changed his tone in an interview with Bloomberg News Editor-in-Chief John Micklethwait published Tuesday, where the longtime investment banking executive finally found something positive to say about President Trump.As Blankfein argued, Trump's tariff threats "make sense" as a bargaining strategy and probably won't precipitate a devastating trade war or the attendant economic collapse that on Tuesday clinched the Dow's longest losing streak in 15 months. "That’s what you’d do if it was a negotiating position and you wanted to remind your negotiating counterparty of how much firepower you have," Blankfein said Tuesday in an interview at the Economic Club of New York."I don’t think we’re in a suicide pact on this, so I suspect we’re not going to cause the economies to collapse."Instead, Blankfein speculated that Trump's aggressive trade war threats (the president most recently threatened to expand tariffs to $200 billion of Chinese good) are part of a broader "negotiating strategy.""I do think -- as some people have commented - that this is part of a negotiating pattern, that would be my best take," Blankfein said. Asked about his relationship with the Trump administration, Blankfein shared details about a recent trip to China that Goldman was invited to participate in. Blankfein tagged along in an effort to help close an "important transaction." While he couldn't provide too many details, he explained that the venture - a partnership with China's sovereign wealth fund - was meant to raise money for a fund that would invest in US companies that export goods to China.  The deal was "an important symbol of what China wanted to do for US trade," Blankfein said.

China MOC spokesperson makes remarks on White House trade statement -  (Xinhua) -- A spokesperson of China's Ministry of Commerce (MOC) said Tuesday that if the United States loses its rationality and unveils another list of Chinese products for additional tariffs, China will have no choice but to take comprehensive measures combining quantitative and qualitative ones to resolutely strike back.After unveiling plans to impose additional tariffs on Chinese goods worth around 50 billion U.S. dollars, the United States went even further by threatening to identify 200 billion U.S. dollars worth of Chinese products for additional tariffs."Such practice of imposing extreme pressure and blackmailing is contrary to the consensus the two sides have reached through rounds of consultations, and disappoints the international community," the spokesperson said."The trade war waged by the United States is against both the law of the market and the development trend of today's world. It undermines the interests of the Chinese and American people, the interests of companies and the interests of the people all over the world," said the spokesperson.The response taken by China aims to safeguard and defend not only the interests of the Chinese nation and the people, but also free trade regime and the common interests of mankind, said the spokesperson.No matter how external environment changes, China will follow its established rhythm, stick to the vision of making development people-centered, resolutely advance reform and opening up, resolutely promote high-quality economic development, and accelerate the development of a modern economy, said the spokesperson.

White House piles pressure on China after Trump tariff threat (Reuters) - China has underestimated U.S. President Donald Trump’s resolve to impose more tariffs unless it changes its “predatory” trade practices, a White House trade adviser said on Tuesday, as Trump greatly expanded the amount of Chinese imports possibly facing new duties. The growing trade conflict hit financial markets hard, with Beijing accusing the United States of “extreme pressure and blackmailing” and vowing to retaliate. With both sides upping the ante, the risks of a damaging trade war grew dramatically. Trump threatened on Monday to hit $200 billion of Chinese imports with 10 percent tariffs if Beijing retaliated against his previous targeting of $50 billion in imports, aimed at pressuring China to stop stealing U.S. intellectual property. He also threatened tariffs on another $200 billion of Chinese products should Beijing hit back again, bringing to $450 billion the potential amount of Chinese exports that could be targeted. That sum approaches the roughly $500 billion in total annual Chinese exports to the United States. White House trade adviser Peter Navarro, who views China as a hostile economic and military power, said Beijing had more to lose from a trade war. China imported $129.89 billion of U.S. goods last year, while the United States purchased $505.47 billion of Chinese products, according to U.S. data. “The fundamental reality is that talk is cheap,” Navarro told reporters on a conference call, saying China “may have underestimated the strong resolve of President Donald J. Trump.” “If they thought that they could buy us off cheap with a few extra products sold and allow them to continue to steal our intellectual property and crown jewels, that was a miscalculation,” Navarro said, referring to now-abandoned talks in which Beijing had offered to purchase more U.S. products. The trade confrontation pits the world’s two largest economies against each other and could disrupt global supply chains for the tech and auto industries, sectors heavily reliant on outsourced components. 

China-based campaign breached satellite, defense companies: Symantec (Reuters) - A sophisticated hacking campaign launched from computers in China burrowed deeply into satellite operators, defense contractors and telecommunications companies in the United States and southeast Asia, security researchers at Symantec Corp said on Tuesday.  Symantec said the effort appeared to be driven by national espionage goals, such as the interception of military and civilian communications.   Such interception capabilities are rare but not unheard of, and the researchers could not say what communications, if any, were taken. More disturbingly in this case, the hackers infected computers that controlled the satellites, so that they could have changed the positions of the orbiting devices and disrupted data traffic, Symantec said. “Disruption to satellites could leave civilian as well as military installations subject to huge (real world) disruptions,” said Vikram Thakur, technical director at Symantec. “We are extremely dependent on their functionality.”  Satellites are critical to phone and some internet links as well as mapping and positioning data.  Symantec, based in Mountain View, California, described its findings to Reuters exclusively ahead of a planned public release. It said the hackers had been removed from infected systems.  Symantec said it has already shared technical information about the hack with the U.S. Federal Bureau of Investigation and Department of Homeland Security, along with public defense agencies in Asia and other security companies. The FBI did not respond to a request for comment.

White House Accuses China Of "Persistent Economic Espionage And Aggression" - In what Bloomberg billed as the White House's "latest salvo in the trade war between the world's two largest economies", the Trump administration released a 35-page report late last night fleshing out its national security concerns emanating from China's theft of intellectual properties as well as economic policies that shield domestic Chinese companies from competition. The report, titled "How China's Economic Aggression Threatens the Technologies and Intellectual Property of the United States and the World", accuses China of achieving its brisk economic growth through "aggressive acts, policies, and practices that fall outside of global norms and rules (collectively, 'economic aggression')" (surprisingly, not through nosebleed levels of debt issuance), before it lists two categories of said "economic aggression" that are the focus of the report; they are:

• Acquire Key Technologies and Intellectual Property From Other Countries, Including the United States.
• Capture the Emerging High-Technology Industries That Will Drive Future Economic Growth15 and Many Advancements in the Defense Industry.

The cites comments from the US intelligence community, which note that "Chinese actors are the world's most active and persistent perpetrators of economic espionage" and that China covets technology in key industries like "electronics, telecommunications, robotics, data services, pharmaceuticals, mobile phone services, pharmaceuticals, satellite communications and imagery and business application software." When thefts of technology are reported, China does everything it can to stymie investigations. Indeed, economic espionage is a main focus of China's intelligence services, and the US believes that China's Ministry of State Security has no fewer than 50,000 intelligence officers operating abroad - and no fewer than 40,000 operating domestically.

China trade war could permanently scar U.S. soybean market: Karen Braun (Reuters) - As the trade fight between the United States and China escalates, many agriculture market participants have taken comfort in the idea that China cannot fulfill its soybean needs without importing massive quantities of the U.S. product. But that situation only holds in the short term. Yes, as the world’s top buyer, China needs U.S. soybeans today, in a few months, and likely even next year. However, it is not unreasonable for China eventually to wane itself off American beans in the longer term, which could have detrimental and irreversible effects on U.S. markets. U.S. President Donald Trump on Friday went ahead with $50 billion in tariffs on Chinese goods to take effect July 6. Beijing quickly hit back with its own tariff list, including soybeans, to be enacted on the same day. On Monday, Trump upped the ante with new tariff threats against China of $200 billion, sending futures markets into a tailspin. China is not backing down from the U.S. actions and has vowed to fight back, a sign it is willing to stomach higher soybean prices right now as long as the United States enforces tariffs on Chinese goods. Even in the immediate aftermath of Beijing’s April 4 warning that U.S. soybeans could come under fire, it was hard to believe the events of last Friday would ever come to pass. On paper, a soybean trade war involving the United States and China makes no sense for either party. China imports roughly 100 million tonnes of soybeans each year, primarily from Brazil and the United States, which together produce 70 percent of the global supply. Simple math demonstrates that under the current structure, China cannot avoid U.S. soybeans right now if it is to meet its import schedule. And besides, why would China want to pay more for a product it clearly needs? Why would the United States threaten its No. 2 export (behind aircraft) to the East Asian country? But logic apparently matters not in this case, as these are the choices that have ultimately been made under the decision to proceed with the tariff tit-for-tat, and potentially a full-on trade war. Unfortunately, the U.S. farmer could become the biggest loser in this fight without a resolution between both sides at some point soon, as China likely has more options to work with. 

Some Notes on Trump’s Trade War Threat - Yves Smith - The threat of Trump going from a trade spat to a full blown trade war with China has produced what Lamber would call an overly dynamic situation, so I’ll offer only a few observations. For instance, after Trump warned China that he planned to hit another $200 billion of Chinese goods with tariffs if they responded in kind to the US assigning tariffs to $50 billion of Chinese products, Trump upped the ante and said he would slap tariffs on an additional $200 billion of Chinese exports if China didn’t back down. The trade war-mongers are in the driver’s seat. From the Wall Street Journal:The White House’s tough stance represents the ascendancy, for now, of trade hawks in the administration, particularly White House senior trade adviser Peter Navarro and U.S. trade representative Robert Lighthizer… “It’s clear that China has much more to lose” than the U.S. from a trade fight, said Mr. Navarro. Mr. Lighthizer said additional tariffs wouldn’t be imposed until the U.S. picked the products, and received industry comment, a process that will take months and leaves open the possibility of additional negotiations. But so far there is no indication that such talks are on the horizon, and the Trump administration is signaling that it is increasingly confident of achieving goals through a dramatically more confrontational approach to China… Next up from the administration is a plan to halt Chinese investment in U.S. technology, due to be released by the Treasury Department by June 30…  Trump’s negotiating strategy, if you can call it that, appears unlikely to work with China. If one were to try to ascribe logic to Trump picking and then escalating a fight with China, it is presumably in the end to bring them to the negotiating table. But China is not North Korea, where the US threatened the Hermit Kingdom with nuclear devastation and Kim Jong Un with being the next Gaddafi and then dialed the bluster way down as China pushed and South Korea pulled North Korea to the negotiating table. And the good luck of the Olympics being in South Korea facilitated the process. One could argue that all of the theatrics was to enable Trump to talk with Kim Jong Un and not look like a wus.  With China, Trump’s escalation to threatening another $200 billion of Chinese goods after his initial $50 billion shot is a reaction to China going into tit for tat mode as opposed to negotiating. This should not be a surprise. The more detailed press reports were making clear that China was initially not engaging with the US (as in making clear that they weren’t receptive to US demands and accordingly weren’t deploying meaningful resources to talks).

The Hidden Risk Of A Trade Deficit Reduction - In May, China reportedly offered the United States a $200 billion reduction in its goods surplus with the United States. It would be a major victory for the Trump administration’s tough trade policy on China.The Chinese authorities so far have confirmed they are willing to buy up to $70 billion more agricultural and energy goods from the United States and they would be able to make good on the promise given the centrally-planned Chinese economy.But even if China were to follow through and import more from the United States or export less to it - reducing its surplus from the $500 billion in 2017 to $300 billion per year in the future - this would not be the end of the story. The problem with the single-handed focus on trade is that international trade between different nations has two sides. One is the goods trade, the other is the trade in capital, which has far-reaching consequences for interest rates and exchange rates.So far, the United States has financed persistent deficits in goods with persistent surpluses in capital exports. This means foreigners ship BMW cars and Samsung TVs to the United States and end up owning Miami condominiums, Apple stocks, and U.S. Treasury bonds.Of course, it’s not necessarily the same people who sell the BMWs and get the Apple stock, but the equation applies to the trade balances between nations.At the end of 2017, foreigners owned $33.8 trillion of U.S. assets with the United States owning $26 trillion of foreign assets, a net deficit of $7.8 trillion, which represents the accumulated trade deficit with the rest of the world from past decades.Indeed, capital transactions make up 95 percent of international financial flows, compared to 5 percent for trade. More importantly, these international investment decisions are not made at a top-down level, although they balance out trade surpluses and deficits automatically at the national aggregate. Because the United States has a very open capital account (there are few restrictions on money moving in and out of the country) and attractive assets (Apple and Miami), it brings in investments from foreign countries with high savings rates like Germany and China.Both companies and consumers in these countries save more than they spend because of culture, state intervention, and many other reasons. Either way, companies and individuals make asset allocation decisions independently of the national goods surplus their country has with the United States.

Tariffs present different global supply chain situations for shippers - For more than a while now, there has been a general consensus of “we will see what happens” among global supply chain, logistics and freight transportation stakeholders, when it comes to what actually happens, or what the eventual fall out will or would be as a result of the tariffs the United States planned to place on Chinese imports to the United States. So instead of the “what if” scenarios that had been floated and discussed, we are instead in a “what now” scenario.  And, to be sure, that scenario is fairly open ended at this point. For nearly 18 months, or even longer, there have been steady gains in United States-bound imports from China, with much of it due to the pending, now actual, tariffs, which have been by viewed by many as protectionist measures.What happens now remains to be seen on myriad fronts, but one thing for certain is that these new tariffs are not catching anyone by surprise, as the very real possibility of them taking effect has been real going back to early March, when the White House first floated the possibility.Much of what is driving the White House’s tariff endgame is the need to compete on a global basis, which requires the U.S. being able to grow its global exports, according to Walter Kemmsies, Managing Director, Economist and Chief Strategist for JLL’s U.S. Ports, Airports and Global Infrastructure Group.  “If you are really going to grow, you want to tie your economy to where the consumers are spending and the consumer is global and spending on things like food, where we are really well positioned, clothing, automobiles and appliances. We are also the world’s most efficient plastics producer….we need to leave the markets open for that and also to compete on an equal basis. In the end, what the U.S. really is asking the world is to ‘let our companies compete with yours on an equal basis.’” And in order for global shippers to weather whatever tariff storms that may be coming, taking a longer view of trade beyond just the U.S. and China is a good step to take. That requires looking into setting up production and distribution operations in places like Vietnam and India, as well as parts of Africa, which Kemmsies said are emerging.   “If you are going to operate as a global company, you need to make your decisions that way, too,” he noted. “When you look across certain products, you can see how bad some supply chains are actually managed if they are not. It makes no sense not to truly diversify globally. If you source stuff in one country and sell it in another, you are extremely vulnerable.”

Trade Bedfellows; Google Shops China; Cheaper iPhone Screens - The Trump administration’s tough line on trade is reshaping economic alliances around the globe. Japan is finding common ground with China after years of skirmishes over territory and security, the WSJ’s Peter Landers writes, as U.S. tariffs threaten Japanese firms that export semiconductors and other high-tech electronics to Chinese factories. During a visit last month Chinese Premier Li Keqiang highlighted how Japan complements China as an export powerhouse, resulting in what he called “strong competitiveness in third-country markets” such as the U.S. Japan, which exported roughly $137 billion of goods to China in the most recent fiscal year, needs “a hedge against Trump,” says one expert, while Beijing is looking to Japan for investment and expertise in advanced manufacturing as its economy slows. Meanwhile, the European Union and Australia launched free-trade talks Monday as other U.S. allies seek to strengthen economic ties in the wake of tit-for-tat tariffs. An e-commerce alliance between Alphabet Inc.’s Google and online retailer JD.com Inc. could help both reach broader markets. Google is investing $550 million in Beijing-based JD, giving the American tech giant a roughly 1% stake in the number-two player in China’s online shopping market, the WSJ’s Liza Lin writes. The deal will help Google expand its e-commerce business in Asia and could strengthen its ties to China, while potentially bolstering advertising revenue even as more businesses move ads to competitor Amazon.com Inc. JD in turn gets access to U.S. and European consumers through the Google Shopping platform, which offers a chance to gain traction outside the competitive Chinese e-commerce market. Google and JD plan to work jointly on retail and infrastructure systems to help traditional merchants go digital, leveraging JD’s logistics know-how as the e-tailer seeks to gain an edge over rival Alibaba Group Holding Ltd.

Trump Tells Cook iPhones Will Be Spared Chinese Tariffs: NYT - America's business community is being squeezed by a Chinese government that is threatening hardball tactics like unexpected "customs delays" for goods produced by American (-owned or -invested) firms; and a White House that has steadfastly refused to back down from what by now has been acknowledged as a trade war by most. Gradually, even the market is waking up to the reality (considering that Dow futures are down 300+ points after Trump threatened another $200 billion in tariffs). In the latest story of how American companies are responding to this fluid situation (there have been a lot of them in recent days), the New York Times  reports how all three constituencies - the Chinese government, the US government and the US business community (or at least one of its most high-profile factions) - have turned to Apple CEO Tim Cook as the unofficial "top diplomat" of America's tech community.Apple’s chief executive, Timothy D. Cook, may be the leader of the world’s most valuable public company, but lately he has had to act a lot like the tech industry’s top diplomat.Last month he visited the Oval Office to warn President Trump that tough talk on China could threaten Apple’s position in the country. In March, at a major summit meeting in Beijing, he called for “calmer heads” to prevail between the world’s two most powerful countries.But in what is the key detail of the story the NYT - citing an anonymous individual - claims that the Trump Administration told Cook it won't slap tariffs on iPhones. The Trump administration has told Mr. Cook that it would not place tariffs on iPhones, which are assembled in China, according to a person familiar with the talks who declined to speak on the record for fear of upsetting negotiations. But Apple is worried China will retaliate in ways that hamstring its business, according to three people close to Apple who declined to be named because they were not authorized to speak publicly.Apple fears "the Chinese-bureaucracy machine is going to kick in," meaning the Chinese government could cause delays in its supply chain and increase scrutiny of its products under the guise of national-security concerns, according to one person close to the company. Apple has faced such retaliation before, another person said, and Reuters reported Ford vehicles are already facing delays at Chinese ports.

A neocon Senate coup against Trump’s foreign policy? | Asia Times: Between the collapse of communism in 1989 and the departure of the Obama Administration, the American foreign policy establishment embraced the “end of history” premise that liberal democracy would replace all the autocracies of the past, and that the goal of American foreign policy was to hasten the inevitable march of history. Trump, by contrast, puts American interests first and will make deals that reinforce the position of the Chinese, Russian, or North Korean regimes if the outcome is in America’s interest. Now Trump’s opponents in the Republican Party – the neo-conservative caucus including Senators John McCain (R-AZ), Marco Rubio (R-FL), and Lindsey Graham (R-SC) – have thrown a monkey wrench into the works, in the form of legislation that would overturn Trump’s carefully-constructed compromise with China over the Chinese telecom giant ZTE. American diplomacy achieved a landmark result in Trump’s Singapore summit with Kim Jong-un, offering the repugnant North Korean leader legitimacy and the prospect of regime continuity in return for his nuclear weapons program.The Korean deal also entailed some quiet trade-offs with China. Importantly, President Trump intervened personally to rescind the Commerce Department’s late-April ban on American chip sales to China’s second-largest telecom equipment company ZTE, in retaliation for ZTE’s violation of sanctions against Iran and North Korea. ZTE’s mobile handsets use Qualcomm chips, and a ban on chip sales would shut the company down. On the president’s initiative, the Commerce Department instead negotiated a $1.9-billion fine, changes in ZTE management, and the imposition of American compliance controls on the company’s operations. That was a severe penalty and an unprecedented assertion of American control over the operations of a Chinese company, but a deal that both sides could live with. Now the US Senate has sought to sabotage Trump’s ZTE deal, by embedding a ban on US chip sales to ZTE in the national defense authorization act – despite intensive lobbying by Commerce Secretary Wilbur Ross and other administration officials. 

White House Split Over Hardline Response to China Trade War -- Some White House officials are trying to restart talks with China to avoid a trade war before U.S. tariffs on Chinese products take effect July 6, three people familiar with the plans said, setting up a battle with others in the administration who favor a harder line. Staff of the National Economic Council have contacted former U.S. government officials and China experts in recent days to gauge chances for high-level talks in the next two weeks, the people said on condition of anonymity to discuss the inquiries. One idea NEC staff floated was inviting Chinese Vice President Wang Qishan before the tariff deadline, they said. The outreach signals a willingness by some U.S. officials to seek a truce before $34 billion in Chinese products are hit with tariffs rather than trigger a trade war between the world’s two largest economies. Still, the chances of such negotiations happening in the near term are slim as long as opponents inside the administration favor penalizing Beijing. President Donald Trump has shown no signs of backing down. The White House didn’t respond to a request for comment. The U.S. administration has said that after July 6, tariffs on an additional $16 billion worth of Chinese goods will be imposed after a public review period. The tariff threats have hurt U.S. stocks in the past week, and the Dow Jones Industrial Average declined for an eighth straight day on Thursday, the longest losing streak in more than a year. Tit-for-Tat After China swiftly responded with counter threats on the same amount of tariffs and timeline, Trump on Monday directed the U.S. Trade Representative’s office to identify an additional $200 billion worth of Chinese products that would be subject to a 10 percent tariff. The administration has not published a timeline for these tariffs. “If it really does get to be a big war, we have many more bullets than any of these other countries,” Commerce Secretary Wilbur Ross said in a Bloomberg Television interview on Thursday.

Chinese Investments In The US Plunge By 92% - Coming amid the escalating trade war between the US and China, many were quick to blame the collapse in Chinese investments in the US on tensions surrounding protectionism. And indeed, according to research firm Rhodium Group, China’s direct investments in the U.S. plunged in the first half of 2018 as Chinese companies completed acquisitions and greenfield investments worth only $1.8 billion, a 92% drop over the past year, and the lowest level in seven years. The reality, however, is that this has little to do with the Chinese trade spat, and everything to do with China's crackdown on outbound M&A and conglomerate "investments" which as we said back in 2015, were just a thinly veiled scheme to cover capital outflows. Rhodium confirms as much:The rapid decline in Chinese FDI in the U.S. was driven by a “double policy punch” -- Beijing cracking down on rapid outbound investment and the U.S. government increasing scrutiny on Chinese acquisitions through the Committee on Foreign Investment as well as taking a more confrontational stance toward economic engagement with China in general.The investment tracker is based on collection and aggregation of data on individual transactions, including acquisitions, greenfield projects, and expansions.Whatever the reason behind the sharp drop, however, it doesn't change the fact that there has been a recent collapse in recycled Chinese capital back into the US. And, while it may not have caused it, Trump's recent change in trade policy will certainly make future Chinese direct investment far more problematic. As Bloomberg notes, "lawmakers and the White House are planning fresh curbs on Chinese investment." Furthermore, as we reported earlier, a just released White House report claimed that China’s spectacular economic growth “has been achieved in significant part through aggressive acts, policies and practices that fall outside of global norms and rules."

India hits back at the U.S. with tariffs - In what could signal escalating trade tensions between New Delhi and Washington, the Centre has written to the World Trade Organisation (WTO) notifying its decision to increase import tariffs on 30 items from the U.S. amounting to $240 million, in retaliation against tariffs imposed by the latter on aluminium and steel imports.The move is significant as it comes a day after Commerce Minister Suresh Prabhu returned from the U.S. and just weeks ahead of further talks between the two countries on the issue.“India hereby reiterates its decision to suspend concessions or other obligations notified to the Council for Trade in Goods on 18 May 2018… that are substantially equivalent to the amount of trade affected by the measures imposed by the United States,” the Centre said in the notification to the WTO’s Council for Trade in Goods. “The proposed suspension of concessions or other obligations takes the form of an increase in tariffs on selected products originating in the United States, based on the measures of the United States.” “India reserves its right to further suspend substantially equivalent concessions and other obligations based on the trade impact resulting from the application of the measures of the United States,” the notification added.U.S. President Donald Trump, in March, signed an order imposing a 25% tariff on steel imports and a 10% tariff on aluminium imports, citing national security as one of the key reasons behind the move. The Indian government repeatedly requested an exemption from these tariffs as India did not pose a security threat to the U.S., but to no avail. India has also taken the U.S. to the dispute settlement mechanism in the WTO over the matter.

India Joins The Tariff War: The Party Is Just Starting! - In response to Trump's tariffs on steel, India will put tariffs on Harley motorcycles, lentils, and almonds. Following the well-established belief that "trade wars are easy to win", India counters Trump tariffs, to hike duty on US bikes, almonds, apples.India has proposed to raise import duty on 30 products, ranging from motorcycles and certain iron and steel goods to boric acid and lentils. The customs duty on some of the items may be raised up to 50 per cent, in a signal that New Delhi will hit back at America's protectionist policies that range from a tighter visa regime to higher import duties.The additional duty proposed to be hiked on these items ranges from 10 per cent to 50 per cent. Those at the lowest include almonds, walnuts and fresh apples - which will cost a little more for consumers as an additional duty of 10 percent is proposed to be imposed.But the real impact will be on products such as motorcycles over 800 cc - a move targeted at Harley-Davidson - where an additional duty of 50 percent has been proposed. This is seen as a real counter to President Donald Trump who had demanded a reduction in tariff on the cult bike brand.The government threatened further action. "India reserves its right to further suspend substantially equivalent concessions and other obligations based on the trade impact resulting from the application of the measures of the US," it added.It's so easy when it's all easy. As Trump says "Trade Wars are Good and Easy to Win" The party is just starting. Who's next?

Trump Threatens 20% Tariffs On All Cars Coming Into US; Euro, Car Stocks Slide - Fiat Chrysler, Volkswagen, and BMW shares are sliding following the latest shot across the bow from President Trump in the global trade wars. This time he took some time off from China and aimed at the European Union, threatening a 20% tariff on all cars coming into the US from Europe...Based on the Tariffs and Trade Barriers long placed on the U.S. and it great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!— Donald J. Trump (@realDonaldTrump) June 22, 2018     Of course, it is just this kind of escalation that most worried Goldman Sachs and as SocGen's Albert Edwards notes below, this was not hard to foresee... It doesn’t take a genius to see what’s coming down the line after completion of the current US probe into whether vehicle imports have damaged the US auto industry. President Trump has already told French President Macron to expect 25% tariffs on imported autos on the same “national security” grounds used to impose US steel and aluminium duties in March. Currently, the US charges just 2.5% on car imports. This is lower than the EU’s 10% and China's 25%, although the latter will lower its tariff to 15% from 1 July. And this is the key difference with China (and Japan) in its trade relations with the US. Both these countries will ‘play the game’ and make concessions as well as conciliatory noises. Germany, in my years of observation, will not. It will push back robustly and the legalistic bent of the European Commission will see tit-for-tat tariffs being implemented far faster than anything seen in the current US/China trade spat. The widely divergent 10% vs 2.5% tariff rate on autos between the EU and the US may indeed look like an anomaly in favour of the EU, but it is nothing compared to the 25% protection US light trucks and pick-ups receive (includes two-seat SUVs). No wonder US automakers are clucking all the way to the bank as they dominate this segment of the market.

Trump threatens to slam a massive tariff on European cars, which could cause economic chaos - President Donald Trump on Friday threatened to slam huge tariffs on imported cars from the European Union, a massive new threat in the escalating trade conflict between the allies.Trump in May had directed the Commerce Department to launch an investigation into imported autos, similar to the procedure that led to the recent tariffs on steel and aluminium imports. While the results of that investigation are still weeks away, Trump raised the specter of tariffs on Twitter.“Based on the Tariffs and Trade Barriers long placed on the US and it great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the US,” Trump tweeted. “Build them here!”The tweet appears to contradict a statement made by Commerce Secretary Wilbur Ross at a Senate Finance Committee hearing on Wednesday. Ross told lawmakers that “no decision” had been made regarding tariffs and that the process was in the “early stages.”A spokesperson for the Commerce Department told Business Insider that the investigation is still ongoing.Trump has long been fixated on imported cars. During a recent panel, his former economic adviser Gary Cohn recounted a story in which, he said, Trump asked why all cars in the US weren’t made domestically.New auto tariffs would be a massive escalation of the already intense trade fight between the US and Europe. Leaders from the UK, Germany, and France slammed Trump’s decision to hit the EU with steel and aluminium tariffs, and the bloc responded with tariffs of its own.

Donald Trump’s Latest Threat Against Germany Is a Reminder That He Stretches the Law to Do Whatever the Heck He Wants - Donald Trump casually lobbed another serious economic threat at our geopolitical allies over Twitter today.Based on the Tariffs and Trade Barriers long placed on the U.S. and it great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!— Donald J. Trump (@realDonaldTrump) June 22, 2018 The tweet was aimed at the German auto industry, and it wasn’t a surprise, exactly. In May, we learned that Trump wanted to placea 25 percent tariff on foreign cars, using the same national security powers that he used to impose border taxes on steel and aluminum imports. As the tweet makes clear, however, our president is not even trying to maintain the legal fiction that these tariffs are actually about national security. The Trump administration’s great insight about trade policy has been to realize that it can use a relatively obscure Cold War-era law—Section 232 of the Trade Expansion Act of 1962—as an all-purpose permission slip to slap duties on foreign products. The statute empowers the president to raise tariffs in order to defend U.S. “national security” interests—a broadly defined concept that includes the “economic welfare of individual domestic industries” and the “weakening of our internal economy.” If the administration wants to take protectionist measures, in theory it just needs to have the Commerce Department produce a report first purporting to show that imports are undermining our ability to make stuff domestically. That’s all the legal cover Trump needs if he wants to rain down economic revenge on Angela Merkel for looking at him the wrong way.

GM To Build Blazer In Mexico Despite Trump Anger -- It appears the Trump touch - the President's ability to browbeat individual companies into cancelling planned factory closures or expanding production in the US - is beginning to fade. To wit, General Motors on Friday openly defied President Trump, who has criticized automakers for building cars abroad, by revealing that it's going to move ahead with plans to build the new Chevy Blazer SUV in Mexico, according to Reuters. Trump has been pushing car companies to build more vehicles in the US as negotiations with Mexico and Canada over NAFTA have continued, despite increasing concerns on all sides that a deal to preserve the trade agreement might prove illusive. A spokesperson for GM said the company remains "committed" to working with the administration. "We remain committed to working with the administration on a modernized NAFTA," GM spokesman Pat Morrissey said, adding the decision was made years ago.  Way back in January 2017, before Trump's swearing-in, the then-president elect instigated a fight with GM, accusing the company of shipping Mexican-made cars into the US tax free, to be sold to US consumers.  General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A.or pay big border tax!— Donald J. Trump (@realDonaldTrump) January 3, 2017 In a tersely worded response, GM later explained that all Cruze sedans sold in the US market are built in the US, while Cruze models intended for global markets are manufactured in Mexico. Automakers have opposed the Trump administration's push to renegotiate Nafta (after all, they're the primary beneficiaries from the status quo). If certain of the Trump administration's priorities are enacted - for example, stiffer content rules - these changes could prove immensely disruptive to automakers' supply chains. We now wait to see if President Trump - who has been preoccupied lately with the collapsing push for immigration reform in Congress, a burgeoning trade war with China, and public outrage over his "zero tolerance" migrant detention policy - offers a response on twitter.

Merrill: "The cost of a trade war" -- A few excerpts from a research note by Merrill Lynch economists: The cost of a trade war: Early this week, trade tensions ratcheted up another notch. President Trump announced that he has directed the US Trade Representative to prepare another round of tariffs on $200bn in Chinese imports at a tax rate of 10%. This comes after China announced that it would retaliate dollar for dollar against the initial round of tariffs that are set to go into effect on July 6. While the actual amount of tariffs that have been imposed by the US to date remain modest at just over $100bn worth of goods imports (only 4.2% of total goods imports), the latest announcement shows that trade tensions are likely to get worse before it gets better. Although we remain of the view that the likelihood of a full blown global trade war remains low, below we try to put some numbers on how a major trade confrontation could potentially impact the US economy. … The good news is that we are still many steps away from a full blown global trade war. The bad news is that the tail risks are rising and our work and the literature suggest a major global trade confrontation would likely push the US and the rest of the world to the brink of a recession. So far, the trade actions taken by the Trump White House and trading partners have been relatively modest and in turn have had a limited impact on the economy and financial markets. The next round of $100-$200bn of tariff between US and China may prove more substantial. Further escalation like auto tariffs would lead us to reassess the US economic outlook.

Imperial President or Emperor With No Clothes? -  Nomi Prins - Leaders are routinely confronted with philosophical dilemmas. Here’s a classic one for our Trumptopian times: If you make enemies out of your friends and friends out of your enemies, where does that leave you?What does winning (or losing) really look like? Is a world in which walls of every sort encircle America’s borders a goal worth seeking? And what would be left in a future fragmented international economic system marked by tit-for-tat tariffs, travel restrictions, and hyper-nationalism? Ultimately, how will such a world affect regular people?Let’s cut through all of this for the moment and ask one crucial question about our present cult-of-personality era in American politics: Other than accumulating more wealth and influence for himself, his children, and the Trump family empire, what’s Donald J. Trump’s end game as president? If his goal is to keep this country from being, as he likes to complain, “the world’s piggy bank,” then his words, threats, and actions are concerning. However bombastic and disdainful of a history he appears to know little about, he is already making the world a less stable, less affordable, and more fear-driven place. In the end, it’s even possible that, despite the upbeat economic news of the moment, he could almost singlehandedly smash that piggy bank himself, as he has many of his own business ventures.Still, give him credit for one thing: Donald Trump has lent remarkable new meaning to the old phrase “the imperial presidency.” The members of his administration, largely a set of aging white men, either conform to his erratic wishes or get fired. In other words, he’s running domestic politics in much the same fashion as he oversaw the boardroom on his reality TV show The Apprentice.Now, he’s begun running the country’s foreign policy in the same personalized, take-no-prisoners, you’re-fired style. From the moment he hit the Oval Office, he’s made it clear at home and abroad that it’s his way or the highway. If only, of course, it really was that simple. What he will learn, if “learning process” and “President Trump” can even occupy the same sentence, is that “firing” Canada, the European Union (EU), or for that matter China has a cost. What the American working and the middle classes will see (sooner than anyone imagines) is that actions of his sort have unexpected global consequences. They could cost the U.S. and the rest of the world big time. If he were indeed emperor and his subjects (that would be us) grasped where his policies might be leading, they would be preparing a revolt. In the end, they -- again, that’s us -- will be the ones paying the price in this global chess match.

Desperate Asylum-Seekers Are Being Turned Away by U.S. Border Agents Claiming There’s “No Room” -- U.S. Customs and Border Protection agents are systematically violating U.S. and international law by blocking immigrants at international ports of entry on the southern border from entering the country so they can claim asylum. Immigration civil rights advocates have been documenting this illegal behavior since late 2016, from Texas to California. It was sporadic then, and appears to have been based at least in part on CBP’s difficulties with handling large numbers of people. Even so, the practice of turning immigrants away has suddenly become routine, creating chilling scenes of immigrants and children camped out near the bridges, exposed to sun, wind, and rain, amid make-do bedding, scattered clothing, and trash. A few times a day, the immigrants walk to the middle of the bridges and ask to be admitted to the port of entry building on the U.S. side so that they can request asylum. They are almost always turned back. The Intercept witnessed such a scene on June 4 in El Paso, Texas. At 6 a.m., the sun rose on a 15-year-old Guatemalan boy and his father who were trying to walk across the border to apply for asylum. They did not swim the Rio Grande or otherwise attempt to enter the country illegally — they’d made their attempt on an arcing, international bridge that joins El Paso with its Mexican sister city, Ciudad Juárez. They were stopped at the top of the bridge by two CBP agents who refused to let them cross, pointed them back to Mexico, and said to try crossing later. This was the sixth time in three days that the man, his son, and about a dozen other Guatemalans had been thus rejected. This man and others in the group told me that they were asylum-seekers afraid to go back to their home country because of violence there. They were extremely frustrated about being turned away.  “False words,” the man with the son said, in Spanish that was heavily accented by Q’eqchi’, his indigenous tongue. Another man started crying.

Trump Ordered Troops to the Border, But They’re Doing Busywork - In April, President Donald Trump announced he was ordering National Guard troops to the U.S. border with Mexico. “We’re going to do some things militarily,” Trump said. “Until we can have a wall and proper security, we’re going to be guarding our border with the military.” They have been carrying out a variety of tasks assisting the U.S. Border Patrol in the months since their initial deployment, but all with one thing in common: They’re as far away from the border as possible. In reality, the hundreds of troops deployed in southern Arizona are keeping up the rear, so to speak; in one assignment, soldiers are actually feeding and shoveling out manure from the stalls of the Border Patrol’s horses. Back in April, Trump hailed the deployment as a “big step,” claiming, “We really haven’t done that before, or certainly not very much before.” But that isn’t accurate, either: Both George W. Bush and Barack Obama sent the guard to the border under similar circumstances; Bush in far larger numbers than Trump — some 6,000 compared with up to 4,000 now, and Obama to the tune of 1,200. In Arizona, at least, the troops are being kept at an even safer distance than during previous deployments, veterans of past missions say, and assigned supporting roles that can free up Border Patrol agents for field work.  

Separation at the border: children wait in cages at south Texas warehouse --Inside an old warehouse in south Texas, hundreds of children wait away from their parents in a series of cages created by metal fencing.  One cage had 20 children inside. Scattered about are bottles of water, bags of chips and large foil sheets intended to serve as blankets.  One teenager told an advocate who visited she was helping care for a young child she didn’t know because the child’s aunt was somewhere else in the facility. She said she had to show others in her cell how to change the girl’s diaper.   On Sunday, the US border patrol allowed reporters to briefly visit the facility where it holds families arrested at the southern border, responding to new criticism and protests over the Trump administration’s “zero tolerance” policy and resulting separation of families.  More than 1,100 people were inside the large, dark facility that was divided into separate wings for unaccompanied children, adults on their own and mothers and fathers with children. The cages in each wing open into common areas, to use portable restrooms. The overhead lighting stays on around the clock. Reporters were not allowed by agents to interview any of the detainees or take photos. Nearly 2,000 children have been taken from their parents since the attorney general, Jeff Sessions, announced the policy, which directs homeland security officials to refer all cases of illegal entry into the US for prosecution.  Church groups and human rights advocates have sharply criticized the policy, calling it inhumane.  Stories have spread of children being torn from their parents’ arms, and parents not being able to find where their kids have gone. A group of congressional lawmakers visited the same facility on Sunday and were set to visit a longer-term shelter holding about 1,500 children – many of whom were separated from their parents.

White House faces growing outcry over migrant family policies | TheHill: The Trump administration appears poised for a fight over its practice of separating migrant families who cross the border illegally as a growing number of lawmakers voice concerns over it. Democrats and some Republicans have in recent days visited facilities used to house separated family members, leading to new questions about the process and growing calls for the so-called zero tolerance immigration enforcement policy to end. GOP Sens. Jeff Flake (Ariz.) and Susan Collins (Maine) wrote to the Homeland Security Department (DHS) and Health and Human Services (HHS) Department on Saturday asking for clarity on the administration's practice of separating migrant families. The letter cites multiple instances where families seeking asylum were separated, despite the administration's assurances that wasn't the case. The senators asked for details on when children are separated from their parents, what the purpose of doing so is, and how many children have been separated during the asylum claim process."It is critical that Congress fully understands how our nation’s laws are being implemented on the ground, especially when the well-being of young children is at stake," the senators wrote. Flake and Collins joined numerous congressional colleagues over the weekend in questioning or outright opposing the decision to separate migrant children from their parents. Democrats and Republicans have called the actions "inhumane," "abhorrent," and "inconsistent with our American values." 

Children make the bestest hostages -- Criticisms of Trump in the business press are especially instructive, because they have no obvious partisan motivation. So Josh Barro’s article at Business Insider this morning, castigating his “bully-and-threaten approach to dealmaking,” is particularly noteworthy. He writes:Donald Trump has a negotiating tactic he really likes: Threaten to do something someone else will really hate, and then offer to stop if they give you what you want. Call it the “Why are you hitting yourself?” approach to diplomacy. After noting that he has imposed tariffs on “national security” grounds even against US allies as a tactic to gain concessions renegotiating on existing trade agreements, they turn to the issue of immigration: Trump’s theory of immigration politics [is that] if he shows a willingness to be more cruel, he thinks that will force Democrats to the table, and that they will essentially bribe him into not mistreating vulnerable people by enacting immigration policies he’s long wanted. Look at this hostage I’ve taken, he thinks. How could they possibly let me shoot it? Like Dreamers and SCHIP recipients, the children of migrants are the most vulnerable, innocent, and helpless of all. Deliberately inflicting suffering upon them will call forth tidal waves of sympathy (witness the White House press conference the other day). So to the amoral and those without consciences, they become the perfect hostages. For that very reason, we should expect that children will be targeted again and again and again throughout the Trump presidency, and that once he has pocketed the ransom, the moment that he the ability to renege on the deal, and take the same hostages all over again, he will do so. Thus, for example, already we hear that funding for SCHIP, which was agreed to for 6 years under the February budget deal, is nevertheless again being zeroed out by the House GOP’s proposed budget for next year. Dealing with such a deliberate tactic calls for cold-blooded calculation, and steely determination. Barro writes: In government, a combination of pride and political constraints make it very difficult for Trump’s counterparties to take the hit and give him what he wants so he will go away. Plus, they know they will have to deal with him in the future and had better not get a reputation for folding easily.

Border Patrol Says Yes, We're Definitely Keeping Kids in 'Cages,' but Please Stop Saying That - Amid Homeland Security Secretary Kristjen Nielsen straight-up lying about the Trump administration’s very real and current policy of separating families at the border comes yet another misdirection effort: Whether or not it’s fair to say the government is keeping detained children in cages.This morning, CBS News reported Border Patrol took issue with the media use of the word “cages,” not because it’s inaccurate, but because it’s a deeply “uncomfortable” word for people to keep using to describe the situation.  “They are very uncomfortable, in their words, with this characterization of the word ‘cages,’” co-host Gayle King said on the air. “They said it’s not inaccurate, but they’re very uncomfortable with using the word ‘cages.’”She continued: “They said they may be cages, but they’re not being treated like animals.” Truly incredible. Putting human beings in cages is kind of the definition of treating them like animals, but it seems Border Patrol seems to think they’re the REAL victim here. This inane battle over semantics is another pathetic attempt to derail the conversation about why this policy is allowed to persist, and does nothing to change the fact that this treatment of these immigrants by the United States of America is barbaric.

Trump’s tent city in the desert could be a public health disaster - The Trump administration policy of separating children from their parents at the border is a grotesque horror show. Children are being kept in cages. And as of this weekend, they’re being sent to a tent city in the blistering Texas heat, a move that raises the risk of serious health issues. The first tent city to house children sprung up last week in Tornillo, which sits right on the U.S.-Mexico border. It’s designed to host 400 boys aged 16- or 17-years old. It also opened smack in the middle of a heat wave. Temperatures there are forecast to top out above 100 degrees Fahrenheit every day this week, while the coolest night is forecast to reach 72 degrees Fahrenheit. The town currently averages 120 days above 90 degrees Fahrenheit a year, 22 of which are above 100 degree Fahrenheit according to data compiled by Climate Central. In other words, this heat isn’t going anywhere anytime soon. Pictures of the camp captured by the Texas Tribune show that the tents have no shade around them. At least they’re air conditioned according to the Department of Health and Human Services, which should help ameliorate some of the health concerns. But it’s doesn’t wipe them out completely. “The risk of acute physical illness remains significantly high and needs to be weighed in during discussion on the care of children being detained in non-children friendly spaces away from their parents,”  . Young adults are generally more resilient to heat-related illness, but the kids in the detention centers have in many cases traveled long distances under stressful conditions and are now unsure when they’ll see their parents again or what fate the Trump administration has in store for them. That stress takes a toll, and can leave kids more vulnerable than usual. Satsuki Ina, a psychotherapist who was born in a Japanese internment camp, spoke with Splinter about the biological impact and what it means: “That level of anxiety causes tremendous emotional stress, and we know from the research in neuroscience that constant release of these stress hormones can affect a child’s ability to learn, a child’s ability to self-manage, to regulate themselves.” That last part with emphasis added is one of the biggest concerns in a hot environment. Virtually anyone who spends time outdoors in extreme heat risks heat-related illness, but the effects of extreme emotional stress only exacerbate the threat.

Laura Bush: Separating children from their parents at the border ‘breaks my heart’ - WaPo - On Sunday, a day we as a nation set aside to honor fathers and the bonds of family, I was among the millions of Americans who watched images of children who have been torn from their parents. In the six weeks between April 19 and May 31, the Department of Homeland Security has sent nearly 2,000 children to mass detention centers or foster care. More than 100 of these children are younger than 4 years old. The reason for these separations is a zero-tolerance policy for their parents, who are accused of illegally crossing our borders.  I live in a border state. I appreciate the need to enforce and protect our international boundaries, but this zero-tolerance policy is cruel. It is immoral. And it breaks my heart.  Our government should not be in the business of warehousing children in converted box stores or making plans to place them in tent cities in the desert outside of El Paso. These images are eerily reminiscent of the Japanese American internment camps of World War II, now considered to have been one of the most shameful episodes in U.S. history. We also know that this treatment inflicts trauma; interned Japanese have been two times as likely to suffer cardiovascular disease or die prematurely than those who were not interned.  Americans pride ourselves on being a moral nation, on being the nation that sends humanitarian relief to places devastated by natural disasters or famine or war. We pride ourselves on believing that people should be seen for the content of their character, not the color of their skin. We pride ourselves on acceptance. If we are truly that country, then it is our obligation to reunite these detained children with their parents — and to stop separating parents and children in the first place. People on all sides agree that our immigration system isn’t working, but the injustice of zero tolerance is not the answer. I moved away from Washington almost a decade ago, but I know there are good people at all levels of government who can do better to fix this.

‘Hate to see it’: Melania Trump speaks out against child separations at border -- In a rare public statement, Melania Trump has spoken out against the separation of children from their parents at the US-Mexico border. Photograph: Carlos Barria/Reuters Melania Trump’s spokeswoman has said the first lady “hates to see children separated from their families”, in what at first appeared to be a rare public statement at odds with her husband’s policy of separating children from their parents at the Mexico border. Stephanie Grisham said the first lady believed “we need to be a country that follows all laws”, but also one “that governs with heart”. She added: “Mrs Trump … hopes both sides of the aisle can finally come together to achieve successful immigration reform.”Former first lady Laura Bush has made a similar plea, writing in the Washington Post that a zero-tolerance policy was “cruel” and “immoral”. But unlike Melania Trump, Bush placed responsibility firmly on the Trump administration’s policy, not “both sides”.   “The reason for these separations is a zero-tolerance policy for their parents, who are accused of illegally crossing our borders,” she wrote. Melania Trump’s intervention came as reports emerged of children being held in cages at a warehouse in Texas after being separated from their parents. One cage had 20 children inside. By blaming “both sides”, Melania Trump effectively endorsed her husband’s false claim that Democrats are responsible for his administration’s practice of separating parents and children. The administration announced its “zero-tolerance” enforcement policy in April and has publicly defended the practice as a vital tool for deterring unauthorized migration across the southern border.

Poll: Republicans Approve of Trump’s Family Separation Policy -- Nearly every day, voters have been confronted with heart wrenching stories about immigrant children being separated from their parents upon crossing the border into the United States. The president incorrectly blames his administration’s policy on Democrats, but regardless of his attempt to pass the responsibility, self-identified Republicans have his back, according to a new Ipsos poll done exclusively for The Daily Beast. The poll of roughly 1,000 adults aged 18 and over, and conducted June 14-15, asked respondents if they agreed with the following statement: “It is appropriate to separate undocumented immigrant parents from their children when they cross the border in order to discourage others from crossing the border illegally.”Of those surveyed, 27 percent of the overall respondents agreed with it, while 56% disagreed with the statement. Yet, Republicans leaned slightly more in favor, with 46% agreeing with the statement and 32 percent disagreeing. Meanwhile, 14 percent of Democrats surveyed supported it and only 29% of Independents were in favor.The sample, according to Ipsos, included 339 Democrats, 335 Republicans and 204 Independents.On Saturday, President Trump continued to falsely assert that Democrats were to blame for the horrific stories of families being torn apart. “Democrats can fix their forced family breakup at the Border by working with Republicans on new legislation, for a change!” Trump tweeted.

Trump administration planning massive expansion of jails for immigrant children - The Trump administration is preparing to dramatically expand the number of immigrant children imprisoned and separated from their families. Officials told the Washington Examiner that the administration plans to expand child detention to 30,000 by August, detaining 250 additional children per day. This corresponds to new reports from the border. Sister Norma Pimentel, executive director of Catholic Charities of the Rio Grande Valley, told the World Socialist Web Site: “They are trying to increase capacity at the tent cities so that nobody is released. That’s their goal, and we will probably see that very soon. There are other locations where tent cities are coming. I hear they will be increasing these more.”Department of Homeland Security (DHS) Secretary Kirstjen Nielsen made an unexpected return to Washington DC to give a fascistic press briefing yesterday afternoon in which she said reports of cruelty were “hearsay” and merely a “narrative.” The real issue, she said, is that “the border is being overrun by those who have no right to cross it.”Children are being “well taken care of,” she lied, calling it “offensive” that any reporter would call the policy inhumane and adding that family separation “is not a controversial idea.” Earlier yesterday, she tweeted that opposition to the policy is the product of “misreporting” by “press & advocacy groups,” which is “irresponsible and unproductive” and “must stop.”Trump responded to growing opposition by demonizing immigrant parents in a series of Monday morning tweets. In one, he declared, “Children are being used by the worst criminals on earth as a means to enter our country.”At a press conference with military leaders later, Trump echoed the language of Italian neo-fascists when he said, “The United States will not be a migrant camp and it will not be a refugee holding facility, not on my watch.”

Trump administration scrambles as outrage grows over border separations - The Trump administration struggled on Monday to defend its policy of separating parents from their sons and daughters at the southern US border amid growing national outrage and the release of a shocking recording of sobbing children. As the White House scrambled to respond to the deepening political crisis, the homeland security secretary, Kirstjen Nielsen, flew from New Orleans to Washington to face a barrage of questions from reporters, even as Democrats demanded her resignation and the outcry reached a critical mass. Nielsen claimed that America was a country of “compassion” and “heart” but was unable to square the circle regarding whether the separations were a vindication of the administration’s “zero tolerance” policy towards illegal immigration or an unintended consequence of a law made by the US Congress.  During the West Wing briefing, she did not hear – or ignored – a reporter at the back of the room who played secretly recorded audio, first obtained by ProPublica, in which several Central American children, separated from their parents last week, can be heard crying for their “Mami!” and “Papa!”  On the recording, one child says: “I don’t want them to stop my father, I don’t want them to deport him.” A border agent can be heard joking through the wails: “Well, we have an orchestra here, right? … What we’re missing is a conductor.” Nielsen – who Trump has reportedly criticised in private for failing to tackle border security – told reporters she had not heard the recording. Trump has found himself at the centre of many moral storms since becoming president nearly 18 months ago but they have more often related to words than to actions. The border separations, however, appear to have crossed a new line as the audio recording emerges, as well as harrowing photos of children in tears or in fenced cages, provoking some to draw comparisons with concentration camps.

DHS Secretary Kirstjen Nielsen’s defense of separation of families at the border: it’s not a “policy” - Vox - The nationwide outrage over the Trump administration’s separation of families at the US-Mexico border has the administration on the defensive. Some officials defend family separation as a totally justifiable action when parents have crossed the border illegally; others (including the president himself) claim the administration has no choice but to separate families because of some “law” that does not, in fact, exist. And then there’s Homeland Security Secretary Kirstjen Nielsen, who thinks the right response is to assert flatly that “We do not have a policy of separating families at the border. Period.” Nielsen’s tweet is true — but only in the narrowest and most pedantic way possible. As I wrote last week: To be clear, there is no official Trump policy stating that every family entering the US without papers has to be separated. What there is is a policy that all adults caught crossing into the US illegally are supposed to be criminally prosecuted — and when that happens to a parent, separation is inevitable. Administration officials knew full well that by signing off on a “zero-tolerance” prosecution policy (which was formally rolled out in early May), they were going to cause thousands of parents to be separated from their children. The Washington Post’s Maria Sacchetti reported in April on the existence of a memo from senior Department of Homeland Security officials urging Nielsen to adopt the “zero-tolerance” policy; the first sentence of Sacchetti’s piece describes the proposal as “a stark change in policy that would result in the separation of families that until now have mostly been kept together.” In fact, it’s hard to argue that DHS officials aren’t referring parents to be prosecuted, at least in large part, so that they can separate parents from their children.

Migrants Separated From Their Children at U.S. Border Mostly Come From Central America - Most of the migrant families whose children are being separated from their parents at the southern U.S. border come from Honduras, Guatemala and El Salvador, Central American nations plagued by grinding poverty and some of the worst criminal violence in the world, experts say. “They are coming for a mix of reasons, some because of fear of extreme violence and some looking for better economic opportunities,” says Andrew Selee, president of the Migration Policy Institute, a Washington-based think tank. Analysts say it is too soon to tell whether the Trump administration’s recently announced “zero tolerance” policy, which calls for the prosecution of all migrants crossing into the U.S. illegally, is having any impact in migration flows.Inaccurate information about family separations since the U.S. government announced its new policy is also playing a role, says Alessio Mirra, the advocacy coordinator at the Casa del Migrante shelter, run by the Catholic Church in northern Mexico. “Smugglers are providing misleading information, and that prompts a lot of Central American families escaping violence and poverty to believe that they can cross the U.S.-Mexico border with their children,” he says.The Casa del Migrante receives around 6,000 mainly Central American migrants crossing Mexico each year, he says. Most of them are young adults 17 to 24 years old seeking to request asylum in the U.S.Tonatiuh Guillen, the director of Mexican university Colegio de la Frontera Norte, sees no variations in short-term migration patterns.“  The alternative for them is worse. They prefer to take risks rather than return to their countries where they suffer from tremendous violence and unemployment,” he added.Increased immigration from Central America predates the Trump administration, says Doris Meissner, who served as President Bill Clinton’s Immigration and Naturalization Service commissioner.But the number of illegal migrants apprehended along the southern border fell sharply in fiscal 2017 from fiscal 2016, a decline some analysts said was due to what they called the “Trump effect”—Mr. Trump’s harsh rhetoric against illegal migration accompanied by increased deportations. Illegal migration by Mexicans, in turn, has fallen sharply due to rising costs and risks of crossing the border with the help of smugglers who belong to criminal gangs. Mexico’s economic stability and lower demographic growth have also contributed to the decline. But the number of Central Americans seeking refugee status in the U.S. has grown dramatically over the last decade as gang violence and political instability have escalated. Asylum petitions from El Salvador, Guatemala and Honduras grew 800% between 2010 and 2016, according to the most recent Justice Department figures.

Listen to Children Who’ve Just Been Separated From Their Parents at the Border —  The desperate sobbing of 10 Central American children, separated from their parents one day last week by immigration authorities at the border, makes for excruciating listening. Many of them sound like they’re crying so hard, they can barely breathe. They scream “Mami” and “Papá” over and over again, as if those are the only words they know. The baritone voice of a Border Patrol agent booms above the crying. “Well, we have an orchestra here,” he jokes. “What’s missing is a conductor.” Then a distraught but determined 6-year-old Salvadoran girl pleads repeatedly for someone to call her aunt. Just one call, she begs anyone who will listen. She says she’s memorized the phone number, and at one point, rattles it off to a consular representative. “My mommy says that I’ll go with my aunt,” she whimpers, “and that she’ll come to pick me up there as quickly as possible.”  An audio recording obtained by ProPublica adds real-life sounds of suffering to a contentious policy debate that has so far been short on input from those with the most at stake: immigrant children. More than 2,300 of them have been separated from their parents since April, when the Trump administration launched its “zero tolerance” immigration policy, which calls for prosecuting all people who attempt to illegally enter the country and taking away the children they brought with them. More than 100 of those children are under the age of 4. The children are initially held in warehouses, tents or big box stores that have been converted into Border Patrol detention facilities.

Trump Doubles Down On Immigrant Crackdown: Vows To Stop Illegals Who "Infest" The US - President Trump lashed out at Democrats in a series of morning tweets on immigration - the latest defense of his administration's new "zero tolerance" policy of enforcing rules created and enforced under the Bush and Obama administrations - while the left is now making "internment camp" comparisons. "Democrats are the problem," said Trump. "They don’t care about crime and want illegal immigrants, no matter how bad they may be, to pour into and infest our Country, like MS-13." The President then said that since Democrats "can’t win on their terrible policies" they view illegals as "potential voters" - ostensibly referring to granting undocumented migrants amnesty.  Democrats are the problem. They don’t care about crime and want illegal immigrants, no matter how bad they may be, to pour into and infest our Country, like MS-13. They can’t win on their terrible policies, so they view them as potential voters!— Donald J. Trump (@realDonaldTrump) June 19, 2018In a subsequent tweet, Trump said "We must always arrest people coming into our Country illegally," and that " Of the 12,000 children, 10,000 are being sent by their parents on a very dangerous trip, and only 2000 are with their parents." We must always arrest people coming into our Country illegally. Of the 12,000 children, 10,000 are being sent by their parents on a very dangerous trip, and only 2000 are with their parents, many of whom have tried to enter our Country illegally on numerous occasions.— Donald J. Trump (@realDonaldTrump) June 19, 2018Which raises additional questions: To be clear: 80% of these migrant children came without parents. They separated from their families and then came across the border — Jack Posobiec (@JackPosobiec) June 19, 2018

Trump aides plan fresh immigration crackdowns before midterms - Top aides to President Donald Trump are planning additional crackdowns on immigration before the November midterms, despite a growing backlash over the administration’s move to separate migrant children from parents at the border.Senior policy adviser Stephen Miller and a team of officials from the departments of Justice, Labor, Homeland Security and the Office of Management and Budget have been quietly meeting for months to find ways to use executive authority and under-the-radar rule changes to strengthen hard-line U.S. immigration policies, according to interviews with half a dozen current and former administration officials and Republicans close to the White House.  The goal for Miller and his team is to arm Trump with enough data and statistics by early September to show voters that he fulfilled his immigration promises — even without a border wall or any other congressional measure, said one Republican close to the White House. Among the fresh ideas being circulated: tightening rules on student visas and exchange programs; limiting visas for temporary agricultural workers; making it harder for legal immigrants who have applied for welfare programs to obtain residency; and collecting biometric data from visitors from certain countries. Details of the ideas are still being worked out, one White House official said. In one of the most closely watched plans under discussion, DHS has proposed a new rule that former Obama administration officials and immigration advocates worry could be used as an end run around a 1997 court settlement that limits the time migrant children can be kept in government custody. Putting a formal government rule in place, lawyers and advocates say, could in effect supersede the settlement, allowing the administration to get rid of it altogether by dropping the rule a year or two later. “Once you rescind that regulation, then you go back to being able to do whatever you want and the detention becomes the complete discretion of ICE,”

The Lump That Begot Trump --I don’t want to pretend that this explains everything. But it is “another brick in the wall,” so to speak, if not the keystone. In January 2015, Senator Jeff Sessions produced an “Immigration Handbook for the New Republican Majority,” written by his communications director, Stephen Miller.mMiller’s analysis in the handbook is just the sort of thing that economists would denounce as a “lump-of-labor fallacy.” Curiously enough, few did. They were much too busy snatching pensions from future old folks on the pretext that older people working longer wouldn’t “steal jobs” from youth. Here are a few representative arguments from the handbook:The last four decades have witnessed the following: a period of record, uncontrolled immigration to the United States; a dramatic rise in the number of persons receiving welfare; and a steep erosion in middle class wages. But the only “immigration reforms” discussed in Washington are those pushed by interest groups who want to remove what few immigration controls are left in order to expand the record labor supply even further. . No issue more exposes the Democrats’ colossal hypocrisy than their support for an immigration agenda pushed by the world’s most powerful interest groups and businesses that clearly results in fewer jobs and lower wages for Americans.Here are the findings from a poll of likely U.S. voters commissioned by GOP pollster Kellyanne Conway:

• 77% of respondents said jobs should go to current U.S.-born workers or legal immigrants already in the country—instead of bringing in new workers to fill those jobs
• 88% of conservatives, 78% of moderates, 78% of independents, 71% of Democrats and 62% of liberals says current U.S. workers should get jobs preference
• 80% of respondents said businesses should recruit the currently unemployed instead of expanding the labor supply with new workers from other countries

 How are any members of the Democrat caucus going to explain why they are determined to provide instant work permits to every illegal immigrant and visa overstay in the country? How are they going to explain why they want to double the number of guest workers when we don’t have enough jobs for the workers here right now? How are they going to explain why they voted for legislation that will surge the labor supply at a time when wages are down and a record number of Americans can’t find work?

The United States of America: Land of internment camps - The United States government has implemented a policy of separating thousands of immigrant children from their parents and locking them in cages in desert tent cities. The American Academy of Pediatrics calls this “child abuse”, Amnesty International says it is “nothing short of torture”, and the United Nations denounces it as “despicable” and an “unconscionable” violation of human rights. American history has no shortage of ugly episodes—the Trail of Tears, the jailing of fugitive slaves, the deportation of suspected radicals after World War I and the internment of the Japanese-Americans during World War II are only among the most notorious. But the present policy of inhuman persecution and victimization of children represents a level of political depravity and moral degradation that almost defies description. This is happening in the twenty-first century, in a country whose leaders boast endlessly and hypocritically of American democracy and respect for human rights. Across the United States, thousands of children are currently sitting on concrete slabs locked in cages like animals. Many do not know where their parents are and they are barred from speaking to them. Each day there are 250 more detained children than the day before. A constellation of camps and tent cities is cropping up across the country, some in desert areas where temperatures are over 100 degrees, to handle the growing detainee population. The crowded jails are filled with the sound of frightened children crying. Guards subject many children to verbal, physical and sexual abuse. In its level of extreme brutality and callousness, the family separation policy resembles the policies of the Nazi Gestapo. It is a point of departure in American history from which there is no turning back.  The claim that the US represents a force for “democracy” and “human rights” worldwide is shattered. Such claims were used to invade or intervene in those regions of the world from which tens of millions are now trying to flee. Throughout Central America in the 1970s and 1980s, the US backed dictators whose death squads murdered and tortured hundreds of thousands. To this day entire societies remain in ruin. The US killed some 3 million people in Vietnam, Cambodia and Laos in the 1960s and 1970s. American imperialism continues to lay waste to much of North Africa, the Middle East and Central Asia, with the death toll in the millions. Now, the children of the victims of these wars are being thrown in cages by their former invaders.

Trump’s Immigration Policy: It’s Child Abuse According to Experts - Pam Martens -  According to Dr. Colleen Kraft, President of the American Academy of Pediatrics, the U.S. President of the United States, Donald Trump, is deploying a policy of separating immigrant children from their parents at the U.S. southern border that is tantamount to child abuse. Speaking on CBS News (see video below), Dr. Kraft said when she visited a detention facility for separated children in Texas she saw a toddler girl “sobbing, wailing and beating her little fists on the mat.” She said staff there are told they are not allowed to hold a child to comfort them when they are crying. Dr. Kraft explained that what this kind of emotional stress can do to a child is “disrupt the synapses and the neurological connections that are part of the developing brain.” When asked if the children can recover from this kind of trauma, Dr. Kraft said: “This type of trauma can be long lasting and it’s difficult to recover from this. We know very young children who are exposed to this type of trauma go on to not develop their speech, not develop their language, not develop their gross and fine motor skills and wind up with developmental delays.” Millions of adult Americans know firsthand the emotional trauma that is caused to a child from a sudden separation from a nurturing parent.  On top of this expert testimony, consider the report from ProPublica yesterday that included a tape recording of traumatized and distraught sobbing toddlers and young children who were separated recently from their parents by immigration officials at the U.S. southern border and being held in a detention center without any communication with their parents. A 6-year old girl can be heard begging for someone to call her aunt to come and pick her up. She says she has memorized her aunt’s phone number and proceeds to recite it in a desperate plea for someone to help her. Someone did. A civil rights lawyer who was allowed inside the facility made the tape recording and turned it over to reporter Ginger Thompson at ProPublica. Thompson appeared on the popular Rachel Maddow show on MSNBC last evening. The tape was played, bringing awareness to millions more Americans of the crimes against humanity that President Donald Trump is carrying out in our name.

Trump urges House GOP to fix immigration system, expresses no strong preference on rival bills amid uproar over family separations - President Trump implored anxious House Republicans to fix the nation’s immigration system but did not offer a clear path forward amid the growing uproar over his administration’s decision to separate migrant families at the border.Huddling with the GOP at the Capitol on Tuesday evening, Trump stopped short of giving a full-throated endorsement to immigration legislation meant to unite the moderate and conservative wings of the House Republican conference.“He didn’t really tell us what bill to vote for,” said Rep. Markwayne Mullin (R-Okla.). He said Trump laid out his main principles on immigration and told Republicans he “wanted to take care of the kids” — a reference to the unfolding family separation crisis.  Trump has repeatedly defended his immigration crackdown, including forcibly separating migrant children from their parents as they arrive at the border. But images of young children housed in metal cages have set off a nationwide outcry that has reached the White House.Trump described for Republicans how his daughter Ivanka, a senior White House adviser, told him that the images from the border of families being separated were terrible, according to multiple GOP lawmakers who attended the session. “Can we do anything to stop this?” Trump quoted her saying, according to one lawmaker.   The president’s reaction to his daughter’s remarks, the lawmaker said, was to call it a “tough issue” and push Congress to act: “We need to figure this out,” Trump said. “It’s a sad situation.” Despite the president’s visit, there was no guarantee that the Republican-led Congress would pass any legislation on immigration, an issue that has exposed deep rifts in the GOP and threatens the party’s control of Congress in November’s midterm elections. On Wednesday morning, Trump tried again to pin blame on Democrats, writing on Twitter that the country’s immigration laws are “the weakest and worst anywhere in the world, and the Dems will do anything not to change them.” In another tweet, Trump said he was “working on something” but provided no details.

Schumer rejects GOP proposal to address border crisis - Senate Democratic Leader Charles Schumer (N.Y.) on Tuesday dismissed a legislative proposal backed by Republican leaders to keep immigrant families together at the border, arguing that President Trump could fix the problem more easily with a flick of his pen.“There are so many obstacles to legislation and when the president can do it with his own pen, it makes no sense,” Schumer told reporters. “Legislation is not the way to go here when it’s so easy for the president to sign it.”Asked if that meant Democrats would not support a bill backed by Senate Majority Leader Mitch McConnell (R-Ky.) to keep immigrant families together while seeking asylum on the U.S. border, Schumer said they want to keep the focus on Trump.  “Again, the president can change it with his pen,” he said, warning that Republicans would likely try to add poison-pill provisions to any immigration bill that came to the floor. “Unacceptable additions have bogged down every piece of legislation we’ve done,” he said. Schumer’s opposition to a legislative fix means there likely won’t be a quick end to the emotional images of immigrant children being separated from their families unless Trump backs down and reverses his “zero tolerance” policy.

8 states refuse to deploy National Guard troops to border in protest of Trump immigration policies - U.S. governors, both Republican and Democrat, are refusing to deploy their state’s National Guard troops to the southern border in response to the Trump administration’s policy of separating immigrant children from their families.In April, President Donald Trump signed a proclamation to deploy the National Guard to the border, saying he wanted 2,000 to 4,000 troops in a bid to cut down on illegal immigration. Department of Homeland Security Secretary Kirstjen Nielsen said the order requires her department and the Pentagon to work in tandem with governors. Some governors refused once the initial request was made two months ago, including Gov. Kate Brown (D) of Oregon and Gov. Phil Scott (R) of Vermont. California Gov. Jerry Brown (D) sent 400 California National Guard troops to the border with Mexico, but only under strict conditions that they would not be involved in immigration enforcement, the construction of a wall or “guard people taken into custody for alleged immigration violations.”While no governors from border states have announced their intention to halt the deployment of National Guard troops, at the time of publication, eight states have: Maryland, Massachusetts, Virginia, Rhode Island, Colorado, New York, North Carolina, and Connecticut. All cited the administration’s draconian family separation policy as their reason for withholding or recalling National Guard from the southern border.

Shocking Testimony: Civil Rights Attorney Asked Obama To Close Migrant "Baby Jails" In 2015 - In late May as "new" images of migrant children sleeping in cages at an ICE detention facility began going viral after they were tweeted out by several prominent liberals, we were among the first to point out that the photos driving the new found white-hot rage at President Trump's immigration policies were from 2014 under Obama, and not Trump. Yet a wave of popular anger has surged as the left has "discovered" Trump's army of "baby snatchers" and border "concentration camps", and investigative journalists are now flocking to border detention facilities to chronicle the stories of hardship and suffering endured by migrants, complete with heart-wrenching audio recordings of children crying for their parents. Once American discourse inevitably goes into blind hyperpartisan mode on any given issue as it has on this one — with Fox News referencing the border detention centers as "essentially summer camps" on the one hand and a popular movement to get the facilities labelled "concentration camps" on the other — it becomes harder and harder to come by much that passes for informed critical analysis. But on Monday, in a rare instance of commentary that cuts through the shrill cacophony of voices ready to set up new Nuremberg trials, a prominent immigration attorney and civil rights activist took to twitter to reveal a rare exchange he had with then President Obama in 2015.  Below is immigration attorney and civil rights activist R. Andrew Free's account of his questioning Obama on the migrant "baby jails" which had been in operation under his administration. In 2015, I shook President Obama’s hand, thanked him for DACA, and asked him to reverse course and close the for-profit baby jails (also known as “family detention centers”) he opened in Dilley & Karnes City, Texas. What he said shook me to my core... Specifically, I told him, “It’s wrong. And it’s going to be a stain on your legacy.” He stopped moving on to the next person in the rope line and looked back at me. I’d gotten his attention. He turned back, looked at me and “Are you an immigration lawyer?” “Yes”. Just days before, President Obama’s senior immigration policy advisor Cecilia Munoz had received a chilly welcome during her keynote address to the AILA (American Immigration Lawyers Association) with silent protest & signs saying "End Family Detention". So the President’s immediate association of “End Family Detention” with immigration lawyers wasn’t random. He’d been told and believed we were basically the only ones who’d care, and even then, it would be a minority of us that wouldn’t extract from him a political cost.

Flashback: Both Hillary And Obama Advocated Separating Migrant Families, Strict Border Control While the left rages against "separated migrant children" which they blame on President Trump's "zero tolerance" enforcement policy of Bush-era rules, several "inconvenient" video clips have cropped up revealing both Hillary Clinton and Barack Obama advocating virtually the same border policy they are currently attacking Trump over.  For example, Hillary Clinton said during a 2014 CNN Town Hall;  "We have to send a clear message, just because your child gets across the border - doesn't mean your child gets to stay"  And let's not gloss over the fact that Obama separated migrant families, while taking criticism for encouraging migration while ignoring the growing crisis at the border. 'How many precious lives must be needlessly lost, women raped, girls forced into sex trafficking or people trapped into the drug trade before the Obama administration stops luring them here with continued grants of amnesty, legal status, work permits, and benefits?' asked Rep. Louie Gohmert. -Daily Mail (2014) But wait - rolling the calendar back to 1995 when Bill Clinton promised to crack down on illegal immigration, we have the following quote: "In the budget I will present to you, we will try to do more to speed the deportation of illegal aliens who are arrested for crimes, to better identify illegal aliens in the workplace. We are a nation of immgrants, but we are also a nation of laws."

Human Trafficking? Sessions Proposes DNA Tests For Border Migrants - Attorney General Jeff Sessions has been talking to members of Congress about using DNA testing to verify whether children crossing the southern U.S. border are biologically related to adults they arrive with, or if they are being smuggled into the country by human traffickers, Tony Perkins, President of the Family Research Council. “Sessions is talking to congressional members and is hoping for a legislative fix,” Perkins said, adding that the DOJ would like to see “just, fair and enforceable” immigration policies. To that end, “They are looking at how to use DNA tests in the field to verify they are parents and not traffickers," according to Perkins. Sessions told Perkins “We know for a fact that a lot of adults taking children along are not related to them. [They] could be smugglers. They could be human traffickers. It’s a very unhealthy dangerous thing and it needs to end. We need to return to a good lawful system,” Sessions told Perkins on his broadcast.

What Kind Of Country Are We? - Kurt Nimmo - What Kind Of Country Are We? That’s what Time magazine tweeted this morning. It is trying to place the blame for Trump’s immigration policy - specifically, his separation policy - on all Americans.  Time wants us to stand up for the children.TIME’s new cover: A reckoning after Trump's border separation policy: What kind of country are we? https://t.co/U4Uf8bffoR pic.twitter.com/sBCMdHuPGc   But Time says nothing about the slaughter and starvation of children in Syria, Libya, Iraq, Afghanistan, and in particular Yemen. The US is assisting the Saudis in their genocidal war against the Houthi. It’s helping the fascists in Ukraine kill civilians in Donbas. It’s selling murder hardware to dictators and sadists.  When was the last time they did a cover denouncing Trump for his bombing campaigns in Syria and Iraq that have killed thousands of civilians? Are dead babies buried in rubble less important than immigrants from Mexico and Honduras?  Time’s publisher, Henry Luce, had a close relationship with the CIA.  CIA employees traveled with Time-Life credentials as cover in the 1950s. The Luce family financed efforts to kill Fidel Castro.  “Luce, according to CIA officials, made it a regular practice to brief Dulles or other high Agency officials when he returned from his frequent trips abroad. Luce and the men who ran his magazines in the 1950s and 1960s encouraged their foreign correspondents to provide help to the CIA, particularly information that might be useful to the Agency for intelligence purposes or recruiting foreigners.” Luce is long gone and Time - a staunch Republican periodical during his time - has since embraced the establishment’s shift to “progressive” politics. It is now the preferred political control mechanism.  The rotting piles of corpses - many of them children - in the Middle East and Africa will never make it to the cover of Time magazine. Endless war does not elicit the same kind of squishy humanism on the part of Democrats and liberals as the mistreatment of children crossing the border. The establishment hates Donald Trump even as he goes along with the agenda - the same agenda followed by Obama, Bush, and Clinton. He’s an outlier. It was Hillary’s turn and Democrats are pissed this brusque former casino and real estate magnate “stole” the election by exploiting the anger of the American people. Not much has changed. We are still the kind of people who turn our backs on the victims of endless war in the name of a crumbling empire.

Separating Children From Their Families Is Nothing New, US Has Been Doing It For Decades - The United States has had a longstanding foreign policy of separating thousands of children from their parents on a daily basis. Arguably, this decades-long policy that has continued through both Democrat and Republican administrations is even worse than the current “zero-tolerance” immigration policy, given that the US has been separating thousands of children from their families using explosive devices, not detention centers.On the campaign trail, then-candidate Trump vowed that he would “take out” the families of Islamic State (IS, formerly ISIS) fighters and no one seemed to bat an eyelid at the time. While no one was looking, he began doing just that – and more. Soon after ascending to office, he relaxed the so-called Obama-era restrictions on airstrikes in multiple warzones, meaning that commanders on the field could call in airstrikes with almost all but zero oversight. The result was mass murder and chaos, as the commander-in-chief dropped 20,650 bombs in a mere six-month window.One such airstrike in Mosul, Iraq killed between 200 and 300 civilians in a single strike. An investigation carried out by the Associated Press in relation to the total civilian death toll in the campaign to retake Mosul suggests that over 9,000 civilians lost their lives due to the barrage of strikes that the US-led coalition exacted in the area.  In Syria’s Raqqa, a territory which the US had no legal authority to bomb in the first place, its forces destroyed 80 percent of the entire city, rendering it uninhabitable. Through its violent policy, the US was wiping out entire families, one by one, with no regard at all for civilian life. One such airstrike in Raqqa killed a mother and her three children. Another such airstrike killed 30 members of a single family.Barely two weeks ago, Amnesty International released an explosive report which called the US-led operation in Raqqa a “war of annihilation.” The report details four further cases of civilian families who lost 90 relatives and neighbors. One family lost 39 members in total, all of them by coalition airstrikes.  Reuters described the plight of one resident in Raqqa who came outside to find several of his neighbors lying dead on the street, with cats eating the corpses. It later transpired that the US was doing all of this while allowing thousands of ISIS fighters to escape safely from Raqqa in order to head to Deir Ez-Zor, Syria’s most oil-rich region. In other words, the US was still somehow managing to drop a bomb every eight minutes in Raqqa, yet they allowed their prime enemy to escape safely under their cover, knowing full well they were wrecking civilian life in the process. In Yemen, the US-backed Saudi-led coalition destroyed a family’s home, leaving a four-year-old Yemeni girl as the sole survivor. She wasn’t taken from her parents and put in a center – her parents were violently taken away from her for eternity.   In addition to supplying billions of dollars’ worth of arms to the Saudi kingdom, US and UK personnel provide overwhelming assistance to the Saudi-led coalition to wreak this devastation on Yemen by sitting in the Saudi’s command and control center, refueling Saudi warplanes, providing intelligence and having access to lists of targets.

Trump signs executive order to stop family separations at border - President Donald Trump on Wednesday signed an executive order to allow children to stay with parents caught crossing the border illegally -- moving to stop the family separations that have triggered a national outcry and political crisis for Republicans.  The measure would allow children to stay in detention with parents for an extended period of time. This comes as congressional Republicans scramble to draft legislation to address the same issue, but face challenges mustering the votes.  In signing the measure, Trump said he wants to keep families together while also enforcing border security. He vowed his administration's "zero tolerance" policy for illegal immigration would continue.  Trump, previewing the measure earlier in the day during a meeting with lawmakers, said the move would "be matched by legislation." He also said he's canceling the upcoming congressional picnic, adding: "It didn't feel exactly right to me."

Trump gives in, signs order ending family separations | TheHill: President Trump on Wednesday signed an executive order intended to end family separations at the southern border, giving in to intense bipartisan pressure on an issue that had drawn worldwide condemnation of his administration. Trump told reporters in the Oval Office before signing the document that his “zero tolerance” policy against illegal border crossing will remain in place, but that the order allows children and their parents to remain together in custody. “We’re going to have strong, very strong borders, but we’re going to keep the families together,” Trump said. “I didn’t like the sight or the feeling of families being separated.” As he signed the order, Trump added: “You're going to have a lot of happy people.” The decision marked a surprising reversal for Trump, who has falsely claimed for more than a week that his hands were tied by federal laws and court rulings from stopping the separation of families apprehended at the border. “Congress and the courts created this problem, and Congress alone can fix it,” Homeland Security Secretary Kirstjen Nielsen, who stood next to Trump at the Resolute Desk during Wednesday's signing, said earlier this week. But the president decided to change course following days of blanket news coverage featuring images of young children, often in tears, being held in metal cages inside detention facilities near the U.S.-Mexico border. Those images sparked an international outcry, which was amplified by Pope Francis, who called family separation “immoral.” Republican lawmakers criticized the practice as “cruel” and expressed concern the issue could hurt the party’s chances ahead of the November midterm elections. 

24 Hours of Unprecedented News on Trump’s War on Immigrant Children - Pam Martens - Over the past 24 hours, everyone from the Pope to Fox TV producers to foreign leaders like U.K. Prime Minister Theresa May to top corporate CEOs like Apple’s Tim Cook to U.S. airlines (who learned they had unwittingly transported snatched children hundreds of miles away from their parents) spoke out in condemnation of President Donald Trump’s inhumane policy to forcibly remove children and toddlers and babies as young as three months old from their immigrant parents attempting to enter the United States at our southern border. In many of these cases, the parents were attempting to pursue asylum applications after fleeing deadly gang violence in their central American country.  The outcry and repulsion of this policy of taking children from their lawful parents, without due process, and incarcerating them in internment camp conditions reached a fever pitch yesterday with longtime GOP strategist Steve Schmidt announcing he was leaving the Republican Party. The nation’s largest doctor organization, the American Medical Association, also spoke out yesterday, stating that: “It is well known that childhood trauma and adverse childhood experiences created by inhumane treatment often create negative health impacts that can last an individual’s entire lifespan.” That condemnation followed a statement earlier this week to CBS by Dr. Colleen Kraft, President of the American Academy of Pediatrics, who had visited one of the detention centers holding toddlers. Dr. Kraft called this policy of separating children from their parents a form of child abuse, adding: “This type of trauma can be long lasting and it’s difficult to recover from this. We know very young children who are exposed to this type of trauma go on to not develop their speech, not develop their language, not develop their gross and fine motor skills and wind up with developmental delays.” By yesterday afternoon the vocal outrage had reached such a crescendo that Trump apparently realized it was not going to be quelled by further lies from his administration.  Trump had previously said he could not sign an Executive Order to stop this practice, and yet, he did just that yesterday, stating that “I didn’t like the sight or the feeling of families being separated.” Unfortunately, the Executive Order Trump signed yesterday was written with the same dodgy language that Trump has turned into an art form in the past.

Sinclair Forced Its Local Stations to Discredit Outrage Over Family Separation - Sinclair Broadcasting Group is the largest owner of local television news stations in the United States. . By next year, it will likely reach 72 percent of all American homes. The company is also owned by a longtime Republican donor, and proudly operates as a platform for conservative propaganda.  Since Trump’s election, the media giant has forced all of its affiliates to air commentary that advances White House talking points. Thus, this week, local news channels around the country informed their viewers that dishonest liberals were trying to fool them into thinking that the Trump administration had been separating migrant children from their families, in a heinously cruel bid to deter refugees from seeking asylum in the United States. “Our immigration system is undeniably broken and the discourse around this topic is toxic,” former Trump spokesman Boris Epshteyn explained on 193 differnt local news stations this week. “A perfect illustration of these facts is the recent firestorm surrounding President Trump’s decision to enforce a ‘zero tolerance’ policy and prosecute all adults illegally crossing our borders. Many members of the media and opponents of the president have seized on this issue to make it seem as if those who are tough on immigration are somehow monsters. Let’s be honest: While some of the concern is real, a lot of it is politically driven by the liberals in politics and the media.” In his fair and balanced commentary, Epshteyn also neglected to entertain the possibility that liberal outrage over Trump’s “zero tolerance” policy had less to do with cynical partisan motives — or a radical commitment to open borders — than with the fact that the U.S. government has been ripping infants from their mothers, locking them in cages, and then insisting it has no responsibility to promptly reunite the families it separated.

Trump’s Order to End Immigrant Family Separation Sows Confusion -- Changing, competing and contradictory explanations of the administration’s immigration policy spread confusion from Washington, D.C., to the Mexican border, leaving front-line law-enforcement and social-service agencies unsure of what will happen to thousands of children. Congress put off until next week a decision on an immigration bill designed to be a compromise between centrist and conservative Republicans. Meanwhile, the federal government is still wrestling with the prospect of rapidly running out of space, money or both to detain immigrants—especially as family units. Those factors create an immediate tension with prosecution policy. If the Trump administration stops prosecuting all adults for illegal border entry, it could maintain its detention capacity for longer, but paring back prosecutions would also amount to a significant retreat in the eyes of many, including the president himself. The Pentagon confirmed Thursday that it had received a request from the U.S. Department of Health and Human Services to provide up to 20,000 temporary beds for unaccompanied immigrant children at Defense Department installations. But HHS, which is responsible for the care of unaccompanied minors, couldn’t immediately answer emailed questions Thursday about what they had been directed to do by the president, or what they were specifically doing as a result. Instead, it referred to a statement it issued Wednesday night that said they were awaiting “further guidance.” The Defense Department is also sending 21 military attorneys to the border to prosecute immigration cases, a move a group of senators opposed in a letter to Defense Secretary Jim Mattis on Thursday. President Donald Trump had directed his administration on Wednesday to try to detain asylum-seeking families together, a reversal after weeks in which he insisted he had no choice but to separate children and adults who cross the border. The order had also raised questions about how quickly the government could find facilities to house families together—or how it would affect the more than 2,300 children already separated from adults who had been apprehended. Instructions to reunite children separated from adults under the policy are likely to take weeks to draft and carry out, an administration official said.

Fate of 2,300 separated children still unclear despite Trump’s executive order - Donald Trump may have signed an executive order to end the separation of families at the southern border, but his administration is not making any special efforts to immediately reunite the 2,300 children who have already been separated from their parents under his “zero tolerance” policy.The lack of action has created an additional burden for groups that provide legal and social services to immigrants, flooding non-governmental organisations (NGOs) with cases. In April 2018, the US attorney general, Jeff Sessions, announced a “zero tolerance” policy under which anyone who crossed the border without legal status would be prosecuted by the justice department. This includes some, but not all, asylum seekers. Because children can’t be held in adult detention facilities, they are being separated from their parents.Immigrant advocacy groups, however, say hundreds of families have been separated since at least July 2017. More than 200 child welfare groups, including the American Academy of Pediatrics and the United Nations, said they opposed the practice.  They are supposed to enter the system for processing “unaccompanied alien children”, which exists primarily to serve children who voluntarily arrive at the border on their own. Unaccompanied alien children are placed in health department custody within 72 hours of being apprehended by border agents. They then wait in shelters for weeks or months at a time as the government searches for parents, relatives or family friends to place them with in the US. This already overstretched system has been thrown into chaos by the new influx of children.   Immigration advocacy groups and attorneys have warned that there is not a clear system in place to reunite families. In one case, attorneys in Texas said they had been given a phone number to help parents locate their children, but it ended up being the number for an immigration enforcement tip line. Advocates for children have said they do not know how to find parents, who are more likely to have important information about why the family is fleeing its home country. And if, for instance, a parent is deported, there is no clear way for them to ensure their child is deported with them. 

 Trump executive order: Indefinite detention of immigrant families, 2,300 children to remain separated from parents --On Wednesday afternoon, President Donald Trump signed an executive order paving the way for the detention of immigrant families along the US-Mexico border. The order is in response to overwhelming outrage in the population to the forced separation of thousands of children from their parents.But last night, Trump administration officials made clear that the order was not retroactive, meaning that more than 2,300 children who have been torn away from their parents since early May would remain separated. Trump was explicit that his order does not limit the ongoing “zero tolerance” policy whereby parents are being criminally prosecuted for illegally crossing the border—an act that was criminalized by Democrats and Republicans alike.Trump’s order also allows for family detention only “where appropriate and consistent with law and available resources,” and provides for separation if there is “a risk to the child’s welfare,” leaving wide-open loopholes for the continuation of the criminal and inhumane practice of tearing children away from their parents and placing them in separate detention camps.Furthermore, it is possible that the order will be overturned within three weeks because a federal judge may rule that the order violates the 1997 court settlement reached in the lawsuit Flores v. Reno. In Flores, the Clinton administration reached a consent agreement with plaintiffs mandating that children be released from detention “without unnecessary delay.”Trump’s order requires indefinite detention for children and their parents. If the federal judge overseeing the ongoing Flores case rules against Trump, then the policy of child separation will likely be reimplemented, giving Trump an excuse to blame judges for the separation policy.The order is an effort to tamp down popular outrage which peaked this week following the release of images of youth being packed into cages and audio of young detainees crying out for their mothers and fathers as ICE agents ridiculed their suffering.In a meeting with White House executives and congressmen before releasing the executive order, Trump said, “We have to be very strong on the border, but at the same time we want to be very compassionate.” “We all want to keep families together,” Trump proclaimed. “At the same time, we have to be strong on the border, otherwise you’ll have millions of people coming up. Not thousands like we have now, you’ll have millions of people flowing up and just overtaking the country. And we’re not letting that happen.”

Pentagon asked about housing 20K migrant children at military bases | TheHill: The Trump administration may place up to 20,000 unaccompanied migrant children on military bases starting as early as next month, according to a new Pentagon memo. The notification, sent to lawmakers on Wednesday and first reported by The Washington Post, says the Defense Department received a request for assistance from the Department of Health and Human Services (HHS). “HHS has requested DOD determine its capabilities to provide up to 20,000 temporary beds for unaccompanied children at DOD installations,” the document states. If the Pentagon finds that it can provide such lodging, “the Administration for Children and Families (ACF) requests the facilities be available for occupancy as early as July through December 31, 2018.” HHS personnel or contractors would run the sites, providing care to the children, “including supervision, meals, clothing, medical services, transportation or other daily needs,” the memo states. The Defense Department “would be fully reimbursed” for all expenses as stipulated by the Economy Act, the document adds. The Pentagon on Thursday acknowledged it had received the request for assistance and "HHS and DOD are working closely to determine the requirements and timing for support," according to spokesman Lt. Col. Jamie Davis.

Leaked Navy Memo Reveals Plan For "Temporary, Austere" Migrant Camps "The United States will not be a migrant camp. And it will not be a refugee-holding facility - it won’t be."Trump made this statement on Monday. But it's becoming rapidly apparent that the US government is, in fact, planning to build a series of massive tent cities that could potentially house thousands of migrants for months at a time. A Pentagon spokesperson said Thursday that the US is planning to shelter as many as 20,000 migrant children on four American military bases, according to the New York Times. Meanwhile, just this afternoon, Time Magazine reported that the US Navy is planning to build several massive tent cities to house thousands of immigrants in a few different states. Time, which obtained a Navy memo outlining the plan to build "temporary and austere" tent cities, said the document was sent to the Navy Secretary for his approval. The cities will house roughly 25,000 migrants in abandoned airfields just out side the Florida Panhandle near Mobile, Alabama, at Navy Outlying Field Wolf in Orange Beach, Alabama, and nearby Navy Outlying Field Silverhill.The U.S. Navy is preparing plans to construct sprawling detention centers for tens of thousands of immigrants on remote bases in California, Alabama and Arizona, escalating the military’s task in implementing President Donald Trump’s “zero tolerance” policy for people caught crossing the Southern border, according to a copy of a draft memo obtained by TIME.The internal document, drafted for the Navy Secretary’s approval, signals how the military is anticipating its role in Trump’s immigration crackdown. The planning document indicates a potential growing military responsibility in an administration caught flat-footed in having to house waves of migrants awaiting civilian criminal proceedings. There are also plans for a camp that will hold as many as 47,000 people at former Naval Weapons Station Concord, near San Francisco. And another facility that could house 47,000 near Camp Pendleton, the largest training facility for US Marines situated along the SoCal coastline. The cities are said to be built to last between six months and a year, while the planning document estimates that the Navy would spend about $233 million to build the facility. Officials proposed a 60-day timeline to build the first temporary facility, which will house 5,000 adults. The military believes it could then add room for 10,000 more people every month.

Tent cities cost millions more than keeping migrant kids with parents -- The cost of holding migrant children who have been separated from their parents in newly created "tent cities" is $775 per person per night, according to an official at the Department of Health and Human Services — far higher than the cost of keeping children with their parents in detention centers or holding them in more permanent buildings.The reason for the high cost, the official and several former officials told NBC News, is that the sudden urgency to bring in security, air conditioning, medical workers and other government contractors far surpasses the cost for structures that are routinely staffed.It costs $256 per person per day to hold children in permanent HHS facilities like Casa Padre in Brownsville, Texas. And keeping children with their parents in detention centers like the one run by U.S. Customs and Immigration Enforcement in Dilley, Texas cost $298 per resident per day, according to an agency estimate when it awarded the contract for the facility in 2014.At those prices, the additional cost to operate a 400-bed temporary structure for one month at capacity would be more than $5 million. The average stay for separated kids is nearly two months. The HHS official said the agency is "aggressively looking for potential sites" for more tent cities to accommodate the surge of migrant children who have been separated from their parents by the Trump administration's "zero tolerance" policy on illegal border crossing.

Immigrant children forcibly injected with drugs, lawsuit claims - President Donald Trump’s zero tolerance policy stands to create a zombie army of children forcibly injected with medications that make them dizzy, listless, obese and even incapacitated, according to legal filings that show immigrant children in U.S. custody subdued with powerful psychiatric drugs. Children held at Shiloh Treatment Center, a government contractor south of Houston that houses immigrant minors, have described being held down and injected, according to the federal court filings. The lawsuit alleges that children were told they would not be released or see their parents unless they took medication and that they only were receiving vitamins.  Parents and the children themselves told attorneys the drugs rendered them unable to walk, afraid of people and wanting to sleep constantly, according to affidavits filed April 23 in U.S. District Court in California.One mother said her child fell repeatedly, hitting her head, and ended up in a wheelchair. A child described trying to open a window and being hurled against a door by a Shiloh supervisor, who then choked her until she fainted.“The supervisor told me I was going to get a medication injection to calm me down,” the girl said. “Two staff grabbed me, and the doctor gave me the injection despite my objection and left me there on the bed.” Another child recounted being made to take pills in the morning, at noon and night. The child said “the staff told me that some of the pills are vitamins because they think I need to gain weight. The vitamins changed about two times, and each time I feel different.”  Shiloh is among 71 companies that receive funds from the federal government to house and supervise immigrant children deemed unaccompanied minors. These are the places set up to receive the more than 2,000 children separated from their parents in the past six weeks under the new Trump administration policy as they leave temporary way stations at the border.An investigation by Reveal from The Center for Investigative Reporting found that nearly half of the $3.4 billion paid to those companies in the last four years went to homes with serious allegations of mistreating children. In nearly all cases reviewed by Reveal, the federal government continued contracts with the companies after serious allegations were raised.

Immigrant children tied down, hooded, beaten, stripped and drugged -- Court documents made public in Virginia and Texas give a glimpse of the systematic brutality being meted out to immigrant children in both public and private jails. Children are strapped down, hooded and beaten, or drugged by force, as part of the everyday procedure in what can only be called the American Gulag.  An Associated Press report published Thursday gave details of the abuses committed last year against young Latino migrants at the Shenandoah Valley Juvenile Center near Staunton, Virginia. Lawyers for the teenage victims sued the prison—a state facility run by a consortium of seven towns and cities in the Shenandoah Valley—and a court hearing is set for July. According to a half-dozen sworn statements, given by the victims in Spanish and then translated for filing with the federal court for the Western District of Virginia, children as young as 14 were beaten while handcuffed, tied down to chairs while stripped naked and hooded, and held for long periods in solitary confinement, sometimes naked and cold.  All these are forms of torture practiced at Guantanamo Bay and at CIA torture prisons around the world. These techniques have been transferred back into the United States and unleashed on immigrant children, who have been demonized by the Trump administration.   The lawsuit filed by the nonprofit Washington Lawyers’ Committee for Civil Rights and Urban Affairs declares that young Latino immigrants held at Shenandoah “are subjected to unconstitutional conditions that shock the conscience, including violence by staff, abusive and excessive use of seclusion and restraints, and the denial of necessary mental health care.” As a result of “malicious and sadistic applications of force,” the youth have “sustained significant injuries, both physical and psychological.”

Immigration Bills In Jeopardy After Dramatic GOP Bickering On House Floor - Rep. Mark Meadows (R-NC), chairman of the conservative House Freedom Caucus, had an angry confrontation with House Speaker Paul Ryan after confusion erupted over which version of an piece of immigration legislation the House of Representatives was set to vote on, with Meadows later claiming in a statement that "the leadership compromise bill omitted key provisions that had been agreed upon beforehand."WATCH: (Clip 1/2) Exchange between @SpeakerRyan and Rep. Mark Meadows on the House Floor. (Look at NV column area of screen).Note: C-SPAN doesn't control cameras/audio in House chamber. (h/t @Jakesherman) pic.twitter.com/WrtoLEfg4u— Jeremy Art (@cspanJeremy) June 20, 2018WATCH: (Clip 2/2) Exchange between @SpeakerRyan and Rep. Mark Meadows on the House Floor. (Look at NV column area of screen). Note: C-SPAN doesn't control cameras/audio in House chamber. (h/t @Jakesherman) pic.twitter.com/leOsUZUcTn— Jeremy Art (@cspanJeremy) June 20, 2018Both men became animated - pointing fingers at each other to the point where reporters in the press gallery could hear the the heated discussion - such as Politico's Jake Sherman who live-tweeted the drama.  Mark Meadows and Paul Ryan are in a very heated discussion in the middle of the house floor.  Meadows is furious. Just walked over to his members — the freedom caucus — and signaled that he was done. I’m not sure what they’re pissed about — ask @MEPFuller — but I would expect fireworks tomorrow. — Jake Sherman (@JakeSherman) June 20, 2018 Meadows could be heard telling Ryan "It doesn't matter anymore," and "I don't care anymore."  Meadows and Ryan in each other’s faces. “It doesn’t matter anymore,” Meadows tells Ryan. Wow. — Jake Sherman (@JakeSherman) June 20, 2018  Meadows reportedly got in Ryan's face over which of two similarly-named immigration bills the House is expected to vote on tomorrow.  In order to clear things up, GOP leadership handed out talking points to lawmakers about the "compromise" bill - however Meadows claimed that the "talking points don't match the text," and "are not really for prime time." "This was a communication issue where the leadership compromise bill omitted key provisions that had been agreed upon beforehand," Meadows spokesman Ben Williamson said in a statement. "We are working to resolve it." Several GOP lawmakers told Fox News that they were disturbed at the spat between Ryan and Meadows - with one source saying that a few members who were previously a "hard yes" on the immigration legislation are now "squirming" after the confrontation.

Hardline GOP Immigration Bill Fails In House After Moderate Bill Shelved - The House of Representatives rejected a hardline immigration bill on Thursday, introduced by Judiciary Chairman Bob Goodlatte (R-VA), after House leadership postponed a vote on a more moderate measure written by centrists. No Democrats voted in favor of Goodlatte's bill. The House just voted on goodlatte’s immigration bill. It failed. 193-231, well short of passage. (Higher than I thought it would get, though)And the discharge petition — and a good deal of moderates leverage — is officially gone. — Jake Sherman (@JakeSherman) June 21, 2018The failed vote of 193-231 came one day after President Trump signed an executive order which would end the controversial practice of separating children from parents who cross the border illegally - which had been done under prior administrations but supercharged by the Trump administration's new "zero tolerance" enforcement policies. That said, support for both the hardline and moderate immigration bills started to wane after a tweet from President Trump, who implied that even if the bill passed the House, Senate Democrats would kill it:"What is the purpose of the House doing good immigration bills when you need 9 votes by Democrats in the Senate, and the Dems a re only looking to Obstruct (which they feel is good for them in the Mid-Terms). Republicans must get rid of the stupid Filibuster Rule-it is killing you!" Trump tweeted.

Trump tweet may doom House GOP effort on immigration | TheHill: President Trump on Friday may have doomed the chances for a House GOP immigration bill after urging Republican lawmakers to abandon the compromise effort they have been working on for weeks. The legislation was already on life support, with party leaders deciding on Thursday to postpone a vote to the following day as they struggled to garner enough support for the measure. But Trump likely put the nail in the coffin, telling Republicans they should “stop wasting their time” on the divisive issue. “Republicans should stop wasting their time on Immigration until after we elect more Senators and Congressmen/women in November,” Trump tweeted Friday morning. “Dems are just playing games, have no intention of doing anything to solves this decades old problem. We can pass great legislation after the Red Wave!” Earlier in the week, Trump personally rallied members to support the immigration legislation — the product of weeks of delicate negotiations between centrists and conservatives — and told GOP lawmakers he was with them “1,000 percent.” The whiplash has some House Republicans seriously doubting that leaders will be able to get the bill over the finish line, which was already going to be an uphill climb before Trump's tweet.

HHS creates task force to reunify migrant families - HHS on Friday created an “unaccompanied children reunification task force,” a first step toward reunifying thousands of migrant children in the agency’s custody with their families, according to an internal document obtained by POLITICO. The task force was established by the assistant secretary for preparedness and response — the arm of the agency that responds to public health disasters, and an indication that the challenge of reunifying thousands of families is likely beyond the capabilities of the refugee office. ..“The Secretary of Health and Human Services has directed the Assistant Secretary of Preparedness and Response assist the ACF Office of Refugee Resettlement with Unaccompanied Children Reunification,” the order reads. The agency’s Emergency Management Group, which operates out of the HHS secretary’s operations center, also was activated. “Secretary [Alex] Azar is bringing to bear all the relevant resources of the department in order to assist in the reunification or placement of unaccompanied alien children and teenagers with a parent or appropriate sponsor,” HHS spokesperson Evelyn Stauffer told POLITICO on Friday night. She said the preparedness and response office will apply its “operational and logistical expertise in addressing this complex effort. The Office of Refugee Resettlement continues to oversee and manage the Unaccompanied Alien Children Program.” The emergency response team typically is deployed for crises like hurricanes and viral epidemics — a sign that the agency is approaching reunifying families and accompanying health challenges akin to a public health disaster. Running the response through the secretary’s operation center also will allow HHS to more easily pull resources and coordinate among agencies.

Trump hosts victims of undocumented migrants amid family separations row - US President Donald Trump has hosted the relatives of victims killed by illegal immigrants amid outrage over the separation of migrant families. "Your loved ones have not died in vain," he told the group of so-called Angel Families at the White House. Mr Trump has faced global condemnation for the US immigration policy that has seen more than 2,000 migrant children stripped from their families. He bowed to public pressure and reversed the policy earlier this week. The president signed an executive order on Wednesday to stop undocumented immigrant children being detained separately from their parents after they have illegally entered the country. But the administration's "zero-tolerance" policy of criminally prosecuting anyone who crosses the border illegally remains in place. "These are the American citizens permanently separated from their loved ones," Mr Trump said on Friday, before introducing family members of victims. "I cannot imagine it being any worse, but we promise to act with strength and resolve. "We'll not rest until our border is secure, our citizens are safe and we end this immigration crisis once and for all," the president added. 

Kill the Hastert Rule: A Pedophile’s Indefensible Rule Harms America --  William K. Black -- The House Speaker is the answer to the trick question:  “Who is the second most powerful elected official in the United States.”  The importance of the Speaker is obvious to anyone with even a modestly sophisticated understanding of U.S. politics and government. One of the reasons for this astonishing level of sycophancy of Republican House candidates that run for office by presenting themselves as moderate conservatives is the ‘Hastert rule.’  They run as moderates, but they vote consistently in favor of legislation that creates the most radically right policies in modern American history.  If you have never heard of the Hastert rule or do not know what it is, blame the Democrats (and the media).  The fact that the Hastert rule is not infamous with the public proves (again) the ineptness of Democrats as politicians (and the failure of most of the media as journalists).  The rule bears the name of then-Speaker of the House Dennis Hastert, who decreed and implemented the rule.  If you do not know that Hastert is infamous, and why he is infamous, blame the Democrats (and the media). The Hastert rule is a nakedly anti-democratic, nakedly partisan, and nakedly destructive.  Among the reasons that the House Speaker, rather than the Senate Majority Leader, is the second most powerful elected official in America, is that it is exceptionally difficult to bring any bill to the House floor without the Speaker’s express permission (which he or she gives by approving issuance of a “rule”).  The Hastert rule leverages that power to produce obscene results.  Hastert decreed that he would refuse to give any bill a ‘rule’ allowing a vote unless a majority of Republicans supported the bill.  (In fairness, Hastert violated his own rule about 1.5 times annually.)  Ryan has enforced vigorously the Hastert rule.

"Cesspool Of Political Bias" - Haley Confirms US Withdrawal From UN Human Rights Council - Update: Confirming the earlier leaked expectations, Trump envoy Nikki Haley says that the US withdrawing from UN Human Rights Council, calling it "not worthy of its name" and a "self-serving organization that makes a mockery of human rights," and a "cesspool of political bias." “Earlier this year, as it has in previous years, the Human Rights Council passed five resolutions against Israel — more than the number passed against North Korea, Iran and Syria combined,” Nikki R. Haley, the American ambassador to the United Nations, said in a speech on Tuesday.“This disproportionate focus and unending hostility toward Israel is clear proof that the council is motivated by political bias, not by human rights.”“If the Human Rights Council is going to attack countries that uphold human rights and shield countries that abuse human rights, then America should not provide it with any credibility,” Ms. Haley said. As we noted below, this is first time a member has voluntarily left the Council. The United States now joins Iran, North Korea and Eritrea as the only countries that refuse to participate in the council’s meetings and deliberations.

US becomes first nation to quit UN human rights body - The United States Tuesday formally withdrew from the United Nations Human Rights Council, the first nation in the world to voluntarily quit the organization.US Secretary of State Mike Pompeo and US Ambassador to the United Nations Nikki Haley announced the decision at the State Department late Tuesday afternoon, delivering prepared remarks and turning on their heels and leaving as the assembled press shouted out questions, including about Washington’s own egregious trampling of human rights on the US southern border.The decision came one day after opening of the session of the council in Geneva in which its outgoing chief, Zeid Ra’ad Al Hussein, delivered a farewell speech warning against the rise of “chauvinistic nationalism” and denouncing governments for implementing “policies intended to make themselves as inhospitable as possible by increasing the suffering of many already vulnerable people.”He specifically issued a sharp condemnation of the Trump administration’s immigration policy and voiced concern over the US-backed war against Yemen.“The thought that any state would seek to deter parents by inflicting such abuse on children is unconscionable,” he said, demanding that Washington call an immediate halt to its “zero tolerance” immigration policy and the “forcible separation of these children.” He quoted the president of the American Association of Pediatrics, who declared that locking the children up separately from their parents constituted “government-sanctioned child abuse.'”Turning to Yemen, where the Pentagon has been providing arms, mid-air refueling for Saudi warplanes and intelligence and logistical support without which the near-genocidal war against the Yemeni people could not take place, al-Hussein stated: “I emphasize my grave worry regarding the Saudi and Emirati-led coalition's ongoing attacks in Hodeidah—which could result in enormous civilian casualties and have a disastrous impact on life-saving humanitarian aid to millions of people which comes through the port.”Just days earlier, Washington and London had joined in killing a Swedish-proposed resolution calling for a ceasefire in Yemen and a halt to the Saudi-UAE offensive. The developments on the US-Mexican border and the effective torture of children for the purpose of deterring refugees from coming to the US, as well as Washington’s criminal role in Yemen, expose the rank hypocrisy of Washington’s pretense of quitting the Human Rights Council out of some moral outrage over the body’s failure to pursue abusers.

Nikki Haley: ‘It is patently ridiculous for the United Nations to examine poverty in America’ -- A United Nations report condemning entrenched poverty in the United States is a “misleading and politically motivated” document about “the wealthiest and freest country in the world,” according to the Trump administration's ambassador to the world body.U.N. Ambassador Nikki Haley criticized the report for critiquing the United States' treatment of its poor, arguing that the United Nations should instead focus on poverty in developing countries such as Burundi and Congo. The U.N. report also faulted the Trump administration for pursuing policies it said would exacerbate U.S. poverty.“It is patently ridiculous for the United Nations to examine poverty in America,” Haley wrote in a letter to Sen. Bernie Sanders (I-Vt.) on Thursday. “In our country, the President, Members of Congress, Governors, Mayors, and City Council members actively engage on poverty issues every day. Compare that to the many countries around the world, whose governments knowingly abuse human rights and cause pain and suffering.”The rebuke comes two days after Haley announced the United States' resignation from the U.N. Human Rights Council over that body's perceived bias against Israel and toleration of human rights abusers.

Trump administration plans sweeping government restructure to cut social programs --The Trump administration announced on Thursday its intention to restructure the federal government as part of a reactionary initiative to eliminate food stamps, housing aid and other forms of social assistance that millions of Americans rely upon.The proposed reorganization of federal agencies and cabinet departments includes the merger of the Department of Labor and the Department of Education (ED) into a single entity to be called the Department of Education and the Workforce. This would allow the administration to reduce or eliminate many job training programs, workplace protections and student aid programs. Established in 1980 at the end of the Carter administration, the ED has long been a target of conservative politicians. President Ronald Reagan attempted to eliminate the agency in the 1980s but was blocked by Congress. Former Texas Governor Rick Perry famously called for the elimination of the department during the 2012 presidential campaign along with the Department of Commerce and the Department of Energy, which he now leads. With only 4,000 employees and a budget of some $70 billion dollars, ED is one of the smallest cabinet-level agencies in the federal government. Upon taking office Trump appointed Betsy DeVos to head the agency. The billionaire DeVos, whose husband is heir to the Amway fortune and whose brother, Eric Prince, is the founder of the notorious Blackwater mercenary group, has made a career of attacking public education.   They have spent tens of millions sponsoring legislation which would enable the privatization of public schools, eliminate protections for teachers—including the right to strike—and enable religious organizations to play a prominent role in public education.   Now with his attempt to merge the Departments of Labor and Education, he is indicating to those same forces his intent to eliminate public assistance altogether.

More Sound and Fury: Trump Foreign Corrupt Practices Act Enforcement Record Extends Prior Trend --  Jerri-Lynn Scofield --Earlier this month, Société Générale agreed to pay $860 million in criminal penalties for bribing Gaddafi-era Libyan officials and manipulating LIBOR, according to a Department of Justice (DoJ) press release. Part of the penalty– $585 million, to be paid in part to the DoJ and in part to French enforcement agency, Parquet National Financier– was levied under the US Foreign Corrupt Practices Act (FCPA) and ranks fifth on the list of penalties assessed in enforcement actions under that statute since its enactment in 1977.As the WSJ reported:“Today’s resolution…sends a strong message that transnational corruption and manipulation of our markets will be met with a global and coordinated law-enforcement response,” said John P. Cronan, acting assistant attorney general of the Justice Department’s Criminal Division.The U.S. and overseas authorities have long worked together in the fight against bribery but the cooperation has gained steam in recent years, said Billy Jacobson, a former assistant chief of Foreign Corrupt Practices Act enforcement in the Justice Department’s Criminal Division who now does white-collar defense work at Orrick, Herrington & Sutcliffe LLP. FCPA enforcement actions continue, despite comments made by Trump  about this “horrible law” during the campaign, as reported by FCPA blog in Jeff Sessions: I’ll enforce the FCPA:President Trump criticized the FCPA in a 2012 phone-in appearance on CNBC. The FCPA-related part of the discussion starts at about 14 minutes into the call. Bill Steinman summarized the state of affairs for FCPA enforcement in this FCPA blog post, Bill Steinman: The FCPA is not dead redux: First, as we’ve seen on FCPA Tracker, 133 public companies report having open FCPA investigations. That is near the largest number of ongoing investigations ever. And that only includes issuers. There are numerous privately-held businesses that have disclosed corruption issues to the DOJ. Simply put, there are a lot of cases out there, and no doubt many of them will result in robust fines and penalties in the not so distant future.Second, the enforcement agencies themselves have reminded us time and again over the last 16 months that the FCPA remains one of their top priorities. Roughly a year ago, Attorney General Sessions stated in a speech before the Ethics and Compliance Initiative Annual Conference that the DOJ “will continue to strongly enforce the FCPA.”

Net Neutrality Supporters Face Off Against The FCC - Net neutrality is dead, and ISPs (internet service providers) now have unprecedented power to block or throttle internet traffic or even prioritize traffic in exchange for payment.And you would expect the average ISP to jump at the opportunity to squeeze some extra cash from providers in this cutthroat environment.But some say it isn’t going to happen.Major ISPs are now saying they won’t do any of those things.AT&T, Verizon and Comcast have all said on their websites they have no plans to do any blocking, throttling or paid prioritization. Another telecom giant– Charter Communications– has only promised in its network management disclosure not to block or throttle but has suspiciously remained tight-lipped about its position on paid prioritization.The new rules of the game allow paid prioritization in which ISPs provide internet fast lanes to service providers by optimizing data transfer rates in exchange for payment. They are, however, required to disclose any such privileges publicly. The disclosures are supposed to be made either on the ISPs’ websites or on the FCC website.  AT&T, Verizon, Comcast and Charter are the four biggest home internet providers in the U.S. It’s not like the latest announcements by these ISPs have exactly come as a major surprise to observers. Net neutrality supporters have always speculated that ISPs would be on their best behavior during the early stages after repealing the old law to prevent a backlash that might encourage lawmakers to reconsider their position. Critics of net neutrality argue that bandwidth-hogging companies like Netflix should be made to pay for the heavy burdens they place on broadband networks.Its proponents, on the other hand, argue that creating fast lanes for specific sites would necessarily lead to slowing down other potentially competing sites. That would, of course, amount to unfair or even unethical practices that regulatory bodies would frown upon. Further, favoring some providers over others would essentially be making them gatekeepers and give them too much power to control free market activities.  As responses from state and local governments have been varied, the National Regulatory Research Institute (NRRI), a research branch of the regulatory non-profit NARUC, has decided to start tracking legislative action by each state. NRRI has developed maps that track states that have passed executive orders, laws and various resolutions in response to the repeal.

Supreme Court: Cops Can't Track Cell Phone Location Without A Warrant - The Supreme Court ruled Friday that law enforcement cannot track people's movements for periods of weeks or months without a warrant. In a 5-4 ruling, the court held that the acquisition of cell-site records by government officials is covered under the Fourth Amendment. Chief Justice John Roberts who wrote the opinion sided with the court's four liberal judges; Sonia Sotomayor, Elena Kagan, Ruth Bader Ginsburg and Stephen Breyer - while Justice Anthony Kennedy, Clarence Thomas, Samuel Alito and Neil Gorsuch dissented. While stressing that their decision doesn't question longstanding surveillance techniques and tools such as security cameras, Roberts said that historical cell-site records present even greater privacy concerns than monitoring via GPS. "Here the progress of science has afforded law enforcement a powerful new tool to carry out its important responsibilities," Roberts said, adding "While individuals regularly leave their vehicles, they compulsively carry cell phones with them all the time.""A cell phone faithfully follows its owner beyond public thoroughfares and into private residences, doctor’s offices, political headquarters, and other potentially revealing locales."The conservative judges strongly objected - writing four times as much in their dissents than Roberts did for the court's majority.  Justice Anthony Kennedy said the government's search of cellphone location records was permissible because they were held by the service provider, not the individual. "The court's new and uncharted course will inhibit law enforcement." Justice Samuel Alito called it a "revolutionary" ruling that "guarantees a blizzard of litigation while threatening many legitimate and valuable investigative practices upon which law enforcement has rightfully come to rely." -USA Today

Judge Rules Twitter Can Be Sued For Falsely Advertising They Allow Free Speech - A California judge has ruled that social media giant Twitter can be sued for falsely advertising free speech. As Bloomberg reports, the judge said that Twitter’s policy of banning users “at any time, for any reason or for no reason” may constitute an “unconscionable contract” for a company which advertises free speech.The judge rejected Twitter’s motion to dismiss the lawsuit from Jared Taylor, who was banned by the platform in December last year, according to Breitbart. Taylor, a self-described “white activist” may proceed with his lawsuit against Twitter because the social media company falsely advertises free speech, yet bans users for “any or no reason.”  The judge also ruled that Twitter could be sued on the basis of misleading its users, due to the platform’s promise not to ban accounts on the basis of viewpoint or political affiliation, which is frequently violated.“This ruling has massive implications for the platform going forward,” said Noah Peters, Jared Taylor’s lawyer. “this is the first time that a social media company’s argument that it can censor user speech has been rejected by a court.”Taylor describes himself as a “race realist” and has defended white separatism, claiming that races are “not equal”, but his attorney says this trial is not about his client’s particular views, and that’s a correct assessment.  The trial is about Twitter’s disallowance of free speech although they use that term to advertise the social media platform.“Our lawsuit is not about whether Taylor is right or wrong,” Peters said in February. “It’s about whether Twitter and other technology companies have the right to ban individuals from using their services based on their perceived viewpoints and affiliations.”

Former CIA Employee Charged In Massive Leak Of Confidential Information - Federal prosecutors have charged a former CIA software engineer with stealing secret material from the agency and passing it along to "an organization that purports to publicly disseminate classified, sensitive, and confidential information."The superseding indictment announced Monday details charges against Joshua Adam Schulte, 29, pertaining to the theft and transmission of national defense information to "Organization-1" — which, though it's never named in the indictment, is widely believed to refer to WikiLeaks.Last year, WikiLeaks published thousands of documents outlining the CIA's methods of hacking into computers, phones and other devices that connect to the Internet, in the agency's efforts to spy overseas.All told, Schulte faces 13 counts in the indictment announced Monday — including not only the theft and transmission of government information, but also separate counts relating to alleged child pornography, copyright infringement, lying to investigators and obstruction of justice. If convicted of all of them, he faces the possibility of up to 135 years in prison.

"We Had Whistleblowers": Nunes Reveals "Good FBI Agents" Tipped Off Congress About Comey Team -- "Good FBI agents brought this to our attention."  House Intelligence Committee Chairman Devin Nunes (R-CA) revealed that in late September 2016, "Good FBI agents" stepped forward as whistleblowers to tell them about additional Hillary Clinton emails "sitting" on Anthony Weiner's laptop. "I've never actually said this before," said Nunes. "We had whistleblowers that came to us in late September of 2016 who talked to us about this laptop sitting up in New York that had additional emails on it."In light of IG's failure to look at leaking/anti-Clinton bias among agents in NYC field office, this seems quite relevant. Nunes says "good FBI agents" told him about Weiner laptop in late September 2016. pic.twitter.com/BU6ysY7Xwn— Josh Marshall (@joshtpm) June 15, 2018In other words, the New York FBI "rebelled" - as Rudy Giuliani puts it - which former FBI Director James Comey tried to quash, twice. The FBI sat on the revelation that previously unknown emails from Hillary Clinton’s private server were recovered on the laptop of sex-crimes convict Anthony Weiner for just under a month, according to a review by the Department of Justice’s Inspector General.The stated rationale was to prioritize the Russia investigation, which was a decision made by Peter Strzok, a top FBI agent involved in both investigations and who texted his lover that he would “stop” Donald Trump from becoming president. -Daily CallerAppearing Friday on Fox and Friends, Trump attorney Rudy Giuliani said that FBI agents in the New York office "rebelled" and "had a revolution" which Comey could not keep quiet - forcing him to reopen the Clinton email investigation.  "The agents in the NY office - we all know this, rebelled. They had a revolution. And Comey made two attempts to quiet them down and then realized "I can't do that, I'm gonna look terrible here. If she gets elected I'll look terrible, if she doesn't.." -Rudy Giuliani

Horowitz Reveals That Comey Is Under DOJ Investigation Over Mishandling Classified Info - DOJ Inspector General Michael Horowitz made a stunning admission during Monday Congressional Testimony that former FBI Director James Comey is under a separate and ongoing investigation over mishandling of classified information - when asked by Senate Judiciary Committee Chairman Chuck Grassley (R-IA) about

• Grassley: “Comey said he did not expect a report on his handling of classified information because, “That’s frivolous.” I don’t happen to think that it is frivolous. Question number one, Mr. Horowitz, are you investigating the handling of his memo and does that include the classification issues, and should Mr. Comey expect a report when it’s complete?”
• Horowitz: “We received a referral on that from the FBI,” We are handling that referral and we will issue a report when the matter is complete, consistent with the law and rules that are–a report that’s consistent and takes those into account.”
• Grassley: "Is the IG investigating Comey's handling of his memos about Trump?"
  Horowitz: "Yes, we're investigating it and will produce a report on it."

Earlier Monday, Grassley demanded in a letter to FBI Director Christopher Wray that the agency provide information regarding revelations from last week's Inspector General report that former FBI Director James Comey used personal email accounts to conduct official business - which neither the FBI or the Inspector General independently verified during an internal investigations.

Flynn Evidence May Have Been Tampered With By FBI: GOP Lawmaker - Rep Mark Meadows (R-NC) suggested on a Thursday interview with The Hill that evidence in the Mike Flynn case may have been tampered with - something long hinted at by insiders close to the Congressional investigations. Meadows, the leader of the conservative House Freedom Caucus and a close ally of President Trump's, said he and other lawmakers are finding evidence of possible tampering, an allegation he previously made at a House hearing where Justice Department Inspector General Michael Horowitz testified. -The Hill"Justice should be meted out evenly, and yet we’re finding that evidence could have been tampered with," Meadows said.In particular, Meadows pointed to the "302" reports - which are summaries of FBI interviews with suspects or witnesses. "I brought this up with the inspector general the other day.  Some of those key witness will be asked to appear before House Oversight," he added.The question about the FBI interview reports, he said, was "were they changed to change the outcome of prosecution decisions. I think they might have.""We’re not  going to yield until we get an answer," he added. -The Hill   During Tuesday testimony in front of a joint hearing of the House Judiciary and Oversight committee, IG Horowitz said he is investigating allegations that FBI officials "edited" agents' 302 forms.

Watch IG Horowitz' Reaction When Asked If Hillary Committed "No Crimes" -- An overlooked exchange from Tuesday's testimony by DOJ Inspector General Michael Horowitz provides an insightful moment into his opinion of Hillary Clinton's guilt or innocence.  Unearthed by journalist Tracy Beanz (@tracybeanz) for her latest report which can be found here, this is a must-see exchange between Horowitz and Rep. Eric Salwell (D-CA) during a joint hearing of the House Judiciary and Oversight Committees, the look on the Inspector General's face - and the guy behind him - are priceless..."Do you agree, yes or no, that Hillary Clinton committed no crimes?"It’s literally laughable to both of them, idk who that guy is behind him but they both had same reaction. pic.twitter.com/ymkzPeoxew— Rosie Memos (@almostjingo) June 21, 2018  Smiles all around.

Comey Hits Back At Hillary: "She Doesn't Understand What Her Case Was About" - James Comey hit back at Hillary Clinton after the former secretary of state sniped at him over a Justice Department inspector general report which revealed that the former FBI director used a private email address to conduct official business - while his FBI was investigating Hillary for her own use of private systems.  In an interview with the German newspaper Die Zeit, Comey refused to apologize to Clinton - stressing the difference between his personal use of email for unclassified information vs. her use, which involved classified information.  “No. And here’s why," Comey said when asked if he would apologize. "I don’t want to criticize her, but it shows me that even at this late date, she doesn’t understand what the investigation in her case was about.”“It was not about her use of a personal email system, and she didn’t get that during the investigation, because she used to say ‘Colin Powell when he was secretary of state used AOL,’ that was not what it was about,” Comey explained. “It was about communicating about classified topics on that system when those topics have to be done on a classified system.”Comey defended his use of personal email - saying he only used it for things like sending himself drafts of speeches. “What I would do, is when I had to write speeches—I would write my own speeches—I would type them at home and then gmail them into my government account,”

Grassley wants to subpoena Comey, Lynch after DOJ watchdog report -- Senate Judiciary Chairman Chuck Grassley (R-Iowa) said Thursday that he wants to subpoena former FBI Director James Comey to address sharp criticism of his handling of the Hillary Clinton email investigation by the Justice Department's internal watchdog. Comey declined to testify before the Judiciary Committee at a hearing this week on the report from the department's inspector general, which said Comey made "a serious error of judgment" by telling Congress that the Clinton email inquiry was re-opened days before the 2016 election. Story Continued Below ..Grassley quipped during the hearing that Comey "has time for book tours and television interviews, but apparently no time to" testify, and said Thursday that he wants to consult with the committee's top Democrat, California Sen. Dianne Feinstein, about a subpoena. "I will want to subpoena him," Grassley said during an interview for C-SPAN's "Newsmakers." The Iowan added that committee rules require that he and Feinstein "agree to it, and at this point, I can’t tell you if she would agree to it. But if she will, yeah, then we will subpoena." Grassley said he also plans to consult with Feinstein on a subpoena for former Attorney General Loretta Lynch, whom the inspector general's report knocked for an "ambiguous" incomplete recusal from the FBI's investigation into Clinton's use of a private email server while serving as secretary of state.

Judge denies Trump’s former campaign chairman Paul Manafort's bid to drop money laundering charge -- A federal judge on Friday denied former Trump campaign chairman Paul Manafort's bid to dismiss a money laundering charge brought against him by special counsel Robert Mueller in a pending criminal case in Washington, D.C.U.S. District Court Judge Amy Berman Jackson also denied Manafort's request to dismiss a related allegation that would require him to forfeit properties if he was convicted on that money laundering charge.In a court filing, Jackson disputed the argument put forward by Manafort's lawyers that Manafort did not violate a law requiring people who act as foreign agents to register as such.The lawyers said the law does not ban the act of serving as a foreign agent, but merely bans the failure to register as a foreign agent.Jackson said that argument was "inconsistent with the text of the statute."This is more bad news for Manafort, who has been on the wrong end of multiple court decisions since being sent to jail last week over charges he tampered with potential trial witnesses.The court on Thursday denied Manafort's request to keep prosecutors from using evidence seized in May from his Virginia storage unit. Manafort had argued the search was illegal, but the court rejected that reasoning on the grounds that agents were given consent for the search by Manafort's assistant, whose name was on the lease. Manafort has been indicted on a number of charges related to his overseas consulting business and his personal financial dealings. Following an initial indictment last fall, grand juries in Virginia and Washington, D.C., handed up two more, in February and June of this year. Manafort is now awaiting trial dates in both locations.

Russian Trolls Weigh In on Roseanne Barr and Donald Trump Jr. -- With U.S. midterm elections approaching, Russian trolls found ways to remain active on Twitter well into 2018, trying to rile up the American electorate with tweets on everything from Roseanne Barr’s firing to Donald Trump Jr.’s divorce, a Wall Street Journal analysis found. Newly identified Russian trolls posted politically divisive messages on Twitter as recently as last month, hitting on a wide array of hot-button issues, according to a Journal analysis of recently revealed investigative documents and Twitter data. The new tranche of about 1,100 account names, released Monday by Democrats on the House Intelligence Committee, brings the total number of publicly known Russian troll-farm-operated accounts to more than 3,800. Last month, the Journal reported that the identities of many of the Russian accounts hadn’t been publicly revealed. The newly identified users posted more than 2.9 million tweets and retweets, bringing the total amount of Russian troll farm content on the platform to more than 8 million tweets and retweets, the Journal’s analysis found. “By releasing this Twitter data, we hope that researchers will continue their important work exposing any additional Russian operators who used similar tactics and themes,” Rep. Adam Schiff (D., Calif.) said in a statement. 

FBI Agent Peter Strzok, author of anti-Trump text messages, escorted out of bureau headquarters but still employed: Lawyer - Peter Strzok, the FBI agent whose text messages highly critical of President Donald Trump have fueled claims that the special counsel's ongoing investigation of the Trump presidential campaign is tainted by bias, was escorted out of the bureau's headquarters, his lawyer said Tuesday.But Strzok "remains a proud FBI agent who wants to continue working to keep the American people safe," his lawyer Aitan Goelman said in a prepared statement.Goelman said that Strzok was "escorted from the [FBI] building as part of ... ongoing internal proceedings."Goelman's statement was issued on the heels of Twitter posts by several reporters saying that Strzok had been marched out of the FBI building in Washington on Friday. That was a day after the release of a report by the Justice Department's internal watchdog, which criticized Strzok for his conduct. @LauraAJarrett:  News - FBI special agent Peter Strzok was escorted out of the FBI building on Friday, source familiar tells me; as of today, he is still employed; he's been stationed in Human Resources since dismissal from Mueller team.An FBI spokeswoman, when contacted by CNBC, said "we don't have a comment," when asked both if Strzok remained employed by the bureau, and if he was escorted from the building as reported."Generally speaking, we do not comment on personnel matters," the spokeswoman said. Goelman, in his statement, said, "Pete has steadfastly played by the rules and respected the process, and yet he continues to be the target of unfounded personal attacks, political games and inappropriate information leaks," Goelman said."All of this seriously calls into question the impartiality of the disciplinary process, which now appears tainted by political influence," Goelman said. "Instead of publicly calling for a long-serving FBI agent to be summarily fired, politicians should allow the disciplinary process to play out free from political pressure."

Prosecutors piece together Trump attorney's shredded documents, retrieve encrypted phone messages - Prosecutors say they have reconstructed 16 pages of documents that Michael Cohen had put through a paper shredder, in the latest bit of lamentable news for Donald Trump’s former lawyer.  Cohen’s home, office, and hotel room were raided in April by federal prosecutors investigating possible wire fraud and campaign finance crimes related to a $130,000 payment made to adult film star Stormy Daniels. Daniels and her attorney Michael Avenatti have alleged that the payment, made shortly before the November 2016 presidential election, was hush money to keep her from publicly talking about a sexual tryst she had with Trump in 2006.In a June 15 letter to Judge Kimba Wood obtained by Politico, US government attorneys say that “the contents of a shredding machine were seized on April 9, 2018. The reconstructed documents were produced today, and are approximately 16 pages long.” They have offered no specifics about the content of these documents. Prosecutors also told the court that they have successfully retrieved 315 megabytes of data from one of the two Blackberries seized from Cohen during the same raid. Additionally, 731 pages of messages and call logs, that had been encrypted through the use of messaging apps like Signal and WhatsApp, have been recovered.

Obama’s silky lie and FBI bias in the Clinton investigation - Of all the silky lies being told in Washington over the findings of the FBI’s inspector general on the biased culture of those investigating Hillary Clinton’s email server, one lie seems to be ignored: It’s the silky lie told by then-President Barack Obama. It may have set the tone for the smarmy intrigue detailed in the FBI inspector general’s damning 500-page report on the investigation of Hillary Clinton’s email scandal. And Washington is revealed once again as our modern Versailles, a place of courtiers and lickspittles who’d use the Ministry of Justice to serve their ambitions.  Clinton had endangered top secret information by using an unsecured, home-brew email server when she was U.S. secretary of state. Any other American who dared risk top government secrets on a basement server would have faced federal prosecution and prison. Obama’s lie was told in 2015, when Obama was asked by CBS’ Bill Plante when he learned Mrs. Clinton had used an unsecured email server. “The same time everybody else learned it, through news reports,” Obama said. He was so silky that you couldn’t even hear his tongue rustling along his teeth.  But Obama did not learn about Clinton’s home-brew server like “everybody else.” According to the inspector general’s report, Obama was in fact one of 13 top government officials communicating with Clinton on her private email server, even as Clinton’s server was targeted by foreign intelligence services.According to the IG report, before former (and fired) FBI Director James Comey took it upon himself to publicly criticize Clinton (and exonerate her from a criminal charge), a draft of his public address was heavily edited.It was edited for Hillary Clinton’s benefit, to buttress the case that what she did wasn’t prosecutable.But Comey’s comments were also edited to protect someone else. The IG report discusses a key paragraph in Comey’s statement summarizing the FBI’s thinking that “hostile actors” had accessed Clinton’s server.The paragraph, the report said, “referenced Clinton’s use of her private email for an exchange with then President Obama while in the territory of a foreign adversary. This reference was later changed to ‘another senior government official,’ and ultimately was omitted.”

Regulators’ dangerous plan to carve up the Volcker Rule -  Recently, the five financial regulators responsible for implementing the Volcker Rule issued a proposal that would carve up key elements of the rule.  The changes would narrow definitions, expand certain exemptions and significantly reduce the requirements for banks to demonstrate compliance — giving them more leeway to engage in highly risky and conflicted activities. It is particularly dangerous to introduce more risk into the banking system at a time when regulators and legislators are reducing the resilience of the system by chipping away at several other post-crisis safeguards. The Volcker Rule — Section 619 of the Dodd-Frank Act — prohibits banks and their affiliates from engaging in proprietary trading and owning, investing or sponsoring hedge funds and private equity funds. The Volcker Rule also sets limits on these activities for systemically important nonbank financial companies. Proprietary trading, in which a firm trades financial instruments for its own profit, can lead to massive and rapid losses. During the 2007-2008 financial crisis, banks suffered severe trading book losses in part because of proprietary trades involving financial instruments packed with or referencing subprime mortgages and other assets. Banks also suffered losses during the crisis on their hedge fund and private equity investments: an indirect way to gain exposure to proprietary trading.  Several of the proposed changes will make it easier to disguise proprietary trading. Under the current rule, if banks claim that a trade falls under the Volcker Rule’s hedging exemption, the bank must perform ongoing correlation analyses to demonstrate that the hedge is in fact reducing risk. This is a sensible requirement, as banks should show that the trade classified as a hedge is indeed hedging and not magnifying a certain exposure. The Volcker Rule rewrite removes the correlation analysis requirement and lowers the bar for what qualifies as a hedge by eliminating language requiring the hedge to “demonstrably reduce or otherwise significantly mitigate” the exposure. These are the types of analyses banks should be performing anyway to execute sound risk management.  These changes to the hedging exemption will make it easier for banks to engage in proprietary trading under the guise of risk-mitigating hedging — a dangerous possibility demonstrated by the $6 billion London Whale trading loss in 2012 that was supposedly a hedge. As Securities and Exchange Commissioner Kara Stein states, the SEC’s own analysis of the rewrite admits that “some banking entities may be able to engage in speculative proprietary trading activities while relying on the risk-mitigating hedging exemption.”

Will states pick up where feds left off on derivatives regulation -- As state attorneys general take on a more muscular role in financial policy, enforcing consumer protection laws amid the deregulatory wave in Washington, they may soon add another item to their agenda: derivatives. That is the hope of Michael Greenberger, a law professor at the University of Maryland, who recently published a paper on how big banks — such as JPMorgan Chase, Bank of America and Goldman Sachs — have taken advantage of loopholes in the regulation of derivatives under the Dodd-Frank Act. With efforts to tighten derivatives regulations languishing in the nation’s capital, Greenberger called on state regulators and attorneys general to consider filing lawsuits in federal court that show the banks’ actions pose a financial threat to the public. Getting states involved, though, will be an uphill battle, he said. “The biggest problem in getting the state attorneys general to do this is a lack of understanding,” Michael Greenberger, a professor at the University of Maryland’s Carey School of Law, said during a panel discussion in Manhattan on Tuesday. He cited the confusion that comes along with vague terms such as “naked credit default swaps” and “collateralized debt obligations.” 

6 items on Fed’s full regulatory docket - On the regulatory front, the Federal Reserve Board has been active under Chairman Jerome Powell. The workload is expected to remain busy for the foreseeable future, thanks in large part to enactment of the recent regulatory relief bill. At a press conference on Wednesday, Powell said the Fed has “a pretty full docket right now” on regulatory issues. That he would be focused on regulatory issues makes sense. When he became head of the central bank’s Supervisory Committee as a Fed governor, he committed to revising bank board rules, increasing transparency around stress tests and amending the enhanced supplementary leverage ratio to make it less binding. “The financial system all but failed 10 years ago,” Powell said at the press conference. “We went to work for 10 years to strengthen it — stronger capital, stronger liquidity, stress testing, resolution planning. We want to keep all that stuff. We want to make it even more effective and certainly more efficient.”Powell also noted that the agency is working on tailoring regulation for smaller institutions, which critics say the Dodd-Frank Act neglected to do. This is in addition to implementing a key reform of the reg relief bill that President Trump signed into a law: an increase in the asset threshold for “systemically important financial institutions” to $250 billion, from $50 billion. Here is a list of items taken on by the Fed exclusively or where the central bank is working with other regulators. Some rules have already been finished, and some have yet to begin. (Bloomberg NewsSlide 1 of 8)

Stress test results show hit to capital from tax reform — The largest banks were able to maintain minimum capital levels in the first round of stress tests released Thursday, though some firms took larger losses because of higher credit card balances and one-time accounting challenges related to last year’s tax overhaul. “Despite a tough scenario and other factors that affected this year’s test, the capital levels of the firms after the hypothetical severe global recession are higher than the actual capital levels of large banks in the years leading up to the most recent recession,” said Federal Reserve Vice Chairman for Supervision Randal Quarles. The Fed issued the results for 35 banks that participated in the Dodd-Frank Act Stress Test in 2018. The tests mandated by the 2010 reform law — known as DFAST — precede a separate round of stress tests results expected next week in the Fed's Comprehensive Capital Analysis and Review. The Fed added the results of six new banks — Barclays, UBS, Royal Bank of Canada, BNP Paribas, Credit Suisse and DB USA — that are the U.S.-based holding companies for foreign-owned banking giants. DB USA replaces Deutsche Bank Trust, which had been subject to stress testing requirements in earlier years. Those banks' "intermediate holding companies," or IHCs, performed especially well in terms of capital retention, with Credit Suisse topping the list with 17.6% Common Equity Tier 1 ratio in the severely adverse scenario, or CET1. UBS Americas followed with 16.4% and Santander with 15.2%. DB USA and MUFG Americas each retained 12.2% CET1 post-stress, while RBC and TD Group each retained 11.2% CET1. Among U.S. based banks, Northern Trust topped out at 11.7% CET1 post-stress capital. Only a few banks came close to the minimum 4.5% CET1 ratio. State Street’s post-stress CET1 capital was the lowest at 5.3%, while Goldman Sachs’ post-stress capital was 5.6% and Capital One Financial Corp. came in at 5.7%. 

U.S. banks seen boosting payouts $30 billion after stress tests -- Harsher Federal Reserve stress tests this year won’t stop U.S. banks from increasing their payouts to shareholders. As the annual review gets underway this week, the 25 largest lenders are gearing up to announce dividends and buybacks totaling roughly $30 billion more than last year, representing a 25% increase, according to analysts’ estimates compiled by Bloomberg. JPMorgan Chase, Bank of America and Citigroup are likely to distribute more than 100% of their profits in the next four quarters, according to the estimates. Goldman Sachs Group and Morgan Stanley might not be so lucky. Their earnings are more closely linked to capital markets, which suffer more under the tougher macroeconomic scenario in this year’s test. After years of rebuilding capital buffers by holding on to most of their profits, the largest U.S. banks have been boosting their dividends and buybacks in recent years as they reached capital levels the Fed found sufficient. For the first time since the tests were introduced in 2009, all the banks passed last year as they adjusted to regulators’ expectations for the exercise and as regional banks were exempted from the toughest portion. This year’s average payout ratio will rise to about 96% for the 25 largest banks from 89% in 2017, analysts estimated. The Fed has proposed easing the tests for regional banks further in coming years, which could create more opportunities to boost shareholder returns.

Citibank Fined $100 Million for Manipulating Key Global Interest Rate - Citibank on Friday reached a settlement with 42 U.S. states to pay a $100 million fine for manipulation of LIBOR, a key measure of global interest rates that impacts trillions of dollars worth of loans worldwide, including consumer products.The settlement contains details of instant messages and emails exchanged between Citibank employees as they concealed or misreported what they were paying for interbank loans, mostly in 2008 and 2009. Citi wanted to avoid the appearance of weakness that might have come from being charged high interest rates. The settlement also claims that Citi made millions of dollars in “unjust gains” in deals with governmental and non-profit entities by fixing the rate. New York Attorney General Barbara Underwood described Citi’s actions as “fraudulent conduct” that undermined financial markets.LIBOR, or the London Interbank Offered Rate, has been described as the most important interest rate in the world. It is based on a basket of major currencies, and sets the price banks pay one another for loans. It has a major direct impact on everyday borrowers, with rates on loans such as mortgages pegged to LIBOR. But manipulation of LIBOR has been disturbingly widespread among major banks, particularly before the 2008 financial crisis. U.K. bank Barclays reached a $453 million settlement over rate-fixing in 2012. The same year, UBS agreed to pay a staggering $1.5 billion in fines for fraud and bribery linked to LIBOR manipulation. Such manipulation may have contributed to the U.S. mortgage crisis by driving up home loan rates.

Banks took wide-ranging actions to head off more sales abuses: OCC - Federal banking regulators have released new information about actions that some of the nation’s largest banks are taking to prevent sales abuses, but Senate Democrats continue to push for more disclosure. In a six-page letter sent to key Republicans and Democrats in Congress, Comptroller of the Currency Joseph Otting said that several banks have devised “fair banking” policies that address what employee conduct is expected and lay out repercussions for inappropriate actions. Otting also described how some banks have been developing “sales practices dashboards,” which use data from various sources to monitor sales activity. He said that many banks have reassessed the design of their incentive compensation programs with the goal of reducing the potential for bad behavior.The letter, obtained by American Banker, was sent to Capitol Hill on Monday, in advance of Otting’s appearances this week before House and Senate committees. During those legislative hearings, Otting faced pressure to release more information about his agency’s review of sales practices at dozens of large and midsized banks. The review was launched back in 2016 in response to revelations that Wells Fargo employees had opened more than 2 million deposit and credit card accounts without customers’ consent. The company later uncovered another 1.4 million accounts that may have been opened fraudulently.  Otting confirmed that the Office of the Comptroller of the Currency issued 252 Matters Requiring Attention notices to the more than 40 banks that took part in the review, as was previously reported by American Banker.   But Democrats on the Senate Banking Committee are continuing to press for more information about any misconduct that the sales practices review uncovered. “Consumers deserve to know whether the institutions with which they choose to bank engage in predatory sales practices,” eight Democratic senators, including Sherrod Brown of Ohio, Elizabeth Warren of Massachusetts and Robert Menendez of New Jersey, wrote in a letter to Otting on Thursday.

Congressional Black Caucus raises alarm over OCC chief's comments — The Congressional Black Caucus has requested a meeting with Comptroller of the Currency Joseph Otting over comments he made last week that appeared to downplay the existence of discrimination in banking.Otting told the House Financial Services Committee that he has not "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 comment sparked confusion and alarm among Democrats at the hearing and in Otting's follow-up appearance before the Senate Banking Committee the next day. Otting later clarified that he believed discrimination existed but that he had "personally never experienced” it.

Banks take on Sessions over legalized pot - The nation's banks are taking on Attorney General Jeff Sessions over pot with a big lobbying push to loosen federal restrictions on the surging legalized marijuana industry. Emboldened by support from both President Donald Trump and Sen. Elizabeth Warren (D-Mass.) — two relentless foes on most other issues — top banking trade groups are pressing policymakers to make it easier for their members to serve cannabis businesses that are now legal in states like California and Colorado. “If we’re not at a turning point, we’re very close to it,” said Cam Fine, the former head of the Independent Community Bankers of America trade association. Even Jerome Powell, chairman of the Federal Reserve, is pushing for action on the issue. “This is a very difficult area,” Powell said during a press conference this week. “It puts federally chartered banks in a very difficult situation. It would be great if that could be clarified.” Lenders see the potential for lucrative business in working with the industry. So they’re backing proposals that would address conflicts between a growing number of permissive state laws and the longstanding federal ban on the sale of marijuana that has chilled banks’ appetite to offer accounts to pot-related businesses. The unresolved legal questions have been heightened by Sessions’ public campaign against legalizing marijuana. That’s left many banks on the sidelines and forced pot businesses to carry out transactions in cash, making them a target for theft and violence. The American Bankers Association believes “the time has come for Congress and the regulatory agencies to provide greater legal clarity to banks operating in states where marijuana has been legalized for medical or adult use,” a spokesman said. 

Comcast, AT&T Set To Become World's Most Indebted Companies With Over $350BN In Debt -- At a time when the IMF estimates that more than 20% of the world's companies would be unable to cover their interest payments if interest rates moved sharply higher, Comcast and AT&T are poised to become the most indebted companies in the world following media megadeals that leave the two companies with little room to maneuver if profits fail to materialize, according to the Wall Street Journal. As WSJ points out, assuming both are finalized, the deals would leave the two companies with a combined $350 billion in bonds and loans, more than one-third of a trillion dollars in debt. The number is making some bond fund managers nervous, and some are saying they won't include Comcast or AT&T debt in their portfolios - unless they bear a suitably high yield. But rather than looking at these deals as isolated examples, WSJ reminds us that companies only arrived at this level of corporate indebtedness following a decade long surge in corporate borrowing, as companies - including these two telecoms giants - eagerly bought back their shares to appease investors, and financed these purchases with debt. Global corporate debt, excluding financial institutions, now stands at $11 trillion. Meanwhile, the median leverage for companies with an investment grade rating has increased by 30% since the financial crisis. AT&T's now-closed deal to buy Time Warner has left it with nearly $200 billion in debt,  a leverage ratio that is just below the average for companies rated at the bottom of the investment-grade ladder (though to be sure, the company says it's leverage is significantly lower). AT&T will have about $181 billion of debt because of the Time Warner purchase but other liabilities, including operating leases and postretirement obligations, amount to about $50 billion, Mr. Arden says. As a result, S&P estimates the company’s post-deal leverage at about 3.5 times earnings before interest, taxes, depreciation and amortization, or Ebitda. That is slightly below the 3.75 times leverage that S&P views as typical for comparable telecommunications companies rated triple-B-minus, the lowest investment grade rating. AT&T calculates its leverage at 2.9 times Ebitda, but doesn’t include leases or postretirement obligations in the figure. The telecommunications firm forecasts returning to 2.5 times within four years, a person familiar with the company said.

Are We in a Corporate-Debt Bubble? | by Susan Lund - Is growing corporate debt a bubble waiting to burst? In the ten years since the global financial crisis, the debt held by nonfinancial corporations has grown by $29 trillion – almost as must as government debt – according to new researchby the McKinsey Global Institute. A market correction is likely in store. Yet the growth of corporate debt is not as ominous as it first appears – and, indeed, in some ways even points to a positive economic outcome. Over the past decade, the corporate-bond market has surged as banks have restructured and repaired their balance sheets. Since 2007, the value of corporate bonds outstanding from nonfinancial companies has nearly tripled – to $11.7 trillion – and their share of global GDP has doubled. Traditionally, the corporate-bond market was centered in the United States, but now companies from around the world have joined in. The broad shift to bond financing is a welcome development.Debt capital markets provide an important asset class for institutional investors, and give large corporations an alternative to bank loans. Yet it is also clear that many higher-risk borrowers have tapped the bond market in the years of ultra-cheap credit. Over the next five years, a record $1.5 trillion worth of nonfinancial corporate bonds will mature each year; as some companies struggle to repay, defaults will most likely rise. The average quality of borrowers has declined. In the US, 22% of nonfinancial corporate debt outstanding comprises “junk” bonds from speculative-grade issuers, and another 40% are rated BBB, just one notch above junk. In other words, nearly two-thirds of bonds are from companies at a higher risk of default, including many US retailers. These businesses have a lot of speculative-grade debt coming due over the next five years, and for many the math simply will not add up, owing to declining sales as shoppers go online.Another potential source of vulnerability is soaring corporate debt in developing countries, which have accounted for two-thirds of overall corporate-debt growth since 2007. In the past, advanced-economy firms were the largest borrowers. But much has changed with the rise of China, which is now one of the largest corporate-bond markets in the world. Between 2007 and the end of 2017, the value of Chinese nonfinancial corporate bonds outstanding increased from just $69 billion to $2 trillion. One final source of risk is the fragile finances of some bond-issuing companies. To be sure, MGI finds that in advanced economies, less than 10% of bonds would be at higher risk of default if interest rates were to rise by 200 basis points. Similarly, in Europe, the share of bonds issued by at-risk companies is currently less than 5% in most countries, indicating that only the largest blue-chip companies have issued bonds so far.

Bitcoin Frauds Keep Growing - William Black - One of the prime myths that white-collar criminologists have to refute repeatedly is that blockchain makes fraud impossible.  Blockchain, in some settings, is a costly means of making some frauds much more difficult.  Blockchain is useless against the most important frauds.  The primitive worship of blockchain as a supposed garlic capable of warding off evil breeds complacency, and complacency produces increased fraud and greatly extends the life of fraud.The difference between making fraud impossible and (in a few specialized settings) ‘much more difficult’ brings to mind the critical difference explained in The Princess Bride between ‘dead’ and ‘mostly dead.’  Blockchain is useless in stopping, for example, any or the three epidemics of ‘control fraud’ that drove the 2008 financial crisis and the Great Recession.  Lenders’ executives extorted appraisers to inflate appraised values of homes, creating a Gresham’s dynamic in which bad ethics tends to drive good ethics out of the markets and professions.  The second fraud epidemic in loan origination was ‘liar’s’ loans, which were designed to aid lenders and their agents to inflate the incomes of borrowers.  Note that both of these primary fraudulent loan origination schemes involve lenders deliberately seeking to provide false (inflated) data designed to inflate the market value of homes.  The third fraud epidemic that drove the U.S. financial crisis was the fraudulent sale of these mortgages to the secondary market through false “reps and warranties” about loan underwriting – principally the fraudulently inflated appraisal values and borrowers’ incomes. Blockchain technology allows connected computers to reach agreement over shared data.  The central limitation is “shared data.”  If the shared data are my transfer of one bitcoin to a merchant to purchase a good, then blockchain technology is typically reliable.  (The blockchain confirmation process necessary to prevent fraud can take too long to be commercially viable for many transactions, but that is a different issue.)

FRED now has crypto data - Via David Siegel: Not much, but it’s a start. The individual series are:

• Coinbase Index https://fred.stlouisfed.org/series/CBCCIND
• Coinbase Bitcoin https://fred.stlouisfed.org/series/CBBTCUSD
• Coinbase Bitcoin Cash https://fred.stlouisfed.org/series/CBBCHUSD
• Coinbase Ethereum https://fred.stlouisfed.org/series/CBETHUSD
• Coinbase Litecoin https://fred.stlouisfed.org/series/CBLTCUSD

Bitcoin Could Break the Internet, Central Bank Overseer Says - The Bank for International Settlements just told the cryptocurrency world it’s not ready for prime time -- and as far as mainstream financial services go, may never be. In a withering 24-page article released Sunday as part of its annual economic report, the BIS said Bitcoin and its ilk suffered from “a range of shortcomings” that would prevent cryptocurrencies from ever fulfilling the lofty expectations that prompted an explosion of interest -- and investment -- in the would-be asset class. The BIS said cryptocurrencies are too unstable, consume too much electricity, and are subject to too much manipulation and fraud to ever serve as bona fide mediums of exchange in the global economy. It cited the decentralized nature of cryptocurrencies -- Bitcoin and its imitators are created, transacted, and accounted for on a distributed network of computers -- as a fundamental flaw rather than a key strength. In one of its most poignant findings, the BIS analyzed what it would take for the blockchain software underpinning Bitcoin to process the digital retail transactions currently handled by national payment systems. As the size of so many ledgers swell, the researchers found, it would eventually overwhelm everything from individual smartphones to servers. Researchers also said that the race by so-called Bitcoin miners to be the first to process transactions eats about the same amount of electricity as Switzerland does. “Put in the simplest terms, the quest for decentralized trust has quickly become an environmental disaster,” they said.

Goldman Sachs Gets into the Non-Collateralized Personal Loan Business -- Pam Martens - Goldman Sachs CEO Lloyd Blankfein famously said in 2009 at the height of the financial crisis that he was “doing God’s work.” What Goldman Sachs was actually doing in secret at that time was receiving billions of dollars in undisclosed loans from the Federal Reserve – often at the insanely low interest rate of .01 percent. Goldman was also living off billions of dollars in publicly acknowledged taxpayer bailouts, while paying out obscene bonuses to its executives, including those who had shorted (made bets against) the U.S. housing market as it collapsed into the greatest disaster since the Great Depression. (See related articles below.)Last week we received an unsolicited direct mail offer from Goldman Sachs. It was offering us the ability to borrow a personal loan ranging from $3500 to $40,000 with rates ranging from 6.99 to 24.99 percent. The solicitation noted that “only the most creditworthy applicants qualify for the lowest rates; and longer term loans have higher rates.”The Goldman deal was coming from “Marcus,” which a footnote informed us “is a product of Goldman Sachs Bank USA,” a bank being backstopped with Federal deposit insurance, which is, in turn, backstopped ultimately by the U.S. taxpayer. To summarize, a bank that received a cumulative total of $814 billion in bailout funds during a financial crash it helped to create, with much of that amount consisting of secret loans from the Fed at an interest rate close to zero, wants to charge interest rates as high as 25 percent to Americans, many of whom are still struggling to recover from the greatest economic downturn since the 1930s. America has traveled from an age of enlightenment on usury to the Dark Ages.

Trump to nominate budget official as next consumer bureau chief | TheHill: President Trump will nominate Office of Management and Budget (OMB) official Kathy Kraninger to be the next director of the Consumer Financial Protection Bureau (CFPB), the White House said Saturday. White House deputy press secretary Lindsay Walters confirmed Trump’s choice of Kraninger, an associate director at OMB, in a Saturday statement. Kraninger would take the reins of the politically polarizing consumer watchdog agency that Republicans have long fought to weaken. Walters said the little-known budget official “will bring a fresh perspective and much-needed management experience to the [bureau], which has been plagued by excessive spending, dysfunctional operations, and politicized agendas." Kraninger would replace White House budget director Mick Mulvaney, the OMB chief who has served as the CFPB’s acting director since November. Trump's decision to nominate Kraninger was first reported by Bloomberg. While she has little apparent experience with financial regulation, the White House said Kraninger is "a staunch supporter of free enterprise" that will "ensure that consumers and markets are not harmed by fraudulent actors. Kraninger is seen as a politically safe choice who would continue to ease the CFPB’s policing of the financial services industry. Even so, she will likely to face a lengthy confirmation process as the Senate sprints to finish must-pass legislation and approve a slew of federal judges before November's midterm elections. 

Pelosi, Brown criticize Trump's pick to lead CFPB - House Minority Leader Nancy Pelosi on Monday criticized President Trump's apparent choice to head the Consumer Financial Protection Bureau, claiming Republicans are putting the interests of banks and financial firms ahead of consumers."The Trump Administration’s nominee to lead the Bureau has an opportunity to be a champion for consumers and not the financial industry," Pelosi said in a statement. "But her apparent lack of experience in consumer finance, coupled with the Administration’s hostility to consumer protection, raises questions about her qualifications to lead such an important agency."The apparent nominee, Kathy Kraninger, has no experience in consumer finance. She is currently acting CFPB Director Mick Mulvaney's deputy at the Office of Management and Budget, but spent most of her career at the Department of Homeland Security.  She faces a potentially grueling confirmation battle. If she is opposed by Democrats, holding up her nomination, Mulvaney's tenure at the CFPB could be significantly extended.Pelosi said Republicans "have fought relentlessly to destroy the bureau," which was created by the Dodd-Frank Act in the aftermath of the financial crisis to protect consumers from fraud and abuse."Democrats and the American people will hold Republicans accountable for their cynical big bank and big corporate donor-first agenda that put the interests of big banks and corporations before those of hard-working families," Pelosi said in the statement.Sen. Sherrod Brown, D-Ohio, the ranking member of the Senate Banking Committee, said in a press release that working families "need a CFPB Director who will fight for them.""For months I have called for a CFPB Director with a track record of holding Wall Street and payday lenders accountable," Brown said. "The White House should pick an experienced, serious, independent leader.”But John Czwartacki, the CFPB's chief spokesman, suggested in a tweet Monday that critics were unfairly questioning the choice of Kraninger because of her gender.Linking to an earlier social media post from a former George W. Bush administration official, Czwartacki tw eeted: "A powerful observation about the role sexism is playing in the opposition to Kathy Kraninger. In 2018, this is so sad."

Dems suggest CFPB nominee had role in ‘zero-tolerance’ border policy - Opposition to the White House pick to run Consumer Financial Protection Bureau escalated Tuesday when Democratic senators suggested the nominee may have been involved in the policy of separating children from their parents at the U.S. border.Sens. Elizabeth Warren of Massachusetts and Sherrod Brown of Ohio, sent a letter Tuesday to Kathy Kraninger, seeking information on what role she played in the so-called zero-tolerance policy. Warren separately tweeted that she will place a hold on the nomination until Kraninger provides more details."Kathy Kraninger helps oversee the agencies that are ripping kids from their parents. Now @realDonaldTrump wants her to run the @CFPB. I will put a hold on her nomination – & fight it at every step – until she turns over all documents about her role in this," Warren said in the tweet. Kraninger is program associate director for general government programs at the Office of Management and Budget, with oversight of seven executive branch agencies, including the Department of Homeland Security and the Department of Justice. The Homeland Security and Justice departments developed "zero-tolerance policy" announced by Attorney General Jeff Sessions, a policy that Brown and Warren said has led to the "tearing away more than 2,000 children from the arms of their parents.""The American people deserve to know what role you have played in developing and implementing this appalling process," Warren and Brown wrote in the letter.In a press release, the senators noted that Kraninger is involved in "ongoing policy and management guidance," "implementation of policy options," and working with agencies on budgetary decisions related to legislation or administration policy.The senators asked Kraninger to provide a complete description of any role she played in OMB budgetary or policy decisions, analyses or recommendations related to DOJ's "Zero-Tolerance" policy. Kraninger would succeed former CFPB Director Richard Cordray, but now answers to Mick Mulvaney, who is serving a dual role as head of the Office of Management and Budget and acting head of the CFPB.

 CFPB nominee likely connected to Trump's 'zero-tolerance' immigration policy - Kathy Kraninger, the nominee to head the Consumer Financial Protection Bureau, likely was deeply involved in President Trump's "zero-tolerance" immigration policy, according to former officials with the Office of Management and Budget and the Department of Homeland Security. Kraninger would have taken part in interagency meetings and discussions about the Trump administration's policy of separating migrant children from their parents at the U.S. border as part of her job at OMB, where she is a program associate director for general government programs, these sources said. "OMB is involved in policy across the executive branch so she absolutely would have deep knowledge and be involved in policymaking around immigration, whether it's the budgetary impact, immigration centers, ICE, or personnel," said Kenneth Baer, a former associate director of OMB for communications and strategic planning in the Obama administration and the CEO and co-founder of Crosscut Strategies, a strategic communications and public affairs firm in Washington. At OMB, Kraninger has budgetary oversight of seven executive branch agencies, including the Department of Homeland Security and the Department of Justice. Additionally, Kraninger previously served for most of her career in homeland security, where before 2017 was a deputy assistant secretary for policy on screening coordination and was involved in implementing screening programs. She also supported the Transportation Security Administration's checkpoint operations and policies.

Mulvaney unfazed as immigration policy clouds CFPB nominee -  Acting Consumer Financial Protection Bureau Director Mick Mulvaney urged lawmakers Wednesday to get behind the nominee who has been chosen to run the agency permanently and faced heightened criticism over her experience and possible ties to the administration's "zero tolerance" immigration policy. "Kathy Kraninger ... is going to be fantastic in this position," Mulvaney, who is also director of the Office of Management and Budget, said at a fintech conference in New York. Mulvaney then seemed to goad Democrats, who have been highly critical of the acting director's shepherding of the agency, by noting agency appointment rules that would let him keep his job for several months if Kraninger's nomination is held up. On Tuesday, Sen. Elizabeth Warren, D-Mass., pledged to place hold on the nomination, saying she wanted more information on Kraninger's possible role at OMB helping to devise the policy to separate children from parents at the border. "I am allowed to stay now until [Kraninger] is confirmed or denied by the Senate," Mulvaney said at the event, which was hosted by CB Insights, although he predicted that she would be confirmed in the fourth quarter. "The bottom line is this, in the extreme case — I doubt very seriously, and do not think it will come to this — I could stay until the end of the first term of the presidency." 

Trump's CFPB choice faces uphill battle — and that's part of the plan - President Trump has yet to formally name Kathy Kraninger as his choice to head the Consumer Financial Protection Bureau, but her nomination is already in trouble — and that may be just fine with the White House.  Kraninger has no experience in consumer finance and is currently Mick Mulvaney’s deputy at the Office of Management and Budget, two points likely to guarantee opposition from Senate Democrats and a grueling confirmation battle that will likely stretch out for months. “The Democrats will certainly strongly oppose Kraninger’s nomination,” said Alan Kaplinsky, co-practice leader at Ballard Spahr’s Consumer Financial Services Group.  With Sen. John McCain, R-Ariz., still out on extended medical leave, Senate Republicans have just 50 votes, giving them no room to maneuver if Democrats stay united. If even one GOP senator opposes Kraninger, her nomination will fail.  “I’ll be very surprised if the Republicans push" her nomination, Kaplinsky said. “While the Republicans still have the ability to get her confirmed, I don’t see them picking a fight right now before the midterm elections. They will reassess things after the elections.” But that risk appears to be part of the White House plan, according to industry observers, and ultimately designed to extend Mulvaney’s tenure as acting CFPB director for as long as possible. “Either Ms. Kraninger is confirmed and she continues the reforms begun by Mulvaney for a five-year term, or her nomination is defeated and Mulvaney continues the reforms himself until well into next year,” said Ben Olson, a partner at Buckley Sandler and a former deputy assistant director at the CFPB. “The longer the nomination process lasts, the longer the Vacancies Act allows Mulvaney to stay.”  The White House may even be secretly hoping Kraninger’s nomination is defeated.  “President Trump would not be the first president to make a nomination that won't get confirmed to extend the tenure of an acting official,”

Trump’s CFPB pick clears up what, exactly? - The eleventh-hour nomination of Kathy Kraninger to head the Consumer Financial Protection Bureau ends months of speculation about who would be named to fill the position. But with the decision already under fire from the right and left alike, it doesn’t provide much clarity for the agency’s future. Below are three big questions that remain as Congress begins to consider the nomination:  As an associate director at the Office of Management and Budget, Kraninger was virtually unknown to the financial services community before late last week, when rumors of the nomination began to surface. She has a background in homeland security issues and joined the administration from the Senate Appropriations Committee, but nothing is known about her views on financial services, consumer protection or regulation. Her background has led some to wonder whether the Trump administration intends to seriously advocate for her confirmation — lobbying top senators and ensuring a successful vote — or whether she’s simply filling the role of nominee for acting CFPB Director Mick Mulvaney, who can remain in the position provided the Senate is considering someone.  “Given Ms. Kraninger’s apparent lack of qualifications for this role, it appears that her nomination may be less about securing her confirmation as director, and more about allowing Mick Mulvaney to continue to operate as acting director, which this nomination will potentially allow him to do through 2020 if she is not confirmed,” Rep. Maxine Waters, D-Calif., ranking member on the Financial Services Committee, said in a statement Monday evening. Is Kraninger a serious candidate, a placeholder or something in between? It’s a big unknown right now.  Given her lack of experience in the banking sector, her performance will be critical in determining whether she has a real shot at taking over the consumer agency — and whether the White House actually expects her to do so.  “Everybody’s going to be trying to figure out what she’s about,” But Kraninger is expected to face tough questions when she sits before the Banking Committee — and already, complications from her homeland security work threaten to potentially derail her nomination. Sens. Elizabeth Warren, D-Mass., and Sherrod Brown, D-Ohio, sent a letter to Kraninger on Tuesday asking about her involvement at the budget office in the White House’s controversial “zero-tolerance policy” that has led to the separation of nearly 2,000 children from their parents this spring. Given sharp debate over use of the policy, any involvement could make it difficult to secure even moderate Republican votes.

Another judge says CFPB structure is unconstitutional --A federal judge on Thursday ruled that the Consumer Financial Protection Bureau's structure is unconstitutional and disqualified the agency as a plaintiff in litigation against a New Jersey law firm that made high-cost loans to 9/11 first responders and pro football players diagnosed with brain injuries. Chief District Judge Loretta A. Preska of the U.S. District Court for the Southern District of New York found that the CFPB lacked the authority to bring claims against RD Funding in Cresskill, N.J., its owner Roni Dersovitz and two related companies, RD Legal Finance and RD Legal Funding Partners. The Dodd-Frank Act, in trying to establish the CFPB as an independent agency, permits the president to remove its director only "for cause" — which Preska ruled is an infringement on executive power. Since the court cannot change the statute, the CFPB should not exist, her decision said. A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit ruled in 2016 that the CFPB was unconstitutional, upholding a lower-court decision. But the full D.C. Circuit overruled the panel's decision in January. Preska's ruling will have a limited effect since it is not binding on other judges in the southern district or elsewhere, and does not affect two decisions by the U.S. Court of Appeals for the D.C. Circuit that have upheld the CFPB's structure, lawyers said. "There likely will be little support of the case in other courts that have upheld the constitutionality of the CFPB at the appellate level," said Richard Gottlieb, a partner at Manatt, Phelps & Phillips. However, some lawyers said the ruling could affect whether the CFPB's rules are considered applicable in the southern district, which in turn could interfere with enforcement actions pending there.

Will states fill the CFPB enforcement void? - As a state financial regulator, one question I am getting asked a lot is, “If the CFPB pulls back, will states fill the void?”  My answer: We will apply the same rigor to consumer protection that we always have, providing an unwavering commitment to protecting our citizens. The perception is certainly out there that the Consumer Finance Protection Bureau is moving less aggressively under the new administration. Indeed, acting Director Mick Mulvaney has often stated his desire, when it comes to enforcement, to rely more on state regulators and attorneys general. But enforcement cases are no walk in the park. And state regulators have to be vigorous in working them. Case in point: From 2014-2017, my agency spent three years working to close down a rogue payday lender that was abusing Mississippi consumers. In my state, the law says that a payday loan can be written for up to 30 days and another loan cannot be made until the first one is paid off. Yet this company, All American Check Cashing, brazenly ignored these laws and profited greatly using fraud and rollovers: writing shorter-term loans, training staff to falsely claim that a consumer had paid off a loan, issuing a whole new loan and double-charging a consumer, all within the 30-day window. And all of which was illegal.  Now, just because a state initiates an enforcement action doesn't mean the CFPB plays no role. We have information sharing agreements with CFPB. And once I notified the agency of the facts, it supported our case by taking separate legal action in areas beyond my authority, such as holding the company owner personally accountable.Thus, Mississippi succeeded in closing down a rogue player with CFPB playing a helpful, supporting role, which might be the model that Mulvaney has in mind in banking and nonbanking alike. This model relies on state regulators taking the lead and being committed to action.

White House pushes surprise Fannie, Freddie reform plan, but is it workable?— The Trump administration proposed Thursday to rip off the Band-Aid from Fannie Mae and Freddie Mac, ending conservatorship of the mortgage giants and leaving them to raise their own capital in the private market. But the plan raises a whole host of questions and left many wondering whether it could advance. Included as part of an Office of Management and Budget plan for reorganizing the government, the housing finance reform proposal would appear to require both legislative and administrative action, such as creating an explicit government guarantee for mortgage-backed securities for "limited, exigent circumstances." "There are large hurdles on both sides to getting this passed from a vote count perspective,” said Rob Zimmer, head of external communications for the Community Mortgage Lenders of America. The plan calls for reducing the footprint of the government-sponsored enterprises in the housing market. Fannie and Freddie would be converted into "fully private entities." The housing giants could access the explicit federal guarantee, but so could other market entrants.Both GSEs would lose their federal charters. A federal regulator would oversee the "fully privatized GSEs," approve the creation of new guarantors and "develop a regulatory environment that is conducive to ... competition." "If the GSEs lost some of the benefits that have led them to dominate the market, this would enable other private companies to begin competing in this space," the OMB plan said. "The regulator would also ensure fair access to the secondary market for all market participants, including community financial institutions and small lenders." But the plan developed by OMB Director Mick Mulvaney — who is also the acting director of the Consumer Financial Protection Bureau — immediately produced skepticism.Jaret Seiberg, an analyst at Cowen Washington Research Group, said it was not even clear if the plan had support elsewhere in the administration, such as from the Treasury Department or the Department of Housing and Urban Development. He also speculated that the GSE portion of the reorganization may have been written by Kathy Kraninger, an OMB deputy who is also the nominee to become permanent CFPB director.

Trump’s GSE plan: Familiar solution, familiar problems -- Since not long after Fannie Mae and Freddie Mac were seized by the government a decade ago, policymakers have been circling the same idea for how to revamp the housing finance system.  Broadly speaking, that plan would privatize the two government-sponsored enterprises while providing an explicit federal backstop for the mortgage market. Such an idea has been around since at least early 2010, and taken up by a wide variety of stakeholders over the years, including most famously Sens. Bob Corker, R-Tenn., and Mark Warner, D-Va. They managed to pass a bill based on the concept out of the Senate Banking Committee in 2014, but it died a quiet death afterward. While some details are different, the basic gist of the Corker-Warner bill was present in the Trump administration’s surprise proposal on housing finance reform issued on Thursday. That plan would privatize the GSEs, and create a government fund that provides a federal guarantee for mortgage-backed securities, similar to the Federal Deposit Insurance Corp. system for consumer deposits. (The original Corker-Warner bill also would have created an FDIC-like system, though it would have done away with the existing GSEs in favor of new entities that performed much the same function. Both plans call for multiple “guarantors” beyond the existing Fannie and Freddie.)The plan, tucked away in the larger government restructuring initiative from Office of Management and Budget Director Mick Mulvaney, was immediately praised by Corker, who noted the similarity. “The framework unveiled today by Director Mulvaney is the right one and closely resembles the approach we laid out in recent legislative drafts developed on a bipartisan basis in the Senate,” said Corker, who is retiring at the end of the year. “I am hopeful the reorganization plan will help continue to grow support for the need to address the last unfinished business of the financial crisis.”

Small lenders urge FHFA to let Fannie and Freddie rebuild capital — Days after the Federal Housing Finance Agency proposed a risk-based capital regime for Fannie Mae and Freddie Mac, industry groups representing smaller lenders called on the agency to take more immediate steps to release the two government-sponsored enterprises from conservatorship.In a letter this week, the trade associations, along with civil rights groups, urged FHFA Director Mel Watt to "direct Fannie and Freddie to develop capital restoration plans" and to suspend the companies' profit sweeps into the government. The organizations applauded the proposal FHFA released last week to establish minimum capital requirements, but said the "development of capital restoration plans and suspending the net-worth sweep are crucial first steps to rebuilding capital buffers." That would speed up the process of releasing the GSEs from government control as safe and reformed institutions, they said. 

Waters bill would strengthen FHFA oversight of mortgage servicers -— Rep. Maxine Waters, the ranking Democrat on the House Financial Services Committee, has introduced a bill intended to increase protections for homeowners facing possible foreclosure. The bill would increase the Federal Housing Finance Agency’s oversight of mortgage servicers that conduct business with the government-sponsored enterprises Fannie Mae and Freddie Mac. The bill comes on the heels of legislation that the California Democrat unveiled in April aimed at helping Federal Housing Administration borrowers. “Despite the lessons learned during the foreclosure crisis, we continue to uncover evidence of bad behavior by our nation’s mortgage servicers,” Waters said in a statement. “Borrowers can’t choose their servicer so it’s especially important that Congress provide strong protections to prevent servicers from taking advantage of borrowers and to protect borrowers from foreclosure.”

Overhauling 'Dark Ages' FHA a must for housing reform, HUD says - The Department of Housing and Urban Development believes that a “critical element” of housing finance reform is the need to modernize the risk management and technology platforms at the Federal Housing Administration, said Adolfo Marzol, a top HUD official.  “The difference now between FHA and, say, Fannie Mae or Freddie Mac are truly stark,” Marzol, who is the senior adviser to HUD Secretary Ben Carson, said Monday at an event hosted by the American Action Forum. “We really are in the Dark Ages.”  FHA and Ginnie Mae rely on a COBOL (common business-oriented language) computer operating system that was invented in 1959, which is mainframe-based. Increasingly, more government agencies are moving to a cloud-based system, which offers more security and allows a single operating system to move seamlessly between computers.   Marzol, who formerly worked in the private sector, said the FHA’s system today is behind the system Fannie Mae used 12 to 15 years ago.   “Our systems aren’t very reliable,” he said. “We have outages and they’re expensive to maintain, so it’s like a double whammy of the stuff is old and isn’t working very well, and yet maintaining old software on old technology that’s on mainframes is expensive, and the brainpower that knows how to do all that is slowly winding down.”  If the operating system were to fail, FHA single-family and multifamily loans would be unavailable until a replacement system was configured.   HUD has been lobbying for years to receive funding to update its computer systems, but Congress has failed to provide it, though Marzol said he is “heartened” by the growing support for modernization.  Newly-Senate confirmed FHA Commissioner Brian Montgomery also feels “very strongly” about an updated system, according to Marzol.

Mortgage applications for new homes drop along with sales and supply -  Mortgage applications for newly constructed homes declined in May as sales and supply are not keeping up with demand, the Mortgage Bankers Association said. "Despite strong demand, builders have not been able to ramp up the supply of new homes, as they face rising costs from key inputs such as lumber and having to raise wages to fill open positions," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release. "Additionally, our estimate of new home sales declined in May, reaching its lowest level since December 2017."There was a 4% drop in new home purchase loan applications compared with April, and a 0.5% decline from May 2017, the Builder Application Survey found. May's new home sales were at a seasonally adjusted annual rate of 626,000 units, which the MBA estimated based on the survey's data along with assumptions regarding market coverage and other factors. This was a 4.6% decline from April's pace of 656,000 units.On an unadjusted basis, there was an estimated 60,000 new homes sold in May, down from 63,000 in April but up from 57,000 for May 2017.The average loan size of new homes increased to $337,515 in May from $336,870 in April and $324,844 for May 2017. By product type, conventional loans composed 71.1% of loan applications. Buyers seeking Federal Housing Administration-insured loans made up 15.8% with those looking for Veterans Affairs-guaranteed financing were 12.1% of the total. Only 1% of the borrowers applied for a U.S. Department of Agriculture Rural Housing Service loan.

MBA: Mortgage Applications Increase in Latest Weekly Survey - From the MBA: Mortgage Applications Increase in Latest MBA Weekly SurveyMortgage applications increased 5.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 15, 2018. .. The Refinance Index increased 6 percent from the previous week. The seasonally adjusted Purchase Index increased 4 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 3 percent higher than the same week one year ago. ...The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) remained unchanged at 4.83 percent, with points decreasing to 0.48 from 0.53 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.

Mortgage rate hike not detrimental to housing market; tight supply - Rising mortgage rates are top of mind for the industry after the Federal Open Market Committee's decision to raise the federal funds rate last week, but short-term rate changes matter little to the housing market, according to First American Financial Corp. Chief Economist Mark Fleming.An increase in mortgage rates is actually a sign of a healthier economy, so growth in household income helps to offset the rise in rates. A much greater hurdle for homebuyers is limited home inventory, which is keeping potential homeowners out of the market and putting upward pressure on house values. "Homebuyers can adjust to higher mortgage rates by substituting a lower adjustable-rate mortgage for the fixed-rate mortgage or buy a less expensive home. In other words, the housing market is flexible and can adjust to moderately higher mortgage rates without significant impact," said Fleming.

Average mortgage rates retreat despite Fed hike --Mortgage rates slid over the past week and have now declined in three of the past four weeks, according to Freddie Mac. The 30-year fixed-rate mortgage averaged 4.57% for the week ending June 21, down from last week when it averaged 4.62%. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.9%. "After a sharp run-up in the early part of 2018, rates have stabilized over the last three months, with only a modest uptick since March. However, existing-home sales have hit a wall, declining in six of the last nine months on a year-over-year basis," Freddie Mac Chief Economist Sam Khater said in a press release.

FHFA House Price Index: Up 0.1% in April --The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for April. Here is the opening of the report:   U.S. house prices rose in April, up 0.1 percent from the previous month, according to the Federal Housing Finance Agency (FHFA) seasonally adjusted monthly House Price Index (HPI). The previously reported 0.1 percent increase in March was revised upward to 0.2 percent. [Read more]   The chart below illustrates the monthly HPI series, which is not adjusted for inflation, along with a real (inflation-adjusted) series using the Consumer Price Index: All Items Less Shelter.

NAR: "Existing-Home Sales Backpedal, Decrease 0.4 Percent in May" --From the NAR: Existing-Home Sales Backpedal, Decrease 0.4 Percent in MayExisting-home sales fell back for the second straight month in May, as only the Northeast region saw an uptick in activity, according to the National Association of Realtors®.Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 0.4 percent to a seasonally adjusted annual rate of 5.43 million in May from downwardly revised 5.45 million in April. With last month’s decline, sales are now 3.0 percent below a year ago and have fallen year-over-year for three straight months.... Total housing inventory at the end of May climbed 2.8 percent to 1.85 million existing homes available for sale, but is still 6.1 percent lower than a year ago (1.97 million) and has fallen year-over-year for 36 consecutive months. Unsold inventory is at a 4.1-month supply at the current sales pace (4.2 months a year ago).This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993.Sales in May (5.43 million SAAR) were 0.4% lower than last month, and were 3.0% below the May 2017 rate.The second graph shows nationwide inventory for existing homes. According to the NAR, inventory increased to 1.85 million in May from 1.80 million in April.   Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer. The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.Inventory decreased 6.1% year-over-year in May compared to May 2017.  Months of supply was at 4.1 months in May. Sales were below the consensus view. For existing home sales, a key number is inventory - and inventory is still low, but appears to be bottoming in some areas

A Few Comments on May Existing Home Sales -- Earlier: NAR: "Existing-Home Sales Backpedal, Decrease 0.4 Percent in May"  A few key points:
1) As usual, housing economist Tom Lawler's forecast was closer to the NAR report than the consensus. See:Lawler: Early Read on Existing Home Sales in April.   The consensus was for sales of 5.56 million SAAR, Lawler estimated the NAR would report 5.47 million SAAR in May, and the NAR actually reported 5.43 million.
2) Inventory is still very low and falling year-over-year (YoY) with inventory down 6.1% year-over-year in May. This was the 36th consecutive month with a year-over-year decline in inventory, however the YoY declines have been getting smaller.    And some areas of the country are now reporting YoY increases in inventory.  As an example, the CAR  reported yesterday that inventory in California was up 8.3% YoY in May.More inventory would probably mean smaller price increases.   The following graph shows existing home sales Not Seasonally Adjusted (NSA).

Existing Home Inventory: Up 8.3% Year-over-year in California --It appears inventory has bottomed in some areas. The CAR reported today: California median home price sets new record as home sales dial back, C.A.R. reportsThe number of statewide active listings improved for the second consecutive month, increasing 8.3 percent from the previous year.… “As we predicted last month, California’s statewide median home price broke the previous pre-recession peak set in May 2007 and hit another high as tight supply conditions continued to pour fuel on the price appreciation fire,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “With inventory starting to show signs of improvement, however, home price appreciation could decelerate in the second half of the year, especially since further rate increases are expected to hamper homebuyers’ affordability and limit how much they are willing to pay for their new home.” Here is some data from the NAR and CAR (ht Tom Lawler):

Housing Starts increased to 1.350 Million Annual Rate in May -- From the Census Bureau: Permits, Starts and Completions: Privately-owned housing starts in May were at a seasonally adjusted annual rate of 1,350,000. This is 5.0 percent above the revised April estimate of 1,286,000 and is 20.3 percent above the May 2017 rate of 1,122,000. Single-family housing starts in May were at a rate of 936,000; this is 3.9 percent above the revised April figure of 901,000. The May rate for units in buildings with five units or more was 404,000. Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,301,000. This is 4.6 percent below the revised April rate of 1,364,000, but is 8.0 percent above the May 2017 rate of 1,205,000. Single-family authorizations in May were at a rate of 844,000; this is 2.2 percent below the revised April figure of 863,000. Authorizations of units in buildings with five units or more were at a rate of 421,000 in May.The first graph shows single and multi-family housing starts for the last several years.Multi-family starts (red, 2+ units) increased in May compared to April.   Also Multi-family starts were up 25% year-over-year in May.Multi-family is volatile month-to-month, and  has been mostly moving sideways the last few years.Single-family starts (blue) increased in May, and were up 18% year-over-year.The second graph shows total and single unit starts since 1968. The second graph shows the huge collapse following the housing bubble, and then - after moving sideways for a couple of years - housing is now recovering (but still historically fairly low).Total housing starts in May were above expectations, however starts for March and April were revised down slightly (Combined).

New Residential Housing Starts Up in May - The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for May new residential housing starts. The latest reading of 1.350M was above the Investing.comforecast of 1.310M and an increase from the previous month's revised 1.286M. March figures were also revised.Here is the opening of this morning's monthly report: Privately-owned housing starts in May were at a seasonally adjusted annual rate of 1,350,000. This is 5.0 percent (±10.2 percent)* above the revised April estimate of 1,286,000 and is 20.3 percent (±14.4 percent) above the May 2017 rate of 1,122,000. Single-family housing starts in May were at a rate of 936,000; this is 3.9 percent (±10.6 percent)* above the revised April figure of 901,000. The May rate for units in buildings with five units or more was 404,000. [link to report] Here is the historical series for total privately-owned housing starts, which dates from 1959. Because of the extreme volatility of the monthly data points, a 6-month moving average has been included.

Comments on May Housing Starts --Bill Mcbride - Earlier: Housing Starts increased to 1.350 Million Annual Rate in May  The housing starts report released this morning showed starts were up 5.0% in May compared to April, and starts were up 20.3% year-over-year compared to April 2017. Both multi-family and single family starts were up solidly year-over-year. This first graph shows the month to month comparison for total starts between 2017 (blue) and 2018 (red).Starts were up 20.3% in May compared to May 2017.Note that starts in March, April and May of 2017 were weaker than other months, so this was a solid increase, but also a fairly easy comparison.Through five months, starts are up 11.0% year-to-date compared to the same period in 2017.Single family starts were up 18.3% year-over-year, and up 3.9% compared to April 2018.Multi-family starts (including 2 units) were up 25.1% year-over-year, and up 7.5% compared to April 2018 (multi-family is volatile month-to-month). Below is an update to the graph comparing multi-family starts and completions. Since it usually takes over a year on average to complete a multi-family project, there is a lag between multi-family starts and completions. Completions are important because that is new supply added to the market, and starts are important because that is future new supply (units under construction is also important for employment).These graphs use a 12 month rolling total for NSA starts and completions.The blue line is for multifamily starts and the red line is for multifamily completions.The rolling 12 month total for starts (blue line) increased steadily for several years following the great recession - but has turned down recently.  Completions (red line) had lagged behind - however completions have caught up to starts (more deliveries). It is likely that both starts and completions, on rolling 12 months basis, will now move mostly sideways.As I've been noting for a few years, the significantly growth in multi-family starts is behind us - multi-family starts peaked in June 2015 (at 510 thousand SAAR). The second graph shows single family starts and completions. It usually only takes about 6 months between starting a single family home and completion - so the lines are much closer. The blue line is for single family starts and the red line is for single family completions.Note the low level of single family starts and completions.  The "wide bottom" was what I was forecasting following the recession, and now I expect a few more years of increasing single family starts and completions.

New Residential Building Permits: 1.301M in May --The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for May new residential building permits. The latest reading of 1.301M was a decrease from 1.346M in April and below the Investing.com forecast of 1.350M. Here is the opening of this morning's monthly report: Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,301,000. This is 4.6 percent (±1.4 percent) below the revised April rate of 1,364,000, but is 8.0 percent (±1.3 percent) above the May 2017 rate of 1,205,000. Single-family authorizations in May were at a rate of 844,000; this is 2.2 percent (±1.0 percent) below the revised April figure of 863,000. Authorizations of units in buildings with five units or more were at a rate of 421,000 in May. [link to report]  Here is the complete historical series, which dates from 1960. Because of the extreme volatility of the monthly data points, a 6-month moving average has been included.

Preponderance of evidence from poor housing permits points to slowdown in GDP -- The preponderance of evidence, based on this morning's report on housing permits and starts, is that increased interest rates and continuing increased prices are beginning to take a bite out of the market.  First of all, let's take a look at single family permits -- the most reliable, least volatile of all the measures -- (red, left scale) and total permits (blue, right scale):Both declined this month, but more importantly, both made 7 month lows. Outside of the expiration of the housing stimulus way back in 2010, this is the first time that single family permits have made this significant a decline -- off about 4%. At the same time, since the peaks for single family homes were only in February, and overall in March, not enough time has passed to be confident that this was the peak. Further, declines of 4% or more took place several times in the 1990s and 2000s without signaling the top of the market, as in 1994-95, 1996, and 2004: Meanwhile, housing starts made a new high: This includes on a three month rolling basis, which cuts down on volatility. But permits lead starts, and in the last eight months there has been an increased backlog of housing permits which have not yet translated into starts. This month that number declined slightly to its lowest since December: So it is not a surprise that starts have continued to rise even though permits have declined in the last several months. At the same time, it's worth noting that, even though the economy didn't roll over, in two of the last 3 times -- 1994 and 2004 -- where there was a similar decline in permits outside of recessions, real GDP did slow down: Should single family permits fail to make a new high for at least one more month, and should the decline by over 5% from peak, I will switch their rating from positive to neutral. And, while the evidence is by no means conclusive, I would say the preponderance of the evidence is that housing is slowing down, and that will have an effect on the economy over the next 6 - 12 months.

 Permits Plunge But Starts Surge As Housing Data Suggests Rough Future Ahead - After April's disappointing dip in starts and permits, and following an unexpected drop in homebuilder optimism (blamed on surging lumber prices, and therefore Trump), May was expected to see a modest rebound - but it didn't work out that way.  It was a very mixed picture that paints an ugly scenario for what comes next...

• Housing Starts surged a huge 5.0% MoM in May (smashing the 1.9% rebound expected) after a revised 3.1% drop in April.
• Building Permits plunged a shocking 4.6% MoM (notably worse than the 1.0% decline expected) and dramatically worse than the revised 0.9% MoM drop in April.

Starts rose most since January as Permits puked most since Feb 2017... The surge in Starts was driven by an 11.3% spike in multifamily starts to 404K from 363K, highest since January. Single-family starts up 3.9% to 936K from 901, highest since November. The permits plunge was driven by multifamily (rental) permits, which dropped 8.5% from 460K to 421K, lowest since February. Single Family permits dropped 2.2% from 863K to 844K, lowest since September. Also of note that is the new-, pending-, and existing-home sales all dipped in April (and after a brief rebound).Broadly speaking, US housing data has been notably disappointing this year, and homebuilder stocks are following that trend...

NAHB: Builder Confidence Decreases to 68 in June -- The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 68 in June, down from 70 in May. Any number above 50 indicates that more builders view sales conditions as good than poor. From NAHB: Builder Confidence Slips Two Points as Lumber Prices Soar Builder confidence in the market for newly built single-family homes fell two points to 68 in June on the NAHB/Wells Fargo Housing Market Index (HMI). The decline was due in large part to sharply elevated lumber prices, although sentiment remains on solid footing.“Builders are optimistic about housing market conditions as consumer demand continues to grow,” said NAHB Chairman Randy Noel. “However, builders are increasingly concerned that tariffs placed on Canadian lumber and other imported products are hurting housing affordability. Record-high lumber prices have added nearly $9,000 to the price of a new single-family home since January 2017.” All three HMI indexes inched down a single point in June. The index measuring current sales conditions fell to 75, the component gauging expectations in the next six months dropped to 76, and the metric charting buyer traffic edged down to 50.Looking at the three-month moving averages for regional HMI scores, the Northeast rose two points to 57 while the West and Midwest remained unchanged at 76 and 65, respectively. The South fell one point to 71. This graph show the NAHB index since Jan 1985. This was below the consensus forecast, but still a solid reading.

NAHB Housing Market Index: "Builder Confidence Slips Two Points as Lumber Prices Soar" -The National Association of Home Builders (NAHB) Housing Market Index (HMI) is a gauge of builder opinion on the relative level of current and future single-family home sales. It is a diffusion index, which means that a reading above 50 indicates a favorable outlook on home sales; below 50 indicates a negative outlook.The latest reading of 68, down 2 from last month's revised number, came in at the Investing.com forecast.Here is the opening of this morning's monthly update:Builder confidence in the market for newly built single-family homes fell two points to 68 in June on the NAHB/Wells Fargo Housing Market Index (HMI). The decline was due in large part to sharply elevated lumber prices, although sentiment remains on solid footing.“Builders are optimistic about housing market conditions as consumer demand continues to grow,” said NAHB Chairman Randy Noel. “However, builders are increasingly concerned that tariffs placed on Canadian lumber and other imported products are hurting housing affordability. Record-high lumber prices have added nearly $9,000 to the price of a new single-family home since January 2017.” [link to report] Here is the historical series, which dates from 1985.

Hotels: Occupancy Rate decreased slightly Year-over-Year, On Record Annual Pace -- From HotelNewsNow.com: STR: US hotel results for week ending 9 June The U.S. hotel industry reported mixed year-over-year results in the three key performance metrics during the week of 3-9 June 2018, according to data from STR.
In comparison with the week of 4-10 June 2017, the industry recorded the following:
• Occupancy: -0.2% to 72.9%
• Average daily rate (ADR): +2.5% to US$131.38
• Revenue per available room (RevPAR): +2.3% to US$95.82
The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

Affordability Crisis: Low-Income Workers Can't Afford A 2-Bedroom Rental Anywhere In America - The National Low Income Housing Coalition’s (NLIHC) annual report, Out of Reach, reveals the striking gap between wages and the price of housing across the United States. The report’s ‘Housing Wage’ is an estimate of what a full-time worker on a state by state basis must make to afford a one or two-bedroom rental home at the Housing and Urban Development’s (HUD) fair market rent without exceeding 30 percent of income on housing expenses.  The report finds that a full-time minimum wage worker, or the average American stuck in the gig economy, cannot afford to rent a two-bedroom apartment anywhere in the U.S.According to the report, the 2018 national Housing Wage is $22.10 for a two-bedroom rental home and $17.90 for a one-bedroom rental. Across the country, the two-bedroom Housing Wage ranges from $13.84 in Arkansas to $36.13 in Hawaii.The five cities with the highest two-bedroom Housing Wages are Stamford-Norwalk, CT ($38.19), Honolulu, HI ($39.06), Oakland-Fremont, CA ($44.79), San Jose-Sunnyvale-Santa Clara, CA ($48.50), and San Francisco, CA ($60.02).For people earning minimum wage, which could be most millennials stuck in the gig economy, the situation is beyond dire. At $7.25 per hour, these hopeless souls would need to work 122 hours per week, or approximately three full-time jobs, to afford a two-bedroom rental at HUD’s fair market rent; for a one-bedroom, these individuals would need to work 99 hours per week, or hold at least two full-time jobs. The disturbing reality is that many will work until they die to only rent a roof over their head. The report warns: “in no state, metropolitan area, or county can a worker earning the federal minimum wage or prevailing state minimum wage afford a two-bedroom rental home at fair market rent by working a standard 40-hour week.” The quest to afford rental homes is not limited to minimum-wage workers. NLIHC calculates that the average renter’s hourly wage is $16.88. The average renter in each county across the U.S. makes enough to afford a two-bedroom in only 11 percent of counties, and a one-bedroom, in just 43% .

Late-Cycle: The Stressed-Out, Tapped-Out American Consumer Just Paid Off A Ton Of Credit-Card Debt - A new report from WalletHub, the personal-finance website, could signal the U.S. economy is in late-cycle, as the stressed-out, tapped-out American consumer just rejected consumerism and has overwhelmingly decided to repair its overextended balance sheet instead. While President Trump pedals the notion that the economy is the “greatest economy in HISTORY,” WalletHub noticed a considerable amount of Americans repaid $40.3 billion in credit card debt during the first quarter of 2018 — the second-largest quarterly payoff ever (via data from the U.S. Census Bureau, Federal Reserve and credit agency TransUnion).  However, WalletHub noted that Americans started the fiscal year by “owing more than $1 trillion in credit card debt for the first time ever, after adding a post-Great Recession record $91.6 billion to our tab in 2017.” With credit card spending went through the roof, the consumer hit a decade low on their personal savings rate of 3 percent in the first quarter. In other words, the consumer is tapping into credit cards and savings to support an unsustainable debt-fueled lifestyle of which propaganda from the government and or the Federal Reserve have induced the stressed-out consumer to buy things they do not need.“Only four times in the past three decades have we overspent so much in a year. And in each case, the charge-off rate – currently near historical lows – rose the following year. That’s true so far, as charge-offs jumped nearly 5% from Q4 2017 to Q1 2018,” said WalletHub.   Here are WalletHub Main Findings:  Outstanding credit card debt is at the second-highest point since the end of 2008.

Consumers Stubbornly Cling to Cash, after Multiple IT Fiascos & Payment Systems Outages --The last month has been an unhappy time for daydreamers of a cashless nirvana. Following weeks of disruptive tech failures, payment outages, and escalating cyber fraud scams, much of it taking place in Britain, consumers have been reminded of one of the great benefits of physical cash: it is accepted just about everywhere and does not suddenly fail on you. The findings of a new study by UK-based online payments company Paysafe, partly owned by US private equity giant Blackstone, confirm that consumers on both sides of the Atlantic continue to cling to physical lucre. For its Lost in Transaction report, Paysafe surveyed over 5,000 consumers in the UK, Canada, the US, Germany, and Austria on their payment habits. One of its main findings is that 87% of consumers used cash to make purchases in the last month, while 83% visited ATMs, and 41% are not interested in even hearing about cash alternatives. Although consumers continue to cling to cash, they appear to be carrying less of it: 49% overall in the survey and 55% of U.S. respondents said they carry less cash now than they did a year ago. The average American consumer carries $42 today — that’s $8 less than in 2017. In the UK the average amount carried in 2017 was £33; that has now fallen to £21.But that does not mean that the amount of cash in circulation is dwindling. On the contrary, according to this year’s G4S cash report, the world average ratio of currency vs GDP continues to rise, reaching 9.6% in 2018. “Currency in Circulation vs. GDP is increasing on all continents, indicating a consistent, growing demand for cash across the world,” says the report. South America has by far the highest cash dependency relative to its GDP, with an average ratio of over 16%. The study also reveals that in 17 out of 24 advanced economies studied, cash represents more than 50% of all payment transactions. Data drawn from the ECB’s Diary Study shows that in Europe cash represents 79% of all transactions in volume and 54% in value.

More than half of Millennials expect to be millionaires someday, according to a new study --Millennials expect to make it big some day, with more than half reporting that they believe they will eventually become millionaires, according to a new study. Despite having crushing student loans (20 percent never expect to pay them off), credit card and other debt, people born between 1982 and 2000 share a confidence when it comes to their financial outlook.'Young people are optimistic about the future,' said JJ Kinahan, chief strategist for TD Ameritrade, in a statement on the company's new report. 'On average, survey respondent expect to land a job in their chosen field and be completely financially independent by age 25.'That's despite the fact that 17 percent still can't say they're financially independent from their parents; most report getting cut off once they've moved out of the house.Perhaps the optimism is due to Millennials graduating in record rates – with the overall college completion rates rising nearly 4 percent in 2017, according to a report by the National Student Clearinghouse Research Center. 'This is a financially optimistic group that's feeling positive about the economy, the job market and their own plans,' Kinahan said. 'Their youthful energy combined with countless success stories of young people in the media, likely inspires them to think big when it comes to their earning potential.'

Satisfaction With Life In America Is Just 38%... And That's A 12-Year High - According to the latest poll from Gallup, you not been this 'satisfied' since September 2005 - which was right after Hurricane Katrina caused catastrophic damage along the Gulf Coast, California Senate passed the first bill to allow gay marriage, Israeli troops infamously shoot dead a Palestinian teenager, and perhaps most ironically - North Korea agrees to drop all nuclear weapons programs and return "at an early date" to the Nuclear Non-Proliferation Treaty. However, before you celebrate your aggregate exuberance, the percentage of Americans that are actually satisfied - albeit a 12 year high - was just 38%!  Gallup notes, satisfaction with the nation is now back to the historical average of 37% for this trend, which was first measured in 1979, but is far below the majority levels reached in the economic boom times of the mid-1980s and late 1990s.But, while Republicans and Independents saw a 14pt and 11pts increase in satisfaction in the last 6 months, Democrats' satisfaction was unchanged at just 13%. And as "satisfaction" pushes higher, President Trump's approval rating is back at it highest of his presidency... Gallup concludes by noting that though the vast majority of Americans have expressed pride in their country in polls stretching back more than 30 years, their pride has not meant they were satisfied with the way things were going. This has been especially true during times of economic duress -- though measuring the public's satisfaction with the nation encompasses far more than economics.

High Court: Online shoppers can be forced to pay sales tax (AP) — States will be able to force more people to pay sales tax when they make online purchases under a Supreme Court decision Thursday that will leave shoppers with lighter wallets but is a big financial win for states. Consumers can expect to see sales tax charged on more online purchases — likely over the next year and potentially before the Christmas shopping season — as states and retailers react to the court's decision, said one attorney involved in the case. The Supreme Court's 5-4 opinion Thursday overruled a pair of decades-old decisions that states said cost them billions of dollars in lost revenue annually. The decisions made it more difficult for states to collect sales tax on certain online purchases, and more than 40 states had asked the high court for action. Five states don't charge sales tax. The cases the court overturned said that if a business was shipping a customer's purchase to a state where the business didn't have a physical presence such as a warehouse or office, the business didn't have to collect sales tax for the state. Customers were generally responsible for paying the sales tax to the state themselves if they weren't charged it, but most didn't realize they owed it and few paid. Justice Anthony Kennedy wrote that the previous decisions were flawed. "Each year the physical presence rule becomes further removed from economic reality and results in significant revenue losses to the States," he wrote in an opinion joined by Justices Clarence Thomas, Ruth Bader Ginsburg, Samuel Alito and Neil Gorsuch. Kennedy wrote that the rule "limited States' ability to seek long-term prosperity and has prevented market participants from competing on an even playing field." The ruling is a victory for big chains with a presence in many states, since they usually collect sales tax on online purchases already. Now, rivals will be charging sales tax where they hadn't before. 

May 2018 Sea Container Situation Mixed: The May year-over-year export counts were weaker than last month, but still up 7.6 % year-over-year. Imports are only up 2.3 % year-over-year. Simply looking at this month versus last month - the year-over-year growth rates were stronger for imports (but import counts are more than double exports). The rolling averages are positive for exports (as well as the year-over-year rate of growth is improving for exports) which suggest to me a strengthening global economy, while weakening import growth rate is signally weaker USA economy. This data set is based on the Ports of LA and Long Beach which account for much (approximately 40%) of the container movement into and out of the United States - and these two ports report their data significantly earlier than other USA ports. Most of the manufactured goods move between countries in sea containers (except larger rolling items such as automobiles). This pulse point is an early indicator of the health of the economy. Consider that imports final sales are added to GDP usually several months after import - while the import cost itself is subtracted from GDP in the month of import. Export final sales occur around the date of export. Container counts do not include bulk commodities such as oil or autos which are not shipped in containers. For this month:As the data is very noisy - the best way to look at this data normally is the 3 month rolling averages. There is a direct linkage between imports and USA economic activity - and the change in growth in imports foretells real change in economic growth. Export growth is an indicator of competitiveness and global economic growth.   There is reasonable correlation between the container counts and the US Census trade data also being analyzed by Econintersect. But trade data lags several months after the more timely container counts.

Staying Ahead of the Electronics Component Shortage -- Industry Week -If you’ve operated “business as usual,” hoping that the global electronics components shortage would end soon, it’s time to rethink that strategy.  A tough situation is becoming even tougher to navigate. The shortage was caused by a classic case of demand far outstripping supply. Think back about a decade ago to the Great Recession. Suppliers were left with lots of inventory when demand dried up, seemingly overnight. Those same suppliers have operated out of an abundance of caution ever since, not believing orders, or demand, when it appeared. Recently, reports of customers double-ordering components further fueled lead time anxiety, and there is a growing concern that electronics components could become a pawn in the trade debate.Soon after the Trump administration slapped tariffs on aluminum and steel imports, China threatened to place duties on U.S. exports including electronics—though they have yet to pull the trigger. “In today’s digital world,” read a statement from the Electronic Components Industry Association, “nearly every industry utilizes electronic components and the supply chain for such components is globally interconnected and complex. As a result, the imposition of tariffs on electronic components will have global consequences for businesses and consumers alike, adding friction and costs to the supply chain that can hinder economic growth for all involved.”

Net Neutrality: Maps Show Which States Are Fighting the FCC Repeal - With net neutrality dead and gone, internet service providers now have unprecedented power to control the online experience. Of course, ISPs are happy about it, but not every state is willing to leave their citizens vulnerable to paid prioritization, watchdog surfing, blocking, and other limitations. In December, the Republican-led FCC repealed net neutrality protections that were first set up under the Obama Administration. The repeal did away with rules that inhibited ISPs from slowing down access or prioritizing their own content, and quickly became a point of contention with consumer advocacy groups and progressive lawmakers. As responses from state and local governments become more diversified, the National Regulatory Research Institute (NRRI) will now track legislative action.The NRRI has developed two maps that track which states have passed laws, executive orders, or other resolutions in response to the repeal. NRRI is the research branch of the regulatory non-profit NARUC, a national association that represents state public service commissioners who regulate utility services. These maps not only show which regulatory approaches individual states will use to protect internet freedom but reveal which states have gone so far as to sue the FCC. The latest updates show that 36 states have proposed or passed resolutions since the new rules were adopted. Six of those states — Hawaii, Montana, New Jersey, New York, Rhode Island, and Vermont — have issued executive orders that require ISPs to contract with the state government to confirm that they will meet the 2017 net neutrality requirements.

Manufacturing PMI Plunges To 7-Month Lows: Orders Tumble As Prices Soar - Following a slight bump in EU Composite PMI this morning, US Composite PMI dipped in June (preliminary) data driven by a slump in manufacturing.While Services PMI slipped lower, Manufacturing plunged to its weakest since Nov 2017.  More worrisome is that Stagflation is here -  New Orders tumbled to the lowest since September and inflation spiking with input costs at their highest since Sept 2013.US continues to outperform according to the soft data surveys... Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:“Price pressures remain elevated, however, widely blamed on a mix of rising fuel prices and tariff-related price hikes, as well as supplier’s gaining pricing power as demand outstrips supply for many inputs.“Risks are tilted to the downside for coming months. Business expectations about the year ahead have dropped to a five month low, led by the weakest degree of optimism for nearly one and a half years in manufacturing. Exports are back in decline, showing the worst performance for over two years, causing factory order book growth to slump sharply lower compared to earlier in the year.“For the first time this year, factory output is growing faster than order books, suggesting production may be adjusted down in coming months. Inflows of new business into the service sector have meanwhile cooled to the weakest since January. Finally, although employment is still rising strongly, even here there are signs of weakness, with the latest rise in payrolls being the lowest for a year.”So surging prices are crushing orders and production is continuing to ignore it.. for now. That won't end well.

 Earlier: Philly Fed Manufacturing Survey "Suggest Continuing Growth" in June -- From the Philly Fed: June 2018 Manufacturing Business Outlook Survey Results from the June Manufacturing Business Outlook Survey suggest continued expansion of the region’s manufacturing sector. All the broad indicators remained positive, although the indicators for general activity and new orders fell notably. The firms continued to report higher prices for purchased inputs and their own manufactured goods. Expectations for the next six months continued to moderate but remain positive overall.The diffusion index for current general activity remained positive but decreased 15 points this month. Almost 37 percent of the manufacturers reported increases in overall activity this month, while 17 percent reported decreases. ... The firms continued to report overall increases in employment. Nearly 34 percent of the responding firms reported increases in employment this month, while 3 percent reported decreases. The current employment index, at 30.4, was virtually unchanged from May. The current average workweek index, however, decreased 10 points. Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:

As Labor Shortage Worsens, Small Businesses Are "Recruiting In The County Jail" - With the labor market supposedly at its tightest level in nearly 20 years, employers for a mix of low- and high-skill jobs have been struggling to fill positions. It's become such a problem for some companies - mainly small- and medium-sized businesses - that it's beginning to impact how they approach hiring. As we learned most recently with the release of the May Beige Book, many employers are "relaxing" drug-testing standards and changing policies related to the hiring of felons.Even at a time when small business confidence is at or near record highs, one aneote submitted for the Beige Book by the St. Louis Fed showed that some employers are having such a hard time finding workers that they have begun recruiting in jails. And as it turns out, they're not alone. CNBC on Friday ran a story about how the unusually low unemployment rate and labor participation rate are creating all this tightness."Contacts in Missouri and Arkansas also reported difficulties filling skilled technical and engineering positions. Some local employers have begun relaxing drug-testing standards and reducing restrictions on hiring convicted felons in order to alleviate labor shortages," the Beige Book said.In Manitowoc, Wisconsin, local businessman Mike Fredrich is having trouble finding workers whom he can train to control these unmanned presses in his shop. His business has gone "to extremes" to find employees, including interviewing candidates in local jails."There are no workers, but there's a huge demand. The economy has picked up, but the market is so thin, that we just can't find them. We've gone to extraordinary means to find people that will actually work, including going to the local county jail and recruiting people to work from inside the jail," Fredrich said. The "Main Street Labor Shortage", as CNBC bills it, is increasingly becoming a problem for companies, and is one way that a strong economy can "cut both ways" for businesses. The pinch is being felt across industries and skill levels.

 Many Maryland crab houses expect to go without migrant workers this summer after again losing visa lottery -- Many Eastern Shore crab houses hoping for a lucky break from the federal government now expect to remain mostly idle through the summer, without the migrant laborers needed to perform the painstaking picking to produce tubs of jumbo lump meat.In a supplemental lottery held this month, U.S. immigration officials approved visa applications for only one of those “picking houses,” where smaller crabs are processed for meat sold in restaurants and grocery stores.Most of the rest of the family-owned seafood businesses in the Dorchester County community of Hoopers Island were denied workers again through a visa program that is reporting surging demand across the country.The H-2B work visas were awarded by lottery for the first time this year because of the overwhelming interest from landscapers, pool cleaning companies and golf course managers. The results of the lottery mean the crab picking houses are missing an estimated 35 percent of their seasonal workforce, which could make it difficult for the industry to supply customers and may drive up the price of Maryland crab meat.

 Company that runs immigration detention centers is top donor for three Texas congressmen -- One of the country’s largest operators of private immigration detention facilities has made significant contributions to several Texas members of Congress.  The GEO Group’s PAC and executives have given $32,900 to Houston Republican Rep. John Culberson’s campaign this election cycle, according to Federal Election Commission documents and OpenSecrets.org. GEO is Culberson's largest donor.In Texas, GEO operates detention centers for Immigration and Customs Enforcement in Karnes City, Laredo, Pearsall and Conroe.Culberson received the most funding from GEO out of Texas members of Congress, but GEO is also the top donor this cycle for U.S. Rep. Henry Cuellar, D-Laredo, who received $32,400, and Round Rock Republican Rep. John Carter, who received $31,600. Both Culberson and Cuellar serve on the House Appropriations Homeland Security Subcommittee, which funds private immigration detention centers. Culberson is also the chairman of and Carter serves on the House Appropriations subcommittee on commerce, justice and science, which oversees funding for private prisons.

The Sources Of Tax Revenue For Every US State, In One Chart - In the aftermath of Trump's tax reform, which many mostly coastal states complained would cripple state income tax receipts and hurt property prices, S&P offered some good news: in a May 30 report, the rating agency said that "[s]tate policymakers have a lot to cheer," noting the current slowdown in Medicaid signups and dramatically higher revenue collections, to the tune of 9.4%, are significantly boosting state fiscal positions. Still, the agency's view is that current conditions are "most likely only a temporary respite" (very much the same as what is going on at the federal level) means that the agency is likely to focus on "a state's financial management and budgetary performance during these 'good' times" to determine its "resilience to stress when the economy eventually softens" according to BofA.To that end, S&P warns that:"[f]or those [states] that either stumble into political dysfunction or - out of expedience - assume recent trends will persist, this moment of fiscal quiescence could prove to be a mirage."For now, however, let the good times roll, and with real GDP growth tracking at 3.8% for 2Q18, state tax receipts should grow at a rate of over 10% based on historical correlation patterns, with the growth continuing at 9% and 8% in Q3 and Q4. This is good news for states that had expected a sharp decline in receipts, and is especially important for states heavily skewed to the personal income tax since revenue from that source should rise by over 14%, according to BofA calculations.Finally, the BofA chart below is useful for two reasons, first, it shows the states most reliant on individual income taxes from the Census Bureau's most recent annual survey of tax statistics. Oregon - at 69.4% of total tax collections - is most reliant on individual income taxes, followed by Virginia (57.7%), New York (57.2%), Massachusetts (52.9%) and California (52.0%). More notably, it shows the full relative breakdown of how states collect revenues, from the Individual income tax-free states such as Florida, Texas, Washington, Tennessee, and Nevada, to the sales tax-free Alaska, Vermont and Oregon, to the severance-tax heavy Wyoming, North Dakota and Alaska, and everyone in between: this is how America's states fund themselves.

The Growth of America’s Militarized Law Enforcement System, a Product of a War Economy -- “Weapons of war have no place in our communities,” the March for Our Lives insisted. Yet, such weapons are scattered throughout and utilized in communities across America. And they include more than assault weapons.With more than $5.4 billionin donated equipment from the Department of Defense’s 1033 Programand $34 billionin grants from the Department of Homeland Security, state and local governments have equippedtheir law enforcement officers with a military arsenal. Among other materials, this arsenal includes“armored personnel carriers, M-16 assault rifles, grenade launchers, and infrared gun sights,” materials more suited to sites of hot war than neighborhoods in Indiana. Federal funding outfittedpolice officers in and around Fargo, North Dakota, which, as of 2011, had an average murder rate of two per year since 2005, with assault rifles on every squad car, Kevlar helmets, and a more than $250,000 armored truck. The proliferation of military weapons and gear corresponds to that of para-militarized law enforcement officers. Modeled after the military and armed as such, SWAT teams are the most visible and recognizable manifestation of the militarization of law enforcement. And they’re becoming more numerous. Research has suggested that 80 percent of towns with populations ranging between 25,000 and 50,000 residents had SWAT teams as of the mid-2000s. That represents a major increase from the mid-1980s when only 20 percent of such towns had a SWAT presence. And these para-militarized law enforcement officers are being used more often: Deployments increased 1,400 percent between 1980 and 2000. Perhaps more disturbing than the growing number of para-militarized units is what their deployments are meant to achieve. Research from the University of Missouri-St. Louis determined that the majority of SWAT deployments in their research sample between 1986 and 1998 were for warrants(34,271) as compared to barricaded suspects (7,384) and hostage situations (1,180). A more recent 2014 study from the American Civil Liberties Union (ACLU)reaffirms this trend. Using incident reports from SWAT deployments between 2010 and 2013 from law enforcement agencies across the country, the ACLU found that 79 percent of evaluated SWAT deployments were to act on a search warrant. Sixty-two percent of those search warrants were to conduct drug searches. According to the ACLU, these searches are “almost always” conducted by SWAT teams armed, to some extent, with “assault rifles, battering rams, and distraction devices.” In other words, many of the between 50,000 and 80,000SWAT team raids that occur every year somewhere in the country with military-grade equipment are to perform standard functions of crime control, prevention, and investigation. Militarization has transformed civilian law enforcement officers into something that more resembles soldiers responding to war than public servants. An assault rifle is probably no more needed to execute a warrant than it is to huntdeer.

Kochs Mobilize to Kill Public Transit Plans -  The Koch brothers are pouring money into grassroots state efforts to defeat public transit proposals, The New York Times reported.Local chapters of Koch advocacy group Americans for Prosperity have worked in at least seven states since 2015 to sway voters against public transit proposals, with some notable successes: the group was partially responsible for the defeat of a popular light rail and bus improvement plan in traffic-choked Nashville this May, after making more than 42,000 phone calls and knocking on 6,000 doors.Koch Industries is deeply embedded in the automobile industry, and the group has also launched attacks onelectric vehicles in recent years. "Stopping higher taxes is their rallying cry," Ashley Robbins of Virginia Tech told The New York Times. "But at the end of the day, fuel consumption helps them."As reported by The New York Times:"Supporters of transit investments point to research that shows that they reduce traffic, spur economic development and fight global warming by reducing emissions. Americans for Prosperity counters that public transit plans waste taxpayer money on unpopular, outdated technology like trains and buses just as the world is moving toward cleaner, driverless vehicles....The paucity of federal funding for transit projects means that local ballots are critical in shaping how Americans travel, with decades-long repercussions for the economy and the environment. Highway funding has historically been built into state and federal budgets, but transit funding usually requires a vote to raise taxes, creating what experts call a systemic bias toward cars over trains and buses. The United States transportation sector emits more earth-warming carbon dioxide than any other part of the nation's economy. The Trump administration had initially raised hopes of more funding for transit by advocating a trillion-dollar infrastructure push. However, when that proposed plan was made public it reduced funding for transit-related grants."

The Poor People’s Campaign Is Changing the Moral Narrative of Congress -- The Poor People’s Campaign has come to Washington to challenge members of Congress to address systemic racism, poverty, and inequality, ecological devastation and militarism. For this to happen, however, the economic- and social-justice campaigners from across the country must be heard. And there are too many powerful people in Congress, in the Trump White House, and on the federal bench, who are disinclined toward listening. When a small group of senators and members of the House did gather Tuesday to hear from religious leaders and others who have proposed to replace official injustice and inaction with “a moral agenda based on fundamental rights,” the Rev. Dr. William J. Barber II began by thanking those who who were prepared to listen.  Referring to the Republican leaders of the US Senate and the US House, the co-chair of the Poor People’s Campaign: A National Call for Moral Revival movement, explained to Senators Elizabeth Warren of Massachusetts, Bernie Sanders of Vermont, Cory Booker of New Jersey, and Dick Durbin of Illinois, as well as House members Elijah Cummings of Maryland, Ro Khanna of California, and Barbara Lee of California, that “We sent this letter asking for this hearing to Senator McConnell and Congressman Ryan and to all others, and we didn’t hear anything until we heard from you.” “We sent this letter asking for this hearing to Senator McConnell and Congressman Ryan and to all others, and we didn’t hear anything until we heard from you.” —Rev. Barber addressing @SenWarren and @RepCummingsWhat the listening members of Congress heard at Tuesday’s remarkable hearing was a poignant detailing of concerns from the grassroots of American struggle—concerns about economic inequality, voter suppression, assaults on labor rights and other issues that should be central to the national discourse. This is the real-life experience of Americans that the Poor People’s Campaign has brought to Washington—and to those members of Congress who are paying attention.

Inside America’s Largest Child Migrant Detention Center: An Old Texas Walmart - The US government released some memorable images on Thursday, revealing the inside of a mysterious new U.S. Department of Health and Human Services (HHS) immigration detention center for children who crossed illegally into the United States. Called “Casa Padre,” the former 250,000-square-foot Walmart in Brownsville, Texas, houses nearly 1,469 boys between the ages of 10 and 17.This is the first glimpse inside one of these detention centers that are spring up across the U.S. since the Trump administration enacted a “zero tolerance” immigration policy in April, the result, well, thousands of children have been separated from their parents who illegally crossed the border with them. Earlier this week, the federal government allowed a hand-selected group of reporters to tour the warehouse of children. Before entering, journalists had to agree to a list of preconditions, including no cameras, cell phones, smart devices, and or recorders. Officials told the journalists that children and employees were not allowed to be interviewed. (pictures) With the 2018 midterm elections in the not too distant future, the Trump administration’s zero-tolerance immigration policy could turn into an overcrowding crisis at facilities, as some reporters who toured the Casa Padre facility have already pointed out.It is evident that officials in Washington are scrambling to contain the overflow by opening tent cities in various regions.With the destruction of retail brick and mortar stores, there should be enough Kmarts, Toys“R”Us, and Walmarts around the nation to provide as core infrastructure for President Trump’s exploding new industry of child migrant detention centers.

Chicago Schools Need $3 Billion In Repairs, Yet CPS Spends Big On New Construction -- Students at Washington High School on Chicago's Southeast Side show a picture of what kids call "the Washington waterfall." It's a big hole in the school's roof. Water and tile fall from it, making passing periods dangerous, they say.  Hundreds of Chicago public schools collectively need more than $3 billion in repairs — including leaky roofs, unreliable boilers, and decaying windows that are made worse year after year as critical needs are deferred. And yet, school staff, parents, and students have no way of knowing when — or if — their buildings will ever get attention from the cash-starved school district.At the same time, Mayor Rahm Emanuel, who oversees the school district, is actually spending money on facilities. But relatively little of it goes to building upkeep and repair. About 60 percent of the $3.4 billion budgeted for Chicago Public Schools facilities since his election in 2011 has gone for new building, for additions, to improve technology, or to renovate schools to bring in new programs, according to CPS data.Most of the $3.4 billion comes from issuing bond — debt that CPS will be using taxpayer money to pay off for decades. Advocates have long pushed for more transparency in how these decisions are made. They say it is frustrating when Emanuel announces a new project out of the blue when so many basic repair needs go unmet, especially when it crops up during re-election season.

Rural school closings devastate Wisconsin communities --Nearly 100 students at the Arena Community Elementary School were dismissed from their classes for the last time June 11 as the public school in rural Wisconsin closed its doors for good. This is the first time that Arena, a village of 820 people located roughly 30 miles west of the state capital of Madison, will be without a public school since the 1800s.  Arena is in Iowa County and is part of the River Valley, which includes the villages of Spring Green, Lone Rock and Plain. Joining Arena, Plain’s elementary school will also be closing. The over 200 hundred students from both elementary schools will now be bused to River Valley Elementary in Spring Green beginning next year.Spring Green’s elementary school is “centrally located,” according to school officials, and is approximately 8-9 miles from Plain and Arena. As is the case in the hundreds of school closings since the 2008 recession, officials cite “tight budgets” and demographic shifts from rural to urban areas as the reason to close schools that have been serving communities and teaching children for decades. The two closures were portended by the failure of a $9.3 million school referendum in 2016 that would have increased school levies on struggling working-class residents. In many rural communities the local school is a hub of community and employment. The closing of a school has a devastating effect on the rest of the village, forcing young families to consider moving lest their children be forced to travel miles to the nearest school. This extra burden on travel is not only dangerous, but also cuts into extra-curricular activities such as sports or the arts. Additionally if a family chooses to stay they will likely see a decrease in their property values and fewer job opportunities.

White House to Propose Merging Education, Labor Departments - The White House is set to propose merging the Labor and Education departments as part of a broader reorganization of the federal government, said a person with knowledge of the changes. An announcement is planned for Thursday morning, after a monthslong review of cabinet agencies with an eye toward shrinking the federal government. The changes would require approval from Congress, but it isn’t clear that lawmakers have the appetite to undertake a far-reaching reorganization, especially at this point in the political calendar. Lawmakers have shown reluctance to embrace such plans in the past, and Congress has limited time for major legislation before the November midterm elections. Previous proposals to eliminate agencies, including the departments of education and energy, have made little headway. Streamlining the executive branch has been a longtime conservative goal. The new plan also meshes with the administration’s priority of retooling higher-education programs to train students more directly to join the workforce. The White House has championed plans to expand access to apprenticeships, for example, and the Education Department has moved to deregulate the controversial for-profit college industry, which often focuses on school-to-workforce training programs, but has been plagued by scandals. Spokespeople for the White House and Labor Department declined to comment. Representatives at the Education Department couldn't immediately be reached for comment. The administration has also been weighing changes at the Department of Health and Human Services, such as consolidating safety-net programs under HHS. That could accompany a renaming of the department to something similar to its name in the 1970s, when it was called the Department of Health, Education and Welfare. HHS oversees Medicaid and other social assistance programs, while school meals and the food stamp program, formally called the Supplemental Nutrition Assistance Program, are run by the Department of Agriculture. The Treasury and Department of Housing and Urban Development oversee still other programs.

Trump administration restricts visas for Chinese students --Last week, the Trump administration announced new visa restrictions for Chinese students entering the United States. Long-term visas will be invalid for students entering the country after one year and those who return home while on a visa will be forced to reapply for re-entry and be subjected to additional screening.The change, which was confirmed by a senior department official during a Senate panel on June 11, will apply to Chinese nationals only, and specifically to students engaged in research in fields that are considered to have potential military import, including robotics, aviation, and high-tech manufacturing. It is being justified with reference to the need to prevent spying on sensitive military technologies by Beijing.The announcement is the latest step in an escalating racist and hysterical anti-Chinese campaign in the US. It follows a series of recent statements by intelligence officials, in military strategy documents and in the media, arguing that more than 2 million Chinese nationals residing in the US—including more than 350,000 students at American colleges and schools—are a potential “fifth column” for the Chinese government.This issue was the subject of testimony by FBI director Christopher Wray during a February 13 Senate committee hearing on national security threats. Wray was asked by Republican congressman Marco Rubio, a leading anti-China hawk, to comment on “the counterintelligence risk posed to U.S. national security” from “Chinese students, particularly those in advanced programs in sciences and mathematics.”Wray replied by referring to Chinese nationals as “nontraditional collectors, especially in the academic setting, whether it’s professors, scientists, students,” whom the agency was monitoring in “almost every field office that the FBI has around the country.” He declared that this threat was “not just in major cities” but “small ones as well; it’s across basically every discipline.”   He added that these “collectors”—i.e., spies—were “exploiting the very open research and development environment that we have, which we all revere.” It was necessary, he said, to “view the China threat as not just the whole of government threat, but a whole of society threat on their end,” which would correspondingly require a “whole of society response by us.”

Stop Trying to Sell the Humanities - The humanities are taking it on the chin. If there were any doubts about this proposition, they have been dispelled by the University of Wisconsin at Stevens Point’s proposal to eliminate 13 majors, including history, art, English, philosophy, sociology, political science, French, German, and Spanish. The administration cited large deficits, programs with a low enrollment, and a desire to play to its strengths — STEM subjects and training in technology.  That reasoning might make sense if Stevens Point were a trade school, but it is, at least by title and claim, a university, and there is an argument to be made that because the claim is now without support at Stevens Point, the title should be removed. The philosopher and political theorist Michael Oakeshott would have thought so.  Oakeshott lists in rapid succession the most often invoked defenses and justifications of liberal education, and note too that he immediately dismisses them as barely worth thinking about: "Whenever an ulterior purpose of this sort makes its appearance, education … steals out of the back door with noiseless steps." The key phrase in that sentence is "ulterior purpose."  When a legislator asks what contribution is being made by the university to the state’s bottom line or to its tourist industry, or to the production of skilled workers who might serve in its agencies, he or she is asking the university to submit to a measure that has nothing to do with the reasons that lead people to become educators in the first place, the reasons that continue to inform their actions during the course of a career. The university’s obligation is to be true to what it is and to resist turning over its mechanism of judgment and decision-making to some purpose not internal to its proper operations.

The $1.5 Trillion Student Debt Bubble Is About To Pop - Some 44 million people in the United States now owe more than $1.5 trillion in student loans, and not only do women carry the lion’s share of this burden, but they’ll also have the toughest time paying it back.Such is the state of America’s higher education situation, according to a recent report by an education advocacy group whose statistics show that women hold almost two-thirds of the massive student loan debt.A report by the American Association of University Women said that while 56 percent of today's college students are women, the downside is that they have $890 billion in student loan debt.Women will take longer than men to repay their student loans as they earn 27 percent less than their male counterparts outside of school, according to the report. That also means that they are paying more in interest over time. Even worse, women are more likely than men to have family responsibilities to balance along with their education.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. Three years after graduating, women have paid off less than a third of their debt, while men have cleared some 40 percent of what they owe.“On average across degree levels women in college took on initial student loan balances that were about 14 percent greater than men’s in 2015–16. Upon completion of a bach­elor’s degree, women’s average accrued student debt is about $2,700 greater than men’s, and black women take on more student debt on average than do members of any other group,” the report said. Outstanding student debt currently exceeds auto loan debt (at $1.1 trillion) and credit card debt (at $977 billion), according to the Federal Reserve.

Nonsensical state laws yank licenses from student loan defaulters - State governments do many silly things. Writing in USA Today, Jarrett Dieterle and Shoshana Weissmann bring attention to one of the absolute silliest: in 18 states, workers can have their professional licenses revoked if they default on their student loans. With nearly nine million borrowers in student loan default and 30% of the American workforce required to hold an occupational license to do their jobs, it’s not difficult to imagine that many workers are at risk of losing their livelihoods due to a loan default. An investigation last year by the New York Times found at least 8,700 instances in which state governments revoked professional licenses, which is likely a vast underestimate. State governments enacted these laws at the behest of the Department of Education as a means to deter borrowers from defaulting on their loans. But the logic makes little sense, as taking away a borrower’s right to work also removes a way to earn income and get back on track with her student loan payments.

Americans are drowning in student-loan debt. The U.S. should forgive all of it --  Katrina vanden Heuvel - Politicians in both parties say getting a higher education is not only the ticket to the middle class but also that it is vital to America’s future prosperity. Yet they’ve created a system that prices college out of reach and forces children to take on growing levels of debt to pay the fare. That debt too often becomes a millstone on the young people it was intended to assist.Student debt now totals about $1.5 trillion, more than credit card and auto loan debt. About 4 in 10 people who have attended college have taken out loans to help pay for it. These are the children of working- and middle-class families, not the affluent. As the price of college has skyrocketed nearly 400 percent over the past 30 years, the debt burden of those who take out loans has soared as well. The College Board reports that, in 2016, the average debt for those who took out loans to finish a bachelor’s degree was $28,400 — an inflation-adjusted increase of about 30 percent since 2001.   The onerous debts sabotage the ability of a college education to serve as an instrument of upward mobility for disadvantaged groups. The students from the poorest families are forced to take on the highest amount of debt. Women hold about two-thirds of all student loan debt in the United States, and since they still earn less than men make for comparable work, women pay their loans off more slowly, incurring higher interest payments. African Americans who tend to start off with fewer family resources fare worse than whites. And those with a larger debt burden often can’t begin saving for retirement or afford to buy a home, and they increasingly put off decisions about marriage and children.  The millennial generation has taken the hardest hit. About 75 percent have some form of debt, according to a recent survey. As a result, they save less than previous generations: Around 25 percent have no personal savings. Two-thirds say they would have difficulty paying an unexpected bill of $1,000. More than one-third say debt has forced them to put off buying a home, while 30 percent say they have put off saving for retirement, and 16 percent say they have put off having children. This comes at a time when some 94 percent of the new jobs created in the “recovery” are precarious — part time, short-term, on demand. This is a recipe for calamity.

For The First Time In U.S. History White Deaths Outnumber Births In Majority Of States - Deaths now outnumber births among whites in more than half of the United States, according to demographers at the University of Wisconsin in partnership with the University of Texas at San Antonio. Meanwhile the birth/death ratio among blacks, asians and latinos remains robust. Notably, the number of white deaths increased while births diminished between 1999 and 2016, signaling what could usher in a faster-than-expected transition to a future in which whites are no longer the majority in America. With significantly fewer white births and a rising number of deaths, natural increase (births minus deaths) actually ended in 2016. In that year, for the first time in U.S. history, data from the National Center for Health Statistics showed more white deaths than births in the United States. -wsic.edu “It’s happening a lot faster than we thought,” said Rogelio Sáenz, a demographer at the University of Texas at San Antonio and a co-author of the report, which covers the period from 1999 to 2016 using data from the National Center for Health Statistics. Sáenz said he initially thought that the results must be a mistake.We find overall white natural decrease in the U.S. for the first time in 2016 according to NCHS data. We also find that twenty-six states are currently experiencing it and that its occurrence has accelerated significantly in the past two years from seventeen states in 2014 to twenty-six states in 2016. Some 56 percent of the U.S. population reside in the 26 white natural decrease states and many of them are among the nation's most populous and urbanized.  -wsic.edu The pattern first started nearly two decades ago in a handful of states with aging white populations like Pennsylvania and West Virginia. But fertility rates dropped drastically after the Great Recession and mortality rates for whites who are not of Hispanic origin have been rising, driven partly by drug overdoses. That has put demographic change on a faster track. The list of states where white deaths outnumber births now includes North Carolina and Ohio. -New York Times The rapid change has sweeping implications for the cultural makeup of the United States; transforming a nation of mostly white baby boomers to a multiethnic and racial patchwork that can already be seen in many parts of the country.

Dimon-Bezos-Buffett Name Harvard Surgeon To Head Their Health Venture - The holy billionaire trinity - Warren Buffett, Jamie Dimon and Jeff Bezos - have finally selected the individual who is going to be in charge of setting up and running their new health-care venture, which is intended to provide health care to employees of Berkshire Hawthaway, Amazon and JP Morgan Chase. Their pick is Atul Gawande, a surgeon and professor at Harvard's TH Chan School of Public Health and Harvard Medical School who is also a popular contributor to the New Yorker, where he frequently writes about the rising cost of health care in the US. The company will be based in Boston, and Gawande will start on July 9. So far, all three of the companies teaming up to launch the venture - which will be focused on improving care for employees at a lower cost - have insisted it will be totally independent.Rising health-care costs have been a hobbyhorse for Buffett, who famously compared them with a "tapeworm" afflicting the US economy. Buffett and Berkshire President Charlie Munger have been aware of Gawande since he published a popular 2009 article in the New Yorker about the factors driving uneven health-care costs across the US. Munger was reportedly so impressed with the article, he reportedly mailed Gawande a $20,000 check, which he donated to a nonprofit that provides surgical equipment to developing countries.

Congress tackles mounting opioid epidemic | TheHill: House Republicans are beefing up their efforts to tackle the nation's deadly opioid crisis, but some experts question how effective their piecemeal approach will be. Congress is touting its recent flurry of action — the House is on track to pass more than 50 bills addressing the issue by the end of this week — on an issue that is hitting many constituents hard, and one that lawmakers are sure to hear about on the campaign trail this year. Still, many public health advocates, who applaud the steps taken by the House, also caution that more work is needed to truly end the scourge of overdose deaths, underscoring the scale of the challenge facing congressional leaders. The top Democrat on the House Energy and Commerce Committee has expressed some skepticism of the effort. “Republicans are touting this opioid package, which really doesn’t do a lot,” Rep. Frank Pallone (N.J.) said at a press conference Wednesday. “I would say it doesn’t really do much for treatment, it really doesn’t do much for helping people recover.” Yet the effort has largely remained bipartisan. Democrats have authored and co-sponsored bills, and all but three pieces of legislation passed largely without opposition. The opioid epidemic is a perplexing public health problem that’s only getting worse. An estimated 115 Americans are dying every day of an opioid-related overdose, and the number of deaths increased nearly 28 percent from 2015 to 2016, according to the latest data from the Centers for Disease Control and Prevention. 

Depression and suicide risk are side effects of more than 200 common drugs - Vox -- The recent suicides of celebrities Anthony Bourdain and Kate Spade have prompted many of us to look more closely at what may drive people to depression or to end their own lives.One risk factor has gotten little attention in this discussion: the medications people take.More than a third of American adults are using medications that have the potential to increase their risk of depression, a study published this week in JAMA finds, and nearly a quarter use medications that have suicidal symptoms as side effects.The 203 drugs the researchers identified aren’t obscure; they include some of the most commonly prescribed medications around — like birth control, beta blockers for high blood pressure, and proton pump inhibitors for acid reflux. (You can see the full list at the end of this article.) Strikingly, the researchers from the University of Illinois and Columbia University discovered, people using these drugs had an elevated risk of depression compared to the general population. And the more medications with depression as a side effect people took, the more their risk of the disease increased.  “It’s remarkable to know just how common it is that people might be at higher risk because of medicines they take,” said University of Pennsylvania psychiatry professor Michael Thase, who was not involved in the study. “Thinking about these [potential side effects] should be [doctors’] second or third step before they prescribe antidepressants. Sometimes de-prescribing [other drugs] is what’s needed.”

WHO Classifies "Gaming Addiction" As A Mental Health Disorder - The World Health Organization has just announced that an addiction to video games, dubbed a “gaming addiction” is now a mental health disorder. The WHO also said that “gaming disorder” is a unique mental health condition.The World Health Organization announced “gaming disorder” as a new mental health condition included in the 11th edition of its International Classification of Diseases, released Monday.  The WHO defines a “gaming disorder” as having three major characteristics that experts say are similar to substance-use disorders (drug addiction) and gambling disorder.“One is that the gaming behavior takes precedence over other activities to the extent that other activities are taken to the periphery,” Dr. Vladimir Poznyak, of the WHO’s Department of Mental Health and Substance Abuse, told CNN.The other two characteristics that must be present are impaired control over gaming and a continuation or an increase in gaming despite negative consequences like “disturbed sleep patterns, like diet problems, like a deficiency in the physical activity,” Poznyak said.But, these patterns of behavior must be present for at least 12 months before a gaming addiction can be officially diagnosed as a disorder, according to The New York Post. “It cannot be just an episode of few hours or few days,” Poznyak warned. “I’m not creating a precedent,” Dr. Poznyak added. Poznyak proposed the new diagnosis to the WHO’s decision-making body, the World Health Assembly. Instead, he said, WHO has followed “the trends, the developments, which have taken place in populations and in the professional field.”

These Toxic Chemicals in Food Packaging Are Getting Into Your Meals -- Per- and polyfluoralkyl substances, or PFAS, are a family of greaseproof, waterproof and nonstick industrial compounds. They're used in hundreds of consumer products, including ones that touch your food. These chemicals pollute the bodies of almost everyone worldwide, and have been linked to a slew of serious health problems.Some of the most worrisome places these chemicals lurk are in fast food wrappers and takeout containers. Food and Drug Administration tests found that PFAS chemicals can migrate out of food wrappers tocontaminate food, especially when the food is greasy. And when the Environmental Working Group (EWG) and colleagues tested fast food wrappers, we found fluorinated chemicals in 40 percent of the wrappers tested. This included packaging for sandwiches, pizza, fried chicken and pastries.Until companies change their packaging, or laws are put in place to keep our food safe from this nasty class of chemicals, PFAS in fast food packages is one more reason to cut back on fast food and greasy carryout whenever possible. Avoiding these substances may be even more important if you are pregnant or have kids, as PFAS chemicals can be particularly harmful to a developing fetus or young child.Babies and young children are exposed to these chemicals in more ways than adults. They can ingest PFAS chemicals by drinking breast milk, crawling on dusty floors and putting their hands in their mouths after touching contaminated materials. Because of their small size, children may have higher exposures by body weight than adults.Toxic fluorinated chemicals can lower a baby's birth weight when the mother is exposed. Women drinking water contaminated with the PFAS chemical PFOA in West Virginia and Ohio had increased risk of pregnancy-induced hypertension and pre-eclampsia. PFAS chemicals at concentrations common in Americans may reduce the effectiveness of vaccines in children.Adding to the long list of concerns, exposure to PFAS chemicals may increase the risk of liver damage, cancer and thyroid disease, and cause endocrine disruption. Stricter regulations would effectively reduce Americans' exposures to these harmful chemicals, but there is no federal law to restrict their use in consumer goods.

White collar crime 2: "Moving barrels at a chemical plant" - White collar crime, I’d argue, takes white collar enablers. Let’s use an example, a plain vanilla example. Let’s use Allied Signal. Here’s a Dead Kennedys song about the Kepone Factory case, whichfills in the basic facts. Allied Chemical made a contracting arrangement with a company named (amazingly) Life Sciences Products. As you would expect, when a corporation names something life sciences, it is all about producing deadly toxins -and so it was with this small factory in Hopewell, Virginia. It made kepone, an insecticide used on fire ants. The toxic ingredient in kepone is chlordecone. It is a very water soluble substance, meaning that it is rapidly spread throughout the organic body.  Here’s a list of what overexposure can do to humans: nervousness, tremors, chest pains, weight loss, blurred vision, deterioration of fine motor skills. Life Sciences Products set up their factory and produced the world’s kepone, on a contract from Allied Chemical, from 1974 to 1975. Here’s a description of what was going on in the kepone factory: “There were usually about 20 men a day working for about $3.75 an hour at the Life Sciences plant over the busy two shifts. Overtime pay was easy to come by, and turnover was high, probably because of the health problems. The workers talked among themselves about their symptoms — including involuntary shaking, vision problems and joint pain — suspicious that the chemical was causing it. But the factory owners were almost never there, so there was no one to ask about it..”The men were not equipped with any protection from the kepone – no respirators, no gloves. None were, of course, required. Life Sciences made about 3 million pounds of the stuff, and about 200,000 pounds got into the surrounding environment, including the James River. “After quick meetings with a state deputy attorney general, the next day, July 24, 1975, the Life Sciences plant was closed by order of the state Health Department. At around the same time, the Hopewell sewer system malfunctioned, sending raw sewage into the James River. Some mystery chemical was preventing solid waste from breaking down in the sewage systems’ digesters, special tanks that accelerated decomposition of solid waste. The situation was later thought to be caused by excess Kepone being dumped down drains by Life Science. State Water Control Board officials had already found massive amounts of Kepone in the Hopewell sewage system in winter 1974, but nothing was done about it.

Harvard scientists: Trump environmental policies could result in 80,000 more deaths per decade | TheHill: A new essay from two Harvard University scientists concluded that the Trump administration’s environmental policies could result in an additional 80,000 deaths per decade. The research, from public health economist David Cutler and biostatistician Francesca Dominici, pointed specifically to the health impacts of the Environmental Protection Agency’s (EPA) policies on air pollutants and toxic chemicals. “This sobering statistic captures only a small fraction of the cumulative public health damages associated with the full range of rollbacks and systemic actions proposed by the Trump administration,” the scientists said.The essay was published in the Journal of the American Medical Association as a commentary, not a formal peer-reviewed paper, but it uses the EPA’s own data to make its argument. The EPA pushed back on the findings, saying they were “not scientific.” “This is not a scientific article, it’s a political article. The science is clear, under President Trump greenhouse gas emissions are down, Superfund sites are being cleaned up at a higher rate than under President Obama, and the federal government is investing more money to improve water infrastructure than ever before,” an EPA spokesperson told Bloomberg. The essay accuses President Trump of working to make the air "dirtier" in order to benefit industry. "A central feature of his agenda is environmental damage: making the air dirtier and exposing people to more toxic chemicals," the scientists claim. "The beneficiaries, in contrast, will be a relatively few well-connected companies." 

This nation faces a DNA dilemma: Whether to notify people carrying cancer genes - Sometime in the future, U.S. researchers will be able to press a button and reliably identify the thousands of people who carry cancer-causing genes, including those that trigger breast cancer. In Iceland, that day is already here. With a relatively uniform population and extensive DNA databases, Iceland could easily pinpoint which of its people are predisposed to certain diseases, and notify them immediately. So far, the government has refused to do so. Why? Iceland confronts legal and ethical obstacles that have divided the nation and foreshadow what larger countries may soon face. Since the late 1990s, tens of thousands of Icelanders have agreed to contribute their DNA to a public-private science projects aimed at delivering medical breakthroughs. But in contributing their DNA — and in many cases, their medical records — these people never explicitly consented to be notified of personal health risks that scientists might discover. Icelandic regulators have determined that without that explicit consent, neither the government nor private industry can notify people of these risks. "That is utter, thorough bulls--t," Dr. Kári Stefánsson, a world-renowned Icelandic neurologist and biotech leader who has been at the center of the nation's DNA debate, told McClatchy in an interview in his Reykjavík office. "There is a tradition in American society, there is a tradition in Icelandic society, to save people who are in life-threatening situations, without asking them for informed consent. Should there be a different rule if the danger is because of a mutated gene?"

Google's Artificial Intelligence Can Predict Your Death With 95% Accuracy - Google’s neverending quest to obtain as much information about you as possible has just crossed into a rather eerie territory.  The tech company’s artificial intelligence is now so advanced that it can predict when you will die with 95 percent accuracy. Things feel as they are drifting toward the macabre when it comes to advances in technology.  Nothing seals that quite like the announcement of Google’s ability to predict your death with stunning accuracy using artificial intelligence. As reported by IFL Science, the new ability to use AI to predict death is outlined in a study recently published in npj Digital Medicine. The study involves new Artificial Intelligence (AI) that Google’s Medical Brain team have been working on. It has been trained to predict how likely it is that patients entering a hospital will make it out alive.  As if things aren’t scary enough, imagine how horrifying this technology’s use could be especially if the government ever gains complete control of the healthcare system.  Google’s AI would simply say there’s not a high likelihood of a person making it out of the hospital alive, so no care will be given.  Humanity is most definitely devolving. The AI is 95% accurate which is much more accurate than the current early warning score system used in hospitals now. Overall, the study found that the AI was able to predict mortality 24 hours after admission with 95 percent accuracy at one of the hospitals trialed, and 93 percent at the other. This was significantly better than the hospital’s traditional predictive model (the augmented Early Warning Score), which predicted mortality with 85 and 86 percent accuracy respectively. –IFL Science. The accuracy of the predictions was put down to the extra data that the AI was able to crunch in comparison to what a human can do. Normally when predicting patient outcomes, the time-consuming part is putting all the data together into a readable format, Nigam Shah, an associate professor at Stanford University, told Bloomberg.  “Which includes clinical free-text notes, as well as large amounts of structured and semi-structured data.”

FDA Takes First Steps to Regulating Lab-Grown Meat - Lab-grown meat—also known as cultured meat or in vitro meat—has long been enticing for its potential environmental, social and economic benefits.Lab-grown meat is not yet for sale—one of the most important American companies in the space, Memphis Meats, doesn't expect to start selling its products until 2021—but it is coming. And that's why the FDA, smartly,called for a public meeting to try to figure out just what to do with this stuff.Lab-grown meat is typically made by harvesting certain kinds of cells, like embryonic stem cells, from living animals such as chickens or cows. Those cells are then placed on a sort of scaffolding, surrounded by a protein-rich medium, and allowed to grow. The scaffolding itself is made to be edible.It is possible to acquire the initial animal cells without harming the animal in question, and it's also theoretically possible to grow vast quantities of lab-grown meat from a single initial cell—it's sort of like harvesting seeds from the fruit of a plant you grew from a seed. The possible benefits of lab-grown meat are obvious and enormous: Some studies suggest that lab-grown meat would require half as much energy as regular meat, produce a quarter of the greenhouse gases, take up basically no arable land space and greatly reduce water needs as well.The FDA recently announced a public meeting, to be held on July 12th, to discuss how to regulate lab-grown meat. The FDA plans to start with some basic questions: How should lab-grown meat be evaluated for safety? What sorts of medium should be allowed? What kinds of manufacturing methods should be permitted? The FDA also noted that it expects labeling to be a major topic of conversation. Dan Murphy, writing for Drovers (a long-running meat and livestock industry publication), affirms that expectation. Murphy wrote: "The entrepreneurs branding and positioning their creations want to identify them as "beef" or "chicken," even though they're not derived from conventional animal agriculture…

Welcome to the turf battle over lab-grown meat -  The FDA on Friday declared it has jurisdiction over lab-grown meat — a surprising move that marks the beginning of a high-stakes battle over which part of the government should regulate the buzzy products. Both FDA and the Department of Agriculture have signaled they want to oversee the burgeoning sector of lab-grown or cultured products, which take animal cells and multiply them to recreate foods like chicken nuggets and burgers. But FDA appears to have beaten USDA to the punch. FDA Commissioner Scott Gottlieb issued a statement Friday saying that the agency not only has jurisdiction over the products — which have yet to hit the market — but that it also plans to hold a public meeting on the issue next month. “We take seriously our commitment to the consumers and industry who look to the FDA for important guidance when it comes to our nation’s food supply, including the pathway for bringing forward safe, emerging food innovations,” Gottlieb said in a joint statement with FDA Deputy Commissioner Anna Abram. USDA sees things quite differently — and doesn't seem inclined to let FDA win the regulatory turf standoff so easily. “FDA’s claim of jurisdiction over food — and anything used in food — is so overly broad that it implies that USDA doesn’t have a role,” a USDA spokesperson said in a statement to POLITICO on Friday. “According to federal law, meat and poultry inspections are the sole purview of USDA, so we expect any product marketed as ‘meat’ to be USDA’s responsibility. We look forward to working with FDA as we engage the public on this issue.” The cell-cultured technology has attracted massive venture capital investment as startups seek to change how the world consumes meat. How the government will apply a regulatory framework to the nascent industry — or whether it will regulate it at all — holds the potential to influence its trajectory. 

First Glyphosate Trial, of Thousands, Begins as Plaintiff Fights for His Life -- Monsanto may have dropped its name, but it can't drop the thousands of cases being brought against it by cancer sufferers claiming its weed-killer Roundup gave them non-Hodgkin's lymphoma, the first of which goes to trial Monday, CNN reported. The first plaintiff to get his day in court is Dewayne Johnson, a 46-year-old Bay-area father of two, but for Johnson that is a dubious honor. Johnson is being granted an expedited trial because his doctors say he is nearing death, and California law facilitates speedier trials in such cases. Johnson worked doing pest management for a county school system and used Roundup 20 to 30 times per year in the line of duty. Now, he has days when lesions cover 80 percent of his body and he is too ill to speak. "Mr. Johnson is angry and is the most safety-oriented person I know," his attorney Timothy Litzenburg told CNN. "Right now, he is the bravest dude in America. Whatever happens with the trial and his health, his sons get to know that." Litzenburg also represents "more than 2,000 non-Hodgkin's lymphoma sufferers who used Roundup extensively," he told CNN. The trial will hinge on whether Roundup's key ingredient glyphosate causes cancer and whether Monsanto failed to adequately warn customers.

Weeds Are Winning in the War against Herbicide Resistance - Scientific American - Although academics and companies are looking for technical alternatives such as sprays made from biological compounds, a recent review by researchers at North Carolina State University cautions that society may not be able to science its way out of this thorny problem. There is a “considerable chance,” the authors write, “that the evolution of pest resistance will outpace human innovation.” Addressing the situation requires a collective effort between funding agencies, regulators, farmers and others, the authors add in the review, published in Science. “We need to approach things from more than a single technical fix,” says co-author Jennifer Kuzma, co-director of the Genetic Engineering and Society Center at NC State. While regulatory action seems unlikely to happen anytime soon at the federal level, several efforts are underway to figure out how to tackle the problem.Herbicide resistance dates at least as far back as the 1950s. But the idea that weed control is a collective problem requiring collective action emerged relatively recently, says George Frisvold, an agricultural and resource economist at the University of Arizona, who was not involved in the new review. “People thought that weeds aren’t as mobile as insect pests,” Frisvold says. “But then more and more research came out to suggest that even if they aren’t as mobile, they’re still mobile enough” to spread resistance. Herbicide resistance can work in many different ways; take glyphosate-resistant Palmer amaranth (Amaranthus palmeri), or pigweed, for example. Glyphosate works by targeting a key protein in plants. Most plants have two copies of the gene that makes this protein. But resistant pigweed has evolved to have between five and 160 copies, which means it can make more of the protein and is thus simply harder to kill. To make things worse a single pigweed plant can produce half a million seeds, each of which has the genetic machinery to sprout into more hardy weeds. In some states including Minnesota and Arkansas, herbicide-resistant pigweed is so persistent that farmers have resorted to hiring laborers to handpick or blowtorch the weeds.

Farm Bill With Huge Giveaways to Pesticide Industry Passes House - A farm bill that opponents say would harm endangered species, land conservation efforts, small-scale farmers and food-stamp recipients passed the U.S. House of Representatives 213 to 211, with every House Democrat and 20 Republicans voting against it, The Center for Biological Diversity reported. A similar farm bill failed to pass the House in May when it was caught in the crossfire over immigration reform, but the new bill retains its most controversial provisions.The bill, officially titled H.R. 2, the Agriculture and Nutrition Act of 2018, is a major win for the pesticide industry, which spent $43 million on lobbying this Congressional season. It would ax a requirement that the U.S. Fish and Wildlife Service assess a pesticide's impact on endangered species before the Environmental Protection Agency (EPA) approves it and relax the Clean Water Act's provision that anyone releasing pesticides into waterways obtain a permit."This farm bill should be called the Extinction Act of 2018," Center for Biological Diversity Government Affairs Director Brett Hartl said. "If it becomes law, this bill will be remembered for generations as the hammer that drove the final nail into the coffin of some of America's most vulnerable species." The bill would also be devastating for land conservation efforts. It would allow logging and mining in Alaskan forests, including the world's largest intact temperate rainforest, the Tongass, and get rid of the Conservation Stewardship program, which funds farmers who engage in conservation on their land, according to Environment America.  Democratic Representative Tulsi Gabbard of Hawaii, who opposed the bill, also said it favored agribusiness over ordinary farmers. "The Farm Bill rewards mega-agribusinesses and Wall Street, while slashing funding for nutrition, rural agriculture development, and clean energy programs, cutting key agricultural research and development efforts critically needed to help fight invasive species like the coffee berry borer, macadamia felted coccid, and more," she said in a statement reported by Big Island Now.

Dicamba Damage Roars Back for Third Season in a Row -- University weed scientists have reported roughly 383,000 acres of soybean injured by a weedkiller called dicamba so far in 2018, according to University of Missouri plant sciences professor, Kevin Bradley. Dicamba destroys mostly everything in its path except the crops that are genetically engineered (GE) to resist it. The drift-prone chemical can be picked up by the wind and land on neighboring non-target fields. Plants exposed to the chemical are left wrinkled, cupped or stunted in growth.  Bradley, who has extensively tracked the damage caused by dicamba, noted that this is the third growing season in a row where off-target crops and trees have been affected.  During the 2017 crop season—the first year Monsanto's new dicamba-based XtendiMax was approved by the U.S. Environmental Protection Agency (EPA) for use on the company's Xtend soybeans and cotton—the herbicide reportedly damaged an estimated 3.6 million acres of off-target crops in more than two dozen states.Similar devastation occurred in 2016, when 10 states reported hundreds of thousands of crop acres adversely impacted by the apparent misuse of older, unapproved versions of the herbicide.It appears dicamba damage has roared back this summer. Bradley wrote: "Many growers in [Missouri] have adopted the Xtend trait so they don't experience dicamba injury on their soybean crop for a third season in a row. Since the adoption of the Xtend trait is so high in this area, relatively speaking there seem to be fewer soybean fields with injury this year compared to last. However, just as in the past two seasons, there are still fields of non-Xtend soybean in this area showing injury from one end to the other. More surprising to me than that has been the extent of the trees that are showing symptoms of growth regulator herbicide injury in that part of the state where the adoption of this trait is so high."

The Billion Dollar Bug, Indeed --- The treadmill of planned obsolescence continues. The goal, as proven by the corporate state’s pattern of action, is to cause insect resistance to pesticides to evolve ever faster, to provide a rationale for the ever faster development of ever more complex GMO/pesticide packages. The real purpose of this technological deployment, beyond mundane profit motives, is control, war, and the total destruction of the ecology.All prior anti-rootworm Bt GMOs are admitted failures. Rootworm now resists them all. Monsanto’s “SmartStax Pro” AKA “Corn Rootworm III” (MON 87411), currently in development, is the next GMO “solution” being touted for rootworm control. SS Pro is being developed with the RNA interference mode. RNAi is simply a more aggressive gene driving attack on the ecology than the regular GM contamination already driving its toxic genetics.* As for pest control, this is the exact same product as prior insecticidal GMOs and will fail just as quickly in the exact same way.The piece GMWatch links, a pro-poison outlet, admits that all GMOs are a failure and that farmers have to spray just as much as before, as well as rotate crops and observe insects in the field (what radical ideas, those last two). A neutral observer might think they should admit that the pesticide paradigm is a proven failure. A neutral observer might think they have an ulterior motive for continuing to shill for pesticides even as they admit pesticides don’t work. Rootworm is indeed a “billion dollar bug” for Monsanto, Syngenta, and Dow. Today most Bt GM seed in the US is sold in the form of a “refuge in a bag” (RIB). This means that non-GM seed is scattered in among the bulk of GM seed. RIB abrogates the entire notion of non-Bt “refuges”, which already were a propaganda scam in the first place.** The fact that the EPA lowered the percentage requirement from 20% for discrete “structured” refuges (entomologists originally insisted that at least 50% was necessary, but were bought off at 20%) to 5% for the diffused “RIB” shows their twisted sense of humor. To make the joke complete, they should have lowered the RIB to 0%. It would be just as effective. This is further proof that the pesticide arms race is an intentionally escalating planned failure.

Endocrine-disrupting pesticides impair frog reproduction -- In a new study, researchers from Sweden and Britain have investigated how the endocrine-disrupting substance linuron affects reproduction in the West African clawed frog, Xenopus tropicalis. The scientists found that linuron, which is used as a pesticicide, impaired the males' fertility, and that tadpoles developed ovaries instead of testicles to a greater extent, which caused a female?biased sex ratio. The results are published in the journal Scientific Reports. Worldwide, animal and plant diversity is decreasing, and amphibians are among the animals disappearing most rapidly. It is estimated that nearly 40 per cent of all known amphibian species are endangered. The main cause is changes in their habitat, but pollution, diseases and climate change are also contributing to the extinction. In agriculture, a huge variety of pesticides are used, for example against weeds and insects. These chemicals then leach into nearby ponds where frogs lay their eggs. Some of these substances have hormone-disrupting effects and are known as 'endocrine-disrupting chemicals' or EDCs. Known EDCs include Bisphenol A, DDT and PCBs (polychlorinated biphenyls). "The results show that pesticides with this mechanism of action can cause permanent damage, such as reduced fertility in frogs exposed at the tadpole stage. This supports previous research showing that endocrine-disrupting substances in the environment may negatively impact amphibians. The substance linuron isn't approved for use in Sweden, but it's used in other parts of the EU and in North America," says Cecilia Berg, ecotoxicologist and project leader.

Hawaii becomes the first state to ban the use of pesticide linked to brain damage --More than a year after the Trump administration controversially overturned a decision to ban pesticides containing chlorpyrifos, the state of Hawaii has taken the matter into its own hands.The Aloha State has passed a law barring the use of such chemicals, which have been linked to adverse side effects in humans, including debiltating neurological and developmental maladies. On Wednesday, Hawaii Governor David Ige (D) put his signature to Senate Bill 3095, which will ban the use of chlorpyrifos pesticides in the Aloha State at the start of the next calendar year. The law also bars the spraying of any pesticide within 100 feet of schools during normal hours of attendance.“Protecting the health and safety of our keiki and residents is one of my top priorities. We must protect our communities from potentially harmful chemicals. At the same time, Hawai‘i’s agriculture industry is extremely important to our state and economy. We will work with the Department of Agriculture, local farmers and the University of Hawai‘i as we seek safe, alternative pest management tools that will support and sustain our agriculture industry for generations to come,” said Ige. Protecting the interests of chlorpyrifos-based pesticide manufacturer has been a persistent interest of the Trump administration and his head of the Environmental Protection Agency, Scott Pruitt.

Where have all our insects gone? - The start of summer is the time of year when the nation’s insects should make their presence known by coating countryside windows with their fluttering presence, and splattering themselves on car windscreens. But they are spectacularly failing to do so. Instead they are making themselves newsworthy through their absence. Britain’s insects, it seems, are disappearing. This point was underlined last week when tweets from the naturalist and TV presenter Chris Packham went viral after he commented on the absence of insects during a weekend at his home in the New Forest. Packham said he had not seen a single butterfly in his garden, and added that he sleeps with his windows open but rarely finds craneflies or moths in his room in the morning. By contrast, they were commonplace when he was a boy. “Our generation is presiding over an ecological apocalypse and we’ve somehow or other normalised it,” he later said. Certainly, the statistics are grim. Native ladybird populations are crashing; three quarters of butterfly species – such as the painted lady and the Glanville fritillary – have dropped significantly in numbers; while bees, of which there are more than 250 species in the UK, are also suffering major plunges in populations, with great yellow bumblebees, solitary potter flower bees and other species declining steeply in recent years. Other threatened insects include the New Forest cicada, the tansy beetle and the oil beetle. As for moths, some of the most beautiful visitors to our homes and gardens, the picture is particularly alarming. Apart from the tiger moth, which was once widespread in the UK, the V-moth (Marcaria wauaria) recorded a 99% fall in numbers between 1968 and 2007 and is now threatened with extinction, a fate that has already befallen the orange upperwing, the bordered gothic and the Brighton wainscot in recent years.

These worms are hungry. And plastic is on the menu - The wax worm, a caterpillar typically used for fishing bait and known for damaging beehives by eating their wax comb, has now been observed munching on a different material: plastic bags.  Scientist Federica Bertocchini of the Institute of Biomedicine and Biotechnology of Cantabria in Spain first noticed the wax worms’ plastic-eating skills when she was cleaning up a wax worm infestation in one of the beehives she keeps at home. She put the worms in a plastic bag, tied it closed, and put the bag in a room of her house while she finished cleaning the hive. When she returned to the room, “they were everywhere,” Bertocchini said in a statement. They’d escaped by chewing their way out of the bag, and fast.“This project began there and then,” she said. In a paper published in Current Biology on Monday (April 24), Bertocchini and her colleagues described 100 wax worms chewing through a polyethylene shopping bag—the kind that people discard at a rate of 1 trillion per year globally—in around 40 minutes. After 12 hours, the bag was significantly shredded. To make sure the worms weren’t just chewing through the plastic but actually eating it, the researchers pureed some worms and left the paste in contact with the plastic; after 14 hours, about 13% of the plastic was gone, suggesting that some compound in the worm’s digestive system was truly digesting the bag. The researchers also scanned the chewed-up bags for residue, and found ethylene glycol—the main compound in antifreeze—was left behind, “confirming [polyethylene] degradation.”

Cocaine in rivers harming endangered eels, study finds -- Tiny amounts of cocaine flushed into rivers cause eels to become not only hyperactive but to suffer from muscle wastage, impaired gills and hormonal changes, a study has found.  The impact of traces of cocaine on the physiology of European eels could be hindering their epic migrations through the oceans to reproduce, according to researchers who examined the impact of the drug.The tiny concentrations of cocaine in the laboratory tests are equivalent to the trace levels found in rivers and water systems from illegal drug use, particularly near major cities. Eels were exposed to 20 billionths of a gram of cocaine per litre (20ng/l) of water for 50 days. The cocaine-exposed eels appeared “hyperactive” and their skeletal muscle showed evidence of serious injury, including muscle breakdown and swelling.Even after going into “rehab” – clean waters – for 10 days the eels were still found to have damaged muscles and increased cortisol levels. This stress hormone can cause fat wastage, and endangered European eels require fat reserves to make a successful migration to the Sargasso Sea in the west Atlantic, where they breed.“All the tissues affected by cocaine play a key role in the fish survival,” said Anna Capaldo of the University of Naples Federico II and the lead author of the study, published in Science of the Total Environment.“It is likely that the eels exposed to cocaine have a reduced performance. For example, impaired gills could reduce the breathing ability of the eels; a damaged muscle could reduce their swimming ability.” Earlier studies have found cocaine in many European rivers, including in Italy and in the Thames near the Houses of Parliament and Chiswick, west London. “A polluted river will not have only cocaine, but also, for example, THC, morphine, MDMA, pesticides, heavy metals, phenols and antibiotics. All these substances can interact with each other, and the resulting effects are unpredictable. So, the damages that a wild eel could experience depend on the type of contamination of the watercourse, that is related to the surrounding human activities.”

Plant that causes third-degree burns, blindness found in Virginia - Giant Hogweed, an invasive plant that can cause third-degree burns and permanent blindness, has been found in Virginia, according to researchers at the Massey Herbarium at Virginia Tech.  So far, there has been just one confirmed sighting of Giant Hogweed — in Clarke County, Virginia, but the dangerous plant also grows in New York, Pennsylvania, Ohio, Maryland, Oregon, Washington, Michigan, Virginia, Vermont, New Hampshire and Maine, according to CBS.Experts are currently investigating potential sightings in other parts of the state. Contact with the plant’s sap, in combination with sun exposure, can lead to those extreme conditions.Not only can the plant’s sap cause painful blisters, but if it gets in contact with your eyes, there is the potential for blindness, according to the New York Department of Environmental Conservation. The plant, which is in the carrot family, can not only pose a threat to your skin, but it can also impact the environment. It can grow up to 14 feet, deeply shading areas and inhibiting growth of native species. The plant’s hollow stems are generally two to four inches in diameter, with dark purple and red raised spots and bristle-like hairs. The umbrella-shaped white floral blooms grow up to two and a half feet wide.  The plant can easily be mistaken for other harmless plants, such as Queen Anne’s Lace and Cow Parsnip.

Pollution hits the fungi that nourish European trees -- Pollution is changing the fungi that provide mineral nutrients to tree roots, which could explain malnutrition trends in Europe's trees. A huge study of 13,000 soil samples across 20 European countries has revealed that many tree fungi communities are stressed by pollution, indicating that current pollution limits may not be strict enough. To get nutrients from the soil, trees host fungi, known as mycorrhizal fungi, in their roots. These fungi receive carbon from the tree in exchange for essential nutrients, like nitrogen, phosphorus and potassium, which they gather from the soil. Some of these fungi are known above-ground from the mushrooms and truffles they form. This plant-fungal symbiotic relationship is crucial for the health of the tree. Recent studies have noted signs of tree malnutrition across Europe, such as discoloured leaves or leaves lost from the crown, but the mechanisms underpinning these symptoms are unclear. Now, in a ten-year pan-European study led by Imperial College London and the Royal Botanic Gardens, Kew, researchers have revealed that tree characteristics and local air and soil quality have a large impact on mycorrhizae. The study, published today in Nature, examined 40,000 roots from 13,000 soil samples at 137 forest sites in 20 European countries. This allowed the authors to discover large-scale trends in mycorrhizal communities, including their tolerance to pollution.

June 2018 ENSO Update: El Niño Watch!  -- Well, well, well… what have we here? Favorable conditions for El Niño to develop? The June ENSO forecast estimates a 50% chance of El Niño developing during the late summer or early autumn, and an approximately 65% chance of El Niño conditions in the winter, so forecasters have instituted an El Niño Watch.   Before we get into the potential for El Niño, let’s talk about right now. We are in neutral, and forecasters expect that ENSO-neutral conditions will play on through the summer. The surface temperature of the tropical Pacific Ocean is close to the long-term average in most areas, including the Niño3.4 region (our primary monitoring region for ENSO), which was smack-dab on the average in the latest weekly measurement. Another interesting thing this map shows us is the prominent pattern of warmer-than-average surface temperatures north of the equator, and cooler-than-average waters south of the equator. This illustrates the strongly positive phase of the Pacific Meridional Mode… which I’ll get to in a minute.  The atmosphere is also looking pretty ENSO-neutral. Remember, warmer-than-average waters tend to evaporate more water and warm the air above them, creating more rising motion and clouds than average. Cooler waters are the reverse, resulting in less cloud cover than average. Computer model forecasts made in June are usually more reliable than those made earlier in the spring, thanks to the progression beyond the spring predictability barrier. While many of these models have been hinting at warming east-central Pacific sea surface temperatures for a few months, we can trust their predictions a bit more now that we’re moving past the spring barrier. 

Climate Change Could Lead to Major Crop Failures in World’s Biggest Corn Regions -- Climate change will increase the risk of simultaneous crop failures across the world's biggest corn-growing regions and lead to less of the nutritionally critical vegetables that health experts say people aren't getting enough of already, scientists warn. Two new studies published Monday in Proceedings of the National Academy of Sciences look at different aspects of the global food supply but arrive at similarly worrisome conclusions that reiterate the prospects of food shocks and malnutrition with unchecked global warming. While developing tropical countries would likely be hardest hit, the destabilizing financial effects could reach all corners of the globe, the authors say.One paper analyzed corn—or maize—the world's most produced and traded crop, to project how climate change will affect it across the major producing regions. Much of the world's corn goes into feeding livestock and making biofuels, and swings in production can ripple through global markets, leading to price spikes and food shortages, particularly for the 800 million people living in extreme poverty.   The researchers found significant differences in corn yield depending on how high global temperatures rise.  An increase of 4 degrees Celsius—close to where the current greenhouse gas emissions trajectory would take us by the end of this century—could cut U.S. corn production by nearly half. If global warming is instead held to 2°C (the goal of the Paris climate agreement is to stay below that level) the projected loss in U.S. production would be closer to 18 percent, the researchers found.While those numbers are pretty dramatic, the researchers find that the chances of the top-producing regions suffering extreme yield losses at the same time rises, too.

Climate change strips nutrients from food crops - A new study has further revealed how climate change is reducing yields and sucking the nutrients from our vegetables and legumes, raising serious questions over the future of food security and public health around the world. The report, which was led by the London School of Hygiene & Tropical Medicine, is apparently the first of its kind to methodically examine to what extent environmental changes such as water scarcity, increases in temperature and a greater concentration of carbon dioxide could impact the nutritional quality and yield of crops vital to our everyday nutrition. Previous research into the impact of environmental change on food has mostly focused on the yield of staple crops such as wheat, rice and corn. However, there has been comparatively little discussion on how climate change is affecting nutritious foods that are considered more important to a healthy diet.  "Vegetables and legumes are vital components of a healthy, balanced and sustainable diet, and nutritional guidelines consistently advise people to incorporate more vegetables and legumes into their diet," says lead author Pauline Scheelbeek."However, our new analysis suggests that this advice conflicts with the potential impacts of environmental changes that will decrease the availability of these crops." Alongside water scarcity and increasing temperatures, higher levels of carbon dioxide are being blamed for stripping crops of their nutritional value. But carbon dioxide is good for plants, so why should we be worried about rising CO2 levels? While it's true that plants do require carbon dioxide in order to grow and thrive, it's possible to have too much of a good thing.Rising carbon dioxide levels ramp up the process of photosynthesis — which is what allows plants to transform sunlight into food. While this certainly helps plants grow, it has the side effect of causing them to produce more simple carbohydrates such as glucose. And this comes at the expense of other important nutrients we need in order to stay healthy including protein, zinc and iron.

Harvests will shrink as the planet heats up and crops will be less nutritious - – A hotter world could also be a hungrier one, with shrinking harvests and poorer quality plants. As planetary temperatures rise in response to ever more profligate combustion of fossil fuels, climate change could lower the yield of  vegetable and legume crops – and at the same time reduce their nutritional content.And the same high end-of-the-century temperatures could raise the risk of massive, near-global losses for the world’s most widely grown cereal, maize.This double blow comes close upon the evidence – from field trials over many years – that another global staple, rice, is likely to become less rich in protein and vitamins as temperatures increase.British researchers report in the Proceedings of the National Academy of Sciences that they studied 174 research papers based on 1,540 experiments in 40 countries between 1975 and 2016, on the probable effect of changes in water supplies, ozone, atmospheric carbon dioxide, and ambient temperatures, on vegetables and legumes. They found that on the basis of changes predicted for later this century, average yields of vegetables could fall by 35%, and legumes by 9%. There has been evidence that more atmospheric carbon dioxide could fertilize more plant growth, but other accompanying changes – greater extremes of heat, drought, flood and so on – could cancel out any such gains. Pauline Scheelbeck, of the London School of Hygiene and Tropical Medicine, who led the study, called the finding “a real threat to global agricultural production, with likely impacts on food security and population health.” Scientists have been warning for at least five years of the potential impact of climate change on agriculture and food supply: other studies have shown that fruit and vegetable supplies could be at risk. There has also been evidence that heat extremes could damage wheat yields while endangering food supplies across the whole of Africa, and at the very least test the capacity of global markets to cope with sudden harvest failures across whole regions.

Iraq suspends farming of crops due to drought -- An unusually bad drought has forced Iraq to suspend the cultivation of rice, corn and other cereals that demand large amounts of water, the country's Agriculture Ministry said."The agricultural plan for the summer" was modified "because the quantities of water needed for these cereals are not available", the ministry's spokesman Hamid al-Nayef said."The ministry does not take this decision lightheartedly," he said, adding that cereal crops would no longer be grown without authorization from the Water Resources Ministry. Nicknamed the “land of the two rivers” due to the presence of the Tigris and Euphrates, Iraq has for years seen its water resources decrease. Beyond this year’s dramatic lack of rain, experts say a central reason for Iraq’s creeping drought is the regional sharing of its water resources, AFP reported.

India Suffers 'Worst Water Crisis in Its History' - India is facing its "worst-ever" water crisis, according to a report from a government think tank issued last week.Around 200,000 Indians die each year due to lack of water access, the report finds, and demand will be twice as much as supply by 2030."Part of [the crisis] is because of the rising temperature, and the changing rainfall patterns that come with thechanging climate," Mridula Ramesh, founder of the Sundaram Climate Institute, told Al Jazeera."Part of it is because of unwise choices we have made in managing our waste and water."As reported by the Thomson Reuters Foundation:"About 200,000 Indians die every year due to inadequate access to safe water and 600 million face high to extreme water stress, the National Institute for Transforming India (NITI) Aayog said on Thursday, citing data by independent agencies.'Critical groundwater resources that account for 40 percent of India's water supply are being depleted at unsustainable rates,' the report said, calling for an immediate push towards sustainable management of water resources. 'India is suffering from the worst water crisis in its history and millions of lives and livelihoods are under threat,' it said."

The Lake Powell Pipeline Is a Hot, Expensive Mess - With rainfall at record lows, water is an increasingly precious commodity in the deserts of southern Utah. But in the driest reaches of redrock country, one long-waged water war thunders even louder than the rest.Utah legislators and water managers have spent nearly a decade trying to break ground on the 140-mile-long Lake Powell Pipeline, which will carry 77 million gallons of water annually from the Colorado River to nearby Washington and Kane Counties. When all is said and done, the project is estimated to cost somewhere between $1.1 billion and $1.8 billion. The specifics are unclear as to who is paying for the project, and delays continue ratcheting up the price tag, but part of the burden will probably be borne by Utah taxpayers through raised property taxes, impact fees and spiked water rates; the rest will likely come from state borrowing. According to Lisa Rutherford, a public lands activist in Washington County, "it is the moneyed interests that are pushing for the pipeline." She said that while 22 economists wrote to the state legislator in 2015 questioning the exorbitant costs the pipeline would impose on Washington County residents, developers stand to make millions of dollars from the project.Pipeline proponents argue that Utah is merely drawing its rightful allocation of water from the river based on the Colorado River Compact of 1922, and that if it doesn't, other states will take that water. But Rutherford and other conservationists argue that the state has already used its share because the allocations were based on the Colorado River of 1922, replete with 16 million acre feet flows instead of today's 12 or 13 million acre feet. Rutherford believes that the politicians and developers who support the Lake Powell Pipeline project have blinders on. "They want to get that water flowing sooner rather than later in hopes that if the politics change around the river, they'll already have that straw in there," she said. Anti-pipeline conservationists are concerned about the impacts of the Lake Powell Pipeline on the Colorado River. Different parts of the river—sometimes the upper portion, sometimes the lower, and other times the whole body of water—have been included on American Rivers' annual Most Endangered list several times. The demands on the river for potable water outweigh its supply–nearly 40 million people from Denver to Los Angeles drink water from the Colorado River, and it currently irrigates 15 percent of the nation's crops. .

New Delhi's air pollution went off the scale this week - It’s no secret that New Delhi has a serious air pollution problem. But this week, things went from regular bad to real life is now the Upside Down. A river of dust and sand combined with man-made air pollutants to send levels of particulate matter soaring across India’s northern tier beginning on Tuesday, the Hindu reports. Sensors scattered across the capital city show the air quality index (AQI) for the most dangerous type of particulate matter, PM2.5, ranging from “unhealthy” to “hazardous” over the past 48 hours. A standard metric for reporting air quality in terms of public health risk, the AQI ranges from 0 to 500, with scores over 150 considered unhealthy and scores over 300 deemed hazardous, meaning the entire population is at risk from exposure. Levels of the larger PM10 particles have, in general, been even worse. In some locations, PM10 sensors have repeatedly maxed out over the past two days, with the AQI registering as 999, air quality speak for ¯\_(ツ)_/¯.Alexandra Karambelas, a postdoctoral researcher at Columbia’s Earth Institute studying the health effects of air pollution exposure in India, told Earther that short-term pollution episodes like this “can cause discomforts like coughing and lung irritation or they can exacerbate existing chronic illnesses such as asthma or other lower respiratory infections.”On Friday, European Centre for Medium-Range Weather Forecast scientist Mark Parrington tweeted a PM10 analysis by the Copernicus Atmosphere Monitoring Service, which reveals the choking pollution levels extend across most of northern India and western Pakistan.

Nanoplastics accumulate in marine organisms and may pose harm to aquatic food chains - Plastic nanoparticles - these are tiny pieces of plastic less than 1 micrometre in size - could potentially contaminate food chains, and ultimately affect human health, according to a recent study by scientists from the National University of Singapore (NUS). They discovered that nanoplastics are easily ingested by marine organisms, and they accumulate in the organisms over time, with a risk of being transferred up the food chain, threatening food safety and posing health risks. Ocean plastic pollution is a huge and growing global problem. It is estimated that the oceans may already contain over 150 million tonnes of plastic, and each year, about eight million tonnes of plastic will end up in the ocean. Plastics do not degrade easily. In the marine environment, plastics are usually broken down into smaller pieces by the sun, waves, wind and microbial action. These micro- and nanoplastic particles in the water may be ingested by filter-feeding marine organisms such as barnacles, tube worms and sea-squirts.   Using the acorn barnacle Amphibalanus amphitrite as a model organism, the NUS research team demonstrated for the first time that nanoplastics consumed during the larval stage are retained and accumulated inside the barnacle larvae until they reach adulthood. "We opted to study acorn barnacles as their short life cycle and transparent bodies made it easy to track and visualise the movement of nanoplastics in their bodies within a short span of time," . “This accumulation of nanoplastics within the barnacles is of concern. Further work is needed to better understand how they may contribute to longer term effects on marine ecosystems,"

Iceland Flouts Global Ban to Slaughter First Protected Fin Whale of New Hunting Season -- Iceland's multi-millionaire rogue whaler Kristján Loftsson and his company Hvalur hf have resumed their slaughter of endangered fin whales in blunt defiance of the international ban on commercial whaling.The hunt is Iceland's first in three years and marks the start of a whaling season that could see as many as 239 of these majestic creatures killed.A 67-foot fin whale—landed overnight at the whaling station in Hvalfjörður, Iceland—became the first kill of the new season.Hvalur CEO Loftsson recently sparked outrage when he announced plans to resume his hunt of the second largest animal on the planet and to market fin whale meat, blubber and bones for iron supplements and other medicinal or food products.For the first time since it resumed commercial whaling in 2006, Iceland's self-allocated fin whaling quota allows whalers to expand their hunt to waters east of the country. Fin whale meat is not popular in Iceland; the major market is Japan. Since 2008, more than 8,800 tonnes of whale meat and blubber have been shipped to Japan, despite the ban on international trade in whale meat under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).

The monsoon focusses Bangladeshi battle against polythene bags -- The monsoon is welcomed by every farmer in Bangladesh, which is a predominantly agricultural based economy heavily dependent on the annual rains. But for the cities, especially for Dhaka and Chittagong, the May-July monsoon is nothing short of a nightmare because of all the water-logging, which is intimately linked with the irresponsible disposal of popular non-biodegradable polythene bags that end up clogging the sewers.  Dhaka’s sewers comprise of a very primitive network of concrete pipes most of which are less than 1 metre wide.  Furthermore these pipes serve a city with a population density of 44,500 people per square kilometre, making it the most densely populated city in the world.  There are many areas in Dhaka –  Dania, Paltan and Demra to name a few – that go under several feet of water after just a couple of minutes of heavy rain. The sewers in these areas are so clogged up by polythene that even this amount of water overwhelms them. This year, an item in the budget will try to tackle this issue and hopefully reduce the chaos caused by the monsoon for city dwellers. The budget session in parliament is less than three weeks away and there are high chances that the government is going to impose a 5% supplementary duty on the production of all kinds of polythene plastic bags.

France might ban stores from throwing away unsold cloth -  France has been very progressive in terms of eliminating product waste. Two years ago, they were the first country to pass a law that prevented grocery stores and supermarkets from throwing away food that neared expiration. Now they’re having a same approach to the textile industry that prohibits throwing away unsold clothes.  Back in 2016, France had a problem with an increase in homeless people rummaging through store dumpsters. This led to attempts by store owners to keep them out by adding locks around their garbage. Instead of throwing these items out, the country passed a law requiring these stores to donate them to charity.  A similar approach could be given to clothing waste by next year. Prime Minister Edouard Philippe has a goal to create a circular economy in France, and out of the numerous proposals, one of them is to prohibit throwing away any apparel that isn’t sold. Emmaus, a charity founded in Paris that focuses on poverty, have been advocating for an expansion of the food waste law into the clothing industry.  “The 2019 deadline allows the government to appraise the situation, calculate the amount of discarded [textiles], review the procedures put in place by companies and the problems involved,” Valerie Fayard, general assistant at Emmaus France, told Novethic, a local sustainable research and transformation company.  According to the Fashion Network, Europe throws away four million tons of clothing while five million tons is put back into the market on an annual basis. In France alone, they represent 17.5 percent of that waste, and only 22.9 percent of what’s tossed out is recycled.

China Just Handed the World a 111-Million-Ton Trash Problem -- Few people consider used plastic to be a valuable global commodity. Yet China has imported 106 million tons of old bags, bottles, wrappers and containers worth $57.6 billion since 1992, the first year it disclosed data. So when the country announced last year that it finally had enough of everybody else's junk, governments the world over knew they had a problem. They just didn’t know exactly how large it was. Now they know. By 2030, an estimated 111 million metric tons of used plastic will need to be buried or recycled somewhere else—or not manufactured at all. That's the conclusion of a new analysis of UN global trade data by University of Georgia researchers. Everyone's bottles, bags and food packages add up. Factories have churned out a cumulative 8.3 billion metric tons of new plastic as of 2017, the same Georgia team reported last year. Even 1 million metric tons, the scale that this material trafficks in every year, is hard to visualize in the abstract. It's 621,000 Tesla Model 3s. It's 39 million bushels of corn kernels. The world’s 700 million iPhones make up roughly a tenth of a million metric tons.  Nearly four-fifths of all that plastic has been thrown into landfills or the environment. A tenth of it has been burned. Several million tons reach oceans every year, sullying beaches and poisoning vast reaches of the northern Pacific. Just 9 percent of the total plastic ever generated has been recycled. China took in just over half the annual total in 2016, or 7.4 million metric tons. As the industry matured and the negative effects on public health and the environment became clear, China got more selective about the materials it was willing to buy. A "Green Fence" law enacted in 2013 kept out materials mixed with food, metals or other contaminants. Exports consequently dropped off from 2012 to 2013, a trend that continued until last year, when the world's biggest buyer warned that its scrap plastic purchases would stop altogether.

Texas Supreme Court Rules Cities Cannot Ban Plastic Bags -- The Texas Supreme Court struck down the city of Laredo's plastic bag ban—a decision that will likely overturn similar bans in about a dozen other cities, including Austin, Fort Stockton and Port Aransas. The court ruled Friday that only the state has the authority to regulate solid waste disposal in Texas. In the 19-page opinion, Chief Justice Nathan Hecht wrote that the Texas Constitution prohibits city ordinances from conflicting with state law.  "Both sides of the debate ... assert public-policy arguments raising economic, environmental and uniformity concerns," Hecht said. "We must take statutes as they are written, and the one before us is written quite clearly. Its limitation on local control encompasses the ordinance."The Laredo Merchants Association sued the city in March 2015 to overturn the ordinance, arguing that state law pre-empts the bag ban. The move was supported by 20 state senators and representatives, all Republicans, that filed an amicus brief in support of the merchants for an earlier appeal of the case.Texas Attorney General Ken Paxton also backed the merchants. A press release from his office states that the ruling "effectively invalidates unlawful bag bans across Texas." "I hope that Laredo, Austin, and any other jurisdictions that have enacted illegal bag bans will take note and voluntarily bring their ordinances into compliance with state law," Paxton said in a statement. "Should they decline to do so, I expect the ruling will be used to invalidate any other illegal bag bans statewide."

US, Japan Reject G-7 Ocean Plastics Charter -  Jerri-lynn Scofield - The Trump administration’s trade tantrum at this month’s G-7 Summit in Charlevoix, Quebec, overshadowed the failure of the United States and Japan to endorse the (modest) Ocean Plastics Charter.This commitment by the other members of the G-7– Canada, France, Germany, Italy, the United Kingdom, and the European Union, “to move toward a more resource-efficient and sustainable approach to the management of plastics” is rather weak tea– and non-binding.The charter has five sections, and numerous subsections (the complete text may be found here . There are two headline pledges. First, “working with industry towards 100% reusable, recyclable, or, where viable alternatives do not exist, recoverable, plastics by 2030.” Now, I don’t expect the technology fairy to ride to the rescue here and solve the ocean plastics problem overnight. Yet some G-7 countries–  France, for example– are seeing  some success in developing bioplastics that have less of a harmful impact on the environment than oil-based plastics. As Al Jazeera reported yesterday in France’s plastic revolution: These include plastic produced from seaweed and algae, sugarcane and even milk – designed to try and replace harmful oil-based plastics. Using biological materials allows these new plastic products to decompose over shorter time periods after use, in some cases, cutting decomposition time from more than 500 years to a mere four months. And the second G-7 headline pledge, “Working with industry and other levels of government, to recycle and reuse at least 55% of plastic packaging by 2030 and recover 100% of all plastics by 2040.” In this language I see an additional slim basis for optimism. Although there’s still too much emphasis on recycling– rather than reduction in the use of plastics– the percentages and deadlines, albeit voluntary, improve slightly on previous commitments (see Planet or Plastic,and EU Makes Limited Move on Plastics: Too Little, Too Late?). In announcing the Ocean Plastics Charter, Canadian Prime Minister Justin Trudeau pledged to contribute 100 million (Canadian dollars) to reducing global ocean plastics pollution. The plan is noticeably short on details, and Canadian environmentalists, among others, have called for stronger, binding measures, as reported by the CBC in Environmentalists ‘encouraged’ by G7 plastics charter but urge more action. Similarly, DW.com lamented the dearth of firm commitment in  G7 minus two: Leaders agree to ocean plastics charter— and highlighted that this isn’t the first time that world leaders failed to do much more than express good intentions to tackle the global plastics crisis:

Hawaii volcano eruption UPDATE: Kilauea summit collapse 'LARGEST in history' USGS reveals - Kilauea’s volatile crater has lost around 250 million cubic metres of volume since eruptions began on May 3 this year.  The subsiding Halemaumau crater summit has lost the equivalent of 100,000 Olympic-sized swimming pools.Kilauea’s draining magma chambers are fuelling the summit collapse, the USGS warned on Tuesday, June 19.Two aerial photographs snapped by USGS scientists reveal the extent of the widening crater in Hawaii Volcanoes National Park.The USGS said: “These two photos taken on yesterday's helicopter overflight of the summit show the size of the growing Halemaumau Crater – seeing Hawaii Volcano Observatory and Jaggar Museum in the view helps to put the crater size in context.“A preliminary estimate of summit volume loss is around 250 million cubic meters.“At 5.05am HST, another gas and ash emission from a small subsurface explosion occurred at Kilauea's summit, producing a plume that was blown downwind at about 5,000 ft above sea level.“Inward slumping of the rim and walls of Halemaumau continues in response to ongoing subsidence at the summit.” The crater has at least doubled in size since may this year, the USGS said. This is the largest scale collapse of Halemaumau that we've witnessed in historic time. The molten rock which has drained from the Halemaumau lava lake and Kilauea’s underground chambers has pushed into the Lower East Rift Zone. More than 570 homes have been lost to the oozing lava and a strong channel of molten rock now flows from a volcanic fissure in Leilani.  The USGS recorded lava flow speeds of 17mph on Wednesday morning. When asked about the likelihood of the Kilauea crater filling up with lava again, the geological agency said it might take many years for lava eruptions to return to the summit.

Scientists underestimated how quickly oceans are losing oxygen -- The world’s oceans are losing oxygen, but the technology to model this loss and project future rates of deoxygenation is insufficient, according to a new study. Recent research has found that the oceans have already lost two percent of their oxygen content worldwide in the past fifty years, and deoxygenation is expected to increase in the future. Now, a new study conducted by researchers from the GEOMAR Helmholtz Centre for Ocean Research Kiel shows how current methods to measure deoxygenation and identify drivers of oxygen loss need improvement.The study was published in the journal Nature Geoscience, and the research shows why current models for deoxygenation are limited while also listing several drivers of oxygen loss that previous research had underestimated. One way that warmer temperatures affect ocean oxygenation is through oxygen solubility in the water. As the surface layers of the ocean warm up, fewer gases are able to be stored in the water.This process explains around 20 percent of deoxygenation in the ocean so far and models are able to efficiently represent solubility.   However, models are less able to show how warmer temperatures affect the patterns of global ocean circulation which consists of both deep and shallow currents that supply oxygen to different layers of the ocean.

In the Philippines, dynamite fishing decimates entire ocean food chains  — Nothing beats dynamite fishing for sheer efficiency.A fisherman in this scattering of islands in the central Philippines balanced on a narrow outrigger boat and launched a bottle bomb into the sea with the ease of a quarterback. It exploded in a violent burst, rocking the bottom of our boat and filling the air with an acrid smell. Fish bobbed onto the surface, dead or gasping their last breaths. Under the water, coral shattered into rubble.  The blast ruptured the internal organs of reef fish, fractured their spines or tore at their flesh with coral shrapnel. From microscopic plankton to sea horses, anemones and sharks, little survives inside the 30- to 100-foot radius of an explosion. With 10,500 square miles of coral reef, the Philippines is a global center for marine biodiversity, which the country has struggled to protect in the face of human activity and institutional inaction. But as the effects of climate change on oceans become more acute, stopping dynamite and other illegal fishing has taken on a new urgency. According to the initial findings of a survey of Philippine coral reefs conducted from 2015 to 2017 and published in the Philippine Journal of Science, there are no longer any reefs in excellent condition, and 90 percent were classified as either poor or fair. A 2017 report by the United Nations predicts that all 29 World Heritage coral reefs, including one in the Philippines, will die by 2100 unless carbon emissions are drastically reduced. Dynamite fishing destroys both the food chain and the corals where the fish nest and grow. Blast fishing kills the entire food chain, including plankton, fish both large and small, and the juveniles that do not grow old enough to spawn. Without healthy corals, the ecosystem and the fish that live within it begin to die off. New York Times journalists embedded with dynamite fishermen in Bohol who gave exclusive access on the condition that we not use their names or the names of the islands where they live, for fear of being arrested.

Flooding from sea level rise threatens over 300,000 US coastal homes – study - Sea level rise driven by climate change is set to pose an existential crisis to many US coastal communities, with new research finding that as many as 311,000 homes face being flooded every two weeks within the next 30 years. The swelling oceans are forecast repeatedly to soak coastal residences collectively worth $120bn by 2045 if greenhouse gas emissions are not severely curtailed, experts warn. This will potentially inflict a huge financial and emotional toll on the half a million Americans who live in the properties at risk of having their basements, backyards, garages or living rooms inundated every other week.  “The impact could well be staggering,” said Kristina Dahl, a senior climate scientist at the Union of Concerned Scientists (UCS). “This level of flooding would be a tipping point where people in these communities would think it’s unsustainable. The UCS used federal data from a high sea level rise scenario projected by the National Oceanic and Atmospheric Administration, and combined it with property data from the online real estate company Zillow to quantify the level of risk across the lower 48 states. Under this scenario, where planet-warming emissions are barely constrained and the seas rise by about 6.5ft globally by the end of the century, 311,000 homes along the US coastline would face flooding on average 26 times a year within the next 30 years – a typical lifespan for a new mortgage. The losses would multiply by the end of the century, with the research warning that as many as 2.4m homes, worth around a trillion dollars, could be put at risk. Low-lying states would be particularly prone, with a million homes in Florida, 250,000 homes in New Jersey and 143,000 homes in New York at risk of chronic flooding by 2100.

Sea Level Rise Could Put 2.4 Million U.S. Coastal Homes at Risk - More than 300,000 U.S. coastal homes could be uninhabitable due to sea level rise by 2045 if no meaningful action is taken to combat climate change, a Union of Concerned Scientists (UCS) study published Monday found.The study, Underwater: Rising Seas, Chronic Floods and the Implications for U.S. Coastal Real Estate, set out to calculate how many coastal properties in the lower 48 states would suffer from "chronic inundation," non-storm flooding that occurs 26 times a year or more, under different climate change scenarios.Researchers combined property data from Zillow with three different sea level rise scenarios calculated by the National Oceanic and Atmospheric Administration (NOAA) and found that, in a high sea level rise scenario, $117.5 billion worth of homes, which currently house 550,000 people, would be in danger from chronic flooding within the lifespan of a 30 year mortgage."Even homes along the Gulf coast that are elevated would be affected, as they'd have to drive through salt water to get to work or face their kids' school being cut off. You can imagine people walking away from mortgages, away from their homes." UCS senior climate scientist Kristina Dahl told The Guardian.The report further found that around 14,000 commercial properties worth $18.5 billion would also be at risk by 2045. By the end of the 21st century, the numbers could rise to 2.4 million homes impacted, worth a total of $912 billion and home to 4.7 million people. If you add commercial properties, the total number of properties impacted by 2100 could be worth more than $1 trillion.

$4 Billion Miami Mega-Mall Moves Ahead, Ignores "Collective Belief In Sea-Level Rise" - Plans for a $4 billion mega-mall to be built on the coast line city of Miami are pushing forward, despite the fact that the city is likely going to have to deal with rising sea levels and worsening weather as the years progress. Or, it simply could find itself underwater within years, if other projections are accurate. But don't worry - academics at the University of Penn Wharton School of Business have a solution: just ignore the fact that Miami will soon be underwater, because otherwise you could create a panic that could, in turn, slow down tax revenue that the city is desperately going to need to - wait for it - adapt to being underwater. So in the great spirit of Keynes himself, the project is pushing forward. Government and developers are collectively moving forward on a project for a 6.2 million square foot mall that would house on its property a waterpark, ski slopes, and 2,000 hotel rooms. You may be asking yourself one, or both, of the following two questions.

• 1. Will Miami be underwater in several years?
• 2. Aren't most malls collapsing and simply going out of business?

But this mall is part of a new theory on building malls: one that focuses not only on customers buying things, but also buying experiences. The Wall Street Journal reported on the project moving forward: At a time when store closures are accelerating and struggling malls pockmark the country, county commissioners in Florida have approved a plan to build what would be the largest mall in the U.S. American Dream Miami would also be the most expensive mall ever built, according to Canadian developer Triple Five Worldwide Group of Cos. The 6.2-million-square-foot retail and entertainment complex would cost an estimated $4 billion, Triple Five says. The cost would include 2,000 hotel rooms, indoor ski slope, ice-climbing wall and waterpark with a “submarine lake,” where guests could enter a plexiglass submarine and descend underwater. . They recognize it’s no longer enough to fill malls with stores selling clothing, food, electronics and other merchandise people can more easily buy online. Rather developers are filling malls with restaurants, rides, trampoline parks, gyms, services and other types of entertainment. This strategy taps into the increasing preference of consumers to spend their money on experiences as opposed to goods.

 Should we be worried about surging Antarctic ice melt and sea level rise? -- There’s recently been a spate of sea level rise denial in the conservative media, but in reality, sea level rise is accelerating and melting ice is playing an increasingly large role. In the first half of the 20th Century, average global sea level rose by about 1.4 millimeters per year (mm/yr). Since 1993, that rate has more than doubled to 3.2 mm/yr. And since 2012, it’s jumped to 4.5 mm/yr.  Global mean sea level data from the Colorado University Sea Level Research Group, with 4-to-5-year linear trends shown in black and red. Illustration: Dana NuccitelliThermal expansion (ocean water expanding as it warms) continues to play the biggest role in sea level rise, but its contribution of about 1.3 mm/yr is now responsible for a smaller proportion of total sea level rise (30% in recent years) than its contribution since the 1990s (40% of the total). That’s because of the acceleration in melting ice. Glacier melt is accelerating, recently contributing about 0.75 mm/yr to sea level rise, up from 0.65 mm/yr since the 1990s. But the biggest jumps have come from ice in Greenland and Antarctica. Greenland had been responsible for about 0.48 mm/yr sea level rise since 1990, but in recent years is up to 0.78 mm/yr. A recent study in Nature Climate Change found that Greenland contributed about 5% to sea level rise in 1993 and 25% in 2014. A new study published in Nature using data from a range of satellites found that Antarctica’s contribution has tripled from about 0.2 mm/yr since the 1990s to 0.6 mm/yr since 2012, during which time global sea level rise also spiked. Accelerated ice melt from Antarctica, Greenland, and glaciers have all played a role in the faster recent sea level rise. The question is whether it’s a temporary jump, or if we need to worry about a continued acceleration in Antarctic ice loss.

Bedrock in West Antarctica rising at surprisingly rapid rate - The earth is rising in one part of Antarctica at one of the fastest rates ever recorded, as ice rapidly disappears and weight is lifted off the bedrock, a new international study has found. The findings, reported in the journal Science, have surprising and positive implications for the survival of the West Antarctic Ice Sheet (WAIS), which scientists had previously thought could be doomed because of the effects of climate change. The unexpectedly fast rate of the rising earth may markedly increase the stability of the ice sheet against catastrophic collapse due to ice loss, scientists say. Moreover, the rapid rise of the earth in this area also affects gravity measurements, which implies that up to 10 percent more ice has disappeared in this part of Antarctica than previously assumed. Researchers led by scientists at The Ohio State University used a series of six GPS stations (part of the POLENET-ANET array) attached to bedrock around the Amundsen Sea Embayment to measure its rise in response to thinning ice. The "uplift rate" was measured at up to 41 millimeters (1.6 inches) a year, said Terry Wilson, one of the leaders of the study and a professor emeritus of earth sciences at Ohio State. 

Trump admin tightens media access for federal scientists: report | TheHill: The Trump administration is directing federal scientists in the U.S. Geological Survey (USGS) to get approval from the Department of the Interior, its parent agency, before speaking to reporters, according to the Los Angeles Times.USGS employees interviewed by the L.A. Times said the policy is a departure from decades of past media practices that allowed scientists to quickly respond to media requests. The employees said that the new policy will significantly undermine this. A spokesperson for Interior disputed this description of the policy to the L.A. Times, saying that “the characterization that there is any new policy or that it for some reason targets scientists is completely false.” Deputy press secretary for the Department of the Interior, Faith Vander Voort, told the outlet that Interior had only asked the USGS public affairs office to follow 2012 media guidelines established under former President Obama. The guidelines say Interior’s communications office must be notified ahead of some types of interviews but does not say that scientists must get approval before speaking with reporters as an internal email obtained by the L.A. Times indicates. The employees said that they believe the new policies were established to control the voices of Interior employees. They believe the move is a part of larger efforts to quell discourse about climate change, which the agency has produced research on. 

Capitalism is killing the planet and needs to change, says investor Jeremy Grantham -- Jeremy Grantham, the longtime investor famous for calling the last two major bubbles in the market, is urging capitalists and "mainstream economists" to recognize the looming threat of climate change.  "Capitalism and mainstream economics simply cannot deal with these problems. Mainstream economics largely ignore [them]," Grantham, who co-founded GMO in 1977, said Tuesday in an impassioned speech at the Morningstar Investment Conference in Chicago. "We deforest the land, we degrade our soils, we pollute and overuse our water and we treat air like an open sewer, and we do it all off the balance sheet."  This negligence is due in large part to how short-sighted corporations can be, Grantham said. "Anything that happens to a corporation over 25 years out doesn't exist for them, therefore, as I like to say, grandchildren have no value" to them, he said. Throughout his presentation, Grantham cited a slew of data showing how climate change is impacting soil, grains, temperature as well as general human health. Those numbers, coupled with Grantham's speech delivery, scared a lot of people in attendance at the conference.Grantham also pointed out that many of the problems with how capitalists deal with climate change stem from the very nature of corporations. "A corporation's responsibility is to maximize profit, not to spend money and figure out how to save the planet," he said.  But Grantham added: "We're racing to protect much more than our portfolios. … We're racing to protect our grandchildren and our species, so get to it."

World can ‘safely’ store billions of tonnes of CO2 underground - Storing billions of tonnes of CO2 underground would be a “safe and effective” way to help limit the effects of climate change, a new study says. The research suggests that large amounts of CO2 could be stored under the ground or sea with only a small risk of surface leakage in the following 10,000 years. However, if CO2 storage is poorly managed, higher amounts of leakage can be expected.The findings help dispel common “misconceptions” about the dangers associated with CO2 storage, a scientist not involved in the study tells Carbon Brief. Carbon capture and storage (CCS) is a process whereby CO2 is “captured” from the air and then transported to a storage site – which could be, for example, a depleted oil or gas field or a deep rock reservoir beneath the sea. Though the technology is currently restricted to a few small pilot projects, many view its large-scale development as an essential step to limiting the effects of future climate change. In its most recent assessment report, the Intergovernmental Panel on Climate Change (IPCC) concluded that avoiding dangerous climate change would cost twice as much without CCS.  One barrier to the development of CCS is the costs associated with directly capturing CO2 from the atmosphere. Another barrier is the fear that, once underground, stored CO2 could leak out into the atmosphere. It is this second barrier that is addressed by the new research, which is published in Nature Communications. The findings suggest that – providing a suitable storage site is chosen – the risk of CO2 leakage would be minimal.

Sucking carbon out of the air won’t solve climate change - The idea of pulling carbon dioxide directly out of the air has been bouncing around climate change policy circles for well over a decade, but it’s only been in the past few years that the technology itself — “direct air capture,” or DAC — has been tested in the real world. Earlier this month came the first solid engineering and cost numbers on DAC, courtesy of a company called Carbon Engineering out of Calgary, Canada.In a paper in the new energy journal Joule, the company (led by its founder, Harvard’s David Keith) reports its experience over the past three years running a DAC demonstration plant in Squamish, British Columbia. It’s the clearest look yet at how DAC might actually work, not just as a technology but as a business. The headline news from the paper is that the cost of capturing a ton of CO2 — estimated at around $600 in 2011 — has fallen to between $94 and $232. Almost any source of renewable energy can prevent a ton of carbon for cheaper than that, but still, down at the lower end, beneath $100, DAC starts to look viable in a low-carbon world.  The study was met with extensive and enthusiastic press coverage, some of which involved headline writers getting out over their skis, like this one on Robinson Meyer’s Atlantic piece: “Climate Change Can Be Stopped by Turning Air Into Gasoline.” (Narrator: It can’t.) The article itself is judicious and smart, but it’s pretty clear from the broad public reaction that not a lot of people read past the headlines on this story. To state the bottom line clearly: The ability to pull carbon out of the air is not a silver bullet. It is not the cheapest or most effective way to fight climate change. It won‘t allow us to bypass any of the hard work of reducing our emissions.The apocalypse has not, in fact, been averted. At least not yet. No one who understands this technology, very much including Keith himself, believes otherwise.

Exclusive: Tesla to close a dozen solar facilities in nine states – documents (Reuters) - Electric car maker Tesla Inc’s move last week to cut 9 percent of its workforce will sharply downsize the residential solar business it bought two years ago in a controversial $2.6 billion deal, according to three internal company documents and seven current and former Tesla solar employees. The latest cuts to the division that was once SolarCity - a sales and installation company founded by two cousins of Tesla CEO Elon Musk - include closing about a dozen installation facilities, according to internal company documents, and ending a retail partnership with Home Depot Inc that the current and former employees said generated about half of its sales. About 60 installation facilities remain open, according to an internal company list reviewed by Reuters. An internal company email named 14 facilities slated for closure, but the other list included only 13 of those locations. Tesla declined to comment on which sites it planned to shut down, how many employees would lose their jobs or what percentage of the solar workforce they represent. The company said that cuts to its overall energy team - including batteries to store power - were in line with the broader 9 percent staff cut. “We continue to expect that Tesla’s solar and battery business will be the same size as automotive over the long term,” the company said in a statement to Reuters. The operational closures, which have not been previously reported, raise new questions about the viability of cash-strapped Tesla’s solar business and Musk’s rationale for a merger he once called a “no brainer” - but some investors have panned as a bailout of an affiliated firm at the expense of Tesla shareholders. Before the merger, Musk had served as chairman of SolarCity’s board of directors. The installation offices that the internal email said were targeted for closure were located in California, Maryland, New Jersey, Texas, New York, New Hampshire, Connecticut, Arizona and Delaware. The company also fired dozens of solar customer service staffers at call centers in Nevada and Utah, according to the former Tesla employees, some of whom were terminated in last week’s cuts. 

Scott Pruitt Has Spent a Total of $4.6 Million on Security, New Disclosures Show — Including $1,500 on “Tactical Pants” -- Scandal-plagued Environmental Protection Agency Administrator Scott Pruitt has now spent more than $4.6 million from public coffers on security, according to documents obtained by The Intercept and Documented under the Freedom of Information Act. The amount represents a $1.1 million increase from Pruitt’s total security costs as released in another disclosure just a month ago. Pruitt’s high spending on security has become the subject of mounting criticism and a host of official investigations: Several EPA inspector general investigations have been opened, as well as an ongoing investigation by the Republican-controlled House Oversight Committee.Records released under the Freedom of Information Act list expenditures totaling $288,610 on a range of security-related items. The EPA, according to three expense line items for April, spent a total of $2,749.62 on “tactical pants” and “tactical polos.” Since last year, shortly after his Senate confirmation, Pruitt’s office began purchasing security-related items, including multiple vehicle leases, over $80,000 worth of radios, $700 in shoulder holsters for the radios, and a kit to break down doors, among other purchases.  In May, CNBC and other outlets reported that the mounting cost of Pruitt’s security detail had reached $3.5 million, but that didn’t include any of the cost of equipment or the most recent salary and travel expenditures.

Breaking: Sierra Club Demands Pruitt’s Emails After Only 1 Disclosed by EPA - As part of ongoing litigation, the Sierra Club has demanded that the U.S. Environmental Protection Agency (EPA) search Scott Pruitt's personal email accounts for work-related emails, or certify clearly and definitively that the administrator has never used personal email for work purposes. The demand comes on the heels of a successfully litigated Freedom of Information Act (FOIA) request for all of EPA Administrator Scott Pruitt's email and other communications with all persons and parties outside the executive branch. These facts were first reported in Politico early this morning.  EPA is under a court order to produce all of Pruitt's external work communications. EPA certified to the Sierra Club that it has done so with regard to emails, as of May 30th, 2018. Pruitt has at least four known EPA email accounts. However, as of today, the Sierra Club has received only a single email sent by EPA Administrator Scott Pruitt to an external party over the 10-month period covered by the FOIA response. Despite the disclosure of more than 40,000 pages of documents—including tens of thousands of emails and other communications from top aides to Scott Pruitt, including his Chief of Staff Ryan Jackson, former Director of the Office of Policy Samantha Dravis, and former schedulers Millan and Sydney Hupp, among others—the EPA provided just a single Pruitt email. "The idea that Scott Pruitt sent a single work-related external email during nearly a year leading EPA is absurd on its face. That's why the Sierra Club is demanding that EPA search Pruitt's personal email accounts for work-related communications, or certify definitively that he does not use personal email or secretive messaging applications like WhatsApp and Signal to circumvent records retention laws,"

Colorado Resists Pruitt’s Polluting Agenda by Adopting California Emissions Standards - Colorado joined 12 other states and the District of Columbia in adopting California's stricter vehicle emissions standards Tuesday, The Denver Post reported.Democratic Gov. John Hickenlooper issued an executive order calling on the state to adopt low-emissions vehicle standards by 2025 and to begin drafting the standards in time to start implementing them by the end of 2018. Hickenlooper said in a statement that the move would help reduce air pollution, which poses a greater risk at Colorado's high altitudes, and be in line with the state's commitment to fighting climate change, The Associated Press reported. Colorado's move is necessitated by U.S. Environmental Protection Agency (EPA) head Scott Pruitt'sannouncement in April that the agency would reduce national emissions standards through 2025. California has a waiver under the Clean Air Act to adopt stricter emissions standards than the rest of the country, and other states can choose to adopt them as well. But during the Obama era, the national government's standards were strict enough that California and the other states following its lead were willing to accept them, meaning that automakers only had to make cars for one national set of standards. Pruitt's decision changed that. Now, Colorado is invoking the Clean Air Act to adopt California's standards as well, saying it will help the state to meet its 2030 target for lowering greenhouse gas emissions, The Denver Post reported.

Boulder County and Boulder add 'civil conspiracy' to climate change lawsuit  - Boulder County and the city of Boulder have amended their climate change lawsuit against two fossil fuel producers to add another cause for the action, alleging that both ExxonMobil and Suncor Energy engaged in a "civil conspiracy." In nearly identical language as it applies to both defendants, the Boulder governments — along with co-plaintiff San Miguel County — charge that the two petroleum companies "and their co-conspirators jointly targeted their fossil fuel activities at the State of Colorado, including through the co-conspirators based in, doing business in and/or incorporated in Colorado." The new cause of action, which runs the better part of nine pages, alleges that the defendants "had concerted goals to maintain and/or increase fossil fuel usage at levels they knew were sufficient to alter the climate, and to fail to disclose material information concerning their fossil fuel activities," including the damage to the climate that use of their products would cause. They did so, it claims, "so as to maintain and increase their profits from the sale of their fossil fuel products and services in spite of the increasing alteration of the climate." Damages associated with the companies' "concerted unlawful actions" alleged in the amended complaint include the costs of analyzing the future impacts of climate alteration, the costs of wildfire response, the expense of managing pine beetle infestation, the costs associated with increased drought conditions, the future expense of infrastructure construction and repair, and more. 

Audi CEO Arrested in Emissions-Cheating Investigation —The chief executive of Volkswagen’s luxury unit Audi was jailed Monday without bail after prosecutors said they were worried he might try to interfere in a probe into whether he was involved in the German car maker’s diesel-emissions cheating scandal.The arrest of the executive, Rupert Stadler, came a week after Munich prosecutors searched his home and said they had added him to a list of about 20 suspects in a broad fraud investigation stemming from the scandal.Volkswagen admitted in 2015 to rigging nearly 11 million diesel-powered vehicles, including Audi models, with software that allowed them to cheat on emissions tests. The following year, the luxury Audi unit was part of a broader settlement, in which Volkswagen pleaded guilty to defrauding the U.S. government.Volkswagen has incurred about $25 billion in penalties, fines and compensation for customers stemming from the admission.The scandal has also claimed a growing roster of Volkswagen executives. The U.S. has indicted eight, including former Chief Executive Martin Winterkorn, on charges of conspiracy to defraud the U.S. and to commit wire fraud, and to violate the Clean Air Act. Two are serving time in federal prison.Mr. Winterkorn, who has denied knowledge of the cheating, and the others remain in Germany, which has a law prohibiting the government from extraditing its citizens. Meanwhile, various German investigations into the cheating have been progressing more slowly. Mr. Stadler, a longtime executive at Volkswagen and Audi, is the third person to be arrested by German authorities so far in connection with the scandal. He has served as Audi’s CEO since 2010.

U.S. Auto Makers Are Putting Smaller Engines Into Big Trucks So They Guzzle Less Gas -- Big U.S. auto makers are racing to equip pickup trucks with fuel-efficient engines, a surprising pivot away from their longstanding practice of putting gas-guzzling engines into large vehicles.Ford , General Motors and Fiat Chrysler all now are betting truck buyers want better gas mileage in addition to raw horsepower. That insight has touched off a surge in innovation.   First off the starting line was Ford, which in May began selling a diesel F-150 pickup truck that achieves an estimated 30 miles per gallon in highway driving—viewed by many in the industry as the Holy Grail of fuel economy for trucks. That is better than the 27 mpg rating on the 2018 Ford Taurus family sedan, even though the truck outweighs the car by about 1,000 pounds.GM this fall is set to introduce a revamped full-size Chevy Silverado pickup with an engine smaller than the one under the hood of some Toyota Camry midsize sedans. Fiat Chrysler is countering with a new Ram 1500 pickup equipped with a hybrid system that uses an electric motor and battery pack to supplement the gas engine and improve efficiency. Ford, which four years ago pioneered the use of aluminum body panels in pickup trucks to save weight and fuel, plans its own hybrid truck.  Trucks’ new efficiency push comes as the Trump administration—spurred by the industry’s complaints—is moving to relax gas-mileage standards put in place in the Obama era to fight emissions.Auto makers that long lobbied against existing standards for being too stringent now are adopting a more-global view in their development of new engine technologies for trucks and big sport utility vehicles. Industry officials say companies are unlikely to abandon these innovations, even if the White House, as expected, formally eases fuel-economy standards.

Adoption of autonomous vehicles could increase U.S. transportation energy consumption - Autonomous vehicles are one of the main sources of uncertainty in the future of U.S. transportation energy consumption, as autonomous vehicle technology has the potential to change travel behavior, vehicle design, energy efficiency, and vehicle ownership. Analysis in EIA’s Annual Energy Outlook 2018 (AEO2018) shows that the widespread adoption of autonomous vehicles could increase overall light-duty vehicle travel and, depending on how those vehicles are powered, lead to slightly higher transportation energy consumption.   On-road vehicles, including light-duty vehicles, buses, and commercial and freight trucks, are significant consumers of energy in the United States, accounting for 31% of all delivered end-use energy. Light-duty vehicles alone account for 21% of total delivered end-use energy consumption. EIA projects that light-duty vehicle travel will continue increasing in the future. By 2050, light-duty vehicle miles traveled will reach 3.3 trillion miles, or 18% higher than the 2017 level.  In two AEO2018 sensitivity cases that assume more widespread use of autonomous vehicles—and that these vehicles are driven more miles per year than non-autonomous vehicles—than in the Reference case, overall light-duty vehicle travel demand increases 14% higher than Reference case levels by 2050, reaching 3.8 trillion miles in that year. One case assumes the increasing adoption of autonomous battery electric vehicles; another case assumes the increasing adoption of autonomous hybrid electric vehicles. Both cases assume that autonomous vehicles as a share of overall light-duty vehicle sales increase from 1% percent in the Reference case to 31% in the sensitivity cases in 2050. In the AEO2018 Reference case, autonomous vehicles are powered by conventional gasoline internal combustion engines. Despite the relative fuel efficiency of battery electric and hybrid electric vehicles compared with conventional gasoline internal combustion engines, more energy is consumed in both sensitivity cases (up to 4% more) compared with Reference case levels in 2050 because of increased light-duty vehicle travel. In all three cases, however, conventional gasoline engines remain the most common technology powering light-duty vehicles.

Burning wood as renewable energy threatens Europe’s climate goals - The European Union declared this week that it could make deeper greenhouse gas cuts than it has already pledged under the Paris climate agreement. But its scientific advisors are warning that the EU's new renewable energy policy fails to fully account for the climate impacts of burning wood for fuel.  By counting forest biomass, such as wood pellets used in power plants, as carbon-neutral, the new rules could make it impossible for Europe to achieve its climate goals, the European Academy of Sciences Advisory Council (EASAC) wrote in a strongly worded statement.  The council said the renewable energy policy's treatment of biomass is "simplistic and misleading" and could actually add to Europe's greenhouse gas emissions over the next 20 to 30 years.  That bump in emissions would come just as the planet's carbon emissions budget is running out, said William Gillett, EASAC's energy director. The Paris agreement aims to reduce net emissions from energy systems to zero within the next several decades.  "We don't have 200 years to get to carbon balance. We only have 10 to 20 years. Our carbon budget is nearly used up, and burning trees uses up the budget even faster," he said.

Methane leaks offset much of the benefits of natural gas -- The U.S. oil and gas industry emits 13 million metric tons of methane from its operations each year – nearly 60 percent more than current estimates and enough to offset much of the climate benefits of burning natural gas instead of coal, according to a study published Thursday in the journal Science. The study, led by Environmental Defense Fund researchers and including 19 co-authors from 15 institutions, estimated that the current leak rate from U.S. oil and gas operations is 2.3 percent, significantly higher than the Environmental Protection Agency’s current estimate of 1.4 percent. Methane is a potent greenhouse gas and the additional emissions would erase the climate advantages of burning natural gas instead of coal during the period when methane’s effects on the climate are most pronounced.

India Eyes Unexploited Coal Deposits in Indonesian Papua -- As it seeks to diversify its sources of fuel, India is looking to get in on the ground floor of coal mining in previously unexploited deposits in Indonesian Papua.In exchange for technical support and financing for geological surveys, officials say India is pushing for special privileges, including no-bid contracts on any resulting concessions — a prospect that could run afoul of Indonesia’s anti-corruption laws.The details of an Indian mining project in Papua are still being negotiated, but Indonesia’s energy ministry welcomes the prospect as part of a greater drive to explore energy resources in the country’s easternmost provinces. In the future, the ministry hopes mining for coking coal will support the domestic steel industry, while also bringing economic benefits to locals.Rights activists, however, fear the launch of a new mining industry could deepen tensions in a region where existing extractive projects have damaged the environment and inflamed a long-running armed conflict. When Indian Prime Minister Narendra Modi visited Jakarta last month, joint efforts to extract and process Indonesia’s fossil fuels, including coal, were on the agenda.India’s interest in investing in a new coking coal mining concession in Papua can be traced 2017, when officials from the Central Mine Planning & Design Institute (CMPDI) and Central Institute of Mining and Fuel Research (CIMFR), both Indian government institutes, met with Indonesia’s Ministry of Energy and Mineral Resources in Jakarta. The bilateral plan was announced by then-ministry spokesman Sujatmiko after the first India Indonesia Energy Forum held in Jakarta in April 2017. “The focus is on new territories in Papua,” he said.

Pruitt Grants Oklahoma Leniency to Dispose of Toxic Coal Ash Without Federal Oversight - On Monday, Oklahoma became the first state to be granted a permit from the Environmental Protection Agency (EPA) to dispose of its own coal ash, The Associated Press reported.The move displaces the federal government as the body responsible for coal ash disposal in EPA head Scott Pruitt's home state. Coal ash is the residue left over from burning coal for power that often contaminates groundwater. It is a change that industry has lobbied for and environmental groups have opposed.States have demonstrated that "they don't care about the health and safety of communities near coal ash dumps," Earthjustice attorney Lisa Evans told The Associated Press.About 100 million tons of coal ash is produced by U.S. plants every year, often left in disposal ponds that leak into groundwater, contaminating it with pollutants like arsenic and radium. Tests ordered by the EPA this spring of groundwater around plants in various states found elevated pollution levels, according to The Associated Press.Despite this, "industry has asked for leniency, less stringency. That's the direction they're going," Evans said.According to documents obtained under the Freedom of Information Act, switching coal ash oversight to states was part of an "action plan" proposed by coal industry executive Robert Murray this spring to Pruitt and other officials in the Trump administration.Pruitt defended the decision, saying in a statement that the move empowered "those who are best positioned to oversee coal ash management—the officials who have intimate knowledge of the facilities and the environment in their state." Pruitt also moved to weaken Obama-era coal ash disposal regulations in March, but the rule change allowing states to control coal ash disposal was actually passed by Congress and signed by former President Barack Obama in 2016, according to NPR. The law said that state rules had to be "as protective as" federal guidelines.

Propping up failing coal and nuclear plants in the name of national security is a disgraceful sham - Editorial Board, Los Angeles Times -- President Trump’s fascination with coal borders on obsession — maybe that’s what happens when coal barons donate hundreds of thousands of dollars to one’s inauguration — and he has promised repeatedly to revive the flagging industry. Never mind that the energy market is moving away from coal in favor of cheaper and cleaner natural gas, solar and wind power. Now the administration is contemplating invoking two rarely used laws to postpone the demise of some coal-fired power plants for two years, while also propping up some nuclear power plants that were slated to be mothballed. It’s a preposterous idea. Continuing to operate financially nonviable power plants and forcing grid operators to buy power they don’t need or want is an unacceptable governmental intrusion into the power market that, by one analysis, would needlessly cost consumers hundreds of millions of dollars. Even worse, the White House had the audacity last week to invoke national security when it announced that Trump had directed Energy Secretary Rick Perry to “prepare immediate steps to stop the loss” of coal and nuclear plants to ensure the stability of the power grid. Trump has cited the same spurious justification several times on trade issues, most recently in seeking an inquiry into whether auto imports also endanger national security. Grid operators say the power system is not at risk, and federal regulators agree. In January, the Federal Energy Regulatory Commission — four of whose five members are Trump appointees — unanimously rejected a plan by Perry to shore up unprofitable coal and nuclear plants, ruling that the government had failed to prove that the power grid was in jeopardy. Nothing has happened since then that merits a different conclusion; this is a solution to a nonexistent problem. Whatever plan Perry comes up with to meet the president’s desire for a gift for his coal-burning buddies, it should be rejected for what it is. If the president is genuinely concerned about the stability of the power grid, he would use his administration and bully pulpit to advance renewable sources that are truly sustainable.

Ukrainian villages still suffering legacy of Chernobyl more than 30 years on -- Milk in parts of Ukraine has radioactivity levels up to five times over the country's official safe limit, new research shows. Scientists from the Greenpeace Research Laboratories at the University of Exeter and the Ukrainian Institute of Agricultural Radiology sampled cow's milk from private farms and homes in the Rivne region, about 200km from the site of the Chernobyl Nuclear Power Plant explosion in 1986. They found levels of radioactive caesium in milk above Ukraine's safe limit for adults of 100 Becquerel per litre (Bq/L) at six of 14 settlements studied, and above the children's limit of 40 Bq/L at eight sites. The highest levels found were about 500 Bq/L - five times over the limit for adults and more than 12 times that for children. "More than 30 years after the Chernobyl disaster, people are still routinely exposed to radioactive caesium when consuming locally produced staple foods, including milk, in Chernobyl-affected areas of Ukraine," said Dr Iryna Labunska, of Greenpeace Research Laboratories at the University of Exeter. "Many people in the area we studied keep cows for milk, and children are the main consumers of that milk. "Though the level of soil contamination in the studied areas is not extremely high, radioactive caesium continues to accumulate in milk and other foods, such that the residents of these villages are chronically exposed to radioactivity that presents health risks to almost every system in the body - especially among children." 

How nuclear war would affect Earth’s climate -- We are not talking enough about the climatic effects of nuclear war. The “nuclear winter” theory of the mid-1980s played a significant role in the arms reductions of that period. But with the collapse of the Soviet Union and the reduction of U.S. and Russian nuclear arsenals, this aspect of nuclear war has faded from view. That’s not good. In the mid-2000s, climate scientists such as Alan Robock (Rutgers) took another look at nuclear winter theory. This time around, they used much-improved and much more detailed climate models than those available 20 years earlier. They also tested the potential effects of smaller nuclear exchanges. The result: an exchange involving just 50 nuclear weapons — the kind of thing we might see in an India-Pakistan war, for example — could loft 5 billion kilograms of smoke, soot and dust high into the stratosphere. That’s enough to cool the entire planet by about 2 degrees Fahrenheit (1.25 degrees Celsius) — about where we were during the Little Ice Age of the 17th century. Growing seasons could be shortened enough to create really significant food shortages. So the climatic effects of even a relatively small nuclear war would be planet-wide. A U.S.-Russia war currently seems unlikely, but if it were to occur, hundreds or even thousands of nuclear weapons might be launched. The climatic consequences would be catastrophic: global average temperatures would drop as much as 12 degrees Fahrenheit (7 degrees Celsius) for up to several years — temperatures last seen during the great ice ages. Meanwhile, smoke and dust circulating in the stratosphere would darken the atmosphere enough to inhibit photosynthesis, causing disastrous crop failures, widespread famine and massive ecological disruption.

Nexus pipeline project causes Arlington Road to sink in Green; thousands of vehicles must detour -- South Arlington Road between East Nimisila and Killian roads is closed after digging for the controversial Nexus natural gas transmission line caused the road to partially sink. Valerie Wolford, the city’s communications manager, said the road was closed Monday afternoon and could be opened by midday Friday. “Rest assured, we won’t allow the road to be opened unless it is safe and continuously monitored because of the people that pass here daily,” said City Engineer Paul Pickett, who with Wolford, met with media representatives at the site Tuesday morning. Pickett estimated between 5,000 and 6,000 vehicles travel that section of Arlington daily. The original road was built about 100 years ago and was last resurfaced five years ago. Pickett said the city was notified of the problem by Nexus, which installed steel plates over the depression. After inspection, the city closed the road about 7 p.m. Nexus will pay for the repairs, according to city officials. “This is not a collapse,” Pickett said. “It’s not like there is a large mine underneath here that is going to open up. It is a very small amount of material that causes settling. There is nothing that can happen that would be a danger to the community. It might become a nuisance, but it is not going to be unsafe.” But opponents of the pipeline project aren’t convinced. “I’m concerned that the construction is already causing damage to our roadways and delays for our residents,” Councilman Stephen Dyer said. “… This underscores the potential hazard of this whole project. Having trouble with the construction phase, I sure hope this doesn’t foreshadow future problems.” In February, the city reached a settlement that allowed Nexus to move forward with the pipeline in exchange for $7.5 million and 20 acres of land near Boettler Park. In return, City Hall dropped a legal challenge opposing the pipeline’s route through city-owned property. Some residents have continued to fight the settlement and the project, citing concerns that the 36-inch, high-pressure, natural gas pipeline will endanger the community and reduce property values. Nexus spokesman Adam Parker couldn’t be reached Tuesday for comment.

FERC OKs Construction on Phase II of Tetco Expansion Tied to Nexus - FERC has cleared Texas Eastern Transmission LP (Tetco) to start construction on the second and final phase of its Texas Eastern Appalachian Lease (TEAL) project, a Northeast expansion designed to connect with the Nexus Gas Transmission pipeline.Federal Energy Regulatory Commission staff on Monday issued a notice to proceed with construction on TEAL’s Phase II, approving a request Tetco had submitted last week notifying the agency that all permits had been received for the proposed facilities.TEAL’s Phase II includes the new 18,800 hp Salineville Compressor Station in Columbiana County, OH, and an additional 9,400 hp compressor unit at the existing Colerain Compressor Station in Belmont County, OH, according to FERC filings.  FERC issued a notice to proceed with construction of Phase I of the TEAL project in December. Phase I includes, among other facilities and modifications, about 4.4 miles of new 36-inch diameter pipeline looping on Tetco’s system in Ohio.The TEAL project is designed to add about 950,000 Dth/d of firm transport capacity from receipt points on Tetco’s M2 market zone and its Line 73 to an interconnect with Nexus near the existing Kensington Processing Plant in Columbiana County.Both TEAL and Nexus received FERC certificates in an order handed down in August after a six-month stretch without a quorum on the Commission had caused delays to the project’s timeline.The 255-mile, 1.5 Bcf/d Nexus is a joint venture between DTE Energy Co. and Spectra Energy Partners LP. The project is designed to transport Marcellus and Utica shale gas to existing interconnects in Michigan.Spectra and Tetco are affiliates of Calgary-based Enbridge Inc., which acquired Spectra last year. Nexus and TEAL are both slated for service in the third quarter of this year. Once online, Nexus -- about two-thirds subscribed as of last year -- will have to compete with the similarly-routed 3.25 Bcf/d Rover Pipeline, which placed a substantial portion of its final phase into service at the start of this month and has been flowing more than 2 Bcf/d.

Utica Shale well activity as of June 16:

• DRILLED: 306 (303 as of last week)
• DRILLING: 159 (156)
• PERMITTED: 473 (479)
• PRODUCING: 1,899 (1,899)
• TOTAL: 2,837 (2,837)

No horizontal permits were issued during the week that ended June 16, and 19 rigs were operating in the Utica Shale.

Looking for gas, oil in Ohio where few are - Canton Repository -   In a bid to find the next big source of oil and gas in Ohio, preparations for two exploratory wells are underway in North Central Ohio.Cabot Oil & Gas Corporation has permits from the Ohio Department of Natural Resources to build two exploratory wells in Green and Mohican townships in southern Ashland County. Drilling on the Green Township site is anticipated to begin within the week, according to Cabot officials.It’s the first project in Ohio for Cabot, a Houston-based company. The majority of Cabot’s work has been focused on building similar wells, most recently in Susquehanna County, Pennsylvania, and using the technique known as hydraulic fracturing — more commonly known as fracking — to break through layers of rock underground to harvest trapped oil and gas.Cabot plans to construct five exploratory wells, primarily in Ashland County, but also spreading into Holmes, Wayne, Richland and Knox counties.If these test wells find recoverable natural gas and/​or if oil and production wells are drilled, landowners across the area who sign leases with Cabot could see significant financial benefits as have been seen in the eastern Ohio gas and oil boom over the past decade. It could provide a once-in-a-lifetime boost to the area’s economic landscape.On the other hand, some citizens are concerned about the safety of such drilling operations and fear the impact the potential industrialization would have on the local environment and quality of life. Potential pollution of the local water aquifer is another major concern.

DUG East: Update – Record-Breaking Utica Wells —Eclipse Resources Corp. has broken several laterals records in the Utica Shale, and President and CEO Ben Hulburt told DUG East attendees on June 20 that he expects to break more records for length.Hulburt was joined by other upstream producers as well as midstream operators and industry experts who gathered at the David L. Lawrence Convention Center in Pittsburgh for the 10th annual DUG East conference and exhibition to discuss Marcellus and Utica activity, regional infrastructure and emerging regulatory issues in Appalachia.“We believe we are the industry leader in onshore laterals," said Hulburt, who spoke during an afternoon operator spotlight session. "Frankly, we’ve become quite good at it.”  Eclipse, an E&P focused on the Appalachian region, is drilling super-laterals in the Ohio Utica and in northeast Pennsylvania, guiding to 8%-14% annual growth in 2018. The company's condensate production is also expected to grow about 42% this year. Longer laterals allow companies to maximize opportunities while also minimize footprints, Dennis Degner, senior vice president of operations at Range Resources Corp. told attendees earlier during the conference. Range projects 11% growth this year, on a steady-as-she-goes trajectory utilizing pad sites set up for long-term development of Upper Devonian, Marcellus and Utica reservoirs. The company also typically keeps well spacing between 750 ft to 1,000 ft, he said.

University of Cincinnati study undercuts concerns about fracking & water  Geologists from the University of Cincinnati, between January 2012 and February 2015, collected and tested 180 groundwater samples in several northeast Ohio counties at the center of the Utica shale oil-gas boom. Most of the samples came from Carroll, Harrison and Stark counties, located east and southeast of Canton.  According to its publication in April 2018 in the Environmental Monitoring Assessment journal, the UC geologists' peer-reviewed study “found no relationship between CH4 (natural gas methane) concentration or source in groundwater and proximity to active gas well sites.”  The oil and gas industry seized upon those findings as absolving the fracking industry in Ohio of one of its top alleged offenses, endangering nearby water supplies. In an article published on Energy In Depth’s website on May 8, the industry outreach group’s Ohio director, Jackie Stewart, hailed the UC study as more evidence that fracking doesn’t threaten or harm groundwater. The findings weren’t so clear-cut, however, according to the study’s lead author, UC associate professor of geology Amy Townsend-Small. In an email interview last Monday, she also suggested that the simplistic conclusion – study shows fracking doesn’t hurt the water – misses one of the study’s main takeaways: that it’s vitally important that “the people of eastern Ohio should have access to regular monitoring so that they know whether well-casing failures or surface spills have occurred and that their drinking water is still safe.”  Previous studies in Pennsylvania had found that residents living near fracking wells had high levels of methane in their drinking water, which unlike the water the UC scientists tested in northeast Ohio, had an isotopic signature similar to that of natural gas. The EPA’s deputy administrator at the time, Tom Burke, stated about the revised study: “We found scientific evidence of impacts to drinking water resources at each stage of the hydraulic fracturing water cycle.”

Studies suggest drinking water resilient during Pennsylvania drilling boom - Akron Beacon Journal - New research suggests drinking water supplies in Pennsylvania have shown resilience in the face of a drilling boom that has turned swaths of countryside into a major production zone for natural gas. Energy companies have drilled more than 11,000 wells since arriving en masse in 2008, making Pennsylvania the nation’s No. 2 gas-producing state after Texas. Residents who live near the gas wells, along with environmental groups and some scientists, have long worried about air and water pollution. Two new studies that looked at groundwater chemistry did not find much of an impact from horizontal drilling and hydraulic fracturing — or fracking — the techniques that allow energy companies to extract huge volumes of oil and gas from shale rock deep underground. The results suggest that, as a whole, groundwater supplies appear to have held their own against the energy industry’s exploitation of the Marcellus Shale, a rock layer more than a mile underground that holds the nation’s largest reservoir of natural gas.

Impact fee on Pa. shale wells tops $209 million this year - Pennsylvania shale gas producers paid $209.6 million in impact fees this year, the state Public Utility Commission said Thursday.The total is $36 million more than the prior year, reflecting higher gas prices and an uptick in new drilling in the Marcellus and Utica shales last year.But the final collection is about $10 million less than the state’s Independent Fiscal Office had projected in January, largely because of a higher-than-expected number of wells qualifying as low-flowing “stripper” wells that produce too little gas to have to pay the annual fee, said Mark Ryan, the fiscal office’s deputy director.Pennsylvania’s Commonwealth Court adopted an expansive stripper well definition in a 2017 ruling — exempting more wells from paying the fee than the PUC had in the past.The dispute over what counts as a stripper well is being considered by the state Supreme Court and was intentionally left out of the fiscal office’s earlier analysis.PUC spokesman Nils Hagen-Frederiksen said 17 production companies disputed the status of 294 horizontal wells and 24 vertical wells this year because of the unsettled stripper well definition. That led to a $6.1 million reduction in impact fees paid for the year.

Appalachian Basin Activity Highlights: June 2018 -Appalachian Basin gas production is on the rise and is expected to push the U.S. to a new record this year.The Energy Information Administration forecast dry natural gas production in the U.S. will average 81.2 Bcf/d in 2018, establishing a new record. Production averaged 73.6 Bcf/d in 2017, the agency said in its short-term energy outlook report on June 12.The bump in gas production is largely driven by U.S. shale producers in Appalachia, according to Tom Petrie, chairman of Petrie Partners.Petrie told attendees of Hart Energy’s DUG East conference and exhibition in Pittsburgh on June 20 that the Marcellus, and to a degree the Utica, has dominated the natural gas supply mainly due to cost as infrastructure buildout remains critical to growth in the Gulf Coast market.“We are looking at a new natural gas world unfolding as the U.S. is on the verge of becoming a top three LNG exporting country,” he said. Overall, Appalachian producers have increased production by 77% since 2015, Stephen Beck, senior director of North America Shale with Stratas Advisors, said during a conference panel at DUG East.

Natural-Gas Boom Driving Methane Leaks, Study Finds – WSJ - The country’s natural-gas boom is putting much higher rates of the potent greenhouse gas methane into the atmosphere than government estimates suggest, a challenge for efforts to slow global warming, according to new research analysis published Thursday in the journal Science.  Methane leaks are a crucial element of the country’s gas boom because raw emissions can cancel out gains made by lowering carbon emissions created by burning other fuels. The new report suggests using more gas does have major benefits at limiting climate change over 100 years, but may not help in the short term. That is because leaks and unplanned plumes vented from storage tanks and processing plants are likely larger than previously realized. They appear big enough to make a shift from coal to gas effectively meaningless over a 20-year time span, according to the assessment from about two dozen scientists working with the Environmental Defense Fund, a nonprofit environmental group. The assessment estimates the U.S. energy industry is leaking about 2.3% of all the gas it produces directly into the atmosphere, meaning that enough greenhouse gasses are coming from the gas industry to equal roughly the 20-year climate impact from all the coal-fired power plants running nationwide in 2015. The analysis offers the first comprehensive look at how America’s rise to become the world’s largest gas producer may be affecting the climate. It surveys several years of work and more than a dozen studies from researchers working with the Environmental Defense Fund. Some of those studies have received funding and access from oil-and-gas companies.  Its revelations about gas leaks raise concern about whether growing production and use of natural gas can slow climate change as many have predicted. Natural gas burns cleaner than coal or oil, but methane released directly into the atmosphere is much more potent at trapping heat for about 20 years until it dissipates. .

Oil and Gas Operations Release 60 Percent More Methane than EPA Thought, Study Finds - A study published Thursday found that U.S. oil and natural gas operations release 60 percent more methane than currently estimated by the U.S. Environmental Protection Agency (EPA), according to a press release from the Cooperative Institute for Research in Environmental Sciences (CIRES) at University of Colorado, Boulder.The study, published in Science, calculated yearly methane emissions from the oil and gas industry totaling 13 million metric tons (approximately 14.3 million U.S. tons), mostly from leaks. In fact, the amount of methane leaked by these operations in 2015 had as much impact on the climate as emissions from coal-fired plants during the same year, undermining the idea that natural gas has a lower carbon footprint than coal."This study provides the best estimate to date on the climate impact of oil and gas activity in the United States," co-author and CIRES scientist Jeff Peischl said in the release.Methane has 80 times the warming impact of carbon dioxide over the first 20 years after it is released into the atmosphere, and methane emissions estimated by the study were equal to 2.3 percent of natural gas production in the U.S.However, the study's authors said the problem could be solved if the industry worked to investigate and repair leaks."Natural gas emissions can, in fact, be significantly reduced if properly monitored," study co-author and National Oceanic and Atmospheric Administration (NOAA) scientist Colm Sweeney said in the release. "Identifying the biggest leakers could substantially reduce emissions that we have measured." Doing so would even be in the natural gas industry's best interest, since researchers concluded that two billion dollars worth of methane, which could otherwise heat 10 million homes, is lost to leaks. "This is a solvable problem because you are losing product that you could sell," Steven Hamburg, study co-author and lead scientist of the Environmental Defense Fund (EDF), which lead the research, told Reuters. "But the entire industry has to take action to stop the problem," he said.

Study: US oil and gas methane emissions have been dramatically underestimated - The US has been dramatically underestimating methane emissions from oil and gas operations, according to a new study published in Science on Thursday. The study, conducted by the Environmental Defense Fund and 15 partner universities, asserts that methane emissions from oil and gas production are likely 63 percent higher than what the Environmental Protection Agency has reported. The discrepancy stems from the way methane is measured and monitored, the authors suggest. Methane leakages are measured at known intervals and at specific parts of equipment, without verification of the leak volume at the facility as a whole. This allows the industry to avoid counting any surprise leakage events, which the authors claim are more common than not. The results are concerning because methane is a potent greenhouse gas that has more of a warming effect in the atmosphere than carbon dioxide, part for part. On the other hand, methane is shorter lived in the atmosphere than carbon dioxide, so restricting its escape can have positive short-term effects on warming. This creates a difficult situation: methane is the main component of natural gas, and natural gas burns cleaner than coal and has largely contributed to coal’s demise. Though burning natural gas results in fewer pollutants released to the atmosphere, if the gas is released before it's burned, the methane can be severely environmentally damaging. In addition, leaking natural gas is something of an economic waste, too: any amount of the colorless, odorless gas that escapes obviously can't be sold. Though natural gas is cheap right now, fixing natural gas leaks can have monetary benefit over time. The authors conducted facility-specific measurements at more than 400 well pads and "scores" of midstream facilities with the cooperation of 50 oil and gas companies. They paired this data with aircraft observations of areas that contained about 30 percent of US natural gas production. When the researchers scaled up their results to a national level, they estimated that US natural gas production is releasing gas equivalent to 2.3 percent of gross US national gas production. That number is 63 percent higher than the 1.4 percent the EPA had previously estimated. The New York Times points to a 2017 study that found that once the natural gas leakage rate hit between four and five percent of gross US natural gas production, natural gas is about equivalent to burning coal from a climate perspective.

Study shows fat cells increase in size and number upon exposure to fracking chemicals - Exposure to fracking chemicals and wastewater promotes fat cell development, or adipogenesis, in living cells in a laboratory, according to a new Duke University-led study.Researchers observed increases in both the size and number of fat cells after exposing living mouse cells in a dish to a mixture of 23 commonly used fracking chemicals. They also observed these effects after exposing the cells to samples of wastewater from fracked oil and gas wells and surface water believed to be contaminated with the wastewater. The findings appear June 21 in Science of the Total Environment."We saw significant fat cell proliferation and lipid accumulation, even when wastewater samples were diluted 1,000-fold from their raw state and when wastewater-affected surface water samples were diluted 25-fold," said Chris Kassotis, a postdoctoral research associate at Duke's Nicholas School of the Environment, who led the study. "Rather than needing to concentrate the samples to detect effects, we diluted them and still detected the effects," he said.  Previous lab studies by Kassotis and his colleagues have shown that rodents exposed during gestation to the mix of 23 fracking chemicals are more likely to experience metabolic, reproductive and developmental health impacts, including increased weight gain. Kassotis said further research will be needed to assess whether similar effects occur in humans or animals who drink or come into physical contact with affected surface waters outside the laboratory. More than 1,000 different chemicals are used for hydraulic fracturing across the United States, many of which have been demonstrated through laboratory testing to act as endocrine disrupting chemicals in both cell and animal models.

Fracking exposure leads to more fat cells -  Exposure to fracking chemicals and wastewater promotes fat cell development, or adipogenesis, in living cells in a laboratory, according to a new study. Researchers observed increases in both the size and number of fat cells after exposing living mouse cells in a dish to a mixture of 23 commonly used fracking chemicals. They also observed these effects after exposing the cells to samples of wastewater from fracked oil and gas wells and surface water believed to be contaminated with the wastewater. “We saw significant fat cell proliferation and lipid accumulation, even when wastewater samples were diluted 1,000-fold from their raw state and when wastewater-affected surface water samples were diluted 25-fold,” says Chris Kassotis, a postdoctoral research associate at Duke’s Nicholas School of the Environment, who led the study. To conduct this study, Kassotis and colleagues collected samples of fracking wastewater and wastewater-contaminated surface water near unconventional (aka, fracked) oil and gas production sites in Garfield County, Colorado, and Fayette County, West Virginia, in 2014. The researchers exposed laboratory cultures of mouse cells to these waters at varying concentrations or dilutions over a two-week period. The researchers measured how the waters affected fat cell development in the cultures. They performed similar tests exposing cell models to a mix of 23 fracking chemicals.Within each experiment, researchers exposed other cells to rosiglitazone, a pharmaceutical known to be highly effective at activating fat cell differentiation and causing weight gain in humans.The results showed that the 23-chemical mix induced about 60 percent as much fat accumulation as the potent pharmaceutical; the diluted wastewater samples induced about 80 percent as much; and the diluted surface water samples induced about 40 percent as much.In all three cases, the number of pre-adipocytes, or precursor fat cells, that developed was much greater in cell models exposed to the chemicals or water samples than in those exposed to the rosiglitazone.

TransCanada Fixes Part of Leach Xpress Natgas Pipe After West Virginia Blast (Reuters) - TransCanada Corp's Columbia Gas Transmission (TCO) unit said it fixed a section of the Leach Xpress natural gas pipeline downstream of a pipe blast in West Virginia last week. That work enabled the Stagecoach-Leach Xpress meter in southeast Ohio to return to service late Thursday, according to a notice to customers. 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 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 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 to ship their gas. 

Analysis: Columbia Gas Transmission sees Leach XPress natural gas pipeline force majeure lifted by early July - Columbia Gas Transmission on Monday said that its Leach XPress pipeline, currently under force majeure following an explosion earlier this month, could return to service by early July. In a notice, Columbia said it's continuing to coordinate with the US Pipeline and Hazardous Materials Safety Administration on a repair and restoration plan and would provide updates as that work continues. Related factbox: Leach XPress natural gas pipeline service could return in July.  Following a brief return to service at the Leach XPress downstream Stagecoach meter last week, Columbia said in a separate notice Monday that further investigation during the restoration process would require flows at the meter to be suspended until further notice. On Tuesday, transmission volumes at Stagecoach were reduced to zero, where they remained Wednesday. Upstream receipts at the Eureka, Gibraltar and Majorsville meters have remained at zero since the blast, data compiled by S&P Global Platts Analytics shows. On June 7, an explosion that rocked Leach XPress in Marshall County, West Virginia, caused a force majeure that immediately impacted prices and disrupted interregional gas transportation. Thanks to a dense network of alternative pipelines, regional Appalachian production was unaffected. Columbia has yet to offer an explanation for the blast. 

Two more notices of violation issued to Mountain Valley Pipeline -  State regulators have issued two more violation notices to the Mountain Valley Pipeline project, this time for for water pollution violations in Nicholas and Harrison counties.In all, the West Virginia Department of Environmental Protection has cited the 300-mile pipeline project four times for breaking water pollution rules.One violation notice, issued May 9, is for failing to implement controls, failing to keep sediment-laden water from leaving the site and failing to modify the project’s storm water pollution prevention plan for construction in Nicholas County.The most recent notice was issued June 6 for failing to comply with the project’s storm water permit and general permit.The DEP issued two violation notices earlier this year for similar problems in Monroe and Wetzel counties.The violation notice in Nicholas County lists Price Gregory, a Houston-based company, as site operator. Precision Pipeline, a Wisconsin-based construction company, is listed as the operator for the violation in Harrison County and in Wetzel County. Trinity Energy Services, a Texas company, was the operator on construction in Monroe County.None of the three companies, nor a spokesman for the DEP, responded to requests for comment Monday.Natalie Cox, a spokeswoman for Mountain Valley Pipeline, said the project welcomed the oversight, and that crews were fixing the problems. “Because the construction process is a collaborative effort with both public and private experts sharing information on an ongoing basis, the MVP project team will continue to augment the number of environmental staff, based on construction activity and location, in order to mitigate any potential issues and to assist inspectors as needed,” she said in an email.

2 pipeline projects draw more than 13,000 public comments - More than 13,000 written comments have been submitted to a state board that invited public input on how two huge natural gas pipelines will impact Virginia’s water bodies. It could take weeks to process the information and present it in a meaningful form to the State Water Control Board, a spokeswoman said Monday. Pipeline opponents are calling on the board to take swift action in reviewing a federal permit that governs how streams, rivers and wetlands will be crossed by the Mountain Valley Pipeline in Southwest Virginia and a similar natural gas transmission line to the east, the Atlantic Coast Pipeline. “It is clear that there is already damage occurring,” Del. Sam Rasoul, D-Roanoke, said at a news conference held Monday to push for a state-ordered stop to construction. At a meeting in April, the water board decided to invite written comments on the adequacy of permits issued for the projects by the U.S. Army Corps of Engineers. The deadline for emails and letters was Friday. About 2,600 emails were received about the Mountain Valley Pipeline, which will cross streams and wetlands more than 500 times on its path through six Virginia counties. Approximately 7,100 emails involved the Atlantic Coast Pipeline, according to Virginia Department of Environmental Quality spokeswoman Ann Regn. Another 3,500 letters, reports and other paper records were submitted; it wasn’t clear Monday how many of those were related to each pipeline. Regn said that the board is currently scheduled to meet Aug. 21, and that the comments must first be reviewed by DEQ staff members in a process that could take weeks. Critics are calling for a meeting much sooner. Tree cutting and land clearing by Mountain Valley have already caused environmental damage, they say, and more problems are expected when construction workers begin to blast bedrock and dig trenches for the 42-inch diameter steel pipe. The 303-mile pipeline will start in West Virginia, where environmental regulators have issued three notices to Mountain Valley that it is violating rules meant to control erosion and sediment. DEQ is investigating similar problems with runoff and mudslides in Virginia but has so far taken no enforcement action. 

Federal Court grants stay of water crossing permit for Mountain Valley Pipeline - The 4th Circuit Court of Appeals has stayed a key water crossing permit for the Mountain Valley Pipeline. Thursday evening the federal court granted a motion filed by environmental groups to halt the permit as they call into question the Army Corps of Engineer's verification of the permit. Lawyers for the environmental groups argue that Mountain Valley Pipeline cannot meet the conditions of the permit. The court's decision impacts waterways including the Greenbrier, Elk, and Gauley rivers in West Virginia. WDBJ7 reached out to Mountain Valley Pipeline for comment on the decision. In a statement, Mountain Valley Pipeline said in part: "While disappointed with this temporary setback that affects stream and wetland crossings along approximately 160 miles of the route in West Virginia, the MVP team is evaluating options to understand its ability to continue with construction activities that do not include stream and wetland crossings along this portion of the route." Mountain Valley Pipeline said it still hopes to have the pipeline in service by the end of 2018. You can read the full statement from Mountain Valley Pipeline below: 

Ethane production growth led to record U.S. natural gas plant liquids production in 2017  - U.S. natural gas plant liquids (NGPL) production has nearly doubled since 2010, outpacing the rate of natural gas production growth and setting an annual record of 3.7 million barrels per day (b/d) in 2017. NGPLs are produced at natural gas processing plants, which separate liquids from raw natural gas to produce pipeline-quality dry natural gas. Marketed natural gas includes both NGPLs and dry natural gas.  Growth in U.S. natural gas production has been driven by shale gas, particularly from the Appalachian region, and to a lesser extent by associated natural gas, a byproduct of crude oil production. The high liquids content of many shale plays means that growth in marketed natural gas production has led to increased production of NGPLs. NGPLs accounted for a growing share of marketed natural gas production between 2010 and 2017, making up 15% of total marketed production in 2017 in energy content terms, up from 11% in 2010. The increased share of NGPL production can be attributed to expanded capacity to produce, transport, and consume NGPL products. Increases in NGPL production pushed two measures of total natural gas production—gross withdrawals and marketed production—to record highs in 2017. NGPLs that come out of natural gas plants are a mix of ethane, propane, isobutane and normal butane, and natural gasoline that requires further processing to convert into separate marketable products. The yield of these liquid products, especially ethane, varies significantly depending on product prices, the ability to process and distribute them to market, and the makeup of the raw natural gas.  With the exception of ethane, natural gas plant operators may leave only trace amounts of NGPLs in dry—pipeline-quality—natural gas. Natural gas specifications set by pipeline operators allow for significant amounts of ethane to be left in dry gas at the discretion of natural gas plant operators. If ethane prices are low relative to the price of natural gas on a heating-value equivalent basis, more ethane is likely to be left in the dry natural gas stream, provided that the mix can still meet specifications required by natural gas pipeline operators.

Trade war jeopardizes China's huge investment in creation of new 'cancer alley' in Appalachia -- Doubts are growing about a Chinese company’s planned investment in a suite of natural gas-related projects in West Virginia due to the Trump administration’s intensification of a trade war between the United States and China.  From the day the agreement was announced last fall, skepticism has surrounded the issue of whether state-owned China Energy Investment Corp. would follow through on its planned $83 billion investment in energy infrastructure in West Virginia. The cost and scope of the project — known as the Appalachian Storage Hub — would be unprecedented. The massive project would include natural gas liquids storage, a major intersection of pipelines, and a petrochemical refinery row. Environmental groups have expressed concern that the construction of natural gas liquids and petrochemical processing plants could contaminate air and water resources.The escalating trade war between the United States and China is causing further uncertainty about the agreement. Global stock prices fell Monday as investors reacted to the decision last week by the United States to target an additional $50 billion in China-made goods for new tariffs.Brian Anderson, director of the Energy Institute at West Virginia University, has previously touted the positive impact of the China Energy investment. Anderson said two months ago that the agreement with the Chinese company could be coming along at the perfect time. But on Monday, Anderson adjusted his expectations, telling an energy industry conference in Pittsburgh, Pennsylvania that the trade war “has put this project in jeopardy.”

China hits pause on Appalachian energy investment citing trade war concerns - Brian Anderson was hoping to be flanked by officials from China Energy Investment Corp. and to watch the crowd’s eyes widen as the CEO of the Chinese giant announced its first few projects in the U.S.This was to be the first tangible milestone of a bombshell agreement announced in November between China Energy and West Virginia — one that promised the possibility of nearly $84 billion in Chinese investment in the tri-state area in shale gas and chemical manufacturing industries over two decades.What better venue for the mic-drop than the Northeast U.S. Petrochemical Construction Conference, perhaps even upstaging the much-anticipated annual update from Shell Chemical Co. on its ethane cracker complex in Beaver County.Three weeks ago, Mr. Anderson, who directs the West Virginia University Energy Institute, got the call he was expecting. The trip to Pittsburgh was canceled. The reason: a pending trade war between the U.S. and China. Following weeks of threats, the Trump administration announced $50 billion in tariffs on Chinese goods last week, and China retaliated with tariffs on U.S. products.Also canceled -— or postponed — was a training program that WVU prepared for a group of about 30 China Energy officials in May. Its intent was to familiarize the Chinese with how to operate in the U.S.: how to navigate tax structures, get permits, build a workforce.  Mr. Anderson has been working closely with China Energy, a company he said has “a vision to become a much more Western corporation,” but is still 60 percent state-owned.“Their orders and their travel authority comes from the Chinese government,” he said.Given escalating talk of more tariffs, “It was not the time that they were going to show up and announce the project,” Mr. Anderson said.West Virginia officials helped the Chinese investment firm map out a portfolio of possible projects to fill up that $84 billion bucket.The projects range from $600 million to $20 billion each and include anything that happens downstream from the fractionator, Mr. Anderson said. That means that however natural gas and natural gas liquids are used once they are separated in a natural gas processing plant is on the table, including chemical plants like the one Shell is building.

China Energy executives cancel West Virginia trip amid trade dispute (Reuters) - A scheduled trip to West Virginia by executives from China Energy Investment Corp to discuss a planned $83.7 billion investment in the state has been canceled, the latest victim of a growing trade war between the United States and China. The investment by China Energy, which ranks among the world’s largest power companies by asset value, was the biggest among a slew of deals signed during U.S. President Donald Trump’s state visit to Beijing in November. The total value of the deals could be as much as $250 billion. Brian Anderson, director of the West Virginia University Energy Institute, told Reuters on Wednesday the executives were due to arrive in West Virginia last weekend to discuss where to invest in shale gas, power and petrochemical projects. “The original plan was for the CEO of China Energy and a delegation to arrive over this past weekend and be here in West Virginia with our state officials and others,” said Anderson. “But that visit was canceled because it would be inappropriate in the midst of this trade dispute for China to come,” he said. China Energy could not immediately be reached for comment. Among planned stopovers by the delegation was an appearance at the Northeast U.S. Petrochemical Construction Conference in Pittsburgh on Tuesday. The gas and power agreement signed as part of Trump’s Beijing visit marked the first overseas investment for newly founded China Energy, which formed from a merger of China Shenhua Group, the country’s largest coal producer and China Guodian Corp, one of its top five utilities. The Trump administration announced $50 million in tariffs on Chinese goods last week. In return, China retaliated with tariffs on U.S. exports and threatened to impose more duties on U.S. energy exports. West Virginia Governor Jim Justice, a Trump ally, has said the investment deal would boost his economically ailing state’s natural gas and petrochemical industries and create jobs. Justice declined to comment on whether he was concerned that trade frictions jeopardized the China Energy investment, but Anderson said the governor had been in regular contact with Trump. Among the investments under consideration is an Appalachian Storage and Trading Hub for hydrocarbons, such as ethane and butane, as well as two power plants in the state. 

U.S. oil pipeline companies, producers seek relief from steel tariffs  (Reuters) - Major U.S. energy companies including Plains All American Pipeline, Hess, and Kinder Morgan Inc are among many seeking exemptions from steel-import tariffs as the United States ratchets up trade tensions with exporters including China, Canada and Mexico.  There have been nearly 21,000 requests overall for exclusions submitted to the U.S. Commerce Department since the Trump administration imposed levies this year. Of those, more than 500 petitions involve pipes and related materials.   Initial decisions are expected this month, offering the first clues as to how the administration will balance an agenda favoring oil and gas exports while also supporting the U.S. steel and aluminum industries.  For the energy industry, the potential for relief has taken on added importance after China surprised markets last week by proposing 25 percent levies on about $1 billion a month in U.S. oil imports in retaliation for U.S. tariffs.  The pipeline industry could face higher costs from tariffs as about 77 percent of the steel used in U.S. pipelines is imported, according to a 2017 study for the pipeline industry. Benchmark hot-rolled U.S. steel coil prices are up more than 50 percent from a year ago, according to S&P Global Platts.  Pipelines from the nation’s largest oilfield in west Texas to the Gulf Coast are nearly full, depressing crude prices as output is projected to rise by about 850,000 barrels per day this year, and significant projects are not expected to be completed until at least next year.  Plains sought a tariff exclusion for its 500-mile Cactus II oil pipeline, which will connect West Texas oil fields to export docks near Corpus Christi, Texas. This month, it expects to receive its first material from Corinth Pipeworks SA, a Greek manufacturer, according to a Commerce Department filing.  No U.S. mills can produce pipe with the specifications needed for Plains’ line. Only three mills in the world make such pipe, and delivery delays could exacerbate constraints, the company wrote in its petition, affecting the price of oil from the largest U.S. oilfield.  The 585,000-barrel per day line is due to start flowing next year, just as analysts warn a bottleneck of crude could force some producers to shut in production.  Rival pipeline operator Kinder Morgan also wants an exclusion for its $1.75 billion Gulf Coast Express natural gas pipeline from West Texas to the U.S. Gulf Coast. It ordered 47 percent of specialized pipe needed for the project from Turkish steel maker Borusan Mannesmann.  Only one U.S. producer could meet Kinder Morgan’s needs, but it could not meet the volume required within the necessary timeline, Kinder said in a filing.

As oil pipeline trial begins, South Portland banks on ‘foie gras’ defense - The trial is finally set to start Monday in the Portland Pipe Line Corp.’s federal lawsuit challenging South Portland’s 2014 ban on shipping crude oil from the city’s waterfront, including controversial tar sands oil produced in western Canada. After more than three years of preliminary court filings, hearings and orders, U.S. District Court Judge John Woodcock Jr. must decide whether the city’s so-called “Clear Skies” ordinance violates the Commerce Clause, which gives Congress sole power to regulate foreign and interstate trade. The company – a Canadian-owned subsidiary of ExxonMobil, Shell and Suncor Energy – is fighting the ordinance because it effectively blocks the company from reversing the flow of its 236-mile underground pipeline, which now transports a dwindling amount of foreign crude from harbor terminals in South Portland to refineries in Montreal. The city is poised for a foie gras defense in a case that’s expected to generate interest across the energy sector and other markets that depend on interstate commerce and seaport access for foreign trade. “The cumulative impact of similar ordinances enacted in other harbor cities would be catastrophic,” the company’s lawyers wrote in a pretrial brief. “Parochial efforts designed to curtail or effectively (prevent) cross-border transportation caused our Founding Fathers to include the Commerce Clause in the Constitution in the first place.”  The city disputes the company’s claims that the Clear Skies ordinance discriminates against out-of-state competitors, attempts to regulate business outside South Portland and interferes with federal control of foreign commerce, according to the city’s pretrial brief.

With Cove Point Shale Gas Exports Underway, ICE's Updated Product Reflects Shifting Market -- With exports underway at Dominion Energy Inc.’s Cove Point liquefied natural gas (LNG) terminal in Lusby, MD, the Intercontinental Exchange (ICE) has launched a physical trading product to reflect the changing market dynamics at the facility.The new “Dominion Energy - Cove Point - on system delivery” product was begun on June 11 to reflect the physical market for deliveries into Dominion’s LNG terminal for liquefaction and export. The prior Cove Point market, which had been set up for receiving natural gas from LNG imports, was delisted simultaneously, officials with ICE confirmed to NGI.NGI has since updated the Cove Point location in both NGI’s Daily Gas Price Index and NGI’s MidDay Price Alert to reflect the changes to ICE’s Cove Point physical product.Cove Point was trading 11 cents higher at $3.110/MMBtu on 20,000 MMBtu of reported volume, according to Wednesday’s MidDay Price Alert.For Tuesday’s trade date in NGI’s Daily Gas Price Index, day-ahead prices at Cove Point averaged $3.00/MMBtu on 390,000 MMBtu of reported volume.Built in the 1970s to import LNG supplies, Dominion acquired the Cove Point terminal in 2002. Responding to the rapid rise of U.S. onshore gas output over the last decade, Dominion recently finished adding liquefaction and export capabilities at the facility, which is situated along the Chesapeake Bay on the East Coast.In March, Cove Point became the second U.S. facility to export LNG from the Lower 48 after Cheniere Energy Inc.’s Sabine Pass LNG terminal. A little over a month later in April, Cove Point officially entered commercial service.

Trump ocean order removes hurdles to offshore oil, gas drilling: industry chief - The Trump administration this week released a new federal oceans policy with a focus on offshore energy development and revoked an Obama-era policy which the industry had argued slowed new oil and natural gas drilling. "We now have the opportunity to start with a clean slate," Randall Luthi, president of the National Ocean Industries Association, said Thursday. Trump late Tuesday signed an executive order that revoked a 2010 Obama order which set protections for US oceans, coastlines and waters of the Great Lakes. The Obama order, signed roughly three months after the Deepwater Horizon oil spill, called for the federal government to work with states and municipal governments on conservation efforts. "The Deepwater Horizon oil spill in the Gulf of Mexico and resulting environmental crisis is a stark reminder of how vulnerable our marine environments are, and how much communities and the Nation rely on healthy and resilient ocean and coastal ecosystems," the order states. But the order created "more layers" of unnecessary planning, much of it already required by the Outer Continental Shelf Lands Act and the National Environmental Policy Act, Luthi said, adding the five-year planning process for offshore oil and gas lease sales already requires consultation with state governors. "The National Ocean Policy, although laden with laudable goals, brought additional and duplicative layers of bureaucracy, instead of streamlining a vital process," Luthi said. "Industry was also concerned because as the regional planning bodies started moving forward, they demonstrated a propensity to close off wide areas to exploration of oil and natural gas without having any information concerning the existence of those resources."

A Drill Down Report On Emerging Natural Gas Transportation Bottlenecks In The Bayou State - An influx of natural gas supply in northern Louisiana — from Marcellus/Utica inflows and the rebound in Haynesville Shale production — is not only reversing long-held flow patterns but is also starting to fill up existing pipeline capacity on routes to the Southeast U.S. and the Louisiana Gulf Coast, where demand is growing. As more LNG export capacity comes online in the Bayou State, more gas will be needed at the coast, and, with existing routes to the coast filling up, more pipeline capacity will be needed as well. These factors are expected to transform the Louisiana gas market over the next several years, with impacts to prices, transportation values and basis, and with repercussions for both the U.S. gas market and global LNG trade. Today, we discuss highlights from our new Drill Down Report on the fast-changing Louisiana gas flow patterns and the need for more pipeline capacity.

Enterprises fractionators and other NGL-related assets at Mont Belvieu - The fractionation and NGL storage complex in Mont Belvieu, TX, would surely qualify as one of the Seven Wonders of the Energy World, if there were such a list. With more than 250 million barrels of NGL storage carved — by water! — out of an enormous subterranean salt dome formation, and nearly two dozen fractionation plants with a combined capacity of more than 2 MMb/d, Mont Belvieu not only serves as the largest receipt point for mixed NGL streams on the planet, it is also the key hub of distribution for the ethane, propane, normal butane and other NGL purity products that are either consumed by Gulf Coast steam crackers and refineries or exported to foreign end-users. But unlike wonders of the ancient world like the Great Pyramids at Giza, Mont Belvieu is still very much a work in progress, with new storage caverns and new fractionators now under development to try to keep up with the breakneck pace of U.S. NGL production growth. Today, we begin a company-by-company review of fractionation capacity and other key infrastructure there. In Part 1 of this blog series, we discussed the current state of the U.S. natural gas liquids (NGL) sector. The condensed version goes like this: NGL production in the Permian, the Marcellus/Utica, the SCOOP/STACK and other key basins is rocketing higher, with potential U.S. NGL production from natural gas processing plants — including ethane that is rejected into natural gas — now approaching 5 MMb/d. A number of new, ethane-consuming steam crackers are coming online along the Texas and Louisiana Gulf Coast, conveniently close to the NGL storage and fractionation hub in Mont Belvieu. The export market for liquefied petroleum gases (LPG) — mostly propane but some normal butane — is through the roof too, 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 as well. And, with the rapid run-up in U.S. NGL production — combined with some reluctance of producers to commit to new fractionation capacity — the existing fractionation plants in Mont Belvieu are running flat-out to keep up. More fractionation capacity is needed ASAP.

Just Released -- USGS Survey Of The Eagle Ford -- June 22, 2018 --For release, June 22, 2018 -- USGS estimates 8.5 billion bbls of oil in Texas' Eagle Ford Group. “This assessment is a bit different than previous ones, because it ranks in the top five of assessments we’ve done of continuous resources for both oil and gas,” said USGS scientist Kate Whidden, lead author for the assessment. “Usually, formations produce primarily oil or gas, but the Eagle Ford is rich in both.” Some data points:

• map at the link: a very, very thin footprint in southern Texas, stretching from the western border with Mexico to Louisiana
• estimate of undiscovered, technically recoverable resources in continuous accumulations
  • oil: 8.5 billion bbls (compare with the Bakken; the USGS Bakken survey of 2013 is linked at the sidebar at the right; the USGS is currently re-surveying the Bakken)
  • 66 trillion cubic feet of natural gas (compare with other fields here)
  • 1.9 billion bbls of natural gas liquids
• one of the most prolific continuous accumulations in the United States, and is comprised of mudstone with varying amounts of carbonate
• continuous oil and gas is dispersed throughout a geologic formation rather than existing as discrete, localized occurrences, such as those in conventional accumulations. Because of that, continuous resources commonly require special technical drilling and recovery methods, such as hydraulic fracturing
• the USGS is the only provider of publicly available estimates of undiscovered technically recoverable oil and gas resources of onshore lands and offshore state waters. The USGS assessment of the Eagle Ford Group was undertaken as part of a nationwide project assessing domestic petroleum basins using standardized methodology and protocol
• the new assessment of the Eagle Ford Formation may be found online

Why Texas officials decided not to levy penalties after pipeline leak -  A buried pipeline running across a Fayette County ranch was leaking, and at least 42 barrels, or 1,700 gallons, of liquid gas containing a known carcinogen were seeping into the ground and possibly making their way into the Central Texas water table. The landowner told the company that owned the pipeline of an unusual odor and dying mesquite trees.Officials with the pipeline giant, Denver-based DCP Midstream, said they would alert state regulatory authorities.But they didn’t do so until at least 3½ months after the spill, according to county and state officials.Company officials say they have acted responsibly and followed all regulations, but this spring an administrative law judge, deciding the company had acted “with a lack of good faith,” recommended that the state’s oil and gas regulatory agency, the Texas Railroad Commission, levy a $10,000 penalty against the $6 billion company.But instead of penalizing DCP Midstream over its failure to report the leak, which may have begun as early as 2013 before being repaired in 2014, two of the three commissioners criticized their own agency employees.In the end, the company, which says it is not to blame for any groundwater contamination, got off without a fine or reprimand. The episode, pieced together through interviews and emails, documents, and notes obtained by the American-Statesman, illuminates the close ties between the commissioners overseeing the state agency and the industry they’re charged with regulating.

Permian Discount Could Rise To $20 Per Barrel - The pipeline constraints in the Permian basin have become a hot topic lately, not least because of the steep discounts that oil producers in West Texas have been forced to accept. But the midstream bottlenecks might not get resolved soon, raising questions about the growth prospects of the Permian, and thus, the entire U.S. shale complex. The Permian pipelines are essentially at full capacity, which means that ongoing increases in output are forcing producers to try to find creative ways to get their oil to market, including shipping oil on trains and trucks, or consuming the oil locally. Ultimately, however, these methods might not be enough to soak up all the expected increase in supply.The constraints have not yet significantly altered oil growth forecasts, whether it be from the IEA, EIA, OPEC, or a range of private sector analyses. However, Goldman Sachs says that it sees the pipeline problems lingering for quite some time, and efforts to resolve the bottlenecks do not appear to be imminent.“Neither public nor private producers appear on track at present to narrow the 0.2-0.4 million bpd of regional oversupply we see in 1Q-3Q 2019,” Goldman Sachs wrote in a note, adding that “there was little optimism among most producers that there would be suf?cient trucks entering the region on a temporary basis to ?ll the gap.”  The lack of resolution for takeaway capacity will mean the painful discounts that shale producers are starting to see will stick around for a while. “We continue to see Permian oil prices of around $50/bbl in 2Q/3Q 2019 and a discount to Gulf Coast prices of around $19-$22 per bbl in 4Q18-3Q19,” Goldman wrote.  That only magnifies the recent conclusion that some analysts have come to, which is that the Permian is now made up of “Haves” and “Have Nots.” That is, shale companies that have lined up pipeline capacity under contract should emerge from this period unscathed, while those shale companies, often smaller ones, that have failed to secure pipeline space are suffering from the discounts. Goldman has Buy ratings for Occidental Petroleum, Pioneer Natural Resources and WPX Energy because of either secure pipeline contracts or because production is hedged at fixed prices for the next year.

The Permian Faces Shut-Ins Due To Oil Pipeline Shortage - The fastest-growing oil producing region in the United States, the Permian, is nearing the limits of its pipeline takeaway capacity and some producers may be forced to shut in wells within months, according to the chairman of one of the biggest U.S. shale producers, Pioneer Natural Resources.“We will reach capacity in the next 3 to 4 months,” Pioner’s chairman Scott Sheffield told Bloomberg in an interview on the sidelines of an OPEC conference in Vienna, which is attended by representatives of some U.S. oil companies.“Some companies will have to shut in production, some companies will move rigs away, and some companies will be able to continue growing because they have firm transportation,” Sheffield told Bloomberg, commenting on the Permian constraints that threaten to slow down the relentless pace of production growth.Oil production in the Permian is rising by 800,000 bpd annually, with current production at 3.3 million bpd, Sheffield said, adding that total pipeline capacity is 3.6 million bpd, so producers - especially those that don’t have firm deals for pipeline transportation - will be bumping into the limit of takeaway capacity in the next three to four months.

Texas Oil Port to Raise $300MM for Work to Handle US Shale Export Boom (Reuters) - Port officials on Tuesday are expected to consider $300 million in financing that would prepare the country's largest oil-export port - Corpus Christi, Texas - to handle a surge in U.S. shale production over the next five years.International buyers would like more U.S. crude but are unable to get it because of infrastructure constraints along the U.S. Gulf Coast. Terminals originally designed for imports only recently have revamped operations to handle exports including accepting larger tankers preferred by China and other oil buyers.The Port of Corpus Christi Commission is voting on a plan that would authorize it to raise the debt next month through underwriters led by Wells Fargo & Co, Citigroup Inc and JPMorgan Chase & Co.The port is prepared to levy new user fees for the debt costs if the U.S. government does not reimburse it for spending the money to deepen and widen port facilities to accept larger ships, according to a port official. A decision to raise fees for dredging, which could begin as early as September, would be rare among U.S. Gulf Coast ports."We don't want to be the next bottleneck" to U.S. oil exports, said Sean Strawbridge, chief executive of the Port of Corpus Christi Authority.The United States is now exporting more than 2 million barrels of oil a day, but the largest tankers currently only move in and out of a Louisiana offshore port because others are not deep enough.Corpus Christi exports 800,000 barrels per day (bpd) of crude, Strawbridge said. It sits on the U.S. Gulf Coast near two of the nation's largest oilfields, the Permian Basin and Eagle Ford shale, which together produce about 4.7 million bpd, nearly half of the total U.S. production.The channel's existing 47-foot-depth restricts it from fully loading crude tankers that carry up to 1 million barrels. Smaller vessels must finish loading the tankers offshore, he said. The project will deepen the channel to 54 feet for larger tankers, he said. Oil export capacity from the Corpus Christi area is expected to rise to 3.3 million bpd by 2021 from 1.3 million bpd this year, keeping its rank as the top oil export port, according to energy research firm Wood Mackenzie.

Minnesota regulators near decision on disputed oil pipeline - Minnesota regulators will open two days of final arguments on whether they should approve Enbridge Energy's proposal for replacing its deteriorating Line 3 crude oil pipeline from Canada across Minnesota.The proposal has aroused intense opposition from tribal and climate change activists. The Public Utilities Commission is scheduled to make its final decision late this month on whether the project is needed and, if so, what route it should take.Groups on both sides are urging supporters to pack the two-day hearing, which start Monday. Some opponents plan to canoe the Mississippi River to downtown St. Paul and then carry their boat to the proceedings. Calgary, Alberta-based Enbridge wants to replace Line 3, which it built in the 1960s. For safety reasons, Enbridge runs it at only about half its original capacity and only with light crude. The replacement would restore its original capacity of 760,000 barrels per day so that it can again deliver as much light or heavy crude as Midwest refineries want. All Enbridge still needs is Minnesota's approval, through it has been a long, contentious process.The current Line 3 starts in Alberta and clips the northeastern corner of North Dakota before it traverses northern Minnesota on its way to Enbridge's terminal in Superior, Wisconsin. Enbridge wants to lay a line that would run parallel to the existing one as far as Clearbrook, Minnesota, before taking a more southerly route to Superior.Enbridge says the old line is increasingly subject to corrosion and cracking, and that its maintenance needs are accelerating. It says that without a new Line 3, its customers would have to rely more heavily on rail and truck transport, which have higher costs and risks.

US Shale Oil Production to Rise 141000 Barrels a Day in July - Between July of 2017 and July of 2018, U.S. crude oil production from seven major shale regions is forecast to rise by 1.7 million barrels of oil per day to 7.34 million barrels a day. The month-over-month increase from June to July is expected to total 141,000 barrels a day. The forecast was published Monday by the U.S. Energy Information Administration (EIA) in its monthly Drilling Productivity Report. Total production in June is forecast to reach 7.2 million barrels a day, an increase of 164,000 barrels a day compared with previously estimated May production. In March the number of drilled but uncompleted (DUC) wells rose by 94 to a total of 7,622 including 122 new wells in the Permian basin. In April the number of DUC wells rose by 55 to a total of 7,677 including 111 new wells in the Permian basin. In May the number of DUC wells rose by 31 to a total of 7,772 including 100 new wells in the Permian basin. No overall oil production declines are forecast either for June or July, and production from new wells is expected to increase by 2 barrels per day per rig to 677 month over month in July. Natural gas production is expected to increase by 1.14 billion cubic feet per day. Production in the Permian Basin is expected to rise by 229 million cubic feet in July. Haynesville gas production is forecast to rise by 235 million cubic feet per day and Niobrara production is expected to be up by 52 million cubic feet per day. WTI crude oil for July delivery traded Monday at $65.90 a barrel, up about 1.3% from Friday’s closing price of $65.06. July crude opened at $64.46 Monday morning. Natural gas for July delivery traded Monday at $2.95 per million BTUs, down about 2.35% from Friday’s closing price of $3.02. July gas opened at around $3.05 Monday morning. 

Total DUCs in US continue climbing in May: DPR - The number of DUCs, drilled, but uncompleted wells, in the Lower 48 U.S. states' seven major plays rose less than 1% from April to May, the Energy Information Administration reported Monday in its monthly Drilling Productivity Report (DPR).A total of 31 DUCs were added to the total found in the Anadarko, Appalachia, Bakken, Eagle Ford, Haynesville, Niobrara and Permian plays. Total DUCs at May 31, was 7,772, up from 7,741 in April, Kallanish Energy reports.Just three of the seven plays saw a month-to-month increase in DUCs, led by the Permian Basin, which gained 100 drilled but uncompleted wells, to 3,203 from 3,103.The Eagle Ford (14) and the Bakken (1) were the other plays recording an April-to-May increase in DUCs, to 1,485 and 750, respectively.  The remaining four plays each saw their DUCs total fall, led by a 48-DUCs drop in the Niobrara, falling to 491 from 539. Appalachia (the Marcellus and Utica Shale plays combined) saw its DUCs total drop by 27, to 744, from 771.

U.S. shale producers warn Chinese tariffs would hit energy exports (Reuters) - China’s proposed tariffs on U.S. petroleum imports, part of a mounting trade war between the two countries, would crimp sales to the shale industry’s largest customer, adding new pressure on U.S. crude prices, energy executives and analysts said in interviews this week. China has said it would slap a 25 percent tariff on imports of U.S. crude, natural gas and coal on July 6 if Washington went ahead, as planned, with its own tariffs on Chinese goods that day. Energy would be added for the first time to a burgeoning trade dispute that has hit imports of Chinese metals and solar panels, and exports of U.S. medical equipment and soybeans. Targeting petroleum puts the Trump administration’s “energy dominance” agenda in Beijing’s cross-hairs as U.S. shale has grabbed share from Middle East suppliers in Asia. China is the largest customer for U.S. crude, importing about 363,000 barrels a day in the six months ended in March. Thomson Reuters shipping data shows those exports have increased since, rising to an expected 450,000 bpd in July. “It is going to hurt everyone for the short term,” While U.S. crude will continue flowing to market even with tariffs, “it’ll force you to put your oil somewhere else, and it’ll cost you more” to line up other buyers. U.S. oil exports have steadily grown since the four-decade-old ban on crude exports was lifted at the end of 2015. China’s tariff threat caught U.S. producers off guard because it had been discussing buying more U.S. energy and agricultural products to reduce its $375 billion trade surplus with the United States. The levies could boost suppliers of West African crude at the expense of U.S. exports. The tariffs are “creating a whole new set of uncertainties on top of what’s already there,” 

Cheniere pipeline to carry Oklahoma natgas output gets positive environmental review- Cheniere Energy's Midcontinent Supply Header Interstate Pipeline, which would boost takeaway capacity from Oklahoma's Anadarko Basin to support growing Gulf Coast demand for LNG exports, got a positive environmental review Thursday from the US Federal Energy Regulatory Commission. The project would result in some environmental impacts, but these would be reduced to less-than-significant levels with mitigation that is planned and being requested, the agency said in its final Environmental Impact Statement.Midship would augment Cheniere's feedgas supplies at its LNG export terminals and provide another outlet for producers in the prolific SCOOP and STACK plays to reach downstream markets. The Houston-based company has been ramping up production at its Louisiana terminal, while continuing to build two liquefaction units with plans for a third at its Texas facility. "Due to the implementation of specialized construction techniques, the relatively short construction timeframe in any one location, and resource protection and mitigation plans designed to minimize and control environmental impacts for the Midship project, we conclude that minimal cumulative impacts would occur," FERC said in its report.

Utah drillers import fracking sand from Wisconsin, but there may a cheaper place to buy it right inside the Beehive State -- A trainload of sand, enough to fill 50 or more rail cars, can disappear down a single bore hole when drillers frack oil and gas wells in eastern Utah’s Uinta Basin.    Utah energy developers must acquire their “frac sand” from Wisconsin quarries, which hold an abundance of clean silica grains of the right size, shape and hardness, a material known as “northern white.” But now alternative sources are under exploration in southern Utah’s Kane County, potentially opening the West’s first major quarries of sand needed for fracking operations. A 12,000-acre area in Kane County could yield enough to meet the needs for Utah energy developers for 40 to 50 years, according to energy industry representatives speaking last month at Gov. Gary Herbert’s Energy Summit in Salt Lake City. “We have some of the best frac sand in the country,” J.T. Martin, president of Salt Lake City-based Integrated Energy Cos., told conference attendees. “We are calling this ‘Utah pink Champagne.’ The Wisconsins have nothing on us.”

Zinke Caught in Conflict of Interest With Oil Giant Halliburton - Interior Secretary Ryan Zinke, who has spent his first 15 months opening public lands to oil and gas drilling, has been linked to a development project with Halliburton chairman David Lesar, POLITICO reported Tuesday.Lesar is backing a real estate development in Zinke's hometown of Whitefish, Montana and receiving help from a foundation started by Zinke and currently run by his wife, Lola.Lola Zinke has agreed in writing to allow the Lesar-funded development, which would convert an industrial area into a hotel and shops, to build a parking lot on land donated to the Zinke's foundation for a Veteran's Peace Park, which has remained undeveloped for nearly 10 years. The Zinkes also own land across from the development that stands to increase in value, real estate agents told POLITICO.The development would also include a microbrewery, a project for which Zinke has spent five years lobbying town officials. Whitefish city planner David Taylor told POLITICO that the developers would allow the Zinkes to own and run the microbrewery, though the developers themselves said nothing had been decided."The sad fact is that this is just the latest example of Zinke attempting to personally benefit from a resource that should benefit the public," Whitefish conservation group the Western Values Project Executive Director Chris Saeger told The Associated Press. The Western Values Project has called for an investigation into Zinke's offer of the land, donated for a park, to private interests and has asked Zinke to recuse himself from any future arrangements the Department of the Interior (DOI) makes with Halliburton. Halliburton is the largest oil services company in the U.S., and ethics experts told POLITICO any deal between the company and the Zinkes presents a conflict of interest, since Halliburton stands to benefit from DOI plans announced under Zinke to open public lands to fossil fuel interests, such as the decision to open U.S. coasts to offshore oil drilling. POLITICO highlighted the DOI's move under Zinke to loosen Obama-era fracking restrictions on federal lands after lobbying by Halliburton, one of the world's largest fracking companies. DOI is also responsible for drilling and pipeline safety standards.  Marilyn Glynn, acting director of the Office of Government Ethics under President George W. Bush, also thought the development deal meant that Zinke should now remove himself from any decisions that could impact Halliburton. "In a previous administration, whether Bush or Obama, you'd never run across something like this," she told POLITICO.

Why It Matters If Fracking Companies Are Overestimating Their ‘Proved’ Oil and Gas Reserves -- Back in 2011, The New York Times first raised concerns about the reliability of America’s proved shale gas reserves. Proved reserves are the estimates of supplies of oil and gas that drillers tell investors they will be able to tap. The Times suggested that a recent Securities and Exchange Commission (SEC) rule change allowed drillers to potentially overbook their “proved” reserves of natural gas from shale formations, which horizontal drilling and hydraulic fracturing (“fracking”) were rapidly opening up. “Welcome back to Alice in Wonderland,” energy analyst John E. Olson told The Times, commenting on the reliability of these reserves after the rule change. Olson, a former Merril Lynch analyst, is best known for seeing the coming Enron scandal 10 years before the infamous energy company imploded in 2000.Today, those same rules have allowed shale drillers to boost their reserves of oil, as well as natural gas. As a result, these “proved” reserves, which investors and pipeline companies are banking on, could potentially be much less proven than they appear. And the unprecedented degree to which this is happening in the shale industry casts a shadow of doubt on the purportedly bright future of America’s booming oil and gas industry. Under the updated SEC rules, which went into effect in 2009, drillers can count oil and gas from wells that won’t be drilled or fracked for up to five years as part of their proved reserves. Those as-yet-untapped wells can be put on a company’s books as a subset of their “proved” reserves, listed under the label “proved undeveloped” reserves. And drillers can count all of the oil and gas they expect to pump out over the well’s entire lifetime — before they’ve found out how fast that well flows or seen a single drop of oil from it. Those “proved undeveloped reserves” now make up an average of just over half of the proved oil reserves at 40 drilling companies active in shale gas basins nationwide, according to SEC filings reviewed by DeSmog. For drilling companies that are less heavily involved in shale drilling, the average mix is roughly 30 percent — similar to the industry’s average before the SEC rule change.

Oil from Alaskan refuge not coming before 2030, Energy Department says - Oil from Alaska's wilderness refuge won't be added to U.S. production until well after 2030, and much of that oil could be headed to China, the Energy Department’s analysis arm says. The Energy Information Administration said this week that it looked at several ways opening the Alaska National Wildlife Refuge to drilling, called for in the Republicans’ tax law, would affect crude oil production in the U.S. “Much uncertainty surrounds any projection of production from ANWR,” the energy agency said in a Thursday report. That's because the data it has on the area slated to be drilled in is more than 30 years old and confidential. “The only well drilled in the coastal plain was completed in 1986, and the results have remained confidential," the report read. "Federal resource estimates are based largely on the oil productivity of geologic formations in neighboring state-owned lands in Alaska and two-dimensional seismic data that had been collected by a petroleum industry consortium in 1984 and 1985.” Three estimates done by EIA, including low, average, and high, all showed that production from the Arctic refuge would not start until 2031, because of the time needed to acquire leases, explore, and develop the required production infrastructure. The oil from the refuge also faces problems in getting to market if its intended for use in the lower 48 states. Most of the fuel likely will be bound for China, because of legal constraints and other factors, the agency said.

Former Bank Of Canada Head: 'Pipeline Protesters May Be Killed...So Be It'  - As Canada's controversial Trans Mountain pipeline expansion project faces ongoingopposition, the former governor of the Bank of Canada said that protesters may die but that the government should push the project through anyway. Speaking at an event Wednesday, David Dodge said, "We're going to have some very unpleasant circumstances," the Edmonton Journal reported. "There are some people that are going to die in protesting construction of this pipeline. We have to understand that."  "Nevertheless, we have to be willing to enforce the law once it's there," Dodge said. "It's going to take some fortitude to stand up." In an interview with the Journal, he elaborated by saying, "We have seen it other places, that equivalent of religious zeal leading to flouting of the law in a way that could lead to death."Dodge's comments prompted outrage from climate activists.Author and 350-org co-founder Bill McKibben warned, "North American governments have shown the 'fortitude' necessary to kill indigenous people often enough that this is no idle threat," while Canandian author Naomi Klein called the threat a "disgrace." She added, "If the worst happens, we now know they went into this with their eyes wide open." Greenpeace climate and energy campaigner Mike Hudema, meanwhile, wondered if Canadian Prime Minister Justine Trudeau would weigh in on Dodge's remarks. Trudeau was the target of sharp criticism from environmental advocacy groups after announcing last month that the government would purchase the pipeline and expansion system, which will roughly triple the system's capacity. That $4.5 billion buyout, commented the B.C.-based Dogwood Initiative, makes every taxpayer "partial owner of a leaky 65-year-old pipeline—and the proponent of a still uncosted oil tanker expansion project."  Dodge, for his part, has been described as "not inclined to hold his tongue."

Trans Mountain pipeline expansion still has hurdles to cross - The Canadian government's deal to buy Kinder Morgan's Trans Mountain crude pipeline is far from over, with industry executives anticipating a six-month delay in the planned startup, keeping Alberta heavy oil prices at steep discounts to global benchmarks. Canada said in late May it will buy the 300,000 b/d pipeline and 590,000 b/d expansion project for $3.5 billion. Alberta producers are keen on expanding the pipeline to access Asian customers via the Westridge export terminal in Burnaby, British Columbia. The expansion was originally scheduled to start up in December 2020, but that is looking unlikely unless construction resumes soon. "Pipeline construction is a seasonal activity during summer to the fall [June to August] in Western Canada and failure to start work on the main infrastructure works will also drive up expansion costs," Chris Bloomer, president of the Canadian Energy Pipeline Association, said in an interview. "There are a few regulations that will be issued during the bird-nesting season [as ownership changes hands]," said Keith Chiasson, senior vice president for downstream with oil sands producer Cenovus Energy, noting a closer look will also be taken at the construction schedule. Kinder Morgan is now in talks with contractors on a new cost estimate and time schedule to restart work on the pipeline expansion that was stopped April 8. The expectation is the construction contracts will be revalidated, Bloomer said. Kinder could not be reached for comment on what their next steps would be in the transition process. The deal is expected to be ratified by its board by the fourth quarter. Kinder Morgan has estimated an expansion of the Trans Mountain pipeline will cost C$7.5 billion. 

Leaked letter: Kinder Morgan broke rules for months during Trans Mountain Pipeline construction - Kinder Morgan put fish, porpoises, sea lions and other marine life in danger during recent construction work near an oil terminal in Vancouver, says a leaked federal letter that warns the company could face prosecution for its violations.The letter from the federal Fisheries and Oceans Department (DFO) notes that the company also went months without filing mandatory monitoring reports to the government and First Nations before federal officials noticed the Texas company was breaking the rules.The department sent the warning to an executive at the company’s Canadian unit, Trans Mountain, in a letter dated June 6, 2018, and obtained by National Observer. That was just days after the Trudeau government announced a deal to take over the Trans Mountain pipeline expansion project and buy many of Kinder Morgan’s Canadian assets for 4.5 billion Canadian dollars ($3.4 billion).It has prompted environmental lawyer Eugene Kung to raise this question: “Down the line, if the feds become the owner, what does it look like for them to prosecute themselves?” The letter contrasts with recent assurances by the federal government that its officials have kept a close eye on the company and taken adequate measures through a “world-leading” plan to ensure that the Trans Mountain west coast pipeline and tanker expansion project will proceed without damaging the environment or public safety. The warning letter identifies four different violations related to pile driving during expansion work on the Burrard Inlet in the metro Vancouver region near the Kinder Morgan terminal between January and May 2018. The company exceeded safe underwater noise limits for such marine species as the harbor porpoise and the Steller sea lion as it proceeded with the pile driving activity, according to a separate email sent by the federal department to members of an Indigenous Advisory and Monitoring Committee that was set up to keep tabs on the project.

Canadian oil pipeline could drive famous Puget Sound whales to extinction -  Orcas are one of the Pacific Northwest’s most iconic creatures. But despite their beloved status, the local resident population known as the Southern Resident killer whales are critically endangered, with just 75 known animals left. Now, advocates worry the Trudeau government’s plan to purchase the Trans Mountain Expansion Project may push the whales to the edge of extinction. Southern Resident killer whales are acoustically, culturally, and genetically distinct from other orca populations. While they can be found from California to southern Alaska, they generally spend May through the fall in the inland waters of British Columbia and Washington state. Known as the Salish Sea, it’s one of the world’s busiest shipping routes, a reality that’s considered one of the biggest threats to the population, which has remained small and vulnerable for decades despite receiving federal protection in 2005. And the Salish Sea is about to get busier. The Trans Mountain expansion, which is the twinning of an existing oil pipeline that carries diluted bitumen from the Alberta tar sands to British Columbia’s shores, is expected to cause the number of oil tankers passing through these waters to jump from around the 60 that annually service the existing pipeline to over 400. “The ships go exactly where the whales go,” Misty MacDuffee, marine biologist and the Wild Salmon Program Director for B.C.’s Raincoast Conservation Foundation, told Earther.Earlier this spring, it looked like the whales might receive a reprieve from the increased noise, shipping traffic, and possible marine oil spills associated with the project. In April Kinder Morgan, the Texas-based company behind the expansion, made noises about shutting it down due to growing delays caused by court battles and indigenous-led resistanceagainst the project. But, after declaring the pipeline vital to national interests, in late May the Canadian government moved to purchase the expansion. Now, a project that Raincoast Conservation Foundation’s population viability analysis found “increases the risk to more than 50% probability that the population will decline below 30 animals,” is back on.

TransCanada Keystone XL May Be One Oil Pipeline Too Many - -- TransCanada Corp.’s Keystone XL may be one pipeline too many for Canada, at least for now. Construction of the export line would supply Western Canada with more pipeline capacity than needed through 2030, assuming it were operating in the next decade along with the Trans Mountain pipeline expansion and Enbridge Inc.’s Line 3, according to research released by the Canadian Energy Research Institute on Tuesday. The three lines would raise the country’s crude export capacity to about 5.5 million barrels a day from just under 4 million barrels a day last year, according to CERI. Alberta’s growing crude oil production, mostly from the oil sands, won’t exceed the capacity of existing and three planned expanded oil pipelines for another twelve years. Canadian heavy crude prices have traded at an average discount to West Texas Intermediate future of almost $22 a barrel this year, about 70 percent bigger than the average discount last year, after existing pipelines filled to capacity amid a surge of new production from Suncor Energy Inc.’s Fort Hills oil sands mine. The discount widened 50 cents to $24 a barrel on Wednesday. The $8 billion Keystone XL, approved by U.S. President Donald Trump last year, would carry 830,000 barrels of crude from Alberta to Nebraska. While TransCanada hasn’t made a final investment decision on the pipeline, the company has said it has “approximately 500,000 barrels per day of firm, 20-year commitments." A total of 12 percent of the pipeline would be reserved for uncommitted volumes, according to the National Energy Board. The company will begin clearing brush in Montana this fall, according to a U.S. State Department letter addressed to the Assiniboine and Sioux Tribes obtained by Bloomberg News. TransCanada didn’t respond to an email seeking comment. To be sure, all three pipelines will deliver crude to different markets, with Keystone XL boosting access to the U.S. Gulf Coast, where diminishing volumes of heavy crude from Latin America have increased demand for Canadian volumes, Dinara Millington, CERI’s vice president of research, said in a phone interview. Some oil sands volumes may migrate from Enbridge’s Mainline onto Keystone XL, she said. “You want that flexibility,” she said.

Province extends fracking ban 'indefinitely' after failing to meet its own conditions - Three and a half years into what was supposed to be a "temporary" moratorium on natural gas fracking in New Brunswick, the Gallant government has failed to execute key tasks it gave itself before the ban can be lifted and is citing that inaction as a reason to extend the moratorium further."Our government has put a moratorium on hydraulic fracturing, which will continue indefinitely, as it is clear that our conditions (for ending it) cannot be satisfied in the foreseeable future,"  read an update on the moratorium released by Premier Gallant last month.But critics complain the five conditions set by government in 2014 to end the moratorium are mostly assignments the Gallant government gave itself and did not complete, including failures to strengthen provincial fracking regulations or change natural gas royalty rates."We are not aware of any work the government has done in order to satisfy its own conditions," said Colleen Mitchell, president of the Atlantica Centre for Energy, an industry group that  advocates for the moratorium to be lifted.The moratorium will continue even though locally produced natural gas supplies are rapidly running dry and New Brunswick is being forced to turn to jurisdictions that do allow fracking to solve its growing gas supply problems. "There's an incredible amount of gas that's coming up from the United States," said Enbridge Gas New Brunswick general manager Gilles Volpe about how the sources of gas supplying the province have been shifting.

China's threat to U.S. crude, coal exports is a tactical masterstroke: Russell (Reuters) - China’s threat to impose tariffs on U.S. crude oil, certain refined products and coal is possibly the only sign of clear thinking in the increasingly muddled escalating trade dispute with the administration of President Donald Trump. The tariffs on energy imports were mooted by the Chinese on June 15 as part of their response to the U.S. announcement of tariffs on $50 billion worth of imports. To be clear, the tariffs on crude oil and products and coal are still in the realm of the possible, and it will likely take a further deterioration in the relationship between the world’s two largest economies to turn them into a reality. It was also curious that the list of potential targets for customs included natural gas in its gaseous form, but not as liquefied natural gas (LNG). China imports zero gaseous natural gas from the United States, but is major buyer of its LNG. The Chinese threat to impose tariffs on energy imports makes sense from two perspectives. The first is that in economic terms it’s generally best to put tariffs on goods with high elasticity, in other words goods you can substitute relatively easily from other suppliers. The second is that if the aim of your tariffs is to inflict sufficient pain on the other country, it’s best to target them where they can do the most damage to the economy, or the politicians promoting the trade war. Looking at the first point, it’s clear that China would be able to source crude oil, refined products and coal from other countries, even if it had to pay slightly more. The Chinese have become a major buyer of U.S. crude, importing about 319,000 barrels per day (bpd) in the first five months of the year, according to vessel-tracking and port data compiled by Thomson Reuters Oil Research and Forecasts. This makes China the biggest net buyer of U.S. crude and therefore an important customer for the booming shale industry. With U.S. crude exports running at about 2 million bpd, China’s purchases represent about 16 percent of the total. However, U.S. crude supplies to China account for only about 3.5 percent of the country’s total daily imports. What this is likely to mean is that China will find it easier to replace U.S. crude imports than U.S. producers will to get new customers. 

Continental Resources CEO Harold Hamm pulls out of OPEC meeting (Reuters) - Harold Hamm, founder and chief executive officer of Continental Resources Inc, has canceled a scheduled appearance at an OPEC event this week in Vienna, a company spokeswoman said.  Hamm is the third of five U.S. shale executives to withdraw from a scheduled speaking slot at the OPEC meeting in Vienna. His withdrawal comes days after a trade skirmish between China and the United States intensified, with China imposing $50 billion in tariffs on U.S. crude oil and other goods, a retaliatory measure on Washington’s tariffs of Chinese products. Continental, the largest oil producer in North Dakota’s Bakken shale formation, has been a key supplier of crude oil to China, shipping more than 1 million barrels to the country since a U.S. crude export ban was lifted in 2015. It was unclear how China will replace that source of crude, but several OPEC countries produce crude grades similar to Continental’s Bakken wells. Continental spokeswoman Kristin Thomas confirmed Hamm’s withdrawal, saying the event did not fit with his schedule. The company did not immediately respond to requests for further comment on the China tariffs. Hamm, who was an informal campaign adviser to U.S. President Donald Trump in 2016 and was considered for a U.S. Cabinet post, had been listed since at least March on the OPEC International Seminar's website as a speaker here. His attendance had been widely anticipated as he had derided OPEC as a "toothless tiger" in 2014. Trump also chided OPEC last week, blaming the group for rising oil prices and saying its 14 members were “at it again.” Yet, Hamm has appeared in recent months to be trying to reach a more conciliatory tone with OPEC producers. Last month he attended a board meeting of Saudi Aramco, the oil producer controlled by OPEC’s largest member, Saudi Arabia. He has also begun asking fellow shale producers to focus more on profitability and less on profligate production. Hamm’s withdrawal leaves only two U.S. shale executives confirmed to speak at the event, out of an original five. Centennial Resource Development Inc CEO Mark Papa and ConocoPhillips Ryan Lance also withdrew from the OPEC event.

Scottish Government Wins Fracking Case Against Ineos - (Reuters) - Scotland's highest court ruled against petrochemicals company INEOS on Tuesday, after it challenged a devolved Scottish government moratorium against fracking for oil and gas. INEOS, headed by billionaire founder Jim Ratcliffe, argued the Scottish government had imposed an unlawful ban on fracking in October 2017 and had sought a judicial review to overturn it. The Court of Session said the government had not imposed a ban, despite several statements to that effect, and had instead an "emerging and unfinalized planning policy expressing no support on the part of the Scottish government" for fracking. The extraction of oil and gas from tight rocks by fracturing them using chemicals has become a contentious issue in Europe after it helped reverse a fall in U.S. oil output, transformed its gas sector and boosted the economy of several states. Despite that, fracking is also associated with environmental issues such as increased industrial activity, fears over water contamination and objections that it boosts fossil fuel production when more renewable energy should be encouraged. INEOS holds the rights, expiring on June 30, to explore for gas over a 400 km area between Glasgow and Falkirk. The devolved Scottish government announced last October it was against fracking, in line with public opinion. It ordered local authorities to reject planning applications from companies seeking to frack, a measure that energy minister Paul Wheelhouse told parliament was "sufficient to effectively ban the development of unconventional oil and gas extraction".  . Judge Lord Pentland said, despite such ministerial statements which he cited in the court opinion, "there is indeed no prohibition against fracking in force at the present time". INEOS welcomed the court's decision which it said clarified the "confusion arising out of government announcements". "Today's judgement makes it clear the SNP government will now have to make decisions based on facts and science rather than prejudice and political expediency," it said. "With an environmental assessment and business and regulatory assessments still to be carried out, there may never be a fracking ban in Scotland." Wheelhouse said, in reaction to the court ruling, that the government's position against fracking remained unchanged. 

Herald View: The ground is shaky under the SNP on fracking - FRACKING is obviously a dangerous concept – it can undermine a government’s policy foundations and cause severe structural damage to its credibility. Yesterday, the SNP administration was accused of extracting a liquid substance with its stance on fracking, which it told the world it had banned, only to change that to having a “preferred position” against the controversial practice.  Accordingly, the Court of Session rejected a bid by would-be frackers Ineos to overturn the ban as there was no such ban, only an evolving planning policy. To that extent, yesterday’s ruling was a legal victory for the administration, but a political defeat as Ineos and the Tories cast aspersions on its competence and suggested it had performed a sleight of hand. On a day during which nothing was as it seemed, everyone was a winner, and everyone was a loser. In one sense, this was an exercise in semantics. The new party line is that there is at present a “moratorium” on fracking, and to all intents and purposes observers might conclude that there is therefore an “effective ban”. Seen thus, yesterday’s ruling is hardly as seismic as the frackers and their allies make out – particularly as they lost. But there is no doubt that it was embarrassing for the administration to learn that its previous talk of a ban was “mistaken” and that no such ban was legally in place.  To make matters worse, it looked distinctly weaselly to change the words on its website from “The Scottish Government has put in place a ban on fracking in Scotland” (Tuesday’s position) to “No fracking can take place in Scotland and that remains the case” (Wednesday’s position).

‘Plenty’ of oil discoveries to be made in Northern Seas -- A report due to be published by the Norwegian Petroleum Directorate (NPD) today will claim there are still “plenty” of oil and gas discoveries to be made in the North Sea, the Barents Sea and the Norwegian Sea. The report claims that mature and less explored regions still hold a “significant” amount of oil and gas and that exploration and discovery will hold the key to future high hydrocarbon yields. Torgeir Stordal, NPD exploration director, said: “This report includes an updated overview of undiscovered petroleum resources on the shelf. It shows that after more than 50 years of activity, about 55 percent of anticipated oil and gas resources have yet to be produced. Of these, just under half have not even been discovered.” About two-thirds of the undiscovered resources are said to be located in the Barents Sea with the rest is distributed between the North Sea and Norwegian Sea.

Exxonmobil plans LNG import terminal off east coast Australia by 2022 - Oil major ExxonMobil is planning an LNG import project off Australia's east coast, in the state of Victoria, with a potential startup as early as 2022, a spokesman said Monday. ExxonMobil's proposed project makes it the third LNG import terminal planned off Australia's east coast, based on floating storage regasification units, as natural gas shortages in the region prompt energy companies and utilities to secure supply from global LNG markets. The project comes alongside similar plans by Australian utility AGL Energy and consortium Australian Industrial Energy, which is partly backed by Japanese energy traders Jera and Marubeni. It is still in very early stages of planning, but could begin importing gas from 2022 onwards, the spokesman said via email. Details on the size of the facility are not yet available and while a number of potential locations for it are being assessed, the state of Victoria has been flagged for its location, which would see it feed into the tight east coast gas network, he said. "ExxonMobil would be able to bring world-class project experience in all facets of LNG development, production and regasification," he said. "Combined with the existing Gippsland resource and infrastructure, an LNG import facility could ensure ExxonMobil can continue to meet our customers' needs," the spokesman added. The Gippsland Basin Joint Venture oil and gas fields, located in the Bass Strait off Victoria's Gippsland coast, are owned equally by Esso Australia, a subsidiary of ExxonMobil, and BHP Billiton Petroleum

U.S. LNG not included in China’s targeted tariff list  -- It’s not a surprise the proposed retaliatory Chinese tariffs on U.S. imports doesn’t include liquefied natural gas (LNG), Wood Mackenzie’s head of Asia-Pacific Gas and LNG, Nicholas Browne, said Monday.According to Browne, China’s announcement last Friday, that it would pursue duties against the U.S. if Washington made effective its tariffs plan on July 6, excludes LNG for two key reasons. “Firstly, LNG demand is growing rapidly in China. Secondly, the U.S. will be the key source of incremental supply growth in 2018 and 2019,” he said.The list from the Chinese government includes nearly all commodities, such as mineral fuels, mineral oils, bituminous substances and mineral waxes. Although LNG seems to be excluded from the list, natural gas in a gaseous state is included. That, however, would have no significance given China can’t import pipeline gas from the U.S., Browne noted.LNG has played a crucial role in limiting the extent of gas shortages during the last Chinese winter, with demand for the liquid fuel rising by a record 12 million tonnes (MMt) to reach 38 MMt in 2017. U.S. LNG met 1.6 MMt, or 4%, of that demand last year, Kallanish Energy learns. Tariffs on US LNG would increase costs and potentially limit availability of LNG, Browne said, adding CNPC recently signed two long-term deals with Cheniere Energy, one of which starts in 2018. “For flexible U.S. volumes, the introduction of tariffs would have posed a significant challenge for Chinese buyers as they seek to meet surging demand. It would also have created logistical headaches for suppliers to optimize their portfolios to ensure they could meet Chinese demand while redirecting U.S. LNG to other markets,” he explained.  The U.S.-China trade war is at a “nascent stage” with an uncertain extent or duration. However, Browne believes LNG is clearly seen as an essential good by the Chinese government.

$1.6 Trillion Natural Gas Expansion Will Eliminate Any Chance Of Meeting Paris Carbon Goals -- When the G20 countries meet in Argentina later this year, one of the topics on the agenda will be increasing investments in natural gas production by as much as $1.6 trillion by 2030. A new report by Oil Change International finds doing so will use up the entire remaining carbon budget limitations needed to meet the climate goals of the Paris climate accords. In other words, if the world’s major economies continue on their business as usual approach, all those promises made in Paris will likely be for naught. The slogan being used to justify continued use of natural gas resources is that it is a “bridge fuel to the future.”   Indeed, in 2017, the governor of  Rhode Island used it to advocate on behalf of a utility company that wants to build three 1,000 MW gas fired generating plants in the northwestern corner of the state and in nearby Massachusetts.  One of the concerns with natural gas is leakage of methane, which is extraordinarily high from fracking operations. The Oil Change International study shows that even without such leakage, natural gas is not the bridge fuel its proponents claim it to be. “Setting methane leakage aside, we demonstrate that even in the hypothetical case of zero methane leakage, fossil gas cannot be a bridge fuel. This demonstrates that methane leakage is not the sole determinant of whether fossil gas causes net harm to the climate. To meet climate goals, fossil gas production and consumption must, as with other fossil fuels, be phased out, and reducing methane leakage does not alter that fact

Venezuela Forced To Shut Down Production As Operations Fall Apart  - Every week the crisis in Venezuela takes a turn for the worse...There are now signs that its oil industry is entering a dangerous new phase. Argus Media reports that Venezuela has begun to “proactively shut in oil production to cope with nearly replete terminal storage, further accelerating an output decline and bringing the OPEC country closer to the psychological barrier of 1mn b/d.”Venezuela’s oil production fell to an average of 1.392 million barrels per day in May, down another 42,000 bpd from a month earlier, according to OPEC’s secondary sources. However, with the crisis in Venezuela spiraling out of control at a horrific pace, the numbers from May might as well be a year ago.The May numbers don’t reflect the full ramifications of having to deal with inadequate port capacity, after PDVSA diverted operations to Venezuela from its Caribbean island refineries and storage facilities following the attempt by ConocoPhillips to take control of them.The problem of export capacity has become so acute that PDVSA is demanding customers send ships that can handle ship-to-ship loadings, since there is a backlog of ships trying to load up at the country’s decrepit ports. PDVSA is even considering declaring force majeure on contracts that it will be unable to fulfill. The upshot is that PDVSA might have only 694,000 bpd available for export in June, which is less than half of the 1.495 mb/d that it is contractually obligated to deliver this month.  As such, the 1.392 mb/d figure for May, bad as it is, is woefully out of date. Sources told Argus Media that production plunged to just 1.1-1.2 mb/d in early June, heading down towards 1 mb/d.

Factbox: Venezuela's near collapse takes toll on oil industry - Venezuela's near economic collapse has taken a toll on the country's oil production, causing shifts in oil flows as buyers look to secure alternative supplies. As workers have fled the country, state-owned oil company PDVSA has had a difficult time maintaining crude output, let alone boosting production. PDVSA's refining sector has also deteriorated on a lack of funds and manpower.PDVSA has had difficulty pulling crude from storage because its supplies are subject to seizure by creditors. Most notably, on April 26 the International Trade Court ordered PDVSA to pay $2.04 billion to ConocoPhillips for the 2007 expropriation of ConocoPhillips' 50.1% interest in its Petrozuata joint venture in PDVSA, and its 40% stake in the Hamaca project, both of which were heavy oil installations in the Orinoco Belt of eastern Venezuela. And US has sanctioned individuals in Venezuela, including President Nicolas Maduro, prohibited the purchase and sale of any Venezuelan government debt, including any bonds issued by PDVSA, and banned the use of the Venezuela-issued digital currency known as the petro. Below are some key takeaways from the current situation.
* Venezuela crude production could be on the verge of sinking to 1 million b/d, and a drop in crude exports is causing a shift in trade flows.
* Venezuela's crude output averaged 1.36 million b/d in May, down from 1.41 million b/d in April, and 1.9 million b/d in May 2017, according to S&P Global Platts. The International Energy Agency said it could fall to 800,000 b/d or even lower next year.
* S&P Global Platts Analytics sees Venezuelan production remaining above 1 million b/d during 2019. "They have a certain amount of production that they can keep going although the heavier grades would get impacted if they can no longer buy diluents," said Chris Midgley, head of Platts Analytics.
* In early June, PDVSA notified 11 international customers that it would not be able to meet its crude supply commitments in full, a PDVSA official said. It is contractually obliged to supply 1.495 million b/d to these customers in June, but only has 694,000 b/d available. The customers either would not comment, or could not be reached for comment.
* Venezuela's rig count has fallen to 28 in May from 36 in April, and 49 in January, according to Baker Hughes International Rig Counts.
* PDVSA has experienced similar drops in the past. In the 1980s, the number of rigs fell to less than 30, causing crude production to fall to 1.3 million b/d.
* Production has slowed largely because of a lack of maintenance and as skilled employees have fled the country. For instance, PDVSA Friday was operating its 202,000 b/d Petrocedeno extra heavy crude upgrader at just 39.6% of capacity, due to delayed maintenance, lack of spare parts, and electrical failures, according to an operator at the facility.
* PDVSA's three other upgraders -- the 120,000 b/d Petrosanfelix, 120,000 b/d Petromonagas and 190,000 b/d Petropiar upgraders -- are expected to be operating below capacity in June.

Venezuela Rages: U.S. Sanctions Are "An Attack On The Oil Market" - The U.S. sanctions against Venezuela are affecting consumers worldwide and are an attack on the oil market, Venezuelan Oil Minister Manuel Quevedo said on Thursday. The minister, speaking at an OPEC International Seminar today—a day before OPEC ministers meet to discuss how much production to bring back to the market to ‘ease consumer and market anxiety’—Venezuela’s Quevedo said, as carried by Platts:“These sanctions are very strong, the sanctions are practically immobilizing PDVSA.”“They are trying to asphyxiate PDVSA,” the minister added.“It affects not just the Venezuelan oil sector but the consumers worldwide,” Quevedo said, referring to the sanctions.“It’s an attack on the oil market. Oil is an instrument for development, not an instrument for a political attack.” The U.S. has been stepping up sanctions against Venezuela, after cutting off all access of PDVSA and its sovereign to U.S. banks, and cutting off all refinancing of new debt. Amid plummeting production, PDVSA fails to honor its supply obligations, and has started to refine imported crude oil.

Libya's NOC confirms two crude storage tanks destroyed in Ras Lanuf attacks - The attacks last week on Libya's eastern oil terminals destroyed two crude oil storage tanks at Ras Lanuf, cutting its storage capacity by 42% to 550,000 barrels, the National Oil Corp. said Monday, and warned of further tank losses. Storage tanks 2 and 12 at the Ras Lanuf oil terminal were destroyed by fires after armed militia assaults, the state oil company said in a statement. Ras Lanuf had five operational storage tanks, storing up to 950,000 barrels. The loss of the two tanks has reduced its total capacity by 400,000 barrels to just 550,000 barrels, NOC said. Tank 2 is in danger of leaking and spreading the blaze to tanks 1, 3 and 6, as firefighters have been unable to reach the tanks, which are still on fire, it added. NOC declared force majeure on crude oil loadings from the Es Sider and Ras Lanuf oil terminals Thursday. Libya's oil production dropped 240,000 b/d, roughly 25%, as clashes between rival militia groups halted crude oil loadings from these two key eastern oil ports. The two Libyan terminals were set to load a total of around 420,000 b/d in June. Before the attacks, Libya produced an average of 950,000 b/d, a Platts survey of OPEC and oil industry officials and analysts showed earlier this month. 

Egypt Raises Petrol Prices by up to 50 Percent - Egypt raised gasoline prices by up to 50 per cent, the oil ministry said on Saturday, under an IMF reform plan that calls for the slashing of state subsidies on some consumer products. Oil Minister Tarek El Molla said the price rises will help Egypt save up to 50 billion pounds ($2.8 billion) in allocations for state subsidies in the 2018-19 state budget.The price hike, the third since Egypt floated the pound currency in November 2016, is expected to add more pressure on Egyptian consumers struggling to make ends meet amid high unemployment and price volatility. The ministry said the price for 95 octane gasoline was increased to 7.75 Egyptian pounds a litre from 6.60 pounds; 92 octane was increased to 6.75 pounds a litre from 5 pounds and 80 octane was raised to 5.50 pounds a litre from 3.65 pounds. The ministry also raised the price for a canister of gas for Egyptian households to 50 pounds from 30, while a bottle of gas for commercial purposes was raised to 100 pounds from 60. Molla said the price rise will cut the funds allocated for fuel subsidies to 89 billion pounds from 139 billion pounds. "Moving fuel prices will help reduce petroleum products consumption by about 5 per cent," Molla said. 

China's Oil Trade Retaliation Is Iran's Gain - I’ve told you that once you start down the Trade War path forever it will dominate your destiny. Well here we are.  Trump slaps big tariffs on aluminum and steel in a bid to leverage Gary Cohn’s ICE Wall plan to control the metals and oils futures markets.   I’m not sure how much of this stuff I believe but it is clear that the futures price for most strategically important commodities are divorced from the real world.Alistair Crooke also noted the importance of Trump’s ‘energy dominance’ policy recently, which I suggest strongly you read.But today’s edition of “As the Trade War Churns” is about China and their willingness to shift their energy purchases away from U.S. producers.  Irina Slav at Oilprice.com has the good bits.The latest escalation in the tariff exchange, however, is a little bit different than all the others so far. It’s different because it came after Beijing said it intends to slap tariffs on U.S. oil, gas, and coal imports.China’s was a retaliatory move to impose tariffs on US$50 billion worth of U.S. goods, which followed Trump’s earlier announcement that another US$50 billion in goods would be subjected to a 25-percent tariff starting July 6.It’s unclear as to what form this will take but there’s also this report from the New York Times which talks about the China/U.S. energy trade.Things could get worse if the United States and China ratchet up their actions [counter-tariffs]. Mr. Trump has already promised more tariffs in response to China’s retaliation. China, in turn, is likely to back away from an agreement to buy $70 billion worth of American agricultural and energy products — a deal that was conditional on the United States lifting its threat of tariffs.“China’s proportionate and targeted tariffs on U.S. imports are meant to send a strong signal that it will not capitulate to U.S. demands,” said Eswar Prasad, a professor of international trade at Cornell University. “It will be challenging for both sides to find a way to de-escalate these tensions.” But as Ms. Slav points out, China has enjoyed taking advantage of the glut of U.S. oil as shale drillers flood the market with cheap oil.  The West Texas Intermediate/Brent Spread has widened out to more than $10 at times. By slapping counter tariffs on U.S. oil, that would more than overcome the current WTI/Brent spread and send Chinese refiners looking for new markets. Hey, do you know whose oil is sold at a discount to Brent on a regular basis?Iran’s.  That’s whose. And you know what else?  Iran is selling tons, literally, of its oil via the new Shanghai petroyuan futures market.

Indian oil minister mum about adhering to US oil sanctions on Iran - India's oil minister on Wednesday refused to commit his country to abandoning purchases of Iranian crude after the Islamic Republic was hit by US sanctions. International buyers of Iranian oil have until November 5 to wind down contracts before the US re-imposes sanctions on the oil, energy, shipping and insurance sectors, according to a US Department of the Treasury fact sheet.However, India's top oil official, Dharmendra Pradhan, was tight-lipped Wednesday when asked about the sanctions on the sidelines of OPEC's Vienna seminar. India is the second-largest buyer of Iranian crude, with imports averaging 600,000-700,000 b/d in the past 12 months."Let's wait and watch and see how things are unfolding," he said in an interview with S&P Global Platts. "India was among the main importers of Iranian crude when there were sanctions a few years ago." Earlier this year, India's oil ministry said imports of Iranian crude in the 2018-19 fiscal year will rise by more than 30% year on year as Iran was providing Indian refiners with a "freight discount."

Pakistan Among Top 5 Countries to Discover Oil and Gas in 2017 - Pakistan made two key oil and gas discoveries in the third quarter and another three discoveries in the fourth quarter of 2017. These discoveries may have prompted the US-based Exxon-Mobil to join off-shore drilling efforts in Pakistan. American energy giant's entry in Pakistan brings advanced deep sea drilling technology, its long experience in offshore exploration and production and its deep pockets to the country. US Energy Information Administration (EIA) estimates that Pakistan has technically recoverable deposits of 105 trillion cubic feet (TCF) of gas and 9.1 billion barrels of oil. Exxon-Mobil is expected to accelerate exploration and lead to more discoveries and increased domestic oil and gas production.Russia led with 10 discoveries, followed by Australia with seven discoveries and Colombia with four discoveries. Pakistan and the UK each had three discoveries in the fourth quarter of 2017, according to Global Oil and Gas Discoveries Review.In fourth quarter of 2017, the Former Soviet Union leads with 12 discoveries, followed by Asia with eight discoveries, and Oceania with seven discoveries. Europe and South America had five discoveries each, followed by North America with two discoveries, while the Middle East and Africa had one discovery each in the quarter, according to Offshore Technology website.

How energy could play a role in North Korea denuclearization talks - The June 12 summit between President Trump and North Korean Leader Kim Jong-un offered little visibility on the path ahead for U.S.–North Korea relations. But behind the scenes, particularly in South Korea, there is great interest in using energy as a key incentive to nudge Pyongyang toward further concessions.  The U.S. already has an active energy dialogue with South Korea, with imports of U.S. liquefied natural gas and crude growing dramatically. For North Korea, which has only minimal refining capacity and lacks domestic fossil fuel production, U.S. gasoline, diesel and propane would be an attractive asset. The U.S. has promised fuel exports to North Korea before, during the 1990s peace talks. But for North Korea, increased dependence on a U.S. energy supply chain could be viewed as a new source of insecurity: Like any import-dependent energy consumer, North Korea can enhance its security only through diversifying its imports across both geography and fuel source. North Korea will likely be open to U.S. energy support, but will try to hedge its bets elsewhere — particularly Seoul, which wants long-term energy infrastructure links to regional suppliers and greater access to renewable energy. The other options:

1. A Russian pipeline that would deliver natural gas or crude through the Korean Peninsula, serving markets on both sides of the demilitarized zone — though U.S. sanctions on the Russian energy sector would complicate such a project.
2. A “supergrid” transmission line linking the Koreas to hydroelectric and wind power resources in Western China, Mongolia and Russia. (Only 27% of North Koreans have regular electricity access.)

 U.S. policymakers will likely offer bilateral incentives to North Korea in the form of petroleum products and grid-modernization investments rather than more complicated regional pipeline and transmission links. But ultimately, U.S. energy exports and investment may prove merely a bridge from the Korean Peninsula to the vast resources of neighboring Russia and China.

Russia's Oil Export, Refinery Plans Point To Increase In Output -(Reuters) - Ahead of a meeting with Saudi Arabia and other producers, Russia already plans to increase oil exports, its July-September schedule shows, which coupled with increasing refinery runs suggests Moscow is gearing up to raise production. OPEC and non-OPEC producers are scheduled to meet on June 22-23 in Vienna to discuss a possible increase in output after more than a year and a half of coordinated cuts which have taken 1.8 million barrels per day (bpd) out of the market. Those cuts, led by Saudi Arabia and Russia, having helped slash global oversupply and raised prices by almost $20 a barrel, but there are now calls, from Russia's energy minister Alexander Novak and others, that the deal be re-examined. Crude exports and transit from Russia is expected to rise to 63.34 million tonnes in the July-September quarter from 62.45 million planned for April-June, Russia's export schedule shows. That works out to an increase of around 20,000 bpd - not significant in itself - but comes alongside plans by Russian refiners to raise third-quarter throughput by 2.2 million tonnes versus the second quarter, energy ministry forecasts show. Raising both would typically require a production increase. Under the deal among OPEC and non-OPEC producers, Russia agreed to cut production by 300,000 bpd compared to its output in October 2016. It has exceeded its production quota for the last three months, however, pumping an average 10.97 million bpd in May - or around 20,000 bpd more than agreed, ministry data showed. Russia could quickly add back at least 300,000 bpd of production, the ministry has said. Top producer Rosneft could increase output by 70,000 bpd in just two days, according to analysts who have recently visited the company. 

OPEC grandee Attiyah says oil prices at $75/b are 'reasonable' -- Oil prices trading between $70-75/b are "reasonable" for consumers and producers, said Qatar's former energy minister Abdullah bin Hamad al-Attiyah in an interview with S&P Global Platts. Saudi Arabia and Russia are pushing for oil-producing group OPEC to scrap its current 1.8 million b/d production cut agreement in the wake of pressure from US President Donald Trump who has complained over high prices. "OPEC is under a lot of pressure from politics," said Al-Attiyah, a former president of the 14-member producer group and an adviser to Qatar's emir. He added that $70-75/b was "a reasonable price" for crude. Oil ministers are converging on Vienna for tense negotiations this week. Saudi and non-OPEC partner Russia are proposing the producer coalition increases output by 1.5 million b/d in the third quarter and consider further steps to manage the market, Russia's energy minister Alexander Novak said over the weekend. However, he faces stiff opposition from Iran. The Islamic Republic has stressed its opposition to changing OPEC's existing agreement without the full support of the group. "The issue of changing the agreement requires unanimity of all who have to be on board," said Hossein Kazempour Ardebili, Iran's OPEC governor, in an interview with S&P Global Platts June 14. He added that Iran, Iraq and Venezuela were aligned on the issue. 

OPEC Confident Global Oil Demand Will Stay Strong - - An OPEC technical panel has found that global oil demand is on pace to stay strong in the second half of this year, suggesting that the oil market could comfortably absorb a production increase without sending oil prices plummeting, Reuters reported on Tuesday, citing three OPEC sources.A technical panel - a kind of economic body within OPEC - met on Monday to take stock of the oil market situation and to prepare a report for the ministers of the OPEC countries at their meeting later this week.“If OPEC and its allies continue to produce at May levels then the market could be in deficit for the next six months,” one of the sources told Reuters.“The market outlook in the second half is strong,” according to another source.OPEC is up for a tough meeting in Vienna this week after the leaders of the two groups of the OPEC/NOPEC production cuts—Saudi Arabia and Russia - have signaled that they are willing to boost production to offset what is sure to be further supply disruptions, mostly from Venezuela’s collapsing oil industry and from a potential decline in Iran’s oil exports in view of the returning U.S. sanctions.But it’s Iran and Venezuela - founding OPEC members and those most affected by U.S. sanctions and unable to boost production - that are most vehemently opposing an increase in the cartel’s production.According to one of Reuters’ sources, at the technical panel on Monday, Iran and Venezuela, as well as Algeria, continued to voice opposition to a production boost.This faction is reportedly also supported by Iraq. Iran said over the weekend that it would veto any proposal for a production increase with the support of Venezuela and Iraq.

Any OPEC outcome except free-for-all could help US shale producers - US shale oil producers will likely benefit from any decision OPEC makes this week in Vienna, with the exception of a complete breakdown in unity that created the current supply quotas."The US is in a strong position either way here," director of oil and products research at Morningstar Commodities and Energy Sandy Fielden said. "I think you'll see a benefit even if OPEC increases production, provided that they don't allow prices to fall below $40/b. And there's absolutely no incentive for OPEC to allow that to happen." Permian Basin drillers are making money despite steep Midland discounts caused by a lack of Texas pipeline capacity that is expected to continue until mid-2019. Oil prices would have to fall sharply to change that picture, analysts said.US shale was long seen as a rival to OPEC, but those tensions may be subsiding as a global supply shortage looms. Several CEOs of international oil companies, including US drillers Pioneer Natural Resources and Hess, will address the OPEC International Seminar on Wednesday in Vienna, at times sharing a stage with OPEC ministers. The production group will then meet Friday to discuss changes to its supply cut agreement that took effect in January 2017. Rapidan Energy Group President Bob McNally said chaos would be the only outcome to Friday's meeting in Vienna that would be negative for US drillers."If there was a disorderly breakdown of unity, and everyone went back to maximum production, if we go back to 2016 where everyone is going to the max, that could risk a price implosion," he said. "If you're a shale oil producer, you don't want that."That's why McNally thinks US shale producers are praying this week for anything but a free-for-all.

Oil prices finish higher as traders assess trade tensions - Oil prices finished higher on Monday to recoup some of their recent losses, as traders assessed escalating trade tensions between the U.S. and China. July West Texas Intermediate crude rose 79 cents, or 1.2%, to settle at $65.85 a barrel on the New York Mercantile Exchange, after losing 2.7% on Friday and posting a loss of 1% last week. Global benchmark Brent crude for August delivery added $1.90, or 2.6%, to $75.34 a barrel on ICE Futures Europe, following a decline of 3.3% Friday and a roughly 4% loss last week.Investors were fixated on how trade-related disagreements between the U.S. and China are escalating. President Donald Trump on Friday announced tariffs on $50 billion worth of Chinese imports, and Beijing retaliated by targeting high-value American exports.The Chinese government announced plans to place tariffs on U.S. oil imports as well as other energy products, so trade war fears are “scaring oil traders into believing that we could see this trade spat lower economic growth and reduce oil demand,” said Phil Flynn, senior market analyst at Price Futures Group, in a daily email. Analysts at Commerzbank said in a note Monday that “the possible punitive tariff of 25% means that U.S. crude oil would no longer be a low-cost alternative despite the current price discount,” adding that they “therefore expect the high price gap between Brent and WTI to remain in place during the summer months.”  Flynn, however, said “U.S. crude exports to China were roughly 380,000 barrels per day in March, a large amount but not enough to shatter the global oil supply and demand balance.” He believes the White House’s announcement of planned tariffs against Chinese goods and an equal retaliation by the Chinese “will not really slow the global economy by that much.” The trade tariffs also won’t start until early July, he said, so there’s “plenty of time to cut another deal.”  On Friday, both WTI and Brent notched big drops for the session and the week, weighed by expectations that the Organization of the Petroleum Exporting Countries and its allies will agree to increase production at a meeting this Friday.

Oil hit by flaring tensions over U.S.-China trade (Reuters) – Oil fell on Tuesday as an escalating trade dispute between the United States and China unleashed sharp selloffs in many global markets. U.S. crude futures was down $1.08 to $64.77 a barrel. The crude price was also dented by expectations that producer group OPEC and partner Russia will gradually increase output in order to make up for falls in Venezuela and potential shortfalls from Iran, which is facing U.S. sanctions related to its nuclear activity. The United States and China are threatening punitive tariffs on each other’s exports, which could include oil supplies, which sent Chinese stocks to their lowest in almost a year and kept European indices and other industrial commodities such as copper and nickel under pressure. Brent crude futures fell 62 cents to $74.72 a barrel by 1120 GMT. Oil traders are closely watching a threat by China to react to U.S. tariffs by putting a 25 percent duty on U.S. crude oil imports, which have been surging since 2017 to a value of almost $1 billion per month. Global oil demand will be revised downwards and as such oil will not be immune from all of the potential negative impact of international trade wars. Energy consultancy Wood Mackenzie said the United States “would find it hard to find an alternative market that is as big as China”. It said China takes around 20 percent of all U.S. crude exports.

RBOB Slides After Surprise Build, WTI Flat On Crude Draw -  With WTI unable to rally beyond $65 today due to trade war concerns (and with OPEC on its mind), investors' expectations are for further inventory draws this week, which WTI did but an unexpected build in gasoline sent RBOB lower. “The market is in a holding pattern awaiting OPEC decisions and tethered very closely to the stock market, which is crumbling,” said Thomas Finlon, director of Energy Analytics Group LLC in Wellington, Florida. API":

• Crude -3.016mm (-2.475mm exp)
• Cushing -1.594mm (-450k exp)
• Gasoline +2.113mm
• Distillates +750k

Another sizable draw for WTI but Gasoline surprised with a big build (as did Distillates)... WTI was unable to get back above $65 during the day session and the API print sparked a kneejerk lower in WTI/RBOB before WTI recovered...

WTI/RBOB Algos Confused As Production Stalls, Crude Draws, Product Builds -- WTI bounced off $65 this morning but RBOB is lower after API's unexpected build in gasoline as all eyes remain focused on Vienna and any OPEC headlines. However, DOE reported the biggest draw in crude since Jan (but another weekly build in Gasoline and Distillates).“The market is in a holding pattern awaiting OPEC decisions and tethered very closely to the stock market, which is crumbling,” said Thomas Finlon, director of Energy Analytics Group LLC in Wellington, Florida.  DOE:

• Crude -5.914mm (-2.475mm exp) - biggest draw since Jan
• Cushing -1.296mm (-450k exp) - biggest draw since Feb
• Gasoline +3.277mm
• Distillates +2.715mm - biggest build since Feb

Following inventory draws across the board last week, very mixed bag this week with crude seeing the biggest draw since Jan (over double expectations) and products seeing big builds... Gasoline stocks are near 5Y highs for this time of year and bucking the seasonals... The WTI-Brent spread has pushed back down to $10...

WTI vs. WTI vs. WTI - The degree to which the perception of quality of West Texas Intermediate crude oil influences price was on display Wednesday in the form of the following crude value indication given to S&P Global Platts: WTI Midland at Cushing, Oklahoma, is worth 90 cents/b more than WTI at Cushing. If that sounds confusing, it is, and let me explain.West Texas Intermediate is the flagship US grade of oil produced in the Permian Basins of West Texas and transported by pipe, rail and truck to refiners near and far (like India far). The value of WTI at Cushing, Oklahoma, is the most commonly accepted benchmark for crude sales in the Americas for varying types of crude oil produced onshore and offshore in the US. It’s called “Cash WTI.”WTI at Cushing also forms the backbone of the de facto North American crude oil futures contract, CME Group’s NYMEX WTI Light Sweet Crude Oil, which for simplicity’s sake we’ll call NYMEX Crude from now on. Launched in March 1983, historically, it was often colloquially referred to in the market as “NYMEX WTI,” even though WTI was one of many grades that could be delivered at Cushing against the contract, which caused uncertainty.“Confusion over what is sold has led to problems, Merc officials say,” an Associated Press article from August 1990 reads. “Some buyers who thought they were getting WTI have discovered they were getting a different grade.” That led the NYMEX at the time to tell the market it should refer to the contract as light sweet crude instead of WTI, though the three-letter acronym persists to this day.CME says NYMEX Crude represents light sweet crude oil meeting a series of specifications including 37-42 API, less than 0.42% sulfur and other parameters, which includes WTI-type light sweet crude streams as well as other blends referred to as Domestic Sweet, or DSW, that meet those specs. To simplify: NYMEX Crude is WTI that meets NYMEX parameters, as well as other crudes, which may be blends, that meet NYMEX parameters. Blended crudes aren’t bad, but the possibility that a buyer may get one is an uncertainty, and uncertainty leads to lower bids for the unknown and higher bids for the known.

Crude Oil Prices Settle Lower as OPEC Decision Looms - – WTI crude oil prices settled lower Thursday as major oil producers neared a deal to hike oil production by about one million barrels per day to avert a possible supply shortage and stabilise prices. On the New York Mercantile Exchange crude futures for July delivery fell 0.26% to settle at $65.54 a barrel, while on London's Intercontinental Exchange, Brent fell 2.22% to trade at $72.08 a barrel. Saudi Arabian Energy Minister Khalid al-Falih reportedly said OPEC and non-OPEC members were close to hashing out a deal to lift oil production, and suggested an output hike of about 1 million barrels was needed to stabilise prices. The production-cut accord – initially agreed in November 2016 – had achieved its goal of rebalancing the oil market, restoring global inventories to the five-year average, al-Falih said. The oil-cartel's attempts to reach a consensus on an output hike has been plagued by other OPEC members, who have appeared unwilling to compromise. Iran had been one of the most vocal OPEC members against an uptick in production, insisting oil prices still needed to be supported, but has since warmed up to the idea of a modest boost in output. Non-OPEC Russia, meanwhile, has taken a more hawkish stance on output hikes, calling for a 1.5 million barrel a day increase in production amid fears the market could overheat as demand picks up. OPEC is expected to announce its decision on Friday. OPEC has also come under fire – for the sharp rise in oil prices – from U.S. President Donald Trump, claiming the oil-cartel was "artificially" keeping oil prices elevated. Some analysts have suggested OPEC would strive to reach a 'goldilocks' output hike, neither too high – which would irk Iran – nor too low, which would raise the risk of higher oil prices negatively impacting oil demand. "Saudi energy minister Khalid al-Falih hinted that looking at five-year average inventory levels is not a good measure of the health of global markets," a team of analysts at Energy Aspect said in a research note. "If true, then a 1 million barrels a day increase between now and the end of the year is not warranted...half of that figure would be a good compromise."

 Oil price will be driven by consumers rather than OPEC: Kemp (Reuters) - Oil traders' attention is focused this week on Vienna, where ministers from the Organization of the Petroleum Exporting Countries and its allies must decide whether to increase their output in the second half of 2018. But the direction of prices over the next year will be more influenced by less visible developments in the major oil-consuming countries, especially the United States, Europe, China and India. With available production capacity fairly fixed in the short-term, oil market rebalancing will depend on consumer reactions to higher prices (https://tmsnrt.rs/2M6MCGP ). Stocks of crude oil and refined products are now below their five-year averages and expected to continue falling in the second half of 2018 and through 2019. OPEC's spare production capacity has shrunk to less than 2 million barrels per day (bpd) and is expected to fall to less than 1 million bpd by the end of 2019. OPEC and its allies are discussing an output increase of 1 million bpd or more to avert future shortages and stock declines. By adding barrels to the market now, OPEC can stabilise or even increase inventories and ease shortages later in 2018/19. But the cushion of spare capacity is already low and will shrink further as OPEC boosts its output, leaving the market without much capacity to absorb further disruptions. U.S. oil production is expected to rise by 1.4 million bpd in 2018 and another 1.1 million bpd in 2019 but may not be able to rise much faster because of pipeline bottlenecks. From the supply side, therefore, the oil market's production capability now appears fairly fixed for the rest of 2018 and into 2019. Any further rebalancing will have to come from the demand side, where prices will have to rise high enough to moderate consumption growth. 

OPEC Cartel On The Verge Of Collapse -- The last time OPEC splintered, and the Saudi energy minister demonstrated that when it comes to the "cartel", the only opinion that matters was that of, well, Saudi Arabia, was on November 27, 2014, when in the infamous "OPEC Thanksgiving Massacre", OPEC effectively broke up after Saudi Arabia decided it could put shale out of business by sending the price of oil so lower, it would cause mass shale defaults and regain market share.  The result was two-fold: oil prices crashed (both immediately as shown below) and over the longer-term, while the Saudi strategy proved to be an epic disaster as it woefully miscalculated that shale's breakeven price was far lower than the Saudi advisors (Goldman and Citi, as well as a handful of hedge funds) had estimated.  We bring this bit of not so ancient history because tomorrow OPEC may break apart again, for the simple reason that Iran, OPEC's third largest producer, finds itself in a lose-lose situation, in which it either agrees with a production boost, thereby effectively greenlighting US sanctions against itself and allows Saudi Arabia to take over much of its market share, or defies Saudi Arabia, and along with Venezuela, causes OPEC to splinter again.Sure enough, with just hours to go until tomorrow's meeting, Iran has continued to reject any increase in OPEC oil production, potentially dooming any effort by Saudi Arabia and Russia to get a consensus decision tomorrow.According to Bloomberg, during today's Vienna talk, ministers from some of the world’s largest oil producers failed to secure the sought-after compromise that would allow the cartel to ease back on its production cuts. And here is where it gets interesting: while Iran alone can veto any change to the group’s output policy, there is historical precedent for the Saudis to act alone and increase supply when they see an urgent need. And even though Saudi Arabia also finds itself between a rock (the Aramco IPO which desperately needs even higher oil prices) and a hard case (President Trump who demands higher oil prices), Crown Prince MbS will have no choice but to yield to the latter, and overrule the Iran veto, concluding the process in which Trump effectively splinters OPEC.  Sensing what is about to happen, Iran - which again has virtually no upside tomorrow no matter what the OPEC decision is - was not happy:

OPEC agrees modest hike in oil supply after Saudi and Iran compromise (Reuters) - OPEC agreed on Friday on a modest increase in oil production from next month after its leader Saudi Arabia persuaded arch-rival Iran to cooperate, following calls from major consumers to help reduce the price of crude and avoid a supply shortage. However, the decision confused some in the market as OPEC gave opaque targets for the increase, making it difficult to understand how much more it will pump. Oil prices rose as much as 3 percent. “Hope OPEC will increase output substantially. Need to keep prices down!” U.S. President Donald Trump wrote on Twitter less than an hour after OPEC announced its decision. The United States, China and India had urged Vienna-based OPEC to release more supply to prevent an oil deficit that would hurt the global economy. The Organization of the Petroleum Exporting Countries said in a statement that it would go back to 100 percent compliance with previously agreed output cuts but gave no concrete figures. Saudi Arabia said the move would translate into a nominal output rise of around 1 million barrels per day (bpd), or 1 percent of global supply. Iraq said the real increase would be around 770,000 bpd because several countries that had suffered production declines would struggle to reach full quotas. The deal gave a tacit green light to Saudi Arabia to produce more than currently allowed by OPEC as the 14-nation organization avoided setting individual country targets. Iran, OPEC’s third-largest producer, had demanded OPEC reject calls from Trump for an increase in oil supply, arguing that he had contributed to a recent rise in prices by imposing sanctions on Iran and fellow member Venezuela. Trump slapped fresh sanctions on Tehran in May and market watchers expect Iran’s output to drop by a third by the end of 2018. That means the country has little to gain from a deal to raise OPEC output, unlike top oil exporter Saudi Arabia. OPEC and its allies have since last year been participating in a pact to cut output by 1.8 million bpd. The measure had helped rebalance the market in the past 18 months and lifted oil LCOc1 to around $75 per barrel from as low as $27 in 2016. But unexpected outages in Venezuela, Libya and Angola have effectively brought supply cuts to around 2.8 million bpd in recent months. The output boost agreed on Friday had been largely priced into the market and was seen as modest. 

Oil output to rise by 1m barrels a day as Opec reaches compromise - Major oil producers have agreed to pump more crude to help reduce prices and prevent a supply shortage, in a significant reversal of Opec’s strategy of curbing output over the past 18 months. After a fraught meeting in Vienna in which Iran was initially at odds with a Saudi-led drive to boost production, ministers settled on a target they said would increase output by around 1m barrels per day (bpd). Donald Trump, who has blamed the cartel for recent oil price highs, appeared to welcome the deal. “Hope Opec will increase output substantially. Need to keep prices down!” the US president tweeted after the agreement. However, analysts and ministers said the actual amount of extra oil is likely to be around a third lower than the headline 1m figure. Joe McMonigle, an energy analyst at HedgeEye, said: “I suspect we will eventually get some calculations from Opec but [the] lack of details is bullish not bearish for oil prices.” Brent crude, the international benchmark, was up nearly 2% to $74.47 (£56.12) a barrel, shortly after the agreement was announced. It hit $80 a barrel last month before falling back. The oil cartel also failed to spell out how the extra production would be allocated among members, a key question as several have no capacity to pump more crude. 

Oil up over 2 percent as OPEC raises output modestly (Reuters) - Oil prices rose sharply on Friday as OPEC agreed a modest increase in output to compensate for losses in production at a time of rising global demand. Benchmark Brent crude LCOc1 jumped $2.29 a barrel, or 3.1 percent, to a high of $75.34 before slipping to around $74.60 by 1345 GMT. U.S. light crude CLc1 was $1.90 higher at $67.44. The Organization of the Petroleum Exporting Countries, meeting in Vienna, agreed on Friday to boost output from July after its de facto leader Saudi Arabia persuaded arch-rival Iran to cooperate in efforts to reduce the crude price and avoid a supply shortage. The group agreed OPEC and its allies led by Russia should increase production by about 1 million barrels per day (bpd), or 1 percent of global supply, OPEC sources said. The real increase will be smaller because several countries that recently underproduced oil will struggle to return to full quotas, while other producers may not be able to fill the gap. The deal looked to be broadly in line with expectations. Analysts had expected OPEC to announce a real increase in production of 500,000 to 600,000 barrels per day (bpd), which would help ease tightness in the oil market without creating a glut. “The effective increase in output can easily be absorbed by the market,” Harry Tchilinguirian, head of oil strategy at French bank BNP Paribas, told the Reuters Global Oil Forum. 

OPEC ministers agree to raise oil production but don’t say by how much - OPEC ministers announced a deal on Friday that will increase oil supplies from the producer group, which has been capping output in order to balance the market and boost prices for the last 18 months.The agreement came after a week of tense negotiation at OPEC's headquarters in Vienna, Austria. Top OPEC producer Saudi Arabia faced the challenge of convincing a handful of reluctant producers including Iran, Iraq and Venezuela to support an output hike.While OPEC avoided the disastrous outcome of ending the week without a deal, it left the oil market somewhat disappointed by declining to announce a hard figure."With the looming threat of an Iran walkout, the best you could get was deliberate ambiguity," said Helima Croft, global head of commodity strategy at RBC Capital Markets. On Friday, OPEC members agreed to start pumping more oil, though the agreement will not end the group's 18-month-old deal to limit output. Instead the producers are seeking to cut no deeper than 1.2 million bpd, the target they set in November 2016. OPEC's official statement said members agreed to return to 100 percent compliance with the 2016 deal beginning on July 1. The group said compliance reached 152 percent in May 2018, which means OPEC was cutting about 600,000 bpd more than it intended.Ahead of the official decision, sources said the group was aiming to restore about 1 million bpd to the market. However, industry sources familiar with the oil cartel's deliberations said the actual increase is likely to total around two-thirds of Saudi Arabia's target.That's because some OPEC members would be unable to sufficiently ramp up crude production. Analysts say supply increases are more likely to fall in a range between 600,000 to 800,000 bpd.OPEC's agreement with Russia and other producers to limit oil output has helped to clear a global supply overhang that weighed on prices for years. Oil prices shot up on Friday as details of the deal leaked ahead of the statement. John Kilduff, founding partner at energy hedge fund Again Capital, said the lack of clarity in the official statement around a production target was boosting crude futures.

Oil Prices Jump After OPEC Deal to Lift Output – WSJ -- Oil prices rose by the biggest amount in nearly two years Friday after some of the world’s major oil producers agreed to boost crude output less than many investors had feared. Ministers from the Organization of the Petroleum Exporting Countries ended a contentious gathering with a loose promise to boost output by about 600,000 barrels a day. That was far less than the one million barrels many predicted.The result dashed the hopes of some big producing nations like Russia, which wanted to raise production further to sell more crude at these higher prices. The move was cheered by investors, who say they now feel more confident the global glut that dragged U.S. oil prices below $30 a barrel isn’t about to return.  U.S. oil prices surged 4.6% to $68.58 a barrel; the price of Brent, the international benchmark, rose $2.50, or 3.4%, to $75.55.    For U.S. prices, it marked the biggest one-day jump since November 2016 when OPEC agreed to cut oil output for the first time in eight years.  Oil prices have risen briskly this year amid improving global economic growth and unexpected supply outages, drawing complaints from big consuming countries, like the U.S.OPEC said Friday its members had tentatively agreed with their non-OPEC partners to end their overcompliance with production curbs they set in 2016 to add barrels to the market.On paper, such a move would add about one million barrels a day to global markets, officials said. But the boost is to be shared among all members, some of whom can’t raise output at all right now. That translates into about 600,000 barrels of new oil a day, said people familiar with the deal’s technical aspects. The 2016 cuts had helped boost oil prices to a 3½-year high earlier this year, sending U.S. crude prices above $70 a barrel and boosting the earnings of big global producers like Exxon Mobil Corp. and Chevron Corp.

Trump Tweets Hope For "Substantial Increase" After OPEC Agrees To Hike Oil Production By 700kb/d - What was expected to be a drawn-out affair, with Iran potentially resisting and even leading to the collapse of the cartel, moments ago OPEC reached a deal in principle to raise oil production by 1 million b/d on paper, and in reality by 600 kb/d as many of the OPEC nations are already tapped out and unable to produce more."Real" increase of 600,000 b/d: BBG— Vandana Hari (@VandanaHari_SG) June 22, 2018The deal is roughly what the committee had agreed to yesterday and is the plan pushed by Saudi Arabia all week.And while details haven’t yet been formally announced, the deal would mean a return to 100% compliance with output quotas.As Bloomberg notes, this is the deal traders have been waiting for:The fear was that, if the meeting broke up in disarray, Saudi Arabia would simply open the taps and other producers would follow suit, unleashing far more supply than the market needed. What this deal does is to bring some order to the process of easing supply restraint. Indeed, absent some last minute shock, Iran appears to have gone along with the majority and will comply with what is effectively A Saudi-Russian decision, prompted by Trump complaints for the cartel to produce more oil . Update: the deal is done and here are the headlines, which are as mostly reported previously - a 1 million "paper" production increase, which however will not be fully satisfied since many nations are already at their peak output, as OPEC nations comply with output quotas - with the exception of the "real" production increase, which according to the Nigeria energy minister will be 700kb/d while earlier reports had it at 600kb/d:  Here is the final full #OPEC communique | #OOTT pic.twitter.com/f3I5yaKyiC 

Congress Is Considering A Bill Enabling Anti-Trust Litigation Against OPEC - Trump’s open and repeated criticism of OPEC and its influence on oil prices provides credibility to the belief that he would sign into law the NOPEC legislation that is currently making its way through Congress. The bill would allow America to pursue litigation against OPEC on anti trust grounds.NOPEC isn’t a totally new concept, as it has been drafted and voted through Congress some 16 times over the past 18 years, but never made it past the President’s desk, whether it was Bush or Obama. But Trump could give NOPEC a different sort of ending, one which could see it taking up the status of US law.  Anadolu agency reports: A legislation being debated in Congress could put pressure on OPEC if it is signed into law by President Donald Trump who has long been critical of the cartel’s practices. If the No Oil Producing and Exporting Cartels Act, or NOPEC, is signed into law, it would allow the U.S. to sue the cartel for manipulating crude prices and global oil market that caused enormous damage for the American economy and consumers.The NOPEC Act was first introduced in 2000 to allow the cartel to be sued by the U.S. in violation of anti-trust laws. It has been introduced around 16 times since then, but former presidents George W. Bush and Barack Obama were openly against it.“In the energy industry our players get hurt, because some actions by OPEC — flooding the market with oil at a time where normally they wouldn’t have in the past — ended up prices going too low during the production war, knocking out a lot of investment that we probably are going to need in future,” senior market analyst Phil Flynn from Chicago-based futures brokerage firm, Price Futures Group, told Anadolu Agency.“I would argue that OPEC conspired to knock a lot of energy producers out of business so that they could maintain the market share. And I think they succeeded in doing that in a large degree,” he said.

Rig count slides by 7 - Oil and gas companies pulled seven drilling rigs out of operation this week, the Houston energy services company Baker Hughes reported.The number of oil rigs operating in the United States fell by one while those seeking natural gas dropped by six, driving the overall rig count down to 1,052, compared to 941 a year ago.Texas lost one net rig over the week. In the booming Permian Basin, drillers pulled two rigs, bringing the rig count in the West Texas shale play to 474, compared to 369 a year ago. The Permian still accounts for more than half of the 862 oil rigs operating in the United States. The rig count was unchanged in the Eagle Ford shale, the second most active U.S. oil and gas field, with 82 operating rigs.

 Rig Count Falls As US Oil Output Flatlines | OilPrice.com - Baker Hughes reported another dip in the number of active oil and gas rigs in the United States today. Oil and gas rigs decreased by 7 rigs, according to the report, with the number of oil rigs decreasing by 1, and the number of gas rigs decreasing by 6.The oil and gas rig count now stands at 1,052—up 111 from this time last year.Canada, for its part, gained 21 oil rigs for the week—after last week’s gain of 27 oil and gas rigs. Despite weeks of significant gains, Canada’s oil and gas rig count is still down by 10 year over year. Oil benchmarks surged on Friday afternoon as the market processed OPEC’s agreement to stick more closely to the production cuts by holding the feet to the fire of those members who had underproduced its quota under the OPEC deal that went into effect in January 2017. The OPEC meeting on Friday resulted in OPEC agreeing to increase production to get back to agreed upon levels, which is about 1 million bpd more than the cartel produced in May, when compliance to the quota was about 150%. Missing from the events of the day was OPEC’s agreement to undo the production cut deal, or to gradually increase production beyond the contractual amount of 32.4 million bpd. The absence of any real change to the production quota proceeded a significant price spike of 4%, as relief set in that OPEC deal would either fall apart or come to an early end. At 11:44am EDT, the WTI benchmark was trading up 3.83% (+$2.51) to $68.05, with Brent up 2.31% (+$1.68) to $74.48. Both benchmarks are up week over week as well as on the day.US oil production continues putting downward pressure on oil prices, and for the second week in a row, US production reached 10.900 million bpd—close to the 11 million bpd production that many had forecast for the year. This week is the first week in over a quarter that wasn’t an increase. At 6 minutes after the hour, WTI was trading up 4.81% at $68.69, with Brent trading up 2.18% at $74.39.

OPEC/non-OPEC coalition to restore oil cut compliance to 100%: Falih - OPEC and its 10 non-OPEC partners have agreed to restore compliance with their production cuts to 100%, implying a nominal distribution of "just under 1 million b/d" between the 24 countries, Saudi energy minister Khalid al-Falih said Friday. How that output rise would be allocated among the members would be finalized tomorrow, Falih told reporters, emerging after nearly five hours of talks with his OPEC counterparts in Vienna. "We know that certain countries don't have the spare capacity and others do so it will be disproportional in terms of which countries are actually able to pump the additional crude, but it will not be above the 1 million for sure collectively," Falih said. Nigerian oil minister Emmanuel Kachikwu said the deal would result in the addition of 700,000 b/d in actual production among OPEC's 14 members.

Saudi pledges 'measurable' oil supply boost as OPEC, Russia agree deal  (Reuters) - OPEC agreed with Russia and other oil-producing allies on Saturday to raise output from July, with Saudi Arabia pledging a “measurable” supply boost but giving no specific numbers.  The Organization of the Petroleum Exporting Countries had announced an OPEC-only production agreement on Friday, also without clear output targets. Benchmark Brent oil rose by $2.5 or 3.4 percent on the day to $75.55 a barrel. On Saturday, non-OPEC oil producers agreed to participate in the pact but a communique issued after their talks with the Vienna-based group provided no concrete numbers amid deep disagreements between OPEC arch-rivals Saudi Arabia and Iran. U.S. President Donald Trump was among those wondering how much more oil OPEC would deliver. “Hope OPEC will increase output substantially. Need to keep prices down!” Trump wrote on Twitter after OPEC announced its Friday decision. The United States, China and India had urged oil producers to release more supply to prevent an oil deficit that could undermine global economic growth. OPEC and non-OPEC said in their statement that they would raise supply by returning to 100 percent compliance with previously agreed output cuts, after months of underproduction. Saudi Energy Minister Khalid al-Falih said OPEC and non-OPEC combined would pump roughly an extra 1 million barrels per day (bpd) in coming months, equal to 1 percent of global supply. Top global exporter Saudi Arabia will increase output by hundreds of thousands of barrels, he said, with exact figures to be decided later. “We already mobilized the Aramco machinery, before coming to Vienna, pre-empting this meeting,” Falih said, referring to the Saudi state oil company. Russian Energy Minister Alexander Novak said his country would add 200,000 bpd in the second half of this year.

 Saudi Arabia's Economic Revamp Means More Jobs for Saudis—If Only They Wanted Them - Abdulmohsen, an executive at a Saudi logistics company, estimated that half of the Saudis on his payroll are employees in name only. “Our company can’t survive without foreign workers because there are some jobs that Saudis just won’t do, like truck driving,” Abdulmohsen says. “Where are the Saudi drivers?” Successive monarchs saw replacing expat workers with Saudis as desirable but not essential. Targets for the “Saudization” of labor were only loosely enforced. That changed under the current Saudi leadership, which has vowed to transform the sleepy petrostate into a dynamic economy, with plans that include selling a small portion of the state-owned oil giant Saudi Aramco through a public listing. For the transformation to succeed, Saudi Arabia must slash its bloated bureaucracy and find jobs for Saudis in the private sector. About two-thirds of Saudis currently working are employed by the state. Adding to the pressure to replace foreigners with locals is the kingdom’s unemployment rate of 12.8% at the end of 2017. The goal is to cut that to 7% by 2030. .Though the workforce percentage that must be Saudi varies from sector to sector and job type to job type, the quotas generally are rising. Starting this September, all salespeople at bakeries and electronics and furniture shops will have to be Saudi. When jewelry stores were forced to replace their foreign workers entirely with locals last year, the owners of a chain called Osool panicked. They had employed only expats and didn’t know where to begin to recruit Saudis. They laid off almost their entire staff of 100 and closed all but two of their 25 stores. After nearly half a century, the family-owned business was on the brink of collapse. “This is gold, it can’t be handled by just anyone,” said Ali al-Ayed, 24, whose father started the company. “There aren’t enough trained and qualified young Saudis.” The first Saudis they recruited were the founder’s four sons, who quit their other jobs and started working in two of the shops to keep them open. 

Saudi Arabia, UAE conduct air strikes on Yemen’s Hudaida airport - The Saudi and Emirati-led coalition has conducted air strikes on Yemen's Hudaida airport to support forces attempting to seize control from Houthi fighters inside, according to Saudi and Houthi media. The coalition warplanes carried out five strikes on the port city of Hudaida - a lifeline to millions of Yemenis - on Sunday in a continuation of the biggest battle of the war in three years, the Houthis' official SABA news agency said. Saudi-owned broadcaster Al Arabiya also reported strikes on the airport. The coalition launched a major offensive five days ago that could cut off supply lines to the capital Sanaa, which is controlled by the Houthis. Each side holds various parts of the airport. The UN envoy for Yemen arrived in Sanaa on Saturday for crisis talks amid growing fears that fighting between the two sides could exacerbate a humanitarian crisis. Martin Griffiths has not made any statement since his arrival in Yemen. He is expected to propose to rebel leaders that they halt fighting and cede control of Hudaida's vital port to a UN-supervised committee. Griffiths' arrival came as fighting intensified around Hudaida's airport amid conflicting claims over its fate. 

The Saudi-UAE Alliance Is The Most Dangerous Force In The Middle East Today - For three years, Saudi Arabia and the United Arab Emirates have conducted a murderous campaign to reinstall a pliable regime in the desperately poor country of Yemen. This campaign is based on a lie intended to gain American support: that the two authoritarian monarchies are responding to Iranian aggression. Now the UAE is preparing a military offensive that could split Yemen apart and create mass starvation.The Saudi-Emirati alliance is the most dangerous force in the Middle East today. Sometimes acting alone, but usually in tandem, the two dictatorships have promoted intolerant Wahhabism around the world, backed brutal tyranny in Egypt and Bahrain, supported radical jihadists while helping tear apart Libya and Syria, threatened to attack Qatar while attempting to turn it into a puppet state, and kidnapped the Lebanese premier in an effort to unsettle that nation’s fragile political equilibrium. Worst of all, however, is their ongoing invasion of Yemen.To demonstrate support for its royal allies, America joined their war on the Yemeni people, acting as chief armorer for both authoritarian monarchies and enriching U.S. arms makers in the process. America’s military has also provided the belligerents with targeting assistance and refueling services. And our Special Forces are on the ground assisting the Saudis. The result has been both a security and humanitarian crisis. Observed Perry Cammack of the Carnegie Endowment: “By catering to Saudi Arabia in Yemen, the United States has empowered AQAP, strengthened Iranian influence in Yemen, undermined Saudi security, brought Yemen closer to the brink of collapse, and visited more death, destruction, and displacement on the Yemeni population.

 Coalition Ignores Famine Warnings and Continues Assault on Yemen as Critics Question US Complicity --  Ignoring international aid groups’ warnings that an attack on the Yemeni city of Hodeida, which is held by Houthi rebels, could exacerbate hunger in an impoverished and war-torn nation already on the brink of famine, Saudi-led US-backed coalition forces continued a sweeping assault on the Red Sea port city Saturday, reportedly seizing control of an airport.Since the fighting started earlier this week, thousands of Hodeida’s 600,000 civilians have evacuated and hundreds of people have been killed. The port city is the main conduit through which about 70 percent of international aid reaches Yemenis, many of whom are battling starvation and outbreaks of infectious diseases such as cholera.The Norwegian Refugee Council’s office in Yemen told Reuters that “humanitarian agencies cannot currently access areas south of the city where people are most likely to have been injured, affected, and displaced, leaving us without a clear picture of needs.” “The lack of humanitarian assistance, following suspension of aid programs and with limited NGO staff on the ground while a military offensive is ongoing, will have severe consequences on a region already facing restrictions on the import and internal transportation of vital supplies, including medicines, food, and fuel,” Frederic Pelat, head of Médecins Sans Frontières’ mission in Yemen, warned Thursday. “Yemenis living in the northern parts of the country depend on vital supplies that pass through Hodeida’s port.” The port of #Hodeida is an essential lifeline for the country: more than 70% of all food, essential medicines and healthcare supplies are brought in through this port.

UAE Officers Film Themselves Raping, Torturing Men In Yemen "Hidden Prisons" - Hundreds of prisoners in southern Yemen swept up on suspicion of belonging to al-Qaida or ISIS are being systematically raped, tortured and humiliated in at least five out of 18 UAE-controlled "hidden prisons," according to seven witnesses who spoke to AP, which also obtained letters and drawings smuggled out of one prison in Aden.Emiratis have swept up hundreds of Yemeni men into a network of at least 18 hidden prisons on suspicion of being al-Qaida or Islamic State militants. The prisoners are held without charges or trials....Witnesses said Yemeni guards working under the direction of Emirati officers have used various methods of sexual torture and humiliation. They raped detainees while other guards filmed the assaults. They electrocuted prisoners’ genitals or hung rocks from their testicles. They sexually violated others with wooden and steel poles. ...“In some cases, they rape the detainee, film him while raping, use it as a way to force him to work for them,” he said. He spoke on condition of anonymity, because of security concerns. –AP “They strip you naked, then tie your hands to a steel pole from the right and the left so you are spread open in front of them. Then the sodomizing starts,” said one father of four.  “They tortured me without even accusing me of anything. Sometimes I wish they would give me a charge so I can confess and end this pain,” he said. “The worst thing about it is that I wish for death every day and I can’t find it.”  The father of four said that sometimes the screaming from the beatings is so intense that he can feel his cell shake. “It’s beyond imagination,” he said. –AP The photos reportedly smuggled out of Aden depict a man hanging from chains while being electrocuted. In another, an inmate cowers on the floor surrounded by snarling dogs as people kick and beat him. There are also graphic depictions of anal rape. “Naked after beating,” one Arabic caption says. Another drawing shows a man’s rectum being forced open.

"Qatar Island": Saudis Launch Massive Canal Project To Cut Off Neighbor -It almost sounds too insane to be believed, but Saudi Arabia's move to further isolate neighboring Arab rival Qatar by literally turning it into an island is but the latest in an intense year long feud between the two countries that has already produced its fair share of bizarre headlines.  Tiny but ultra-wealthy Qatar is a peninsula which shares a 37.5 mile border (60km) with Saudi Arabia on the kingdom's northeast side and juts out from the Arabian peninsula about 100 miles into the Persian Gulf.  Saudi media revealed this week the kingdom is quickly moving forward with ambitious plans to dig a 200 meter wide and 15-10 meter deep canal the entire length of the land border, effectively creating 'Qatar island' — as some Mideast news sources are already calling it. Of course, the Qataris don't appear to have a say in their own country's geographic fate, and the Saudis and Emirates further plan to locate nuclear waste sites and a military base along the proposed canal to boot.  The so-called “Salwa Marine Canal Project” has reportedly opened up to bidding among five international companies that specialize in digging canals, with bids closing next Monday and the project to be awarded in 90 days, according to regional sources. The canal project is estimated to cost up to 2.8 billion riyals ($750 million) according to Saudi-based Sabq newspaper. Saudi and UAE officials have long accused Qatar of supporting terrorism, aligning with Iran, and meddling in the affairs of its gulf neighbors in a crisis that has resulted in the near complete unraveling of the GCC.  The Salwa canal was first announced in April but many observers dismissed it as but the latest in outrageous Saudi claims and punitive measures aimed at Qatar.  But it now appears to be concretely advancing and not a bluff.

Syria Sends More Troops To South Despite New US Warnings-  The United States once again warned this week it would "take firm and appropriate measures" against the Syrian government forces should they continue pushing into the southwest of the country, which has long been held by Al-Qaeda, ISIS, and other groups fighting the Assad government. The state department issued a statement Thursday saying that any Syrian government action risks igniting a broader conflict, but didn't specify what actions the US or its allies might take.  “We affirm again that the United States will take firm and appropriate measures in response to Syrian government violations in this area,” the statement said in an almost word for word repeat of a prior warning issued at the end of May. It said further that “the ceasefire must continue to be enforced and respected."As Reuters reports, the Syrian Army has continued bombarding rebel positions in the southwestern Deraa region, including the towns of Kafr Shams and al-Harah, near the border with the Israeli-occupied Golan Heights.The "ceasefire" is a reference to a tenuously-holding deal between the US, Russia, and Jordan struck last November which among other stipulations proposed efforts for "the reduction, and ultimate elimination of foreign forces and foreign fighters from the area to ensure a more sustainable peace." This was widely interpreted at the time as calling for an "Iran-free" zone in southern Syria, as Israel has long threatened to go to war should Iranian troops be present near its border.A week prior to the latest the state department warning The Wall Street Journal reported in a dubiously sourced story that Hezbollah and other Iran-linked fighters are disguising themselves as Syrian government troops to avoid being targeted by Israeli airstrikes. “It’s a camouflage,” the leader of a group called the Salvation Army told the WSJ. “They are leaving in their Hezbollah uniform and they are returning in regime vehicles and dressed in regular [Syrian] army uniforms,” the commander said, claiming further that many of the Iran-backed fighters in Syria had obtained ID cards of dead Syrian fighters. However, a report in Sputnik cites a local Israeli radio interview with Defense Minister Avigdor Lieberman as saying the Wall Street Journal story of disguised Iranian troops operating in southern Syria is false:  Israel's Defense Minister Avigdor Lieberman said that although there are several dozen Iranian "so-called advisors" in southern Syria, there are no forces there disguised as Syrian army forces or operating within its ranks.

Turkish forces begin patrolling Syria's Manbij The Turkish army has said its forces have begun patrols along the outskirts of the northern Syrian city of Manbij, in cooperation with US soldiers in the area.The announcement on Monday came after Turkish and US military officials agreed earlier this month to a plan for the withdrawal of Kurdish fighters considered "terrorists" by Ankara from the city.The Turkish army announced on Monday the launch of the operation between Manbij and an area it controls after one of its two cross-border military campaigns along with Syrian rebels in the past two years. "As per the Manbij Roadmap and Safety Principles previously agreed upon, independent patrol activities by soldiers of Turkish Armed Forces and US Armed Forces have begun on the line between (the Turkish-controlled) area and Manbij," Turkey's armed forces said on Twitter.

No breakthrough in Turkey-Iran-Russia talks on Syria constitution - A tripartite meeting between Russia, Turkey and Iran to discuss the formation of an all-inclusive committee tasked with drafting a new Syrian constitution had ended without a major breakthrough, and a plan to reconvene in a few weeks time.The officials of the three nations acting as guarantors of a ceasefire in the war-torn country met on Tuesday in the Swiss city of Geneva under the auspices of the United Nations.In a brief statement issued after the meeting, UN Syria envoy Staffan de Mistura said "some common ground was beginning to emerge" around the formation of the committee. "Constructive exchanges and substantive discussions took place on issues relevant to the establishment and functioning of a constitutional committee."For its part, the Syrian opposition said it needs to receive guarantees about the scope and form of the constitutional body before endorsing its mandate."There are many aspects that are not yet clear about the prospected constitutional committee," Yahya al-Aridi, spokesperson for the Syrian Negotiation Commission (SNC) told Al Jazeera from the Turkish city of Istanbul. "We are asking many questions about the formation, functions, terms of reference of this committee. Who will be accredited to participate? Is it going to be part of the transitional process? That is why there is a delay in the presentation of the list of names that should be part of it on behalf of the opposition."

Syria – Ready To Start The Daraa Campaign - There are signs that the long expected liberation of the Daraa region in southwest Syria is about to begin. After a month of negotiations between Russia, Israel, Jordan and the U.S. no peaceful solution has been found. The various terrorist forces in the (green) area, including al-Qaeda aligned HTS and groups loyal to the Islamic State, have rejected all negotiations. For over a month Russian negotiators tried to convince locals to give up and to reconcile with the government. But the hardliners under the rebels have killed anyone who talked with the Russians. The U.S. government has warned against a Daraa operation and threatened to intervene. First airstrikes were launched by the Syrian government today against villages in the eastern part of the Deraa area. Some local fighting is ongoing. This is not yet the expected all out attack on the 'rebel' held areas but the testing of enemy forces. The Syrian army has assembled a large force to liberate the southwest. It includes ten thousands of soldiers, more than 100 tanks and lots of artillery. Short range air defenses have been moved into the area to protect the Syrian troops. A well coordinated attack on several front and multiple axes should allow for a quick victory. Israel, with U.S. backing, might intervene in such an operation even if it makes little sense to do so. The current state can not continue indefinitely. Any intervention might well lead to a war for which Israel is unprepared. The Syrian army is willing and able to hit back into Israel. After seven years of war it is not afraid of a fight. The Russian military is warning of a false-flag "chemical incident" in Deir Ezzor governorate. The Syrian Observatory reports that Islamic State remnants in the southeastern desert and in the Rukban camp, both under cover of the U.S. occupied zone around al-Tanf, prepare for a large attack on Syrian government forces. It claims that such an attack is an attempt to occupy the zone between al-Tanf and Albu Kamal at the Euphrates. Both operation would be planned diversions intended to draw Syrian forces away from Deraa and could provide excuses for U.S. intervention on the opposition side.

Unprecedented Israeli Strikes Target Iraqi Shia Militias In Syria -  A day after a mysterious airstrike close to the Iraq-Syria border reportedly killed over 30 Syrian government soldiers and Iraqi paramilitary forces backed by Iran, a US official has told CNN the attack was carried out by Israel and not by the US coalition. Syrian state media blamed the strike on the US-led coalition — though in the immediate aftermath any level of confirmation or evidence was hard to come by. The claims prompted the US coalition spokesman to issue a formal denial, calling Syria's accusation "misinformation" as US-backed SDF forces are only operating east of the Euphrates, and not near Abu Kamal, which lies west, according to the statement.  If confirmed it would mark the first time in the war that Iraq's paramilitary forces have been targeted by Israel. The Iran-backed Popular Mobilization Units (PMU, or PMF) have increasingly coordinated with the Syrian Army as well as pro-Syrian irregular Shia fighters during anti-ISIS operations along Syria's eastern border of late.  The incident marks the second time in three weeks that the Syrian Army has accused the US Coalition of bombing their troops in southeast Syria; however it is uncertain as yet how Damascus will respond to this new claim of Israeli responsibility. The CNN source is an unnamed US official, who gave no other details on the strike, including how many jets conducted the mission or the flight path into the Iraq-Syria border area, though CNN notes, "The area is some distance from Israel and Israeli jets would have had to overcome significant logistical hurdles to strike that area."

Israel moves to ban filming soldiers after controversial videos --The Israeli government has endorsed a bill that seeks to outlaw the filming of Israeli soldiers "for the sake of shaming them".It follows the release of a number of videos which the government has deemed harmful to the army's image, including ones showing deadly shootings of Palestinians.The bill refers to the "intent" of the person recording a soldier's actions being to injure their spirit or harm national security. Rights groups say the bill is a stain on democracy and an attempt to conceal the reality of Israel's occupation.

Jewish extremists taunt ‘Ali’s on the grill’ at slain toddler’s relatives -- Far-right activists chanted slogans cheering for the death of an 18-month old Palestinian outside a courthouse in central Israel as the late toddler’s family walked near them following a hearing Tuesday.Referencing toddler Ali Saad Dawabshe, killed in a 2015 arson attack carried out by Jewish terrorists, right-wing extremists chanted “Where is Ali? Ali’s dead,” “Ali’s on the grill” and other hate slogans.Roughly two dozen youth had gathered outside the Central District Court in the city of Lod for a ruling regarding the admissibility of the confessions given by the two suspects in the firebombing of the Dawabsha home, which killed toddler Ali Saad Dawabsha and parents Riham and Saad Dawabsha. Another son, Ahmed Dawabsha, who was 5 at the time, underwent months of treatment for severe burns sustained in the attack.The chanting took place as uncle and grandfather Nasr and Hussein Dawabsha, who have served as guardians for Ahmed Dawabsha since the attack, walked out of the courtroom accompanied by Joint (Arab) List MKs Ahmad Tibi and Ayman Odeh.A spokesman for Tibi managed to capture most of the chants on video, including those of one young religious activist who approached the crowd of Dawabsha supporters and shouted, “Where is Ali? He’s burned!” as he laughed. Roughly 20 police officers were at the scene, but did not appear to react as the chants persisted.

EU Backs Effort To Prosecute Israeli Military Officials For Human Rights Violations - The European Union is funding a project to prosecute Israel Defence Forces (IDF) officers for committing violations against Palestinian civilians, according to Israel Hayom, which quotes a local human rights organisation. The pro-Israel group NGO Monitor analyses the funding and performance of non-governmental organisations which keep an eye on violations committed by the IDF. “Following the request of Israeli human rights organisations,” it reported, “the European Union has begun funding a project for the prosecution of Israeli military staff involved in the violation of human rights in the occupied Palestinian territories.” Human rights groups have confirmed their belief that Israel “does not conduct serious investigations into the violations its soldiers are committing against the Palestinians.” What’s more, they added, the military judiciary “almost always” acquits IDF personnel suspected of violations, especially those committed during raids on Palestinian homes. According to Israel Hayom, the EU allocated a budget of €250,000 until November 2019 for the project – “The Culture of Impunity among the Members of the Israeli Security Forces” – and the budget is open for the coming years. The project is expected to last until 2021. Israeli rights group Yesh Din (“There is Law”) is behind the EU project, in partnership with other organisations, including Doctors for Human Rights and the Breaking the Silence movement. The project aims to establish an “evidence bank” by collecting testimonies on IDF activities and attacks through providing Palestinian women with video cameras to record violations during house raids. Israeli human rights organisations say that they are seeking to put political pressure on the government by putting the IDF’s apparent impunity at the top of the international agenda so that it is one of the issues discussed by foreign governments and their Israeli counterpart. 

US says Israel responsible for Syria air strike that killed dozens of pro-Assad fighters - Israel has not responded to reports in US media that it was behind an airstrike in Syria which killed more than 50 regime-allied troops in the east of the country.Sunday night's attack on the town of al Hari in Deir Ezzor, near the border with Iraq, killed 52 fighters, including 22 members of an Iraqi Shia militia, the Syrian Observatory for Human Rights monitoring group said.  Syrian state news blamed the US-led coalition fighting Isis for the casualties and Damascus has demanded an explanation for the targeting from Washington. Baghdad, too, condemned the attack on Iraqi paramilitary forces, calling it “support for Isis”. US Central Command denied responsibility, however, saying in a statement there were “no strikes by US or Coalition forces in that area during the time in question”. Instead, unnamed US officials told AFP and CNN that the strike was carried out by the Israeli air force – a move that would represent several new developments for Israeli involvement in neighbouring Syria’s civil war.The Israel Defence Forces (IDF) did not comment on the strike, as per its usual policy.  If the IDF was indeed behind the attack, it is the first time Israel has targeted Iraqi Shia forces in the country, and hundreds of miles away from the area it normally operates in, which already has a heavy US, Russian and Syrian air force presence.

It’s Time To Start Getting Enraged At What Western Imperialists Have Done To Syria -  Rumors are again swirling of an impending false flag chemical weapons attack in Syria, just as they did shortly before the highly suspicious Douma case in April. Warnings from Syrian and Russian intelligence, as well as US war ship movements and an uptick in US funding for the Al Qaeda propaganda firm known as the White Helmets, give these warnings a fair bit of weight. Since the US war machine has both a known regime change agenda in Syria and an extensive history of using lies, propaganda and false flags to justify military interventionism, there’s no legitimate reason to give it the benefit of the doubt on this one. These warnings are worth taking seriously. So some people are understandably nervous. The way things are set up now, it is technically possible for the jihadist factions inside Syria and their allied imperialist intelligence and defense agencies to keep targeting civilians with chemical weapons and blaming the Assad government for them until they pull one off that is so outrageous that it enables the mass media to manufacture public support for a full-scale assault on Damascus. This would benefit both the US-centralized empire which has been plotting regime change in Syria for decades and the violent Islamist extremists who seek control of the region. It also creates the very real probability of a direct military confrontation with Syria’s allies, including Russia. But the appropriate response to the threat of a world war erupting in Syria is not really fear, if you think about it. The most appropriate response to this would be unmitigated, howling rage at the western sociopaths who created this situation in the first place. The United States and its allies started the war in Syria. The narrative that it was an organic uprising brutally attacked by the Assad government is a lie. There is no reasonable doubt about this. The former Prime Minister of Qatar said on television that the US and its allies were involved in the Syrian conflict from the very beginning. A WikiLeaks cable and a declassified CIA memo both show the US government plotting to provoke an uprising in Syria exactly as it occurred, years before it happened. Former Foreign Minister of France Roland Dumas stated that he was informed that the UK was engineering an uprising in Syria two years before the violence erupted in 2011, and General Wesley Clark stated that there were Pentagon plans to take out the Syrian government in 2001. Shortly after the violence started President Obama secretly authorized the arming and training of violent extremist factions for the overthrow of Assad in a CIA program code named Timber Sycamore, which along with Saudi finances has wound up aiding some of the most evil terror groups ever to exist.

China Responds To US Sabre-Rattling With Anti-Aircraft "Drill" Over South China Sea - The People’s Liberation Army Navy (PLAN) has carried out an alarming anti-aircraft drill with missiles fired at dummy drones over the South China Sea to simulate an aerial attack, after Washington challenged Beijing by flying Boeing B-52 Stratofortress bombers near its highly disputed militarized islands, said the South China Morning Post.  The military exercise, which involved “three target drones making flyovers of a ship formation at varying heights and directions,” is part of a much larger effort by Beijing to increase its military readiness for future combat with the U.S.The report said the drones served to “precisely verify the feasibility and effectiveness to ensure a close stimulation of an aerial attack target,” according to the report. In other words, Beijing is preparing for an attack on its islands — most likely led by the U.S. and backed by its regional allies. The report came out shortly after U.S. Secretary of State Mike Pompeo expressed great concern over China’s rapid militarization of the South China Sea during a briefing in Beijing with Chinese leadership on last week’s summit between President Trump and North Korean leader Kim Jong-un.Pompeo’s remarks came after the recent U.S. Navy warships and U.S. Air Force Boeing B-52 Stratofortress bombers traveled dangerously close (separate but related incidents) to the militarized islands, which drew sharp criticism from Beijing.

American Military Aircraft Targeted By Lasers in Pacific Ocean, U.S. Officials Say —Lasers have targeted pilots of American military aircraft operating over the western Pacific Ocean more than 20 times in recent months, U.S. officials say, following a series of similar incidents in which Pentagon officials said Chinese personnel used lasers against U.S. pilots in East Africa. Officials said all of the incidents occurred in and around the East China Sea, typically where the Chinese military or other Chinese civilians operate. The laser signals directed at American aircraft appeared to be coming from fishing boats operating in the area and from shore, multiple officials said. Almost two-dozen such incidents have occurred in that region since September, an official said, while other officials said other incidents could have occurred but not been reported by American pilots. Some of the fishing boats were Chinese-flagged craft, but U.S. officials wouldn’t definitively confirm that Chinese personnel were behind all of the incidents, the most recent of which occurred within the past few weeks, officials said. Unlike in Djibouti in East Africa, where military-grade lasers were used against American pilots in some cases earlier this year, all of the incidents that have occurred in the East China Sea involved smaller, commercial-grade lasers—along the lines of the widely popular “cat grade” lasers that pet owners might use to play with their pets. Beams from such devices can temporarily blind pilots and in some cases cause eye damage. The incidents likely will come up as part of a broader discussion of issues when Defense Secretary Jim Mattis visits Beijing next week and meets Chinese President Xi Jinping. 

Trump’s trade war escalation has sent Chinese stocks tumbling to multi-year lows - A short time ago, the benchmark Shanghai Composite index had slumped by more than 2% which saw it fall below the 3,000 mark - the lowest level for China's benchmark index since August 2016.Asian markets more broadly have tumbled, after US President Donald Trump said he authorized the Trade Department to identify another $200 billion worth of Chinese goods that will become eligible for a 10% tariff, unless China relaxes its current stance.At around midday Australian time, Chinese authorities responded to the Trump administration's latest announcement.Reuters reported that China's Commerce Industry said if the US published a list of additional tariffs, "China will have to adopt comprehensive measures to fight back firmly".The Ministry also said that the latest threats by the US "disobeys negotiation and consensus reached previously between the two parties", and the China will continue to protect its interests.US stock futures have also fallen, with Nasdaq futures down 1% and the Dow and S&P500 futures markets each down around 0.8%.Bond yields are also falling, with benchmark US 10-year bond yields edging lower to 2.88%.Evan Lucas, chief market strategist at Investsmart Group, pointed back to last Friday's tariff announcement by the US as the catalyst for renewed tensions."What happened on Friday was the game-changer. That event basically reversed previous efforts by US Trade Representatives to smooth out the negotiation process," Lucas told Business Insider. Lucas said China's hand had now been forced and "it's not only tit-for-tat announcements, it's beginning to impact both markets."

Kim Jong Un visiting Beijing again - Chinese state media say North Korean leader Kim Jong Un will make a two-day visit to Beijing starting today following his groundbreaking summit with President Donald Trump in Singapore last week. Security was tight Tuesday morning at the Beijing airport where paramilitary police prevented journalists from shooting photos. A motorcade including sedans, minibuses, motorcycles and a stretch limo with a golden emblem was seen leaving the airport in vehicles that were not apparently carrying flags. The state media reports did not say if Kim had already arrived in Beijing.   A ring of police vehicles and unmarked cars surrounded the perimeter of the guesthouse where Kim stayed on his first visit earlier this year. Kim has made two recent visits to China, North Korea’s main ally and key source of trade and economic assistance. Following his summit with Trump, Kim was expected to meet with Chinese leaders to discuss progress in halting his country’s missile and nuclear weapons programs in exchange for economic incentives.China did not announce past visits by North Korea’s leader until Kim returned home. The Singapore meeting resulted in a surprise announcement of a U.S. suspension of military drills with its South Korean ally, a goal long pursued by Beijing and Pyongyang. That move is seen as potentially weakening defenses and diplomatic ties among U.S. allies in Asia, while bolstering rivals such as China and Russia. The U.S. has stationed combat troops in South Korea since the Korean War, in which China fought on North Korea’s side, ended in 1953 with an armistice and no peace treaty. The more than 28,000 U.S. forces serve as a military tripwire against North Korean aggression. The next major exercise with South Korea is known as Ulchi Freedom Guardian; last year’s version was held for 11 days in August and involved about 17,500 U.S. troops.

Xi Jinping, Kim Jong Un hold talks in Beijing - (Xinhua) -- Xi Jinping, general secretary of the Central Committee of the Communist Party of China (CPC) and Chinese president, held talks with Kim Jong Un, chairman of the Workers' Party of Korea (WPK) and chairman of the State Affairs Commission of the Democratic People's Republic of Korea (DPRK), in Beijing on Tuesday.The two leaders had a candid and in-depth exchange of views on the current development of China-DPRK relations and the situation on the Korean Peninsula.They agreed to safeguard, consolidate and develop China-DPRK relations, and jointly push forward the sound momentum of peace and stability of the Korean Peninsula to make a positive contribution to safeguarding world and regional peace, stability, prosperity and development.Xi said that China was pleased to see the important summit between Comrade Chairman and U.S. President Donald Trump in Singapore achieve principled consensus and positive results in realizing the denuclearization of the Korean Peninsula and establishing a lasting peace mechanism on the Peninsula."China speaks highly of the summit," Xi said.Comrade Chairman's visit to China showed the great importance he attaches to the strategic communication between the two parties and two countries, Xi said, expressing his appreciation to Kim.Xi stressed that he and Kim had met three times in less than three months, which pointed out the direction for the development of the relations between the two parties and the two countries, and opened a new chapter in the development of China-DPRK relations.

China's Xi praises North Korea's Kim for Trump summit, promises support (Reuters) - Chinese President Xi Jinping offered high praise to visiting North Korean leader Kim Jong Un on Tuesday, lauding the “positive” outcome of his historic summit with U.S. President Donald Trump and promising unwavering friendship. Meeting Kim on his third trip to China this year, and just a week after Kim met Trump in Singapore, Xi said China was willing to keep playing a positive role to promote the peace process on the Korean peninsula. Kim’s visit was the latest in a flurry of diplomatic contacts, and unlike during his previous two visits to China, the government announced his presence while he was in the country rather than waiting for him to leave. Xi told Kim that he was very happy to see the “positive” outcome of his meeting with Trump, and the important consensus reached on denuclearization and setting up a lasting peace mechanism, according to Chinese state television. “No matter the changes in the international and regional situation, China’s party and government’s resolute position on being dedicated to consolidating and developing Sino-North Korea relations will not change,” the report cited Xi as saying. “The Chinese people’s friendship for the North Korean people will not change, and China’s support for socialist North Korea will not change,” Xi added. Kim told Xi he hoped to work with China and other parties to push the peace process, Chinese state television said. While not formally billed as a state visit, China gave Kim most of the trappings of one, including a welcome ceremony with honor guard in Beijing’s Great Hall of the People. Xi greeted Kim warmly, in images carried on state television. The two men were accompanied by their wives. Xi said he was pleased to see North Korea’s decision to promote economic reforms, adding that China’s own reform and opening up process had meant the Chinese people’s eyes had been open to the world. 

 South Korea, U.S. to announce suspension of major military drills this week: Yonhap  - South Korea and the United States are expected to announce the suspension of “large-scale” military drills this week, with the provision that they would restart if North Korea failed to keep its promise to denuclearize, news agency Yonhap said on Sunday. Citing an unnamed government source, the South Korean news agency said the suspension was likely to affect only major joint exercises, not more routine military training. U.S. President Donald Trump surprised officials in Seoul and Washington when he pledged to end “war games” after his summit with North Korean leader Kim Jong Un in Singapore last week. Immediately after the announcement, U.S. forces in Korea said they had received no guidance on stopping any drills, and South Korean officials said they were trying to figure out which exercises Trump was referring to. However, in a sign Seoul may be open to suspending drills, South Korean President Moon Jae-in said on Thursday his government would need to be flexible when it came to applying military pressure on North Korea if it was sincere about denuclearization. Moon said South Korea would carefully consider joint military drills with the United States and he asked his officials to cooperate with the United States on the issue, his office said in a statement at the time. Yonhap also reported on Sunday that during military talks between the two Koreas on Thursday, South Korean officials asked their northern counterparts to relocate artillery 30 to 40 kilometers away from the heavily fortified military demarcation line that divides the two countries. The South’s defense ministry denied it made such a request, Yonhap said. The talks, the first in more than a decade, held in the border village of Panmunjom in the demilitarized zone (DMZ), followed an inter-Korean summit in April at which leaders of the two Koreas agreed to defuse tensions and cease “all hostile acts”. North and South Korea failed to reach any concrete agreement during those talks, officials said. 

Japan confronts risks of U.S. alliance based on dollars and deals, not values (Reuters) - Eighteen months after Donald Trump became U.S. president and started shaking up global diplomacy, Japan is waking up to the risks of an alliance based on dollars and deals rather than shared values and security interests. For decades, U.S. and Japanese leaders have stressed that the two countries’ alliance was based on values such as democracy, freedom and the rule of law. One of Asia’s oldest security relationships, it placed Japan under a U.S. defense umbrella. Trump’s summit last week with North Korean leader Kim Jung Un failed to address Japanese security concerns such as a missile program that Tokyo sees as a direct threat. Japan’s defense establishment was also taken aback by the U.S. president saying he would halt “expensive” military exercises with South Korea that have long been seen in Tokyo as a deterrent to North Korea’s threats. “The alliance has changed from one based on shared values to a transactional alliance,” Katsuyuki Kawai, a ruling Liberal Democratic Party (LDP) lawmaker who advises Prime Minister Shinzo Abe on foreign affairs, told Reuters. “That is the reality now,” he said, stressing that this was his personal view, not that of the government. Kawai said he was most surprised by the fact Trump cited cost as the reason for halting the joint exercises, long considered by Washington as vital to deter Pyongyang’s threats. “I think this summit will serve as a trigger for the Japanese people to begin to realize that it is risky to leave Japan’s destiny to another country,” he added. Abe, who has spoken with Trump face-to-face or by telephone dozens of times including days before the U.S.-North Korea summit, has put a brave face on the president’s meeting with Kim, characterizing it as a first step toward denuclearization.

Nothing to fear from China, says Malaysia’s Mahathir Mohamad, but lopsided deals must end - Malaysian Prime Minister ­Mahathir Mohamad wants to strengthen “good relations” with Beijing, but is urging Chinese ­investors to refrain from relying only on material, capital and ­labour from back home and ­denying his country any real benefits.The 92-year-old leader’s ­setting out of the terms for better relations in an exclusive interview with the South China Morning Post came in the wake of widespread unease that his defeated predecessor, Najib Razak, had been too lax in approving ­Chinese-backed projects that ­offered little value to local players.Mahathir’s comments were the most extensive yet on Asia’s biggest economy after his Pakatan Harapan coalition staged a stunning victory in a general election in May, dislodging the long-ruling Barisan Nasional bloc.Pundits have been parsing Mahathir’s public comments for a clearer view of his China policy after a heated election campaign in which he assailed Najib for “selling off” the country to China in exchange for help in settling debts linked to the multibillion-dollar 1MDB ­scandal.Najib has strenuously fought off that insinuation and denies links to the scandal – for which he is currently being investigated and is likely to be arraigned.Najib is widely viewed by foreign policy observers as having brought his country closer to China during the last few years of his nine-year premiership. Under his leadership, ­Malaysia became one of the ­largest beneficiaries of investments linked to Beijing’s “Belt and Road Initiative”, securing some US$34.2 billion worth of deals as China seeks to open up international trade along a New Silk Road.

Laos stirs controversy with plan for fourth dam on Mekong | Asia Times: The government of Laos has proposed that yet another dam should be built on the Mekong River’s midstream. Vientiane submitted an official notice to the Mekong River Commission with a detailed description of a hydropower project at Pak Lay in the country’s western Xayaburi province. The new dam will be the fourth on the Mekong in Laos after another dam, also in Xayaburi, plus others at Pak Beng and Don Sahong. The budget for the project is estimated at US$1.8 billion and reports indicate that the Lao government has granted a 30-year concession to develop it to two Chinese companies: the China National Electronics Import and Export Corporation and the Sinohydro Corporation. Exports of electricity could become a major source of income for Laos, but the project has caused concern among environmental activists in Thailand. The Nation quoted Channarong Wongla of the Rak Chiang Khan (“Love Chiang Khan”) Conservation Group as saying that the project would have a negative impact on the Mekong’s ecology.The dam would be built over the mainstream Mekong River around 11 kilometers upstream from the Thai border at Chiang Khan. Channarong also mentioned dams on the Mekong further upstream in China, arguing that, “we are affected every year by fluctuating water flows” from those dams, and “if the Pak Lay dam is built it will create huge impacts on the livelihood of local people living along the Mekong River in northeastern Thailand.” According to the Mekong River Commission Secretariat, the dam would generate 770 megawatts of electricity once it is built. But construction is not expected to start till 2022 and finish in 2029. 

India resumes military operations in Kashmir -- The Indian government is resuming military operations against rebels in Indian-administered Kashmir after the end of a 30-day unilateral ceasefire announced at the beginning of the Muslim holy month of Ramadan.Separatist leaders who support the merger of Himalayan region with Pakistan and rebel groups fighting Indian rule had rejected the temporary measure as "cosmetic". "Operations against terrorists to resume," Indian Home Minister Rajnath Singh wrote on Twitter on Sunday, a month after directing security forces to halt anti-rebel operations during Ramadan."While the security forces displayed exemplary restraint, the terrorists have continued with their attacks on civilians and security forces, resulting in deaths and injuries."   According to police records, dozens of people were killed during the past 30 days, including six civilians, nine security personnel and more than 20 fighters - most of whom died near the Line of Control, a demarcation line that divides the Indian- and Pakistan-administered parts of the disputed territory.

Russia And India Ditch Dollar In Military Deals - With the US increasingly willing to use the dollar, and SWIFT, as a strategic weapon against the country's sovereign enemies (as Iran learned every 5 or so years), Russia and India are preparing to bypass US sanctions on Moscow by using the rupee and the ruble in bilateral trade involving military deals, the Economic Times reported.  Some $2 billion in weapons deals between India and Russia have been hit as a result of the recent US sanctions, as payments get stuck. The countries are seeking to bypass such monetary bottlenecks this by switching to settlements in domestic currencies and ditching the greenback.Senior officials told ET that after several rounds of consultations, it has become clear that a rupee-rouble transfer, pegged to the exchange rate of an international currency, is the solution. A top official said that a foreign currency, such as the Singapore dollar, could be used as the benchmark and cont .Until now, India signed defense contracts with Russia for which payments are made in US dollars. However, as US sanctions making this virtually impossible, contractual payments have been frozen since April.The involuntary loss of India as a Russian customer has had significant effects on the Russian economy: the Asian country is one of the largest buyers of military equipment from Russia, having signed military contracts worth $65BN since the 1960s. With current trade deals between the two countries estimated at around $12 billion, it is imperative for Russia to way to find a loophole to US sanctions. Furthermore, just like Turkey, India is ready to purchase Russia's state of the art S400 air-defense system in a $5-billion deal. And just like in the case of Turkey - which overnight saw the US Senate block the sale of over over 100 F-35 juts to Erdogan precisely because of Ankara's overtures to Moscow - the sale is being heavily opposed by the United States. The two nations have been struggling to find banks that would risk US sanctions for transferring the money between the two nations. Sources said that on the Indian side, the banks being talked to include Vijaya Bank and Indian Bank, while on the Russian side, its largest banking entity in India, Sberbank, has been involved in discussions.

Mass Deportations of Afghans From Turkey: Thousands of Migrants Sent Back in a Deportation Drive - In a recent television appearance, the Turkish Interior Minister, Suleyman Soylu, said that 15,000 Afghans have been sent back home from Turkey. While it is likely that this number has been exaggerated, there is no doubt that in April and May of 2018, thousands of Afghan migrants were sent back on charter flights from Turkey to Kabul. This is the Turkish government’s response after a 400 per cent increase in arrivals of Afghan migrants to Turkey during the first quarter of 2018. In early April of this year, the first charter flight carrying Afghans back to Kabul flew out of Erzurum, a city in eastern Anatolia that has become the centre of these returns. AAN’s guest author Amy Pitonak visited Erzurum to find out first-hand about the situation for Afghans there. Afghans make up the second largest group of protection seekers in Turkey, totalling around 157,010 people. The largest displaced group remains Syrians who number approximately 3.5 million. However, they are classed under the ‘temporary protection regime’, rather than the “international protection regime” which encompasses all non-Syrian protection seekers. This number of Afghan protection seekers consists only of those who have managed to register in Turkey and maintain that status throughout their stay. It is likely that there are thousands more Afghans in Turkey who do not fall into the category of protection seekers (1).

South Africa's cash-in-transit heists: A national emergency?  - The shaky footage could come from a film: men standing on the grassy verge wielding AK-47s, bombs exploding, and the sound of gunfire. But this is not the latest action blockbuster. This is a small South African town in the middle of the day, and what the shocked driver is recording from the relative safety of his own vehicle is a scene being repeated across the nation on an almost daily basis: a cash-in-transit heist. It is an epidemic which has seen millions of rand disappear into the hands of highly organised criminal gangs - a crime spree which some say can be traced back to the police themselves, and that others suggest is being orchestrated by criminals already serving time behind bars. It is, according to those in the know, seen as high prestige and low risk - at least, for those carrying out the attacks. Since the start of the year, there have been more than 150 "cash-in-transit" robberies - equating to more than one a day. There are a number of approaches. It can involve a gang swooping on an armoured vehicle as it drives down the road, shooting out the tyres before using explosives to get the doors open. Or the security guard can be targeted when they are at their most vulnerable: as they leave the premises carrying the cash, in what is known as a "cross pavement" attack. The latter is where the real rise has come in, Anneliese Burgess, a journalist who has spent the last few years researching the phenomenon for her book, Heist! South Africa's cash-in-transit epidemic, tells the BBC. "It is extraordinary: the incredible brazenness of these acts," she explains. "They just attack people, just shoot them in the back of the head."

The Brazilian Truckers’ Strike: How WhatsApp Is Changing the Rules of the Game -- The massive truckers’ strike that began on May 21 and immobilized Brazil for a week and half was one of the largest mobilizations ever carried out via the messaging platform WhatsApp.With hundreds of thousands participating in the strike, gasoline, diesel and ethanol ran out across Brazil within a few days. Flights were canceled and airplanes grounded as jet fuel ran low at major airports. Supermarket shelves were emptied. Schools were closed. Buses ran on reduced schedules. Tankers, waiting to ship thousands of tons of soy and sugar, waited and waited some more, as truckers blocked all movement of freight and ground the country to a halt. There were even reports that officials might be forced to shut down reactors at nuclear plants because of a shortage of fuel.The truckers were upset over the price of diesel, which had risen consecutively in the preceding months, and was adjusted 16 times in the month before the strike, in some parts of Brazil. The price hikes stemmed from a shift in the policies of the state-owned oil company Petrobras, which let the price of diesel float with the market under the government of Michel Temer. Temer rose to power in 2016 following the impeachment of leftist president Dilma Rousseff, in what many called a congressional coup.The truckers said the high diesel costs made their job impossible. They parked their trucks along the highway and truck stops. Blockades ensured that nothing would get through. Hundreds of protests dotted the country.Four days into the strike, the government announced that a deal had been reached to suspend the strike and that it would be cutting the cost of diesel by 10 percent over 30 days.The truckers didn’t buy it. They refused to move.They said the concessions weren’t enough and the truckers’ unions, which struck the deal with the government, didn’t represent them. The Brazilian Truckers’ Association — which represents 600,000 truckers across the country, and which had been one of the main groups calling for the strike — had actually walked out of the talks. Over countless groups formed via the messaging platform WhatsApp, truckers said they weren’t going anywhere and called on their companions across the country to hold firm and continue to protest.  WhatsApp enabled truckers, and their highly decentralized movement, to communicate with each other in real time.

Canada Becomes Second Country To Legalize Weed - Canada is on track to become the first G-7 nation to legalize marijuana, and the second country in the world (after Uruguay), after its Senate approved legislation in a 52-29 vote, paving the way for recreational cannabis to be legally bought and sold within the next few months. The vote clears the way for the government in Ottawa to take the final step: The ceremonial approval of by the governor-general that would make Bill C-45 law. Still, not all of the details have been ironed out. For example, the date for when the law would take effect remains unclear. And lawmakers have said it will take a few months for producers and retail stores to stock up and get ready for legal sales to begin, according to Bloomberg. Possession of Cannabis became a crime in Canada way back in 1923, but it has been legal for medicinal purposes since 2001. Yet despite the culture's longstanding permissiveness when it comes to marijuana, some groups objected to the law, including conservative politicians and indigenous groups who felt they hadn't been consulted about the bill. But their resistance wasn't enough to scuttle the law, and by mid-September, Canadians will be able to buy cannabis and certain cannabis products at retail shops - though cannabis edibles will not be available for purchase for another year because the government says it needs time to decide on appropriate regulations. Meanwhile, adults will be allowed to possess one ounce of the stuff in public, according to the BBC.

Loonie Tumbles After Ugly Canadian Data: Worst Toronto Retail Sales In 3 Years - The synchronized economic slowdown has hit again, this time striking America's latest trade war opponent, Canada, which moments ago reported some very ugly inflation and retail sales data.First, on the inflation front, Canadian CPI rose just 2.2% in May from 2.1% in April, badly missing what Wall Street estimated would be an increase to 2.6% due to higher gasoline prices. According to Statistics Canada, the largest upside contributor to the inflation print was the recreation, education category, 0.27 percentage points, while the largest downside contributor was the household operations category, -0.12 percentage points.Broken down by the various CPI metrics, the data was as follows:

• The average of CPI core measures was 1.90% y/y in May from 1.97% a month earlier
• CPI-common at 1.9% y/y in May from 1.9% in previous month
• CPI-median at 1.9% y/y in May from 1.9% in previous month
• CPI-trim at 1.9% y/y in May from 2.1% in previous month

The retail sales data was even worse, with the headline number tumbling -1.2% in April, well below not only the consensus estimate of an unchanged print , but also below the lowest end of the forecast range which was -0.4% to 0.2%. Core retail sales, ex-autos, also missed, falling 0.1% in April, est. +0.5%

Revealed: Canada uses massive US anti-terrorist database at borders - Canadian border guards have been screening travelers using a huge, secretive US anti-terrorism database that is almost never referred to publicly, new documents reveal. The database, called Tuscan, is provided to every Canadian border guard and immigration officer, and empowers them to detain, interrogate, arrest and deny entry to anyone found on it. Hundreds of pages of documents obtained by the Guardian through Canada’s access to information system reveal the fullest picture yet of a database that, although employed in Canada, is maintained exclusively by the US. It contains the personal information of as many as 680,000 people believed by US authorities to be linked with terrorism, and functions effectively as a second no-fly list that is cloaked in secrecy. Canada’s official no-fly list is called the Passenger Protect Program, which lists known and suspected terrorists who are forbidden from flying to or from Canada. One estimate concludes it has around 100,000 names, and the government has offered a redress so travellers can apply to have their name removed. Tuscan, however, is much larger and is managed entirely by the US government. There is no clear process in Canada to have your name removed from the list – nor would the US be required to oblige. What’s more, while Canada’s no-fly list only applies to airports, Tuscan extends to every land and sea border in Canada, as well as visa and immigration applications. Ottawa has never formally recognised the scope of Tuscan, although it is forging ahead with a closely guarded plan to expand and update it. Originally created in 1997 as a consular aid, the list was repurposed and expanded after 9/11, and in 2016 Justin Trudeau and Barack Obama agreed to expand it still further. The list effectively means that people cleared by the Canadian government to travel in and out of the country might still be detained because of the American list. It could also explain why certain travellers are searched and questioned more frequently or extensively, or why others have visas or immigration applications denied. 

 Mining for Bitcoin in a remote Russian outpost -  At the Kaliningrad Region Development Corporation, a state-owned entity whose aim is to bring business into the region, I was told how a couple of entrepreneurs from Moscow had recently been shown around two sites in the city, where they were looking to set up their own cryptocurrency mines — large data centres where specialised computers process transactions, consuming vast amounts of energy, in return for bitcoins. The entrepreneurs decided to take not just one but both sites, with an investment of $50m in the mines — a not inconsiderable sum for a region whose GDP is less than $7bn. I ask Sergei Evstigneev, the region’s IT and communications minister, whether he is concerned that cryptocurrencies have not been regulated at the state level yet. “Whatever is not illegal is legal,” he tells me. “There are no laws regarding cryptocurrency mining because it’s a new kind of business.” Russia’s approach to cryptocurrencies is unclear — it had said it would ban them but its tone appeared to soften after Vladimir Putin met Vitalik Buterin, the creator of Ethereum, one of bitcoin’s rivals. What is clear is that Kaliningrad is very much open for business — and it doesn’t seem to mind what form it comes in. Surrounded by both the EU and Nato, but a member of neither, the region finds itself cut off from its neighbours, with any goods that it wants to export — the majority of which go to Russia — having to travel through two different countries in order to reach the mainland, 300 miles to the east. Since 1996 though, Kaliningrad has been designated a special economic zone, meaning it can entice investors with benefits, including some duty-free imports, reduced social security premiums and various tax breaks. The federal government decided that as of the start of this year tech companies should be given extra tax breaks in Kaliningrad — exporting virtual goods across three borders is a lot easier than exporting physical ones. As a result of this new regime, entrepreneurs such as the pair from Moscow will not have to pay income or property taxes for the first six years — and that’s not all. KRDC’s director-general Vladimir Zarudny says: “Kaliningrad has become a kind of lab where we can test new initiatives and legislation. We think we could be a liberal Russian territory which is friendly for doing business, and a gateway to Russian markets.”

Russia Raises Retirement Age Above Life Expectancy For 40% Of Men - An estimated 40% of Russians may never live to retire, after Prime Minister Dmitry Medvedev announced that the age to receive a Russian state pension would be raised from 60 to 65 for men by 2028, and from age 55 to 63 by 2034 for women. The draft legislation was discussed in the Russian cabinet on Thursday. There is one problem: a substantial portion of the Russian population will never live that long. Angry Russians are accusing the Kremlin of announcing the changes while the country is distracted hosting the World Cup.  Expected to be officially adopted by next year, the new policy would mean the country’s retirement age for men would be only a year lower than the World Health Organisation’s estimated life expectancy for a Russian man of 66. The Russian Confederation of Labour (KTR) says that the average life expectancy for men is actually less than 65-years-old in over 60 regions in Russia.

Italy Holds A Mirror to a Broken Europe – INET - “Populist” and right wing parties are gaining ground all over Europe, with a message of euro-skepticism and pure distrust of the so-called European establishment. The Italian general election held on March 4, 2018 was no exception: The strongly pro-Europe Democratic Party of the previous Prime Minister Matteo Renzi registered a historic low, obtaining 18.9% of the votes (a decline of 6.5 percentage points compared to the earlier elections). Renzi almost wears this loss as a medal, proof of his loyalty to the EU, rather than as a sign of his failure at solving or alleviating the problems of the country. The populist Five Star Movement (M5S) became the largest single party in Italy (with 32.2% of the vote) and the right wing and xenophobic party Lega Nord obtained substantial electoral gains (17.7% of the vote). But the result, a hung parliament, did not indicate one electoral coalition strong enough to govern by itself, triggering a longer than usual process to arrange for a government coalition. Finally, after 90 days of negotiations, the Five Star Movement and the Lega Nord reached an uneasy alliance for a coalition government. These two parties have in common a strong rhetoric against the traditional political establishment, even though Lega was in the government repeatedly in the past and ran in this year’s elections in a coalition with Forza Italia, the party of Silvio Berlusconi. Both M5S and Lega Nord share a belief that Italian economic growth cannot be revived within the policy conditionalities imposed by the Eurozone.As soon as M5S and Lega Nord announced that Paolo Savona, an 82-year old “Eurosceptic”, would be their appointment to the Treasury, all hell broke loose in Rome, Brussels, Berlin and Paris. Italy’s President Sergio Mattarella vetoed the proposal, arguing that he had to“protect the savings of the Italian people.” EU budget commissioner Gunther Oettinger commented that, “Markets will teach Italy to vote for the right thing.”The threat might just be real: the artificial creation of economic and financial emergencies has often shaped the distribution of power in the Eurozone, now heavily leaning toward creditors and surplus countries. But the Eurozone’s reliance on a large apparatus of quasi-technical regulations points to the absence of a yet fully defined and established hegemony. The latest crisis can be described basically as a struggle to redefine the locus of power between nation-states, supranational institutions, and the market in the post-Bretton Woods age.

"Hypocritical" France Caves, Agrees To Take Shipwrecked Migrants After Macron Spat With Italy - France has agreed to accept some of the 630 migrants from 26 countries rescued by the MV Aquarius following an international spat between French President Emmanuel Macron and Italian authorities which led to Spain agreeing to take them in. Among them are 450 adult men and 80 women -- including at least seven pregnant women -- as well as 11 under-13s and 93 adolescents, according to figures released by authorities in Valencia. –AFP  After Italian Interior Minister Matteo Salvini refused to accept the NGO vessel packed with shipwrecked immigrants, Macron said that Italy was "playing politics" with the migrants, and that the Italian government had displayed "cynicism and irresponsibility." Mr Macron's spokesman Benjamin Griveaux said the French president recalled that "in cases of distress, those with the nearest coastline have a responsibility to respond". "There is a degree of cynicism and irresponsibility in the Italian government's behaviour," he quoted President Macron as saying. -BBCRome wasn't having any of Macron's rhetoric - as Italian Prime Minister Guiseppe Conte shot back - accusing Macron of being hypocritical, cynical and rigid. "The statements around the Aquarius affair that come from France are surprising and show a serious lack of knowledge about what is really happening. Italy can not accept hypocritical lessons from countries that have always preferred to turn their backs when it comes to immigration," Conte's office said.After Italy closed their ports to the migrants and nearby Malta refused to take them in as well, Spain agreed to take the North Africans - who were escorted by the Italian Navy to Valencia. The ship is making the 1,500-kilometre (930-mile) voyage to Spain accompanied by Italian coast guard vessels, which have taken on board some of the migrants.High waves and winds forced the convoy to take a detour on the way, but the first migrants are expected to land in Valencia between 6am (0400 GMT) and 12pm (1000 GMT) on Sunday. –AFP And after several days of discussions, Madrid announced on Saturday that it had accepted France's offer to take in some of the 630 shipwrecked migrants.

Spain welcomes disputed Aquarius migrants - BBC - Migrants rescued from the Mediterranean and turned away by Italy and Malta have arrived in Spain's port of Valencia.Three vessels, including the Aquarius, which rescued the 630 migrants last weekend, have now docked in the harbour. Health officials, interpreters and Red Cross workers are on hand to offer support.Spain's new socialist government has promised free healthcare and says it will investigate each asylum case."It is our duty to help avoid a humanitarian catastrophe and offer a safe port to these people, to comply with our human rights obligations," Prime Minister Pedro Sánchez said earlier this week. He has adopted a migrant-friendly stance since taking up his post two weeks ago.An Italian coast guard ship, the Dattilo, entered the port of Valencia at 06:20 (04:20 GMT). It was carrying 274 migrants, the Italian news agency Ansa reported. On Valencia's quayside, 1,000 Red Cross workers were on hand to greet the migrants as they stepped off the ship. Police officers have also been drafted in to handle their arrival. The Aquarius itself entered the port shortly after 09:30 carrying another 106 migrants. They were seen celebrating as the ship arrived.

Angela Merkel calls for special EU summit on refugees: report -- Angela Merkel is pushing for a special summit on refugee policy ahead of this month’s European Council, German newspaper BILD reported Sunday. The German chancellor is under pressure from her Bavarian interior minister, Horst Seehofer, to find a compromise over his proposed plan to stop some refugees at the German border, a measure her party opposes.Merkel, who reiterated Saturday that the refugee crisis needs a “European solution,” has invited her Greek, Italian and Austrian counterparts to discuss strategies on migration, BILD reported.It is unclear if Spain and the Balkan countries will also be in attendance at the special summit, which BILD reported is likely to take place the weekend of June 23-24, just days ahead of the planned European Council summit in Brussels.Seehofer, who reportedly refused Merkel’s call to wait until the European summit to find a solution, is due to seek approval on Monday from CSU party leadership for his plan to turn away migrants at Germany’s borders, according to reports. If Seehofer implements the measure, it could force Merkel to fire him, spelling the end of the decades-long alliance between her Christian Democrats and her Bavarian sister party.In an interview with BILD am Sonntag, Seehofer  claimed it was not his intention to break apart the coalition or bring down the government. “No one in the CSU has an interest in toppling the chancellor,” he said. “We want to finally have a sustainable solution for turning back refugees at our borders.”

Migration hijacks French-German summit — Emmanuel Macron, that courtly Frenchman, may get his chance this week to show Angela Merkel that romance is a two-way street. After a year asking for German concessions on eurozone reform, the French president in turn will have to give the German chancellor something that would give her some breathing space in domestic politics: a pledge to work seriously toward a European agreement on how to treat refugees.Even though Merkel seems to have fended off for now a rebellion by the CSU, the right-leaning Bavarian sister party of her Christian Democrats, this is conditional on a European summit at the end of the month coming up with a deal on asylum seekers.And on Tuesday, the refugee question will partly hijack the annual Franco-German joint Cabinet meeting, which was originally meant to put the two leaders’ stamp of approval on a partial eurozone deal clinched by the countries’ finance ministers. The French were ready to celebrate Germany’s supposed concessions on eurozone reforms. The Germans in turn were prepared to rejoice at the fact that they had held firm on their age-old principles of wise fiscal conservatism. But the refugee question looks like a more pressing issue for Merkel and Macron than knowing how a new eurozone stabilization facility will be managed and what it will be called.

"It's A New Chapter For Europe": Merkel, Macron Unveil Plan To Reform Europe - After her meeting with French President Macron on Tuesday, Merkel said Germany and France have agreed to cooperate to reform the EU’s asylum system as both "understand the topic of migration is a joint task" and "our goal remains a European answer to the challenge." What she really meant is that if her government is toppled by the collapse of the CSU-CDU coalition - recall Merkel has a 2 week ultimatum to reach a solution on Germany's treatment of refugees by July 1 - the rest of Europe gets it too, and the grand experiment is over.Aside from immigration, the two leaders agreed to an in principle plan to strengthen the Euro area, including setting up a euro-area budget and a crisis backstop under the ESM (European stability mechanism), although they postponed decisions on some elements which could prove consequential. Chief among them: specifics on the size and conditions of the euro-area budget.“There is a general feeling that there is some momentum, not towards a complete reform package but towards progress,” Nicolas Veron, a senior fellow at the Bruegel think tank told Bloomberg, who admitted that the European project is now hanging on by a thread: "It’s a political fact that what you have in the German Bundestag and in Italy has created a less favorable environment." Here are the key items courtesy of Bloomberg:The agreement on a euro-area budget, starting in 2021, marks an important win for French president Emmanuel Macron, who has been advocating for such an instrument. According to a roadmap endorsed by Macron and German Chancellor Angela Merkel, the budget should promote competitiveness, convergence and stabilization in the euro area, with resources coming from national contributions, Europe and revenue from taxes including a financial transactions tax or a levy on digital companies. The budget aims to help investment in innovation and human capital while other options examined include allowing nations in trouble to suspend their contributions, or establishing a European unemployment stabilization fund.There is just one problem: it's nothing more than an abstraction at this moment - there are no details on the size of this budget and on whether countries need to adhere to strict conditions to be eligible for funds, two key elements that are likely to determine the impact of such an instrument. . “The French side wanted symbol, the German side didn’t want a lot of substance." In short: another typical European compromise which is great for optics yet achieves nothing in practice.

12 European States Revolt Against Merkel, Macron Plan To Reform Europe -  Europe's two self-proclaimed leaders are facing an unexpected backlash from most other European governments against the German and French plans for a common eurozone budget, dealing a blow to the two countries’ ambitions for a big overhaul of the single currency area.As the FT reports, the rest of Europe's "core", including the Netherlands, Austria and Finland are among 12 governments questioning the need for any joint eurozone “fiscal capacity”, challenging a central tenet of French President Emmanuel Macron’s vision for the eurozone that he has successfully pressed Berlin to endorse.As we reported on Wednesday, increasingly unpopular French president Macron and the politically embattled Merkel tried to restart their close collaboration this week ahead of a wider summit of EU leaders. They agreed that a new common pot of eurozone money could be funded by a mixture of national contributions and new EU levies, such as a financial transactions tax.Ironically, while their agreement supposedly forms part of a broader deal between Paris and Berlin on how to strengthen the currency bloc, the rest of Europe generally disagreed, which incidentally is also the reason why any attempt at "Federalizing" Europe is doomed to failure: Europeans tend to frown upon self-declared "master states" who tends to decide for everyone else, even if these states end up paying for much of the outlays (largely thanks to the presence of the EUR and the absence of the DEM).As a result, EU diplomats said Merkel’s concession to Macron - as a reminder, having found herself isolated at home, Merkel has been forced to see support abroad - had emboldened other countries to resist the blueprint, out of concern that it would leave their taxpayers too exposed to problems in crisis-hit member states.  And, as the FT writes, the splits were observable at a meeting of EU finance ministers in Luxembourg on Thursday, with increasing signs that governments have formed competing camps with distinct visions on the direction of further integration. According to a letter seen by the Financial Times, Dutch finance minister Wopke Hoekstra has written to Mário Centeno, the president of the eurogroup, to underline that there is “wide divergence” on the need for any budget, with a number of countries concerned about “moral hazard risks” and questions of “fiscal neutrality” posed by the plan.The letter insisted that the lack of the agreement on the budget be clearly communicated to leaders at next week’s summit.

Opinion: Donald Trump’s Germany Twitter rant actually helps Angela Merkel - It is difficult to be surprised anymore in the era of Donald Trump, so the US president's recent Twitter attack can't really come as a shock to people in Germany. Trump claimed on Monday that the Germans are turning their backs on "the already tenuous Berlin coalition" because of migration policy and that "Crime in Germany is way up." The latter part is a lie, but that is hardly unusual in a Trump tweet. The people of Germany are turning against their leadership as migration is rocking the already tenuous Berlin coalition. Crime in Germany is way up. Big mistake made all over Europe in allowing millions of people in who have so strongly and violently changed their culture! 9:02 AM - Jun 18, 2018 The aggressive rhetoric follows a clear pattern: Trump has chosen German Chancellor Angela Merkel as his main enemy in Europe. Perhaps because, unlike French President Emmanuel Macron, she never tried to flatter him. Or because she got along well with former US President Barack Obama, in itself enough to provoke Trump's ire. This president's dealings with Merkel (and Germany) include sending to Berlin as his US ambassador Richard Grenell, a man who openly calls for strengthening the populist movement in Europe — a bold violation of his authority and breach of diplomatic custom. Trump's tweet continues on a level unheard of before by an American president: "Big mistake made all over Europe in allowing millions of people in who have so strongly and violently changed their culture!" Only to add in his next tweet: "We don't want what is happening with immigration in Europe to happen with us!"Trump's attacks on the German government are more than just rude, they are imprudent. Lectures from Washington have never gone down well in Germany, and certainly not when they come from this president. Most Germans, meanwhile, take a critical view of or even roundly reject Merkel's relatively liberal refugee policies, but that doesn't mean they are all right-wing populists. In fact, that Merkel's opponents are backed by the man currently occupying the White House is actually more likely to benefit the chancellor.

 Angela Merkel promises to support Italy on migration after Giuseppe Conte meeting in Berlin - Chancellor Angela Merkel pledged to support Italy in tackling mass migration from outside the European Union during a meeting with Italian Prime Minister Giuseppe Conte on Monday."We want to support Italy's desire for solidarity, and also hope that Germany receives understanding when it comes to European solidarity on the question of migration," she said in Berlin.Merkel and Conte agreed on the need to beef up Frontex, the EU's external border police, and to work with international organizations to tackle the causes of migration in Africa and the Middle East, Merkel said.They also agreed that EU asylum applications should be processed in origin or transit countries before would-be migrants enter the bloc, she added. Millions of refugees have traversed the Mediterranean Sea in the last few years to apply for asylum in the EU. The influx has led to an anti-migrant backlash in Italy, where many arrivals first landed, and in Germany, the preferred end destination for many refugees. Conte, who was visiting Germany for the first time since assuming office on June 1, said Italy wanted changes to EU immigration rules to ensure other EU countries share the burden of handling refugees. Current rules stipulate that refugees need to register their asylum application in the first EU country they arrive in.

Far-right Italy minister vows 'action' to expel thousands of Roma - Matteo Salvini vowed to turn “words into action” in his drive to root out and expel thousands of nomadic Roma from Italy as he shrugged off critics who said the far-right interior minister was adopting illegal policies reminiscent of the country’s fascist past. Salvini, who has seen a jump in his approval ratings in the little under three weeks he has been in office, has called for a new census of Roma and for all non-Italian Roma to be expelled from the country.  He also praised on Twitter the demolition of an “illegal” house used by Roma in Turin - which had been ordered by a local council controlled by Salvini’s League party - even as he was condemned by rival politicians and a top Jewish leader. Salvini’s move against the Roma comes amid a hard line against migrants into Europe, which last week saw him to refuse to allow a ship carrying more than 600 people rescued from Mediterranean from docking in Italy, forcing it to divert to Spain. The EU was on Tuesday considering plans for migrant processing centres in north Africa as the continent is convulsed by a row over migration. Hungary, which has one of Europe’s most avowedly anti-migrant governments, on Tuesday announced it would levy a 25% tax on groups that support immigration. The developments in Italy have caused the first major rift between Salvini and his Five Star Movement coalition partner. Luigi Di Maio, the leader of the anti-establishment M5S, called Salvini’s order for the creation of a new Roma registry “unconstitutional”. A similar census pitched by the former prime minister Silvio Berlusconi was blocked by an Italian court. It was also lambasted by Noemi Di Segni, the president of Italy’s union of Jewish communities, who said the proposal recalled the fascist race laws of the late 1920s and 1930s. The former centre-left prime minister Paolo Gentiloni also tweeted his disgust, saying: “Yesterday the refugees, today the Roma, tomorrow guns for all.”

 Italy's Salvini Orders "Special Census" And Expulsion Of Illegal Gypsies, Immediately Compared To Hitler - Italy's new Interior Minister, and the country's de facto leader now that the League has surpassed 5-Star is national poalling, Matteo Salvini told an Italian television station Monday that he plans to conduct a census of the Roma community, and will kick anyone out of the country residing there illegally. "I've asked the ministry to prepare a dossier on the Roma question in Italy," Salvini told TeleLombardia, adding that the country's large community of Roma, also known as Gypsies, was "chaos" several years after a crackdown. “Unfortunately we will have to keep the Italian Roma because we can’t expel them,” Salvini added. Italy's Roma community is vast, and consists of mostly poor people from Romania and the former Yugoslavia. Italian authorities periodically clean out Gypsy squatter camps at the outskirts of major cities in the hopes that the notoriously nomadic Roma will find another place to set up camp. Salvini's remarks drew immediate comparisons to Adolf Hitler - with liberal politicians warning that Italy had a "terrible" history in which they conducted a Fascist-era census of Jews. "You can work for security and respect for rules without becoming fascist," tweeted Democratic lawmaker Ettore Rosato. "The announced census of Roma is vulgar and demagogical." Si può lavorare per la #sicurezza e il rispetto delle regole senza diventare razzisti. Spero Salvini lo capisca. Il censimento annunciato dei Rom è volgare e demagogico, e purtroppo ricorda solo pessimi precedenti — Ettore Rosato (@Ettore_Rosato) June 18, 2018  In a follow-up statement, Salvini said he had no plans to take digital fingerprints or make index cards of individual Roma - rather, he wants a study of the overall situation.

Italy's Salvini: "We Need A Mass Cleansing, Street By Street, Quarter By Quarter" In The EU --Italian Interior Minister Matteo Salvini continues to pile the pressure on Brussels and expose his more fascist credentials as he warned today that it will be decided within a year "whether a united Europe still exists or not," according to Germany’s Der Spiegel."Whether the whole thing has no sense any more" will be seen in particular in talks on budget and within context of 2019 European Parliament elections.On migrants, Salvini confirmed:"We can’t take even one more, actually we want to hand over a couple," adding that...he is aware his stand on migrants could lead to fall of Chancellor Angela Merkel but this isn’t Italy’s intention "even though we’re very distant, not just on the migration issue."And finally, in a quite shocking comment during a BBC documentary on the Italian Interior Minister, Salvini says ominously:“We need a mass cleansing. Street by street, quarter by quarter” in the EU. Forward to 4:42 in the clip below... All of which leaves Salvini's call to NATO and the potential 'help' of the US 6th Fleet (as we discuss below) very much in play as Oriental Review's Andrew Korybko details below,  President Trump may rescue Italy from the migrant crisis in order to further divide Europe.Italy’s populist government that just came to power pledged to make the Migrant Crisis one of its main priorities, so it’s no surprise that it’s poised to take immediate action in delivering tangible results to the voters. Matteo Salvini, the head of the EuroRealist Lega party and Italy’s current Deputy Prime Minister and Interior Minister, said that:“I am in favor of NATO, but we are under attack. We will ask NATO to defend us. There are many concerns about terrorist infiltrations. Italy is under attack from the south, not from the east.”

Why Italy’s Crisis Is the Left’s Crisis -- Current turmoil in Italy is the result of lack of a clear political majority. An attempt at forming a so-called populist majority shows the real face of populism in the country, which is conservative and neoliberal in its economic philosophy. However, framing the debate in terms of mainstream vs. populists is preventing Italy from intervening in the most important public debate in years, that on the reform of the Eurozone, which can only be framed in the more traditional terms of Keynesianism vs. mercantilism. To understand the current situation and outlook for Italy, it is necessary to take one step back. The Presidency of the Italian Republic is one of the most flexible institutions in Western Europe. With a strong parliamentary majority and government, it can shrink to almost a residual role, but with a fragmented and chaotic scenario the president emerges as a leading figure. However, despite current President Prof. Sergio Mattarellabeing under the spotlight since last general elections in March, it is really the political deadlock – represented in the figure below – that is responsible for the recent turmoil in the country and in financial markets.  Partly due to a mixed system that encompasses elements of both first-past-the-post and proportional representation, and partly due to a real fragmentation of Italy’s society, the 5-Star Movement (M5S) emerged as the party with a relative majority in both chambers of Parliament, whereas the center-right electoral alliance of Lega, Silvio Berlusconi’s Forza Italia, and a smaller radical right party (FdI) emerged as the relatively larger party coalition.[1]Following confusion about who had legitimacy and the numbers in Parliament to form a government, the Lega attempted (first unsuccessfully, then successfully the second time) to forge a new parliamentary alliance, with the M5S (it could be useful to recall here that in Italian, “populist” has nothing to do with popular or grassroots, but is rather a synonym for demagogue).

The Force Behind Europe’s Populist Tide: Frustrated Young Adults WSJ - A youth revolt is upending Italian politics, and it could be a harbinger of things to come.Western Europe’s largest antiestablishment government came to power earlier this month, driven largely by young Italian voters. Struggling with a persistent lack of job prospects over the past decade, they voted in droves for two parties in the country’s March 4 elections, the 5 Star Movement and the League, an anti-immigration party.The result laid bare a stark generation gap, with older Italians, who often have to support their grown children, continuing to vote for mainstream parties.The same pattern appears across southern Europe, and the forces behind the divide show few signs of slowing. Almost 30% of Italians age 20 to 34 aren’t working, studying or in a training program, according to Eurostat, more than in any other European Union country. Greece is second at 29%, while Spain’s rate is 21%. “Italy is collapsing and yet nothing has changed in this country for at least 30 years,” said Carlo Gaetani, a self-employed engineer in Puglia. Ten years ago, when he was in his early 20s, he voted for a center-left party that he hoped would push for economic development in southern Italy. When Italy descended into a crippling recession, he felt betrayed by the traditional Italian left-wing parties. He has seen friends struggle to find jobs, and said his own business opportunities are limited to the stagnant private sector, because commissions for the public sector are usually awarded to people with connections he doesn’t have. Mr. Gaetani, now 33, voted for 5 Star in the 2013 election, a choice he repeated in March with more conviction. “5 Star is our last hope. If they also fail, I think I’ll stop voting,” he said. The employment rate of Italians under 40 fell every year from 2007 to 2014 before flatlining over the past three years, according to Eurostat. Meanwhile, it has risen every year for those between 55 and 64 years, in part due to an increase in the retirement age.The number of Italians under 34 in absolute poverty—defined as being unable to afford basic goods and services—more than doubled between 2010 and 2016 to 10%, according to the Italian National Institute of Statistics, or Istat. For those over 65, it dropped to 3.8% from 5.4%. One major problem in southern Europe is a dual employment system in which people with open-ended contracts—often older workers—enjoy ironclad job security and benefits. At the same time, during the downturn, employers began to use more short-term contracts, generally lasting from one month to a year. In Italy, 62% of contracts for those under age 25 were short-term in 2017, up from a quarter in 2000.

Yanis Varoufakis: Why Germany Neither Can Nor Should Pay More To Save the Eurozone - naked capitalism - Yves here. Varoufakis is extremely articulate and charismatic, and had the correct economic analysis for the mess Greece was in in 2015, as well as an economically sound solution in the form of his and Jamie Galbraith’s A Modest Proposal. However, one of its centerpieces was some fudges to get around prohibitions against Eurozone-level fiscal spending. Given that economic problems are now becoming political ones, Eurocrats may be more willing to consider fudges that before. But I don’t see them as anywhere near giving up their fervor about fiscal discipline. Until the Eurozone is willing to run meaningful and sustained deficits to lower unemployment rates, the stagnation and lack of opportunity, particularly in southern countries, the populists will gain more seats. By Yanis Varoufakis: “I wanted a Germany that was hegemonic and efficient, not authoritarian and caught up in a European Ponzi scheme. That was in 2013.” Excerpt from the CESifo group Munich seminar on June 11, 2018. In these trying times for Europe, our common home, opportunities like tonight’s to discuss honestly and frankly Europe’s crisis are priceless.When the title of my talk was announced, many of my critics were puzzled. Having portrayed me as a Greek politician who, back in 2015, came to Germany cap-in-hand demanding more money, they had difficulty explaining why I would be standing in front of you to argue that Germany neither can nor should pay more to save the eurozone.The puzzle of course disappears after a close look at what I was saying since 2010. Let me give you an example. On July 24, 2013 I published an article in Handelsblatt entitled ‘Europe needs a hegemonic Germany’. In that article I had, again, surprised many by arguing in favour of a strong Germany as the best way of leading Europe out of its difficulties. My criticism of the German government, and its attitudes towards the eurozone more broadly and Greece more specifically, was not that Berlin was not paying enough but that, in a sense, it was paying too much – except that it was wasting the German people’s money in perpetuating what I termed a gigantic exercise in fraudulent bankruptcy concealment.

EU to Members: Prepare for No Deal Brexit -  Yves Smith - The UK has made no progress on the critical issue of the Irish border and failed to articulate what sort of post-Brexit arrangement it wants. The EU therefore plans to issue a warning about a so-called crash out Brexit during the European Council meetings of June 28 and 29. From Bloomberg:European Union leaders will say next week they’re concerned about the lack of “substantial progress” on the crucial issue of the Irish border. They will also warn that if there’s no divorce agreement before the scheduled departure date of March 2019, there won’t be a transition — the grace period that businesses are counting on for the first two years after the split….The joint document shows that while some disagreements have been resolved in the areas of customs, sales tax and nuclear material, the biggest areas of dispute remain.The Financial Times’ account was more pointed: EU leaders are to call on member states, companies and organisations to step up preparations for a no-deal Brexit amid concerns that the UK has made “no substantial progress” on the Irish border, the biggest sticking point in the talks…. In an unwelcome warning for Theresa May, British prime minister, the summit text says contingency planning for a hard exit in March 2019 must be accelerated…. But frustration is growing in European capitals over the slow pace of negotiations on Ireland and the future relationship. “It is going nowhere and it is clear to everyone,” said one senior EU diplomat, who expected the talks to drag on into the winter… In what he presented as a call for greater realism by London, Mr Barnier gave a speech on Tuesday in which he ruled out UK participation in the European Arrest Warrant and full access to EU law-enforcement databases. He said this was a result of the British government’s “red lines” on issues such as the role of the European Court of Justice. The UK seems particularly upset at being told it will no longer be part of EU security operations. From The Times: It is rare for the head of any of Britain’s three intelligence and security agencies to speak in public, particularly on such a politically charged issue. Mr [Jeremy] Fleming’s comments appear deliberately timed to bolster Britain’s argument as ministers fight back against attempts to block the country from EU security databases and prevent Britain from accessing military aspects of the EU satellite surveillance system Galileo….  The UK again and again reverts to the same argument, that the UK must get a special deal…and the EU will benefit too! But the Brits simply do not want to internalize that the EU has accepted that they will take losses and have moved on.

Theresa May faces showdown with pro-European Tory MPs after Lords hands Government Brexit defeat - Theresa May is facing a showdown with pro-European Tory MPs after the Lords overwhelmingly backed plans to give Parliament a "meaningful vote" on the Government's final Brexit deal. The Government was defeated by 354 votes to 235 after a Conservative peer tabled an amendment that ministers believe will undermine Brexitby tying the Government's hands during negotiations.The defeat sets up a clash between the Government and pro-European MPs led by Dominic Grieve, a former Attorney General, when the EU withdrawal bill returns to the Commons on Wednesday.   Around 14 Tory MPs are prepared to rebel against the Government, which is refusing to accept the Lords' amendment because it believes it would effectively enable Parliament to direct negotiations.  During angry exchanges Lord Hailsham, the peer who tabled the meaningful vote amendment in the Lords, described Brexit as a "national calamity".  He told peers: "This Government has sought to prevent a meaningful vote in every possible way. I want to ensure that Parliament does have a meaningful vote and I don't want to see that left to chance."Lord Robathan, a pro-Brexit Tory peer, accused his colleague of wishing to "destroy Brexit" and said his move was all about "sabotaging" the UK's departure from the EU. One peer was overheard calling him an "idiot" as he made the comment.Last week Mrs May headed off a rebellion by making "personal assurances" to a dozen rebels that she would address their concerns over Parliament being given a meaningful vote. But when the final amendment was tabled it made clear that the Commons would only be able to pass a motion saying that it had "considered" the matter, which critics said rendered the meaningful vote "meaningless".

As the Brexit shambles shows, May needs to learn how to do diplomacy - One reason to imagine that Theresa May has hidden depths is that the thought of the country’s future depending on the visible portion of her ability is so alarming. These are unsettled times, so there is comfort in the idea of a prime minister with a plan – any plan. There is a psychological incentive to suppose that May thinks beyond the end of the day; that her strategy for Brexit is more sophisticated than it looks. Because it looks like deferral of hard choices, evasion of confrontation, and Hail Mary hope that something will turn up.May’s starchy manner helps cultivate belief in an invisible realm of calculation. Inscrutability looks enigmatic. Her rigid persona seems to invite speculation that there is another, more versatile person behind the mask. It is hard to believe that what you see on screen is really what you’d get off camera. It is not just in this country that observers crave access to a more candid version of the prime minister. During May’s first year in Downing Street, European Union politicians routinely asked their contacts in London for insight into the real Brexit plan. It seemed implausible that a serious country with a reputation for pragmatism would go about such a dangerous enterprise in such a haphazard fashion. It took a while for the message to get through that the appearance of improvisation and unreadiness was not an illusion. May’s continental counterparts were also disoriented by the discovery that she can be as robotic in private as she is on screen. EU diplomatic channels hum with gossip about the British prime minister’s inability to drop the soundbites and slip into something more vernacular. She squanders precious top-level bilateral meetings by sticking to pre-briefed scripts. Angela Merkel, the German chancellor, and Mark Rutte, the Dutch prime minister, are two of Britain’s potential friends who have come away from talks with May stunned and frustrated, having learned nothing more than they might glean by watching her on television.

What’s Left to Be Settled Before Brexit (Quite a Lot) - With just over nine months to go until Britain is set to leave the European Union, the task of untangling itself from its neighbors is proving fiendishly complex. Former World Trade Organization chief Pascal Lamy says it’s like taking an “egg out of an omelet.” Brexit, as the withdrawal is known, poses risks to people and businesses that could get caught on the wrong side of a newly erected border. Deep disagreement among the British themselves on the best approach is complicating the process. With the U.K. set to exit the 28-nation bloc in March 2019, there are still more questions than answers about how Brexit will work. Here’s a guide to the trickiest issues.

• 1. Keeping supply lines untangled. Brexit means the U.K. must potentially give up one of the greatest benefits of being in the EU: the ability to buy and sell stuff with the 27 other members as if they were all one country. Leaving the EU’s so-called single market and its common customs rules could cripple cross-border supply chains that have been built up over decades..
• 2. Avoiding customs checks. One way to keep some of those trade benefits would be to stay in a customs union with the EU. That means the U.K. would adopt the same set of tariffs as the EU for outside countries and avoid new customs checks. But it would also prevent the U.K. from striking its own trade agreements with the likes of China, India and the U.S., a freedom that’s critical for many pro-Brexit campaigners.
• 3. Making an Irish border that’s not a border. After Brexit, the U.K.’s new land border with the bloc will run through the island of Ireland. At the moment the divider is an invisible line between the Republic of Ireland (which will remain part of the EU) and Northern Ireland (a region that’s part of the U.K.). Both sides have pledged not to let a policed frontier emerge, fearful that any physical signs of a border – even cameras operating on some sort of seamless, technologically-controlled boundary – could reignite sectarian violence or renew questions about a united Ireland. There’s no obvious solution.
• 4. Keeping access for finance. To ensure that they’ll be able to keep serving EU customers, firms in Britain’s financial industry, known collectively as the City, have been setting up subsidiaries elsewhere in the region and moving employees to cities including Frankfurt, Paris and Dublin. They aren’t taking any chances, since they don’t know what kind of access they’ll get after the split. Britain wants a system based on “mutual recognition” of rules that would enable London-based staff to continue to sell stocks, bonds and other financial products to customers across the bloc. The EU instead proposed a system based on so-called equivalence, in which the bloc would grant selective access to certain lines of business on a case-by-case basis. Even that would be revocable.
• 5. Protecting the rights of citizens. The two sides agreed in December 2017 on a deal that would protect the rights of more than 3 million EU citizens now living in the U.K., and about a million British citizens residing in the bloc. It basically allows them to stay where they are and continue to enjoy pensions and access to health care where they live. But the agreement is subject to a final divorce deal being reached, so affected citizens are still in a state of limbo..
• 6. Searching for a reverse gear. Polls don’t offer much evidence that Britons have changed their mind. But there are plenty of campaigners trying to reverse Brexit. Their big opportunity will be when the negotiated divorce deal comes to the U.K. Parliament for approval, which is expected to happen in the fall.

Brexit ‘meaningful vote’: May wins after rebels accept compromise -- The final obstacle to the EU withdrawal bill was overcome in the Commons on Wednesday when MPs voted against the last outstanding rebel Tory amendment, but only after an eleventh-hour concession on the power of backbenchers to hold the government to account. The attempt to secure a “meaningful vote” that could have potentially given MPs the power to stop Britain leaving the EU without a deal was defeated by 319 votes to 303. Last-ditch horse trading led to the bizarre spectacle of the rebel leader, the former attorney general Dominic Grieve, voting against his own amendment. But although the prime minister got her bill she has made significant concessions along the way, with her reluctance to confront the rebels head on undermining her authority. Rather than face down the rebels, she kicked down the road the inevitable parliamentary clash between Tory remainers and Brexiters until crunch votes on the customs union next month. Leading Brexiters were confident they had the numbers to defeat them and were anxious for a test of strength ahead of key votes on membership of the customs union and single market. The bill repatriates EU law from Brussels and is a vital precondition to Britain’s exit. It is likely to get royal assent in days. Angry opposition MPs accused Grieve of compromising his integrity as he argued that a written statement from David Davis, the Brexit secretary, underlining the role of the Speaker and parliament was enough reassurance that MPs would be able to have a voice, if not a meaningful vote, on the final deal. They believe the government could have been defeated in an amendment that would have obliged ministers to table a motion on a final deal which MPs would be able to change.

EU Withdrawal Bill approved by Parliament with May vowing “smooth and orderly” exit - Theresa May has welcomed the passing of the Brexit bill through Parliament as "a crucial step" in delivering a "smooth and orderly Brexit". Peers accepted the amendment to the EU (Withdrawal) Bill sent to them from the House of Commons, meaning the bill now goes for Royal Assent, becoming law. The vote passed 319 to 303 after would-be Tory rebel MPs were given assurances they would have a meaningful say. The PM said more detail on the UK-EU's future relationship will be given soon. Mrs May said: "Today's votes show people in the UK, and to the EU, that the elected representatives in this country are getting on with the job, and delivering on the will of the British people." "Over the next few weeks we will publish more details of our proposed future relationship with the EU in a White Paper, and will bring the Trade and Customs Bills back to the House of Commons. "But today has been an important step in delivering the Brexit people voted for, a Brexit that gives Britain a brighter future, a Britain in control of its money, laws, and borders." = The UK is due to leave the European Union on 29 March 2019 and negotiations have been taking place over the terms of its departure. Leading Brexiteer Jacob Rees-Mogg told Sky News Mrs May would now attend a summit of EU leaders next week "with full strength, with the ability to say the legislation to leave the EU, under EU law and UK law, is now fully in place". 

Britain’s Tory government offers concession to pro-EU MPs to advance Brexit bill -- The European Union Withdrawal Bill, facilitating Brexit, passed through its latest stage in parliament yesterday by a vote of 319 to 303.MPs were voting on an amendment requiring parliament to hold a “meaningful vote” on the final Brexit deal negotiated between Prime Minister Theresa May’s Conservative government and the European Union (EU). The amendment required the government to allow MPs a vote on how to proceed in the event there is no deal agreed by January 21, 2019.It was the second time that the amendment, tabled by Dominic Grieve, former attorney general and pro-Remain Tory MP, had come before parliament in five days. Last Thursday, May headed off a potential rebellion by around 15 pro-Remain Tory MPs after a supposed compromise on the issue.That deal rapidly unravelled when the government tabled an amendment that would mean allowing MPs a vote only on a neutral motion at the end of UK/EU negotiations—effectively meaning they would have no power to halt a final Brexit deal. Grieve complained that the final draft as presented had been “inexplicably changed” and “cannot be accepted.”With the government facing possible defeat, another last-minute compromise was cobbled together before Wednesday’s vote, which meant Grieve did not vote in favour of his own amendment.To pacify pro-Remain Tory rebels, Brexit Secretary David Davis stated that if MPs had not approved the Brexit withdrawal deal by the deadline, the speaker of the house at the time could decide whether MPs can have a “meaningful vote.”The agreement ended what had been expected to be a significant rebellion by pro-EU Tories, and a potentially fatal defeat for May. While Grieve voted with the government, six pro-Remain Tories—Heidi Allen, Ken Clarke, Philip Lee, Antoinette Sandbach, Anna Soubry, and Sarah Wollaston—voted for the amendment. On Monday evening, the Lords had upped the ante by voting 354 to 235 in favour of an amendment along Grieve’s line. Some 22 Conservative peers, including Tory former deputy prime minister Lord Heseltine and Conservative former ministers Lord Patten of Barnes, Lord Willetts and Baroness Warsi, rebelled against the government. The Lords’ vote expressed the striving of the pro-Remain faction of the ruling elite to halt and even reverse Brexit. Significantly, a total of 588 peers voted in total—the fourth largest turnout in a single Lords vote on record.

Airbus: ‘Catastrophic’ Brexit would threaten our future in the UK - If Britain crashes out of the European Union in March 2019 without a deal on trading arrangements, Airbus (EADSF) says the outcome would be "catastrophic," throwing its production into chaos and threatening its future in the country. "This scenario would force Airbus to reconsider its investments in the UK, and its long-term footprint in the country, severely undermining UK efforts to keep a competitive and innovative aerospace industry," the European planemaker said in a statement late Thursday. Even in a scenario where the UK leaves on agreed terms with the EU — its biggest trading partner — there would be a serious risk to Airbus operations, the company added. Airbus is headquartered in Toulouse, France, but has significant engineering and production facilities in the United Kingdom. One large production center in Wales makes the wings used on all Airbus civil aircraft. The company says it has 14,000 employees in Britain and supports another 110,000 jobs through its supply chain in the country.  The company's big fear is that Britain may leave the European Union in March 2019 without a transition deal to keep it temporarily in the bloc's single market and customs union. Those arrangements allow the European Union's 28 member states to function as a single trading area with no tariffs or border checks.  British and EU negotiators conditionally agreed in March to a transition period lasting until the end of 2020, but it's contingent on other major issues that still need to be resolved. The British government has yet to agree a proposal for how to avoid customs checks at the UK-EU border, let alone win EU approval.

Two years on from the referendum and we still have no earthly clue how Brexit will play out -A week, as they say, is a long time in politics. Little wonder that the last couple of years felt like an eternity.So, two years after the referendum what, if anything, have we learned about Brexit, and indeed about ourselves?  Well, first and foremost, we’ve discovered that leaving the EU is unbelievably difficult. Untangling 40-plus years of membership was never going to be easy. Doing so under the ridiculous time constraints imposed by Article 50 doubly so. A senior civil servant recalled one of his EU colleagues remarking that Article 50 was written in such a way that only the British civil service would have a chance of getting it done in time.Which points to another lesson. Whoever was in charge of this process, whatever the size of their majority, doing Brexit would have been difficult, all-consuming and messy. And this is so not least because of the choice the EU has presented us with. Michel Barnier’s infamous "steps of doom" mean there simply isn’t the room to arrive at the kind of ambitious free trade agreement of which the Prime Minister long dreamed. Rather, the Government must choose between three unpalatable options, or rather two unpalatable ones and an inconceivable one.Whether the Dominic Grieve amendment had passed last week or not, the Prime Minister now realises that no deal is not an option at all.  Leaving us with two: a Brexit that is economically ruinous and one that, essentially, equates to membership without the perks.  We must, in other words, choose between something that looks like the EU’s deal with Canada (though in all probability a Canada minus rather than a Canada plus) or something resembling continued membership of the single market and customs union. There isn’t much of a half-way house. All the clever talk of a "partial single market for goods" is unrealistic. It would be complicated to manage, and does not really help even manufacturers. Rolls Royce, to use the most cited example, make a fair amount of their money from "service" contracts on their goods. Moreover, and not incidentally, the EU has not indicated it would accept anything along these lines.

The Guardian view on the NHS cash boost: pay for it with deficit spending - Editorial -- Finally the penny has dropped in No 10. The prime minister, Theresa May, has recognised that the English health service does not have the resources it requires to provide high-quality patient care, and has told the Treasury to “find the money” the NHS desperately needs. Mrs May seems to be offering to increase the budget of the English NHS by about 3% a year until the end of the parliament, meaning that government spending would rise from around £130bn to £150bn in four years’ time. While welcome, the sums are probably going to be too small to keep pace with the rising cost of drugs and an ageing population that has ever more complex needs. Mrs May does not want to be remembered as the prime minister who squandered the dramatic improvements that had been achieved by the NHS. Despite the longest budget squeeze in its history, the NHS was last year judged the best and safest healthcare system of 11 developed nations. Unsurprisingly, given austerity, the NHS was reckoned to be cheaper to run than other healthcare services found in comparable economies. What the health service needs is the kind of vision that Tony Blair and Gordon Brown offered almost two decades ago when they decided to raise health spending to the EU average. Before spending more money on the NHS, British politicians should take the advice of the US economist Stephanie Kelton: in a UK lecture this week, she explained that it was wrong for politicians and the media to argue that the government must balance its books, just like a household. If a household were to continually spend more than its income, it would eventually face insolvency; it is thus claimed that the government is in a similar situation. This is false. Yet politicians are obsessed with avoiding an increase in the deficit, an impulse so ingrained that Professor Kelton described as it “almost Pavlovian”. An analysis of the UK’s economic position tells us how to fund the NHS: growth is flatlining, real wages are stagnant and there’s little inflation. The UK’s indebted households are sinking deeper into debt. Hardly the time to raise taxes. The public sector deficit ought to be seen as an instrument to support the economy, not a way to break it. To pay for the NHS, which is critical for long-term prosperity, the government should engage in Keynesian deficit spending: this would help to keep not only the public healthy but the economy too.

Donald Trump must not set foot in the UK until his despicable border policy is overturned - British governments, including administrations that have enjoyed my support, have come under fire in the past for their treatment of illegal immigrants. The practice of so-called dawn raids, when police and immigration officers arrive at a house in the early hours so that a family can be detained prior to removal from the country, was seen, by those with very little understanding of the process, the law or history, as a step towards Nazism. Demands were made to close all detention centres, on the basis that children should have to spend no time “locked up”. But the protesters were wrong. The reason detention centres were – are – necessary was because UK governments don’t wish to split up families.   Alas, it is that cruelty, that inhumanity, that utter absence of sympathy and empathy that is driving the Trump administration’s domestic drive to clamp down on illegal immigration. Ever desperate to please and solidify Trump’s election-winning base, and to hell with the rest of the country, the government has decided to enforce the letter of the federal law on immigration, which means that anyone crossing the Mexican-US border is being charged with committing a federal offence and can therefore be separated from their children while awaiting trial before a federal court.Like half-witted jocks out of an Eighties high school coming-of-age John Hughes film, Trump’s henchmen in the various enforcement agencies have tackled their new role with relish, as if only the liberal sentiments of the president’s predecessors prevented them from breaking their leashes before now, and stopped them from bullying and humiliating lesser human beings for their own enjoyment. And they are enjoying it. Listen to the recording of those anguished children, nearly hysterical with fear and dread at being separated unnecessarily from their parents. Listen to the mocking laughter of their guards and know that these people, if not evil, are certainly without basic human understanding, or emotion other than hatred and contempt.